UNITED STATES SECURITIES AND EXCHANGE COMMISSION

LITIGATION RELEASE NO. 17943 / January 21, 2003

   SECURITIES AND EXCHANGE COMMISSION v. ONLINE POWER SUPPLY INC., LARRY
   G. ARNOLD AND KRIS M. BUDINGER, Civ. No. 03-M-0121 (USDC Colo.)

   The Commission announced today that it filed a civil injunctive action
   against OnLine Power Supply, Inc. ("OnLine"), headuartered in
   Englewood, Colorado, its former chief executive officer, Larry G.
   Arnold ("Arnold"), and its former president, Kris M. Budinger
   ("Budinger"). The Commission's complaint alleges that between June
   1996 and May 2000, OnLine, Arnold and Budinger sold $17.7 million of
   OnLine stock through unregistered transactions. The complaint further
   alleges that in connection with these stock sales, OnLine, Budinger
   and Arnold made false and misleading statements or omitted to state
   material facts to investors concerning, among other things,
   compensation that OnLine paid to registered representatives, and
   Budinger and Arnold's misappropriation of some of the proceeds from
   the sale of 841,000 shares of OnLine treasury stock. According to the
   complaint, these false and misleading statements were contained in
   OnLine's periodic reports filed with the Commission and offering
   materials provided to investors. Moreover, the complaint alleges that
   OnLine, aided and abetted by Arnold and Budinger, failed to keep
   accurate books and records.

   The Commission's complaint alleges that OnLine violated Sections 5(a),
   5(c), and 17(a) of the Securities Act of 1933 ("Securities Act"),
   Sections 10(b), 13(a) and 13(b)(2)(A) of the Securities Exchange Act
   of 1934 ("Exchange Act") and Rules 10b-5, 12b-20, 13a-1 and 13a-13
   thereunder. The complaint further alleges that Arnold and Budinger
   violated Sections 5(a), 5(c), and 17(a) of the Securities Act, Section
   10(b) of the Exchange Act and Rule 10b-5 thereunder, and aided and
   abetted Online's violations of Sections 13(a) and 13(b)(2)(A) of the
   Exchange Act and Rules 12b-20, 13a-1 and 13a-13 thereunder. The
   Commission seeks an injunction against OnLine, Arnold and Budinger, as
   well as an order requiring Arnold and Budinger to pay disgorgement
   plus prejudgment interest and civil penalties, and imposing officer
   and director bars and penny stock bars against them.


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Modified 01/23/2003