FORM 10-Q


                       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 January 31, 1999
                         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 I.D.
    incorporation or organization)                          number)


4601 NE 77th Avenue, Suite 200, 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)                           3,303,162

<PAGE>
                         WESTERN POWER & EQUIPMENT CORP.
                                      INDEX


PART I.     FINANCIAL INFORMATION                                    Page Number

    Item 1.  Financial Statements

    Consolidated Balance Sheet
       January 31, 1999 (Unaudited) and July 31, 1998.................... 1

    Consolidated Statement of Operations
       Three months ended January 31, 1999 (Unaudited)
       and January 31, 1998 (Unaudited).................................. 2

    Consolidated Statement of Operations
       Six months ended January 31, 1999 (Unaudited)
       and January 31, 1998 (Unaudited).................................. 3

    Consolidated Statement of Cash Flows
       Six months ended January 31, 1999 (Unaudited)
       and January 31, 1998 (Unaudited).................................. 4

    Notes to Consolidated Financial Statements........................... 5

    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............................. 10

    Item 4.  Submission of Matters to a Vote of Security
             Holders..................................................... 11

    Item 5.  Other Information........................................... 11

    Item 6.  Exhibits and Reports on Form 8-K............................ 11


<PAGE>
ITEM 1.
<TABLE>
<CAPTION>
                         WESTERN POWER & EQUIPMENT CORP.
                           CONSOLIDATED BALANCE SHEET
                             (Dollars in thousands)

                                                                              January 31,          July 31,
                                                                                    1999              1998
                                                                                --------          --------
                                                                              (Unaudited)
<S>                                                                             <C>               <C>     
                                     ASSETS
                                     ------
Current assets:
    Cash and cash equivalents..........................................         $  2,297          $  2,555
    Accounts receivable, less allowance for
      doubtful accounts of $812 and $670...............................           15,953            23,626
    Inventories........................................................           63,715            73,491
    Prepaid expenses...................................................              200               172
    Income taxes receivable............................................              676               -0-
    Deferred income taxes..............................................            1,298             1,298
                                                                                --------          --------
        Total current assets...........................................           84,139           101,142

    Property, plant and equipment, net.................................            9,907             8,614
    Rental equipment fleet, net........................................           21,243            23,080
    Leased equipment fleet, net........................................            5,385             2,760
    Intangibles and other assets, less accumulated
        amortization of $1,406 and $1,262..............................            3,026             3,170
                                                                                --------          --------
        Total fixed assets.............................................           39,561            37,624

        Total assets...................................................         $123,700          $138,766
                                                                                ========          ========

                       LIABILITIES & STOCKHOLDERS' EQUITY
                       ----------------------------------
Current liabilities:
    Borrowings under floor plan financing..............................         $ 11,580          $ 11,038
    Short-term borrowings..............................................           63,702            76,019
    Accounts payable...................................................           12,896            17,574
    Accrued payroll and vacation.......................................              744               858
    Other accrued liabilities..........................................            1,573             1,653
    Income taxes payable...............................................              -0-               255
    Capital lease obligation...........................................                8                63
    Covenant Not to Compete............................................              -0-                21
                                                                                --------          --------
        Total current liabilities......................................           90,503           107,481

Deferred income taxes..................................................              690               690
Capital lease obligation...............................................            2,849             2,827
Long-term borrowings...................................................            1,158             1,156
Deferred lease income..................................................            6,320             3,474
                                                                                --------          --------
      Total long-term liabilities......................................           11,017             8,147

        Total liabilities..............................................          101,520           115,628

Stockholders' equity:
    Preferred stock-10,000,000 shares authorized;
      none issued and outstanding......................................                -                 -
    Common stock-$.001 par value; 20,000,000 shares
      authorized; 3,303,162 issued and outstanding ....................                4                 4
    Additional paid-in capital.........................................           16,072            16,072
    Retained earnings..................................................            7,595             8,553
    Less common stock in treasury, at cost
      (230,300 shares).................................................           (1,491)           (1,491)
                                                                                --------          --------
        Total stockholders' equity.....................................           22,180            23,138

        Total liabilities and stockholders'
          equity.......................................................         $123,700          $138,766
                                                                                ========          ========


                 See accompanying notes to financial statements.
</TABLE>

                                      - 1 -
<PAGE>
<TABLE>
<CAPTION>
                         WESTERN POWER & EQUIPMENT CORP.
                      CONSOLIDATED STATEMENT OF OPERATIONS
                                   (UNAUDITED)
                (Dollars in thousands, except per share amounts)


                                                                                Three Months Ended
                                                                                    January 31,
                                                                               1999              1998
                                                                            -------           -------
<S>                                                                         <C>               <C>    
Net revenue............................................................     $41,279           $39,658

Cost of goods sold.....................................................      36,787            34,669
                                                                            -------           -------

Gross profit...........................................................       4,492             4,989

Selling, general and administrative expenses...........................       3,193             3,119

Other income (expense):
    Interest expense...................................................        (957)           (1,076)
    Other income.......................................................         296               153
                                                                            -------           -------

Income before taxes....................................................         638               947

Income tax provision...................................................         307               332
                                                                            -------           -------

Net income.............................................................     $   331           $   615
                                                                            =======           =======

Basic earnings per common share........................................     $  0.10           $  0.17
                                                                            =======           =======

Average outstanding common shares for
  basic earnings per share.............................................       3,303             3,533
                                                                            =======           =======

Average outstanding common shares and equivalents
 for diluted earnings per share........................................       3,303             3,747
                                                                            =======           =======

Diluted earnings per share.............................................     $  0.10           $  0.16
                                                                            =======           =======


                 See accompanying notes to financial statements.
</TABLE>

                                      - 2 -
<PAGE>
<TABLE>
<CAPTION>
                         WESTERN POWER & EQUIPMENT CORP.
                      CONSOLIDATED STATEMENT OF OPERATIONS
                                   (UNAUDITED)
                (Dollars in thousands, except per share amounts)


                                                                                Six Months Ended
                                                                                   January 31,
                                                                               1999              1998
                                                                            -------           -------
<S>                                                                         <C>               <C>    
Net sales..............................................................     $81,644           $76,616

Cost of goods sold.....................................................      74,677            67,292
                                                                            -------           -------

Gross profit...........................................................       6,967             9,324

Selling, general and administrative expenses...........................       6,319             5,931

Other income (expense):
    Interest expense...................................................      (2,725)           (1,840)
    Other income.......................................................         546               242
                                                                            -------           -------

Income (loss) before taxes.............................................      (1,531)            1,795

Income tax provision (benefit).........................................        (574)              665
                                                                            -------           -------

Net income (loss)......................................................     $  (957)          $ 1,130
                                                                            ========          =======

Basic earnings per common share........................................     $ (0.29)          $  0.32
                                                                            ========          =======

Average outstanding common shares for
  basic earnings per share.............................................       3,303             3,533
                                                                            =======           =======

Average outstanding common shares and equivalents
 for diluted earnings per share........................................       3,303             3,756
                                                                            =======           =======

Diluted earnings per share.............................................     $ (0.29)          $  0.30
                                                                            ========          =======


                See accompanying notes to financial statements.
</TABLE>

                                      - 3 -
<PAGE>
<TABLE>
<CAPTION>
                         WESTERN POWER & EQUIPMENT CORP.
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                   (UNAUDITED)
                             (Dollars in thousands)

                                                                                 Six Months Ended
                                                                                    January 31,
                                                                                1999              1998
                                                                            --------          --------
<S>                                                                         <C>               <C>     
Cash flows from operating activities:
    Net (loss) income..................................................     $   (957)         $  1,130
    Adjustments to reconcile net income to net cash
      provided by (used in) operating activities:
        Depreciation...................................................        2,380               589
        Amortization...................................................          144                92
        Changes in assets and liabilities:
            Accounts receivable........................................        7,674            (2,474)
            Inventories................................................        9,776               377
            Leased equipment, net......................................       (2,625)              -0-
            Inventory floor-plan financing.............................          542           (39,982)
            Short-term financing.......................................      (12,317)           45,351
            Prepaid expenses...........................................          (28)               33
            Accounts payable...........................................       (4,678)           (6,438)
            Accrued payroll and vacation...............................         (114)               32
            Other accrued liabilities..................................          (80)             (211)
            Deferred lease income......................................        2,846               -0-
            Income taxes receivable/payable............................         (931)              701
            Other assets...............................................          -0-             1,197
                                                                            --------          --------
    Net cash provided by (used in)
      operating activities.............................................        1,632            (4,972)
                                                                            --------          --------

Cash flow from investing activities:
    Purchase of fixed assets...........................................       (1,484)             (383)
    Purchase of rental equipment, net..................................         (354)              -0-
    Covenant not to compete............................................          (21)              -0-
                                                                            --------          --------
    Net cash used in investing activities .............................       (1,859)            (383)
                                                                            --------          --------

Cash flows from financing activities:
    Principal payments on capital leases...............................          (33)              (47)
    Long-term borrowings...............................................            2               -0-
                                                                            --------          --------
    Net cash(used in)financing activities..............................          (31)              (47)
                                                                            --------          --------

Decrease in cash and cash equivalents..................................         (258)              (33)
Cash and cash equivalents at beginning of
 period................................................................        2,555             1,875
                                                                            --------          --------

Cash and cash equivalents at end of period.............................     $  2,297          $  1,842
                                                                            ========          ========


Supplemental schedule of noncash investing and financing activities:

     none

                 See accompanying notes to financial statements.
</TABLE>

                                      - 4 -
<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, 1998 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, 1998 filed with the Securities and Exchange Commission.


2.   Inventories

Inventories consist of the following:

                                            January 31,          July 31,
                                                  1999              1998
                                                -------           -------
         Equipment:
           New equipment                        $45,474           $54,883
           Used equipment                         8,687            10,073
           Parts                                  9,554             8,535
                                                -------           -------

                                                $63,715           $73,491
                                                =======           =======

                                      - 5 -
<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 because of a number of
risks and uncertainties, including but not limited to fluctuations in the
construction, agricultural and industrial sectors and general economic cycles;
the success of the Company's entry into new markets through store openings or
acquisitions; the success of the Company's expansion of its equipment rental
business; rental industry conditions and competitors; competitive pricing; the
Company's relationship with Case and other suppliers; relations with the
Company's employees; the Company's ability to manage its operating costs and to
integrate acquired businesses in an effective manner; the continued availability
of financing; governmental regulations and environmental matters; risks
associated with regional, and national and world economies. Any forward-looking
statements should be considered in light of these factors.

Results of Operations
---------------------

The Three and Six Months ended January 31, 1999 compared to the Three and Six
Months ended January 31, 1998.
-----------------------------------------------------------------------------

Revenues for the three-month period ended January 31, 1999 increased 4% to $41.3
million compared with $39.7 million for the three month period ended January 31,
1998. Same store revenues increased less than 1% for the three-month period
ended January 31, 1999, as compared to the prior year period. Sales were up from
the prior year's second quarter in all revenue categories other than new
equipment sales which have been negatively affected by grey market machine
inventory in the Company's geographic markets, increased competitive pressures,
a slowdown in the northwest economy, and some especially inclement weather in
the northwest.

Revenues for the six-month period ended January 31, 1999 increased $5,028,000 or
approximately 7% over the six-month period ended January 31, 1998. The increase
was due primarily to the contribution of the stores acquired or opened in the
last year. For the six-month period ended January 31, 1999, sales in all revenue
categories were up from the same period in the prior year.

The Company's gross profit margin of 10.9% for the three-month period ended
January 31, 1999 was down from the prior year comparative period margin of
12.6%. The decrease in gross profit margins was the result of a decrease in new
and used equipment margins due to competitive pressures and some ongoing
wholesale inventory liquidation. For the six-month period ended January 31,
1999, the Company's gross margin was 8.5% down from the 12.2% gross margin for
the six-month period ended January 31, 1998 due to market pricing pressure and
the used equipment reserve taken in the first fiscal quarter.

                                     - 6 -
<PAGE>
For the three-month period ended January 31, 1999, selling, general, and
administrative ("SG&A") expenses, as a percentage of sales, were 7.7%, down from
7.9% for the prior year's quarter. SG&A expenses for the six-month period ended
January 31, 1999 were 7.7% of sales compared to 7.7% of sales for the prior year
six-month period. Executive management has put in place a plan to reduce SG&A
expenses as a percentage of sales for the balance of the fiscal year.

Interest expense for the three months ended January 31, 1999 of $957,000 was
down slightly from the $1,076,000 in the prior year comparative period. This
decrease is the result of a lower average borrowing rate on the Deutsche
Financial Services facility and some one-time rebates used to offset interest
expense in the period. Interest expense for the six-month period ended January
31, 1999 was $2,725,000 compared to $1,840,000 for the six-month period ended
January 31, 1998, due to the increased inventory carried by the Company.

The effective tax rate for the six months ended January 31, 1999 was
approximately 37.5%, which is slightly higher than the 37.0% effective tax rate
for the prior year comparative period. The Company anticipates the effective tax
rate to remain at or near the current level for the foreseeable future.

Due to the reasons stated above, net income for the quarter ended January 31,
1999 was $331,000 or $.10 per (basic and diluted) share compared with $615,000
or $0.17 per (basic) share ($0.16 per diluted shares) for the prior year's
second quarter. For the six-month period ended January 31, 1999, the Company
reported a loss of $0.29 per share (basic and diluted) compared with net income
of $0.32 earnings per (basic) share ($0.30 per diluted share) for the six-month
period ended January 31, 1998. The number of weighted average common shares and
equivalents used for computing diluted earnings per share for the quarter and
six months ended January 31, 1999 reflects the incremental number of shares
calculated using the treasury stock method for 1,541,000 options and warrants
whose exercise prices range from $4.375 to $10.375.

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, store
openings, and acquisitions of additional stores. The Company's primary source of
internal liquidity has been its profitable 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, and Deutsche Financial Services ("DFS") and, with respect to
acquisitions, secured loans from Case.

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 January 31,
1999, the Company was indebted under manufacturer-provided floor planning
arrangements in the aggregate amount of $11,580,000.

                                      - 7 -
<PAGE>
The Company currently has a $75 million inventory flooring and operating line of
credit through Deutsche Financial Services ("DFS"). The DFS credit facility is a
three-year, floating rate facility based on prime with rates between 0.50% under
prime to 1.00% over prime depending on the amount of total borrowing under the
facility. Borrowings 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 January 31,
1999, approximately $63,702,000 was outstanding under the DFS credit facility.
At January 31, 1999, the Company was in technical default of the debt leverage
covenant in the Deutsche Financial Services Loan Agreement. The Company obtained
a waiver for the period through March 12, 1999. There is no guarantee that
Deutsche Financial Services will not call this debt at any time after March 12,
1999. The Company and DFS have reached preliminary agreement to amend this
credit facility to revise several covenants, including an increase in the debt
leverage covenant. Finalization of this amendment is expected during the third
fiscal quarter.

During the quarter ended January 31, 1999, cash and cash equivalents decreased
by $258,000. The Company had positive cash flow from operating activities
through the second quarter reflecting the net loss for the year after adding
back depreciation and amortization. Purchases of fixed assets during the period
were related mainly to the purchase of new equipment for the rental fleet.

The Company's cash and cash equivalents of $2,297,000 as of January 31, 1999 and
available credit facilities are considered sufficient to support current or
higher levels of operations for at least the next twelve months.

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 5% 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.

                                      - 8 -
<PAGE>
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.


Impact of the Year 2000 Issue

The Year 2000 issue is the result of computer programs being written using two
digits rather than four to define the applicable year. Any of the Company's
computer programs that have date sensitive software may recognize a date using
"00" as the year 1900 rather than the year 2000. This could result in a system
failure or miscalculations causing disruptions of operations, including, among
other things, a temporary inability to process transactions, send invoices, or
engage in similar normal business activities.

The Company has determined that it will be required to modify or replace
significant portions of its software so that its computer systems will properly
utilize dates beyond December 31, 1999. The Company presently believes that with
modifications to existing software and conversions to new software, the Year
2000 issue can be mitigated. However, if such modifications and conversions are
not made, are not timely completed, or do not work as anticipated, the Year 2000
issue could have a material impact on the operations of the Company.

During the second fiscal quarter, the Company installed an upgrade to its
primary enterprise software and to the base operating system. These upgrades
were represented to be Year 2000 compliant by their respective suppliers. The
Company expects to substantially complete testing for Year 2000 compliance on
these upgrades by July 31, 1999.

The Company has a plan in place to contact all of its significant suppliers to
determine the extent to which the Company is vulnerable to those third parties'
failure to remediate their own Year 2000 issues. There can be no guarantees that
the systems of third parties on which the Company's systems rely or which
influence the business of the Company's customers will be timely remediated,
that any attempted remediation will be successful, or that such conversions
would be compatible with the Company's systems. The Company has not yet
determined the projected costs of the Company's Year 2000 project and cannot yet
determine whether the Company has any exposure to contingencies related to the
Year 2000 issue for the products it has previously sold.

The Company will utilize both internal and external resources to reprogram, or
replace, and test the Company's software for Year 2000 modifications. The
Company plans to complete its Year 2000 project by October 31, 1999. Funding for
the costs of the program are anticipated to come from operating cash flows.

The Company's current plan to complete the Year 2000 modifications are based on
management's best estimates, which were derived using numerous assumptions of
future events including the continued availability of certain resources, third
party modification plans, and the ability to meet projected time lines. There
can be no guarantee that these estimates will be achieved and actual results
could differ materially from those plans. Specific factors that might cause such
material differences include, but are not limited to, the availability and cost
of personnel trained in this area, the ability to locate and correct all
relevant computer codes, and other uncertainties.

                                      - 9 -
<PAGE>
ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

At January 31, 1999, the Company was in technical default of the leverage
covenant in the Deutsche Financial Services ("DFS") Loan Agreement. As of
January 31, 1999, the outstanding balance owed to DFS was approximately
$63,702,000. The Company obtained a waiver of the default for the period through
March 12, 1999. There is no guarantee that DFS will not call this debt at any
time after March 12, 1999. See Item 1, "Liquidity and Capital Resources."

                                     - 10 -
<PAGE>
PART II.  OTHER INFORMATION

     ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
              ---------------------------------------------------

          On January 20, 1999, the Company held its 1998 Annual meeting of
     Stockholders (the "Annual Meeting"). Each of the directors holding office
     prior to the date of the Annual Meeting, Messrs. C. Dean McLain, Robert M.
     Rubin, Harold Chapman, Jr., and Merrill A. McPeak, were reelected at the
     Annual Meeting for another term as director. The votes recorded for
     election of each nominee for director were the following:

     Name                       For        Against     Abstention
     ----                    ---------     -------     ----------
     C. Dean McLain          3,212,232       -0-         10,525
     Robert M. Rubin         3,212,232       -0-         10,525
     Harold Chapman, Jr.     3,212,232       -0-         10,525
     Merrill A. McPeak       3,208,132       -0-         14,625

          Votes were also cast, and proposals approved, at the Annual Meeting
     for (i) ratification of the reappointment of PricewaterhouseCoopers, LLP as
     the Company's independent auditors for the 1999 fiscal year (3,185,797
     votes in favor, 35,060 votes against, and 1,900 abstentions), and (ii)
     changing the Company's state of incorporation from Delaware to Oregon
     (2,501,697 votes in favor, 27,963 votes against, 1,065 abstentions and
     681,507 broker non-votes). The Board of Directors has deferred
     implementation of reincorporating from Delaware to Oregon.

     ITEM 5.  OTHER INFORMATION
              -----------------

          The Company has received notice from Nasdaq that the Company has
     failed to maintain a market value of publicly held shares greater than or
     equal to $5 million in accordance with Nasdaq Marketplace Rule 4450(a)(2)
     under Maintenance Standard 1 for continued listing on the National Market
     System (NMS). The Company has requested a hearing with Nasdaq regarding
     this issue. The hearing is scheduled for April 8, 1999. The result of this
     hearing will determine whether the Company can continue its NMS listing. In
     the event that the Company does not meet the NMS maintenance requirement on
     the hearing date, the Company will request that listing of its shares be
     transferred to the Nasdaq SmallCap Market. There can be no assurances that
     Nasdaq will approve continued listing of the Company's shares on the NMS or
     that the listing will be transferred to the Nasdaq SmallCap Market.

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

          A.   EXHIBITS.

               Exhibit 27 - Financial Data Schedule

          B.   REPORTS ON FORM 8-K.

               NONE

                                     - 11 -
<PAGE>
                                    SIGNATURE


Pursuant to the requirements of the Securities and 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.

March 17, 1999

                                  By: MARK J. WRIGHT
                                      -------------------------------
                                      Mark J. Wright
                                      Vice President of Finance and
                                      Chief Financial Officer

                                     - 12 -