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: December 31, 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 ________

                      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 December 31, 2003
                (unaudited) and June 30, 2003..................................3

              Consolidated Statements of Operations for the three and
                six months ended December 31, 2003 and 2002 (unaudited)........5

              Consolidated Statement of Stockholders' Equity for the
                six months ended December 31, 2003 (unaudited).................6

              Consolidated Statements of Cash Flows for the  six months
                ended December 31, 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   .............................13

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

<PAGE>
                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                PRODUCTIVITY TECHNOLOGIES CORP. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>

                                                                          December 31, 2003       June 30, 2003
                                                                             (Unaudited)

Assets

Current Assets
<S>                                                                                 <C>            <C>
     Cash                                                                           $477,797       $1.163,187
     Short-term investments, including accrued interest                               96,179          540,582
     Contract receivables, net of allowance for doubtful accounts of
          $237,663 and $227,663                                                    3,653,566        3,620,852
     Costs and estimated earnings in excess of billings on
          uncompleted contracts                                                    4,670,221        3,423,457
     Inventories                                                                   1,010,618        1,154,512
     Prepaid expenses and other                                                      309,978          328,517
     Deferred income taxes                                                           290,000          290,000
                                                                                  ----------       ----------
Total current assets                                                              10,508,359       10,521,107
                                                                                  ----------       ----------


Property and equipment
     Land                                                                           $591,514         $591,514
     Buildings and improvements                                                    4,963,008        4,962,690
     Machinery and equipment                                                       4,245,837        4,215,036
     Transportation equipment                                                         21,000           21,000
                                                                                  ----------       ----------

                                                                                   9,821,359        9,790,240

          Less accumulated depreciation                                            3,936,557        3,631,717
                                                                                  ----------       ----------

Net property and equipment                                                         5,884,802        6,158,523
                                                                                  ----------       ----------

Other assets
     Goodwill                                                                      2,985,909        2,985,909
     Patent, net                                                                     305,638          354,384
     Deferred income taxes                                                           430,000          430,000
     Other assets                                                                    311,869          252,955
                                                                                  ----------       ----------

Total other assets                                                                 4,033,416        4,023,248
                                                                                  ----------       ----------
                                                                                 $20,426,577      $20,702,878
                                                                                 ===========      ===========
     See accompanying notes to unaudited consolidated financial statements.

</TABLE>

<PAGE>
<TABLE>
<CAPTION>

                PRODUCTIVITY TECHNOLOGIES CORP. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

                                                                           December 31, 2003       June 30, 2003
                                                                              (Unaudited)
Liabilities and stockholders' equity

Current liabilities
<S>                                                                                <C>            <C>
Current portion of long-term debt                                                  4,355,503       $8,385,918
Accounts payable                                                                   4,646,157        3,784,778
Accrued expenses
     Commissions payable                                                             331,229          310,000
     Payroll and related withholdings                                                119,497           62,464
     Warranty Reserve                                                                275,000          250,000
     Interest                                                                        230,663          610,957
     Other                                                                            11,790          143,574
Billings in excess of costs and estimated
     earnings on uncompleted contracts                                               830,375        1,864,980
Current maturities of executive deferred compensation agreements                           -          974,933
                                                                                  ----------       ----------
Total current liabilities                                                        $10,800,214      $16,387,604

Executive deferred compensation agreements, less current maturities                  974,933                -
Long-term debt, less current maturities                                            5,834,992        1,735,000
                                                                                  ----------       ----------
Total liabilities                                                                 17,610,139       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                                                          (7,152,445)      (7,388,609)
                                                                                  ----------       ----------
Total stockholders' equity                                                         2,816,438        2,580,274
                                                                                  ----------       ----------
                                                                                 $20,426,577      $20,702,878
                                                                                 ===========      ===========

     See accompanying notes to unaudited consolidated financial statements.

</TABLE>
<PAGE>

                PRODUCTIVITY TECHNOLOGIES CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENT OF OPERATIONS
                                   (Unaudited)
<TABLE>
<CAPTION>



                                                  Three Months Ended                           Six Months Ended
                                             December 31,       December 31,              December 31,       December 31,
                                               2003               2002                       2003               2002
                                             ------------       ------------              ------------       ------------

<S>                                         <C>                  <C>                       <C>                <C>
Revenues Earned                             $7,839,274           $7,616,976                $15,403,737        $14,353,919

Cost of Revenues Earned                      6,491,408            5,899,528                 12,441,811         11,062,419
                                            ----------           ----------                -----------        -----------
Gross Profit                                 1,347,866            1,717,448                  2,961,926          3,291,500

 Selling, general and
   administrative expenses                   1,287,599            1,407,758                  2,508,218          2,934,174
                                            ----------           ----------                -----------        -----------
 Income from operations                         60,267              309,690                    453,708            357,326

 Other income (expense)
           Interest income                          45                  938                        284              8,405
           Interest expense                   (174,435)            (170,307)                  (346,184)          (362,865)
           Miscellaneous                        11,701               13,066                      7,406             27,165
                                            ----------           ----------                -----------        -----------
 Total other expenses                         (162,689)            (156,303)                  (338,494)          (327,295)
                                            ----------           ----------                -----------        -----------
 (Loss) income before income taxes
    and extraordinary item                    (102,422)             153,387                    115,214             30,031
 Income tax expense (benefit)                        0                    0                      4,050            (29,981)
                                            ----------           ----------                -----------        -----------

 (Loss) income before extraordinary item      (102,422)             153,387                    111,164             60,012

 Extraordinary item, gain on extinguishment
    of debt                                    125,000                    -                    125,000                  -
                                            ----------           ----------                -----------        -----------
 Net income                                    $22,578             $153,387                   $236,164            $60,012

 Basic earnings (loss) per share:
   Before extraordinary gain                    $(0.04)              $0.06                       $0.05              $0.02
   Extraordinary gain                             0.05                   -                        0.05                  -
                                            ----------           ----------                -----------        -----------
        Total basic net income                  $ 0.01               $0.06                       $0.10              $0.02


Diluted earnings (loss) per share:
   Before extraordinary gain                    $(0.04)              $0.06                       $0.04              $0.02
   Extraordinary gain                             0.05                   -                        0.05                  -
                                            ----------           ----------                -----------        -----------
        Total diluted net income                $ 0.01               $0.06                       $0.09              $0.02
                                            ==========           ==========                ===========        ===========
 Weighted average number of
    common shares outstanding:
            Basic                            2,475,000            2,475,000                  2,475,000          2,475,000
            Diluted                          2,629,000            2,475,000                  2,629,000          2,475,000



See accompanying notes to unaudited consolidated financial statements.

</TABLE>

<PAGE>



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

<TABLE>
<CAPTION>



                                    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                          --             --                    --         236,164             236,164
                             ---------         ------            ----------     ------------         ----------
December 31, 2003            2,475,000         $2,475            $9,966,408     ($7,152,445)         $2,816,438
                             =========         ======            ==========     ============         ==========

</TABLE>



     See accompanying notes to unaudited consolidated financial statements.

<PAGE>

<TABLE>
<CAPTION>

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


                                                                                      Six Months Ended
                                                                            December 31, 2003       December 31, 2002

Cash flows from operating activities
<S>                                                                               <C>                    <C>
     Net income                                                                   $236,164               $60,012
     Adjustments to reconcile net income to net cash
          used in operating activities:
            Depreciation                                                           304,840               304,841
            Amortization                                                            48,746                71,246
            Gain on extinguishment of debt                                        (125,000)                     -
     Changes in operating assets and liabilities:
          Contract receivables                                                     (32,714)           (2,930,365)
          Inventories, prepaid expenses and other                                  103,519               283,602
          Costs and estimated earnings in excess of billings
               on uncompleted contracts, net effect                             (2,281,369)            1,726,887
          Accounts payable, accrued expenses and other                             452,563               619,468
                                                                                -----------            ---------
Net cash (used in) provided by operating activities                             (1,293,251)              135,691
                                                                                -----------            ---------

Cash flows from investing activities
     Proceeds from sale (purchase of) short-term investments - net                 444,403              (20,047)
     Expenditures for property and equipment                                       (31,119)                (967)
                                                                                -----------            ---------
Net cash provided by (used in) investing activities                                413,284              (21,014)
                                                                                -----------            ---------
Cash flows from financing activities
     Net payments under revolving credit agreements                               (512,275)           (2,062,030)
     Borrowings on long term debt                                                4,000,000                     -
     Payments on long term debt                                                 (3,293,148)             (800,000)
                                                                                -----------            ---------
Net cash provided by (used in) financing activities                                194,577            (2,862,030)
                                                                                -----------            ---------
Net decrease in cash                                                              (685,390)           (2,747,353)

Cash at the beginning of the period                                              1,163,187             4,971,837
                                                                                -----------            ---------
Cash at the end of the period                                                     $477,797            $2,224,484
                                                                                ===========           ==========
Supplemental Cash Flow Information
     Cash paid during the period for interest                                     $726,478              $317,588
     Income Taxes Received                                                              $-               $29,981

Schedule of Non-Cash Financing Activities
     Goodwill reduction and debt extinguishment                                         $0            $1,940,538
                                                                                -----------            ---------

</TABLE>

     See accompanying notes to unaudited consolidated financial statements.



                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,  consolidated  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 six months ended
December 31, 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.

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."


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").

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 and Six Months Ended  December  31, 2003  Compared to Three and Six Months
Ended December 31, 2002

Unaudited  revenues  earned  for  the  quarter  ended  December  31,  2003  were
$7,839,274,  as compared to $7,616,976  for the quarter ended December 31, 2002,
an increase of 3%.  Revenues  earned for the six months ended  December 31, 2003
were $15,403,737, an increase of more than 7% from the six months ended December
31, 2002  revenues  earned of  $14,353,919.  Gross profit for the quarter  ended
December 31, 2003 was  $1,347,866,  representing a 22% decrease  compared to the
$1,717,448  gross profit for the quarter ended  December 31, 2002.  While volume
increased  as noted,  the sales were less  profitable  overall 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.  For the six
months ended December 31, 2003,  gross profit was $2,961,926,  down 10% compared
to the six months ended December 31, 2002 gross profit of $3,291,500.

Consolidated selling, general and administrative (SG&A) expenses were $1,287,599
or 9%  lower  than  the  quarter  ended  December  31,  2002  SG&A  expenses  of
$1,407,758.  For the six  months  ended  December  31,  2003  SG&A  expense  was
$2,508,218 or $425,956  lower than the six months ended  December 31, 2002.  The
reduction in SG&A  expenses  for the quarter and six months  ended  December 31,
2003 was due to continued  cost controls and cost  reductions at both  operating
subsidiaries.

The income from  operations for the quarter ended December 31, 2003 was $60,267,
compared to income from  operations  for the quarter ended  December 31, 2002 of
$309,690.  The  decrease in income from  operations  in the second  quarter is a
direct  result of the lower gross  margin  noted above offset by the lower SG&A.
For the six months ended December 31, 2003,  income from operations was $453,708
or $96,382 higher than the six months ended December 31, 2002. This increase for
six months ended December 31, 2003 was primarily  attributable to the lower SG&A
expenses explained above.

Interest  expense for the quarter  ended  December  31,  2003 was  $174,435,  as
compared to $170,307 for the quarter ended December 31, 2002. For the six months
ended December 31,2003 interest expense was $346,184 as compared to $362,865 for
the prior six months ended December 31, 2002.

The net income for the quarter  ended  December 31, 2003 was $22,578  ($0.01 per
share (basic and diluted))  compared to net income of $153,387  ($0.06 per share
(basic and diluted)) for the quarter ended December 31, 2002. The net income for
the six months ended December 31, 2003 was $236,164 ($0.10 per share (basic) and
$0.90 per share  (diluted))  as compared  to a net income of $60,012  ($0.02 per
share (basic and diluted)) for the six months ended  December 31, 2002.  The net
income for the three and six months ended  December 31, 2003 included a $125,000
gain on extinguishment of debt.

The  gross  carrying  amount  and  accumulated  amortization  of  the  Company's
intangible assets other than goodwill as of December 31, 2003 is as follows:

                                                   December 31, 2003
                                    --------------------------------------------
                                         Gross          Accumulated        Net
                                       Carrying                            Book
                                        Amount         Amortization       Value


Patents                                 $573,132         $267,494      $305,638

Non-compete Agreements                   348,750          248,172       100,578

Bank Closing Fees                        189,785           67,500       122,285

                                    --------------------------------------------
Total                                 $1,111,667         $583,166      $528,501
                                    ============================================

Liquidity and Capital Resources

At December  31,  2003,  the Company had (1) $3.5  million  outstanding  under a
commercial mortgage loan for Atlas as part of the MLB Credit Facility,  (2) $0.5
million  outstanding  under an equipment  term loan for Atlas as part of the MLB
Credit  Facility,  (3) debt of $3,221,636  outstanding  under a revolving credit
facility for Atlas as part of the MLB Credit  Facility,  (4) deferred  executive
compensation  obligations of $974,933 originally scheduled to be paid over three
equal  annual  installments  during the period from July 2000 through July 2002,
(5) $733,859 outstanding under the Spectrum Credit Facility,  and (6) $2,210,000
outstanding  under the Westland Loan.  This total of $11,140,428 at December 31,
2002 compares to a total  combined  long-term  debt financing and line of credit
balance of  $12,162,703 at December 31, 2002.  The increase in  indebtedness  at
December  31,  2003 is  principally  due the  refinancings  by  both  Atlas  and
Westland,  with two new lenders,  as of December 12,  2003,  whereby  additional
credit was made available to the subsidiaries. See "Recent Developments" in this
Item 2.

Working  capital  deficit at December  31, 2003 was  ($291,855)  and the current
ratio was (.97) 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.

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 through the end of the 2004
fiscal year.

Off Balance Sheet Arrangements

During the three and six months  ended  December  31,  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.

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 its Atlas revolving credit facility with Bank One 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. (2)

          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

               (2)  Filed as an exhibit  to the  Company's  quarterly  report on
                    Form 10-Q for the quarter ended September 30, 2003

     (b)  Reports on Form 8-K.

              None.


<PAGE>

                                   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 11, 2004                     By:  /s/  Samuel N. Seidman
                                               --------------------------------
                                            Samuel N. Seidman
                                            Chairman, Chief Executive Officer
                                            and President

Date:    March 11, 2004                     By:  /s/  Jesse A. Levine
                                               --------------------------------
                                            Jesse A. Levine
                                            Vice President, Secretary, Treasurer
                                            and Chief Financial Officer