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

                                 FORM 10-KSB/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 (No Fee Required)
           For the transition period from            to
                                          ----------    ------------

                         Commission File Number 0-14731
                                                -------


                           ACT Teleconferencing, Inc.
--------------------------------------------------------------------------------
          (Name of small business issuer as specified in its charter)


Colorado                          84-1132665
-------------------------------   -------------------------------------
(State or other jurisdiction of     (IRS Employer Identification No.)
incorporation or organization)


Issuer's telephone number:  (303) 235-9000
                            ----------------------------------------------------

Securities registered under Section 12(b) of the Exchange Act:

Title of each class                  Name of each exchange on which registered
None                                 None
------------------------------       -------------------------------------------

Securities registered under Section 12(g) of the Exchange Act:
Common stock, no par value
--------------------------------------------------------------------------------
                               (Title of Class)
Redeemable Warrants to purchase Common Stock
--------------------------------------------------------------------------------
                                (Title of Class)


     Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15 (d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes [ X ]        No [ ]

     Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [   ]

                        This report contains 42 pages.
<PAGE>
 
     State issuer's revenues for its most recent fiscal year.   $10,234,403
                                                            --------------------

     State the aggregate market value of the voting stock held by non-affiliates
computed by reference to the price at which the stock was sold, or the average
bid and asked prices of such stock, as of a specified date within the past 60
days.  (See definition of affiliate Rule 12b-2 of the Exchange Act).  Note:  If
determining whether a person is an affiliate will involve an unreasonable effort
and expense, the issuer may calculate the aggregate market value of the common
equity held by non-affiliates on the basis of reasonable assumptions, if the
assumptions are stated.  The aggregate market value of the voting stock held by
non-affiliates of the Company as of February 19, 1998 was: $20,073,150.
                                                           -----------  
Assumptions:  All directors are affiliates, and the following officers are
affiliates:  David Holden, Charles T. Stout, Gene Warren and Gavin Thomson.


                        (ISSUERS INVOLVED IN BANKRUPTCY
                    PROCEEDINGS DURING THE PAST FIVE YEARS)


     Check whether the issuer has filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court.
Yes [    ]    No [     ] n/a


                   (APPLICABLE ONLY TO CORPORATE REGISTRANTS)


     State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date.  Common Stock, no par value:
                                                   ---------------------------
3,612,758 shares as of March 13, 1998.
--------------------------------------
 

                      DOCUMENTS INCORPORATED BY REFERENCE


     If the following documents are incorporated by reference, briefly describe
them and identify the part of the Form 10-KSB (e.g. Part I, Part II, etc.) into
which the document is incorporated (1) any annual report to security holders;
(2) any proxy or information statement; and (3) any prospectus filed pursuant to
Rule 424(b) or (c) of the Securities Act of 1933 ("Securities Act").  The listed
documents should be clearly described for identification purposes (e.g. annual
report to security holder for fiscal year ended December 24, 1990).


                      Documents incorporated by reference:
                                        
                                   Document
                                   --------
Proxy Statement to be used for the Annual Meeting of Stockholders to be held May
13, 1998 (the "Proxy Statement") to be filed with the Commission prior to April
10, 1998 is incorporated by reference herein. 

Item(s) Into Which Incorporated         
-------------------------------         
Part III, Items 9 through 12 inclusive   
                                       

Transitional Small Business Disclosure Format (Check one):  Yes [    ]  No [ X ]


                                    Page 2
<PAGE>
 
                           ACT Teleconferencing, Inc.

                                  Form 10-KSB
                                        

Table of Contents
<TABLE>
<CAPTION>
 
 
PART I.                                                               Page No.
                                                                      --------
<S>              <C>                                                  <C>
     Item 1.     Business                                                    6
     Item 2.     Facilities                                                 11
     Item 3.     Legal proceedings                                          11
     Item 4.     Submission of matters to a vote of security holders        11
 
 
 
PART II.
 
     Item 5.     Market for registrants' common equity and related          12
                 stockholder matters
     Item 6.     Management's discussion and analysis of financial          13
                 condition and results of operations
     Item 7.     Financial statements and supplementary data                19
                 (see Table of contents, page 19)
     Item 8.     Changes in and disagreements with accountants              36
 
 
 
PART III.
 
     Item 9.     Directors and executive officers of the registrant         36
     Item 10.    Executive compensation                                     36
     Item 11     Security ownership of certain beneficial owners and        36
                 management
     Item 12.    Certain relationships and related transactions             36
     Item 13.    Exhibits and reports on Form 8-K                           37
 
</TABLE>

                             Introductory Statement



CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE
                   SECURITIES LITIGATION REFORM ACT OF 1995.
                                        
                                        
The foregoing section of this report contains forward-looking statements, within
the meaning of Section 27A of the Securities Act of 1933 as amended and Section
21E of the Securities Exchange Act of 1934 as amended, which are subject to
certain risks and uncertainties. Certain such statements are discussed in this
section together with specific cautionary statements identifying factors that
could cause the actual results to differ materially from expectations contained
in each such statement. Forward-looking statements also may be implicit but not
readily identified within the context of other statements. In general, among the
factors that could affect the Company's actual results and could cause results
to differ from those

                                    Page 3
<PAGE>
 
contained in the forward-looking statements are the ability of the Company to
generate growth in audio teleconferencing, the general rate of development of
the market for videoconferencing services, and opportunities to explore new
foreign markets. Other factors could also cause actual results to vary
materially from the anticipated results covered in such forward-looking
statements. In addition, statements containing expressions such as "believes,"
"anticipates," "plans," or "expects" used in the Company's periodic reports on
Forms 10-K and 10-Q filed with the SEC are intended to identify forward-looking
statements. The Company cautions that these and similar statements included in
this report and in previously filed periodic reports including reports filed on
Forms 10-K and 10-Q, are further qualified by important factors that could cause
actual results to differ materially from those in the forward-looking statements
which include but are not limited to:

 . Statements in regard to the availability of Integrated Services Digital
  Network ("ISDN") service in most major metropolitan markets. The speed of
  introduction of ISDN may differ greatly in various markets.
 . Statements in regard to the Company actively seeking opportunities for
  expansion through the establishment of additional American, European and Asia-
  Pacific sales offices and teleconferencing service operations centers. The
  Company may be limited in its growth plans by the availability or otherwise of
  appropriate management, capital or other resources.
 . Statements in regard to the Company's intention to serve as a technical
  outsource for certain customers teleconferencing needs. Certain large
  customers will not require this resource and will incorporate these resources
  "in-house."
 . Statements in regard to the Company's intention to expand its domestic audio,
  video and data teleconferencing operations by establishing or acquiring
  additional bridges and sales offices in selected cities in North America,
  Europe and Asia.
 . Statements that these plans, as and when fulfilled, will permit the Company to
  improve services to existing multinational customers, secure larger number of
  new customers, and reduce operation costs per call as the volume of calls
  handled by each bridge or sales office grows. The Company may be limited in
  its growth plans by the availability or otherwise of appropriate management,
  capital or other resources.
 . Statements that teleconferencing is available in Europe and Asia, but, in the
  Company's view, it is not yet widely used and may hold the potential for rapid
  growth. This will depend on future economic growth, liberalization of
  telecommunications, the adoption of teleconferencing into different work
  cultures and a variety of other non-quantifiable factors.
 . Statements that the market for videoconferencing is expected to continue to
  grow. This will depend on the price, cost and availability of different
  products and technologies.
 . Statements that to the extent that smaller, more innovative service companies
  are creating a new niche market, this industry can be viewed as significant
  and emerging. This will depend mainly on the ability of smaller companies to
  provide competitive service differentiation.
 . Statements that despite the size and name recognition of the long-distance
  companies, the Company believes its primary competition will come from smaller
  teleconferencing services companies similar to itself. This will depend mainly
  on the ability of smaller companies to provide competitive service
  differentiation.
 . Statements that additional competition will also develop from more
  sophisticated telephone sets, PBX systems, or customer-owned bridges. This
  appears inevitable, but may develop at different rates in different countries
  at different times.
 . Statements that government regulation or licensing currently has no material
  impact on the delivery of teleconferencing services in the United States, the
  United Kingdom, or in Europe, where the Company now conducts its business, or
  in other countries of the Pacific rim where the Company may consider future
  expansion. Government regulations may change at any time in any particular
  country.

                                    Page 4
<PAGE>
 
 . Statements that the Company's policy with regard to international expansion is
  to enter countries with developed infrastructures where there is an
  expectation for rapid and high demand for teleconferencing services (video,
  audio and data).
 . Statements that implementation of this AT&T agreement, although modified by
  the arrangement with Tandberg, is expected to take effect in 1998.
  Implementation will depend upon product suitability, customer preferences,
  pricing and general market conditions and implementation cannot be assured.
 . Statements that the Company anticipates that substantial real growth in audio,
  video and data teleconferencing revenues will continue in the United States,
  United Kingdom, Europe, Australia and Asia Pacific. The existence of competing
  or alternate conferencing technologies cannot be ruled out and growth cannot
  therefore be assured.


The following additional factors may cause actual results to vary materially
from expected results: a decline in demand for teleconferencing products and
services, reduction in the growth rate of new and existing markets; delays of
scheduled openings of new operations; the effect of economic conditions; a
decline in the market acceptability of teleconferencing; changes in regulation
or legislation; political and economic instability in international markets; a
decline in the demand for video conferencing hardware, a decrease in the desire
of customers to outsource teleconferencing,; the loss of a major customer,
changes in interest rates causing an increase in finance charges, loss or
retirement of key executives; flucuations in foreign exchange rates, tariffs and
other barriers and with respect to legal action; the discovery of facts not
presently known to the Company.















                                    Page 5
<PAGE>
 
                                     PART I


Item 1.        Business
               --------



General

ACT Teleconferencing, Inc. (the "Company") provides and markets a broad range of
high-quality audio, video and data teleconferencing services and distributes
related teleconferencing products to businesses and other organizations in the
United States, United Kingdom, Netherlands, Belgium, France and Australia. The
Company maintains operations centers in these countries, where it has installed
and operates computer-managed telecommunications equipment known as "bridges"
for conducting multiparty audio conferences.

The Company's audio teleconferencing services accommodate multiparty conferences
with a number of participants at levels of audio volume and clarity that are not
generally available on most office telephones. Audio teleconferencing enables
routine meetings, training, information distribution and other business meetings
to take place where travel makes it impractical, inconvenient, or expensive to
assemble a large group on short notice or with regular frequency. The Company
offers a variety of services at different price levels depending on customer
needs and business volume. The Company's customers include small businesses,
multinationals, law firms, accounting firms, banks, and a variety of other
businesses and entities.

The Company's video conferencing bridging service commenced in 1996 in the
United Kingdom and connects video participants by means of a video multipoint
control unit (MCU) under the ActionViewTM brand name.

The Company also offers a variety of video teleconferencing products including
the Tandberg, Picturetel, Sony, and RSI brand names. These products are
competitively priced, stand-alone systems that permit individuals or small
groups to send and receive video and audio signals over digital telephone
systems. These systems comply with international standards and are connected
primarily over the Integrated Services Digital Network ("ISDN") service, which
is available in most major metropolitan markets.  The Company's audio and data
teleconferencing services can be provided over any telephone network.

The Company markets data teleconferencing services and software, as an adjunct
to its audio teleconferencing services and also distributes data
teleconferencing software that permits clients to interconnect desktop computers
by standard modem to simultaneously

                                    Page 6
<PAGE>
 
conduct audio and data teleconferences.

The Company markets its services and certain products through its North
American, European and Australian marketing operations and through commission-
based sales representatives. The Company is actively seeking opportunities for
expansion through the establishment of additional American, European and Asia-
Pacific sales offices and teleconferencing service operations centers.


The Company and its Subsidiaries

The Company was incorporated under the laws of Colorado in 1989, and commenced
operations on January 2, 1990. Through a reorganization in October 1992, the
Company acquired all of the outstanding shares of certain related companies,
which were owned by substantially the same shareholders who owned the Company's
shares, transferred its operating assets to its subsidiaries, and began
operations as a holding company.

In 1992 the Company acquired 60 percent of ACT Teleconferencing Limited, a
majority owned United Kingdom subsidiary to conduct operations in the United
Kingdom. In July 1995 the Company acquired 100% of the issued share capital of
NBS, Inc., a Minnesota corporation, and changed its name to ACT
VideoConferencing, Inc. In September 1995 the Company commenced audio
teleconferencing operations in continental Europe through a wholly owned
subsidiary, ACT Teleconferencing B.V., a Netherlands corporation.

In May 1997 the Company formed ACT Teleconferencing (Pty) Limited, in Australia
and purchased 80% of the issued share capital. In December 1997 the Company
acquired 80% of the issued shares of Multimedia and Teleconferencing Solutions,
Limited (MaTS). MaTS is a value-added videoconferencing reseller based in the
United Kingdom. Since the close of the 1997 year, the Company formed ACT
Teleconferencing France, S.A., for the purpose of operating a teleconferencing
service in France.


The Company's Plan of Business

Key elements of the Company's business strategy are: (i) to establish itself
globally as a recognized provider of reliable, high quality, competitively
priced audio, video and data teleconferencing services and products; (ii) to
position itself as a single-source provider of customized solutions for customer
teleconferencing needs; (iii) to maintain the technical expertise necessary to
evaluate and implement such technologies to serve its customers' requirements;
and (iv) to expand operations commensurate with available capital and market
opportunities through geographic expansion, internal development, and
acquisitions.

                                    Page 7
<PAGE>
 
The Company intends to expand its domestic audio, video and data
teleconferencing operations by establishing or acquiring additional audio
bridges, video multipoint control units (MCUs) and sales offices in selected
cities in North America, Europe and Asia. These plans, as and when fulfilled,
will permit the Company to improve services to existing multinational customers,
secure larger numbers of new customers, and reduce operation costs per
conference as the volume of conferences handled by each bridge or MCU grows.


Background

Early forms of telephone conference calls depended on the skills of a telephone
company operator and manually operated equipment. In the 1980s, the availability
of reliable teleconferencing equipment prompted the growth of independent
teleconferencing providers. The U.S. federal court decision which resulted in
the breakup of AT&T, separated telephone carriers into interexchange carriers
("IECs"), such as AT&T, and local exchange carriers ("LECs"), such as US West.
The LECs were initially prohibited from providing audio teleconferencing, except
in limited areas.

Since the early 1980s, awareness and acceptance of teleconferencing and
innovations in audio, data, and video communications have resulted in a
significant increase in the use of teleconferencing. Audio conferencing
equipment now accommodates full-duplex transmission (simultaneous transmission
and reception), eliminating "clipping" of words among participants during
conversation. The equipment is also able to clarify and equalize sound volume
among participants. New equipment accommodates dial-in and dial-out connections
so that participants may participate either by awaiting a call from the operator
or by placing a call to the service center. The equipment also permits digital
recording, polling and expanded capacity for larger conferences.

Advances in office equipment technology and changes in workstyles have
contributed to the increased use of teleconferencing. Decentralized and
networked management information systems have also empowered workers at all
levels with faster access to data.

Teleconferencing provides a vehicle for bringing decision makers together more
frequently, at lower cost, and with fewer scheduling conflicts than is possible
for face-to-face meetings. While not replacing physical meetings, many
organizations looking for increased productivity use teleconferencing as a
convenient, lower-cost alternative for sales, operations, financial review,
training programs, marketing presentations, press conferences, workshops,
seminars, and Board or other meetings.

Increased competition among various telephone carriers has also improved the
quality and availability of basic telephone service. A number of relatively
small companies have


                                    Page 8
<PAGE>
 
created a market niche for teleconferencing services in the United States and
the United Kingdom, notwithstanding the size and financial strength of major
telecommunications companies. Teleconferencing is available in continental
Europe and Asia, but, in the Company's view, it is not widely used and holds the
potential for rapid growth.


Products and Services

The Company offers a broad range of services and products, primarily to
corporate business clients and institutions. Revenues are earned by charging
clients a fee per minute plus charges related to transmission costs.

In addition to basic conference call services, the Company offers a range of
enhanced services that allow customers to specify a particular feature for a
conference. For example, the Company will place reminder calls, conduct
electronic polling, record the conference and make it available for dial-in
access and digital playback to persons who were unable to participate. For high-
volume customers who prefer to own their own equipment, the Company provides
services for the purchase, installation, and operation of the bridge and also
contracts to operate the bridge for the customer. The Company is an authorized
distributor of desktop conference telephones that provide enhanced sound
quality, and sells such conference telephones to its customers.

The Company has devised and implemented a quality management program to track
the results of internal operations, assess service quality, and measure customer
satisfaction. The Company offers its services over fully digital bridges, and
has increased and upgraded capacity commensurate with growth.


The Company extends credit to all its major customers. Infrequent users of audio
teleconferencing bill their calls to a major credit card. Other customers are
granted credit based upon individual creditworthiness. The Company obtains
volume discounts on long-distance transmission from long-distance telephone
companies, and re-markets that service to its customers.

Video teleconferencing has grown substantially since its first introduction in
the 1980s. The earliest applications involved expensive systems in dedicated
locations used primarily for large group conferences. The market has evolved
with the development of "roll about" systems for use by a small group of two to
eight individuals.  More recently available are relatively inexpensive desktop
systems. Virtually all manufacturers of these systems use the H.320 standard for
compression/decompression of video signals in conjunction with personal
computers.

                                    Page 9
<PAGE>
 
Marketing

The Company has adopted a strategy of developing and providing reliable, high
quality services to create and maintain strong relationships with its clients
and to foster client loyalty that results in repeat usage. The Company markets
its teleconferencing services directly through its own employees, through
commissioned sales representatives, and through a commission-based referral
arrangement with certain long-distance carriers.

The principal source of business is repeat business from current customers. The
Company employs sales personnel in its Denver, London, Amsterdam, Paris and
Sydney offices. The Company also attends trade shows and places limited
advertising in trade publications.

Suppliers

The Company is not dependent on any single carrier or supplier for any of the
services or products the Company sells. The Company has negotiated volume
discounts with its primary carriers, and believes it could negotiate similar
arrangements at similarly competitive prices with one or more other carriers
should its current carriers be unable to continue to provide service at
competitive prices. The equipment purchased by the Company for use in its
operations is also available from a variety of suppliers, some of which compete
in the teleconferencing services business.


Competition

The Company believes the principal competitive factors in the teleconferencing
market are reputation, service quality, reliability, price and name recognition.
The location of equipment can also be a competitive factor as a local bridge or
MCU can reduce transmission charges for teleconference participants. A local
sales office makes local marketing more personal and effective. The Company
offers price-competitive services as well as enhanced services at higher
pricing.

To the extent that smaller, more innovative service companies are creating a new
niche market, this industry can be viewed as significant and emerging. To the
extent that carriers such as AT&T, British Telecom, MCI, and Sprint provide
these services, the market can be viewed as part of the telecommunications
industry. Competition, therefore, is on two levels: with carriers as part of a
broad base of communication service and with relatively new and smaller
enterprises catering specifically to the teleconferencing application. Despite
the size and name recognition of the long-distance companies, the Company
believes its primary competition comes from smaller teleconferencing services
companies similar to itself.

The IECs and the LECs have had both positive and adverse effects on the
Company's 


                                    Page 10
<PAGE>
 
business. Through sizable advertising budgets and marketing resources, the
telephone utilities have stimulated the market for teleconferencing, thereby
providing smaller companies with a large market. Although the IECs' large
long-distance line capacity enables the IECs to generally offer a price
advantage to high-volume customers, higher prices are generally charged by the
IECs to smaller and medium volume customers. This creates a pricing niche that
enables the Company and others to compete for the teleconferencing business of
medium and smaller volume customers.

Additional competition will also develop from more sophisticated telephone sets,
PBX systems, or customer-owned bridges. Currently, most business desk telephones
can conference three lines. PBX systems are able to conference several calls in
addition to those connected on a handset, and technology is available to enhance
PBX capability up to six calls. PBX-handled conference calls typically have poor
sound quality, as the addition of each line weakens the overall sound volume.

Intellectual Property
The Company seeks to protect its proprietary information and business practices
as trade secrets. The Company's United Kingdom subsidiary has a British
trademark for "CONFERCALL" and the Company owns British trademarks for "ACT" and
"ACTIONCALL" which it licenses to said subsidiary. "ACT Teleconferencing" is
trademarked in the Benelux countries. "ACT" is not trademarked in the United
States since a wide variety of companies use "ACT" in their corporate name or
advertising; however, the Company believes it is the only enterprise currently
using "ACT" in the teleconferencing industry. Nevertheless, the use of "ACT" by
a variety of other enterprises makes trademark protection or the defense thereof
prohibitively expensive. The Company has developed customized copyrighted
software, which it considers proprietary, for service and quality control
functions, and has also developed technical know-how with respect to the
operation of telecommunications equipment. The Company requires each of its
employees to execute a nondisclosure agreement for the protection of the
Company's confidential information. There can, however, be no assurance that the
Company will be able to protect its proprietary information, business practices,
or trademarks from use by competitors, or that the Company would be successful
in any litigation it might bring to protect its proprietary information,
business practices, or trademarks. The Company holds no patents.

                                    Page 11
<PAGE>
 
Regulation
Government regulation or licensing currently has no material impact on the
delivery of teleconferencing services in the United States, the United Kingdom,
in Europe, or in Australia, where the Company now conducts its business, or in
other countries of the Pacific rim where the Company may consider future
expansion.

Employees
As of December 31, 1997, the Company had 150 employees: 72 in North American
operations; 65 at its subsidiary in London, England; 5 employees at its
Netherlands subsidiary, 6 at its Sydney, Australia subsidiary and 2 at its
Paris, France operation. Of the 150 total worldwide employees, 81 are in
teleconferencing operations, 34 are in sales and marketing, and 35 are in
management and administration.


Item 2.   Facilities
          ----------

The Company currently leases office and operations space at its locations in
Denver, New Jersey, London, Amsterdam, Brussels, Sydney, and Paris. All
operations are in quality office locations either in a major downtown area or
close to the city center. These leases all expire or are renegotiable over the
next five years. Forward lease commitments are not significant in relocation to
total ongoing operating expenses and all lease costs are in line with generally
available market rentals.

Item 3.   Legal proceedings
          -----------------

The Company is not involved in any material legal proceedings.


Item 4.   Submission of matters to a vote of security holders
          ---------------------------------------------------

During the fourth quarter of its fiscal year ended December 31, 1997, the
Company did not submit any matter to a vote of security holders.

                                     PART II

Item 5.   Market for registrants' common equity and related stockholder matters
          ---------------------------------------------------------------------

The Company's common shares have been traded on the Nasdaq SmallCap Market under
the symbol ACTT since March 11, 1996. For the period from January 2, 1997
through 

                                    Page 12
<PAGE>
 
December 31, 1997 the high and low closing sales prices for the Company's Common
Stock for each quarter as reported by NASDAQ were:

-----------------------------------------------------------------------------
1997                     Common Stock (ACTT)           Warrants (ACTTW)
-----------------------------------------------------------------------------
                          High           Low            High        Low
-----------------------------------------------------------------------------
First Quarter            $ 5.00         $ 2.88          $ .75      $ .25
Second Quarter           $ 7.50         $ 4.99         $ 2.25      $ .75
Third Quarter            $13.05         $ 8.25         $ 7.31      $ 2.88
Fourth Quarter           $ 9.13         $ 4.50         $ 4.06      $ .88
-----------------------------------------------------------------------------

As of December 31, 1997 the Company's share price was $6.125.

-----------------------------------------------------------------------------
1996                     Common Stock (ACTT)           Warrants (ACTTW)
-----------------------------------------------------------------------------
                          High           Low            High       Low
-----------------------------------------------------------------------------
First Quarter/1/            -              -              -          -
Second Quarter           $ 3.63         $ 2.63         $ 0.88     $ 0.38
Third Quarter            $ 3.63         $ 2.75         $ 0.88     $ 0.50
Fourth Quarter           $ 3.75         $ 2.13         $ 0.55     $ 0.25
-----------------------------------------------------------------------------

       /1/Common stock and warrants traded as a unit (ACTTU) during the period
       commencing March 11, 1996 until April 17, 1996. During this period, the
       unit traded at a high of $4.25 and a low of $3.13.

Stockholders. As of December 31, 1997 the Company had approximately 110 common
------------
stockholders of record and an estimated 250 additional beneficial holders whose
stock was held in street name by brokerage houses for a total of 360 
stockholders.

Warrant holders. There were approximately 200 warrant holders as of December 31,
---------------
1997.

Dividends. The Company has never paid any dividends on its common stock and
---------
expects for the foreseeable future to retain all of its earnings from operations
for use in expanding and developing its business. Any future decision as to the
payment of dividends will be at the discretion of the Company's Board of
Directors and will depend upon the company's earnings, financial position,
capital requirements, plans for expansion and such other factors as the Board of
Directors deems relevant.

                                    Page 13
<PAGE>
 
Item 6.   Management's discussion and analysis of financial condition and
          ---------------------------------------------------------------
          results of operations
          ---------------------

Overview
The Company completed another strong year in terms of both revenue growth and
geographic market expansion. Revenues grew by 65%, reflecting growth in the
market as well as additional market share gains made by the Company. Revenues in
the United States grew by 67% while United Kingdom revenues grew by 69%. Audio
conferencing revenues in developing operations (Netherlands and Australia) grew
by over 230%.

Development expenses incurred with the entry into the European (French, Belgian
and Dutch) and Australian markets as well as the company's new video operation
amounted to approximately $1.4 million and include significant corporate
resources devoted to the development of these new operating units. The Amsterdam
(Netherlands) operation, which was commenced in 1995, achieved break-even
monthly operating results during the last half of 1997.

The Company's policy with regard to international expansion is to enter
countries with developed infrastructures where there is an expectation for
eventual rapid and high growth in demand for audio, video and data
teleconferencing services. The Company will also continue to develop its United
States and United Kingdom operations, which are large and competitive markets.

The global videoconferencing market continued to achieve substantial real growth
annually both in the USA and internationally. The Company plans to enter the
video bridging services market internationally and has also expanded its product
line by offering a broader range of branded video conferencing equipment which
includes Picturetel, Tandberg and RSI in its product range. In November 1997,
ACT signed a distributor/reseller agreement with Tandberg of Norway. Tandberg is
one of the world's largest suppliers of video conferencing systems and has sales
and service support in over 50 countries. In March 1997, agreement was reached
in the United States with AT&T to co-market the Company's range of
videoconferencing systems. Implementation of this agreement, although now
modified and expanded by the arrangement with Tandberg, is expected to take full
effect in 1998.

The Company also completed the acquisition of Multimedia and Teleconferencing
Solutions (MaTS), located in the United Kingdom, which will extend video
conferencing systems representation into Europe, the Middle East and Africa.
MaTS is an accredited reseller of PictureTel, Sony and RSI and will also market
Tandberg in Europe when 

                                    Page 14
<PAGE>
 
appropriate.

Components of Revenue and Expense
The Company derives revenues principally from fees charged to clients for
teleconference "bridging" services which connect multiple parties to a
conference call, from fees for enhanced services, and from re-billing
transmission charges. The costs of teleconferencing services consist of
transmission, depreciation on equipment, salaries, benefits and expenses of
reservationists and conference coordinators. Selling, marketing, general, and
administrative expenses consist of salaries, benefits, and office expenses of
the Company's administrative, marketing, and sales organizations.

The company's policy is to achieve balanced revenue growth and avoid unnecessary
concentrations of revenue or risk. Notwithstanding the above and due to the
ratio of the growth achieved in teleconferencing, the Company is to some extent
economically dependent upon certain major customers.

Due to higher levels of volume and associated rebates, the contribution by large
customers to operating profit is not as significant. However, should the Company
lose business from any one of its top five customers for any particular reason,
the Company would, out of necessity, scale back its growth plans until a more
stable and balanced volume had been regained.

Results of Operations

Fiscal Year Ended December 31, 1997, Compared to Fiscal Year Ended December 31,
1996 
Net Revenues. Net revenues increased 65 percent to $10.2 million for the
year ended December 31, 1997, compared to $6.2 million for 1996. As in 1996,
revenue growth during the year ended December 31, 1997, resulted from increased
continuing service business to established customers and increased revenues from
higher priced enhanced services as well as from sales to new customers. During
the year ended December 31, 1997, United States audio conferencing operations
accounted for 45 percent of net revenues, compared to 44 percent for 1996.
United States net audio conferencing revenues for the year ended December 31,
1997, increased by 67 percent over net revenues for the prior year.
International net revenues for the year ended December 31, 1997, increased by 76
percent over international net revenues for the comparable prior period in 1996
and presently make up 55% of total revenues compared to 56% in the previous
year.

Cost of Teleconferencing Services. Cost of teleconferencing services increased
31 percent to $4.7 million for the year ended December 31, 1997, compared to
$3.6 million for the 

                                    Page 15
<PAGE>
 
prior year, reflecting mainly volume increases in sales of teleconferencing
services. Cost of teleconferencing services represented 46 percent of net
revenues for the year ended December 31, 1997, compared to 58 percent of net
revenues for 1996. Gross margin percentage (net revenues less costs of
conferencing services divided by net revenues) for the year ended December 31,
1997, was 54 percent, versus 42 percent during the prior year. Future increases
in gross margin can be sustained to some degree as the Company adds new
locations, increases capacity and improves recovery over its fixed and semi-
fixed costs.

Marketing, General and Administrative. Marketing, general, and administrative
expenses for the year ended December 31, 1997 were $5.4 million, or 54% of
revenue, compared to $3.5 million or 57% of revenue for 1996. The 53% increase
in such expenses, reflects the additional investment in established operations
as well as in the start up of the Company's new business units in Europe and
Australia and the entry into videoconferencing. With the exception of new
international locations, these costs are more fixed than variable. It is
therefore expected that they will, in future years, show a lower growth rate and
comprise a lower percentage of sales as the Company's net revenue grows.

Income (Loss) Before Taxes and Minority Interest. Profit before taxes and
minority interest increased by $1,021,876 to $98,227 for the year ended December
31, 1997, compared to a loss before taxes and minority interest of $923,649 for
1996. Profit before taxes and minority interest for the year ended December 31,
1997 includes the costs of approximately $1.4 million from the ongoing
development of European, Australian and videoconferencing operations.

Taxes on Income. Taxes on income increased to $332,566 for the year ended
December 31, 1997, compared to $164,591 for 1996, primarily due to increased
income earned by the Company's 60% majority-owned United Kingdom subsidiary. The
Company paid no United States, Netherlands or Australia income taxes due to
carry-forward losses incurred in these operations and has tax loss
carry-forwards of approximately $2.5 million.

Minority Interest. Minority interest increased by 69% to $202,469 for the year
ended December 31, 1997, compared to $119,867 for the comparable prior period in
1996, due mainly to increased income earned by the Company's 60% majority-owned
United Kingdom subsidiary.

Net Loss for the Year. Net loss for the year was reduced by $771,299 to a loss
of $436,803 mainly due to the revenue growth, gross margin and productivity
improvement achievements described above.

                                    Page 16
<PAGE>
 
Key ratios and statistics
Established operations are defined as "over 3 years old." New operations are
defined as "under 3 years old."

<TABLE> 
<CAPTION> 

Revenues - $000                                                1997              1996          % Change
---------------                                                ----              ----          --------
<S>                                                          <C>                <C>            <C>           
Established operations
     United States, United Kingdom                           $ 9,731            $5,793            68

New operations and products
     Netherlands, Australia, Belgium,               
     France, Video and Internet                                  503               427            18
                                                        ----------------------------------------------------
Total revenues                                               $10,234            $6,220            65
                                                        ====================================================

<CAPTION> 

Profit before taxes - $000                                     1997              1996          % Change
--------------------------                                     ----              ----          --------
<S>                                                           <C>                <C>           <C>           
Established operations                                        $1,490              $305            389
     United States, United Kingdom
New operations and products
     Netherlands, Australia, Belgium,               
     France, Video and Internet                               (1,392)           (1,229)           (13)
                                                        ----------------------------------------------------
Total profit before tax                                           98              (924)           N/M
                                                        ====================================================
<CAPTION> 

Return on sales (PBT divided by total                          1997              1996           Change
-------------------------------------                          ----              ----           ------
sales)% 
-------
<S>                                                           <C>               <C>             <C>           
Established operations                                         14.6               4.9            +9.7
New operations - (combined)                                   (13.6)            (19.8)           +6.2
                                                        ----------------------------------------------------
Net return on sales                                             1.0             (14.9)          +15.9
                                                        ====================================================
</TABLE> 
N/M - not meaningful

Cost as a percentage of sales
The following table outlines certain items in the Company's income statement as
a percentage of sales for each of the last two years:

                                              Years Ended December 31
                                                   1997      1996       Change
--------------------------------------------------------------------------------
Sales                                              100%       100%         -
Cost of teleconferencing services                 (46.2)     (58.0)      +11.8
                                              ----------------------------------
Gross profit                                       53.8       42.0       +11.8
Selling, general and administrative expenses      (39.3)     (37.1)       (2.2)
                                              ----------------------------------
Operating income before development costs          14.5        4.9        +9.6
Net development costs                             (13.6)     (19.8)       +6.2
                                              ----------------------------------

                                    Page 17
<PAGE>
 
Net income before provision for taxes and
minority interest                                  0.9       (14.9)      +15.8
Minority interest and income taxes                (5.2)       (4.6)       (0.6)
                                              ----------------------------------
Net income (loss)                                 (4.3)      (19.5)      +15.2
                                              ==================================

                                    Page 18
<PAGE>
 
Reconciliation of gross EBITDA (earnings before interest, taxes, depreciation,
amortization, minority interest) before and after development costs is as
follows:

$000                                                 1997       1996     Change
                                                     ----       ----     ------
Net income (loss) for the year                       (437)    (1,208)      771
Add interest                                           99         36        63
      taxes                                           333        164       169
      depreciation and amortization                   376        327        49
      development costs                             1,392      1,230       162
      minority interest                               203        120        83
                                                  ------------------------------
EBITDA before development costs                     1,966        669     1,297
  (deduct development costs)                       (1,392)    (1,229)     (163)
                                                  ------------------------------
EBITDA after development costs                        574       (560)    1,134
                                                      ===       =====    =====

EBITDA to total sales % (before development costs)   19.2       10.8       8.4
EBITDA to total sales % (after development costs)     5.6       (9.0)     14.6

The Company regards EBITDA (before and after development) expenses as an
important indicator of progress in established operations. EBITDA from
established operations grew by over 190% ($1.2 million) reflecting the
improvement in profitability as well as increased interest, depreciation,
amortization, minority and development charges. However, EBITDA should not be
considered in isolation to, or be construed as having greater significance than,
other indicators of the Company's performance.


Cashflow, Liquidity and Capital Resources
During the year ended December 31, 1997, net cash and cash equivalents on hand
decreased by $170,308. At December 31, 1997, the Company had cash and cash
equivalents of $451,434 compared to $621,742 in 1996. Although operating
cashflow increased by $957,115 significant cash was required to fund the
companies growth in working capital.

The Company also invested a total of $1,596,135 in additional telecommunications
equipment, software and office equipment, principally in telecommunications
systems that provide new technology and capacity for the United States, the
United Kingdom, continental Europe and Australia. The Company's total cash
requirements were funded using a mix of equity financing (via conversion of
certain share warrants) and certain lease and debt financing.

                                    Page 19
<PAGE>
 
The Company has further plans to expand its capacity, open new operations in new
international locations, and develop its videoconferencing business. The Company
has a conservative policy towards establishing the appropriate mix of debt and
equity finance. Expansion plans will continue to be financed using an
appropriate mix of internally generated cash from operations, lease financing
for capital equipment and the expected conversion of certain share warrants
expiring in March, 1999. This conversion, when completed, is expected to raise
additional proceeds of approximately $4 million.

If the warrant conversion is not completed, the Company will defer certain of
its expansion plans and examine alternative forms of debt or equity financing.
The Company believes that, given the present rate of sales and profit growth, it
has access to sufficient cash resources to meet its growth needs for future
years.

Year 2000 Conversion
In May 1998, the Company will commence a project to identify, evaluate and
implement changes to computer systems and applications necessary to ensure an
orderly year 2000 date conversion. The Company will also be communicating with
suppliers, financial institutions and others with which it conducts business to
coordinate year 2000 conversions. The total cost of compliance and its effect on
the Company's future results of operations will be determined as a part of this
project. Based on initial review, the total cost is not expected to have a
material effect on the Company's results of operation or financial statements.
There can be no assurance that the systems of other companies on which the
Company may rely will be properly converted before year 2000 or that failure to
convert by another company would not have an adverse effect on the Company's
systems or financial position.

                                    Page 20
<PAGE>
 
Item 7.           Financial statements and supplementary data
                  -------------------------------------------


                                    Contents

Report of Independent Auditors..............................................20
Consolidated Balance Sheets ................................................21
Consolidated Statements of Operations.......................................22
Consolidated Statements of Shareholders' Equity.............................23
Consolidated Statements of Cash Flows.......................................24
Notes to Consolidated Financial Statements...............................25-35

                                    Page 21
<PAGE>
 
                         Report of Independent Auditors



The Board of Directors and Shareholders
ACT Teleconferencing, Inc.

We have audited the accompanying consolidated balance sheets of ACT
Teleconferencing, Inc. as of December 31, 1997 and 1996, and the related
consolidated statements of operations, shareholders' equity 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.

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 consolidated financial statements referred to above present
fairly, in all material respects, the financial position of ACT
Teleconferencing, Inc. at December 31, 1997 and 1996, and the consolidated
results of its operations and its cash flows for the years then ended, in
conformity with generally accepted accounting principles.



                                                      ERNST & YOUNG LLP

Denver, Colorado
February 20, 1998

                                    Page 22
<PAGE>
 
                          ACT Teleconferencing, Inc.

                          Consolidated Balance Sheets
<TABLE> 
<CAPTION> 
                                                                           December 31,
                                                                     1997                1996
                                                               -----------------------------------
<S>                                                                <C>            <C> 
Assets                                                   
   Cash and cash equivalents                                       $   451,434    $    621,742
   Accounts receivable (net of allowances for doubtful               2,885,125       1,356,471
    accounts of $18,992 and $255,494 for 1997 and 1996,  
    respectively)                                        
   Prepaid expenses and other                                          203,673          55,994
   Inventory                                                           136,116         125,850
   Available for sale marketable securities                             50,000          50,000
                                                               -----------------------------------
Total current assets                                                 3,726,348       2,210,057
                                                         
   Telecommunications equipment                                      2,651,395       1,664,697
   Office equipment                                                  1,910,606         702,019
   Less: accumulated depreciation                                   (1,094,938)       (736,556)
                                                               -----------------------------------
Total equipment-net                                                  3,467,063       1,630,160
                                                         
Goodwill                                                               736,300         245,052
                                                               -----------------------------------
Total assets                                                        $7,929,711      $4,085,269
                                                               ===================================
Liabilities                                              
   Notes payable                                                   $   540,014      $   74,784
   Accounts payable                                                  1,349,337         764,520
   Accrued liabilities                                                 777,526         339,299
   Current portion of long term debt                                   253,251         177,312
   Income taxes payable                                                293,238         156,991
                                                              ------------------------------------
Total current liabilities                                            3,213,366       1,512,906
                                                         
Long-term debt                                                         613,714         395,960
Deferred income taxes                                                  117,454          41,042
Minority interest                                                      607,244         367,404
                                                         
Shareholders' equity:                                    
Preferred stock, no par value, 1,000,000 shares authorized                  -               -
          - none issued                                  
Common stock, no par value, 10,000,000 shares authorized 
  3,612,758 and 2,939,930 shares issued and outstanding in
  1997 and 1996, respectively                                        6,158,584       4,022,671
Accumulated deficit                                                 (2,729,069)     (2,292,261)
Currency translation adjustment                                        (51,582)         37,547
                                                              ------------------------------------
Total shareholders' equity                                           3,377,933       1,767,957
</TABLE> 

                                    Page 23
<PAGE>
 
<TABLE> 
<S>                                                                <C>             <C> 
                                                              ------------------------------------
Total liabilities and shareholders' equity                         $7,929,711      $4,085,269
                                                              ====================================
</TABLE> 

See notes to consolidated financial statements.

                                    Page 24
<PAGE>
 
                          ACT Teleconferencing, Inc.

                     Consolidated Statements of Operations

<TABLE> 
<CAPTION> 

                                                                  Year ended December 31,
                                                                  1997               1996
                                                            -------------------------------------
<S>                                                         <C>                 <C>  
Net revenues                                                   $10,234,403            $6,219,946
                                                         
Costs and expenses:                                      
   Cost of teleconferencing services                             4,727,236             3,604,729
   Marketing, general and administration                         5,408,940             3,538,866
                                                            -------------------------------------
Total costs and expenses                                        10,136,176             7,143,595
                                                         
Income (loss) before income taxes and minority           
   interest                                                         98,227              (923,649)
                                                         
Income taxes                                                      (332,566)             (164,591)
Minority interest in earnings of consolidated subsidiary          (202,469)             (119,867)
                                                            -------------------------------------
                                                         
Net (loss)                                                     $  (436,808)          $(1,208,107)
                                                            =====================================
                                                         
(Loss) per common share                                             $(0.14)               $(0.41)
                                                            =====================================
                                                         
Weighted average shares outstanding                              3,204,747             2,911,187
</TABLE> 

See notes to consolidated financial statements.

                                    Page 25
<PAGE>
 
                          ACT Teleconferencing, Inc.

                Consolidated Statements of Shareholders' Equity
<TABLE> 
<CAPTION> 
                                                     Common Stock
                                             -------------------------------
                                                                                                Currency
                                                                              Accumulated      Translation
                                                 Shares          Amount         Deficit        Adjustment          Total
                                             ---------------------------------------------------------------------------------
<S>                                           <C>               <C>            <C>             <C>               <C>  
Balance at December 31, 1995                    2,318,000       $2,157,940     $(1,084,154)    $      -          $1,073,786
                                                                                             
Shares issued for cash                            712,497        1,987,531          -                 -           1,987,531
                                                                                             
Expiration of put issued in connection                                                       
with prior year acquisition                           -            125,000          -                 -             125,000
                                                                                             
Reduction of purchase price related                                                          
to acquisition                                   (100,000)        (250,000)         -                 -            (250,000)
                                                                                             
Cashless exercise of employee                                                                
stock options                                       8,333             -             -                 -                -
                                                                                             
Exercise of employee stock options                  1,100            2,200          -                 -               2,200
                                                                                             
Currency translation adjustment                       -               -             -            37,547              37,547
                                                                                             
Net (Loss)                                            -               -         (1,208,107)           -          (1,208,107)
                                             ---------------------------------------------------------------------------------
Balance December 31, 1996                       2,939,930        4,022,671      (2,292,261)      37,547           1,767,957

Exercise of employee stock options                 43,500           52,000                                           52,000

Exercise of 1994 private placement warrants       514,950        1,520,834                                        1,520,834

Issuance of shares as fee to warrant
placement agent                                    33,000          115,500                                          115,500

Shares issued in connection with the
acquisition of MaTS Ltd.                           81,378          447,579                                          447,579

Currency translation adjustment                                                                 (89,129)            (89,129)

Net (Loss)                                                                        (436,808)                        (436,808)
                                             ---------------------------------------------------------------------------------
Balance December 31, 1997                       3,612,758       $6,158,584     $(2,729,069)    $(51,852)         $3,377,933
                                             =================================================================================
</TABLE> 

See notes to consolidated financial statements.

                                    Page 26
<PAGE>
 
                          ACT Teleconferencing, Inc.

                     Consolidated Statements of Cash Flows

<TABLE> 
<CAPTION> 
                                                                              Year ended December 31
                                                                             1997                 1996
                                                                    -----------------------------------------
<S>                                                                        <C>                 <C> 
Operating activities
Net (loss)                                                                 $(436,808)          $(1,208,107)
Adjustments to reconcile net income to
   net cash used for operating activities:
     Depreciation                                                            358,382               288,670
     Amortization of goodwill                                                 18,054                38,463
     Deferred income tax                                                      76,416                22,491
     Minority interest                                                       202,469               119,867
                                                                    -----------------------------------------
 Cashflows before changes in operating assets and liabilities                218,513              (738,616)
 Changes in operating assets and liabilities (Net of effect of
 business combinations):
     Accounts receivable                                                  (1,310,000)             (676,021)
     Inventory                                                                73,276               (14,376)
     Prepaid expenses and other assets                                      (124,612)              (25,774)
     Accounts payable                                                        424,460               162,867
     Accrued liabilities                                                     356,356               175,214
                                                                    -----------------------------------------
Net cash used for operating activities                                      (362,007)           (1,116,706)

Investing activities
Property and equipment purchases                                          (1,618,359)             (759,337)
Short Term Notes                                                             (26,739)                 -
Investment in marketable security                                               -                  (50,000)
Cash paid for MaTS acquisition net of cash acquired                         (101,257)                 -
                                                                    =========================================
Net cash used for investing activities                                    (1,746,355)             (809,337)

Financing activities
Net proceeds from issuance (repayment) of debt                               258,985               142,840
Net proceeds from issuance of common stock                                 1,688,334             2,115,473
                                                                    -----------------------------------------
Net cash provided by financing activities                                  1,947,319             2,258,313

Effect of exchange rate changes on cash                                       (9,265)                1,127

                                                                    -----------------------------------------
Net (decrease) increase in cash and cash equivalents                        (170,308)              333,397

Cash and cash equivalents, beginning of year                                 621,742               288,345
                                                                    -----------------------------------------
Cash and cash equivalents, end of year                                      $451,434              $621,742
                                                                    =========================================
</TABLE> 
See notes to consolidated financial statements.

                                    Page 27
<PAGE>
 
<TABLE> 
<CAPTION> 
Supplemental Cash Flow Information and Non Cash Investing and Financing Activities
                                                                          1997               1996
<S>                                                                      <C>                <C> 
Capital asset and lease additions                                        432,127            208,805
</TABLE> 

                                    Page 28
<PAGE>
 
                          ACT Teleconferencing, Inc.

                  Notes to Consolidated Financial Statements

                          December 31, 1997 and 1996


1. Organization and Significant Accounting Policies

Business

ACT Teleconferencing, Inc. (the Company) is engaged in the business of providing
high quality audio, video and data conferencing products and services to
business clients. The Company operates principally in the United States, the
United Kingdom, the Netherlands, Belgium, and Australia, and France.

Principles of Consolidation

The consolidated financial statements include the accounts of ACT
Teleconferencing, Inc., its wholly-owned domestic subsidiaries ACT
Teleconferencing Services, Inc., ACT VideoConferencing, Inc., ACT Research,
Inc., its 60% owned United Kingdom subsidiary, ACT Teleconferencing, Limited,
its 100% owned Dutch subsidiary, ACT Teleconferencing, B.V., and its 80% owned
Australian subsidiary, ACT Teleconferencing, (Pty) Limited. The Company has
accounted for its 80% acquisition of Multimedia and Teleconferencing Solutions,
Limited (MaTS) as of December 31, 1997 and no results of operations are
consolidated for 1997. All material inter-company transactions and balances have
been eliminated.

Use of Estimates

The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

Inventories

Inventories are stated at the lower of cost or market, on a first-in, first-out
("FIFO") basis. Finished goods are priced using specific unit costs consisting
of materials, labor and related manufacturing overhead, but exclusive of
research and development, selling and general and administrative expenses, which
are charged to operations as incurred. Inventories consist primarily of raw
materials and finished goods.

Available for Sale Marketable Securities

                                    Page 29
<PAGE>
 
The fair value of the Company's marketable securities at December 31, 1997
approximates the carrying value. The fair value was determined using market
quotes.




Equipment and Depreciation

Equipment is stated at cost. Depreciation is calculated on a straight-line basis
over the estimated useful lives of five years for furniture and five or ten
years for equipment. Depreciation expense includes capital lease amortization
charges.

Goodwill

Goodwill represents the excess of purchase price over tangible assets acquired
less liabilities assumed arising from acquisitions and is being amortized on a
straight-line basis over the estimated useful life of fifteen (15) years.

Goodwill is reviewed for impairment when events indicate that the carrying
amount may not be recoverable. If such events are noted, the Company estimates
the future free cash flows to be generated by the business associated with those
assets. In the event that the sum of the cash flows is less than the carrying
amount of those assets, the assets would be written down to fair value, which is
normally measured by discounting the estimated future cash flows.

Foreign Currency Conversion

The financial statements of the Company's foreign subsidiaries have been
translated into United States dollars at the average exchange rate during the
year for the statement of operations and year-end rate for the balance sheet.

Cash and cash equivalents

The Company considers all highly liquid investments with original maturities of
three months or less when purchased to be cash equivalents.

Loss per common share

In 1997, the Financial Accounting Standards Board issued Statement No. 128,
"Earnings Per Share." Statement No. 128 replaced the calculation of primary and
fully diluted earnings per share with basic and diluted earnings per share.
Unlike primary earnings per share, basic earnings per share excludes any
dilutive effects of options, warrants and convertible securities. Diluted
earnings per share is very similar to the previously reported fully diluted
earnings per share. As all of the Company's common stock equivalents are
anti-dilutive, only basic earnings per share is presented in the

                                    Page 30
<PAGE>
 
Consolidated Statements of Operations.

For 1997 and 1996, net loss per common share was computed based on the weighted
average number of common shares outstanding.

Advertising Costs

The company expenses  advertising costs as incurred.  Total advertising expenses
were  $151,941  and  $185,519  for the years  ended  December  31, 1997 and 1996
respectively.

Recently Issued Accounting Standards

On June 30, 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive
Income." This statement requires companies to classify items of other
comprehensive income by their nature in a financial statement and display the
accumulated balance of other comprehensive income separately from retained
earnings and additional paid-in capital in the equity section of a statement of
financial position, and is effective for the Company's fiscal year ending
December 31, 1998. Management intends to comply with the disclosure requirements
of this statement.

On June 30, 1997, the FASB issued SFAS No. 131, "Disclosure About Segments of an
Enterprise and Related Information." This statement establishes additional
standards for segment reporting in the financial statements and is effective for
the Company's fiscal year ending December 31, 1998. Management intends to comply
with the disclosure requirements of this statement and does not anticipate a
material impact on the results of operations of each segment.

Reclassifications

Certain reclassifications of the 1996 balances have been made in order to
conform to the 1997 presentation.

2. Long and short term debt (including capitalized leases)

Short term line of credit

The Company has a line of credit secured by the accounts receivable of its
United States operations (namely ACT Teleconferencing Services, Inc.) bearing
interest at 0.5% over prime rate (9% at December 31, 1997). This line of credit
contains certain covenants which include the maintenance of certain financial
ratios. The Company is in compliance with these ratios and covenants. The line
of credit has a borrowing base restricted to qualified accounts receivable up to
$500,000. As of December 31, 1997, the outstanding balance under this line of
credit was $455,677.

At December 31, 1997, the Company had a short term note payable to a

                                    Page 31
<PAGE>
 
telecommunications vendor for $77,577, bearing interest at 10%. This note is
collateralized by a second lien over the accounts receivable of ACT
Teleconferencing Services and also by a corporate guarantee from ACT
Teleconferencing, Inc. This note matures on April 30, 1998 and requires monthly
interest and principal payments until that date.

Short term note payable to related parties

At December 31, 1997, the Company had a 6% note payable to the 20% minority
shareholder in ACT Australia (Pty) Limited for $6,762. This loan is expected to
be converted to a long term note payable.

                                    Page 32
<PAGE>
 
                                                             December 31,
                                                         1997           1996
                                                     ---------------------------
Long term debt is summarized as follows:

Bank note payable, 1.5% over prime, (9.75% at
December, 1996) due in monthly principal amounts
of $834 plus interest, due August 31, 1999. The
loan agreement contains certain covenants, the
most restrictive of which includes maintenance of
certain financial ratios and a defined borrowing
base; additionally, the agreement limits payment
of dividends and repurchase or retirement of the
Company's stock.                                            -          25,814

Bank note payable, 10% (3.5% over bank's base rate
at December 31, 1997) due in monthly installments
of $990 plus interest, due December 31, 1998.           $21,790       $28,037

Bank note payable, 14.205%, due in quarterly
installments of $20,424 plus interest, due August
31, 1999.                                               136,158       228,867

Notes payable to vendors bearing interest at rates
from 16.125% to 18.102% due in monthly repayments
of $3,413 and due July and August, 2002. These
notes are collateralized by certain bridging
equipment held by ACT Teleconferencing Services,Inc.    133,044             0

Capitalized leases, at interest rates from 5% to
14%, due at various periods through 2002.               321,568       119,340

Capitalized leases, at interest rates from 17% to
24%, due at various periods through 2002.               231,540       140,029

Capitalized lease, at 29%, due December, 1999.           22,865        31,185
                                                    ----------------------------
Subtotal                                                866,965       573,272

                                                    ----------------------------
Less, current portion of long term debt                (253,251)     (177,312)

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

                                    Page 33
<PAGE>
 
Long term debt including capitalized leases            $613,714     $395,960
                                                    ============================

Total interest paid on notes and capitalized leases for the year ended December
31, 1997 and 1996 amounted to $99,496 and $36,253 respectively.



3. Commitments - operating and capitalized leases


Operating leases

The company leases office space in the United States, United Kingdom, the
Netherlands, Australia and France. These leases expire November, 2002,
September, 1998, June, 2000, December, 2000 and October, 1998, respectively.
Total rent expense charged to operations was $301,316 and $229,141 for the years
ended December 31, 1997 and 1996.

During 1997, the Company entered into several operating leases for computer and
office equipment. Total rent expense charged under these leases was $51,715 for
the year ended December 1997.

Capitalized leases

The Company leases telecommunication equipment, office equipment, computers and
furniture under long-term leases classified as capital leases. For several of
these leases, the Company has the option to purchase the equipment for a nominal
cost at the termination of the lease. The assets classified as capital leases
are amortized over the shorter of the estimated useful life of the property or
the lease term.

Amortization related to these assets is included in depreciation for financial
reporting purposes.

The following property is secured under capital leases:
                                                           December 31,
                                                         1997         1996
                                                    ----------------------------
Telecommunications and office equipment, computers 
and furniture                                          $797,310     $385,368
Less accumulated depreciation                          (142,387)     (55,497)
                                                    ----------------------------
                                                       $654,928     $329,871
                                                    ============================

The aggregate minimum annual rental commitments as of December 31, 1997 are as
follows:

                                    Page 34
<PAGE>
 
                                                      Operating     Capital
                                                  ------------------------------
                                                        Leases       Leases
                                                  ------------------------------
       1998                                            $648,717     $235,778
       1999                                             479,092      216,735
       2000                                             410,840      132,503
       2001                                             275,742      115,641
       2002 and thereafter                              250,017       55,964
                                                  ------------------------------
       Total minimum lease payments                  $2,064,408     $756,621
                                                  ================
       Less amounts representing interest                           (180,648)
                                                                  --------------
       Present value of net minimum capital
          leases payments                                           $575,973
                                                                  ==============

During 1997, the Company incurred capital lease obligations of $432,127 in
connection with lease agreements to acquire equipment, as compared to $208,805
in 1996.

4. Shareholders' Equity

Initial Public Offering  - common stock and warrants

On March 5, 1996, the Company issued 712,497 units (common stock plus warrants)
in an initial public offering raising cash proceeds (net of expenses) of
$1,987,531.

Each of the above warrants entitles the holder to purchase one share of common
stock during a three-year period commencing February 2, 1996 at an exercise
price of $5.00 per share, subject to adjustment in certain events. The Company
may at any time redeem the warrants at $.10 per warrant on 30 days written
notice, provided that the average closing bid price per share of common stock
has been at least 120% of the exercise price of the warrant (i.e., an average
closing bid price of $6.00), for ten consecutive trading days prior to the
notice of redemption. Holders of these warrants will forfeit all other rights
upon such redemption except the right to receive the $.10 redemption price per
warrant and the right to exercise the warrants during the 30 days following
written notice.

Also in connection with the initial public offering, the Company granted a Unit
Purchase Option to Tuschner & Co., the underwriter of the offering. The Unit
Purchase Option grants the holder the right to purchase 71,250 units (each
consisting of one share of common stock and one warrant to purchase common
stock) for a nominal total price of $100, and must be exercised on or before
February 2, 2001. Each of the warrants underlying the Unit Purchase Option
allows the holder to purchase one share of common stock for $5.00, and may be
exercised at any time up to three years from the date the Unit Purchase Option
is exercised.

Holders of the above warrants are not entitled to vote, receive dividends, or
exercise any of the rights of shareholders of Common Stock for any purpose until
the warrants have 

                                    Page 35
<PAGE>
 
been duly exercised.

Warrant Conversion - 1994, 1995 private placement and certain IPO warrants

In connection with loans obtained from private investors, during 1994, the
Company had issued warrants to purchase 8,750 shares of the Company stock at
$4.00 per share expiring December 31, 1998. During 1997, 3750 warrants were
exercised and are included in the analysis below.

In connection with a 1995 private offering, the Company issued 435,700 warrants
exercisable at $3.50 per share expiring August 31, 1997. The Company also issued
42,570 units of one share of common stock plus two additional warrants for
conversion of the Company's stock exercisable at $3.25 per share. These warrants
expired August 31, 1997.

During 1997 a total of 514,950 warrants (including 13,300 warrants arising from
the initial public offering and 3,750 warrants from the 1994 private placement)
were converted at an average price of $3.30 realizing gross proceeds of
$1,698,375. In connection with these conversions, the Company incurred costs of
$177,541 which were offset against the related proceeds for net proceeds of
$1,520,834. As a warrant placement fee 33,000 shares at $3.50 were also issued
to the warrant placement agent.

5. Stock Option Plan

The Company has elected to follow Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees" (APB 25) and related Interpretations
in accounting for its employee stock options because, as discussed below, the
alternative fair value accounting provided for under FASB Statement No. 123,
"Accounting for Stock-Based Compensation," requires the use of complex option
valuation models which were not developed for use in valuing the Company's
employee stock options. Under APB 25, because the exercise price of the
Company's employee stock options equals the market price of the underlying stock
on the date of grant, no compensation expense is required to be recognized.

The Company's 1991 Stock Option Plan authorized the grant of options to
officers, key employees, and consultants for up to 400,000 shares of the
Company's common stock. The Company has also granted options under the Stock
Option Plan of 1996. The 1996 Stock Option Plan, has authorized the grant of an
additional 400,000 options to officers, key employees, and consultants of the
Company for a total of 800,000. Options granted under both Plans generally have
10 year terms and vest 25% each year following the date of grant.

Pro forma information regarding net income and earnings per share is required by
Statement 123, which also requires that the information be determined as if the
Company has accounted for its employee stock options granted subsequent to
December 31, 1994 under the fair value method of that Statement. The fair value
for these options was estimated at the date of grant using a Black-Scholes
option pricing model. The following 

                                    Page 36
<PAGE>
 
are weighted-average assumptions for 1996 and 1997, respectively: risk-free
interest rates of 6.5% and 6.0%; a dividend yield of 0%; volatility factors of
the expected market price of the Company's common stock of .60 and .80; and a
weighted-average expected life of the option of 7 years.

The Black-Scholes option valuation model was developed for use in estimating the
fair value of traded options which have no vesting restrictions and are fully
transferable. In addition, option valuation models require the input of highly
subjective assumptions including the expected stock price volatility. Because
the Company's employee stock options have characteristics significantly
different from those of traded options, and because changes in the subjective
input assumptions can materially affect the fair value estimate, in management's
opinion, the existing models do not necessarily provide a reliable single
measure of the fair value of its employee stock options.

For purposes of pro forma disclosures, the estimated fair value of the options
is amortized to expense over the options' vesting period. The Company's pro
forma information is as follows:

                                              1997                 1996
                                              ----                 ----
Pro forma net (loss)                       $(714,230)           $(1,279,660)
Pro forma (loss) per share                   $(.22)               $(.44)

Because Statement 123 is applicable only to options granted subsequent to
December 31, 1994, its pro forma effect will not be fully reflected until 1999.

A summary of the Company's stock option activity, and related information for
the years ended December 31 follows:

                                       1997                    1996
                                       ----                    ----
                                         Weighted-Avg.            Weighted-Avg.
                                Options  Exercise Price  Options  Exercise Price
                                -------  --------------  -------  --------------

Outstanding-beginning of year   454,300     $2.53        221,000      $1.75
Granted                         325,100      5.62        410,800       2.98
Exercised                      (43,500)      1.20       (26,100)       2.00
Forfeited                       (5,500)      2.00      (151,400)       2.71
                               ---------               ----------
                                        
Outstanding-end of year         730,400     $4.02        454,300      $2.53
                                =======                  =======
                                        
Exercisable at end of year      186,350     $5.62        109,500      $1.50
                                        
Weighted-average fair value of          
options granted during the year             $3.74                     $1.93
================================================================================

Weighted average exercise prices for options outstanding as of December 31, 1997
were 151,500 shares at $2.12, 378,800 shares at $3.01, and 200,100 shares at
$5.75.

                                    Page 37
<PAGE>
 
7. Income Taxes

The Company accounts for income taxes in conformity with FASB Statement No. 109,
Accounting for Income Taxes ("Statement 109"). Under the provisions of Statement
109, a deferred tax liability or asset (net of valuation allowance) is provided
in the financial statements by applying the provisions of applicable tax laws to
measure the deferred tax consequences of temporary differences. This will result
in net taxable or deductible amounts in future years as a result of events
recognized in the financial statements in the current or preceding years.

Income tax expense and the related current and deferred tax liabilities for all
periods presented relate solely to the Company's U.K. operations and therefore
have no relation to the U.S. Statutory rates.

The provision for income taxes for the years ended December 31, is comprised of
the following:

                                                       1997            1996
                                                 -------------------------------
               Current                             $  256,154     $  142,100
               Deferred                                76,412         22,491
                                                 -------------------------------
                                                   $  332,566     $  164,591
                                                 ===============================
                                          





(Income Taxes continued)

Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components of
the Company's deferred tax liabilities and assets as of December 31 are as
follows:
                                                      1997              1996
                                                  ------------------------------
Deferred Tax Liabilities-Domestic
 Tax depreciation in excess of book depreciation    $(100,267)     $ (20,697)

Deferred Tax Assets-Domestic
  Net operating loss carry-forward                    926,714        716,081
  Reserves for doubtful accounts                        3,850         94,230
  Other                                                12,381          9,951
                                                  ------------------------------
                                                      942,945        820,262

                                    Page 38
<PAGE>
 
Valuation allowance for deferred tax assets          (842,678)      (799,565)
                                                  ------------------------------

Net deferred tax-Domestic                           $       0      $       0
                                                  ==============================

Deferred Tax Liabilities-International
 Tax depreciation in excess of book depreciation    $(117,454)     $ (41,042)

Deferred Tax Assets-International
  Net operating loss carry-forward                    335,088        177,724
  Other                                                 3,234          1,069

Valuation allowance for deferred tax assets          (338,322)      (178,793)
                                                  ------------------------------
Net deferred tax liability-International            $(117,454)     $ (41,042)
                                                  ==============================

Taxes of $118,989 and $132,126 were paid during 1997 and 1996, respectively. The
domestic net operating loss carry forwards of approximately $2,484,000 will
begin to expire in the year 2005. The Company has not provided for any taxes on
undistributed foreign earnings as the Company intends to permanently reinvest
these earnings in the future growth of the business.



8. Business Segment Analysis

The Company owns a 60% interest in ACT Teleconferencing, Limited which operates
in the United Kingdom; ACT Teleconferencing, B.V., a wholly owned subsidiary
which operates in the Netherlands and Belgium; an 80% interest in ACT Australia
(Pty) Limited; and an 80% interest in Multimedia and Teleconferencing Solutions,
(MaTS) which operates in the United Kingdom.

Presented below is certain segment information regarding the Company's United
States and international operations:

For the year ended December 31, 1997:

                       International  United States  United States
                         Operations    Operations      Corporate     Total
                      
Net revenues             $ 5,527,846   $4,706,557     $    --    $ 10,234,403
                      
Income (loss) before  
income taxes and      
minority interest        $   526,531   $  175,624     $(603,928) $     98,227
                      
Net Income (Loss)        $   (41,093)  $  175,624     $(571,339) $   (436,808)

                                    Page 39
<PAGE>
 
Total assets             $ 4,483,424   $3,050,274     $ 396,013  $  7,929,711


For the year ended December 31, 1996:

                        International  United States  United States
                          Operations    Operations     Corporate       Total
                     
Net revenues             $ 3,157,515   $ 3,062,431     $    --     $ 6,219,946 
                                                                               
Income (loss) before                                                           
income taxes and                                                               
minority interest        $   113,128   $  (703,644)    $(333,133)  $  (923,649)
                                                                               
Net income (loss)        $   (51,463)  $   703,644)    $(453,000)  $(1,208,107)
                                                                               
Total assets             $ 2,027,236   $ 1,658,682     $ 399,351   $ 4,085,269  

One customer accounted for approximately 24% and 11% of consolidated revenues
for the years ended December 31, 1997 and 1996, respectively.



9. Multimedia and Teleconferencing Solutions, Limited Acquisition (MaTS)

In December 1997 the Company acquired 80% of the outstanding shares of
Multimedia and Teleconferencing Solutions, Limited, a United Kingdom
corporation. The consideration paid for the acquisition was 81,378 shares of the
Company's common stock at a price of $5.50 per share, and $155,474 in cash for a
total consideration of $603,053. In addition to the consideration described
above, the Company agreed to a deferred consideration of a further $540,000 to
be issued in shares of common stock to the seller if the acquired business
attains certain pre-tax revenue and profit targets. A reduced number of shares
will be issued if the acquired company does not achieve the specified targets
but achieves certain targets prorata. If such targets are achieved and the
shares are issued, the value of the shares issued will increase both goodwill
and shareholders' equity.

                                    Page 40
<PAGE>
 
The acquisition was accounted for as a purchase as follows:
Consideration paid:
   Cash                                                           $ 155,474
   81,378 shares of common stock at $5.50                           447,579
   Acquisition costs                                                 31,822
                                                                -----------
                                                                  $ 634,875
                                                                ===========

Fair value of assets acquired:
   Fair value of equipment and other tangible assets               $125,575
   Goodwill                                                         509,300
                                                                -----------
                                                                   $634,875
                                                                ===========

If this acquisition had occurred on January 1, 1997, consolidated revenues, net
loss and loss per share would have been $12,278,940, $(222,031) and $(0.07),
respectively.


10. Fair Value of Financial Instruments

The Company's financial instruments consist primarily of cash, temporary
investments, medium term investments, long term investments, accounts
receivable, accounts payable, long-term debt and capitalized lease obligations.

Because accounts receivable and accounts payable are short-term instruments that
are settled at face value, the Company considers the carrying amounts to be
equal to the fair values.

Long-term debt consists of notes and capitalized lease obligations that bear
interest at adjustable rates. The Company also considers the carrying amount
(face value) of all instruments to be equal to the fair value.


11.  Defined Contribution Plan

The Company has a defined contribution 401(k) plan which allows eligible
employees to contribute a percentage of their compensation and provides for
certain discretionary employer matching contributions. For the years ended
December 31, 1997 and 1996, the Company contributed $15,355.32 and $3,722.81,
respectively.

Item 8.       Changes in and disagreements with Accountants
              ---------------------------------------------                  
       N/A

                                    Page 41
<PAGE>
 
                                   PART III

Item 9.       Directors and executive officers of the registrant
              --------------------------------------------------

      Incorporated by reference to the Company's Proxy Statement for Annual
Meeting of Stockholders to be filed with the Securities and Exchange Commission
within 120 days after the close of the fiscal year ended December 31, 1997.


Item 10.      Executive compensation 
              ----------------------

       Incorporated by reference to the Company's Proxy Statement for Annual
Meeting of Stockholders to be filed with the Securities and Exchange Commission
within 120 days after the close of the fiscal year ended December 31, 1997.


Item 11.      Security ownership of certain beneficial owners and management
              --------------------------------------------------------------

       Incorporated by reference to the Company's Proxy Statement for Annual
Meeting of Stockholders to be filed with the Securities and Exchange Commission
within 120 days after the close of the fiscal year ended December 31, 1997.


Item 12.      Certain relationships and related transactions
              ----------------------------------------------

       Incorporated by reference to the Company's Proxy Statement for Annual
Meeting of Stockholders to be filed with the Securities and Exchange Commission
within 120 days after the close of the fiscal year ended December 31, 1997.

                                    Page 42
<PAGE>
 
Item 13.      Exhibits and reports on Form 8-K
              --------------------------------

Exhibit No.   Description
--------------------------
3.1**         Restated Articles of Incorporation of the Company dated April 15,
              1996

3.2**         Bylaws of the Company, amended as of April 15, 1996 4.1* Form of
              specimen certificate for Common Stock of the Company 4.2* Form of
              Unit Purchase Option to be issued by the Company to the
              Underwriter 4.3* Impound Agreement 4.4* Lock-up Letter Agreement

10.1*         Stock Option Plan of 1991, as amended, authorizing 400,000 shares
              of Common Stock for issuance pursuant to the Plan
              
10.2*         Form of Stock Option Agreement

10.3*         Form of Common Stock Purchase Warrant

10.4*         Form of Placement Agent Warrant

10.5*         Denver West Office Building Lease dated April 1, 1993, by and
              between Denver West Office Building No. 6 Venture and the Company,
              as amended

10.6*         Leases for United Kingdom facilities (First floor of Howard House)
              dated September 29, 1993 and April 17, 1995, between Garfunkel &
              Wanderer Limited and Reichwald Brothers

10.7*         Letter agreement dated May 31, 1995 with Worldcom regarding lease
              of Amsterdam facilities

10.8*         Sublease Agreement with Integraf Corporation dated August 1995 for
              ACT VideoConferencing, Inc. premises

10.9*         Term Loan Agreement dated August 11, 1994, between the Company and
              Norwest Bank, N.A., Boulder Colorado

10.10*        Split Dollar Insurance Agreement dated March 1, 1990, between the
              Company and Gerald D. Van Eeckhout

10.11*        Service Agreement dated April 10, 1992 between David Holden and
              ACT Teleconferencing Limited

10.14*        Agreement between Company and Gerald D. Van Eeckhout limiting his
              compensation in 1996 and 1997

10.15*        Memorandum dated December 22, 1995 from director Seifert amending
              Mr. Van Eeckhout's compensation

10.17*        Agreement to Exchange Stock between Apogee Robotics, Inc. and
              Company

10.18*        Agreement between Company and Ronald J. Bach to borrow proceeds
              from sale of Apogee Robotics common stock

10.19****     Stock Option Plan of 1996

21*           Subsidiaries of the Company

23.1          Consent of Ernst & Young LLP

24.1          Power of Attorney of Ronald J. Bach, James F. Seifert, Donald
              Sturtevant and Carolyn R. Van Eeckhout

27.1          Financial Data Schedule

*      Exhibit incorporated by reference to the Company's Registration Statement
       on Form SB-2, filed with the Securities and Exchange Commission on
       October 10, 1995, and amendments thereto. Exhibits incorporated by
       reference carry exhibit numbers identical to those in the Registration
       Statement.
**     Incorporated by reference to the exhibit of the same number to the 
       Company's Form 10-QSB for the Quarter ended March 31, 1996, File No. 
       0-27560.
***    Incorporated by reference to the exhibits to the Company's Form 8-K filed
       with the Securities and Exchange Commission on June 18, 1996, File No.
       0-27560.
****   Incorporated by reference to the Company's Proxy Statement filed with the
       Securities and Exchange Commission on April 30, 1997, File No. 0-27560.

Reports on Form 8-K
    The Company filed no reports on Form 8-K during the last quarter of its
    fiscal year ended December 31, 1997.

                                    Page 43
<PAGE>
 
                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.

                                       ACT TELECONFERENCING, INC.

Date:  November 11, 1998               By       /s/ Gerald D. Van Eeckhout      
                                       -----------------------------------------
                                       Gerald D. Van Eeckhout
                                       Chief Executive Officer

         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed by the following persons on behalf of the
Registrant, and in the capacities indicated on March 5, 1998.

Signature                                                   Title
---------                                                   -----

      /s/ Gerald D. Van Eeckhout      Chief Executive Officer and Director
------------------------------------- (Principal Executive Officer)
Gerald D. Van Eeckhout                

      /s/ Gavin Thomson               Chief Financial Officer
------------------------------------- (Principal Financial & Accounting Officer)
Gavin Thomson                         

      /s/ Ronald J. Bach              Director
-------------------------------------
Ronald J. Bach

      /s/ James F. Seifert            Director
-------------------------------------
James F. Seifert

      /s/ Donald Sturtevant           Director
-------------------------------------
Donald Sturtevant

      /s/ Carolyn R. Van Eeckhout     Director
-------------------------------------
Carolyn R. Van Eeckhout

                                    Page 44
<PAGE>
 
<TABLE> 
<CAPTION> 
                                                     Index to Exhibits
Exhibit No.         Description                                                                      Page
-----------         -----------                                                                      ----
<C>                 <S>                                                                              <C> 
3.1**               Restated Articles of Incorporation of the Company dated April 15, 1996           All exhibits filed
                                                                                                     electronically or
                                                                                                     incorporated by
                                                                                                     reference
3.2**               Bylaws of the Company, amended as of April 15, 1996 
4.1*                Form of specimen certificate for Common Stock of the Company 
4.2*                Form of Unit Purchase Option to be issued by the Company to the Underwriter 
4.3*                Impound Agreement 
4.4*                Lock-up Letter Agreement 
10.1*               Stock Option Plan of 1991, as amended, authorizing 400,000 shares of Common
                    Stock for issuance pursuant to the Plan
10.2*               Form of Stock Option Agreement
10.3*               Form of Common Stock Purchase Warrant                                          
10.4*               Form of Placement Agent Warrant                                                
10.5*               Denver West Office Building Lease dated April 1, 1993, by and between          
                    Denver West Office Building No. 6 Venture and the Company, as amended          
10.6*               Leases for United Kingdom facilities (First floor of Howard                    
                    House) dated September 29, 1993 and April 17, 1995, between                    
                    Garfunkel & Wanderer Limited and Reichwald Brothers Limited,                   
                    Landlord, and ACT Teleconferencing Limited, Tenant                             
10.7*               Letter agreement dated May 31, 1995 with Worldcom regarding lease of           
                    Amsterdam facilities                                                           
10.8*               Sublease Agreement with Integraf Corporation dated August 1995 for ACT         
                    VideoConferencing, Inc. premises                                               
10.9*               Term Loan Agreement dated August 11, 1994, between the Company and             
                    Norwest Bank, N.A., Boulder, Colorado                                          
10.10*              Split Dollar Insurance Agreement dated March 1, 1990, between the              
                    Company and Gerald D. Van Eeckhout                                             
10.11*              Service Agreement dated April 10, 1992 between David Holden and ACT            
                    Teleconferencing Limited                                                       
10.14*              Agreement between Company and Gerald D. Van Eeckhout limiting his              
                    compensation in 1996 and 1997                                                  
10.15*              Memorandum dated December 22, 1995 from director Seifert amending Mr.          
                    Van Eeckhout's compensation                                                    
10.17*              Agreement to Exchange Stock between Apogee Robotics, Inc. and Company          
10.18*              Agreement between Company and Ronald J. Bach to borrow proceeds from           
                    sale of Apogee Robotics common stock                                           
10.19****           Stock Option Plan of 1996                                                      
21*                 Subsidiaries of the Company                                                    
23.1                Consent of Ernst & Young LLP                                                   
24.1                Power of Attorney of Ronald J. Bach, James F. Seifert, Donald                  
                    Sturtevant and Carolyn R. Van Eeckhout                                         
27.1                Financial Data Schedule                                                         
</TABLE> 

*      Exhibit incorporated by reference to the Company's Registration Statement
       on Form SB-2, filed with the Securities and Exchange Commission on
       October 10, 1995, and amendments thereto. Exhibits incorporated by
       reference carry exhibit numbers identical to those in the Registration
       Statement.
**     Incorporated by reference to the exhibit of the same number to the
       Company's Form 10-QSB for the Quarter ended March 31, 1996, File No.
       0-27560.
***    Incorporated by reference to the exhibits to the Company's Form 8-K filed
       with the Securities and Exchange Commission on June 18, 1996, File No.
       0-27560.
****   Incorporated by reference to the Company's Proxy Statement filed with the
       Securities and Exchange Commission on April 30, 1997, File No. 0-27560.

                                    Page 45