UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

[X]      Quarterly  report  pursuant  to section  13 or 15(d) of the  Securities
         Exchange Act of 1934 for the quarterly period ended March 31, 2000

[ ]      Transition  report  pursuant to section 13 or 15(d) of the Securities
         Exchange Act of 1934 for the transition period from _____ to ______.

Commission file number   0-29669
                       ---------

                            OnLine Power Supply, Inc.
--------------------------------------------------------------------------------
                 (Name of Small Business Issuer in its charter)

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

               6909 South Holly Circle, #200, Englewood, CO 80112
--------------------------------------------------------------------------------
                    (Address of principal executive offices)

Issuer's telephone number      303.741.5641
                           --------------------

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

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

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the  registrant  filed all  documents  and reports  required to be
filed by Section 12, 13, or 15(d) of the Exchange Act after the  distribution of
securities under a plan by a court.

                                                              Yes_____  No_____

                      APPLICABLE ONLY TO CORPORATE ISSUERS

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

                Class                            Outstanding on May 15, 2000
---------------------------------------      -----------------------------------
     Common Stock, Par Value $.001.                   17,133,500 shares

Transitional Small Business Disclosure Format (Check one): Yes___  No   X    .



                                        1


<PAGE>



                                    CONTENTS

                                                                        PAGE NO.
                                                                        --------

DISCLOSURE REGARDING FORWARD LOOKING STATEMENTS                               3

PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS.

         Balance sheets                                                     4-5
         Statements of operations                                             6
         Statements of changes in stockholders' deficit                       7
         Statements of cash flows                                             8
         Notes to financial statements                                     9-13

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS       14-16

PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS                                                   16

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K                                    16

         SIGNATURES                                                          17


                                        2


<PAGE>



                 DISCLOSURE REGARDING FORWARD LOOKING STATEMENTS

     Except for the  historical  information,  all of the  information  which is
contained  in this Form  10-QSB  are  "forward  looking"  statements  within the
meaning  of  section  27A of the  1933  Act and  section  21E of the  Securities
Exchange Act of 1934.  Specifically,  all  statements in this Report (other than
statements  of historical  fact)  regarding  our  financial  position,  business
strategy  and plans and  objectives  of  management  for future  operations  are
forward-looking  statements.  These forward- looking statements are based on the
beliefs of management,  as well as assumptions made by and information currently
available to  management.  These  statements  involve  known and unknown  risks,
including the risks  resulting from economic and market  conditions,  accurately
forecasting  operating and capital  expenditures  and capital needs,  successful
anticipation  of  competition  which  may  not  yet  be  fully  developed,   the
uncertainties  of  litigation,  and other business  conditions.  The use in this
Report  of the  words  "anticipate,"  "believe,"  "estimate,"  "expect,"  "may,"
"will," "continue" and "intend" and similar words or phrases, are intended by us
to identify forward-looking  statements (also known as "cautionary statements").
These statements  reflect our current views with respect to future events.  They
are subject to the  realization  in fact of  assumptions,  but what we now think
will happen may be turn out to be inaccurate or incomplete. Our actual operating
results and financial  performance  may prove to be very  different from what we
now predict or anticipate.

     Although we believe that our expectations are reasonable,  we cannot assure
you  that  our  expectations  will  prove  to  be  correct.  Based  on  changing
conditions,  should any one or more of these risks or uncertainties materialize,
or should any of our underlying assumptions prove incorrect,  actual results for
the  company  may  vary  substantially  from  what we now  anticipate,  believe,
estimate,  expect or intend.  All  subsequent  written and oral  forward-looking
statements attributable to us are expressly qualified in their entirety by these
cautionary statements.

                                        3


<PAGE>



                            ONLINE POWER SUPPLY, INC.
                                 BALANCE SHEETS
<TABLE>
<CAPTION>

                                                                              March 31,          December 31,
                                                                                2000                 1999
                                                                             -----------         ------------
                                                                             (unaudited)
ASSETS

Current assets

<S>                                                                        <C>                <C>
   Cash                                                                    $      114,090     $    1,941,367
   Certificates of deposit                                                      4,682,672          3,100,000
   Accounts receivable, net of allowance for uncollectible
      accounts of $187 (2000) and $364 (1999)                                       6,504              6,048
   Accrued Interest Receivable                                                     43,013            --
   Inventory, at cost                                                              63,860             66,713
   Prepaid expenses                                                                88,855              2,780
                                                                           --------------     --------------
        Total current assets                                                    4,998,994          5,116,908
                                                                           --------------     --------------

    Property and equipment, less accumulated depreciation
       of $81,664 (2000) and $66,135 (1999)                                       287,961            251,114
    Equipment under capital leases, less accumulated
       depreciation of $9,387 (2000) and $3,771 (1999)                             81,570             74,190
    Goodwill, less accumulated amortization of $117,807
       (2000) and $104,718 (1999)                                                 143,987            157,076
    Acquired technology costs, less accumulated amortization
       of  $57,330 (2000) and $50,960 (1999)                                       70,070             76,440
    Patent, less accumulated amortization
       of $1,769 (2000) and $492 (1999)                                            23,762             25,039
    Other assets                                                                    1,512              1,512
                                                                           --------------     --------------
    Total assets                                                           $    5,607,856     $    5,702,279
                                                                           ==============     ==============
</TABLE>



                       See notes to financial statements.

                                        4


<PAGE>



                            ONLINE POWER SUPPLY, INC.
                                 BALANCE SHEETS
<TABLE>
<CAPTION>

                                                                                     March 31,      December 31,
                                                                                       2000             1999
                                                                                 ---------------   --------------
                                                                                    (unaudited)

LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)

Current liabilities
<S>                                                                              <C>               <C>
   Accounts payable                                                              $       150,329   $      245,772
   Accounts payable, related parties                                                      78,815          101,081
   Bank line-of-credit                                                                   585,000              731
   Notes payable, current maturity                                                        16,100           --
   Current maturities on capital lease obligations                                        25,495           20,017
   Accrued interest payable                                                               19,063           26,012
   Bonuses payable, related parties                                                       --               72,000
   Retirement liability, related parties, current maturity                               162,000           --
   Other                                                                                  65,942          100,772
                                                                                 ---------------   --------------
       Total current liabilities                                                       1,102,744          566,385

Long-term liabilities

   Capital lease obligations, less current maturities                                     50,337           48,583
   Notes payable, less current maturity                                                   40,993           --
   Retirement liability, less current maturity                                            67,500           --
                                                                                 ---------------   --------------
       Total liabilities                                                               1,261,574          614,968
                                                                                 ---------------   --------------

 Liability for common stock subject to rescission, 0 (2000)
   and 1,243,151 shares (1999)                                                           --             1,281,815
                                                                                 ---------------   --------------

Commitments and contingencies

Shareholders' equity
   Preferred stock,  $.0001 par value; 1,000,000 shares
       authorized; 3,600 (2000) and 10,467 (1999) shares
       issued and outstanding                                                                  0                1
    Common stock; $.0001 par value; 50,000,000 shares
       authorized; 17,029,495 (2000) and 16,954,119 (1999)
       shares issued and outstanding (including rescission shares)                         1,703            1,571
   Additional paid-in capital                                                         21,254,015       19,914,828
   Retained deficit                                                                  (16,909,436)     (16,110,904)
                                                                                 ---------------   --------------
       Total shareholders' equity                                                      4,346,282        3,805,496
                                                                                 ---------------   --------------

Total liabilities and shareholders' equity                                       $     5,607,856   $    5,702,279
                                                                                 ===============   ==============

</TABLE>


                       See notes to financial statements.

                                        5


<PAGE>



                            ONLINE POWER SUPPLY, INC.
                            STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>

                                                                      For the Three Months Ended
                                                                                March 31,
                                                                   ---------------------------------
                                                                         2000              1999
                                                                   --------------     --------------
                                                                     (unaudited)       (unaudited)

<S>                                                                <C>                <C>
Net sales                                                          $       12,434     $      71,436

Cost of sales                                                               7,452            49,804
                                                                   --------------     -------------

Gross profit                                                                4,982            21,632
                                                                   --------------     -------------

Research and development                                                  261,620            81,622

Selling, general and administrative expenses                              624,666           201,430
                                                                   --------------     -------------
                                                                          886,286           283,052
                                                                   --------------     -------------
Loss from operations                                                     (881,304)         (261,420)
                                                                   --------------     -------------

Interest income                                                             95,775                --
Interest (expense)                                                        (13,003)           (9,796)
                                                                   --------------     -------------

Net loss available to common shareholders                          $     (798,532)    $    (271,216)
                                                                   ==============     =============

Basic weighted average common shares                                   16,353,688        12,069,203
outstanding

Basic loss per common share                                        $        (0.05)    $       (0.02)
                                                                   ==============     =============
Diluted loss per common share                                          16,353,688        12,069,203
                                                                   ==============     =============
Diluted loss per common share                                      $        (0.05)    $       (0.02)
                                                                   ==============     =============

</TABLE>


                       See notes to financial statements.

                                        6


<PAGE>



                            ONLINE POWER SUPPLY, INC.
                        STATEMENT OF SHAREHOLDERS' EQUITY

               JANUARY 1, 2000 THROUGH MARCH 31, 2000 (UNAUDITED)
<TABLE>
<CAPTION>

                                              Preferred Stock          Common Stock      Additional                      Total
                                            ------------------    --------------------     Paid-in        Retained    Shareholders'
                                            Shares   Par Value      Shares   Par Value    Capital        (Deficit)      Equity
                                            ------   ---------    ---------- ---------  ------------   ------------   -------------
<S>                                         <C>      <C>          <C>         <C>       <C>            <C>            <C>
Balance, January 1, 2000                    10,467   $      1     15,710,968  $  1,571  $ 19,914,828   $(16,110,904)  $ 3,805,496

Common stock issued
   for sales commission                      --          --           36,624         4        73,244         --            73,248

Conversion of non-cumulative
   preferred stock to common stock          (6,867)        (1)        13,734         1         --            --             --

Stock offering costs                         --          --           --          --         (65,780)        --           (65,780)

Common stock issued in private
   placement (Note 12)                       --          --           25,018         3        50,032         --            50,035


Reverse rescission liability (Note 5)        --          --        1,243,151       124     1,281,691         --         1,281,815

Net loss for the Quarter ended
March 31, 2000                               --          --           --          --          --           (798,532)     (798,532)
                                           -------   --------   ------------  --------  ------------   ------------   ------------

Balance, March 31, 2000                      3,600   $      0     17,029,495  $  1,703  $ 21,254,015   $(16,909,436)  $ 4,346,282
                                           =======   ========   ============  ========  ============   ------------   ============

</TABLE>


                       See notes to financial statements.



                                        7


<PAGE>



                            ONLINE POWER SUPPLY, INC.
                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                               For the Three Months Ended
                                                                         March 31,
                                                           ----------------------------------
                                                                 2000               1999
                                                           ---------------     --------------
                                                             (unaudited)        (unaudited)

Cash flows from operating activities
<S>                                                        <C>                 <C>
   Net loss                                                $     (798,532)     $    (271,216)
                                                           --------------      -------------
   Adjustments to reconcile net loss to net cash
      used by operating activities
      Depreciation and amortization                                43,075             27,673
      Changes in certain assets and liabilities
         Receivables, inventory
            and other current assets                             (126,691)            (7,672)
         Accounts payable and
            other current liabilities                              79,761            (13,017)
                                                           --------------      -------------
                                                                   (3,855)             6,984
                                                           --------------      -------------
      Net cash (used in) operating activities                    (802,387)          (264,232)
                                                           --------------      -------------

Cash flows from investing activities
   Purchases of equipment                                         (36,258)            (8,500)
   Payments to acquire patent                                      --                 (1,080)
   Purchases of certificates of deposit                        (1,582,672)           (86,600)
                                                           --------------      -------------
      Net cash (used in) investing activities                  (1,618,930)           (96,180)
                                                           --------------      -------------

Cash flows from financing activities
   Proceeds from sale of stock                                     50,034             84,700
   Payments for offering costs                                    (74,280)            (2,488)
   Principal payments on capital leases                            (5,763)           --
   Proceeds from Line of Credit                                   585,000             24,500
   Principal LOC payments                                            (731)            (2,644)
   Proceeds from debt issuance                                     42,687            123,000
   Principal debt payments                                         (2,907)            -
                                                           --------------      -------------
      Net cash provided by financing activities                   594,040            227,068
                                                           --------------      -------------

Net decrease in cash                                           (1,827,277)          (133,344)

Cash - beginning of period                                      1,941,367            151,341
                                                           --------------      -------------

Cash - end of period                                       $      114,090      $      17,997
                                                           ==============      =============
</TABLE>

Supplemental disclosure of cash flow information:

   Cash paid for interest  during three months ended March 31, 2000 and 1999 was
$19,952 and $2,319.

Non-cash investing and financing transactions:

   Acquisition  of  equipment  under  capital  leases for the three months ended
   March 31, 2000 and 1999 was $12,995 and $0.

   Acquisition of equipment financed with long-term debt totalled $17,313 and $0
   for the three months ended March 31, 2000 and 1999, respectively.

                       See notes to financial statements.

                                        8


<PAGE>



                            ONLINE POWER SUPPLY, INC.
                        FOOTNOTES TO FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
---------------------------------------------------

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

The  financial  statements  include the  accounts of OnLine Power  Supply,  Inc.
(formerly OnLine  Entertainment,  Inc.). Two wholly owned  subsidiaries,  Glitch
Master  Marketing,  Inc.  and OnLine  Power  Supply,  Inc. (a separate  domestic
Colorado  corporation)  were liquidated into the parent  corporation on December
31, 1999 and the  remaining  assets and  liabilities  are now included  with the
accounts of OnLine Power Supply Inc. (a Nevada domiciled corporation).

Earnings (Loss) Per Common Share
--------------------------------

SFAS 128  "Earnings  per Share"  requires  a dual  presentation  of earning  per
share-basic and diluted. Basic earnings per common share has been computed based
on the weighted  average number of common shares  outstanding.  Diluted earnings
per share reflects the increase in weighted  average  common shares  outstanding
that would result from the assumed  exercise of all  outstanding  stock options.
All  periods  presented  have been  restated  to reflect  the  adoption  of this
standard.  At December 31, 1999, March 31, 2000 and 1999,  1,966,568,  2,575,142
and 2,036,367  shares,  respectively were excluded from the diluted earnings per
share  calculation,  as these shares were  anti-dilutive.  Had these shares been
included in the calculation,  diluted weighted average common shares outstanding
would  have  increased  to  14,776,519(1999),  18,928,830  (1st  Qtr  2000)  and
14,105,570 (1st Qtr 1999), respectively.

Nature of Organization
----------------------

The company has been  operating  as OnLine Power  Supply Inc.  since  January 1,
2000. The  activities  include the ongoing  development of the company's  patent
pending new power  supplies for sales to a few, but large,  corporations.  These
original  equipment  manufacturers  will incorporate our products into their own
product lines.  Management is estimating that volume sales will occur during the
fourth quarter of the year 2000.

 NOTE 2 - INTERIM FINANCIAL STATEMENTS
 -------------------------------------

The financial  statements  included  herein are presented in accordance with the
requirements  of SEC  Form  10-  QSB and  therefore  do not  include  all of the
disclosures  made in the Company's SEC form 10-KSB annual report  filing.  These
financial statements should be read in conjunction with the financial statements
and notes  thereto  included in the  Company's  1999 annual report filing on SEC
Form 10-KSB.  The quarterly  financial  statements  have not been audited by the
company's independent accountants,  but in the opinion of management reflect all
adjustments necessary for the fair presentation of the operations of the company
for the periods  reported.  The results of operations for the three months ended
March 31,  2000 are not  necessarily  indicative  of the  results for the entire
year.

NOTE 3 -  NOTES PAYABLE & LINE-OF-CREDIT
----------------------------------------

Bank Loan
---------

The company  acquired a $60,000  bank loan during the first  quarter of 2000 for
equipment and working capital.  The note carries an annual interest rate of 7.3%
and matures in January of 2003.

                                        9


<PAGE>



Line-of-Credit
--------------

The company has a $750,000 revolving bank line-of-credit, of which, $165,000 was
unused as of March 31, 2000.  Advances on the line carry an interest rate of 8%.
It is collateralized by the pledging of a $ 1,000,000 certificate of deposit.

NOTE 4 - OTHER LIABILITIES
--------------------------

As part of their executive employment agreements,  two executive officers earned
performance  bonuses  equivalent to 50% of their annual 1999  compensation.  The
bonuses  totaling $ 72,000  were  accrued at the end of 1999 and paid during the
first quarter, 2000.

NOTE 5 - RESCISSION OFFER
-------------------------

The  company  gave  certain  common  shareholders  the  right to  rescind  their
purchases due to the possible violation of the registration exemption provisions
of the  Securities  Act of  1933.  A total  potential  rescission  liability  of
$1,281,813 was included in the December 31, 1999 financial statements;  however,
none of the  shareholders  have requested a refund of their  investments and the
response  period has  terminated.  The liability for the rescission at March 31,
2000 has been  reduced to zero and the  liability  reclassified  as common stock
equity on the  balance  sheet.

NOTE 6 -  SHAREHOLDERS' EQUITY
------------------------------

Non-Qualified Stock Options
---------------------------

A senior executive, with an employment agreement,  retired on March 1, 2000 and,
by the terms of the  agreement,  will continue to receive stock option  benefits
for a period of 18 months from his separation  date.  These benefits include the
performance  option  provisions  that would  result in the  executive  receiving
vested  common  stock  options  during the years  ended 2000 and 2001 if certain
provisions for vesting are achieved.

On  January  1,  2000,  the board of  directors  granted  100,000  non-qualified
executive  common stock options to one officer in  accordance  with the terms of
his employment  agreement.  The options are  exercisable at $5.625 per share and
will vest over five years;  none of the options have been  exercised as of March
31, 2000 and will expire on December 2, 2009.

On  September  1, 1999,  the board of directors  granted  500,000  non-qualified
executive  common stock options to one officer in  accordance  with the terms of
his  employment  agreement.  The options are  exercisable at $3.00 per share and
vest over five years;  none of the options  have been  exercised as of March 31,
2000 and will expire on September 1, 2009. The  employment  agreement was signed
in February of 2000.

On September 1, 1999,  the board of directors  granted  1,023,000  non-qualified
executive  common stock options to one officer in  accordance  with the terms of
his employment agreement. 523,000 options are immediately vested and the rest of
500,000 shares will vest over five years.  The options are  exercisable at $3.00
per share; none of the options have been exercised as of March 31, 2000 and will
expire on September 1, 2009.

Qualified Stock Options
-----------------------

The board of directors  adopted a new Qualified  Incentive  Stock Option Plan on
December 1, 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 them stock options as a means of

                                       10


<PAGE>



compensation.  The company is  authorized  to grant a total of 3,500,000  common
shares  under this plan of which  209,124  and 11,362  were  granted in 1999 and
during the three months ended March 31, 2000.  These options are fully vested on
the date granted and are priced at or above the current  over the counter  share
trading price.  They have a term of 10 years. None of the options were exercised
as of March 31, 2000.

The status of the Company's  stock-option plan and executive  employment options
is summarized as follows:

                                                                   Weighted
                                                 Number             Average
                                               of Shares        Exercise Price
                                               ---------        --------------

Outstanding at December 31, 1999                 2,444,624                4.14
Granted in 2000                                    611,362                3.48
Canceled in 2000                                         0                   0
                                            --------------              ------
Outstanding at March 31, 2000                    3,055,986                4.01
                                            ==============              ======

The  company  continues  to  account  for  stock-based  compensation  using  the
intrinsic value method  prescribed by APB 25, under which no  compensation  cost
for stock options is recognized  for stock option awards granted at or above the
fair market value. Had compensation  expense for the Company's stock option plan
and the executive  employment  options been determined based upon fair values at
the  respective  grant  dates in  accordance  with SFAS 123,  the  company'  net
earnings and earnings per share would have been reduced to the pro forma amounts
indicated below. The pro forma effects indicated below. The pro forma effects of
SFAS 123 are not  indicative of future amount.  Additional  stock options awards
are anticipated in future years.

Net losses
   As reported                              $     (798,532)       $   (271,216)
      Employee stock option plan                (1,879,962)             --
      Executive employment options                 (58,254)             --
                                            --------------        ------------

   Pro forma                                $   (2,736,748)       $   (271,216)
                                            ==============        ============

Loss per common share
   As reported                              $        (0.05)       $      (0.02)
   Pro forma                                $        (0.17)       $      (0.02)

The weighted  average fair value of options granted during 2000 estimated on the
date of grant using the Black- Scholes  option-pricing model was $3.17. The fair
value of the  options  granted  is  estimated  on the date of  grant  using  the
following  assumptions:  dividend  yield of zero,  expected  volatility of 97.16
percent,  risk-free interest rate of 6.65 percent, and an expected life of three
to ten years.

NOTE 7 -  STOCK BASED COMPENSATION
----------------------------------

During the current quarter,  the company issued 36,624  restricted common shares
to a broker for stock sales commissions related to prior private offerings.  The
board of directors valued the issuance at the same price as the private offering
price.  A total of $73,244 was  recorded as  offering  expense in the  financial
statements.

                                       11


<PAGE>



NOTE 8 - RELATED PARTIES
------------------------

During  1999,  the  company  paid stock  offering  commissions  of $299,919 to a
broker.  The broker is an affiliated  party by virtue of his  relationship  to a
member of the Company's  board of directors.  The broker received 10% commission
on equity funds raised pursuant to a selling agreement signed by the company. As
of March 31, 2000, the company owes unpaid commissions of $78,815 to the broker.

Retirement Liability
--------------------

A senior executive, with an employment agreement,  retired on March 1, 2000, and
by the terms of the  agreement,  will  continue to receive  salary and all other
benefits  for a period of 18 months from his  separation  date.  A liability  of
$229,500  has been  accrued for his future  payments as of March 31,  2000.  The
separation expense of $243,962 is included in the first quarter of 2000 and will
be a non-recurring expense.

NOTE 9 -  INCOME TAXES
----------------------

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

<TABLE>
<CAPTION>
                                                                           March 31,
                                                              --------------------------------
                                                                  2000                  1999
                                                              -----------           -----------
                                                              (unaudited)           (unaudited)
                                                              -----------           -----------

<S>                                                              <C>                   <C>
U.S. statutory federal rate                                      34.00%                34.00%
State income tax rate, net of federal benefit                     3.30                  3.30
Provision for bad debts                                           (0)                   (0)
 Net operating loss for which no tax benefit
is currently available                                           (37.3)                (37.3)
                                                                 ------

                                                                  -  %                  -  %
                                                                 ======                ======
</TABLE>

Deferred taxes consisted of the following:

<TABLE>
<CAPTION>
                                                                           March 31
                                                           -------------------------------------
                                                                  2000                  1999
                                                           ---------------      ----------------
                                                              (unaudited)           (unaudited)
                                                           ---------------      ----------------


<S>                                                        <C>                  <C>
Deferred tax asset, net operating loss                     $     1,748,290      $       980,047
carryforward

Valuation allowance                                             (1,748,290)            (980,047)
                                                           ----------------     ---------------
Net deferred taxes                                         $        --          $         --
                                                           ================     ===============
</TABLE>


The  valuation  allowance  offsets the deferred tax assets for which there is no
assurance of recovery.  The change in the  valuation  allowance for the quarters
ended March 31, 2000 and 1999 totaled  $295,457 and $100,350  respectively.  The
net operating loss carry-forwards expire through the year 2019.

The valuation  allowance will be evaluated at the end of each year,  considering
positive  and  negative  evidence  about  whether the deferred tax asset will be
realized. At that time, the allowance will either be increased or

                                       12


<PAGE>



decreased;  reduction could result in the complete  elimination of the allowance
if positive  evidence  indicates that the value of the deferred tax assets is no
longer impaired and the allowance is no longer required.

NOTE 10 - COMMITMENTS AND CONTINGENCIES
---------------------------------------

Manufacturing Agreement
-----------------------

The  company  has  entered  into  an  agreement  with  Saturn   Electronics  and
Engineering Inc. for the manufacture of the initial power supplies  developed by
the company.  Saturn may, if asked by the company,  internally  finance  certain
startup costs normally  associated  with the initial  production  process and be
reimbursed  out of the  proceeds of payment for the orders when  received by the
company.

NOTE 11 -  PRIVATE OFFERINGS
----------------------------

Common Stock
------------

In the last two quarters of fiscal  1999,  the company  circulated  two separate
private offering memorandums of private stock. In the first quarter of 2000, the
company circulated a separate (SEC registered)  rescission  offering  prospectus
relating to three earlier  private  offerings of common and preferred  shares in
1998 and  1999.  The  rescission  offer  related  to  common  stock,  as all the
privately  sold  preferred  stock had been converted to common stock in December
1999. The private  offering in the last two quarters of 1999 were not registered
pursuant to the Securities  Act of 1933, as amended (the "Act"),  nor registered
under the  securities  act of any  state.  The  securities  dealers  for all the
private  offerings  had  been  paid  a  commission  up to  ten  percent  of  the
subscriptions accepted by the company.  Offering commissions were paid through a
combination of cash and the issuance of restricted common stock.

In the first  quarter of 2000,  we  recorded  $50,032  for stock  which had been
subscribed for in the last two quarters of 1999 but not accepted until the first
quarter of 2000.

Following is a summary of the offerings undertaken in 1999:

                             Offering #1                  Offering #2
                             -----------                  -----------

Date:                      Third Qtr. 1999              Fourth Qtr. 1999
Offering:                    $2.00/share                  $2.00/share
Minimum:                      $        500,000             $      --
Maximum:                      $      5,000,000             $       2,500,000

Sold in 1999
         Shares                      2,473,533                     748,571
         Proceeds             $      4,947,066             $       1,497,142

Sold in 2000
         Shares                         25,018
         Proceeds             $         50,033




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

     The following  discussion  should be read in conjunction  with the reviewed
quarterly financial statements filed with this report.

     NATURE OF THE BUSINESS.  We were originally  founded in 1991 under the name
Roth Financial Fitness, Inc. to market the financial fitness and wealth-building
concepts of J.W.  Roth. We developed a mail order program of videos,  workbooks,
telephone  consultant  sessions with financial experts and monthly  newsletters.
These  items  were  marketed  and  sold  through   infomercials  and  television
advertising featuring celebrities. This business was not successful and the plan
of operations was abandoned in late 1995.

     In late  1995,  we  changed  our name to  OnLine  Entertainment,  Inc.  and
developed  a business  plan to sell  entertainment  products  which we  packaged
through the Internet.  Our products were to include nature films,  rock and roll
record  compilations,  and other  items.  In late  1995 and  early  1996 we also
performed  a  limited  amount  of media  advertising  placement  work for  other
companies  (arranging  radio and television  advertising  time for our clients).
This business plan also was unsuccessful.

     In 1996, we acquired 100% of the stock of Glitch Master Marketing, Inc. Our
acquisition  of the common  stock of that entity in  exchange  for shares of our
common stock was treated for accounting  purposes as a recapitalization  of that
entity,  with that entity as the acquiror.  The entertainment  business line was
discontinued after the merger.

     In 1997 we acquired  Renaissance  Systems,  Inc.  and formed  OnLine  Power
Supply,  Inc. as a 100%  subsidiary  to develop new products in the power supply
business (Renaissance was not continued as a separate  subsidiary).  In December
1999 the two subsidiaries OnLine Power Supply, Inc. and Glitch Master Marketing,
Inc.  transferred  their assets and liabilities to us and the subsidiaries  were
dissolved.  This action was taken to simplify  our  accounting  systems and will
have no  effect  on our  operations  or  financial  statements.  Our  historical
financial  statements  included in this prospectus are consolidated (which means
they  reflect  the  assets,  liabilities,  revenues  and  expenses  of  the  two
subsidiaries).  Starting  with the  fiscal  year  ended  December  31,  2000 our
financial statements will be for one entity and will not be consolidated.

     RESULTS OF  OPERATIONS.  The  operating  nature of the  company has changed
considerably  from the first quarter 1999 compared to the current  quarter ended
March  31,  2000.  The  operating  focus  during  1999  was  on  developing  the
GlitchMaster  product lines, but that line of business and effort was terminated
at December 31, 1999.  The company is now  re-focused on developing  their newly
discovered (patent pending) power supply  technology.  The prototypes of the new
power  supplies  were  introduced  to the design  engineers  of  numerous  large
manufacturers in late 1998. From  introduction  until now, the company filed its
patent  application in late 1999,  received an initial UL approval and continues
to improve the performance  characteristics  of the initial product based on the
suggestions  and criteria of potential  customers  and the power  industry.  The
upgraded  and  improved  version  of the power  factor  correction  module  just
recently  received  UL  approval  for  operation  at 85 degrees C  baseplate  as
required for one of our potential large customers. Final commercialized products
are  anticipated  in the next quarter  followed by orders for product that could
lead to  shipments  in the fourth  quarter,  2000.  Until then the  company  has
operating  losses ( and expects  further  losses for several  months) due to the
costs of establishing the  organizational  structure and completing the in-house
research and development laboratory facility.

     Revenues  for the quarter  consisted  of the balance of the  deliveries  of
GlitchMaster  custom  power  supply  circuitry   previously  ordered  by  a  few
customers.  There have been no sales of the power factor  modules or other power
supplies  as  a  result  of  the  new  technology  because  it  is  still  under
development.  Interest  income of $ 95,775 from $ 4,650,000 of  Certificates  of
Deposits is the only  significant  non-operating  revenue  for the company  this
quarter.  The funds  invested  are the  results  of  several  private  placement
offerings for stock that were completed during 1999.

                                       14


<PAGE>



     General and  administrative  expenses  for the two  quarters  2000 and 1999
included  officers'  salaries:  $96,705  and $ 39,426;  administrative  salaries
$44,139  and  $  29,683;  sales  salaries  $25,047  and  $15,528;  research  and
development  salaries  $  157,865  and $ 58,244.  A  non-recurring  expense  was
recorded  during the March 31, 2000  quarter ,  totaling $ 243,337,  and was the
result of recording the  retirement  benefits that will be paid over the next 17
months to a retiring executive pursuant to his written employment agreement.

     Research and development costs,  including all direct and indirect costs of
salaries,  materials,  subcontracts  and overhead,  totaled $ 261,620 during the
current  quarter and was necessary to continue the  development of the products.
The comparable  costs for the March 31, 1999 quarter were less than $ 81,622 and
consisted mostly of salaries for technicians.

     Losses from business  development  were $798,532 in 2000 compared to losses
as a result of product  development  of $ 271,216 in 1999.  Among the  principal
items causing the increased losses from 1999 to 2000 were increased expenses for
laboratory personnel and equipment,  management and administrative salaries, the
cost of the  retirement of a senior  executive and related office  expenses.  In
2000 we have been fully developing the corporate infrastructure needed to become
a large volume maker of power supply systems.

     We issued stock in exchange for  services.  In 2000, we recorded an expense
(offering costs that offset equity capital on the balance sheet) of $ 73,244 for
stock sales  commissions in exchange for restricted common shares valued for the
transaction at the underlying  placement  selling price of $ 2.00 per share.  We
may be issuing more stock for commissions to the brokerage firms that placed the
offerings for us.

     The  legal  and  accounting  expenses  of $  31,724  in 1999  were  related
primarily to litigation costs resulting from claims of a prior line of business,
which should decrease  significantly after 2000.  However,  legal and accounting
expenses of $ 67,321 in 2000, primarily associated with becoming registered with
the Commission  under the Securities  Exchange Act of 1934, will offset expected
savings of legal costs in the litigation area to some extent.

     Continuing losses are expected until the  commercialization of OPS products
is completed  which is expected to occur in the first three quarters of 2000. We
can't  predict  with  certainty  the final date for  product  development  to be
completed or the start of production  against  specific  orders from  customers.
Operating losses will continue to occur until the revenue stream is established.
In this  context,  commercialization  will mean  sales  orders  are  signed  and
sufficiently performed to be profitable. At the present time there are no signed
orders in hand.

     Administrative  and  development  costs and other expenses will increase in
2000 as  additional  staff is hired and we expand our  facilities.  Research and
development  costs  will  probably  continue  to  increase  as a  result  of the
acceleration of the program for releasing new products.

     LIQUIDITY AND CAPITAL RESOURCES. Additional working capital was obtained by
private equity  offerings in 1999 resulting in cash and  certificates of deposit
totaling  $4,796,672  and  $5,041,367  at March 31, 2000 and  December  31, 1999
respectively.  Proceeds from these equity  financings  will allow us to meet our
obligations in a timely manner in 2000, as our working capital at March 31, 2000
was $ 3,896,249.

     We do not foresee the need for  additional  financing  in 2000 at this time
unless start up orders require added  up-front  funding to secure raw materials,
fund work in process and provide  capital for operating  cycles in excess of our
present cash needs  projections.  By  contracting  with Saturn  Electronics  and
Engineering,  Inc. to  manufacture  our products  for us on a "turn-key"  basis,
there should not be a greater than anticipated need for additional financing.

                                       15


<PAGE>



PLAN OF OPERATIONS

     In 2000  we  intend  to  speed  up the  commercialization  process  for OPS
technology.  The  development  of  marketable  product lines for OPS will have a
direct and  significant  impact on revenues and earnings in the future.  Most of
our  resources  will be devoted to support  OPS'  research and  development  and
marketing  efforts,  tailoring  OPS products to the specific  configurations  of
customers'  needs,  and to obtaining  contracts and setting up production  lines
(working out the  protocols  for parts  inventory  and other matters with third-
party  manufacturers).  These  activities  will require  substantial  amounts of
additional capital.

     The new OPS PFC Front End Module products and the new 500 Watt 48 Vdc power
supply  product are expected to enter the market in the second  quarter of 2000.
Additional  testing and  refinement  of the products  will be completed in 2000.
Revenues  and  earnings  (profits)  from  sales  of these  products  will not be
predictable until well into the initial production period.

     Capital  outlays for  manufacturing  are expected to be minimal  because we
will  subcontract  out  all   manufacturing  of  devices  except   demonstration
prototypes.  As production  is underway,  however,  added staff and  warehousing
resources  for  finished  goods will be needed,  and more  technical  and middle
management staff will be hired. We could have as many as 30 employees in 2000.

     More  products  are  planned,  including  a dynamic  array of power  output
wattages and multiple DC voltage  outputs.  This expansion of product lines will
continue to project OPS into larger and diversified  markets,  which may lead to
customer diversification.

                           PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

     Since  1996 we have been  defending  a lawsuit  filed by Fox  Sports,  Inc.
(which is pending in  California  Superior  Court (file  number  BC20946)).  Fox
sought approximately  $150,000 in damages for alleged breach of a contract by us
to distribute  films. The dispute arose out of the  arrangements  between OnLine
Entertainment  Inc.  and Fox to  distribute  video  film  products  when we were
involved in the  entertainment  business in 1996. In January,  2000, the parties
negotiated a settlement of this matter  whereby  OnLine paid $28,000 as full and
final  satisfaction  of the claims made in the lawsuit;  the  attorneys  are now
executing the necessary  agreements to withdraw the court filings and provide us
with a satisfactory release of liability.

     As previously reported in our last 10-KSB Report, litigation continues with
respect to certain  Bankruptcy  Court  proceedings.  There has been no change in
this matter since our last 10-KSB Report.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits.

         Exhibit No.       Description                               Page No.
         -----------       -----------                               --------

         27.0              Financial Data Schedule                       17

(b)      Reports on Form 8-K.

     We filed three  reports on Form 8-K during the quarter ended March 31, 2000
reporting events of February 28, 2000, February 29, 2000 and March 17, 2000.

                                       16


<PAGE>


                                   SIGNATURES

         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.

                                                ONLINE POWER SUPPLY, INC.
                                                (Registrant)


Date:    May 15, 2000                  By:           /s/    Kris M. Budinger
                                                --------------------------------
                                                Kris M. Budinger, President


                                       17


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