SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No.)

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|X| Preliminary Proxy Statement
|_| Confidential, for Use of the Commission Only
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|_| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12

Western Power & Equipment Corp
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(Name of Registrant as Specified In Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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WESTERN POWER & EQUIPMENT CORP.
6407-B N.E. 117th Avenue
Vancouver, Washington 98662

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
May 15, 2002

To the Stockholders of Western Power & Equipment Corp.:

NOTICE IS HEREBY GIVEN that the Annual Meeting (the "Annual Meeting") of
Stockholders of Western Power & Equipment Corp., a Delaware corporation (the
"Company") for its fiscal years 2000 and 2001, will be held at 10:00 a.m on May
15, 2002, at the offices of Mintz & Fraade, P.C., 488 Madison Avenue, Suite
1100, New York, NY, 10022, for the following purposes:

(a) To elect a five member Board of Directors to serve until the next
Annual Meeting of Stockholders of the Company and until their successors are
duly elected and qualified;

(b) To consider and act upon the proposal to issue 600,000 shares of
common stock of the Company to the Rubin Family Irrevocable Stock Trust.

(c) To consider and act upon the proposal to issue options to purchase
25,000 shares of common stock of the Company to each of Dr. Seymour Kessler and
Allen Perres pursuant to the 1995 Stock Option Plan, as amended; and

(d) To consider and transact such other business as may properly come
before the Annual Meeting and any adjournments thereof.

In accordance with the provisions of the Company's By-laws, the Board of
Directors has fixed the close of business on April 1, 2002 as the date for
determining the stockholders of record entitled to receive notice of, and to
vote at, the Annual Meeting and any adjournments thereof.

Dated: April 8, 2002

By Order of the Board of Directors,

Mark J. Wright, Secretary

STOCKHOLDERS ARE URGED TO FILL IN, DATE, SIGN AND PROMPTLY RETURN THE
ENCLOSED PROXY IN THE ACCOMPANYING PREPAID ENVELOPE.

It is desirable that as many stockholders as possible be represented, in
person or by proxy, at the Annual Meeting. Consequently, whether or not you now
expect to be present, please execute and return the enclosed proxy. You have the
power to revoke your proxy at any time before it is voted, and the giving of a
proxy will not affect your right to vote in person if you attend the Annual
Meeting.

iii

[THIS PAGE IS INTENTIONALLY LEFT BLANK]

WESTERN POWER & EQUIPMENT CORP.
6407-B N.E. 117th Avenue
Vancouver, Washington 98662

PROXY STATEMENT

ANNUAL MEETING OF STOCKHOLDERS
May 15, 2002

April 8, 2002

This Proxy Statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of Western Power & Equipment Corp.
(the "Company") for use at the Company's Annual Meeting of Stockholders for its
fiscal years 2000 and 2001 to be held on May 15, 2002, and at any adjournment
thereof (the "Annual Meeting"). Further, solicitation of proxies may be made
personally, or by telephone or telegraph, by regularly employed officers and
other employees of the Company, who will receive no additional compensation for
such. The cost of soliciting proxies will be borne by the Company which may
enlist the assistance, and reimburse the reasonable expenses, of banks and
brokerage houses in the additional solicitation of proxies and proxy
authorizations, particularly from their customers whose stock is not registered
in the owner's name, but in the name of such banks or brokerage houses.

All shares represented at the Annual Meeting by proxies will be voted
provided that such proxies are properly signed and dated. In cases where a
choice is indicated, the shares represented will be voted in accordance with the
specifications so made. In cases where no specifications are made, the shares
represented will be voted FOR the election as directors of the nominees listed
below, FOR the issuance of 600,000 shares of common stock of the Company to the
Rubin Family Irrevocable Stock Trust and FOR the issuance of 25,000 options to
purchase shares of common stock of the Company to each of Dr. Seymour Kessler
and Allen Perres.

Any stockholder executing and returning a proxy has the power to revoke
such proxy at any time prior to the voting thereof by: (a) written notice to the
Secretary of the Company at the Company's headquarters delivered prior to the
commencement of the Annual Meeting, (b) providing a signed proxy bearing a later
date, or (c) appearing in person and voting at the Annual Meeting.

A copy of the Annual Reports on Form 10-K of the Company for the fiscal
years ended July 31, 2001, (the "2001 Fiscal Year") and July 31, 2000, (the
"2000 Fiscal Year"), and the Form 10-Q for the fiscal quarter ended January 31,
2001, as amended, including financial statements, which are incorporated by
reference into this Proxy Statement and made a part hereof, is being mailed
concurrently herewith (on or about April 8, 2002) to all stockholders of record
at the close of business on April 1, 2002. Pursuant to comments the Company
received from the Securities and Exchange Commission, the Annual Report on Form
10-K for the fiscal year ended July 31, 2001 (the "2001 Form 10-K") incorporates
certain of such comments with respect to the Annual Report on Form 10-K for the
fiscal year ended July 31, 2000 (the "2000 Form 10-K"). Accordingly, the 2001
Form 10-K supercedes the 2000 Form 10-K.

VOTING SECURITIES

Only stockholders of record at the close of business on April 1, 2002 are
entitled to vote at the Annual Meeting. The total number of shares of common
stock, par value $.001 per share (the "Common Stock"), of the Company, issued,
outstanding and entitled to be voted on the record date was 3,403,162 shares.
Each of such shares of Common Stock is entitled to one vote upon all matters to
be acted upon at the Annual Meeting. There are no cumulative voting rights. The
holders of a majority of the outstanding votes (i.e., 1,701,582 votes) shall
constitute a quorum A quorum is necessary to hold a valid meeting. In accordance
with the Company's Certificate of Incorporation and By-laws, and applicable law,
the election of directors shall be by a plurality of the votes cast and the
ratification of the issuance of 600,000 shares of common stock of the Company to
the Rubin Family Irrevocable Stock Trust and the issuance of 25,000 options to
purchase shares of common stock of the Company to each of Dr. Seymour Kessler
and Allen Perres shall be by a majority of the votes cast.

Abstentions and broker non-votes are not counted as votes cast in the
election of directors and will have no effect on the election of directors
except to the extent that they affect the total votes received by a candidate.
On matters other than the election of directors, abstentions will be counted as
votes cast, which will have the same effect as a negative vote on the matter. A
broker non-vote occurs when a broker votes on some matter on the proxy card but
not on others because the broker does not have the authority to do so.

Shares Held By Directors and Named Executive Officers

Set forth in the table below is information concerning the ownership, as
of the close of business on April 1, 2002, of the Common Stock by the Company's
directors and Named Executive Officers and all directors and present executive
officers as a group.

C. Dean McLain (2) 529,485 15.5%

Mark J. Wright (3) 100,000 2.9%

Robert M. Rubin (4) 705,197 20.7%

Dr. Seymour Kessler(5) 25,000 0%

Allen Perres (6) 25,000 0%

Irwin Pearl 0 0%

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All directors and executive
officers as a group
(5 persons) 1,384,682 39.9%
- --------------------------------------------------------------------------------

(1) Unless otherwise indicated, the Company believes that all persons named in
the table have sole voting and investment power with respect to all shares
of Common Stock beneficially owned by them. A person is deemed to be the
beneficial owner of securities which may be acquired by such person within
60 days from the date on which beneficial ownership is to be determined,
upon the exercise of options, warrants or convertible securities. Each
beneficial owner's percentage ownership is determined by assuming that
options, warrants and convertible securities that are held by such person
(but not those held by any other person) and which are exercisable within
such 60 day period, have been exercised.

(2) Excludes Mr. McLain's indirect ownership in the Company through his
beneficial ownership of options to purchase 12,000 shares of AUGI common
stock. Includes Mr. McLain's direct beneficial ownership of 29,485 shares
of common stock of the Company and exercisable options to acquire 500,000
shares of Company Common Stock. Mr. McLain's beneficial ownership of AUGI
common stock represents 2.4 percent of AUGI voting stock as at April 1,
2002. (3) Includes exercisable stock options to purchase 100,000 shares of
common stock of the Company issued to Mr. Wright for services rendered to
the Company.

(4) Excludes Mr. Rubin's indirect ownership in the Company through his
ownership of an aggregate of 33,680 voting shares of AUGI, the Company's
principal stockholder, including 80

- --------------------

shares of AUGI common stock, options to purchase an additional 33,600
shares of AUGI common stock, and 49,831.92 shares of AUGI common stock
held by the Rubin Family Irrevocable Stock Trust, to which Mr. Rubin
disclaims beneficial ownership. Excludes the 600,000 shares of Common
Stock issuable upon shareholder approval to the Rubin Family Irrevocable
Stock Trust, to which Mr. Rubin will disclaim beneficial ownership.
Includes Mr. Rubin's direct beneficial ownership of Company Common Stock
through 205,197 shares of Company Common Stock and his ownership of
exercisable options to acquire 500,000 shares of Company Common Stock. Mr.
Rubin's beneficial ownership of AUGI voting stock represents 6.7 percent
of AUGI voting stock as at April 1, 2002.

(5) Includes stock options to purchase 25,000 shares of common stock of the
Company issued to Dr. Kessler for services rendered to the Company,
subject to shareholder approval at this meeting.

(6) Includes stock options to purchase 25,000 shares of common stock of the
Company issued to Mr. Perres for services rendered to the Company, subject
to shareholder approval at this meeting.

Shares Held by Certain Other Stockholders

The following table sets forth, as of the close of business on April 1, 2002,
certain information with respect to each person who is known to the Company to
be the beneficial owner of more than five (5%) percent of the Common Stock,
other than the directors set forth in the Directors and Named Executive Officers
Ownership Table above.

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Amount and Nature of
Name and Address Beneficial Ownership (1) Percent (1)
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American United Global, Inc.
("AUGI")
11108 NE 106th Place
Kirkland, WA, 98033 (2) 1,222,586 35.9%
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(2) Mr. Rubin has been the Chief Executive Officer of American United Global,
Inc. ("AUGI"), the Company's principal shareholder, since October 1990,
and also served as Chairman of AUGI from October 1990 until January 1996.
From March 1, 1993 through June 13, 1995, Mr. McLain served as Executive
Vice President of AUGI. Mr. McLain has served on the Board of

Directors of AUGI since March 7, 1994. To the extent Mr. Rubin is CEO and
a Director on the Board of Directors of AUGI, he has no control over the
voting and investment power of the shares of the Company held by AUGI,
other than being one Director on a Board of seven Directors.

Voting by Directors and Executive Officers

It is anticipated that the directors and the Named Executive Officers of
the Company will vote, FOR the election as directors of the nominees listed
below and FOR the issuance of 600,000 shares of common stock of the Company to
the Rubin Family Irrevocable Stock Trust.

ELECTION OF DIRECTORS

The individuals named in the enclosed form of proxy will vote, if so
authorized, FOR the persons named below as directors of the Company, each of
whom has served as a director of the Company for the periods so indicated. Each
such person is to be elected to hold office until the next succeeding Annual
Meeting of Stockholders and until his successor is duly elected and qualified.
Management of the Company is not aware of any reason why any of the nominees
will not be able to serve. If a nominee should subsequently become unavailable
for election, the persons voting the accompanying proxy may, in their sole
discretion, vote FOR such substitute nominee the present Board of Directors may
recommend.

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Name Age Principal Positions with the Company Director Since
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C. Dean McLain 48 Chairman of the Board of Directors
of the Company 1993

Robert M. Rubin 61 Director of the Company 1992

Dr. Seymour Kessler 70 Director of the Company 2000

Allen Perres 53 Director of the Company 2000

Irwin Pearl 59 Director of the Company 2001
- --------------------------------------------------------------------------------

C. DEAN MCLAIN. Mr. McLain has served as President, Chief Executive Officer, and
a director of the Company since March 7, 1993. Mr. McLain was elected Chairman
of the Board of Directors effective August 1, 1998. From March 1, 1993 through
June 13, 1995, Mr. McLain served as Executive Vice President of AUGI. Mr. McLain
has served on the Board of Directors of AUGI since March 7, 1994. From January
1990 through January 1993, Mr. McLain served as Manager of Privatization of Case
Corporation.

ROBERT M. RUBIN. Mr. Rubin has been the Chief Executive Officer of American
United Global, Inc. ("AUGI"), an approximately 35.9% stockholder of the
Company', since October 1990, and also served as

Chairman of AUGI from October 1990 to present. Mr. Rubin served as the Chairman
of the Board of Directors of the Company from November 20, 1992 to August 1,
1998. Mr. Rubin is also a director of Medimerge, Inc. Mr. Rubin was Chairman of
the Board of ERD Waste Technology, Inc., a diversified waste management public
company specializing in the management and disposal of municipal solid waste,
industrial, and commercial non-hazardous waste and hazardous waste. ERD Waste
Technology filed for Chapter 11 bankruptcy reorganization September 30, 1997.
Mr. Rubin also served as Chairman of IDF International Inc., which is no longer
in business, and was a director of Help at Home, Inc. through 2000.

DR. SEYMOUR KESSLER. Dr. Kessler was elected a Director of the Company in 2000.
He has also been a partner at RKP Capital Partners since 1996 and serves as a
Director of Magna Labs. Dr. Kessler served as President & C.E.O. of Princeton
Dental Management Corp. (one of the nation's first home health care companies).
He has also served as Vice Chairman of the Board of Peterson Bank, Chairman of
the Board of First National Bank of Wheaton and Chairman of the Executive and
Loan Committees for First National Bank in Lincolnshire.

ALLEN PERRES. Mr. Perres was elected a Director of the Company in 2000. He has
also been a managing partner at RKP Capital Partners since 1996 and serves as a
Director of American United Global International. Mr. Perres was a co-founder
and principal of RealCorp., Inc. a commercial real estate investment company.

IRWIN PEARL. Mr. Pearl was appointed as a Director in July 2001. Mr. Pearl has
been the Chief Operating Officer of E-GlobalNet Inc. since 1997. He was
President and a Director of PhaseOut of America from 1993 to 1997. Mr. Pearl was
Executive Vice-President and a Director of Aqua Sciences International from 1985
to 1992.

Board Committees and Attendance Records

The Company's Audit and Compensation Committee currently consists of Allan
Perres, Seymour Kessler and Irwin Pearl. None of Messr. Perres, Kessler, or
Pearl are officers or employees of the Company and none have served in such
capacities with the Company in the past.

During the 2000 Fiscal Year, there was one formal meeting of the Board of
Directors of the Company. All of the then directors were in attendance. In
addition, the Board of Directors took 8 actions by unanimous written consent of
Directors in lieu of a meeting.

During the 2001 Fiscal Year, there were two formal meeting of the Board of
Directors of the Company. All of the then directors were in attendance. In
addition, the Board of Directors took 4 actions by unanimous written consent of
Directors in lieu of a meeting.

Audit Committee Report

The Board of Directors has maintained an Audit Committee comprised of two
of the Company's outside directors. With the addition of the third member, the
Board of Directors and the Audit Committee believe that the Audit Committee's
member composition will satisfy the rule of the National Association of
Securities Dealers, Inc. ("NASD") that governs audit committee composition, Rule
310(c)(26)(B)(i), including the requirement that audit committee members all be
"independent directors" as that term is defined by NASD Rule 4200(a)(15).

In accordance with its written charter adopted by the Board of Directors
(set forth in Appendix "A" to this proxy statement), the Audit Committee assists
the Board of Directors with fulfilling its oversight responsibility regarding
the quality and integrity of the accounting, auditing and financial reporting
practices of the Company. In discharging its oversight responsibilities
regarding the audit process, the Audit Committee:

(1) reviewed and discussed the audited financial statements with
management;

(2) discussed with the independent auditors the material required to be
discussed by Statement on Auditing Standards No. 61; and

(3) reviewed the written disclosures and the letter from the independent
auditors required by the Independence Standards Board's Standard No. 1, and
discussed with the independent auditors any relationships that may impact their
objectivity and independence.

Based upon the review and discussions referred to above, the Audit
Committee recommended to the Board of Directors that the audited financial
statements be included in the Company's Annual Report on Form 10-K for the
fiscal year ended July 31, 2000, as amended and filed with the Securities and
Exchange Commission.

Based upon the review and discussions referred to above, the Audit Committee
recommended to the Board of Directors that the audited financial statements be
included in the Company's Annual Report on Form 10-K for the fiscal year ended
July 31, 2001, as amended and filed with the Securities and Exchange Commission.

Compensation Committee Report

Proxy disclosure rules require the Company to report certain relationships
involving the Company in which members of the Compensation Committee have a
direct or indirect material interest. Also required is disclosure of
interlocking relationships among Compensation Committee members and those
executive officers of the Company, if any, who also serve as members of
Compensation Committees or executive officers at other companies. The purpose of
these requirements is to allow shareholders to assess the independence of the
Company's Compensation Committee members in making executive compensation
decisions and recommendations.

Formation

The Company's Compensation Committee was formed on June 9, 2000 and its
mandate is to assist the Board in the discharge of its fiduciary
responsibilities relating to the fair and competitive compensation of the
employees of the Company, including: (i) the review and approval of the
Company's compensation philosophy; (ii) the review and approval of compensation
programs, plans and awards; (iii) administration of the Company's short- and
long-term incentive plans and other stock or stock-based plans, and; (iv) to
issue an annual report on executive compensation for inclusion in the Company's
proxy statement.

Insider Participation and Interlocks

While the Company has had transactions with companies and firms with which
certain members of the Compensation Committee are, or at some point during
fiscal years 2001 and 2000 were, affiliated as an officer and/or director, there
are no such relationships in which members of the Committee have a direct or
indirect material interest. In addition, there are no interlocking relationships
of the nature described above involving members of the Compensation Committee.

Director and Executive Compensation

Existing executive compensation agreements were entered into on July 26,
2000. For information regarding these agreements, please see "Employment
Contracts with Named Executive Officers".

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF
THE ABOVE-LISTED SLATE OF DIRECTOR-NOMINEES

RATIFICATION OF THE ISSUANCE OF 600,000 SHARES OF THE COMPANY'S
COMMON STOCK TO THE RUBIN FAMILY IRREVOCABLE STOCK TRUST

The Company's Board of Directors has unanimously approved the issuance of
600,000 shares of the Company's Common Stock to the Rubin Family Irrevocable
Stock Trust.

The issuance of 600,000 shares of the Company's common stock to the Rubin
Family Irrevocable Stock Trust is in connection with the role Mr. Rubin played
in negotiating a merger transaction which was contemplated by and between the
Company and eMobile, Inc. (the "EMI transaction"). Mr. Rubin is both a director
and consultant to the Company. When the Board determined to explore the prospect
of acquiring or combining with a high-technology company as a means of
increasing its shareholders' value in the Company, Mr. Rubin on behalf of the
Company, having had previous experience with start-up high-technology companies,
reviewed many business plans of high technology companies and met or spoke with
representatives of such companies. Mr. Rubin met with representatives of EMI and
introduced such representatives to the Company. Mr. Rubin also played an active
role in negotiating the terms of the EMI transaction. The EMI transaction is now
terminated.

The issuance of 600,000 shares of the Company's common stock will not
increase Mr. Rubin's beneficial ownership of the Company's common stock because
he will disclaim beneficial ownership of such shares and will not, pursuant to
Rule 13d3, be deemed the beneficial owner of such shares. Mr. Rubin has assigned
his interest in the stock to the Rubin Family Irrevocable Stock Trust. Mr. Rubin
does not directly or indirectly control the Rubin Family Irrevocable Stock
Trust. The Trustees of the Rubin Family Irrevocable Stock Trust are Marjorie
Rubin, Mr. Rubin's wife and Robert Schulman, an unrelated individual. Mr. Rubin
will not share any voting or investment power over the shares that will be held
by the Rubin Family Irrevocable Stock Trust. With the issuance of the 600,000
shares of common stock of the Company to the Rubin Family Irrevocable Stock
Trust, the aggregate voting control of the Company held by Robert Rubin, the
Rubin Family Irrevocable Stock Trust, to which Mr. Rubin disclaims beneficial
ownership, and AUGI is 63.1% of the issued and outstanding stock of the Company.
Such issuance will not have a dilutive effect on the earnings per common share
of the Company. However, it will result in an immediate dilution in the net
tangible book value per share of approximately $.33. The common stock has no
preemptive rights.

As part of the terminated eMobile merger transaction and for consulting
services rendered, the Board of Directors has determined that it is in the best
interest of the Company to issue 600,000 shares of the Company's Common Stock to
the Rubin Family Irrevocable Stock Trust.

THE BOARD OF DIRECTORS RECOMMENDS RATIFICATION OF THE ISSUANCE OF 600,000
SHARES OF THE COMPANY'S COMMON STOCK TO THE RUBIN FAMILY IRREVOCABLE
STOCK TRUST

RATIFICATION OF THE ISSUANCE TO DR. SEYMOUR KESSLER AND ALLEN PERRES OF
OPTIONS TO PURCHASE 25,000 SHARES OF COMMON STOCK OF THE COMPANY

The Company's Board of Directors has unanimously approved the issuance of
options to purchase 25,000 shares of the Company's Common Stock to each of Dr.
Seymour Kessler and Allen Perres.

The issuance to each of Allen Perres and Dr. Seymour Kessler of options to
purchase 25,000 shares of the Company's Common Stock is pursuant to the
Company's 1995 Stock Option Plan and for services rendered as directors of the
Company.

THE BOARD OF DIRECTORS RECOMMENDS RATIFICATION OF THE ISSUANCE
TO DR. SEYMOUR KESSLER AND ALLEN PERRES OF OPTIONS TO PURCHASE 25,000 SHARES
OF COMMON STOCK OF THE COMPANY

PENDING TRANSACTIONS

On May 14, 2001, the Company entered into a Merger Agreement (the "Merger
Agreement") with SupplyPoint Inc. ("SupplyPoint") which closed as of May 4,
2001, subject to certain conditions including, but not limited to, the consent
of the Company's secured lenders, due diligence, and shareholder approval.
Although not a condition of closing, the Merger Agreement contemplated certain
financing to be obtained pursuant to a private placement offering (the "Private
Offering"). Management believes the inability to raise additional funds could
also delay the completion of the transaction. The requisite financing has not
been obtained as of the date herein. Although, as discussed below, the EMAC
transaction has expired without closing and the Company has continued to pay
down its debt to Deutsche Financial Services, the Company's overall business has
been reduced as a result of economic conditions. Accordingly, Management does
not believe that the Company will obtain consent to the SupplyPoint transaction
at this time. Therefore, Management cannot estimate when, or if, such
transaction will occur. If the conditions are met and the Company raises
requisite funds, the Company will schedule a Special Shareholders' Meeting to
obtain shareholder approval of the Merger Agreement.

On September 18, 2001, the Company announced that it had entered into an
agreement to sell substantially all of assets and liabilities of the equipment
distribution business owned by Western Power & Equipment Corp. (Oregon), a
wholly owned subsidiary, to e*machinery.net, inc. (EMAC) for $500,000 in cash, a
seven-year, 7% promissory note for $700,000, and 1.2 million shares of EMAC
restricted common stock. Closing was subject to a number of conditions
including, but not limited to, due diligence, approval

of Case Corporation, and Deutsche Financial Services. On November 1, 2001 the
Company and EMAC entered into an agreement to extend the due diligence and
escrowed funds deadlines in the Asset Purchase Agreement until February 28,
2002. The agreement with EMAC was conditioned upon EMAC depositing $5,500,000
into escrow by February 28, 2002. As of September 30, 2001, EMAC's financial
statements listed cash and net equity of $114,000 and $614,000, respectively. As
of March 1, 2002, the Asset Purchase Agreement expired due to EMAC's failure to
meet the escrowed funds deadline, the Company's notice to EMAC with respect to
such failure and EMAC's failure to cure same. The Company is continuing
discussions with EMAC regarding potential business relationships. However, there
is no assurance that such discussions will result in any business relationship
or transactions with EMAC, or that any such relationship or transaction
undertaken will be profitable to the Company.

Neither e*Machinery nor SupplyPoint are deemed to be affiliates of the
Company pursuant to Rule 144 of the Securities Act of 1933, as amended.

CREDIT FACILITY

The Company has a $50 million inventory flooring and operating line of
credit through Deutsche Financial Services ("DFS"). Amounts are advanced against
the Company's assets, including accounts receivable, parts, new equipment,
rental fleet, and used equipment. The agreement was amended as of October 31,
2000 with terms maturing December 31, 2001 and with a floating rate based on
prime with rates between 0.75% under prime to 2.25% over prime depending on the
amount of total debt leverage of the Company. This amendment waived all prior
defaults under the agreement and established revised financial covenants to be
measured at the Company's second and fourth quarters. In addition, the amendment
included several, periodic mandatory reductions in the credit limit. The Company
expects to use this borrowing facility to lower flooring related interest
expense by using advances under such line to finance inventory purchases in lieu
of financing provided by suppliers, to take advantage of cash purchase discounts
from its suppliers, to provide operating capital for further growth, and to
refinance some its acquisition related debt at a lower interest rate. Borrowings
are collateralized by the Company's assets, including accounts receivable, parts
inventory, new and used equipment inventory and rental fleet equipment. As of
January 31, 2002, approximately $48,285,000 was outstanding under the DFS credit
facility.

As of October 31, 2001, the Company was in technical default of the
financial covenants in the DFS credit facility. The Company has not received a
waiver of such defaults from DFS and although DFS has not called the loan, there
is no guarantee that it will not do so in the future.

The Company currently is in negotiations with DFS to extend or renew the credit
facility beyond its expiration on December 28, 2001. The Company believes that
it can reach agreement with DFS to extend or renew the agreement on reasonably
acceptable terms prior to July 31, 2002. However, in the event that the Company
cannot reach a reasonably acceptable agreement to extend or renew the expired
DFS credit facility, DFS could demand repayment of the entire outstanding
balance at anytime. In such case, the Company would be unable to repay the
entire DFS outstanding balance. There can be no assurance that the Company will
be able to successfully negotiate an acceptable extension or renewal of the
expired DFS credit facility or that DFS will not call the balance due at
anytime.

MANAGEMENT REMUNERATION

Summary Compensation Table

The following table sets forth the amount of all compensation paid during
each of the last three fiscal years to the Chief Executive Officer and to each
of the Company's other executive officers for services in all capacities to the
Company.

Long-Term
Compensation
Annual Compensation Awards
-------------------------------------------------- ------------
Other Annual Number of All Other
Name and Principal Position Year Salary Bonus Compensation Options Compensation
- --------------------------- ---- -------- ------ ------------ -------- ------------

Robert M. Rubin 2001 0 0 0 0 $200,000
Consultant; former Chairman(1) 2000 $150,000 0 0 500,000 0
1999 150,000 0 0 0 0
1998 150,000 0 0 100,000 0

C. Dean McLain 2001 $387,474 0 1,369 0 31,199
President, CEO, Chairman of the 2000 322,502 0 11,668 500,000 31,199
Board(2) 1999 300,425 0 7,281 0 22,596
1998 280,000 68,935 40,000 425,000 22,596

Mark J. Wright 2001 $173,265 0 9,000 0 7,718
Vice President of Finance and CFO 2000 157,674 0 5,040 100,000 6,114
1999 132,588 20,000 4,680 0 7,778
1998 98,958 15,000 0 98,500 0

(1) The Company's employment agreement with Mr. Rubin, pursuant to which Mr.
Rubin was paid a base salary of $150,000 plus an annual bonus, expired
July 31, 1998. See "Employment, Consulting and Incentive Compensation
Agreements" below. Mr. Rubin resigned as Chairman effective August 1,
1998. The Company entered into a consulting agreement with Mr. Rubin,
effective August 1, 1998 and expiring August 1, 2000, pursuant to which
Mr. Rubin was paid a salary of $150,000 plus all authorized business
expenses. The Company entered into a new seven (7) year consulting
agreement with Mr. Rubin effective August 1, 2000 which pays Mr. Rubin
compensation of $200,000 plus all authorized business expenses in the
first year, followed by a 3% raise in each successive year of the
agreement. See "Employment, Consulting and Incentive Compensation
Agreements," below.

(2) Mr. McLain joined the Company in March 1993, when he became its Chief
Executive Officer. On July 31, 1995, Mr. McLain was permitted to and did
purchase from AUGI 6,000 shares of AUGI's common stock at a price of $.01
per share. On August 1, 1995, the closing price for a share of AUGI's
common stock as reported by NASDAQ was $4.875. Effective as of August 1,
1995, Mr. McLain's employment agreement with the Company was terminated
and he entered into an amended employment agreement expiring July 31,
2005. The base salary under this employment agreement commenced at
$250,000 for fiscal 1996, and rises to $300,000 for fiscal 2000. His
employment agreement also calls for Incentive Bonuses under certain
circumstances. Effective as of August 1, 2000 Mr. McLain's employment
agreement with the Company was terminated and he entered into a new
employment agreement expiring July 31, 2007. The base salary under this
employment agreement commences at $390,000 and increases yearly based upon
the average percentage increase in salary for all employees of Employer
for the current fiscal year

over the previous fiscal year. His employment agreement also calls for
Incentive Bonuses under certain circumstances. See "Employment, Consulting
and Incentive Compensation Agreements" below. Mr. McLain became Chairman
effective August 1, 1998.

During the three year period ended July 31, 2001, the Company did not grant any
restricted stock awards or stock appreciation rights. Additionally, all of the
Company's group life, health, hospitalization, medical reimbursement or
relocation plans, if any, do not discriminate in scope, terms or operation, in
favor of the Named Executive Officers and are generally available to all
salaried employees. Further, no Named Executive Officer received, in any of the
periods specified in the Summary Compensation Table, perquisites and other
personal benefits, securities or property in an aggregate amount in excess of
the lesser of $50,000 or 10% of the total salary and bonus reported for the
Named Executive Officer in the fiscal year in which such benefits were received,
and no single type of perquisite or other personal benefits exceeded 25% of the
total perquisites and other benefits reported for the Named Executive Officer in
the applicable fiscal year.

Option Grants Table

The following table sets forth (a) the number of shares underlying options
granted to each Named Executive Officer during the 2000 and 2001 Fiscal Years,
(b) the percentage the grant represents of the total number of options granted
to all Company employees during the 2000 and 2001 Fiscal Years, (c) the per
share exercise price of each option, (d) the expiration date of each option, and
(e) the potential realized value of each option based on: (i) the assumption of
a five (5%) percent annualized compounded appreciation of the market price of
the Common Stock from the date of the grant of the subject option to the end of
the option term, and (ii) the assumption of a ten (10%) percent annualized
compounded appreciation of the market price of the Common Stock from the date of
the grant of the subject option to the end of the option term.

Option Grants in Last Fiscal Year

The following table provides information regarding individual grants of
stock options to each executive officer in fiscal 2000 and 2001.

Potential Realizable
Individual Grants Value at Assumed
- ----------------------------------------------------------------------------------- Annual Rates of Stock
Price Appreciation for % of Total Options
Granted to Exercise Option Term
Employees Options in Fiscal of Base Expiration
Name Granted Year Price Date 5% 10%
- --------------- ------- ---------- -------- ----------- ---- ----

C. Dean McLain 0

Robert M. Rubin 0

Mark J. Wright 0

Seymour Kessler 0

Allen Perres 0

Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values

The following table provides information concerning the exercise of stock
options during the fiscal 2000 and 2001 by each executive officer and the fiscal
year-end value of unexercised options held by that officer.

Number of Unexercised Value of Unexercised
Options at In-the-Money Options at
Shares Fiscal Year-End Fiscal Year-End
Acquired on Value ------------------------- -------------------------
Name Exercise Realized Exercisable/Unexercisable Exercisable/Unexercisable
- --------------- ----------- -------- ------------------------- -------------------------

C. Dean McLain 0 0 500,000 N/A

Robert M. Rubin 0 0 500,000 N/A

Mark J. Wright 0 0 100,000 N/A

Seymour Kessler 0 0 0 N/A

Allen Perres 0 0 0 N/A

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to market risk from changes in interest rates.
Market risk is the potential loss arising from adverse changes in market rates
and prices such as interest rates. For fixed rate debt, interest rate changes
affect the fair value of financial instruments but do not impact earnings or
cash flows. Conversely for floating rate debt, interest rate changes generally
do not affect the fair market value but do impact future earnings and cash
flows, assuming other factors are held constant. At July 31, 2000, the Company
had variable rate floor plan payables, notes payable, and long-term debt of
approximately $82.4 million. Holding other variables constant, the pre-tax
earnings and cash flow impact for the next year resulting from a one percentage
point increase in interest rates would be approximately $0.8 million.

At July 31, 2001, the Company had variable rate floor plan payables, notes
payable, and long-term debt of approximately $67.8 million. Holding other
variables constant, the pre-tax earnings and cash flow impact for the next year
resulting from a one percentage point increase in interest rates would be
approximately $0.7 million. The Company's policy is not to enter into
derivatives or other financial instruments for trading or speculative purposes.

The Company's policy is not to enter into derivatives or other financial
instruments for trading or speculative purposes.

The following line graph compares the yearly percentage change in the Company's
cumulative total stockholder return on its common stock since July 31, 1996 as
compared to the Nasdaq Stock Market and the S&P Machinery (Diversified) Index.

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
AMONG WESTERN POWER & EQUIPMENT CORP.,
THE NASDAQ STOCK MARKET (U.S.) INDEX
AND THE S & P MACHINERY (DIVERSIFIED) INDEX

[LINE GRAPH OMITTED]

* $100 INVESTED ON 7/31/1996 IN STOCK OR INDEX--
INCLUDING REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDING JULY 31.

[The following table was depicted as a line graph in the printed material.]

Cumulative Total Return
------------------------------------------------------------------
7/96 7/97 7/98 7/99 7/00 7/01

WESTERN POWER & EQUIPMENT CORP 100.00 108.57 131.43 55.71 114.29 10.51
NASDAQ STOCK MARKET (U.S.) 100.00 147.54 173.63 248.14 353.41 189.68
S & P MACHINERY (DIVERSIFIED) 100.00 162.43 134.31 157.34 125.02 150.92

* Assumes $100 invested on July 31, 1995 in the Company's common stock or on
July 31, 1995 in the Nasdaq Stock Market and S&P Machinery (Diversified) Index,
including reinvestment of dividends. Fiscal year ending July 31.

The corporations comprising the S&P Machinery (Diversified) Index are as
follows: Case Corporation, Caterpillar, Inc., Cincinnati Milicron, Cooper
Industries, Deere & Co., Dover Corporation, Harnischfeger, Ingersoll Rand
Corporation, NACCO Industries, Inc. (class A), and Timken.

Begin: 7/31/96
Period End: 7/31/01
End: 7/31/01

Beginning
Transaction Closing No. Of Dividend Dividend Shares Ending Cum. Tot.
Date* Type Price** Shares*** per Share Paid Reinvested Shares Return
- ----- ----------- ------- --------- --------- -------- ---------- ------ ---------

31-Jul-96 Begin 4.375 22.86 22.857 100.00

31-Jul-97 Year End 4.750 22.86 22.857 108.57

31-Jul-98 Year End 5.750 22.86 22.857 131.43

31-Jul-99 Year End 2.438 22.86 22.857 55.71

31-Jul-00 Year End 5.000 22.86 22.857 114.29

31-Jul-01 End 0.460 22.86 22.857 10.51

* Specified ending dates or ex-dividends dates.
** All Closing Prices and Dividends are adjusted for stock splits and stock
dividends.
*** Begin Shares' based on $100 investment.

Director's Remuneration

Each director, not otherwise a full time employee of the Company, is
eligible to receive $5,000 per quarter, along with the reimbursement of their
reasonable expenses incurred on the Company's behalf.

Employment, Consulting and Incentive Compensation Agreements

Upon completion of the Company's 1995 initial public offering, the Company
entered into an employment agreement with Mr. Rubin, effective as of June 13,
1995, that expired July 31, 1998. Pursuant to this agreement, Mr. Rubin served
as Chairman of the Board of the Company and received an annual base salary of
$150,000 plus bonuses if certain conditions were met. Effective August 1, 1998,
the Company entered into a new two-year agreement with Mr. Rubin. Under the
terms of this agreement, Mr. Rubin no longer served as Chairman, but provided
consulting services to the Company. He received an annual fee of $200,000 plus
all authorized business expenses. The Company then entered into a new seven (7)
year consulting agreement with Mr. Rubin effective August 1, 2000 paying him
$200,000 plus all authorized business expenses in the first year, followed by a
3% raise in each successive year of the contract.

On March 5, 1996, Mr. Rubin received options to acquire 150,000 shares of
Common Stock exercisable at $4.50 per share and vesting 33.3 percent on March 5,
1997 and 33.3 percent on each succeeding March 5 until all were vested. In
August 1996, Mr. Rubin received options to acquire 50,000 shares of Common
Stock, exercisable at $4.375 per share and vesting 50 percent on each of the
first and second anniversaries of the date of grant. In November 1997, Mr. Rubin
received options to acquire 100,000 shares of Common Stock, exercisable at
$4.5625 per share which were all vested immediately.

On August 1, 1996, Mr. McLain entered into an amended employment agreement
with the Company that was to expire July 31, 2005. Pursuant to that agreement,
Mr. McLain agreed to serve as President and Chief Executive Officer of the
Company, and was to receive an annual base salary of $250,000 through the end of
fiscal 1996 and $265,000 in fiscal 1997. The Company and Mr. McLain mutually
agreed to terminate the existing agreement and entered into a new 10-year
employment agreement, effective January 1, 1998. The 1998 agreement provides for
an annual base salary, payable monthly, of $280,000 through July 31, 1998 and
$290,000 through December 31, 1998. Under the terms of this new agreement, Mr.
McLain's salary was to be increased each January 1st by the average percentage
increase in pay for all employees during the preceding calendar year. In
addition, Mr. McLain is entitled to receive a bonus payment equal to 5 percent
of the consolidated pre-tax income in excess of $1,750,000 in each fiscal year
covered under the employment agreement (the "Incentive Bonus"). The maximum
amount of the Incentive Bonus payable under the new agreement were not to exceed
$150,000 in any year through 2002, inclusive, and shall not exceed $200,000 in
fiscal years 2003 through 2007, inclusive. Mr. McLain did not receive a bonus
for the Company's 1999 fiscal year under the terms of his employment agreement.
As used in Mr. McLain's employment agreement, the term "consolidated pre-tax
income" is defined as consolidated net income of the Company and any
subsidiaries of the Company subsequently created or acquired, before the
Incentive Bonus, income taxes and gains or losses from disposition or purchases
of assets or other extraordinary items.

Under the terms of the employment agreement, in any year that Mr. McLain
received the maximum bonus, he was entitled to receive options to purchase
25,000 additional shares of the Company's Common

Stock at the market price per share on the date the options were issued that
would vest one year from such date. Mr. McLain's employment agreement also
provided for fringe benefits customary for senior executive officers in the
industry in which the Company operates, including medical coverage, excess life
and disability insurance benefits, and the use of an automobile supplied by the
Company in addition to an $800 per month auto allowance. The aggregate value of
all of the fringe benefits was approximately $40,000 per year.

Effective as of August 1, 2000 Mr. McLain's employment agreement with the
Company was terminated and he entered into a new employment agreement expiring
July 31, 2007. The base salary under this employment agreement commences at
$390,000 and increases yearly based upon the average percentage increase in
salary for all employees of Employer for the current fiscal year over the
previous fiscal year. His employment agreement also calls for Incentive Bonuses
under certain circumstances. Mr. McLain did not receive a bonus for the
Company's 2000 fiscal year.

Compensation Committee Interlocks and Insider Participation

The Compensation Committee consists of Dr. Kessler, Mr. Perres and Mr.
Pearl. There are no interlocking relationships, as described by the Securities
and Exchange Commission, between the Compensation Committee members. Mr. McLain,
the Chairman of the Board of Directors since August 1998, as well as its
President and CEO, and Mr. Rubin, the Chairman of the Board of Directors before
Mr. McLain, and currently a director and consultant for the Company,
participated in all discussions and decisions regarding salaries and incentive
compensation for all employees and consultants to the Company, except that they
were each excluded from discussions regarding their own salary.

CERTAIN TRANSACTIONS

Set forth below is a description of certain transactions between the
Company and its directors, executive officers and beneficial owners of five
percent or more of the outstanding Common Stock, or member of the immediate
family of any of the foregoing persons, as well as certain business
relationships between the Company and its directors, which occurred or existed
in the 2000 and 2001 Fiscal Years.

The real property and improvements used in connection with the Sacramento
Operations, and upon which the Sacramento Operation is located, were sold by
Case for $1,500,000 to the McLain-Rubin Realty Company, LLC ("MRR"), a Delaware
limited liability company the owners of which are Messrs. C. Dean McLain, the
President and a director of the Company, and Robert M. Rubin, the Chairman and a
director of the Company. Simultaneous with its acquisition of the Sacramento
Operation real property and improvements, MRR leased such real property and
improvements to the Company under the terms of a 20-year commercial lease
agreement dated March 1, 1996 with the Company paying an initial annual rate of
$168,000. As of October 1, 2000, the Company entered into a renegotiated 7-year
lease with an initial annual rate of $228,000. In addition to base rent, the
Company is responsible for the payment of all related taxes and other
assessments, utilities, insurance and repairs (both structural and regular
maintenance) with respect to the leased real property during the term of the
lease. The new lease qualifies for treatment as an operating lease.

On December 11, 1997, the real property and improvements used in
connection with Case's Yuba City, California operation, was purchased by
McLain-Rubin Realty Company III, LLC ("MRR III"), a Delaware limited liability
company, the owners of which are Messrs. C. Dean McLain, the President and a
director of

the Company, and Robert M. Rubin, the Chairman and a director of the Company.
Simultaneous with its acquisition of the Yuba City, California real property and
improvements, MRR III leased such real property and improvements to the Company
under the terms of a 20-year commercial lease agreement dated effective December
11, 1997 with the Company paying an initial annual rate of $54,000. As of
October 1, 2000, the Company entered into a renegotiated 7-year lease with an
initial annual rate of $66,000. In addition to base rent, the Company is
responsible for the payment of all related taxes and other assessments,
utilities, insurance, and repairs (both structural and regular maintenance) with
respect to the leased real property during the term of the lease. The new lease
qualifies for treatment as an operating lease.

In February 1999, the real property and improvements used in connection
with the Company's Sparks, Nevada operation and upon which such operation is
located, were sold to McLain-Rubin Realty, L.L.C. (MRR) under the terms of a
real property purchase and sale agreement. MRR is a Delaware limited liability
company the owners of which are Messrs. C. Dean McLain, the President and
Chairman of the Company, and Robert M. Rubin, a director of the Company. The
sale price was $2,210,000 in cash at closing. Subsequent to the closing of the
sale, the Company entered into a 20-year commercial lease agreement with MRR for
the Sparks, Nevada facility at an initial rental rate of $252,000 per year. The
lease is a net lease with payment of insurance, property taxes and maintenance
costs paid by the Company. The sale resulted in a deferred gain which will be
amortized over the life of the lease pursuant to generally accepted accounting
principles. As of October 1, 2000, the Company entered into a renegotiated
7-year lease with an initial annual rate of $276,000. The new lease qualifies
for treatment as an operating lease and the remainder of the deferred gain which
was previously being amortized over the life of the cancelled lease was all
recognized in the first quarter of fiscal year 2001.

On April 1, 2000, the Company entered into a lease with McLain-Rubin
Realty Company II, LLC ("MRR II"), a Delaware limited liability company, the
owners of which are Messrs. C. Dean McLain, the President and a director of the
Company, and Robert M. Rubin, the Chairman and a director of the Company, for a
5-year lease on its Vancouver, Washington corporate office with an annual rate
of $98,000. In addition to base rent, the Company is responsible for the payment
of all related taxes and other assessments, utilities, insurance, and repairs
(both structural and regular maintenance) with respect to the leased real
property during the term of the lease. The lease qualifies for treatment as an
operating lease.

OTHER BUSINESS

As of the date of this Proxy Statement, the Board of Directors is not
aware of any other matter, which is to be presented for action at the Annual
Meeting. If any matter other than those described above (i.e., election of
directors and the issuance of 600,000 shares of common stock of the Company to
the Rubin Family Irrevocable Stock Trust) does properly come before the Annual
Meeting, the individuals named in the enclosed Proxy will, unless indicated
otherwise, vote the shares represented thereby in accordance with their best
judgment.

AUDITORS FOR FISCAL 2001

Upon the recommendation of the Company's Audit Committee, the Board selected
PricewaterhouseCoopers LLP, independent public accountants, as auditors of the
Company for the fiscal year ending July 31, 2001. PricewaterhouseCoopers LLP
acted as independent certified public accountants for the Company since 1993.

Representatives of PricewaterhouseCoopers LLP are not expected to be present at
the Annual Meeting.

On December 6, 2001 the Board of Directors of the Company dismissed its
independent accountants, PricewaterhouseCoopers LLP. The reports of
PricewaterhouseCoopers LLP on the consolidated financial statements of the
Company as of July 31, 2001 and 2000 and for the years then ended contained no
adverse opinions or disclaimer of opinion and were not otherwise qualified or
modified as to uncertainty, audit scope, or accounting principles, except that
the reports of PricewaterhouseCoopers LLP for each of the past two fiscal years
contained an explanatory paragraph expressing substantial doubt regarding the
Company's ability to continue as a going concern. In connection with its audits
of the consolidated financial statements of the Company as of July 31, 2001 and
2000 and for the years then ended, and during the interim period between August
1, 2001 and December 6, 2001, there have been no disagreements with
PricewaterhouseCoopers LLP on matters of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure, which
disagreements if not resolved to the satisfaction of PricewaterhouseCoopers LLP
would have caused them to make reference thereto in their report on the
consolidate financial statements for such years.

NEW INDEPENDENT ACCOUNTANTS

The Company engaged Moss Adams LLP as its new independent accountants as
of December 5, 2001. During the two fiscal years and the subsequent interim
period prior to the engagement of Moss Adams LLP on December 5, 2001, the
Company did not consult with Moss Adams LLP regarding the application of
accounting principles to any specific transaction, whether completed or
proposed; on the type of audit opinion that might be rendered on the Company's
financial statements; or on any matter that was either the subject of a
disagreement or a reportable event.

AUDIT FEES

PricewaterhouseCoopers LLP's fees for the Company's fiscal 2001 annual audit and
quarterly financial statement reviews were approximately $88,558.

FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES

PricewaterhouseCoopers LLP did not render any service to the Company in fiscal
2001 with respect to financial information systems design or implementation.

ALL OTHER FEES

PricewaterhouseCoopers LLP's fees for all other services rendered to the Company
in fiscal 2001 were approximately $8,100 for benefit plan auditing.

ADDITIONAL INFORMATION

Annual Report

Upon the written request of any stockholder of the Company, as record or
beneficial owner, the Company will provide to such stockholder a copy of the
Company's Annual Reports on Form 10-K for its fiscal year ended July 31, 2001
and fiscal year ended July 31, 2000, including the financial statements and the
schedules thereto, filed with the Securities and Exchange Commission. Any
request should be directed to the Corporate Secretary, at the Company's place of
business listed above. There will be no charge for the Form 10-Ks, unless one or
more exhibits thereto are requested, in which event the Company's reasonable
expenses of furnishing such exhibits may be charged.

Future Stockholder Proposals

From time to time, stockholders present proposals, which may be the proper
subject for inclusion in the Company's Proxy Statement and for consideration at
its annual meetings of stockholders. To be considered, proposals must be
submitted on a timely basis. Proposals for the next Annual Meeting of
Stockholders of the Company must be received by the Company no later than
September 10, 2002 for inclusion, if proper, in next year's proxy solicitation
materials.

How We Solicit Proxies

The Company will pay all of the costs of preparing, assembling and mailing
the form of Proxy, Proxy Statement and other materials which may be sent to the
stockholders in connection with this solicitation, as well as any costs of
soliciting proxies in the accompanying form. Solicitation will be made by mail,
and officers and regular employees of the Company may also solicit proxies by
telephone, telegraph or personal interview for which they will receive no
additional remuneration. The Company expects to request brokers and nominees who
hold stock in their names to furnish this proxy material to their customers and
to solicit proxies from them. The Company will reimburse such brokers and
nominees for their out-of-pocket and reasonable clerical expenses in connection
therewith.

Certified Public Accountants

The firm of PricewaterhouseCoopers, LLP, independent auditors, served as
our auditors for the fiscal year ended July 31, 2001 and will not serve in that
capacity for the current fiscal year which will end on July 31, 2002. A
representative of PricewaterhouseCoopers is not expected to be present at our
Annual Meeting.

The firm of Moss Adams LLP, independent auditors, will serve as our
auditors for the fiscal year

ended July 31, 2002.

WHILE YOU HAVE THE MATTER IN MIND, PLEASE COMPLETE, SIGN AND RETURN THE ENCLOSED
PROXY CARD.

BY ORDER OF THE BOARD OF DIRECTORS,

Mark J. Wright, Secretary

PROXY PROXY

Western Power & Equipment Corp.
6407-B N.E. 117th Avenue, Vancouver, Washington 98662

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

KNOW ALL MEN BY THESE PRESENT, that the undersigned stockholder of Western Power
& Equipment Corp. (the "Company") hereby constitutes and appoints C. Dean McLain
and Mark J. Wright and each of them, the true and lawful attorneys, agents and
proxies of the undersigned, each with full power of substitution to vote all of
the shares of stock of the Company that the undersigned would be entitled, if
personally present, to vote at the meeting of stockholders of the Corporation to
be held on May 15, 2002 at 10:00 a.m. at the offices of Mintz & Fraade, P.C.,
488 Madison Avenue, Suite 1100, New York, NY 10022, and at any adjournment
thereof.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR:

1. Election of Directors:

For all nominees listed below (except as marked to the contrary below)

NOMINEES: C. Dean McLain, Robert M. Rubin, Dr. Seymour Kessler,
Allen Perres, Irwin Pearl

WITHHOLD AUTHORITY
to vote for all nominees listed above ___

INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided below.

------------------------------------------------------

2. To approve the issuance of 600,000 shares of common stock of the Company
to the Rubin Family Irrevocable Stock Trust.

For ___ Against ___ Abstain _______

3. To approve the issuance to each of Dr. Seymour Kessler and Allen Perres of
options to purchase 25,000 shares of common stock of the Company.

For ___ Against ___ Abstain _______

Dated:__________________, 2002