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 June 30, 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 August 5, 1997, there were 6,199,732 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

                                   (Unaudited)

                                                                   December 31,
                                           June 30, 1997               1996
                                                        
            ASSETS

CURRENT ASSETS:
   Cash and short-term investments         $  2,914,605            $  1,174,293
   Accounts receivable                          388,358                 596,946
   Inventories                                  800,604                 983,375
   Prepaid royalties                            124,610                 118,470
   Other current assets                          60,969                  53,102
                                            -----------             -----------
               Total current assets           4,289,146               2,926,186
EQUIPMENT, FURNITURE AND FIXTURES               390,532                 494,811
REPERTOIRE DEVELOPMENT COSTS                    564,800                 476,921
OTHER ASSETS                                    155,146                 183,916
                                            -----------             -----------
                                           $  5,399,624            $  4,081,834
                                            ===========             ===========

 LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
   Accounts payable                        $    197,406            $    366,271
   Accrued expenses                             350,282                 516,146
   Deferred revenue                             182,285                 201,927
                                            -----------             -----------
    Total current liabilities                   729,973               1,084,344

SHAREHOLDERS' EQUITY                          4,669,651               2,997,490
                                            -----------             -----------
                                           $  5,399,624            $  4,081,834
                                            ===========             ===========


            See accompanying notes to condensed financial statements


<PAGE>


                           Coda Music Technology, Inc.

                       Condensed Statements of Operations

                                   (Unaudited)

<TABLE>
<CAPTION>


                                                            Quarter Ended June 30,                Six Months Ended June 30,
                                                           1997                1996                1997                1996

<S>                                                   <C>                    <C>               <C>                  <C>    
NET REVENUES                                          $    1,014,583         $  1,292,514      $   2,632,055        $   2,547,093

COST OF SALES                                                303,710              551,534            761,958              852,617
                                                          ----------           ----------         ----------           ----------
GROSS PROFIT                                                 710,873              740,980          1,870,097            1,694,476
                                                          ----------           ----------         ----------           ----------
OPERATING EXPENSES:
   Sales and marketing                                       445,465              614,266            987,373            1,478,623
   Product development                                       369,586              268,809            703,470              591,284
   General and administrative                                374,771              358,088            816,708              730,088
                                                          ----------           ----------         ----------           ----------
               Total operating expenses                    1,189,822            1,241,163          2,507,551            2,799,995
                                                          ----------           ----------         ----------           ----------
LOSS FROM OPERATIONS                                        (478,949)            (500,183)          (637,454)          (1,105,519)

Interest Income (Expense), net                                20,618               34,941             32,147               80,304
                                                          ----------           ----------         ----------           ----------
NET LOSS                                              $     (458,331)        $   (465,242)       $  (605,307)       $  (1,025,215)
                                                          ==========           ==========         ==========           ==========
WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT
   SHARES OUTSTANDING                                      5,006,145            4,280,657          4,666,590            4,273,871
                                                          ==========           ==========         ==========           ==========

NET LOSS PER COMMON AND COMMON EQUIVALENT SHARE       $         (.09)        $       (.11)       $      (.13)       $        (.24)


                                           See accompanying notes to condensed financial statements

</TABLE>


<PAGE>



                           Coda Music Technology, Inc.

                       Condensed Statements of Cash Flows

                        For the Six Months Ended June 30,

                                   (Unaudited)

<TABLE>
<CAPTION>


                                                                                               1997               1996
<S>                                                                                    <C>              <C>    
OPERATING ACTIVITIES:
   Net loss                                                                             $  (605,307)     $  (1,025,215)
   Adjustments to reconcile net loss to net cash used in operating activities-
         Depreciation and amortization                                                      266,441            166,927
         Change in current assets and liabilities:
            Accounts receivable                                                             208,588           (108,391)
            Inventories                                                                     182,771           (205,919)
            Prepaid royalties                                                                (6,140)           (16,106)
            Other current assets                                                             (7,867)            65,013
            Accounts payable                                                               (168,865)          (133,949)
            Accrued expenses                                                               (165,864)          (196,103)
            Deferred revenue                                                                (19,642)            34,008
                                                                                         ----------         ----------
               Net cash used in operating activities                                       (315,885)        (1,419,735)
                                                                                         ----------         ----------
INVESTING ACTIVITIES:
   Purchases of equipment, furniture and fixtures                                           (40,966)          (228,774)
   Capitalized repertoire development cost                                                 (163,663)          (276,049)
   Other assets, principally patents and trademarks                                         (16,642)           (76,247)
                                                                                         ----------         ----------
              Net cash used in investing activities                                        (221,271)          (581,070)
                                                                                         ----------         ----------
FINANCING ACTIVITIES:
   Proceeds from exercise of stock options and warrants                                           -            110,364
   Proceeds from sale of common stock, net of offering costs                              2,277,468                  -
   Repayment of long-term debt                                                                    -             (3,838)
                                                                                         ----------         ----------
               Net cash provided by financing activities                                  2,277,468            106,526
                                                                                         ----------         ----------
NET INCREASE (DECREASE) IN CASH AND SHORT-TERM INVESTMENTS                                1,740,312         (1,894,279)
                                                                                                         
CASH AND SHORT-TERM INVESTMENTS, beginning of period                                      1,174,293          3,960,274
                                                                                         ----------         ---------- 
CASH AND SHORT-TERM INVESTMENTS, end of period                                          $ 2,914,605      $   2,065,995
                                                                                         ==========         ==========


                                           See accompanying notes to condensed 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 six months ended June
           30, 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     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.



Note 3     Private  Placement of Common  Stock.  On May 29, 1997,  the Company
           sold an aggregate  of 1,872,697  shares of Common Stock at a price of
           $1.30 per share and issued warrants to purchase,  at $2.00 per share,
           an aggregate of 936,357  shares of Common Stock.  The net proceeds of
           the offering totaled $2,277,468.







<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)  music  notation   software  products  while
developing Vivace(R)  Intelligent  Accompaniment(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  musician  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  $9,061,284  as of June 30, 1997. In the spring of 1996,
the Company released new configurations of the Vivace product at lower suggested
retail  prices,  as well as an application  and  repertoire  for vocalists.  The
Company  announced in July 1997 the  introduction  of a software  version of the
product with a suggested retail price of $199. The Company anticipates that this
new product  will begin to ship in  September,  but does not expect  significant
unit sales of this new  product to occur until at least the fourth  quarter.  In
addition, the Company expects to release an upgrade to the Finale product in the
third quarter of 1997.

Results of operations

For the periods ended June 30, 1997 compared to the periods ended June 30, 1996

     Net Revenues.  Revenues of  $1,014,583  for the quarter ended June 30, 1997
decreased  $277,931  over the quarter  ended June 30, 1996.  The net decrease in
revenues  between the two periods  reflects a 28% increase in revenues  from the
Finale music notation  software  product and a 59% decrease in revenues from the
Vivace Intelligent  Accompaniment(R)  product. Revenues for the six months ended
June 30, 1997 were  $2,632,055,  a 3% increase  over revenues for the six months
ended June 30, 1996. Finale product revenues  increased  $376,089 or 25% in this
period  while  Vivace  product  revenues  decreased  28%.The  increase in Finale
revenue  results from a change in the timing of the release of product  upgrades
between  years as well as an increase in the price of the Finale for Mac upgrade

<PAGE>

between years.  The Company's  second  quarter 1996 Vivace  revenues were higher
than second quarter 1997 Vivace revenues,  in part because the soundcard version
of Vivace was  introduced  in May 1996 and the network of retail  music  dealers
placed stocking orders for that product. Also, in the second quarter of 1996, an
international  distributor placed a substantial  stocking order for applications
and  repertoire.  Comparative  Vivace unit sales  information for the periods is
represented in the table below:

                                    Quarter Ended         Six Months Ended

                           ------------------------  ---------------------------
                             6/30/97      6/30/96       6/30/97         6/30/96
Applications                     315          975           732           1,164
Repertoire cartridges          3,977        5,565         9,224           9,938


     The Company has announced  its  intention to release a software  version of
the Vivace  product in  September.  Priced at a suggested  retail price of $199,
this  product  will be  marketed to the  student  and home  markets,  as well as
academic  institutional markets. In preparation for marketing to the student and
home markets,  the Company has reduced repertoire suggested retail prices. While
the Company  intends to encourage  sales of its existing  configurations,  it is
possible that this  pre-announcement of the product will negatively impact sales
of the current  configurations  and that the Company will not achieve sufficient
volume  increases at the lower suggested  retail price to offset the significant
decrease in the application and repertoire prices.

     The Company  also plans to release an upgrade to the Finale  product in the
third  quarter of 1997.  As a result,  the Company  expects  third  quarter 1997
Finale revenues to be higher than for the third quarter of 1996.

     Gross  profit.  The gross profit of $710,873 for the quarter ended June 30,
1997 represented a gross profit margin of 70%. For the second quarter ended June
30,  1996,  the gross  profit  margin was 57%.  The increase in the gross margin
percentage  is primarily  attributable  to the higher mix of Finale sales in the
1997 quarter  compared to 1996. In addition,  during the second quarter of 1996,
the Company offered a special  promotion whereby customers who purchased $995 of
repertoire  received  a  soundcard  application  at no charge.  The low  margins
resulting from this  promotion,  as well as the lower margins on Vivace products
compared  to Finale  products,  accounted  for the low gross  margin  during the
quarter.

     The gross  profit for the first half of 1997 was 71% compared to 67% in the
first half of 1996.  The increase  principally  relates to a stronger mix of the
higher  margin  Finale  products in the first half of 1997 compared to the first
half of 1996.  It is expected that the gross profit  percentage  will decline as
Vivace products constitute a higher percentage of total revenues of the Company.

     Sales and marketing expenses. For the quarter ended June 30, 1997 sales and
marketing expenses of $445,465 are 27% lower than for the quarter ended June 30,
1996. Sales and marketing  expenses of $987,373 for the first six months of 1997
decreased 33% or $491,250  over the first six months of 1996. Of this  decrease,

<PAGE>

approximately  $85,000 is related to lower personnel costs,  $215,000 is related
to decreased  travel and  attendance  at educator  trade shows,  and $130,000 is
attributable  to lower  advertising  and public  relations  costs.  The  Company
intentionally  postponed  certain selling expenses  pending  announcement of the
software  version of the Vivace  product,  which  announcement  was made in July
1997.  The Company  expects to incur higher sales and marketing  expenses in the
second half of 1997 than in the first half of 1997.

     Product development expenses.  Product development expenses of $369,586 for
the  quarter  ended June 30,  1997 were  approximately  37% higher  than for the
quarter  ended June 30, 1996.  For the six months  ended June 30, 1997,  product
development  expenses of $703,470 were  $112,186  higher than for the six months
ended June 30, 1996.  The major reason for the increase in expense is related to
increased  amortization of repertoire development and software translation costs
in 1997.

     General and Administrative  Expenses.  General and administrative  expenses
for the second quarter of 1997 were $374,771 compared to $358,088 for the second
quarter of 1996.  General and  administrative  expenses of $816,708  for the six
months  ended June 30, 1997  increased  $86,620 or 12% over the six months ended
June 30, 1996.  This increase in expenses on a comparative  basis with the first
half of 1996 is due to that period  having been  abnormally  low as  adjustments
related to employee  termination  costs were  recorded  in the first  quarter of
1996.

     Interest  Income  (Expense),  Net. The Company had net  interest  income of
$20,618 for the quarter  ended June 30, 1997 compared to $34,941 for the quarter
ended June 30, 1996.  For the first six months of 1996, the Company had interest
income of $32,147  compared  to  interest  income of  $80,304  for the first six
months of 1996. The lower interest income is attributable to the Company's lower
average cash and  investment  balances 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 $458,331 for the quarter  ended June 30, 1997 is
an  improvement  from the $465,242 loss in the quarter ended June 30, 1996.  For
the six  months  ended June 30,  1997,  the  Company's  loss of  $605,307  was a
favorable  change of  $419,908  over the six  months  ended June 30,  1996.  The
changes  in the loss are  attributable  to the  changes  in  revenues  and costs
described above.

Liquidity and Capital Resources

     In May 1997,  the Company  received  net  proceeds of  $2,277,468  from the
private  placement of  1,872,697  shares of its common stock and the issuance of
warrants to purchase  936,357  shares of common  stock at a price of $2.00.  The
proceeds were invested in short-term securities.

     The Company has a $500,000 line of credit with a bank. 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

<PAGE>

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 June 30, 1997 there were no borrowings under the line
of credit.

     Net cash used in operating  activities  totaled $315,885 for the six months
ended June 30, 1997.  In addition,  the Company  made capital  expenditures  for
furniture, equipment and fixtures of $40,966 and repertoire development costs of
$163,663 in the six months ended June 30, 1997. During the six months ended June
30, 1996,  the Company used cash for operating  activities of  $1,419,735,  made
capital  expenditures  for  furniture,  equipment  and  fixtures of $228,774 and
repertoire development of $276,049.

     The Company anticipates that capital expenditures for 1997 will approximate
$150,000 and that increased  working capital will be required to support planned
revenue growth.  Management  believes existing cash and short-term  investments,
proceeds from line of credit  borrowings,  and funds  generated from the sale of
products will be sufficient to fund its capital expenditure, product development
and working capital requirements  through 1998.  Management expects that, in the
future,  cash in excess of current  requirements  will be invested in investment
grade interest-bearing securities.



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,   competition,   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 2.  Changes in Securities.

     On May 29, 1997,  the Registrant  sold an aggregate of 1,872,697  shares of
Common Stock at a price of $1.30 per share and issued  warrants to purchase,  at
$2.00 per share, an aggregate of 936,357 shares of Common Stock.  The securities
were sold to 33  accredited  investors  through  directors  and  officers of the
Registrant and through John G. Kinnard and Company,  Incorporated, as Agent. The
total  proceeds  of  the  offering  were  $2,434,506,  and  the  Agent  received
commissions  of $125,750.  The sale of such  securities  was deemed to be exempt
from  registration  under  the  Securities  Act of 1933 by virtue of Rule 506 of
Regulation D thereunder.  The purchasers  represented their intention to acquire
the  securities  for  investment  purposes  only  and  not  with a  view  to the
distribution  thereof;  in addition,  a restrictive  securities  legend has been
placed on the certificates representing the securities.



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

         (a) Exhibits: 27 - Financial Data Schedule 
                           (filed in electronic format only)

         (b)  Reports on Form 8-K: No reports on Form 8-K were filed by the
              registrant during the quarter ended June 30, 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:  August 5, 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