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                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-K/A

                                   (Mark One)

[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act
    of 1934

                   For the fiscal Year Ended December 31, 1997

[ ] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange
    Act of 1934

                  For the Period From _________ to __________.

                         Commission File Number: 0-14836
                                                 -------

                               TELEGEN CORPORATION
             (Exact name of Registrant as specified in its charter)


          California                                   84-067214                
(State or other jurisdiction of          ---------------------------------------
 incorporation or organization)          (I.R.S. employer identification number)
                                                                  
 .

                    101 Saginaw Drive, Redwood City, CA 94063
              (Address of principal executive offices and zip code)

                                 (650) 261-9400
              (Registrant's telephone number, including area code)

        Securities registered pursuant to Section 12(b) of the Act: None
                                                                    -----  

    Securities registered pursuant to Section 12(g) of the Act: Common Stock
                                                                ------------ 

         Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12  months  (or for such  shorter  periods  as 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
                                        ---    ---

         Indicate by check mark if disclosure of delinquent  filers  pursuant to
Item 405 of Regulation S-K is not contained  herein,  and will not 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-K or any
amendment to this Form 10-K. [ ]

         As of April 15, 1998, the approximate  aggregate market value of voting
stock held by nonaffiliates of the Registrant was  $5,678,093.25  based upon the
closing sale price on the Electronic Bulletin Board for that date.

         As of  April  15,  1998,  the  number  of  outstanding  shares  of  the
Registrant's Common Stock was 8,173,931.

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<PAGE>
                                Explanatory Note

         This Report on Form 10-K/A No. 1 is being filed to disclose those items
previously  omitted  from  Part  III of the  Report  on Form  10-K  filed by the
Registrant on April 15, 1998, in compliance  with  instruction  G(3) to the Form
10-K which  allows for an  amendment  thereto by April 30, 1998 if a  definitive
proxy statement is not filed with the Commission by such date.


                                      -2-
<PAGE>


                                    PART III.


         ITEM 10. DIRECTORS AND OFFICERS OF THE REGISTRANT

         (a) PROFILES OF DIRECTORS AND EXECUTIVE OFFICERS

         GREGORY  BELL  has  a  decade  of  experience  in  corporate   finance,
operations,  management  issues and systems  development.  He has held mergers &
acquisitions,  strategic  planning and  operating  positions at AMF  Industries,
where he restructured new  acquisitions,  reorganized  international  operation,
managed the  performance  of portfolio  companies  and ran a business  unit with
operations in twelve  countries.  Previously he was a consultant to Booz Allen &
Hamilton,  and worked with a commodities trading company. Mr. Bell was appointed
to the  Company's  Board of Directors in October 1997 and became a member of the
Company's Executive Committee in November 1997.

         GILBERT F. DECKER was  Assistant  Secretary of the Army from April 1994
until May 1997.  Prior to his employment with the Department of the Army, he was
President of ESL Inc. and, after ESL Inc. was acquired by TRW, he headed the New
Ventures  Department  for TRW. He has also served as  President  and CEO of Penn
Central Federal Systems Company and President and CEO of Accurex Corp. He became
a member of Telegen's Board of Directors in May 1997, after leaving his position
with the Army. Mr. Decker became Chairman of the Company's Board of Directors in
September  1997 and Chairman of the  Company's  Executive  Committee in November
1997.

         JAMES R.  (DICK)  IVERSON has an  extensive  background  in  technology
development  including management positions with companies such as Teledyne Ryan
Electronics,   General  Dynamics,  and  Gould,  Inc.,  with  responsibility  for
government and commercial  electronics systems.  Since January 1995, Mr. Iverson
has been an  independent  consultant to the  electronics  industry.  Mr. Iverson
serves on the board and  compensation  committee of  Ameriquest  Tech,  Inc. Mr.
Iverson served on the board of Telegen Communications Corporation, the Company's
predecessor  corporation from October 1995 to October 1996 and has been a member
of the  Company's  Board of Directors  since  October 28, 1996 and serves on the
Company's  Executive  Committee,  receiving an  appointment  to such position in
November 1997.

         FREDERICK T. LEZAK, JR. has been a financial executive since 1969, with
senior positions at Time, Inc.,  McKesson Corp., The Headquarters  Companies and
Visucom Productions, Inc. Mr. Lezak was also the Chief Financial Officer of TCC,
the Company's  wholly-owned  subsidiary  between January 1991 and July 1993, was
not an officer or employee of TCC thereafter until April 1997 when he became the
President  of TCC.  Mr.  Lezak  served  on the board of  Telegen  Communications
Corporation,  the Company's predecessor corporation from January 1991 to October
1996 and became a director of the Company on October 28, 1996 and he also serves
on the Company's  Executive  Committee receiving an appointment to such position
in November 1997.

         LARRY J.  WELLS is the  founder  and a  director  of  Sundance  Venture
Partners,  L.P., a venture capital fund, and is the Chairman of Anderson & Wells
Company, which manages Sundance Venture Partners,  L.P. and El Dorado Investment
Company.  Mr.  Wells  currently  serves on the  Board of  Directors  of  Cellegy
Pharmaceutical,  Inc. and Indentix, Inc., which are publicly held companies. Mr.
Wells also is a director of Upside Publishing, Inc., Plop Golf Company, VoiceCom
Systems, Inc. and Murphex Corporation.  Mr. Wells served on the board of Telegen
Communications Corporation,  the Company's predecessor corporation from May 1996
to October  1996 and has served as  director of the  Company  since  October 28,
1996.

         FRED Y. KASHKOOLI has been an independent consultant since 1991 and was
formerly a senior vice  president  of Research and  Development  at GE Intersil,
where he was responsible for design,  manufacturing  and strategic  marketing of
analog and digital products. During his eleven year tenure with GE Intersil, Mr.
Kashkooli  managed design centers in Singapore,  New Jersey,  North Carolina and
Florida,  and was a director  of the  microprocessor  and memory  division  with
profit  and loss  responsibility.  Mr.  Kashkooli  became  the  Company's  Chief
Executive Officer on October 31, 1997.

         JESSICA L.  STEVENS  has been an inventor  and an engineer  since 1972.
From 1991 to 1996, Ms. Stevens served as Chief Executive Officer,  President and
director  of  Telegen  Communications  Corporation,  the  Company's  predecessor
corporation.  From October 1996 to August of 1997,  Ms.  Stevens was  President,
Chief  Executive  Officer  and a director  of the  Company.  In August  1997 Ms.
Stevens  relinquished  her title of Chief Executive  Officer and was named Chief
Technology Officer. In October 1997 Ms. Stevens was terminated as an employee by
the Company  including her positions as President and CTO. Ms. Stevens remains a
director of the Company.


                                      -3-
<PAGE>


         BONNIE CRYSTAL has been a telecommunications  engineer,  consultant and
inventor since 1972. Ms. Crystal served as Executive Vice President,  Secretary,
and director of Telegen  Communications  Corporation,  the Company's predecessor
corporation  from 1991 to 1996.  From October 1996 to October 1997,  Ms. Crystal
was a director,  Executive  Vice-President,  and  Secretary of the  Company.  In
November  1997,  the  Company  terminated  her  from  her  executive  management
positions. Ms. Crystal remains a director of the Company.

         WARREN M. DILLARD has been a financial  analyst and  financial  manager
since  1967.  In October  1993,  he became  Chief  Financial  Officer of Telegen
Communications  Corporation,  the Company's predecessor corporation,  adding the
title of Chief  Operating  Officer  in March  1994.  Mr.  Dillard  served as the
Company's Chief Financial Officer,  Chief Operating Officer, and director of the
Company  since  October 28,  1996,  relinquishing  the title of Chief  Operating
Officer for Chief  Executive  Officer of the Company in August 1997. In November
1997,  Mr.  Dillard  relinquished  all of his executive  management and director
positions with the Company.

         P. VICTOR KELSEY Ph.D. was formerly the Marketing  Development  Manager
for eight years for Lanxide Products, a joint venture company with DuPont, where
he was responsible for the sales,  marketing and product development of advanced
armor  systems.  Dr. Kelsey has consulted  over his entire career in the area of
luminescent  research and display  development.  Dr. Kelsey joined the Company's
majority-owned subsidiary,  Telegen Display Laboratories,  Inc. on June 17, 1996
as Manager of Materials  Development.  In February 1997 Dr. Kelsey was appointed
as Executive Vice President of TDL.

         DANIEL J. KITCHEN was a vice  president of creative  development  and a
director of Absolute  Entertainment,  Inc.  from May 1986 through  October 1995.
Absolute  Entertainment,  Inc. was a public reporting company which ceased to do
business in 1995. Mr. Kitchen has been a director, president and chief executive
officer of Morning Star Multimedia, Inc., a New Jersey Corporation ("MSM") since
October of 1995.  Mr.  Kitchen  joined the  Company in December of 1996 upon the
Company's acquisition of MSM and he has continued to serve in all such positions
with MSM. On December  31,  1997,  MSM was sold by the Company to a  corporation
formed for the purpose of acquiring MSM, of which  corporation  Mr. Kitchen is a
director, president and chief executive officer.

         (b) Compliance with Section 16(a) of the Exchange Act

         Section  16(a) of the  Securities  Exchange  Act of 1934,  as  amended,
requires the Company's  officers and directors and persons who own more than 10%
of a registered  class of the  Company's  equity  securities  to file reports of
ownership on Form 3 and changes in ownership on Form 4 or 5 with the  Securities
and  Exchange  Commission  (the  "SEC").  Such  officers,   directors,  and  10%
shareholders  are also  required by SEC rules to furnish the Company with copies
of all Section 16(a) reports they file.

         Based  solely on its review of the copies of such forms  received by it
or written  representations from certain reporting persons, the Company believes
that,  during the fiscal year ended  December 31, 1997,  certain  Section  16(a)
filing requirements applicable to its officers,  directors, and 10% shareholders
were not complied with. The following  directors of the Company failed to file a
timely  Form 3:  Fred Y.  Kashkooli  (reported  late on a Form 5)  Gregory  Bell
(reported  late on a Form 5). The  following  10%  beneficial  owners  also have
failed  to file a timely  Form 3:  Elara  Ltd.  and  Augustine  Fund,  L.P.  The
following  insiders  failed to file timely  Forms 4 and/or 5: Jessica L. Stevens
for two  sales  and one  gift  transaction;  Larry  J.  Wells  for one  purchase
transaction (reported late on a Form 5).

         In addition, each of the Company's directors failed to file a Form 4 or
5 for grants of options made  pursuant to  compensation  arrangements  with such
directors for board service.  As to the Company's  officers and  directors,  the
Company has either confirmed filing of late Forms 4 and/or 5 regarding the above
failures to timely file or expects  that those  filings will be made in the near
future.

         Item 11. Executive Compensation

         (a) Summary Compensation Table

         The following  table  summarizes  the total  compensation  of the Chief
Executive Officer and the other most highly  compensated  executive  officers of
the Company in fiscal 1997 (the "Named Executive Officers") as well as the total
compensation  paid to each such individual for the Company's two previous fiscal
years. 


                                      -4-
<PAGE>


<TABLE>
<CAPTION>
============================================================================================================================
                                                SUMMARY COMPENSATION TABLE

                                                Annual Compensation                        Long Term Compensation Awards
                                                -------------------                        -----------------------------
                                                                                           Restricted   
                                                                          Other Annual       Stock
  Name and Principal Position       Year      Salary ($)      Bonus($)    Compensation     Awards(s)($)    Options/SAR's (#)
  ---------------------------       ----      ----------      --------    ------------     ------------    -----------------
<S>                                 <C>       <C>             <C>         <C>               <C>               <C>
Fred Y. Kashkooli, Chief            1997      $  27,500(1)    $   --      $       --        $      --               0(1)
Executive Officer                                                                                         
                                                                                                          
Jessica L. Stevens,                 1997      $ 166,667       $   --      $       --        $      --          35,712
former President, former            1996(2)   $ 170,000       $   --      $       --        $      --         133,501
Chief Executive Officer and         1995(2)      29,167           --         252,000(3)            --          20,004
current Director                                                                                          
                                                                                                          
Bonnie Crystal,                     1997      $ 157,500           --              --               --          35,712
former Executive Vice               1996(2)     157,500           --              --               --         107,650
President, former Secretary and     1995(2)      60,000           --              --               --          18,000
current Director                                                                                          
                                                                                                          
Warren M. Dillard,                  1997        153,333           --              --               --          25,167
former Chief Executive Officer,     1996(2)     136,667           --              --               --         106,799
former Chief Operating Officer,     1995(2)      53,333           --              --               --          15,996
and former Chief Financial                                                                                
Officer                                                                                                   
                                                                                                          
P. Victor Kelsey(4)                 1997        111,250           --              --               --           8,163
                                    1996(2)      43,750           --              --               --           2,250
============================================================================================================================
<FN>
------------------------
(1)  Mr. Kashkooli became the Chief Executive Officer of the Company on October 31, 1997. His employment  agreement provides
     for annual  compensation  of $220,000 for his first year of  employment  with an annual bonus of up to $110,000 for his
     first year of employment.  In connection  with his  employment  agreement Fred Y. Kashkooli was granted on February 24,
     1998, options for 720,000 shares of Common Stock of the Company.
(2)  Compensation  for the  fiscal  year  1995 and up to  October  28,  1996  reflects  compensation  paid by the  Company's
     predecessor corporation Telegen Communications Corporation (formerly known as Telegen Corporation).
(3)  In August 1995,  Ms. Stevens was issued  warrants to purchase  50,500 shares of Telegen common stock for $.01 per share
     for a period of five years. The warrants can be exercised at any time.  Compensation expense of approximately  $252,000
     was recorded to reflect the  difference  between the fair market value of the common stock at the time of the grant and
     the exercise price.
(4)  Dr. Kelsey is an Executive Vice President of the Company's wholly-owned  subsidiary Telegen Display Laboratories,  Inc.
     Dr. Kelsey's compensation for the fiscal years 1996 and 1997 was paid by Telegen Display Laboratories, Inc.
</FN>
</TABLE>


                                                            -5-
<PAGE>

         (b) Option/SAR Grants Table
<TABLE>
         The following table  summarizes the individual  grants of stock options
(whether or not in tandem with SARs), and freestanding SARs made during the last
completed fiscal year to each of the Named Executive Officers.
<CAPTION>
============================================================================================================================
                                           Option/SAR Grants in Last Fiscal Year

                                                                                                Potential Realizable Value
                                                                                                    at Assumed Annual
                                                                                                   Rates of Stock Price
                                                                                                     Appreciation for
                                           Individual Grants                                            Option Term
---------------------------------------------------------------------------------------------  ----------------------------
                               Number of        % of Total                                     
                               Securities       Options/SARS    
                               Underlying       Granted to        Exercise or  
                              Options/SARS       Employees        Base Price    Expiration 
          Name                 Granted (#)     in Fiscal Year       ($/Sh)         Date           5% ($)        10% ($)
-------------------------    ---------------   ---------------   ------------  --------------  ------------  ------------- 
<S>                              <C>              <C>             <C>             <C>            <C>           <C>
Jessica L. Stevens               20,000            5.48           5.00             5/1/03        59,136.36     110,372.87
                                 15,000            4.08           2.06             8/6/03        25,635.28      43,837.73
                                    356             .09           2.81            10/31/02           0              0
                                    356             .09           2.81            11/10/02           0              0
                                 20,000(1)        14.00(1)        5.00(1)          5/1/03(1)         0              0
                                                                                  
                                                                                  
Bonnie Crystal                   20,000            5.45           5.00             5/1/03        59,136.36     110,372.87
                                 15,000            9.08           2.06             8/6/03        25,635.28      43,837.73
                                    356             .09           2.81            10/31/02           0              0
                                    356             .09           2.81            11/10/02           0              0
                                 20,000(1)        14.00(1)        5.00(1)          5/1/03(1)         0              0
                                                                                  
                                                                                  
Warren M. Dillard                 1,000             .27           5.63             4/2/03         2,508.04       4,935.03
                                 20,000            5.45           5.00             5/1/03        59,136.36     110,372.87
                                  4,167             .44           2.88            12/31/02           0              0
                                 20,000(1)        14.00(1)        5.00(1)          5/1/03(1)         0              0
                                                                                  
                                                                                  
P. Victor Kelsey                  3,000             .82           9.50            1/31/03        23,763.72      40,590.88
                                  1,038             .28           6.50            9/20/02            0              0
                                  1,000             .27           5.63             4/2/03            0              0
                                  3,125             .85           2.88            12/31/02           0              0

============================================================================================================================
<FN>
----------------- 
(1)  These  options  were  granted for common stock of the  Company's  subsidiary,  Telegen  Display  Laboratories,  Inc., a
     privately  held  corporation.  There is no market in such common stock and any potential  realizable  value relating to
     appreciation of such stock may never be obtained until such market develops.
</FN>
</TABLE>


                                                            -6-
<PAGE>


         (c) Fiscal Year-End Option/SAR Value Table
<TABLE>
         The  following  table  provides  information  concerning  the  value of
unexercised options at fiscal year end for each of the Named Executive Officers.
<CAPTION>
============================================================================================================================
                                             Fiscal Year-End Option/SAR Values

                                               Number of Securities Underlying               Value of Unexercised
                                                 Unexercised Options/SARs at                In-the-Money Options/
                                                   FY-End(#) Exercisable/                     SARs at FY-End ($)
                Name                                   Unexercisable                      Exercisable/Unexercisable
--------------------------------------    ----------------------------------------    ---------------------------------------
<S>                                                 <C>                                            <C>
Jessica L. Stevens                                  245,174/27,379                                 0/0
                                                     33,338/6,667(1)                               0/0

Bonnie Crystal                                      210,983/27,379                                 0/0
                                                     33,333/6,667(1)                               0/0

Warren M. Dillard                                   178,784/9,333                                  0/0
                                                     33,333/6,667(1)                               0/0

P. Victor Kelsey                                      9,413/1,000                                  0/0
                                                     37,500/0(1)                                   0/0
============================================================================================================================
<FN>
------------------------
(1)  These options  represent  rights to purchase  shares in Telegen  Display  Laboratories,  Inc., a majority owned private
     subsidiary of the Company in which no trading market exists.  At this time, the Company  believes that these options do
     not have in-the-money value.
</FN>
</TABLE>

         (d) Compensation of Directors

         Currently,  the Company's non-employee directors receive (i) 356 shares
of the  Company's  common  stock or an  option  to  purchase  356  shares of the
Company's  common  stock at an  exercise  price  of  $2.81,  at such  directors'
election,  and (ii) no cash  compensation,  for  each  meeting  of the  Board of
Directors  or a  committee  of the Board of  Directors  attended  in person,  or
attended  by  telephone.   Immediately   prior  to  the  Company's  1997  Annual
Shareholder Meeting held on August 6, 1997, the non-employee  directors received
(i) 200 shares of the Company's Common Stock or an option to purchase 200 shares
of the Company's  Common Stock at an exercise  price of $5.00 at such  directors
election,  and (ii) no cash  compensation,  for  each  meeting  of the  Board of
Directors or committee of the Board of Directors attended in person, or attended
by telephone.  The Company  reimburses each non-employee  member of the Board of
Directors and its committees for expenses  incurred by such member in connection
with the attendance of such meetings.  Additionally,  the Company's non-employee
directors receive options under its 1996 Director Stock Option Plan.

         The 1996  Director  Option  Plan  (the  "1996  DOP"),  under  which the
Company's   non-employee  members  of  the  Board  of  Directors  (the  "Outside
Directors" or  individually  the "Outside  Director") are  compensated for their
service,  provides  for the Outside  Directors  to receive an option to purchase
twenty thousand  (20,000) shares of the Company's common stock on each date such
Outside  Director is  re-elected  by the  shareholders  to serve another term in
office. All option grants under the 1996 DOP to any Outside Director are limited
to once in any  given  calendar  year on the  date of the  Shareholders'  annual
meeting upon their election or  re-election to the board.  The exercise price of
options  acquired  pursuant to the 1996 DOP is 100% of the fair market value per
share of Common  Stock on the date of the  grant.  In the event that the date of
grant is not a trading  day,  the  exercise  price per share is the fair  market
value on the next  trading day  immediately  following  the date of grant of the
option.  All options granted under the 1996 DOP are fully vested and exercisable
upon the date of grant and remain  exercisable  only while the Outside  Director
remains a director of the Company.

         The  Company's  directors  who are also  officers of the Company do not
receive any additional  compensation  for their services as members of the Board
of Directors.


                                       -7-
<PAGE>


         (e)   Employment    Contracts,    Termination   of   Employment,    and
               Change-in-Control Arrangements

         Fred Y. Kashkooli (the "Employee") has an employment  contract with the
Company  (the  "Kashkooli  Employment  Agreement").   The  Kashkooli  Employment
Agreement  provides  that Mr.  Kashkooli  will receive  during his first year of
service an annual salary of $220,000 and an annual cash bonus of $110,000,  such
amounts to increase to $275,000 and $125,000 respectively for his second year of
service,  with increases  thereafter  subject to determination by the board. The
bonuses  are  subject to  certain  performance  targets  being  obtained  by the
Company. The Kashkooli Employment Agreement also provides for a grant of 720,000
options. The Employee is also entitled to participate in any pension, insurance,
savings or other employee benefits adopted by the Company.

         The Kashkooli  Employment Agreement is at-will and may be terminated by
the Company by written notice to the Employee,  unless termination is for cause.
Where the Employee is involuntarily  terminated  without cause, which is defined
in the Kashkooli Employment Agreement,  the Employee is eligible for a severance
package which includes lump sum payments and certain  acceleration of vesting on
options held by the Employee.

         Jessica  L.  Stevens,  Bonnie  Crystal,  and  Warren  M.  Dillard  were
executives  of the Company  during the last fiscal year until  October 1997 (the
"Former  Executives")  and  they  did not  have  employment  contracts  with the
Company.  The  Former  Executives  maintained  employment  agreements  with TCC,
formerly  the  Company's  wholly owned  subsidiary  (the  "Executive  Employment
Agreements").

         The Executive  Employment  Agreements  provided that Ms.  Stevens,  Ms.
Crystal,  and Mr.  Dillard would receive an annual salary of $200,000,  $180,000
and $160,000  respectively (which is reviewed  annually),  and reimbursement for
certain expenses. The Former Executives were also entitled to participate in any
pension insurance, savings or other employee benefits adopted by the Company.

         The Executive Employment Agreements were at-will,  terminable by TCC by
written  notice  to any of  the  Former  Executives.  The  Executive  Employment
Agreements  would  also  have  terminated  on the  occurrence  of any one of the
following events: (i) the occurrence of circumstances that make it impossible or
impracticable  for the  business  of TCC to be  continued,  (ii) the  death of a
Former  Executive,  (iii)  the loss by a Former  Executive  of his or her  legal
capacity,  (iv) the loss by TCC of the legal  capacity to  contract  and (v) the
dissolution of TCC. Ms.  Stevens and Ms. Crystal were  terminated by the Company
in October 1997.

         P. Victor Kelsey does not have an employment contract with the Company.
Mr. Kelsey maintains an employment agreement (the "Kelsey Employment Agreement")
with  Telegen  Display   Laboratories,   Inc.,  a  California   corporation  and
wholly-owned subsidiary of the Company ("TDL").

         The  Kelsey  Employment  Agreement  was  entered  into in June 1996 and
provides that Mr.  Kelsey  receive an annual income of $120,000 per year in cash
plus options to purchase  25,000 shares of TDL Common Stock at a purchase  price
of $1.00 per share,  12,500  shares of such options  vested and accrued upon his
completing  of ninety  (90) days of service,  and the  balance of 12,500  shares
vested one hundred eight (180) days of service thereafter. Also, upon completion
of ninety (90) days of  service,  Mr.  Kelsey was awarded  either a grant of TDL
Common  Stock  valued at 5% of his annual  salary or options  to  purchase  such
number of shares, such options to vest ratably over five (5) years.

         The Kelsey Employment Agreement is at-will and may be terminated by TDL
by written notice to Mr. Kelsey. The Kelsey Employment Agreement also terminates
upon the  occurrence of any one of the following  events:  (i) the occurrence of
circumstances  that make it impossible or impracticable  for the business of TDL
to be continued,  (ii) the death of Mr. Kelsey,  (iii) the loss by Mr. Kelsey of
his legal  capacity,  (iv) the loss by TDL of the legal capacity to contract and
(v) the dissolution of TDL.

         (f) Compensation Committee Interlocks and Insider Participation

         The members of the  Compensation  Committee  as of the  Company's  1997
fiscal year end were James R.  Iverson,  Larry J. Wells and  Frederick T. Lezak.
Gilbert  F.  Decker  became  a member  of the  Compensation  Committee  upon his
appointment  to the  Company's  Board of Directors on May 15, 1997. No member of
the Compensation Committee was at any time during the Company's 1997 fiscal year
or at any other time an officer or employee of the Company except that Frederick
T. Lezak,  Jr. ceased
                                      -8-
<PAGE>

to be a member of the Compensation Committee on April 1, 1997 when he became the
President  of  Telegen  Communications  Corporation,  a  California  corporation
("TCC"), the Company's former wholly-owned subsidiary.  Mr. Lezak also served as
Chief  Financial  Officer of TCC between 1991 and 1993. No executive  officer of
the  Company  serves  as a member  of the  Board of  Directors  or  compensation
committee of any entity which has one or more  executive  officers  serving as a
member of the Company's Board of Directors or Compensation Committee.

         Item 12. Security Ownership of Certain Beneficial Owners and Management
<TABLE>
         The following tables sets forth the shares of common stock beneficially
owned as of February  13, 1998 by persons  known by the Company to  beneficially
own more than 5% of the  Company's  outstanding  stock,  by each director of the
Company, by each executive officer,  and by all directors and executive officers
of the Company as a group.
<CAPTION>
                                                                                         Shares of Common Stock (1)
                                                                                         --------------------------

              Five-Percent Shareholders, Directors, Executive Officers                    Number           Percent
------------------------------------------------------------------------------------  ----------------  ------------
<S>                                                                                         <C>            <C>
Five-Percent Shareholders, Directors and Executive Officers:
Elara, Ltd.(2)......................................................................        1,125,000      13.06%
Sundance Venture Partners, L.P.(3) .................................................          793,132       9.58%
TSC LLC(3)(4) ......................................................................          793,132       9.58%
Augustine Fund, L.P.(5).............................................................        1,257,730      13.25%
Triton Equities Fund L.P.(5)........................................................          874,015       9.59%
Fred Y. Kashkooli(6)................................................................          105,950       1.27%
Jessica L. Stevens(7)...............................................................          795,102       9.32%
Bonnie Crystal(8)...................................................................          399,596       4.73%
Warren M. Dillard(9) ...............................................................          179,024       2.46%
Victor P. Kelsey(10)................................................................           10,839         *
Gilbert F. Decker(11)...............................................................           28,490         *
Gregory Bell(12)....................................................................           11,068         *
James R. Iverson(13)................................................................           51,609         *
Frederick T. Lezak, Jr.(14).........................................................           52,210         *
Larry J. Wells(3)...................................................................          793,132       9.58%
All Directors and Executive Officers as a Group (11) persons........................        2,454,979       26.5%
<FN>
--------------------------
*  Indicates less than 1%

(1)      Beneficial ownership includes voting and investment power with respect to the shares.  Shares of common
         stock subject to options currently  exercisable or exercisable  within 60 days of February 13, 1998 are
         deemed outstanding for computing the percentage of the person holding such options,  but are not deemed
         outstanding  for computing the percentage of any other person.  Thus, the sum of the  individuals'  and
         entities' ownership as a percent of common stock beneficially owned may exceed 100%. As of February 13,
         1998, Telegen had 8,236,216 shares of common stock outstanding.
(2)      Elara Ltd. owns 750,000  shares of Common Stock and has a warrant to acquire  375,000  shares of Common
         Stock.
(3)      Larry J. Wells individually owns 200 shares of Common Stock and has options to acquire 42,932 shares of
         Common Stock.  Larry J. Wells is also (i) a director of Sundance  Venture  Partners,  L.P.,  which owns
         200,000  shares of Common Stock and (ii) the manager for TSC LLC,  which owns 550,000  shares of Common
         Stock.
(4)      In October 1997,  TSC, LLC, a Delaware  limited  liability  company ("TSC") entered into an amended and
         restated  stock  purchase  agreement  with Jessica L. Stevens, an executive officer and director of the
         Company, for the purchase of 550,000 shares of the Company's common stock in a private transaction.
(5)      As of February 13, 1998,  Augustine Fund,  L.P. and Triton Private  Equities Fund, L.P. held Promissory
         Notes that are  convertible  to Common Stock within sixty (60) days of such date at a conversion  price
         equal to 75% of the lowest  trading price of the Common Stock for the five (5) day period prior to such
         conversion  date.  Such conversion  price,  if calculated  based on stock prices for February 13, 1998,
         would have been  $0.24609375  (75% of the such lowest  trading  price  ($0.328125)  ) per share.  As of
         February 13, 1998,  Augustine Fund L.P. and Triton Private  Equities Fund,  L.P. also held warrants for
         59,000 shares of Common Stock and 41,000 shares of Common Stock respectively.
(6)      Fred Y.  Kashkooli  individually  owns 950 shares of Common  Stock and has  options to acquire  105,000
         shares of Common Stock.
(7)      Jessica L. Stevens  individually owns 499,428 shares of Common Stock and has options to acquire 245,174
         shares of Common Stock and a warrant to acquire 50,500 shares of Common Stock.
(8)      Bonnie  Crystal  individually  owns 188,613  shares of Common Stock and has options to acquire  210,983
         shares of Common Stock.


                                                      -9-
<PAGE>


(9)      Warren M.  Dillard  individually  owns 240 shares of Common  Stock and has  options to acquire  178,784
         shares of Common Stock.
(10)     Victor P. Kelsey individually owns 1,426 shares of Common Stock and has options to acquire 9,413 shares
         of Common Stock.
(11)     Gilbert F. Decker  individually owns no shares of Common Stock and has options to acquire 28,490 shares
         of Common Stock.
(12)     Gregory Bell individually owns no shares of Common  Stock and has options to acquire  11,068  shares of
         Common Stock.
(13)     James R. Iverson individually owns 4,432 shares of Common Stock and has option to acquire 47,177 shares
         of Common Stock.
(14)     Frederick T. Lezak, Jr.  individually  owns no shares of Common Stock and has options to acquire 52,210
         shares of Common Stock.
</FN>
</TABLE>


         Item 13. Certain Business Relationships and Related Transactions

         In connection with the Company's  Electronic Trade Show in Las Vegas in
January 1997,  Jessica L. Stevens hired the services of a  nationally-recognized
entertainer for the benefit of the Company's employees. The Company has advanced
$190,000 to Ms.  Stevens to cover the  expenses  relating to such  entertainment
services.  Ms.  Stevens has not repaid the  Company's  advance as of the date of
this report and the Company is carrying such advance as an account receivable on
its balance  sheet dated as of fiscal year end 1997.  Ms.  Stevens is  currently
disputing the above repayment obligations to the Company.

         On December  31, 1997,  the Company  sold all of its stock  holdings in
Morning Star Multimedia, Inc., a wholly owned subsidiary of the Company ("MSM"),
to an entity in which Daniel J. Kitchen,  an Executive Officer of the Company is
a significant  shareholder,  for $200,000 plus royalty streams to be paid to the
Company for a period of two years from  December 31, 1997, of 5% to 10% of gross
sales of certain  MSM CD-ROM  products.  This  transaction  was  approved by the
Company's board with full knowledge of the above relationship. After the sale of
MSM, Mr. Kitchen resigned from all of his positions with the Company.

         On March 19,  1998,  the Company made  available to certain  holders of
common stock including Elara Ltd. and TSC LLC, which  beneficially own more than
five  percent  (5%) of the  Company's  Common  Stock,  an  exchange  offer  (the
"Exchange  Offer")  for their  common  stock.  Under  the  Exchange  Offer,  the
Investors were offered convertible  subordinated  promissory notes (the "Notes")
for their shares of Common Stock with a face value equal to the number of shares
of common stock  tendered  under the Exchange  Offer  multiplied by the five-day
average of the Company's  closing trading prices on the OTC Bulletin Board prior
to March 17, 1998 (the "Conversion  Price"). The Notes have a one-year term with
a six percent  (6%) balloon  interest  payment due at the end of the term of the
Note. the Notes are subordinated to all other existing debt of the Company, both
as  to  interest  and  principal  and  upon  liquidation.  The  Notes  are  also
convertible  to common  stock at any time by a holder  thereof,  such  number of
shares of common stock to be  determined by dividing the amount of face value of
the Note tendered by the Conversion  Price.  The Company may prepay the Notes at
any time after giving fifteen (15) days prior written notice to holders thereof.
Under the Exchange  Offer,  Elara Ltd. and TSC LLC converted  their common stock
holdings to Notes in the amounts of $334,156  and $245,781 respectively.  A form
S-3 Registration Statement was filed with the Securities and Exchange Commission
on March 24, 1998 and declared effective on April 23, 1998 covering the issuance
of common stock upon the conversion of the Notes.

         On April  1,  1998,  the  Company  entered  into an  agreement  to sell
substantially  all of the  assets of  Telegen  Communications  Corporation,  the
Company's telecommunications subsidiary ("TCC"), to an entity in which Frederick
T.  Lezak,  Jr.,  an  Executive  Officer  and  director  of  the  Company,  is a
significant  shareholder,  for  $500,000  ($350,000  in cash  and an  additional
$150,000 in the form of a promissory  note) and the rights of royalty streams on
certain TCC  products  for up to three  years.  The buying  entity also  assumed
certain liabilities totaling approximately  $223,000. The Company has received a
deposit of  $350,000  in cash as part of the sale price.  This  transaction  was
approved by the Company's  board with full knowledge of the above  relationship.
After the sale of TCC, Mr. Lezak resigned from all his management positions with
the Company, and he remains a director of the Company.


                                      -10-
<PAGE>


                                   SIGNATURES

         Pursuant to 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.

                                              TELEGEN CORPORATION


                                              By:    /S/  FRED Y. KASHKOOLI
                                                   -----------------------------
                                                      Fred Y. Kashkooli,
                                                      Chief Executive Officer


                                              Date: April 29, 1998
<TABLE>

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
this Form 10-K/A has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated:

<CAPTION>
Signature                                 Title                                   Date
---------                                 -----                                   ----
<S>                                       <C>                                     <C>
   */S/ GILBERT F. DECKER                 Chairman of the Board                   April 29, 1998
---------------------------------
        Gilbert F. Decker


                                          Director
---------------------------------
          Gregory Bell


   */S/ JAMES R. IVERSON                  Director                                April 29, 1998
---------------------------------
        James R. Iverson


  */S/ FREDERICK T. LEZAK, JR.            Director                                April 29, 1998
---------------------------------
       Frederick T. Lezak, Jr.


     */S/ LARRY J. WELLS                  Director                                April 29, 1998
---------------------------------
          Larry J. Wells


                                          Director
---------------------------------
      Jessica L. Stevens


                                          Director
---------------------------------
        Bonnie Crystal


    /S/ FRED Y. KASHKOOLI                 Chief Executive, Financial              April 29, 1998
---------------------------------         and Accounting Officer
        Fred Y. Kashkooli              






*   /S/ FRED Y. KASHKOOLI
-------------------------------------------
        Fred Y. Kashkooli, Attorney-In-Fact
</TABLE>

                                                   -11-