FORM 10-Q/A

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                   Quarterly Report Under Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

                     For the Quarter Ended October 31, 2001
                         Commission File Number 0-26230

                         WESTERN POWER & EQUIPMENT CORP.
                         -------------------------------
             (Exact name of registrant as specified in its charter)

          DELAWARE                                                 91-1688446
     ------------------                                            ----------
(State or other jurisdiction of                                 (I.R.S. Employer
incorporation or organization)                                     I.D. number)

6407-B N.E. 117th Avenue, Vancouver, WA                                98662
---------------------------------------                                -----
(Address of principal executive offices)                            (Zip Code)

                    Registrant's telephone no.: 360-253-2346
                                                ------------

Indicate by check mark whether the registrant (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 registrant
was required to file such reports); and (2) has been subject to such filing
requirements for the past 90 days.

                                 YES |X| NO |_|

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the close of the period covered by this report.

      Title of Class                                       Number of shares
       Common Stock                                          Outstanding
(par value $.001 per share)                                   3,403,162

<PAGE>

                         WESTERN POWER & EQUIPMENT CORP.

                                      INDEX

PART I. FINANCIAL INFORMATION                                      Page Number

         Item 1. Financial Statements

          Consolidated Balance Sheet
            October 31, 2001 (Unaudited) and July 31, 2001 ...........  1

          Consolidated Statement of Operations
            Three months ended October 31, 2001 (Unaudited)
            and October 31, 2000 (Unaudited) .........................  2

          Consolidated Statement of Cash Flows
            Three months ended October 31, 2001 (Unaudited)
            and October 31, 2000 (Unaudited) .........................  3

          Notes to Consolidated Financial Statements .................  4

         Item 2. Management's Discussion and Analysis of
                 Financial Condition and Operating Results ...........  6 - 9

PART II. OTHER INFORMATION

         Item 1. Legal Proceedings ...................................  N/A

         Item 2. Changes in Securities ...............................  N/A

         Item 3. Defaults Upon Senior Securities .....................  N/A

         Item 4. Submission of Matters to a Vote of Security
                 Holders .............................................  N/A

         Item 5. Other Information ...................................  N/A

         Item 6. Exhibits and Reports on Form 8-K ....................  10

<PAGE>

ITEM 1. FINANCIAL STATEMENTS

                         WESTERN POWER & EQUIPMENT CORP.
                           CONSOLIDATED BALANCE SHEET
                             (Dollars in thousands)

<TABLE>
<CAPTION>
                                                                     October 31,      July 31,
                                                                        2001            2001
                                                                    ------------    ------------
                                                                     (Unaudited)
<S>                                                                 <C>             <C>
                ASSETS
Current assets:
    Cash and cash equivalents ...................................   $         51    $        770
    Accounts receivable, less allowance for
      doubtful accounts of $849 and $948 ........................         11,195          14,295
    Inventories .................................................         41,057          44,867
    Prepaid expenses ............................................            198             298
    Deferred income taxes .......................................          2,541           2,541
                                                                    ------------    ------------
         Total current assets ...................................         55,042          62,771

Fixed Assets:
    Property, plant and equipment (net) .........................          5,503           5,584
    Rental equipment fleet (net) ................................         21,332          22,027
                                                                    ------------    ------------
         Total fixed assets .....................................         26,835          27,611

Intangibles and other assets, net of accumulated
      amortization of $838 and $808 .............................          2,679           2,720
                                                                    ------------    ------------
Total assets ....................................................   $     84,556    $     93,102
                                                                    ============    ============

               LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
    Borrowings under floor plan financing .......................   $     13,425    $     14,237
    Short-term borrowings .......................................         49,246          53,384
    Convertible debt ............................................            182             182
    Accounts payable ............................................          9,272          11,591
    Accrued payroll and vacation ................................            865           1,754
    Other accrued liabilities ...................................            974           1,716
    Capital lease obligation ....................................             14              18
                                                                    ------------    ------------
        Total current liabilities ...............................         73,978          82,882

Deferred income taxes ...........................................          2,541           2,541
Capital lease obligation ........................................            920             920
Long-term borrowings ............................................              8               8
                                                                    ------------    ------------
      Total long-term liabilities ...............................          3,469           3,469
                                                                    ------------    ------------
Total liabilities ...............................................         77,447          86,351
                                                                    ------------    ------------

Stockholders' equity:
    Preferred stock-10,000,000 shares authorized;
      none issued and outstanding ...............................             --              --
    Common stock-$.001 par value; 20,000,000 shares
      authorized; 3,403,162 issued and outstanding ..............              4               4
    Additional paid-in capital ..................................         15,894          15,894
    Retained earnings ...........................................         (7,945)         (8,303)
    Less common stock in treasury, at cost
      (130,300 shares) ..........................................           (844)           (844)
                                                                    ------------    ------------
        Total stockholders' equity ..............................          7,109           6,751
                                                                    ------------    ------------
Total liabilities and stockholders' equity ......................   $     84,556    $     93,102
                                                                    ============    ============
</TABLE>

                 See accompanying notes to financial statements.


                                       1
<PAGE>

                         WESTERN POWER & EQUIPMENT CORP.
                      CONSOLIDATED STATEMENT OF OPERATIONS
                                   (UNAUDITED)
                (Dollars in thousands, except per share amounts)

                                                           Three Months Ended
                                                               October 31,
                                                            2001        2000
                                                            ----        ----
Net revenue ...........................................   $ 28,500    $ 37,783

Cost of revenues ......................................     24,383      32,925
                                                          --------    --------

Gross profit ..........................................      4,117       4,858

Selling, general and administrative expenses ..........      2,570       3,280
                                                          --------    --------

Operating Income ......................................      1,547       1,578

Other income (expense):
    Interest expense ..................................     (1,258)     (1,679)
    Other income ......................................         80         856
                                                          --------    --------

Income before taxes ...................................        370         755

Income tax provision ..................................         12         294
                                                          --------    --------

Net income ............................................   $    358    $    461
                                                          ========    ========

Basic earnings per common share .......................   $   0.11    $   0.14
                                                          ========    ========

Average outstanding common shares for
  basic earnings per share ............................      3,403       3,353
                                                          ========    ========

Average outstanding common shares and equivalents
  for diluted earnings per share ......................      3,403       3,353
                                                          ========    ========

Diluted earnings per share ............................   $   0.11    $   0.14
                                                          ========    ========

                 See accompanying notes to financial statements.


                                       2
<PAGE>

                         WESTERN POWER & EQUIPMENT CORP.
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                   (UNAUDITED)
                             (Dollars in thousands)

                                                            Three Months Ended
                                                                October 31,
                                                              2001        2000
                                                            -------     -------
Cash flows from operating activities:
    Net income .........................................    $   358     $   461
    Adjustments to reconcile net income to net cash
      provided by operating activities:
        Depreciation ...................................      2,634       3,275
        Amortization ...................................         31          10
        Gain on sale of fixed assets ...................       (222)       (522)
        Changes in assets and liabilities:
            Accounts receivable ........................      1,549        (249)
            Inventories ................................      2,478         119
            Leased equipment, net ......................         -0-         53
            Prepaid expenses ...........................        100          64
            Accounts payable ...........................     (1,903)     (1,345)
            Accrued payroll and vacation ...............         86          74
            Other accrued liabilities ..................       (307)        (86)
            Deferred lease income ......................         -0-        (63)
            Income taxes receivable/payable ............          2         278
            Other assets/liabilities ...................         -0-         -0-
                                                            -------     -------
    Net cash provided by operating activities ..........      4,806       2,069
                                                            -------     -------

Cash flow from investing activities:
    Purchase of fixed assets ...........................        (47)       (263)
    Purchase/sales of rental equipment, net ............     (1,694)       (359)
    Proceeds on sale of fixed assets ...................        187          45
    Proceeds on sale of rental equipment ...............      1,249          -0-
    Purchase of intangibles ............................         10          15
                                                            -------     -------
    Net cash used in investing activities ..............       (295)       (562)
                                                            -------     -------

Cash flows from financing activities:
    Principal payments on capital leases ...............         (4)        (17)
    Inventory floor-plan financing .....................       (807)      5,066
    Short-term financing ...............................     (4,143)     (6,992)
    Long-term borrowings (repayments) ..................         -0-         -0-
                                                            -------     -------
    Net cash used in financing activities ..............     (4,954)     (1,943)
                                                            -------     -------

Decrease in cash and cash equivalents ..................       (443)       (436)
Cash and cash equivalents at beginning of
 period ................................................        494         824
                                                            -------     -------

Cash and cash equivalents at end of period .............    $    51     $   388
                                                            =======     =======

                 See accompanying notes to financial statements.


                                       3
<PAGE>

                         Western Power & Equipment Corp.

                   Notes to Consolidated Financial Statements
                             (Dollars in thousands)

1. Basis of Presentation

The financial information included in this report has been prepared in
conformity with the accounting principles and practices reflected in the
financial statements for the preceding year included in the annual report on
Form 10-K for the year ended July 31, 2001 filed with the Securities and
Exchange Commission. All adjustments are of a normal recurring nature and are,
in the opinion of management, necessary for a fair statement of the results for
the interim periods. This report should be read in conjunction with the
Company's financial statements included in the annual report on Form 10-K for
the year ended July 31, 2001 filed with the Securities and Exchange Commission.

2. Inventories

Inventories consist of the following:

<TABLE>
<CAPTION>
                                                                    October 31,   July 31,
                                                                       2001         2001
                                                                       ----         ----
         <S>                                                         <C>           <C>
         Equipment (net of reserve allowances of $6,618 and $7,489
          respectively):
           New equipment                                             $ 24,852      $28,163
           Used equipment                                               6,971        7,425

         Parts (net of reserve allowance of $287
          and $282 respectively)                                        9,234        9,279
                                                                     --------      -------

                                                                     $ 41,057      $44,867
                                                                     ========      =======
</TABLE>

3. Fixed Assets

Fixed Assets consist of the following:

<TABLE>
<CAPTION>
                                                                    October 31,    July 31,
                                                                       2001         2001
                                                                       ----         ----
         <S>                                                         <C>           <C>
         Operating property, plant and equipment:
           Land                                                      $    500      $   500
           Buildings                                                    1,733        1,717
           Machinery and equipment                                      3,864        3,997
           Office furniture and fixtures                                2,232        2,377
           Computer hardware and software                               1,453        1,453
           Vehicles                                                     1,703        1,964
           Leasehold improvements                                         943          958
                                                                     --------      -------
                                                                       12,428       12,966
           Less: accumulated depreciation                              (6,925)      (7,382)
                                                                     --------      -------
         Property, plant, and equipment (net)                        $  5,503      $ 5,584
                                                                     ========      =======

         Rental equipment fleet                                      $ 29,016      $28,889
           Less: accumulated depreciation                              (7,684)      (6,862)
                                                                     --------      -------
         Rental equipment (net)                                      $ 21,332      $22,027
                                                                     ========      =======
</TABLE>


                                       4
<PAGE>

4.    Short-term Borrowings

      As of October 31, 2000, the Company and Deutsche Financial Services (DFS)
      signed an amendment to the existing loan and security agreement. The
      amendment waived all prior defaults under the agreement and established
      revised financial covenants to be measured at the Company's second and
      fourth quarters. In addition, the amendment included several, periodic
      mandatory reductions in the credit limit. The amended DFS facility matures
      December 28, 2001 and is a floating rate facility based on prime with
      rates between 0.75% under prime to 2.25% over prime depending on the
      amount of total debt leverage of the Company. As of October 31, 2001, the
      Company was in technical default of the financial covenants in the DFS
      credit facility. The Company has not received a waiver of such defaults
      from DFS and although DFS has not called the loan, there is no guarantee
      that it will not do so in the future.

      The Company currently is in negotiations with DFS to extend or renew the
      credit facility beyond its current expiration of December 28, 2001. The
      Company believes that it can reach agreement with DFS to extend or renew
      the agreement on reasonably acceptable terms. However, in the event that
      the Company cannot reach a reasonably acceptable agreement to extend or
      renew the current DFS credit facility, DFS could demand repayment of the
      entire outstanding balance at anytime after December 28, 2001. In such
      case, the Company would be unable to repay the entire DFS outstanding
      balance. There can be no assurance that the Company will be able to
      successfully negotiate an acceptable extension or renewal of the existing
      DFS credit facility or that DFS will not call the balance due at anytime
      after December 28, 2001.


                                       5
<PAGE>

5.    Segment Information.

      In fiscal 1999, the Company adopted Statement of Financial Accounting
      Standards No. 131 (SFAS 131), "Disclosures about Segments of an Enterprise
      and Related Information," which requires the reporting of certain
      financial information by business segment. For the purpose of providing
      segment information, management believes that all of the Company's
      operations consist of one segment. However, the Company evaluates
      performance based on revenue and gross margin of three distinct business
      components. Revenue and gross margin by component are summarized as
      follows:

      Business Component                         Three Months Ended
      Net Revenues                                   October 31,
                                               2001              2000
      ------------------                     --------          --------

      Equipment Sales                         $18,878           $20,851

      Equipment Rental                          1,695             6,983

      Product Support                           7,927             9,949
                                               ------           -------

      Totals                                  $28,500           $37,783
                                              =======           =======

      Business Component                         Three Months Ended
      Gross Margins                                  October 31,
                                               2001              2000
      ------------------                     --------          --------

      Equipment Sales                         $ 2,162           $   638

      Equipment Rental                            555             1,893

      Product Support                           1,400             2,327
                                              -------           -------

      Total                                   $ 4,117           $ 4,858
                                              =======           =======


                                       6
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
LIQUIDITY AND CAPITAL RESOURCES

The following discussion and analysis should be read in conjunction with the
Financial Statements and Notes thereto appearing elsewhere in this Form 10-Q.
Information included herein relating to projected growth and future results and
events constitutes forward-looking statements. Actual results in future periods
may differ materially from the forward-looking statements due to a number of
risks and uncertainties, including but not limited to fluctuations in the
construction, agricultural, and industrial sectors; the success of the Company's
restructuring and cost reduction plans; the success of the Company's equipment
rental business; rental industry conditions and competitors; competitive
pricing; the Company's relationship with its suppliers; relations with the
Company's employees; the Company's ability to manage its operating costs; the
continued availability of financing; governmental regulations and environmental
matters; risks associated with regional, national, and world economies; and
consummation of the merger and asset purchase transactions (see below). Any
forward-looking statements should be considered in light of these factors.

Results of Operations

The Three Months ended October 31, 2001 compared to the Three Months ended
October 31, 2000.

Revenues for the three-month period ended October 31, 2001 decreased 24.6% to
$28.5 million compared with $37.8 million for the three-month period ended
October 31, 2000. Revenues were down from the prior year's first quarter in
every department and in most store locations. The closure of two stores during
the first fiscal quarter also contributed to the revenue decrease.

The Company's gross profit margin of 14.4% for the three-month period ended
October 31, 2001 was up from the prior year comparative period margin of 12.9%.
The increase in gross profit margins was partly the result of higher gross
margins on equipment sales as well as a higher concentration of overall business
coming from the relatively higher margin product support (parts and service)
business.

For the three-month period ended October 31, 2001, selling, general, and
administrative ("SG&A") expenses, as a percentage of sales, were 9.0%, up from
8.7% for the prior year's quarter. Some of the increased SG&A expenses are
attributable to costs associated with the closing of two stores during the first
quarter and some ongoing expenses still being incurred for the vacated
locations.

Interest expense for the three months ended October 31, 2001 of $1,258,000 was
down from the $1,679,000 in the prior year comparative period. This decrease is
the result of reduced overall inventory levels as well as lower average interest
rates on the DFS facility.

The effective tax rate for the three months ended October 31, 2001 was
approximately 3.2%, which is lower than the 39.0% effective tax rate for the
prior year comparative period. The first quarter's effective tax rate reflects
the company's net operating loss carryforwards, which have not yet been
recognized for tax purposes. The effective tax rate in the prior year more
closely approximates statutory levels.

The Company had net income for the quarter ended October 31, 2001 of $358,000 or
$.11 per (basic and diluted) share compared with a net income of $461,000 or
$0.14 per (basic and diluted) for the prior year's first quarter. The first


                                       7
<PAGE>

quarter of FY01 included a non-recurring pre-tax gain of $589,000 for the
conversion of capital leases to operating leases.

Liquidity and Capital Resources

The Company's primary needs for liquidity and capital resources are related to
its inventory for sale and its rental and lease fleet inventories. The Company's
primary source of internal liquidity has been its operations. The Company's
primary sources of external liquidity are equipment inventory floor plan
financing arrangements provided to the Company by the manufacturers of the
products the Company sells, the Deutsche Financial Services ("DFS") credit
facility, and, with respect to acquisitions, secured loans from Case Corporation
(now CNH Global).

Under inventory floor planning arrangements the manufacturers of products sold
by the Company provide interest-free credit terms on new equipment purchases for
periods ranging from one to twelve months, after which interest commences to
accrue monthly at rates ranging from zero percent to two percent over the prime
rate of interest. Principal payments are typically made under these agreements
at scheduled intervals and/or as the equipment is rented, with the balance due
at the earlier of a specified date or sale of the equipment. At October 31,
2001, the Company was indebted under manufacturer-provided floor planning
arrangements in the aggregate amount of $13,425,000.

As of October 31, 2000, the Company and DFS signed an amendment to the existing
loan and security agreement. The amendment waived all prior defaults under the
agreement and established revised financial covenants to be measured at the
Company's second and fourth quarters. In addition, the amendment included
several, periodic mandatory reductions in the credit limit. The amended DFS
credit facility matures December 28, 2001 and is a floating rate facility based
on prime with rates between 0.75% under prime to 0.25% over prime depending on
the amount of total debt leverage of the Company. As of October 31, 2001, the
Company was in technical default of the financial covenants in the DFS credit
facility. The Company has not received a waiver of such defaults from DFS and
although DFS has not called the loan, there is no guarantee that it will not do
so in the future.

Borrowings under the DFS credit facility are secured by the Company's assets,
including accounts receivable, parts, new equipment, rental fleet, and used
equipment. The Company uses this borrowing facility to lower flooring-related
interest expense by using advances under such line to finance inventory
purchases in lieu of financing provided by suppliers, to take advantage of cash
purchase discounts from its suppliers, to provide operating capital for further
growth, and to refinance some its acquisition-related debt at a lower interest
rate. As of October 31, 2001, approximately $49,246,000 was outstanding under
the DFS credit facility.

The Company currently is in negotiations with DFS to extend or renew the credit
facility beyond its current expiration of December 28, 2001. The Company
believes that it can reach agreement with DFS to extend or renew the agreement
on reasonably acceptable terms. However, in the event that the Company cannot
reach a reasonably acceptable agreement to extend or renew the current DFS
credit facility, DFS could demand repayment of the entire outstanding balance at
anytime after December 28, 2001. In such case, the Company would be unable to
repay the entire DFS outstanding balance. There can be no assurance that the
Company will be able to successfully negotiate an acceptable extension or
renewal of the existing DFS credit facility or that DFS will not call the
balance due at anytime after December 28, 2001.

During the quarter ended October 31, 2001, cash and cash equivalents decreased
by $443,000. The Company had positive cash flow from operating activities in


                                       8
<PAGE>

the first quarter reflecting the net income for the quarter and adding
depreciation and amortization.

The Company's cash and cash equivalents of $51,000 as of October 31, 2001 and
available credit facilities are considered sufficient to support current levels
of operations for at least the next twelve months.

Merger Agreement; Asset Sale Agreement

      On May 14, 2001, the Company announced that its merger with Supply Point,
Inc., based in San Jose, California, closed, subject to certain conditions
including the approval of Deutsche Financial Services, its chief lender, and
Case Corporation. The closing documents are being held in escrow subject to such
conditions. The Company currently does not know whether these conditions will be
satisfied.

      On September 18, 2001, the Company announced that it had entered into an
agreement to sell substantially all of assets and liabilities of the equipment
distribution business owned by Western Power & Equipment Corp. (Oregon), a
wholly owned subsidiary, to e*machinery.net, inc. (EMAC) for $500,000 in cash, a
seven-year, 7% promissory note for $700,000, and 1.2 million shares of EMAC
restricted common stock. Closing is subject to a number of conditions including,
but not limited to, due diligence, approval of Case Corporation, and Deutsche
Financial Services. There is no assurance that the transaction will be
consummated. On November 1, 2001 the Company and EMAC entered into an agreement
to extend the due diligence and escrowed funds deadlines in the Asset Purchase
Agreement until February 28, 2002. The agreement with EMAC is conditioned upon
EMAC depositing $5,500,000 into escrow by February 28, 2002. As of Spetember 30,
2001, EMAC's financial statements listed cash and net equity of $114,000 and
$614,000, respectively.

Inventory; Effects of Inflation and Interest Rates; General Economic Conditions

Controlling inventory is a key ingredient to the success of an equipment
distributor because the equipment is characterized by long order cycles, high
ticket prices, and the related exposure to "flooring" interest. The Company's
interest expense may increase if inventory is too high or interest rates rise.
The Company manages its inventory through company-wide information and inventory
sharing systems wherein all locations have access to the Company's entire
inventory. In addition, the Company closely monitors inventory turnover by
product categories and places equipment orders based upon targeted turn ratios.

All of the products and services provided by the Company are either capital
equipment or included in capital equipment, which are used in the construction,
industrial, and agricultural sectors. Accordingly, the Company's sales are
affected by inflation or increased interest rates which tend to hold down new
construction, and consequently adversely affect demand for the equipment sold
and rented by the Company. In addition, although agricultural equipment sales
are less than 2% of the Company's total revenues, factors adversely affecting
the farming and commodity markets also can adversely affect the Company's
agricultural equipment related business.

The Company's business can also be affected by general economic conditions in
its geographic markets as well as general national and global economic
conditions that affect the construction, industrial, and agricultural sectors.
An erosion in North American and/or other countries' economies could adversely
affect the Company's business. Market specific factors could also adversely
affect one or more of the Company's target markets and/or products. The Company
expects the construction equipment market in its store locations to


                                       9
<PAGE>

remain flat or slightly down over the next 6 to 12 months. A larger drop in the
construction equipment market could have a material adverse impact upon the
Company's operating results.

PART II. OTHER INFORMATION

      ITEM 5. OTHER INFORMATION

              None.

      ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

              A.    EXHIBITS.

                    None.

              B.    REPORTS ON FORM 8-K.

              The Company filed a current report on Form 8-K on September 24,
              2001 regarding the Company signing an agreement to sell
              substantially all of its assets to e-machinery.net, Inc. The
              Company filed a current report on Form 8-K on December 10, 2001
              regarding the Company changing its external auditors. The
              Company filed a current report on Form 8-K/A on December 11, 2001
              to amend the current report on Form 8-K filed on December 10,
              2001.


                                       10
<PAGE>

                                    SIGNATURE

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

WESTERN POWER & EQUIPMENT CORP.

January 3, 2002


                    By: /s/ Mark J. Wright
                        -------------------------------------
                        Mark J. Wright
                        Vice President of Finance and
                        Chief Financial Officer


                                       11