UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                 --------------

                                    FORM 10-Q


(Mark One)

 [x]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
      EXCHANGE ACT OF 1934
      For the quarterly period ended June 30, 2001

      or

 [ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
      EXCHANGE ACT OF 1934
      For the transition period from ________________ to ________________


                         Commission File Number 0-29038

                            TANISYS TECHNOLOGY, INC.
             (Exact name of registrant as specified in its charter)

                    Wyoming                                     74-2675493
         (State or other jurisdiction of                     (I.R.S. Employer
         incorporation or organization)                   Identification Number)

       12201 Technology Blvd., Suite 125
                  Austin, Texas                                    78727
    (Address of principal executive offices)                    (Zip Code)

                                 (512) 335-4440
              (Registrant's Telephone Number, Including Area Code)

     Indicate  by check mark  whether the  Registrant  (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the  Securities  Exchange Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
Registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. [X] Yes [ ] No

     Indicated  below is the number of shares  outstanding  of the  Registrant's
common stock at August 14, 2001:

                                                      Number of Shares
                  Title of Class                         Outstanding
            Common Stock, no par value                    24,147,534


                                       1
<PAGE>

                    TANISYS TECHNOLOGY, INC. AND SUBSIDIARIES

                                      INDEX

PART I   FINANCIAL INFORMATION
Item 1.     Interim Consolidated Financial Statements (Unaudited)
            Consolidated Balance Sheets - June 30, 2001 and
                September 30, 2000..........................................   3
            Consolidated Statements of Operations - For the Three
                Months and Nine Months Ended June 30, 2001 and 2000.........   4
            Consolidated Statements of Cash Flows - For the Three
                Months and Nine Months Ended June 30, 2001 and 2000.........   5
            Notes to Interim Consolidated Financial Statements..............   6
Item 2.     Management's Discussion and Analysis of Financial
                Condition and Results of Operations.........................  11
Item 3.     Quantitative and Qualitative Disclosures About Market Risk......  15

PART II  OTHER INFORMATION
Item 1.     Legal Proceedings...............................................  15
Item 2.     Changes in Securities and Use of Proceeds.......................  16
Item 6.     Exhibits and  Reports on Form 8-K...............................  16
SIGNATURES..................................................................  17


                                       2
<PAGE>

                          PART 1. FINANCIAL INFORMATION

Item 1. Financial Statements

                    TANISYS TECHNOLOGY, INC. and SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                June 30,       September 30,
                                                                                  2001             2000
============================================================================================================
<S>                                                                         <C>                 <C>
ASSETS
Current assets:
     Cash and cash equivalents                                              $     79,962        $  1,601,777
     Trade accounts receivable, net of allowance of $121,632 and
        $132,743, respectively                                                   674,578           1,713,417
     Inventory                                                                 1,287,132             694,529
     Prepaid expenses and other                                                   98,682             137,654
------------------------------------------------------------------------------------------------------------
        Total current assets                                                   2,140,354           4,147,377
Property and equipment, net of accumulated depreciation of
     $947,489 and $954,945, respectively                                         411,594             394,468
Other non-current assets                                                          52,214              51,217
------------------------------------------------------------------------------------------------------------
        Total assets                                                        $  2,604,162        $  4,593,062
============================================================================================================

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
     Accounts payable                                                       $    612,598        $    340,925
     Accrued liabilities                                                         325,997             598,498
     Revolving credit note                                                       358,904             600,000
     Current portion of obligations under capital lease                           17,753              10,516
     Net current liabilities of discontinued operations                          594,997             994,010
------------------------------------------------------------------------------------------------------------
        Total current liabilities                                              1,910,249           2,543,949
Long-term portion of obligations under capital lease                              22,793                 126
Net long-term liabilities of discontinued operations                               4,138               9,971
------------------------------------------------------------------------------------------------------------
        Total liabilities                                                      1,937,180           2,554,046
------------------------------------------------------------------------------------------------------------
Stockholders' equity:
     Common stock, no par value, 50,000,000 shares authorized,
        24,147,534 and 24,097,358 shares issued and outstanding,
        respectively                                                          37,604,709          37,579,849
     Additional paid-in capital                                                1,711,719           1,711,719
     Accumulated deficit                                                     (38,649,446)        (37,252,552)
------------------------------------------------------------------------------------------------------------
        Total stockholders' equity                                               666,982           2,039,016
------------------------------------------------------------------------------------------------------------
        Total liabilities and stockholders' equity                          $  2,604,162        $  4,593,062
============================================================================================================
</TABLE>

          The accompanying notes are an integral part of these interim
                       consolidated financial statements.


                                       3
<PAGE>

                    TANISYS TECHNOLOGY, INC. and SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                                               For the Three Months          For the Nine Months
                                                                                  Ended June 30,                Ended June 30,
                                                                               2001            2000          2001           2000
====================================================================================================================================
<S>                                                                        <C>            <C>            <C>            <C>
Net sales                                                                  $ 1,012,583    $ 2,430,272    $ 4,220,898    $ 6,491,882
Cost of goods sold                                                             673,248        834,203      2,038,858      2,259,455
------------------------------------------------------------------------------------------------------------------------------------
Gross profit                                                                   339,335      1,596,069      2,182,040      4,232,427
------------------------------------------------------------------------------------------------------------------------------------
Operating expenses:
   Research and development                                                    579,239        621,632      1,854,003      1,377,888
   Sales and marketing                                                         280,860        380,343      1,032,879      1,010,703
   General and administrative                                                  159,823        185,655        519,064        515,180
   Depreciation and amortization                                                32,844         26,273        101,757        105,746
------------------------------------------------------------------------------------------------------------------------------------
       Total operating expenses                                              1,052,766      1,213,903      3,507,703      3,009,517
------------------------------------------------------------------------------------------------------------------------------------
Operating income (loss)                                                       (713,431)       382,166     (1,325,663)     1,222,910
Other income (expense):
   Interest income                                                               2,843          7,808         22,355         14,797
   Interest expense                                                            (25,030)       (17,977)       (60,985)      (223,485)
   Other                                                                        (9,238)        23,129        (32,601)       146,284
------------------------------------------------------------------------------------------------------------------------------------
Net income (loss) before discontinued operations                              (744,856)       395,126     (1,396,894)     1,160,506
Income from discontinued operations                                                 --        250,000             --        250,000
------------------------------------------------------------------------------------------------------------------------------------
Net income (loss)                                                          $  (744,856)   $   645,126    $(1,396,894)   $ 1,410,506
------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from continuing operations                                   $  (744,856)   $   395,126    $(1,396,894)   $ 1,160,506
  Preferred stock dividend and amortization of the value of the
    beneficial conversion feature on preferred stock                                --             --             --        (44,021)
------------------------------------------------------------------------------------------------------------------------------------
Net income (loss) from continuing operations applicable to
    common stockholders                                                       (744,856)       395,126     (1,396,894)     1,116,485
Income from discontinued operations                                                 --        250,000             --        250,000
------------------------------------------------------------------------------------------------------------------------------------
Net income (loss) applicable to common stockholders                        $  (744,856)   $   645,126    $(1,396,894)   $ 1,366,485
====================================================================================================================================

Basic income (loss) per common share:
    Income (loss) from continuing operations applicable to
      common stockholders                                                        (0.03)          0.02          (0.06)          0.06
    Income (loss) from discontinued operations                                      --           0.01             --           0.01
====================================================================================================================================
Net income (loss) applicable to common stock                               $     (0.03)   $      0.03    $     (0.06)   $      0.08
====================================================================================================================================
Diluted income (loss) per common share:
   Income (loss) from continuing operations applicable to
      common stockholders                                                  $     (0.03)   $      0.02    $     (0.06)   $      0.06
   Income (loss) from discontinued operations                                       --           0.01             --           0.01
====================================================================================================================================
Net income (loss) applicable to common stock                               $     (0.03)   $      0.03    $     (0.06)   $      0.07
====================================================================================================================================
</TABLE>

          The accompanying notes are an integral part of these interim
                       consolidated financial statements.


                                       4
<PAGE>

                    TANISYS TECHNOLOGY, INC. and SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                               For the Three Months        For the Nine Months
                                                                                  Ended June 30,              Ended June 30,
                                                                                2001          2000          2001            2000
====================================================================================================================================
<S>                                                                       <C>            <C>            <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)                                                         $  (744,856)   $   645,126    $(1,396,894)   $ 1,410,506
Deduct: Net income from discontinued operations                                    --        250,000             --        250,000
------------------------------------------------------------------------------------------------------------------------------------
Net income (loss) from continuing operations                                 (744,856)       395,126     (1,396,894)     1,160,506
 Adjustment to reconcile net income to net cash provided by
     (used in) operating activities:
         Depreciation and amortization                                         52,563         61,287        161,629        211,768
         Loss on disposal of fixed assets                                      54,779          7,094         54,593          4,768
         Common stock issued for services                                          --             --         32,500        406,036
 Changes in operating assets:
     Restricted cash                                                           50,000             --             --        290,511
     Accounts receivable, net                                                 540,197     (1,165,162)     1,038,839        173,896
     Inventory, net                                                           (76,978)        32,995       (592,603)       195,156
     Prepaid expenses and other                                                 6,711        100,653         30,972         78,912
     Other noncurrent assets                                                       --             --         (8,679)         1,816
     Accounts payable                                                          15,989        114,133        271,673       (541,085)
     Accrued liabilities                                                        9,908        194,739       (272,501)       (76,010)
------------------------------------------------------------------------------------------------------------------------------------
          Net cash provided by (used in) operating activities of
            continuing operations                                             (91,687)      (259,135)      (680,471)     1,906,274
------------------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of fixed assets                                                     (33,375)       (46,455)      (225,667)       (59,545)
Proceeds from sales of fixed assets                                                --             --             --          4,000
------------------------------------------------------------------------------------------------------------------------------------
         Net cash provided by (used in) investing activities of
           continuing operations                                              (33,375)       (46,455)      (225,667)       (55,545)
------------------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Draws (repayments) on revolving credit note, net                             (316,096)       387,032       (241,096)    (1,373,969)
Payment of debt financing costs                                                    --             --             --        149,554
Proceeds from exercise of stock options and warrants                               --             --            360        108,333
Proceeds from issuance of common stock                                             --             --             --      1,223,000
Proceeds (payments) on capital lease obligations                                  (30)        (6,836)        29,905        (22,814)
------------------------------------------------------------------------------------------------------------------------------------
         Net cash provided by (used in) financing activities
           of continuing operations                                          (316,126)       380,196       (210,831)        84,104
------------------------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) continuing operations                         (441,188)        74,606     (1,116,969)     1,934,833
Net cash used in discontinued operations                                      (88,133)      (194,984)      (404,846)    (1,411,504)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents                         (529,321)      (120,378)    (1,521,815)       523,329
Cash and cash equivalents at beginning of period                              609,283      1,328,656      1,601,777        684,949
------------------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period                                $    79,962    $ 1,208,278    $    79,962    $ 1,208,278
====================================================================================================================================

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
     Cash paid for interest                                               $    21,558    $    20,759    $    51,791        209,478
     Interest received                                                          2,843          3,385          8,693         10,374
NON-CASH INVESTING AND FINANCING ACTIVITIES:
     Issuance of stock warrants for compensation                                   --         10,684             --         23,277
     Preferred stock dividends paid in common stock                                --             --             --         55,315
     Conversion of preferred stock to common stock                                 --             --             --      1,831,482
     Cancellation of common stock                                               8,000             --          8,000             --
====================================================================================================================================
</TABLE>

          The accompanying notes are an integral part of these interim
                       consolidated financial statements.


                                       5
<PAGE>

                            Tanisys Technology, Inc.
                   Notes to Consolidated Financial Statements
                                   (Unaudited)


NOTE 1: BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

     The  accompanying   unaudited  interim  consolidated  financial  statements
include the  accounts of Tanisys  Technology,  Inc.  ("Tanisys")  and its wholly
owned subsidiaries,  1st Tech Corporation ("1st Tech"),  DarkHorse Systems, Inc.
("DarkHorse"),  and  Rosetta  Marketing  and Sales  Inc.,  and also  include the
accounts of Tanisys  (Europe)  Ltd.,  located in  Scotland,  for the nine months
ended June 30, 2000 (collectively, the "Company"). The stock of Tanisys (Europe)
Ltd. was sold on December 9, 1999 (see Note 2 below). The consolidated financial
statements have been prepared in accordance with generally  accepted  accounting
principles.  All significant  intercompany  balances and transactions  have been
eliminated in consolidation.

     The accompanying  unaudited interim consolidated  financial statements have
been prepared in accordance with generally  accepted  accounting  principles for
financial  information and with the  instructions to Form 10-Q and Article 10 of
Regulation  S-X.  Accordingly,  they do not include all of the  information  and
notes  required  by  generally  accepted  accounting   principles  for  complete
financial   statements.   It  is  recommended   that  these  unaudited   interim
consolidated  financial  statements  be read in  conjunction  with the Company's
consolidated  financial  statements  and the notes  thereto  for the fiscal year
ended  September 30, 2000  contained in the  Company's  Form 10-K filed with the
Securities and Exchange Commission on December 15, 2000.

     The Company designs,  manufactures and markets  production-level  automated
test equipment for a wide variety of semiconductor memory technologies.

     On  December  9, 1999,  the Company  sold its memory  module  manufacturing
business, including all of the common stock of Tanisys (Europe) Ltd. The assets,
liabilities  and the  loss  from  the sale of the  memory  module  manufacturing
business have been included in the accompanying interim  consolidated  financial
statements as discontinued operations.

NOTE 2. DISCONTINUED OPERATIONS

     On December 9, 1999,  the Company sold certain  assets of its memory module
manufacturing  business,  including  all the stock of Tanisys  (Europe)  Ltd., a
wholly  owned  subsidiary  of the  Company  located in  Scotland.  The sale also
included the assumption of certain  liabilities by the buyer. The results of the
memory module manufacturing  business have been classified as discontinued,  and
prior periods have been restated to reflect the sale.

     The loss on the sale, as well as the costs  associated with the disposition
of the memory module manufacturing  business, has been recorded in the financial
statements as of September 30, 1999. As of June 30, 2001, remaining future costs
associated with the disposition of the discontinued operations are $599,135.


                                       6
<PAGE>

NOTE 3: CASH AND CASH EQUIVALENTS

     The Company  invests its excess cash in money market funds,  U.S.  Treasury
obligations,  and short-term debt instruments of U.S.  corporations  with strong
credit  ratings.  The Company has  established  guidelines  with  respect to the
diversification  and maturities that maintain safety and liquidity.  The Company
considers  all highly  liquid  investments  with an  original  maturity of three
months or less and money market funds to be cash equivalents.

NOTE 4: INVENTORY

     Inventory consists of the following:

                                            June 30,     September 30,
                                              2001           2000
        =============================================================
        Raw materials                     $  992,722       $  453,573
        Work-in-process                       38,012           93,941
        Finished goods                       256,398          147,015
        -------------------------------------------------------------
         Total inventory                  $1,287,132       $  694,529
        =============================================================

     Inventory  is stated at the lower of cost or  market  value.  Inventory  is
accounted for on a first in, first out basis.  Inventory  costs  include  direct
materials and certain manufacturing overhead costs.

NOTE 5: REVOLVING CREDIT NOTE

     The Company entered into an Accounts Receivable  Financing Agreement ("Debt
Agreement") with Silicon Valley Bank on May 30, 2001 to fund accounts receivable
and provide working capital up to a maximum of $2,000,000  secured by the assets
of the  Company.  The  Company has  violated  certain  requirements  of its Debt
Agreement with Silicon Valley Bank relating to failure to meet the specified net
income level for the quarter ended June 30, 2001. The Company and Silicon Valley
Bank entered into a Loan Modification and Forbearance  Agreement dated August 3,
2001 in which Silicon  Valley Bank agreed to forbear from  exercising its rights
and  remedies  under the Debt  Agreement  until the Company  closed its Series A
Preferred Stock equity  financing.  Upon the closing and funding of the Series A
Preferred  Stock  equity  financing,  Silicon  Valley Bank waived its rights and
remedies under the Debt Agreement. (See Note 11).

NOTE 6: LONG-TERM DEBT

     As of June 30, 2001,  and September 30, 2000,  the Company had no long-term
debt.  During  the  quarter  ended  March 31,  2000,  all of the debt to certain
stockholders  was  converted to  4,000,000  shares of Common  Stock.  There was,
however,  interest  paid on this debt during the quarter  ended March 31,  2000.
Along with the notes payable to these  stockholders,  all related  discounts and
debt  issuance  costs  have been  charged  to Common  Stock on the  Consolidated
Balance Sheet for the fiscal year ended September 30, 2000.

NOTE 7: PREFERRED STOCK

     Pursuant to a Convertible Stock Purchase Agreement dated June 30, 1998, the
Company issued 400 shares of its 5% Series A Convertible  Preferred  Stock,  par
value $1 per share ("Series A Stock"), for $4,000,000. As of March 31, 2000, the
Company had converted all of the Series A Stock into shares of Common Stock.

     A new issuance of Series A Preferred  Stock  occurred on August 13, 2001 in
which 2,575,000 shares were issued for $2,575,000 (See Note 11).


                                       7
<PAGE>

NOTE 8: STOCKHOLDERS' EQUITY

     On December 6, 2000, the Company filed a Registration Statement on Form S-8
with the Securities and Exchange Commission  requesting that 7,000,000 shares of
Common Stock be registered and set aside for the Company's stock option plans.

NOTE 9: EARNINGS PER SHARE

     Basic  income or loss per common  share is computed  based on the  weighted
average number of common shares outstanding during each period. For the quarters
ended June 30, 2001 and 2000,  diluted income per common share is computed based
on the weighted average number of common shares  outstanding after giving effect
to the  potential  issuance  of Common  Stock on the  exercise  of  options  and
warrants.  All Common Stock amounts and per share information have been restated
to reflect the Reverse  Split for all periods  presented.  The  following  table
provides a reconciliation between net income and net income applicable to common
stockholders, and between basic and diluted shares outstanding:

<TABLE>
<CAPTION>
                                                   For the Three Months Ended             For the Nine Months Ended
                                                             June 30,                              June 30,
                                                       2001              2000                2001               2000
=========================================================================================================================
<S>                                              <C>                 <C>                <C>                 <C>
Net income (loss)                                $   (744,856)       $    645,126       $ (1,396,894)       $  1,410,506
Less:
   Series A Stock dividends                                --                  --                 --             (44,021)
-------------------------------------------------------------------------------------------------------------------------
Net income (loss) applicable to common
   stock (basic and diluted)                     $   (744,856)       $    645,126       $ (1,396,894)       $  1,366,485
=========================================================================================================================
Weighted average number of common
   shares used in basis earning per share          24,151,050          24,022,358         24,134,500          18,074,184

Effect of dilutive securities:
   Stock options                                           --             485,500                 --             485,500
   Warrants                                                --             443,334                 --             443,334
-------------------------------------------------------------------------------------------------------------------------
Weighted average number of common
   shares and dilutive potential common
   stock used in dilutive earning per share        24,151,050          24,951,192         24,134,500          19,003,018
=========================================================================================================================
</TABLE>

NOTE 10: RELATED PARTY TRANSACTIONS

     Accrued  liabilities  as of June 30,  2001  included  $90,000  in  deferred
compensation to the Company's President and Chief Executive Officer,  Charles T.
Comiso.  On July  27,  2001,  the  $90,000  of  deferred  compensation,  plus an
additional  $5,000 of  deferred  compensation  for the month of July  2001,  was
converted  to a note  payable  to Mr.  Comiso  along with  $6,800 of  additional
compensation  and $30,000 of funds borrowed from Mr. Comiso for working capital.
The note payable to Mr. Comiso totaled  $131,800 and carried an interest rate of
ten percent  (10%) per annum.  In  conjunction  with the closing of the Series A
Preferred Stock financing (See "Note 11: Subsequent Events" below) on August 14,
2001,  Mr.  Comiso  converted  $90,000 of the note payable into 90,000 shares of
Series A Preferred Stock.  The remaining  balance of the note payable was repaid
on August 13, 2001.

     On August 13, 2001, the Company closed a private financing in the amount of
$2,575,000. New Century Equity Holdings Corp. (Nasdaq: NCEH) participated in the
financing  through the purchase of one million shares of the Company's  Series A
Preferred Stock. The Chairman and Chief Executive  Officer of New Century Equity
Holdings Corp. is also the Company's Chairman of the Board of Directors.

As part of the August 13, 2001 private financing  transaction,  a certain number
of the Company's  employees purchased shares of the Company's Series A Preferred
Stock.


                                       8
<PAGE>

NOTE 11: SUBSEQUENT EVENTS

     The Company has settled a lawsuit filed by one of its customers  related to
the  discontinued  memory module  manufacturing  business for alleged  breach of
contract.  The suit asked for actual  damages of $77,838  and was settled for an
undisclosed amount. The settlement amount is included in net current liabilities
of discontinued operations as of June 30, 2001.

     The Company  has reached an  agreement  with a former  equipment  financing
company  to  settle a lawsuit  claiming  a breach of an  agreement  for  certain
manufacturing equipment previously utilized in the Company's discontinued memory
module manufacturing  business. The manufacturing equipment has been sold at the
direction of the equipment financing company.  The settlement amount is included
in net current liabilities of discontinued operations as of June 30, 2001.

     The  Company  has settled a dispute  arising  from the  guaranty of a lease
associated with the Company's discontinued memory module manufacturing business.
The  settlement  was made with the  landlord  and the  Scottish  Enterprise  and
releases  the Company from any  guaranty of past or future  rental  payments and
other related  expenses in connection with the default of Tanisys  (Europe) Ltd.
The  dispute  arose  when,  in  December  1999,  the  Company  sold  assets  and
liabilities related to its memory module  manufacturing  business and exited the
memory  module  manufacturing  business.  Included  in the  sale  was all of the
capital stock of Tanisys (Europe) Ltd., which was then a wholly owned subsidiary
of the Company.  Tanisys  (Europe)  Ltd.  (the  "Lessee") had executed a 15-year
lease in April 1998  covering  industrial  premises  situated in High  Blantyre,
Scotland.   In  connection  with  the  execution  of  the  lease,   the  Company
co-guaranteed the lease payments along with the Scottish Enterprise. The initial
annual  rental  payment was  approximately  $200,000,  plus  increases  based on
reviews in 2003 and 2008. In March or April 2000,  Tanisys  (Europe) Ltd., which
is now  owned by the  purchaser  of the  Company's  discontinued  memory  module
manufacturing  business,  abandoned the premises, and accordingly,  the landlord
sought  reimbursement  for its losses  resulting  from the Lessee  vacating  the
property.  The Company was the first  guarantor and the Scottish  Enterprise was
the second guarantor of the lease. The liability for this settlement is recorded
in the net current liabilities of discontinued operations as of June 30, 2001.

     The  slowdown in the  worldwide  semiconductor  industry has had a severely
negative  impact on the Company's  revenues and cash flows resulting in the need
for an infusion of cash into the Company.  Therefore,  on August 13,  2001,  the
Company closed a private  placement  financing in the amount of $2,575,000.  New
Century Equity Holdings Corp. (Nasdaq: NCEH) ("New Century") participated in the
financing  through the purchase of one million shares of the Company's  Series A
Preferred  Stock.  The  proceeds  will  be  utilized  to  continue  its  product
development  and  marketing  efforts  and to  provide  working  capital  for the
Company's operations.

     In connection  with the private  placement  financing,  the Company  issued
2,575,000 shares of its Series A Preferred Stock for $1.00 per share. Each share
of Series A Preferred Stock is initially  convertible  into 33.334 shares of the
Company's  common  stock.  The holders of the Series A  Preferred  Stock will be
entitled to a cumulative  annual  dividend of 15%,  which,  at the option of the
holders of the Series A Preferred  Stock,  may be paid in cash or in  additional
shares of Series A Preferred  Stock. The holders of the Series A Preferred Stock
will have a liquidation  preference in the event of any liquidation sale, merger
or other similar event, and have registration rights and other customary rights.
The Company has also agreed to make payments to the Series A Preferred Stock, to
the extent its cash flow meets certain  levels,  until the holders have received
the amount of their  investments in the Series A Preferred Stock and has granted
a security  interest in all of its assets to secure its obligation to make these
payments.  The Company has also  agreed to issue  additional  shares of Series A
Preferred  Stock  equal to 50% of the then  fully  diluted  common  stock to the
investors if the Company  fails to return the amount of their  investment,  plus
the mandatory dividends,  by July 15, 2003. In addition,  the Company has agreed
that  if it  does  not  meet  any of  certain  financial  targets  in any of six
performance  periods  that the Series A  Preferred  stockholders  will be issued
additional  Series  A  Preferred  Stock  equal  to  25%  of  the  fully  diluted
as-if-converted  shares of the  Company  at the end of each  such  determination
period  beginning with the quarter ending September 30, 2001. If the slowdown in
the worldwide  semiconductor  industry continues for an extended period of time,
the Company


                                       9
<PAGE>

may not meet one or more of the specified financial targets, thus triggering the
issuance of additional shares of Series A Preferred Stock.

     The Series A Preferred  shares will vote together with the Company's common
stock on an as-if-  converted basis and not as a separate  class.  Each share of
Series A  Preferred  will have a number of votes  equal to the  number of common
stock  shares  then  issuable  upon  conversion  of such  shares of the Series A
Preferred Stock.

     The Company  has agreed to call a special  meeting of its  shareholders  to
vote on a proposal  to  authorize  additional  common  stock so as to permit the
conversion  of the  Series  A  Preferred  Stock.  The  holders  of the  Series A
Preferred Stock will be entitled to vote with the holders of the common stock at
the special meeting,  and will control sufficient votes to approve the proposal.
Immediately  after the special  meeting,  the shares of Series A Preferred Stock
initially  issued  would  be  convertible  into  approximately  78% of the  then
outstanding  common stock.  If Tanisys is required to issue all of the shares of
Series A  Preferred  Stock that it could  potentially  be  required  to issue in
connection with the Series A financing,  those shares would be convertible  into
approximately 97% of the then outstanding as-if-converted common stock.

     In connection with the financing  transaction  described above, two members
of the Board of Directors of the Company resigned, and New Century appointed two
directors to the Board. Subject to certain  requirements,  New Century will have
the  right to  appoint a third  member to the  Company's  five  member  Board of
Directors.

     Also in connection  with the financing  transaction  described  above,  the
Company's Board of Directors approved,  subject to shareholder  approval,  a new
stock option plan,  pursuant to which the Board may grant stock options covering
up to 15% of the fully diluted  common  stock,  including the Series A Preferred
Stock as-if-converted into common stock.

NOTE 12: CONTINGENCIES

     The  Company is a  defendant  in a lawsuit  filed by the  purchaser  of the
Company's  discontinued memory module manufacturing  business for alleged breach
of  representations,  warranties and  covenants.  The suit asks for $50,000 plus
attorneys' fees and court costs.  The Company believes the suit is without merit
and is vigorously  defending its position.  The Company  believes it is unlikely
that the final  outcome  would have a material  adverse  effect on the Company's
financial  position or results  from  operations;  however,  due to the inherent
uncertainty of litigation,  there can be no assurance that the resolution of any
particular  claim or proceeding  would not have a material adverse effect on the
Company's  results of operations for the fiscal period in which such  resolution
occurred.


                                       10
<PAGE>

This Quarterly Report on Form 10-Q contains certain  forward-looking  statements
and information  relating to Tanisys and its subsidiaries  that are based on the
beliefs  of  the  Company's  management  as  well  as  assumptions  made  by and
information currently available to the Company's  management.  When used in this
report, the words "anticipate,"  "believe,"  "estimate,"  "expect," and "intend"
and words or phrases of similar  import,  as they  relate to the  Company or its
management, are intended to identify forward-looking statements. Such statements
reflect the current  risks,  uncertainties  and  assumptions  related to certain
factors including,  without limitations,  competitive factors,  general economic
conditions,  customer  concentrations,   customer  relationships  and  financial
conditions,   relationships   with  vendors,   the  interest  rate  environment,
governmental  regulation and supervision,  seasonality,  distribution  networks,
product introductions and acceptance,  technological change, changes in industry
practices,  one-time  events  and other  factors  described  herein.  Based upon
changing  conditions,  should  any one or more of these  risks or  uncertainties
materialize,  or should  any  underlying  assumptions  prove  incorrect,  actual
results  may  vary  materially  from  those  described  herein  as  anticipated,
believed, estimated, expected or intended. The Company does not intend to update
these forward-looking statements.


Item 2. Management's Discussion and Analysis of Financial Condition and Results
        of Operations

Overview

     The  following  is a  discussion  of  the  interim  consolidated  financial
condition  and results of  operations  of the Company for the three months ended
June 30,  2001 and 2000.  It should be read in  conjunction  with the  unaudited
interim Consolidated Financial Statements, the Notes thereto and other financial
information  included  elsewhere in this  report,  and in the  Company's  Annual
Report  on Form  10-K for the year  ended  September  30,  2000  filed  with the
Securities  and Exchange  Commission  on December 15, 2000.  For purposes of the
following  discussion,  references to year periods refer to the Company's fiscal
year ended  September 30, 2000 and references to quarterly  periods refer to the
Company's fiscal quarters ended June 30, 2001 and 2000.

     On  December  9, 1999,  the Company  sold its memory  module  manufacturing
business, including all of the common stock of Tanisys (Europe) Ltd. The results
of the memory module manufacturing business have been classified as discontinued
operations,  and prior periods have been restated to reflect the sale.  The loss
on the sale, as well as the costs  associated with the disposition of the memory
module manufacturing  business,  has been recorded in the consolidated financial
statements as of September 30, 1999. As of June 30, 2001,  the remaining  future
costs  associated  with  the  disposition  of the  discontinued  operations  was
$599,135.

     Since  consummating the sale transaction,  the Company has refocused all of
its  efforts  on the  development,  manufacture  and  sale  of  production-level
automated test equipment.


                                       11
<PAGE>

Results of Operations

     The following table sets forth certain consolidated  operations data of the
Company  expressed as a percentage of net sales (unaudited) for the three months
and nine months ended June 30, 2001 and 2000:

<TABLE>
<CAPTION>
                                                              For the Three                For the Nine
                                                               Months Ended                Months Ended
                                                                 June 30,                    June 30,
                                                            2001          2000          2001          2000
     =========================================================================      ======================
     <S>                                                    <C>           <C>           <C>           <C>
     Net sales                                              100%          100%          100%          100%
     Cost of goods sold                                      67%           34%           48%           35%
     -------------------------------------------------------------------------      ----------------------
     Gross profit                                            33%           66%           52%           65%
     -------------------------------------------------------------------------      ----------------------
     Operating expenses:
           Research and development                          57%           26%           44%           21%
           Sales and marketing                               28%           16%           25%           15%
           General and administrative                        16%            7%           12%            8%
           Depreciation and amortization                      3%            1%            2%            2%
     -------------------------------------------------------------------------      ----------------------
                    Total operating expenses                104%           50%           83%           46%
     -------------------------------------------------------------------------      ----------------------
     Operating income (loss)                                (71%)          16%          (31%)          19%
     Other income (expense):
           Interest income                                   --            --            --            --
           Interest expense                                  (2%)          (1%)          (1%)          (3%)
           Other income (expense)                            (1%)           1%           (1%)           2%
     -------------------------------------------------------------------------      ----------------------
     Net income (loss) before discontinued operations       (74%)          16%          (33%)          18%
     Income from discontinued operations                     --            10%           --             4%
     -------------------------------------------------------------------------      ----------------------
     Net income (loss)                                      (74%)          26%          (33%)          22%
     =========================================================================      ======================
</TABLE>

Net Sales

     Net sales consist of sales of  production-level  automated  test  equipment
along with related hardware and software, less returns and discounts. Continuing
to be impacted  by the  worldwide  semiconductor  industry  slowdown,  net sales
decreased 58% to $1,012,583 in the third quarter of fiscal 2001 from  $2,430,272
in the same period last year.  The Company's  customers  depend upon the current
and  anticipated  market  demand for  semiconductors  and products  that utilize
semiconductors.  The  slowdown  in  the  worldwide  semiconductor  industry  has
resulted  in   significantly   reduced  levels  of  capital   expenditures   for
semiconductor  equipment such as the Company's  automated test  equipment.  This
slowdown has had a severely negative impact upon the sales of the Company during
the quarter ended June 30, 2001. We do not believe that orders for the Company's
test systems were lost to competition but instead have been delayed. The Company
continues  to  enhance  and  broaden  its  product  line to  support  all memory
technologies  in order to deliver high quality,  cost  effective and  high-speed
test systems to its customers when a recovering economy occurs.

Cost of Sales and Gross Profit

     Cost of sales includes the costs of all components and materials  purchased
for the manufacture of products,  direct labor and related overhead costs.  Cost
of sales for the June 2001 quarter was $673,248,  down in absolute  dollars from
the  $834,203 of the previous  year,  but higher in terms of percent of sales at
67% versus 34% for the same quarter last year.  The decrease in cost of sales in
terms of dollars was due to lower sales volume in the June 2001  quarter,  while
the increase in  percentage of sales was due to the mix of products sold as well
as lower sales volume,  resulting in reduced  absorption of fixed  manufacturing
costs.

     Gross  profit  for the June 2001  quarter  was  $339,335,  as  compared  to
$1,596,069  from the same quarter last year.  Gross profit as a percent of sales
was 33% and 66% for the quarters ended June 30, 2001 and 2000, respectively. The
decrease in gross  profit in terms of both  dollars and percent of sales was due
to the mix of  products  sold and lower sales  volume in the June 2001  quarter,
resulting in reduced absorption of fixed manufacturing costs.


                                       12
<PAGE>

Research and Development

     Research and development  expenses,  which consist of all costs  associated
with the engineering  design and testing of new technologies and products,  were
$579,239  for the third  quarter of fiscal year 2001 as compared to $621,632 for
the same  quarter  last year.  Costs  reflect  the ongoing  development  of test
systems for both Double Data Rate ("DDR") and Flash memory technologies, as well
as a new distributed  networking  architecture that can be applied to all memory
technologies.

     The Company will continue to invest in research and  development to develop
new test systems and enhance current test systems to meet the market demands for
the testing of new memory technologies.

Sales and Marketing

     Sales and marketing  expenses  include  compensation of sales and marketing
related employees and independent sales representatives,  plus costs for travel,
advertising,  trade shows and  related  overhead.  Expenses of $280,860  for the
third fiscal  quarter of 2001 were down by 26% when compared to $380,343 for the
same quarter last year.  Most of the reduction  reflects  sales  commissions  on
lower revenues. The Company continues to market its tests systems to the world's
largest semiconductor and memory module manufacturers.

General and Administrative

     General and  administrative  expenses consist primarily of personnel costs,
including  employee  compensation  and  benefits,  and support  costs  including
utilities,  insurance,  professional  fees  and  all  costs  associated  with  a
reporting company.  General and administrative expenses for the third quarter of
fiscal 2001  decreased  14% to $159,823  from  $185,655  for the same quarter of
fiscal 2000. The decrease was primarily due to reductions in  professional  fees
and  public  company  expenses.  The  Company  has taken  additional  actions to
decrease general and administrative costs.

Depreciation and Amortization

     Depreciation  and  amortization  includes  the  depreciation  for all fixed
assets,  exclusive  of those used in the  manufacturing  process and included as
part of "Cost of Goods Sold," and the  amortization  of  intangibles,  including
patents  related to memory  module test  systems  technology.  Depreciation  and
amortization  increased  to  $32,844 in the third  quarter  of fiscal  2001 from
$26,273 in the same quarter of fiscal 2000. The increase reflects  investment in
new  software  and  hardware  tools  designed  to  maximize  the  efficiency  of
engineering  research  and  development  as  well  as  additional   amortization
resulting from the issuance of new patents.

Other Income (Expense), Net

     Other  income  (expense),  net consists  primarily of interest  income less
interest  expense.  Substantially  all of the  interest  expense  relates to the
Company's  working  capital  loan  facility  which is  utilized  for short  term
inventory requirements and to fund accounts receivable.  Interest income relates
to the investment of available cash in short-term  interest bearing accounts and
cash equivalent  securities.  Other income (expense) decreased to $31,425 in net
other  expense for the June 2001  quarter  from $12,960 in net other income from
last year.  Interest  expense for the June 2001 quarter  increased over the same
period last year due to increased  borrowing from the Company's  working capital
facility. In addition,  non-recurring  miscellaneous income enhanced results for
the third quarter of last year.

Liquidity and Capital Resources

     Since  inception,  Tanisys  has  utilized  the  funds  acquired  in  equity
financings  of its Common  Stock and  preferred  stock,  the  exercise  of stock
warrants and stock options,  capital leases,  operating leases,  vendor credits,
certain bank  borrowings,  and funds  generated  from  operations to support its
operations,


                                       13
<PAGE>

carry on research and development activities, acquire capital equipment, finance
inventories   and  accounts   receivable   balances  and  pay  its  general  and
administrative expenses.

     During the third quarter of fiscal 2001,  the Company  utilized  $91,687 in
cash flow from its operating  activities of continuing  operations primarily due
to a net loss from  operations  partially  offset  by a  reduction  in  accounts
receivable. The Company also reduced its revolving credit line by $316,096. Cash
and cash  equivalents  decreased by $529,321  during the quarter ended June 2001
resulting  in $79,962 in  unrestricted  cash and working  capital of $230,105 at
June 30, 2001, a decrease in working  capital of $681,064  from the prior fiscal
quarter ended March 31, 2001.

     The Company entered into an Accounts Receivable  Financing Agreement ("Debt
Agreement") with Silicon Valley Bank on May 30, 2001 to fund accounts receivable
and provide working capital.  The Company has violated  certain  requirements of
its Debt  Agreement  with  Silicon  Valley Bank  relating to failure to meet the
specified net income level for the quarter ended June 30, 2001.  The Company and
Silicon Valley Bank entered into a Loan  Modification and Forbearance  Agreement
dated  August 3, 2001 in which  Silicon  Valley  Bank  agreed  to  forbear  from
exercising its rights and remedies  under the Debt  Agreement  until the Company
closed its Series A Preferred Stock  financing.  Upon the closing and funding of
the Series A Preferred  Stock  financing,  Silicon Valley Bank waived its rights
and remedies under the Debt Agreement.

Significant Customer Concentration

     A  significant  percentage  of the  Company's  net sales is  produced  by a
relatively  small number of customers.  In the third quarter of fiscal 2001, the
ten largest  customers  accounted for approximately 98% of net sales compared to
approximately  98% in the  same  period  last  year.  The  top  three  customers
represented 33%, 22%, and 18% of sales, respectively,  in the quarter ended June
30, 2001.  The customer that  represented  22% of sales in the June 2001 quarter
accounted  for  approximately  58% of sales in the same period  last year.  Four
customers  were  included in both top ten  customer  lists for the third  fiscal
quarters of 2001 and 2000;  they  accounted  for  approximately  50% of sales in
third quarter of fiscal 2001 and approximately 87% of sales in the third quarter
of fiscal 2000.

     The Company in general has no firm long-term  volume  commitments  from its
customers  and  generally  enters  into  individual  purchase  orders  with  its
customers. Customer purchase orders are subject to change, cancellation or delay
with little or no consequence to the customer.  The Company has experienced such
changes and  cancellations  and expects to continue to do so in the future.  The
replacement of cancelled,  delayed or reduced  purchase orders with new business
cannot be assured.  The Company's  business,  financial condition and results of
operations  will depend  significantly  on its ability to obtain purchase orders
from existing and new customers, upon the financial condition and success of its
customers,  the success of customers' products and the general economy.  Factors
affecting the industries of the Company's  major customers could have a material
adverse  effect on the Company's  business,  financial  condition and results of
operations.

Certain Events Occurring Subsequent to June 30, 2001

     The  slowdown in the  worldwide  semiconductor  industry has had a severely
negative  impact on the Company's  revenues and cash flows resulting in the need
for an infusion of cash into the Company.  Therefore,  on August 13,  2001,  the
Company closed a private  placement  financing in the amount of $2,575,000.  New
Century Equity Holdings Corp. (Nasdaq: NCEH) ("New Century") participated in the
financing  through the purchase of one million shares of the Company's  Series A
Preferred  Stock.  The  proceeds  will  be  utilized  to  continue  its  product
development  and  marketing  efforts  and to  provide  working  capital  for the
Company's operations.

     In connection  with the private  placement  financing,  the Company  issued
2,575,000 shares of its Series A Preferred Stock for $1.00 per share. Each share
of Series A Preferred Stock is initially  convertible  into 33.334 shares of the
Company's  common  stock.  The holders of the Series A  Preferred  Stock will be
entitled to a cumulative  annual  dividend of 15%,  which,  at the option of the
holders of the Series A


                                       14

<PAGE>

Preferred  Stock,  may be paid  in cash or in  additional  shares  of  Series  A
Preferred  Stock.  The  holders  of the  Series A  Preferred  Stock  will have a
liquidation  preference in the event of any  liquidation  sale,  merger or other
similar event,  and have  registration  rights and other customary  rights.  The
Company has also agreed to make payments to the Series A Preferred Stock, to the
extent its cash flow meets certain  levels,  until the holders have received the
amount of their  investments  in the Series A Preferred  Stock and has granted a
security  interest in all of its assets to secure its  obligation  to make these
payments.  The Company has also  agreed to issue  additional  shares of Series A
Preferred  Stock  equal to 50% of the then  fully  diluted  common  stock to the
investors if the Company  fails to return the amount of their  investment,  plus
the mandatory dividends,  by July 15, 2003. In addition,  the Company has agreed
that  if it  does  not  meet  any of  certain  financial  targets  in any of six
performance  periods  that the Series A  Preferred  stockholders  will be issued
additional  Series  A  Preferred  Stock  equal  to  25%  of  the  fully  diluted
as-if-converted  shares of the  Company  at the end of each  such  determination
period  beginning with the quarter ending September 30, 2001. If the slowdown in
the worldwide  semiconductor  industry continues for an extended period of time,
the Company may not meet one or more of the specified  financial  targets,  thus
triggering the issuance of additional shares of Series A Preferred Stock.

     The Series A Preferred  shares will vote together with the Company's common
stock on an  as-if-converted  basis and not as a separate  class.  Each share of
Series A  Preferred  will have a number of votes  equal to the  number of common
stock  shares  then  issuable  upon  conversion  of such  shares of the Series A
Preferred Stock.

     The Company  has agreed to call a special  meeting of its  shareholders  to
vote on a proposal  to  authorize  additional  common  stock so as to permit the
conversion  of the  Series  A  Preferred  Stock.  The  holders  of the  Series A
Preferred Stock will be entitled to vote with the holders of the common stock at
the special meeting,  and will control sufficient votes to approve the proposal.
Immediately  after the special  meeting,  the shares of Series A Preferred Stock
initially  issued  would  be  convertible  into  approximately  78% of the  then
outstanding  common stock.  If Tanisys is required to issue all of the shares of
Series A  Preferred  Stock that it could  potentially  be  required  to issue in
connection with the Series A financing,  those shares would be convertible  into
approximately 97% of the then outstanding as-if-converted common stock.

     In connection with the financing  transaction  described above, two members
of the Board of Directors of the Company resigned, and New Century appointed two
directors to the Board. Subject to certain  requirements,  New Century will have
the  right to  appoint a third  member to the  Company's  five  member  Board of
Directors.

     Also in connection  with the financing  transaction  described  above,  the
Company's Board of Directors approved,  subject to shareholder  approval,  a new
stock option plan,  pursuant to which the Board may grant stock options covering
up to 15% of the fully diluted  common  stock,  including the Series A Preferred
Stock as-if-converted into common stock.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

     The Company does not believe that there is any material  risk exposure with
respect  to  derivative  or other  financial  instruments  which  would  require
disclosure under this item.


                           PART II. OTHER INFORMATION

Item 1. Legal Proceedings

     Information  on the Company's  legal  proceedings is contained in this Form
10-Q  for  the  quarterly  period  ended  June  30,  2001 in  "Part 1  Financial
Information"  under the caption  "Notes to  Consolidated  Financial  Statements"
under "Note 12: Contingencies," and is incorporated herein by reference.


                                       15
<PAGE>

Item 2. Changes in Securities and Use of Proceeds

     (a)  Not applicable.

     (b)  Not applicable.

     (c)  On August 13, 2001, the Company issued  2,575,000 shares of its Series
          A  Preferred  Stock  in  a  private  financing  for  consideration  of
          $2,575,000.  The  shares of  Series A  Preferred  Stock  issued in the
          private  financing are  restricted  securities.  The  transaction  was
          exempt  from  the  registration  requirements  of  Section  5  of  the
          Securities  Act of  1933,  as  amended.  Information  on the  Series A
          Preferred  Stock  transaction  is  contained in this Form 10-Q for the
          quarterly period ended June 30, 2001 in "Part 1 Financial Information"
          under the caption " Notes to Consolidated  Financial Statements" under
          "Note 11: Subsequent Events," and is incorporated herein by reference.

     (d)  Not applicable.


Item 6.  Exhibits and Reports on Form 8-K.

     (a)  Exhibits

          The exhibits listed below are filed as part of this report.

          Exhibit
          Number                Description
          ------                -----------

          10.40     Silicon Valley Bank Accounts Receivable  Financing Agreement
                    dated May 30, 2001 (filed herewith)

          10.41     Loan Modification and Forbearance  Agreement dated August 3,
                    2001 (filed herewith)

          10.42     Promissory  Note to Charles T.  Comiso  dated July 27,  2001
                    (filed herewith)


     (b)  Current Reports on Form 8-K:

          Form 8-K dated and filed July 31, 2001 reporting the Company's results
          of operations for the quarter ended June 30, 2001.

          Form 8-K dated August 13, 2001 and filed August 14, 2001 reporting the
          Company's  issuance of Series A Preferred Stock in a private financing
          transaction.


                                       16
<PAGE>

SIGNATURES

     Pursuant to the  requirements  of the  Securities  Exchange Act of 1934, as
amended,  the  Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.

                                   TANISYS TECHNOLOGY, INC.


Date: August 14, 2001              By: /s/ CHARLES T. COMISO
                                      --------------------------------
                                      Charles T. Comiso
                                      Chief Executive Officer,
                                      President and Director


Date: August 14, 2001              By: /s/ TERRY W. REYNOLDS
                                      --------------------------------
                                      Terry W. Reynolds
                                      Vice President and Chief Financial Officer
                                      (Duly authorized and Principal Accounting
                                      Officer)


                                       17