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, 2001
[ ]  Transition  report  pursuant to section 13 or 15(d) of the Securities
     Exchange Act of 1934 For the transition period from _____ to _____

Commission file number   000-29669

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

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

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

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

                    Former Address through February 28, 2001:
                6909 South Holly Circle #200, Englewood, Co 80112
--------------------------------------------------------------------------------
                    (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, 2001
----------------------------------          ------------------------------------
  Common stock, $.0001 par value                     21,243,155 Shares



                                        1

<PAGE>







                 DISCLOSURE REGARDING FORWARD LOOKING STATEMENTS

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


                                        2

<PAGE>



                            OnLine Power Supply, Inc.

                                      Index

PART I.  FINANCIAL INFORMATION

ITEM 1.  Financial Statements

         Condensed Balance Sheets June 30, 2001 and December 31, 2000........4-5

         Condensed Statements of Operations - Three and Six Months Ended
         June 30, 2001 and June 30, 2000.......................................6

         Condensed Statements of Cash Flows - Six Months Ended
         June 30, 2001 and June 30, 2000.......................................7

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

ITEM 2.  Management's Discussion and Analysis of
         Financial Condition and Results of Operations.....................10-13


PART II. OTHER INFORMATION

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

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

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

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


                                        3

<PAGE>



                            OnLine Power Supply, Inc.
                            Condensed Balance Sheets



<TABLE>
<CAPTION>

                                                           June 30,       December 31,
                                                             2001             2000
                                                         ------------    -------------
                                                          (unaudited)

Assets
Current assets
<S>                                                      <C>             <C>
     Cash and cash equivalents                           $5,294,473      $3,181,728
     Certificates of deposit                                150,000         650,000
     Short term investments                                    --         5,067,156
     Accounts receivable, net                               245,770          29,819
     Accrued interest                                        23,793          50,239
     Receivable from officers                               103,780          40,050
     Inventory, at lower of cost or market                  141,283          79,643
     Prepaid expenses                                       200,523         128,184
                                                         ----------      ----------

         Total current assets                             6,159,622       9,226,819

Property and intangibles, net of depreciation and
amortization, and other assets
     Property and equipment, net                          1,033,647         434,437
     Equipment under capital leases, net                     64,571          72,976
     Leasehold improvements, net                            102,119            --
     Goodwill, net                                           78,538         104,718
     Acquired technology, net                                38,220          50,960
     Patents, net                                            68,546          58,582
     Other assets                                              --            18,114
                                                         ----------      ----------

         Total property and other assets                  1,385,641         739,787
                                                         ----------      ----------

         Total assets                                    $7,545,263      $9,966,606
                                                         ==========      ==========
</TABLE>




                                        4

<PAGE>



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

<TABLE>
<CAPTION>

                                                                June 30,       December 31,
                                                                  2001            2000
                                                             -------------   --------------
                                                               (unaudited)
Liabilities and shareholders' equity

Current liabilities
<S>                                                          <C>             <C>
     Accounts payable                                        $    542,096    $    379,836
     Accrued interest                                              19,063          19,063
     Capital lease obligations, current maturity                   33,769          31,212
     Officer's retirement liability                                27,000         108,000
     Notes payable, current maturities                             20,593          19,840
     Accrued liabilities                                           30,000            --
     Other                                                        194,524          52,650
                                                             ------------    ------------
         Total current liabilities                                867,045         610,601
                                                             ------------    ------------
Long-term liabilities
     Capital lease obligations, less current maturities            15,721          33,329
     Note payable, less current maturities                         12,738          23,226
                                                             ------------    ------------
         Total long term liabilities                               28,459          56,555
                                                             ------------    ------------
              Total liabilities                                   895,504         667,156
                                                             ------------    ------------
Shareholders' equity
     Preferred stock, $.0001 par value; 1,000,000 shares
         authorized 2,800 shares issued and outstanding              --              --
     Common stock; $.0001 par value; 100,000,000
          shares authorized; 21,243,155 shares issued
         and outstanding                                            2,124           2,124
     Stock option notes receivable                                (83,127)        (83,127)
     Additional paid-in capital                                29,342,883      29,277,729
     Accumulated (deficit)                                    (22,612,121)    (19,897,276)
                                                             ------------    ------------
         Total shareholders' equity                             6,649,759       9,299,450
                                                             ------------    ------------
Total liabilities and shareholders' equity                   $  7,545,263    $  9,966,606
                                                             ============    ============
</TABLE>



                                        5

<PAGE>



                            OnLine Power Supply, Inc.
                   Unaudited Condensed Statement of Operations


<TABLE>
<CAPTION>

                                  Three Months     Six Months     Three Months      Six Months
                                      Ended           Ended           Ended            Ended
                                  June 30, 2001   June 30, 2001   June 30, 2000   June 30, 2000
                                  -------------   -------------   -------------   -------------

<S>                               <C>             <C>             <C>             <C>
Revenue                           $    746,837    $    949,240    $     15,677    $     28,111
Cost of Revenue                        861,919       1,076,784           6,077          13,529
                                  ------------    ------------    ------------    ------------
Gross profit (loss)                   (115,082)       (127,544)          9,600          14,582
                                  ------------    ------------    ------------    ------------

Operating expenses:
Research and development               544,538       1,009,886         315,059         576,679
Sales and marketing                    311,081         547,113          89,414         142,627
General and administrative             607,307       1,233,810         570,683       1,142,345
                                  ------------    ------------    ------------    ------------
Total operating expenses             1,462,926       2,790,809         975,156       1,861,651
                                  ------------    ------------    ------------    ------------
(Loss) from operations              (1,578,008)     (2,918,353)       (965,556)     (1,847,069)


Interest & Investment Income            70,033         216,768         129,771         225,547
Interest (expense)                      (6,211)        (13,260)        (10,614)        (23,617)
                                  ------------    ------------    ------------    ------------
Net (loss)                        $ (1,514,186)   $ (2,714,845)   $   (846,399)   $ (1,645,139)
                                  ============    ============    ============    ============
Net loss per common share         $       (.07)   $       (.13)   $       (.05)   $       (.09)
                                  ============    ============    ============    ============
Weighted average shares
     outstanding                    21,243,155      21,243,155      17,782,490      16,955,337
                                  ============    ============    ============    ============
</TABLE>



                                        6

<PAGE>



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

<TABLE>
<CAPTION>

                                                                      For the Six Months Ended June 30,
                                                                      ---------------------------------
                                                                           2001               2000
                                                                       ------------      ------------

Cash flows from operating activities
<S>                                                                    <C>               <C>
     Net (Loss)                                                        $(2,714,845)      $(1,645,139)
     Adjustments to reconcile net loss to net cash:
         Depreciation and amortization                                     157,788            89,333
         Stock Based compensation                                           65,153           129,258
         Options issued for services                                          --              63,783
         Common stock issues for services                                     --              22,100
         Impairment loss on fixed assets                                      --               7,540
     Changes in certain assets and liabilities
         Receivables, inventory and other current assets                  (369,100)         (383,286)
         Accounts payable and other current liabilities                    253,134           (83,105)
                                                                       -----------       -----------
              Net cash provided by (used in) operating activities       (2,607,870)       (1,799,516)
                                                                       -----------       -----------

Cash flows from investing activities
     Payment of leasehold improvements                                    (102,903)             --
     Purchases of equipment                                               (703,316)         (176,681)
     Payments to acquire patent                                            (15,536)           (5,992)
     Sale (purchases) of certificates of deposit                           500,000           (50,000)
     Sale (purchase) investments                                         5,057,156        (5,907,719)
                                                                       -----------       -----------
              Net cash provided by (used in) investing activities        4,745,401        (6,140,392)
                                                                       -----------       -----------

Cash flows from financing activities
     Proceeds from sale of stock                                              --           8,323,125
     Payments for offering costs                                              --            (960,074)
     Payments on capital leases                                            (15,051)          (13,115)
     Payments on line of credit                                               --                (731)
     Proceeds from (repayment of)  long term debt                           (9,735)           52,446
                                                                       -----------       -----------
              Net cash provided by (used in) financing activities          (24,786)        7,401,651
                                                                        -----------       -----------
Net increase (decrease) in cash                                          2,112,745          (538,257)
                                                                       -----------       -----------
Cash and cash equivalents- beginning of period                           3,181,728         1,941,367
                                                                       -----------       -----------
Cash and cash equivalents- end of period                               $ 5,294,473       $ 1,403,110
                                                                       ===========       ===========
</TABLE>

Supplemental disclosure of cash flow information:

Cash paid for  interest  during the six months  ended June 30, 2001 and June 30,
2000 was $13,260 and $23,617 respectively.


                                        7

<PAGE>



                            ONLINE POWER SUPPLY, INC.
                          NOTES TO FINANCIAL STATEMENTS

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

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

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

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

The  interim   financial   statements  are  presented  in  accordance  with  the
requirements  of SEC  Form  10-QSB  and  therefore  may not  include  all of the
disclosures  made in the SEC Form 10-KSB annual report filing.  These  financial
statements should be read in conjunction with Management's  Discussion  included
in the SEC Form 10- QSB and the audited financial  statements and notes included
in the 2000 SEC Form 10-KSB.

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

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

The shareholders approved a Qualified Incentive Stock Option Plan on December 7,
1999. The purpose for the plan is to have the ability to offer stock  incentives
to  key  employees  as  a  reward  for  past  performance  and  to  attract  the
best-qualified  new  employees  by offering  ownership  as a means of reward and
retention.  A total of 3,500,000  common shares have been set aside in this plan
to provide  for stock  options to  participants.  During  this  quarter,  97,000
qualified  stock options were granted to several  employees to reward their past
performance.

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

During this quarter,  170,000  non-qualified  stock options were granted to five
employees to reward their past performance,  including 25,000 options granted to
the Chief Financial Officer.  The options vest over three years, were awarded at
the market price of $ 3.50 per share and will expire at the end of ten years.

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

The Board of Directors adopted a Directors'  Non-Qualified  Stock Option Plan in
August 2000 to provide for stock options to non-executive members serving on the
Board. The plan will be used to attract and retain the most qualified candidates
by  issuing  them  stock  options in  exchange  for their  service on the Board.
300,000 shares of common stock are reserved for issuance on exercise of options;
options on 30,000 shares have been issued to the three non-executive directors.

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

The Company's Incentive Stock Option Plan (ISOP) administrators allow (beginning
October  2000)  employee ISOP  participants  to borrow funds from the Company to
option their common stock. The advances are evidenced by recourse notes from the
employee to the Company bearing interest at 8% per annum. The outstanding  stock
option  exercise  notes payable to the Company at December 31, 2000 and June 30,
2001 is $83,127.

                                        8

<PAGE>



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

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


                                                       June30,        June 30,
                                                       -------        --------
                                                         2001           2000
                                                        -----           ----

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:

<TABLE>
<CAPTION>

                                                          June 30, 2001      June 30, 2000
                                                          -------------      -------------

Deferred tax asset as a result of a net operating
<S>                                    <C>                <C>                <C>
     tax loss carry-forward (beginning 1996)              $  2,992,000       $  1,748,290
Valuation allowance                                         (2,992,000)        (1,748,290)

Net deferred taxes                                        $     --           $     --
</TABLE>


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

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

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

The  Company  has leased  their  office-laboratory  space in the  Highland  Park
complex in Englewood,  Colorado through February 28, 2006. Future minimum rental
payments  payable  under the office lease are $465,304 at $8,309 per month until
February, 2006.

Performance Options
-------------------

As part of their executive  employment  agreements,  two officers (including the
retired CEO) shall become  fully vested to receive  options to purchase  150,000
shares  (three  hundred  thousand in total) of the  Company's  common stock upon
achieving the following  performance goals: If the Company's  consolidated gross
revenues exceed  $9,000,000 for the year ended December 31, 2001, the executives
vest in the  options;  if this  event does not occur,  the  options  will not be
granted and will expire.

                                        9

<PAGE>



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

The  Company  has  entered  into an  arrangement  with  Saturn  Electronics  and
Engineering  Inc. for the turnkey  manufacture  of the initial power  conversion
units developed by the Company. Saturn may, if asked by the Company,  internally
finance certain costs normally  associated  with the production  ramp-up process
and  subsequently  be reimbursed  out of the proceeds of payments for the orders
when received by the Company.  Subject to certain terms and  conditions,  Saturn
has the exclusive right to manufacture  all of the products  developed by OnLine
through the end of their first product development program.

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

The Company has settled and  satisfied  all claims that have arisen from a prior
business  endeavor  except  for  one  known  as Max  Music  (claiming  $390,000)
currently  being  appealed by the bankruptcy  trustee for the plaintiff.  It was
litigated  with the  Magistrate's  ruling given in favor of the Company in 1999.
The ruling is now being  reviewed  by the Federal  District  Court and the final
outcome is yet to be decided.  Management has been advised by counsel that it is
likely the Company will prevail.  However, as with all litigation  results,  the
actual  outcome  will  not be known  until  the  process  is  completed;  in the
meantime,  management  believes  that  the  eventual  outcome  will not have any
adverse financial effect on the Company.

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

The Company is dedicated to bringing its new,  proprietary  technology to market
that will compete  favorably  against  existing  technology for certain targeted
applications  and  customers.  The Company is  focusing  on  original  equipment
manufacturer  (OEM) customers for  prospective  sales during the balance of 2001
and has established a significant sales marketing budget to expedite the release
and  introduction  of the technology to these  potential  users.  The technology
introduction process is complex and lengthy;  however,  initial orders are being
taken and production units were delivered in the first quarter 2001 to the first
customer.  The Company has attracted numerous 2nd and 3rd tier type companies in
the  United   States,   Canada  and   overseas   that  will  lead  to  a  strong
diversification of customers,  industries and product  applications  However, we
are unable at this time to predict when net sales  revenues  will be adequate to
cover the overhead for the Company.



                                       10

<PAGE>



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

BUSINESS STRATEGY

     The Company  successfully  released the PFC product late in 2000 to signify
the beginning of the  operational  phase of the Company  following  research and
development  work  leading to the patented  technology  that forms the basis for
several iterations of new power supply products.

     Shortly,  the Company  expects to release a family of single output 48 volt
power supplies  beginning with 500 watts, 750 watts and 1000 watts of DC output,
all  incorporating  the highly  successful  front-end PFC module allowing design
engineers  much  greater  design  flexibility.  The  initial  interest  shown by
potential  customers  indicates that OnLine Power Supply Inc. will have start up
orders after the product evaluation process is completed by the OEM engineers.

     OnLine Power Supply  Inc.'s goal is to lead the way in producing the newest
generation  of 48-volt power supply  products.  The new 48-Volt  product  should
provide  the power  industry  much  needed  advancements  in the  size,  weight,
efficiency and  reliability of power products that can keep pace with all of the
other changes  affecting the way the power  component is presently being viewed.
The core  technology has been  thoroughly  validated and an intense focus on our
potential  customer's  design  engineers  is  ongoing  to  introduce  the design
flexibility and innovative  uses to ultimately  persuade them to "design in" our
products as a strategic component for their next generation OEM products.

RESULTS OF OPERATIONS

Revenues
--------

     Revenues  during the second  quarter were $ 746,837  consisting of sales of
the PFC unit for resale and evaluation; this represents an increase of $ 544,434
over the  previous  quarter and $ 731,160  over the same quarter a year ago. The
gross profit margin for the initial  revenue stream has been adversely  affected
by introductory  (preferential)  pricing  parameters,  but ongoing sales will be
formulated with more normal  industry  profit margins.  The second quarter sales
resulted  in a gross loss of $ 115,082  for the  reasons  mentioned  above,  but
profit margin  improvement  should occur  throughout  the rest of 2001 with more
sales and  coupled  with  realization  of the cost  saving  benefits  due to the
relocation of the production line operation to Monterrey, Mexico in June, 2001.

     Since the fourth quarter of 2000, significant sectors of the U.S and global
economies have  experienced a sharp slowdown in growth.  The resulting impact on
our  customers  and markets is unclear but may cause a slowdown in our sales for
the balance of 2001 and our internal expectations for 2002.

Operating Costs and Expenses
----------------------------

     The quarter  over  quarter cost  structure  for general and  administrative
expenses has increased from $570,683 in 2000 to $607,307 in 2001,  mainly due to
the Company's move into expanded and improved  facilities and increased  support
costs of four  additional  staff  members.  The main  corporate  offices and lab
facility were  relocated in March 2001 to a custom  designed space over twice as
large as the former space. The growth caused the general operating costs for the
offices to increase, but not in proportion to the increased size of the Company.
New  laboratory  equipment,  new  computer  capabilities  and new voice and data
communications  were  incorporated  into  the  design  of the  space to serve us
adequately for the foreseeable future.


                                       11

<PAGE>



     Research and development  costs have almost doubled from the second quarter
2000 to second quarter, 2001. The cost of operating the laboratory was $ 544,538
this quarter  versus $ 315,059 last year. The overall  research and  development
program has been  stepped up to finish the 48-volt  product work and to continue
to answer the customer  application  requests for the PFC unit.  Presently,  the
Company is seeking  additional  technical  staff at all skill  levels to further
increase  the  work  capacity  of  the  new  product  development  program.  The
expectations  are for the costs of  operations  of the  laboratory  to  increase
moderately  for the remainder of 2001 and into 2002 until we achieve the optimum
operational management level to support our goals.

     Sales and marketing has been operating,  since third quarter 2000, with the
short-term  goal and  commensurate  funding  level  to  attain  the  most  rapid
introduction  of the PFC technology to the most likely first users.  As planned,
the cost to carry out this plan was $ 311,081 in this  quarter as  compared to $
89,414 for this comparable quarter last year. The major sales and marketing cost
components include:  direct advertisements,  direct mail correspondence,  travel
and lodging,  distributor training seminar costs,  attendance at trade shows and
public relations type industry  projects.  Early results indicate that the focus
of the campaign has produced  steady and  acceptable  rewards and should lead to
additional  orders  accordingly  during  the rest of 2001.  Also  evident is the
longer-term  educational  goal for the  potential OEM customer to begin to think
about  adaptation of the new technology  into their long-term  product  planning
processes.  A new product and new  application  idea  translates  into long lead
times for converting leads to orders; however, in many instances, the process is
well underway and evaluation  units are being  investigated  for  suitability by
many prospects at this time.

FINANCIAL CONDITION

     When the Company was re-focused in 1999 and 2000 to new technology research
for the power supply industry, it also successfully raised $ 14.2 million of new
equity capital to build a solid financial  foundation for forecasted growth. The
present cash position is  $5,295,000  which is twelve months cash in the bank at
the current burn rate. All cash resources (except the checking account cash) are
currently invested in institutional money market accounts. The interest earnings
have been reduced quarter over quarter by the lowering of the interest rates and
the  lowering of the amount of cash for  investment  due to the working  capital
consumed to sustain the operations during this pre-production phase.

     The current  quick  ratio  (ability to pay bills on time) is 9.8 to 1.0 and
the overall  current  ratio is 7.1 to 1.0,  both  results  indicating  excellent
financial  health at this time.  The debt to equity ratio is .13 to 1.0 which is
superior to industry  averages and  indicates a near term comfort  level pending
the expected creation of profitable  operations  sometime within the next twelve
months.

     The Company has not incurred  any new debt this  quarter and has  routinely
paid down all of its note and finance lease obligations pursuant to their agreed
upon terms over the past quater and six months. The obligation to pay retirement
benefits  to the  retired  CEO has been reduce to $27,000 at the end of June 30,
2001 and will be completely paid off at August 31, 2001.  Accounts  payable have
increased  $162,620  from the end of last year to the end of this  quater due to
the amounts owing to Saturn  Electronics  and Engineering for the manufacture of
the PFC units and for the $225,000 in  pre-production  costs  incurred to set up
the production  line. All of our trade payables are paid in the normal course of
business and within pre-arranged credit terms; accounts payable will increase as
the amount of business increases from quarter to quarter.

     Management has historically placed idle funds in cash equivalents,  such as
liquid money market accounts,  and  investments,  such as short term, high grade
commercial paper, to achieve the most earnings within a conservative  investment
program.  Consequently,  the previous  quarters show cash  equivalents and short
term  investments.  During this quarter,  all of the maturing  commercial  paper
investments were placed in money market

                                       12

<PAGE>



accounts;  therefore, no short term investments are on the balance sheet at June
30, 2001 and a large increase of cash is now reported as cash equivalents.

     Based on our current business plans and operating strategy, we believe that
the current  working  capital and borrowing  capacity are sufficient to fund the
Company's   working  capital,   capital   expenditures  and  other  normal  cash
requirements for the next twelve months.  However, with sustained growth and the
completion of the 48-volt  development and the product release,  the Company may
need to seek a  combination  of  debt  and  additional  equity  capital  to keep
operations at expected levels,  while we seek enhanced  revenues from the launch
of the next line of 48-volt power supplies early next year. All of the necessary
steps of the business plan are being more fully developed,  including hiring new
engineers and new engineering  technicians.  In addition, a new purchasing agent
has been hired to develop  central  purchasing and a newly hired chief operating
officer  is  now  implementing  manufacturing  company  operating  policies  and
procedures.

     The Company will reap the benefits of an estimated $ 8,000,000 net tax loss
carry forward which can be applied to any future tax liability  once the Company
reaches profitability. The loss may be limited in its use by tax regulations and
may  expire  if not  utilized,  but still  represents  a  significant  potential
economic benefit in the form of cash saved against  otherwise payable income tax
that would be due and payable.


                           PART II. OTHER INFORMATION


ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS.

     On April  25,  2001 the  Company  adopted  (by  authority  of its  board of
directors) a shareholder  rights plan ("poison pill"), by which all shareholders
of record on that date (and all future  shareholders of record)  received rights
to purchase preferred stock under certain  conditions.  The plan was filed as an
exhibit to the Company's Form 8-A  registration  of the purchase  rights,  which
Form 8-A was filed with the  Securities  and  Exchange  Commission  on April 25,
2001. That Form 8-A is incorporated by reference into this Form 10-QSB report.


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

     The annual  meeting of the  shareholders  was held on June 21, 2001 and the
following items were approved by a majority vote of the shareholders:

(a)      All current  serving  members of the board of directors were re-elected
         for another  one year term.  Shares  were voted on the  re-election  of
         directors as follows:

                                    FOR           AGAINST          ABSTAIN

         Kris M. Budinger         12,455,019       327,598        1,206,340
         Gary R. Fairhead         12,631,049       132,818        1,206,340
         Ronald W. Mathewson      12,631,049       151,568        1,206,340
         Thomas Glaza             12,649,799       132,818        1,206,340

(b)      The  authorized  shares of common stock was increased  from  50,000,000
         shares to 100,000,000  shares,  with 11,294,877  shares voted in favor,
         2,545,760 shares voted against, and 148,320 shares abstaining.

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(c)      The  appointment  of the current audit firm  (Ehrhardt  Keefe Steiner &
         Hottman)  to  serve  as  the  audit  firm  for  2001  was  ratified  by
         shareholder  vote (13,657,744  shares in favor,  97,949 shares against,
         and 233,264 shares abstaining).


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


         (a)      Exhibits.   None

         (b)      Reports on Form 8-K.  The Company did not file any  reports on
Form 8-K during the quarter ended June 30, 2001.





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                                   SIGNATURES



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

                                       ONLINE POWER SUPPLY INC.
                                       (Company)




Date:  August 7, 2001                  By:       /s/   Kris Budinger
                                              ----------------------------------
                                              KRIS BUDINGER,
                                              CEO and President




Date:  August 7, 2001                  By:       /s/   Richard L.  Millspaugh
                                              ----------------------------------
                                              RICHARD L. MILLSPAUGH,
                                              Chief Financial Officer


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