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                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                               AMENDMENT NO. 2 TO
                                   FORM 10-KSB

                                  ANNUAL REPORT

                     Pursuant to Section 13 or 15(d) of the
                       Securities and Exchange Act of 1934

For the fiscal year ended                                 Commission File Number
      June 30, 1998                                               0-15379

                                POWER-CELL, INC.
             (Exact name of Registrant as specified in its charter)

           Colorado                                      84-1029701
      State of Incorporation                  IRS Employer Identification Number

                       660 Preston Forest Center, Box 200
                               Dallas, Texas 75230
          (Address and telephone number of principal executive offices)

                                  214/373-1887
               (Registrant's telephone number including area code)

      Securities registered pursuant to Section 12(b) or 12(g) of the Act:
                          $.0001 par value common stock

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 Exchange Act of 1934 during
the preceding 12 months and (2) has been subject to filing requirements for the
past 90 days.

                                  Yes  X  No
                                      ---    ---

The aggregate market value of the voting stock held by non-affiliates of the
Registrant is approximately $342,000. This calculation is based upon the average
of the bid and asked prices of the Registrant's Common Stock on June 30, 1998.

The number of shares of the Registrant's $.0001 par value Common Stock
outstanding as of April 7, 1998, was 6,419,540.



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This Form 10-KSB/A2 is filed to amend Items 1, 2, 4, 6 and 10 and the Exhibits.
The remaining items of the Form 10-KSB previously filed are not amended hereby.

Item 1.  Business

         (a)      General Development of Business.

                  On December 27, 1988, the United States Patent and Trademark
                  Office issued a United States' Letter Patent to Power-Cell,
                  Inc., a Colorado corporation (the "Company" of "PCI") relating
                  to certain features of the Company's replaceable low-cost
                  reserve battery charger unit. The patent entitles the Company
                  to prohibit others from making, using or selling the invention
                  claimed for a period of seventeen (17) years from the date of
                  issue. The Company filed a Divisional Patent Application on
                  September 19, 1988 relating to other aspects of the battery
                  charger unit. The Company was advised on August 22, 1989 that
                  certain of its claims contained in its Divisional Patent
                  Application are allowable by the U.S. Patent Examiner and the
                  patent will advance to issue. Based upon the results of a
                  search conducted of the United States Patent and Trademark
                  Office records in March 1987, it was determined that there
                  were no U.S. patents that would be infringed by the
                  manufacturing and marketing of the Product, and no patents
                  have subsequently come to the attention of the Company which
                  would be infringed. In addition, the Company has filed for
                  patent protection relating to the battery charger unit in
                  thirteen foreign countries and was advised on August 8, 1989
                  that its patent application in Spain, Italy, Great Britain,
                  Australia and Argentina has been approved for issue. There can
                  be no assurance that such additional patent protection can or
                  will be obtained.

                  On May 27, 1989, the Company entered into a letter of intent
                  (the "Letter of Intent") with Daewoo Heavy Industries, Inc.,
                  of Seoul, Korea ("DHI") to complete the development program
                  for the Company reserve battery charger unit (the "Product").
                  The Letter of Intent provided that DHI would bear most costs
                  and expenses related to development of the Product. The
                  Company would provide technical assistance and pay regulatory
                  costs. Upon satisfactory development of the Product pursuant
                  to the development program, the parties intended to negotiate
                  a definitive agreement for the manufacture and distribution of
                  the Product on a worldwide basis.

                  Negotiations pursuant to the Letter of Intent were terminated
                  in September, 1990. DHI informed the Company that DHI's prime
                  bank would not approve a loan to DHI for the Product on the
                  grounds of government policies to regulate the business
                  diversification of conglomerates in Korea. In addition, DHI
                  informed the Company that DHI's Board of Directors decided to
                  postpone indefinitely DHI's participation in the project due
                  to increased wage and material costs for cases and plates, the
                  strength of the Korean won, and the general problem of oil
                  price increases caused by the crises in the Persian Gulf.

                  Power-Cell, Inc. entered into an Agreement of Limited
                  Partnership on October 9, 1992, by and among Reserve Battery,
                  Inc., a Colorado corporation as general partner (the name of
                  the general partner was amended to read "Reserve Cell Limited
                  Liability


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                  Company", General Partner of Reserve Battery Cell, L.P.), and
                  other parties at interest.

                  The parties, as above, formed a limited partnership with the
                  name of "Reserve Battery Cell, L.P." subject to the provisions
                  of the Colorado Uniform Limited Partnership Act of 1981, as
                  amended, to develop, manufacture, market and sell the reserve
                  battery product lines; to obtain financing and refinancing to
                  accomplish the foregoing purposes and other provisions
                  normally required in such projects.

                  Power-Cell, Inc. has a participation of 7.35% percent in the
                  Reserve Battery Cell, L.P., that may be increased or
                  decreased, due to certain events pending, namely the legal
                  action of Reserve vs. Osmic et al. (See item 3, page 5).
                  Should Reserve prevail in this matter, the 5.34% interest of
                  Osmic in the limited partnership will be canceled and
                  re-allocated on a pro rata basis between Reserve, Power-Cell,
                  Inc. and the international rights holders. Further, the right
                  to participate in 41% of the Power-Cell, Inc. domestic
                  royalties should also be canceled. The three year option of
                  Osmic to acquire 200 thousand PCI common shares at $1.00 per
                  share expired on March 5, 1995. (originally 20 million shares
                  at a one cent per share cost, adjusted for a 100/1 reverse
                  split of the common shares effective November 21, 1994). In
                  addition, PCI will receive royalty payments on all units
                  produced and sold in the United States and its possessions.
                  Royalty payments on international sales of the unit will be
                  paid to individual international rights holders or their
                  designees, some of which are affiliates of PCI, and all of
                  which are limited partners in the partnership, on the
                  following basis: one-third (33 1/3%) to J. C. Rambin;
                  one-third (33 1/3%) to Rudy Marich; seventy-five percent of
                  one-third to Howard Farkas (75% of 1/3) and twenty-five
                  percent of one-third to Burt Kanter (25% of 1/3).

                  The Company was advised by Reserve Battery, Inc. on June 30,
                  1997 that litigation had been settled between Reserve and
                  OSMIC, Inc. and furnished with a copy of the assignments.
                  OSMIC, Inc. has assigned to Reserve Battery, Inc. the above
                  cited limited partnership interest and the license royalty
                  interest of Power-Cell, Inc./OSMIC, Inc. The Company is
                  currently reviewing the release and assignment to determine
                  the adequacy of the legal conveyance of the royalty of (41%)
                  of its domestic royalty provision; and its pro rata portion of
                  the 34% OSMIC interest in the limited partnership to
                  Power-Cell, Inc.

                  Power-Cell, Inc. entered into a License Agreement on October
                  9, 1992, by and among Reserve Battery Cell, L.P., a Colorado
                  limited partnership (Reserve), the International Rights
                  Holders and other parties at interest. The license agreement
                  granted to Reserve included the rights to the patents,
                  technology and the Domestic and International Rights, to
                  develop, produce, market and sell the product.

                  The separate license royalty agreement between the Company and
                  the Partnership provides that the Company will receive royalty
                  payments on all Power Cell units produced and sold in the
                  United States and its territories from 5% to 20% of annual
                  gross per unit. Royalty payments on international sales of
                  Power Cell units will be paid to individual international
                  rights holders, some of which are affiliates of the


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                  Company (director and/or significant shareholders), and all of
                  which are limited partners in the Partnership.

                  Around March 1997, the Company was informed that all
                  activities and operations of Reserve Battery Cell, L.P. had
                  ceased due to lack of funding. As a result, at such time, for
                  all practical purposes the operations of the Company ceased.

         (b)      Financial Information About Industry Segments.

                  Not applicable.

         (c)      Narrative Description of Business.

                  The Company was organized in April 1986 to seek out and
                  evaluate potential business opportunities. It received
                  $360,000 in net proceeds, before offering expenses of
                  approximately $44,000, from its initial public offering of
                  400,000 Units of its Common Stock and Class A Warrants
                  ("Units") that closed in December 1986. From the close of that
                  offering until the Spring of 1987, the Company evaluated
                  various business opportunities. In May 1987, the Company and
                  Balzac Investments, Inc. ("Balzac") entered into a Merger
                  Agreement. The merger was completed on February 19, 1988 after
                  the declaration of effectiveness of the Company's Post
                  Effective Amendment Number 6 to its Registration Statement on
                  Form S-18. Upon consummation of the merger, the Company
                  changed its name to Power-Cell, Inc. The reason for this name
                  change was that the primary business of the Company was the
                  development for eventual manufacture and marketing of the
                  Product.

                  In January 1987, Balzac purchased the rights to a battery
                  charger product (the "Product"). As a result of the merger,
                  the rights to manufacture, market and distribute the Product
                  and all related technology in the United States and its
                  territories now belong to the Company. Other individuals and
                  entities who are all former shareholders of Balzac, own all
                  the international rights to the Product. The Product is a
                  reserve battery approximately 6 inches by 8 inches encased in
                  hard form plastic that is designed to be carried in a car and
                  used to charge a "dead" automotive battery. The Product
                  utilizes a lead acid cell commonly used in marine batteries.
                  Marine batteries have been reported to have retained full
                  capacity after storage for up to nine years. Approximately 12
                  minutes after plugging the Product into the cigarette lighter
                  of a car, the Product is designed to transfer enough energy to
                  the "dead" battery to allow a normal restart. The Product is
                  designed to be used once and then be replaced. The Company
                  does not consider the Product to be hazardous.

                  The Company believes the potential market for the Product
                  includes every operator of a car, truck or boat that uses a
                  battery for starting purposes. The Company intends to develop,
                  manufacture and market the Product through one or more
                  third-party companies specializing in the manufacture and
                  national distribution of batteries. Prior to the Merger,
                  Balzac executed a royalty agreement with its shareholders and
                  assigned the international rights to the Product to certain of
                  its shareholders, both of which were conditions precedent to
                  the Merger. The Company is not entitled to international
                  rights to the Product and, therefore, has no right to
                  manufacture, market


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                  or distribute the Product outside the United States and its
                  territories. The Company is also obligated to pay the expenses
                  incurred in filing foreign patent applications for the Product
                  which expenses will be reimbursed out of a royalty interest
                  granted to the shareholders of Balzac prior to the Merger.
                  These international rights are currently owned by four
                  individuals and entities, all of which are principal
                  shareholders of the Company.

                  Management intends that the Product, if marketed and
                  distributed, will compete with many other products including
                  batteries, battery chargers and jumper cables. Many
                  manufacturers of these products are established, well-financed
                  entities with greater financial resources than the Company,
                  well-established products, existing markets, customer lists
                  and established distribution centers.

                  Around March 1997, the Company was informed that all
                  activities and operations of Reserve Battery Cell, L.P. had
                  ceased due to lack of funding. As a result, at such time, for
                  all practical purposes, the operations of the Company ceased.

                  The Company has no full-time or part-time employees but uses
                  one consultant, who devotes substantially all of his time to
                  the Company's business.

         (d)      Financial Information About Foreign and Domestic Operations
                  and Export Sales.

                  Not applicable.

Item 2. Properties

                  The Company has a nominal amount of office space, which is
                  located at the residence of James C. Rambin. Mr. Rambin
                  provides such space on an informal basis and free of charge.
                  There are no other offices or properties of the Company.

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

                  A special meeting (the "Special Meeting") of the shareholders
                  of Power-Cell, Inc., a Colorado corporation (the "Company"),
                  was held at the offices of the Zisman Law Firm, A Professional
                  Corporation, Fourth Floor Conference Room, 2626 Cole Avenue,
                  Suite 400, Dallas, Texas, 75204, at 11:00 A.M., Dallas, Texas
                  time, on December 4, 1997 for the follow purpose:

                           To consider the proposals of James C. Rambin to (a)
                           remove, without cause, Howard L. Farkas and Burton W.
                           Kanter as Directors of the Company, (b) elect H. Don
                           Gill and E. Brewer Newton as Directors of the
                           Company, and (c) re-elect James C. Rambin as a
                           Director of the Company. The proposals were approved,
                           ratified and adopted.

                           The results of the vote of the shareholders at the
                           meeting are set forth below with respect to the
                           proposals presented:



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                           (i)      Removal of Howard L. Farkas as a director of
                                    the Company: Shares of the Company's Common
                                    Stock with respect to such removal were
                                    voted as follows: the number of votes cast
                                    for his removal was 3,800,801, the number of
                                    votes cast against his removal was 4,900,
                                    and the number of votes abstaining was
                                    10,355.

                           (ii)     Removal of Burton W. Kanter as a director of
                                    the Company: Shares of the Company's Common
                                    Stock with respect to such removal were
                                    voted as follows: the number of votes cast
                                    for his removal was 3,801,351, the number of
                                    votes cast against his removal was 4,550,
                                    and the number of votes abstaining was
                                    10,155.

                           (iii)    Messrs. Gill and Newton were the nominees to
                                    fill the vacancies of Messrs. Farkas and
                                    Kanter. Shares of the Company's Common Stock
                                    were voted as follows: with respect to Mr.
                                    Gill, the number of votes cast for his
                                    election was 3,801,976, the number of votes
                                    cast against his election was 3,925, and the
                                    number of votes abstaining was 10,155; with
                                    respect to Mr. Newton, the number of votes
                                    cast for his election was 3,800,806, the
                                    number of votes cast against his election
                                    was 4,845, and the number of votes
                                    abstaining was 10,405.

                           (iv)     Mr. Rambin was nominated for re-election to
                                    the Board of Directors. Shares of the
                                    Company's Common Stock were voted as
                                    follows: the number of votes cast for his
                                    election was 3,777,226, the number of votes
                                    cast against his election was 28,665, and
                                    the number of votes abstaining was 8,065.

Item 6.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations Liquidity and Capital Resources

         On October 21, 1992, the Company entered into a limited partnership
         agreement (see General Development of Business section for outline of
         various contract terms and conditions) with several other limited
         partners and a sole general partner to provide for management, funding,
         manufacturing and marketing of the Power Cell reserve battery unit on a
         worldwide basis. The company initially owned an 11% interest in the
         limited partnership, which may increase or decrease due to the
         occurrence of certain events. The interest decreased to 7.35% during
         fiscal 1996 due to the addition of outside investors, resulting in a
         pro rata dilution. In addition, a separate license royalty agreement
         between the Company and the limited partnership provides that the
         Company will receive royalty payments on all Power Cell units produced
         and sold in the United States and its territories. Royalty payments on
         international


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         sales of Power Cell units will be paid to individual international
         rights holders, or their designees, some of which are affiliates of the
         Company, and all of which are limited partners in the partnership, as
         follows: one-third (33 1/3%) to J. C. Rambin; one-third (33 1/3%) to
         Rudy Marich; seventy-five percent of one-third to Howard Farkas (75% of
         1/3) and twenty-five percent of one-third to Burt Kanter (25% of 1/3).

         The contract agreement has no provision for direct funding of
         Power-Cell, Inc. Its earnings, if any, will be derived from an interest
         in the limited partnership together with royalties, if any, from the
         license royalty agreement.

         On July 1, 1996, Reserve Battery Cell, L.P. (Reserve Battery) announced
         initial market release in select cities of the Power Cell Reserve
         Battery unit. According to Reserve Battery, the product will plug into
         a cigarette lighter or attach directly to battery terminals and
         recharge a battery even in extreme weather conditions (-10 degrees F to
         100 degrees F) in a matter of minutes. Also, these small units can be
         stored for years, do not need to be recharged and never lose their
         power prior to activation. The Power Cell has the strength to recharge
         a battery more than once for a few weeks after it has been activated.
         It is a powerful 5 amp Hour battery and, with the additional purchase
         of a Power Inverter, will operate small household and other electronic
         appliances for hours during a power outage or emergency situation.

         Power-Cell, Inc. has received information from Reserve Battery that, as
         of June 30, 1996, funds in excess of $4,288,000 had been expended on
         product development, capital equipment, operating capital, and
         marketing activities.

         The Company has been informed by Reserve Battery, Inc. that all
         marketing and operations activities have ceased as a result of its
         inability to source sufficient capital to sustain operations.

         Plan of Operation

                  When the activities and operations of Reserve Battery Cell,
         L.P., ceased in the spring of 1997, at such time, for all practical
         purposes, the operations of the Company ceased. The Company has had
         virtually no revenue from operations for the last two fiscal years.
         After reviewing the Company's prospects, management believed that it
         would be possible to develop a strategy for the Company to enter into a
         business combination with a privately held company as a reasonable
         alternative for such company to the more traditional initial public
         offering or, "IPO", and would provide the shareholders of the Company a
         reasonable opportunity to recover some value on their investment. The
         Company also considered raising capital by means of a public or private
         debt or equity offering in order to continue operations. However, such
         alternative did not appear feasible on the basis that the Company has
         virtually no assets or resources.

                  The Company believes that it is an attractive business partner
         for an entity seeking a strategic combination with a publicly-held
         company. Company management and the Board of Directors believe that
         such a combination will serve the interests of the Company's
         shareholders better than a liquidation of the Company. The Company's


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         plan of operation for the next twelve months is to continue to seek a
         business combination that may benefit the Company's shareholders.
         Foreseeable cash requirements relating to maintenance of the Company in
         good standing and expenses associated with receiving and investigating
         a potential business combination will be met by personal funds advanced
         from Mr. Rambin. Because the Company has no revenues or cash resources,
         management anticipates that to achieve any such combination, the
         Company plans to issue shares of Company Common Stock as the sole
         consideration for such combination. However, the consummation of any
         such combination may require the Company to obtain debt or equity
         financing. The Company has no current plan to obtain additional
         financing and no assurance can be given that such financing will be
         available to enter into a particular business combination.

         Results of Operations

         The company has been engaged in organizational and capital raising
         activities since inception through June 30, 1998. It has not incurred
         major operational expenditures. The losses incurred since inception
         primarily reflect legal, accounting, and administrative expenses
         associated with the preparation of the merger documents and
         registration statement, product development and arranging for the
         manufacture of its battery charger product for test marketing purposes.

         Year 2000

                  The Company currently has virtually no active business
         operations. The issues associated with computing difficulties that may
         affect existing computer systems as a result of programming code
         malfunctions in distinguishing 21st century dates from 20th century
         dates are known as the "Year 2000" issue. The Year 2000 issue is a
         pervasive problem affecting many information technology systems and
         embedded technologies in all industries. The Company has determined
         that the consequences of its Year 2000 issues will not have a material
         effect on the Company's business, results of operations, or financial
         condition.

                  The Company does not currently have any significant
         information technology ("IT") systems, including computer hardware
         systems or software.

                  The Company's assessment of the Year 2000 issue does not
         necessitate a review of non-information technology ("non-IT" systems)
         (systems that contain embedded technology in process control equipment
         containing microprocessors or other similar circuitry), because the
         Company has no internal equipment and facilities.

Item 10. Executive Compensation

                  During the fiscal year ended June 30, 1998, no officer or
         director of the Company received any compensation for their services as
         such. However, in fiscal 1998, Mr. Rambin requested a bonus of
         approximately $607,000 for services rendered as President of the
         Company. The Board of Directors approved such request on the condition
         that such bonus would be payable by the Company only if Mr. Rambin was
         able to successfully negotiate the payment of the bonus, or a portion
         thereof, in the context of a business combination with another company,
         including, without limitation, by way of an acquisition of the Company
         or a merger with the Company.




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                                    SIGNATURE

         In accordance with Section 13 or 15(d) of the Exchange Act, the Company
caused this amendment to report to be signed on its behalf by the undersigned,
thereunto duly authorized.

                                            POWER-CELL, INC.
                                            (Registrant)


                                            By:    /s/ James C. Rambin
                                                   -----------------------------
                                                   James C. Rambin, President
                                                   and Chief Executive Officer

                                            Date:  August 4, 1999
                                                   -----------------------------

         In accordance with the Exchange Act, this amendment to report has been
signed by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.

                                            By:    /s/ James C. Rambin
                                                   -----------------------------
                                                   James C. Rambin, President
                                                   and Chief Executive Officer,
                                                   Director

                                            Date:  August 4, 1999
                                                   -----------------------------

                                            By:    /s/ Brewer Newton
                                                   -----------------------------
                                                   Brewer Newton, Director

                                            Date:  August 4, 1999
                                                   -----------------------------

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                                INDEX TO EXHIBITS

<TABLE>
<CAPTION>

EXHIBIT
NUMBER                         DESCRIPTION
-------                        -----------
<S>                 <C>
3.1.1 (1)           Articles of Incorporation and Amendment to Articles of Incorporation

3.1.2 (2)           Articles of Amendment to Articles of Incorporation

3.2 (3)             Bylaws
</TABLE>


(1)      Incorporated herein by reference to Exhibit 3(a) in the Company's
         Registration Statement on Form S-18 filed on August 8, 1986 with the
         Securities and Exchange Commission.

(2)      Filed herewith.

(3)      Incorporated herein by reference to Exhibit 3(b) in the Company's
         Registration Statement on Form S-18 filed on August 8, 1986 with the
         Securities and Exchange Commission.