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                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   FORM 10-QSB

   [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                             EXCHANGE ACT OF 1934

                  For The Quarterly Period Ended March 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 000-22172

                              MIDISOFT CORPORATION
        (Exact name of small business issuer as specified in its charter)


       Washington                                        91-1345532
(State of incorporation)                   (I.R.S. Employer Identification No.)


                        1605 NW Sammamish Rd., Suite 205
                           Issaquah, Washington 98027
                    (Address of principal executive offices)

                                 (425) 391-3610
                           (Issuer's telephone number)



Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days.

                                    Yes [X]  No [ ]


State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date.

                 Common stock, no par value; shares outstanding;
                         7,020,621 as of April 30, 1999

<PAGE>



                              MIDISOFT CORPORATION
                              INDEX TO FORM 10-QSB




                           Page     

                                     PART I

                              FINANCIAL INFORMATION

Item 1.       Financial Statements ........................................... 3

              a)   Balance Sheets - March 31, 1999 and December 31, 1998

              b)   Statements of Operations - For the Three Months Ended
                   March 31, 1999 and 1998

              c)   Statements of Cash Flows - For the Three Months Ended
                   March 31, 1999 and 1998

              d)   Notes to Financial Statements - For the Three Months Ended
                   March 31, 1999 and 1998

Item 2.       Management's Discussion and Analysis or
              Plan of Operation .............................................. 7


                                     PART II

                                OTHER INFORMATION

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

Item 2.       Changes in Securities and Use of Proceeds ..................... 14

Item 3.       Defaults Upon Senior Securities ............................... 14

Item 4.       Submission of Matters to a Vote of Security Holders ........... 14

Item 5.       Other Information ............................................. 14

Item 6.       Exhibits and Reports on Form 8-K .............................. 14


              SIGNATURE ..................................................... 15





<PAGE>


ITEM 1.  Financial Statements
<TABLE>
<CAPTION>
                             MIDISOFT CORPORATION
                                BALANCE SHEETS
<S>                                            <C>              <C>
                                    ASSETS
                                                 (Unaudited)        (Audited)
                                                 At March 31,    At December 31,
                                                    1999                 1998
                                                -------------    ---------------
Current assets:
   Cash and cash equivalents                      $ 139,000          $ 270,000
   Accounts receivable - net of allowances of
   $245,000 in 1999 and 1998                         94,000            183,000
   Inventories                                      112,000            115,000
   Prepaid expenses and other receivable             40,000             42,000
                                               --------------    ---------------
       Total current assets                         385,000            610,000
Long-term receivable                                195,000            195,000
Property & equipment, net of depreciation            99,000            116,000
Debt issuance costs, net of accum. amortization
of $29,000 in 1999 and $23,000 in 1998               50,000             56,000
                                               --------------    ---------------
       Total assets                               $ 729,000          $ 977,000
                                               ==============    ===============


                      LIABILITIES & SHAREHOLDERS' EQUITY

Current liabilities:
   Trade accounts payable                       $ 1,452,000        $ 1,181,000
   Current portion of long-term debt                250,000            250,000
   Accrued wages & payroll taxes                     94,000             93,000
   Other accrued expenses                            84,000            273,000
   Deferred revenue                                   9,000              6,000
                                               --------------    ---------------
       Total current liabilities                  1,889,000          1,803,000
Long-term debt, net of discount                   2,490,000          2,258,000
Warrant obligations                                  81,000             81,000

Shareholders' (deficit) equity
   Common stock, no par value; 25,000,000
     shares authorized, 7,251,000 issued and
     outstanding in 1999 and 1998                20,488,000         20,488,000
   Additional paid-in capital                     3,277,000          3,026,000
   Notes receivable from shareholders              (191,000)          (191,000)
   Retained deficit                             (27,305,000)       (26,488,000)
                                               --------------    ---------------
       Total shareholders' deficit               (3,731,000)        (3,165,000)
                                               --------------    ---------------
Total liabilities and shareholders' deficit       $ 729,000          $ 977,000
                                               ==============    ===============


</TABLE>



            See accompanying  notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
                            MIDISOFT CORPORATION
                          STATEMENTS OF OPERATIONS
                                (Unaudited)

<S>                                           <C>               <C>
                                                        Quarter Ended
                                                           March 31,
                                               ---------------------------------
                                                    1999              1998
                                               --------------    ---------------
Revenues                                          $ 133,000          $ 365,000
Cost of revenues                                     41,000            140,000
                                               --------------    ---------------
Gross profit                                         92,000            225,000

Operating expenses:
   Sales and marketing                              203,000            310,000
   General and administrative                       357,000            377,000
   Research and development                         101,000            225,000
                                               --------------    ---------------
       Total operating expenses                     661,000            912,000

Operating loss                                     (569,000)          (687,000)
Interest expense                                   (240,000)          (765,000)
Other expense                                        (7,000)           (11,000)
                                               --------------    ---------------
Net loss                                         $ (816,000)       $(1,463,000)
                                               ==============    ===============

Net loss per share (basic)                          $ (0.11)           $ (0.23)
                                               ==============    ===============

Net loss per share (diluted)*                       $ (0.11)           $ (0.23)
                                               ==============    ===============
* Common stock equivalents not included, as it would be anti-dilutive

Weighted average shares outstanding               7,251,000          6,298,005
                                               ==============    ===============

</TABLE>














                See accompanying  notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>

                              MIDISOFT CORPORATION
                            STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<S>                                           <C>               <C>
                                                        Quarter Ended
                                                           March 31,
                                               ---------------------------------
                                                     1999             1998
                                               --------------    ---------------
Cash flows used for operations:
   Net loss                                      $ (816,000)      $ (1,463,000)
                                               --------------    ---------------
   Adjustments to reconcile net loss to net
   cash provided by operating activities:
      Depreciation & amortization                    23,000             53,000
      Non-cash interest expense to APIC             250,000            722,000
        (Increase) decrease in assets:
           Accounts receivable, net                  89,000            168,000
           Inventories                                2,000            (17,000)
           Prepaid expenses & other assets            3,000           (159,000)
         Increase (decrease) in liabilities:
           Trade accounts payable                   271,000             (6,000)
           Accrued wages & payroll taxes              1,000              8,000
           Other accrued expenses                  (179,000)           (86,000)
           Deferred revenue                                              1,000
                                               --------------    ---------------
               Total adjustments                    460,000            684,000
                                               --------------    ---------------
               Net cash used for operations        (356,000)          (779,000)
                                               --------------    ---------------
Cash flows used for investing:
   Additions to plant & equipment                        -              (5,000)
                                               --------------    ---------------
               Net cash used for investing               -              (5,000)
                                               --------------    ---------------
Cash flows from financing:
   Proceeds from issuance of long-term debt
     and warrants, net of debt issue costs          225,000          1,088,000
                                               --------------    ---------------
               Net cash provided by financing       225,000          1,088,000
                                               --------------    ---------------

Net change in cash and cash equivalents            (131,000)           304,000
Cash and cash equivalents, beginning of year        270,000             90,000
                                               --------------    ---------------
Cash and cash equivalents, end of period          $ 139,000          $ 394,000
                                               ==============    ===============

</TABLE>











                 See accompanying notes to financial statements.


<PAGE>


                              MIDISOFT CORPORATION

                     NOTES TO UNAUDITED FINANCIAL STATEMENTS

               For the Three Months Ended March 31, 1999 and 1998


Interim Financial Information

     The condensed  financial  statements  included herein have been prepared by
Midisoft  Corporation (the "Company") without audit,  according to the rules and
regulations of the Securities and Exchange  Commission.  Certain information and
footnote  disclosures  normally  included in  financial  statements  prepared in
accordance  with  generally  accepted  accounting  principles  have been omitted
pursuant to such rules and regulations.  However,  in the opinion of management,
the  accompanying   unaudited  financial   statements  contain  all  adjustments
(consisting of only normal recurring accruals)  considered  necessary to present
fairly the results for the interim periods presented. The accompanying condensed
financial  statements and related notes should be read in  conjunction  with the
Company's  1998 audited  financial  statements  included in its Annual Report on
Form 10-KSB/A filed April 30, 1999.

     The results of operations for the three months ended March 31, 1999 are not
necessarily indicative of the results to be expected for the full calendar year.

Accounts Receivable and Major Customer Information

     Accounts  receivable from Original Equipment  Manufacturers (OEM) and other
resellers are summarized as follows:
<TABLE>
<CAPTION>
<S>                                           <C>               <C>
                                                  March 31,        December 31,
                                                    1999              1998
  OEM                                              $ 19,000           $ 17,000
  Resellers and other                               320,000            411,000
                                               --------------    ---------------
     Subtotal                                       339,000            428,000
  Less:  Allowance for doubtful accounts           (159,000)           (72,000)
         Allowance for sales returns                (86,000)          (173,000)
                                               ==============    ===============
  Total accounts receivable                        $ 94,000          $ 183,000
                                               ==============    ===============

</TABLE>


     Accounts  receivable  consists  principally  of  amounts  due from OEMs and
reseller  customers for licensing fees,  royalties and direct sales of products.
OEM  customer  payment  terms  typically  are one year in  duration  and require
payments to be made in quarterly  installments.  At March 31, 1999, OEM accounts
receivable  amounts  not yet due were $0,  equal to 0% of total OEM  receivables
compared to $1,000,  equal to 6% of total OEM  receivables at December 31, 1998.
Reseller  payment terms  typically are  standardized  and similar to those given
software  distributors.  At March 31, 1999, reseller accounts receivable amounts
not yet due were $54,000, equal to 17% of total reseller receivables compared to
$257,000, equal to 63% at December 31, 1997.

     The Company's  primary credit  concentrations  involve domestic and foreign
OEM and reseller  customers.  Foreign customers are primarily located in Western
Europe,  Taiwan,  Singapore,  Korea  and  Japan.  Domestic  customers  comprised
$325,000  of  accounts  receivable  at March 31,  1999,  compared to $415,000 at
December 31, 1998. Foreign customers comprised $14,000 of accounts receivable at
March 31, 1998 compared to $13,000 at December 31, 1998.

Income Taxes

     No income taxes are payable at March 31, 1999,  the result of the Company's
year-to-date  loss and the  result  of  Federal  net  operating  losses  through
December 31, 1998 of  approximately  $26.1  million that may reduce taxes due in
future  periods  and expire  beginning  in 2008.  In certain  circumstances,  as
specified  in the  Internal  Revenue  Code,  a 50% or more  ownership  change by
certain combinations of the Company's  stockholders during any three-year period
would  result  in  limitations  on the  Company's  ability  to  utilize  its net
operating  loss  carry-forward.  An investor  who owns  $3,200,000  in principal
amount of convertible  debentures and associated warrants  outstanding,  has the
right to purchase an additional  $800,000 of convertible  debentures in 1999. If
the debenture  holder were to exercise all its warrants and convert all the debt
it holds and has a right to acquire,  a change in control of the  Company  would
result.
<PAGE>

Inventories

Inventories are summarized as follows:
<TABLE>
<CAPTION>
<S>                                           <C>               <C>
                                                  March 31,        December 31,
                                                    1999              1998
  Raw materials                                   $ 103,000          $ 106,000
  Finished goods                                     29,000             29,000
  Less:  Allowance for obsolescence                 (20,000)           (20,000)
                                               --------------    ---------------
      Total inventory                             $ 112,000          $ 115,000
                                               ==============    ===============

</TABLE>

ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS.

     The following  discussion  should be read in conjunction with the financial
statements and the notes thereto appearing elsewhere in this Form 10-QSB.

General

     Midisoft provides innovative applications and utilities for the control and
enhancement of sound on personal  computers.  The Company,  founded in 1986, has
developed  award-winning  audio software products since that time. Over the past
thirteen years the available market, represented by hardware for sound creation,
has expanded  dramatically,  from being available on a small segment of PCs used
mainly by computer  hobbyists,  into  availability  on nearly each computer that
ships  from  every  system  manufacturer.  Sound  on the PC has  changed  from a
differentiating  feature into a standard component on all hardware platforms and
product  lines.  Emergence  of the  Internet  has  amplified  this  expansion by
creating the backbone, on which music and other audio embellished  communication
are now distributed globally, and which web-based businesses increasingly desire
to use in creating compelling online experiences.

     Midisoft  is  implementing  a  strategy  designed  to meet the needs of two
groups  whose  needs  converge  in  their  desire  for  a  compelling   "musical
experience:"  (i) those who seek an engaging  music  listening  experience  from
their PC desktop,  and (ii) those who desire to create this  musical  experience
for others to enjoy.  For  example,  the  Company  has  recently  completed  the
engineering to customize its Desktop Sheet Music product for the Christian music
market. This customized version features  functionality tailored to the needs of
music pastors and directors who require  numerous pages of easily modified sheet
music  each week for use by soloist  performers  or choirs.  In  addition,  this
product  contains  a large  selection  of  hymns,  which can be  transposed  and
modified with the Company's  proprietary  software,  to fit particular voices of
the choir and individual parts of accompanying instruments.

     Additionally,  the Company  believes  that it has  identified  other groups
whose needs also converge on a desire for compelling online musical experiences,
and who will  benefit  from  the  Company's  expertise  in  music  creation  and
internet-centric  audio and music delivery.  Development of these products is in
the planning stages.

     Midisoft's  strategy  is based on its belief that the  Internet  provides a
platform for  promoting,  marketing and selling  music and related  products and
services.  For example,  MP3, the file format for compression of audio files, is
the second most  frequently  searched  for term on the leading  Internet  search
engines,  according to Searchterms.com.  Jupiter Communications  estimates music
downloads and other music sales will reach $1.4 billion by 2002.  The Company is
positioning its Internet Products to exploit these trends. Internet Media Player
is a candidate for private  labeling on  destination  and portal  websites.  The
Company has initiated  arrangements  with content  aggregators and providers for
the download of the Internet Media Player.

     However,  success of the  Company's  strategy in this area depends in large
part on the global  development  of an  infrastructure  for  providing  Internet
access  and  services.   Because  global   e-commerce  and  online  exchange  of
information and compelling  music content on the Internet and other similar open
wide area networks are new and evolving,  it is not possible to anticipate  with
assurance whether the Internet will prove to be a viable commercial  marketplace
for the Company's technology.  Even though the Internet has experienced,  and is
expected to continue to experience,  significant, geometric growth in the number
of users and amount of  traffic,  there can be no  assurance  that the  Internet
infrastructure  will continue to be able to support the demands  placed on it by
this continued growth. In addition, the Internet could lose its viability due to
delays in the  development  or  adoption of new  standards  and  protocols  (for
example,  the  next-generation  Internet Protocol) to handle increased levels of
Internet activity, or due to increased governmental regulation. If the necessary
infrastructure or complementary services or facilities are not developed,  or if
the Internet  does not become a viable  commercial  marketplace,  the  Company's
ability  to execute  its  strategy  could be  seriously  limited  and this would
materially and adversely affect its results of operation and financial position.

     With  these   strategies   the  Company  is  seeking  to  ehance  its  core
technologies,  in which it has continued to invest over the past 24 months,  and
augment  its retail  distribution  model with more direct  distribution  models,
including  web-based  sound and music  delivery.  The  Company is  hopeful  that
successful  execution  of these  strategies  will result in growth and  improved
gross margins.  However,  Midisoft's  development  efforts may not result in the
timely  introduction  of  new  products,  and  these  new  products  may  not be
commercially successful. Failure to successfully develop new products, delays in
the  introduction of these new products,  or  lower-than-anticipated  demand for
these  products  could  have a  material  and  adverse  effect on the  Company's
business and results of operations.

     The  Company  markets its  products  on a  worldwide  basis (i) to original
equipment  manufacturers  (OEMs),  which  "bundle"  one or  more  of  Midisoft's
products with their own products,  (ii) to  distributors  and  resellers,  which
directly supply the retail distribution channel, and (iii) to end users, catalog
companies,  and businesses and (iv) through  on-line  Internet  sales.  Sales to
software distributors and resellers, together with direct sales, represented 30%
of revenues in the three months ended March 31, 1999, and OEM sales  represented
70%  during  the  same  period.  International  sales  accounted  for 11% of the
Company's  revenues  during the three months  ended March 31,  1999.  Midisoft's
customer  base  tends to vary  from  period  to  period  as it  establishes  new
relationships  in each of its customer  segments.  During the three months ended
March 31, 1999,  two customers  individually  accounted for more than 10% of the
Company's  total revenues and together  represented  91% of net revenues for the
period.

     The principal competitive factors affecting the music creation software and
internet music distribution markets include product functionality,  ease of use,
performance and reliability; customer service and support; product availability;
vendor  credibility;  brand awareness;  ability to keep pace with  technological
change;  and price.  Although the Company  believes that its products  currently
compete favorably with respect to these factors,  there can be no assurance that
the  Company  can  achieve  an  improved  competitive  position  in the  face of
increasing competition from new products and enhancements introduced by existing
competitors  and  new  companies  entering  this  market.  The  markets  for the
Company's products are characterized by significant price  competition,  and the
Company expects it will continue to face increasing pricing pressures. There can
be no assurance  that the Company will be able to compete  successfully  against
current  and  future  competitors  or that  competitive  pressures  faced by the
Company will not materially  adversely affect its business,  financial  position
and results of operations.

     Additionally,  certain  of the  Company's  competitors  have  substantially
greater financial,  marketing or technical resources than the Company. There can
be no assurance that other  companies have not developed or marketed or will not
develop or market  products that are superior to those of the Company,  that are
offered at substantially  lower prices than those of the Company or that have or
will achieve greater market acceptance than those of the Company.

     The Company's  revenues  include sales of software,  software  licenses and
services,  less  returns.  Cost of  revenues  includes  the  costs  of  manuals,
diskettes and duplication,  packaging materials, assembly, paper goods, shipping
and  amortization  of purchased  software  technology and  capitalized  software
development  costs.  Cost of revenues as a percentage  of sales is lower for OEM
sales  than for  distributor  and direct  sales  because  few  direct  costs are
involved.  Sales and marketing  expenses consist  primarily of salaries of sales
and  marketing  personnel,  customer  service and  technical  support  costs and
advertising and promotion expenses.  General and administrative expenses consist
of salaries of administrative personnel,  legal and accounting costs and general
operating  expenses  including  rent and  insurance.  Research  and  development
expenses consist  primarily of personnel and equipment costs required to conduct
the Company's  development  efforts.  Software development costs are expensed as
incurred.

     Revenues  from sales to  distributors  and  resellers  and direct sales are
recognized when products are shipped.  The Company's  software sales  agreements
generally do not involve any significant  obligations to customers subsequent to
delivery.  Revenues  from  products  licensed  to OEMs,  consisting  of one-time
license fees,  are  recognized at the time the software  master is delivered and
when the criteria for fixed fee revenue  recognition under Statement of Position
No. 97-2 "Software Revenue Recognition" are satisfied. Additional royalty use or
unit copy royalty fees are recognized when they are received pursuant to license
agreements upon notification of shipment from OEMs.

Seasonality

     Sales to distributors tend to be greater in the fourth quarter as consumers
buy software to supplement their holiday computer hardware purchases.  OEM sales
are concentrated in a small number of large customer contracts and tend to occur
sporadically.  Direct sales  generally  increase when software  upgrades  become
available.

Comparison of Three months ended March 31, 1999 and 1998

     This table provides  comparative  results of the quarters  ending March 31,
1999 and 1998. A general discussion of these results follow.
<TABLE>
<CAPTION>
<S>                                      <C>              <C>
                                            Quarters ending March 31,
                                              1999             1998
                                          % of Revenue     % of Revenue
Revenues                                          100%             100%
Gross Profit                                       69%              62%
Research & Development                             76%              62%
Sales & Marketing Expense                         153%              85%
General & Administrative Expense                  268%             103%
Total Operating Expenses                          497%             250%
Net Operating Loss                               -428%            -188%
Other Expense                                     186%             213%
Net Loss                                         -614%            -401%


</TABLE>







     Revenues  for the three  months  ended  March 31,  1999  were  $133,000,  a
decrease of $232,000, compared to $365,000 for the same period in 1998. Sales to
software  distributors  and resellers,  together with direct sales were $40,000,
representing 30% of revenues in the three months ended March 31, 1999,  compared
to $287,000 which  represented  79% of revenues for the same period in 1998. OEM
sales were  $93,000 and $78,000  representing  70% and 21% for the same  periods
respectively.  International  sales accounted for 11% of the Company's  revenues
for the three months ended March 31, 1999 and 15% in 1998.

     The  Company  has begun  positioning  its  Midisoft  StudioTM  6.0 into the
Christian music market with enhanced  features  tailored to meet requirements of
music  pastors.  With this emphasis on special  feature sets  enhancing its core
technologies,  the Company hopes to lessen its reliance on relatively low margin
retail  distribution.  The  Company  expects  to ship the  enhanced  version  of
Midisoft  StudioTM  6.0  during  the second  quarter  of 1999.  This  effort has
required  marketing and sales resources,  which the Company would otherwise have
applied to its traditional  retail channel sales efforts.  The Company  believes
that this  transitioning  process,  and the  resources it has  required,  is the
principal reason for significantly lower revenues in the quarter ended March 31,
1999 compared to the same period in 1998. These efforts are a key element of the
Company  strategy  to  enhance  its core  technologies  and  augment  its retail
distribution with more direct  distribution  models. The Company is hopeful that
successful  execution of this  strategy  will result in higher gross margins for
its packaged  software  business.  However,  these  development  efforts may not
result in timely introduction of new products, and these new products may not be
commercially successful. Failure to successfully develop new products, delays in
the  introduction of these new products,  or  lower-than-anticipated  demand for
these  products  could  have a  material  and  adverse  effect on the  Company's
business and results of operations.

     Gross  profit for the three  months  ended  March 31, 1999 was  $92,000,  a
decrease of  $133,000,  compared to $225,000 for the same period the prior year.
As a percentage of revenues,  gross margin  increased to 69% in the three months
ended  March 31,  1999 from 62% in 1998.  This is mainly  the result of a higher
percentage of OEM sales,  compared to other software sales, in the quarter ended
March 31,  1999  versus the same  quarter in 1998.  Gross  margins of OEM sales,
which generate licensing  royalties with no distribution or packaging costs, are
generally higher than gross margins for the Company's other products.

     Sales and marketing expenses for the three months ended March 31, 1999 were
$203,000,  a reduction of $107,000,  compared to $310,000 for the same period in
the  prior  year.  This  decrease  has  resulted  from  targeted  reductions  in
advertising  and fewer  personnel  during the three months ending March 31, 1999
compared  to this  period  in 1998.  As a  percentage  of  revenues,  sales  and
marketing  expenses  increased  to 153% in the three months ended March 31, 1999
from 85% for the same  period  in 1998.  This  increase  was a direct  result of
comparably lower revenues in the quarter ended March 31, 1999.

     General and  administrative  expenses  for the three months ended March 31,
1999 were  $357,000,  a decrease of $20,000,  compared to $377,000  for the same
period of the prior year.  As a percentage of revenues,  these  expenses for the
three  months  ended  March 31,  1999  increased  to 268% from 103% for the same
period in 1998,  as a result of lower  revenues in the three month period ending
March 31, 1999.

     Research and development expenses for the three months ended March 31, 1999
were $101,000, a decrease of $124,000,  compared to $225,000 for the same period
in the prior  year.  As a  percentage  of  revenues,  research  and  development
expenses  increased to 76% in the three months ended March 31, 1999 from 62% for
the same period in 1998.

     Interest  and other  income for the three  months  ended March 31, 1999 was
$5,000,  compared to $7,000 for the same period the prior year. Interest expense
for the three months ended March 31, 1999 was $240,000  compared to $765,000 for
the same  period in 1998,  a decrease of  $525,000.  Interest  expense  includes
one-time non-cash charges of $174,000 in the first quarter of 1999,  relating to
the  valuation  of the  $250,000  of  convertible  debentures  and  $50,000  for
amortization  of the discount on the  detachable  warrants  issued through March
1999 and $722,000 in the first quarter of 1998, relating to the valuation of the
$1,000,000  of  convertible  debentures  and  $30,000  for  amortization  of the
discount on detachable warrants issued through January, 1998. The balance of the
expense  totaling  $15,000 in the first  quarter of 1999 and $29,000 in the same
period last year, represent accrued interest on the Company's debt.

     No income taxes are payable at March 31, 1999,  the result of the Company's
year-to-date loss and the result of federal net operating losses at December 31,
1998 of  approximately  $26,137,000.  The net operating  losses may  potentially
reduce federal  income tax  liability,  due in future periods and which begin to
expire in 2008,  In certain  circumstances,  as  specified in Section 382 of the
Internal  Revenue  Code,  a fifty  percent or more  ownership  change by certain
combinations of the Company's  stockholders  during any three-year  period would
result in limitations on the Company's ability to utilize its net operating loss
carryforwards.  An investor owns  $3,200,000 in principal  amount of convertible
debentures and  associated  warrants and has the right to purchase an additional
$800,000 in  convertible  debentures in 1999.  If the  debenture  holder were to
exercise  all of its  warrants  and convert  all the debt it holds,  a change in
control of the Company would result.

Liquidity and Capital Resources

     As of March 31, 1999, the Company's principal sources of liquidity included
cash and cash  equivalents  of $139,000 and net accounts  receivable of $94,000.
This compares to cash, cash  equivalents and short term  investments of $270,000
and net accounts  receivable  of $183,000 at December  31,  1998.  The change in
liquidity  and  capital  resources  is the  result  of  negative  cash flow from
operations during the first quarter of 1999.

     The  Company's  current  liabilities  at March  31,  1999  were  $1,889,000
compared to  $1,803,000  at December  31, 1998.  As of March 31,  1999,  working
capital totaled a negative  $1,504,000.  The Company's operating activities used
cash of $356,000 for the three month period ending March 31, 1999, due primarily
to operating losses of $569,000,  net of non-cash  charges.  This use of cash of
$356,000  for the three  month  period  ended March 31,  1999,  is a decrease of
$423,000 from the first quarter of 1998 and a $316,000  increase from the fourth
quarter of 1998. The decrease in cash used in the first quarter of 1999 compared
to the same quarter in 1998 is  principally  due to lower  operating  losses and
increases  in accounts  payable.  The increase  from the fourth  quarter of 1998
results from lower revenues in the current period.

     The  Company  sold  $250,000 of  convertible  notes on March 30,  1999,  in
accordance  with the Securities  Purchase  Agreement  discussed in the Company's
10-KSB/A  filed with the SEC on April 30, 1999.  The notes bear  interest at the
rate of 1% per annum payable annually in cash and are convertible into 1,000,000
shares of the Company's  common stock.  The note holder also received  five-year
detachable  warrants to purchase  500,000  shares of common  stock for $0.75 per
share. On April 30, 1999 the Company sold another $200,000 of convertible  notes
bearing interest at 1% per annum,  payable annually in cash and convertible into
250,000 shares of common stock.  The note holder received  five-year  detachable
warrants to purchase  250,000 shares of the Company's common stock for $1.75 per
share.  Additionally,  the note holder has the right to  purchase an  additional
$800,000 of convertible  debentures in 1999. If the note holder were to exercise
all its warrants and convert all the debt it holds and has a right to acquire, a
change in control of the Company would result.

     To date,  the Company has financed its operations  principally  through net
proceeds from two public  offerings  and private  placements of debt and equity.
Cash  on  hand,  along  with  cash  generated  from  the  sale of  products  and
collections of accounts receivable, will not be sufficient to meet the Company's
requirements  for the next 3 months.  The  Company's  ability to fund  continued
operations depends on raising additional  capital.  Should the Company be unable
to raise  additional  capital,  the Company  will be  required to  significantly
reduce  operations,  reduce  expenses,  and may  find it  necessary  to file for
protection  under the bankruptcy  code.  Such steps would likely have a material
adverse effect on the Company's  ability to establish  profitable  operations in
the future. The Company will continue to pursue other financing  arrangements to
increase  its cash  reserves.  There can be no  assurance  the  Company  will be
capable of raising  additional capital or that the terms upon which such capital
will be available to the Company will be acceptable.

Trade Debt and Other Matters

     As of March 31, 1999, the Company had $40,000 of accounts payable that were
current, $97,000 extended to between 31 and 60 days and $1,153,000 extended over
60 days.  The level of extended  accounts  payable  results  from the  Company's
negative  operating  cash. The Company has entered into plans to extend payments
beyond due dates in the original  purchase  orders.  While the Company  believes
that payment plans will continue to be accepted,  there is no certainty that the
Company will be able to continue to meet extended payment terms. The Company has
received demand letters from certain  vendors  requesting  immediate  payment of
amounts owing them totaling approximately $401,000.  Eight of these vendors have
initiated litigation and received judgments totaling approximately $95,000. Some
vendors have refused to make sales to the Company and others have  required cash
on  delivery  terms.  The  Company  has  negotiated  changes  in  delivery  date
commitments, but has not failed to make product shipments due to supply problems
from its vendors.

YEAR 2000 Issues

     The Year 2000 or Y2K problem is  somewhat  predictable  in its timing,  but
unpredictable in its effects. In order to conserve limited computer memory, many
computer systems,  software programs, and other microprocessor dependent devices
were created using only two digit dates,  such that 1998 was  represented as 98.
These  systems  may not  recognize  certain  1999  dates,  and the year 2000 and
beyond,  with the result that  processors  and programs may fail to complete the
processing  of  information  or revert back to the year 1900. As we approach the
year 2000, we expect  computer  systems and software used by many companies in a
wide variety of applications to experience  operating  difficulties  unless they
are  modified  or  upgraded  to process  information  involving,  related to, or
dependent upon the century change. Failures could incapacitate systems essential
to the functioning of commerce, building systems, consumer products,  utilities,
and government  services locally as well as worldwide.  Significant  uncertainty
exists concerning the scope and magnitude of problems associated with Y2K.

     The Company has  established a Y2K Task Force to address  these risks.  The
Y2K  Task  Force,  comprised  of  the  CEO,  CFO  and  Director  of  Information
Technology, is leading the Year 2000 risk management efforts. The Y2K Task Force
is coordinating the identification and testing of computer hardware and software
applications,   with  a  goal  to  ensure  availability  and  integrity  of  the
information  systems and the reliability of the operational  systems utilized by
the Company.

     The Year 2000 Project at Midisoft Corporation uses the following five-phase
methodology and approach:

     The first two phases  are "work in  progress"  and are being  updated on an
ongoing basis.

Phase I - Inventory.  Collect a  comprehensive  list of  components  that may be
affected by the Year 2000 issues.  Components are categorized  into  facilities,
hardware, software, and services.

Phase II - Assessment. Evaluate the inventory to determine which components will
function  properly  with the turn of the  century and rank  components  based on
their potential  impact to the company.  Each component is assigned  priority as
follows:

     Based on assigned priorities from Phase I and II, the following phases will
be  carried  out  to  the  critical  components  first,  followed  by  important
components, then inconvenient components and finally non-essential components if
resources and time are available.  The Company is committed to complete  testing
of all critical and important components before August 31, 1999.

Phase  III  -  Remediation.  Analyze  all  components  affected  by  Year  2000,
identifying problem areas and repairing / replacing non-compliant components.

Phase IV - Testing.  Thorough testing of all affected systems, including present
and future date testing to simulate Year 2000 dates.

Phase V -  Implementation.  Place all  components  that  have been  successfully
tested into production.

     Information  systems  are being  tested with a licensed  software  program,
diagnostic tools designed for personal  computers and servers that will identify
Y2K issues  related to  computer  hardware,  software  and data.  To date,  this
testing appears to have been successful and has yielded no significant problems.
With  the  constant   introduction  of  new  computer  equipment  and  software,
information systems testing will continue throughout the year.

     The company does not currently  utilize  Electronic Data Interchange  (EDI)
with any of its partners or vendors but will  thoroughly  test any EDI situation
that may arise  between  now and March 1, 2000.  If  critical  suppliers  do not
satisfy the companies Year 2000 compliance  requirements,  alternative suppliers
will be identified.  As a contingency plan, inventory levels may be raised prior
to December 1999 to assure continued  delivery of products to customers  through
March 2000.

Risks

     In the event such third parties  cannot  provide the Company with products,
services,  or systems that meet the Year 2000 requirements on a timely basis, or
in the event Year 2000 issues prevent such third parties from timely delivery of
products  or  services  required  by  the  Company,  the  Company's  results  of
operations  could be  materially  adversely  affected.  To the extent  Year 2000
issues cause  significant  delays in, or cancellation of, decisions to purchase,
the  Company's  products  or  services,  the  Company's  business,   results  of
operations,  and financial position would be materially adversely affected.  The
Company  is  assessing  these  risks  and in some  cases  has  initiated  formal
communications with significant  suppliers and customers to determine the extent
to which the Company is vulnerable to these third parties'  failure to remediate
their own Year 2000 issues.  There can be no assurance the Company will identify
and remediate all significant  Year 2000 risks, or that such risks will not have
a material adverse effect on the Company's business,  results of operations,  or
financial   position.   Accordingly,   the  Company  will  continue  to  develop
contingency  plans in anticipation of unexpected Year 2000 events.  Based on its
assessment of year 2000 risks to date, the Company does not believe any material
exposure to significant  business  interruption  exists as a result of Year 2000
compliance issues.

Contingency Plans

     Since the Year 2000 problem is pervasive,  few, if any,  companies can make
absolute  assurances  that they  will  identify  and  remediate  all Y2K  risks.
Accordingly, the Company expects the risk assessment and contingency planning to
remain an ongoing  process  leading up to and beyond the year 2000. In addition,
the  potential  Year 2000 problem is being  addressed  as part of the  Company's
overall emergency  preparedness  program that includes  contingency planning for
other potential major catastrophes like earthquakes, fires and floods.

     The  Company's  approach  to  Financial  Risk has two main  areas of focus.
Secure the broadest  insurance coverage available at a reasonable cost and avoid
exclusions or  restrictions  of coverage,  if possible.  Explore other Financial
Risk Transfer products and/or Y2K specific insurance coverage to the extent that
it becomes available at economically feasible levels.

Estimated Costs

     The Company is  continuing  to assess the  potential  impact of the century
change on its business, results of operations, and financial position. The total
cost of these Year 2000 compliance  activities is not anticipated to be material
to the Company's  financial position or its results of operations.  However,  if
there should be significant problem(s) achieving Year 2000 compliance,  there is
no  assurance  that the Company will have the  financial  or other  resources to
properly address the problem(s). The cost of internal resources dedicated to the
Year 2000 has not been estimated at this time.

Forward-Looking Statements

     This report contains certain forward-looking  statements within the meaning
of Section 27A of the  Securities  Act of 1933 and Section 21E of the Securities
Exchange  Act of 1934,  and such  statements  are  subject  to the safe  harbors
created  thereby.  These  forward-looking   statements  include  the  plans  and
objectives of management for future  operations,  including plans and objectives
relating to (a) the ability to fund continued operations out of existing working
capital,  additional  capital infusion and cash flow from future  operations and
(b) the success of the Company's  approach to dealing with year 2000 issues. The
forward-looking  statements  included  herein are based on current  expectations
that  involve  a  number  of  risks  and  uncertainties.  These  forward-looking
statements  are based on  assumptions  that the Company will continue to develop
and introduce new music, strategic and Internet products on a timely basis, that
rapid changes in technology  will not make the  Company's  products  obsolete or
otherwise reduce their ability to compete in the  marketplace,  that competitive
conditions within the industry will not change materially or adversely, that the
use of multimedia  PC's in homes and small  offices will continue to grow,  that
management's  decision  to focus  the  Company's  resources  on music  and sound
products will reduce certain  expenses from the levels which were experienced in
1997  and  1998,  and that  there  will be no  material  adverse  change  in the
Company's operations or business.  Assumptions relating to the foregoing involve
judgments with respect to, among other things, future economic,  competitive and
market conditions,  and future business decisions, all of which are difficult or
impossible to predict accurately and many of which are beyond the control of the
Company.  Although the Company  believes  that the  assumptions  underlying  the
forward-looking  statements are reasonable,  any of the assumptions  could prove
inaccurate and, there can be no assurance that the  forward-looking  information
will prove to be accurate. In light of the significant uncertainties inherent in
the  forward-looking   information   included  herein,  the  inclusion  of  such
information  should not be  regarded as a  representation  by the Company or any
other person that the objectives or plans of the Company will be achieved.






<PAGE>


                                     PART II
                                OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS -

             In 1997,  an entity which sold  substantially  all of its assets to
             the Company in 1995  demanded  that the Company  arbitrate  certain
             claims arising from the sale. The claims aggregated in excess of $1
             million.  The parties  reached an agreement in July 1998 outside of
             arbitration.  In exchange for the mutual  release of all claims and
             counterclaims,  the  Company  agreed to  provide  consideration  of
             $420,000,   $25,000  in  cash  and  the   remainder   comprised  of
             forgiveness  of  $112,000  in debt and  issuance  of  approximately
             630,000  Midisoft  common  shares.  The  Company  agreed  to file a
             registration  statement for these shares within 30 days after final
             authorization  by the  shareholders  in 1998, but has not filed the
             registration  statement as of this date. Midisoft intends to file a
             registration  statement at the  earliest  possible  date.  Payments
             totaling  $20,000  have been made.  The debt of  $112,000  has been
             fully  reserved and expense of $283,000 for the  additional  common
             shares has been booked as of December 31, 1998.  Midisoft agreed to
             remove restrictive  legends on 166,667 of previously issued shares.
             It is  anticipated  that the  releases  and  consideration  will be
             exchanged in 1999.

             In March 1997, a former sales representative filed suit in Michigan
             against  Midisoft  under a  certain  manufacturer's  representative
             agreement  entered  into  between  the  parties in  November  1994.
             Plaintiff  claims  that the  Company  breached  this  agreement  by
             failing  to pay  commissions  and is  seeking  damages in excess of
             $75,000.  Midisoft denies that it failed to pay  commissions  under
             the agreement and is asserting  counterclaims for over payments and
             return credits.  Damages  asserted by the Company equal the damages
             claimed by the  plaintiff.  The parties are  awaiting a trial date,
             which is reportedly to occur sometime  during the second quarter of
             1999.  The ultimate  outcome cannot be determined at this time, but
             the  Company  believes  that  it has  meritorious  defenses  and is
             vigorously defending against the claim.

             On April 3, 1997 the Company began arbitration  proceedings against
             a former customer. On September 24, 1997, the Company was awarded a
             judgement in the amount of $194,983.37 against the former customer.
             The amount of the award  represents the sum of 1) $160,000.00,  the
             unpaid  portion  of the  base  annual  license  royalty  under  the
             Company's  OEM License  Agreement and 2)  $34,983.37,  representing
             interest on the unpaid installments from their respective due dates
             through  the  date  of the  award  computed  at 12% per  annum.  In
             November 1998,  the former  customer had exhausted its appeals when
             the Washington State Court of Appeals denied the former  customer's
             appeal motion,  thereby terminating the appellate process. In March
             1999, the Company  amended the judgement to add attorneys' fees and
             interest  accrued  since the original  judgement  was entered.  The
             total amount of the amended  judgement is $247,925.34.  The Company
             has engaged a California law firm to enforce judgement in the state
             of California, the headquarters location of the former customer.

             The  Company has  received  demand  letters  from  certain  vendors
             requesting   immediate  payment  of  amounts  owing  them  totaling
             approximately  $401,000.  Twelve of these  vendors  have  initiated
             litigation  for claims  totaling  $131,000  and eight of these have
             received judgments totaling  approximately $95,000. The Company has
             reached settlement  agreements with some vendors and is negotiating
             with the  remainder.  Some vendors have stopped making sales to the
             Company and others have required cash on delivery terms.

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS - None

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES - None

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS -None

ITEM 5.  OTHER INFORMATION. - None

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

         a) EXHIBITS - No. 27 Financial Data Schedule


<PAGE>


                                    SIGNATURE

     In accordance  with the  requirements  of the Exchange Act, the  registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.


                              MIDISOFT CORPORATION
                                  (Registrant)


Date: May 19, 1999

                                   BY:    /S/ Gary M. Cully
                                      -----------------------------------------
                                   Gary M. Cully, Vice President of Finance and
                                   Chief Financial Officer