SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   FORM 10-QSB
(Mark One)
[X]      Quarterly  report under Section 13 or 15(d) of the Securities  Exchange
         Act of 1934 For the quarterly period ended March 31, 1997

[  ]     Transition report under Section 13 or 15(d) of the Exchange Act
         For the transition period from            to

         Commission file number     0-26192


                           Coda Music Technology, Inc.
        (Exact Name of Small Business Issuer as Specified in its Charter)

    Minnesota                                              41-1716250
(State or Other Jurisdiction of                        (I.R.S. Employer
 Incorporation or Organization)                       Identification No.)

                                 6210 Bury Drive
                       Eden Prairie, Minnesota 55346-1718
                    (Address of Principal Executive Offices)

                                 (612) 937-9611
                (Issuer's Telephone Number, Including Area Code)



              (Former Name, Former Address and Former Fiscal Year,
                          if Changed Since Last Report)

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_____

As of May 12, 1997, there were 4,327,035 shares of Common Stock outstanding.

Transitional Small Business Disclosure Format (check one):

         Yes          No   X




<PAGE>




                          Part 1. Financial Information

                          Item 1. Financial Statements

                           Coda Music Technology, Inc.

                            Condensed Balance Sheets

<TABLE>
<CAPTION>

                                                                               March 31, 1997       December 31, 1996
                                                                                 (Unaudited)

                                  ASSETS
<S>                                                                               <C>                   <C>   
CURRENT ASSETS:
   Cash and cash equivalents                                                      $1,003,349            $1,174,293
   Accounts receivable                                                               439,496               596,946
   Inventories                                                                       813,645               983,375
   Prepaid royalties                                                                 118,985               118,470
   Other current assets                                                               44,382                53,102
                                                                                  ----------             ---------
               Total current assets                                                2,419,857             2,926,186
EQUIPMENT, FURNITURE AND FIXTURES                                                    447,021               494,811
REPERTOIRE DEVELOPMENT COSTS                                                         517,967               476,921
OTHER ASSETS                                                                         184,241               183,916
                                                                                  ----------             ---------
                                                                                  $3,569,086            $4,081,834
                                                                                   =========             =========
                   LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
   Accounts payable                                                               $  228,036            $  366,271
   Accrued expenses                                                                  308,251               516,146
   Deferred revenue                                                                  182,285               201,927
                                                                                   ---------             ---------
               Total current liabilities                                             718,572             1,084,344

SHAREHOLDERS' EQUITY                                                               2,850,514             2,997,490
                                                                                   ---------             ---------
                                                                                  $3,569,086            $4,081,834
                                                                                   =========             =========

                 See accompanying notes to financial statements
</TABLE>


<PAGE>


                           Coda Music Technology, Inc.

                       Condensed Statements of Operations

                         For the Quarter Ended March 31,

                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                                                   1997               1996

<S>                                                                                             <C>                <C>    
NET REVENUES                                                                                    $1,617,473         $1,254,579

COST OF SALES                                                                                      458,249            301,082
                                                                                                 ---------          ---------
GROSS PROFIT                                                                                     1,159,224            953,497
                                                                                                 ---------          ---------
OPERATING EXPENSES:
   Sales and marketing                                                                             541,907            864,356
   Product development                                                                             333,884            322,476
   General and administrative                                                                      441,938            372,001
                                                                                                 ---------          ---------
               Total operating expenses                                                          1,317,729          1,558,833
                                                                                                 ---------          ---------
LOSS FROM OPERATIONS                                                                              (158,505)          (605,336)

INTEREST INCOME, net                                                                                11,529             45,363
                                                                                                 ---------          ---------
               Net loss                                                                         $ (146,976)       $  (559,973)
                                                                                                 =========          =========

WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING
                                                                                                 4,327,035          4,267,084
                                                                                                 =========          =========

NET LOSS PER COMMON AND COMMON EQUIVALENT SHARE
                                                                                                $    (0.03)        $    (0.13)
                                                                                                 =========          =========

                                    See accompanying notes to financial statements

</TABLE>


<PAGE>

                           Coda Music Technology, Inc.

                       Condensed Statements of Cash Flows

                         For the Quarter Ended March 31,

                                   (Unaudited)
<TABLE>
<CAPTION>

                                                                                                   1997               1996



<S>                                                                                            <C>                <C>   
OPERATING ACTIVITIES:
   Net loss                                                                                    $  (146,976)       $  (559,973)
   Adjustments to reconcile net loss to net cash used in operating activities-
         Depreciation and amortization                                                             115,268             79,860
         Change in current assets and liabilities:
            Accounts receivable                                                                    157,450             19,726
            Inventories                                                                            169,730             (9,975)
            Prepaid royalties                                                                         (515)           (11,600)
            Other current assets                                                                     8,720              6,283
            Accounts payable                                                                      (138,235)            15,892
            Accrued expenses                                                                      (207,895)          (145,135)
            Deferred revenue                                                                       (19,642)             9,528
                                                                                                  --------          ---------
               Net cash used in operating activities                                               (62,095)          (595,394)
                                                                                                  --------          ---------
INVESTING ACTIVITIES:
   Purchases of equipment, furniture and fixtures                                                  (25,077)          (132,710)
   Capitalized repertoire development cost                                                         (76,435)          (132,639)
   Capitalized patents and trademarks                                                               (7,337)            (9,057)
                                                                                                  --------          ---------
              Net cash used in investing activities                                               (108,849)          (274,406)
                                                                                                  --------          ---------
FINANCING ACTIVITIES:
   Proceeds from stock options and warrants exercise                                                     -             24,801
   Repayment of long-term debt                                                                           -             (3,838)
                                                                                                  --------          ---------
               Net cash provided by financing activities                                                 -             20,963
                                                                                                  --------          ---------
NET DECREASE IN CASH AND SHORT-TERM INVESMENTS                                                    (170,944)          (848,837)

CASH AND SHORT-TERM INVESTMENTS, beginning of period                                             1,174,293          3,960,274
                                                                                                 ---------          ---------
CASH AND SHORT-TERM INVESTMENTS, end of period                                                  $1,003,349         $3,111,437
                                                                                                 =========          =========

                                             See accompanying notes to financial statements


</TABLE>




<PAGE>

                           Coda Music Technology, Inc.

                          Notes to Financial Statements

                                   (Unaudited)





Note 1     Accounting  Policies.  The information  furnished in this report is
           unaudited but reflects all  adjustments  which are necessary,  in the
           opinion of  management,  for a fair  statement of the results for the
           interim  period.  The  operating  results for the three  months ended
           March  31,  1997  are not  necessarily  indicative  of the  operating
           results to be expected  for the full fiscal  year.  These  statements
           should be read in  conjunction  with the Company's most recent Annual
           Report on Form 10-KSB.

Note 2     Subsequent  Event. The Company has initiated a private placement of
           its common stock. Under the proposed terms of the private offering, a
           minimum  of  1,153,846  shares  of  common  stock  and a  maximum  of
           1,730,769  shares of common stock will be offered at a price of $1.30
           per share.  In addition,  the Company will issue to purchasers of the
           Shares  warrants  to  purchase,  for  $2.00  per  share  (subject  to
           adjustment),   one  share  of  Common  Stock  for  every  two  Shares
           purchased.  The  offering  is  scheduled  to close  on May 29,  1997,
           subject to extension by the Company for up to 60 days.

Note 3     New Accounting Pronouncement.  The Company will adopt in the fiscal
           year ending  December  31, 1997,  Statement  of Financial  Accounting
           Standards No. 128 "Earnings Per Share" (SFAS No. 128), which requires
           disclosure  of basic  earnings  per share (EPS) and diluted  EPS. The
           Company  anticipates  that  adoption of this standard will not have a
           material impact on previously reported EPS.









<PAGE>




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



General

     The Company develops and markets proprietary music technology products that
enhance  music  learning  and  composition,   increase   productivity  and  make
practicing and performing music fun.

     Through 1994, the primary  business of the Company  consisted of enhancing,
marketing and selling Finale(R) products while developing Vivace(R) products. In
June 1994,  the first test markets of the Vivace  product were  launched.  After
receiving an  encouraging  response from music  educators and music students the
Company  began the process of building a dealer  network  commencing  in January
1995.  The  Company  anticipates  that  revenues  from the Vivace  product  will
increase as the dealer network expands and gains experience, as well as with the
introduction of stronger and more focused marketing efforts by the Company. With
a long-term  objective  of  penetrating  the amateur  music making  market,  the
Company intends to continue to adapt its product to technologies with lower cost
and to  expand  the  amount  of  repertoire  available  for use with the  Vivace
product.

     The Company has incurred losses from operations  since inception and has an
accumulated  deficit of  $8,602,953 as of March 31, 1997. In the spring of 1996,
the Company released new configurations of the Vivace product at lower suggested
retail prices together with upgraded features. The Company does not anticipate a
similar release in the second quarter of 1997. As a result,  second quarter 1997
Vivace  revenues  may be lower than second  quarter  1996 Vivace  revenues.  The
Company  does  anticipate  the release of upgrades to the Finale  product in the
third  quarter.  In November  1996,  the Company  reduced  its  headcount  by 17
positions to align fixed operating expenses with current revenues.


Results of operations

For the period ended March 31, 1997 compared to the period ended March 31, 1996

     Net Revenues.  Revenues of $1,617,473  for the quarter ended March 31, 1997
were 29% greater than for the quarter  ended March 31, 1996.  Of this  increase,
approximately  $220,000 is due to an increase in Finale product revenues related
to a  difference  in the timing of the release of  upgrades.  Revenues  from the
Vivace  product  totaled  approximately  $432,000 in the quarter ended March 31,
1997 compared to $291,000 in the quarter ended March 31, 1996.  Comparative unit
sales information for the periods is represented in the table below:



<PAGE>

                                          For the Quarter Ended March 31,

                                      1997              1996           Increase

Applications                           417               186              124%
Repertoire Cartridges                5,247             4,373               20%


The increase in revenue  between the periods is principally  due to the increase
in the number of units sold.

     Gross profit.  The gross profit of  $1,159,224  for the quarter ended March
31, 1997  represented  a gross profit margin of 71%. For the first quarter ended
March 31, 1996, the gross profit margin was 76%. The decrease is attributable to
lower Vivace margins  associated with  promotional  pricing and also because the
lower margin Vivace  product  comprises 27% of total revenue in 1997 compared to
23% of total revenue in 1996.

     Sales and marketing  expenses.  For the quarter ended March 31, 1996, sales
and  marketing  expenses  of $541,907  are 37% lower than for the quarter  ended
March 31, 1996.  Of this amount,  approximately  $140,000 is  associated  with a
reduction  in trade show and travel  expenses,  $60,000 is  associated  with the
reduction in personnel  costs, and the remainder is due to timing of promotional
expenditures.

     Product development expenses.  Product development expenses of $333,884 for
the quarter ended March 31, 1997 were $11,408  higher than for the quarter ended
March 31, 1996.

     General and Administrative  Expenses.  General and administrative  expenses
for the first quarter of 1997 were  $441,938  compared to $372,001 for the first
quarter of 1996. This increase in expenses on a comparative basis with the first
quarter of 1996 is due to that quarter having been abnormally low as adjustments
related to employee  termination  costs were  recorded  in the first  quarter of
1996.

     Interest  Income,  net. The Company had net interest  income of $11,529 for
the quarter ended March 31, 1997 compared to $45,363 for the quarter ended March
31, 1996 due to lower cash and short-term  investments in 1997 compared to 1996.
The Company's  financing is discussed  further under the caption  "Liquidity and
Capital Resources".

     Net loss.  The net loss of $146,976 or $.03 per share for the quarter ended
March 31,  1997 is  favorable  to the  $559,973  or $.13 per  share  loss in the
quarter ended March 31, 1996.  This decrease in the loss is  attributable to the
changes in revenues and costs described above.

Liquidity and Capital Resources

     In July 1995,  the Company  received  net proceeds of  $5,891,725  from the
initial public  offering of 1,135,000  shares of its common stock.  The proceeds
were used to repay  subordinated debt and accrued interest totaling  $1,262,592,
and the remainder was invested in short-term securities.


<PAGE>

     The Company has a $500,000 line of credit with a bank. The borrowings under
the line of credit bear  interest at 1% over the bank's  reference  rate and are
collateralized  by  all  of  the  accounts  receivable,  inventory  and  general
intangibles  of the  Company.  Among  other  requirements,  the  loan  agreement
requires  the  Company to maintain  minimum  levels of  tangible  net worth,  as
defined in the agreement.  While the agreement is in effect, the Company may not
incur additional indebtedness,  liquidate or merge the Company, pay dividends or
acquire any other entity  without the prior approval of the lender.  Further,  a
25% or more change in ownership of the Company  constitutes  an event of default
under the agreement.  As of March 31, 1997,  there were no borrowings  under the
line of credit.

     Net cash used in operating activities totaled $62,095 for the quarter ended
March  31,  1997.  In  addition,  the  Company  made  capital  expenditures  for
furniture, equipment and fixtures of $25,077 and repertoire development costs of
$76,435  in the first  quarter  of 1997.  The  Company  used cash for  operating
activities of $595,394 and made capital  expenditures  for furniture,  equipment
and fixtures of $132,710 and repertoire development costs of $132,639 during the
three months ended March 31, 1996.

     The Company anticipates that capital expenditures for 1997 will approximate
$150,000.  Management  believes  existing  cash and proceeds from line of credit
borrowings,  together  with funds  generated  from the sale of products  will be
sufficient  to fund its capital  expenditure,  product  development  and working
capital requirements  through 1997. However, to assure adequate  availability of
resources to promote planned product announcements,  the Company has initiated a
private  placement of its common stock.  Under the proposed terms of the private
offering,  a  minimum  of  1,153,846  Shares of  common  stock and a maximum  of
1,730,769  shares of common stock will be offered at a price of $1.30 per share.
In addition,  the Company  will issue to  purchasers  of the Shares  warrants to
purchase, for $2.00 per share (subject to adjustment), one share of Common Stock
for every two Shares  purchased.  The  offering is scheduled to close on May 29,
1997, subject to extension by the Company for up to 60 days.

Cautionary Statements

The Company  cautions  investors  that actual  results of future  operations may
differ from those  anticipated in forward looking  statements due to a number of
factors  including  market  acceptance of the  Company's  Vivace  products,  the
potential  need for  additional  capital,  the need for  additional  product and
repertoire  development  work,  dependence  on  suppliers,   and  dependence  on
proprietary  technology.  For a more complete  description of such factors,  see
"Cautionary  Statements"  under Item 1 of the Company's Form 10-KSB for the year
ended December 31, 1996.

<PAGE>


                            PART 2. OTHER INFORMATION



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

               (a)  The Annual Meeting of the Registrant's shareholders was held
                    on April 23, 1997.

               (b)  At the  Annual  Meeting  a  proposal  to set the  number  of
                    directors at six was adopted by a vote of  3,780,922  shares
                    in  favor,   with  78,288  shares  against,   15,750  shares
                    abstaining and 0 shares represented by broker nonvotes.

               (c)  Proxies for the Annual  Meeting were  solicited  pursuant to
                    Regulation  14A under the  Securities  Exchange Act of 1934,
                    there was no  solicitation  in  opposition  to  management's
                    nominees,  and the following  persons were elected directors
                    of the  Registrant to serve until the next annual meeting of
                    shareholders and until their successors shall have been duly
                    elected and qualified:

<TABLE>
<CAPTION>

                        Nominee                     Number of Votes For             Number of Votes Withheld
                    <S>                                   <C>                               <C>    
                    John W. Paulson                        3,782,156                         92,804
                    Ronald B. Raup                         3,784,156                         90,804
                    David A. Henderson                     3,786,956                         88,004
                    Gordon R. Stofer                       3,786,956                         88,004
                    Larry A. Pape                          3,786,956                         88,004
                    Karl T. Bruhn                          3,786,956                         88,004
</TABLE>


               (d)  At the Annual  Meeting the  shareholders  approved a 200,000
                    share increase in the number of shares reserved for issuance
                    under the  Company's  1992  Stock  Option  Plan by a vote of
                    3,525,308  shares in favor,  with  293,812  shares  against,
                    46,937 shares  abstaining  and 8,903 shares  represented  by
                    broker nonvotes.



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

              (a)  Exhibits: See Exhibit Index on page following Signature page.

              (b)  Reports on Form 8-K: No reports on Form 8-K were filed by the
              registrant during the quarter ended March 31, 1997.



<PAGE>




                                   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.





Date:  May 12, 1997                  CODA MUSIC TECHNOLOGY, INC.


                                      By: s/ Ronald B. Raup
                                          Ronald B. Raup, President and
                                             Chief Operating Officer


                                      And:s/ Joan K. Berg
                                          Joan K. Berg, Chief Financial Officer


















<PAGE>




                                  EXHIBIT INDEX



                                   FORM 10-QSB

                              For the Quarter Ended
                                 March 31, 1997





Exhibit
Number            Description
 27           Financial Data Schedule (filed in electronic format only)