U.S. SECURITIES AND EXCHANGE
                        COMMISSION WASHINGTON, D.C. 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 quarterly period ended: September 30, 2003

                                       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 0-24242

                         PRODUCTIVITY TECHNOLOGIES CORP.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

                Delaware                             13-3764753
---------------------------------          ------------------------------------
  (State or Other Jurisdiction of          (I.R.S. Employer Identification No.)
  Incorporation or Organization)

                   3100 Copper Avenue, Fenton, Michigan 48430
                    (Address of Principal Offices)(Zip Code)

Registrant's Telephone Number, Including Area Code      (810) 714-0200
                                                   -----------------------------

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            No    X
   ---           --------

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act).

Yes            No    X
   ---           --------

                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                  PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate  by check mark  whether  the  registrant  has filed all  documents  and
reports  required  to be  filed by  Section  12,  13 or 15(d) of the  Securities
Exchange Act of 1934 subsequent to the  distribution of securities  under a plan
confirmed by a court.

Yes            No    X
   ---           --------

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock,  as of March 5, 2004:  2,475,000  shares,  $ .001 par value common
stock.


<PAGE>


                         Productivity Technologies Corp.

                                      INDEX

                                                                           Page
                                                                          Number

PART I        FINANCIAL INFORMATION...........................................3

Item 1.       Financial Statements............................................3

              Consolidated Balance Sheets at September 30, 2003
                (unaudited) and June 30, 2003.................................3

              Consolidated Statements of Operations for the three months
                ended September 30, 2003 and 2002 (unaudited).................5

              Consolidated Statement of Stockholders' Equity for
                the three months ended September 30, 2003 (unaudited).........6

              Consolidated Statements of Cash Flows for the three
                months ended September 30, 2003 and 2002 (unaudited)..........7

              Notes to Unaudited Consolidated Financial Statements............8

Item 2.       Management's Discussion and Analysis of
                Financial Condition and Results of Operations.................9

Item 3.       Quantitative and Qualitative Disclosure about Market Risk......12

Item 4.       Controls and Procedures........................................12

PART II       OTHER INFORMATION..............................................12

Item 1.       Legal Proceedings .............................................12

Item 2.       Changes in Securities, Use of Proceeds and
               Issuer Purchases of Equity Securities (not applicable)........12

Item 3.       Defaults upon Senior Securities ...............................12

Item 4.       Submission of Matters to a Vote of Security Holders (
                not applicable)..............................................13

Item 5.       Other Information  ............................................13

Item 6.       Exhibits and Reports on Form 8-K   ............................14


SIGNATURES...................................................................14


<PAGE>




                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                PRODUCTIVITY TECHNOLOGIES CORP. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>

                                                                            September 30, 2003    June 30, 2003
                                                                            ------------------    -------------
                                                                                (Unaudited)

Assets

Current Assets
<S>                                                                                 <C>            <C>
     Cash                                                                           $377,307       $1.163,187
     Short-term investments, including accrued interest                              259,679          540,582
     Contract receivables, net of allowance for doubtful accounts of
          $237,663 and $227,663                                                    2,063,314        3,620,852
     Costs and estimated earnings in excess of billings on
          uncompleted contracts                                                    4,603,150        3,423,457
     Inventories                                                                   1,278,593        1,154,512
     Prepaid expenses and other                                                    2,438,511          328,517
     Deferred income taxes                                                           290,000          290,000
                                                                                     -------          -------
Total current assets                                                              11,310,554       10,521,107
                                                                                  ----------       ----------


Property and equipment
     Land                                                                           $591,514         $591,514
     Buildings and improvements                                                    4,962,689        4,962,690
     Machinery and equipment                                                       4,235,696        4,215,036
     Transportation equipment                                                         21,000           21,000
                                                                                      ------           ------

                                                                                   9,810,899        9,790,240

          Less accumulated depreciation                                            3,784,138        3,631,717
                                                                                   ---------        ---------

Net property and equipment                                                         6,026,761        6,158,523
                                                                                   ---------        ---------


Other assets
     Goodwill                                                                      2,985,909        2,985,909
     Patent,net                                                                      330,011          354,384
     Deferred income taxes                                                           430,000          430,000
     Other assets                                                                    241,705          252,955
                                                                                     -------          -------

Total other assets                                                                 3,987,625        4,023,248
                                                                                   ---------        ---------

                                                                                 $21,324,940      $20,702,878
                                                                                 ===========      ===========

</TABLE>

     See accompanying notes to unaudited consolidated financial statements.



<PAGE>

<TABLE>
<CAPTION>


                PRODUCTIVITY TECHNOLOGIES CORP. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

                                                                            September 30, 2003     June 30, 2003
                                                                            ------------------     -------------
                                                                               (Unaudited)
Liabilities and stockholders' equity

Current liabilities
<S>                                                                               <C>              <C>
Current portion of long-term debt                                                 $4,631,609       $8,385,918
Accounts payable                                                                   4,254,107        3,784,778
Accrued expenses
     Commissions payable                                                             340,000          310,000
     Payroll and related withholdings                                                 65,021           62,464
     Warranty Reserve                                                                275,000          250,000
     Interest                                                                        613,077          610,957
     Other                                                                           607,749          143,574
Billings in excess of costs and estimated
     earnings on uncompleted contracts                                             1,534,583        1,864,980
Current portion of executive deferred
       compensation agreement                                                              -          974,933
                                                                                     -------          -------

Total current liabilities                                                        $12,321,146      $16,387,604

Executive deferred compensation agreements, less current maturities                  974,933                -

Long-term debt, less current maturities                                            5,235,000        1,735,000
                                                                                   ---------        ---------

Total liabilities                                                                 18,531,079       18,122,604
                                                                                  ----------       ----------

Stockholders' equity
     Common stock, $.001 par value, 20,000,000
          shares authorized; 2,475,000 shares issued and outstanding                   2,475            2,475
     Additional paid-in capital                                                    9,966,408        9,966,408
     Accumulated Deficit                                                          (7,175,022)      (7,388,609)
                                                                                 -----------      -----------

Total stockholders' equity                                                         2,793,861        2,580,274
                                                                                   ---------        ---------

                                                                                 $21,324,940      $20,702,878
                                                                                 ===========      ===========
</TABLE>




     See accompanying notes to unaudited consolidated financial statements.



<PAGE>


<TABLE>
<CAPTION>

                PRODUCTIVITY TECHNOLOGIES CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (unaudited)


                                                                                      Three Months Ended
                                                                               September 30,         September 30,
                                                                                   2003                  2002
                                                                               -------------         -------------

<S>                                                                             <C>                   <C>
Revenues Earned                                                                 $7,564,463            $6,736,943
Cost of Revenues Earned                                                          5,950,403             5,162,891
                                                                                 ---------             ---------

Gross profit                                                                     1,614,060             1,574,052
Selling, general and administrative expenses                                     1,220,619             1,526,416
                                                                                 ---------             ---------

Income from operations                                                             393,441                47,636
                                                                                   -------                ------


Other income (expense)
     Interest income                                                                   239                 7,467
     Interest expense                                                             (171,749)             (192,558)
     Miscellaneous                                                                  (4,294)               14,099
                                                                                   -------                ------

Total other expenses                                                              (175,804)             (170,992)
                                                                                 ---------             ---------

Income (loss) before income taxes                                                  217,637              (123,356)
Income tax expense (benefit)                                                         4,050               (29,981)
                                                                                     -----              --------

Net income (loss)                                                                 $213,587              ($93,375)
                                                                                  ========              =========

Basic Earnings per share                                                             $0.09               $(0.04)
                                                                                     =====               =======

Diluted earnings per share                                                           $0.08               $(0.04)
                                                                                     =====               =======
Weighted average number of
     common shares outstanding                                                   2,475,000             2,475,000

Weighted average numer
     of common shares oustanding (diluted)                                       2,629,000             2,475,000
</TABLE>


     See accompanying notes to unaudited consolidated financial statements.



<PAGE>


<TABLE>
<CAPTION>

                PRODUCTIVITY TECHNOLOGIES CORP. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                                   (unaudited)




                                         Common Stock                Additional                               Total
                                         ------------                 Paid-In          Accumulated         Stockholders'
                                    Shares          Amount            Capital            Deficit             Equity

<S>          <C> <C>               <C>               <C>            <C>               <C>                  <C>
Balance June 30, 2003              2,475,000         $2,475         $9,966,408        ($7,388,609)         $2,580,274

Net income                                --             --                 --            $213,587           $213,587
                                          --             --                 --            --------           --------


September 30, 2003                 2,475,000         $2,475         $9,966,408        ($7,175,022)         $2,793,861
                                   =========         ======         ==========        ============         ==========

</TABLE>






















     See accompanying notes to unaudited consolidated financial statements.



<PAGE>

<TABLE>
<CAPTION>


                PRODUCTIVITY TECHNOLOGIES CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (unaudited)


                                                                                      Three Months Ended
                                                                               September 30,         September 30,
                                                                                   2003                  2002
                                                                               -------------         -------------

Cash flows from operating activities
<S>                                                                               <C>                  <C>
     Net income (loss)                                                            $213,587             ($93,375)
     Adjustments to reconcile net income (loss) to net cash
          used in operating activities:
            Depreciation                                                           152,421               152,421
            Amortization                                                            24,373                35,623

     Changes in operating assets and liabilities:
          Contract receivables                                                   1,557,538             (641,429)
          Inventories, prepaid expenses and other                              (2,222,825)                34,815
          Costs and estimated earnings in excess of billings
               on uncompleted contracts, net effect                            (1,510,090)           (1,153,337)
          Accounts payable, accrued expenses and other                             993,181               113,460
                                                                                   -------               -------

Net cash used in operating activities                                            (791,815)           (1,551,822)
                                                                                 ---------           -----------

Cash flows from investing activities
     Proceeds from sale (purchase of) short-term investments - net                 280,903              (45,021)
     Expenditures for property and equipment                                      (20,659)               (1,068)
                                                                                  --------               -------

Net cash provided by (used in) investing activities                                260,244              (46,090)
                                                                                   -------              --------

Cash flows from financing activities
     Net payments under revolving credit agreement                                (181,161)           (1,848,030)
     Payments on long term debt                                                    (68,148)             (800,000)
                                                                                                       ---------

Net cash provided by (used in) financing activities                              (254,309)           (2,648,030)
                                                                                 ---------           -----------
Net decrease in cash                                                             (785,880)           (4,245,942)

Cash at the beginning of the period                                              1,163,187             4,971,837
                                                                                 ---------             ---------
Cash at the end of the period                                                     $377,307              $725,895
                                                                                  ========              ========

Supplemental Cash Flow Information
     Cash paid during the period for interest                                     $169,629              $156,546
     Income Taxes Received                                                               -               $29,981

Schedule of Non-Cash Financing Activities
     Goodwill reduction and debt extinguishment                                         $-            $1,940,538
                                                                                        --            ----------
</TABLE>


     See accompanying notes to unaudited consolidated financial statements.




<PAGE>



                PRODUCTIVITY TECHNOLOGIES CORP. AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1.   Basis of Presentation

The unaudited  consolidated  financial  statements of Productivity  Technologies
Corp. and  Subsidiaries  (the  "Company")  have been prepared in accordance with
generally accepted accounting  principles for interim financial  information and
in accordance  with  instructions to Form 10-Q and Article 10 of Regulation S-X.
Certain  information  and footnote  disclosures  normally  included in financial
statements prepared in accordance with generally accepted accounting  principles
have  been  omitted  from  the  accompanying  interim   consolidated   financial
statements.  The information furnished in the accompanying  consolidated balance
sheets,  statements of operations,  stockholders' equity and cash flows, reflect
all adjustments,  which are, in the opinion of management,  necessary for a fair
presentation of the  aforementioned  consolidated  financial  statements for the
interim  periods.  Operating  results for the three months ended  September  30,
2003, are not necessarily indicative of the results that may be expected for the
year ending June 30, 2004.

The  consolidated  financial  statements  should be read in conjunction with the
Company's  annual  report on Form 10-K for the fiscal year ended June 30,  2003.
Information  provided includes the consolidated  audited  financial  statements,
including footnotes for the year ended June 30, 2003 and Management's Discussion
and Analysis of Financial Condition and Results of Operations.

2.   Summary of Significant Accounting Policies

History of the Company and Basis of Presentation

The  Company was  incorporated  in June 1993 under the name  Production  Systems
Acquisition  Corporation  with the objective of acquiring an operating  business
engaged in the production  systems  industry.  The Company  completed an initial
public offering  ("IPO") of common stock in July 1994 and raised net proceeds of
approximately  $9.0  million.  In May  1996,  the  Company  changed  its name to
Productivity   Technologies  Corp.  and  acquired,   through  a  merger,   Atlas
Technologies, Inc. ("Atlas") as a wholly owned subsidiary. On February 23, 2000,
the  Company  purchased,  through  a wholly  owned  subsidiary  formed  for this
purpose,  substantially  all of the assets of  Westland  Control  Systems,  Inc.
("Westland").  The Company has no other subsidiaries or operations. The Company,
which produces  industrial  machinery,  operates in a single segment through its
Atlas and Westland subsidiaries.

The accompanying  financial statements include the consolidated  accounts of the
Company,  Atlas  and  Westland.  All  significant   inter-company  accounts  and
transactions have been eliminated upon consolidation.

Nature of Business

The  Company  operates  in a single  segment  through  its  Atlas  and  Westland
subsidiaries.  Atlas is a leading  innovator  and  supplier of quick die change,
flexible transfer, and stacking/destacking equipment used to automate automotive
and other metal stamping operations.  Atlas operates two manufacturing plants in
Fenton,  Michigan and has sales and engineering offices in Michigan,  Europe and
China. Atlas also established locations in late 2003 in Brazil and Germany.

Westland  designs,  manufactures  and field installs custom  electrical  control
panels  primarily for use in production  machinery and machine tools utilized in
automotive,   adhesive  and  sealants,  food  processing  and  other  industrial
applications.  Westland operates one manufacturing plant in Westland,  Michigan,
which is located less than one hour from Atlas' plants in Fenton, Michigan.

Sales of Atlas products have principally been to automobile and automotive parts
manufacturers and appliance manufacturers. Other customers include steel service
centers  and  manufacturers  of lawn and  garden  equipment,  office  furniture,
heating,  ventilation and air  conditioning  equipment,  and large  construction
equipment.  Sales to automotive  related  customer's account for the majority of
sales.  Westland's  customers  participate in the automotive,  food  processing,
adhesive and sealants, engine part machining and other industries.



<PAGE>



Revenue and Cost Recognition

At Atlas,  revenues from fixed price contracts,  and the related contract costs,
are    recognized    using    the    percentage-of-completion     method.    The
percentage-of-completion  method  measures  the  percentage  of  contract  costs
incurred to date and compares these costs to the total  estimated costs for each
contract.  Atlas  estimates  the status of  individual  contracts  when progress
reaches a point where  experience is  sufficient to estimate  final results with
reasonable accuracy.  Contract costs include all direct material and labor costs
and those  indirect  costs  related to  contract  performance,  such as indirect
labor, supplies, repairs and depreciation costs. Provisions for estimated losses
on  uncompleted  contracts  are made in the  period  in which  such  losses  are
determined.  Changes in job performance, job condition, estimated profitability,
and final contract  settlement may result in revisions to costs and income,  and
are  recognized  in the period  the  revisions  are  determined.  Revenues  from
time-and-material  contracts are recognized  currently as the work is performed.
Westland recognizes sales and cost of sales upon shipment to the customer.

Earnings Per Share

Earnings  per share have been  computed by dividing  the income by the  weighted
average number of common shares outstanding.  The per share amounts reflected in
the  consolidated  statements  of operations  are  presented in accordance  with
Statement of Financial Accounting Standards (SFAS) No. 128 "Earnings per share";
the  amounts of the  Company's  "basic"  and  "diluted"  earnings  per share (as
defined in SFAS No.  128) are the same for the first  quarter of fiscal  2003 in
that the Company recorded a net loss for the period.


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

Recent Developments

Effective as of December 12, 2003,  Merrill Lynch  Business  Financial  Services
Inc.  ("MLB")  entered  into a new credit  facility  with Atlas (the "MLB Credit
Facility") providing for borrowing  availability of up to $8.0 million, of which
$7.4 million was funded at closing.  Effective on March 4, 2004, MLB agreed to a
modification  of the  terms  under  which in which it  increased  the  borrowing
availability  by $750,000  under the  revolving  credit  facility  for a 60 -day
period (the "overline period") and increased the interest rate by 0.5% per annum
during this period. As modified, the MLB Credit Facility consists of :

     o    a seven-year real estate term loan in the original principal amount of
          $3.5 million,  bearing  interest at a variable per annum rate equal to
          3.15% in excess of one-month LIBOR, payable in monthly installments of
          interest plus 1/180th of principal (a 15-year  amortization  schedule)
          with the balance of principal  due at maturity in December  2010,  and
          secured by substantially all of the assets of Atlas;

     o    a three-year  equipment term loan in the original  principal amount of
          $500,000, bearing interest at a variable per annum rate equal to 3.15%
          in excess of  one-month  LIBOR,  payable  in monthly  installments  of
          interest  plus 1/36th of principal  (full  amortization),  maturing in
          December  2006,  and  secured  by  substantially  all of the assets of
          Atlas; and

     o    a one-year  revolving  working capital credit  facility  providing for
          borrowing availability of up to $4.0 million ($4.75 million during the
          overline  period) based upon  eligible  accounts  receivable,  bearing
          interest at a variable per annum rate equal to 2.85% (3.35% during the
          overline  period)  in excess of  one-month  LIBOR,  payable in monthly
          installments  of interest  only,  maturing  on  December  31, 2004 and
          secured by substantially all of the assets of Atlas.

The MLB Credit  Facility is  guaranteed  by the Company  and, in  addition,  the
Company has pledged  all of the capital  stock of Atlas to secure the  guaranty.
The proceeds of the MLB Credit Facility were used to retire the revolving credit
facility and commercial mortgage loan from Bank One, NA ("Bank One") to Atlas in
the aggregate outstanding  principal amount of $7.4 million.  Atlas continues to
be responsible  for legal and  professional  field audit fees of Bank One in the
amount  of  approximately   $60,000   annually.   As  part  of  these  financing
transactions,  Bank One also  agreed to release the liens on the assets of Atlas
and the Company.  In addition,  Bank One agreed to  subordinate  its rights with
respect  to  Westland's  new  lender,   Spectrum   Commercial   Services,   Inc.
("Spectrum"),  in  connection  with  Bank  One's  term  loan in the  outstanding
principal amount of approximately  $2.2 million,  bearing interest at 1.25% over
Bank One's prime rate,  which the Company  incurred in February 2000 to purchase
Westland (the "Westland Loan").
<PAGE>

     In addition,  also effective as of December 12, 2003, Spectrum entered into
a two-year  credit  facility with the Company (the "Spectrum  Credit  Facility")
providing for borrowing  availability of up to $1.25 million based upon eligible
accounts  receivable,  bearing  interest  at a variable  per annum rate equal to
5.25% in excess of the prime rate of Wells Fargo Bank,  NA,  (subject to certain
minimum  payments  of $5,575 per month,  and  subject  to  reduction  by 0.5% if
specified  profitability  thresholds  are met),  maturing in  December  2005 and
secured by substantially all of the assets of Westland.

Bank One agreed to  subordinate  its rights under the Westland Loan to Spectrum,
subject to restating the  obligations  under a new Guarantor  Payment  Agreement
effective  as of December 12, 2003 under which Bank One will look to Westland to
repay the remaining obligations owed to Bank One (which continues to be the $2.2
million  principal  amount  that  was  outstanding  prior  to the  restatement).
Although the Company continues to be the primary obligor under the Westland Loan
as restated,  the Company is prohibited from making payments to Bank One so long
as the MLB Loan to Atlas  (as to  which  the  Company  is a  guarantor)  remains
outstanding,  and, accordingly,  Westland entered into the new Guarantor Payment
Agreement.  Under the terms of the restated Westland Loan,  Westland is required
to pay to Bank One $10,000 per month plus interest as well as 25% of excess cash
flow (as defined in the restated loan  agreement)  from  Westland's  operations.
Under  the  restatement,  without  expressly  waiving  the  previously  existing
covenant  defaults  under  Westland  Loan,  Bank One has  agreed  to  honor  the
scheduled  maturity  date of the Westland  Loan  (February  23, 2005) absent any
further defaults. As restated, the Westland Loan bears interest at the per annum
rate of 3.0% in excess of Bank One's prime rate.  Bank One  continues  to hold a
lien on  substantially  all of Westland's  assets,  subordinated  to the lien of
Spectrum.

In connection with these financing transactions, the Company, Atlas and Westland
retired the remaining  obligations to the former owner of Westland,  Thomas Lee,
in  consideration  of a  payment  of  $525,000,  resulting  in  a  gain  on  the
extinguishment of debt of approximately $125,000.  Under agreements entered into
with Bank One in January  1999,  Ronald  Prime,  formerly an owner and executive
officer of Atlas, and Michael Austin, formerly an owner and executive officer of
Atlas and  currently  a director of the  Company,  agreed to  subordinate  their
rights to receive payments for deferred  executive  compensation  obligations of
approximately  $974,000 (which were  originally  scheduled to be paid during the
period from July 2000 through July 2002). These executives agreed to continue to
subordinate their right to payment to MLB.

Results of Operations

Three Months Ended  September 30, 2003 Compared to Three Months Ended  September
30, 2002

Unaudited  revenues  earned  for the  quarter  ended  September  30,  2003  were
$7,564,463,  as compared to $6,736,943 for the quarter ended September 30, 2002,
an increase of 12%.  Gross profit for the quarter  ended  September 30, 2003 was
$1,614,060,  representing a 3% increase  compared to the $1,574,052 gross profit
for the quarter  ended  September  30, 2002.  The increase in gross  profits was
principally  due to the higher  volume,  although the higher volume  overall was
less profitable due to continued margin  pressure,  which derived from continued
slower economic activity in the capital goods industry. Management also believes
the capital goods sectors in which the Company participates  continue to exhibit
excess capacity.

Consolidated selling, general and administrative (SG&A) expenses were $1,220,619
or 20%  lower  than the  quarter  ended  September  30,  2002 SG&A  expenses  of
$1,526,416.  The reduction in SG&A expenses for the quarter ended  September 30,
2002 was due to continued  cost controls and cost  reductions at both  operating
subsidiaries.

The  income  from  operations  for the  quarter  ended  September  30,  2003 was
$393,441, compared to income from operations for the quarter ended September 30,
2002 of $47,636.  This  increase for the quarter  resulted from higher sales and
lower SG&A expenses discussed above.
<PAGE>

Interest  expense  for the quarter  ended  September  30,  2003 at $171,749  was
approximately  11% lower as compared to $192,558 for the quarter ended September
30, 2002.

Net income for the quarter ended September 30, 2003 was $213,587,  compared to a
net loss of $93,375 for the quarter ended  September 30, 2002.  The reported net
income for the quarter was $0.09 per share (basic) and $0.08 per share (diluted)
based on 2,475,000 and 2,629,000  respectively,  weighted  average common shares
outstanding  during the  quarter.  This  compared  to a net loss for the quarter
ended September 30, 2002 of $0.04 cents per share (basic and diluted),  based on
2,475,000  weighted average common shares  outstanding during the quarter a year
ago.

The  gross  carrying  amount  and  accumulated  amortization  of  the  Company's
intangible assets other than goodwill as of September 30, 2003 is as follows:

                                           September 30, 2003
                             -----------------------------------------------
                                    Gross                           Net
                                  Carrying        Accumulated       Book
                                   Amount         Amortization      Value


Patents                             $573,132          $243,121     $330,011

Non-compete Agreements               348,750           239,232      109,518

Bank Closing Fees                    138,785            63,504       75,281

                             -----------------------------------------------
Total                             $1,060,667          $545,857     $514,810
                             ===============================================

Liquidity and Capital Resources

At September 30, 2003, the Company had (1) $2.7 million outstanding under a
commercial mortgage loan from Bank One, (2) $4,281,609 outstanding under the
revolving credit facility with Bank One (the "Old Atlas Revolver") plus
obligation for letters of credits issued thereunder, (3) $974,933 due to Messrs.
Prime and Austin under a deferred compensation arrangement, (4) $2.2 million
outstanding under the Westland Loan, and (5) subordinated term debt (not
including accrued interest) of $650,000, payable to the former owner of
Westland. This total of $10.8 million of debt compares to a total combined
indebtedness approximating $11.1 million as of June 30, 2003.

Working capital deficit at September 30, 2003 was  ($1,010,592)  and the current
ratio was (.92) to 1, as compared to a working  capital  deficit of ($5,866,497)
and a current ratio of (.64) to 1 for the Company at June 30, 2003.

Prior to the  expiration of the Old Atlas  Revolver in January 2002, the Company
was not in  compliance  with certain  financial  covenants  and  borrowing  base
limitations  thereunder.  The Company  also was not in  compliance  with certain
financial  covenants under the Westland Loan.  During fiscal year ended June 30,
2003 and the first fiscal  quarter ended  September  30, 2003,  Bank One did not
demand  that the Company  repay  either the Old Atlas  Revolver or the  Westland
Loan.  In the period  following  the January  2002  expiration  of the Old Atlas
Revolver,  the Company and Bank One engaged in discussions  concerning  possible
terms of  forbearance,  and Bank One consented to the  settlement  with Mr. Lee;
however, no formal forbearance arrangements were entered into by the Company and
Bank One. While Bank One was under no legal obligation to continue to forbear in
demanding  payment of outstanding  obligations owed to it, it continued to do so
through the  Company's  successful  refinancing  of its various  obligations  in
December 2003 as described under "Recent Developments" in this Item 2.

Since the expiration of the Atlas Revolver in January 2002 through and including
the quarter ended  September 30, 2003,  the Company was able to meet its working
capital needs from cash generated from operations  without borrowing  additional
funds under a line of credit In addition, since such time, the Company sought to
pay down its  borrowings  from  Bank  One  when and as cash was  available  from
operations.  However,  during the fiscal  quarter ended  September 30, 2003, the
Company did not have funds  available to it from its  operations or otherwise to
repay  the  amounts  it owed to its  creditors.  As a  result  of the  financing
transactions  described under "Recent Developments" in this Item 2, and assuming
no  adverse  developments,  management  believes  that it has  sufficient  funds
available to it under the various  facilities  and  operations to provide for it
working capital needs at least through the end of the 2004 fiscal year.
<PAGE>

Off Balance Sheet Arrangements

During the quarter  ended  September  30, 2003,  the Company had no  off-balance
sheet arrangements other than operating leases entered into in the normal course
of business.

Forward-Looking Statements

Various  statements  in this Report  concerning  the manner in which the Company
intends to conduct its future  operations  and potential  trends that may affect
future results of operations are forward-looking  statements. The Company may be
unable to realize its plans and  objectives  due to various  important  factors.
These factors  include but are not limited to economic and business  conditions,
particularly in the automotive,  machine tool and other  industries  principally
served by the Company,  including the ongoing and permanent  (non-cyclical) loss
of manufacturing  capabilities in the United States to foreign competition,  and
continued  volatile  demand in the domestic and foreign  markets for automobiles
and automotive  parts, in each case resulting in reduced or uncertain demand for
the Atlas' automation  equipment;  potential  technological  developments in the
metal forming and handling automation  equipment markets which may render Atlas'
automation equipment noncompetitive or obsolete; the risk that Atlas or Westland
customers  may be  unwilling  or  unable  to  continue  ordering  products;  the
potential  inability  of the Company to achieve  adequate  operating  results or
obtain  needed  access to the credit  and  capital  markets  to  finance  future
operations or plans for capital improvement or growth.

ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The  information  required by Item 3 has been disclosed in the Company's  Annual
Report on Form 10-K for the year ended June 30, 2003. There has been no material
change in the disclosure regarding market risk.

ITEM 4.   CONTROLS AND PROCEDURES

The  Company's  management  evaluated,  with  the  participation  of  the  chief
executive  officer  and  chief  financial  officer,  the  effectiveness  of  the
Company's disclosure controls and procedures as of the end of the period covered
by this report.  The chief executive  officer and chief  financial  officer have
concluded  that,  to  their  knowledge  on the  basis  of that  evaluation,  the
Company's disclosure controls and procedures were effective as of the end of the
period  covered  by this  report.  There  has been no  change  in the  Company's
internal  control  over  financial  reporting  that  occurred  during the period
covered by this report that has materially affected,  or is reasonably likely to
materially affect, the Company's internal control over financial reporting.



                           PART II. OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS.

Since the date of the filing of the Company's Annual Report on Form 10-K for the
year ended June 30,  2003,  there have been no  material  new legal  proceedings
involving the Company or any material  developments to the proceedings described
in such 10-K.

Item 2. Changes in  Securities,  Use of Proceeds and issuer  purchases of equity
securities.

Not applicable.
<PAGE>

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

As more fully described under "Liquidity and Capital Resources," in Part 1, Item
2 of this report (which  discussion is  incorporated by reference  herein),  the
Company was not in  compliance  with certain  financial  covenants and borrowing
base  limitations  under the Old Atlas  Revolver and the Westland  Loan from the
first  quarter of 2002 until the funding of the MLB Credit  Facility in December
2003 as described under "Recent Developments," in Part 1, Item 2 of this report.

Item 4.  Submission of Matters to a Vote of Security Holders.

Not applicable.

Item 5.  Other Information.

On February  19,  2004,  William  Rogner  replaced  James  Kolinski as the Chief
Executive Officer of Atlas.

Mr. Rogner has  approximately 18 years  experience with Atlas,  including having
previously   served  as  its  Executive  Vice   President,   Vice  President  of
Engineering,  Director of Contract  Management and Project Manager. In these and
other  capacities,  Mr. Rogner has at various times had direct  responsibilities
for  sales,  manufacturing,   engineering,  and  mechanical  engineering,  fluid
engineering,  and electrical controls.  As Executive Vice President,  Mr. Rogner
assisted in development  and  implementation  of the Company's  strategic  plan,
including the reduction of Atlas' financial break-even point by approximately 35
percent.  He initiated a value analysis and value engineering (VA/VE) program to
reduce  costs  at  least  5  percent  while  maintaining  or  improving  product
functionality.

Mr. Rogner also had direct  responsibility  for  establishing  Atlas'  Brazilian
subsidiary,  which  was  profitable  in  its  first  year,  and he  assisted  in
developing  sales and  service  in Europe and Asia and sales  representation  in
India. As part of a continuous focus on costs,  Mr. Rogner reduced  headcount by
over 40% in  approximately  three  years and sought to level load  (smooth  out)
manufacturing  schedules  and direct  labor  manpower  by  utilizing  production
outsourcing.  He also supervised the implementation of the Company's  enterprise
resource  planning  (ERP)  system.  From 1984 to 1997,  as  Director of Contract
Management at Atlas,  Mr. Rogner had direct  responsibility  for major projects,
customer  service,  and  warranty.  He also was a Project  Manager  with  direct
responsibility  for the mechanical design and building of machines and projects.
During  this time,  he managed  some of the  largest  projects in the history of
Atlas,  including an $18 million system which included an engineering  study and
implementation  of a  Greenfield  project  for an entire  press room for a major
appliance  manufacturer,  including  sheet  metal dies for a new  product.  This
project employed 18 presses,  three coil lines,  more than 130 tools, as well as
equipment automation, and quick die change capabilities.

Mr.  Rogner  spent two  years  away  from  Atlas in the past 20  years,  when he
co-founded an engineering  design and consulting  firm. As a company  principal,
Mr. Rogner  arranged the firm's line of credit,  more than doubled firm revenues
in its first two years of  operations,  broadened  the firm's  initial  customer
base,  enabling the firm to report net earnings of 10 percent of its sales.  Mr.
Rogner  received his B.S. from Michigan  State  University  and he also recently
completed an immersion  course at the Wharton  School of Business in finance for
non-financial executives.

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

     (a)  Exhibits.

          10.1 WCMA Loan and  Security  Agreement  dated as of November 25, 2003
               between  Atlas  Technologies,  Inc.  and Merrill  Lynch  Business
               Financial Services Inc. (1)

          10.2 Term Loan and  Security  Agreement  dated as of November 25, 2003
               between  Atlas  Technologies,  Inc.  and Merrill  Lynch  Business
               Financial Services Inc. (1)

          10.3 Term Loan and  Security  Agreement  dated as of November 25, 2003
               between  Atlas  Technologies,  Inc.  and Merrill  Lynch  Business
               Financial Services Inc. (1)

          10.4 General  Credit and  Security  Agreement  dated as of December 3,
               2003  between  WCS  Acquisition  Corp.  and  Spectrum  Commercial
               Services Company. (1)

          10.5 Guarantor Payment Agreement dated as of December 10, 2003 between
               WCS Acquisition Corp. and Bank One, NA. (1)

          10.6 Letter  Agreement  dated as of March 4, 2004 from  Merrill  Lynch
               Business  Financial  Services  Inc. to Atlas  Technologies,  Inc.
               modifying the WCMA Loan and Security Agreement.

          31.1 Certification of chief executive officer under section 302 of the
               Sarbanes-Oxley Act of 2002.

          31.2 Certification of chief financial officer under section 302 of the
               Sarbanes-Oxley Act of 2002.

          32.1 Certification of chief executive officer under section 906 of the
               Sarbanes-Oxley Act of 2002.

          32.2 Certification of chief financial officer under section 906 of the
               Sarbanes-Oxley Act of 2002.

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

               (1)  Filed as an exhibit to the  Company's  annual report on Form
                    10-K for the year ended June 30, 2003

     (b)  Reports on Form 8-K.

          None.


                                   SIGNATURES

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


                                     PRODUCTIVITY TECHNOLOGIES CORP.

Date:    March 9, 2004               By:  /s/  Samuel N. Seidman
                                     ---------------------------
                                     Samuel N. Seidman
                                     Chairman, Chief Executive Officer
                                     and President

Date:    March 9, 2004               By:  /s/  Jesse A. Levine
                                     -------------------------
                                     Jesse A. Levine
                                     Vice President, Secretary,
                                     Treasurer and Chief Financial Officer