<PAGE>


                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549



                          FORM 10-QSB (AMENDMENT NO. 1)

(X)      QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
         ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED: MARCH 31, 2001

( )      TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
         ACT OF 1934 FOR THE TRANSITION PERIOD FROM _____________ TO __________

                           Commission File No. 0-31805

                          POWER EFFICIENCY CORPORATION
        ----------------------------------------------------------------
             (Exact name of Registrant as specified in its charter)

<TABLE>
<CAPTION>

<S>                                                <C>
                    Delaware                                          22-3337365
------------------------------------------------   --------------------------------------------
(State or other jurisdiction of incorporation or        (I.R.S. Employer Identification NO.)
              organization)

</TABLE>

                           4220 Varsity Drive Suite E
                               Ann Arbor, MI 48108
                                 (734-975-9111)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirement for the past 90 days.
Yes  X  No__

The number of shares outstanding of the Issuer's Common Stock, $.001 Par Value,
as of March 31, 2001 was 6,393,370.
Transitional Small Business Disclosure Format (check one): Yes ___ No X


<PAGE>


Table of Contents

                             POWER EFFICIENCY CORP.
                                FORM 10-QSB INDEX

<TABLE>
<CAPTION>

<S>            <C>                                                                                             <C>
               Index                                                                                            2
Part I.                                        FINANCIAL INFORMATION                                          Page
Item 1.        Financial Statements (Unaudited)
               Condensed Balance Sheets as of March 31, 2001 and December 31, 2000                              3
               Condensed Statements of Operations for the three months ended March 31, 2001 and 2000            4
               Condensed Statements of Cash Flows for the three months ended March 31, 2001 and 2000            5
               Notes to Consolidated Financial Statements                                                      6/7
Item 2.        Management's Discussion and Analysis or Plan of Operation                                       8/9

Part II.                                          OTHER INFORMATION                                            Page
Item 1.        Legal Proceedings                                                                                9
Item 2.        Changes in Securities                                                                            9
Item 3.        Defaults Upon Senior Securities                                                                  9
Item 4.        Submission of Matters to a Vote of Security Holders                                              9
Item 5.        Other Information                                                                                9
Item 6.        Exhibits and Reports on Form 8-K                                                                 9
               Signatures                                                                                       10

</TABLE>



                                       2
<PAGE>


                          Power Efficiency Corporation
                            Condensed Balance Sheets
                      March 31, 2001 and December 31, 2000

<TABLE>
<CAPTION>

                                                                                            (Unaudited)
                                                                                          March 31, 2001      December 31, 2000
                                                                                          --------------      -----------------
                                                                                            (Restated)            (Restated)
<S>                                                                                       <C>                 <C>
                                   Assets

Current Assets
   Cash and Equivalents                                                                     $     2,294          $     8,492
   Accounts Receivable - Trade, Net of reserve of $5,000                                        104,625              114,166
   Inventory                                                                                    562,434              526,454
   Prepaid Expenses                                                                                 443                  443
                                                                                            -----------          -----------
          Total Current Assets                                                                  669,796              649,555
                                                                                            -----------          -----------

Property and Equipment, Net                                                                     142,543              132,315
                                                                                            -----------          -----------
Other Assets
   Deposits                                                                                       6,000                6,000
   Patent Application Costs (Net)                                                                14,980               17,089
   Deferred Financing Costs                                                                      47,746               51,936

Goodwill                                                                                      2,036,522            2,072,043
   Customer Contacts, Manuals and Sales Literature                                              186,657              197,426
   Website and Customer List                                                                    107,719              119,260
                                                                                            -----------          -----------
          Total Other Assets                                                                  2,399,624            2,463,754
                                                                                            -----------          -----------
                                                                                            $ 3,211,963          $ 3,245,624
                                                                                            ===========          ===========
Liabilities and Stockholders' (Deficit) Equity

Current Liabilities
   Line of Credit Agreement                                                                 $   372,887          $   277,887
   Accrued Salaries and Payroll Taxes                                                            49,922               51,611
   Accounts Payable and Accrued Expenses                                                        413,723              485,695
   Stockholder Loan Payable                                                                           -              100,000
                                                                                            -----------          -----------
          Total Current Liabilities                                                             836,532              915,193
                                                                                            -----------          -----------

Stockholders' Equity
   Preferred Stock, $.001 par value 1,000,000 shares authorized,
   none outstanding                                                                                   -                    -
   Common Stock, $.001 par value, 9,000,000 shares
   authorized, 6,393,370 and 6,043,370 shares issued and outstanding
   in 2001 and 2000, respectively                                                                 6,368                6,043
   Additional Paid-in Capital                                                                 8,379,769            7,950,094
   Accumulated Deficit                                                                       (6,010,706)          (5,625,706)
                                                                                            -----------          -----------
          Total Stockholders' Equity                                                          2,375,431            2,330,431
                                                                                            -----------          -----------

Total Liabilities and Stockholders' Equity                                                  $ 3,211,963          $ 3,245,624
                                                                                            ===========          ===========

</TABLE>


See notes to condensed Financial Statements.


                                       3
<PAGE>

                          Power Efficiency Corporation
                 Condensed Statements of Operations - Unaudited

<TABLE>
<CAPTION>

                                                                             Three Months
                                                                             Ended March 31,
                                                                   --------------------------------
                                                                      2001
                                                                    (Restated)             2000
                                                                   ------------         -----------
<S>                                                                <C>                  <C>
REVENUES                                                           $   155,050          $       782
                                                                   -----------          -----------

COSTS AND EXPENSES:                                                                               -
   Cost of Sales                                                        79,307
   Research and Development                                             67,174                  500
   Manufacturing                                                        35,205                6,630
   Selling, general and administrative                                 285,969               19,236
   Depreciation and Amortization                                        72,195                6,584
                                                                   -----------          -----------
          Total Costs and Expenses                                     539,850               32,950
                                                                   -----------          -----------

LOSS BEFORE PROVISION FOR INCOME TAXES                                (384,800)             (32,168)

PROVISION FOR INCOME TAXES                                                 200                    -
                                                                   -----------          -----------

NET LOSS                                                           $  (385,000)         $   (32,168)
                                                                   ===========          ===========


BASIC LOSS PER COMMON SHARE                                        $      (.06)         $      (.07)
                                                                   ===========          ===========

WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING                                                   6,149,500            4,384,000
                                                                   ===========          ===========

</TABLE>

See notes to condensed Financial Statements



                                       4
<PAGE>

                          Power Efficiency Corporation
                  Condensed Statements of Cash Flow - Unaudited
                      Quarter Ended March 31, 2001 and 2000

<TABLE>
<CAPTION>

                                                                 March 31, 2001         March 31, 2000
                                                                 --------------         --------------
                                                                   (Restated)
<S>                                                              <C>                    <C>
Cash Flow From Operating Activities
   Net Loss                                                        $(385,000)             $ (32,168)
   Adjustments to reconcile net loss to net cash:
      Used for operating activities:

    Depreciation and Amortization                                     72,195                  6,384
     Debt restructuring                                              130,000                     -

 Accounts Receivable - Trade                                           9,541                 19,012
     Inventory - Raw Materials/Finished Goods                        (35,980)                    -
     Accounts Payable and Accrued Expenses                           (73,661)                 7,213
                                                                   ---------              ---------
   Total Adjustments                                                (102,095)                32,609
                                                                   ---------              ---------
   Net Cash (Used For) Provided By                                 $(282,905)             $     441
   Operating Activities

Investing Activities
    Equipment Purchases                                              (18,293)                    -


Financing Activities
   Proceeds from issuance of equity securities                       200,000                     -
   Notes Payable - Bank                                               95,000                     -

   Net Cash Provided By Financing Activities                         295,000                     -
                                                                   ---------              ---------

   Net (Decrease) Increase in Cash                                 $  (6,198)             $     441
                                                                   =========              =========

Summary:
   Cash Balance At End Of Period                                   $   2,294              $      91
   Cash Balance At Beginning Of Period                                 8,492                   (350)
                                                                   ---------              ---------
   Net (Decrease) Increase in Cash                                 $  (6,198)             $     441
                                                                   =========              =========
Non-cash Investing and Financing Activities

    Common Stock issued in connection with
     extinguishment of stockholder note payable                    $ 230,000
                                                                   =========

</TABLE>

     See notes to condensed Financial Statements



                                       5
<PAGE>

                       POWER EFFICIENCY CORPORATION NOTES
                        TO CONDENSED FINANCIAL STATEMENTS

                                   (UNAUDITED)

NOTE 1, BASIS OF PRESENTATION

         The accompanying unaudited financial statements, which are for interim
         periods, do not include all disclosures required to be presented in the
         annual financial statements. These unaudited financial statements
         should be read in conjunction with the financial statements and the
         footnotes thereto for the year ended December 31, 2000 contained in
         Power Efficiency Corporation's (the "Company") Form 10-KSB Annual
         Report and Form 10-SB Registration Statement, as amended from time to
         time, as filed with the Securities and Exchange Commission. The March
         31, 2001 balance sheet was derived from unaudited financial statements,
         and does not include all disclosures required by generally accepted
         accounting principles.

NOTE 2, INTERIM PERIODS

         In the opinion of the Company, the accompanying unaudited financial
         statements contain all adjustments (which are of a normal recurring
         nature) necessary for a fair presentation of the financial statements.
         The results of operations for the three months ended March 31, 2001 are
         not necessarily indicative of the results to be expected for the full
         year.

NOTE 3, GOING CONCERN

         The accompanying condensed interim financial statements have been
         prepared assuming the Company is a going concern which assumption
         contemplates the realization of assets and satisfaction of liabilities
         in the normal course of business. The financial statements do not
         include any adjustments relating to the recoverability and
         classification of recorded asset amounts or the amount of liabilities
         that might be necessary should the Company be unable to continue in
         existence. Continuation of the Company as a going concern is dependent
         on achieving profitable operations. Management's plans to achieve
         profitability include developing new products, obtaining new customers
         and increasing sales to existing customers. Management also plans to
         raise additional capital through equity issuance or other types of
         financing.

NOTE 4, PER SHARE DATA

         Per share data was computed by dividing net loss by the weighted
         average number of shares outstanding during the period.

NOTE 5, REVENUE

         For financial reporting purposes, the Company reports revenues from
         sales as product is shipped and invoiced.

NOTE 6, LINE OF CREDIT AGREEMENT

         On May 1, 2001 the company renegotiated its line of credit agreement
         with the bank to extend the expiration date of its line of up to
         $750,000 to October 31, 2001. The line of credit agreement is
         collateralized by all inventory, accounts receivable, equipment and
         instruments. The bank has a general lien on all corporate assets.


                                       6
<PAGE>

NOTE 7, ISSUANCE OF STOCK OPTIONS

         On March 23, 2001, the Company granted 180,000 stock options at an
         exercise price of $2.00. Since the weighted average price per share was
         $1.83, the Company is not required to recognize compensation expense.

NOTE 8, DEBT RESTRUCTURING

         On March 15, 2001, the Company settled a loan payable to a Stockholder
         in the amount of $100,000, plus interest thereon, and the option to
         purchase 75,000 shares of common stock for 125,000 shares of common
         stock. The Company accounted for this transaction as a capital
         transaction between related parties during the first quarter of 2001.
         The difference of $130,000 between the fair value of the equity
         interest and the carrying amount of the payable was recognized as a
         loss by the Company and is included in selling, general and
         administrative expenses.

NOTE 9, FILING OF FORM 10-KSB FOR FISCAL YEAR 2001-APRIL 2002

         In conjunction with the Company's filing of its Form 10-KSB for the
         year ended December 31, 2001 with the United States Securities and
         Exchange Commission (the "SEC") on or about April 1, 2002, certain
         modifications were made to previously filed financial statements for
         2000 and the first, second and third quarters of 2001. Such
         modifications related primarily to the valuation of the Performance
         Control acquisition, the valuation of the repriced options, the value
         of options issued during the periods and settlement of a loan payable
         for common stock.


                                       7
<PAGE>

Item 2. Management's Discussion and Analysis or Plan of Operation

The following discussion is designed to provide a review of the financial
condition and results of operations of Power Efficiency Corporation (the
"Company"). This discussion should be read in conjunction with the financial
statements related notes.

Forward-Looking Statements

This discussion and analysis of financial condition and results of operations,
and other sections of this report, contain forward-looking statements that are
based on management's beliefs, assumptions, current expectations, estimates and
projections about the industrial and commercial motor industry, the economy, and
about the Company itself. Words such as "anticipates," "believes," "estimates,"
"judgment," "expects," "forecasts," "intends," "is likely," "plans," "predicts,"
"projects," variations of such words and similar expressions are intended to
identify such forward-looking statements. These statements are not guarantees of
future performance and involve certain risks, uncertainties and assumptions
("Risk Factors") that are difficult to predict with regard to timing, extent,
likelihood and degree of occurrence. Therefore, actual results and outcomes may
materially differ from what may be expressed, implied or forecasted in such
forward-looking statements.

Risk Factors include, but are not limited to, demand for products and services;
the degree of competition by competitors; changes in tax laws; changes in
prices, levies and assessments; the impact of technological advances and issues;
governmental and regulatory policy changes; the outcomes of pending and future
litigation and contingencies; trends in customer behavior; the ability to raise
capital and maintain financing sources; development of the Company's products;
and changes in the national economy. In addition, recent events relating to the
terrorist attacks on September 11, 2001 and other terrorist activities have
created significant global economic and political uncertainties that may have
material and adverse effects on financial markets, the economy, and demand for
the Company's service and products. These are representative of the Risk Factors
that could cause a difference between an ultimate actual outcome and a preceding
forward-looking statement. The Company undertakes no obligation to update, amend
or clarify forward-looking statements, whether as a result of new information,
further events or otherwise.

The Registrant generates revenues from a single business segment, the design,
development, marketing and sale of proprietary solid state electrical components
designed to effectively reduce energy consumption in alternating current
induction motors.

The Registrant began generating revenues from sale of its patented Power
Commander line of motor controllers in 1995. As of December 31, 2000, the
Registrant had total stockholders equity of $2,330,431, primarily as a result of
the Registrant's August 7, 2000, purchase of the assets of Performance Control,
LLC ("PerCon"), the largest distributor of the Registrant's products. The
transaction was accounted for as a purchase and PerCon's Statement of Operations
is not included in the first quarter results comparison. The Registrant
relocated its principal offices and facilities to PerCon's facilities in Ann
Arbor, Michigan.

The consolidation of both entities allowed the Registrant to incorporate the
administrative, sales, marketing and manufacturing operations by PerCon. PerCon
had developed sales contacts with major OEM's in the elevator/escalator industry
and transferred those agreements. The fully integrated organization allowed the
Registrant to obtain a bank line of credit up to $750,000 for the build up in
inventory collateralized by the current inventory and account receivables. Also,
the recent Private Placement 506 offering had additional subscribers that
enabled the Registrant to address the consolidated Accounts Payable.

The first quarter of 2001 reflects the combined entities with respect to
operating expenses, research and development etc. The expected savings in
operating expenses, cost of goods will be reflected in year 2001.


                                       8
<PAGE>

Results of Operation

Three Months Ended March 31,2001 Compared to Three Months Ended March 31, 2000

Revenues. Revenues for the three months ended March 31, 2001 was $155,050
compared to $782 of miscellaneous income for the prior comparable quarter, an
increase of $154,268. The increase in revenue was principally attributable to
the completion of performance testing by our clients and the conversion of the
test units into purchases.

Cost of revenues. Cost of revenues for the three months ended March 31, 2001 was
$79,307, or 51% of revenues. The increase in Cost of Revenues was due to the
increased volume in sales.

Research and development. Research and development expenses were $67,174, or 43%
of revenues, for the three months ended March 31, 2001 as compared to $500, or
64% of revenues, for the three months ended March 31, 2000 due to increased
research and development activity after the acquisition of PerCon.

Selling, general, manufacturing and administrative. Selling, general,
manufacturing and administrative expenses increased to $321,174, or 207% of
revenues, for the three months ended March 31, 2001 from $25,866, or 3,307% of
revenues, for the three months ended March 31, 2000. The increase in expenses
was primarily due to a loss of $130,000 recognized on a loan settlement with a
Stockholder, and increases in sales, marketing and administrative personnel from
two to eight. There was additional travel due to new customers in the
Asia-Pacific region and substantial administrative fees for professional
services due to the filing of the Form 10-SB.

As a result, the Company incurred a net loss of $385,000 during the three months
ended March 31, 2001, compared to a net loss of $32,168 during the three months
ended March 31, 2000.

Liquidity and Capital Resources

Since inception, the Registrant has financed its operations primarily through
the sale of equity securities and using bank borrowings. As of March 31, 2001,
the Registrant has received a total of approximately $1,829,261 from public and
private offerings of its equity securities and received approximately $372,887
under a bank line of credit. As of March 31, 2001, the Registrant had cash and
cash equivalents of $2,294.

Cash used in operating activities was for the three months ended March 31, 2001,
was $282,905 in 2001, and ($441) in 2000. Cash used in operating activities in
the three months ended March 31, 2001 reflected a net loss of $385,000. In 2000,
cash used in operating activities reflected a net loss of $32,168.

The Registrant expects to experience growth in its operating expenses,
particularly in research and development and selling, general and administrative
expenses, for the foreseeable future in order to execute its business strategy.
As a result, the Registrant anticipates that operating expenses, as well as
planned increases in inventory expenditures, will constitute a material use of
any cash resources.

Management believes that its existing cash and cash equivalents are insufficient
to meet the Registrant's anticipated cash needs for the next 6 months. Since
capital resources are insufficient to satisfy the Registrant's liquidity
requirements, Management intends to seek to sell additional equity securities or
debt securities or obtain debt financing. The Registrant has not made
arrangements to obtain additional financing and there is no assurance that
financing, if required, will be available in amounts or on terms acceptable to
Management, if at all.

The Company was not required to and did not engage an independent accountant to
review the quarterly financial statements for the year ended December 31, 2000.
As such, the financial information for the quarter ended March 31, 2000, which
is included with this filing, were not reviewed by an independent accountant.


                                       9
<PAGE>

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

         The Company is involved with certain claims and counterclaims related
to litigation for breach of contract arising out of the manufacture and assembly
of certain electronic component parts. The Company has accrued approximately
$21,300 at March 31, 2001 related to these claims. In the opinion of management,
after consultation with legal counsel, the outcome of such matter is not
expected to have a material adverse effect on the Company's financial position
or results of operations.

ITEM 2. CHANGES IN SECURITIES

In connection with a private placement memorandum dated May 16, 2000 the company
sold 225,000 shares of its common stock in 1st quarter 2001. The company also
issued 125,000 shares of common stock to cancel a note payable to a shareholder
in the amount of $100,000. The Company accounted for this transaction as a
capital transaction between related parties during the first quarter of 2001.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

         Not applicable

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         Not applicable

ITEM 5. OTHER INFORMATION

         ADDITION TO MANAGEMENT. On March 12, 2001 Douglas C. Finch was hired as
Vice-President of Operations. Mr. Finch was President of Plastigage Corporation,
a family-owned manufacturer of extruded and injection molded plastic automotive
components from 1999 to 2000. He spent five years with Enprotech a subsidiary of
Itochu Corporation involved in merger and acquisitions. He also spent two years
managing a subsidiary of high-speed electric motors and power electronics. Mr.
Finch received a BSc and Masters in Aeronautical Engineering from Massachusetts
Institute of Technology and an MBA in 1991 from Harvard Graduate School of
Business Administration. Mr. Finch has no beneficial ownership of common stock.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K NONE



SIGNATURES


         In accordance with the requirements of the Securities Exchange Act of
1934, the registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

             ------------------------------------------------------
                          POWER EFFICIENCY CORPORATION
             ------------------------------------------------------



             Date: September 6, 2002    /s/  Raymond J. Skiptunis
                                        --------------------------------------
                                             Raymond J. Skiptunis
                                        President, Chief Executive Officer
                                        And Chief Financial Officer



                                       10