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: March 31, 2005

                                       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              (I.R.S. Employer Identification No.)
of 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 May 13, 2005: 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

        Condensed Consolidated Balance Sheets at March 31, 2005 (Unaudited)
                and June 30, 2004..............................................3

        Condensed Consolidated Statements of Operations for the three and
                nine months ended March 31, 2005 and 2004 (Unaudited)..........5

        Condensed Consolidated Statement of Shareholders' Equity
                for the nine months ended March 31, 2005 (Unaudited)...........6

        Condensed Consolidated Statements of Cash Flows for the nine
                months ended March 31, 2005 and 2004 (Unaudited)...............7

        Notes to Unaudited Condensed 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.............13

Item 4. Controls and Procedures...............................................13

PART II OTHER INFORMATION.....................................................14

Item 1. Legal Proceedings ....................................................14

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds...........14

Item 3. Defaults upon Senior Securities (not applicable)......................14

Item 4. Submission of Matters to a Vote of Security Holders (not applicable)..14

Item 5. Other Information (not applicable)....................................14

Item 6. Exhibits  ............................................................14

SIGNATURES....................................................................15


                                       2
<PAGE>


                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS
<TABLE>
<CAPTION>

                                           PRODUCTIVITY TECHNOLOGIES CORP. AND SUBSIDIARIES
                                                CONDENSED CONSOLIDATED BALANCE SHEETS


                                                                                March 31, 2005           June 30, 2004
                                                                               --------------           -------------
                                                                                 (Unaudited)

Assets

Current Assets
<S>                                                                               <C>                <C>
     Cash                                                                         $1,168,359         $233,882
     Short-term investments, including accrued interest                              147,792          450,080
     Contract receivables, net of allowance for doubtful accounts of
          $387,663 and $377,663                                                    4,786,520        4,479,656
     Costs and estimated earnings in excess of billings on
          uncompleted contracts                                                    2,185,691        3,759,498
     Inventories                                                                   1,238,615        1,151,703
     Prepaid expenses and other                                                      251,172          268,005
     Deferred income taxes                                                           173,000          173,000
                                                                                     -------          -------
Total current assets                                                               9,951,149       10,515,824
                                                                                   ---------       ----------


Property and equipment
     Land                                                                           $591,514         $591,514
     Buildings and improvements                                                    4,962,690        4,962,690
     Machinery and equipment                                                       4,256,385        4,235,503
     Transportation equipment                                                         34,079           21,000
                                                                                      ------           ------

                                                                                   9,844,668        9,810,707

          Less accumulated depreciation                                            4,700,551        4,241,399
                                                                                   ---------        ---------

Net property and equipment                                                         5,144,117        5,569,308
                                                                                   ---------        ---------


Other assets
     Goodwill                                                                      2,985,909        2,985,909
     Patent, net                                                                     183,774          256,893
     Deferred income taxes                                                           752,000          722,000
     Other assets                                                                    405,334          299,570
                                                                                     -------          -------

Total other assets                                                                 4,327,017        4,264,372
                                                                                   ---------        ---------

                                                                                  19,422,283      $20,349,504
                                                                                  ==========      ===========
</TABLE>
See accompanying notes to unaudited condensed consolidated financial statements.


                                       3
<PAGE>
<TABLE>
<CAPTION>
                                           PRODUCTIVITY TECHNOLOGIES CORP. AND SUBSIDIARIES
                                                CONDENSED CONSOLIDATED BALANCE SHEETS

                                                                               March 31, 2005   June 30, 2004
                                                                               --------------   -------------
                                                                                (Unaudited)
Liabilities and stockholders' equity

Current liabilities
<S>                                                                               <C>              <C>
     Current portion of long-term debt                                            $7,527,861       $7,305,936
     Accounts payable                                                              2,739,452        3,427,383
     Accrued expenses
          Commissions payable                                                        194,265          251,648
          Payroll and related withholdings                                            26,464           85,665
          Warranty Reserve                                                           125,000          225,000
           Interest                                                                  251,538          240,755
          Other                                                                      292,339          271,199
Billings in excess of costs and estimated
     earnings on uncompleted contracts                                             1,101,346          652,849
                                                                                   ---------          -------

Total current liabilities                                                        $12,258,265      $12,460,435

Executive deferred compensation agreements, less current maturities                  974,933          974,933
Long-term debt, less current maturities                                            3,365,826        3,613,326
                                                                                   ---------        ---------

Total liabilities                                                                 16,599,024       17,048,694
                                                                                  ----------       ----------

Stockholders' equity
     Common stock, $.001 par value, 20,000,000 shares authorized;
          2,747,500 shares and 2,475,000 issued and outstanding at                     2,748            2,475
March 31, 2005 and June 30, 2004 respectively.
     Additional paid-in capital                                                   10,075,135        9,966,408
     Accumulated deficit                                                         (7,254,624)      (6,668,073)
                                                                                 -----------      -----------

Total stockholders' equity                                                         2,823,259        3,300,810
                                                                                   ---------        ---------

Total liabilities and shareholders' equity                                       $19,422,283      $20,349,504
                                                                                 ===========      ===========
</TABLE>

See accompanying notes to unaudited condensed consolidated financial statements.


                                       4
<PAGE>

<TABLE>
<CAPTION>

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

                                                          Three Months Ended                        Nine Months Ended
                                                          ------------------                        -----------------
                                                    March 31,            March 31,            March 31,            March 31,
                                                      2005                2004                 2005                 2004
                                                      ----                ----                 ----                 ----
<S>                                                 <C>                 <C>                  <C>                 <C>
Revenues Earned                                     $6,168,706          $5,638,873           $16,885,748         $21,042,610

Cost of Revenues Earned                              4,836,843           4,280,512            13,592,541          16,722,323
                                            -------------------  ------------------  --------------------  ------------------

Gross Profit                                         1,331,863           1,358,361             3,293,207           4,320,287
Selling, general and
administrative expenses                              1,137,429           1,121,012             3,438,597           3,629,230
                                            -------------------  ------------------  --------------------  ------------------
Income (loss) from operations                          194,434             237,349             (145,390)             691,057
Other income (expense)

          Interest income                                   47                 371                   468                 655

          Interest expense                           (188,128)           (216,472)             (554,686)           (562,656)

          Miscellaneous                                (2,784)            (41,579)               113,057            (34,173)
                                            -------------------  ------------------  --------------------  ------------------
Total other expenses                                 (190,865)           (257,680)             (441,161)           (596,174)
                                            -------------------  ------------------  --------------------  ------------------

Income (loss) before income taxes
and extraordinary items                                  3,569            (20,331)             (586,551)              94,883

Income tax expense                                           0               4,050                     0                   0
                                            -------------------  ------------------  --------------------  ------------------
Net income (loss) before
extraordinary item                                      $3,569           ($16,281)            ($586,551)             $94,883
                                            ===================  ==================  ====================  ==================

Extraordinary item, gain on
extinguishment of debt                                      --                  --                    --             125,000
Net Income (loss)                                       $3,569           ($16,281)            ($586,551)            $219,883
Basic earnings (loss) per share:
      Before extraordinary gain                          $0.00             ($0.01)               ($0.21)               $0.04
      Extraordinary gain                                    --                  --                    --               $0.05

         Total basic net income                          $0.00             ($0.01)               ($0.21)               $0.09
Diluted earnings (loss) per share
      Before extraordinary gain                          $0.00             ($0.01)               ($0.20)               $0.03
      Extraordinary gain                                    --                  --                    --               $0.05

         Total diluted net income                        $0.00             ($0.01)               ($0.20)               $0.08
Weighted average number of
         common shares
         outstanding:
         Basic                                       2,747,500           2,475,000             2,747,500           2,475,000
         Diluted                                     3,003,500           2,629,000             3,003,500           2,629,000


</TABLE>

See accompanying notes to unaudited condensed consolidated financial statements.



                                       5
<PAGE>


<TABLE>
<CAPTION>


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


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

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

Net loss                                  --             --                 --        (586,551)           (586,551)
                                          --             --                 --     -----------          ----------

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

Balance, March 31, 2005            2,747,500         $2,748        $10,075,135     ($7,254,624)         $2,823,259
                                   =========         ======        ===========     ============         ==========

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


                                       6
<PAGE>
<TABLE>
<CAPTION>

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


                                                                                      Nine Months Ended
                                                                               March 31,             March 31,
                                                                                  2005                  2004
                                                                                  ----                  ----

Cash flows from operating activities
<S>                                                                             <C>                     <C>
     Net income/(loss)                                                          ($586,551)              $219,883
     Adjustments to reconcile net income/(loss) to net cash
        provided by (used in) operating activities:
            Depreciation                                                           459,156               457,260
            Amortization                                                           147,657                73,119
            Gain on extinguishment of debt                                               -               125,000

     Deferred income tax                                                          (30,000)                     -
     Changes in operating assets and liabilities:
          Contract receivables                                                   (306,864)           (1,132,787)
          Inventories, prepaid expenses and other                                (141,385)                20,769
          Costs and estimated earnings in excess of billings
               on uncompleted contracts, net effect                              2,022,304             (796,763)
          Accounts payable, accrued expenses and other                           (872,592)           (1,005,077)
                                                                                 ---------           -----------

Net cash provided by (used in) operating activities                                691,725           (2,038,596)
                                                                                   -------           -----------

Cash flows from investing activities
     Proceeds from sale of short-term investments - net                            302,288               375,585
     Expenditures for property and equipment                                      (33,961)              (32,368)
                                                                                  --------              --------

Net cash provided by investing activities                                          268,327               343,217
                                                                                   -------               -------

Cash flows from financing activities
     Net repayments under revolving credit agreement                               221,925             (695,236)
     Borrowings on long term debt                                                  256,907             1,673,325
     Payments on long term debt                                                  (504,407)                     -
                                                                                 ---------                     -

Net cash (used in) provided by financing activities                               (25,575)               978,089
                                                                                  --------               -------
Net increase (decrease) in cash                                                    934,477             (717,290)

Cash at the beginning of the period                                                233,882             1,163,187
                                                                                   -------             ---------
Cash at the end of the period                                                   $1,168,359              $445,897
                                                                                ==========              ========

Supplemental Cash Flow Information
     Cash paid during the period for interest                                   $  543,903              $916,838
     Cash paid during the period for income taxes                               $      ---              $    ---

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



</TABLE>

See accompanying notes to unaudited condensed consolidated financial statements.




                                       7
<PAGE>

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


1. Basis of Presentation

The  unaudited  condensed  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,  stockholders'  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 nine months ended March 31, 2005, 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. In March 2004, Atlas formed a German subsidiary, Atlas Technologies GmbH,
in order to facilitate its operations in Europe.

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,  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

Basic net earnings per share  excluding  dilution has been  computed by dividing
the net earnings by the weighted-average number of common shares outstanding for
the period.  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."  Diluted  earnings per share is
computed  the same as basic except that the  denominator  also  includes  shares
issuable upon assumed  exercise of stock options.  Options to purchase shares of
common stock were  outstanding as of March 31, 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 and nine month periods
ended  March 31, 2005 and 2004 would have been the pro forma  amounts  indicated
below:
<TABLE>
<CAPTION>

                            ----------------------------------------- -- ----------------------------------------
                                  Three months ended March 31,                 Nine months ended March 31,
                            ----------------------------------------- -- ----------------------------------------
                                   2005                  2004                  2005                  2004
                            -------------------    ------------------ -- ----------------- -- -------------------
Net earnings:
<S>                             <C>                 <C>                  <C>                     <C>
     As reported                $  3,569            $   (16,281)         $  (586,551)            $   219,883
     Pro forma                  $  3,569            $   (16,281)         $  (586,551)            $   219,883

Net earnings per share:
As reported:
     Basic                      $   0.00            $     (0.01)         $     (0.21)            $      0.09
     Diluted                    $   0.00            $     (0.01)         $     (0.20)            $      0.08

Pro forma:
     Basic                      $   0.00            $     (0.01)         $     (0.21)            $      0.09
     Diluted                    $   0.00            $    (0.01)          $     (0.20)            $      0.08

</TABLE>



                                       9
<PAGE>

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

Results of Operations

Three and Nine Months  Ended  March 31,  2005  Compared to Three and Nine Months
Ended March 31, 2004

Unaudited  revenues earned for the quarter ended March 31, 2005 were $6,168,706,
as compared to  $5,638,873  for the quarter ended March 31, 2004, an increase of
9%.  Westland's  revenues  increased by 43% due to the addition of new customers
which began  ordering from Westland for the first time or which placed orders in
greater volume and Atlas' revenues  increased by 1%.  Unaudited  revenues earned
for the nine months  ended March 31,  2005 were  $16,885,748,  down 20% from the
nine months  ended March 31, 2004  revenues  earned of  $21,042,610.  Westland's
revenues  were  down by 2% and  Atlas's  revenues  were down by 25% due to lower
order activity in the first and second quarter of fiscal year 2005.

Gross profit for the quarter ended March 31, 2005 was $1,331,863, representing a
$26,498 decrease compared to the $1,358,361 gross profit for the quarter ended
March 31, 2004. Gross profit as a percentage of sales decreased by 2.5%. Atlas's
gross margins decreased by 3.5% due to continued competitive pricing pressures
in the automation equipment segments which Atlas serves. Westland's gross
margins increased by 2.7%. For the nine months ended March 31, 2005 gross profit
was $3,293,207, down 24% compared to the nine months ended March 31, 2004 gross
profit of $4,320,287. The decrease in gross profit for the nine month period as
compared to one year ago was due to lower revenues during the nine month period.

Consolidated   selling,   general  and   administrative   (SG&A)  expenses  were
$1,137,429.  This was slightly higher than the quarter ended March 31, 2004 SG&A
expenses of $1,121,012.  For the nine months ended March 31, 2005,  SG&A expense
was  $3,438,597 or $190,633 lower than the nine months ended March 31, 2004. The
company  continued  to reduce SG&A  expenses for the nine months ended March 31,
2005.

The income from  operations  for the quarter  ended March 31, 2005 was $194,434,
compared  to income  from  operations  for the  quarter  ended March 31, 2004 of
$237,349.  The decrease in income from operations for the quarter  primarily was
due to  continued  competitive  pricing  pressures in the  automation  equipment
segments  which Atlas serves.  For the nine months ended March 31, 2005 the loss
from operations was $145,390, compared to income from operations of $691,057 for
the nine months  ending March 31, 2004.  The loss from  operations  for the nine
months ended March 31, 2005 resulted  from lower sales volumes  reported by both
operating subsidiaries which was partly offset by the lower SG&A expenses during
the nine month period described above.

Interest  expense for the quarter  ended March 31, 2005 was $188,128 as compared
to $216,472 for the same time period ending March 31, 2004.  For the nine months
ended March 31, 2005  interest  expense was $554,686 as compared to $562,656 for
the nine months  ended March 31, 2004.  Atlas'  interest  expenses  year-to-date
period ending March 31, 2005 were lower due to lower  borrowing  levels which in
turn  resulted  from lower  revenues  during  the  subject  periods.  Westland's
interest  expenses  increased due to its utilization of line of credit financing
which was not available to Westland for a portion of the nine month period ended
March 31, 2004.

The net income for the quarter ended March 31, 2005 was $3,569 compared to a net
loss of $16,281 for the quarter ended March 31, 2004.  The net loss for the nine
months ended March 31, 2005 was $586,551 as compared to a net income of $219,883
for the nine  months  ended March 31,  2004.  The net income for the nine months
ended March 31, 2004 included a $125,000  gain on  extinguishment  of debt.  The
reported net loss for the quarter amounted to $0.00 per share and a year-to-date
net loss of $0.21 (basic) and $.20  (diluted) per share.  The earnings per share
figures are based on 2,747,500 (basic) and 3,003,500  (diluted) weighted average
common shares outstanding for both the quarter and nine month period ended March
31,  2005.  This  compared to a net loss for the quarter and net income for nine
months  ended March 31, 2004 of $0.01 per share  (basic and  diluted)  and $0.09
(basic) and $0.08 per share (diluted),  respectively. The March 31, 2004 quarter
calculations  were based upon 2,475,000  shares  outstanding and the nine months
ended March 31, 2004 calculation were based upon 2,629,000 shares outstanding.

The  gross  carrying  amount  and  accumulated  amortization  of  the  Company's
intangible assets other than goodwill as


                                       10
<PAGE>

of March 31, 2005 is as follows:

                                                    March 31, 2005
                                    --------------------------------------------
                                         Gross                            Net
                                       Carrying        Accumulated       Book
                                        Amount         Amortization      Value


Patents                                $573,132          $389,358     $183,774

Non-compete Agreements                  348,750           292,872       55,878

ML Closing Fees                         166,979            54,670      112,309

                                -----------------------------------------------
Total                                $1,088,861          $736,900     $351,961
                                ===============================================

Liquidity and Capital Resources

Between 2000 and 2003, the Company was scheduled to repay approximately $974,833
due to the  former  owners of Atlas.  Repayments  of all of these  amounts  were
postponed  for an  indefinite  period  of time.  Instead,  cash was and is being
conserved for ongoing  operations.  These  borrowings are subordinated to Atlas'
senior lender and are subject to subordination agreements executed by the former
owners of Atlas in favor of Atlas' senior lender.

At March  31,  2005,  the  Company  had (1)  $3.2  million  outstanding  under a
commercial mortgage loan for Atlas as part of a credit facility (the "MLB Credit
Facility")  with  Merrill  Lynch  Business  Financial  Services  Inc.  ("Merrill
Lynch"),  (2) $0.306 million  outstanding under an equipment term loan for Atlas
as part of the MLB Credit Facility,  (3) debt of $3.77 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, (5)
$0.921 million outstanding under Westland's Spectrum Credit Facility,  (6) $2.21
million outstanding under the Westland Loan ,and (7) $0.3 million outstanding in
convertible  subordinated  debentures  which mature in June 2007.  This total of
$11.7 million of debt compares to a total  combined  indebtedness  approximating
$12.1 million as of March 31, 2004.

Working capital deficit at March 31, 2005 was ($2,307,116) 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.

In April 2005, the MLB Credit Facility was extended until December 31, 2005.

Off Balance Sheet Arrangements

During the  quarter and nine months  ended  March 31,  2005,  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 and the subordinated note due
to the former owners of Atlas) for the fiscal years  indicated,  and thereafter.
With respect to the lines of credit borrowed by Atlas and Westland, at March 31,
2005, these amounted to $4.0 million in maximum revolving  commitments for Atlas
which will be subject to renewal in December  2005 and $1.25  million in maximum
revolving  commitments  for  Westland  which  will also be subject to renewal in
December 2005.

                                       11
<PAGE>

<TABLE>
<CAPTION>

                             2005         2006         2007         2008         2009       There-after     Total
                           ---------    ---------    ---------    ---------    ----------   ----------    ----------
<S>                          <C>         <C>          <C>          <C>           <C>        <C>           <C>
Real estate term loan        58,333      233,333      233,333      233,333       233,333    2,236,105     3,227,770
Equipment term loan          41,667      166,667       97,222           --            --           --       305,556
Revolver - Atlas           3,777,067          --           --           --            --           --     3,777,067
Revolver - Westland         920,853           --                                                            920,853
Subordinated term loan     2,212,583          --           --           --            --           --     2,212,583
Debentures                       --           --           --      300,000            --           --       300,000
                           ---------    ---------    ---------    ---------    ----------   ----------    ----------
         Total debt        7,010,370     400,000      330,555      533,333       233,333    2,236,105     10,743,829

Building lease               53,717      214,867                                                            268,584
                           ---------    ---------    ---------    ---------    ----------   ----------    ----------
          Total            7,064,220     614,867      330,555      533,333       233,333    2,236,105     11,012,413
                           =========    =========    =========    =========    ==========   ==========    ==========
</TABLE>


Impact of Recently Issued Accounting Standards

In March 2004,  the  Financial  Accounting  Standards  Board  ("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.

In December  2004,  the FASB issued SFAS  No.123  (revised  2004),  "Share-Based
Payment".  Statement 123(R) will provide  investors and other users of financial
statements  with more complete and neutral  financial  information  by requiring
that the  compensation  cost relating to  share-based  payment  transactions  be
recognized in financial statements. That cost will be measured based on the fair
value of the equity or  liability  instruments  issued.  This  Statement  123(R)
covers a wide range of share-based  compensation  arrangements  including  share
options,  restricted share plans,  performance-based  awards, share appreciation
rights,  and employee  share  purchase  plans.  Statement  123(R)  replaces FASB
Statement No. 123, Accounting for Stock-Based  Compensation,  and supersedes APB
Opinion No. 25,  Accounting  for Stock Issued to  Employees.  Statement  123, as
originally issued in 1995,  established as preferable a fair-value-based  method
of accounting for share-based payment transactions with employees. However, that
Statement  permitted  entities the option of continuing to apply the guidance in
Opinion 25, as long as the footnotes to financial  statements disclosed what net
income  would have been had the  preferable  fair-value-based  method been used.
Public  entities  (other than those filing as small  business  issuers)  will be
required to apply Statement  123(R) as of the first interim or annual  reporting
period that begins after June 15, 2005. The Company is currently  evaluating the
financial statement impact of the adoption of SFAS 123(R).

In November 2004, the FASB issued SFAS No. 151 "Inventory Costs, an amendment of
ARB No.  43,  Chapter 4. The  amendments  made by  Statement  151  clarify  that
abnormal amounts of idle facility expense,  freight,  handling costs, and wasted
materials (spoilage) should be recognized as current-period  charges and require
the allocation of fixed  production  overheads to inventory  based on the normal
capacity of the production  facilities.  The guidance is effective for inventory
costs  incurred  during  fiscal years  beginning  after June 15,  2005.  Earlier
application  is permitted  for  inventory  costs  incurred  during  fiscal years
beginning  after  November 23, 2004.  The Company is  currently  evaluating  the
financial statement impact of the adoption of SFAS 151.

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 rising raw  material  prices for
steel  and  commodities  which  depend  upon  or use oil in  their  manufacture,
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'  senior  lender  will not  agree to renew  its
revolver;  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


                                       12
<PAGE>

continue to have required access to the credit and capital markets to enable the
Company to finance future operations.

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,  and
excluding  the  conditions  discussed  below,  the  remainder  of 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
which, under Section 404 of the Sarbanes Oxley Act,  constitutes a deficiency in
internal controls over financial reporting.  The Company has assigned a priority
to the short- and long-term  correction of these internal  control  deficiencies
and believes it can make meaningful  progress toward correction of these matters
during calendar year 2005.

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 above.


                                       13
<PAGE>

                           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.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

Not applicable.

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.


                                       14
<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:    May 16, 2005          By:  /s/  Samuel N. Seidman
                                  ----------------------------------------------
                                  Samuel N. Seidman
                                  Chairman, Chief Executive Officer
                                  and President

Date:    May 16, 2005          By:  /s/  Jesse A. Levine
                                  ----------------------------------------------
                                  Jesse A. Levine
                                  Vice President, Secretary, Treasurer
                                  and Chief Financial Officer



                                       15