<PAGE> 1
                   SECURITIES AND EXCHANGE COMMISSION
                         Washington, D.C. 20549

                                FORM 10-K

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934
      For the fiscal year ended December 31, 1999,
  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 0-3035

                        COGNITRONICS CORPORATION
         (Exact name of registrant as specified in its charter)

                   NEW YORK                        13-1953544
     (State or other jurisdiction of           (I.R.S. Employer
       incorporation or organization)          Identification No.)

       3 Corporate Drive, Danbury, Connecticut            06810
       (Address of principal executive offices)         (Zip Code)

Registrant's telephone number, including area code (203) 830-3400

Securities registered pursuant to Section 12(b) of the Act:

                                                 Name of each exchange on
          Title of each class                        which registered
          -------------------                    -------------------------
  Common Stock, par value $0.20 per share         American Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:     None

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 and (2) has been subject to such filing
requirements for at least the past 90 days. Yes   x       No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not 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-K. [   ]

The aggregate market value of the voting stock held by non-affiliates of the
registrant as of March 1, 2000:

         Common Stock, par value $0.20 per share -- $112,965,000

The number of shares outstanding of each of the issuer's classes of common
stock as of March 1, 2000:

       Common Stock, par value $0.20 per share -- 5,846,428 shares

Documents incorporated by reference:   Portions of the Proxy Statement for the
annual meeting of stockholders to be held on May 11, 2000 are incorporated by
reference into Part III.
<PAGE> 2
                            TABLE OF CONTENTS


                                 PART I

Item                                                                 Page

 1. Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
 2. Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
 3. Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . . . .5
 4. Submission of Matters to a Vote of Security Holders. . . . . . . . . . .5
 Executive Officers of the Company . . . . . . . . . . . . . . . . . . . . .6


                                 PART II

 5. Market for Company's Common Equity and Related Stockholder Matters . . .7
 6. Selected Financial Data. . . . . . . . . . . . . . . . . . . . . . . . .7
 7. Management's Discussion and Analysis of Financial Condition and
    Results of Operations. . . . . . . . . . . . . . . . . . . . . . . . . .7
 7a.Market Risk. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
 8. Financial Statements and Supplementary Data. . . . . . . . . . . . . . 10
 9. Changes in and Disagreements with Accountants on Accounting and
    Financial Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . 24


                                PART III

10. Directors and Executive Officers of the Company. . . . . . . . . . . . 24
11. Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . 24
12. Security Ownership of Certain Beneficial Owners and Management . . . . 24
13. Certain Relationships and Related Transactions . . . . . . . . . . . . 24


                                 PART IV

14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K . . . 24


McIAS is a trademark of Cognitronics Corporation.
UNIX is a registered trademark of Santa Cruz Operation, Inc.

<PAGE>  3
                                 PART I

Item 1.    Business

 (a)  Cognitronics Corporation (the "Company") was incorporated in January
1962 under the laws of the State of New York. The Company designs, manufactures
and markets voice processing systems.

 (b)  The Company operates in two segments of the voice processing industry.
In the United States, the Company designs, manufactures and sells equipment for
use in telephone central offices.  In Europe, the Company distributes equipment
for use on customers' premises.

 (c) (i) A description of the fields of voice processing in which the Company
operates and its products are as follows:

Domestic Operation.   These products are sold directly to telephone service
providers or through switch manufacturers who distribute the Company's products.

 Intelligent Announcers.  The Company's McIAS -trademark- 16xx product family
has been primarily used by  Incumbent Local Exchange Carriers (ILECs) and
Competitive Local Exchange Carriers (CLECs) to provide voice announcements in
connection with custom calling features (CLASS), such as selective call
forwarding and caller originator trace.  Number change intercept is another
important feature provided.

  The 16xx is available in two versions:  a lower cost configuration which
provides network announcement functionality, is available as a 1607/68 (1 T-1
span capacity) and a 1610/68 (3 T-1 span capacity). The second version of this
series is a UNIX -registered trademark- based platform which utilizes many of
the same components as the /68 series and is known as McIAS 16xx/IP.  "IP"
designates an Intelligent Peripheral, indicating the ability to serve as a
voice peripheral to any manufacturer's switch and delivering multiple
application capability.

 The McIAS 16xx/IP is available as a 1607/IP, a 1610/IP, and a 1623/IP.
Features include an open architecture, scalable processing power and disk
drives, and centralized administration.  Application examples include number
change with call completion, automated attendant, voice mail and time and
temperature announcements.

 A new product line, the CX Series, was announced and sales began in 1999.  This
family of products provides greater capacity and increased functionality to meet
carriers' network needs in Advanced Intelligent Network ("AIN") and packet
switched environments.  Included in the CX capabilities are a new MultiResource
Line Card and support for several key AIN protocols such as SS7, SR-3511,
GR-1129-CORE and ISDN-PRI.  The CX is also designed and planned to be IP
Telephony and ATM ready by providing key packet switched network support such as
MGCP, MEGACO, RTP/RTCP, H.323, SIP and others.

 Passive Announcers.  These announcers are used by the ILECs and CLECs to
inform callers about network conditions or procedures to invoke the use of a
service.  The Company has been a major supplier to the industry of passive
announcers and incorporates these features in products such as the Model 688
Automatic Number Announcer, McIAS 950, and the McIAS 16xx product family.

 Call Processors.  The Company's McIAS 950 is also an automated attendant and
<PAGE>  4
audiotext system with the flexibility to offer the caller various choices (dial
an extension, revert to an operator, etc.).  The system also offers a wide
variety of menu-selected information to callers.   The McIAS 950 is designed for
use in both telephone network environments and the commercial business market.


European Distributorship Operations. Dacon Electronics Plc., based in
Hertfordshire, England, distributes call management and voice processing
products, including products manufactured by the Company, in Europe.

  (ii)  Status of publicly announced new products or industry segments
requiring material investment.  Inapplicable.

  (iii)  The Company has adequate sources for obtaining raw materials,
components and supplies to meet production requirements and did not experience
difficulty during 1999 in obtaining such materials, supplies and components.

  (iv)  The Company relies on technological expertise, responsiveness to
users' needs and innovations and believes that these are of greater significance
in its industry than patent protection. There can be no assurance that patents
owned or controlled by others will not be encountered and asserted  against the
Company's voice processing products or that licenses or other rights under such
patents would be available, if needed. The Company has registered trademarks
and names which the Company considers important in promoting the business of the
Company and its products.

  (v)  Seasonality.   Inapplicable.

  (vi)  The discussion of liquidity and sources of capital as set  forth in
Management's Discussion and Analysis of Financial Condition and Results of
Operations is included in Item 7 of this Annual Report on Form 10-K and is
incorporated herein by reference.

  (vii) In 1999, revenues included sales of $7.3 million to Siemens
Communication Networks  Inc., $2.9 million to Alcatel Indetel Industria de
Telecomunicacion S.A. de C.V. and $2.9 million to GTE Corp.  The Company's U.K.
operations had sales of $4.6 million to British Telecommunications Plc in 1999.
Over the past several years, a major portion of the revenues of the domestic
operations has come  from two or three large customers, and a significant
portion of the revenues of the UK operations has come from one customer.
Accordingly, the loss of any of these customers could have a material adverse
impact on the Company's results of operations.

  (viii) The dollar amount of orders believed by the Company to be firm as of
December 31, 1999 and 1998, amounted to $.5 million and  $1.2 million,
respectively. Substantially all of the orders as of December 31, 1999, can
reasonably be expected to be filled during 2000.

  (ix) Business subject to renegotiation.  Inapplicable.

  (x)  The Company competes, and expects to compete, in fields noted for rapid
technological advances and the frequent introduction of new products and
services. The Company's products are similar to those manufactured, or capable
of being manufactured, by a number of companies, some of which are well-
established corporations with financial, personnel and technical resources
substantially larger than those of the Company. The Company's ability to compete
in the future depends on its ability to maintain the technological and
performance advantages of its current products and to introduce new products
and applications that achieve market acceptance. Future research and development
<PAGE>  5
expenditures will be based, in part, on future results of operations.  There
are no assurances that the Company will be able to successfully develop and
market new products and applications.

  (xi) Expenditures for research and development activities, as determined in
accordance with generally accepted accounting principles, amounted to $2.1
million in 1999, $2.0  million in 1998 and $1.8 million in 1997.  In addition,
the estimated dollar amount spent on the  improvement of existing products or
techniques was $.2 million in each of the years.

  (xii) Material effects of compliance with Federal, State or local provisions
regulating the discharge of materials into the environment or otherwise relating
to the protection of the environment.    Inapplicable.

  (xiii) At December 31, 1999, the Company and its subsidiaries employed 91
people.

 (d)  Sales to foreign customers primarily represent sales of Dacon Electronics
Plc. (incorporated in the United Kingdom) of $7.2 million in 1999, $8.3 million
in 1998 and $8.0 million in 1997.  Additional information about foreign
operations is included in Note K to Consolidated Financial Statements included
in Item 8 of this Annual Report on Form 10-K and is incorporated herein by
reference.

 Further, there were export-type sales (primarily North America) of
approximately $3.5 million in 1999, $2.4 million in 1998 and $1.1 million in
1997.  Export sales do not involve any greater business risks than do sales to
domestic customers and, in certain instances, the Company obtains an irrevocable
letter of credit or payment prior to shipment of products to the customer.
Selling prices and gross profit margins on export-type sales are comparable to
sales to domestic customers.

Item 2.   Properties

      The facilities of the Company and its subsidiaries are located as follows:
                                                   SQUARE    LEASE EXPIRATION
     LOCATION            DESCRIPTION                FEET           DATE

Danbury, Connecticut:    Office, engineering,       40,000        10/31/03
   3 Corporate Drive     production and service
                         facility

Hemel Hempstead          Office, distribution       12,000         7/31/01
Hertfordshire,           and service facility
United Kingdom
1 Enterprise Way

 The Company considers each of these facilities to be in good condition and
adequate for the Company's business.


Item 3.   Legal Proceedings

 There are no material pending legal proceedings to which the Company or any
of its subsidiaries is a party or of which any of their property is the subject.


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

 Inapplicable.
<PAGE>  6
                    Executive Officers of the Company

The executive officers of the Company, their positions with the Company and
ages as of March 1, 2000 are as follows:

    NAME               POSITION(S) AND OFFICE(S)                        AGE

 Brian J. Kelley     President and Chief Executive Officer; Director     48

 Kenneth G. Brix     Vice President                                      53

 Harold F. Mayer     Secretary                                           70

 Michael N. Keefe    Vice President                                      44

 Roy A. Strutt       Vice President; Director                            43

 Garrett Sullivan    Treasurer and Chief Financial Officer               54

 Emmanuel A. Zizzo   Vice President                                      59

 No family relationships exist between the executive officers of the Company.
Each of the executive officers was elected to serve until the next annual
meeting of the Board of Directors or until his successor shall have been elected
and qualified.

 Mr. Kelley has been President and Chief Executive Officer of the Company since
1994. Prior to that he was Executive Vice President of TIE/Communications, Inc.
from 1991 to 1994 with responsibility for business development, acquisitions and
product management, President of CTG Inc., a subsidiary of TIE/Canada, Inc.,
from 1990 to 1991 and President of TIE National Accounts, Inc., a subsidiary of
TIE/Communications, Inc., from 1986 to 1990.

 Mr. Brix has been a Vice President of the Company since 1994 with
responsibility for U.S. sales and marketing. Prior to that he was Director of
Sales and Marketing of Syntellect Network Systems, Inc. from 1993 to 1994,
Regional Vice President of Voicetek Corp. from 1990 to 1993 and President of
Voicecom Associates, Inc. from 1987 to 1990.

 Mr. Mayer has been Secretary of the Company since 1975. He was Treasurer from
1974 to 1989 and a Vice President of the Company from 1986 to 1996.

 Mr. Keefe has been a Vice President of the Company since 1993 with
responsibility for engineering, prior to which he was Manager of Software
Planning and Development from 1992 until 1993 and senior engineer for more than
five years. He has been employed by the Company since 1980.

 Mr. Strutt has been a Vice President of the Company since 1994 with
responsibility for European operations. Since 1992, he has been Managing
Director of Dacon Electronics Plc, which was acquired by the Company in 1992,
and Director of Sales and Operations from 1990 to 1992. Prior to that he was
Managing Director of Automatic Answering Ltd. for four years.

 Mr. Sullivan has been Treasurer and Chief Financial Officer of the Company
since 1989. Prior to that he was Treasurer and Chief Financial Officer of
Fundsnet, Inc., an electronic funds transfer company, from 1986 until 1989. He
was employed by The Singer Co. from 1977 to 1986, where his most recent position
was Vice President-Finance, Asia Division.
<PAGE>  7
 Mr. Zizzo has been a Vice President of the Company since 1995 with
responsibility for operations, primarily manufacturing, purchasing and physical
facilities, prior to which he had been Director of Operations since 1994. He was
an independent consultant from 1993 to 1994. Prior to that he was a Vice
President of TIE/Communications, Inc. from 1991 to 1992, a Vice President of
CTG Inc., a subsidiary of TIE/Canada, Inc., from 1990 to 1991 and Director of
Customer Support Services of TIE/Communications, Inc. for more than five years.

                                 PART II

Item 5.   Market for Company's Common Equity and Related Stockholder Matters

 (a) and (b) Cognitronics' Common Stock is traded on the American Stock
Exchange under the symbol CGN. On March 1, 2000, there were 738 shareholders of
record; the Company estimates that the total number of beneficial owners was
approximately 4,400.  Information on quarterly stock prices is set forth in Item
8 of this Annual Report on Form 10-K and is incorporated herein by reference.

 (c) The Company has never paid a cash dividend on its Common Stock and has
used its cash for the development of its business.  In 1998, the Company
announced its intention to repurchase up to 300,000 shares of its Common Stock.
Through December 31, 1999, the Company had repurchased 105,900 shares of its
Common Stock.  The Company has no present intention of paying a cash dividend,
and payment of any future dividends will depend upon the Company's earnings,
financial condition and other relevant factors.

Item 6.  Selected Financial Data
                                        Year ended December 31,
                                   (in thousands except per share data)

OPERATING RESULTS               1999      1998      1997      1996      1995

Revenues                     $31,693   $28,917    $29,521   $17,343   $17,485
Net income (loss)              5,346     4,689      3,622     1,099     1,321
Net income (loss) per share:
  Basic                         $.94      $.85       $.69      $.22      $.27
  Diluted                        .88       .78        .62       .20       .26
Weighted average number of
 basic shares outstanding      5,670     5,543      5,233     5,074     4,917
Weighted average number of
 diluted shares outstanding    6,048     5,993      5,840     5,378     5,157

FINANCIAL POSITION

Working capital              $24,130   $18,281    $13,112   $ 8,745   $ 7,374
Total assets                  35,102    27,080     23,123    17,511    15,040
Stockholders' equity          25,729    20,033     15,014    10,612     9,044
Stockholders' equity
  per share                    $4.40     $3.58      $2.73     $2.04     $1.75
Cash dividends paid             None      None       None      None      None


Included in 1997 is $956,000 (net of tax $598,000 or $.11 per basic share and
$.10 per diluted share) of settlement costs and legal fees related to class
action litigation.

The above Selected Financial Data should be read in conjunction with the
Consolidated Financial Statements of the Company, including the notes thereto,
and the unaudited quarterly financial data included in Item 8 of this Annual
Report on Form 10-K.
<PAGE>  8
Item 7.  Management's Discussion and Analysis of Financial Condition and
Results of Operations

  The Company reported net income of $5.3 million, $4.7 million and $3.6
million for 1999, 1998 and 1997, respectively.

  In 1999, sales increased 10% to $31.7 million due to increased sales of $3.9
million (19%) by the Company's domestic operations, offset by decreased sales
of $1.1 million (13%) in its UK distributorship operations.  The increased sales
in the U.S. operations were due to increased direct sales of $3.0 million and
$.9 million of indirect sales.  The increase in direct sales was primarily
attributable to two customers and the increase in indirect sales was
attributable to increased sales of $5.7 million to three customers,  offset by
a decrease of $4.9 million sales to another customer.  In 1999, primarily in the
third quarter, the Company sold $2.9 million to Alcatel Indetel Industria de
Telecomunicacion S.A. de C.V., up from $2.0 million in the fourth quarter of
1998.  This completed the project which began in the fourth quarter of 1998.
The decreased sales in UK distributorship operations were due to decreased
demand from its primary customer, reflecting increased competition faced by this
customer and obsolescence of certain products distributed by the Company.  The
Company's backlog at December 31, 1999 was $.5 million, versus $1.2 million
at December 31, 1998.  In 1999, a major portion of the Company's domestic
revenue came from one customer and a significant portion of its UK
distributorship revenue came from one customer.  The loss of either of these
customers would have a material adverse impact on the Company.

  Consolidated gross margin percentage improved 1% to 56% from 55% in 1998,
primarily due to an increase of 2.7% in the domestic operations' gross margin
attributable  to improved product mix and higher volume.  This was offset, in
part, by a 3.5% decrease in the UK distributorship's gross margin due to
unfavorable product mix and exchange rates.

  In 1998, sales decreased 2% to $28.9 million from $29.5 million in 1997 due
to decreased sales of $.9 million (4%) by the Company's domestic operations,
offset in part by increased sales of $.3 million (4%) by the Company's UK
distributorship operations.  This decrease reflects lower direct and indirect
(OEM) sales in the United States of $2 million, offset by an increase of $1.1
million in export sales (primarily to North America).  The increase in export
sales was due to a $2.0 million sale to Alcatel Indetel Industria de
Telecomunicacion S.A. de C.V. in the fourth quarter of 1998, offset by lower
sales to another customer.  The UK distributorship operations' increased sales
is primarily attributable to exchange rate fluctuation.  Gross margin percentage
improved 1% to 55% in 1998 from 1997.  The US operations'  gross margin
percentage increased .5% in 1998 from 1997 due to improved product mix.  The UK
distributorship's gross margin percentage increased 2.5% in 1998 as compared to
1997 due to favorable product mix and favorable exchange rates.

  In 1999 and 1998, research and development increased $.1 million (7%) and
$.2 million (11%), respectively, in each year versus the prior year due to
higher personnel costs.  The Company anticipates an acceleration in the rate of
increase in spending for research and development.

  In 1999, selling, general and administrative costs increased $.9 million
(13%) due to an increase of $.7 million (20%) in the domestic operations and $.1
million (5%) in the UK distributorship operations.  The increase in the domestic
operations was due to higher sales commissions and bonuses.  In 1998, selling,
general and administrative costs decreased from the prior year $.4 million (6%)
to $6.6 million due to a decrease of $.5 million (10%) in the domestic
operations primarily attributable to lower bonus expense and  sales commissions.
<PAGE>  9
  Other income was $.4 million in 1999 and 1998 and  $.2 million in 1997.  The
increase in 1998 from 1997 is due to higher interest income earned on available
cash balances and marketable securities and to interest  income realized on tax
refunds.

  The Company's effective tax rate for 1999 and 1998 was 36% versus 39% for
1997.  The reduction in the effective rate in 1998 from 1997 is attributable to
higher US tax credits for R&D, higher amounts of tax-free interest income and a
higher proportion of income from foreign operations.  The provision for income
taxes is discussed in Note G to Consolidated Financial Statements. Under
Financial Accounting Standards Board ("FASB") Statement No. 109, the Company
has recognized future tax benefits that management believes will be realized.
In order to realize these benefits, the Company, exclusive of the results of
Dacon Electronics Plc, will have to generate pretax income of $4.2 million.
The current deferred tax benefit of $.9 million is primarily attributable to
inventory provisions, the recognition of such loss, for tax purposes, is, in
large measure, within the control of the Company. The non-current tax benefit,
$.7 million, primarily relates to deferred compensation and benefit plans and,
as such, would be recognized over a long period of time. The Company's U.S.
pretax income was $8.4 million, $6.0 million and $5.3 million in 1999, 1998 and
1997, respectively.  Based on this, management anticipates that the Company will
generate sufficient taxable income in the future to realize these benefits.

  The effect of inflation has not had a major impact on the operating results
of the Company over the past few years.  Technological advances and productivity
improvements are continually being applied to reduce costs, thus reducing
inflationary pressures on the operating results of the Company.

  Exchange rate changes will impact the reported dollar sales and cost of
sales of the Company's UK distributorship operations.  In addition, at December
31, 1999, the Company's UK distributorship operations had net assets of $1.6
million, which would be impacted by changes in foreign exchange rates.  However,
the impact of such rate change would be reflected in the translation
adjustment recorded in the equity section of the balance sheet.  The Company
does not hedge this foreign currency net asset exposure.

Liquidity and Sources of Capital

  Net cash provided by operations was $3.0 million, $3.7 million and $4.5
million in 1999, 1998 and 1997, respectively, primarily due to the results of
operations.  In 1999, cash provided by operating activities decreased from 1998
due to increased accounts receivable, inventories and tax payments, offset, in
part, by increases in accounts payable. Cash provided by operating activities
decreased in 1998 from 1997, in spite of increased net income due to an increase
in working capital.  Cash used by investing activities was $6.1, $1 and $3.2
million in 1999, 1998 and 1997, respectively.  Included in these amounts were
$5.6, $.5 and $2.7 million, respectively, for the net purchase of marketable
securities.  Cash provided by financing activities was $.1 million in 1999 and
1998.

  Working capital increased to $24.1 million at December 31, 1999 from $18.3
million at December 31, 1998 and $13.1 million at December 31, 1997.  The ratio
of current assets to current liabilities was 4.4:1 at December 31, 1999 versus
4.9:1 at December 31, 1998 and 3.3:1 at December 31, 1997.  The decrease in 1999
was due to a volume purchase of inventory items at a favorable price occurring
in the last quarter of 1999.  The increase in 1998 is primarily due to the
results of operations.
<PAGE>  10
   The Company anticipates making capital expenditures of approximately $.5
million and incurring increased research and development expenditures and may
repurchase up to 194,000 shares of its Common Stock in 2000.  Management
believes that the cash and cash equivalents  at December 31, 1999 and the cash
flow from operations in 2000 will be sufficient to meet its needs.

Impact of Year 2000

  In prior years, the Company discussed the nature and progress of its plans
to become Year 2000 ready.  The Company is not aware of any material problems
resulting from Year 2000 issues, either with its products, its internal systems,
or the products and services of third parties.  The Company will continue to
monitor its mission critical computer applications and those of its suppliers
and vendors throughout the year 2000 to ensure that any latent Year 2000 matters
that may arise are addressed promptly.  The Company expensed less than $.1
million during 1999 in connection with remediating its systems.

Certain Factors That May Affect Future Results

  From time to time, information provided by the Company, statements made by
its employees or information included in its filings with the Securities and
Exchange Commission (including this Form 10-K) may contain statements which are
not historical facts, so-called "forward-looking statements". These forward-
looking statements are made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. The Company's actual future
results may differ significantly from those stated in any forward-looking
statements. Forward-looking statements involve a number of risks and
uncertainties, including, but not limited to, product demand, pricing, market
acceptance, litigation, risk of dependence on significant customers, third party
suppliers and intellectual property rights, risks in product and technology
development and other risk factors detailed in this Annual Report on Form 10-K
and in the Company's other Securities and Exchange Commission filings.  Further,
the Company's sales volume may vary from quarter to quarter as a result of a
variety of factors.  Because, in the short term, a significant portion of
the Company's expenses are fixed, sales variances would have a significant
effect on the results of operations.

Item 7.a  Market Risk

  The Company does not use derivative financial instruments.  The Company is
exposed to changes in interest rates.  The Company's marketable securities
consist of short-term and/or variable rate instruments and therefore a change
in interest rates would not have a material impact on the value of these
securities.
<PAGE>  11
Item 8.  Financial Statements and Supplementary Data

                  QUARTERLY FINANCIAL DATA (UNAUDITED)
                 (in thousands except per share amounts)

1999                             FIRST       SECOND       THIRD      FOURTH
----                             -----       ------       -----      ------
Sales                           $7,804       $8,334      $9,662      $5,893
Gross profit                     4,401        4,738       5,560       3,095
Net income                       1,283        1,512       1,873         678
Net income per share:
    Basic                         $.23         $.27        $.33        $.12
    Diluted                       $.22         $.25        $.31        $.11
Common Stock price range:
    High                      $6 13/64    $12 11/64     $14 3/8     $18 5/8
    Low                        4  7/8       5 27/64       9 3/8       9 3/4

1998                             FIRST       SECOND       THIRD      FOURTH
----                             -----       ------       -----      ------
Sales                           $7,540       $7,069      $7,029      $7,279
Gross profit                     4,211        3,955       3,901       3,767
Net income                       1,196        1,189       1,114       1,190
Net income per share:
    Basic                         $.21         $.21        $.20        $.21
    Diluted                       $.20         $.20        $.19        $.20
Common Stock price range:
    High                       $14          $12 1/4      $9 1/2      $8
    Low                         10 1/8        8 3/8       5 1/3       4 2/3


 Included in the fourth quarter of 1998 is $100,000 (net of tax - $.01 per
basic share and diluted share) related to interest income on tax refunds.  In
addition, the effective tax rates for the fourth quarter of 1999 and 1998 were
25.2% and 28.5%, respectively, versus the estimated effective rates of 37.3%
and 38.4% for the first nine months of 1999 and 1998, respectively.

 The above financial information should be read in conjunction with the
Consolidated Financial Statements, including the notes thereto.
<PAGE> 12
                     Report of Independent Auditors

Stockholders and Board of Directors
Cognitronics Corporation

We have audited the accompanying consolidated balance sheets of Cognitronics
Corporation and subsidiaries as of December 31, 1999 and 1998, and the related
consolidated statements of income and comprehensive income, stockholders'
equity, and cash flows for each of the three years in the period ended December
31, 1999.  These financial statements are the responsibility of the Company's
management.  Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States.  Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement.  An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation.  We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Cognitronics
Corporation and subsidiaries at December 31, 1999 and 1998, and the consolidated
results of their operations and their cash flows for each of the three years in
the period ended December 31, 1999, in conformity with accounting principles
generally accepted in the United States.


                                    /s/ ERNST & YOUNG LLP


Stamford, Connecticut
March 3, 2000
<PAGE>  13
CONSOLIDATED BALANCE SHEETS
COGNITRONICS CORPORATION AND SUBSIDIARIES
(dollars in thousands)
                                                               December 31,
                                                             1999       1998
ASSETS                                                       ----       ----
CURRENT ASSETS
 Cash and cash equivalents                                 $ 3,992   $ 6,991
 Marketable securities                                      10,000     4,400
 Accounts receivable, less allowances of $54 and $44         6,752     4,972
 Inventories                                                 9,079     5,012
 Deferred income taxes                                         889       858
 Other current assets                                          591       766
                                                           -------   -------
   TOTAL CURRENT ASSETS                                     31,303    22,999
PROPERTY, PLANT AND EQUIPMENT, net                           1,370     1,334
GOODWILL, less amortization of $2,394 and $2,061               983     1,316
DEFERRED INCOME TAXES                                          685       809
OTHER ASSETS, less amortization of $11 in 1999                 761       622
                                                           -------   -------
                                                           $35,102   $27,080
                                                           =======   =======

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
 Accounts payable                                          $ 4,312   $ 1,603
 Accrued compensation and benefits                           1,176     1,066
 Income taxes payable                                          734       974
 Current maturities of debt                                     49       112
 Other accrued expenses                                        902       963
                                                           -------   -------
   TOTAL CURRENT LIABILITIES                                 7,173     4,718

LONG-TERM DEBT                                                  90       140
OTHER NON-CURRENT LIABILITIES                                2,110     2,189

COMMITMENTS AND CONTINGENCIES (Note I)

STOCKHOLDERS' EQUITY
 Common Stock, par value $.20 a share; authorized
 10,000,000 shares; issued 5,841,153 and 5,597,869
 shares                                                      1,168     1,120
 Additional paid-in capital                                 14,050    13,628
 Retained earnings                                          10,688     5,359
 Cumulative other comprehensive income                          66       166
 Unearned compensation                                        (243)     (239)
                                                           -------   -------
                                                            25,729    20,034
 Less cost of 150 common shares in treasury in 1998                       (1)
                                                           -------   -------
   TOTAL STOCKHOLDERS' EQUITY                               25,729    20,033
                                                           -------   -------
                                                           $35,102   $27,080
                                                           =======   =======
The accompanying notes to consolidated financial statements are an integral
part of these statements.
<PAGE>14
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
COGNITRONICS CORPORATION AND SUBSIDIARIES
(in thousands except per share data)
                                                     Year ended December 31,
                                                    1999      1998      1997
                                                    ----      ----      ----
SALES                                            $31,693   $28,917   $29,521
COSTS AND EXPENSES
 Cost of products sold                            13,899    13,083    13,698
 Research and development                          2,132     1,997     1,807
 Selling, general and administrative               7,422     6,564     6,972
 Amortization of goodwill                            333       332       333
 Class action litigation                                                 956
 Other (income) expense, net                        (441)     (404)     (165)
                                                 -------   -------   -------
                                                  23,345    21,572    23,601
                                                 -------   -------   -------
 Income before income taxes                        8,348     7,345     5,920
PROVISION FOR INCOME TAXES                         3,002     2,656     2,298
                                                 -------   -------   -------
NET INCOME                                         5,346     4,689     3,622
 Currency translation adjustment                    (100)      142      (153)
                                                 -------   -------   -------
COMPREHENSIVE INCOME                             $ 5,246   $ 4,831   $ 3,469
                                                 =======   =======   =======
NET INCOME PER SHARE:
    Basic                                           $.94      $.85      $.69
                                                    ====      ====      ====
    Diluted                                         $.88      $.78      $.62
                                                    ====      ====      ====
<PAGE>  15
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Years ended December 31, 1997, 1998 and 1999
(dollars in thousands)
<TABLE>
                                        Common Stock     Additional           Compre-   Unearned    Treasury
                                        Shares             Paid-In  Retained  hensive   Compensa-    Shares
                                    Outstanding  Amount    Capital  Earnings   Income      tion       Amount
                                    ----------   ------  ---------  --------  -------   --------    --------
<S>                                  <C>        <C>       <C>       <C>         <C>       <C>          <C>
Balance at January 1, 1997            5,213,194  $1,043    $12,250   $(2,702)    $177      $(156)
Shares issued pursuant to
 employee stock plans                   317,082      63      1,129       (21)                137
Shares returned to pay statutory
 withholding tax                        (29,415)     (6)      (170)     (199)
Currency translation adjustment                                                  (153)
Net income                                                             3,622
                                      ---------  ------    -------   -------    -----      -----
Balance at December 31, 1997          5,500,861   1,100     13,209       700       24        (19)
Shares issued pursuant to
 employee stock plans                    48,501      10        369        (3)               (220)
Shares returned to pay statutory
 withholding tax                         (5,800)     (1)       (29)      (23)
Repurchase of common shares                                                                             $(1)
Exercise of Warrants                     54,307      11         79        (4)
Currency translation adjustment                                                   142
Net income                                                             4,689
                                      ---------  ------    -------   -------     ----      -----       ----
Balance at December 31, 1998          5,597,869   1,120     13,628     5,359      166       (239)        (1)
Shares issued pursuant to
 employee stock plans                   243,284      48        422       (17)                 (4)       589
Repurchase of common shares                                                                            (588)
Currency translation adjustment                                                  (100)
Net income                                                             5,346
                                      ---------  ------    -------   -------     ----      -----       ----
Balance at December 31, 1999          5,841,153  $1,168    $14,050   $10,688     $ 66      $(243)      $  0
                                      =========  ======    =======   =======     ====      =====       ====
</TABLE>
The accompanying notes to consolidated financial statements are an integral
part of these statements.
<PAGE>  16
CONSOLIDATED STATEMENTS OF CASH FLOWS
COGNITRONICS CORPORATION AND SUBSIDIARIES
(in thousands)                                         Year ended December 31,
                                                         1999     1998    1997
                                                         ----     ----    ----
OPERATING ACTIVITIES
  Net income                                            $5,346  $4,689  $3,622
  Adjustments to reconcile net income to net cash
     provided by operating activities:
     Income tax expense                                  3,002   2,656   2,298
     Depreciation and amortization                         802     769     758
     (Gain) loss on disposition of  assets                 (15)      6       3
     Shares issued as compensation                         185      40     188
     Net (increase) decrease in:
      Accounts receivable                               (1,820)   (605)   (750)
      Inventories                                       (4,111)   (569)   (602)
      Other assets                                        (296)    284    (459)
     Net increase (decrease) in:
      Accounts payable                                   2,738    (802)    732
      Accrued compensation and benefits                     34     (60)    191
      Other accrued expenses                               (62)   (793)  1,218
                                                        ------  ------  ------
                                                         5,803   5,615   7,199
      Income taxes paid                                 (2,760) (1,956) (2,712)
                                                        ------  ------  ------
      NET CASH PROVIDED BY OPERATING ACTIVITIES          3,043   3,659   4,487
                                                        ------  ------  ------

INVESTING ACTIVITIES
  Purchase of marketable securities                    (11,200) (3,700) (5,750)
  Sale of marketable securities                          5,600   3,200   3,050
  Proceeds from disposition of assets                       10      24     387
  Additions to property, plant and equipment              (483)   (539)   (381)
  Purchase of software licenses                                           (528)
                                                       -------  ------  ------
      NET CASH USED BY INVESTING ACTIVITIES             (6,073) (1,015) (3,222)
                                                       -------  ------  ------
FINANCING ACTIVITIES
  Principal payments on debt                              (111)   (174)   (433)
  Issuance of debt                                                 196     210
  Shares issued pursuant to employee stock plans           783      22     611
  Shares issued pursuant to warrants                                86
  Shares repurchased for treasury, 105,750 in 1999
    and 150 in 1998                                       (588)     (1)
  Shares returned to pay statutory withholding tax
    upon vesting of restricted stock                               (53)   (375)
                                                       -------  ------  ------
        NET CASH PROVIDED BY FINANCING ACTIVITIES           84      76      13
                                                       -------  ------  ------
EFFECT OF EXCHANGE RATE DIFFERENCES                        (53)     83     (59)
                                                       -------  ------  ------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS        (2,999)  2,803   1,219
CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR            6,991   4,188   2,969
                                                       -------  ------  ------
CASH AND CASH EQUIVALENTS - END OF YEAR                $ 3,992  $6,991  $4,188
                                                       =======  ======  ======
The accompanying notes to consolidated financial statements are an integral
part of these statements.
<PAGE>  17
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
COGNITRONICS CORPORATION AND SUBSIDIARIES

NOTE A.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization.  The Company designs, manufactures and markets voice processing
products in the United States and, through a subsidiary, distributes call
management and voice processing equipment in Europe.

Risks and Uncertainties.  A major portion of the Company's domestic revenues
is generated by sales to two customers, and a significant portion of its
European distributorship revenue comes from one customer.  The loss of any of
these customers would have a material adverse impact on the Company. The
Company's receivables are primarily from major, well-established companies
in the telecommunications industry, and at December 31, 1999, three such
companies accounted for 37% of the Company's accounts receivable.  In addition,
50% of the Company's accounts receivable were supported by a guaranteed,
irrevocable letter of credit.  The Company's markets are subject to rapid
technological change and frequent introduction of new products. The Company's
products are similar to those manufactured, or capable of being manufactured,
by a number of companies, some of which are well established with financial,
personnel and technical resources substantially larger than those of the
Company. The Company's ability to compete in the future depends on its ability
to maintain the technological and performance advantages of its current products
and to introduce new products and applications that achieve market acceptance.

Principles of Consolidation.  The financial statements include the accounts of
the Company and its subsidiaries, all of which are wholly-owned. Intercompany
accounts and transactions have been eliminated in consolidation.

Revenue.  Revenue is recognized when products are shipped or when services are
rendered.

Use of Estimates.   The preparation of the financial statements in conformity
with generally accepted accounting principals requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.

Fair Value of Financial Instruments.  The carrying amounts of the Company's
financial instruments (trade receivables/payables and other short-term and
long-term debt) due to their terms and maturities approximate fair value.

Cash and Cash Equivalents.  The Company considers financial instruments with a
maturity of three months or less from the date of purchase to be cash
equivalents. At December 31, 1999, essentially all of the Company's cash and
cash equivalent balances were with two financial institutions.

Marketable Securities.  Marketable securities are classified as available for
sale and are reported at cost.  Due to their short maturities and/or reset
provisions, their carrying value approximates fair value.

Inventories.  Inventories are stated at the lower of cost (first-in, first-out
method) or market.

Property, Plant and Equipment.  Property, plant and equipment is carried at
cost less allowances for depreciation, computed in accordance with the
straight-line method based on estimated useful lives.  The estimated lives for
machinery and equipment are 5 to 12 years and for furniture and fixtures are 4
to 10 years.
<PAGE>  18
Foreign Exchange.  Results of operations for the Company's foreign subsidiary
were  translated into U.S. dollars using average exchange rates during the
period, while assets and liabilities were translated using current rates at the
end of the period.

Stock Based Compensation. The Company grants stock options for a fixed number
of shares to employees with an exercise price equal to the fair value at the
date of grant.  The Company accounts for stock option grants in accordance with
Accounting Principles Board ("APB")  Opinion No. 25, "Accounting for Stock
Issued to Employees", and therefore recognizes no compensation expense for stock
options granted.

Income Per Share.  In computing basic earnings per share, the dilutive effect
of stock options and warrants are excluded, whereas for diluted earnings per
share they are included.  The shares used in the basic earnings per share
calculations were 5,670,023, 5,542,804 and 5,233,414 and in the diluted earnings
per share were 6,047,636, 5,993,077 and 5,839,815 for 1999, 1998 and 1997,
respectively.

Goodwill.  The Company has classified as goodwill the cost in excess of fair
value of the net assets of companies acquired in purchase transactions. Goodwill
is amortized using the straight-line method over its estimated useful life (10
years). Goodwill in excess of associated expected operating cash flows is
considered to be impaired and is written down to fair value.

Stock Split.   All shares and per share amounts have been restated to give
retroactive effect to a 3 for 2 split in the form of a dividend declared July
1999.  The par value of the additional shares of common stock issued in
connection with the stock split was credited to common stock and charged to
retained earnings.

NOTE B. VALUATION AND QUALIFYING ACCOUNTS

The allowance for doubtful accounts was increased (decreased) by $10,000,
$24,000 and $(12,000) in 1999, 1998 and 1997, respectively, by credits (charges)
to costs and expenses.  The Company wrote off uncollectible accounts, net of
recoveries, of $18,000 and $53,000 in 1998 and 1997, respectively.

NOTE C.  INVENTORIES (IN THOUSANDS):
                                                                 1999    1998
                                                                 ----    ----
Finished and in process                                        $3,947  $3,998
Materials and purchased parts                                   5,132   1,014
                                                               ------  ------
                                                               $9,079  $5,012
                                                               ======  ======

NOTE D.  PROPERTY, PLANT AND EQUIPMENT (IN THOUSANDS):
                                                                 1999    1998
                                                                 ----    ----
Machinery and equipment                                        $1,768  $1,780
Furniture and fixtures                                          2,100   1,777
                                                               ------  ------
                                                                3,868   3,557
Less allowances for depreciation                                2,498   2,223
                                                               ------  ------
                                                               $1,370  $1,334
                                                               ======  ======
<PAGE>  19
NOTE E.  OTHER NON-CURRENT LIABILITIES (IN THOUSANDS):

                                                                 1999    1998
                                                                 ----    ----
Accrued officers' supplemental pension                         $  593  $  630
Accrued deferred compensation                                     305     316
Accrued pension                                                   607     647
Accrued postretirement benefit                                    800     778
                                                               ------  ------
                                                                2,305   2,371
Less current portion                                              195     182
                                                               ------  ------
                                                               $2,110  $2,189
                                                               ======  ======

NOTE F.  DEBT AND CREDIT ARRANGEMENTS

Dacon Electronics Plc has a bank line of credit of $160,000 expiring in 2000.
During 1999 and 1998, no amounts were borrowed under this facility.

Long term debt (in thousands):
                                                                 1999    1998
                                                                 ----    ----
  Installment finance agreements, interest at 8% to 12%
    per annum expiring through 2003                              $139    $252
  Less current maturities of debt                                  49     112
                                                                 ----    ----
                                                                 $ 90    $140
                                                                 ====    ====
Payments on the installment finance agreements in each of the four years in
the period ending December 31, 2003 are $49,000, $43,000, $35,000 and $12,000,
respectively.

Interest of $30,000, $42,000 and $53,000 was paid in 1999, 1998 and 1997,
respectively.

NOTE G.  INCOME TAXES

At December 31, 1999, the consolidated retained earnings included approximately
$1.3 million of retained earnings applicable to Dacon Electronics Plc, a foreign
subsidiary. If the undistributed earnings were remitted, any resulting federal
tax would be substantially reduced by foreign tax credits.

The components of the provision (benefit) for income taxes for the years ended
December 31 are as follows (in thousands):
<PAGE>  20
                                                         1999    1998    1997
                                                         ----    ----    ----
Current:
  Federal                                              $2,428  $1,565  $2,023
  Foreign                                                  62     377     310
  State                                                   419     370     310
                                                       ------  ------  ------
      Total current                                     2,909   2,312   2,643
                                                       ------  ------  ------
Deferred:
  Federal                                                  84     344    (345)
  State                                                     9
                                                       ------  ------  ------
      Total deferred                                       93     344    (345)
                                                       ------  ------  ------
                                                       $3,002  $2,656  $2,298
                                                       ======  ======  ======
Not reflected in the 1999, 1998 and 1997 tax provisions are $73,000, $94,000
and $509,000, respectively, of income tax benefits related to employee stock
plans; such amounts were credited to additional paid-in capital.

Domestic and foreign pretax income (loss) for the years ended December 31 are
as follows (in thousands):

                                                         1999    1998    1997
Domestic operations                                    $8,484  $6,357  $5,313
Foreign Operations                                       (136)    988     607
                                                       ------  ------  ------
                                                       $8,348  $7,345  $5,920
                                                       ======  ======  ======

Deferred income taxes reflect the net tax effects of temporary differences
between carrying amounts of assets and liabilities for financial reporting
purposes and amounts used for income tax purposes.  Significant components of
the Company's deferred tax liabilities and assets as of December 31, 1999 and
1998 are as follows (in thousands):
                                                                 1999    1998
                                                                 ----    ----
Deferred tax liabilities                                       $  238  $   79
                                                               ------  ------
Deferred tax assets:
  Inventory valuation                                             701     700
  Accrued liabilities and employee benefits                       380     313
  Accrued deferred compensation                                   333     351
  Other postretirement benefits                                   304     296
  Separate return federal operating loss carryforwards
     expiring in 2008 and 2009                                    445     445
  Other                                                            94      86
                                                               ------  ------
     Total deferred tax assets                                  2,257   2,191
  Valuation allowance                                            (445)   (445)
                                                               ------  ------
                                                                1,812   1,746
                                                               ------  ------
        Net deferred tax assets                                $1,574  $1,667
                                                               ======  ======
<PAGE>  21
Valuation allowance at January 1                               $ (445) $ (686)
Credited (charged) to tax expense                                          22
Reclassified to taxes payable                                             219
                                                               ------  ------
Valuation allowance at December 31                             $ (445) $ (445)
                                                               ======  ======

A reconciliation of the statutory federal income tax rate to the effective tax
rate on income for the years ended December 31, is as follows:

                                                         1999    1998    1997
                                                         ----    ----    ----
Statutory federal income tax rate                        34.0%   34.0%   34.0%
State income taxes, net of federal tax benefit            3.4     3.6     3.5
Lower foreign tax rate                                   (0.1)   (1.0)   (0.2)
Research & Development Credit                            (1.0)   (1.6)   (0.7)
Nontaxable interest income                               (1.2)   (0.7)   (0.4)
Goodwill amortization                                     1.0     1.5     1.9
Other                                                    (0.1)    0.4     0.7
                                                         ----    ----    ----
                                                         36.0%   36.2%   38.8%
                                                         ====    ====    ====
NOTE H.  OTHER (INCOME) EXPENSE, NET (IN THOUSANDS):
                                                       Year Ended December 31,
                                                         1999   1998    1997
                                                         ----   ----    ----
Interest expense                                        $  49  $  73   $  74
Interest income                                          (490)  (477)   (239)
                                                        -----  -----   -----
                                                        $(441) $(404)  $(165)
                                                        =====  =====   =====

NOTE I. COMMITMENTS

Leases.  Total rental expense amounted to $532,000 in 1999, $465,000 in 1998
and  $449,000 in 1997.  Future annual payments for long-term noncancellable
leases for each of the five years in the period ending December 31, 2004 are
approximately $457,000, $399,000, $282,000, $217,000 and $0, respectively, and
no amounts thereafter.

Pension Plan.  The Company and its domestic subsidiaries have a defined
benefit pension plan covering substantially all employees.  The benefits are
based on years of service and the employee's compensation.  No additional
service cost benefits were earned subsequent to June 30, 1994.  The Company's
funding policy is to contribute amounts to the plan sufficient to meet the
minimum funding requirements set forth in the Employee Retirement Income
Security Act of 1974, plus such additional amounts as the Company may determine
to be appropriate from time to time.

The components of net cost of the plan for the years ended December 31 are as
follows (in thousands):
                                                          1999    1998    1997
                                                          ----    ----    ----
Interest cost on projected benefit obligation             $117    $115    $103
Actual return on plan assets                               (50)   (120)   (170)
Net amortization and deferral                              (44)     31      77
                                                          ----    ----    ----
  Net periodic pension cost                               $ 23    $ 26    $ 10
                                                          ====    ====    ====
<PAGE>  22
The following table sets forth the plan's funded status and the accrued
pension liability recognized in the Company's Consolidated Balance Sheets at
December 31 (in thousands):
                                                                 1999    1998
                                                                 ----    ----
Projected benefit obligation for services rendered to date
  Beginning of year                                            $1,773  $1,542
  (Gain)loss due to change in estimates                          (152)    227
  Interest cost                                                   116     115
  Less benefits paid                                             (151)   (111)
                                                               ------  ------
  End of year                                                   1,586   1,773
                                                               ------  ------
Plan assets at fair value
  Beginning of year                                             1,258   1,200
  Actual return on plan assets                                     50     120
  Contribution                                                     63      49
  Benefits paid                                                  (151)   (111)
                                                               ------  ------
  End of year                                                   1,220   1,258
                                                               ------  ------
Plan assets less than projected benefit obligation               (366)   (515)
Unrecognized net asset, less accumulated amortization
  of $164 and $156                                                (17)    (25)
Unrecognized net gain                                            (224)   (107)
                                                               ------  ------
Accrued pension liability (included in other non-current
  liabilities)                                                 $ (607) $ (647)
                                                               ======  ======
The discount rates used in determining the projected benefit obligation were
7.75% in 1999 and  6.75% in 1998.  The expected long-term rate of return on plan
assets used in determining the net periodic pension cost was 7% for all years
presented.

The plan assets at December 31, 1999 and 1998 were principally invested in
corporate debt and equity securities.

401(k) Retirement Plan.  The Company has a defined contribution plan covering
substantially all domestic employees. The Company's contribution is based upon
the participants' contributions. The expense was $53,000, $52,000 and $40,000
in 1999, 1998 and 1997, respectively.

Officers' Supplemental Pension Plan.  The Company has an unfunded,
noncontributory defined benefit pension plan covering certain retired officers.

The components of net pension cost of the plan for the years ended
December 31 are as follows (in thousands):

                                                         1999    1998    1997
                                                         ----    ----    ----
Interest cost on projected benefit obligation             $34     $35     $39
Amortization of actuarial gains                            (2)     (3)     (6)
                                                          ---     ---     ---
     Net periodic pension cost                            $32     $32     $33
                                                          ===     ===     ===
The following table sets forth the plan's status and the accrued pension
liability recognized in the Company's Consolidated Balance Sheets at December 31
<PAGE>  23
(in thousands):

                                                                 1999    1998
                                                                 ----    ----
Projected benefit obligations
  Balance at beginning of period                                 $543    $548
  Loss on change in estimates                                              30
  Interest expense                                                 34      35
  Less benefits paid                                              (69)    (70)
                                                                 ----    ----
  Balance at end of period                                        508     543

Unrecognized net gain                                              85      87
                                                                 ----    ----
Accrued pension liability (included in other non-current
  liabilities)                                                   $593    $630
                                                                 ====    ====
The discount rates used in determining the projected benefit obligation was
6.75% in 1999 and 1998 and 7.25% in 1997.  All participants are retired and
receiving benefits under the Plan and therefore future increases in compensation
are not applicable.

Other Postretirement Benefit Plans.  In addition to the Company's pension plans,
the Company has a contributory, unfunded defined benefit plan providing certain
health care benefits for domestic employees who retired prior to March 31, 1996.
The participants' contributions are adjusted periodically and are based on age
and length of service at time of retirement. The assumed rate of increase in
the per capita cost of covered benefits used in 1998 was 7.8% decreasing to 6%
after 6 years and for 1999 was 9% decreasing to 5% after 8 years.  Increasing
the health care cost trend rate by one percentage point each year would increase
the accumulated postretirement benefit obligation by $73,000 at December 31,
1999 and the aggregate service and interest cost component of net periodic
postretirement benefit cost for 1999 by $5,000.  The corresponding impact for a
1% decrease are $(64,000) and ($5,000), respectively.  The weighted average
discount rates used in determining the net periodic postretirement benefit cost
and accumulated benefit obligation were 7.75% and 7.0% for 1999 and 1998,
respectively.

The following sets forth the plan's status and accrued postretirement benefit
liability recognized in the Company's Consolidated Balance Sheets at
December 31 (in thousands):
                                                                 1999    1998
                                                                 ----    ----
Actuarial present value of accumulated postretirement
   benefit obligation:                                           $733    $635
Unrecognized net gain                                              67     143
                                                                 ----    ----
Accrued postretirement benefit liability (included in
   other non-current liabilities)                                $800    $778
                                                                 ====    ====
The components of postretirement benefit cost for the years ended December 31,
are as follows (in thousands):
                                                         1999    1998    1997
                                                         ----    ----    ----
     Interest cost                                        $53     $42     $36
     Net amortization                                              (8)    (18)
                                                          ---     ---     ---
      Net periodic cost                                   $53     $34     $18
                                                          ===     ===     ===
<PAGE>  24
Deferred Compensation. At December 31, 1999 and 1998, the liability relating
to a deferred compensation arrangement between the Company and a director and
former officer of the Company was $305,000 and $316,000, respectively.

NOTE J.  STOCK PLANS

At December 31, 1999, the Company has reserved 124,250 shares of its common
stock for grant to key employees under the 1990 Stock Option Plan. The plan
provides for the grant, at fair market value on the date of grant, of
nonqualified stock options and incentive stock options. Options generally become
exercisable in three equal annual installments on a cumulative basis commencing
six months from the date of grant and expire five years (maximum ten years)
after the date granted.

The Company also has the 1967 Employee Stock Purchase Plan under which 52,478
shares were reserved for grant at December 31, 1999. The purchase price is 85%
of the fair market value of the stock on the date offered. Generally, rights to
purchase shares under this plan expire 12 months (maximum 27 months) after the
date of grant.

The Company also has a time accelerated restricted stock plan ("Restricted
Stock Plan") under which 87 shares are available for grant. The plan provides
for the award of shares to key employees; generally, the awards vest in five
equal annual installments commencing two years after the date of the award.
Vesting may be accelerated based on the achievement of certain financial
performance goals.


Share information pertaining to these plans is as follows:
                                                                    Restricted
                                                Option   Purchase     Stock
                                                 Plan      Plan        Plan
                                                ------   --------   ----------
Outstanding at January 1,1997                  634,924     54,027      145,950
 Granted                                       134,250                  18,000
 Cancelled or expired                                        (707)      (1,587)
 Vested                                                               (139,413)
 Exercised                                    (247,348)   (53,320)
                                               -------     ------      -------
Outstanding at December 31, 1997               521,826          0       22,950
 Granted                                       175,725     28,603       39,000
 Cancelled or expired                           (2,000)
 Vested                                                                (20,550)
 Exercised                                      (9,501)
                                               -------     ------       ------
Outstanding at December 31, 1998               686,050     28,603       41,400
 Granted                                       142,875                  21,000
 Cancelled or expired                           (4,101)      (913)
 Vested                                                                (12,480)
 Exercised                                    (300,497)   (27,690)
                                               -------     ------       ------
Outstanding at December 31, 1999               524,327          0       49,920
                                               =======     ======       ======

The exercise price for options granted in 1997 ranged from $3.13 to $5.09, for
options granted in 1998 was $6.67 and for options granted in 1999 was $9.00.
The weighted average exercise price for the 524,477 options outstanding under
the Option Plan is $5.67 with expiration dates ranging from 2000 to 2004.
Options were exercised under the Option Plan at weighted average exercise prices
<PAGE>  25
of $1.94, $1.98 and $2.08 in 1997, 1998 and 1999, respectively. Shares
exercisable under the Option Plan at December 31, 1997, 1998 and 1999 were
340,075, 419,577 and 316,027, respectively.

Rights were granted under the Purchase Plan at an exercise price of $5.67 in
1998.  Shares were exercised under the Purchase Plan at a weighted average price
of $2.48 in 1997 and $5.67 in 1999.

Under the Restricted Stock Plan compensation expense was $184,000, $30,000 and
$189,000 in 1999, 1998 and 1997, respectively.

During 1998, the Company established a stock option plan for non-employee
directors and officers.  The plan provided for an initial grant of options to
purchase 3,000 shares to each participant (18,000 in total) at $5.50, the fair
market value on the date of grant, and additional grants of 1,500 shares for
each participant on August 1st of subsequent years at the then fair market
value.  Effective August 1, 1999, an additional 1,500 shares were granted to
each participant (9,000 in all) at an exercise price of $11.17.  Through
December 31, 1999, no grants under this plan have been exercised.  At
December 31, 1999, the Company has reserved 25,500 shares of its Common Stock
for grant.

The Company has elected to follow APB No. 25 and related interpretations in
accounting for its stock option plans, and has adopted the disclosure-only
provisions of  SFAS No. 123.  If the Company had elected to recognize
compensation expense for the 1990 Stock Option Plan and the 1967 Stock Purchase
Plan based on the fair value at the grant date , consistent with the method
presented by SFAS No. 123, the pro forma net income and net income per share
would be as follows (in thousands except per share information):

                                                         1999    1998    1997
                                                         ----    ----    ----
 Net income                  As reported               $5,346  $4,689  $3,622
                                                       ======  ======  ======
                             Pro forma                 $4,859  $4,442  $3,461
                                                       ======  ======  ======

 Net income per share        As reported    Basic        $.94    $.85    $.69
                                                         ====    ====    ====
                                            Diluted      $.88    $.78    $.62
                                                         ====    ====    ====
                             Pro forma      Basic        $.86    $.80    $.66
                                                         ====    ====    ====
                                            Diluted      $.81    $.75    $.60
                                                         ====    ====    ====


The estimated weighted average fair value per share of stock options granted
were $5.16, $3.21 and $1.68 for 1999, 1998 and 1997, respectively.  The fair
value for the Stock Option and Stock Purchase Plans was estimated at the date
of grant using a Black-Scholes option  pricing model with the following
weighted-average assumptions for 1999, 1998 and 1997, respectively: risk-free
interest rates of 5.5%, 4.5% and 5.0%; no dividend yields; volatility factors
of the expected market price of the Company's common stock of .61 in 1999 and
 .64 in 1998 and 1997; and a weighted-average expected life of the option of 3.8
years in 1999 and 1998 and 4.2 years for 1997 for the Option Plan; 9 months for
all years for the Purchase Plan, and 5 years for the Directors and Officers
Plan.
<PAGE>  26
The Black-Scholes option valuation model was developed for use in estimating
the fair value of traded options which have no vesting restrictions and are
fully transferable.  In addition, option valuation models require the input of
highly subjective assumptions including the expected stock price volatility.
Because the Company's employee stock options have characteristics significantly
different from those of traded options, and because changes in the subjective
input assumptions can materially affect the fair value estimate, in management's
opinion, the existing models do not necessarily provide a reliable single
measure of the fair value of its employee stock options.

In 1998, warrants to purchase 54,307 shares of common stock at $1.58 per share
were exercised and 20,693 expired.
<PAGE>  27
NOTE K.  OPERATIONS BY INDUSTRY SEGMENT AND GEOGRAPHIC AREAS

The Company operates in two segments of the voice processing industry.  In the
United States, the Company designs, manufactures and sells equipment for use in
telephone central offices.  In Europe (United Kingdom), the Company distributes
equipment for use in customers' premises. Information about the Company's
operations by segment and geographic area for the years ended December 31,
is as follows (in thousands):
                                                     1999      1998      1997
                                                     ----      ----      ----
Net sales
 United States:
   Unaffiliated customers (North America)         $24,462   $20,603   $21,550
   Intercompany transfers                             194        98       186
                                                  -------   -------   -------
                                                   24,656    20,701    21,736
 Europe                                             7,231     8,314     7,971
 Eliminations                                        (194)      (98)     (186)
                                                  -------   -------   -------
                                                  $31,693   $28,917   $29,521
                                                  =======   =======   =======
Operating profit
 United States                                    $ 9,433   $ 7,247   $ 7,587
 Europe                                              (138)      878       594
   Intercompany eliminations                          (10)       18        17
                                                   ------    ------    ------
                                                    9,285     8,143     8,198
General corporate expenses                          1,378     1,202     2,443
Other (income) expense, net                          (441)     (404)     (165)
                                                  -------   -------   -------
Income before income taxes                        $ 8,348   $ 7,345   $ 5,920
                                                  =======   =======   =======
Total assets
 United States                                    $31,238   $21,461   $17,086
   Europe                                           3,919     5,670     6,092
      Intercompany eliminations                       (55)      (51)      (55)
                                                  -------   -------   -------
                                                  $35,102   $27,080   $23,123
                                                  =======   =======   =======
Long-lived assets
 United States                                    $ 1,718   $ 1,531   $ 1,395
 Europe                                             1,432     1,757     2,144
   Intercompany eliminations                          (36)      (16)      (32)
                                                  -------   -------   -------
                                                  $ 3,114   $ 3,272   $ 3,507
                                                  =======   =======   =======
Expenditures for long-lived assets
 United States                                    $   300   $   384   $   775
 Europe                                               246       155       134
   Intercompany eliminations                          (63)        0         0
                                                  -------   -------   -------
                                                  $   483   $   539   $   909
                                                  =======   =======   =======
Depreciation and amortization
 United States                                    $   279   $   261   $   251
 Europe                                               540       525       512
   Intercompany eliminations                          (17)      (17)       (5)
                                                  -------   -------   -------
                                                  $   802   $   769   $   758
                                                  =======   =======   =======
<PAGE>  28
Gross profit margin on intercompany transfers are comparable to sales to third
parties.  The United States operations had net sales of $1.9 million, $6.8
million and $7.4 million in 1999, 1998 and 1997, respectively, to one major
customer; sales of $7.3 million, $5.2 million and $5.4 million in 1999, 1998 and
1997, respectively, to another major customer; sales of $2.9 million in 1999 and
$2.4 million in 1997 to another customer and export sales of $2.9 million and
$2.0 million in 1999 and 1998, respectively, to another customer.  The European
operations had sales of $4.6, $5.2 million and  $5.0 million in 1999, 1998 and
1997, respectively, to one customer.


Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure

 None.


                                PART III

Item 10.   Directors and Executive Officers of the Registrant

 1. (a) The identification of the directors of the Company as of March 1, 2000
and persons nominated to become directors set forth under the caption
Information Concerning Nominees in the Proxy Statement for the annual meeting
of stockholders to be held on May 11, 2000 is incorporated herein by reference.

   (b) The identification of the executive officers of the Company and their
positions with the Company and ages as of March 1, 2000 is set forth under the
caption Executive Officers of the Company in Part I of this Annual Report on
Form 10-K.

 2. The information regarding compliance with Section 16(a) of the Securities
Exchange Act of 1934 set forth under the caption Section 16(a) Beneficial
Ownership Reporting Compliance in the Proxy Statement for the annual meeting of
stockholders to be held on May 11, 2000 is incorporated herein by reference.

Item 11.   Executive Compensation

   The information on executive compensation set forth under the caption
Executive Compensation in the Proxy Statement for the annual meeting of
stockholders to be held on May 11, 2000 is incorporated herein by reference.

Item 12.   Security Ownership of Certain Beneficial Owners and Management

   (a) and (b)  Security ownership of certain beneficial owners and management
set forth under the caption Security Ownership in the Proxy Statement for the
annual meeting of stockholders to be held on May 11, 2000  is incorporated
herein by reference.

   (c) Changes in Control.  None.

Item 13.   Certain Relationships and Related Transactions

   The information on certain relationships and related transactions set forth
under the caption Certain Relationships and Related Transactions in the Proxy
Statement for the annual meeting of stockholders to be held on May 11, 2000
is incorporated herein by reference.

<PAGE>  29
                                 PART IV

Item 14.   Exhibits, Financial Statement Schedules, and Reports on Form 8-K

 (a)(1) and (2) and (d)  The response to this portion of Item 14 is submitted
as a separate section beginning on page 26 of this Annual Report on Form 10-K.

 (a)(3) and (c)  The response to this portion of Item 14 is submitted as a
separate section beginning on page 27 of this Annual Report on Form 10-K.

 (b) There were no reports filed on Form 8-K during the fourth quarter of
1999.

                               SIGNATURES
 Pursuant to the requirements of Section 13 or 15(d) of the Securities  and
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized, on March 29, 2000.

                                                COGNITRONICS CORPORATION
                                                        Registrant

                                                by /s/ Garrett Sullivan
                                                       Garrett Sullivan
                                                       Treasurer

  Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated on March 29, 2000.


  Signature                                 Title
Chief Executive Officer:

  /s/ Brian J. Kelley                       President and Chief
      Brian J. Kelley                       Executive Officer

Chief Financial and Accounting Officer:

  /s/ Garrett Sullivan                      Treasurer
      Garrett Sullivan

A Majority of the Board of Directors:

  /s/ Edward S. Davis                       Director
      Edward S. Davis

  /s/ Jack Meehan                           Director
      Jack Meehan

  /s/ William A. Merritt                    Director
      William A. Merritt

  /s/ Timothy P. Murphy                     Director
      Timothy P. Murphy

  /s/ David H. Shepard                      Director
      David H. Shepard
<PAGE>  30

Form 10-K -- Item 14 (a) (1) and (2) and (d)

 (a)  (1)  Financial Statements

The following financial statements of the Company are included in Item 8.

Financial Statements Covered by Report of Independent Auditors:      PAGE

Report of Independent Auditors . . . . . . . . . . . . . . . . . . . . 11

Consolidated Balance Sheets, December 31, 1999 and December 31, 1998 . 12

Consolidated Statements of Income and Comprehensive Income for each
  of the three years in the period ended December 31, 1999 . . . . . . 13

Consolidated Statements of Stockholders' Equity for each of the
  three years in the period ended December 31, 1999 . . . . . . . . .  13

Consolidated Statements of Cash Flows for each of the three years
  in the period ended December 31, 1999. . . . . . . . . . . . . . . . 14

Notes to Consolidated Financial Statements . . . . . . . . . . . . . . 15


     (2) and (d) Financial Statement Schedules

Schedules for which provision is made in the applicable accounting regulation
of the Securities and Exchange Commission are not required under the related
instructions, are inapplicable, or the information has been included in the
Company's financial statements. and, therefore, have been omitted.
<PAGE>  31
                          Item 14(a)(3) and (c)
                            INDEX TO EXHIBITS
Exhibit
3.1    Certificate of Incorporation as filed on January 2, 1962 (Exhibit 3-1-A
       to Form S-1 Registration Statement No. 2-27439  and incorporated herein
       by reference).

3.2    Amendment, dated June 28, 1965 (Exhibit 3-1-B to Form S-1 Registration
       Statement No. 2-27439 and incorporated herein by reference).

3.3    Amendment, dated October 3, 1966 (Exhibit 3-1-C to Form S-1 Registration
       Statement No. 2-27439 and incorporated herein by reference).

3.4    Amendment, dated October 30, 1967 (Exhibit 3-1-D to Form S-1 Registration
       Statement No. 2-27439 and incorporated herein by reference).

3.5    Amendment, dated July 27, 1981 (Exhibit 3.5 to Annual Report on Form
       10-K for the fiscal year ended December 31, 1983 and incorporated herein
       by reference).

3.6    Amendment, dated September 27, 1984 (Exhibit 3.6 to Annual Report on
       Form 10-K for the fiscal year ended December 31, 1984 and incorporated
       herein by reference).

3.7    Amendment dated June 13, 1988 (Exhibit 3.7 to Annual Report on Form
       10-K for the fiscal year ended December 31, 1988 and incorporated herein
       by reference).

3.8    Amendment dated November 3, 1994 (Exhibit 3.8 to Annual Report on Form
       10-K for the year ended December 31, 1994 and incorporated herein by
       reference).

3.9    By-laws of the Company (Exhibit 3.9 to Annual Report on Form 10-K for
       the year ended December 31, 1994 and incorporated herein by reference).

4.     Specimen Certificate for Common Stock (Exhibit 4-1 to Form S-1
       Registration Statement No. 2-27439 and incorporated herein by reference).

10.1   1990 Stock Option Plan, as amended (attached as Exhibit 10.1 to this
       Annual Report on Form 10-K ).

10.2   Lease, dated April 30, 1993, between Seymour R. Powers and The Danbury
       Industrial Corporation, landlord, and Cognitronics Corporation, tenant
       (Exhibit 10.3 to Annual Report on Form 10-K for the year ended
       December 31, 1993 and incorporated herein by reference).

10.3   Form of Indemnity Agreement, dated October 27, 1986, between each
       Director (with equivalent form for each Officer) and Cognitronics
       Corporation (Exhibit 10.7 to Annual Report on Form 10-K for the year
       ended December 31, 1986 and incorporated herein by reference).

10.4   Supplemental Pension Plan for Officers, as amended November 2, 1993
       (Exhibit 10.6 to Annual Report on Form 10-K for the year ended
       December 31, 1993 and incorporated herein by reference).

10.5   1999 Executive Bonus Plan (attached as Exhibit 10.5 to this Annual
       Report on Form 10-K).
<PAGE>  32
10.6   Cognitronics Corporation Restricted Stock Plan (attached as Exhibit
       10.6 to this Annual Report on Form 10-K).

10.7   Form of Executive Severance Agreement between certain officers and
       Cognitronics Corporation  ( Exhibit 10.8 to Annual Report on Form 10-K
       for the year ended December 31, 1997 and incorporated herein by
       reference).

10.8   Addendum to Executive Severance Agreement between certain officers and
       Cognitronics Corporation (attached as Exhibit 10.8 to this Annual Report
       on Form 10-K).

10.9   The Directors' Stock Option Plan (attached as Exhibit 10.9 to this
       Annual Report on Form 10-K).

22.    List of subsidiaries of the Company as of December 31, 1999 (attached
       as Exhibit 22 to this Annual Report on Form 10-K).

23.    Consent of Independent Auditors, dated March 29, 2000 (attached as
       Exhibit 23 to this Annual Report on Form 10-K).




  Copies of the Exhibits to this Annual Report on Form 10-K are available upon
written request to the Secretary of the Company at 3 Corporate Drive, Danbury,
CT 06810-4130 and payment of $35.00 for a complete set of the Exhibits or $.25
per page for any part thereof (minimum $5.00).