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

                            FORM 10-K
(Mark One)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

    For the fiscal year ended September 26, 1999
                               OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934

              For the transition period from       to

Commission file number 0-19717


                         WPI GROUP, INC.
                         ---------------
     (Exact Name of Registrant as Specified in Its Charter)

New Hampshire                          02-0218767
-------------                          ----------
(State or other jurisdiction           (I.R.S. Employer
of incorporation or organization)       Identification Number)

1155 Elm Street, Manchester, New Hampshire    03101
------------------------------------------    -----
(Address of principal executive offices)      (Zip Code)

Registrant's telephone number: (603) 627-3500
                                --------------
Securities registered under Section 12(b) of the Act: None
                                                      ----
Securities registered under Section 12(g) of the Act:
Common Stock, par value $.01 per share
--------------------------------------
(Title of Class)

Indicate  by  check mark whether the registrant (1) filed all  reports
required  to  be filed by Section 13 or 15(d) of the Exchange  Act  of
1934  during the past 12 months (or for such shorter period  that  the
registrant   was  required to file such reports),  and  (2)  has  been
subject  to  such filing requirements for the past  90  days.
Yes   X   No
     ---     ---

Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of the registrant's knowledge, in definitive
proxy  or information statements incorporated by reference in  Part
III of this Form 10-K or any amendment to this Form 10-K [ X ]

As of December 30, 1999, the aggregate market value of the 5,357,388
outstanding shares of voting stock held by non-affiliates of the
registrant was $13,438,470.

As of December 30, 1999, 6,051,963 shares of the Registrant's Common Stock,
par value $.01 per share, were issued and outstanding.

               Documents Incorporated by Reference
               -----------------------------------


None.

<PAGE>

                             PART I

Item 1. Business
        ---------
This  report  contains  forward-looking  statements  within   the
meaning  of Section 21E of the Securities Exchange Act   of  1934
that  reflect the Company's current view with respect  to  future
events and financial performance.  When used in this report,  the
words  "anticipates", "believes", "expects", "intends",  "plans",
"future",   and   similar  expressions  identify  forward-looking
statements.   The  future events described  in  these  statements
involve   risks   and  uncertainties,  among   them   risks   and
uncertainties  related to the market acceptance of the  Company's
products  and  continuing development of  its  products,  general
market  conditions and competition.  Actual results could  differ
materially from those projected in the forward-looking statements
as  a  result of factors set forth throughout this document.   In
particular,  there  can  be  no  assurance  that  the   strategic
initiatives  detailed  below will be achieved  within  the  times
currently  contemplated by management, if at all.   In  addition,
there  can  be no assurance that the realizable values shown  for
the discontinued operations will be achieved. Further, much of the
Company's future growth is dependent on the successful launch of
MPSI's E-Technician product. There is no assurance that the product
will succeed even after introduction to the market. The Company
undertakes no  obligation to revise or publicly release the results
of  any revision to these forward-looking statements, whether as a
result of  new information, future events, or otherwise.  Readers
should be  advised  to  read  this Form 10-K in its entirety  and
other reports or documents the Company files from time to time with
the Securities  and Exchange Commission, particularly  the  Quarterly
Reports on Form 10-Q and any Current Reports on Form 8-K,  copies
of  which may be obtained from the Company or from the Securities
and Exchange Commission at its website at www.sec.gov.

General
-------
Beginning  in  April,  1999, the Board  of  Directors  instructed
management  to  explore various strategic  alternatives  for  the
Company  that  could  maximize stockholder value. As a result,
management reviewed various strategic alternatives to strengthen the
Company's financial position and to position the Company for future growth.
These alternatives included the sales and/or retention of the Company's
operating businesses in  various combinations.  Management reported on
the various alternatives to the Board at numerous board meetings
and ultimately the   Board  of  Directors approved  certain strategic
initiatives to enhance stockholder value.  The Board authorized a  series
of  initiatives designed to reposition the Company  as  a provider  of
vehicle diagnostic equipment and software solutions. Accordingly, the
Company plans to divest and exit  its handheld computer  and  terminals
business, its power conversion business and  its  electromechanical
instrument business.   The Company's strategic goal is to continue and
expand its leadership position in  the development, manufacture and
marketing of diagnostic and repair  equipment  and  software for the
automotive,  heavy-duty vehicle, construction and agricultural equipment
market,  through  its  wholly-owned subsidiary, WPI Micro Processor
Systems,  Inc. ("MPSI").   Accordingly,  the Company's non-core
businesses  are reflected  as  "discontinued operations"  throughout
this  annual report.  The Company currently estimates that by the end
of  the third quarter of its current fiscal year, it will have exited
its non-core businesses.

References  to  "MPSI"  in this report  shall  include  only  the
Company's  Vehicle  Diagnostic Equipment and  Software  business and are
identified as "continuing operations". References to "Company" or "WPI"
shall include both continuing operations and discontinued operations.

Historically,  WPI  Group,  Inc. ("WPI"  or  the  "Company")  has
designed,  manufactured and marketed high  value  added  products
used in mission critical systems for a wide range of applications
through   two   operating  groups:  Information   Solutions   and
Industrial Technology.  The Information Solutions Group  produces
three  distinct product lines: Vehicle Diagnostic  Equipment  and
Software;   Rugged  Handheld  Computers;  and   Rugged   Handheld
Terminals. Each of the handheld products is designed to  function
under   harsh   environmental  conditions.  Unlike   conventional
computer  equipment, many of WPI's computers  and  terminals  can
function  after  a 10 foot drop to concrete, total  immersion  in
water, exposure to extreme temperatures as well as dust and other
harmful  agents, and can operate for up to 30 hours on  a  single
battery  charge.  The handheld products are used in a variety  of
applications such as vehicle monitoring and maintenance,  utility
field  service and factory automation.  Because the Company plans
to  exit  and divest the handheld computer and terminal business,

                              2

<PAGE>

the  Company  has  internally  reorganized  the  businesses  that
formerly  comprised  the  Information  Solutions  Group  and  the
handheld  computer and terminals businesses are now reflected  as
discontinued operations.

 The  Industrial Technology Group segment produces four distinct product
lines:  Industrial  Power Conversion Systems  (heavy  duty  power
supplies   used  in  elevators  and  semiconductor  and   thermal
processing  equipment);  Electronic Ballasts  (small  specialized
power  supplies  that  power  lamps used  in  medical  equipment,
multimedia projectors and lighting systems); Precision  Solenoids
(electro-mechanical devices which are incorporated into  cameras,
printers  and  other  products); and Precision  Electromechanical
Instruments (avionic components and subsystems, inertial sensors,
and  digital and analog panel meters).  On December  23,  1999
the  Company sold the Industrial Power Conversion Systems (WPI
Power Systems) and the Electronic  Ballasts (WPI Electronics)
businesses to a private group of  investors. The Company intends to
Divest the  Precision  Solenoids  and  the Precision  Electromechanical
Instruments businesses. Accordingly, each are reflected as discontinued
operations in the financial statements.

The  Company  was incorporated in New Hampshire in 1948  and  its
corporate   headquarters  are  located  at   1155   Elm   Street,
Manchester, New Hampshire 03101.  Its telephone number  is  (603)
627-3500.


Products

MPSI  -  Continuing Operations

WPI's  vehicle diagnostic group, MPSI, offers diagnostic hardware
and   software   ranging   from   application   cartridges   with
connectivity  and diagnostic support for particular  vehicles  to
complete solutions for in-field diagnosis of vehicle failures and
tracking  services with the ability to monitor  the  function  of
critical vehicle components. In 1988, MPSI introduced the Prolink
scan  tool for the diagnostic and repair equipment for  the  auto
and  heavy-duty vehicle markets.  This product has been extremely
successful and has been, over its ten year history, the  tool  of
choice with more OEM endorsements than any other tool of its type
in the industry.  MPSI has continuously updated the Prolink using
the  latest  developments in hardware and software technology  to
enhance the tool and keep the design current. Today, over 120,000
Prolinks have been sold, mainly for use in the heavy-duty vehicle
market  although  many are employed in the automotive  sector  as
well.  From this base business, MPSI has continued to expand  its
product  offerings  and  today provides a  broad  range  of  test
capability   for   heavy-duty  vehicles.   Application   coverage
includes  hardware and software to test many types of  electronic
control  modules  ("ECMs")  for engines,  transmissions,  braking
systems, instrument clusters, passenger safety systems,  as  well
as  others.   In  addition to the specific test  devices,  MPSI's
other product offerings include exhaust emission analyzers, smoke
meters and various handheld electronic system testers.

In  1998,  MPSI introduced two new products that have significant
strategic  importance for the Company and the heavy-duty  vehicle
service  industry.   These  products  are  known  as  the  "PDM",
(parallel data module) and the "SDM" (serial data module).  These
devices  can  be connected to either the computer's  parallel  or
serial  data  port and the vehicle's electronic  systems.   Using
MPSI's unique software, which combines proprietary OEM data  with
MPSI's own in-house software, the vehicle's on-board systems  can
be  thoroughly  analyzed.   The data is  then  presented  to  the
service technician to facilitate the repair or adjustment of  the
vehicle.

MPSI's  newest  product,  known  as  E-Technician,  is  a  remote
diagnostic   platform.   The  E-Technician  web-based  diagnostic
platform  monitors   more than 550 data  points  on  a  vehicle's
electronic  data  bus via the Internet.  It  also  allows  remote
monitoring of a vehicle's sensors and provides real-time analysis
for  maintenance  and repair technicians.  The  Company  believes
that  E-Technician will play an essential role in future  vehicle
service  and  maintenance, bringing advanced  business  value  to
transport  logistic operations across many industries.   With  E-
Technician, companies will perform diagnostic services  remotely,
including  the reprogramming of on-board computers to  enter  new
calibration  data  and  also  the reading  of  fault  codes.   E-
Technician will also link to other business applications, such as
trip  and  maintenance  scheduling and to applications  measuring
vehicle  and fleet profitability.  E-Technician is scheduled  for
launch  in  June  2000.   The Company has numerous  demonstration
units currently in place.

                              3

<PAGE>

Customers

MPSI - Continuing Operations

For Fiscal 1999, a distributor with exclusive rights to sell
certain MPSI product represented approximately 51% of MPSI's net
sales.  Another customer represented approximately 16% of MPSI's
net sales for fiscal 1999.  For Fiscal 1998 and 1997, a
distributor with exclusive rights to sell certain MPSI product
represented approximately 60% of MPSI's net sales in each of
those years.

Company - Including Continuing and Discontinuing Operations

For  Fiscal 1999, 1 customer represented 10% or more of WPI's net
sales.  For Fiscal 1998, no customer represented 10% or  more  of
WPI's net sales. For Fiscal 1997, one customer represented 11% of
WPI's net sales.

Sales and Marketing

MPSI - Continuing Operations

Sales of vehicle diagnostic equipment and software is carried out
by a group of 34 sales and marketing employees, most of which are
located  in  the United States.  MPSI's products are  distributed
through  a  number  of traditional channels as  well  as  through
MPSI's  own  direct telemarketing operation.  In  addition,  MPSI
sells  its  products through a number of independent distributors
located  in North America.  MPSI's automotive products  are  sold
through  several independent warehouse distributors  and  through
MPSI's  catalog.  MPSI offers a full range of pre- and post-sales
support.   Pre-sales  support  is  primarily  provided  by  sales
engineers  located in the field.  Post-sales support is primarily
provided   through   the   MPSI  hot   line.    Together,   these
organizations  ensure  the  successful  application   of   MPSI's
technology and the satisfaction of its clients.

Company - Including Continuing and Discontinuing Operations

WPI's  marketing  efforts  are directed at  identifying  emerging
markets  for  its products.  WPI's cooperative marketing  efforts
and  design  capabilities  often  result  in  long-term  customer
relationships  and  have contributed to a stable  customer  base.
Further,  such  cooperative efforts enable WPI  to  identify  new
product    opportunities   and   participate   in   new   product
specifications  as they are determined.  Other marketing  efforts
include   market   research,  lead  generation,  production   and
distribution  of  WPI's  product  literature,  trade  shows   and
advertising.

Manufacturing and Raw Materials

Each  of WPI's businesses (both continuing and the discontinued
operations)manufacture  nearly  100%  of  their  products.   WPI
businesses generally  operate their manufacturing facilities one
shift  per day, five days per week.  WPI's businesses use many
different raw materials  in  their manufacturing processes.  However,
none  of WPI's  businesses  are  dependent  on  any  one  or  several
raw materials  used  in their manufacturing.  WPI's  businesses  have
multiple sources for each raw material used in the manufacture of
their  products and are not dependent on any one or group of  its
vendors for their raw material purchases.

Backlog

WPI  manufactures  its  products against orders  from  customers.
Backlog  is comprised of orders for products that generally  have
scheduled shipment dates within 12 months.  Some orders in  WPI's
backlog  may  be  canceled  under  certain  conditions,  although
cancellation rarely occurs.

MPSI - Continuing Operations

As  of  September  26, 1999, MPSI had a backlog of  approximately
$500,000,  compared  with a total backlog of  approximately  $1.2
million at September 27, 1998.  Management believes that most  of
MPSI's  backlog at September 26, 1999 will be shipped in  the  12
months  following that date.  Because many of its  contracts  are
performed  within short time periods after receipt of  an  order,
MPSI  does  not  believe  that the level  of  its  backlog  is  a
meaningful predictor of its future results.

                              4

<PAGE>

Company - Including Continuing and Discontinued Operations

As  of  September  26, 1999, WPI had a backlog  of  approximately
$20.3  million,  compared with a total backlog  of  approximately
$23.6  million  at September 27, 1998.  Management believes  that
most  of  WPI's backlog at September 26, 1999 will be shipped  in
the 12 months following that date.  Because many of its contracts
are  performed  within short time periods  after  receipt  of  an
order,  WPI does not believe that the level of its backlog  is  a
meaningful predictor of its future results.

Product Development

MPSI - Continuing Operations

In  its  twenty  year  history  MPSI has  established  widespread
recognition  for  new  product innovation and  has  introduced  a
number   of  first  to  market  products  which  have  not   only
contributed significantly to sales but have also helped shape the
vehicle  diagnostic  and repair industry in  North  America.   In
addition, MPSI develops both hardware and software products based
on   existing  product  offerings  and  technology  for  specific
customer  needs.   MPSI's  current  new  product  development  is
focused on the development of its E-Technician vehicle diagnostic
platform  and internet-based diagnostic service. MPSI charged  to
operations approximately $1.4 million, $1.5 million and
$1.9 million for new product development   in  Fiscal  1997,  1998
and  1999,   respectively. Expenditures on new product development
represented approximately 12%, 10% and 16% of net revenues in Fiscal
1997, 1998 and  1999, respectively.


Company - Including Continuing and Discontinued Operations

WPI  believes  that its commitment to product  development  is  a
critical  element  of  its  strategy aimed  at  exploiting  niche
markets  for  each  group's products.  WPI's product  development
activities  are focused on the design of products  identified  by
both  its  customers and its sales and marketing groups.   A  key
element  of WPI's product development activities is the expansion
of  product  offerings based on its existing  technologies.   WPI
charged  to  operations approximately $4.0 million, $5.1  million
and $6.0 million for new product development in Fiscal 1997, 1998
and  1999, respectively.  Expenditures on product development
represented approximately 6%, 5% and 7% of net revenues in Fiscal
1997, 1998 and 1999, respectively.


Patents and Proprietary Information

WPI (including continuing and discontinued operations) have a number of
United  States  and foreign patents on certain  products.   WPI's
businesses  also  rely on trade secrets, in-house  expertise  and
technological   advancement   to   maintain   their   competitive
positions.

WPI  does not believe patent protection to be significant to  any
of its current businesses.  However, WPI considers its patents to
be  a  strong  deterrent  against  unauthorized  copying  of  its
products  and key product attributes.  WPI believes in vigorously
protecting its rights under its patents.

Similarly,  each  of  WPI's businesses  have  certain  registered
trademarks,  none of which is considered significant  to  current
operations.

Competition

Although WPI believes it is one of the leading manufacturers  and
distributors of certain of its products, the industries in  which
WPI  competes  are  highly  competitive.  WPI  competes  with   a
relatively small number of full-line national manufacturers and a
much  larger  number of regional manufacturers and  manufacturers
with  limited  product lines.  WPI believes that  competition  is
largely based on, among other things, price, quality, breadth  of
product   lines,   distribution  capabilities  (including   quick
delivery   times)  and  customer  service.   Certain   of   WPI's
competitors are larger and have greater financial, technical  and
marketing  resources than the Company. In certain  circumstances,
due  primarily  to factors such as freight rates, quick  delivery
times  and  customer  preference  for  local  suppliers,  certain
manufacturers and suppliers may have a competitive advantage over
WPI in a given geographic region.

                              5

<PAGE>

MPSI - Continuing Operations

Currently,  MPSI's  diagnostic systems and related  software  are
sold   primarily  to  the  transportation  industry.  The   major
competitive  factors  in  this market include  product  features,
portability, product knowledge and customer service.  WPI  has  a
number  of  competitors in certain segments of the transportation
market.   Management  believes that WPI competes  effectively  in
these   markets  by  offering  innovative,  rugged  and  portable
products and by providing excellent customer service.

At the present time, management does not believe that there are any
products which are not competitive with E-Technician.  There can be no
assurance, however, that products competitive with E-Technician are
in the process of development or will not be introduced in the future.
However, management believes that MPSI has a number of key strengths
that give it an advantage over companies wishing to introduce a
product competitive with E-Technician.  These strengths include access
to and understanding of non-proprietary and proprietary original
equipment manufacturer data streams, an in-depth knowledge and expertise
in on-board/off-board communication protocols, an in-depth knowledge and
expertise in the diagnosis and reprogramming of electronic control units,
and well-established links with other key players in the heavy-duty
diagnostic industry which management believes will assist in the
deployment and market penetration of E-Technician.

Competition - Discontinued Operations

Handheld Computers and Terminals

The  major  competitive factors in the programmable and DOS-based
hand-held terminals and computer markets are portability, product
performance,  the ability to customize the unit to  a  customer's
specific needs, customer support and ruggedness.  WPI has several
competitors in specified niche markets. Certain of the  Company's
competitors  in  the  data entry terminal market  have  developed
terminals  to complement their own product lines. Many  of  WPI's
potential customers for handheld terminals and control panels now
satisfy  their needs by designing and producing their own  units.
Management believes that WPI competes effectively in this  market
by offering products that are rugged and easily customized and by
providing excellent customer service.

Industrial Power Conversion Systems

WPI  has  a  number of competitors in the markets for  industrial
power  conversion systems. The major competitive factors  in  the
markets  for industrial power conversion systems are applications
knowledge,  product  reliability,  fully  integrated  design  and
manufacturing, delivery schedule, performance features and  cost.
Management  believes  that  WPI  competes  effectively  in  these
markets   by   offering   high  quality  products,   applications
expertise,  superior customer service and quick delivery.

Electronic Ballasts

WPI has some competition in the market for ballasts in endoscopes,
multimedia projectors and fiber optic light sources incorporating
metal halide  and  xenon arc  lamps. In each of these markets, WPI
believes  that  it competes favorably against its competitors  by
offering  quality,  reliability and  solutions  tailored  to  its
customers' unique needs.

On December 23, 1999, the Company sold the Industrial Power Conversion
Systems and the Electronic Ballast businesses to a group of private
investors.

Precision Solenoids

WPI  has  several  established  competitors  in  the  market  for
solenoids,  some  of  which are larger, and  some  of  which  are
smaller,  than  WPI.   WPI believes that, in  these  markets,  it
competes  favorably  against  its competitors  by  offering  high
quality, dependable products, superior engineering expertise  and
innovative, custom-tailored solutions.

                              6

<PAGE>

Precision Electromechanical Instruments

WPI  has  several  established  competitors  in  the  market  for
avionics,  inertial sensors and digital and analog meters.   Some
of  these competitors are larger, and some are smaller than  WPI.
WPI  believes that it competes favorably against its  competitors
in  these markets by offering vertical integration, high  quality
dependable  products, superior engineering expertise and  a  high
level of customer support.

Employees

MPSI - Continuing Operations

As of December 30, 1999 MPSI employed approximately 75 people, 17
of  whom  work  in manufacturing, 25 of whom work  in  sales  and
marketing,   26   of  whom  work  in  engineering   and   product
development, and 7 of whom work in administration. None of MPSI's
employees is represented by a union, and management believes that
MPSI's employee relations are good.

Company - Including Continuing and Discontinued Operations

As  of  December 30, 1999, WPI employed approximately 765 people,
531   of  whom  work  in  manufacturing,  68  of  whom  work   in
administration, 62 of whom work in product development and 104 of
whom work in sales and marketing. None of the Company's employees
is  represented  by  a union, and management  believes  that  the
Company's employee relations are good.


Item 2. Property
----------------

Properties

The  Company  currently owns property located in Cwmbran,  United
Kingdom.  The  Cwmbran  property is  comprised  of  approximately
26,000  square  feet of facilities which was formerly used to support the
production  of handheld  terminals. The facility is now leased to a
third party and is currently for sale as it is no longer needed to
support operations. The  Company  leases  approximately  17,000
square  feet  of  modern  manufacturing  facilities  in  Sterling
Heights, Michigan to produce diagnostic tools; 40,000 square feet
of  manufacturing  facilities  in  Coventry,  United  Kingdom  to
produce  handheld  and laptop computers; 60,000  square  feet  of
manufacturing facilities in Manchester, New Hampshire to  produce
digital  and  analog meters, inertial sensors and  avionics;  and
19,000  square  feet of manufacturing facilities  in  Bridgetown,
Barbados   to   produce  analog  meters.   The   Company   leases
approximately  12,000 square feet of office space in  Manchester,
New  Hampshire which houses its corporate offices.  In  addition,
the  Company leases office space in six locations in  the  United
States,  France  and Germany use by its sales and service  staff.
WPI  believes that its existing space is adequate for its current
needs.

Regulatory Matters

The  Company is subject to regulation under various and  changing
federal,  state, local and foreign laws and regulations  relating
to  the  environment and to employee safety  and  health.   These
environmental   laws  and  regulations  govern  the   generation,
storage,   transportation,  disposal  and  emission  of   various
substances.  Permits are required for operation of the  Company's
business  and  these permits are subject to renewal, modification
and, in certain circumstances, revocation.  The Company  believes
that it is in substantial compliance with  such laws and permitting
requirements.  The Company is also subject to regulation under
various and changing federal, state,  local  and foreign  laws and
regulations which allow regulatory  authorities to  compel  (or
seek reimbursement for) cleanup of environmental contamination at
its own sites and at facilities where its  waste is or has been
disposed.

The Company expects to incur on-going capital and operating costs
to  maintain  compliance with currently applicable  environmental
laws and regulations.  The Company does not expect such costs, in
the aggregate, to be material to its financial condition, results
of operations or liquidity.

                              7
<PAGE>

Item 3. Legal Proceedings
-------------------------
The Company is not a party to any litigation that in management's
opinion  would have a material adverse effect upon the  Company's
financial position or results of operations.

Item 4. Submission of Matters to a Vote of Security Holders
-----------------------------------------------------------
Not applicable.


                             Part II

Item 5. Market for Registrant's Common Stock and Related
--------------------------------------------------------
Stockholder Matters
-------------------

The Company's common stock is traded on the NASDAQ National
Market System under the symbol WPIC. Set forth below for each
quarter of its last 2 fiscal years indicated are the high and low
sale prices for WPI Group, Inc. common stock.

                          1999             1998
Fiscal Quarter       High      Low      High     Low
-------------------------------------------------------

First                $7 7/8    $4       $15 1/8  $6 7/8
Second               $4 5/8    $3 7/16  $10 1/4  $7 1/8
Third                $4 1/8    $3       $10 1/2  $6 3/4
Fourth               $4 1/8    $2 13/16 $ 9 1/4  $4 3/4


The  number of shareholders of record on December 30,  1999,  was
approximately 3,975.  No dividends have been paid on  the  common
stock  to  date,  and  the Company does not expect  to  pay  cash
dividends in the foreseeable future.  In addition, the Company is
prohibited  from paying cash dividends pursuant to the  terms  of
its credit facility with its lenders.

                              8

<PAGE>



Item 6. Selected Financial Data
----------------------------------
<TABLE>
<CAPTION>


Financial Highlights
<S>                   <C>           <C>         <C>         <C>         <C>

Year Ended              September   September   September   September   September
                            26,         27,         28,         29,         24,
(in thousands,             1999        1998        1997        1996        1995
except per share        ----------  ---------   ---------   ---------   ---------
data)


Statement of
Income Data:

Net Sales             $     12,289  $  14,514   $  11,364   $   8,661   $    -

Gross Profit                 7,427      8,075       6,136       4,147        -

Operating income
(loss) from
continuing operations       (3,367)       (12)          4      (1,521)       -

Loss from continuing
operations                  (3,975)      (165)        (48)       (908)       -

Income (loss) from
discontinued operations,
net of income taxes        (29,230)     2,651       1,164       3,429      1,155

Cumulative effect of
change in accounting
principle                   (2,822)      -           -            -          -


Net income (loss)          (36,027)    2,486       1,116       2,521       1,155
                        ----------  --------   ---------   ----------  ---------
Diluted income (loss)
per share:
 Continuing operations  $    (0.66)  $ (0.03)  $   (0.01)  $   (0.15)  $     -
 Discontinued operations     (4.83)     0.43        0.19        0.57        0.20
 Accounting change           (0.47)      -           -            -          -
 Net income (loss)      $    (5.96)  $  0.40   $    0.18   $    0.42   $    0.20
                        ----------  --------   ---------   ---------   ---------
Adjusted Weighted
Average Shares               6,044     6,195       6,163       6,001       5,823


Balance Sheet Data:

Working Capital
(deficit)               $   11,837  $  21,327   $  16,967   $   12,156  $  6,626
Total Assets                64,557    110,123      78,501       50,675    22,380
Long-Term Debt                -        62,639      42,000       18,650     1,123
Stockholders'
Equity (deficit)           (10,974)    25,243      21,813       20,549     17,311
                        ==========  =========   =========   ==========  =========


</TABLE>

Item 7. Management's Discussion and Analysis of Financial
---------------------------------------------------------
Condition and Results of Operations
-----------------------------------
RESULTS OF OPERATIONS

FISCAL 1999 COMPARED TO FISCAL 1998

Net sales decreased 15.3% to $12.3 million in 1999 from $14.5 million in
1998.  The decrease was due primarily to decrease in sales by MPSI to its
principal distributor.  During 1999, sales to the primary distributor
decreased from $8.8 million in 1998 to $6.3 million in 1999.

Gross profit in 1999 decreased 8.0% to $7.4 million from $8.1 million in
1998.  As a percentage of sales, gross profit increased to 60.4% from
55.6% in 1998.  The decline in gross profit was the result of the decrease
in sales during 1999.  The increase in gross profit as a percentage of
sales was due primarily to change in product mix.

Research and new product development expenses increased 37.3% to $2.1 million
in 1999 from $1.5 million in 1998.  As a percentage of sales, research and new
product development expenses increased to 16.8% in 1999 from 10.4% in 1998.
The increase was due in part to the change in the Company's accounting
method for deferred product enhancement costs.

                              9
<PAGE>

Selling, general and administration expenses increased 24.9% to $8.2 million
in 1999 compared to $6.6 million in 1998.  As a percentage of sales, selling,
general and administration expenses increased to 66.9% from 45.3% in 1998.
The increase in selling, general and administration expense was due primarily
to increased corporate expenses.

The Company's operating loss in 1999 of $3.4 million compared to $12 thousand
in 1998.  The increase in the Company's operating loss was due primarily to
lower sales and high operating expenses as discussed above.

Other income (expense) increased to ($.6 million) in 1999 from ($.2 million)
in 1998.  The increase was due primarily to an increase in interest expense
on debt.

The Company's loss from discontinued operations in 1999 was $8.8 million
compared to income from discontinued operations of $2.7 million in 1998.
The loss was the result of the increased costs and operating expenses as
a result of the acquisition of Instruments in August 1998, lower sales in
the Company's rugged handheld computer and terminal, power conversions and
electronic ballasts businesses and higher interest expense from additional
borrowings and higher interest rates.

FISCAL 1998 COMPARED TO FISCAL 1997

Net  sales  increased 27.5%  to $14.5 million in  1998  from $11.4
million  in 1997.  The increase was due to increased sales by MPSI
to its principal distributor.  Sales to the principal distributor
increased from $6.9 million in 1997 to $8.8 million in 1998.  In
addition, 1998 include sales of diagnostic hardware and software
products to Deere & Company totaling $1.1 million as a result of a
development agreement with Deere for its construction and
agricultural equipment.

The Company's gross  profit in 1998 increased 31.6% to $8.1 million
from  $6.1 million in 1997.  As a percentage of sales, gross profit
increased to 55.6% in 1998 from 54.0%  in 1997.  The increase was due
primarily  to  increased sales and change in product mix.

Research  and new product development expenses increased  16.7%  to
$1.5  million in 1998 from $1.3 million. As a  percentage of sales,
research and new product development expenses decreased to 10.4% in
1998 from 11.4% in 1997.

Selling,  general  and administration expenses increased  35.9%  to
$6.6  million in 1998 compared to $4.8 million in  1997.  As  a
percentage of sales, selling, general and administration expenses
increased to 45.3% from 42.6% in 1997.  The increase was primarily
the result of higher corporate and general administration expenses
in 1998 in comparison to 1997.

The Company's operating loss in 1998 was $12 thousand compared to
$4 thousand operating income in 1997.

Other  income (expense) increased to ($.2 million) in 1998  from
($.1  million)  in 1997.  The increase was due primarily  to  an
increase  in  interest expense on debt.

The Company's income from discontinued operations in 1998 was $2.7
million compared to $1.2 million in 1997.  The increase was primarily
the result of a full year of rugged handheld computer operations in
1998 following the June 1997 acquisition of Husky Computers.

LIQUIDITY AND CAPITAL RESOURCES

As  of September 26, 1999, the Company had a working capital
(deficit) of  ($11.8) million million  versus  $21.3 million
at September 27, 1998.   Net  cash provided  by  operating activities
totaled $1.2 million  in 1999 and $5.6 million in 1998.

As of September 26, 1999, the Company had no material commitments
for capital expenditures.

In August 1998, the Company entered into a $75 million credit facility
with a syndication of banks, consisting of a $20 million revolving line
of credit which was to expire on September 30, 2003 and term notes
totaling $55 million payable in varying quarterly installments commencing
on December 31, 1998 and through September 30, 2004.  The credit facility
agreement contain certain restrictive covenants, including financial
covenants, one of which the Company was not in compliance with at
September 27, 1998.  In December 1998, the Company reached an agreement
with the banks to waive the event of non-compliance and amend certain
terms of the agreement.

As of March 28, 1999 and June 27, 1999 the Company was not in compliance
with two of the financial covenants contained in the credit agreement.  The
Company reached an agreement with the banks to waive the event of non-
compliance as of March 28, 1999 and June 27, 1999 up to and until October 1,
1999 and to amend certain terms of the agreement.  In relevant part, the
terms of the amendment increases the interest accrued on all borrowings by
2% per annum and limits the revolving credit borrowings to $14.8 million,

                              10
<PAGE>

the amount of the Company's current revolving credit borrowings.  In
addition to the payment of a fee to amend the agreement, the Company agreed
to issue to the banks warrants to purchase 124,000 shares of the Company's
common stock at $2.75 per share.  The warrants are exercisable after one
year for a period of ten years.

As of October 1, 1999 the Company was not in compliance with terms of the
credit agreement as amended.  Accordingly, the aggregate bank debt totaling
$67,356,000 is callable by the bank and has been classified as current in
the consolidated balance sheet as of September 26, 1999.

The Company is negotiating a forbearance agreement with the banks.
The terms of the forbearance agreement provides all outstanding
borrowings are due and payable, limits the revolving credit borrowings to
$12.5 million, all borrowings bear interest at prime, payment of a $250,000
fee to the bank group, consummation of the sale of the rugged handheld
computers and terminals business, execute a letter of intent with a potential
purchaser of the instruments and solenoids business and an action plan to
reduce the Company's expenses.  The forbearance period is the earlier of
March 31, 2000 or any default under terms of the agreement.

During its fiscal 1999, the Company has adopted and is in the process of
implementing a restructuring plan intended to focus on its MPSI business
unit (the provider of vehicle diagnostic systems).

In connection therewith:

1.      The Company decided to divest itself of its Industrial Technology
        Group segment.  In December 1999, the Company completed the sale of
        its industrial power conversion systems and electronic ballasts
        businesses (WPI Power Systems and WPI Electronics) to a private
        group of investors for approximately $9.3 million in cash plus the
        assumption of certain liabilities.  The Company is also in the
        process of seeking a buyer for its instruments and solenoids
        businesses (WPI Instruments and WPI Magnetec).  Substantially all
        of the proceeds from the completed sale were applied to the
        outstanding bank debt.

2.      The Company is in the process of negotiating the sale of its rugged
        handheld computer and terminal business units (WPI Husky Technology
        and WPI Oyster Termiflex/MicroPalm) and expects this transaction to
        be concluded sometime in the first calendar quarter of 2000.  Also
        during its fiscal 1999, the Company decided to terminate the software
        development operations of its expert systems business (WPI
        DecisionKey).

The Company's intention is to utilize the cash generated from the divestitures
of its businesses to repay a significant portion of the existing bank debt.
Thereafter, the Company intends to refinance the remaining debt to provide
sufficient liquidity to satisfy its continuing working capital requirements.
There is no assurance the Company will be successful in divesting its
businesses or that the funding will be available to execute the plan.

If the Company is unable to successfully complete the divestiture
transactions, renegotiate its bank agreements, or obtain additional financing,
the cash from operations may not be sufficient to cover short-term or
long-term liquidity requirements.

INFLATION

The Company does not believe that inflation has had a significant
impact on its results of operations in the last three years.

                              11

<PAGE>

YEAR 2000

WPI  established its Year 2000 Project in order to  evaluate  the
issue  of computer software and embedded computer chips that  are
not  able to distinguish between the year 1900 and the year 2000.
WPI'  s  Year 2000 Project was divided into three major  sections:
(1)  IT  systems  (which examine operating systems  and  business
applications software); (2) External agents (which examine  third
party  suppliers  and customers); and (3) Product  issues  (which
involve Year 2000 issues inherent in products sold by WPI).

The  IT  systems section evaluated hardware and systems software.
WPI completed its evaluation of its main internal operating
systems  and business application software.  As a result of  this
evaluation, WPI implemented the necessary changes and  tested
its  internal  systems to achieve Year 2000  compliance  in  this
area.   As  of  the date of this report, WPI has  experienced  no
material  issues or problems relating to Year 2000  readiness  of
its internal systems.

The  external agents section included the process of  identifying
and  prioritizing critical suppliers and customers at the  direct
interface  level, and communicating with them about  their  plans
and  progress  in  addressing the year 2000 problem.   Year  2000
compliance  issues at critical suppliers create  risks  for  WPI,
since  their  inability to operate effectively could  impact  our
business.  Evaluations of the most critical  third  parties  have
been  completed.  The Company had received assurances from  these
parties  that  they  are "Y2K Ready."  As of  the  date  of  this
report,  WPI  has  experienced  no material  issues  or  problems
relating to Year 2000 readiness of its external agents.

The  product  issues section included the process of  identifying
any  product  sold by WPI which may not be Year  2000  compliant,
determining  a  corrective  course of  action  and  disseminating
information  about  Year 2000 compliance to customers.   Although
most  of WPI's products that have integrated software or embedded
microprocessors  are  Year  2000  compliant,  there  can  be   no
assurances  that  all of WPI's products are currently  Year  2000
compliant.  Detailed evaluations of products have been completed.

Total costs associated with required IT systems modifications  to
become Year 2000 compliant and product issues are not expected to
have a material effect on the consolidated results of operations,
cash flows or financial position of WPI.

                              12

<PAGE>

Item 8. Financial Statements and Supplementary Data
        -------------------------------------------

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

TO WPI GROUP, INC.:

We  have audited the accompanying consolidated balance sheets  of
WPI Group, Inc. (a New Hampshire corporation) and subsidiaries as
of  September  26, 1999 and September 27, 1998, and  the  related
consolidated statements of income, stockholders' equity (deficit)
and  cash flows  for  each of the three years in the period ended
September 26,  1999.   These  consolidated  financial  statements
are  the responsibility  of the Company's management.  Our
responsibility is  to express an opinion on these financial statements
based  on our audits.

We  conducted  our audits  in accordance with generally  accepted
auditing  standards.  Those standards require that  we  plan  and
perform  the  audit to obtain reasonable assurance about  whether
the  financial statements are free of material misstatement.   An
audit  includes  examining, on a test basis, evidence  supporting
the  amounts  and  disclosures in the financial  statements.   An
audit also includes assessing the accounting principles used  and
significant  estimates made by management, as well as  evaluating
the  overall  financial statement presentation.  We believe  that
our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to
above  present fairly, in all material respects, the consolidated
financial  position  of WPI Group, Inc. and  subsidiaries  as  of
September  26,  1999 and September 27, 1998, and the  results  of
their operations and their cash flows for each of the three years
in  the  period  ended  September 26, 1999,  in  conformity  with
generally accepted accounting principles.

The accompanying financial statements have been prepared assuming
that the Company will continue as a going concern.  As discussed
in Note 1 to the financial statements, the Company has a net working
capital deficit that raises substantial doubt about its ability to
continue as a going concern.  Management's plans in regard to these
matters are also described in Note 1.  The financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.

Arthur Andersen LLP


Boston, Massachusetts
January 24, 2000

                              13

<PAGE>
<TABLE>

                 WPI GROUP, INC AND SUBSIDIARIES
                   CONSOLIDATED BALANCE SHEETS
<CAPTION>

September 26, 1999 and September 27, 1998         1999            1998
-----------------------------------------------------------------------------
ASSETS
<S>                                             <C>             <C>

Current Assets
 Cash and cash equivalents                       $  1,086,708    $     159,518
 Accounts receivable - net of allowance
 for doubtful accounts of $171,000 and
 $1,283,000 in 1999 and 1998,
 respectively                                       2,027,808       21,123,792
 Accounts receivable - other                          101,135          270,611
 Inventories                                          461,893       14,188,286
 Prepaid expenses and other current
 assets                                               238,550        1,562,048
 Refundable income taxes                              220,205          620,578
 Prepaid income taxes                               2,655,419        2,551,616
 Net assets of discontinued operations             54,200,000             -
                                                 ------------     ------------
    Total current assets                           60,557,718       40,476,449
                                                 ------------     ------------


Property, Plant and Equipment, at cost,
less accumulated depreciation                       1,668,473       15,514,291
Other Assets                                        1,896,868       54,132,417
                                                 ------------     ------------

                                                 $ 64,557,059     $110,123,157
                                                 ============     ============

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current Liabilities
 Current portion of long-term debt               $ 69,155,487     $  3,715,748
 Accounts payable                                   1,499,103        7,776,470
 Accrued expenses                                   2,173,763        5,985,304
 Accrued income taxes                                  -             1,672,166
                                                 ------------     ------------

    Total current liabilities                      72,828,353       19,149,688
                                                 ------------     ------------
Long-Term Debt                                         -            62,638,964
                                                 ------------     ------------

Deferred Income Taxes                               2,702,987        3,091,995
                                                 ------------     ------------
Commitments

Stockholders' Equity (Deficit)

 Common stock, $.01 par value;
 authorized 20,000,000 shares;
 issued and outstanding 6,050,398
 and 6,028,204 shares in 1999 and
 1998, respectively                                    60,504           60,282
 Additional paid-in capital                        14,574,134       14,169,771
 Retained earnings (deficit)                      (25,608,919)      10,418,044
 Cumulative foreign currency translation
  adjustments                                          -               594,413
                                                 ------------     ------------
       Total stockholders' equity (deficit)       (10,974,281)      25,242,510
                                                 ------------     ------------

                                                 $ 64,557,059     $110,123,157
                                                 ============     ============
</TABLE>
See notes to consolidated financial statements.

                              14

<PAGE>





<TABLE>

                WPI GROUP, INC. AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF INCOME
 Restated to Report Husky and Industrial Technology Companies as
                     Discontinued Operations

<CAPTION>

For the years ended September 26, 1999, September 27, 1998
----------------------------------------------------------
and September 28, 1997
----------------------
                                    1999            1998           1997
                                -------------   ------------   -------------
<S>                             <C>             <C>            <C>

Continuing Operations
Net Sales                       $  12,228,976   $ 14,513,904   $  11,363,820
Cost of Sales                       4,801,990      6,438,888       5,227,677
                                -------------   ------------   -------------

Gross Profit                        7,426,986      8,075,016       6,136,143
                                -------------   ------------   -------------
Operating Expenses
 Research and new product
 development                        2,067,352      1,506,001       1,290,844
 Selling, general and
 administration                     8,216,789      6,581,082       4,841,512
 Restructuring costs                  510,000          -               -
                                -------------   ------------   -------------
Total operating expenses           10,794,141      8,087,083       6,132,356
                                -------------   ------------   -------------

Operating income (loss)            (3,367,155)       (12,067)          3,787

Other Income (Expense)
 Interest expense                    (620,213)      (234,896)       (105,128)
 Other income                          12,373            595          20,005
                                -------------   ------------   -------------
Loss before provision
for income taxes                   (3,974,995)      (246,368)        (81,336)
Provision (benefit)for
Income Taxes                            -            (81,090)        (33,234)
                                -------------   ------------   -------------

Loss from continuing
operations                      $  (3,974,995)  $   (165,278)  $     (48,102)


Discontinued Operations
  Income (loss)from discontinued
    operations (net of applicable
    income taxes of $-,
    $1,306,000 and $887,000 in 1999,
    1998 and 1997,
    respectively                   (8,849,821)     2,651,760       1,163,863
  Estimated loss on disposal of
  discontinued operations         (20,380,000)         -               -
                                -------------   ------------   -------------

Income (loss) from discontinued
operations                        (29,229,821)     2,651,760       1,163,863
                                -------------   ------------   -------------
Income (loss) before cumulative
  effect of change in accounting
  principal                       (33,204,816)     2,486,482       1,115,761
Cumulative effect of change
  in accounting principle, net of
  applicable income
  taxes of  $1,000,000             (2,822,147)         -               -
                                -------------   ------------   -------------

Net income (loss)               $(36,026,963)   $  2,486,482   $   1,115,761
                                ============    ============   =============

Earnings (Loss) Per Share -
Continuing Operations
(see Note 2)                    $       (0.66)  $      (0.03)  $       (0.01)
                                =============   ============   =============
</TABLE>
See notes to consolidated financial statements.


                              15

<PAGE>


<TABLE>


                WPI GROUP, INC. AND SUBSIDIARIES
         CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
<CAPTION>

For the years ended September 26, 1999 September 27, 1998 and September 28,1997
1997

<S>                        <C>         <C>       <C>           <C>  <S>        <C>          <C>       <S>   <C>     <S>
                                                                                  Foreign
                                  Common Stock      Additional     Retained       Currency
                                  $.01 Par Value     Paid-in       Earnings      Translation                 Comprehensive
                               Shares     Amount     Capital       (Deficit)     Adjustment    Total         Income
Balance                        ------     ------    ----------   -----------    -----------    -----
September 29, 1996          5,947,922  $59,479   $13,658,604    $ 6,815,801     $  14,762     $20,548,646    $     -
Employeee stock purchase        2,865       29        23,488          -              -             23,517          -
plan
Stock bonus plan                4,525       45        34,186          -              -             34,231          -
Exercise of stock              41,425      414       117,262          -              -            117,676          -
options
Income tax benefit from           -         -         89,000          -              -             89,000          -
stock options exercised
Non-employee
compensation stock  options       -         -         70,000          -              -             70,000          -
Foreign currency                  -         -           -             -          (185,976)       (185,976)       (185,976)
translation
Net income                        -         -           -         1,115,761          -          1,115,761       1,115,761
----------------------------------------------------------------------------------------------------------------------------
Comprehensive income                                                                                         $    929,785
                                                                                                             ---------------
Balance
 September 28, 1997          5,996,737  $59,967   $13,992,540    $ 7,931,562     $(171,214)    $21,812,855          -

Employee stock purchase          7,582       76        50,226          -              -             50,302          -
plan
Stock bonus plan                 3,135       31        25,744          -              -             25,775          -
Exercise of stock               20,750      208        79,261          -              -             79,469          -
options
Income tax benefit from            -         -         22,000          -              -             22,000          -
stock options exercised
Foreign currency                   -         -           -             -           765,627         765,627        765,627
translation
Net Income                         -         -           -         2,486,482          -          2,486,482      2,486,482
-----------------------------------------------------------------------------------------------------------------------------
Comprehensive income                                                                                         $  3,252,109
                                                                                                             ----------------
Balance
 September 27, 1998          6,028,204  $60,282   $14,169,771    $10,418,044     $ 594,413     $25,242,510   $      -

Employee stock purchase          6,803       68        27,317          -              -             27,385          -
plan
Stock bonus plan                 2,225       22         9,990          -              -             10,012          -
Exercise of stock               13,166      132        28,388          -              -             28,520          -
options
Non-employee
compensation stock                 -         -        337,768          -              -            337,768          -
options and warrants
Income tax benefit from
stock options exercised            -         -            900          -              -                900          -
Foreign currency                   -         -           -             -          (594,413)       (594,413)      (594,413)
translation
Net (loss)                         -         -           -       (36,026,963)         -        (36,026,963)   (36,026,963)
---------------------------------------------------------------------------------------------------------------------------
Comprehensive loss                                                                                           $(36,621,376)
                                                                                                            ---------------
Balance
 September 26, 1999          6,050,398  $60,504   $14,574,134    $(25,608,919)   $    -        (10,974,281)
===========================================================================================================================
</TABLE>

See notes to consolidated financial statements.

                              16
<PAGE>
<TABLE>

                 WPI GROUP, INC AND SUBSIDIARIES
              CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>

For the years ended September 26, 1999, September 27, 1998 and
September 28, 1997

<S>                                    <C>             <C>            <C>
                                             1999           1998           1997

Cash Flows From Operating Activities
 Net Income (loss)                       $(36,026,963)   $ 2,486,482    $ 1,115,761
                                         ------------    -----------    -----------
  Adjustments to reconcile net income
  to net cash
  provided by operating activities:
  Depreciation and amortization             5,352,969      5,424,802      3,409,364
  Loss from disposal of
  discontinued operations                  20,380,000        -               -
  Cumulative effective of change in
  accounting principle                      2,822,147         -               -
  Write-off of software development             -          1,312,283          -
  costs
  Write-off of property and equipment         523,531          -              -
  Non-cash interest expense                 1,221,371          -              -
  Deferred income taxes                       236,052     (1,173,110)       860,307
  Non-cash compensation                        46,000         25,775        104,231
  Changes in current assets and
  liabilities, net of effects of
  acquisitions:
  Accounts receivable                       3,525,293     (5,982,700)     4,266,396
  Inventories                              (3,149,380)       825,685      1,733,357
  Other current assets                        577,773        940,689     (1,216,626)
  Accounts payable                          5,518,563         66,926       (500,407)
  Accrued expenses                            824,623        632,823     (1,357,394)
  Accrued income taxes                       (616,223)     1,016,789     (1,018,724)
                                         ------------    -----------    -----------

     Total adjustments                     37,262,719      3,089,962      6,280,504
                                         ------------    -----------    -----------

     Net cash provided by operating         1,235,756      5,576,444      7,396,265
     activities                          ------------    -----------    -----------

Cash Flows From Financing Activities
 Proceeds from debt                         3,266,523     62,893,343     23,350,000
 Payments of debt                            (465,748)   (42,270,664)       (20,000)
 Proceeds from exercise of stock               28,520         79,469        117,676
 options
 Issuance of common stock                      37,397         50,302         23,517
 Tax benefit on exercise of non-
 statutory options                                900         22,000         89,000
                                         ------------    -----------    -----------
     Net cash provided by financing
     activities                             2,867,592     20,774,450     23,560,193
                                         ------------    -----------    -----------
Cash Flows From Investing Activities
 Additions to property, plant and          (2,934,982)    (1,934,052)     (3,912,522)
 equipment
 Proceeds from sales of property,
 plant and equipment                            -          1,462,894          -
 Additions to other assets                    (67,000)    (2,611,857)    (2,911,010)
 Acquisitions, net of cash acquired             -        (23,495,000)   (22,039,007)
 Payments of accrued acquisition
 costs                                       (720,140)      (362,152)    (1,435,973)
                                         ------------    -----------    -----------
 Net cash used in investing
 activities                                (3,722,122)   (26,940,167)   (30,298,512)
                                         ------------    -----------    -----------
Effect of Foreign Currency
Translation on Cash                             9,576         69,992       (185,976)
                                         ------------    -----------    -----------
Net Increase (Decrease) in Cash and           390,802       (519,281)       471,970
Cash Equivalents
Cash and Cash Equivalents, Beginning
of Year                                       159,518        678,799        206,829
                                         ------------    -----------    -----------
Cash and Cash Equivalents, End of
Year                                     $    550,320    $   159,518    $   678,799
                                         ------------    -----------    -----------
Supplemental Disclosure of Cash Flow
Information
 Income taxes paid                       $    340,558    $    68,839    $ 2,644,700
 Interest paid                              5,831,090      3,599,679      1,906,915
                                         ------------    -----------    -----------
Supplemental Disclosure of Non-Cash
Investing Activities

 Summary of entities acquired:
 Fair value of assets acquired           $      -        $ 28,478,663    $ 27,754,666
 Cash paid                                      -         (23,495,000)    (21,811,753)
                                         ------------    ------------    ------------
 Liabilities assumed                     $      -        $  4,983,663    $  5,942,913
                                         ============    ============    ============

</TABLE>

See notes to consolidated financial statements.

                              17

<PAGE>



1.  Business and Discontinued Operations
    ------------------------------------
Business  - WPI Group, Inc. (the "Company") designs, manufactures
and   markets  high,  valued-added  information  and   industrial
technology  products used for a wide range of applications. The
Company operates through two segments, the Industrial Technology
Group (consisting of WPI Electronics, WPI Power Systems, WPI
Instruments and WPI Magnetec) and the Information Solutions Group
(consisting of WPI Oyster Termiflex/MicroPalm, WPI DecisionKey,
WPI Husky Technology and WPI Micro Processor Systems, Inc. ("MPSI")).
The Industrial Technology Grup segment provides highly engineered
electromechanical and electronic equipment, electromechanical devices
and precision electromechanical instruments.  The Information Solutions
Group segment is a provider of rugged handheld computers and terminals,
as well as vehicle diagnostic systems.

Discontinued Operations - During its fiscal 1999, the Company has adopted
and is in the process of implementing a restructuring plan intended to
focus on its MPSI business unit (the provider of vehicle diagnostic systems).
In connection therewith:

1.      The Company decided to divest itself of its Industrial Technology
        Group segment.  In December 1999, the Company completed the sale of
        its industrial power conversion systems and electronic ballasts
        businesses (WPI Power Systems and WPI Electronics) to a private
        group of investors for approximately $9.3 million in cash plus the
        assumption of certain liabilities.  The Company is also in the
        process of seeking a buyer for its instruments and solenoids
        businesses (WPI Instruments and WPI Magnetec).  Substantially all
        of the proceeds from the completed sale were applied to the
        outstanding bank debt.

2.      The Company is in the process of negotiating the sale of its rugged
        handheld computer and terminal business units (WPI Husky Technology
        and WPI Oyster Termiflex/MicroPalm) and expects this transaction to
        be concluded sometime in the first calendar quarter of 2000.  Also
        during its fiscal 1999, the Company decided to terminate the software
        development operations of its expert systems business (WPI
        DecisionKey).


As a result of these actions, the Company's remaining and continuing
operations consist solely of MPSI, its vehicle diagnostic systems
business.  All other businesses are presented as discontinued operations
in the statements of operations in accordance with Accounting Principles
Board Opinion No. 30. Accordingly, the sales, costs and expenses of these
discontinued operations have been excluded from the respective captions
in the consolidated statements of operations for all years presented and
have been reported as income (loss) from discontinued operations, net of
applicable income taxes.

The net assets of the discontinued operations have been classified as such
on the accompanying balance sheet as of September 26, 1999 as assets held
for sale.

The Company has recorded an estimated loss on disposal of discontinued
operations of approximately $20.4 million which includes an estimated
loss on the sale of its Industrial Technology Group of $16.0 million,
an estimated loss on the sale of its rugged handheld computer and terminal
business operations of $1.8 million and approximately $2.6 million estimated
loss on future results of operations through the estimated date of
disposal (including $3.0 million of allocated interest expense).

The amount the Company will ultimately realize could differ materially
in the near term from the amounts assumed in arriving at the loss
anticipated on disposal of the discontinued operations.

                              18

<PAGE>
<TABLE>
Summary operating results of the discontinued operations is as follows:
<CAPTION>

                                   1999           1998           1997
                               -------------  ------------    ------------
<S>                            <C>            <C>             <C>

Sales                          $  79,779,825  $ 80,382,052    $ 51,119,568
Costs and Operating Expenses      80,846,942    72,945,412      47,799,429
                               -------------  ------------    ------------
Operating income (loss) from
  discontinued operations         (1,067,117)    7,436,640       3,320,139
Interest expense allocation
  (based on relative net
  assets) and other
  income expenses                 (7,782,704)    (3,478,790)    (1,268,042)
                               -------------  ------------    ------------
Income (loss) from discontinued
  operations before income
  taxes                           (8,849,821)    3,957,850       2,052,097
Provision for income taxes             -         1,306,090         888,234
                               -------------  ------------    ------------
Income (loss) from discontinued
operations                     $  (8,849,821) $  2,651,760    $  1,163,863
                               =============  ============    ============

</TABLE>

Going Concern - As described in Note 4, the Company was not in compliance
with the covenants of its credit facility at September 26, 1999.  The default
has not been waived by the bank syndicate and, as a result, the Company has
no additional availability under its line of credit, the aggregate borrowings
of $67,356,000 are callable by the bank.  The Company is presently in the
process of negotiating a forbearance agreement with its bank group.  The
proposed terms of the forbearance agreement are more fully described in
Note 4. As a result, the amounts oustanding under the bank agreements have
been classified as current in the accompanying financial statements.

As discussed above, the Company has adopted a broad plan to divest of its
Industrial Technology Group and rugged handheld computers and terminals
businesses and focus on its MPSI business.  The Company's intention is
to utilize the cash generated from the divestitures of its businesses
to repay a significant portion of the existing bank debt.  Thereafter,
the Company intends to refinance the remaining debt to provide sufficient
liquidity to satisfy its continuing working capital requirements.

The Company's continuation as a going concern is dependent upon its ability
to generate sufficient cash flow to meet its obligations on a timely basis,
successfully complete the divestiture of its businesses, to comply with
terms of the forbearance agreement which is currently being negotiated and to
obtain additional financing or refinancing as may be required.  The Company
can make no assurances it will be successful in these efforts.

If the Company is unsuccessful, it would be unable to meet its remaining
short-term liquidity requirements, including debt service, normal working
capital and other cash requirements, which would have a material adverse
effect on the Company's on-going operations and would adversely affect the
solvency of the Company.

These factors among others may raise substantial doubt about the Company's
abiity to continue as a going concern.  The financial statements do not
include any adjustment that might result from the outcome of this uncertainty.



2.  Summary of Significant Accounting Policies
    ------------------------------------------
Basis  of  Consolidation - The consolidated financial  statements
include  the  accounts  of  the  Company  and  its  wholly  owned
subsidiaries.    All   significant  intercompany   balances   and
transactions have been eliminated.

Fiscal  Year-end  - The Company operates on a  52-  to  53-  week
fiscal year ending on the last Sunday in September.

                              19
<PAGE>

Revenue  Recognition  -  Sales are  recorded  when  products  are
shipped or when services are performed.  The Company provides for
estimated warranty costs at the time of shipment. Arrangements to
deliver  software  or software systems which require  significant
production, modification or customization are accounted for on  a
percentage   of  completion basis.   Revenue  is  recognized   in
the proportion that the cost of milestones achieved bear to the total
estimated  costs of the project at completion.  Losses,  if  any,
are provided for in the period in which the loss is determined.

Management Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management  to  make estimates and assumptions  that  affect  the
reported  amounts  of assets and liabilities  and  disclosure  of
contingent  assets and liabilities at the date of  the  financial
statements  and  the  reported amounts of revenues  and  expenses
during  the  reporting period.  Actual results could differ  from
those estimates.

Cash  and Cash Equivalents - For the purposes of the consolidated
statements of cash flows, the Company considers all highly liquid
investments purchased with a maturity of three months or less  to
be cash equivalents.

Fair  Value  of  Financial Instruments  -  The  carrying  amounts
reported on the consolidated balance sheet for cash, receivables,
payables, accrued expenses and debt approximate fair value.

Concentration  of  Credit  Risk  -  The  Company's  exposure   to
concentrations of credit risk relates primarily to trade accounts
receivable.  Such exposure is limited due to the large number  of
customers  and  their  industry and geographic  dispersion.   The
Company  controls  credit  risk  by  performing  ongoing   credit
evaluations of its customers' financial condition. Management  is
not  aware  of  any specific concentrations that  could  cause  a
severe impact to its operations.

Inventories  -  Inventories  are stated  at  the  lower  of  cost
(principally  first-in, first-out method) or market  and  include
materials, labor and manufacturing overhead.
<TABLE>
     Inventories consist of:
<CAPTION>
                                1999          1998
                            -----------    -----------

          <S>               <C>            <C>

          Raw materials     $   315,071    $ 7,684,405
          Work in process        27,340      4,758,535
          Finished goods        119,482      1,745,346
                            -----------    -----------
                            $   461,893    $14,188,286
                            ===========    ===========

</TABLE>

Property, Plant and Equipment - Property, plant and equipment are
recorded  at  cost.   Expenditures for maintenance,  repairs  and
renewals  are  charged  to  expense  as  incurred  whereas  major
betterments are capitalized as additions to property,  plant  and
equipment.   The provision for depreciation and amortization  has
been  calculated using the straight-line method over  the  assets
estimated useful lives.


                              20
<PAGE>

The  components  of  property,  plant  and  equipment  and  their
estimated useful lives are as follows:
<TABLE>
<CAPTION>
                             Useful Life         1999        1998
                             -----------      -----------  -----------

          <S>                   <C>           <C>          <C>

          Land and land
          improvements          15            $     -      $   372,160
          Buildings and
          improvements          39                308,700    6,561,575
          Machinery and
          equipment              7                106,847    4,957,801
          Tooling and dies     3 - 7              173,356    2,101,954
          Office equipment     5 - 7            2,144,605    5,616,943
          Equipment under
          capital leases         5                  -          652,685
          Demonstration
          equipment              3                  -          516,933
          Construction in
          progress               -            $     -      $   383,381
                                              -----------  -----------
                                                2,733,503   21,163,432
          Less: accumulated
          depreciation                         (1,065,035)  (5,649,141)
                                              -----------  -----------
                                              $ 1,668,473 $15,514,291
                                              ===========  ===========


</TABLE>
Goodwill and Other Intangibles - The excess of the purchase price
over  the fair value of net assets acquired in an acquisition  is
included in other assets in the accompanying consolidated balance
sheets  and is being amortized over 5 to 25 years on a  composite
straight-line  basis.   The  Company periodically  evaluates  the
existence  of  goodwill impairment on the basis  of  whether  the
goodwill  is  fully recoverable from projected  undiscounted  net
cash  flows  of  the  related business unit. Goodwill  and  other
intangibles (net of accumulated amortization and write-down for
planned disposal)  was approximately $1,871,372 and $48,799,000
at the end of 1999  and 1998,   respectively. Amortization included in
continuing operations amounted  to  approximately $170,000 in 1999,
1998  and  1997.

Change in Accounting Principle - Deferred Product Enhancement Costs -
Deferred product enhancement costs  represent incremental direct
costs specifically identified with  the  adaptation  and  enhancement
of  existing  commercial products  to meet the needs of specifically
identified  customers or  markets.   Such costs were amortized on a
straight-line  basis over  the estimated economic useful lives of
the related products which  presently  did not  exceed five years.
Periodically,  the Company  evaluated each product on a number of
factors, including but not limited to: customer and/or market
projections of ongoing business;  projected units for the following
year when available; customers'  evaluation  of  the  state  of  the
technology;  and estimated  stage of the life cycle of the product.
As of September 26, 1999 the costs and accumulated amortization for
deffered product enhancement costs was approximately $5,849,000 and
$1,919,000, respectively.   The amortization  of these  costs included
in continuing operations cost of  sales  and  amounted  to
approximately $91,000 and $13,000 for 1998 and  1997, respectively.

As of September 28, 1998,in accordance with the Statement of Position
98-5 "Reporting on the Costs of Start-Up Activities," the Company changed
its method of accounting for deferred product enhancement costs to expense
costs as incurred. As a result, the Company recognized a cumulative affect
in accounting principle of $2,822,000, net of taxes of $1,000,000.

Software  Development  Costs - In accordance  with  Statement  of
Financial Accounting Standards (SFAS) No. 86, "Accounting for the
Costs  of   Computer  Software to Be Sold,  Leased  or  Otherwise
Marketed,"  the Company capitalizes certain software  development
costs.  Capitalization of software development costs begins  upon
the  establishment of technological feasibility and  ceases  when
the product is ready for release.  Research and development costs
incurred  prior to the establishment of technological feasibility
are  charged  to  research and new product  development  expense.
Amortization  of  capitalized software development  costs  begins
when   the   product  is  available  for  release  to  customers.
Amortization is provided on a product-by-product basis, using the
greater of the anticipated future revenue stream or straight-line
method over the economic life of the product, initially estimated
at two years.

During the fourth quarter of 1998, the Company performed a review
of  these costs and recorded a charge of approximately $1,312,000
to  write-off  all  previously capitalized  software  development
costs. This change is included in income from discontinued
operation for 1998.

Long-Lived  Assets - In accordance with SFAS No. 121, "Accounting
for the Impairment of Long-Lived Assets and Long-Lived Assets  to
be Disposed of,"  the Company evaluates the recoverability of its
carrying  value  of the Company's long-lived assets  and  certain
intangible assets based on estimated undiscounted cash  flows  to

                              21

<PAGE>

be  generated  from each of such assets compared to the  original
estimates used in measuring the assets.  To the extent impairment
is  identified, the Company reduces the carrying  value  of  such
impaired  assets.

Income  Taxes - In accordance with SFAS No. 109, "Accounting  for
Income  Taxes,"   the  Company recognizes deferred  income  taxes
based  on  the  expected future tax consequences  of  differences
between the financial statement basis and tax basis of assets and
liabilities calculated using enacted tax rates in effect for  the
year in which the differences are expected to reverse.

Earnings  Per  Share  -  The Company has adopted  SFAS  No.  128,
"Earnings   Per  Share."   This  statement  modifies   disclosure
requirements for companies required to report earnings per  share
(EPS)  to  include presentations of Basic EPS (which includes  no
dilution of common stock equivalents) and, if applicable, Diluted
EPS  (which  reflects  the  potential dilution  of  common  stock
equivalents). All earnings per share amounts for all periods have
been presented and, where appropriate, restated to conform to the
SFAS  No.  128  requirements. Options to  purchase  approximately
621,000 shares, 144,000 shares  and  18,000  shares  of   common
stock   were outstanding  during 1999, 1998 and 1997, respectively,
but  were not  included  in the computation of diluted earnings  per
share because  the  exercise price was greater than the average  market
price  of  the common shares and, therefore, the effect would  be
anti-dilutive.

<TABLE>
The computations of basic and diluted earnings (loss) per common
share for 1999, 1998 and 1997 is as follows:

                                            1999          1998         1997
                                        ------------  ------------ -----------
  <S>                                   <C>    <C>    <C>    <C>         <C>

Earnings (loss) per share - basic
  Continuing operations                 $      (0.66) $      (0.03)$     (0.01)
  Discontinued operations                      (4.83)         0.44        0.20
  Effect of accounting change                  (0.47)          -           -
                                        ------------  ------------ -----------
  Net income (loss)                     $      (5.96) $       0.41 $      0.19
                                        ------------  ------------ -----------

  <S>                                   <C>    <C>    <C>    <C>         <C>
Earnings (loss) per share - diluted
  Continuing operations                 $      (0.66) $      (0.03)$     (0.01)
  Discontinued operations                      (4.83)         0.43        0.19
  Effect of accounting change                  (0.47)          -           -
                                        ------------  ------------ -----------
  Net income (loss)                     $      (5.96) $       0.40 $      0.18
                                        ------------  ------------ -----------
Weighted Average Common Shares             6,043,634     6,015,192   5,972,310
Effective of Dilutive Options                  -           179,574     190,668
                                        ------------  ------------ -----------
Adjusted Weighted Average Common Shares    6,043,634     6,194,766   6,162,978
                                        ============  ============ ===========
</TABLE>

Foreign  Currency  Translation - Assets and  liabilities  of  the
Company's foreign operations are translated at year-end  exchange
rates.   Net  sales and expenses are translated  at  the  average
rates prevailing during the year. Balance sheet translation gains
and losses are reflected as a separate component of stockholders'
equity. The foreign currency translation as of September 26, 1999
has been included in the net assets of discontinued operations.
Foreign   currency  gains  and  losses   arising   from
transactions are reflected in net income.


During  1999, 1998 and 1997, the Company recognized  net  foreign
exchange gains (losses) of approximately $33,000, ($247,000)  and
($61,000) primarily resulting from intercompany transactions with
foreign subsidiaries. The foreign exchange loss has been recorded
in  the  consolidated statements of income in discontinued operations.
As of  September 26,  1999, the Company has not entered into any
foreign  currency contracts to hedge this exposure.

Recent Accounting Pronouncements - In 1998, the Financial Accounting
Standards Board issued SFAS No. 133, "Accounting   for  Derivative
Instruments   and   Hedging Activities." The statement establishes
accounting and  reporting standards  for derivative instruments

                              22

<PAGE>

and  hedging  activities. SFAS No. 133 requires the Company to
recognize all derivatives on the balance sheet at fair value.
Derivatives that are not hedges must  be  adjusted to fair value
through income.  If a derivative is  a hedge, the accounting treatment
of changes in fair value is based on the nature of the hedge.
SFAS No. 133 is effective  for the Company's fiscal year ending
September 2001.  The Company  is currently  evaluating the impact
of SFAS No. 133 on its financial statements and related disclosures.

Reclassifications - Certain prior year amounts have been
reclassified to conform with current year presentation.

3.  Other Assets
    ------------
<TABLE>
   Other assets consist of:
<CAPTION>

                                               1999            1998
                                            -----------     -----------
       <S>                                  <C>             <C>

       Goodwill and other intangibles       $ 2,552,215     $52,235,359
       Deferred product
       enhancement costs                         -            5,848,962
       Debt issuance costs                       -            1,196,500
       Security deposits                         25,496          89,896
                                            -----------     -----------

                                              2,577,711      59,370,717
       Less: accumulated
       amortization                            (680,843)     (5,238,300)
                                            -----------     -----------
                                            $ 1,896,868     $54,132,417
                                            ===========     ===========
</TABLE>


4.  Notes Payable and Long-Term Debt
    --------------------------------

In August 1998, the Company entered into a $75 million credit facility
with a syndication of banks, consisting of a $20 million revolving line
of credit which was to expire on September 30, 2003 and term notes
totaling $55 million payable in varying quarterly installments commencing
on December 31, 1998 and through September 30, 2004.  The credit facility
agreement contain certain restrictive covenants, including financial
covenants, one of which the Company was not in compliance with at September
27, 1998.  In December 1998, the Company reached an agreement with the
banks to waive the event of non-compliance and amend certain terms of the
agreement.

As of March 28, 1999 and June 27, 1999 the Company was not in compliance
with two of the financial covenants contained in the credit agreement.
The Company reached agreement with the banks to waive the event of
non-compliance as of March 28, 1999 and June 27, 1999 up to and until
October 1, 1999 and to amend certain terms of the agreement.  In relevant
part, the terms of the amendment increases the interest accrued on all
borrowings by 2% per annum and limits the revolving credit borrowings to
$14.8 million, the amount of the Company's current credit borrowings.  In
addition to the payment of a fee to amend the agreement, the Company agreed
to issue to the banks warrants to purchase 124,000 shares of the Company's
common stock at $2.75 per share.  The warrants are exercisable after one
year for a period of ten years. The Company recorded interest expense of
$292,000 related to these warrants during 1999.

As of October 1, 1999 the Company was not in compliance with the terms of the
credit agreement, as amended.  Accordingly, the aggregate bank debt totaling
$67,356,000 is callable by the bank has been classified as current in the
consolidated balance sheet as of September 26, 1999. In addition the Company
wrote off $930,000 of deferred finance fees previously capitalized which
is included in interest expense.

The Company is negotiating a forbearance agreement with the banks.  In
relevant part, the terms of the forbearance agreement provides that all
outstanding borrowings are due and payable, the revolving credit
borrowings are limited to $12.5 million, all borrowings bear interest at
prime plus 3.5%, payment of a $250,000 fee is to be paid to the bank group,
the sale of the rugged handheld computers and terminals business to be
completed by March 31, 2000, a letter of intent with a potential purchaser
of the instruments and solenoids business and an action plan to reduce the
Company's expenses be completed by January 7, 2000.  The forbearance period
is the earlier of March 31, 2000 or any default under terms of the agreement.

                              23
<PAGE>

Based on its present financial condition, the Company anticipates the need
to continue to negotiate with its banks on further extension of the
forbearance period and other terms, or refinance its credit facility. There
is no assurance that the Company will obtain an extension, waiver or be able
to refinance its credit facility.  If the Company is unable to obtain an
extension or waiver or is unable to refinance the credit facility, the
Company could be in non-compliance with the terms of the credit agreement.

On  August  3, 1998, the Company issued $2,750,000 in promissory
notes  in connection with the acquisition of certain assets  and
technology  of  ANG Instruments.  The notes were recorded  at  a
8.25%  discount  rate which represents a net  present  value  of
$2,335,533.   Principal and interest payments  totaling  $51,563
are payable monthly over the four years commencing September  1,
1998.   At  September  27,  1999, the  outstanding  balance  was
$1,599,121. As a result of a default under the terms of the notes
subsequent to September 26, 1999, the outstanding balance of
$1,599,121 has been classified as current.

On  August  6,  1998,  the Company issued a $200,000  promissory
note  in  connection with the acquisition of  the  Lucas  sensor
product  line.  The note bears interest at  a  rate  of  9%  per
annum.  The  note and related interest are due  and  payable  on
July 31, 2000.


5.  Accrued Expenses
    ----------------
<TABLE>

  Accrued expenses consist of:
<CAPTION>
                                       1999            1998
                                     ----------    ----------
       <S>                           <C>           <C>

       Interest                      $1,446,893    $  395,193
       Payroll and related
       amounts                          406,643     1,760,902
       Warranty                         120,000     1,477,538
       Acquisition related              151,945       872,085
       Deferred revenue                   7,810       471,760
       Other                             40,472       648,169
       Leases                             -           359,657
                                     ----------    ----------
                                     $2,173,763    $5,985,304
                                     ==========    ==========
</TABLE>


6. Income Taxes
   ------------
<TABLE>

The components of federal and state income taxes provision are as follows:
<CAPTION>
                                      1999        1998          1997
                                   -----------  -----------   ----------
         <S>                      <C>           <C>           <C>  <S>
       Current
         Federal                   $    -       $  (78,000)   $  (32,000)
         State                          -           (3,000)       (1,000)
                                   -----------  ----------    ----------
                                        -          (81,000)      (33,000)
                                   -----------  ----------    ----------

       Deferred
        Federal                         -            -             -
        State                           -            -             -
                                   -----------  ----------    ----------
                                        -          (81,000)      (33,000)
                                   -----------  ----------    ----------

                                   $    -       $1,225,000    $  855,000
                                   ===========  ==========    ==========
</TABLE>

                              24
<PAGE>

<TABLE>
A reconciliation of income taxes at the federal statutory rate of
34%  to  income taxes at the Company's effective tax rate  is  as
follows:
<CAPTION>
                                                  1999          1998         1997
                                              ------------   ----------  ---------
     <S>                                     <C>            <C>         <C>
     Income tax at 34% of income
       before provision for income taxes      $(1,351,000)   $  (84,000) $ (28,000)
     State income tax
       provision (benefit)
       (net of effect of federal tax)            (184,000)       (4,000)    (1,000)
     Change in valuation allowance              1,535,000         -          -
     Other                                          -             7,000     (4,000)
                                              ------------   ----------  ---------

                                              $     -        $  (81,000) $ (33,000)
                                              ============   ==========  =========

</TABLE>

<TABLE>
The  approximate  income  tax  effect  of  temporary  differences
comprising  the  deferred  tax  assets  and  liabilities  are  as
follows:
<CAPTION>
                                               1999             1998
                                           -------------    -------------
        <S>                                <C>              <C>   <C>

     Deferred tax assets and valuation
     allowance
        Goodwill                           $   7,440,000    $        -
        Software development costs             1,410,000          453,000
        Inventory related                        344,000          353,000
        Bad debt reserve                         365,000          424,000
        Warranty reserve                         178,000          200,000
        Payroll related                          106,000          115,000
        Tax loss carryforwards                 2,786,000          805,000
        Other                                    282,000          202,000
        Valuation allowance                  (10,226,000)            -
                                           -------------    -------------

                                               2,655,000        2,552,000
                                           -------------    -------------
     Deferred tax liabilities
        Fixed asset differences                  654,000        1,402,000
        DISC deferral                            996,000        1,116,000
        Goodwill                                 791,000          490,000
        Deferred enhancement costs               315,000          164,000
        Other                                    (53,000)         (80,000)
                                           -------------    -------------
                                               2,703,000        3,092,000
                                           -------------    -------------
     Net deferred liabilities              $      48,000    $     540,000
                                           =============    =============
</TABLE>


For income tax purposes, the Company had available, at September 26,
1999, net operating loss ("NOL") carryforwards for regular income tax
purposes of approximately $6,966,000.


7. Common Stock
   ------------
A) Stock Option Plans

The  Company  has stock option plans for selected  officers,  key
employees  and  directors.  Under these  plans,  options  may  be
granted at a price equal to at least the fair market value at the
date   of  the  grant.  Options  granted  under  the  plans   are
exercisable  at  various  dates as specified  in  the  underlying
option   agreement.   The  options  automatically   expire   upon
termination of employment with the Company.

                              25
<PAGE>


<TABLE>
A summary of stock option activity for each of the three years in
the period ended September 26, 1999, is as follows:
<CAPTION>
                                            Shares Under      Weighted-Average
                                               Option          Exercise Price
                                            ------------      ----------------
        <S>        <C>         <C> <C>       <C>                  <C>

        Outstanding, September 29, 1996      314,946              $  4.02
         Exercised                           (41,750)                2.87
         Terminated                          (19,500)                7.07
         Granted                             276,000                 6.66
                                            ------------      ----------------
        Outstanding, September 28, 1997      529,696                 5.38
          Exercised                          (20,750)                3.83
          Terminated                         (38,000)                7.36
          Granted                            296,000                 9.60
                                            ------------      ----------------
        Outstanding, September 27, 1998      766,946                 6.95
         Exercised                            (2,500)                2.88
         Terminated                         (133,666)                7.96
         Granted                             206,700                 5.09
                                            ------------      ----------------
        Outstanding, September 26, 1999      837,480                $6.37
                                            ============      ================

</TABLE>
<TABLE>
The following is a summary of options outstanding and exercisable
at September 26, 1999:
<CAPTION>
<C>   <S><C>     <C>          <C>  <S>          <C>                 <C>           <C>       <S> <S>
               Options Outstanding                                         Options Exercisable
               -------------------                                         -------------------
                 Number       Weighted Average                      Number
Range of         Outstanding  Remaining         Weighted Average    Exercisable   Weighted Average
Exercise Prices  at 9/26/99   Contractual Life  Exercise Price      at 9/26/99    Exercise Price
---------------  ----------   ----------------  --------------      ----------    --------------

$2.25 to $4.50   176,500      6.85 years        $ 3.11              131,000       $  2.94
$4.51 to $6.50   410,480      4.21                5.59              274,614          6.18
$6.51 to $9.00   149,000      8.46                8.13               45,833          8.07
$9.01 to $11.13  101,500      8.10               11.13               53,833         11.13
                 -------                                            -------
                 837,480      7.65                6.37              505,280          6.00
                 =======                                            =======

</TABLE>
As permitted by SFAS No. 123, the Company has elected to continue to
apply APB No. 25 to account for its stock- based compensation plans.
Had compensation for the stock option plans been determined using the
fair value at the grant dates for awards under those plans, consistent
with the guidelines of SFAS No. 123, the Company's net income (loss)and
net income (loss) per share would have been increased (decreased) to the
pro forma amounts listed below:
<TABLE>
<CAPTION>
                                       1999             1998            1997
                                   -------------    -------------   ----------
<S>                                <C>              <C> <C>         <C>

Pro forma net income  (loss)       $  (4,456,989)   $    (689,675)  $  (289,639)
  from continuing operations
Pro forma diluted net income
(loss) per shar  e                 $       (0.74)   $       (0.11)   $    (0.05)

</TABLE>
Consistent with SFAS No. 123, pro forma net income and earnings
per share have not been calculated for options granted prior to
September 24, 1995.  Pro forma compensation cost may not be
representative of that to be expected in future years.

The weighted average fair value of options granted was $2.35,
$4.68 and $3.39 for options granted during 1999, 1998 and 1997,
respectively.  The values were estimated on the date of grant
using the Black-Sholes option pricing model with the following
weighted average assumptions used for grants in 1999, 1998 and
1997, respectively; risk-free interest rates ranging from 4.0%
to 6.3%, expected dividend yield of 0% for the periods, expected
options lives of 5 years and expected volatilities ranging from
46.7% to 49.2%.

                              26

<PAGE>

B) WPI Employee Stock Purchase Plan

The  Company's Employee Stock Purchase Plan (the "Purchase Plan")
was  adopted  by  the Board of Directors on June  1,  1997.   The
Purchase  Plan  is  a  qualified stock purchase  plan  under  the
Internal  Revenue  Code covering all employees  of  the  Company,
except  employees  who are owners of 5% of the  Company's  stock.
Eligible  employees can purchase shares on a quarterly  basis  on
December  15,  March 15, June 15 and September  15.  The  minimum
purchase  amount  is 10 shares per quarter to a  maximum  of  400
shares per year.  The purchase price of the shares is 93% of  the
average  of  the  closing prices of the common stock  during  the
period  of  5  trading  days  ending on  the  purchase  date.  An
aggregate  of 30,000 shares were reserved for issuance under  the
Purchase Plan. Shares purchased under the Company's Purchase Plan
were 6,803, 7,582 and 2,865 in 1999, 1998 and 1997, respectively.


C) WPI Stock Bonus Award Plan

The  Company's  Stock  Bonus Award Plan (the  "Bonus  Plan")  was
adopted  by the Board of Directors on June 1, 1997. All employees
of  the Company, except employees who are owners of 5% or more of
the  Company's stock, are eligible to participate  in  the  Bonus
Plan.   The  Bonus  Plan allows for the award of  shares  of  the
Company's common stock.  Awards under the Bonus Plan are made  at
the  discretion of the Chief Executive Officer to  employees  who
have demonstrated outstanding performance and commitment in their
employment  with the Company. An aggregate of 20,000 shares  were
reserved for issuance under the Bonus Plan. Shares awarded  under
the  Company's  Bonus Plan were 2,225, 3,135 and 4,525  in  1999,
1998 and 1997, respectively. The compensation expense related  to
these awards is not significant.

8. Employee Benefits
   -----------------

A) WPI 401k Plan

The Company has a Profit-Sharing 401(k) Plan for the  benefit  of
eligible United States employees,  whereby  the Company matches a
portion of the employees' contributions to  the plan.  During 1999,
the Company  matched 50% of the first  4%  of employees'  contributions.
The Company's  expense included in continuing operations  relating  to
this  plan  amounted  to approximately  $128,000,  $83,000  and $57,000
in 1999, 1998 and 1997, respectively. The Company

B) WPI Group UK Money Purchase Pension Plan

The Company has a defined contribution pension schemes for the
majority of its full-time employees located in the United
Kingdom. The Company's expense relating to the schemes amounted
to approximately $331,000, $358,000 and  $135,000, in 1999, 1998
and 1997,  respectively, which is included in discontinued
operations.

9. Significant Customers
   ---------------------

For Fiscal 1999, a distributor with exclusive rights to sell
certain MPSI product represented approximately 51% of MPSI's net
sales.  Another customer represented approximately 16% of MPSI's
net sales for fiscal 1999.  For Fiscal 1998 and 1997, a
distributor with exclusive rights to sell certain MPSI product
represented approximately 60% of MPSI's net sales in each of
those years.

                              27

<PAGE>


10. Commitments
    -----------

The Company leases certain buildings, office space, machinery and
equipment,  and  vehicles under various  lease  agreements  which
expire at various dates over the next five years.

As  of  September  26, 1999, the aggregate future  minimum  lease
commitments under operating and capital leases obligations are as
follows:
<TABLE>
<CAPTION>
                                     Operating
        Fiscal Year                   Leases
        -----------                  ----------
       <S> <C>                          <C>
        2000                         $  249,000
        2001                            135,000
        2002                            122,000
        2003                            122,000
        2004                             82,000
                                     ----------
        Total minimum lease
        payments                     $  710,000
                                     ==========

</TABLE>

Total rental expense included in continuing operations charged to
operations for 1999, 1998 and  1997 totaled   approximately  $332,000,
$317,000   and   $316,000,respectively.

The Company is currently leasing a building from a entity in which one
of its executive officers is a party.  The total rent in connection with
the lease arrangement of $594,000, $74,000 and $0 in 1999, 1998 and 1997,
respectively, is included in discontinued operations.

Subsequent to year end, the Company entered into a severance agreement
with a former executive officer which provides for payments of $250,000
per year for a five year period commencing January 1, 2000 which will be
charged to operations during the Company's first quarter of fiscal 2000.

11.  Restructuring Costs
     -------------------

During 1999, the Company entered into a severance agreement with a former
executive.  In connection with the agreement, the Company recorded a
restructuring charge of $510,000, consisting primarily of the continuation
of payroll and benefits subsequent to termination.  During 1999, the
Company utilized approximately $360,000 of the charges.


12. Business Segment and Geographical Information
    ---------------------------------------------
The Company operates in one industry: vehicle diagnostic equipment and
software.

                              28
<PAGE>


13.   Selected Quarterly Financial Information (Unaudited)
      ----------------------------------------------------
<TABLE>

Selected  quarterly  financial information for  the  years  ended
September 26, 1999 and September 27, 1998 is as follows:

(in thousands, except earnings per share)
<CAPTION>

                              First     Second    Third     Fourth
                             Quarter   Quarter   Quarter    Quarter
                             -------   --------  -------    --------
<S>                          <C>       <C>       <C>        <C>
1999
----
Net sales                    $ 3,110   $ 3,278   $ 2,169    $ 3,222
Gross profit                   1,993     2,055     1,516      1,863
Loss from continuing
operations                      (283)     (612)   (1,553)    (1,527)
Loss from
 discontinued operations        (275)     (905)   (1,695)   (26,354)
Change in accounting
principle                     (2,822)       -        -         -
Net income (loss)             (3,380)   (1,517)   (3,248)   (27,881)
Earnings (loss)
per share - basic & diluted
 Continuing operations         (0.05)    (0.10)    (0.26)     (0.25)
 Discontinued operations       (0.04)    (0.15)    (0.28)     (4.36)
 Change in accounting
 principle                     (0.47)       -        -          -
 Net loss                      (0.56)    (0.25)    (0.54)     (4.61)




1998
----
<S>                          <C>       <C>       <C>        <C>
Net sales                    $ 2,983   $ 3,765   $ 4,154    $ 3,661
Gross profit                   1,477     2,131     2,421      2,046
Income (loss) from continuing
operations                       (40)      137       182      (445)
Income (loss) from
discontinued operations          952       915     1,186      (401)
Net income (loss)                912     1,052     1,368      (846)
Earnings (loss)
per share - basic
 Continuing operations         (0.01)     0.02      0.03      (0.07)
 Discontinued operations        0.16      0.16      0.20      (0.07)
 Net income (loss)              0.15      0.18      0.23      (0.14)
<S>                          <C>       <C>       <C>        <C>
Earnings (loss)
per share - diluted
 Continuing operations         (0.01)     0.02      0.03      (0.07)
 Discontinued operations        0.16      0.15      0.19      (0.07)
 Net loss                       0.15      0.17      0.22      (0.14)

</TABLE>

Item  9.  Changes  In  and  Disagreements  with  Accountants   on
          -------------------------------------------------------
Accounting and Financial Disclosure
-----------------------------------

None

                              29

<PAGE>

                            Part III

<TABLE>
Item 10. Directors and Executive Officers of the Registrant
         --------------------------------------------------

       DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
<CAPTION>
                                Officer or
Name                    Age     Director Since     Position with the Company
-----                   ---     ---------------    -------------------------
<S>                     <C>     <C>                <S>


John Allard             34      1998               Director, President
                                                   and Chief Executive Officer

Stephen Carlotti        57      1997               Director

Michael Foster          64      1988               Director

Paul Giovacchini        42      1990               Director,  Nonexecutive
                                                   Vice Chairman

Irving Gutin            67      1994               Director

Karen Hebert            39      1995               Vice President,
                                                   Human Resources

John Powers             42      1997               Vice President and
                                                   Chief Financial Officer

James Risher            57      1999               Director

Steven Shulman          58      1997               Director,  Nonexecutive
                                                   Chairman

Bernard Tenenbaum       44      1994               Director

Michael Tule            38      1996               Vice President,
                                                   General Counsel and
                                                   Secretary

</TABLE>

John Allard has been a Director of the Company since August 1998,
and  President  and Chief Executive Officer of the Company  since
December, 1999.  From February 1999 to December 1999, Mr.  Allard
served  as President and Chief Operating Officer of the  Company.
From  August 1998 to February 1999, Mr. Allard served  as  Senior
Vice  President,  Business Development.  From  December  1992  to
August  1998,  Mr.  Allard served as President,  Chief  Executive
Officer  and  Director  of  Allard  Nazarian  Group,  Inc.  which
included   Jewell  Electrical  Instruments,  a  manufacturer   of
avionics  components, subsystems, and panel meters,  and  Granite
State  Manufacturing,  a  contract  manufacturing  service.  From
December  1992  to  December 1996, Mr. Allard also  served  as  a
Director  of  The  Aerospace Displays Systems  Group  located  in
Hatfield, Pennsylvania.

Stephen Carlotti has been a director of WPI since September 1997.
He has been a partner of the law firm of Hinckley, Allen & Snyder
since 1992.  From February 1996 to November 1996, he served as  a
Vice  Chairman of AMTROL, Inc.  He has been a director  of  Fleet
National Bank since 1986.

Michael  Foster  has been a director of the Company  since  1988.
From  October 1988 to December 1999, he was Chairman of the Board
of  Directors  and Chief Executive Officer of the  Company.   Mr.
Foster  led  the  management buy-out of the Company  from  Walker
Magnetics Group, Inc. in October 1988.  Since 1997, he has been a
director of Foilmark, Inc., a Massachusetts-based manufacturer of
metallic foils and foil stamping machinery.

Paul  Giovacchini  has  been  a Director  of  the  Company  since
September  1990  and Nonexecutive Vice Chairman  of  the  Company
since   December  1999.   Mr.  Giovacchini  has  been  a   Senior
Investment   Manager   for   Signal   Capital   Corporation,    a
Massachusetts-based investment firm, since  August  1990.   Since

                              30

<PAGE>

1995, Mr. Giovacchini has also been a partner of Seacoast Capital
Partners,  L.P.,  a  federal licensee under  the  Small  Business
Investment Act of 1958.

Irving  Gutin  has been a Director of the Company since  February
1994.   Mr.  Gutin  has  been  Senior  Vice  President  of   Tyco
International (U.S.), Inc., formerly Tyco International,  Ltd.  a
New Hampshire-based international manufacturer of fire protection
and  flow  control products, electronic and electrical components
and packaging materials since 1988.

Karen  Hebert  has  served as Vice President of  Human  Resources
since August 1995.  From November 1993 to August 1995, she served
as  Director  of  Human Resources.  From 1987  until  1993,   Ms.
Hebert served as Manager of Human Resources with the Company.

John  Powers has been Vice President and Chief Financial  Officer
of  WPI since February 1997.  From August 1993 to February  1997,
he  was  the  Chief  Financial  Officer  of  Janco  Companies,  a
manufacturer  of medical and electronic products.   From  October
1987  to  August 1993, he was a principal of Smith, Batchelder  &
Rugg, a certified public accounting firm.

James  Risher  has  been a Director of the Company  since  April,
1999.   Mr.  Risher  is  currently Chairman of  Bluestar  Battery
Systems  International, a manufacturer of  batteries,  automotive
electric  and  battery-related products. Prior to  this,  he  was
Chairman  of  Exide  Electronics Group, Inc.  a  manufacturer  of
uninterruptible power supplies based in Raleigh,  N.C.   He  also
served as Exide President and CEO.  Prior to his twelve years  in
executive management at Exide, Mr. Risher spent nearly  20  years
as  a  senior manager in computer sales and marketing.  He  is  a
member  of  American Business Conference Board of Directors,  the
University  of  North  Carolina  Board  of  Visitors,  the  North
Carolina  Symphony Board of Trustees and a Regional Board  Member
of the First Union Bank.

Steven  Shulman  has been a Director of WPI since September  1997
and  Nonexecutive  Chairman since December  1999.   He  has  been
Managing Director of Latona Associates since 1995 and a principal
of the Hampton Group, an investment banking firm, since 1984.  He
has  served as a director of Beacon Capital Partners since  1995,
Ermanco Incorporated since 1987 and Corinthian Directories,  Inc.
since  1995.  He  has  been a director and Chairman  and  CEO  of
Terrace  Food Group, Inc. since 1997. In addition, he  serves  as
Vice Chairman of the Board of Stevens Institute of Technology.

Bernard  Tenenbaum has been a Director of the Company since  July
1994. Since April 1997, Mr. Tenenbaum has  been President of  the
Children's  Leisure  Products Group  of  The  Jordan  Company,  a
leveraged buyout firm based in New York.  From 1993 to 1997,  Mr.
Tenenbaum  was  Vice  President, Corporate Development,  of  Russ
Berrie  & Company, a New Jersey-based gift company.  He was  also
President and CEO of R.B.T. Company, a division of Russ Berrie  &
Company.   From  1988  to  1992, he was a Founding  Director  and
Professor  of  Entrepreneurial  Studies  at  the  George  Rothman
Institute   of   Entrepreneurial  Studies,  Fairleigh   Dickinson
University.

Michael Tule has served as Vice President and General Counsel  of
the  Company since March 1996.  Mr. Tule has served as  Secretary
since December 1994.  From 1987 to 1996, Mr. Tule was an attorney
at McLane, Graf, Raulerson & Middleton, Professional Association.



                              31

<PAGE>



Item 11. Executive Compensation
         ----------------------

                     EXECUTIVE COMPENSATION

The   following  table  sets  forth  information  concerning  the
compensation  for services in all capacities to the  Company  for
the fiscal years ended September 26, 1999, September 27, 1998 and
September  28,  1997 of those persons who were at  September  26,
1999  (i)  the Chief Executive Officer and (ii) each of the  four
most  highly compensated executive officers of the Company  other
than  the  Chief  Executive Officer, (with  the  Chief  Executive
Officer, collectively, the "Named Officers").
<TABLE>
Summary Compensation Table

<CAPTION>


<S>            <C>    <C>         <C>           <S>            <C>                 <C>
                                       Annual            Long Term Compensation
Name and Principal                 Compensation (1)      Securities Underlying      All Other
Position              Year        Salary      Bonus            Options             Compensation($)
--------              ----        ------      -----            -------             ---------------

Michael Foster (2)    1999        509,648       -              186,000             73,651
Chairman and CEO
                      1998        400,036       -                 -                23,855

                      1997        325,000       -               48,000             25,028


John Allard           1999        272,921       -               25,000              9,234
President and COO
                      1998           -          -               20,000                -

                      1997           -          -                 -                   -

Timothy Jones (3)     1999        174,342       -                7,200             17,333
Vice President
Information           1998        175,032       -               15,000             11,367
Solutions
                      1997        150,020       -               20,000             11,616


Richard Longo (4)     1999        178,398       -                3,000              7,686
Vice President
Industrial            1998           -          -                5,000                -
Technology
                      1997           -          -                 -                   -

John Powers           1999        168,222       -                7,200             10,803
Vice President and
CFO                   1998        132,522       -                5,000             10,848

                      1997           -          -                5,000                -

</TABLE>

(1)   Excludes  perquisites  and other personal  benefits,  the
      aggregate  annual  amount  of which  was  less  than  the
      lesser  of  $50,000 or 10% of the total of annual  salary
      and bonus reported.

(2)   Mr.  Foster  retired  as Chairman  and  Chief  Executive
      Officer as of January 1, 2000.

(3)   Mr.  Jones resigned his position with the Company  as  of
      September 29, 1999.

(4)   Mr.  Longo resigned his position with the Company  as  of
      December 22, 1999.


                              32

<PAGE>

Option Grants in Last Fiscal Year  (Individual Grants)
<TABLE>
The following table contains information concerning the grant of
stock options under the Company's 1995 Stock Option Plan and the
1997 Equity Incentive Plan to the Named Officers during the
Company's last fiscal year.
<CAPTION>
                          Number of      % of Total
                          Securities     Options Granted
                          Underlying     to Employees       Exercise   Expiration  Grant Date
Name                      Options        In Fiscal 1999     Price ($)  Date        Present Value
                                                                                   (4)
----                      -------        --------------     ---------  -----       -------------
<S>            <C>        <C>     <C>    <C>                <C>        <C>         <C>

Michael Foster (7)         60,000 (1)    37.9%              $5.50      10/19/08    $  151,800
Chairman, CEO

John Allard                25,000 (2)     9.5%              $3.562     03/22/09    $   43,250
President, COO

Timothy Jones (5)           7,200 (3)     2.7%              $5.50      10/19/08    $   18,216
Vice President
Information Solutions

Richard Longo (6)           1,500 (3)     0.5%              $5.50      10/19/08    $    3,750
Vice President
Industrial Technology

John Powers                 7,200 (3)     2.7%              $5.50      10/19/08    $   18,216
Vice President, CFO
</TABLE>

  (1)   Options  granted  under  the WPI  Group,  Inc.  1997  Equity
        Incentive Plan at an exercise price equal to the fair market
        value  of  the Company's Common Stock on the date of  grant.
        The options granted to Mr. Foster are fully vested.

  (2)   Options  granted  under  the WPI  Group,  Inc.  1997  Equity
        Incentive Plan at an exercise price equal to the fair market
        value  of  the Company's common stock on the date of  grant.
        The options vest in 1/3 increments on 03/23/00, 03/23/01 and
        03/23/02.

  (3)   Options  granted  under  the WPI  Group,  Inc.  1997  Equity
        Incentive Plan at an exercise price equal to the fair market
        value  on  the  date  of grant.  The  options  vest  in  1/3
        increments on 10/1/99, 10/1/00 and 10/1/01.

  (4)   The  weighted average fair value of options granted  to
        the named officers  was  $2.53.  The values were estimated on
        the date of grant using  the Black-Sholes   option  pricing
        model  with  the   following weighted average assumptions used:
        Risk free interest  rates ranging  from 4.03%  to 5.10%, expected
        dividend yield  of  0%,   expected option  lives  of  5  years
        and  expected volatilities ranging from 46.82%  to 48.38%.


  (5)   Mr.  Jones  resigned his position with  the  Company  as  of
        September 29, 1999.


  (6)   Mr.  Longo  resigned his position with  the  Company  as  of
        December 22, 1999.

  (7)   Mr.  Foster retired as Chairman and CEO as  of January 1, 2000.


                             33
<PAGE>

Option Exercises And Fiscal Year End Values
<TABLE>
The   following  table  contains  information  with  respect   to
aggregate  stock  options exercised by the Named Officers  during
fiscal  1999  as  well  as unexercised options  to  purchase  the
Company's  Common Stock granted through September 26, 1999  under
the  Company's  1995 Stock Option Plan or 1997  Equity  Incentive
Plan to the Named Officers and held by them at that date.

 Aggregated Options/SAR Exercises In Last Fiscal Year And Fiscal
                      Year End Option Value
<CAPTION>
<S>                                                    <C>                 <S>          <C>   <S>      <C>    <S>

                                                          Number of Unexercised       Value of Unexercised In-the-Money
                       Shares                          Options at September 26, 1999   Options at September 26, 1999
                       Value              Value              Common Stock                     Common Stock
Name                   On Exercise      Realized ($)   Exercisable    Unexercisable   Exercisable    Unexercisable
----                   -----------      ------------   -----------    -------------   -----------    -------------

Michael Foster             -               -           317,280             -            $     -        $      -

John Allard                -               -             6,667          38,333                -               -

Timothy Jones              -               -            30,000          17,200                -               -

Richard Longo              -               -             1,667            4,833               -               -

John Powers                -               -             6,667           10,533               -               -

Michael Tule               -               -             9,000            9,200               -               -

</TABLE>

(1) Based  on the difference between the exercise price  of  each
    grant and the closing price of the Company's Common Stock  as
    quoted  on  the NASDAQ/NMS on September 27, 1999,  which  was
    $3.375.

The  foregoing options were granted under either the  1995  Stock
Option  Plan (the "1995 Plan") or the 1997 Equity Incentive  Plan
(the  "1997  Plan").  Both plans are administered  by  the  Stock
Option/Compensation Committee, which consists of  not  less  than
three  outside  directors.   The  Committee  determines  the  key
employees  to whom, and the time or times at which, options  will
be  granted, the number of shares subject to each option and  the
terms  upon  which each option may be granted.  An  aggregate  of
550,000  shares  of common stock are reserved for issuance  under
the  1995 Plan and an aggregate of 750,000 shares of common stock
are  reserved  for  issuance under  the  1997  Plan.   Since  the
adoption of the 1995 Plan on June 6, 1995, options for a total of
550,000 shares of common stock (or all of the shares reserved for
issuance)  have  been  granted  to  selected  officers  and   key
employees of the Company.  Since the adoption of the 1997 Plan on
June  10,  1997, options for a total of 434,200 shares of  common
stock have been granted to selected officers and key employees of
the Company.

Change In Control Plan and Severance Agreements

The  Board  of  Directors has adopted a Change  in  Control  Plan
covering  nine  officers and key employees, including  the  Named
Executive Officers.  The provisions of the Change in Control Plan
become   effective  only  upon  the  occurrence   of   an   event
constituting  a  change  in control of the  Company.   Under  the
Change in Control Plan, a "Change in Control" shall be deemed  to
have  occurred  if any of the following events  occur:   (i)  any
"person" (as such term is defined in Section 13 and 14 under  the
Exchange  Act) except for Michael Foster, directly or indirectly,
is  or becomes the "beneficial owner" (as such term is defined in
Rule  13d-3  under  the  Exchange Act) of  25%  or  more  of  the
Company's Common Stock; (ii) any change occurs in the composition
of  WPI's  Board  of  Directors resulting in a  majority  of  the
present directors not constituting a majority two years from such
date,  provided  that directors who were elected  by  or  on  the
recommendation  of such present majority shall  be  excluded;  or
(iii) any other event that would be required to be reported under
Item 1 of Form 8-K pursuant to Section 13 or Section 15(d) of the
Exchange  Act.  A change in control shall not be deemed  to  have
occurred if such change in control results from a distressed sale
of  WPI due to the Company's material default with respect to any
applicable debt covenants with its lender.

The  Change in Control Plan provides that if, within one (1) year
after  a  change of control of WPI, a Named Executive Officer  is
discharged  without Cause (as defined below) or has resigned  for
reasons   relating   to   a   diminution   of   responsibilities,
compensation  or benefits or relocation of place  of  employment,
WPI  shall  pay to such individual a lump sum severance  benefit.
For  purposes of the Change in Control Plan, "Cause"  shall  mean
conviction of certain crimes, willful misconduct or conduct  that
caused  WPI  to suffer a substantial loss or damage.   Currently,
each  Named  Executive  Officer would receive  between  nine  and

                             34

<PAGE>

eighteen  months of base salary, plus bonus, depending  upon  the
Named  Executive Officer's years of service and status  with  the
Company.   At  the  discretion of the  Board  of  Directors,  the
vesting of options may be accelerated in the event of a Change in
Control.   A Named Executive Officer may resign at any  time  and
for any reason within one year of a Change in Control and receive
the base salary component only of the lump sum benefit.

In  addition to being covered by the Change In Control Plan,  Mr.
Allard has a Severance Agreement with the Company which provides,
in  relevant part, that if the Company terminates his  employment
for  any reason other than cause, or in connection with a change-
in-control,  the  Company will continue to pay him  at  his  then
present salary rate for a period of twelve months.

Mr.  Foster  has  a  severance agreement with the  Company  which
provides,  in relevant part, for severance of $250,000  per  year
for  the  next  five  years,  effective  January  1,  2000.   The
agreement also provides for the full vesting of options  held  by
Mr.  Foster.   The expiration and option exercise  prices  remain
unchanged.

                              35
<PAGE>


Item  12.  Security  Ownership of Certain Beneficial  Owners  and
           ------------------------------------------------------
           Management
           ----------
<TABLE>
              MANAGEMENT AND PRINCIPAL SHAREHOLDERS

The  following  table  sets forth certain  information  regarding
beneficial ownership of the Common Stock as of December 30,  1999
by  (i)  each  person who is known by the Company to beneficially
own  more than 5% of the outstanding shares of Common Stock; (ii)
each  of  the  Company's directors; and (iii) all  directors  and
officers of the Company as a group:
<CAPTION>
                       Number of Shares    Percentage
Name and Address       Beneficially Owned  Beneficially Owned
----------------       ------------------  ------------------
<S>            <C>        <C>                 <C>

Michael Foster (1)        816,271             13.49%
1155 Elm Street
Manchester, NH 03101

John Allard (2)            57,067                *
1155 Elm Street
Manchester, NH 03101

Stephen  Carlotti (3)       7,501                *
1500 Fleet Center
Providence, RI 02903

Paul Giovacchini (4)        9,167                *
55 Ferncroft Road
Danvers, MA 01923

Irving Gutin (5)           22,661                *
One Tyco Park
Exeter, NH 03833-1108

Steven Shulman (6)         24,001                *
Liberty Lane
Hampton, NH 03842

Bernard Tenenbaum (7)      12,662                *
767  5th Avenue, 48th
Floor
New York, NY 10053

Dimensional Fund          442,300              7.3%
Advisors (8)
1299   Ocean  Avenue,
11th Floor
Santa   Monica, CA
90401

Hathaway &                352,100              5.81%
Associates, Ltd. (9)
119 Rowayton Avenue
Rowayton, CT 06853

Gerald R. Allard (10)     451,500             7.464%
520 South Collier
Boulevard
Chalet Number 301
Marco Island, FL 33937

All executive             990,650            16.37%
officers and directors
as a group (11)
(12 persons)

</TABLE>
                             36

<PAGE>

*  Less than one percent

(1)  Includes  207,614 shares of the Company's common stock which  Mr.
     Foster  has  the  right to acquire within 60  days  of  the  date
     hereof pursuant to the exercise of stock options.

(2)  Includes  6,667  shares of the Company's common stock  which  Mr.
     Allard  has  the  right to acquire within 60  days  of  the  date
     hereof pursuant to the exercise of stock options.

(3)  Includes  7,501  shares of the Company's common stock  which  Mr.
     Carlotti  has the right to acquire pursuant to exercise of  stock
     options.


(4)  Includes  9,167  shares of the Company's common stock  which  Mr.
     Giovacchini has the right to acquire pursuant to the exercise  of
     stock options.


(5)  Includes  8,958  shares of the Company's common stock  which  Mr.
     Gutin  has the right to acquire pursuant to the exercise of stock
     options.

(6)  Includes  7,501  shares of the Company's common stock  which  Mr.
     Shulman  has  the  right to acquire pursuant to the  exercise  of
     stock options.

(7)  Includes  9,167  shares of the Company's common stock  which  Mr.
     Tenenbaum  has the right to acquire pursuant to the  exercise  of
     stock options.


(8)  According  to  a  Schedule  13G filed  with  the  Securities  and
     Exchange  Commission  (the "Commission") on  February  12,  1999,
     Dimensional  Fund  Advisers,  a Commission-registered  investment
     adviser  with  its  principal place of  business  at  1299  Ocean
     Avenue,   11th  Floor, Santa Monica, California 90401,  has  sole
     voting  and dispositive power with respect to the 442,300  shares
     of Common Stock.

(9)  According  to a Schedule 13G filed with the Commission   for  the
     period ending September 30, 1998, Hathaway & Associates, Ltd.,  a
     Commission-registered investment adviser located at 119  Rowayton
     Avenue,   Rowayton,  Connecticut  06853,  has  sole  voting   and
     dispositive  power with respect to the 352,100 shares  of  Common
     Stock.

(10) According to a Schedule 13D filed with the Commission on  January
     4,  2000, Gerald R. Allard, a private investor with an address of
     520  South  Collier Boulevard, Chalet Number 301,  Marco  Island,
     Florida  33937,  has  sole  voting  and  dispositive  power  with
     respect to the 451,500 shares of Common Stock.

(11) Includes  296,075  shares  of the Company's  Common  Stock  which
     certain officers and directors have a right to acquire within  60
     days  of  the  date  hereof pursuant to  the  exercise  of  stock
     options  which  are deemed to be outstanding for the  purpose  of
     computing  the percentage ownership of officers and directors  as
     a group.


Item 13. Certain Relationships and Related Transactions
         ----------------------------------------------

Certain Relationships and Related Transactions

The  Company is currently leasing and occupying a building at 850
Perimeter  Road,  Manchester, New Hampshire (the "Perimeter  Road
Facility")  from 850 Perimeter Road Associates  NA,  LLC,  a  New
Hampshire  limited liability company in which  Mr.  Allard  is  a
member.   The  current yearly base rental for the Perimeter  Road
facility,  which houses the operations of WPI Instruments,  Inc.,
is $402,408. The lease term expires on December 31, 2002, and may
be  renewed  by the Company for an extended term to December  31,
2007.   In management's opinion, the lease rate for this facility
is  not  in  excess of the range of fair market  rentals  in  the
relevant area.

Hinckley, Allen & Snyder, a law firm of which Stephen Carlotti, a
director,  is  a member, provided legal services to  the  Company
during its 1999 fiscal year.

                             37
<PAGE>

Item  14. Exhibits, Financial Statement Schedules and Reports  on
          -------------------------------------------------------
          Form 8-K
          ---------

(a)  Documents filed as part of the Report:

          (1)  Financial Statements of the Registrant and Report of
               Independent Public Accountants Reference is made to the Index of
               Financial Statements under Item 8 of Part II hereof.

          (2)  Financial Statement and Auditors' Report

               Title                               Schedule
               -----                               --------

               Valuation and Qualifying Accounts      II

               All schedules omitted are inapplicable or the information
               required is shown in the Consolidated Financial Statements
               or ntoes thereto.  The auditors' report of Arthur Andersen
               LLP with respect to the Financial Statement Schedule is
               located on page 39 of this Report.

          (2)  Exhibits:

                Incorporated by reference to the Exhibit Index at
                the end of this report.

     (b)   The Registrant has filed the following reports on Form
     8-K during quarter ended September  26, 1999:

               None.

                              38
<PAGE>



            REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

TO WPI GROUP, INC.

We  have  audited, in accordance with generally accepted auditing
standards,  the consolidated balance sheets as of  September  26,
1999  and  September  27,  1998 and  the  related  statements  of
operations, stockholders' equity and cash flows for each  of  the
three  years in the period ended September 26, 1999 of WPI Group,
Inc.  included  in  this Form 10-K, and have  issued  our  report
thereon  dated  January 24, 2000. Our audit  was  made  for  the
purpose  of  forming an opinion on those statements  taken  as  a
whole.   The  schedule listed in Item 14(a) of the index  is  the
responsibility of the Company's management and is  presented  for
purposes   of   complying  with  the  Securities   and   Exchange
Commission's  rules  and are not part of the  basic  consolidated
financial  statements.  This schedule has been subjected  to  the
auditing  procedures applied in the audit of the basic  financial
statements  and,  in our opinion, fairly state, in  all  material
respects,  the  supplemental financial data required  to  be  set
forth therein in relation to the basic financial statements taken
as a whole.


ARTHUR ANDERSEN LLP


Boston, Massachusetts
January 24, 2000



                              39

<PAGE>
<TABLE>

                                                            SCHEDULE II
                        WPI GROUP, INC.
              VALUATION AND QUALIFYING ACCOUNTS

For the years ended September 26, 1999, September 27, 1998 and
September 28, 1997.
<CAPTION>
                                                                           Additions
                                                      -----------------------------------------------------
<S>                                    <C>           <C> <C>      <C>    <S>     <C>    <S>      <C>        <C>    <C>  <S> <S>

                                        Balance at    Charged to
                                        beginning     costs and                    Charged to                 Balance at
                                        of period     expenses    Acquisitions   other accounts  Deductions   end of period
                                        ---------     ---------   ------------   --------------  ----------   -------------

1999
  Allowance for doubtful accounts      $1,283,000    $   164,668  $      -       $      -        $  904,959 (1)$   542,709
  Acquisition reserves                    872,000           -            -              -           720,140 (2)    151,945

1998
  Allowance for doubtful accounts      $1,237,000    $    49,164  $   75,728     $      6,170    $   85,062 (1) $1,283,000
  Aquisition reserves                    286,226           -        948,011            -           362,152 (2)    872,085

1997
  Allowance for doubtful accounts      $  244,300    $ 1,026,119  $   77,544            -        $  110,963 (1) $1,237,000
  Acquisition reserves                    622,763           -      1,099,436            -         1,435,973 (2)    286,226


(1) Accounts deemed uncollectible, net of recoveries
(2) Acquisition costs paid/charges incurred
</TABLE>

                              40

<PAGE>

                           SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf of the undersigned,
thereunto duly authorized.

                                        WPI GROUP, INC.

January 25, 2000                       By:/s/Steve Shulman
                                           ----------------
                                           Steven Shulman
                                           Nonexecutive Chairman

     Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed below by the following
persons on behalf of the Registrant in the capacities and on the
dates indicated.

Signature                    Title                    Date
---------                    ------                   ----

/s/John Allard           Director, President and      January 25, 2000
--------------           Chief Executive Officer
John Allard             (Principal Executive Officer)

/s/ John Powers          Vice President and           January 25, 2000
---------------          Chief Financial Officer
John Powers             (Principal Financial and Accounting Officer)


/s/ Stephen Carlotti     Director                     January 25, 2000
---------------------
Stephen Carlotti

/s/Michael Foster        Director                     January 25, 2000
-----------------
Michael Foster

/s/Paul Giovacchini      Director,                    January 25, 2000
-------------------      Nonexecutive Vice Chairman
Paul Giovacchini


/s/Irving Gutin          Director                     January 25, 2000
---------------
Irving Gutin

/s/ James Risher         Director                     January 25, 2000
----------------
James Risher

/s/ Steven Shulman       Director,                    January 25, 2000
------------------       Nonexecutive Chairman
Steven Shulman

/s/Bernard Tenenbaum     Director                     January 25, 2000
--------------------
Bernard Tenenbaum



                              41

<PAGE>

                          EXHIBIT INDEX

     Certain of the following exhibits, designated with an
asterisk (*) are filed herewith. The exhibits not designated have
been previously filed with the Commission and are incorporated
herein by reference to the documents indicated following the
descriptions of such exhibits.

                                                           Page No.
Exhibit No.  Description                               Of Paper Filing
-----------  ------------                              ----------------

    3.1      Amended   and   Restated   Articles   of
             Incorporation   of   the   Company   are
             incorporated by reference to Exhibit 3.1
             to  the Registrant's Report on Form  10-
             KSB  for  the  year ended September  29,
             1996.

    3.2      Bylaws  of  the Company are incorporated
             by  reference  to  Exhibit  3.2  of  the
             Registrant's  Registration Statement  on
             Form  S-4  filed with the Commission  on
             February 22, 1994, Registration No.  33-
             75656.

    10.1     Asset    Purchase    Agreement,    dated
             September 28, 1993 among WPI Group, Inc.
             and   Magnetec  Corporation  and  Tridex
             Corporation,   previously   filed    and
             incorporated     by     reference     to
             Registrant's report on Form  10-KSB  for
             the year ended September 26, 1993.

    10.2     Agreement and Plan of Merger,  dated  as
             of  January 27, 1994, by and between WPI
             Group,  Inc.  and Termiflex Corporation,
             previously  filed  and  incorporated  by
             reference    to   Exhibit    28.11    of
             Registrant's report on Form 8-K filed on
             September 30, 1994.

    10.3     Agreement  and  Plan  of  Merger,  dated
             August  31,  1994, by  and  between  WPI
             Group,  Inc.  and Micro Palm  Computers,
             Inc.,  previously filed and incorporated
             by   reference  to  Exhibit   28.11   of
             Registrant's report on Form 8-K filed on
             September 30, 1994.

    10.4     Stock Purchase Agreement, dated November
             7, 1995 between WPI Group, Inc. and IVHS
             Technologies, Inc., previously filed and
             incorporated  by  reference  to  Exhibit
             28.13 of Registrant's report on Form  8-
             K, dated November 10, 1995.

    10.5     Share Purchase Agreement dated July  16,
             1996 by and between WPI Group (U.K.) and
             D.R.   Watkins  and  others,  previously
             filed  and incorporated by reference  to
             Exhibit 28.15 in Registrant's Report  on
             Form 8-K, dated July 16, 1996.

    10.6     Agreement  for the sale and purchase  of
             the  share  capital of  Husky  Computers
             Limited, Husky Computers, Inc. and Husky
             Computers  GmbH,  previously  filed  and
             incorporated  by  reference  to  Exhibit
             4.12 in Registrant's report on Form  8-K
             dated June 25, 1997.

    10.7     Asset  Purchase Agreement  dated  as  of
             July   31,   1998  by  and   among   WPI
             Instruments,    Inc.,    Allard-Nazarian
             Group,  Inc.,  Modutec,  Inc.,  A  &   M
             Instruments,    Inc.,    and     others,
             previously  filed  and  incorporated  by
             reference    to   Exhibit    10.24    in
             Registrant's  report on Form  8-K  dated
             August 3, 1998.

    10.8     Inertial   Products  Purchase  Agreement
             dated July 30, 1998 by and among Allard-
             Nazarian    Group,   Inc.   and    Lucas
             Automation and Control Engineering, Inc.
             previously  filed  and  incorporated  by
             reference    to    Exhibit    10.8    in
             Registrant's report on Form  10-K  dated
             September 27, 1998.

                              42
<PAGE>


                                                           Page No.
Exhibit No.  Description                               Of Paper Filing
-----------  ------------                              ----------------

    10.9     Walker   Power,   Inc.  Employee   Stock
             Purchase  Plan  and  Bonus  Award   Plan
             adopted  May  7, 1992, previously  filed
             and incorporated by reference to Exhibit
             28.1  of  Registrant's  Registration  on
             Form   S-8   filed  on  June  1,   1992,
             Registration No. 33-48285.

    10.10    Termiflex   Corporation  1981   Employee
             Incentive Stock Option Plan,
             previously  filed  and  incorporated  by
             reference   to  Exhibit  10.1   of   the
             Termiflex Registration Statement No.  2-
             85910-B on Form S-8.

    10.11    The 1992 Stock Option Plan for Directors
             of    Micro   Palm   Computers,    Inc.,
             previously  filed  and  incorporated  by
             reference   to  Exhibit  99.4   of   the
             Registrant's  Registration Statement  on
             Form   S-8  filed  February  28,   1996,
             Registration No. 333-1696.

    10.12    WPI  Group, Inc. Change in Control  Plan
             adopted  December  15, 1995,  previously
             filed  and incorporated by reference  to
             Exhibit 10.8 to the Registrant's  Report
             on   Form  10-KSB  for  the  year  ended
             September 29, 1996.

    10.13    WPI  Group, Inc. 1995 Stock Option Plan,
             adopted  June 6, 1995, previously  filed
             and incorporated by reference to Exhibit
             10.10 of Registrant's report on Form 10-
             KSB  for  the  year ended September  24,
             1995.

    10.14    WPI  Group,  Inc.  1997  Employee  Stock
             Purchase Plan and Bonus Award Plan, each
             adopted on February 12, 1997, previously
             filed  and incorporated by reference  to
             Exhibit    99    to   the   Registrant's
             Registration on Form S-8 filed  June  3,
             1997 Registration No. 333-28335.

    10.15    WPI  Group,  Inc. 1997 Equity  Incentive
             Plan,  adopted June 10, 1997, as amended
             on  December 12, 1997, previously  filed
             and incorporated by reference to Exhibit
             A  of  the  Registrant's Proxy Statement
             dated January 9, 1998.

    10.16    Noncompetition agreement, dated  January
             17, 1994, by and between WPI Group, Inc.
             and   William  E.  Fletcher,  previously
             filed  and incorporated by reference  to
             Exhibit 10.7 of the Registrant's  report
             on   Form  10-KSB  for  the  year  ended
             September 25, 1996.

    10.17    Lease  agreement, dated October 7, 1994,
             by and between WPI Group, Inc. and State
             Mutual   Life   Assurance   Company   of
             America,     previously    filed     and
             incorporated  by  reference  to  Exhibit
             10.9  of the Registrant's report on Form
             10-KSB for the year ended September  24,
             1995.

    10.18    Lease agreement dated September 10, 1986
             as   amended  on  September  10,   1986,
             September 1, 1991 and January 1, 1998 by
             and  between  850 Perimeter  Rd/NA,  LLC
             (formerly    NA    Realty)    and    WPI
             Instruments, Inc. previously  filed  and
             incorporated  by  reference  to  Exhibit
             10.43 of the Registrant's report on Form
             10-K dated September 27, 1998.

    10.19    Commercial Loan Agreement, dated October
             24,    1995,   previously   filed    and
             incorporated by reference to Exhibit 4.9
             of  the Registrant's Report on Form  10-
             KSB  for  the  year ended September  24,
             1995.

                              43
<PAGE>

                                                           Page No.
Exhibit No.  Description                               Of Paper Filing
-----------  ------------                              ----------------


    10.20    First Amendment dated March 20, 1996  to
             Commercial Loan Agreement dated  October
             24,    1995,   previously   filed    and
             incorporated by reference to Exhibit 4.4
             of  the Registrant's Report on Form  10-
             KSB  for  the  year ended September  29,
             1996.

    10.21    Second Amendment dated July 12, 1996  to
             Commercial Loan Agreement dated  October
             24,    1995,   previously   filed    and
             incorporated by reference to Exhibit 4.6
             of  the Registrant's Report on Form  10-
             KSB  for  the  year ended September  29,
             1996.

    10.22    Third Amendment dated February 27,  1997
             to   Commercial  Loan  Agreement   dated
             October  24,  1995  is  incorporated  by
             reference to Registrant's report on Form
             10-Q  for  the  period ended  March  30,
             1997.

    10.23    Revolving Line of Credit Promissory Note
             dated February 27, 1997, replacement  to
             Revolving Line of Credit Promissory Note
             dated  July  12, 1996, previously  filed
             and incorporated by reference to Exhibit
             4.1 of the Registrant's Report on Form 8-
             K for the period ended March 30, 1997.

    10.24    Fourth Amendment dated June 20, 1997  to
             Commercial Loan Agreement dated  October
             24,    1997,   previously   filed    and
             incorporated  by  reference  to  Exhibit
             4.13 in Registrant's Report on Form  8-K
             dated June 25, 1996.

    10.25    Promissory  Note dated  June  20,  1997,
             previously  filed  and  incorporated  by
             reference    to    Exhibit    4.14    in
             Registrant's  Report on Form  8-K  dated
             June 25, 1997.

    10.26    Stock   Pledge  and  Security  Agreement
             dated  June  20, 1997, previously  filed
             and incorporated by reference to Exhibit
             4.15 in Registrant's Report on Form  8-K
             dated June 25, 1997.

    10.27    Credit Agreement dated August 3, 1998 by
             and   among   Fleet  Bank-NH   and   the
             Registrant    previously    filed    and
             incorporated  by  reference  to  Exhibit
             10.26 in Registrant's report on Form 10-
             K dated September 27, 1998.

    10.28    First  Amendment dated October 30,  1998
             to Credit Agreement dated August 3, 1998
             previously  filed  and  incorporated  by
             reference    to   Exhibit    10.27    in
             Registrant's report on Form  10-K  dated
             September 27, 1998.

    10.29    Second Amendment dated December 27, 1998
             to Credit Agreement dated August 3, 1998
             previously  filed  and  incorporated  by
             reference  to  Exhibit  10.41   of   the
             Registrant's report on Form  10-K  dated
             September 27, 1998.

    10.30    Revolving Noted dated October  30,  1998
             in the principal amount of $3,333,333.33
             previously  filed  and  incorporated  by
             reference  to  Exhibit  10.28   of   the
             Registrant's report on Form  10-K  dated
             September 27, 1998.

    10.31    Revolving Noted dated October  30,  1998
             in  the  principal amount of  $4,000,000
             previously  filed  and  incorporated  by
             reference  to  Exhibit  10.29   of   the
             Registrant's report on Form  10-K  dated
             September 27, 1998.


                              44

<PAGE>
                                                           Page No.
Exhibit No.  Description                               Of Paper Filing
-----------  ------------                              ----------------


    10.32    Revolving Noted dated October  30,  1998
             in the principal amount of $2,666,666.67
             previously  filed  and  incorporated  by
             reference  to  Exhibit  10.30   of   the
             Registrant's report on Form  10-K  dated
             September 27, 1998.

    10.33    Revolving Noted dated October  30,  1998
             in  the  principal amount of  $4,000,000
             previously  filed  and  incorporated  by
             reference  to  Exhibit  10.31   of   the
             Registrant's report on Form  10-K  dated
             September 27, 1998.

    10.34    Revolving Noted dated October  30,  1998
             in  the  principal amount of  $6,000,000
             previously  filed  and  incorporated  by
             reference  to  Exhibit  10.32   of   the
             Registrant's report on Form  10-K  dated
             September 27, 1998.

    10.35    Term  A  Note dated October 30, 1998  in
             the   principal  amount  of   $5,000,000
             previously  filed  and  incorporated  by
             reference  to  Exhibit  10.33   of   the
             Registrant's report on Form  10-K  dated
             September 27, 1998.

    10.36    Term  A  Note dated October 30, 1998  in
             the   principal  amount  of   $6,000,000
             previously  filed  and  incorporated  by
             reference  to  Exhibit  10.34   of   the
             Registrant's report on Form  10-K  dated
             September 27, 1998.

    10.37    Term  A  Note dated October 30, 1998  in
             the   principal  amount  of   $4,000,000
             previously  filed  and  incorporated  by
             reference  to  Exhibit  10.35   of   the
             Registrant's report on Form  10-K  dated
             September 27, 1998.

    10.38    Term  A  Note dated October 30, 1998  in
             the   principal  amount  of   $6,000,000
             previously  filed  and  incorporated  by
             reference  to  Exhibit  10.36   of   the
             Registrant's report on Form  10-K  dated
             September 27, 1998.

    10.39    Term  A  Note dated October 30, 1998  in
             the   principal  amount  of   $9,000,000
             previously  filed  and  incorporated  by
             reference  to  Exhibit  10.37   of   the
             Registrant's report on Form  10-K  dated
             September 27, 1998.

    10.40    Term  B  Note dated October 30, 1998  in
             the  principal  amount of  $4,166,666.67
             previously  filed  and  incorporated  by
             reference  to  Exhibit  10.38   of   the
             Registrant's report on Form  10-K  dated
             September 27, 1998.

    10.41    Term  B  Note dated October 30, 1998  in
             the   principal  amount  of   $5,000,000
             previously  filed  and  incorporated  by
             reference  to  Exhibit  10.39   of   the
             Registrant's report on Form  10-K  dated
             September 27, 1998.

    10.42    Term  B  Note dated October 30, 1998  in
             the  principal  amount of $15,833,333.33
             previously  filed  and  incorporated  by
             reference  to  Exhibit  10.40   of   the
             Registrant's report on Form  10-K  dated
             September 27, 1998.


                              45
<PAGE>
                                                           Page No.
Exhibit No.  Description                               Of Paper Filing
-----------  ------------                              ----------------



    10.43    Waiver  dated  as of December  27,  1998
             previously  filed  and  incorporated  by
             reference  to  Exhibit  10.42   of   the
             Registrant's report on Form  10-K  dated
             September 27, 1998.

    10.44    Asset Purchase Agreement, dated December
             22,  1999  among Warner Power,  LLC  and
             Warner  Power Conversion,  LLC  and  WPI
             Power Systems, Inc. and WPI Electronics,
             Inc.  and  WPI  Group, Inc.,  previously
             filed  and incorporated by reference  to
             Exhibit 10.24 of Registrant's Report  on
             Form 8-K, dated January 4, 2000.

    10.45    Non-Competition     Agreement,     dated
             December 22, 1999 among WPI Group,  Inc.
             and WPI Electronics, Inc. and WPI Poster
             Systems,  Inc.  and Warner  Power,  LLC,
             previously  filed  and  incorporated  by
             reference    to   Exhibit    10.24    of
             Registrant's Report on Form  8-K,  dated
             January 4, 2000.

    10.46    Purchase   and  Sale  Agreement,   dated
             December 22, 1999 among WPI Group,  Inc.
             and  40  Depot  Street, LLC,  previously
             filed  and incorporated by reference  to
             Exhibit 10.24 of Registrant's Report  on
             Form 8-K, dated January 4, 2000.

    10.47    Terminal      Products     Manufacturing
             Agreement, dated December 22, 1999 among
             Warner Power, LLC and WPI Group, Inc and
             WPI  Oyster  Termiflex, Inc., previously
             filed  and incorporated by reference  to
             Exhibit 10.24 of Registrant's Report  on
             Form 8-K, dated January 4, 2000.

    10.48    Services  Agreement, dated December  22,
             1999  among  WPI Group, Inc. and  Warner
             Power,  LLC and Warner Power Conversion,
             LLC previously filed and incorporated by
             reference to Registrant's Report on Form
             8-K, dated January 4, 2000.

  * 10.49    Third   Amendment  to  Credit  Agreement
             dated as of August 16, 1999.

  * 10.50    Limited  Waiver dated as of  August  16,
             1999.

  * 10.51    Common  Stock Purchase Warrant dated  as
             of   August 16, 1999 for  20,670  shares
             of  WPI Group, Inc. Common Stock to  FSC
             Corp.

  * 10.52    Common  Stock Purchase Warrant dated  as
             of  August 16, 1999 for 24,800 shares of
             WPI Group, Inc. Common Stock to Bank  of
             NH.

  * 10.53    Common  Stock Purchase Warrant dated  as
             of  August 16, 1999 for 37,200 shares of
             WPI  Group, Inc. Common Stock  to  Fleet
             Bank - NH.

  * 10.54    Common  Stock Purchase Warrant dated  as
             of  August 16, 1999 for 16,530 shares of
             WPI  Group,  Inc. Common  Stock  to  Key
             Bank.

  * 10.55    Common  Stock Purchase Warrant dated  as
             of  August 16, 1999 for 24,800 shares of
             WPI   Group,   Inc.  Common   Stock   to
             Sovereign Bank.

  * 10.56    Registration Rights Agreement  dated  as
             of August 16, 1999.

  * 21       List  of  subsidiaries of the Registrant
             as of September 26, 1999.

  * 23       Consent of Arthur Andersen LLP.


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                                                           Page No.
Exhibit No.  Description                               Of Paper Filing
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  * 27       Financial Data Schedule.


                              47
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