<PAGE>  1
                                                    CONFORMED


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

                                 FORM 10-Q


[X]   Quarterly Report Pursuant to Section 13 or 15(d) of the        
       Securities Exchange Act of 1934
                                                            
For the period ended June 30, 1998     

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        06810-4130
   (Address of principal executive offices)        (Zip Code)


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


        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 the number of shares outstanding of each of 
the issuer's classes of common stock, as of June 30, 1998.     

Common Stock, par value $0.20 per share -- 3,671,101 shares
<PAGE>  2
Part I, Item 1.
     
                    COGNITRONICS CORPORATION AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                              (dollars in thousands)

                                            June 30,         December 31,
                                              1998               1997    
                                            --------         ------------
                                           (Unaudited)
ASSETS
CURRENT ASSETS                                                 
  Cash and cash equivalents                 $ 5,017           $ 4,188
  Marketable securities                       4,200             3,900
  Accounts receivable, net                    3,853             4,300
  Inventories                                 4,874             4,386
  Deferred income taxes                         872             1,023
  Other current assets                        1,657             1,050     
                                            -------           -------
      TOTAL CURRENT ASSETS                   20,473            18,847
  
PROPERTY, PLANT AND EQUIPMENT, NET            1,330             1,223
GOODWILL, NET                                 1,481             1,648
DEFERRED INCOME TAXES                           760               769
OTHER ASSETS                                    625               636
                                            -------           -------
                                            $24,669           $23,123
                                            =======           =======
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
  Accounts payable                          $ 1,718           $ 2,378
  Accrued compensation and benefits             916             1,051
  Income taxes payable                          450               317
  Current maturities of debt                    130               114
  Other accrued expenses                      1,396             1,875
                                            -------           -------
      TOTAL CURRENT LIABILITIES               4,610             5,735

LONG-TERM DEBT                                  219               111
OTHER NON-CURRENT LIABILITIES                 2,251             2,263

STOCKHOLDERS' EQUITY
  Common Stock, par value $.20 a
    share, authorized 10,000,000
    shares; issued 3,671,101
    and 3,667,351 shares                        734               733
  Additional paid-in capital                 13,292            13,209
  Retained earnings                           3,452             1,067
  Accumulated comprehensive income              120                24 
  Unearned compensation                        (  9)              (19)
                                            -------           -------
      TOTAL STOCKHOLDERS' EQUITY             17,589            15,014
                                            -------           -------
                                            $24,669           $23,123        
                                            =======           =======
 See Note to Condensed Consolidated Financial Statements.
<PAGE>  3
                    COGNITRONICS CORPORATION AND SUBSIDIARIES
             CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
                 (dollars in thousands, except per share amounts)


                               Three Months Ended       Six Months Ended
                                    June 30,                 June 30,    
                               ------------------       ----------------
                                1998        1997        1998       1997
                                ----        ----        ----       ----
NET SALES                      $7,069      $9,645      $14,609    $15,193

COST AND EXPENSES:
  Cost of products sold         3,114       4,239        6,443      6,892
  Research and development        460         465          929        846
  Selling, general and 
     administrative             1,594       2,030        3,337      3,616
  Amortization of goodwill         84          83          167        166
  Other (income) expense, 
     net                          (87)         30         (122)        14
                               ------      ------      -------    -------
                                5,165       6,847       10,754     11,534
                               ------      ------      -------    -------
Income before income taxes      1,904       2,798       3,855       3,659

PROVISION FOR INCOME TAXES        718       1,184       1,470       1,541
                               ------      ------     -------     -------
NET INCOME                      1,186       1,614       2,385       2,118

Currency translation
 adjustment                                                96        (153)
                               ------      ------     -------     -------
COMPREHENSIVE INCOME           $1,186      $1,614     $ 2,481     $ 1,965
                               ======      ======     =======     =======
                                                  
Net Income Per Share:                             
  Basic                          $.32        $.47        $.65        $.62
                                 ====        ====        ====        ====
  Diluted                        $.30        $.42        $.59        $.56
                                 ====        ====        ====        ====
                                                            
Weighted average number                                      
of outstanding shares:                                       
  Basic                     3,687,609   3,435,528   3,686,678   3,431,117
                            =========   =========   =========   =========
  Diluted                   4,009,000   3,856,824   4,015,667   3,764,101
                            =========   =========   =========   =========




See Note to Condensed Consolidated Financial Statements.
<PAGE>  4
                    COGNITRONICS CORPORATION AND SUBSIDIARIES
           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                             (dollars in thousands)

                                                   Six Months Ended  
                                                       June 30     
                                                 --------------------
                                                 1998            1997
                                                 ----            ----
NET CASH PROVIDED BY OPERATIONS                $1,222          $  821
                                               ------          ------

INVESTING ACTIVITIES
  Additions to property, plant and       
     equipment, net                              (293)           (249)
                                               ------          ------
   NET CASH USED BY INVESTING ACTIVITIES         (293)           (249)
                                               ------          ------

FINANCING ACTIVITIES
  Purchases of marketable securities           (2,800)         (3,380)
  Sales of marketable securities                2,500           2,050
  Payment of debt                                (123)           (122)  
  Issuance of debt                                196             212
  Shares issued pursuant to employee
    stock plans, 4,751 and 48,457 shares           84             119    
                                               ------          ------
   NET CASH USED BY FINANCING ACTIVITIES         (143)         (1,121)
                                               ------          ------
EFFECT OF EXCHANGE RATE DIFFERENCES                43             (58)
                                               ------          ------
INCREASE (DECREASE) IN CASH 
    AND CASH EQUIVALENTS                          829            (607)
CASH AND CASH EQUIVALENTS- BEGINNING
    OF PERIOD                                   4,188           2,969
                                               ------          ------
CASH AND CASH EQUIVALENTS - END OF PERIOD      $5,017          $2,362 
                                               ======          ======

INCOME TAXES PAID                              $  893          $1,266
                                               ======          ======
INTEREST EXPENSE PAID                          $   32          $   21
                                               ======          ======
    

See Note to Condensed Consolidated Financial Statements. 

<PAGE>  5
NOTE TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)June 30, 1998

The accompanying unaudited condensed consolidated financial statements have 
been prepared in accordance with generally accepted accounting principles for 
interim financial information and the instructions to Form 10-Q and Rule 10-01 
of Regulation S-X. Accordingly, they do not include all of the information and 
footnotes required by generally accepted accounting principles for complete 
financial statements. In the opinion of management, all adjustments 
(consisting of normal recurring accruals) considered necessary for a fair 
presentation have been included. Operating results for the three-month and 
six-month periods ended June 30, 1998 are not necessarily indicative of the 
results that may be expected for the year ending December 31, 1998. The 
balance sheet at December 31, 1997 has been derived from the audited financial 
statements at that date. For further information, refer to the consolidated 
financial statements and footnotes thereto and the quarterly financial data 
included in the Company's Annual Report on Form 10-K for the year ended 
December 31, 1997.  

Certain amounts have been reclassified in the prior year for comparative 
purposes.

Inventories (in thousands):
                                           June 30,           December 31,
                                             1998                1997     
                                           --------           ------------
Finished and in process                      $3,915                 $3,450
Materials and purchased parts                   959                    936
                                             ------                 ------
                                             $4,874                 $4,386
                                             ======                 ======
Other Non-Current Liabilities (in thousands):
                                         June 30,          December 31,
                                           1998                 1997     
                                         --------          ------------
Accrued supplemental pension plan        $  653               $  667
Accrued deferred compensation               320                  324
Accrued pension expense                     664                  670
Accrued other post-retirement  
   benefit liability                        790                  778
                                         ------               ------
                                          2,427                2,439
    Less current portion                    176                  176
                                         ------               ------
                                         $2,251               $2,263
                                         ======               ======
Income Per Share

In computing basic earnings per share, the dilutive effect of stock options 
and warrants are excluded, whereas, for dilutive earnings per share, they are
included.

Comprehensive Income

As of January 1, 1998, the Company adopted Statement of Financial Accounting 
Standards ("SFAS") No. 130, Reporting Comprehensive Income.  SFAS No. 130 
established new rules for the reporting of comprehensive income and its 
components; however, the adoption of this Statement had no impact on the 
<PAGE>  6
Company's net income or shareholders' equity.  SFAS No. 130 requires the
Company's foreign currency translation adjustments, which prior to adoption
were reported separately in shareholders' equity, to be included in other
comprehensive income.  Prior year financial statements have been reclassified
to conform to the requirements of SFAS No. 130.

Recently Issued Accounting Pronouncements

The Financial Accounting Standards Board has issued Statement of Financial
Accounting Standards No. 131, Disclosure About Segments of an Enterprise and
Related Information; No. 132, Employers Disclosures About Pensions and Other
Postretirement Benefits; and No. 133, Accounting for Derivative Instruements
and Hedging Activities.  The Company has not yet adopted these standards.
Management does not anticipate that the adoption of these standards will have
a significant effect on earningsor the financial position of the Company.

Contingencies

In 1993, class action lawsuits were filed against the Company and certain of 
its officers alleging securities law violations in connection with the 
purchase of the Company's common stock by members of the class during the 
period from October 29, 1992 through March 11, 1993. The plaintiffs sought 
unspecified damages and related costs.  On January 28, 1998, the plaintiffs 
and the defendants and their insurer signed a Memorandum of Understanding  to 
settle this litigation, which provides for the payment of an aggregate of $2.3 
million by the defendants and their insurer and the complete release of all 
claims by the plaintiffs against the defendants and all other persons who were 
directors or officers of the Company during the class period.  In the year 
ended December 31, 1997, the Company expensed its share of the proposed 
settlement related to this litigation.  In February 1998, the Company 
deposited into an escrow account, pending the Court's approval of the 
settlement, its share of the proposed settlement, $.8 million, which is 
included in other current assets.  On April 14, 1998, the parties entered into 
a Stipulation of Settlement providing for the settlement of this litigation.  
On June 5, 1998, the Court issued an Order of preliminary approval of the 
settlement.  The settlement is contingent upon final approval by the Court at 
a class settlement hearing scheduled for September 11, 1998.  The Company has 
denied any fault or wrongdoing in this matter.  If the Stipulation of 
Settlement is not approved by the Court and if the lawsuit is adversely 
determined, the resolution of this matter could have a material negative 
effect on the Company's financial condition, results of operations and cash 
flow.


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

Results of Operations

Net income was $1,186,000 and $2,385,000, respectively, for the three and 
six-month periods ended June 30, 1998 versus $1,614,000 and $2,118,000, 
respectively, in the prior year periods.

Consolidated sales for the quarter and the six months ended June 30, 1998 
<PAGE>  7
decreased $2.6 million (27%) to $7.1 million and $.6 million (4%) to $14.6
million, respectively, due to sales decreases by domestic operations of $3 
million and $1.7 million, respectively, partially offset by higher sales 
volume by the UK distributorship operations.  The domestic sales decrease for 
the three-month period was primarily due to the inclusion in the 1997 period 
of a $1 million order to a North American telephone company to replace 
existing equipment and, in the 1998 period, lower sales of $1.8 million to 
switch manufacturers.  For the six-month period, the decrease was due to lower 
sales of $.6 million to the previously mentioned telephone company, $.7 
million to another telephone company and $.3 million to switch manufacturers.

Research and development expenses increased $83,000 (10%) in the six-month 
period ended June 30, 1998 primarily due to higher personnel expenses.


Selling, general and administrative expenses decreased $436,000 (21%) and 
$279,000 (8%), respectively, for the three-month and six-month periods when 
compared to the comparable periods of the prior year primarily due to lower 
personnel costs (commissions and bonuses) in the domestic operations.

Other (income) expense in the current periods is primarily interest income.  
Included in the prior year periods was a charge of $76,000 to write down the 
Company's building in the UK, which was for sale, to net realizable value.  
The Company's effective tax rate for the 1998 periods was 38% versus 42% for 
1997.  This reduction is primarily attributable to the decreasing impact of 
the non-deductibility of goodwill on the effective tax rate as the pretax 
income increases and a higher proportion of income attributable to the UK 
distributorship operations, which has a lower effective tax rate.  Under 
Statement of Financial Accounting Standards No. 109, the Company has 
recognized future tax benefits that management believes will be realized.  In 
order to realize this benefit, the Company, exclusive of the results of Dacon 
Electronics Plc, will have to generate pretax income of $5 million.  The 
current deferred tax benefit of $.9 million is primarily attributable to 
inventory provisions and the recognition of such expense, for tax purposes, 
is, in large measure, within the control of the Company and the provision for 
the class action settlement which should reverse this year.  The non-current 
tax benefit, $.8 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 $3.1 million for the six months ended 
June 30, 1998 and $5.3 million, $.8 million and $1.0 million for the years 
ended December 31, 1997, 1996 and 1995, respectively.  Based on this, 
management anticipates that the Company will generate sufficient taxable 
income in the future to realize these benefits.


Liquidity and Sources of Capital

Working capital and the ratio of current assets to current liabilities 
increased to $15.9 million and 4.4:1 at June 30, 1998 compared to $13.1 
million and 3.3:1 at December 31, 1997.  The improvement in 1998 is mainly due 
to the Company's results of operations for the six months ended June 30, 1998.

During the remainder of 1998, the Company anticipates purchasing $.3 million 
of equipment and incurring increased research and development expenditures.  
Management believes that its cash and cash equivalents and the cash flow from 
operations in 1998 will be sufficient to meet these needs.
<PAGE>  8
In 1993, class action lawsuits were filed against the Company and certain of 
its officers (see Note to Condensed Consolidated Financial Statements).


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-Q) 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 
Quarterly Report on Form 10-Q and in the Company's other Securities and 
Exchange Commission filings.

PART II

Item 1. Legal Proceedings
Item 1, Part II of Form 10-Q for the period ended March 31, 1998, is
incorporated herein by reference.

Item 4.Submission of Matters to a Vote of Security Holders
     
(a) The Registrant's Annual Meeting of Stockholders was 
    held on May 14, 1998.

(c) The following matters were voted upon by stockholders:
                                           Withheld                  Broker
                                   For    or Against    Abstain    Non-votes
1. Election of seven 
   Directors -
    Edward S. Davis           3,228,709      157,789                  43,217
    Brian J. Kelley           3,231,004      155,494                  43,217 
    Jack Meehan               3,228,147      158,351                  43,217 
    William A. Merritt        3,230,269      156,229                  43,217 
    Timothy P. Murphy         3,228,219      158,279                  43,217 
    David H. Shepard          3,201,608      184,890                  43,217 
    Roy A. Strutt             3,230,369      156,129                  43,217

2. To approve a proposal
   to amend the Company's                                                   
   1990 Stock Option Plan                                                   
                              3,137,750      223,634      25,114      43,217
3. To approve a proposal
   to amend the Company's
   Restricted Stock Plan
                              3,289,574       75,465      21,459      43,217
4. To approve the selection
   of Ernst & Young LLP as
   independent auditors
                              3,363,621       16,243        6,634      43,217
<PAGE>  9  
Item 6.Exhibits and reports on Form 8-K

No exhibits or reports were filed during the current quarter.


SIGNATURE


Pursuant to the requirements of the Securities Exchange Act of 1934, the  
registrant has duly caused this report to be signed on its behalf by the 
undersigned thereunto duly authorized.



                                      COGNITRONICS CORPORATION
                                              Registrant


                                        
Date: August 6, 1998                    By    /s/ Garrett Sullivan     
                                        Garrett Sullivan, Treasurer  
                                        and Chief Financial Officer