<PAGE>  1        
        
        
        
                                  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 March 31, 1997     
        
                                         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 March 31, 1997.     
        
           Common Stock, par value $0.20 per share -- 3,485,633 shares
<PAGE>  2
  Part I, Item 1.
       
                    COGNITRONICS CORPORATION AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                              (dollars in thousands)
  
                                               March 31,       December 31,
                                                1997              1996
                                             (Unaudited)                   
                                             -----------       ------------
  ASSETS
  CURRENT ASSETS                                                 
    Cash and cash equivalents                 $ 5,030           $ 4,169
    Accounts receivable, net                    3,713             3,624
    Inventories                                 3,605             3,877
    Deferred income taxes                         625               625
    Other current assets                          627               587     
                                              -------           ------- 
        TOTAL CURRENT ASSETS                   13,600            12,882
    
  PROPERTY, PLANT AND EQUIPMENT, NET            1,605             1,701
  GOODWILL, NET                                 1,898             1,981
  DEFERRED INCOME TAXES                           822               822
  OTHER ASSETS                                    119               125
                                              -------           -------
                                              $18,044           $17,511
                                              =======           =======    

  LIABILITIES AND STOCKHOLDERS' EQUITY
  CURRENT LIABILITIES
    Notes payable                             $    36                   
    Accounts payable                            1,525           $ 1,700
    Accrued compensation and benefits             791               748
    Income taxes payable                          849               772
    Other accrued expenses                      1,016               917
                                              -------           -------
        TOTAL CURRENT LIABILITIES               4,217             4,137
  
  LONG-TERM DEBT                                  437               379
  OTHER NON-CURRENT LIABILITIES                 2,381             2,383
  
  STOCKHOLDERS' EQUITY
    Common Stock, par value $.20 a
      share, authorized 10,000,000
      shares; issued 3,485,633  
      and 3,475,573 shares                        697               695
    Additional paid-in capital                 12,276            12,250
    Accumulated deficit                        (1,850)           (2,354)
    Currency translation adjustment                24               177
    Unearned compensation                        (138)             (156)
                                              -------           -------
        TOTAL STOCKHOLDERS' EQUITY             11,009            10,612
                                              -------           -------
                                              $18,044           $17,511        
                                              =======           =======
  See Note to Condensed Consolidated Financial Statements.
<PAGE>  3  

  
  
      CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
           (dollars in thousands except per share amounts)
  
  
  
                                                  Three Months Ended 
                                                       March 31,    
                                                  ------------------   
                                                   1997        1996 
                                                   ----        ----

  SALES                                           $5,548      $3,765     
                                                  ------      ------
  COST AND EXPENSES:
    Cost of products sold                          2,653       1,975
    Research and development                         381         365
    Selling, general and 
       administrative                              1,586       1,172       
    Amortization of goodwill                          83          83  
    Other (income) expense, net                      (16)        (16)
                                                  ------      ------
                                                   4,687       3,579     
                                                  ------      ------
    Income before income taxes                       861         186  
  PROVISION FOR INCOME TAXES                         357          78     
                                                  ------      ------
  NET INCOME                                      $  504      $  108
                                                  ======      ======
  
  
  NET INCOME PER SHARE                              $.14       $ .03
                                                    ====       =====
  Weighted average number of
  common and common equivalent
  shares outstanding                             3,629,705   3,605,232    
                                                 =========   =========
  
  
  
  See Note to Condensed Consolidated Financial Statements.
<PAGE>  4
                  COGNITRONICS CORPORATION AND SUBSIDIARIES
  
         CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                           (dollars in thousands)
  
                                                   Three Months Ended 
                                                         March 31    
                                                  --------------------
                                                  1997            1996
                                                  ----            ----  
  NET CASH PROVIDED BY             
  OPERATIONS                                     $  764          $  273
                                                 ------          ------
  
  INVESTING ACTIVITIES
    Additions to property, plant and       
      equipment, net                                (60)           (125)
                                                 ------          ------
     NET CASH USED BY INVESTING 
        ACTIVITIES                                  (60)           (125)
                                                 ------          ------
  
  FINANCING ACTIVITIES                                                         
    Payment of debt                                 (45)            (52)  
    Issuance of debt                                231              
    Shares issued pursuant to
      employee stock plans                           29              35    
                                                 ------          ------
     NET CASH PROVIDED (USED) BY              
        FINANCING ACTIVITIES                        215             (17)
                                                 ------          ------

  EFFECT OF EXCHANGE RATE DIFFERENCES               (58)              0  
                                                 ------          ------
  INCREASE IN CASH AND CASH EQUIVALENTS             861             131
  CASH AND CASH EQUIVALENTS - BEGINNING
     OF PERIOD                                    4,169           3,668
                                                 ------          ------  
  CASH AND CASH EQUIVALENTS - END OF PERIOD      $5,030          $3,799
                                                 ======          ======      
  
  INCOME TAXES PAID                              $  253          $  270
                                                 ======          ======
  
  INTEREST EXPENSE PAID                          $   10          $   16
                                                 ======          ====== 
  
  
  
  
  
  
  See Note to Condensed Consolidated Financial Statements. 
<PAGE>  5  
        NOTE TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
   
                                  March 31, 1997 
   
   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 includ-
   ed.  Operating results for the three-month period ended March  31,  1997 
   are  not necessarily indicative of the results that may be expected  for 
   the  year  ending December 31, 1997. The balance sheet at  December  31, 
   1996  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  in-
   cluded  in the Company's Annual Report on Form 10-K for the  year  ended 
   December 31, 1996.
   
   Inventories                             March 31,          December 31,
   (in thousands):                           1997                 1996 
                                           ---------          ------------
   Finished and in process                  $2,682              $2,682
   Materials and purchased parts               923               1,195
                                            ------              ------
                                            $3,605              $3,877
                                            ======              ======       
   
   Other Non-Current Liabilities (in thousands):
   
                                           March 31,          December 31,
                                             1997                 1996         
                                           ---------          ------------
   Accrued supplemental pension plan        $  696              $  702
   Accrued deferred compensation               331                 332
   Accrued pension expense                     720                 713
   Accrued post-retirement benefit
      liability                                819                 813
                                            ------              ------
                                             2,566               2,560
        Less current portion                   185                 177
                                            ------              ------
                                            $2,381              $2,383
                                            ======              ======
                                            
   Earnings per Share
   
   In February 1997, the Financial Accounting Standards Board issued State-
   ment No. 128, Earnings per Share, which is required to be adopted as  of 
   December 31, 1997.  At that time, the Company will be required to change 
   the  method currently used to compute earnings per share and to  restate 
   all  prior  periods.  Under the new requirements  primary  earnings  per 
   share  will  be replaced with basic earnings per  share.   In  computing 
   basic  earnings per share, the dilutive effect of stock options will  be 
   excluded.  The impact of Statement No. 128 on the computation of primary 
<PAGE>  6
   earnings  per share (to be replaced with basic earnings per  share)  and 
   fully dilutive earnings per share for the quarters ended March 31,  1997 
   and March 31, 1996 is not expected to be material. 

   Contingencies
   
   Pending  Litigation.   In 1993, a purported  consolidated  class  action 
   lawsuit was filed against the Company and certain of its officers alleg-
   ing  securities  law violations in connection with the purchase  of  the 
   Company's  common stock by members of the purported classes  during  the 
   period  from  October 29, 1992 through March 12, 1993.   The  plaintiffs 
   seek  unspecified damages and related costs.  The Company and the  other 
   defendants  submitted a motion to dismiss the consolidated amended  com-
   plaint.   In  March  1997, the court denied this  motion.   The  Company 
   denies any wrongdoing and intends to defend this lawsuit vigorously. Due 
   to the uncertainties involved in litigation, the ultimate outcome cannot 
   be determined at this time, and no provision for any liability that  may 
   result  from  this litigation, if any, has been made  in  the  financial 
   statements.   If  adversely determined, the resolution  of  this  matter 
   could have a material negative affect on the Company's financial  condi-
   tion, results of operations and cash flows.
   
   
   Item 2.
                  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
   
               FINANCIAL CONDITION AND RESULTS OF OPERATIONS
   
   Results of Operations
   
   Net  income increased 367% to $504,000 ($.14 per share) in  the  quarter 
   ended  March 31, 1997, from $108,000 ($.03 per share) in the  comparable 
   1996 quarter on a sales increase of 47%.
   
   Consolidated  sales for the first quarter of 1997 increased  $1,783,000, 
   or   47%,  from  the prior year period.  Sales  of  domestic  operations 
   increased $1,783,000, or  98%, while sales of the United Kingdom  opera-
   tions  were  unchanged.  The domestic sales increase was due  to  higher 
   volume of sales of the McIAS 16xx family of products for installation in 
   independent and regional telephone companies, competitive access provid-
   ers  and competitive local exchange carriers, offset, in part, by  lower 
   sales  of  older  products which have been replaced by  the  McIAS  16xx 
   family of products.  The Company's domestic operations have  experienced 
   strong demand and improved results in the fourth quarter of 1996 and the 
   first quarter of 1997 and management anticipates this momentum  continu-
   ing  in the second quarter of 1997.  Consolidated backlog at  March  31, 
   1997 was $3.4 million up from $2.0 million at December 31, 1996.
   
   The gross margin percentage increased to 52% in the current quarter from 
   48%  in the comparable quarter in 1996 primarily due to the increase  in 
   sales of higher gross margin McIAS products relative to the lower  gross 
   margin distributorship products.
   
   Selling, general and administrative expense increased $414,000, or  35%, 
   in  the current quarter from the same 1996 quarter.   Domestic  expenses 
<PAGE>  7
   increased  $263,000,  or 36%, primarily due to  higher  personnel  costs 
   related to sales commissions and bonus accruals.  Expenses in the United 
   Kingdom  increased $151,000, or 34%, due to higher occupancy  costs  and 
   increased staff.
   
   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 $3.9 million.  The current deferred tax benefit of $.6 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.  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  (loss) was $.6 million for the quarter ended March 31, 1997  and 
   $.8 million, $1.0 million and $(.3) million for the years ended December 
   31, 1996, 1995 and 1994, respectively.  The Company anticipates continu-
   ing revenue contributions from the McIAS 16xx family of products.  Based 
   on  this, management anticipates that the Company will  generate  suffi-
   cient 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 $9.4 million and 3.2:1 at March 31, 1997 compared to  $8.7 
   million  and  3.1:1 at December 31, 1996.  The improvement  in  1997  is 
   mainly  due to the Company's results of operations for the three  months 
   ended March 31, 1997.
   
   In 1997, the Company anticipates purchasing $.5 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 1997 will be sufficient to meet these needs.
   
   In 1993, a purported consolidated class action lawsuit was filed against 
   the  company  and certain of its officers (see Note   to  the  Condensed 
   Consolidated  Financial Statements and Part II - Item 1. Legal  Proceed-
   ings).   Due to the uncertainties involved in litigation,  the  ultimate 
   outcome cannot be determined at this time.  If adversely determined, the 
   resolution  of this matter could have a material negative affect on  the 
   Company financial condition, results of operations and cash flows.
   
   
   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 Securi-
   ties  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 
<PAGE>  8  
   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  develop-
   ment  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
   
   In 1993, purported class action lawsuits were filed against the  Company 
   and certain of its officers as follows:
   
             1. Michael Germano v. Cognitronics Corporation and Matthew J.
        Flanigan in the United States District Court, District of Connecticut,
        dated March 15, 1993;
   
             2. Barry L. Bragger and Eve Gerber vs. Matthew J. Flanigan
        and Cognitronics, Inc. in the United States District Court, District
        of Connecticut dated March 16, 1993; and
   
             3. John M. Mitnick, on behalf of himself and all other similarly
        situated v. Cognitronics Corp., Matthew J. Flanigan and G. Sullivan 
   
        in the United States District Court for the Northern District of 
        Georgia, Atlanta Division, dated March 15, 1993.
   
   These  actions were consolidated in the United States District Court  in 
   Connecticut  and a consolidated amended complaint was filed on  July  8, 
   1993.   The  consolidated lawsuit alleges securities law  violations  in 
   connection with the purchase of the Company's common stock by members of 
   the  purported classes during the period from October 29,  1992  through 
   March  12,  1993.  The plaintiffs seek unspecified damages  and  related 
   costs.   On July 28, 1993, the Company and the other defendents filed  a 
   motion to dismiss the consolidated amended complaint.  After briefing by 
   the  parties, the motion was submitted to the Court in October 1993  and 
   denied  in March 1997.  The parties have engaged in  limited  discovery.  
   The  Company  denies any wrongdoing and intends to defend  this  lawsuit 
   vigorously.  Management has not made provision for liability, if any, in 
   the  financial  statements  of the Company which may  result  from  this 
   litigation.
   
   
   Item 4.  Submission of Matters to a Vote of Security Holders.
   
   (a)  The Registrant's Annual Meeting of Stockholders was held on May 8,
        1997.
<PAGE>  9   
   (c)  The following matters were voted upon by the stockholders:
   
                                       Withheld                  Broker
                              For      or Against     Abstain    Non-Votes
   1.  Election of seven
       Directors -
       Edward S. Davis      3,130,938     16,624                 56,303
       Brian J. Kelley      3,132,819     14,743                 56,303 
       Jack Meehan          3,132,938     14,624                 56,303
       William A. Merritt   3,132,938     14,624                 56,303
       Timothy P. Murphy    3,131,938     15,624                 56,303
       David H. Shepard     2,936,101    211,461                 56,303
       Roy A. Strutt        3,131,938     15,624                          
    
   2.  To approve the 
       selection of 
       Ernst & Young LLP
       as independent
       auditors             3,133,085      8,846      5,631      56,303  
   
   Item 6.  Exhibits and Reports on Form 8-K
   
   No exhibits or reports were filed during the current quarter.

       
   
                                 SIGNATURES
   
   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: May 14, 1997                  By  /s/ Garrett Sullivan       
                                         _________________________
                                         Garrett Sullivan, Treasurer  
                                             and Chief Financial Officer