<PAGE>


                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, 1999

[   ]  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
                    Series A Preferred Stock Purchase Rights

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 [ ] No [X]

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. [ ]

State issuer's revenues for its most recent fiscal year. $11,094,672

The aggregate  market value of Common Stock,  $.01 par value per share,  held by
non-affiliates of the registrant was $44,986,828 on March 21, 2000 (based on the
average bid and ask price per share of Common  Stock on that date as reported by
the Nasdaq  SmallCap  Market).  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 24, 2000, there were 5,315,239 shares of Common  Stock, $.01 par  value
per  share,  of the  registrant outstanding.



<PAGE>
                                       2


Part III is replaced in its entirety as follows:
--------------------------------------------------------------------------------
                                    PART III
--------------------------------------------------------------------------------

Item 9.  Directors, Executive Officers, Promoters and Control Persons;
         Compliance with Section 15(a) of the Exchange Act

Directors

         The Board of  Directors  currently  consists of five  members:  Neil A.
Jacobstein,  Dr. Larry E.  Druffel,  General  Robert T. Marsh  (Ret.),  Benedict
O'Mahoney,  and James C. Workman.  Dr. Frederick  Hayes-Roth and William G. Roth
resigned their  positions on the Board  effective  November 22, 1999, and joined
the  Board  of  GlobalStake.com,  an  Internet  start-up  company  spun  off  by
Teknowledge  on that  date.  Benedict  O'Mahoney,  Corporate  Counsel  and  Vice
President of Teknowledge,  was elected by the Board in November 1999 to fill the
vacancy  created by the departure of William G. Roth,  and the Board reduced the
size of the Board  from six to five to  eliminate  the  vacancy  created  by the
resignation of Mr. Hayes-Roth in November 1999. The Board of Directors comprises
three  classes of  directors,  each class  consisting  as nearly as  possible of
one-third of the Board,  with one class of the Board being elected each year. At
each annual meeting  thereafter,  nominees for directors in the class whose term
is expiring  are voted upon,  and upon  election,  such  director  would serve a
three-year term. At the 1999 Annual Meeting, Neil A. Jacobstein,  and William G.
Roth were elected as Class II directors to serve a three-year  term. At the 1998
Annual Meeting,  Dr. Larry E. Druffel and James C. Workman were elected as Class
I directors to serve a three-year  term. At the 2000 Annual  Meeting,  Robert T.
Marsh, as the nominee for Class III director,  is to be elected for a three-year
term and until their successors are duly elected and qualified.


--------------------------------------------------------------------------------
                                          Positions                     Director
        Name                    Age       With the Company              Since


Class III Director nominated for election at the 2000 Annual Meeting

        Gen. Robert T. Marsh    75        Director                       1987

Class I Directors whose terms expire at the 2001 Annual Meeting

        Dr. Larry E. Druffel    59        Director                       1997
        James C. Workman        57        Director                       1993

Class II Directors whose term expires at the 2002 Annual Meeting

        Neil A. Jacobstein      45        Chairman of the Board and      1993
                                          Chief Executive Officer

        Benedict O'Mahoney      40        Director                       1999

--------------------------------------------------------------------------------


         Class III Nominee for a Term Expiring in 2003

         The nominee for election has indicated a willingness  to serve,  but if
the nominee  should  decline or be unable to serve as a Class III director,  the
proxy  holders will vote for the election of another  substitute  nominee as the
Board of Directors recommends.

         General  Robert T. Marsh.  General Marsh  (Retired),  75, was elected a
director of American Cimflex Corporation (a predecessor to the Company) in 1987.
He served as Chairman of the Board of Thiokol  Corporation  until his retirement
in 1991.  Since 1995 he has served as  Executive  Director  of the Air Force Aid
Society, a non-profit  charitable  organization serving the Air Force community.
He served as Chairman of the President's  Commission on Critical  Infrastructure
Protection.  General Marsh joined the Board of SI International in December 1998
and  continues to serve on the Board.  General Marsh also serves on the Board of
Comverse  Infosys  Technologies,  Inc.  and he is a  trustee  emeritus  of MITRE
Corporation.  General  Marsh is  Chairman  of the  Company's  Finance  and Audit
Committee.


<PAGE>
                                       3


         Continuing Class I Directors for a Term Expiring in 2001

         Dr. Larry E. Druffel.  Dr.  Druffel,  59, was appointed to the Board of
Directors in April 1997.  Since 1996,  he has served as President and a Director
of  the  South  Carolina   Research   Authority   (SCRA),  a  public  non-profit
organization.  He holds a doctorate  degree in computer  science from Vanderbilt
University  and a master's  degree in computer  science from the  University  of
London,   and  was  a  director  of  the  Software   Engineering   Institute  at
Carnegie-Mellon  University  from 1986 to 1996.  He also  served on the Board of
Rational  Software  Corp.  from 1986 to 1993. He is Chairman of the Board of the
Advanced Technology  Institute,  and a member of the Board of the South Carolina
Technology Alliance, both private non-profit corporations. He served as Director
of Computer Software and Systems, Office of Deputy Undersecretary of Defense for
Research and Advanced Technology, Washington, DC.

         James C. Workman. Mr. Workman, 57, was appointed Chairman of the Board,
Chief  Executive  Officer,  and  President  of the  Company on an interim  basis
effective  October 20, 1992.  With the  appointment  of Dr.  Hayes-Roth  and Mr.
Jacobstein to executive positions in 1993, Mr. Workman resigned from his interim
executive  officer  position  but retained a seat on the Board.  Mr.  Workman is
active in several  community  organizations in Wisconsin.  He is a member of the
Executive  Council  and Board of  Trustees  of the Diocese of Fond Du Lac. He is
also a Director of the United Way of Door County. His primary employment is as a
self-employed  attorney/consultant.   Mr.  Workman  is  Chairman  of  the  Human
Resources Committee.

         Continuing Class II Directors for a Term Expiring in 2002

         Neil A. Jacobstein. Mr. Jacobstein, 45, is Chairman of the Board, Chief
Executive  Officer,  and  President of  Teknowledge.  He served as President and
Chief  Operating  Officer  and a Director of the Company  from  January  1993 to
November  22,  1999,  when he was elected to the  position of Chairman  and CEO.
After joining  Teknowledge in 1984, Mr. Jacobstein was promoted over a nine year
period to:  Senior  Knowledge  Engineer,  Manager of the  Research  and Advanced
Development  Group,  Vice President and General Manager of Research and Advanced
Systems  Development,  and Vice  President and General  Manager of the Knowledge
Systems Division. Mr. Jacobstein initiated Teknowledge's eCommerce business unit
in 1996. In 1998, he was appointed to the Technology  Advisory Board of the U.S.
Army's Simulation,  Training,  and Instrumentation  Command (STRICOM).  Prior to
joining  Teknowledge,   Mr.  Jacobstein  was  a  Graduate  Research  Intern  and
consultant at Xerox PARC, and a Research  Associate at CBNS.  Since 1992; he has
served as the Chairman of the Board of Directors of the  Institute for Molecular
Manufacturing,  a nonprofit organization. He co-founded and serves as a Director
of GlobalStake.com.  In 1999, Mr. Jacobstein was elected a Henry Crown Fellow in
the Aspen Institute's  executive  leadership program.

         Benedict   O'Mahoney.   Mr.   O'Mahoney,   40,   is   Vice   President,
Administration  and Legal  Affairs of the Company.  Mr.  O'Mahoney was elected a
Director of Teknowledge in November  1999. Mr.  O'Mahoney  joined the Company in
1996  as  Corporate  Counsel.   From  1991  to  1996,  Mr.  O'Mahoney  practiced
intellectual  property  law and he also  served  as  General  Counsel  for Slatt
Mortgage  Company  from  1988 to 1995.  Mr.  O'Mahoney  serves  on the  Board of
Directors of the Virtual Reality Education Foundation, a nonprofit organization.

Executive Officers

         The following is certain  information  regarding  the  Company's  other
executive officer who is not a member of the Board of Directors.

         Dennis A. Bugbee, 53, is Director of Finance,  Treasurer, and Secretary
for the  Company.  Mr.  Bugbee  joined  the  Company  in  1990  as the  Division
Controller for the Knowledge Systems Division in Palo Alto,  California.  He was
promoted  to Director  of Finance in March 1993 and  shortly  thereafter  to the
positions of Treasurer  and Corporate  Secretary.  Prior to joining the Company,
Mr. Bugbee held the position of Accounting  Manager with TRW's Space and Defense
Sector.


<PAGE>
                                       4


Item 10.   Executive Compensation

Summary Compensation

         The following table sets forth the cash  compensation paid to the Chief
Executive Officer and the four most highly compensated executive officers of the
Company whose salary and bonus exceeded $100,000 for all services to the Company
in the years ended December 31, 1999, 1998, and 1997.

                           SUMMARY COMPENSATION TABLE

                                                        Annual Compensation
--------------------------------------------------------------------------------

Name and Principal Position           Year             Salary            Bonus
                                                        $(1)              $(2)
--------------------------------------------------------------------------------
Frederick Hayes-Roth, Chair, CEO(3)   1999            247,297            89,547
Frederick Hayes-Roth, Chair, CEO      1998            230,123           148,329
Frederick Hayes-Roth, Chair, CEO      1997            208,084            96,769

Neil Jacobstein, Chair, CEO(4)        1999            162,770            64,891
Neil Jacobstein, Pres, COO            1998            152,784            97,585
Neil Jacobstein, Pres, COO            1997            134,692            63,664

Benedict O'Mahoney, VP Adm&Legal      1999            107,086            36,710
Benedict O'Mahoney, VP Adm&Legal      1998             93,608            16,700
Benedict O'Mahoney, VP Adm&Legal      1997             77,745            19,547

Dennis Bugbee, Dir. of Finance        1999            116,383            12,843
Dennis Bugbee, Dir. of Finance        1998            109,172             9,000
Dennis Bugbee, Dir. of Finance        1997             98,635             7,500
--------------------------------------------------------------------------------

(1)     Includes 401(k) deferred compensation and 5% Company matching provision.
(2)     The bonuses set forth in this column are generally paid after the
        conclusion of the annual audit  following the year to which they relate.
(3)     Dr.Hayes-Roth resigned his positions as Chairman and CEO of Teknowledge
        on November 22, 1999, but retained his position as Chief Scientist in a
        part-time capacity.
(4)     Mr. Jacobstein was elected Chairman of the Board and Chief Executive
        Officer on November 22, 1999.


Stock Option Grants and Exercises

         The  following  tables  set forth  information  regarding  the value of
options held by the executive  officers named in the Summary  Compensation Table
at December 31,  1999.  A total of 337,600  options were granted to employees in
1999.
<TABLE>

                      OPTION GRANTS IN LAST FISCAL YEAR(1)
<CAPTION>

--------------------------------------------------------------------------------------------------------------------
                                                 Number of       % of Total Options
                                                 Securities     Granted to Employees
                                                 Underlying        in Fiscal Year      Exercise or
                                              Options Granted           (%)             Base Price     Expiration
Name                                                (#)                                   ($/Sh)          Date
--------------------------------------------------------------------------------------------------------------------
<S>                                           <C>               <C>                    <C>             <C>
Frederick Hayes-Roth, Chair, CEO                     -                   -                  -              -
--------------------------------------------------------------------------------------------------------------------
Neil Jacobstein, Chair, CEO                          -                   -                  -              -
--------------------------------------------------------------------------------------------------------------------
Benedict O'Mahoney, VP Adm&Legal                   27,000                8%                3.81         11/23/09
--------------------------------------------------------------------------------------------------------------------
Dennis Bugbee, Dir. of Finance                     20,000               5.9%               3.81         11/23/09
--------------------------------------------------------------------------------------------------------------------
</TABLE>

(1)      Generally,  the right to exercise an option  under the  Company's  1998
         Stock  Option Plan (the "Option  Plan")  vests in quarterly  increments
         over a four-year  period  commencing  on the date of grant.  The Option
         Plan  permits  the grant of both  incentive  stock  options  within the
         meaning of Section 422 of the Internal  Revenue Code,  as amended,  and
         nonstatutory  stock  options.  The exercise  price of  incentive  stock
         options  must at least equal the fair value of the Common  Stock of the
         Company on the date of grant. The exercise price of nonstatutory  stock
         options  must equal at least 85% of the fair market value of the Common
         Stock  of the  Company  on the date of  grant.  The  exercise  price of
         incentive  stock options or  nonstatutory  stock options granted to any
         person who at the time of grant owns stock  representing  more than 10%
         of the  voting  power of all  classes  of stock of the  Company  or any
         parent or  subsidiary  corporations  must be at least  110% of the fair
         market  value of the Common Stock on the date of grant and term of such
         options cannot exceed ten years.


<PAGE>
                                       5


<TABLE>
            AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL
                              YEAR-END OPTION VALUE
<CAPTION>

----------------------------------------------------------------------------------------------------------------------
                                                                                                Value of Unexercised
                                                                               Number of        In-the-Money Options
                                                                               Securities              at FYE
                                                 Shares                        Underlying          (Exercisable/
                                                Acquired        Value     Unexercised Options      Unexercisable)
Name                                           on Exercise    Realized           at FYE                 (2)
                                                   (#)           (1)         (Exercisable/
                                                                             Unexercisable)
----------------------------------------------------------------------------------------------------------------------
<S>                                              <C>         <C>             <C>                  <C>
Frederick Hayes-Roth, Chair, CEO(3)              306,296     $1,149,249           -/-                   -/-
----------------------------------------------------------------------------------------------------------------------
Neil Jacobstein, Chair, CEO (4)                  15,722        $52,896         390,854/-            $1,407,074/-
----------------------------------------------------------------------------------------------------------------------
Benedict O'Mahoney, VP Adm&Legal                                             11,250/40,750        $22,500/$22,000
----------------------------------------------------------------------------------------------------------------------
Dennis Bugbee, Dir. of Finance                      -             -           6250/33,750         $10,000/$22,000
----------------------------------------------------------------------------------------------------------------------
</TABLE>



(1)      The value  realized  upon  exercise is the  difference  between the
         exercise  price and the closing bid price at the close of business on
         the date the stock is exercised.
(2)      The  value  of  unexercised   in-the-money  options  is  determined  by
         multiplying  the number of shares  under the  option by the  difference
         between the  December  31, 1999 bid price of $3.75 and the grant price.
         Of the options  granted to  executives  since the  inception of the ISO
         Plan, only the options granted in 1990 or later were in the money for a
         total of 408,354 shares.
(3)      Dr.  Hayes-Roth  resigned his positions as Chairman and CEO of
         Teknowledge on November 22, 1999, but retained his position as
         Chief Scientist in a part-time capacity.
(4)      Mr. Jacobstein was elected Chairman of the Board and Chief Executive
         Officer on November 22, 1999.

Directors' Compensation

         Directors'  Fees.  Each  non-employee  member of the Board of Directors
receives  cash  compensation  totaling  $10,000,  which  are  paid in  quarterly
increments of $2,500. In addition to their regular  compensation,  directors are
entitled to be reimbursed  for related  travel,  lodging,  and other expenses in
attending board and committee meetings.

         Directors'  Option Plan. The Company  maintains a stock option plan for
non-employee  directors.  The  Directors'  Option  Plan,  as amended at the 1995
Annual Meeting of  Stockholders,  provides that each Eligible  Director shall be
granted,  on the date such  director  becomes an Eligible  Director,  an initial
option to purchase 3,000 shares of Common Stock,  and on the date of each annual
meeting  thereafter,  each  continuing  Eligible  Director  shall be  granted an
additional option to purchase 3,000 shares of Common Stock.  Options to purchase
62,000  shares of Common  Stock have been  granted  since the  inception  of the
Directors' Option Plan and 38,000 shares remain to be granted.

Employment Arrangements

         Neil Jacobstein,  Chairman of the Board, Chief Executive  Officer,  and
President,  has an  employment  agreement  with the Company that provides for an
annual base  salary of 195,000.  The  resolutions  approved by the  Compensation
Committee  on November 22, 1999,  include an  incentive  compensation  plan with
target  objectives  established  in the six  strategic  categories of cash flow,
profitability,  bookings,  e-Commerce  products and services,  special licensing
fees, and GlobalStake.com, which will be determined and assessed by the Board of
Directors to a maximum of 120% of his annual base salary. Mr. Jacobstein is also
eligible  for a possible  bonus up to  $120,000 as a  consequence  of his having
taken over the position of Chief Executive Officer of the Company,  to be earned
in monthly  increments  from December 1999 through May 22, 2000. Mr.  Jacobstein
has a severance  package that  entitles him to severance  benefits  equal to his
most recent  twelve-month  salary and bonus;  except in the event of a change of
control,  defined as any  consolidation  or merger of the Company,  in which the
Company is not the continuing or surviving  corporation,  Mr. Jacobstein will be
entitled to  severance  benefits  to  include:  (i) full  accrued  salaries  and
vacation pay, (ii) accrued  incentive  compensation  awarded or determined to be
awarded by the Board of Directors,  (iii)  insurance  coverage,  (iv) retirement
benefits  and (v) a lump sum  severance  payment  equal to two times  total cash
compensation.


<PAGE>
                                       6


Item 11.   Security Ownership of Certain Beneficial Owners and Management

         The  following  table sets forth  certain  information  concerning  the
beneficial  ownership of Common  Stock as of April 26, 2000 by persons  known to
the Company to own beneficially more than 5% of the Common Stock, by each of the
directors of the Company, by each of the executive officers named in the Summary
Compensation  Table, and by all directors and executive  officers of the Company
as a group.

   -----------------------------------------------------------------------------
   Name and Address of          Common Stock Owned
   Beneficial Owner               Beneficially(i)               Percent of Class
   -----------------------------------------------------------------------------
   Mark J. Hanna                      267,607(2)                        5.1%
   327 Plaza Real, Suite 319
   Boca Raton, FL 33432

   Dennis A. Bugbee(1)                 53,682(3)                        1.0%
   Larry E. Druffel(1)                  9,000(4)                         *

   Frederick Hayes-Roth               542,552(5)                       10.2%
   1810 Embarcadero Road
   Palo Alto, CA 94303

   Neil A. Jacobstein(1)              680,864(6)                       12.0%
   Robert T. Marsh(1)                  19,000(7)                         *
   Benedict O'Mahoney(1)               14,500(8)                         *
   James C. Workman(1)                 19,000(9)                         *

All Directors and Executive
   Officers of the Company
   as a Group (6 Persons)              796,046(10)                     13.8%
   -----------------------------------------------------------------------------

  (i)    All share numbers have been  adjusted to give effect to a  one-for-five
         reverse stock split on December 22, 1998
  *      Less than 1%

 (1)     The address of all directors and executive  officers is the Company's
         Executive Offices located at 1810 Embarcadero Road, Palo Alto,
         California 94303.
 (2)     The  information  concerning the Common Stock owned  beneficially by
         Mark J. Hanna was obtained from a Schedule 13D filed with the
         Securities and Exchange Commission on August 29, 1997.
 (3)     Includes  7,500  shares,  which may be  purchased  upon the exercise of
         employee  stock options that are currently  exercisable  or will become
         exercisable within 60 days of April 26, 2000.
 (4)     Includes  9,000  shares,  which may be  purchased  upon the exercise of
         director  stock options that are currently  exercisable  or will become
         exercisable within 60 days of April 26, 2000.
 (5)     Dr.   Hayes-Roth   resigned  his  positions  as  Chairman  and  CEO  of
         Teknowledge on November 22, 1999. The information concerning the Common
         Stock owned  beneficially by Dr.  Hayes-Roth was obtained from a Form 4
         filed with the Securities and Exchange Commission on March 28, 2000.
 (6)     Includes  390,854  shares,  which may be purchased upon the exercise of
         employee  stock options that are currently  exercisable  or will become
         exercisable  within 60 days of April 26, 2000.  Includes  18,000 shares
         owned by Mr. Jacobstein's  spouse;  however,  Mr. Jacobstein  disclaims
         beneficial ownership.
 (7)     Includes  19,000  shares,  which may be purchased  upon the exercise of
         director  stock options that are currently  exercisable  or will become
         exercisable within 60 days of April 26, 2000.
 (8)     Includes  13,750  shares,  which may be purchased  upon the exercise of
         employee  stock options that are currently  exercisable  or will become
         exercisable within 60 days of April 26, 2000.
 (9)     Includes  15,000  shares,  which may be purchased  upon the exercise of
         director  stock options that are currently  exercisable  or will become
         exercisable within 60 days of April 26, 2000. Mr. Workman's spouse owns
         4,000 shares beneficially.
 (10)    Includes options for 453,854 shares,  which are currently  exercisable
         or will become  exercisable within 60 days of April 26, 2000.


<PAGE>
                                       7


Item 12.   Certain Relationships and Related Transactions

           None.

Item 13.   Exhibits and Reports on Form 8-K

(a)(1) and (2): Financial Statements and Financial Statement Schedules

           Reference is made to the Index to Financial  Statements preceding the
consolidated  financial  statements  included  in response to Part II, Item 7 of
this annual report for a list of all financial statements filed.

(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 (4)

        3.2        Amended and Restated Bylaws of Teknowledge Corporation (4)

        3.3        Certificate of Designation, Preferences and Rights of the
                   Terms of the Series A Preferred Stock (2)

        4.1        Rights Agreement dated January 29, 1996 between the Company
                   and Registrar and Transfer  Company as Rights Agent (2)

       10.1        Stock  Option  Agreement  between the  Company and  Frederick
                   Hayes-Roth, dated November 29, 1993 (5)

       10.2        Stock   Option   Agreement   between  the  Company  and  Neil
                   Jacobstein, dated November 29, 1993 (5)

       10.3        Stock  Option  Agreement  between the  Company and  Frederick
                   Hayes-Roth, dated April 1, 1994 (5)

       10.4        Stock   Option   Agreement   between  the  Company  and  Neil
                   Jacobstein, dated April 1, 1994 (5)

       10.5        Change of Control Agreement, dated November 21, 1994, between
                   the Company and Frederick Hayes-Roth and Neil Jacobstein (1)

       10.6        Stock  Option  Agreement  between the  Company and  Frederick
                   Hayes-Roth, dated March 30, 1995 (5)

       10.7        Stock Option Agreement between the Company and Neil
                   Jacobstein, dated March 30, 1995 (5)

       10.8        Teknowledge Corporation 1998 Stock Option Plan (3)

       10.9        Executive Compensation Plan, adopted by resolution of the
                   Company's Compensation Committee, dated November 22, 1999

       10.10       Contract Agreement with GlobalStake.com, dated
                   November 22, 199

       23.1        Consent of Arthur Andersen LLP, independent public
                   accountants

       27          Financial Data Schedule


<PAGE>
                                       8


References

     (1)      Filed as an Exhibit to the Company's Annual Report on Form 10-KSB,
              for the fiscal year ended December 31, 1994.

     (2)      Filed as an Exhibit to the  Company's  Current  Report on Form 8-K
              dated  February  12,  1996,  related  to the  adoption  of a 12(g)
              Shareholder Rights Agreement dated January 29, 1996.

     (3)      Filed as an  Exhibit  to the  Company's  Quarterly  Report on Form
              10-QSB, for the quarter ended June 30, 1998.

     (4)      Filed as an Exhibit to the Company's Annual Report on Form 10-KSB,
              for the fiscal year ended December 31, 1998.

     (5)      Filed as an  Exhibit  to the  Company's  Quarterly  Report on Form
              10-QSB, for the quarter ended June 30, 1999.

(b)      Reports on Form 8-K

         None.

(c)      Exhibits

         Reference is made to the response to Item 13(a)(3)  above for a list of
all exhibits filed herewith or  incorporated by reference as part of this Annual
Report on Form 10-KSB.  Reference is also made to the Exhibit Index forming part
of this Annual Report on Form 10-KSB.

(d)      Financial Statement Schedules

         Reference is made to the  response to Item  13(a)(1) and (2) above with
regard to the financial  statement schedules filed as part of this Annual Report
on Form 10-KSB.

         For  the  purposes  of  complying  with  the  amendments  to the  rules
governing Form S-8  (effective  July 13, 1990) under the Securities Act of 1933,
the undersigned registrant hereby undertakes as follows, which undertaking shall
be incorporated by reference into registrant's  Registration  Statements on Form
S-8 Nos. 33-27291, 33-77874, 33-78984, 33-82720, 333-00261, and 333-67623.

         Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors,  officers and controlling  persons of
the  registrant  pursuant  to  the  foregoing  provisions,   or  otherwise,  the
registrant  has been advised that in the opinion of the  Securities and Exchange
Commission  such  indemnification  is against  public policy as expressed in the
Securities  Act of 1933 and is,  therefore,  unenforceable.  In the event that a
claim for  indemnification  against such liabilities  (other than the payment by
the  registrant  of  expenses  incurred  or  paid  by  a  director,  officer  or
controlling  person of the registrant in the  successful  defense of any action,
suit or proceeding) is asserted by such director,  officer or controlling person
in connection with the securities being registered,  the registrant will, unless
in the  opinion  of its  counsel  the matter  has been  settled  by  controlling
precedent,  submit to a court of appropriate  jurisdiction  the question whether
such  indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.

<PAGE>
                                       9


                                  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:  April 26, 2000                    By: /s/ Neil A. Jacobstein
                                             ------------------------
                                             Neil A. Jacobstein
                                             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/ Neil A. Jacobstein             Chairman of the Board         April 26, 2000
------------------------------     of Directors, President &
Neil A. Jacobstein                 Chief Executive Officer
                                   (Principal Executive
                                   Officer)

/s/ Dennis A. Bugbee               Director of Finance,          April 26, 2000
------------------------------     Treasurer and Secretary
Dennis A. Bugbee                   (Principal Financial and
                                   Accounting Officer)

/s/ Lawrence Druffel               Director                      April 26, 2000
------------------------------
Lawrence Druffel

/s/ Benedict O'Mahoney             Director, Vice President,     April 26, 2000
------------------------------     Administration and
Benedict O'Mahoney                 Legal Affairs

/s/ General Robert T. Marsh        Director                      April 26, 2000
------------------------------
General Robert T. Marsh (Ret.)

/s/ James C. Workman               Director                      April 26, 2000
------------------------------
James C. Workman