SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB


         [X]  QUARTERLY REPORT PURSUANT TO SECTON 13 OR 15(d) OF THE SECURITIES
              EXCHANGE ACT OF 1934

         For the quarterly period ended September 30, 2001

         [ ]  TRANSITIONAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
              EXCHANGE ACT OF 1934 (No Fee Required)

                           Commission File No. 0-27210


                          Tech Electro Industries, Inc.
              ----------------------------------------------------
                 (Name of Small Business Issuer in its Charter)


              Texas                                            75-2408297
    -------------------------------                  --------------------------
    (State or other jurisdiction of                         (I.R.S. Employer
     incorporation of organization)                       Identification No.)

        275 North Franklin Turnpike, Suite 230, Ramsey, New Jersey 07446
        ----------------------------------------------------------------
                     (Address of principal executive office


                                 (201) 760-9900
                          ----------------------------
                           (Issuer's telephone number)

     Check  whether the issuer has (1) filed all reports  required by Section 12
or 15(d) of the Exchange  Act during the past 12 months,  and 2) been subject to
such filing requirements for the past ninety (90) days. Yes [ X ] No [ ]

     As  of  September  30,  2001,  8,327,653,   shares  of  Common  Stock  were
outstanding.










                                        1




<PAGE>



                                      INDEX


                                                                      Page

PART I - Financial Information

Item 1.  Financial Statements

   Consolidated Balance Sheets at September 30, 2001 (unaudited)
   and December 31, 2000................................................3

   Consolidated Statements of Operations for the periods
   ended September 30, 2001 and 2000 (unaudited)........................5

   Consolidated Statements of Cash Flows for the periods ended
   September 30, 2001 and 2000 (unaudited)..............................7

   Notes to Consolidated Financial Statements...........................9

Item 2.  Management's Discussion and Analysis or Plan of Operation.....10

PART II - Other Information............................................16

   Item 1.  Legal Proceedings..........................................16

   Item 2.  Changes in Securities......................................16

   Item 3.  Defaults Upon Senior Securities............................16

   Item 4.  Submission of Matters to a Vote of Securities Holders......16

   Item 5.  Other Information..........................................16

   Item 6.  Exhibits and Reports on Form 8-K...........................16

Signature..............................................................17












                                        2




<PAGE>
PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

                 TECH ELECTRO INDUSTRIES, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

                                     ASSETS
                                                   (Unaudited)
                                                  September 30,    December 31,
                                                      2001             2000
                                                  -------------   -------------
CURRENT ASSETS
     Cash and cash equivalents....................$    739,022    $    839,060
     Certificate of deposit.......................     159,490         153,519
     Accounts receivable trade, net of allowance
        for doubtful accounts of $130,218
        (unaudited) and $218,763..................   4,452,373       4,390,700
        Other.....................................      33,823          40,280
     Inventories, net of allowance for
        obsolescence of $344,274(unaudited) and
        $335,274..................................   3,240,000       3,303,541
     Prepaid expenses and other current assets....     949,295         814,864
                                                   -----------     -----------

           Total current assets...................   9,574,003       9,541,964
                                                   -----------     -----------
PROPERTY AND EQUIPMENT
     Facsimile and business center equipment......   3,771,267       4,252,306
     Machinery and equipment .....................     559,631         526,628
     Furniture and fixtures.......................     246,733         241,388
     Computer equipment ..........................     215,396         210,706
     Vehicles.....................................      46,262          46,262
     Leasehold improvements.......................     181,276         181,276
                                                   -----------     -----------
                                                     5,020,565       5,458,566
     Less accumulated depreciation and
        amortization..............................  (1,987,030)     (1,866,068)
                                                   -----------     -----------
           Net property and equipment.............   3,033,535       3,592,498
                                                   -----------     -----------

OTHER ASSETS
     Deferred financing costs, net................      52,962         274,231
     Other........................................       4,951          18,436
                                                   -----------     -----------
           Total other assets.....................      57,913         292,667
                                                   -----------     -----------
TOTAL ASSETS......................................$ 12,665,451    $ 13,427,129
                                                   ===========     ===========

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

                                  - Continued -

                                        3

<PAGE>
                 TECH ELECTRO INDUSTRIES, INC. AND SUBSIDIARIES
                     CONSOLIDATED BALANCE SHEETS - Continued


                      LIABILITIES AND STOCKHOLDERS' EQUITY

                                                   (Unaudited)
                                                  September 30,    December 31,
                                                      2001             2000
                                                  -------------    ------------
CURRENT LIABILITIES
     Line of credit...............................$  1,740,511     $ 2,617,720
     Current portion of long-term debt............   2,871,201       2,894,990
     Accounts payable.............................   2,460,448       2,426,417
     Accrued liabilities..........................     957,818         629,276
     Other current liabilities....................       9,200           9,200
                                                    ----------      ----------
            Total current liabilities.............   8,039,178       8,577,603
                                                    ----------      ----------

LONG-TERM DEBT, less current portion..............      13,608          89,666
                                                     ---------      ----------
            Total liabilities.....................   8,052,786       8,667,269

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY
     Preferred stock - $1.00 par value;  1,000,000
     shares  authorized; 120,588 Class A issued and
     outstanding; liquidation preference
     of $633,087..................................     120,588         120,588
     Common stock - $0.01 par value; 50,000,000
        shares authorized; 8,327,653(unaudited)and
        8,198,197 shares issued and outstanding at
        September 30, 2001 and December 31, 2000,
        respectively..............................      83,277          81,982
     Additional paid-in capital...................  14,481,335      14,457,207
     Accumulated deficit.......................... (10,072,535)     (9,899,917)
                                                    ----------      ----------
            Total stockholders' equity............   4,612,665       4,759,860
                                                    ----------      ----------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY........$ 12,665,451     $13,427,129
                                                    ==========      ==========










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

                                        4
<PAGE>
                 TECH ELECTRO INDUSTRIES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                For the Periods Ended September 30, 2001 and 2000
                                   (Unaudited)

<TABLE>
<CAPTION>
                                               Three Months Ended             Nine Months Ended
                                                 September 30,                   September 30,
                                            ------------------------       ------------------------
                                               2001           2000            2001          2000
<S>                                        <C>            <C>             <C>           <C>
REVENUES                                    ---------      ---------       ----------    ----------
     Sales.................................$8,572,789     $5,400,148      $18,590,111   $12,796,916
     Service revenue.......................   973,453      1,593,432        3,630,962     5,571,624
                                            ---------      ---------       ----------    ----------
                                            9,546,242      6,993,580       22,221,073    18,368,540

COST OF REVENUES
     Cost of goods sold.................... 7,052,155      4,327,867       15,175,235    10,012,853
     Direct servicing costs................   181,412        332,885          781,790     1,440,650
                                            ---------      ---------       ----------    ----------
                                            7,233,567      4,660,752       15,957,025    11,453,503
                                            ---------      ---------       ----------    ----------
GROSS PROFIT............................... 2,312,675      2,332,828        6,264,048     6,915,037

OPERATING EXPENSES
     Selling, general and administrative... 1,626,551      1,625,196        4,840,834     5,408,701
     Depreciation and amortization of
         property and equipment............   206,037        215,145          628,587       630,050
                                            ---------      ---------        ---------    ----------
                                            1,832,588      1,840,341        5,469,421     6,038,751
                                            ---------      ---------        ---------    ----------
INCOME FROM OPERATIONS                        480,087        492,487          794,627       876,286

OTHER INCOME (EXPENSES)
     Interest income.......................     1,964          4,456            7,592        16,177
     Interest expense......................  (222,543)      (246,768)        (704,524)     (648,831)
     Amortization of deferred financing
        costs..............................   (73,756)      (102,649)        (221,269)     (445,366)
     Lawsuit settlement....................         -       (199,000)               -      (549,086)
     Other.................................    (4,627)        29,902          (13,621)       76,109
                                            ---------      ---------        ----------    ---------
                                             (298,962)      (514,059)        (931,822)   (1,550,997)
                                            ---------      ---------        ----------    ---------
INCOME (LOSS) BEFORE PROVISION FOR INCOME
    TAXES AND EXTRAORDINARY GAIN...........   181,125        (21,572)        (137,195)     (674,711)

PROVISION FOR INCOME TAXES.................         -             -                -              -
                                            ---------      ---------        ---------     ---------
INCOME (LOSS) BEFORE EXTRAORDINARY GAIN....   181,125        (21,572)        (137,195)     (674,711)
</TABLE>

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

                                   -Continued-

                                        5
<PAGE>
                 TECH ELECTRO INDUSTRIES, INC. AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF OPERATIONS - Continued
                For the Periods Ended September 30, 2001 and 2000
                                   (Unaudited)

<TABLE>
<CAPTION>
                                              Three Months Ended             Nine Months Ended
                                                 September 30,                   September 30,
                                            ------------------------       ------------------------
                                               2001           2000            2001          2000
<S>                                         <C>            <C>             <C>           <C>
                                            ---------      ---------       ----------    ----------
EXTRAORDINARY GAIN.........................         -              -                -       568,750
                                            ---------      ---------       ----------    ----------
NET INCOME (LOSS).......................... $ 181,125    $   (21,572)     $  (137,195)  $  (105,961)
                                            =========      =========       ==========    ==========
Net income (loss) attributable to common
     shareholders...........................$ 168,011    $   (32,859)     $  (172,618)  $  (140,952)
                                            =========      =========       ==========    ==========
Basic and diluted net income (loss)
     before extraordinary gain per share
     attributable to common shareholders....$    0.02    $      0.00      $     (0.02)  $     (0.09)

Basic and diluted extraordinary gain per
     share attributable to common
     shareholders..........................         -              -                -          0.07
                                            ---------      ---------       ----------    ----------
Basic and diluted net income (loss)
     per share attributable to common
     shareholders.......................... $    0.02    $      0.00      $     (0.02)  $     (0.02)
                                            =========      =========       ==========    ==========
Number of weighted-average shares of
     common stock outstanding (basic
     and diluted).......................... 8,297,506      8,128,730        8,250,238     7,979,526
                                            =========      =========       ==========    ==========
</TABLE>














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


                                        6


<PAGE>
                 TECH ELECTRO INDUSTRIES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                               For The Nine Month
                    Periods Ended September 30, 2001 and 2000
                                   (Unaudited)

                                                             2001        2000
CASH FLOWS FROM OPERATING ACTIVITIES                     ----------- -----------
Net loss                                                 $ (137,195) $ (105,961)
Adjustments to reconcile net loss to net
   cash provided by (used by) operating activities:
     Common stock issued for compensation...............          -     (45,000)
     Common stock returned recorded as other income.....    (10,000)          -
     Depreciation and amortization of property
        and equipment...................................    628,587     630,050
     Provision for bad debts............................    253,616     353,976
     Provision for obsolete inventory...................      9,000    (194,549)
     Extraordinary gain on note retirement..............          -    (568,750)
     Amortization of debt discount......................     48,933      48,933
     Amortization of deferred financing costs...........    221,269     445,366
     Change in operating assets and liabilities
           Accounts receivable - trade..................   (315,289) (1,801,922)
           Accounts receivable - other..................      6,457       5,475
           Inventories..................................     54,541    (166,318)
           Prepaid expenses and other current assets....   (134,431)   (105,390)
           Other assets.................................     13,485       9,944
           Trade accounts payable.......................     34,031     509,422
           Accrued liabilities..........................    328,542    (362,253)
                                                         -----------  ----------
Net cash provided by (used by) operating activities.....  1,001,546  (1,346,977)
                                                         -----------  ----------
CASH FLOWS FROM INVESTING ACTIVITIES
   Purchases of property and equipment..................    (69,624)   (367,285)
   Proceeds on sale of property and equipment...........          -      76,031
   Payments received on notes receivable................          -     102,762
   Write-off of notes receivable........................          -      80,146
   Increase (decrease)in certificate of deposit.........     (5,971)    108,980
                                                         -----------  ----------
Net cash provided by (used by) investing activities.....    (75,595)        634
                                                         -----------  ----------
CASH FLOWS FROM FINANCING ACTIVITIES
   Net activity on line of credit.......................   (877,209)  1,328,222
   Repayment of long-term debt..........................   (148,780)   (742,631)
   Proceeds from long-term debt.........................          -     500,000
                                                         -----------  ----------
Net cash provided by (used by) financing activities....  (1,025,989)  1,085,591
                                                         -----------  ----------




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

                                   -Continued-

                                        7

<PAGE>
                 TECH ELECTRO INDUSTRIES, INC. AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF CASH FLOWS - Continued
                               For The Nine Month
                    Periods Ended September 30, 2001 and 2000
                                   (Unaudited)

                                                             2001        2000
                                                         ----------- -----------
NET DECREASE IN CASH AND CASH EQUIVALENTS............... $ (100,038) $ (260,752)

Cash and cash equivalents at beginning
     of period..........................................    839,060     894,261
                                                         -----------  ----------
Cash and cash equivalents at end of period.............. $  739,022  $  633,509
                                                          ==========  ==========



SUPPLEMENTAL SCHEDULE OF NONCASH
     INVESTING AND FINANCING ACTIVITIES

     Issuance of common stock for
        settlement of note payable........................ $      -  $1,031,250
                                                          ==========  ==========
     Dividends paid through issuance
        of common stock................................... $ 35,423  $   34,991
                                                          ==========  ==========
     Issuance of warrants recorded as
        deferred financing costs.......................... $      -  $  163,553
                                                          ==========  ==========
     Acquisition of property and equipment
        through capital lease............................. $      -  $   17,288
                                                          ==========  ==========





















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

                                        8
<PAGE>
                 TECH ELECTRO INDUSTRIES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE A - BASIS OF PRESENTATION

The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting  principles for interim financial information
and in  accordance  with the  instructions  per Item  310(b) of  Regulation  SB.
Accordingly,  they do not include all of the information and footnotes  required
by generally accepted accounting principles for complete financial statements.

In the opinion of management,  all adjustments  (consisting of normal  recurring
adjustments) considered necessary for a fair presentation have been included for
the nine month period ended  September 30, 2001.  The results for the nine month
period ended  September 30, 2001 are not  necessarily  indicative of the results
that may be expected for the year ended December 31, 2001.

NOTE B - ORGANIZATION

Tech Electro Industries,  Inc. ("TEI") was formed on January 10, 1992 as a Texas
corporation.  TEI's subsidiary,  Computer Components  Corporation ("CCC"), doing
business as Universal  Battery ("UBC"),  stocks and sells electronic  components
and batteries.  Within the battery sales  activity,  there is significant  value
added to the batteries in the assembly of batteries into "packs".  UBC's battery
and electronic  components sales are generated by in-house sales staff and sales
representatives  to customers  throughout the United States.  TEI's  subsidiary,
AlphaNet  Hospitality  Systems,  Inc.  ("AHS"),  provides in-room  facsimile and
business center services to the hotel industry through licensing agreements. AHS
generates  revenues from its product line which includes  InnFax(R),  The Office
(TM)and InnPhone. InnFax(R) is a patented in-room facsimile service which offers
guests a  personal  facsimile  number and  e-mail  address  to send and  receive
correspondence during the duration of their stay, as well as facsimile, printing
and  copying  capabilities.  The Office  (TM),  is a full  service,  credit card
activated business center for business travelers staying at hotels.  InnPhone is
a private labeled product line featuring  digital and analog phones  distributed
by AHS to the hospitality industry.

NOTE C - NET INCOME (LOSS) PER SHARE

Basic net income  (loss) per share is computed by  dividing  net income  (loss),
decreased or increased by the preferred  stock  dividends of $35,423 and $34,991
for the nine month periods ending  September 30, 2001 and 2000,  respectively by
the weighted average number of common shares outstanding for the period. Diluted
net income (loss) per share is computed by dividing net income  (loss)  adjusted
for preferred  stock  dividends by the weighted  average number of common shares
and common stock equivalents outstanding, if dilutive, for the period.

NOTE D - RECLASSIFICATIONS

Certain 2000 amounts have been reclassified to conform with 2001 presentation.

NOTE E - SEGMENTS

The battery and electronic sales segment represents the operations of UBC, which

                                        9
<PAGE>
NOTE E - SEGMENTS (continued)

includes  the  stocking  and sales of battery  and  electronic  components.  The
hospitality  service  operations of AHS provides  private in-room  facsimile and
office  business center for business  travelers.  These segments were identified
based on the different nature of the services,  location,  and, in general,  the
type of customers for those services.

A summary of the segment financial  information  reported to the chief operating
decision maker is as follows:
<TABLE>
<CAPTION>
                                            Nine Months Ended September 30, 2001
                                    -------------------------------------------------------
                                                      Battery and
                                      Facsimile &      Electronic
                                     Business Center     Sales      Adjustment  Consolidated
                                     ---------------  ------------  ----------  ------------
<S>                                  <C>              <C>           <C>         <C>
Revenue                              $ 3,630,962      $ 18,590,111  $        -  $ 22,221,073
Depreciation and amortization            553,131            71,640       3,816       628,587
Segment profit (loss)                   (882,274)          690,247      54,832      (137,195)
Segment assets                         4,105,926         8,774,991    (215,466)   12,665,451
Capital expenditures by segment           50,046            19,578           -        69,624

                                              Nine Months Ended September 30, 2000
                                     -------------------------------------------------------
                                                      Battery and
                                      Facsimile &      Electronic
                                     Business Center     Sales      Adjustment  Consolidated
                                     ---------------  ------------  ----------  ------------
Revenue                              $ 5,571,624      $ 12,796,916  $        -  $ 18,368,540
Depreciation and amortization            563,630            62,657       3,763       630,050
Segment profit (loss)                   (343,696)           (6,235)    243,970      (105,961)
Segment assets                         4,047,457         7,045,049   1,296,023    12,388,529
Capital expenditures by segment          249,570           113,176       4,539       367,285
</TABLE>
The adjustments  represent  depreciation and  amortization  related to corporate
assets,  corporate  expenses,  and corporate  capital  expenditures to reconcile
segment balances to consolidated amounts.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

The following  discussion and analysis should be read in conjunction  with TEI's
Consolidated  Financial  Statements and notes thereto included elsewhere in this
Form  10-QSB.  Except  for the  historical  information  contained  herein,  the
discussion in this Form 10-QSB contains certain forward looking  statements that
involve risks and uncertainties,  such as statements of TEI's plans, objectives,
expectations and intentions.  The cautionary statements made in this Form 10-QSB
should be read as being  applicable  to all related  forward-looking  statements
wherever  they appear in this Form 10-QSB.  These  statements  include,  without
limitation,  statements  concerning the potential  operations and results of the
Company described below. TEI's actual results could differ materially from these
discussed  here.  Factors  that could cause or  contribute  to such  differences
include, without limitation,  those factors discussed herein and in TEI's Annual
Report on Form 10-KSB for the year ended December 31, 2000.

                                       10
<PAGE>
RESULTS OF OPERATIONS

Currently,  Tech Electro  Industries,  Inc.'s  ("TEI")  operations are conducted
through its two  wholly-owned  subsidiaries,  Computer  Components  Corporation,
doing  business  as  Universal  Battery   Corporation   ("UBC"),   and  AlphaNet
Hospitality Systems Inc. ("AHS").

THREE MONTHS ENDED  SEPTEMBER 30, 2001 COMPARED TO THREE MONTHS ENDED  SEPTEMBER
30, 2000.

Revenues

For the three month  period  ended  September  30,  2001,  TEI had  consolidated
revenues of  $9,546,242  compared to  $6,993,580  for the similar  period  ended
September 30, 2000, an increase of $2,552,662 or 36.5%.

UBC and AHS had revenues of  $8,572,789  and $973,453 for the three month period
ended September 30, 2001,  respectively,  compared to revenues of $5,400,148 and
$1,593,432 for the similar period in 2000, respectively. The $3,172,641 or 58.8%
in increased  UBC revenues is largely  attributable  to the increase in sales of
battery and battery  related  products to the primary  markets  serviced by UBC.
Specifically,  direct shipping sales accounted for  approximately  $2,230,357 or
70.3%  of the  increase.  Batteries  sold to the  medical  industry  represented
$329,927 or 10.4% of UBC's  increased  revenues and $612,357 or 19.3% related to
new business growth in both industrial and consumer batteries. AHS's decrease in
revenues of $619,979 or 38.9% is largely  attributable to the continued  decline
in facsimile  usage by hotel guests  which  represents  $536,396 or 86.5% of the
decrease,  as well as, the  declining  installation  base of InnFax  machines in
North  America.  Revenues  generated from AHS's The Office product for the three
months ended  September  30, 2001 remained flat in comparison to the same period
in 2000. Sales of AHS's InnPhone product  decreased by 56% to $19,193 during the
third  quarter of 2001 in  comparison  to $43,672  in  revenues  during the same
period in 2000.

Cost Of Revenues

For the three month period ended  September 30, 2001, TEI's consolidated cost of
revenues increased to $7,233,567 compared to cost of revenues $4,660,752 for the
similar period in 2000, an increase of $2,572,815 or 55.2%.

UBC's and AHS's cost of revenues  totaled  $7,052,155 and $181,412 for the three
month period ended  September  30,2001,  compared to $4,327,867 and $332,885 for
the similar period in 2000,  respectively.  Increased revenues at UBC during the
three month period ended  September 30, 2001  compared to the similar  period in
2000 resulted in an increase in the cost of revenues of $2,724,288 or 62.9%. The
cost of  revenues,  as a  percentage  of revenues  for UBC,  increased to 82.3%,
compared  to 80.1% for the  similar  period  in 2000.  This  increase  is mainly
attributable  to a  reduction  of the  prices  of goods  sold to  UBC's  largest
account,  Schumacher  Electric,  which  is a high  volume  and  direct  shipping
customer.  The cost of revenues as a percentage of service revenues for AlphaNet
decreased to 18.7% compared to 20.9% for the three month period ending September




                                       11

<PAGE>
30, 2001 and 2000, respectively. The decrease in cost of revenues is primarily a
result of lower usage and repairs and maintenance on existing fax machines.  The
remaining  decrease in cost of revenues is due to the decrease in direct service
related  costs.  These costs are relatively  fixed in nature and thus,  have not
decreased significantly as revenue has decreased.

Operating Expenses

For the  three  month  period  ended  September  30,  2001,  TEI's  consolidated
operating  expenses,  consisting  of  selling,  general and  administrative  and
depreciation  and  amortization  expenses  decreased to  $1,832,588  compared to
$1,840,341 for the similar period in 2000, a decrease of $7,753.

UBC's,  AHS's, and TEI's selling,  general and  administrative  expenses totaled
$900,539,  $592,926 and $133,086  respectively  for the three month period ended
September 30, 2001, compared to $729,611, $760,604 and $134,981, for the similar
period  in 2000,  respectively.  The  increase  in UBC's  selling,  general  and
administrative  expenses in 2001 is due to increases in  advertising,  bad debt,
commission and wages. The decrease in AHS's selling,  general and administrative
expenses is largely  attributable to the decrease in personnel,  which decreased
wages and bonuses.  A reduction in recruiting  expenses also  contributed to the
decrease. TEI's selling, general and administrative expenses remained relatively
consistent compared to the three month period ending September 30, 2000.

For the  three  month  period  ended  September  30,  2001,  TEI's  consolidated
depreciation expense was $206,037 compared to $215,145 for the similar period in
2000, a decrease of $9,108

Interest Expense And Financing Fees

For the  three-month  period ended  September 30, 2001,  TEI, on a  consolidated
basis,  incurred  $222,543 in  interest  expense  compared  to $246,768  for the
similar  period in 2000,  a  decrease  of  $24,225  or 9.9%.  This  decrease  is
primarily due to lower interest rates in 2001.

Deferred  financing  costs  are  amortized  on a  straight-line  basis  over the
original  term of the  financing  agreement.  TEI  issued  warrants  to  various
lenders,  which were  recorded  at fair  value  using the  Black-Scholes  model.
Amortization of these deferred  financing costs was $73,756 and $102,649 for the
three  month  periods  ended  September  30,  2001 and 2000,  respectively.  The
decrease was caused by a portion of these deferred fees becoming fully amortized
during 2001.

NINE MONTHS ENDED SEPTEMBER 30, 2001 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
2000.

Revenues

For the nine  month  period  ended  September  30,  2001,  TEI had  revenues  of
$22,221,073  compared to $18,368,540 for the similar period in 2000, an increase
of $3,852,533 or 21.0%.





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<PAGE>
The  increase  in  revenues  is  comprised  of an  increase  in  sales of UBC to
$18,590,111  and a decrease in revenues of AHS to $3,630,962 for the nine months
ended  September 30, 2001 compared to revenues of $12,796,916 and $5,571,624 for
the similar period in 2000,  respectively.  The $5,793,195 or 45.3% in increased
UBC  revenues is largely  attributable  to the  increase in sales of battery and
battery related products to the primary markets  serviced by UBC.  Specifically,
direct  shipping sales  accounted for  approximately  $3,553,239 or 61.3% of the
increase.  Batteries  sold to the medical  industry  represented  $1,127,797  or
19.5%, while the remaining $1,112,159 or 19.2% represents new business growth in
both industrial and consumer batteries. AHS's decrease of $1,940,662 in revenues
is attributable to the decline in InnFax usage by hotel guests which  represents
$1,605,163  or 82.7% of the decrease and the decrease of new  installations  and
hardware sales of $333,074 or 17.2% from 2000. Additionally,  revenues generated
for the nine  months  ended  September  30,  2001,  are  comprised  of  $368,925
generated  from The Office  product  compared to $387,690 for the same period in
2000. Also, $198,517 was generated from InnPhone sales for the nine month period
September  30,  2001  compared to  $153,237  for the same period in 2000,  which
represents a 30% increase.

Cost of Revenues

For the nine month period ended  September 30, 2001, TEI had cost of revenues of
$15,957,025  compared to $11,453,503 for the similar period in 2000, an increase
of $4,503,522 or 39.3%.

UBC's and AHS's cost of revenues  totaled  $15,175,235 and $781,790 for the nine
month period ended  September 30, 2001,  compared to $10,012,853  and $1,440,650
the similar period in 2000,  respectively.  Increased revenues at UBC during the
nine month period ended  September  30, 2001  compared to the similar  period in
2000, resulted in an increase of $5,162,382 or 51.6%.   The cost of revenues, as
a percentage of revenues for UBC,  increased to 81.6%  compared to 78.2% for the
similar period in 2000. This increase is attributable  mainly to lowering prices
to Schumacher  Electric,  which is UBC's  largest  account and a high volume and
direct  shipping  customer.  The cost of revenues,  as a  percentage  of service
revenues for AHS, decreased to 21.5% compared to 25.9% for the nine month period
ending  September  30,  2001 and 2000,  respectively.  The  decrease  in cost of
revenues  is  primarily  a result  of a fewer  number of new  installations  and
resulting hardware costs,  installation costs and freight,  which represents 60%
of the decrease.  The InnFax direct service costs are relatively fixed in nature
and thus, have not decreased significantly as revenue has decreased.

Operating Expenses

For the nine month period ended September 30, 2001,  TEI's  operating  expenses,
consisting  mainly of selling,  general  and  administrative,  depreciation  and
amortization  expenses  decreased to $5,469,421  compared to $6,038,751  for the
similar period in 2000, a decrease of $569,330 or 9.4%.

UBC's,  AHS's and TEI's selling,  general and  administrative  expenses  totaled
$2,265,730,  $2,156,957  and  $418,147,  respectively  for the nine month period
ending September 30, 2001,  compared to $2,009,862,  $2,979,299 and $419,540 for
the similar period in 2000, respectively. The increase in UBC's selling, general
and administrative  expenses in 2001 is due to increases in advertising,  travel
commission and wages. The decrease in AHS's selling,  general and administrative

                                       13
<PAGE>
expenses is largely  attributable to the decrease in personnel,  which decreased
wages and  bonuses.  A  reduction  in the  expenses  related to  recruiting  and
temporary  personnel,  in addition to AHS's concerted  effort to reduce overhead
expenses  in light of reduced  revenues  contributed  to the  decrease  in AHS's
selling,  general  and  administrative  expenses.  TEI's  selling,  general  and
administrative  expenses  decreased  slightly for the nine month  period  ending
September 30, 2000.

For the nine month period ended  September  30, 2001,  TEI incurred  $628,587 in
depreciation  and  amortization  expense  compared to  $630,050  for the similar
period in 2000, a decrease of $1,463 or 0.2%.

Interest Expense And Financing Fees

For the nine month period September 30, 2001, TEI incurred  $704,524 in interest
expense  compared to $648,831  during the similar period in 2000, an increase of
$55,693 or 8.6%. This increase is due to the increased  borrowings under the UBC
line of credit.

Deferred  financing  costs  are  amortized  on a  straight-line  basis  over the
original  term of the  financing  agreement.  TEI  issued  warrants  to  various
lenders,  which were  recorded  at fair  value  using the  Black-Scholes  model.
Amortization of these deferred financing costs was $221,269 and $445,366 for the
nine month periods ended September 30, 2001 and 2000, respectively. The decrease
was caused by a portion of these deferred fees becoming fully  amortized  during
2001.

Extraordinary Gain

During the nine month  period  ended  September  30,  2000,  TEI  recognized  an
extraordinary    gain    of    $568,750    from    the    retirement    of   the
PricewaterhouseCoopers,  Inc.  note  of  $2,100,000  that  composed  part of the
purchase price of the AHS acquisition.  The note was paid with $500,000 cash and
the issuance of 1,100,000 common shares in February 2000.

Liquidity

TEI had  cash and cash  equivalents  on a  consolidated  basis of  $739,022  and
$633,509 at September 30, 2001 and 2000, respectively.

Net cash provided by operations  was  $1,001,546 for the nine month period ended
September 30, 2001 compared to cash used of $1,346,977 for the similar period in
2000.  The majority of the cash  provided  during 2001 related to an increase in
accounts  receivable  of $315,289 and an increase in prepaid  expenses and other
current assets of $134,431 offset by the net loss of $137,195 and an increase in
accounts  payable  and  accrued   liabilities  of  $362,573,   depreciation  and
amortization  of $898,789 and the provision for bad debts of $253,616.  The 2000
cash used by operating  activities  results  from the net loss of $105,961,  the
extraordinary  gain on note  retirement  of  $568,750,  an  increase  in account
receivable  trade of  $1,801,922,  an  increase in  inventory  of  $166,318,  an
increase in prepaid  expense and other  current  assets of $105,390  and less an
increase in accounts payable and accrued  liabilities of $147,169,  depreciation
and amortization of $1,124,349 and the provision for bad debts of $353,976.


                                       14
<PAGE>
Net cash  used by the  investing  activities  for the nine  month  period  ended
September  30,  2001,  was  $75,595  compared  to  cash  provided  by  investing
activities of $634 for the similar period in 2000.  During the nine-month period
ended September 30, 2001, the majority of this amount resulted from purchases of
property and equipment.  During the nine-month  period ended September 30, 2000,
this amount  primarily  resulted  from  purchases of property  and  equipment of
$367,285 less payments  received and write-offs of notes receivables of $182,908
and increase of certificate of deposit of $108,980.

Net cash used by financing  activities for the nine month period ended September
30, 2001 was $1,025,989  compared to cash provided of $1,085,591 for the similar
period in 2000.  The net cash used by financing  activities  for the nine months
ended  September 30, 2001  comprised of net payments of $877,209 on the UBC line
of credit and repayments of long-term debt of $148,780. The net cash provided by
financing  activities for the nine months ended September 30, 2000 was comprised
of net  borrowings on the line of credit of  $1,328,222,  repayment of long-term
debt of $742,631 and proceeds of $500,000 received on the Caspic loan.

UBC has a  $3,000,000  line of credit with a financial  institution,  payable on
demand,  with interest  payable  monthly at prime plus 2%, maturing August 2002.
The line of  credit is  secured  by UBC's  accounts  receivable,  inventory  and
equipment. Availability under the line of credit is based on a borrowing formula
which allows for borrowings equal to 85% of UBC's eligible  accounts  receivable
and 50% of UBC's eligible  inventory.  On September 30, 2001,  $1,740,511 of the
line  of  credit  was  outstanding,  while  $1,051,947  remained  available  for
borrowings under the line of credit.

As of September  30, 2001,  AHS has notes  payable to financing  companies  with
balances of $2,199,762,  net of an unamortized  discount of $5,438.  One note in
the original  principal  amount of $1,525,000  is payable to Appel  Investments,
Inc.  ("Appel") of which Kim Yeow Tan,  William  Tan's  brother,  is an officer,
director and  shareholder.  As of September 30, AHS owes $1,343,800 in principal
on this note.  Accrued  interest is paid through  September 30, 2001.  The other
note in the original  principal  amount of  $1,000,000 is payable to AHS Funding
LLC ("AHS  Funding")  of which  Jenny  Jechart,  a  shareholder  of TEI,  is the
principal shareholder.  As of September 30, 2001, AHS owes $861,400 in principal
on this note. The above notes, which have an interest rate of 20.5%,  matured on
October  21, 2001 and are secured by a first lien on all AHS assets and a second
lien on all AHS stock owned by TEI. On October 21, 2001, the notes were extended
by Appel and AHS  Funding  for an  additional  three  month  term and  expire on
January 21, 2002.

TEI currently  has a $500,000  note at a 12% per annum  interest rate payable on
December 10, 2001 to Caspic International,  Inc. ("Caspic") of which William Tan
is an officer,  director  and  shareholder.  As of September  30,  2001,  we owe
$500,000 in principal. As of September 30, 2001, we owe $10,000 accrued interest
on this note.

TEI and AHS are  seeking  alternative  sources  of  financing  to repay the said
Appel,  AHS Funding and Caspic  notes.  These  lenders have agreed to extend the
term of each loan by three months from their respective original maturity dates.
TEI and AHS have  applied  for loans  from  traditional  lenders,  but have been
unable to secure acceptable loan terms or terms with which TEI or AHS can comply
with.

                                       15
<PAGE>
TEI believes that cash provided by its operations  and cash available  under the
UBC line of credit will be  sufficient  to meet its  operational  needs over the
next year.  However,  it will not be  sufficient  to retire the said Appel,  AHS
Funding and Caspic indebtedness.

INFLATION

TEI has not been materially effected by inflation. While TEI does not anticipate
inflation  affecting  TEI's  operations,  increases in labor and supplies  could
impact TEI's ability to compete.

INTERNATIONAL CURRENCY FLUCTUATION

Since the  majority  of goods  that UBC  purchases  are from  Asia,  it has been
subject, like its competitors,  to international  currency fluctuation since the
Company's inception. The management of UBC does not believe that the fluctuation
in currency presents a serious threat to its operations.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

None.

Item 2. Changes in Securities.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Submission of Matters to a Vote of Securities Holders.

None.

Item 5. Other Information.

None.

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

None.










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<PAGE>
                                    Signature
                                    ---------

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


                                       Tech Electro Industries, Inc.
                                       -----------------------------


Date: November 12, 2001                /s/  Julie Sansom-Reese
                                       -----------------------------
                                       Chief Financial Officer









































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