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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-QSB

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: March 31, 2002

OR

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

For the transition period from ___________ to ___________

Commission File No.  0-31805

POWER EFFICIENCY CORPORATION
(Exact Name of Small Business Issuer as Specified in its Charter)

|Delaware
(State or Other Jurisdiction of
Incorporation or Organization)                  |  | 22-3337365
(I.R.S. Employer Identification No.)                
|---------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------
|                                                                                         |  |                                                                
|                                                                                         |  |                                                                
|4220 Varsity Drive, Suite E
Ann Arbor, MI 48108
(Address of Principal Executive Offices) |  | (734) 975-9111
(Issuer's Telephone Number,
Including Area Code)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities 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 XNo

The number of shares outstanding of the Issuer's Common Stock, $.001 Par Value, as of March 31, 2002 was 6,523,120.

Transitional Small Business Disclosure Format (check one):   Yes       No  X

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POWER EFFICIENCY CORPORATION
FORM 10-QSB INDEX

|PART I.    | FINANCIAL INFORMATION | Page                                                                                 
|---------- | --------------------- | -------------------------------------------------------------------------------------
|           |                       |                                                                                      
|           | Item 1.               | Financial Statements (Unaudited)                                                     
|           |                       |                                                                                      
|           |                       | Condensed Balance Sheets as of March 31, 2002 and December 31,
2001                  
|           |                       |                                                                                      
|           |                       | Condensed Statements of Operations for the three months ended
March 31, 2002 and 2001
|           |                       |                                                                                      
|           |                       | Condensed Statements of Cash Flows for the three months ended
March 31, 2002 and 2001
|           |                       |                                                                                      
|           |                       | Notes to Consolidated Financial Statements                                           
|           |                       |                                                                                      
|           | Item 2.               | Management's Discussion and Analysis or Plan of Operation                            
|           |                       |                                                                                      
|PART II.   | OTHER INFORMATION     |                                                                                      
|           |                       |                                                                                      
|           | Item 6.               | Exhibits and Reports on Form 8-K                                                     
|           |                      
|SIGNATURES | 11                   

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Power Efficiency Corporation
Condensed Balance Sheets
March 31, 2002 and December 31, 2001

|                                                                                                           | (Unaudited)    |            |                   |  
|---------------------------------------------------------------------------------------------------------- | -------------- | ---------- | ----------------- | -
|                                                                                                           | March 31, 2002 |            | December 31, 2001 |  
|Assets                                                                                                     |                |            |                   |  
|                                                                                                           |                |            |                   |  
|Current Assets                                                                                             |                |            |                   |  
|Cash and Equivalents                                                                                       | $              | 493        |                   | $
|Accounts Receivable - Trade Net of Reserve of $5,000                                                       |                | 94,307     |                   |  
|Inventory                                                                                                  |                | 551,790    |                   |  
|Prepaid Expenses                                                                                           |                | 5,918      |                   |  
|Total Current Assets                                                                                       |                | 652,508    |                   |  
|                                                                                                           |                |            |                   |  
|PROPERTY AND EQUIPMENT - Net                                                                               |                | 141,468    |                   |  
|                                                                                                           |                |            |                   |  
|OTHER ASSETS                                                                                               |                |            |                   |  
|Deposits                                                                                                   |                | 15,500     |                   |  
|Patent Application Costs - Net                                                                             |                | 15,739     |                   |  
|Goodwill                                                                                                   |                | 1,929,963  |                   |  
|Customer Contracts, Manuals and Sales Literature                                                           |                | 143,582    |                   |  
|Website and Customer List                                                                                  |                | 61,285     |                   |  
|Total Other Assets                                                                                         |                | 2,166,069  |                   |  
|                                                                                                           |                |            |                   |  
|Total Assets                                                                                               | $              | 2,960,045  |                   | $
|                                                                                                           |                |            |                   |  
|Liabilities and Stockholders' (Deficit) Equity                                                             |                |            |                   |  
|                                                                                                           |                |            |                   |  
|Current Liabilities                                                                                        |                |            |                   |  
|Line of Credit Agreement                                                                                   | $              | 445,387    |                   | $
|Accrued Salaries and Payroll Taxes                                                                         |                | 199,175    |                   |  
|Accounts Payable and Accrued Expenses                                                                      |                | 739,300    |                   |  
|Stockholder and Officers' Loans Payable                                                                    |                | 223,322    |                   |  
|Total Current Liabilities                                                                                  |                | 1,607,184  |                   |  
|                                                                                                           |                |            |                   |  
|Long Term Liabilities                                                                                      |                |            |                   |  
|Stockholder Note Payable                                                                                   |                | 300,000    |                   |  
|Total Liabilities                                                                                          |                | 1,907,184  |                   |  
|                                                                                                           |                |            |                   |  
|Stockholders' Equity                                                                                       |                |            |                   |  
|Preferred Stock, .001 par value, 10,000,000 shares
    authorized, none outstanding                        |                | -          |                   |  
|Common Stock, .001 par value, 50,000,000 authorized,
    6,523,120 issued and outstanding in 2001 and 2000 |                | 6,523      |                   |  
|Additional Paid-in Capital                                                                                 |                | 8,869,914  |                   |  
|Accumulated Deficit                                                                                        |                | (7,823,576 | )                 |  
|Total Stockholders' Equity                                                                                 |                | 1,052,861  |                   |  
|                                                                                                           |                |            |                   |  
|Total Liabilities and Stockholders' Equity                                                                 | $              | 2,960,045  |                   | $

See Notes to Condensed Financial Statements

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Power Efficiency Corporation
Condensed Statement of Operations
(Unaudited)

|                                             |   | Three Months Ended
March 31, |  
|-------------------------------------------- | - | ---------------------------- | -
|                                             |   | 2002                         |  
|                                             |   |                              |  
|REVENUES                                     | $ | 139,142                      |  
|                                             |   |                              |  
|COSTS AND EXPENSES:                          |   |                              |  
|Cost of Sales                                |   | 71,945                       |  
|Research and Development                     |   | 83,547                       |  
|Manufacturing                                |   | 52,851                       |  
|Selling, General and Administrative          |   | 231,938                      |  
|Depreciation and Amortization                |   | 31,429                       |  
|Total Costs and Expenses                     |   | 471,710                      |  
|                                             |   |                              |  
|LOSS BEFORE PROVISION FOR INCOME TAXES       |   | (332,568                     | )
|                                             |   |                              |  
|PROVISION FOR INCOME TAXES                   |   | 1,500                        |  
|                                             |   |                              |  
|NET LOSS                                     | $ | (334,068                     | )
|                                             |   |                              |  
|BASIC LOSS PER COMMON SHARE                  | $ | (.05                         | )
|                                             |   |                              |  
|WEIGHTED AVERAGE COMMON
  SHARES OUTSTANDING |   | 6,523,120                    |  

See Notes to Condensed Financial Statements

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Power Efficiency Corporation
Condensed Statements of Cash Flows (Unaudited)

|                                                                                            |  | Three Months Ended
March 31, 2002 |         | Three Months Ended
March 31, 2001 |  
|------------------------------------------------------------------------------------------- |  | --------------------------------- | ------- | --------------------------------- | -
|                                                                                            |  |                                   |         |                                   |  
|Cash Flow from Operating Activities                                                         |  |                                   |         |                                   |  
|Net Loss                                                                                    |  |                                   |         |                                   | $
|Adjustments to reconcile Net Cash:                                                          |  |                                   |         |                                   |  
|Depreciation and Amortization                                                               |  |                                   | 31,429  |                                   |  
|Debt Restructuring                                                                          |  |                                   |         |                                   |  
|Accounts Receivable - Trade                                                                 |  |                                   | (83,188 | )                                 |  
|Inventory - Raw Materials/Finished
     Goods                                               |  |                                   | 57,755  |                                   |  
|Prepaid Expenses                                                                            |  |                                   | (5,918  | )                                 |  
|Accounts Payable and Accrued
     Expenses                                                  |  |                                   | 182,920 |                                   |  
|Total Adjustments                                                                           |  |                                   |         |                                   |  
|Net Cash Used in Operations                                                                 |  |                                   |         |                                   | $
|                                                                                            |  |                                   |         |                                   |  
|Cash Flow From Investing Activities                                                         |  |                                   |         |                                   |  
|Equipment Purchases                                                                         |  |                                   | (1,504  | )                                 |  
|Net Cash Used in Investing Activities                                                       |  |                                   |         |                                   | $
|                                                                                            |  |                                   |         |                                   |  
|Cash Flow From Financing Activities                                                         |  |                                   |         |                                   |  
|Proceeds from issuance of Equity
     Securities                                            |  |                                   | -       |                                   |  
|Notes Payable Bank                                                                          |  |                                   | -       |                                   |  
|Officers' and Stockholders Note Payable                                                     |  |                                   | 117,822 |                                   |  
|Net Cash Provided by Financing
  Activities                                                 |  |                                   |         |                                   | $
|                                                                                            |  |                                   |         |                                   |  
|Net Decrease in Cash                                                                        |  |                                   |         |                                   | $
|                                                                                            |  |                                   |         |                                   |  
|Summary:                                                                                    |  |                                   |         |                                   |  
|Cash Balance At End Of Period                                                               |  |                                   |         |                                   | $
|Cash Balance At Beginning Of Period                                                         |  |                                   |         |                                   |  
|Net Decrease In Cash                                                                        |  |                                   |         |                                   | $
|                                                                                            |  |                                   |         |                                   |  
|Non-cash Investing Activities                                                               |  |                                   |         |                                   |  
|Common Stock issued in connection
     with the Conversion of Stockholder
     Loan Payable |  |                                   |         |                                   | $

See Notes to Condensed Financial Statements

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POWER EFFICIENCY CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)

|1. | BASIS OF PRESENTATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | The accompanying unaudited financial statements, which are for interim periods, do not include all disclosures required to be presented in the annual financial statements. These unaudited financial statements should be read in conjunction with the financial statements and the footnotes thereto for the year ended December 31, 2001 contained in Power Efficiency Corporation's (the "Company") Form 10-KSB Annual Report as filed with the Securities and Exchange Commission. The March 31, 2002 balance sheet was derived from unaudited financial statements, and does not include all disclosures required by generally accepted accounting principles.                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|2. | INTERIM PERIODS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | In the opinion of the Company, the accompanying unaudited financial statements contain all adjustments (which are of a normal recurring nature) necessary for a fair presentation of the financial statements. The results of operations for the three months ended March 31, 2002 are not necessarily indicative of the results to be expected for the full year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|3. | GOING CONCERN                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | The accompanying condensed interim financial statements have been prepared assuming the Company is a going concern, which assumption contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amount of liabilities that might be necessary should the Company be unable to continue in existence. Continuation of the Company as a going concern is dependent on achieving profitable operations. Management's plans to achieve profitability include developing new products, obtaining new customers and increasing sales to existing customers. Management also plans to raise additional capital through equity issuance or other types of financing.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|4. | PER SHARE DATA                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Per share data was computed by dividing net loss by the weighted average number of shares outstanding during the period.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|5. | REVENUE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | For financial reporting purposes, the Company reports revenues from sales as products are shipped and invoiced.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|6. | LINE OF CREDIT AGREEMENT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | On February 1, 2002, the company renegotiated its line of credit agreement with Bank One to extend the due date to April 30, 2002. The line of credit agreement is collateralized by all inventory, accounts receivable, equipment and instruments.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

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|7. | GOODWILL                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | The Company adopted the provisions of Statement of Financial Accounting Standards (SFAS) No. 142, "Goodwill and Other Intangible Assets" for the year ended December 31, 2002. SFAS No. 142 was applied at the beginning of the fiscal year. SFAS No. 142 requires that Goodwill no longer be amortized. Goodwill will be tested for impairment on an annual basis and between annual tests in certain circumstances.                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|8. | RELATED PARTY TRANSACTIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | During the quarter ended March 31, 2002, stockholders and officers loaned the Company $117,822.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|9. | FINANCIAL STATEMENTS FOR YEARS ENDED DECEMBER 31, 2000 AND 2001                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | The Annual Reports filed by the Company on Form 10-KSB for the years ended December 31, 2001 and 2000, contained certain corrections that related primarily to the valuation of the Company's common stock and options. The adjustments were associated with, among other things, the Company's purchase of the assets of Performance Control, L.L.C. on August 7, 2000, the settlement of a loan payable in exchange for the Company's stock and the difference between the fair value of the Company's common stock compared to the exercise price of certain options, including options with exercise prices that were repriced on September 7, 2000 and options that were issued in 2000 and 2001 with exercise prices below the fair value of the Company's common stock.

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| | Item 2. Management's Discussion and Analysis or Plan of Operation

The following discussion is designed to provide a review of the financial condition and results of operations of Power Efficiency Corporation (the "Company"). This discussion should be read in conjunction with the financial statements and related notes.

Forward-Looking Statements

This discussion and analysis of financial condition and results of operations, and other sections of this report, contain forward-looking statements that are based on management's beliefs, assumptions, current expectations, estimates and projections about the industrial and commercial motor industry, the economy, and about the Company itself. Words such as "anticipates," "believes," "estimates," "judgment," "expects," "forecasts," "intends," "is likely," "plans," "predicts," "projects," variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions ("Risk Factors") that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. Therefore, actual results and outcomes may materially differ from what may be expressed, implied or forecasted in such forward-looking statements.

Risk Factors include, but are not limited to, demand for products and services; the degree of competition by competitors; changes in tax laws; changes in prices, levies and assessments; the impact of technological advances and issues; governmental and regulatory policy changes; the outcomes of pending and future litigation and contingencies; trends in customer behavior; the ability to raise capital and maintain financing sources; development of the Company's products; and changes in the national economy. In addition, events relating to the terrorist attacks on September 11, 2001 and other terrorist activities have created significant global economic and political uncertainties that may have material and adverse effects on financial markets, the economy, and demand for the Company's services and products. These are representative of the Risk Factors that could cause a difference between an ultimate actual outcome and a preceding forward-looking statement. The Company undertakes no obligation to update, amend or clarify forward-looking statements, whether as a result of new information, future events or otherwise.

Results of Operations

Revenues. Revenues were $139,142 for the three months ended March 31, 2002, compared to $155,050 for the three months ended March 31, 2001, a decrease of $15,908. The decrease in revenue was principally attributable to the stagnation of the economy which delayed purchase orders.

Cost of revenues. Cost of revenues was $71,945 for the three months ended March 31, 2002, or 51.7% of revenues, compared to $79,307, or 51% of revenues, for the three months ended March 31, 2001. The increase in cost of revenues was minimal and due in part to discounted sales to a new customer.

Research and development. Research and development expenses were $83,547, or 59.7% of revenues, for the three months ended March 31, 2002, as compared to $67,174, or 43% of revenues, for the three months ended March 31, 2001. The increase was due to increased research and development activity.

Selling, general, manufacturing and administrative. Selling, general, manufacturing and administrative expenses increased to $284,789, or 205% of revenues, for the three months ended March 31, 2002, from $321,174, or 207% of revenues, for the three months ended March 31,
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| | 2001. The decrease in expenses was primarily due to a $130,000 loss on debt extinguishment in 2001, offset by increases in sales, marketing and administrative personnel in 2002.

As a result of operations, the Company incurred a net loss of $334,068 for the three months ended March 31, 2002, compared to $385,000 for the three months ended March 31, 2001.

Financial Condition, Liquidity, and Capital Resources

Since inception, the Registrant has financed its operations primarily through the sale of equity securities and bank borrowings. As of March 31, 2002, the Registrant has received approximately $2,257,261 from public and private offerings of its equity securities and approximately $445,387 from a bank line of credit. As of March 31, 2002, the Company had cash and cash equivalents of $493.

Cash used in operating activities was $151,000 for the three months ended March 31, 2002, and $282,905 for the three months ended March 31, 2001. Cash used in operating activities during the three months ended March 31, 2002, reflected a net loss of $334,068. For the three months ended March 31, 2001, cash used in operating activities reflected a net loss of $385,000.

The Registrant's Line of Credit Agreement expired on April 30, 2002. The Registrant's total borrowings under the agreement exceed the permitted borrowing limits and the line of credit is subject to acceleration and could become due and payable at the bank's option. The bank has not exercised its acceleration option and the Registrant is currently negotiating an extension of the agreement. If the bank exercises its option to demand accelerated payment of the indebtedness or declines to renew the line of credit, such events would have a material and adverse effect upon the financial condition, results of operations and capital resources of the Company.

The Registrant expects to experience growth in its operating expenses, particularly in research and development and selling, general and administrative expenses, for the foreseeable future in order to execute its business strategy. As a result, the Company anticipates that operating expenses, as well as planned increases in inventory expenditures, will constitute a material use of any cash resources.

Management believes that its existing cash and cash equivalents are insufficient to meet the Company's anticipated cash needs for the next six months. Because capital resources are insufficient to satisfy the Company's liquidity requirements, Management intends to seek to sell additional equity securities or debt securities or obtain debt financing. There is no assurance that financing, if acquired, will be available in amounts or on terms acceptable to Management, if at all.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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PART II.   OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K

| | (a)       Exhibits. The following documents are filed as exhibits to this report on Form 10-QSB:                
| | ----------------------------------------------------------------------------------------------------------------
| |                                                                                                                 
| |                                                                                                                 
| | Exhibit No.                                                                                                     
| |                                                                                                                 
| | 3.1                                                                                                             
| |                                                                                                                 
| | 3.2                                                                                                             
| |                                                                                                                 
| | (b)       Reports on Form 8-K. No reports on Form 8-K were filed during the quarter covered by this Form 10-QSB.

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SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized

|Date:  May 15, 2002 | POWER EFFICIENCY CORPORATION
(Registrant)
By: /s/ Stephen L. Shulman                          
|------------------- | ----------------------------------------------------------------------------------------------
|                    | Stephen L. Shulman
     President and Chief Executive Officer                                 
|                    |                                                                                               
|Date:  May 15, 2002 | By: /s/ Arthur N. Smith                                                                       
|                    | Arthur N. Smith
     Chief Financial Officer (Principal Financial
     and Accounting Officer)

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EXHIBIT INDEX

|Exhibit No. |  | Document                                                                                                                                           
|----------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------
|            |  |                                                                                                                                                    
|3.1         |  | Certificate of Incorporation. Previously filed as an exhibit to the Company's Form 10-SB filed on October 20, 2000. Here incorporated by reference.
|            |  |                                                                                                                                                    
|3.2         |  | Bylaws. Previously filed as an exhibit to the Company's Form 10-SB filed on October 20, 2000. Here incorporated by reference.