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, 2000 or
[]   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.)

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

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

                                      NONE
--------------------------------------------------------------------------------
              (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 June 30, 2000
---------------------------------------      -----------------------------------
      Common stock, $.001 par value                     21,198,836 Shares



                                        1


<PAGE>



                            ONLINE POWER SUPPLY, INC.

                                      INDEX

PART I.   FINANCIAL INFORMATION

ITEM 1.   Financial Statements

          Condensed Balance Sheet - June 30, 2000 & December 31,1999.........3-4

          Condensed Statements of Operations -- Three and Six Months

          Ended June 30, 2000 and June 30, 1999................................5

          Consolidated Statement of Shareholders' Deficit....................6-7

          Condensed Statements of Cash Flows -- Six Months

          Ended June 30, 2000 and June 30, 1999................................8

          Notes to Condensed Financial Statements...........................9-13

ITEM 2.   Management's Discussion and Analysis of

          Financial Condition and Results of Operations....................14-16

PART II.  OTHER INFORMATION

ITEM 2.   Changes in Securities and Use of Proceeds...........................16

ITEM 4.   Submission of Matter to a Vote of Shareholders......................16

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

          Signatures..........................................................17


                                        2


<PAGE>



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

                                                                  June 30,     December 31,
                                                                   2000           1999
                                                                ---------------------------
                                                                (unaudited)

Assets

Current assets
<S>                                                             <C>            <C>
     Cash                                                       $ 1,403,110    $ 1,941,367
     Certificates of deposit                                      3,150,000      3,100,000
     Short term investments                                       5,907,719
     Accounts receivable, net of allowance for uncollectible
     accounts totaling $187(2000) and $364(1999)                      4,985          6,048
     Accrued interest receivable                                    138,165           --
     Receivable from officers                                        90,050           --
     Inventory, at cost                                             137,056         66,713
     Prepaid expenses                                                89,633          2,780
                                                                -----------    -----------
         Total current assets                                    10,920,718      5,116,908

Property and other assets
     Property and equipment, less
         accumulated depreciation of $85,315
         (2000) and $66,135 (1999)                                  384,643        251,114
     Equipment under capital leases, less
         accumulated depreciation of $15,920
         (2000) and $3,771 (1999)                                    86,043         74,190
     Goodwill, less accumulated
         amortization of $130,897 (2000) and
         $104,718 (1999)                                            130,897        157,076
     Acquired technology costs, less
         accumulated amortization of $63,700
         (2000) and $50,960 (1999)                                   63,700         76,440
     Patents, less accumulated amortization
         of $ 3,145 (2000) and $492 (1999)                           28,369         25,039
     Other assets                                                       450          1,512
                                                                -----------    -----------

         Total property and other assets                            694,102        585,371
                                                                -----------    -----------

                  Total assets                                  $11,614,820    $ 5,702,279
                                                                ===========    ===========

</TABLE>

                See notes to consolidated financial statements.

                                        3


<PAGE>



                            ONLINE POWER SUPPLY, INC.
                     CONSOLIDATED BALANCE SHEETS (CONTINUED)

<TABLE>
<CAPTION>
                                                                   June 30,       December 31,
                                                                    2000             1999
                                                                -------------    -------------
                                                                 (unaudited)

Liabilities and shareholders' equity

Current liabilities
<S>                                                             <C>              <C>
     Accounts payable                                           $    246,522     $    245,772
     Accounts payable, related parties                                  --            101,081
     Line-of-credit                                                     --                731
     Notes payable, current maturity                                  19,115             --
     Capital lease obligations, current maturity                      21,751           20,017
     Accrued interest payable                                         19,063           26,012
     Bonuses payable, related parties                                   --             72,000
     Retirement liability, related parties, current maturity         162,000             --
     Other                                                             7,947          100,772
                                                                ------------     ------------
         Total current liabilities                                   476,398          566,385
                                                                ------------     ------------

Long-term liabilities
     Capital lease obligations, less current maturities               57,316           48,583
     Note payable, less current maturity                              33,331             --
     Officer's retirement liability, less current maturity            27,000             --
                                                                ------------     ------------
         Total long term liabilities                                 117,647           48,583
                                                                ------------     ------------
                  Total liabilities                                  594,045          614,968
                                                                ------------     ------------

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

Shareholders' equity
     Preferred stock, $.0001 par value; 1,000,000 shares
         authorized  10,467 (1999) and 2,800 (2000)
         shares issued and outstanding                                  --                  1
     Common stock; $.0001 par value; 50,000,000 shares
         authorized; 21,198,836 (2000) and 16,954,119(1999)
         shares issued and outstanding                                 2,120            1,571
     Additional paid-in capital                                   28,774,698       19,914,828
     Retained deficits                                           (17,756,043)     (16,110,904)
                                                                ------------     ------------
         Total shareholders' equity                               11,020,775        3,805,496
                                                                ------------     ------------
Total liabilities and shareholders' equity                      $ 11,614,820     $  5,702,279
                                                                ============     ============
</TABLE>


                See notes to consolidated financial statements.

                                        4


<PAGE>



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

                                           For the Quarter   For the Six    For the Quarter   For the Six
                                                Ended        Months Ended        Ended       Months Ended
                                            June 30, 2000   June 30, 2000    June 30, 1999   June 30, 1999
                                           ---------------  -------------   ---------------  -------------

<S>                                        <C>              <C>              <C>              <C>
Net sales                                  $     15,677     $     28,111     $    117,153     $    188,589
Cost of sales                                     6,076           13,528           99,444          149,248
                                           ------------     ------------     ------------     ------------
Gross profit                                      9,600           14,582           17,709           39,341
                                           ------------     ------------     ------------     ------------

Operating cost and expenses

Research and development                        315,059          576,679           66,568          148,190

Selling, general and administrative
     expenses                                   660,097        1,284,972          209,403          410,833

                                           ------------     ------------     ------------     ------------
Total costs and expenses                        975,156        1,861,651          275,971          559,023
                                           ------------     ------------     ------------     ------------

         Loss from operations                  (965,556)      (1,847,069)        (258,062)        (519,682)

Interest income                                 129,772          225,547            1,110            1,110
Interest (expense)                              (10,614)          23,617)         (20,004)         (29,800)

Net (loss) available to common
      shareholders                         $   (846,399)    $ (1,645,139)    $   (277,756)    $   (548,372)
                                           ============     ============     ============     ============

Net loss per common share                  $       (.05)    $       (.09)    $       (.02)    $       (.05)
                                           ============     ============     ============     ============

    Weighted average shares outstanding      17,782,490       16,955,337       12,090,890       12,158,540
</TABLE>


                See notes to consolidated financial statements.

                                        5


<PAGE>


<TABLE>
<CAPTION>

                                   CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT)
                                       JANUARY 1, 1999 THROUGH JUNE 30, 2000 (UNAUDITED)

                                                                                            Series A Cumulative  Series B Cumulative
                                                                        Preferred Stock       Preferred Stock       Preferred Stock
                                                                        ---------------       ---------------     ------------------
                                                                                                     Stated               Stated
                                                                        Shares  Par Value   Shares    Value      Shares    Value
                                                                        ------  ---------   ------- ----------   ------  ----------

<S>                                                                    <C>     <C>         <C>      <C>         <C>       <C>
Balance, January 1, 1999                                               12,467  $       1   125,000  $ 250,000       --    $    --

Cumulative preferred stock issued in private placement                   --         --      25,600     51,200    272,750    545,501
    (Note 12)

Common stock issued for services (Note 7)                                --         --        --         --         --         --

Common stock issued for sales commissions (Note 7)                       --         --        --         --         --         --

Conversion of non-cumulative preferred stock to common stock           (2,000)      --    (125,000)  (250,000)      --         --
   (Note 6)

Common stock issued for retirement of debt (Note 6)                      --         --        --         --         --         --

Common stock issued in private placement (Note 12)                       --         --        --         --         --         --

Stock offering costs                                                     --         --        --         --         --         --

Stock subject to rescission (Note 5)                                     --         --        --         --         --         --

Declaration of 6% preferred stock dividend on cumulative
preferred stock (Note 6)                                                 --         --       7,860     15,720     26,574     53,148

Conversion of cumulative preferred stock to common stock                 --         --     (33,460)   (66,920)  (299,324)  (598,649)
    (Note 6)

Net (loss) for the year ended December 31, 1999                          --         --        --         --         --         --
                                                                      -------  --------- ---------  ---------  ---------  ---------

Balance, January 1, 2000                                               10,467  $       1      --    $    --         --    $    --
                                                                      =======  ========= =========  =========  =========  =========
</TABLE>


                See notes to consolidated financial statements.

                                        6a


<PAGE>



<TABLE>
<CAPTION>

                                   CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT)
                                       JANUARY 1, 1999 THROUGH JUNE 30, 2000 (UNAUDITED)


                                                                      Common Stock         Additional                     Total
                                                                     --------------         Paid in        Retained    Shareholders'
                                                                 Shares      Par Value      Capital        Deficit        Equity
                                                                 ------      ---------    -----------      -------       -------
<S>                                                            <C>         <C>           <C>           <C>             <C>
Balance, January 1, 1999                                       11,846,826  $      1,185  $  8,879,706  $  (9,573,142)  $   (442,250)

Cumulative preferred stock issued in private placement               --            --            --            --           596,701
    (Note 12)

Common stock issued for services (Note 7)                          25,000             2        62,835          --            62,837

Common stock issued for sales commissions (Note 7)                336,350            34       252,229          --           252,263

Conversion of non-cumulative preferred stock to common stock      254,000            25       249,975          --              --
    (Note 6)

Common stock issued for retirement of debt (Note 6)                53,571             5       149,995          --           150,000

Common stock issued in private placement (Note 12)              3,222,104           322     6,443,891          --         6,444,213

Stock offering costs                                                 --            --        (959,699)         --          (959,699)

Stock subject to rescission (Note 5)                           (1,243,151)         (124)   (1,281,691)         --        (1,281,815)

Declaration of 6% preferred stock dividend on cumulative
preferred stock (Note 6)                                             --            --            --            --            68,868

Conversion of cumulative preferred stock to common stock        1,216,268           122     6,117,587          --         5,452,140
    (Note 6)

Net (loss) for the year ended December 31, 1999                      --            --            --      (6,537,762)     (6,537,762)
                                                             ------------  ------------  ------------  ------------    ------------
Balance, January 1, 2000                                       15,710,968  $      1,571  $ 19,914,828  $(16,110,904)   $  3,805,496
                                                             ============  ============  ============  ============    ============
</TABLE>


                See notes to consolidated financial statements.

                                        6b


<PAGE>
<TABLE>
<CAPTION>

                                   CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT)
                                       JANUARY 1, 1999 THROUGH JUNE 30, 2000 (UNAUDITED)
                                                          (CONTINUED)


                                                                                    Series A Cumulative     Series B Cumulative
                                                                                     Preferred Stock         Preferred Stock
                                                              Preferred Stock        ---------------        ------------------
                                                              ---------------                  Stated                 Stated
                                                            Shares    Par Value     Shares     Value       Shares     Value
                                                            ------    ---------     -------  ----------    ------    ----------

<S>                                                         <C>      <C>         <C>         <C>         <C>        <C>
Balance, January 1, 2000                                    10,467   $       1        --     $     --         --    $        --

Conversion of non-cumulative preferred stock to             (7,667)         (1)       --           --         --             --
    common stock
Stock offering costs(36,624 shares issued                     --          --          --           --         --             --
    at $2 per share included)

Common stock issued in private placements                     --          --          --           --         --             --


Reverse rescission liability                                  --          --          --           --         --             --

Stock exchanged for public relations fees                    8,124           1      22,099

Employee exercise of stock options                          32,579           3          (3)

Stock issued in cashless exercise of stock options            --          --          --           --         --             --

Options granted                                               --          --          --           --         --             --

Net loss for the Six Months Ended June 30, 2000               --          --          --           --         --             --
                                                           -------   ---------   ---------   ----------  ---------  -------------
Balance, June 30, 2000                                       2,800   $       0        --     $     --         --    $        --
                                                           =======   =========   =========   ==========  =========  =============
</TABLE>


                See notes to consolidated financial statements.
                                        7a


<PAGE>


<TABLE>
<CAPTION>

                                   CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT)
                                       JANUARY 1, 1999 THROUGH JUNE 30, 2000 (UNAUDITED)


                                                                    Common Stock          Additional                     Total
                                                                   --------------          Paid in       Retained     Shareholders'
                                                               Shares      Par Value       Capital       Deficit         Equity
                                                               ------      ---------     -----------     -------        -------
<S>                                                           <C>         <C>           <C>            <C>            <C>

Balance, January 1, 2000                                      15,710,968  $      1,571  $ 19,914,828   $(16,110,904)  $  3,805,496

Conversion of non-cumulative preferred stock                      15,334             1          --             --             --
    common stock

Stock offering costs(36,624 shares issued                         36,624             4      (960,079)          --         (960,079)
    at $2 per share included)

Common stock issued in private placements                      4,120,790           412     8,323,125           --        8,323,537


Reverse rescission liability                                   1,243,151           124     1,281,691           --        1,281,815

Stock exchanged for public relations fees                                                                      --           22,100

Employee exercise of stock options                                                                                            --

Stock issued in cashless exercise of stock options                31,266             4       129,254           --          129,258

Options granted                                                     --            --          63,783           --           63,783

Net loss for the Six Months Ended June 30, 2000                     --            --            --       (1,645,139)    (1,645,139)
                                                            ------------  ------------  ------------   ------------   ------------
Balance, June 30, 2000                                        21,198,836  $      2,120  $ 28,774,698   $(17,756,043)  $ 11,020,775
                                                            ============  ============  ============   ============   ============
</TABLE>


                See notes to consolidated financial statements.
                                        7b


<PAGE>



                            ONLINE POWER SUPPLY, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>

                                                       For the Six Months Ended
                                                               June 30,
                                                      ---------------------------
                                                         2000            1999
                                                        ------           -----
                                                      (unaudited)     (unaudited)

Cash flows from operating activities
<S>                                                   <C>             <C>
   Net loss                                           $(1,645,139)    $  (548,372)
   Adjustments to reconcile net loss to net cash
      used by operating activities
      Depreciation and amortization                        89,333          55,610
      Stock based compensation                            129,258            --
      Options issued for services                          63,783            --
      Common stock issued for services                     22,100            --
      Impairment loss on fixed assets                       7,540            --
         Changes in certain assets and liabilities
            Receivables, inventory

              and other current assets                   (383,286)           (476)
            Accounts payable and

              other current liabilities                   (83,105)        (52,344)
                                                      -----------     -----------
      Net cash (used in) operating activities          (1,799,516)       (545,582)
                                                      -----------     -----------

Cash flows from investing activities
   Purchases of equipment                                (176,681)        (13,073)
   Payments to acquire patent                              (5,992)         (1,080)
   Purchases of certificates of deposit                   (50,000)        (86,600)
   Purchase of short term investments                  (5,907,719)           --
                                                      -----------     -----------
      Net cash (used in) investing activities          (6,140,392)       (100,753)
                                                      -----------     -----------

Cash flows from financing activities
   Proceeds from sale of stock                          8,323,125         582,339
   Payments for offering costs                           (960,074)        (24,850)
   Principal payments on capital leases                   (13,115)        (44,000)
   Payments on line of credit                                (731)           --
   Proceeds from long term debt                            52,446         123,000
                                                      -----------     -----------
      Net cash provided by financing activities         7,401,651         636,489
                                                      -----------     -----------

Net decrease in cash                                     (538,257)         (9,846)

Cash - beginning of period                              1,941,367         151,341
                                                      -----------     -----------
Cash - end of period                                  $ 1,403,110     $   141,495
                                                      ===========     ===========
</TABLE>

Supplemental disclosure of cash flow information:

   Cash paid for interest during the six months ended June 30, 2000 and 1999 was
   $23,617 and $29,800, respectively.

                See notes to consolidated 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,
GlitchMaster Marketing,  Inc. and OnLine Entertainment,  Inc. (separate domestic
Colorado  corporations)  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,  formerly
named OnLine Entertainment, Inc., which changed its name to OnLine Power Supply,
Inc. in December 1999).

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

SFAS 128  "Earnings  per Share"  requires a dual  presentation  of earnings  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.  All potentially  dilutive securities have been excluded as they would
be antidilutive.

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 six months ended
June 30, 2000 are not necessarily indicative of the results for the entire year.

                                        9


<PAGE>



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.

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

The Company has a $750,000 revolving bank line-of-credit,  of which $750,000 was
unused as of June 30, 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 June 30,
2000 has been  reduced to zero and the  liability  reclassified  as common stock
equity on the balance sheet.

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

Stock Options
-------------

On June 16, 2000 the Board of Directors  granted 3,000 options to an employee in
accordance  with  the  terms  of  his  employment  agreement.  The  options  are
exercisable  at  $10.62  per share and were  immediately  vested;  none of these
options have been  exercised at June 30, 2000 and will expire  December 2, 2009.
The employment agreement was signed June 2000.

On June 28, 2000 the Board of Directors granted 10,000 options to a director for
serving as a Board Member.  The options are  exercisable  at $4.50 a share.  The
fair value of these options is $63,783.  The options are immediately vested. The
total  fair  vlaue of these  options  has been  reflected  in the June 30,  2000
financial  statements.  None of the options were  exercised at June 30, 2000 and
expire December 2, 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
incentive.

                                       10


<PAGE>



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.

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:

                                                       June 30,       June 30,
                                                         2000           1999
                                                         ----           ----

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%)
                                                       -------        --------
                                                         -    %           -   %
                                                       =======        ========

Deferred taxes consisted of the following:

                                           June 30,           June 30,
                                             2000               1999
                                             ----               ----

Deferred tax asset, net operating
   loss carryforward                     $   1,990,032     $    1,082,595
Valuation allowance                         (1,990,032)        (1,082,595)
                                         -------------     --------------
Net deferred taxes                       $      -          $       -
                                         =============     ==============

                                       11


<PAGE>



The  valuation  allowance  offsets the deferred tax assets for which there is no
assurance of recovery.  The change in the  valuation  allowance  for the periods
ended June 30,  2000 and 1999  totaled  $0.00 and $0.00,  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 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
---------------------------------------

The Company  leases  office space under a  non-cancelable  operating  lease that
  expires on January 31, 2001.  Future minimum annual rental  payments under the
  office lease are as follows:

Through January 31, 2001
(termination date)                          $  60,200

Two executive  officers  were granted  options to purchase  500,000  shares (one
million in total) of the  Company's  common stock on  September  1, 1999.  These
options  were  granted  at  market  price on  September  1,  1999 and  expire on
September  1, 2004.  These  options  will  become  vested at 20% per year on the
anniversary  date of the  grant.  The  vested  options  will have a life of five
years. The options are exercisable at $ 3.00 per share.

As part of the executive  employment  agreements,  two executive  officers shall
become fully vested to receive  options to purchase  500,000 shares (one million
in total) of the Company's common stock upon achieving the following performance
goals:

1.    If the Company's consolidated gross revenues exceed $3,000,000 by December
      31, 1999,  the executives  vest in 35% of the options;  this event did not
      happen and the options did not vest accordingly.

2.    If the Company's consolidated gross revenues exceed $6,000,000 by December
      31, 2000 the executives vest in an additional 35% of the options;

3.    If the Company's consolidated gross revenues exceed $9,000,000 by December
      31, 2001, the executives vest in the remaining 30% of the options.

The Chief  Executive  Officer  retired in March,  2000 and the separation  costs
associated with his retirement  totaled $244,033  ($162,000 is the current total
of the current portion of the monthly obligations).

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.

                                       12


<PAGE>



NOTE 11 - LITIGATION AND SETTLEMENTS
------------------------------------

The Company has settled  and  satisfied  various  claims that have arisen in the
normal  course of a prior  business  endeavor that has been  terminated.  One of
those cases (Max Music) was litigated and a  magistrate's  ruling given in favor
of the Company.  The ruling is now being reviewed by the appellate judge and the
final outcome still to be decided.  Management  expects that any future  adverse
impact on the financial position of the Company will be minimal.

NOTE 12 -  PRIVATE STOCK OFFERINGS
----------------------------------

The Company  circulated  three  separate  private  offering  memorandums,  and a
rescission  offering  prospectus  (see below)  relating to other earlier private
offering  of shares of common  stock,  during 1999 and 2000.  The three  private
offerings from mid-1999 to mid-2000 were not rescinded; these offerings were not
registered  pursuant to the Securities Act of 1933, as amended (the "Act"),  nor
under the securities act of any state.  These  securities  were offered under an
exemption  from  registration  requirements  of  the  Act  and  exemptions  from
registration  provided by  applicable  state  securities  laws.  The  securities
dealers were 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.  The Company  filed a  registration
statement  prospectus  with the SEC in early  2000 to refund  $1,281,815  of the
financing provided by the earlier financings. None of the money was refunded.

Following is a summary of the offerings undertaken in 1999 and of 2000:

<TABLE>
<CAPTION>

                       Refund Offer      Offering #1 New     Offering #2 New    Offering #3 New
                   Rescission Offering       Funding             Funding            Funding
                   -------------------   ---------------     ---------------    ----------------

<S>                   <C>                 <C>                 <C>                <C>
Date:                 February, 2000      August, 1999        November, 1999      April, 2000

Offering:                Various          $ 2.00/share         $ 2.00/share      $ 2.00/ share
Minimum:                                  $ 500,000
Maximum:               $ 1,281,815        $ 5,000,000          $ 2,500,000       $ 8,500,000


<CAPTION>

Sold in 1999
------------
<S>                                        <C>                 <C>
Shares                                       2,473,533             748,571
Proceeds                                   $ 4,947,066         $ 1,497,142
<CAPTION>

Sold in 2000
------------
<S>                    <C>                                                       <C>
Shares                   1,243,151                                                 4,076,750
Proceeds               $ 1,281,815                                               $ 8,153,500
</TABLE>


NOTE 13 - OPERATIONS
--------------------

The Company  continues to develop an organization for the further support of the
research  and  development   efforts  and  to  commercialize  the  power  supply
technology discovered by the Company 1997. The Company has raised equity capital
by selling stock to support the  Company's  business plan and to fund cash flow.
Financial  resources  are adequate to allow the Company to complete the products
and release them to the marketplace as projected by management.

                                       13


<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 risks and uncertainties,  including  manufacturing risks
associated with implementing new process technology,  achieving commercial-scale
manufacturing  levels,  achieving consistent yields and quality,  uncertainty of
market  acceptance  and  timing of  market  acceptance,  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  registration  statement effective
February 24, 2000 (rescission offer).

GENERAL DISCUSSION OF THE BUSINESS STRATEGY

         The GlitchMaster  line of power surge products and circuitry  accounted
for almost all of the  historic  revenues  of the Company  since 1997;  however,
future  revenues will consist  mostly of sales of new power supply  products now
being finalized for the marketplace.  The original patent for the new technology
was filed in October, 1999 and is still pending issuance;  additional claims are
being incorporated into the patent document as a result of the improvements made
to the  product  since the  filing of the  patent.  Independent  testing  of the
prototype  power supply product verify that the unit should be more desirable to
the  design  engineers  in  the  telecommunications,  industrial,  military  and
computer server markets.  The Company's power factor corrected  front-end module
(PFCFEM)  is  lighter,   smaller,  more  efficient,   more  reliable  and  price
competitive to existing units applied in a comparable situation.

         The  objective  for the year 2000 is to release  the final model to the
marketplace in the third quarter and to begin full-scale production of the units
for our customers in the fourth quarter. The focus for the year to date has been
the  improvement  of the  initial  product to include a)  operating  at a higher
baseplate  temperature  level,  b) operating at lower  incoming AC currents,  c)
protecting  from  transient  power surges,  and d) reducing the size of the form
factor.  Our engineers have  incorporated all of the above changes into the unit
and prototypes are now in the hands of potential  customers for final evaluation
and acceptance.

         Additional  products are now being  developed that will contain the new
technology  from the  PFCFEM to also  allow  them to  outperform  the  existing,
competing  products.  The Company is scheduled to introduce the 48 volt-500 watt
power supply  shortly  followed by other power  supplies  with  multiple  output
capabilities.  It is expected that the first wide scale use of the products will
be in the wireless telecommunications  industry. Known applications exist in the
computer  industry and the military.  The  Company's  objective is to become the
leader in innovation for the power supply industry and to revolutionize  the way
power  supplies are  designed;  the goal is to have the power supply viewed as a
strategic  component of the next  generation  of power driven  products that can
give our customers a competitive edge when producing their final products.

         Significant  revenues  are not  expected  until  later in 2000 when the
company  anticipates the release of the Power Factor  Correction Module into the
market.  The  Company  has  raised  equity  working  capital,  hired  personnel,
furnished a research  laboratory,  completed a turnkey  manufacturing  agreement
with a major company and  formulated a marketing  plan to insure the  successful
rollout of these initial units to customers  who are  presently  evaluating  the
product.

                                       14


<PAGE>



RESULTS OF OPERATIONS--PERIOD  ENDED JUNE 30, 2000 COMPARED TO PERIOD
ENDED JUNE 30, 1999.

         Sales decreased to $ 28,111 for the six months ended June 30, 2000 from
$ 188,589 for the six months ended June 30, 1999.  The  declining  sales is from
the  gradual  phasing  out  of  the  previous   business  of  manufacturing  the
GlitchMaster  products; the remaining sales represent the sell down of inventory
to a few customers  that will  continue to purchase the products  until they are
used up from our  inventory.  Sales of new products will remain nominal and will
consist  mainly of  evaluation  units until the fourth  quarter when the Company
expects to release the products to the market.

         Cost of revenues  decreased  from $ 149,248 in 1999 to $13,528 in 2000;
related gross profits from these sales increased from approximately 20 % in 1999
to 50% in 2000  due to the  cost  reductions  associated  with  phasing  out the
production and sales of the units throughout 1999 and 2000.

         The primary focus of the Company in 1999 and  continuing  for 2000 is a
directed  effort in the  research  and  development  laboratory  to complete the
design of the  Power  Factor  Corrected  Front End  Module  (PFCFEM)  for a very
specific and custom  application in the wireless  telecommunication  industry at
the request of a large prospective customer. The PFCFEM is a proprietary product
that is  protected  by a patent  filing in October,  1999 and will become a core
piece  of  technology  that  will be  incorporated  into  all of the  derivative
products that are being developed,  such as the 48 volt-500 watt, 1,000 watt and
1,500 watt power supplies.  The Company has added technical and management staff
in the laboratory and has expanded the floor space  considerably over last year.
New equipment has been acquired to bring our bench testing  capability up to the
standards of the independent laboratories and to allow us to design the products
with  all of  the  safety  and UL  characteristics  required  by our  customers.
Research and  development  costs increased $ 428,489 from $ 148,190 in 1999 to $
576,679  in  2000  due to the  expansion  of the  efforts  to  complete  the new
technology (especially the PFCFEM).

         Selling,  general  and  administrative  expenses  have  increased  from
$410,833 in 1999 to $1,284,972  in 2000.  In large part,  the increase is due to
the addition of  administrative  staff and management (from nine to nineteen) as
the Company  prepares  to go into full  production  operations  later this year.
Additional  costs  totaling  approximately  $60,000  for  legal  and  accounting
associated with audits and SEC  registration  was incurred in 2000.  Shareholder
relations  costs (for costs paid by us,  none to any public  relations  firm) of
$62,272  this year added to the increase in total  expenses for 2000.  The Chief
Executive  Officer retired in March,  2000 and the separation  costs  associated
with his  retirement  totaled  $244,033  ($162,000  is the total of the  current
portion of the monthly obligations). An expanded effort to market the technology
represents  an  increase  of trade  shows,  travel  and  marketing  expenses  of
approximately  $ $ 50,000  over the same period  last year.  Compensation  costs
related to granting and exercising employee stock options accounted for $193,041
of increased expenses in the quarter ended June 30, 2000.

         Interest income  increased  $224,437 from $1,110 in 1999 to $225,547 in
2000 as a result of earnings  from invested  funds raised in private  offerings.
Short-term  investments  of $  3,150,000  in  certificates  of  deposits  and  $
5,907,719  in  commercial  paper at June 30, 2000 is yielding an average  annual
return of 6.75%.

         LIQUIDITY  AND CAPITAL  RESOURCES.  The Company from its  inception has
financed  its  operations  through a series of public and private  offerings  of
securities (the public offering was the registered rescission offer).  Beginning
in  August,  1999 and  ending in  January,  2000,  a total of  $14,699,000  (net
$13,000,000   after  offering  costs)  was  raised  in  three  separate  private
placements to  accredited  investors.  The working  capital at June 30, 2000 was
$10,444,323  consisting  mainly of cash and near cash items.  The operations are
presently  consuming $225,000 to $250,000 of cash resources  monthly,  offset by
approximately  $60,000 in interest  earnings.  At the present  operating  level,
management  does  not  foresee  the  need  for  any  additional  equity  or debt
financings  in 2000 unless  start up orders and product  rollout  require  added
up-front  funding to secure raw  materials,  fund work in  process  and  provide
capital for operating cycles in excess of our present


                                       15


<PAGE>




expectations. Also, by contracting with Saturn Electronics and Engineering, Inc.
to manufacture our products on a "turn-key" basis, there should not be a greater
than anticipated need for additional start up funding.

         As of June  30,  2000  we had  paid a  former  officer  (Larry  Arnold)
$101,191  to retire  his  personal  loans to us in prior  years.  We  recorded a
receivable  of  $73,750  as a  bridge  loan  to an  officer  (Chris  Riggio)  in
connection  with his employment  agreement and to accomplish his relocation from
Longmont,  Colorado to the Denver area to better serve the Company.  He has paid
off this obligation as of the date of this report.

         INCOME  TAXES.  The  Company has  $7,998,600  of  operating  loss carry
forwards  that expire  partially  each year through  2019;  these losses will be
available in the future to offset the current  payment of the taxes normally due
on the profits of the  Company.  The Company has not paid income taxes since its
inception.  The Tax Reform Act of 1986 and other income tax regulations  contain
provisions  which may limit the NOL carry  forwards  available to be used in any
given year, if certain events occur,  including significant changes in ownership
interests.

                           PART II. OTHER INFORMATION

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS.

         See Financial Statement Notes.

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

         There  was  no  annual  meeting  held  and  no  matters   submitted  to
shareholders for vote.

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

(a)      Exhibits.

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

         27.0              Financial Data Schedule ........................18

(b)      Reports on Form 8-K.  The Company  filed two Reports on Form 8-K during
         the  quarter  ended  June 30,  2000.  The first  filed on May 22,  2000
         announced the opening of the Company's internet web site and the second
         filed on May 24, 2000,  announced  the  completion of an SEC rule (506)
         accredited investor stock offering. The offering was for $8,153,500 and
         4,076,750 shares of common stock.

                                       16


<PAGE>


                                   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 14, 2000                      By:   /s/   Kris Budinger
                                                 -------------------------------
                                                 KRIS BUDINGER,
                                                 CEO and President

Date:  August 14, 2000                      By:   /s/   Richard L. Millspaugh
                                                 -------------------------------
                                                 RICHARD L. MILLSPAUGH,
                                                 Chief Financial Officer

                                       17