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 June 30, 2002

         [ ]  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.)

                           4300 Wiley Post Road, Addison, Texas, 75001
        ----------------------------------------------------------------
                     (Address of principal executive office


                                 (972) 239-0271
                          ----------------------------
                           (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 June 30, 2002, 8,403,390 shares of Common Stock were outstanding.










                                        1

<PAGE>








                                      INDEX



                                                                      Page
PART I - Financial Information

Item 1.  Financial Statements

   Consolidated Balance Sheets at June 30, 2002 (unaudited)
   and December 31, 2001................................................3

   Consolidated Statements of Operations for the three and six
     month periods ended June 30, 2002 and 2001 (unaudited).............5

   Consolidated Statements of Cash Flows for the six month
     periods ended June 30, 2002 and 2001 (unaudited)...................6

   Notes to Consolidated Financial Statements...........................8

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...........................17

Signature..............................................................18













                                        2

<PAGE>




PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

                 TECH ELECTRO INDUSTRIES, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

                                     ASSETS
                                                  (Unaudited)
                                                 June 30, 2002   Dec. 31, 2001
                                                 -------------   -------------
CURRENT ASSETS
     Cash and cash equivalents....................$  1,111,164    $  1,355,153
     Certificate of deposit - restricted..........     162,122         160,563
     Accounts receivable trade, net of allowance
        for doubtful accounts of $142,650
        (unaudited) and $133,111..................   6,351,786       3,426,120
        Other.....................................      34,990          30,088
     Inventories, net of allowance for
        obsolescence of $181,741 (unaudited) and
        $175,741..................................   6,639,010       3,433,871
     Prepaid expenses and other current assets....     574,825         905,017
                                                   -----------     -----------

           Total current assets...................  14,873,897       9,310,812
                                                   -----------     -----------
PROPERTY AND EQUIPMENT
     Facsimile and business center equipment......   2,692,927       3,423,261
     Machinery and equipment .....................     647,567         561,152
     Furniture and fixtures.......................     298,496         246,733
     Computer equipment ..........................     215,725         215,208
     Leasehold improvements.......................     187,776         181,276
     Vehicles.....................................      46,262          46,262
                                                   -----------     -----------
                                                     4,088,753       4,673,892
     Less accumulated depreciation and
        amortization..............................  (1,284,091)     (1,806,558)
                                                   -----------     -----------
           Net property and equipment.............   2,804,662       2,867,334
                                                   -----------     -----------

OTHER ASSETS......................................      89,956           4,926
                                                   -----------     -----------

TOTAL ASSETS......................................$ 17,768,515    $ 12,183,072
                                                   ===========     ===========



              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)
                                                 June 30, 2002   Dec. 31, 2001
                                                 -------------   -------------
CURRENT LIABILITIES
     Line of credit...............................$  3,606,354    $  2,107,362
     Current portion of long-term debt............   2,373,020         643,856
     Accounts payable.............................   5,791,508       2,447,573
     Accrued liabilities..........................   1,440,547         440,984
     Other current liabilities....................       9,200          12,244
                                                   -----------    ------------
            Total current liabilities.............  13,220,629       5,652,019
                                                   -----------    ------------

LONG-TERM DEBT, less current portion..............       7,937       2,215,121
                                                   -----------    ------------
            Total liabilities.....................  13,228,566       7,867,140

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY
     Preferred stock - $1.00 par value;
        1,000,000 shares authorized; 115,088
        Class A issued and outstanding;
        liquidation preference of $633,087........     115,088         115,088
     Common stock - $0.01 par value; 50,000,000
        shares authorized; 8,403,390 shares
        issued and outstanding....................      84,034          84,034
     Additional paid-in capital...................  14,474,856      14,496,437
     Accumulated deficit.......................... (10,134,029)    (10,379,627)
                                                   -----------    ------------
            Total stockholders' equity............   4,539,949       4,315,932
                                                   -----------    ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY........$ 17,768,515    $ 12,183,072
                                                   ===========    ============








              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 June 30, 2002 and 2001
                                   (Unaudited)

<TABLE>
<CAPTION>
                                          Three Months Ended June 30,  Six Months Ended June 30,
                                          --------------------------   ------------------------
                                              2002         2001            2002         2001
REVENUES                                    ---------    ---------      ----------   ----------
<S>                                        <C>          <C>            <C>          <C>
     Sales.................................$8,746,765   $4,542,533     $14,864,807  $10,017,322
     Service revenue....................... 1,010,053    1,262,890       2,028,749    2,657,508
                                            ---------    ---------      ----------   ----------
                                            9,756,818    5,805,423      16,893,556   12,674,830

COST OF REVENUES
     Cost of goods sold.................... 7,303,495    3,692,347      12,106,525    8,123,080
     Direct servicing costs................   221,635      233,696         405,417      600,379
                                            ---------    ---------      ----------   ----------
                                            7,525,130    3,926,043      12,511,942    8,723,459
                                            ---------    ---------      ----------   ----------
GROSS PROFIT............................... 2,231,688    1,879,380       4,381,614    3,951,371

OPERATING EXPENSES
     Selling, general and administrative... 1,726,276    1,553,464       3,372,289    3,214,283
     Depreciation and amortization of
         property and equipment............   185,043      209,667         366,927      422,552
                                            ---------    ---------      ----------   ----------
                                            1,911,319    1,763,131       3,739,216    3,636,835
                                            ---------    ---------      ----------   ----------
INCOME FROM OPERATIONS                        320,369      116,249         642,398      314,536

OTHER INCOME (EXPENSES)
     Interest income.......................       701        1,978           1,562        5,628
     Interest expense......................  (183,490)    (232,729)       (368,353)    (481,981)
     Amortization of deferred financing
        costs..............................        -       (73,756)              -     (147,513)
     Other, net............................   (14,060)      (7,119)        (30,009)      (8,992)
                                            ---------    ---------      ----------   ----------
                                             (196,849)    (311,626)       (396,800)    (632,858)
                                            ---------    ---------      ----------   ----------
INCOME (LOSS) BEFORE PROVISION FOR INCOME
     TAXES                                    123,520     (195,377)        245,598     (318,322)

PROVISION FOR INCOME TAXES.................         -            -               -            -
                                            ---------    ---------      ----------   ----------
NET INCOME (LOSS)                          $  123,520   $ (195,377)    $   245,598  $  (318,322)
                                            =========    =========      ==========   ==========
Net income (loss) attributable to common
     stockholders                          $  113,160   $ (208,280)    $   224,017  $  (340,631)
                                            =========    =========      ==========   ==========
Basic and diluted net income (loss)
     per share attributable to common
     shareholders                          $     0.01   $    (0.03)    $      0.03  $     (0.04)
                                            =========    =========      ==========   ==========
Number of weighted-average shares of
     common stock outstanding (basic
     and diluted).........................  8,403,390    8,248,024       8,403,390    8,226,511
                                            =========    =========      ==========   ==========
</TABLE>

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

                                        5

<PAGE>


                 TECH ELECTRO INDUSTRIES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
             For The Six Month Periods Ended June 30, 2002 and 2001
                                   (Unaudited)


                                                            2002        2001
                                                        -----------  ----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)                                       $   245,598  $ (318,322)
Adjustments to reconcile net income (loss) to net
   cash provided by (used by) operating activities:
     Common stock returned recorded as other income.....          -     (10,000)
     Depreciation of property and equipment.............    366,927     422,552
     Provision for bad debts............................      9,539     (55,561)
     Provision for obsolete inventory...................      6,000       6,000
     Amortization of debt discount......................          -      32,622
     Amortization of deferred financing costs...........          -     147,513
     Loss on disposal of equipment......................     10,804           -
     Change in operating assets and liabilities
           Accounts receivable - trade.................. (2,935,205)    875,660
           Accounts receivable - other..................     (4,902)      2,823
           Inventories.................................. (3,211,139)    219,640
           Prepaid expenses and other current assets....    330,192    (137,619)
           Other assets.................................    (85,030)     11,808
           Accounts payable.............................  3,343,935    (315,360)
           Accrued liabilities..........................    996,519     (87,979)
                                                         ----------   ---------
Net cash provided by (used by) operating activities.....   (926,762)    793,777
                                                         ----------   ---------

CASH FLOWS FROM INVESTING ACTIVITIES
   Purchases of property and equipment..................   (315,059)    (54,726)
   Purchase of certificate of deposit...................     (1,559)     (4,042)
                                                         ----------   ---------
Net cash used in investing activities...................   (316,618)    (58,768)
                                                         ----------   ---------

CASH FLOWS FROM FINANCING ACTIVITIES
   Net activity on line of credit.......................  1,498,992  (1,042,107)
   Repayment of long-term debt..........................   (478,020)   (121,522)
   Payment of preferred stock dividends.................    (21,581)          -
                                                         ----------   ---------
Net cash provided by (used by) financing activities....     999,391  (1,163,629)
                                                         ----------   ---------





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

                                   -Continued-


                                        6

<PAGE>




                 TECH ELECTRO INDUSTRIES, INC. AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF CASH FLOWS - Continued
              For The Six Month Periods Ended June 30, 2002 and 2001
                                   (Unaudited)


                                                          2002          2001
                                                       ----------    ----------
NET DECREASE IN CASH AND CASH EQUIVALENTS..........      (243,989)     (428,620)

Cash and cash equivalents at beginning
     of period.....................................     1,355,153       839,060
                                                       ----------    ----------
Cash and cash equivalents at end of period.........   $ 1,111,164   $   410,440
                                                       ==========    ==========
SUPPLEMENTAL SCHEDULE OF NONCASH
     INVESTING AND FINANCING ACTIVITIES

     Dividends paid through issuance
        of common stock............................   $         -   $    22,309
                                                       ==========    ==========






























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

                                        7

<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 six month period  ended June 30, 2002.  The results for the six month period
ended June 30, 2002 are not  necessarily  indicative  of the results that may be
expected for the year ended December 31, 2002.

NOTE B - ORGANIZATION

Tech Electro Industries, Inc. ("TEI" or the "Company") was formed on January 10,
1992 as a Texas corporation.  TEI's subsidiary,  Computer Components Corporation
("CCC"),  doing  business as UBC ("UBC"),  stocks and sells  batteries,  battery
related  products and passive  electronic  components.  Within the battery sales
activity,  there is  value  added  to the  batteries  through  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,  AHS 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)  and The  Office(TM).  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.

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 $21,581 and $22,309
for the six month  periods  ending  June 30,  2002 and 2001,  respectively,  and
$10,360 and $12,903 for the three month  periods  ending June 30, 2002 and 2001,
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) by the weighted  average  number of common shares and common stock
equivalents  outstanding for the period.  TEI's common stock equivalents are not
included in the diluted loss per share for the three and six month periods ended
June 30, 2001 as they are antidilutive.  At June 30, 2002, all outstanding stock
options and warrants have exercise prices greater than the current fair value of
the  underlying  stock and  therefore,  have no affect on the  income  per share
computation.




                                        8

<PAGE>


NOTE D - LINE OF CREDIT

On March 27,  2002,  UBC  obtained a  $12,000,000  line of credit with a finance
company,  payable on demand,  with interest  payable monthly at prime plus 1.25%
maturing  March  2005.  The line of credit is  secured by  accounts  receivable,
inventories  and  equipment  of UBC.  The  line's  availability  is  based  on a
borrowing  formula,  which allows for borrowings  equal to 85% of UBC's eligible
accounts  receivable  and  percentage of eligible  inventory.  On June 30, 2002,
$3,606,354  of the line of  credit  was  outstanding,  while  $490,734  remained
available for borrowings under the line of credit.

NOTE E - NOTES PAYABLE

AHS has two notes payable to related party financing companies.  One note in the
original principal amount of $1,525,000 is payable to Appel Investments, Inc., a
company in which Kim Yeow Tan,  William Tan's brother,  is an officer,  director
and  shareholder.  As of June 30, 2002, AHS owes $1,343,800 in principal on this
note. The second note in the original  principal amount of $1,000,000 is payable
to AHS Funding LLC, a company in which Jenny Jechart, a shareholder and director
of the Company,  is the  principal  shareholder.  As of June 30, 2002,  AHS owes
$440,400 in principal on this note.  These notes,  which have interest  rates of
20.5%,  originally  matured on October 21,  2001 and were  extended to March 27,
2003. Both notes are secured by a first lien on all AHS assets and a second lien
on all AHS stock owned by TEI.

TEI has two notes payable to related party financing companies.  One note in the
principal  amount of $67,000  is payable to  Placement  &  Acceptance,  Inc.,  a
company  in which  William  Tan is a  director  and  shareholder.  This  note is
non-interest  bearing and is payable as cash flow permits.  As of June 30, 2002,
TEI owes $67,000 in principal on this note.  The second note in the original and
current   outstanding   principal  amount  of  $500,000  is  payable  to  Caspic
International,  Inc.,  a  company  in which  William  Tan is a  shareholder  and
director.  This note has an interest rate of 12%, originally matured on June 10,
2002 and was extended to September 10, 2002.  The loan is secured by a pledge of
the shares of capital stock of AHS.

NOTE F - CONCENTRATIONS

Through June 30, 2002, a significant portion of UBC's business was performed for
one major customer,  which represented  approximately 33% and 19%, respectively,
of UBC's  sales for the three and six months  ended June 30,  2002.  At June 30,
2002 UBC had aggregate  accounts  receivable from this customer in the amount of
$2,792,360.  Through August 12, 2002,  substantially all of this amount has been
collected.

NOTE G - SEGMENTS

The battery and electronic sales segment represents the operations of UBC, which
includes the stocking and sales of battery, battery related products and passive
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.



                                        9

<PAGE>
NOTE G - SEGMENTS (continued)

A summary of the segment financial  information  reported to the chief operating
decision maker is as follows:


<TABLE>
<CAPTION>
                                                 Six Months Ended June 30, 2002
                                     -------------------------------------------------------
                                                      Battery and
                                      Facsimile &      Electronic
                                     Business Center     Sales      Adjustment  Consolidated
                                     ---------------  ------------  ----------  ------------
<S>                                  <C>              <C>           <C>         <C>
Revenue                              $ 2,028,749      $ 14,863,462  $   1,345   $ 16,893,556
Depreciation and amortization            308,623            55,022      3,282        366,927
Segment profit (loss)                   (318,238)          281,096    282,740        245,598
Segment assets                         3,796,204        13,903,212     69,099     17,768,515
Capital expenditures by segment          169,752           145,307          -        315,059


                                                 Six Months Ended June 30, 2001
                                     -------------------------------------------------------
                                                      Battery and
                                      Facsimile &      Electronic
                                     Business Center     Sales      Adjustment  Consolidated
                                     ---------------  ------------  ----------  ------------
Revenue                              $ 2,657,508      $ 10,017,322  $       -   $ 12,674,830
Depreciation and amortization            372,708            47,300      2,544        422,552
Segment profit (loss)                   (565,958)          244,515      3,121       (318,322)
Segment assets                         4,466,139         7,012,288     86,034     11,564,461
Capital expenditures by segment           39,162            15,564          -         54,726
</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, 2001.


                                       10


<PAGE>


BACKGROUND AND RECENT DEVELOPMENTS

On March 7, 2002, UBC signed an agreement with Brink's Home Security,  Inc., the
security division of the Pittston Brinks Group, to procure and assemble security
components for both  residential  and commercial  alarm systems.  This agreement
became  effective May 1, 2002 and will  continue for a two year period.  For the
quarter ended June 30, 2002, this contract provided  approximately  $2.9 million
in revenue.  The Company  believes that this agreement will provide  significant
revenues in the future.

On March 27, 2002, UBC entered into a $12,000,000  revolving line of credit with
General  Electric Capital  Corporation,  payable on demand with interest payable
monthly at prime plus  1.25%,  maturing  March 27,  2005.  The line of credit is
secured by the accounts receivable, inventories and equipment of UBC. The line's
availability is based on a borrowing  formula which allows for borrowings  equal
to 85% of UBC's eligible  accounts  receivable  plus the lesser of $3,000,000 or
85% of the net orderly  liquidation value of UBC's eligible inventory and 55% of
the lower of cost or market of UBC's eligible inventory.  This line of credit is
guaranteed  by TEI.  On June 30,  2002,  $3,606,354  of the line of  credit  was
outstanding,  while $490,734 remained available for borrowings under the line of
credit.

On March 28, 2002, the maturity dates on AHS notes payable to related parties
totaling $2,205,200 were extended to March 27, 2003. Additionally, on June 9,
2002 the maturity date of TEI's $500,000 note payable to a related party was
extended to September 10, 2002.


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 AHS Hospitality
Systems Inc. ("AHS").


THREE MONTHS ENDED JUNE 30, 2002 COMPARED TO THREE MONTHS ENDED JUNE 30, 2001.

Revenues

For the three month period ended June 30, 2002, TEI had consolidated revenues of
$9,756,818 compared to $5,805,423 for the similar period ended June 30, 2001, an
increase of $3,951,395 (68.1%).

UBC and AHS had revenues of $8,746,765 and $1,010,053 for the three month period
ended June 30,  2002,  respectively,  compared  to revenues  of  $4,542,533  and
$1,262,890  for the similar  period in 2001,  respectively.  The  $4,204,232  in
increased UBC revenues is largely attributable to one new customer,  Brinks Home
Security,  as well as to the  increase in sales of battery  and battery  related
products  to the primary  markets  serviced  by UBC.  Specifically,  Brinks Home
Security  sales amounted to $2,872,653 or 68.3% of the increase in sales for the
three month period ended June 30, 2002.  Battery  sales to the medical  industry
contributed  $386,368 or 9.2% of UBC's increased  revenues,  and new business in



                                       11
<PAGE>


both industrial and consumer batteries contributed  $1,331,579 or 31.7% of UBC's
increased  revenues.  AHS's decrease in revenues of $252,837 is  attributable to
the  continued  decline  in  facsimile  usage by hotel  guests,  as well as, the
declining   installation  base  of  InnFax  machines  in  North  America,  which
represents  $426,258  of the  decrease.  The decline is  partially  offset by an
increase in revenue of $173,421 on AHS's The Office for the three  months  ended
June 30, 2002 compared to the same period in 2001.

Cost Of Revenues

For the three month  period  ended June 30,  2002,  TEI's  consolidated  cost of
revenues increased to $7,525,130  compared to cost of revenues of $3,926,043 for
the similar period in 2001, an increase of $3,599,087.

UBC's and AHS's cost of revenues  totaled  $7,303,495 and $221,635 for the three
month period ended June 30, 2002,  compared to  $3,692,347  and $233,696 for the
similar period in 2001, respectively. Increased revenues at UBC during the three
month period ended June 30, 2002 compared to the similar period in 2001 directly
resulted  in an  increase  in the cost of  revenues  during the same three month
period in 2002  compared  to the similar  period in 2001.  Cost of revenues as a
percentage  of revenues  for UBC  increased  to 83.5%  compared to 81.3% for the
similar period in 2001.  This increase is mainly  attributable to the low margin
on the sales to Brinks Home Security,  which is a high volume customer.  Cost of
revenues as a percentage  of service  revenues for AHS increased to 21.9% in the
current  period  compared  to 18.5% for the three month  period  ending June 30,
2001.  The  increase  in cost of  revenues  is  primarily  a result of fewer new
installations while costs have remained constant.

Operating Expenses

For the three month  period ended June 30, 2002,  TEI's  consolidated  operating
expenses, consisting of selling, general and administrative and depreciation and
amortization  expenses  increased to $1,911,319  compared to $1,763,131  for the
similar period in 2001, an increase of $148,188.

UBC's,  AHS's, and TEI's selling,  general and  administrative  expenses totaled
$1,145,917, $465,583 and $114,776, respectively for the three month period ended
June 30, 2002, compared to $693,498, $715,859 and $144,107, respectively for the
similar   period  in  2001.   The  increase  in  UBC's   selling,   general  and
administrative  expenses in 2002 is  primarily  due to  increases in payroll and
related expenses of $317,310 and increased rent of $32,299.  These increases are
primarily  related to the additional  revenues  earned in  association  with the
Brinks  contract.  The  decrease in AHS's  selling,  general and  administrative
expenses is largely  attributable to decreased marketing expenses of $55,573 and
decreased wages and  commissions of $67,869.  Additionally,  AHS's  professional
fees decreased by $30,728  compared to the same period in 2001. TEI  experienced
decreases  in wages of $35,600 and  printing  costs of $8,363,  offset by moving
costs associated with TEI's relocation to Texas of $13,272.

For the three month period ended June 30, 2002, TEI's consolidated  depreciation
expense was  $185,043  compared to $209,667  for the similar  period in 2001,  a
decrease of $24,642  primarily due to AHS's  significant  disposals of assets in
2002.



                                       12
<PAGE>


Interest Expense

For the three month period ended June 30, 2002,  TEI, on a  consolidated  basis,
incurred  $183,490 in  interest  expense  compared  to $232,729  for the similar
period in 2001, a decrease of $49,239.  This  decrease is  primarily  due to the
decreased  interest  rate under the UBC line of credit  during the quarter ended
June 30, 2002 compared to the same quarter in 2001.

SIX MONTHS ENDED JUNE 30, 2002 COMPARED TO SIX MONTHS ENDED JUNE 30, 2001.

Revenues

For the six month period ended June 30,  2002,  TEI had revenues of  $16,893,556
compared  to  $12,674,830  for the  similar  period  in  2001,  an  increase  of
$4,218,726 (33.3%)

UBC and AHS had revenues of $14,864,807 and $2,028,749, respectively for the six
months ended June 30, 2002 compared to revenues of $10,017,322  and  $2,657,508,
respectively,  for the similar period in 2001.  The  $4,847,485  increase in UBC
revenues is largely  attributable  to the increase in sales to one new customer,
Brinks  Home  Security,  which  accounted  for  $2,872,653  of the  increase  in
revenues,  and an increase in sales of battery  related  products to the primary
markets serviced by UBC. Revenue from direct shipments accounted for $420,753 or
8.7% of the  increase  in  sales  and  battery  sales  to the  medical  industry
contributed $545,599 or 11.3% of the increase in sales. UBC's increased revenues
in both  industrial and consumer  batteries  consisted of $1,007,135 or 20.8% of
the increase in sales.  The  increases  are due to the addition of new customers
during the six months ended June 30, 2002 as well as  continued  growth in sales
to UBC's  existing  customers.  The  decrease  of  $628,759  in AHS  revenues is
attributable  to the decline in InnFax  usage by hotel  guests  which  decreased
$741,704 as compared to the prior year,  and the  decrease of new  installations
and hardware sales of $14,889  compared to 2001.  The Office  product  generated
increased revenues of $135,086 for the period ending June 30, 2002,  compared to
the same period in 2001.

Cost of Revenues

For the six month period ended June 30, 2002,  TEI's cost of revenues  increased
to  $12,511,942  compared  to  $8,723,459  for the  similar  period in 2001,  an
increase of $3,788,483 (43.4%).

UBC's and AHS's cost of revenues  totaled  $12,106,525  and $405,417 for the six
month  period  ended June 30,  2002,  compared to  $8,123,080  and  $600,379 the
similar period in 2001,  respectively.  Increased revenues at UBC during the six
month  period  ended  June 30,  2002  compared  to the  similar  period in 2001,
directly  resulted in an  increase  in the cost of revenues  during the same six
month  period  compared  to the  similar  period in 2001.  Cost of revenues as a
percentage  of revenues  for UBC  increased  to 81.4%  compared to 81.1% for the
similar period in 2001. This slight increase is attributable mainly to the lower
margins  on the high  volume  sales  to  UBC's  largest  customer,  Brinks  Home
Security. Cost of Revenues as a percentage of service revenues for AHS decreased
to 20.0%  compared to 22.6% for the six month  periods  ending June 30, 2002 and




                                       13

<PAGE>


2001,  respectively.  The  decrease in cost of revenues is primarily a result of
fewer new  installations and resulting  hardware costs,  which represents 46% of
the decrease in cost of revenues.  The remaining decrease in cost of revenues is
due to the decrease in direct  service  related costs of 12.8% compared to 14.8%
for the six month  period  ending  June 30, 2002 and 2001,  respectively.  These
costs are relatively  fixed in nature and thus have not decreased  significantly
as revenues decreased.

Operating Expenses

For the six  month  period  ended  June  30,  2002,  TEI's  operating  expenses,
consisting  of  selling,   general  and   administrative  and  depreciation  and
amortization  expenses  increased to $3,739,216  compared to $3,636,835  for the
similar period in 2002, an increase of $102,381.

UBC's,  AHS's, and TEI's selling,  general and  administrative  expenses totaled
$2,125,350,  $1,028,620  and  $218,319,  respectively  for the six month  period
ending  June  30,  2002,  compared  to  $1,365,189,   $1,564,430  and  $284,664,
respectively  for the similar  period in 2001.  The  increase in UBC's  selling,
general and  administrative  expenses in 2002 is due to increases in payroll and
related expenses of $471,399,  rent of $42,967,  travel, meals and entertainment
of $35,238, bank charges of $54,305, and legal fees of $31,889.  These increases
are primarily related to the additional  revenues earned in association with the
Brinks  contract.  The  decrease in AHS's  selling,  general and  administrative
expenses is largely attributable to decreased marketing expenses of $113,937 and
decreased  wages  and  sales  commissions  of  $214,655.   Additionally,   AHS's
professional  fees  decreased  by $150,509 as compared to the same six months in
2001. TEI experienced decreases in wages of $35,600,  legal and accounting costs
of $26,557 and printing  costs of $8,363 for the six months ended June 30, 2002,
offset by moving costs of $13,272 associated with TEI's relocation to Texas.

For the six  month  period  ended  June  30,  2002,  TEI  incurred  $366,927  in
depreciation  and  amortization  expense  compared to  $422,552  for the similar
period in 2001,  a  decrease  of  $55,625  due  primarily  to AHS's  significant
disposals of assets in 2002.

Interest Expense

For the six month  period  June 30,  2002,  TEI  incurred  $368,353  in interest
expense  compared to $481,981  during the similar  period in 2001, a decrease of
$113,628. This decrease is due to the decreased interest rate under the UBC line
of credit  during the six months  ended June 30,  2002  compared to the same six
months in 2001.

Liquidity

TEI had cash and cash  equivalents  on a  consolidated  basis of $1,111,164  and
$410,440 at June 30, 2002 and 2001, respectively.

Net cash used by operations was $926,762 for the six month period ended June 30,
2002 compared to cash provided by operations of $793,777 for the similar  period
in 2001. The cash used by operating  activities in 2002 was primarily related to
increases in accounts  receivable  and inventory of $2,935,205  and  $3,211,139,



                                       14

<PAGE>


respectively,  offset by an increase in accounts payable and accrued liabilities
of  $4,340,454.  These changes were directly  related to our new agreement  with
Brinks Home  Security.  The cash  provided by operating  activities  during 2001
related to a decrease  in  accounts  receivable  of  $875,660  and a decrease in
inventory  of  $219,640  offset by the net loss of  $318,322  and a decrease  in
accounts payable and accrued liabilities of $403,339.

Net cash used by  investing  activities  for the six month period ended June 30,
2002,  was  $316,618  compared to $58,768 for the  similar  period in 2001.  The
majority of this  increase  resulted  from  purchases of property and  equipment
during the six month period ended June 30, 2002.

Net cash  provided by financing  activities  for the six month period ended June
30, 2002 was $999,391 compared to cash used of $1,163,629 for the similar period
in 2001. The net cash provided by financing  activities for the six months ended
June  30,  2002  was  comprised  of net  borrowings  on the  line of  credit  of
$1,498,992,  offset by repayment  of  long-term  debt of $478,020 and payment of
preferred stock dividends of $21,581.  The net cash used by financing activities
for the six  months  ended  June  30,  2001 was  comprised  of net  payments  of
$1,042,107 on the Universal  Battery line of credit and  repayments of long-term
debt of $121,522.

UBC has a $12,000,000  revolving line of credit with a finance company,  payable
on demand with interest payable monthly at prime plus 1.25%,  maturing March 27,
2005. The line of credit is secured by the accounts receivable,  inventories and
equipment of UBC. The line's  availability is based on a borrowing formula which
allows for borrowings  equal to 85% of UBC's eligible  accounts  receivable plus
the lesser of  $3,000,000 or 85% of the net orderly  liquidation  value of UBC's
eligible  inventory  and 55% of the lower of cost or  market  of UBC's  eligible
inventory.  This  line of  credit  is  guaranteed  by TEI.  On  June  30,  2002,
$3,606,354  of the line of  credit  was  outstanding,  while  $490,734  remained
available for borrowing under the line of credit.

At June 30, 2001, AHS had notes payable to financing  companies with balances of
$2,205,200.  One note in the original  principal amount of $1,525,000 is payable
to Appel  Investments,  Inc.,  a company  in which Kim Yeow Tan,  William  Tan's
brother, is an officer, director and shareholder.  As of June 30, 2002, AHS owes
$1,343,800 in principal on this note.  The other note in the original  principal
amount of  $1,000,000  is payable to AHS  Funding  LLC, a company in which Jenny
Jechart, a shareholder,  is the principal  shareholder and director.  As of June
30, 2002, AHS owes $440,400 in principal on this note.  These notes,  which have
an  interest  rate of 20.5%,  originally  matured on October  21,  2001 and were
extended to March 27,  2003.  These notes are secured by a first lien on all AHS
assets and a second lien on all AHS stock  owned by TEI. As provided  for in the
UBC line of credit  agreement  discussed in the  preceding  paragraph,  UBC may,
under certain conditions,  borrow under the line to advance funds to its parent,
TEI,  to pay this  indebtedness  of AHS.  Assuming  borrowing  availability  and
certain  fixed  charge  coverage  ratio  tests are met,  UBC may borrow for this
purpose  up to 50% of its net  income  for  (i)  calendar  year  2001  and  (ii)
quarterly  thereafter  until such AHS  indebtedness is paid. The loan agreements
between  AHS and said  financing  companies  have been  amended  to  extend  the
maturity dates of the notes to March 27, 2003 in  consideration of the repayment
provisions discussed above.



                                       15

<PAGE>


TEI currently has two notes payable to related party  financing  companies.  One
note in the  principal  amount of $67,000 is payable to Placement &  Acceptance,
Inc., a company in which William Tan is a director and shareholder. This note is
non-interest  bearing and is payable as cash flow permits.  As of June 30, 2002,
TEI owes  $67,000 in  principal  on this note.  The second note in the  original
principal amount of $500,000 is payable to Caspic International, Inc., a company
in which William Tan is a shareholder  and  director.  As of June 30, 2002,  TEI
owes  $500,000 in  principal.  As of June 30, 2002,  TEI owes  $132,798  accrued
interest on this note.  As of July 31, 2002 the  accrued  interest  has not been
paid.  This note has an interest rate of 12% and originally  matured on June 10,
2002. The note has been extended to September 10, 2002.

TEI is seeking  alternative  sources of financing  to repay the said Appel,  AHS
Funding and Caspic notes.  These  lenders have not  indicated  whether they will
refinance these loans. We have applied for loans from traditional  lenders,  but
to date have been unable to secure  acceptable loan terms or terms with which we
can comply.  To date,  we have been  unsuccessful  in securing  any  alternative
financing.

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

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.



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<PAGE>



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

a.   Exhibits.

     Exhibit 99.1 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
     Pursuant to Section 906 of the Sarbanes-Oxley Act 0f 2002.

     Exhibit 99.2 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
     Pursuant to Section 906 of the Sarbanes-Oxley Act 0f 2002.

b.   Reports on Form 8-K.

     None.










































                                       17

<PAGE>













                                    Signature
                                    ---------

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934, as amended,  the registrant  caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.


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


Date: August 13, 2002                  /s/Julie Sansom-Reese
                                       -----------------------------
                                       Chief Financial Officer






























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