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, 2004

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

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 November 16, 2004: 2,747,500 shares of common stock.




                                       1
<PAGE>

                         Productivity Technologies Corp.

                                      INDEX

                                                                           Page
                                                                          Number

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

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

        Consolidated Balance Sheets at September 30, 2004 (unaudited)
                and June 30, 2004..............................................3

        Consolidated Statements of Operations for the three months ended
                September 30, 2004 and 2003 (unaudited)........................5

        Consolidated Statement of Shareholders' Equity for the three months
                ended September 30, 2004 (unaudited)...........................6

        Consolidated Statements of Cash Flows for the three months ended
                September 30, 2004 and 2003 (unaudited)........................7

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

Item 2. Management's Discussion and Analysis of
                Financial Condition and Results of Operations.................10

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. Unregistered Sales of Equity Securities and Use of Proceeds...........12

Item 3. Defaults upon Senior Securities (not applicable)......................13

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

Item 5. Other Information  (not applicable)...................................13

Item 6. Exhibits  ............................................................13

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

                                       2
<PAGE>


                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                PRODUCTIVITY TECHNOLOGIES CORP. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>

                                                                            September 30, 2004    June 30, 2004
                                                                                (Unaudited)

Assets

Current Assets
<S>                                                                              <C>              <C>
     Cash                                                                        $ 1,103,224      $   233,882
     Short-term investments, including accrued interest                              253,997          450,080
     Contract receivables, net of allowance for doubtful accounts of
          $377,663 and $377,663                                                    4,402,166        4,479,656
     Costs and estimated earnings in excess of billings on
          uncompleted contracts                                                    2,078,680        3,759,498
     Inventories                                                                   1,141,236        1,151,703
     Prepaid expenses and other                                                      293,620          268,005
     Deferred income taxes                                                           173,000          173,000
                                                                                 -----------      -----------
Total current assets                                                               9,445,923       10,515,824
                                                                                 -----------      -----------

Property and equipment
     Land                                                                         $  591,514      $   591,514
     Buildings and improvements                                                    4,962,778        4,962,690
     Machinery and equipment                                                       4,235,886        4,235,503
     Transportation equipment                                                         34,079           21,000
                                                                                 -----------      -----------

                                                                                   9,824,257        9,810,707

          Less accumulated depreciation                                            4,394,818        4,241,399
                                                                                 -----------      -----------
Net property and equipment                                                         5,429,439        5,569,308
                                                                                 -----------      -----------


Other assets
     Goodwill                                                                      2,985,909        2,985,909
     Patent, net                                                                     232,520          256,893
     Deferred income taxes                                                           722,000          722,000
     Other assets                                                                    405,227          299,570
                                                                                 -----------      -----------
Total other assets                                                                 4,345,656        4,264,372
                                                                                 -----------      -----------
                                                                                 $19,221,018      $20,349,504
                                                                                 ===========      ===========

</TABLE>

     See accompanying notes to unaudited consolidated financial statements.

                                       3
<PAGE>


<TABLE>
<CAPTION>

                PRODUCTIVITY TECHNOLOGIES CORP. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

                                                                            September 30, 2004   June 30, 2004
                                                                                (Unaudited)
Liabilities and shareholders' equity

Current liabilities
<S>                                                                              <C>              <C>
     Current portion of long-term debt                                           $ 7,458,814      $ 7,305,936
     Accounts payable                                                              2,478,035        3,427,383
     Accrued expenses
          Commissions payable                                                        290,729          251,648
          Payroll and related withholdings                                                 -           85,665
          Warranty Reserve                                                           150,000          225,000
           Interest                                                                  252,224          240,755
          Other                                                                      186,185          271,199
Billings in excess of costs and estimated
     earnings on uncompleted contracts                                               840,650          652,849

Total current liabilities                                                        $11,656,637      $12,460,435

Executive deferred compensation agreements, less current maturities                  974,933          974,933
Long-term debt, less current maturities                                            3,558,325        3,613,326
                                                                                 -----------      -----------
Total liabilities                                                                 16,189,895       17,048,694
                                                                                 -----------      -----------
Shareholders' equity
     Common stock,  $.001 par value,  20,000,000 shares  authorized;
       2,747,500  shares and  2,475,000  issued and  outstanding  at
       September 30, 2004 and June 30, 2004, respectively                              2,748            2,475
     Additional paid-in capital                                                   10,075,135        9,966,408
     Accumulated deficit                                                         (7,046,760)      (6,668,073)
                                                                                 -----------      -----------
Total shareholders' equity                                                         3,031,123        3,300,810
                                                                                 ===========      ===========
Total liabilities and shareholders' equity                                       $19,221,018      $20,349,504
                                                                                 ===========      ===========

     See accompanying notes to unaudited consolidated financial statements.
</TABLE>

                                       4
<PAGE>


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

<TABLE>
<CAPTION>

                                                                                      Three Months Ended
                                                                               September 30,        September 30,
                                                                                   2004                 2003
                                                                               -------------        -------------

<S>                                                                             <C>                   <C>
Revenues Earned                                                                 $5,335,878            $7,564,463
Cost of Revenues Earned                                                          4,413,460             5,950,403
                                                                                ----------            ----------
Gross profit                                                                       922,418             1,614,060
Selling, general and administrative expenses                                     1,152,981             1,220,619
                                                                                ----------            ----------
Income (loss) from operations                                                     (230,563)              393,441
                                                                                ----------            ----------

Other income (expense)
     Interest income                                                                   263                   239
     Interest expense                                                             (170,146)             (171,749)
     Miscellaneous                                                                  21,759                (4,294)
                                                                                ----------            ----------
Total other expenses                                                              (148,124)             (175,804)
                                                                                ----------            ----------
Income (loss) before income taxes                                                 (378,687)              217,637
Income tax expense                                                                       -                 4,050

Net income (loss)                                                                ($378,687)             $213,587
                                                                                ===========           ==========
Basic Earnings per share                                                            ($0.14)                $0.09
                                                                                ===========           ==========
Diluted Earnings per share                                                          ($0.14)                $0.08
                                                                                ===========           ==========
Weighted average number of
     Common shares outstanding  (basic)                                          2,747,500             2,475,000

Weighted average number of                                                       2,747,500             2,629,000
      Common share outstanding (diluted)

</TABLE>

     See accompanying notes to unaudited consolidated financial statements.


                                       5
<PAGE>

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

<TABLE>
<CAPTION>


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

<S>          <C> <C>         <C>             <C>             <C>                 <C>                 <C>
Balance June 30, 2004        2,475,000       $  2,475        $ 9,966,408         $ (6,668,073)       $ 3,300,810

Net loss                            --             --                 --             (378,687)          (378,687)

Issuance of common stock       272,500            273            108,727                   --            109,000

Balance September 30, 2004   2,747,500       $  2,748       $ 10,075,135           (7,046,760)       $ 3,031,123
                             =========       ========       ============         =============       ===========

</TABLE>




     See accompanying notes to unaudited consolidated financial statements.

                                       6
<PAGE>

<TABLE>
<CAPTION>

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


                                                                                      Three Months Ended
                                                                               September 30,         September 30,
                                                                                   2004                  2003
                                                                               -------------         -------------

Cash flows from operating activities
<S>                                                                              <C>                  <C>
     Net income/(loss)                                                           ($378,687)           $  213,587
     Adjustments  to  reconcile  net   income/(loss)   to  net  cash
        provided by/(used in) operating activities:
            Depreciation                                                           153,419               152,421
            Amortization                                                            43,835                24,373
     Deferred income tax                                                                                       -
     Changes in operating assets and liabilities:
          Contract receivables                                                      77,490             1,557,538
          Inventories, prepaid expenses and other                                  (31,267)           (2,222,825)
          Costs and estimated earnings in excess of billings on
         uncompleted contracts, net effect                                       1,868,619            (1,510,090)
          Accounts payable, accrued expenses and other                          (1,144,477)              993,181
                                                                                ----------            ----------
Net cash provided /(used) in operating activities                                  588,932              (791,815)
                                                                                ----------            ----------
Cash flows from investing activities
     Proceeds from sale of short-term investments - net                            196,083               280,903
     Expenditures for property and equipment                                       (13,550)              (20,659)
                                                                                ----------            ----------
Net cash provided by investing activities                                          182,533               260,244
                                                                                ----------            ----------
Cash flows from financing activities
     Net borrowings/(payments) under revolving credit agreement                    152,879              (181,161)
     Payments on long term debt                                                   (100,002)              (68,148)
    Proceeds from long-term debt arrangement                                        45,000                    --

Net cash provided by/(used) in financing activities                                 97,877              (254,309)
                                                                                ----------            ----------
Net increase/(decrease) in cash                                                    869,342              (785,880)

Cash at the beginning of the period                                                233,882             1,163,187
                                                                                ----------            ----------
Cash at the end of the period                                                   $1,103,224            $  377,307
                                                                                ==========            ==========
Supplemental Cash Flow Information
     Cash paid during the period for interest                                   $  158,677            $  169,629

Schedule of Non-Cash Financing Activities
     Securities issued for commitment fees                                      $  109,000            $       --
                                                                                ----------            ----------

</TABLE>

     See accompanying notes to unaudited consolidated financial statements.

                                       7
<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  financial  statements.  The
information  furnished  in  the  accompanying  balance  sheets,   statements  of
operations,  shareholders' equity and cash flows, reflect all adjustments, which
are, in the opinion of  management,  necessary  for a fair  presentation  of the
aforementioned  financial statements for the interim periods.  Operating results
for the three months ended September 30, 2004, are not necessarily indicative of
the results that may be expected for the year ending June 30, 2005.

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,  2004.
Information  provided includes the consolidated  audited  financial  statements,
including footnotes for the year ended June 30, 2004 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 2004 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, packaging 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,  packaging,  adhesive
and sealants, engine part machining and other industries.


                                       8
<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."
Options to purchase shares of common stock were  outstanding as of September 30,
2004 but were not  included in the  computation  of diluted  earnings  per share
because the shares would be anti-dilutive.


3 Stock Option Plan

SFAS No. 123, "Accounting for Stock-Based  Compensation," prescribes a method of
accounting for stock-based  compensation that recognizes compensation cost based
on the fair value of options at grant date.  In lieu of applying this fair value
based method, a company may elect to disclose only the pro forma effects of such
application.  The Company has adopted the disclosure-only provisions of SFAS No.
123. In December 2002,  SFAS No. 148,  "Stock-Based  Compensation,"  was issued,
which requires that the Company illustrate the effect on net income and earnings
per share if it had applied the fair value  principles  included in SFAS No. 123
for both annual and interim financial  statements.  Accordingly,  if the Company
had  elected  to  recognize  compensation  cost  based on the fair  value of the
options at grant  date,  the  Company's  earnings  and  earnings  per share from
continuing  operations,  assuming  dilution,  for the three-month  periods ended
September  30,  2004 and 2003  would have been the pro forma  amounts  indicated
below:

<TABLE>
<CAPTION>

                                                           September 30,
                                            --------------------------------------------
                                                    2004                    2003
                                            ---------------------    -------------------
              Net earnings:
<S>                                                 <C>                     <C>
                   As reported                      $  (378,687)            $   213,587
                   Pro forma                        $  (378,687)            $   213,587

              Net earnings per share:
              As reported:
                   Basic                              $   (0.14)              $    0.09
                   Diluted                            $   (0.14)              $    0.08

              Pro forma:
                   Basic                              $   (0.14)              $    0.09
                   Diluted                            $   (0.14)              $    0.08

</TABLE>




                                       9
<PAGE>


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

Results of Operations

Three Months Ended  September 30, 2004 Compared to Three Months Ended  September
30, 2003

Unaudited  revenues  earned  for the  quarter  ended  September  30,  2004  were
$5,335,878,  as compared to $7,564,463 for the quarter ended September 30, 2003,
a decrease of 30%. Unaudited revenues for Atlas were down by 36% and Westland by
6%, due to slower  order  activity.  Management  believes  that order  activity,
starting at the end of the first  quarter and the beginning of the second fiscal
quarter, is showing signs of increasing again.

Gross profit for the quarter ended September 30, 2004 was $922,418, representing
a 43% decrease  compared to the  $1,614,060  gross profit for the quarter  ended
September  30, 2003.  The decrease in gross profits was  principally  due to the
lower volume and less profitable  product mix.  Margins  compressed due to lower
volumes and revenues  over which to spread  fixed and variable  costs during the
quarter.  As noted above,  the lower volumes were due to continued slow economic
activity in the capital goods industry.

Consolidated selling, general and administrative (SG&A) expenses were $1,152,981
or 6%  lower  than the  quarter  ended  September  30,  2003  SG&A  expenses  of
$1,220,619.  The reduction in SG&A expenses for the quarter ended  September 30,
2004 was due to continued  cost controls and cost  reductions at both  operating
subsidiaries,  and as  partially  offset  by a  $50,000  payment  for the  final
resolution  of a legal  matter which  related to the  Company's  September  2002
settlement with the former owner of Westland.

The net loss from  operations  for the  quarter  ended  September  30,  2004 was
$230,563, compared to income from operations for the quarter ended September 30,
2003 of $393,441.  This decrease for the quarter  resulted from the lower volume
offset by lower SG&A expenses explained above.

Interest  expense  for the quarter  ended  September  30,  2004 at $170,146  was
approximately  1% lower as compared to $171,749 for the quarter ended  September
30, 2003.

Net loss for the quarter ended September 30, 2004 was $378,687,  compared to net
income of $213,587 for the quarter ended  September  30, 2003.  The reported net
loss for the  quarter  of  ($0.14)  per  share  (basic  and  diluted),  based on
2,747,500  weighted average common shares outstanding (basic and diluted) during
the quarter.  This  compared to net income for the quarter  ended  September 30,
2003 of $0.09 cents per share (basic) and $0.08 cents per share (diluted), based
on 2,475,000  weighted average common shares  outstanding  (basic) and 2,629,000
weighted average common shares  outstanding  (diluted) 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, 2004 is as follows:

                                                  September 30, 2004
                                    --------------------------------------------
                                         Gross         Accumulated        Net
                                       Carrying                          Book
                                        Amount         Amortization      Value


Patents                                $573,132          $340,612     $232,520

Non-compete Agreements                  348,750           274,992       73,758

ML Closing Fees                         154,603            35,045      119,558

                                -----------------------------------------------
Total                                $1,076,485          $650,649     $425,836
                                ===============================================

                                       10
<PAGE>

Liquidity and Capital Resources

At  September  30,  2004,  the  Company  had   approximately  (1)  $3.4  million
outstanding under a commercial mortgage loan for Atlas as part of the MLB Credit
Facility, (2) $0.4 million outstanding under an equipment term loan for Atlas as
part of the MLB Credit Facility,  (3) debt of $4.0 million  outstanding  under a
revolving  credit  facility  for Atlas as part of the MLB Credit  Facility,  (4)
deferred  executive  compensation  obligations of  approximately  $0.975 million
originally  scheduled to be paid over three equal annual installments during the
period from July 2000 through July 2002, (5) $0.8 million  outstanding under the
Spectrum Credit Facility,  (6) $2.2 million outstanding under the Westland Loan,
and (7) $300,000 outstanding in convertible subordinated debentures which mature
in June 2007.  This total of $11.98 million of debt compares to a total combined
indebtedness approximating $11.9 million as of June 30, 2004.

Working capital deficit at September 30, 2004 was  ($2,210,714)  and the current
ratio was (.81) to 1, as compared to a working  capital  deficit of ($1,913,000)
and a current ratio of (.85) to 1 for the Company at June 30, 2004.

Assuming no adverse  developments in the near term,  management believes that it
has sufficient funds available to it under the various facilities and operations
to provide for it working capital needs in the near term.

Off Balance Sheet Arrangements

During the quarter  ended  September  30, 2004,  the Company had no  off-balance
sheet arrangements other than operating leases entered into in the normal course
of business, as indicated in the table below.

Summary of Contractual Commitments

The following table represents contractual commitments associated with operating
agreements  (excluding  interest  on  debt  obligations)  for the  fiscal  years
indicated, and thereafter. With respect to the lines of credit borrowed by Atlas
and Westland,  at September 30, 2004,  these amounted to $4.0 million in maximum
revolving  commitments  for Atlas which will be up for renewal in December  2004
and $1.25 million in maximum revolving commitments for Westland which will be up
for renewal in December 2005.
<TABLE>
<CAPTION>

                             2005         2006         2007         2008         2009       There-after     Total
                           ---------    ---------    ---------    ---------    ----------   ----------    ----------
<S>                         <C>          <C>          <C>          <C>           <C>        <C>           <C>
Real estate term loan        233,342      233,333      233,333      233,333       233,333    2,236,105     3,402,780
Equipment term loan          166,667      166,667       97,222          --           --            --        430,555
Revolver - Atlas           3,998,177          --           --           --           --            --      3,998,177
Revolver - Westland          695,167                                                                         695,167
Subordinated term loan     2,212,583          --           --           --           --            --      2,212,583
Debentures                       --           --           --       300,000          --            --       300,000
                           ---------    ---------    ---------    ---------    ----------   ----------    ----------
         Total debt        7,305,936      400,000      330,555      533,333      233,333     2,236,105    11,039,262

Building lease               214,867      214,867                                                            429,734
                           ---------    ---------    ---------    ---------    ----------   ----------   ----------
          Total            7,520,803      614,867      330,555      533,333      233,333     2,236,105    11,468,996
                           =========    =========    =========    =========    ==========   ==========   ===========
</TABLE>

Impact of Recently Issued Accounting Standards

In March 2004, the FASB issued a proposed statement,  "Share-Based  Payment - an
Amendment to Statement  Nos. 123 and 95" that would require stock based employee
compensation  to be recorded  as a charge to  earnings  using a fair value based
method.  The  proposed  statement  is  effective  for interim or annual  periods
beginning  after June 15, 2005.  The Company will continue to monitor the FASB's
progress  on this  issuance  of the  proposed  statement  and its  impact on the
Company's consolidated financial statements.

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


                                       11
<PAGE>

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, 2004. 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;
however,  management has begun to implement the changes necessary to address the
issues identified below.

In connection with its audit of the Company's  consolidated financial statements
as of and for the year ended June 30, 2004,  the Company's  auditor  advised the
Company's management and its Audit Committee that it had identified deficiencies
which were  designated as "reportable  conditions"  but which did not constitute
"material  weaknesses".  Areas  requiring  improvement  include (1)  reconciling
intercompany   accounts  and  balances  between   consolidated   entities,   (2)
recordkeeping  over  property,   plant  and  equipment,  (3)  recordkeeping  and
evaluation  of deferred  tax assets and  liabilities  and  analysis of valuation
allowance against net deferred tax assets, and (4) reviewing accounting activity
performed  on  amounts  appearing  in  the  Company'  s  consolidated  financial
statements. In addition, in the past the Company has not filed on a timely basis
certain of its  quarterly  reports  on Forms 10-Q and its annual  report on Form
10-K with the Securities  Exchange  Commission within the required due dates. An
extension of time to file was  requested  for the annual report on Form 10-K for
the year ended June 30,  2004 (as well as this  quarterly  report on Form 10-Q),
which, under Section 404 of the Sarbanes Oxley Act,  constitutes a deficiency in
internal  controls  over  financial  reporting.  The Company has assigned a high
priority  to the short-  and  long-term  correction  of these  internal  control
deficiencies and believes it can make significant  progress toward correction of
these matters in fiscal 2005.




                           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,  2004,  there have been no  material  new legal  proceedings
involving the Company or any material  developments to the proceedings described
in such 10-K. The company recorded a $50,000 payment for the final resolution of
a legal matter which related to the Company's September 2002 settlement with the
former owner of Westland.

Item 2.  UNREGISTERED SALES OF equity securities AND USE OF PROCEEDS.

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<PAGE>

Recent Sales of Unregistered Securities

In June 2004,  Cornell  Capital  Partners  ("Cornell  Capital")  entered  into a
securities  purchase  agreement  with the Company  under which  Cornell  Capital
agreed to purchase $300,000 face amount of the Company's convertible debentures.
Cornell Capital purchased $200,000 face amount of convertible debentures in June
2004. Cornell Capital subsequently  purchased $50,000 face amount of convertible
debentures in July 2004 and $50,000 of face amount of convertible  debentures in
September  2004. In each case,  the purchase  price of the debentures was 90% of
their face amount,  so that Cornell  Capital paid  $270,000 in the aggregate for
$300,000 face amount of the Company's convertible debentures.

The debentures are convertible at the holder's option any time up to maturity at
a  conversion  price equal to the lower of (i) $0.48 or (ii) 100% of the average
of the three  lowest  closing  bid  prices of the  common  stock for the  thirty
trading days  immediately  preceding the  conversion  date.  The  debentures are
secured by a second  mortgage  on real  property  owned by the  Company's  Atlas
subsidiary.  The debentures have a three-year term and accrue interest at 5% per
year.  Interest  accrues and must be paid at or prior to maturity.  At maturity,
the  Company has the option to either pay the holder the  outstanding  principal
balance and accrued  interest or to convert the debentures into shares of common
stock at a conversion  price equal to the lower of (i) $0.48 or (ii) 100% of the
average of the three  lowest  closing  bid  prices of the  common  stock for the
thirty  trading days  immediately  preceding the  conversion  date. No principal
payments are due prior to maturity.

The Company can redeem the debentures by paying Cornell Capital Partners 120% of
the face  amount of the  debentures  to be redeemed  and by issuing  warrants to
Cornell Capital Partners to purchase 50,000 shares of the Company's common stock
for every $100,000 of debentures redeemed.

In connection with Cornell Capital's  investment in the convertible  debentures,
in July 2004,  the Company  issued to Cornell  247,500  shares of the  Company's
common stock as a commitment fee, valued at $0.40 per share.  The Company issued
to Newbridge Security  Corporation  ("Newbridge") an additional 25,000 shares of
its common stock as a placement agent fee. These shares were valued at $0.40 per
share, or $109,000 in the aggregate.  Cornell Capital and Newbridge received the
shares of common stock from the Company in a private  placement in reliance upon
the exemption from  registration  available under Section 4(2) of the Securities
Act of 1933.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

Not applicable.

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

Not applicable.

Item 5.  Other Information.

Not applicable.

Item 6.  Exhibits.

          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.


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<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:    November 16, 2004          By:  /s/  Samuel N. Seidman
                                        ----------------------------------------
                                        Samuel N. Seidman
                                        Chairman, Chief Executive Officer
                                        and President

Date:    November 16, 2004          By:  /s/  Jesse A. Levine
                                        ----------------------------------------
                                        Jesse A. Levine
                                        Vice President, Secretary, Treasurer
                                        and Chief Financial Officer