FORM 10-QSB
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D. C. 20549

[X]   Quarterly  report  pursuant to section 13 or 15(d) of the Securities
      Exchange Act of 1934 for the fiscal quarter ended June 30, 2002
[ ]   Transition report pursuant to section 13 or 15(d) of the Securities
      Exchange Act of 1934 For the transition period from _____ to _____

Commission file number   000-29669

                            OnLine Power Supply, Inc.
--------------------------------------------------------------------------------
               (Exact Name of Company as Specified in its Charter)

                 Nevada                                    84-1176494
-------------------------------------------------     --------------------------
     (State or other jurisdiction of                    (I.R.S. Employer
     Incorporation or organization)                    Identification No.)

 8100 South Akron,   # 308  Englewood, Colorado               80112
-------------------------------------------------     --------------------------
    (Address of principal executive offices)               (Zip Code)

Company's telephone Number:    (303) 741-5641
                             --------------------

--------------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                          if changed since last report)

     Check whether the Company: (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities and Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the Company was required to
file such reports), and (2) has been subject to such filing requirements for the
past 90 days. YES  X    NO
                 -----    -----

     State the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

                 Class                         Outstanding at August 12, 2002
---------------------------------------     ------------------------------------
    Common stock, $.0001 par value                    21,243,155 Shares



<PAGE>









                 DISCLOSURE REGARDING FORWARD LOOKING STATEMENTS

Except for historic financial information, all of the information that is
contained in this Form 10-QSB is comprised of forward-looking statements within
the meaning of the Securities and Exchange Act of 1934. Specifically, all
statements in the report, other than historical facts, regarding our financial
position, business strategy, and plans for future operations are
forward-looking. These statements are based on beliefs of management and are
subject to known and unknown risks. These risks involve present and future
economic conditions, market conditions, financing, litigation and other
potentially threatening business influences, all of which may change and produce
risks and results very different than those now affecting us. The words
"anticipate", "believe", "estimate", "expect", "will", "may", "continue",
"intend", "could" and "should" or other words and phrases similar to these are
intended to caution the reader of the forward-looking nature of their use.
Statements containing these words should be considered "cautionary".
Management's statements in this report are based on the most accurate assessment
of the risks associated with the business today; however, certain facts and
assumptions may not be realized and the actual operating results may prove to be
different than expected. Although we believe our assumptions are reasonable, we
are qualifying all written statements attributed to management's estimates as
cautionary and forward-looking and accordingly expressly qualify their accuracy
pending substantial realization of the underlying estimates, conditions and
assumptions.



                                       2

<PAGE>


                            OnLine Power Supply, Inc.

                                      Index

PART I.   FINANCIAL INFORMATION

ITEM 1.   Financial Statements

          Condensed Balance Sheets June 30, 2002 and December 31, 2001.......4-5

          Condensed Statements of Operations -
          Three and Six Months Ended
          June 30, 2002 and June 30, 2001......................................6

          Condensed Statements of Cash Flows - Six Months Ended
          June 30, 2002 and June 30, 2001......................................7

          Notes to Condensed Financial Statements...........................8-10

ITEM 2.   Management's Discussion and Analysis of
          Financial Condition and Results of Operations....................11-13


PART II.  OTHER INFORMATION

ITEM 2.   Changes in Securities ..............................................14

ITEM 3.   Defaults Upon Senior Securities.....................................14

ITEM 4.   Submission of Matter to a Vote of Shareholders......................14

ITEM 5.   Other Events........................................................14

ITEM 6.   Exhibits and Reports on Form 8-K....................................14

          Signatures..........................................................15


                                       3

<PAGE>


                            OnLine Power Supply, Inc.
                            Condensed Balance Sheets



<TABLE>
<CAPTION>

                                                               June 30,      December 31,
                                                                 2002            2001
                                                             -----------     ------------
                                                             (unaudited)

Assets

Current assets
<S>                                                          <C>            <C>
     Cash and cash equivalents                               $   44,547     $2,338,835
     Certificates of deposit                                     76,000        150,000
     Short term investments                                     696,883      1,012,540
     Accounts receivable                                        214,752        191,901
     Other receivables                                          150,821        159,779
     Inventory                                                   61,616        319,856
     Other current assets                                       279,846        112,635
                                                             ----------     ----------

         Total current assets                                 1,524,465      4,285,546

Property and equipment, net                                     930,672      1,068,412
Acquired technology and patents, net                            109,129         87,508
                                                             ----------     ----------

         Total assets                                        $2,564,266     $5,441,466
                                                             ==========     ==========
</TABLE>



                                       5


<PAGE>


                            OnLine Power Supply, Inc.
                      Condensed Balance Sheets (Continued)


<TABLE>
<CAPTION>
                                                               June 30,        December 31,
                                                                 2002              2001
                                                             ------------      ------------
                                                             (unaudited)
Liabilities and shareholders' equity

Current liabilities
<S>                                                          <C>               <C>
     Accounts payable and accrued liabilities                $    472,742      $    498,896
     Current portion of long-term debt                               --              21,374
     Current portion of capital lease obligation                   16,067            33,250
     Accrued interest payable                                      19,063            19,063
     Accrued vacation payable                                        --             175,189
     Other accrued liabilities                                    447,829           154,361
     Retirement benefit liability, current portion                200,000              --
     Executive's severance liability                                 --             100,000
                                                             ------------      ------------
         Total current liabilities                              1,155,701         1,002,133
                                                             ------------      ------------

Long-term liabilities
     Long-term debt, less current portion                            --               1,852
     Retirement benefit liability                                 100,006              --
                                                             ------------      ------------

              Total liabilities                                 1,255,707         1,003,985
                                                             ------------      ------------

Shareholders' equity
     Preferred stock, $.0001 par value; 1,000,000 shares
         authorized 2,800 shares issued and outstanding              --                --
     Common stock; $.0001 par value; 100,000,000
          shares authorized; 21,243,155 shares issued
         and outstanding                                            2,124             2,124
     Stock option notes receivable                                (91,027)          (74,727)
     Additional paid-in capital                                29,334,482        29,334,482
     Accumulated (deficit)                                    (27,937,020)      (24,824,398)
                                                             ------------      ------------
         Total shareholders' equity                             1,308,559         4,437,481
                                                             ------------      ------------
Total liabilities and shareholders' equity                   $  2,564,266      $  5,441,466
                                                             ============      ============
</TABLE>


                                       5


<PAGE>


                            OnLine Power Supply, Inc.
                  Unaudited Condensed Statements of Operations


<TABLE>
<CAPTION>
                                 Three Months       Six Months       Three Months        Six Months
                                    Ended             Ended             Ended              Ended
                                 June 30, 2002     June 30, 2002     June 30, 2001     June 30, 2001
                                 -------------     -------------     -------------     -------------

<S>                              <C>               <C>               <C>               <C>
Revenue                          $    279,745      $    774,168      $    746,837      $    949,240
Cost of Revenue                       175,558           517,612           861,919         1,076,784
                                 ------------      ------------      ------------      ------------
Gross profit (loss)                   104,187           256,556          (115,082)         (127,544)
                                 ------------      ------------      ------------      ------------

Operating expenses:
Research and development              635,561         1,172,612           544,538         1,009,886
Sales and marketing                   491,025           827,775           311,081           547,113
General and administrative            928,726         1,392,720           607,307         1,233,810
                                 ------------      ------------      ------------      ------------
Total operating expenses            2,055,312         3,393,107         1,462,926         2,790,809
                                 ------------      ------------      ------------      ------------

(Loss) from operations             (1,951,125)       (3,136,551)       (1,578,008)       (2,918,353)


Interest & Investment Income           13,509            28,615            70,033           216,768
Interest (expense)                     (2,395)           (4,686)           (6,211)          (13,260)
                                 ------------      ------------      ------------      ------------
Net (loss)                       $ (1,940,011)     $ (3,112,622)     $ (1,514,186)     $ (2,714,845)
                                 ------------      ------------      ------------      ------------

Net loss per common share        $       (.09)     $       (.15)     $       (.07)     $       (.13)
                                 ============      ============      ============      ============


Weighted average shares
     outstanding                   21,243,155        21,243,155        21,243,155        21,243,155
                                 ============      ============      ============      ============
</TABLE>



                                       6


<PAGE>


                            OnLine Power Supply, Inc.
                  Unaudited Condensed Statements of Cash Flows

<TABLE>
<CAPTION>
                                                                          For the Six Months Ended June 30,
                                                                         -----------------------------------
                                                                             2002                  2001
                                                                         -----------            -----------

Cash flows from operating activities
<S>                                                                      <C>                    <C>
     Net (Loss)                                                          $(3,112,622)           $(2,714,845)
     Adjustments to reconcile net loss to net cash used in operating
      activities
         Depreciation and amortization                                       184,572                157,788
         Stock Based compensation                                               --                   65,153
     Changes in certain assets and liabilities
         Receivables, inventory and other current assets                      77,136               (369,100)
         Accounts payable and other current liabilities                      290,279                253,134
                                                                         -----------            -----------
              Net cash used in operating activities                       (2,560,635)            (2,607,870)
                                                                         -----------            -----------

Cash flows from investing activities
     Payment of leasehold improvements                                          --                 (102,903)
     Purchases of equipment                                                  (24,019)              (703,316)
     Payments to acquire patent                                              (44,434)               (15,536)
     Sale of certificates of deposit                                          74,000                500,000
     Sale investments                                                        315,657              5,067,156
                                                                         -----------            -----------
              Net cash provided by investing activities                      321,204              4,745,401
                                                                         -----------            -----------

Cash flows from financing activities
     Note issued                                                             (16,300)                  --
     Payments on capital leases                                              (17,183)               (15,051)
     Repayment of long term debt                                             (21,374)                (9,735)
                                                                         -----------            -----------
              Net cash used in financing activities                          (54,857)               (24,786)
                                                                         -----------            -----------

Net (decrease) increase in cash                                           (2,294,288)             2,112,745
                                                                         -----------            -----------

Cash and cash equivalents- beginning of period                             2,338,835              3,181,728
                                                                         -----------            -----------

Cash and cash equivalents- end of period                                 $    44,547            $ 5,294,473
                                                                         ===========            ===========
</TABLE>

Supplemental disclosure of cash flow information:

Cash paid for interest during the six months ended June 30, 2001 and June 30,
2000 was $4,686 and $13,260, respectively.


                                       7


<PAGE>


                            ONLINE POWER SUPPLY, INC.
                          NOTES TO FINANCIAL STATEMENTS

NOTE 1 - ACCOUNTING POLICIES
----------------------------

Basis of Presentation
---------------------

In the opinion of management, the accompanying balance sheets and related
interim statements of income, cash flows and shareholders' equity include all
adjustments, consisting only of normal recurring items, necessary for their fair
presentation in conformity with U.S. generally accepted accounting principles.
Preparing financial statements requires management to make estimates and
assumptions that affect the reported amounts of assets, liabilities, revenue and
expenses. Actual results may differ from these estimates and assumptions and
interim results are not necessarily indicative of the results for the full year.

Annual Versus Interim Statements
--------------------------------

The interim financial statements are presented in accordance with the
requirements of SEC Form 10-QSB and therefore may not include all of the
disclosures made in the SEC Form 10-KSB annual report filing. These financial
statements should be read in conjunction with Management's Discussion included
in the SEC Form 10-QSB and the audited financial statements and notes included
in the 2001 SEC Form 10-KSB.

NOTE 2 - SHAREHOLDERS' EQUITY
-----------------------------

Qualified Stock Option Plan
---------------------------

The shareholders approved a Qualified Incentive Stock Option Plan on December 7,
1999. The purpose for the plan is to have the ability to offer stock incentives
to key employees as a reward for past performance and to attract the
best-qualified new employees by offering ownership as a means of reward and
retention. A total of 3,500,000 common shares have been set aside in this plan
to provide for stock options to participants. During this quarter, 15,000
qualified stock options were granted to an employee as a reward for past
performance.

Non Qualified Options:
---------------------

During this quarter, 600,000 non-qualified stock options were granted to the new
executive officer (installed June 3, 2002) as provided in his employment
agreement; 120,000 options vest immediately upon grant and the remainder vest
over the five year term of his contract agreement.

Stock Option Plan for Non-Executive Directors
---------------------------------------------

The Board of Directors adopted a Directors' Non-Qualified Stock Option Plan in
August 2000 to provide for stock options to non-executive members serving on the
Board. The plan will be used to attract and retain the most qualified candidates
by issuing them stock options in exchange for their service on the Board.
300,000 shares of common stock are reserved for issuance on exercise of options;
options on 73,000 shares have been issued to the three non-executive directors
to date.

NOTE 3-STOCK OPTION NOTES RECEIVABLE
------------------------------------

The Company's Incentive Stock Option Plan (ISOP) administrators allow (beginning
October 2000) employee ISOP participants to borrow funds from the Company to
option their common stock. The advances are evidenced by recourse notes from the
employee to the Company bearing interest at 8% per annum. The outstanding stock
option exercise notes payable to the Company at December 31, 2001 and June 30,
2002 is $74,727 and $91,027,


                                       8


<PAGE>


respectively. Notes were created to indicate payment due for stock issued under
discontinued cashless exercise feature of options exercised by employees in
2001.


NOTE 4 - INCOME TAXES
---------------------

A reconciliation of the US statutory federal income tax rate to the effective
rate follows:

<TABLE>
<CAPTION>
                                                                 June30,     June 30,
                                                                 -------     --------
                                                                  2002        2001

<S>                                                              <C>         <C>
U.S. statutory federal rate                                      34.00%      34.00%
State income tax rate, net of federal benefit                     3.00%       3.00%
Provision for bad debts                                            --          --
Net operating loss for which no tax benefit
     is currently available                                     (37.00%)    (37.00%)
                                                                --------    --------
                                                                   -- %        -- %
                                                                ========    ========
</TABLE>

Deferred taxes consisted of:

<TABLE>
<CAPTION>
                                                          June 30, 2002    June 30, 2001
                                                          -------------    -------------
<S>                                                       <C>              <C>
Deferred tax asset as a result of a net operating
     tax loss carry-forward (beginning 1996)              $   4,494,000    $   2,992,000
Valuation allowance                                          (4,494,000)      (2,992,000)
                                                          -------------    -------------
Net deferred taxes                                        $      --        $      --
                                                          =============    =============
</TABLE>


The valuation allowance offsets the deferred tax assets for which there is no
assurance of recovery. The net operating losses prior to 1996 have been lost due
to the change of business and change of ownership. The losses since 1996 may be
limited because of the change of ownership during 2000. The available NOL is
based on the estimated time during the year that the greater than 50% ownership
change occurred, thereby, resulting in the loss becoming partially limited in
its future use.

NOTE 5 - CONTINGENCIES AND COMMITMENTS
--------------------------------------

Office and Laboratory Space
---------------------------

The Company has leased office-laboratory space in the Highland Park complex in
Englewood, Colorado through February 28, 2006. Future minimum rental payments
payable under the office lease are $357,287 at $8,309 per month until February,
2006.

Manufacturing
-------------

The Company has entered into a written arrangement with Saturn Electronics and
Engineering Inc. for the turnkey manufacture of products. Saturn commits to
certain pre-production costs and purchase order liabilities for long lead
components, sometimes in advance of an order from OnLine. Based on certain
future events occurring, Saturn has been given a non-exclusive license to
manufacture our products to complete unfilled customer's orders.



                                       9

<PAGE>


NOTE 6- LITIGATION
------------------

The Company has prevailed on appeal in a claim against it known as Max Music
(claiming $390,000). It was litigated with the Magistrate's ruling given in
favor of the Company in 1999. The ruling has been sustained on appeal.

NOTE 7 - DEVELOPMENTAL TECHNOLOGY RISKS AND REVENUE GENERATION
--------------------------------------------------------------

The Company is bringing new, proprietary technology to market that will compete
favorably against existing technology for certain targeted applications and
customers. The Company is focusing on original equipment manufacturer (OEM)
customers for prospective sales and the technology introduction process is
complex and lengthy. It typically takes from 12 to 52 weeks until purchase
orders are received from this type of sale and this type of customer. The normal
lead time for manufacturing to begin from the point of initial purchase order
can be 12-16 weeks to allow for parts procurement lead times.

NOTE 8 - CONCENTRATIONS
-----------------------

Current revenue generation is provided from sales of our PFC product; however,
98% of the business is with one large customer (Ericsson Wireless
Communications, Inc.) that has pulled back and pushed out orders in the recent
past due to their customers changing order deliveries accordingly. When
significant scheduling changes occur with this customer, OnLine's revenues are
affected, sometimes adversely. The Company is relying on continuing PFC sales at
existing levels to sustain operations and cash flows for the remainder of 2002
until 48 volt revenues are realized in 2003 (48 volt sales may develop late in
2002).

NOTE 9 - GOING CONCERN ISSUES
-----------------------------

Revenues from sales of the PFC product are not presently adequate to sustain the
Company's overhead for the next twelve months at existing levels; therefore, our
December 31, 2001 financial statement opinion includes a going concern
qualification from our outside accountants. Management believes that its current
short term plan for operations, including the addition of debt and sales of
private equity capital, will be adequate tools to maneuver through our current
financial liquidity issues from now until year end. A new bank borrowing
facility, new private equity capital, continuing PFC sales, limited 48 volt
sales in fourth quarter 2002 and aggressive downsizing of overhead and
operations will achieve the objective of matching expenses with revenue levels
in the next twelve months.

NOTE 10 - SUBSEQUENT EVENTS
---------------------------

Approval was received from Silicon Valley Bank on August 8, 2002 for OnLine to
borrow up to $1,200,000 utilizing accounts receivables as a borrowing base.
Documentation is being reviewed and should be executed for potential borrowing
transactions as early as August 25, 2002. Collateral for this facility is all
tangible and intangible assets of the Company, including intellectual property,
and the term of the agreement is one year. OnLine expects to use these funds to
support working capital from time to time and be better able to manage cash
flows in the near term.


                                       10


<PAGE>


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
        AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the reviewed
quarterly financial statements filed with this report. Except for the historical
information contained herein, this report may contain forward looking statements
that involve unique risks and uncertainties for the Company, including
manufacturing risks associated with the implementation of new process
technology, achieving commercial-scale manufacturing levels, obtaining
consistent product yields and quality, the uncertainty of market acceptance of
new technology, as well as other risks detailed from time to time in the
Company's filings with the Securities and Exchange Commission, including the
Company's annual 10-K report.

GENERAL BUSINESS STRATEGY

The Company successfully released the power factor corrected front end module
("PFC") product late in 2000 to signify the end of the developmental phase and
the beginning of the operational phase of the Company following three years of
discovery, research and product development efforts resulting in the filing in
1999 of patents for our intellectual DPM technology property.

To date, the company has sold over 14,000 PFC's which has served to validate the
product performance in the field and has released the 48 volt, 1000 watt AC/DC
power supply to the market in 2002. Pre-production is substantially complete in
advance of starting full production of the 48 volt unit; evaluation units have
been delivered to a select number of prospective customers and a limited number
of initial orders for product have been received.

The goal and strategy for the company in 2002 is to continue to penetrate the
niche markets with total-solution selling to those users that will benefit most
from the advanced operating characteristics and improved performance provided by
the core technology and process methodology embodied in our power devices.
Smaller, cooler and lighter are features of our power supply that can be used by
our prospective customer's design engineers when designing their new products to
gain an advantage in their markets.

The continuing product development in the laboratory will focus on releasing our
second generation 48 volt 1000 watt AC/DC power supply to provide further
enhancements required by our prospective data storage and computer server
customers.

OnLine Power Supply Inc.'s mission is to become one of the leaders in our
industry in producing the newest generations of 48-volt power supplies. We want
to provide customers of our power supplies with much needed advancements in
size, weight, efficiency and reliability. Additionally, we want to take the
leadership position in enhancing the role of power components in both
traditional and non-traditional applications.

RESULTS OF OPERATIONS-SECOND QUARTER VS. FIRST QUARTER, 2002

Revenues
--------

Revenues from the sales of PFC's during the second quarter were $279,745 down
from the first quarter revenues of $494,423 mainly due to stoppage of
manufacturing in Monterrey, Mexico in May and June. A problem caused by the
failure of a key component led to manufacturing and quality issues that caused
us to temporarily halt production to identify and remedy the issues before
continuing production. Our planned scheduling of PFC production would have
produced approximately $1,000,000 in delivered units in the month of June, 2002.
The affected shipments have been delayed, but not lost, and our current
manufacturing process has returned to full


                                       11

<PAGE>


operating status. We will deliver approximately 10,000 new PFC units by the end
of September, 2002 creating $2,000,000 in revenues. Our backlog of released PFC
orders has been steadily climbing and is now $2,000,000; the next twelve month
forecast from our largest customer (Ericsson Wireless Communications, Inc.)
shows 35,000 units to be shipped and will be finalized with rolling 90 day
purchase orders to drive the scheduling of deliveries. However, note that the
forecast is not an order, and may not ripen into such (see below).

Since the fourth quarter of 2000, significant sectors of the U.S. and global
economies have experienced continued sharp slowdowns in sales and growth. Recent
published predictions from creditable sources are stating that we should expect
continued slow economic times and a noticeable recovery may not be seen until
well into 2003. The resulting impact on our customers and markets seems to be
lessening, but may still cause unexpected pullbacks in shipments thereby
negatively impacting OnLine, which now is relying solely on one large customer
(Ericsson Wireless Communications, Inc.) PFC sales in 2002. We have experienced
pullbacks (and increases) in orders from time to time in 2001 from this
customer.

Administrative Costs and Expenses
---------------------------------

The quarter vs. quarter cost structure for general and administrative expenses
has not changed appreciably except for the one time costs associated with the
CEO's separation from the company in June 2002 totaling $286,219 and the
recruiting expenses for locating a new CEO of $90,000 in the current quarter.
The costs of the separation of the CEO were the result of expensing the expected
costs of an 18 month continuation of salary and benefits as determined by his
employment agreement dated March 1998. A second factor affecting general and
administrative costs was the one time legal cost associated with litigating the
legality of a proxy solicitation by third-party shareholders, that has since
been successfully resolved by establishing a compromise slate of new directors,
but not without significant legal cost to the Company during the second quarter.
The only new hire in second quarter was Glenn Grunewald, CEO. No additional
office or lab space was acquired, no expansion occurred in our administrative
cost infrastructure and no new spending was permitted. OnLine requires
additional working capital to operate normally during the remainder of 2002 and
we will likely have to downsize operations in the third quarter to allow time
for the revenues of the 48 volt unit to be realized in 2003.

Research, Product Development and Manufacturing Support Costs
-------------------------------------------------------------

Research, development and manufacturing support costs include: a) costs of
engineers, technicians and test equipment to maintain our laboratory operations,
b) continuing costs of supporting the contract manufacturing process at Saturn,
c) costs associated with the training and set up of new product manufacturing
processes at Saturn and d) parts and equipment dedicated to in-house production
of prototype power supply units. The total R & D/manufacturing support cost was
$635,562 this quarter versus $537,051 first quarter due to the increased cost of
manufacturing support at Saturn to initiate production for the 48 volt 1000 watt
unit in June 2002. The overall laboratory program has been operating at a
constant level for 2002 and continues to respond to customer application
requests for the PFC unit and assisting in customer design modification requests
for the first generation 48 volt power supply.

Sales and Marketing Costs
-------------------------

Sales and marketing expenses for second quarter were $491,025 versus first
quarter of $336,750, an increase of $154,275 for the current quarter. The major
sales and marketing cost components include: print advertisements, direct mail
correspondence, travel, distributor training, attendance at trade shows and
public relations. Beginning in June, the Company has a) de-emphasized trade show
importance and will no longer attend these events, b) most of the previously
scheduled print advertisements have been pushed out several months to lower this
expense, c)

                                       12

<PAGE>


travel (that is not revenue related) is being strictly limited, and d) all
discretionary marketing spending has been seriously curtailed. A new focus has
been developed to target the immediate potential users of our first generation
48 volt 1000 watt power supply to improve our revenue potential during the
remainder of the year and first quarter 2003. We are having success sending 48
volt evaluation units to prospects for testing and processing their feedback.
From these prospects indicating interest in designing-in the 48 volt 1000 watt
unit, we will work to turn these leads into orders in the third and fourth
quarters.

FINANCIAL CONDITION, GOING CONCERN ISSUES AND FINANCIAL LIQUIDITY

OnLine has been funding operations from $14,000,000 raised in three private
offerings conducted in 1999 and more recently has benefited from the proceeds of
$2,800,000 in PFC sales in 2001 and 2002. The Company has continuing sales of
the PFC unit but is not producing profits by which to sustain existing
operations at current levels. Our current spendable cash reserve at June 30,
2002 was $741,431 and would be consumed by operations (without cost reductions
or fresh capital) by August 31, 2002. Expected sales revenues for the third
quarter 2002 are insufficient to sustain cash flows; therefore, the Company is
seeking equity or debt capital, and is also preparing a plan of cost reductions
(up to 20 %) to be implemented August 31, 2002 in the event adequate capital is
not obtained timely from our current fund raising plans.

OnLine has a history of paying its bills in thirty days and does not have any
collection agencies threatening collection or have any pending or threatened
legal activity against us for the purpose of collecting trade debt. However,
beginning in July, 2002 we may have to extend the time for payment of our
payables which may hinder our ability to seek new credit accounts and cause us
to be placed on credit holds or delay shipments of goods from vendors. We are
depending heavily on additional equity capital to continue normal operations
through the remainder of 2002.

Silicon Valley Bank of Santa Clara California has approved the Company for a
credit facility that may be used to provide short term working capital beginning
August 31, 2002. The company has no existing debt and limited encumbrances by
creditors on its operating assets at June 30, 2002 (except for some computer and
telephone equipment subject to finance leases). The new Silicon Valley Bank
credit facility will be collateralized by all of the assets of the Company,
including intellectual property. Accounts receivable will be financed up to a
maximum outstanding loan balance of $1,200,000, unless increased by the bank due
to an increased borrowing base of assets.

Our large customer for the PFC product (Ericsson Wireless Communications, Inc.)
continues to increase its orders for units and anticipates purchasing
approximately 35,000 units over the next twelve months. The profits from these
expected revenues only covers 25% to 30% of our monthly overhead and we must
rely on new PFC sales and new sales of the 48 volt 1000 watt power supply to
reach a breakeven sales level by early 2003. The debt and equity capital
currently being arranged are also required to supplement 2002 working capital
and to provide an adequate financial foundation to grow the company in 2003.

Our auditors have cautioned our readers about our ability to continue in
business by issuing a "going concern" opinion on our December 31, 2001 financial
statements. Management believes that a combination of PFC sales, initial 48 volt
revenues in 2002, a $1,200,000 secured bank line of credit and approximately
$1,500,000 of new equity capital will allow the Company to maintain normal
operations in the near term until breakeven revenues are achieved sometime in
first quarter 2003. In the unlikely event that we can not raise sufficient
capital or our PFC revenues stop unexpectedly, we may have to implement drastic
measures to continue in business; namely, significant down sizing until the
orders of our new 48 volt product results in a revenue stream adequate to
support our overhead expenses on a go forward basis.

                                       13

<PAGE>


                           PART II. OTHER INFORMATION


ITEM 2.   CHANGES IN SECURITIES AND USE OF PROCEEDS.

          Not Applicable.


ITEM 3.   DEFAULTS UPON SENIOR SECURITIES.

          Not applicable.


ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SHAREHOLDERS.

          Not Applicable .


ITEM 5.   OTHER EVENTS.

          Not Applicable.


ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K.


     (a)  Exhibits.

          No.      Description
          ---      -----------

          10.8     Agreement with Ericsson Wireless Communications, Inc.
                     (Pricing provisions omitted)                             *

          99.1     Certifications Pursuant to Section 1350 of Chapter 63
                     of Title 18 of the United States Code                    *

          * Filed herewith.


     (b)  Reports on Form 8-K.

          The Company filed six reports on Form 8-K during the quarter ended
          June 30, 2002 as follows: 1) April 19, 2002 reporting submission of
          OPS-1000-48 volt power supply for UL certification; 2) May 21, 2002
          reporting the scheduling of Annual Shareholders' Meeting; 3) June 3,
          2002 reporting the employment of Glenn M. Grunewald and resignation of
          Kris Budinger; 4) May 31, 2002 reporting certification from
          Underwriter Laboratories of the OPS-1000-48 volt power supply; 5) June
          11, 2002 reporting status of backlog orders; and 6) June 25, 2002
          reporting the settlement of a contested proxy.


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                                   SIGNATURES

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

                                           ONLINE POWER SUPPLY INC.
                                           (Company)



Date:  August 13, 2002                     By:     /s/  Glenn Grunewald
                                                --------------------------------
                                                   Glenn Grunewald
                                                    CEO and President




Date:  August 13, 2002                     By:     /s/  Richard L. Millspaugh
                                                --------------------------------
                                                    Richard L. Millspaugh
                                                    Chief Financial Officer




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