EXHIBIT
        12.0
  **CHARTER**
 **FINANCE
        AND AUDIT COMMITTEE OF THE BOARD OF DIRECTORS**
 **TEKNOWLEDGE
        CORPORATION**
 
 **I.**
              **STATEMENT
                  OF POLICY**
 
 This
        Charter specifies the scope of the responsibilities of the Audit Committee
        (the
“Committee”) of the Board of Directors (the “Board”) of Teknowledge Corporation
        (the “Company”) and the manner in which those responsibilities shall be
        performed, including its structure, processes, and membership requirements.
 
 The
        primary purpose of the Committee is to oversee the accounting and financial
        reporting processes of the Company and the audits of the Company’s financial
        statements; assist the Board in fulfilling its oversight responsibilities
        by
        reviewing and reporting to the Board on the integrity of the financial reports
        and other financial information provided by the Company to any governmental
        body
        or to the public. The Committee shall also review the qualifications,
        independence, and performance, and approve the terms of engagement of the
        Company’s independent auditor and prepare any reports required of the Committee
        under rules of the Securities and Exchange Commission (“SEC”).
 
 The
        Company shall provide appropriate funding, as determined by the Committee,
        to
        permit the Committee to perform its duties under this Charter, to compensate
        its
        advisors and to compensate any registered public accounting firm engaged
        for the
        purpose of rendering or issuing an audit report or related work or performing
        other audit, review or attest services for the Company. The Committee, at
        its
        discretion, has the authority to initiate special investigations, and, hire
        special legal, accounting or other outside advisors or experts to assist
        the
        Committee, as it deems necessary to fulfill its duties under this Charter.
        The
        Committee may also perform such other activities consistent with this Charter,
        the Company’s by-laws and governing law, as the Committee or the Board deems
        necessary or appropriate.
 
 **II.**
              **ORGANIZATION
                  AND MEMBERSHIP
                  REQUIREMENTS**
 
 The
        Committee shall comprise three or more directors selected by the Board, each
        of
        whom shall satisfy the independence and experience requirements of the Nasdaq
        Stock Market. In addition, the Committee shall not include any member who:
 
 §
              accepts
                  any consulting, advisory, or other compensatory fee, directly or
                  indirectly, from the Company, other than in his or her capacity
                  as a
                  member of the Committee, the Board, or any other committee of the
                  Board;
 §
              is
                  an executive officer of the Company, or beneficially owns or controls,
                  directly or indirectly, more than 10% of the Company’s outstanding common
                  stock or is otherwise an affiliate of the Company or any subsidiary
                  of the
                  Company, other than a director who meets the independence requirements
                  of
                  the Nasdaq Stock Market.
 
 Each
        member of the Committee must be able to read and understand fundamental
        financial statements, including a balance sheet, income statement, and cash
        flow
        statement. In addition, at least one member shall have past employment
        experience in finance or accounting, professional certification in accounting,
        or other comparable experience or background resulting in the individual
        being
        financially sophisticated, which may include being or having been a chief
        executive, chief financial, or other senior officer with financial oversight
        responsibilities. No Committee member shall simultaneously serve on the audit
        committee of more than three public companies without prior disclosure to
        the
        Committee and the Board and an affirmative determination by the Board that
        such
        service does not impair the ability of such member to serve effectively on
        the
        Committee, which determination shall be disclosed in the annual proxy
        statement.
 
 The
        members of the Committee shall be appointed by the Board and shall serve
        until
        their resignation or removal or until their successors are duly elected and
        qualified. The Board may replace any member of the Committee. Unless elected
        by
        the full Board, the members of the Committee may designate a chairperson
        by
        majority vote of the full Committee membership in accordance with the by-laws
        of
        the Corporation.
 
 **III.**
              **MEETINGS**
 
 The
        Committee shall meet as often as it determines, but not less frequently than
        quarterly. The Committee meeting can be held in conjunction with the regular
        quarterly Board meetings. The Committee may form and delegate authority to
        subcommittees, or to one or more members of the Committee, when appropriate.
        The
        Committee shall meet with management and the independent auditor in separate
        executive sessions as appropriate. The Committee shall maintain written minutes
        of its meetings, which minutes will be filed with the minutes of the meetings
        of
        the Board. The Committee may also record summaries of its recommendations
        to the
        Board in written form, which will be incorporated as part of the minutes
        of the
        Board meeting at which those recommendations are presented.
  
  **IV.**
              **COMMITTEE
                  AUTHORITY AND
                  RESPONSIBILITIES**
 
 To
        fulfill its responsibilities and duties, the Committee shall:
 
 A.
              Oversight
                  of the Company’s Independent
                  Auditor
 
 1. Be
        directly and solely responsible for the appointment, compensation, retention,
        and oversight of any independent auditor (including resolution of disagreements
        between management and the independent auditor regarding financial reporting)
        engaged by the Company for the purpose of preparing or issuing an audit report
        or related work, with each such auditor reporting directly to the Committee.
 
 
 2. Periodically
        review and discuss with the independent auditor (i) the matters required
        to be
        discussed by Statement on Auditing Standards No. 61, as amended, and (ii)
        any
        formal written statements received from the independent auditor consistent
        with
        and in satisfaction of Independence Standards Board Standard No. 1, as amended,
        including without limitation, descriptions of (x) all relationships between
        the
        auditor and the Company, (y) any disclosed relationships or services that
        may
        impact the independent auditor’s objectivity and independence, and (z) whether
        any of the Company’s senior finance personnel were recently employed by the
        independent auditor
 
 3. Evaluate
        annually the qualifications, performance, and independence of the independent
        auditor, including a review of whether the independent auditor’s quality-control
        procedures are adequate, and a review and evaluation of the lead partner
        of the
        independent auditor, taking into account the opinions of management and the
        Company’s internal auditors, and report to the Board on its conclusions,
        together with any recommendations for additional action
 
 4. Consult
        with the independent auditor to assure the rotation of the lead audit partner
        having primary responsibility for the audit and the audit partner responsible
        for reviewing the audit every five years, consider issues related to the
        timing
        of such rotation and the transition to new lead and reviewing partners, and
        consider whether, in order to assure continuing auditor independence, there
        should be regular rotation of the audit firm, and report to the Board on
        its
        conclusions.
 
 5. Approve
        in advance the engagement of the independent auditor for all audit services
        and
        non-audit services, based on independence, qualifications, and, if applicable,
        performance, and approve the fees and other terms of any such engagement.
 
 6. Approve
        as necessary the termination of the engagement of the independent auditor.
 
 7. Review
        with
        the independent auditor any accounting adjustments that were noted or proposed
        by the auditor but that were “passed” (as immaterial or otherwise), any
“management” or “internal control” letter or schedule of unadjusted differences
        issued, or proposed to be issued, by the auditor to the Company, or any other
        material written communication provided by the auditor to the Company’s
        management.
 
 8. Review
        with
        the independent auditor the critical accounting policies and practices used
        by
        the Company, all alternative treatments of financial information within
        generally accepted accounting principles (“GAAP”) that the independent auditor
        has discussed with management, the ramifications of the use of such alternative
        disclosures, and treatments and the treatment preferred by the independent
        auditor.
 
 B.
              Review
                  of Financial Reporting, Policies and
                  Processes
 
 1. Review
        and discuss with management and the independent auditor the Company’s annual
        audited financial statements and any certification, report, opinion, or review
        rendered by the independent auditor, and recommend to the Board whether the
        audited financial statements should be included in the Company’s annual report
        on Form 10-KSB.
 
 2. Periodically
        meet separately with management and with the independent auditor.
 
 3. Review
        with management its assessment of the effectiveness and adequacy of the
        Company’s internal control structure and procedures for financial reporting
        (“Internal Controls”), review annually with the independent auditor the
        attestation to and report on the assessment made by management, and consider
        with management and the independent auditor whether any changes to the Internal
        Controls are appropriate in light of management’s assessment or the independent
        auditor’s attestation.
  
  4. Review
        and
        discuss with management and the independent auditor any off-balance sheet
        transactions or structures and their effect on the Company’s financial results
        and operations, as well as the disclosure regarding such transactions and
        structures in the Company’s public filings
 
 5. Review
        with management and the independent auditor the effect of regulatory and
        accounting initiatives on the financial statements. Review any major issues
        regarding accounting principles and financial statement presentations, including
        any significant changes in selection of an application of accounting principles.
        Consider and approve, if appropriate, changes to the Company’s auditing and
        accounting principles and practices as suggested by the independent auditor
        or
        management.
 
 6. Review
        the significant reports to management prepared by the internal
        auditors.
 
 C.
              Risk
                  Management, Related Party Transactions, Legal Compliance, and
                  Ethics
 
 1. Review
        with
        the chief executive and chief financial officer of the Company any report
        on
        significant deficiencies in the design or operation of the Internal Controls
        that could adversely affect the Company’s ability to record, process, summarize,
        or report financial data, any material weaknesses in Internal Controls
        identified to the auditors, and any fraud, whether or not material, that
        involves management or other employees who have a significant role in the
        Company’s Internal Controls.
 
 2. Review
        and approve any related-party transactions, after reviewing each such
        transaction for potential conflicts of interests and other improprieties.
 
 3. Establish
        procedures for the receipt, retention, and treatment of complaints received
        by
        the Company regarding accounting, internal accounting controls, or auditing
        matters, and the confidential, anonymous submission by employees of the Company
        of concerns regarding questionable accounting or auditing matters. Adopt,
        as
        necessary, appropriate remedial measures or actions with respect to such
        complaints or concerns.
 
 4. The
        Committee shall consider and present to the Board for adoption a Code of
        Ethics
        for the Company’s principal executive officer, principal financial officer,
        principal accounting officer or controller, and persons performing similar
        functions, which meets the requirements of Item 406 of the SEC’s Regulation S-K,
        and provide for and review prompt disclosure to the public of any change
        in, or
        waiver of, such Code of Ethics.
 
 5. Discuss
        with management and the independent auditor any correspondence with regulators
        or governmental agencies that raise material issues regarding the Company’s
        financial statements or accounting policies.
 
 6. Review
        with the Company’s general counsel and report to the Board on litigation,
        material government investigations, and compliance with applicable legal
        requirements.
 
 7. Prepare
        the report required by the rules of the SEC to be included in the Company’s
        annual proxy statement
 
 8. Review
        and reassess the Charter’s adequacy as appropriate.