<PAGE>
1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-KSB/A
(Amendment No. 1)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [Fee Required]
For the fiscal year ended December 31, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [No Fee Required]
For the transition period from to
Commission File Number: 0-14793
TEKNOWLEDGE CORPORATION
(Name of small business issuer as specified in its charter)
Delaware 94-2760916
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1810 Embarcadero Road, Palo Alto, California 94303
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (650)424-0500
Securities registered pursuant to Section 12 (b) of the Act: None
Securities registered pursuant to Section 12 (g) of the Act:
Common Stock, $.01 par value per share
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[ ]
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [X]
State issuer's revenues for its most recent fiscal year. $11,094,930
The aggregate market value of Common Stock, $.01 par value per share, held by
non-affiliates of the registrant was $18,018,715 on March 23, 1998 (based on the
average bid and ask price per share of Common Stock on that date as reported
over-the-counter by the National Quotation Bureau). Shares of Common Stock held
by each officer and director and by each person who owns 5% or more of the
outstanding common stock have been excluded in that such persons may be deemed
to be affiliates. This determination of affiliate status is not necessarily
a conclusive determination for other purposes.
On March 23, 1998, there were 24,082,714 shares of Common Stock, $.01 par value
per share, of the registrant outstanding.
Documents Incorporated by Reference
Proxy Statement for the 1998 Annual Meeting of Stockholders Part III
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2
Item 13. Exhibits and Reports on Form 8-K
(a)(3): Exhibits
Set forth below is a list of all exhibits filed herewith or incorporated
by reference as part of this Annual Report on Form 10-KSB.
Exhibit No. Description
- ----------- -----------
3.1 Amended and Restated Certificate of Incorporation of Teknowledge
Corporation (5)
3.2 Amended and Restated Bylaws of Teknowledge Corporation (9)
3.3 Certificate of Designation, Preferences and Rights of the Terms of
the Series A Preferred Stock (8)
4.1 Rights Agreement dated January 29, 1996 between the Company and
Registrar and Transfer Company as Rights Agent (8)
10.1 Teknowledge Corporation 1989 Stock Option Plan (7)
10.2 Amendment to Stock Option Agreement, dated November 30, 1988,
between American Cimflex Corporation and Romesh T. Wadhwani (1)
10.3 Amended Employment Agreement, dated as of January 21, 1992, between
Cimflex Teknowledge Corporation and Daniel R. Robusto (2)
10.4 Settlement Agreement, General Release, and Waiver of Claims, dated
November 21, 1992, between Daniel R. Robusto and Cimflex
Teknowledge Corporation (3)
10.5 Settlement Agreement, dated May 21, 1993, between Cimflex
Teknowledge Corporation and Third Copley-Franklin Trust (4)
10.6 Settlement Agreement, dated September 1, 1993, between Cimflex
Teknowledge Corporation and Pittsburgh Great Southern Company (4)
10.7 Change of Control Agreement, dated November 21, 1994, between
Teknowledge Corporation and Frederick Hayes-Roth and Neil
Jacobstein (6)
23.1 Consent of Arthur Andersen LLP, independent public accountants
27.1 Financial Data Schedule for year end 1997
27.2 Financial Data Schedules for year ends 1995, 1996
and quarters 1, 2 and 3 of 1996
27.3 Financial Data Schedules for quarters 1, 2 and 3 of 1997
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3
SIGNATURES
In accordance with the requirements of Section 13 or 15(d) 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.
Teknowledge Corporation
Date: March 30, 1998 By: /s/ Frederick Hayes-Roth
------------------------
Frederick Hayes-Roth
Chairman of the Board of
Directors
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Name Capacity Date
---- -------- ----
/s/ Frederick Hayes-Roth Chairman of the Board March 30, 1998
- --------------------------- of Directors and
Frederick Hayes-Roth Chief Executive Officer
(Principal Executive
Officer)
/s/ Neil A. Jacobstein President, Chief Operating March 30, 1998
- --------------------------- Officer and Director
Neil A. Jacobstein
/s/ Dennis A. Bugbee Director of Finance, March 30, 1998
- --------------------------- Treasurer and Secretary
Dennis A. Bugbee (Principal Financial and
Accounting Officer)
/s/ Lawrence Druffel Director March 30, 1998
- ---------------------------
Lawrence Druffel
/s/ General Robert T. Marsh Director March 30, 1998
- ---------------------------
General Robert T. Marsh
/s/ William G. Roth Director March 30, 1998
- ---------------------------
William G. Roth
/s/ James C. Workman Director March 30, 1998
- ---------------------------
James C. Workman
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<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 2,172,235
<SECURITIES> 0
<RECEIVABLES> 2,298,753
<ALLOWANCES> 10,000
<INVENTORY> 0
<CURRENT-ASSETS> 4,958,893
<PP&E> 3,692,197
<DEPRECIATION> 3,093,603
<TOTAL-ASSETS> 6,084,885
<CURRENT-LIABILITIES> 1,924,844
<BONDS> 0
0
0
<COMMON> 239,823
<OTHER-SE> 2,920,218
<TOTAL-LIABILITY-AND-EQUITY> 6,084,885
<SALES> 0
<TOTAL-REVENUES> 11,094,930
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<TOTAL-COSTS> 7,575,634
<OTHER-EXPENSES> 2,864,848
<LOSS-PROVISION> 0
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<INCOME-PRETAX> 1,882,785
<INCOME-TAX> (876,869)
<INCOME-CONTINUING> 2,759,654
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,759,654
<EPS-PRIMARY> 0.11
<EPS-DILUTED> 0.10
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<CURRENT-LIABILITIES> 1,297,770 1,327,154 1,217,929 1,132,031 1,253,908
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<COMMON> 259,232 260,963 260,397 260,591 260,698
0 0 0 0 0
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<OTHER-SE> 1,116,681 1,933,307 1,348,988 1,565,794 1,755,804
<TOTAL-LIABILITY-AND-EQUITY> 2,798,997 3,594,161 2,918,356 3,049,458 3,361,352
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<TOTAL-REVENUES> 5,566,053 7,158,763 1,670,779 3,332,833 5,180,045
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<TOTAL-COSTS> 3,409,703 4,541,823 972,986 1,987,721 3,184,276
<OTHER-EXPENSES> 1,930,239 2,150,659 581,262 1,117,640 1,625,811
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<INTEREST-EXPENSE> 468 0 0 0 0
<INCOME-PRETAX> 466,595 697,024 174,571 329,915 521,101
<INCOME-TAX> 15,925 24,650 2,625 5,250 7,875
<INCOME-CONTINUING> 450,670 672,374 171,946 324,665 513,226
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<FISCAL-YEAR-END> DEC-31-1997 DEC-31-1997 DEC-31-1997
<PERIOD-END> MAR-31-1997 JUN-30-1997 SEP-30-1997
<CASH> 1,770,956 1,482,032 1,769,088
<SECURITIES> 0 0 0
<RECEIVABLES> 986,520 1,961,200 2,103,444
<ALLOWANCES> 10,000 10,000 10,000
<INVENTORY> 0 0 0
<CURRENT-ASSETS> 2,819,592 3,539,710 3,978,729
<PP&E> 3,243,335 3,358,503 3,565,423
<DEPRECIATION> 2,917,703 2,953,799 3,028,327
<TOTAL-ASSETS> 3,250,204 4,044,281 4,630,159
<CURRENT-LIABILITIES> 902,489 1,372,493 1,581,632
<BONDS> 0 0 0
<COMMON> 262,052 262,052 262,389
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<TOTAL-REVENUES> 1,805,302 4,287,129 7,654,173
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<TOTAL-COSTS> 1,109,541 2,844,595 5,245,658
<OTHER-EXPENSES> 581,040 1,302,580 1,946,295
<LOSS-PROVISION> 0 0 0
<INTEREST-EXPENSE> 0 0 0
<INCOME-PRETAX> 131,298 1,289,111 1,667,263
<INCOME-TAX> 6,147 9,131 15,931
<INCOME-CONTINUING> 125,151 1,279,980 1,651,332
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<NET-INCOME> 125,151 1,279,980 1,651,332
<EPS-PRIMARY> 0.00 0.05 0.07
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