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


                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549
                                -----------------


                                    FORM 10-Q


(Mark One)
       [X]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
             SECURITIES EXCHANGE ACT OF 1934
                   For the Quarter Ended March 31, 2002
                                    OR
       [ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
             THE SECURITIES EXCHANGE ACT OF 1934
                   For the transition period from    to
                      Commission File Number 0-27460



                     PERFORMANCE TECHNOLOGIES, INCORPORATED
             (Exact name of registrant as specified in its charter)

              Delaware                                16-1158413
  (State or other jurisdiction of        (I.R.S. Employer Identification No.)
   incorporation of organization)

  205 Indigo Creek Drive, Rochester, New York           14626
   (Address of principal executive offices)           (Zip Code)

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

       Registrant's telephone number, including area code: (585) 256-0200

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


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

         The number of shares outstanding of the registrant's common stock was
12,239,228 as of April 30, 2002.
     ---------------------------------------------------------------------





                                        1
<PAGE>

             PERFORMANCE TECHNOLOGIES, INCORPORATED AND SUBSIDIARIES

                                      INDEX


                                                                            Page

PART I.   FINANCIAL INFORMATION

Item 1.   Consolidated Financial Statements

            Consolidated Balance Sheets as of March 31, 2002
            (unaudited) and December 31, 2001                               3

            Consolidated Statements of Income For The Three Months
            Ended March 31, 2002 and 2001 (unaudited)                       4

            Consolidated Statements of Cash Flows For The Three
            Months Ended March 31, 2002 and 2001 (unaudited)                5

            Notes to Consolidated Financial Statements For The Three
            Months Ended March 31, 2002 (unaudited)                         6

Item 2.   Management's Discussion and Analysis of Financial Condition
          and Results of Operations                                         7


Item 3.   Quantitative and Qualitative Disclosures About Market Risk       12



PART II.  OTHER INFORMATION

Item 1.   Legal Proceedings                                                13

Item 6.   Exhibits and Reports on Form 8-K                                 13

Signatures                                                                 14



                                        2
<PAGE>


ITEM 1.         CONSOLIDATED FINANCIAL STATEMENTS

             PERFORMANCE TECHNOLOGIES, INCORPORATED AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS


                                     ASSETS


                                                     March 31,     December 31,
                                                       2002            2001
                                                   -------------  --------------
                                                    (unaudited)

Current assets:
  Cash and cash equivalents                         $26,972,000     $26,913,000
  Accounts receivable, net                            6,814,000       6,905,000
  Inventories, net                                    3,863,000       3,756,000
  Prepaid expenses and other                            324,000         359,000
  Deferred taxes                                        608,000         608,000
                                                   -------------  --------------
      Total current assets                           38,581,000      38,541,000

Property, equipment and improvements, net             2,419,000       2,465,000
Software development costs, net                       2,131,000       1,948,000
                                                   -------------  --------------
      Total assets                                  $43,131,000     $42,954,000
                                                   =============  ==============





                      LIABILITIES AND STOCKHOLDERS' EQUITY


Current liabilities:
  Accounts payable                                  $   689,000     $   417,000
  Income taxes payable                                  433,000         350,000
  Accrued expenses                                    2,447,000       3,046,000
                                                   -------------  --------------
      Total current liabilities                       3,569,000       3,813,000

Deferred taxes                                          799,000         799,000
                                                   -------------  --------------
      Total liabilities                               4,368,000       4,612,000
                                                   -------------  --------------

Stockholders' equity:
  Preferred stock - $.01 par value; 1,000,000
   shares authorized; none issued
  Common stock - $.01 par value; 50,000,000
   shares authorized; 13,260,038 shares issued          133,000         133,000
  Additional paid-in capital                         11,286,000      11,305,000
  Retained earnings                                  40,632,000      40,239,000
  Treasury stock - at cost; 1,020,810 and
   1,024,547 shares held at March 31, 2002 and
   December 31, 2001, respectively                  (13,233,000)    (13,284,000)
  Accumulated other comprehensive loss                  (55,000)        (51,000)
                                                   -------------  --------------
      Total stockholders' equity                     38,763,000      38,342,000
                                                   -------------  --------------
      Total liabilities and stockholders' equity    $43,131,000     $42,954,000
                                                   =============  ==============



The  accompanying  notes are an integral  part of these  consolidated  financial
statements.


                                        3
<PAGE>


             PERFORMANCE TECHNOLOGIES, INCORPORATED AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                                   (unaudited)


                                                         Three Months Ended
                                                              March 31,
                                                       2002            2001
                                                   -------------  --------------

Sales                                                $6,407,000      $9,700,000
Cost of goods sold                                    2,652,000       3,809,000
                                                   -------------  --------------
Gross profit                                          3,755,000       5,891,000
                                                   -------------  --------------

Operating expenses:
  Selling and marketing                               1,063,000       1,510,000
  Research and development                            1,498,000       2,285,000
  General and administrative                            577,000         732,000
  Restructuring charge                                  163,000
                                                   -------------  --------------
      Total operating expenses                        3,301,000       4,527,000
                                                   -------------  --------------
Income from operations                                  454,000       1,364,000

Other income, net                                       116,000         355,000
                                                   -------------  --------------
Income before income taxes                              570,000       1,719,000

Provision for income taxes                              177,000         567,000
                                                   -------------  --------------
      Net income                                     $  393,000      $1,152,000
                                                   =============  ==============


Basic earnings per share                             $      .03      $      .09
                                                   =============  ==============

Diluted earnings per share                           $      .03      $      .09
                                                   =============  ==============



Weighted average number of common shares used
  in basic earnings per share                        12,238,095      12,474,014
Common equivalent shares                                313,542         452,832
                                                  --------------  --------------
Weighted average number of common shares used
  in diluted earnings per share                      12,551,637      12,926,846
                                                  ==============  ==============
















The  accompanying  notes are an integral  part of these  consolidated  financial
statements.


                                        4
<PAGE>

             PERFORMANCE TECHNOLOGIES, INCORPORATED AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (unaudited)


                                                         Three Months Ended
                                                              March 31,
                                                       2002            2001
                                                   -------------   -------------

Cash flows from operating activities:
 Net income                                          $  393,000      $1,152,000

 Non-cash adjustments:
   Depreciation and amortization                        401,000         326,000
   Other                                                 12,000           6,000

 Changes in operating assets and liabilities:
   Accounts receivable                                   79,000         636,000
   Inventories                                         (107,000)         62,000
   Prepaid expenses and other                            35,000         373,000
   Accounts payable and accrued expenses               (327,000)       (869,000)
   Income taxes payable                                  83,000         477,000
                                                   -------------   -------------
     Net cash provided by operating activities          569,000       2,163,000
                                                   -------------   -------------

Cash flows from investing activities:
 Purchases of property, equipment and improvements     (190,000)       (587,000)
 Capitalized software development costs                (352,000)       (368,000)
 Purchase of marketable securities                                       (5,000)
 Maturities of marketable securities                                 10,000,000
                                                   -------------   -------------
     Net cash (used) provided by
       investing activities                            (542,000)      9,040,000
                                                   -------------   -------------

Cash flows from financing activities:
 Exercise of stock options and warrants                  32,000          76,000
 Purchase of treasury stock                                          (6,449,000)
                                                   -------------   -------------
     Net cash provided (used) by
       financing activities                              32,000      (6,373,000)
                                                   -------------   -------------

     Net increase in cash and cash equivalents           59,000       4,830,000

Cash and cash equivalents at beginning of period     26,913,000      17,187,000
                                                   -------------   -------------

Cash and cash equivalents at end of period          $26,972,000     $22,017,000
                                                   =============   =============















The  accompanying  notes are an integral  part of these  consolidated  financial
statements.


                                        5
<PAGE>

             PERFORMANCE TECHNOLOGIES, INCORPORATED AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    FOR THE THREE MONTHS ENDED MARCH 31, 2002
                                   (Unaudited)



Note - A    The  unaudited  Consolidated  Financial  Statements  of  Performance
Technologies,  Incorporated and Subsidiaries  (the "Company") have been prepared
in  accordance  with  generally  accepted  accounting   principles  for  interim
financial  information and with the  instructions to Form 10-Q and Article 10 of
Regulation  S-X of the  Securities  and Exchange  Commission.  Accordingly,  the
Consolidated  Financial  Statements  do not include all of the  information  and
footnotes  required by generally  accepted  accounting  principles  for complete
financial statements.  In the opinion of management,  all adjustments considered
necessary  for a fair  presentation  have been  included.  The  results  for the
interim periods are not necessarily indicative of the results to be expected for
the year. The accompanying  Consolidated  Financial Statements should be read in
conjunction with the audited Consolidated Financial Statements of the Company as
of December 31, 2001,  as reported in its Annual  Report on Form 10-K filed with
the Securities and Exchange Commission.


Note - B    During the three months ended March 31,  2002,  3,737 common  shares
were issued upon the exercise of stock options.



Note - C    Inventories  consisted  of the  following  at  March  31,  2002  and
December 31, 2001:
                                                     March 31,      December 31,
                                                       2002             2001
                                                   -------------   -------------
Purchased parts and components                       $1,248,000      $1,329,000
Work in process                                       2,811,000       2,778,000
Finished goods                                          704,000         468,000
                                                   -------------   -------------
                                                      4,763,000       4,575,000
Less: reserve for inventory obsolescence               (900,000)       (819,000)
                                                   -------------   -------------
   Net                                               $3,863,000      $3,756,000
                                                   =============   =============


Note - D    On January 15, 2002, the Company announced plans to improve its cost
structure  primarily  through  reductions in the Company's staff.  This plan has
been  completed and resulted in a reduction in workforce of  approximately  10%.
During the first quarter of 2002, the Company  recorded a restructuring  charge,
primarily related to severance costs, of $163,000.





                                        6

<PAGE>


             PERFORMANCE TECHNOLOGIES, INCORPORATED AND SUBSIDIARIES

ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
            RESULTS OF OPERATIONS

Matters discussed in Management's Discussion and Analysis of Financial Condition
and  Results  of   Operations   and   elsewhere   in  this  Form  10-Q   include
forward-looking  statements  within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as  amended,  and are  subject  to the safe  harbor  provisions  of the  Private
Securities  Litigation  Reform Act of 1995.  Actual results of operations  could
differ materially from those discussed in the forward-looking statements.

Overview

Business Strategy:  Performance Technologies,  Incorporated (the "Company") is a
supplier of  innovative  hardware  and  software  products  for a broad range of
communications  infrastructure  including  traditional data  communications  and
wireline/wireless  telecommunication  systems.  The Company's products fall into
three distinct areas: SS7 signaling,  IP Ethernet switch and network access. The
Company's  development efforts are directed at future growth  opportunities that
utilize the evolving IP (Internet  Protocol)  standards for  communications  and
networking  equipment.  IP based  communications  and systems  products  are the
foundation for next-generation  telecommunications systems and services, as well
as  embedded   systems  for  video,   data   communications   and  mass  storage
applications. Customers who use the Company's products and technologies include:
telecommunications   equipment  manufacturers  (TEMs),   communications  service
providers/operators,   international   mobile/cellular  wireless  operators  and
embedded  systems  platform  suppliers/integrators.  The Company's  products are
based on open-architectures and are focused on high availability requirements.

Financial Information: Total revenue for the first quarter 2002 amounted to $6.4
million, compared to $9.7 million for the first quarter 2001. Net income for the
first quarter 2002 amounted to $.4 million, or $.03 per share including expenses
associated with a  restructuring  charge of $.2 million  (pre-tax),  or $.01 per
share.  Excluding the restructuring  charge net income was $.5 million,  or $.04
per share,  based on 12.6 million fully diluted shares  outstanding.  Net income
amounted to $1.2 million, or $.09 per share for the first quarter 2001, based on
12.9 million fully diluted shares outstanding.

At March 31, 2002,  the Company had $27.0  million of cash and cash  equivalents
and no  long-term  debt.  For the  quarter  ended  March 31,  2002,  the Company
generated  income  from  operations,  excluding  depreciation  and  amortization
(EBITDA), of $.9 million, compared to $1.7 million for the same period in 2001.

During  January  2002,  the  Company  improved  its cost  structure  by reducing
annualized  expenses by approximately $1.6 million due to the uncertainty of the
current  economic  conditions  and lack of  visibility.  These  reductions  were
primarily personnel related and were initiated throughout the organization.

During the quarter,  the Company  continued to focus on "design win" efforts for
its new products and believes that revenue  generated from these design wins can
be the defining criterion in providing increased stockholder value when business
conditions  improve.  Management  believes  the most  important  measurement  of
progress in executing the Company's  product and marketing  strategies is when a
prospective  customer notifies the Company that its product has been selected to
be integrated  with their  product.  During the first quarter 2002,  the Company
realized  seven new "design wins" for its IPnexusTM and SS7 signaling  products,
following thirty-five new "design wins" during 2001.



                                        7

<PAGE>



In  addition,  the  Company  continued  its  aggressive  efforts to promote  its
innovative  SEGwayTM Network  products to achieve  additional  deployments.  The
SEGway Edge product offers wireless and wireline  carriers the ability to reduce
operating  costs,  enhance  services and expand their network by utilizing lower
cost IP networks for signaling.  Introduced a year ago,  shipments of the SEGway
Edge product  continued to rise and more trials began during the first  quarter,
particularly for European customers. Validation testing also began at a tier-one
carrier in North  America.  Additionally,  the first beta  trials for the SEGway
Link Concentrator  began in early April and production  release is scheduled for
mid-year in anticipation of a successful beta period.

In March 2002, the Company continued to expand the breadth and capability of its
embedded  IPnexus switch  products  through the  introduction  of the industry's
first and only  Gigabit  Ethernet  switch  capable  of  supporting  the  maximum
bandwidth and slot density  specified by the PCI Computer  Manufacturers'  Group
2.16  standard.  Since the new PICMG 2.16  industry  standard  was  ratified  in
September 2001, the Company has introduced the broadest array of Ethernet switch
and network access  products  compliant  with this standard,  propelling it to a
market  leadership  position.  Management  is  optimistic  that this  leadership
position will translate into noteworthy growth potential as economic  conditions
strengthen.

In early April 2002,  the  Company's  Rochester  operations  relocated to a new,
larger facility within ten miles of the previous  location and new manufacturing
equipment   was  added  to   accommodate   several  new  products  that  require
leading-edge manufacturing processes.

FAS 144 - In August  2001,  the FASB issued SFAS No.  144,  "Accounting  for the
Impairment or Disposal of Long-Lived  Assets." SFAS No. 144 addresses  financial
accounting and reporting for the impairment or disposal of long-lived  assets to
be held and used, to be disposed of other than by sale, and to be disposed of by
sale.  On January 1, 2002 the Company  adopted  SFAS No.  144.  Adoption of this
statement  did not have an impact on the results of  operations or the financial
position of the Company.

Forward Looking Guidance for the Second Quarter 2002 (published April 24, 2002):

The following includes forward-looking  statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934 and are subject to the safe harbor provisions of the Private  Securities
Litigation Reform Act of 1995.

Performance   Technologies  provides  products  to  communications  and  network
equipment suppliers that are integrated into current and next-generation network
infrastructure products.  Design wins reach production volumes at varying rates,
typically  beginning  twelve to eighteen  months after the design win occurs.  A
variety of risks such as  schedule  delays,  cancellations,  changes in customer
markets and general economic conditions can adversely affect a design win before
production is reached or during deployment.  Not all design wins can be expected
to  result  in  production  orders.   Furthermore,   when  economic   conditions
deteriorate,  customers'  visibility  also  deteriorates,  causing delays in the
placement of orders.  This  results in a  substantial  portion of the  Company's
revenue in each quarter  being derived from orders placed within the quarter and
often shipped in the final month of the quarter.

Performance  Technologies  continued to experience  the effects of the difficult
economic  conditions  and  slowdown of capital  spending  in the  communications
market  during  the first  quarter  2002.  New  project  deployments  and design
activity were sluggish.  In addition,  production orders from a number of design
wins were anticipated but were not received and a number of customers  requested
delays in shipments.

Based upon the current distribution of business,  the current backlog and review
of sales forecasts,  management expects revenue in the second quarter of 2002 to
be $6.5 million to $8.0  million.  Gross margin is expected to be  approximately
58% to 63% and diluted  earnings per share for the second quarter is expected to
be $.03 to $.07.

More in-depth  discussions of the Company's  strategy and financial  performance
can be found in the Company's recent Annual and Quarterly Reports,  on Form 10-K
and Form 10-Q, as filed with the Securities and Exchange Commission.



                                        8

<PAGE>



                   Quarter Ended March 31, 2002, compared with
                        the Quarter Ended March 31, 2001

The following table presents the percentage of sales represented by each item in
the Company's consolidated statements of income for the periods indicated:

                                           Three Months Ended
                                                March 31,
                                           2002            2001
                                      -----------     -----------

Sales                                      100.0%          100.0%
Cost of goods sold                          41.4            39.3
                                      -----------     -----------
Gross profit                                58.6            60.7
                                      -----------     -----------

Operating expenses:
  Selling and marketing                     16.6            15.6
  Research and development                  23.4            23.6
  General and administrative                 9.0             7.5
  Restructuring charge                       2.5
                                      -----------     -----------
     Total operating expenses               51.5            46.7
                                      -----------     -----------
Income from operations                       7.1            14.0

Other income, net                            1.8             3.7
                                      -----------     -----------
Income before income taxes                   8.9            17.7

Provision for income taxes                  (2.8)           (5.8)
                                      -----------     -----------
     Net income                              6.1%          11.9%
                                      ===========     ===========


Sales.  Total revenue for the first  quarter 2002 was $6.4 million,  compared to
$9.7  million  for the same  quarter in 2001.  For the  periods  indicated,  the
Company's  products are grouped  into three  distinct  categories  in one market
segment:  Signaling and network access products, IP Switching products and Other
products.  Revenue  from each product  category is expressed as a percentage  of
sales for the three months ending March 31, 2002 and 2001 as follows:

                                           Three Months Ended
                                                March 31,
                                           2002            2001
                                      -----------     -----------

Signaling and network access products         87%             83%
IP Switching products                          7%              4%
Other                                          6%             13%
                                      -----------     -----------
    Total                                    100%            100%
                                      ===========     ===========


Signaling  and  Network  Access  Products:  During the past twelve  months,  the
decline in capital expenditure investments by carriers has significantly reduced
the Company's signaling and network access products revenue.



                                        9

<PAGE>



IP Switching Products: While still a modest percentage of the Company's revenue,
switching product revenue  increased by 36% to $.5 million in 2002,  compared to
the  respective  quarter in 2001.  The  recently  ratified  PICMG 2.16  embedded
systems  architecture is being adopted by a wide range of industries and revenue
from  switching  products  is  expected to  increase  when  customers  move into
production of their new platforms.

Other product revenue: This revenue is related to legacy products.  Revenue from
other products has declined  significantly over the past twelve months.  Many of
these  products are project  oriented and shipments can fluctuate on a quarterly
basis.  Management  expects  revenue from these  products to continue to decline
over future periods as these technologies are replaced.

Gross profit.  Gross profit consists of sales, less cost of goods sold including
material costs,  manufacturing  expenses,  amortization of software  development
costs,  expenses  associated with  engineering  contracts and technical  support
function  expenses.  In the first  quarter,  gross margin was 58.6% and 60.7% of
sales in 2002 and 2001, respectively. During the first quarter 2002, the product
mix and fixed overhead for  manufacturing  being spread over lower sales volumes
impacted gross margin as a percentage of sales.

Total Operating  Expenses.  Total operating  expenses were $3.3 million and $4.5
million  in first  quarter of 2002 and 2001,  respectively.  Early in the second
quarter 2001, the Company  tightened  control over  discretionary  expenses.  In
January  2002,  the Company took further  actions to improve its cost  structure
primarily through reductions in the Company's staff.

Selling and  marketing  expenses  were $1.1  million  and $1.5  million in first
quarter  of 2002 and 2001,  respectively.  In the  first  quarter  of 2001,  the
Company  participated  in a number of industry trade shows and  conferences  and
broadly  advertised its products.  Early in the second quarter 2001, the Company
tightened  control  over these  expenses.  In the first  quarter of 2002,  lower
headcount resulted in reduced personnel expenses.

Research  and  development  expenses  were $1.5  million and $2.3 million in the
first quarter of 2002 and 2001, respectively.  During the first quarter of 2002,
the Company  focused its  engineering  efforts on the development of the IPnexus
embedded  switch  products and the SEGway Link  Concentrator.  The  reduction in
expenses in the first quarter 2002,  compared to 2001 is primarily  attributable
to lower headcount.

General  and  administrative  expenses  were $.6 million and $.7 million for the
first  quarter  2002 and 2001,  respectively.  The  reduction in expenses in the
first  quarter  2002,  compared  to  2001 is  primarily  attributable  to  lower
headcount.

Restructuring  charges were $.2 million and zero for the first  quarter 2002 and
2001,  respectively.  In January 2002,  the Company  improved its cost structure
primarily through the reduction of the Company's staff resulting in a decline in
its workforce of approximately 10%.

Other  income,  net.  Other income  consists  primarily of interest  income from
marketable securities and cash equivalents.  The funds are primarily invested in
high quality Municipal and U.S. Treasury securities with maturities of less than
one year.

Income  taxes.  The  provision for income taxes for the first quarter of 2002 is
based on the  combined  federal,  state and foreign  effective  tax rate of 31%,
compared to 33% for the first quarter of 2001.


                                       10

<PAGE>



LIQUIDITY AND CAPITAL RESOURCES

As of March 31, 2002, the Company's  primary  source of liquidity  included cash
and cash  equivalents of $27.0 million and available  borrowings of $5.0 million
under a revolving credit facility with a bank. No amounts were outstanding under
this credit  facility as of March 31, 2002.  The Company had working  capital of
$35.0 million at March 31, 2002, compared to $34.7 million at December 31, 2001.

Cash  provided  by  operating  activities  for the  first  quarter  2002 was $.6
million, compared to $2.2 million for the same period in 2001.

Capital equipment  purchases  amounted to $.2 million for the three months ended
March  31,  2002,  compared  to  $.6  million  for  the  same  period  in  2001.
Capitalization of certain software development costs amounted to $.4 million and
$.4 million for the three months ended March 31, 2002 and 2001, respectively.

In August 2000,  the Board of Directors  authorized  the  repurchase  of up to 1
million  shares of the  Company's  Common Stock and the Company  completed  this
repurchase  program  in  March  2001.  In March  2001,  the  Board of  Directors
authorized the repurchase of up to an additional 500,000 shares of the Company's
Common  Stock.  Based on  deteriorating  economic  conditions  and an  effort to
preserve  cash,  the  Company  did not  repurchase  any shares  during the first
quarter of 2002,  compared to 509,900 shares repurchased at a total cost of $6.4
million during the first quarter 2001.

Assuming there is no significant  change in the Company's  business,  management
believes that its current cash and cash equivalents together with cash generated
from operations and available borrowings under the Company's loan agreement will
be sufficient to meet the Company's anticipated needs, including working capital
and  capital  expenditure  requirements,  for at least the next  twelve  months.
However, an unfavorable determination in the outstanding class action litigation
could  have  a  material  adverse  effect  on  the  Company's  working  capital.
Furthermore,  management is  continuing  its  strategic  acquisition  program to
further  accelerate  new product and market  penetration  efforts.  This program
could have an impact on the  Company's  working  capital,  liquidity  or capital
resources.


FORWARD-LOOKING STATEMENTS AND RISK FACTORS

This Quarterly Report on Form 10-Q contains  forward-looking  statements,  which
reflect the Company's  current views with respect to future events and financial
performance, within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the  Securities  Exchange Act of 1934 and are subject to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995.

These forward-looking statements are subject to certain risks and uncertainties,
including  those  identified  below,  which could cause actual results to differ
materially from historical results or those  anticipated.  The words "believes,"
"anticipates,"  "plans," "may," "intend," "estimate," "will," "should," "could,"
"feels," "is optimistic," "expects," and other expressions which indicate future
events and trends also identify forward-looking statements. However, the absence
of such words does not mean that a statement is not forward-looking.








                                       11

<PAGE>



The  Company's  future  operating  results  are  subject  to  various  risks and
uncertainties   and  could  differ   materially  from  those  discussed  in  the
forward-looking  statements  and may be affected  by various  trends and factors
which are beyond the Company's  control.  These  include,  among other  factors,
general  business  and  economic  conditions,  rapid or  unexpected  changes  in
technologies,  cancellation or delay of customer orders including those relating
to the "design wins"  referenced  above,  unreliability  of customer  forecasts,
changes  in  the  product  or  customer  mix of  sales,  delays  in new  product
development,  delays or lack of availability of electronic components,  customer
acceptance  of new products and customer  delays in  qualification  of products.
Furthermore,  an  unfavorable  determination  in the  outstanding  class  action
litigation  could  have a  material  adverse  effect  on the  Company's  working
capital.  This  report  on Form  10-Q  should  be read in  conjunction  with the
Consolidated Financial Statements,  the notes thereto,  Management's  Discussion
and Analysis of Financial Condition and Results of Operations as of December 31,
2001 and "Risk Factors" as reported in the Company's Annual Report on Form 10-K,
and other reports as filed with the Securities and Exchange Commission.

ITEM 3.        QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to various market risks in the normal course of business,
primarily  interest rate risk and changes in the market value of its investments
and believes its exposure to such risk is minimal. The Company's investments are
made in accordance with the Company's investment policy and primarily consist of
U.S. Treasury securities,  municipal securities and corporate  obligations.  The
Company  does  not  participate  in  the  investment  of  derivative   financial
instruments.






















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<PAGE>






             PERFORMANCE TECHNOLOGIES, INCORPORATED AND SUBSIDIARIES

                           PART II. OTHER INFORMATION

ITEM 1.           LEGAL PROCEEDINGS

No material  changes have transpired since the Company's last filing relative to
the class action lawsuits filed on May 19, 2000.

ITEM 6.           EXHIBITS AND REPORTS ON FORM 8-K

                  A.       Exhibits

                           None.

                  B.       Reports on Form 8-K

There were no reports  filed on Form 8-K during  the three  month  period  ended
March 31, 2002.





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<PAGE>


                                   SIGNATURES




         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  registrant  has duly  caused  this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                     PERFORMANCE TECHNOLOGIES, INCORPORATED





May 9, 2002                            By: /s/         Donald L. Turrell
                                          --------------------------------------
                                                       Donald L. Turrell
                                                         President and
                                                     Chief Executive Officer




May 9, 2002                            By: /s/         Dorrance W. Lamb
                                          --------------------------------------
                                                       Dorrance W. Lamb
                                                 Chief Financial Officer and
                                                    Vice President, Finance






























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