U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                 FORM 10-KSB/A2

(Mark One)

[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
      SECURITIES EXCHANGE ACT OF 1934 [Fee Required]
         For the fiscal year ended December 31, 1998

[ ]   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934 [No Fee Required]
        For the transition period from____________to_____________

                         Commission file number 0-15927

                               COMPUTER POWER INC.

                 (Name of small business issuer in its charter)

New Jersey                                       22-1981869
(State or other jurisdiction of                  (I.R.S. Employer
 Incorporation organization)                     Identification No.)

124 West Main Street, High Bridge, NJ              08829
(Address of principal executive offices)         (Zip Code)

Issuer's telephone number:  908-638-8000

Securities registered pursuant to Section 12 (b) of the Exchange act: None




      Securities registered pursuant to Section 12(g) of the Exchange Act:
                     Common Stock, par value $.01 per share
                                (Title of Class)


Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days. Yes X No __

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure  will be contained,  to
the  best  of  registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part III of this Form  10-KSB or any
amendment to this Form 10-KSB. [x ]

       State issuer's revenues for its most recent fiscal year: $8,443,473

The aggregate market value of the voting stock held by  non-affiliates  computed
by  reference  to the price at which the stock was sold,  or the average bid and
asked prices of such stock as of March 29,  1999:  $349,094 The number of shares
outstanding  of each of the issuer's  classes of common  equity,  as of March 2,
1999, was 2,828,300.

Transitional Small Business Disclosure Format (check one)
Yes_______        No    X




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Peter  Gillette had been a Director of the Company  since 1994. He also has been
technical  director of Computers  and Controls  Ltd.,  since 1983.  He is also a
Director of Cableview  Limited,  Body Works Fitness & Aerobics Limited,  Pelinja
Holdings  Limited,  Chaguaramas  Development  Authority,  Tourism and Industrial
Company and Trinidad & Tobago Free Trade Zones.  Mr. Gillette holds a bachelor's
degree in civil engineering from Cornell University.

Roger  Love was a  founder  of the  Company  in 1967.  He has  served  as a
Director  from 1972 to the present.  From 1972 to 1994 Mr. Love was President of
the Company.  Mr. Love is currently  President  and Chief  Executive  Officer of
Drumsurn, a telecommunications service company.

Clarence  Wilcox had been a Director of the Company since 1994. He also had been
Chairman and Managing Director of Wilcox  Enterprises  Limited since 1978. Since
1993 he has been Chairman and Managing Director of Guymar Caribbean Limited. Mr.
Wilcox is also Deputy Chairman and Director of MEGA Insurance  Company  Limited,
and a Director of General Packaging Limited.

Paul  Kohmescher has been employed by the company since 1997. He was promoted to
Chief  Financial  Officer in  November  1998.  Prior to joining  the Company Mr.
Kohmescher held various top management  positions most recently as the Executive
Director of National Kitchen and Bath Association.  He holds a bachelor's degree
from Indiana University,  and is presently pursuing a masters degree in business
administration at Allentown College of St. Francis de Sales.

No director,  officer, of beneficial owner of more than ten percent of any class
of equity securities of the Registrant failed to file on a timely basis, reports
required by Section 16 (a) during the fiscal year ended December 31, 1998.

Item 10. Executive Compensation

The annual and  long-term  compensation  for  services  performed in all Company
related  capacities for the fiscal years ended December 31, 1996, 1997, and 1998
of those  persons who were,  at  December  31,  1997,  the  President  and Chief
Executive Officer, and other Officers of the Company with annual compensation of
$100,000 or greater follows:

                                                SUMMARY COMPENSATION TABLE
         Annual Compensation                      Long Term Compensation

Name and                            Salary       Bonus           Deferred
Position                   Year       ($'s)      ($'s)         Compensation $'s
--------                   ----     --------------------------- ----------------
John M. Perry (1)           1998    $110,000
   President & Chief
   Executive Officer

Hiro Hiranandani(2)        1998     $  100,000
President & Chief          1997     $   75,000                      $25,000
   Executive Officer       1996     $   49,418

Louis Massad(3)            1998     $0
 VP Finance                1997     $0
                           1996     $104,500






----------------------------------------------------------------
(1) Appointed President & Chief Executive Officer on October 1, 1998.
(2) Resigned on September 2, 1998.
(3) Resigned effective December 31, 1996.



10

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         The Company leases certain  equipment  under capital leases expiring in
     various years through 2001. The assets and liabilities under capital leases
     are  recorded  at the  lower  of the  present  value of the  minimum  lease
     payments or the fair value of the asset at the inception of the lease.  The
     assets are  amortized  over the lower of their related lease terms or their
     estimated productive lives.  Amortization of assets under capital leases is
     included in the depreciation expense in 1998 and 1997.

     Properties under capital leases are as follows:


                                               December, 31
                                              1998       1997

Telephone equipment                        $65,127     $65,127

Data Processing equipment                  $150,496    $101,303
                                           --------
               Subtotal                    $215,623    $166,430
Less accumulated depreciation              $62,696     $100,272
                                           -------
               Total                       $152,927    $66,158

                  The  following  is a schedule of minimum  lease  payments  due
under capital leases as of 12/31/98.

         Year Ending, December 31,
                  1999                                               $ 61,564
                  2000                                               $ 58,298
                  2001                                               $ 39,005
                  Total net minimum capital lease payments           $158,867
                  Less amounts representing  interest                $ 20,350
                  Present  value of net minimum capital lease
                   payments                                          $138,517
                  Less current  maturities of capital lease  
                  obligations                                        $ 53,143
                  Obligations under capital leases, excluding
                   current maturities                                $ 85,374

(4)  DEBT:

       At December 31,1998, notes and other debt payable include amounts due to
       related parties and other lenders as follows-


<TABLE>
<CAPTION>
Revolving credit agreement maturing January 31, 1999, bearing
<S>                                                                                         <C>           
   interest at prime (8.5% at December 31, 1997) plus 3.5%                                  $910,098(a)(c)
Subordinated, unsecured notes to a related entity due July 1, 1999
   bearing interest at 9.5%, with quarterly interest payments                               565,000(b)(e)
Term loan, bearing interest at prime (8.5% at December 31,                                  285,000
   1998) plus 3.5%, with monthly installments of $5,000 due December 31, 2002
Subordinated, unsecured note to a related entity due February 1, 1998,
   bearing interest at 10%, with quarterly interest payments                                250,000(b)(d)(e)

Subordinated, unsecured note payable to a director due July 1, 1999,
   bearing interest at 9.5%, with quarterly interest payments                               150,000(b)(e)
Subordinated, unsecured demand note, bearing interest at 8%                                 96,569(b)
Subordinated, unsecured note payable due October 31, 1997
   bearing interest at 10%                                                                  32,000(b)

</TABLE>


26

<PAGE>



                                   SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the Registrant has duly caused this Amendment No. 2 to Form 10-KSB
for December 31, 1998 to be signed on its behalf by the  undersigned,  thereunto
duly authorized.

                                     COMPUTER POWER, INC.



                                   By/s/ John M. Perry
                                     John M. Perry, President

Dated: April 8, 1999












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