<PAGE>   1
                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                  FORM 10-KSB/A

     [X] Annual Report under Section 13 or 15(d) of the Securities Exchange
         Act of 1934
         For the fiscal years ended December 31, 1995, 1996 and 1997.

     [ ] Transition Report under Section 13 or 15(d) of the Securities
         Exchange Act of 1934 
         For the transition period from __________________ to _________________.

                          Commission File No. 2-86551C

                       Peoples Educational Holdings, Inc.
                 (Name of small business issuer in its charter)

                              Concourse Corporation
                     (Former Name of Small Business Issuer)


           Minnesota                                  41-1368898
 (State or other jurisdiction of           (I.R.S. Employer Identification No.)
 incorporation or organization)

                    230 W. Passaic Street, Maywood, NJ 07607
               (Address of principal executive offices) (zip code)

Issuer's telephone number (201) 712-1142

Securities registered under Section 12(b) of the Exchange Act:         None

Securities registered under Section 12(g) of the Exchange Act:         None

AMENDMENT NO. 1:

The purpose of this Amendment is to revise the disclosures contained in Item 6
with respect to the description of the Merger Transaction, Item 8, to include a
conformed copy of the signed audit report and to file a revised balance sheet
that includes the number of the issuer's issued and outstanding shares.


<PAGE>   2


ITEM 6 - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

The purpose of this Amendment is to revise the description of the Merger
contained under the heading "Management's Discussion and Analysis or Plan of
Operations - Merger Transaction." Other portions of the Management's Discussion
and Analysis or Plan of Operations remain the same and are not affected by this
revision.

MERGER TRANSACTION

         Description of the Merger

         In September 1998, the Company and its newly formed and wholly-owned
subsidiary, Peoples Acquisition Corporation ("Acquisition Co."), entered into an
Amended and Restated Agreement and Plan of Merger (the "Merger Agreement") with
Peoples Publishing Group, Inc. ("Peoples Publishing"), a Delaware corporation.
The Merger Agreement constitutes an amendment to and a restating of an Agreement
and Plan of Merger entered into between the Company and Peoples Publishing on
June 4, 1998, and is accordingly made effective as of that date. Peoples
Publishing, with principal offices in Maywood, New Jersey, is engaged primarily
in the publishing of books for use in elementary and secondary schools, grades K
through 12.

         Under the terms of the Merger Agreement, Peoples Publishing will merge
with Acquisition Co., and the separate existence of Acquisition Co., which was
formed only to engage in the merger (the "Merger"), will cease. Peoples
Publishing will then be the wholly owned subsidiary of the Company.

         In consideration of the Merger, holders of capital stock of Peoples
Publishing will receive newly issued preferred stock of the Company as
summarized below. The Board of Directors of the Company established three new
classes of capital stock out of the undesignated shares authorized by the
Company's Articles of Incorporation. The rights and privileges of each of the
three new classes of Concourse capital stock are summarized as follows:

         --       1998 Convertible Stock. The Company issued 600,000 shares of
                  the 1998 Convertible Stock (the "1998 Stock") to the
                  shareholders of Peoples Publishing. Each share of the 1998
                  Stock is convertible into 21.75 shares of the Company's common
                  stock, subject to adjustment in certain cases to prevent
                  dilution of the interests of the holders of 1998 Stock until
                  December 31, 2001, when the 1998 Stock will be convertible
                  into 10 shares of the Company's common stock in lieu of 21.75
                  shares of the Company's common stock. As a result of the
                  20-to-1 reverse stock split which was approved at the Regular
                  Meeting of Shareholders held on December 22, 1998, each share
                  of the 1998 Stock is now convertible into 1.0875 shares of the
                  Company's common stock. Each holder of the 1998 Stock has one
                  vote, on all matters submitted to the capital stockholders of
                  the Company, for each share of the Company's common stock that
                  holder would be entitled to receive upon conversion of 1998
                  Stock into the Company's common stock. The 1998 Stock does not
                  have preferential rights as to dividends or distributions upon
                  liquidation.



                                        2

<PAGE>   3



         --       1990 Redeemable Cumulative Convertible Preferred Shares. The
                  Company issued 1,278,120 shares of the 1990 Redeemable
                  Cumulative Convertible Preferred Shares, having a par value of
                  $0.001 per share (the "1990 Stock"), to the shareholders of
                  Peoples Publishing. Each share of 1990 Stock is convertible
                  into 21.75 shares of the Company's common stock, subject to
                  adjustment in certain cases to prevent dilution of the
                  interests of the holders of 1990 Stock. As a result of the
                  20-to-1 reverse stock split which was approved at the Regular
                  Meeting of Shareholders held on December 22, 1998, each share
                  of the 1993 Stock is now convertible into 1.0875 shares of the
                  Company's common stock. Each holder of 1990 Stock has one
                  vote, on all matters submitted to the capital stockholders of
                  the Company, for each share of the Company's common stock that
                  holder would be entitled to receive upon conversion of the
                  1990 Stock into the Company's common stock. The holders of
                  1990 Stock are entitled to receive a lump sum cash dividend of
                  $0.37 per share plus quarterly cash dividends at the rate of
                  $0.042 per annum per share, if the Company has sufficient
                  quarterly earnings, and if adequate cash, after establishing a
                  reasonable cash reserve, is available for such payment.
                  Dividends will be payable on the last day of each calendar
                  quarter, and will begin to accumulate for the quarter
                  beginning October 1, 1998. In the event of liquidation of the
                  Company, holders of the 1990 Stock would be entitled to
                  receive $0.84624 per share in cash out of the assets of the
                  Company distributed in such liquidation, and all unpaid but
                  accrued dividends. If assets are not sufficient to make such
                  payments in full, along with payment obligations to the
                  holders of 1993 Stock (discussed below), the holders of 1990
                  Stock and the holders of 1993 Stock would share distributions
                  pro-rata, based upon the full amount they would otherwise have
                  been entitled to receive.

                  On August 24, 2000, 2001 and 2003, the Company is required to
                  redeem up to one third of the outstanding 1990 Stock at a
                  price of $0.84624 per share, plus all cumulated but unpaid
                  dividends due thereon, only if adequate funds are available to
                  effect such redemption. If less than adequate funds are
                  available, the Company must redeem such number of shares of
                  the 1990 Stock as it can.

         --       1993 Redeemable Cumulative Convertible Preferred Shares. The
                  Company issued 680,000 shares of the 1993 Redeemable
                  Cumulative Convertible Preferred Shares, having a par value of
                  $0.001 per share (the "1993 Stock"), to the shareholders of
                  Peoples Publishing. Holders of the 1993 Stock have
                  substantially identical rights as the 1990 Stock, with
                  respect, among other things, to voting conversion, conversion
                  rate adjustments, dividends, liquidation and redemption,
                  except that (i) holders of the 1993 Stock are entitled to a
                  lump sum cash dividend of $0.33 per share, plus quarterly cash
                  dividends of $0.062 per annum per share, and (ii) the per
                  share payment upon liquidation or redemption is $1.25 per
                  share plus unpaid but accrued dividends.

         In addition, holders of options to purchase 128,000 shares of Peoples
Publishing's common stock at an average price of $1.25 per share will receive
similar options to purchase 2,784,000 shares of common stock of the Company at
an average price of $0.0575 per share. The actions of the Board of Directors in
establishing the new shares obliges the Company to take action necessary to


                                        3

<PAGE>   4



increase the Company's authorized common stock in order to facilitate the
conversion rights granted to those newly established shares. Accordingly,
following the Merger, the Company's common stock holders will be asked to vote
in favor of an amendment to the Company's Articles of Incorporation, which,
among other things, would increase the authorized common stock (currently
6,000,000 shares) in order to accommodate such conversion.

         Peoples Publishing has loaned the Company $25,000 to pay certain legal
and accounting expenses incurred in connection with the proposed Merger,
including the filing of certain documents with the Securities and Exchange
Commission pursuant to the requirements of the Securities Exchange Act of 1934.
If the Merger is not consummated for reasons other than a breach of warranty or
default on the part of the Company, the $25,000 loan will be forgiven.

         The Merger Agreement contemplates that each of the current members of
the Board of Directors of the Company, with the exception of William Hultgren,
will resign at the time the transaction is completed. In addition, it is
contemplated that, following the Merger, Mr. Hultgren will be terminated as an
employee of the Company and will acquire the Company's current assets in
exchange for the assumption of its liabilities.

         Subsequent Events

         The Merger was consummated effective November 1, 1998. Peoples
Publishing survived the Merger as the Company's wholly-owned subsidiary.

         On December 22, 1998, the Company held a regular meeting of
shareholders. The results of the votes taken at the meeting were reported by the
Company in a current report on Form 8-K filed January 15, 1999.

         Effects of and Reasons for the Merger

         As a result of the Merger, pre-Merger shareholders of the Company
currently hold approximately 5% of the voting power of the Company and former
shareholders of Peoples Publishing own approximately 95% of the voting power of
the Company, as illustrated by the table below. The numbers in the following
table have been adjusted to reflect the 20-to-1 reverse stock split which was
approved at the Regular Meeting of Shareholders held on December 22, 1998:


                                        4

<PAGE>   5

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
                                             NUMBER OF UNDERLYING              
                           NUMBER OF         STOCK AND NUMBER OF               
    CLASS                   SHARES                VOTES                  %
-------------------------------------------------------------------------------
<S>                         <C>                   <C>                   <C>
Common Stock                  153,260               153,260              5.2
-------------------------------------------------------------------------------
1998 Convertible Stock        600,000               652,500             22.2
-------------------------------------------------------------------------------
1993 Convertible Stock        680,000               739,500             25.2
-------------------------------------------------------------------------------
1990 Convertible Stock      1,278,120             1,389,956             47.4
-------------------------------------------------------------------------------
</TABLE>

         After the Merger, the Company's pre-merger assets were sold to Mr.
Hultgren in exchange for the assumption of certain liabilities. As a result, the
business of Peoples Publishing is the sole business of the Company following the
Merger. The Company filed a current report on Form 8-K on November 16, 1998
reporting the Merger and describing the business of Peoples Publishing.

         The Company decided to consummate the Merger for several reasons. The
Company had experienced steadily declining revenues and operations casting doubt
on the Company's ability to continue as a viable company. In December 1995, due
to the settlement of a lawsuit filed against the company by a competitor, the
Company had to discontinue the sale of some of its primary products. See "Item 3
- Legal Proceedings" and "Item 1 - Description of Business." No new products had
been developed since 1995 and telemarketing efforts were discontinued in 1996.
From October 1996 through the date of the Merger, the Company had only one
employee; Mr. Hultgren. See "Item 1 - Description of Business." In addition, all
active trading in the Company's stock ceased around October 1996. Prior to the
Merger, the last bid quote for the Company's common stock was from October 22,
1996 at $0.005 per share. Prior to the Merger, the Company had changed from
primarily a product-based company to a company providing services through the
efforts of only one individual. On the other hand, Peoples Publishing was a
corporation with a history of increasing revenues. By combining with Peoples
Publishing, the Company believed it could bring back value to the investment
held by the common shareholders of the Company as compared to the situation of
the Company prior to the Merger. The Company filed a current report on Form
8-K/A on January 15, 1999 to report the audited financial statements of Peoples
Publishing for the two years ended December 31, 1997 and the unaudited financial
statements of Peoples Publishing for the nine months ended September 30, 1998.
Also included in that current report are pro forma financial statements of the
Company and Peoples Publishing. The following tables set forth some excepts from
the financial statements filed with the current report. In order to understand
the financial statements of Peoples Publishing, the complete set of financial
statements contained in the current report should be reviewed.


                                        5

<PAGE>   6



                       PEOPLES EDUCATIONAL HOLDINGS, INC.

                 UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
                            AS OF SEPTEMBER 30, 1998
<TABLE>
<CAPTION>

                                                                              HISTORICAL
                                                                 --------------------------------------

                                                                     PEOPLES                THE PEOPLES
                                                                   EDUCATIONAL              PUBLISHING             PRO FORMA
                                                                  HOLDINGS, INC.            GROUP, INC.           CONSOLIDATED
                                                                 ---------------           ------------           ------------

<S>                                                                <C>                     <C>                     <C>        
TOTAL ASSETS                                                       $    40,079             $  3,895,415           $  3,935,494
                                                                 =============             ============           ============
                                                                 
       Total current liabilities                                        68,803                1,914,720              1,983,523
                                                                 -------------             ------------           ------------
                                                                       
       Mandatory redeemable preferred stock                                  0                2,622,645              2,622,645
                                                                 -------------             ------------           ------------
                                                                       
       Total stockholders' equity (deficit)                            (28,724)                (641,950)              (670,674)
                                                                 -------------             ------------           ------------
                                                                       
TOTAL LIABILITIES AND                                                  
       STOCKHOLDERS' EQUITY (DEFICIT)                              $    40,079             $  3,895,415           $  3,935,494
                                                                 =============             ============           ============
</TABLE>




                                        6

<PAGE>   7



                       PEOPLES EDUCATIONAL HOLDINGS, INC.

            UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
                      NINE MONTHS ENDED SEPTEMBER 30, 1998
<TABLE>
<CAPTION>

                                                                                    HISTORICAL             
                                                                      -------------------------------------

                                                                          PEOPLES               THE PEOPLES
                                                                        EDUCATIONAL              PUBLISHING             PRO FORMA
                                                                      HOLDINGS, INC.             GROUP, INC.           CONSOLIDATED
                                                                      --------------            ------------           ------------

<S>                                                                   <C>                       <C>                    <C>        
Operating Revenues                                                    $      166,433            $  5,292,838           $  5,459,271
                                                                      --------------            ------------           ------------

Total Operating Expenses                                                     198,124               4,339,093              4,537,217
                                                                      --------------            ------------           ------------

Operating Income (Loss)                                                      (31,691)                953,745                922,054

Net Income (Loss)                                                            (31,691)                569,686                537,995

Preferred stock dividends                                                          0                  71,881                 71,881
                                                                      --------------            ------------           ------------

Net income applicable to common stockholders                          $      (31,691)           $    497,805           $    466,114
                                                                      ==============            ============           ============

       Earnings per common share
            Basic                                                     $        (0.01)                                  $       0.16
            Diluted                                                   $        (0.01)                                  $       0.01
       Average common shares outstanding
            Basic                                                          2,906,221                                      2,906,221
            Diluted                                                        2,906,221                                     61,487,660
</TABLE>



                                        7

<PAGE>   8




                       PEOPLES EDUCATIONAL HOLDINGS, INC.

            UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
                      TWELVE MONTHS ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>

                                                                                  HISTORICAL             
                                                                      ------------------------------------

                                                                         PEOPLES                THE PEOPLES
                                                                        EDUCATIONAL             PUBLISHING            PRO FORMA
                                                                      HOLDINGS, INC.            GROUP, INC.          CONSOLIDATED
                                                                      --------------           ------------          ------------

<S>                                                                       <C>                    <C>                  <C>        
Operating Revenues                                                     $  175,783                $4,528,065           $ 4,703,848
                                                                      --------------            -----------          ------------

Total Operating Expenses                                                  191,852                 4,220,148             4,412,000
                                                                      --------------            -----------          ------------

Operating Income (Loss)                                                   (16,069)                  307,917               291,848

Net income (Loss)                                                         (16,169)                  175,501               159,332

Preferred stock dividends                                                       0                    95,841                95,841
                                                                      --------------            -----------          ------------

Net income applicable to common stockholders                           $  (16,169)               $   79,660           $    63,491
                                                                      ==============            ===========          ============

       Earnings per common share
            Basic                                                      $    (0.01)                                    $      0.02
            Diluted                                                    $    (0.01)                                    $      0.00
       Average common shares outstanding
            Basic                                                       2,704,610                                       2,704,810
            Diluted                                                     2,704,610                                      61,487,660
</TABLE>


                                        8

<PAGE>   9



ITEM 7 - FINANCIAL STATEMENTS

         See financial statements attached.

ITEM 8 - CHANGE IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
         ACCOUNTING AND FINANCIAL DISCLOSURE

         The Company's accountants for the year ended December 31, 1993 were Fox
McCue & Company. As disclosed in the Company's 10-KSB for the year ended
December 31, 1994, Fox McCue was dismissed on January 9, 1995, which dismissal
was not recommended or approved by the Company's Board of Directors. Fox McCue
had issued qualified auditors reports regarding the Company's ability to
continue as a going concern, but there had been no disagreements with Fox McCue
on any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure.

         On January 9, 1995, the Company engaged Casey Menden & Co., P.A.
("Casey Menden"), Bloomington, Minnesota, to act as the Company's certified
public accounting firm, as approved by the Company's Board of Directors. Casey
Menden audited the Company's financial statements for the year ended December
31, 1994 and the report of Casey Menden on such financial statements, dated
March 21, 1995, included an explanatory paragraph that expressed substantial
doubt about the Company's ability to continue as a going concern. These
financial statements were filed with the Company's Form 10-K for the year ended
December 31, 1994 and such report also contained disclosure of the change in
accountants to Casey Menden.

         On approximately December 31, 1995, Casey Menden notified the Company
that it was not qualified to act as the auditor and certified public accounting
firm for public companies and resigned. The Company did not have any
disagreement with Casey Menden on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure, which
if not resolved to the satisfaction of Casey Menden, would have caused Casey
Menden to refer to the subject matter of such disagreement in its report. Since
the resignation of Casey Menden, the Company did not engage new outside auditors
until June 10, 1998 as explained below.

         On June 10, 1998, the Company appointed McGladrey & Pullen LLP
("McGladrey & Pullen") to act as its certified public accountants, as approved
by the Company's Board of Directors. McGladrey & Pullen audited the Company's
financial statements for the years ended December 31, 1995, 1996 and 1997. Their
report for either of the last two years did not contain an adverse opinion or a
disclaimer of opinion and was not qualified or modified as to uncertainty, audit
scope or accounting principles; except that the report references the doubt
expressed by Casey Menden as to the Company's ability to continue as a going
concern for the year ended December 31, 1994. McGladrey & Pullen continues to
act as the Company's certified public accountants.

         During the Company's two most recent fiscal years and the subsequent
interim period ended June 10, 1998, the Company did not have a relationship with
McGladrey & Pullen described in Item 304(a)(2) of Regulation S-B or otherwise.
The only conversations held with McGladrey &Pullen prior to June 10, 1998
related to due diligence issues relative to their engagement.


                                        9

<PAGE>   10



ITEM 13 - EXHIBITS.


Exhibit 16 - Letter on Change in Certifying Accountant



                                       10

<PAGE>   11




                          INDEX TO FINANCIAL STATEMENTS

Independent Auditor's Report                                                F-2

Financial Statements

         Balance sheets                                                     F-3

         Statements of operations                                           F-4

         Statements of stockholders' equity (deficit)                       F-5

         Statements of cash flows                                           F-6

         Notes to financial statements                              F-7 to F-11



                                      F-1

<PAGE>   12


                          INDEPENDENT AUDITOR'S REPORT


To the Board of Directors
Concourse Corporation
Spring Park, Minnesota


We have audited the accompanying balance sheets of Concourse Corporation as of
December 31, 1997, 1996, and 1995, and the related statements of operations,
stockholders' equity (deficit), and cash flows for the years then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits. The financial statements of Concourse Corporation for the year ended
December 31, 1994, were audited by other auditors whose report, dated March 21,
1995, on those financial statements included an explanatory paragraph that
expressed substantial doubt about the Company's ability to continue as a going
concern.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Concourse Corporation as of
December 31, 1997, 1996, and 1995, and the results of its operations and its
cash flows for the years then ended in conformity with generally accepted
accounting principles.


St. Paul, Minnesota                             /s/ McGladrey & Pullen LLP
July 8, 1998


                                      F-2


<PAGE>   13
CONCOURSE CORPORATION

BALANCE SHEETS
DECEMBER 31, 1997, 1996, 1995, AND 1994

<TABLE>
<CAPTION>
ASSETS                                                       1997              1996             1995              1994
---------------------------------------------------------------------------------------------------------------------------
<S>                                                   <C>                   <C>             <C>                <C>                 
Current Assets
     Cash                                             $        10,537       $    16,189      $    10,504       $    48,709     
     Trade accounts receivable, less allowance for
         doubtful accounts of $3,000 (Note 8)                  32,835               877           35,605            37,964
     Inventories                                                6,525             6,320           60,591            89,686
     Prepaid expenses and other                                     -                 -            3,134            11,069
                                                      -------------------------------------------------------------------- 
                   TOTAL CURRENT ASSETS                        49,897            23,386          109,834           187,428
                                                      -------------------------------------------------------------------- 

Equipment, at cost
     Office equipment and furniture                            36,929            36,929           75,921            73,097
     Less accumulated depreciation                             35,830            34,661           65,381            60,672
                                                      -------------------------------------------------------------------- 
                                                                1,099             2,268           10,540            12,425
                                                      -------------------------------------------------------------------- 
                                                      $        50,996       $    25,654      $   120,374       $   199,853      
                                                      ==================================================================== 

LIABILITIES AND STOCKHOLDERS' EQUITY
     (DEFICIT)

Current Liabilities
     Note payable to bank (Note 2)                    $             -       $         -      $         -       $    17,505       
     Subordinated convertible debentures (Note 4)                   -                 -          129,609           129,609
     Trade accounts payable                                    13,267             8,335            6,963             2,016
     Accrued expenses:
         Compensation                                          36,002                 -           18,215            10,482
         Interest                                                   -                 -           32,402            16,201
         Other                                                  2,389             1,812            2,612            12,123
                                                      -------------------------------------------------------------------- 
                   TOTAL CURRENT LIABILITIES                   51,658            10,147          189,801           187,936
                                                      -------------------------------------------------------------------- 

Deferred Compensation Obligation (Note 5)                           -                 -          113,127            89,659
                                                      -------------------------------------------------------------------- 

Commitments and Contingencies (Notes 6, 7, and 10)

Stockholders' Equity (Deficit) (Note 9)
     Common stock, par value $0.01 per share;
     issued and outstanding 2,704,610 shares in
     1997 and 1996, 2,056,558 shares in 1995 and
     2,224,500 shares in 1994                                  27,046            27,046           20,566            22,245
     Additional paid-in capital                             1,951,385         1,951,385        1,828,256         1,827,417
     Accumulated deficit                                   (1,979,093)       (1,962,924)      (2,031,376)       (1,927,404)
                                                      -------------------------------------------------------------------- 
                                                                 (662)           15,507         (182,554)          (77,742)
                                                      --------------------------------------------------------------------
                                                      $        50,996       $    25,654      $   120,374       $   199,853       
                                                      ====================================================================
</TABLE>

See Notes to Financial Statements.


                                      F-3
<PAGE>   14
CONCOURSE CORPORATION

STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1997, 1996, 1995, AND 1994

<TABLE>
<CAPTION>
                                                  1997                1996               1995               1994
------------------------------------------------------------------------------------------------------------------- 
<S>                                           <C>               <C>                 <C>                <C>
Revenues (Note 8)                             $   175,783       $    196,300        $   341,252        $    557,269
                                              --------------------------------------------------------------------- 

Costs, expenses, and other:
      Cost of products sold and
         services rendered                         99,805            119,203             75,610              73,105
      Selling, general, and
                administrative expenses            92,047            154,074            352,670             530,249
                                              --------------------------------------------------------------------- 
                        TOTAL COSTS AND
                               EXPENSES           191,852            273,277            428,280             603,354
                                              --------------------------------------------------------------------- 

                         OPERATING LOSS           (16,069)           (76,977)           (87,028)            (46,085)

Nonoperating income (expense):
      Deferred compensation
            obligation forgiven (Note 5)                -            113,127                  -                   -
      Accrued interest forgiven (Note 4)                -             32,402                  -                   -
      Interest expense                                  -                  -            (16,936)            (16,853)
      Other, net                                     (100)              (100)                (8)               (100)
                                              --------------------------------------------------------------------- 
                   NET INCOME (LOSS)          $   (16,169)      $     68,452        $  (103,972)       $    (63,038)
                                              ===================================================================== 

Basic and diluted net income (loss)
     per common share                         $     (0.01)      $       0.03        $     (0.05)       $      (0.03)
                                              ===================================================================== 

Weighted-average common shares
     outstanding                                2,704,610          2,218,571          2,140,529           2,224,500
                                              =====================================================================
</TABLE>

See Notes to Financial Statements.


                                      F-4
<PAGE>   15
CONCOURSE CORPORATION

STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
YEARS ENDED DECEMBER 31, 1997, 1996, 1995, AND 1994
<TABLE>
<CAPTION>
                                                         Common Stock             Additional                
                                                 ------------------------------    Paid-In      Accumulated 
                                                    Shares         Amount          Capital        Deficit          Total
-----------------------------------------------------------------------------------------------------------------------------
<S>                                              <C>               <C>           <C>             <C>             <C>         
Balance, December 31, 1993                           2,224,500      $   22,245   $   1,827,417   $ (1,864,366)    $   (14,704)
   Net loss                                                  -               -               -        (63,038)        (63,038)
                                                 ----------------------------------------------------------------------------
Balance, December 31, 1994                           2,224,500          22,245       1,827,417     (1,927,404)        (77,742)
   Redemption of 167,942 shares of common stock       (167,942)         (1,679)            839              -            (840)
   Net loss                                                  -               -               -       (103,972)       (103,972)
                                                 ----------------------------------------------------------------------------
Balance, December 31, 1995                           2,056,558          20,566       1,828,256     (2,031,376)       (182,554)
   Conversion of subordinated debentures into
     common stock (Note 4)                             648,052           6,480         123,129              -         129,609
   Net income                                                -               -               -         68,452          68,452
                                                 ----------------------------------------------------------------------------
Balance, December 31, 1996                           2,704,610          27,046       1,951,385     (1,962,924)         15,507
   Net loss                                                  -               -               -        (16,169)        (16,169)
                                                 ----------------------------------------------------------------------------
Balance, December 31, 1997                           2,704,610      $   27,046   $   1,951,385   $ (1,979,093)    $      (662)  
                                                 ============================================================================ 
</TABLE>

See Notes to Financial Statements.


                                      F-5
<PAGE>   16
CONCOURSE CORPORATION

STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1997, 1996, 1995, AND 1994
<TABLE>
<CAPTION>
                                                                       1997              1996          1995           1994
-----------------------------------------------------------------------------------------------------------------------------
<S>                                                                  <C>            <C>           <C>            <C>
Cash Flows From Operating Activities                                                 
   Net income (loss)                                                 $ (16,169)     $   68,452    $  (103,972)    $   (63,038) 
   Adjustments to reconcile net income (loss) to net cash provided by
     (used in) operating activities:
     Depreciation                                                        1,169           3,768          4,973           5,042
     Loss on disposals of equipment                                          -           3,014              -               -
     Deferred compensation expense (income)                                  -        (113,127)        23,468          31,664
     Forgiveness of accrued interest                                         -         (32,402)             -               -
     Changes in current assets and liabilities:
       Trade accounts receivable                                       (31,958)         34,728          2,359          26,827
       Inventories                                                        (205)         54,271         29,095          39,134
       Prepaid expenses and other                                            -           3,134          7,935          (4,109)
       Trade accounts payable                                            4,932           1,372          4,947         (36,044)
       Accrued expenses                                                 36,579         (19,015)        14,423         (25,256)
                                                                     --------------------------------------------------------
          NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES           (5,652)          4,195        (16,772)        (25,780)
                                                                     --------------------------------------------------------

Cash Flows From Investing Activities
   Purchases of equipment                                                    -            (852)        (3,088)         (1,719)
   Proceeds from disposal of equipment                                       -           2,342              -               -
                                                                     --------------------------------------------------------
          NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES                -           1,490         (3,088)         (1,719)
                                                                     --------------------------------------------------------

Cash Flows From Financing Activities
   Net proceeds (payments) under line-of-credit agreement                    -               -        (17,505)         12,583
   Redemption of common stock                                                -               -           (840)              -
                                                                     --------------------------------------------------------
          NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES                -               -        (18,345)         12,583
                                                                     --------------------------------------------------------

          NET INCREASE (DECREASE) IN CASH                               (5,652)          5,685        (38,205)        (14,916)

Cash
   Beginning                                                            16,189          10,504         48,709          63,625
                                                                     --------------------------------------------------------
   Ending                                                            $  10,537      $   16,189    $    10,504     $    48,709
                                                                     ========================================================

Supplemental Disclosures of Cash Flow Information
   Cash payments for:
     Interest                                                        $       -      $        -    $    16,936     $    16,853
     Income taxes                                                          100             100            100             100
                                                                     ========================================================

Supplemental Schedule of Noncash Investing and Financing Activities
   Conversion of subordinated debentures into common stock (Note 4)  $       -      $  129,609    $         -     $         -
   Forgiveness of accrued interest (Note 4)                                  -          32,402              -               -
                                                                     ========================================================
</TABLE>

See Notes to Financial Statements.


                                      F-6

<PAGE>   17
CONCOURSE CORPORATION

NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE 1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 

NATURE OF BUSINESS: Concourse Corporation is engaged in the business of
developing and marketing computer-assisted instruction programs and packaged
instructional seminars for business and industry, as well as related consulting
services. Credit terms are established on a customer-by-customer basis. Since
October 1996, all of the Company's revenue has been generated by the Company's
president, who is also its only employee.

REVENUE RECOGNITION: The Company recognizes revenue upon either the shipment of
its products to the customer or upon completion of each seminar conducted on
behalf of a customer.

INVENTORIES: Inventories, consisting primarily of finished goods (educational
materials), are stated at the lower of cost (specific-identification method) or
market. The first-in, first-out (FIFO) method is used for valuing inventoriable
production and outside vendor service costs.

DEPRECIATION: Depreciation for office equipment and furniture is computed by
using the straight-line method based on estimated useful lives of five to seven
years.

NET INCOME (LOSS) PER SHARE: The Company has adopted Statement of Financial
Accounting Standards No. 128 (SFAS No. 128), Earnings Per Share, which
superseded APB Opinion No. 15. SFAS No. 128 requires the presentation of
earnings per share by all entities that have common stock or potential common
stock, such as options, warrants, and convertible securities, outstanding that
trade in a public market. Those entities that have only common stock outstanding
are required to present basic earnings per share amounts. Basic per share
amounts are computed, generally, by dividing net income or loss by the
weighted-average number of common shares outstanding. All other entities are
required to present basic and diluted per share amounts. Diluted per share
amounts assume the conversion, exercise, or issuance of all potential common
stock instruments unless the effect is antidilutive, thereby reducing a loss or
increasing the income per common share. The Company has applied Statement No.
128 for all periods presented, as required by the statement.

During 1997, the Company had no potential common stock instruments outstanding.
During 1996, 1995, and 1994, the Company had convertible subordinated debentures
outstanding. However, the inclusion of those debentures in the calculation of
diluted net income (loss) per share would have had an antidilutive effect and,
accordingly, were not included in this calculation. Therefore, basic and diluted
income (loss) per share amounts are the same for each period presented.

INCOME TAXES: Deferred income tax assets and liabilities are computed annually
for temporary differences between the financial statement and tax basis of
assets and liabilities that will result in taxable or deductible amounts in the
future. Deferred taxes are based on enacted tax laws and rates applicable to the
periods in which the differences are expected to affect taxable income.
Valuation allowances are established when necessary to reduce deferred tax
assets to the amounts more likely than not to be realized. Income tax expense is
the tax payable or refundable for the year plus or minus the change during the
year in deferred tax assets and liabilities.



                                      F-7
<PAGE>   18
CONCOURSE CORPORATION

NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE 1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
        (CONTINUED) 

MANAGEMENT ESTIMATES: The preparation of financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

FAIR VALUE OF FINANCIAL INSTRUMENTS: The financial statements include the
following financial instruments: cash, trade accounts receivable, and accounts
payable. No separate comparison of fair values versus carrying values is
presented for the aforementioned financial instruments since their fair values
are the carrying amounts reflected on the balance sheet. The aggregate fair
values of the financial instruments would not represent the underlying value of
the Company.


NOTE 2.  LINE OF CREDIT

The Company had a $39,000 bank line-of-credit agreement secured by cash
equivalents and a corporate guarantee. As of December 31, 1994, the balance
outstanding under this agreement was $17,505. There was no balance outstanding
as of December 31, 1995, as the agreement expired in October 1995. The Company
did not obtain a renewal of this agreement in 1996 or 1997.


NOTE 3.  INCOME TAXES

A reconciliation of federal statutory income taxes to the Company's effective
tax provision is as follows:


<TABLE>
<CAPTION>
                                                                         December 31
                                                 ---------------------------------------------------------------
                                                  1997              1996             1995               1994
----------------------------------------------------------------------------------------------------------------
<S>                                              <C>               <C>               <C>               <C>      
Computed "expected" federal tax
  expense (benefit) at statutory rates           $  (5,000)        $   23,000        $ (34,000)        $(21,000)
Effect of income taxed at lower rates                3,000            (12,000)          12,000           11,000
State income taxes, net of federal benefit               -             (3,000)               -                -
Net operating losses unused (used)                   2,000            (10,000)          19,000            2,000
Other                                                    -              2,000            3,000            8,000
                                                 ---------------------------------------------------------------
                                                 $       -         $        -        $       -         $      - 
                                                 ===============================================================
</TABLE>

Net deferred taxes included the following at December 31, 1997, 1996, 1995, and
1994:


<TABLE>
<CAPTION>
                                                  1997              1996              1995            1994
--------------------------------------------------------------------------------------------------------------
<S>                                            <C>               <C>             <C>               <C>
Deferred tax assets                            $   289,000       $   287,000     $   297,000       $ 278,000
Valuation allowance for deferred tax
  assets                                          (289,000)         (287,000)       (297,000)      $(278,000)
                                               ---------------------------------------------------------------
Net                                            $         -       $         -     $         -               -
                                               ===============================================================
</TABLE>


                                      F-8
<PAGE>   19
CONCOURSE CORPORATION

NOTES TO FINANCIAL STATEMENTS
-----------------------------------------------------------------------------

NOTE 3.     INCOME TAXES (CONTINUED)
Deferred tax assets are comprised of the  following at December 31, 1997,  1996,
1995, and 1994:

<TABLE>
<CAPTION>

                                                  1997              1996             1995              1994
--------------------------------------------------------------------------------------------------------------
<S>                                        <C>                <C>               <C>               <C>              
Loss carryforwards                         $         289,000  $       287,000   $     275,000     $    263,000
Accrued expenses                                           -                -          22,000           15,000
                                           -------------------------------------------------------------------
Subtotal                                             289,000          287,000         297,000          278,000
                                                           
Valuation allowance for deferred tax
  assets                                            (289,000)        (287,000)       (297,000)        (278,000)
                                           -------------------------------------------------------------------
                                           $               -  $             -   $           -     $          -
                                           ===================================================================
</TABLE>

At December 31, 1997, the Company has approximately $1,927,000 of federal net
operating loss (NOL) carryforwards available to offset future taxable income.
These NOL carryforwards expire as follows:

<TABLE>
<CAPTION>

Years ending December 31:
<S>                                                                                           <C>               
   1998                                                                                       $          115,000
   1999                                                                                                  876,000
   2000                                                                                                  442,000
   2001                                                                                                  154,000
   2004                                                                                                   23,000
   2006                                                                                                   76,000
   2008                                                                                                   37,000
   2009                                                                                                   30,000
   2010                                                                                                   81,000
   2011                                                                                                   77,000
   2012                                                                                                   16,000
                                                                                              ------------------
                                                                                              $        1,927,000
                                                                                              ==================
</TABLE>

The planned merger (see Note 10), if completed, will limit the annual
availability of the aforementioned NOL carryforwards.


NOTE 4. SUBORDINATED CONVERTIBLE DEBENTURES

In February 1986, the Company sold $473,000 of 12.5 percent subordinated
convertible debentures pursuant to registration exemptions provided by federal
and state securities laws. The debentures were issued in $1,000 denominations
and at the time of issuance were convertible into common stock at $1.25 per
share, or 800 shares per denomination.








                                      F-9
<PAGE>   20


CONCOURSE CORPORATION

NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE 4. SUBORDINATED CONVERTIBLE DEBENTURES (CONTINUED)

During 1987, the Company negotiated revisions with the debenture holders whereby
the maturity date was extended to January 1, 1990, as well as changes to the
conversion features and interest payments.

As a result of insufficient funds, the Company was unable to repay the
debentures which became due and payable on January 1, 1990. The remaining
principal of outstanding debentures was $129,609 at December 31, 1995, as a
result of periodic payments made to debenture holders during 1990 to 1992,
including interest thereon. The remaining accrued interest related to these
debentures was $32,402 at December 31, 1995. During 1996, these debentures were
converted into 648,052 shares of common stock. The related accrued interest of
$32,402 was forgiven and is included as a component of nonoperating income for
the year ended December 31, 1996.


NOTE 5.  DEFERRED COMPENSATION

In 1989, the Company entered into nonqualified deferred compensation agreements
for the benefit of two key executives, one of which is a stockholder. The
agreements provided for a postretirement benefit to be paid for ten years
immediately following retirement. The agreements also contained early death and
disability benefit provisions. During 1996, the two key executives covered by
the agreements released the Company from these deferred compensation obligations
in full, and no additional future benefit payments related to these agreements
are required by the Company. Accordingly, in 1996, the Company recognized income
resulting from the reversal of the related deferred compensation obligation.


NOTE 6.  LEASE COMMITMENT

The Company had a lease commitment on the office space it used to conduct
business during 1994 and 1995. Rent expense was $33,179 and $30,933 for 1995 and
1994, respectively. This lease commitment expired at December 31, 1995. The
Company renewed this commitment for reduced space through October 1996, at which
point the lease was terminated altogether. Since this time, the Company has
operated out of the home of its president, who is also its only employee. No
other lease commitments have been incurred during the year ending December 31,
1997.


NOTE 7.  LITIGATION

The Company was named in a legal action alleging violations of copyright laws
and illegal trade practices. This litigation was fully settled in 1995.


NOTE 8.  MAJOR CUSTOMER

As of and for the year ended December 31, 1997, 96 percent of the Company's
trade accounts receivable were from one customer, and 53 percent of the
Company's revenues for the year were from this same customer. There were no
major customers for the years ending December 31, 1996, 1995, or 1994.



                                      F-10
<PAGE>   21

CONCOURSE CORPORATION

NOTES TO FINANCIAL STATEMENTS

NOTE 9.   AUTHORIZED SHARES

The Company has 10,000,000 shares of capital stock authorized for issuance. Of
these shares, 6,000,000 are designated as common stock and 4,000,000 are
undesignated.


NOTE 10.  MERGER

In September 1998, the Company and its newly formed and wholly-owned subsidiary,
Peoples Acquisition Corporation (PAC), entered into an Amended and Restated
Agreement and Plan of Merger (Merger Agreement) with Peoples Publishing Group,
Inc. (PPG), a Pennsylvania corporation. Under the Merger Agreement, which is
effective as of June 4, 1998, PPG will be merged with PAC and become the
surviving corporation. Following the merger, the shareholders of PPG will own
approximately 95 percent of the Company's outstanding voting capital stock. PPG,
with principal offices in Maywood, New Jersey, is engaged primarily in the
publishing of books for use in elementary and secondary schools, grades K
through 12.

The merger is expected to be completed on or about October 1, 1998. Closing of
the merger is contingent upon a number of factors, including the continued
accuracy of warranties and representations made in the Merger Agreement by each
party. There is no assurance that the merger will be completed.


NOTE 11.  SUBSEQUENT EVENT

Subsequent to year end, the Company's general counsel agreed to forgive
approximately $17,000 of indebtedness owed by the Company. The Company also
issued 75,000 shares of common stock to its general counsel for services
rendered to the Corporation, valued by the Board of Directors at approximately
$930.





                                      F-11
<PAGE>   22



                                   SIGNATURES

         In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant has caused this Amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.

                                         Peoples Educational Holdings, Inc.


                                   By:   /s/ James J. Peoples 
                                         -------------------------------------
                                         James J. Peoples, Chairman, President
Dated: February 4, 1999                  and Chief Executive Officer