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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                 FORM 10-KSB/A
(Mark One)

      |X|   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
            EXCHANGE ACT OF 1934

      For the fiscal year ended DECEMBER 31, 2003         OR

      | |   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
            EXCHANGE ACT OF 1934

      For the transition period from                to
                                    ---------------    --------------

      Commission File Number: 0-21142

                              NEMATRON CORPORATION
                 (Name of small business issuer in its charter)

           MICHIGAN                                      38-2483796
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization)

                 5840 INTERFACE DRIVE, ANN ARBOR, MICHIGAN 48103
               (Address of principal executive offices) (Zip Code)

                                 (734) 214-2000
                           (Issuer's telephone number)

         Securities registered under Section 12(b) of the Exchange Act:

   Title of Each Class                   Name of Exchange on Which Registered
   -------------------                   ------------------------------------
Common Stock, no par value                 Over the Counter Bulletin Board

       Securities registered under Section 12(g) of the Exchange Act: NONE

      Check whether the issuer (1) 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. |X|  Yes | | No

      Check if disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. |X|

      Issuer's revenues for its most recent fiscal year: $13,536,877

      The aggregate market value of the voting stock held by non-affiliates as
of March 26, 2004, computed by reference to the closing price of such stock on
such date as quoted on the OTCBB, was approximately $1,023,000. For purposes of
this computation only, all executive officers, directors and beneficial owners
of more than 5% of the outstanding Common Stock are assumed to be affiliates.

      The number of shares outstanding of the issuer's Common Stock on March 26,
2004 was 15,744,472.

         TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT | | Yes |X|  No

                    DOCUMENTS INCORPORATED BY REFERENCE: None

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                                   SIGNATURES

            In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized

NEMATRON CORPORATION

By:   /s/ Jeffrey K. Crowell                     Dated:  April 21, 2004
    ---------------------------------------
    Jeffrey K. Crowell, President and COO

And

      /s/ Matthew S. Galvez                      Dated:  April 21, 2004
    ---------------------------------------
    Matthew S. Galvez, CEO and a Director

            In accordance with the Exchange Act, this report has been signed
below by the following persons on behalf of the registrant in the capacities and
on the dates indicated.

<TABLE>
<CAPTION>
         Signature                                 Title                                Date

<S>                                  <C>                                           <C>
  /s/ Tina M. Raiford                Vice President, Accounting and                April 21, 2004
---------------------------------    Corporate Controller
Tina M. Raiford                      (Principal Accounting Officer)


  /s/ Ronald C. Causley              Director                                      April 21, 2004
---------------------------------
Ronald C. Causley

  /s/ Joseph J. Fitzsimmons          Chairman of the Board                         April 21, 2004
---------------------------------    and a Director
Joseph J. Fitzsimmons

  /s/ Stephen E. Globus              Director                                      April 21, 2004
---------------------------------
Stephen E. Globus
</TABLE>


                                                                              27
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                     NEMATRON CORPORATION AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                           December 31, 2002 and 2003



(16)   QUARTERLY OPERATING RESULTS

       Results of operations for each of the quarterly periods in the years
       ended December 31, 2002 and 2003 are as follows:

<TABLE>
<CAPTION>


                                                            Year Ended December 31,  2002
                                  --------------------------------------------------------------------------
                                  1st Quarter     2nd Quarter     3rd Quarter    4th Quarter        Total
                                  -----------     -----------     -----------    -----------     -----------
<S>                               <C>             <C>             <C>            <C>             <C>
         Revenues                  $4,519,111      $3,616,826      $3,450,069     $3,281,209     $14,867,215
         Cost of revenues           3,082,772       2,835,348       2,628,741      2,673,827      11,220,688
         Gross profit               1,436,339         781,478         821,328        607,382       3,646,527
         Net loss                    (192,920)       (961,189)       (837,315)    (1,121,522)     (3,112,946)
         Loss per share --
         basic and diluted             $(0.06)         $(0.31)         $(0.27)        $(0.36)         $(0.99)

</TABLE>


<TABLE>
<CAPTION>
                                                            Year Ended December 31, 2003
                                   -------------------------------------------------------------------------
<S>                                <C>             <C>             <C>            <C>            <C>
         Revenues                  $3,334,223      $3,088,658      $3,347,276     $3,766,720     $13,536,877
         Cost of revenues           2,684,527       2,335,101       2,535,259      2,836,567      10,391,454
         Gross profit                 649,696         753,557         812,017        930,153       3,145,423
         Net loss                    (799,553)       (671,181)       (818,801)      (845,645)     (2,925,187)
         Loss per share --
         basic and diluted             $(0.25)         $(0.21)          $(.26)         $(.27)         $(0.93)

</TABLE>

       In connection with completion of the audit of the Company's financial
       statements for the year ended December 31, 2003, it was noted that the
       Company had made an error in the application of Emerging Issues Task
       Force Consensus 00-27, "Application of Issue No. 98-5 to certain
       Convertible Instruments" ("EITF 00-27") in the determination of the value
       of the beneficial conversion features connected with the issuance of
       convertible securities with detachable warrants, which resulted in an
       audit adjustment increasing interest expense and common stock by
       $286,498. This is a complex area of accounting involving the computation
       of intrinsic values inherent in relative values of the instruments. It
       was determined that of the total non-cash interest expense adjustment,
       $147,620 applied to the second quarter and $138,878 applied to the third
       quarter. Results of the second and third quarters, as shown above, have
       been restated for the effects of the correction of this error.


                                      F-27