<PAGE>
 
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                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549
 
                               ----------------
 
                                   FORM 10-Q
 
  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                                  ACT OF 1934
 
<TABLE>
<S>                                            <C>
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1997           COMMISSION FILE NUMBER 0-28904
</TABLE>
 
                               ----------------
 
                      AWARD SOFTWARE INTERNATIONAL, INC.
            (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
 
                               ----------------
 
<TABLE>
<S>                                            <C>
                 CALIFORNIA                                      94-2893462
        (STATE OR OTHER JURISDICTION                          (I.R.S. EMPLOYER
      OF INCORPORATION OR ORGANIZATION)                     IDENTIFICATION NO.)
</TABLE>
 
<TABLE>
<S>                                            <C>
          777 EAST MIDDLEFIELD ROAD
          MOUNTAIN VIEW, CALIFORNIA                              94043-4023
  (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                       (ZIP CODE)
</TABLE>
 
                                 650.237.6800
             (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
 
                               ----------------
 
  Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter 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 [_]
 
  Registrant had 6,900,839 shares of Common Stock, no par value, outstanding
at June 30, 1997.
 
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<PAGE>
 
                       AWARD SOFTWARE INTERNATIONAL, INC.
 
                                     INDEX
 
<TABLE>
<CAPTION>
                                                                           PAGE
                                                                          NUMBER
                                                                          ------
 <C>      <S>                                                             <C>
 PART I.  FINANCIAL INFORMATION
 Item 1.  Condensed Consolidated Financial Statements...................     3
          a) Condensed Consolidated Balance Sheet as of June 30, 1997
             (Unaudited) and December 31, 1996..........................     3
          b) Condensed Consolidated Statement of Income for the three
             and six months ended June 30, 1997 and 1996 (Unaudited)....     4
          c) Condensed Consolidated Statement of Cash Flows for the six
             months ended June 30, 1997 and 1996 (Unaudited)............     5
          d) Notes to Condensed Consolidated Financial Statements.......     6
 Item 2.  Management's Discussion and Analysis of Financial Condition
          and Results of Operations.....................................     8
 PART II. OTHER INFORMATION
 Item 6.  Exhibits and Reports on Form 8-K..............................    19
 SIGNATURES..............................................................   20
 EXHIBIT INDEX...........................................................   21
</TABLE>
 
 
  Award Software International(R) and SMSAccess are trademarks of registrant.
 
                                       2
<PAGE>
 
                         PART I. FINANCIAL INFORMATION
 
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
                       AWARD SOFTWARE INTERNATIONAL, INC.
 
                      CONDENSED CONSOLIDATED BALANCE SHEET
                       (IN THOUSANDS, EXCEPT SHARE DATA)
 
<TABLE>
<CAPTION>
                                                        JUNE 30,   DECEMBER 31,
                                                          1997         1996
                                                       ----------- ------------
                                                       (UNAUDITED)
<S>                                                    <C>         <C>
ASSETS
Current assets:
  Cash and cash equivalents...........................   $22,756     $23,248
  Accounts receivable, net............................     3,204       2,068
  Receivables from related parties....................       664       1,197
  Other current assets................................       998         598
                                                         -------     -------
    Total current assets..............................    27,622      27,111
Property and equipment, net...........................       918         683
Other assets..........................................     1,022         616
                                                         -------     -------
                                                         $29,562     $28,410
                                                         =======     =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
  Accounts payable....................................   $   334     $   215
  Accrued liabilities.................................     2,214       3,104
                                                         -------     -------
    Total current liabilities.........................     2,548       3,319
Minority interest.....................................       189         --
                                                         -------     -------
                                                           2,737       3,319
                                                         -------     -------
Commitments
Shareholders' equity:
  Preferred stock, 5,000,000 shares authorized; no par
   value; no shares issued or outstanding.............       --          --
  Common stock, 40,000,000 shares authorized; no par
   value; 6,900,839 and 6,538,951 shares issued and
   outstanding........................................    21,678      21,269
  Deferred stock compensation.........................      (143)       (180)
  Retained earnings...................................     5,532       4,130
  Cumulative translation adjustment...................      (242)       (128)
                                                         -------     -------
    Total shareholders' equity........................    26,825      25,091
                                                         -------     -------
                                                         $29,562     $28,410
                                                         =======     =======
</TABLE>
 
     See accompanying notes to condensed consolidated financial statements.
 
                                       3
<PAGE>
 
                       AWARD SOFTWARE INTERNATIONAL, INC.
 
                   CONDENSED CONSOLIDATED STATEMENT OF INCOME
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                  (UNAUDITED)
 
<TABLE>
<CAPTION>
                                              THREE MONTHS ENDED    SIX MONTHS
                                                   JUNE 30,       ENDED JUNE 30,
                                              ------------------- --------------
                                                1997      1996     1997    1996
                                              --------- --------- ------- ------
<S>                                           <C>       <C>       <C>     <C>
Revenues:
  Software license fees.....................     $4,287    $2,874 $ 8,323 $5,049
  Engineering services......................        695       160   1,042    291
  Related parties...........................        220       308     865    814
                                                 ------    ------ ------- ------
    Total revenues..........................      5,202     3,342  10,230  6,154
                                                 ------    ------ ------- ------
Cost of revenues:
  Software license fees.....................        210        87     438    139
  Engineering services......................        211        31     297     57
  Related parties...........................          8        25      34    235
                                                 ------    ------ ------- ------
    Total cost of revenues..................        429       143     769    431
                                                 ------    ------ ------- ------
Gross profit................................      4,773     3,199   9,461  5,723
                                                 ------    ------ ------- ------
Operating expenses:
  Research and development..................      1,428     1,011   3,089  1,866
  Sales and marketing.......................      1,210       698   2,251  1,258
  General and administrative................        940       456   1,828  1,046
                                                 ------    ------ ------- ------
    Total operating expenses................      3,578     2,165   7,168  4,170
                                                 ------    ------ ------- ------
Income from operations......................      1,195     1,034   2,293  1,553
Interest income, net........................        275        86     536    170
Minority interest...........................         10       --       10    --
                                                 ------    ------ ------- ------
Income before income taxes..................      1,480     1,120   2,839  1,723
Provision for income taxes..................        480       403     947    620
                                                 ------    ------ ------- ------
Net income..................................     $1,000    $  717 $ 1,892 $1,103
                                                 ------    ------ ------- ------
Net income per share........................     $ 0.13    $ 0.12 $  0.25 $ 0.18
                                                 ======    ====== ======= ======
Weighted average number of common and common
 equivalent shares outstanding..............      7,732     6,061   7,717  6,068
                                                 ======    ====== ======= ======
</TABLE>
 
     See accompanying notes to condensed consolidated financial statements.
 
                                       4
<PAGE>
 
                       AWARD SOFTWARE INTERNATIONAL, INC.
 
                 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                 (IN THOUSANDS)
                                  (UNAUDITED)
 
<TABLE>
<CAPTION>
                                                                SIX MONTHS
                                                              ENDED JUNE 30,
                                                              ----------------
                                                               1997     1996
                                                              -------  -------
<S>                                                           <C>      <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net income.................................................. $ 1,892  $ 1,103
 Adjustments to reconcile net income to net cash provided by
  operating activities:
  Depreciation and amortization..............................     303      116
  Deferred stock compensation................................      37       38
  Minority interest..........................................     189      --
  Changes in assets and liabilities:
   Accounts receivable, net..................................    (983)    (697)
   Receivables from related parties..........................     533      222
   Other current assets......................................     (43)    (645)
   Other assets..............................................      26      (19)
   Accounts payable..........................................      33      329
   Accrued liabilities.......................................  (2,383)     (17)
                                                              -------  -------
    Net cash provided by (used in) operating activities......    (396)     430
                                                              -------  -------
CASH FLOWS FROM INVESTING ACTIVITIES:
 Purchase of property and equipment..........................    (404)    (370)
 Capitalized software development costs......................    (373)     --
                                                              -------  -------
    Net cash used in investing activities....................    (777)    (370)
                                                              -------  -------
CASH FLOWS FROM FINANCING ACTIVITIES:
 Net proceeds from common stock issuances....................     374    4,482
 Payments under bank loan....................................     (45)     --
                                                              -------  -------
    Net cash provided by financing activities................     329    4,482
                                                              -------  -------
Effect of exchange rate changes on cash......................    (106)    (106)
                                                              -------  -------
Net increase (decrease) in cash and cash equivalents.........    (950)   4,436
Cash and cash equivalents at beginning of period.............  23,706    6,498
                                                              -------  -------
Cash and cash equivalents at end of period................... $22,756  $10,934
                                                              =======  =======
</TABLE>
 
     See accompanying notes to condensed consolidated financial statements.
 
                                       5
<PAGE>
 
                      AWARD SOFTWARE INTERNATIONAL, INC.
 
             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
1. BASIS OF PRESENTATION
 
  The accompanying condensed consolidated financial statements of Award
Software International, Inc. (the "Company") as of June 30, 1997 for the three
and six months ended June 30, 1997 and 1996 are unaudited. The condensed
consolidated financial statements reflect all adjustments, consisting only of
normal recurring adjustments, which in the opinion of management are necessary
for a fair presentation of the financial position, operating results and cash
flows for the periods presented. The condensed consolidated financial
statements have been prepared pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations. These condensed consolidated financial
statements should be read in conjunction with the audited consolidated
financial statements and notes thereto for the year ended December 31, 1996 on
Form 10-K filed on March 28, 1997 by the Company under the Securities Exchange
Act of 1934.
 
  The results of operations for the interim periods presented are not
necessarily indicative of the results to be expected for the full year or for
any future period.
 
2. NET INCOME PER SHARE
 
  Net income per share is computed using the weighted average number of common
and common equivalent shares, when dilutive, from stock options and warrants
(using the treasury stock method). Pursuant to a Securities and Exchange
Commission Staff Accounting Bulletin, common and common equivalent shares
(using the treasury stock method and the public offering price) issued by the
Company within 12 months prior to the Company's initial public offering filing
have been included in the calculation as if they were outstanding for all
periods through the effective date of the Company's initial public offering.
 
3. FORMATION OF JOINT VENTURE
 
  In April 1997, the Company entered into an agreement with Sun Corporation
("Sun"), a shareholder, and Axis Corporation ("Axis") to establish a majority-
owned subsidiary, Award Software Japan KK ("Award Japan"). The objective of
Award Japan is to market and distribute the Company's products in Japan. The
Company, Sun and Axis contributed approximately $310,000, $95,000 and $95,000
for 62%, 19% and 19% ownership of Award Japan, respectively.
 
4. BUSINESS COMBINATION
 
  In May 1997, the Company merged with Unicore Software, Inc. ("Unicore"), a
privately-held company providing basic input/output software upgrades for
personal computers and embedded systems. Under the terms of the Agreement and
Plan of Merger and Reorganization, the Company issued 218,571 shares of common
stock for all of the outstanding stock of Unicore in a transaction accounted
for as a pooling of interests. The historical operations of Unicore were not
material and as a result, the business combination has been reported by
restating the Company's consolidated financial statements to include the
Consolidated financial statements of Unicore effective January 1, 1997.
 
5. NEW ACCOUNTING PRONOUNCEMENTS
 
  In February 1997, the Financial Accounting Standards Board issued Statements
of Financial Accounting Standards No. 128 ("SFAS No. 128"), "Earnings per
Share." SFAS No. 128 establishes financial accounting and reporting standards
for calculation of basic earnings per share and diluted earnings per share.
SFAS No. 128
 
                                       6
<PAGE>
 
                      AWARD SOFTWARE INTERNATIONAL, INC.
 
       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
supersedes APB No. 15 and is effective for the periods ending after December
15, 1997, including interim periods. The Company will adopt the standards in
the year ending December 31, 1997. The cumulative effect of adopting SFAS No.
128 will not have a material impact on the condensed consolidated financial
statements for the three and six month periods ended June 30, 1997 and 1996,
respectively.
 
  In June 1997, the Financial Accounting Standards Board issued Statements of
Financial Accounting Standards No. 130 ("SFAS No. 130"), "Reporting
Comprehensive Income," and No. 131 ("SFAS No. 131"), "Disclosures About
Segments of an Enterprise and Related Information." SFAS No. 130 establishes
standards for reporting and display of comprehensive income and its components
in a full set of general purpose financial statements. SFAS No. 130 is
effective for fiscal years beginning after December 15, 1997. Reclassification
of financial statements for earlier periods provided for comparative purpose
is required. SFAS No. 131 supersedes SFAS No. 14 and requires segment
information to be reported on the basis that is used entirely for evaluating
segment performance and deciding how to allocate resources to segments in
quarterly and annual reports. SFAS No. 131 is effective for annual reports for
fiscal years beginning after December 15, 1997 and applicable to interim
financial statements beginning the second year of application, along with
comparative information for interim periods in the initial year of
application.
 
                                       7
<PAGE>
 
                      AWARD SOFTWARE INTERNATIONAL, INC.
 
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
        RESULTS OF OPERATIONS
 
  This quarterly report contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21A of
the Securities Exchange Act of 1934, as amended, which involve risks and
uncertainties. The Company's actual results could differ materially from those
anticipated in these forward-looking statements as a result of certain
factors, including those set forth below and those discussed in the Company's
Form 10-K for the year ended December 31, 1996 on file with the Securities and
Exchange Commission.
 
  Award Software International, Inc. (the "Company") designs, develops and
markets system management software for the global computing market. On May 30,
1997, the Company acquired all of the outstanding stock of Unicore Software,
Inc. ("Unicore") through the merger of Unicore with and into a wholly owned
subsidiary of the Company pursuant to an Agreement and Plan of Merger and
Reorganization (the "Merger Agreement"), dated as of May 29, 1997, by and
among the Company, its wholly owned subsidiary, Unicore and Pierre A. Narath
("Narath") (the "Acquisition"). Unicore is engaged in the business of
providing basic input/output software upgrades for personal computers and
embedded systems. Pursuant to the terms of the Merger Agreement, the Company
issued to Narath, the selling shareholder, 218,571 shares of the Company's
common stock. The merger is being treated as a tax-free reorganization under
the Internal Revenue Code of 1986, as amended, and is being accounted for as a
pooling of interests. The terms of the Merger Agreement were determined
through arms'-length negotiations between the Company and Unicore and Narath.
In addition, Mr. Narath entered into an employment agreement with the Company
pursuant to which Mr. Narath shall serve as a vice president of the Company
and president of Unicore, the Company's wholly owned subsidiary.
 
  On April 30, 1997, the Company entered into a memorandum of understanding
with Sun Corporation ("Sun"), a shareholder, and Axis Corporation ("Axis") to
establish a majority-owned subsidiary, Award Software Japan KK ("Award
Japan"), a joint venture corporation incorporated under the laws of Japan and
based in Yokohama, Japan. The objective of Award Japan is to market and
distribute the Company's products in Japan. The Company, Sun and Axis
contributed approximately $310,000, $95,000 and $95,000 for 62%, 19% and 19%
ownership of Award Japan, respectively.
 
  On February 21, 1997, the Company acquired certain assets of Willows
software ("Willows acquisition") for $400,000 cash, direct acquisition costs
of $40,000 and the assumption of liabilities totaling $44,000. The purchase
price was allocated based upon the estimated fair market value of identifiable
tangible and intangible assets and liabilities assumed, including $289,000 to
in-process research and development. The amount allocated to in-process
research and development relates to acquired development projects that had not
reached technological feasibility at the acquisition date and had no
alternative future use.
 
                                       8
<PAGE>
 
  The following is a discussion of the financial condition and results of
operations of the Company as of June 30, 1997 and for the three and six months
ended June 30, 1997 and 1996, respectively, and should be read in conjunction
with the accompanying Quarterly Condensed Consolidated Financial Information
and Notes thereto and the Company's audited consolidated financial statements
and notes thereto for the year ended December 31, 1996, included in the
Company's Form 10-K, and is qualified in its entirety by reference thereto.
 
RESULTS OF OPERATIONS
 
  The following table sets forth, for the periods indicated, certain
consolidated statement of income information as a percentage of the Company's
total revenues represented by each item. The Company's historical results are
not necessarily indicative of results in any future period.
 
<TABLE>
<CAPTION>
                                          THREE MONTHS         SIX MONTHS
                                         ENDED JUNE 30,      ENDED JUNE 30,
                                         -----------------   -----------------
                                          1997      1996      1997      1996
                                         -------   -------   -------   -------
   <S>                                   <C>       <C>       <C>       <C>
   Revenues:
     Software license fees..............      83%       86%       81%       82%
     Engineering services...............      13         5        10         5
     Related parties....................       4         9         9        13
                                         -------   -------   -------   -------
       Total revenues...................     100       100       100       100
                                         -------   -------   -------   -------
   Cost of revenues:
     Software license fees..............       4         3         4         2
     Engineering services...............       4         1         3         1
     Related parties....................       0         1         0         4
                                         -------   -------   -------   -------
       Total cost of revenues...........       8         5         7         7
                                         -------   -------   -------   -------
   Gross profit.........................      92        95        93        93
                                         -------   -------   -------   -------
   Operating expenses:
     Research and development...........      28        30        30        30
     Sales and marketing................      23        21        22        20
     General and administrative.........      18        14        18        17
                                         -------   -------   -------   -------
       Total operating expenses.........      69        65        70        67
                                         -------   -------   -------   -------
   Income from operations...............      23        30        23        26
   Interest income, net.................       5         3         5         3
   Minority interest....................       0        --         0        --
                                         -------   -------   -------   -------
   Income before income taxes...........      28        33        28        29
   Provision for income taxes...........       9        12         9        10
                                         -------   -------   -------   -------
   Net income...........................      19%       21%       19%       19%
</TABLE>
 
 Comparison of Three and Six Month Periods Ended June 30, 1997 and 1996
 
  Revenues. The Company's revenues consist of software license fees and
engineering services revenues. Revenues increased by $1.9 million (56%) and
$4.1 million (66%) for the three and six month periods ended June 30, 1997,
respectively, from the same periods of the prior year. Software license fees
increased by $1.4 million (49%) and $3.3 million (65%) for the three and six
month periods ended June 30, 1997, respectively, from the same periods of the
prior year primarily due to higher unit shipments to new and existing
motherboard customers in Taiwan and the U.S. and embedded systems customers in
the U.S., partially offset by a decrease in software license fees from a
European customer. Engineering services revenues increased by $534,000 (333%)
and $750,000 (257%) for the three and six month periods ended June 30, 1997,
respectively, from the same periods of the prior year primarily due to higher
engineering services revenues from customers in the U.S and Japan. Related
parties revenues decreased by $88,000 (29%) for the three month period ended
June 30, 1997
 
                                       9
<PAGE>
 
from the same period of the prior year primarily due to lower software license
fees and engineering services revenues, and increased by $51,000 (6%) for the
six month period ended June 30, 1997 from the same period of the prior year
primarily due to higher software license fees partially offset by lower
engineering services revenues.
 
  Cost of Revenues. Cost of revenues consist primarily of the cost of
materials and freight expenses associated with software license fees and
direct costs associated with engineering services revenues. Cost of revenues
as a percentage of revenues increased to 8% and 7% of revenues for the three
and six month periods ended June 30, 1997, respectively, as compared to 5% and
7% of revenues for the same periods of the prior year. The increase in cost of
revenues as a percent of revenues for the three and six month periods ended
June 30, 1997 was primarily due to higher cost of software license fees and
cost of engineering services revenues partially offset by a decrease in cost
of software license fees and cost of engineering services revenues from a
related party product development effort.
 
  Research and Development. Research and development expenses consist
primarily of engineering personnel and related expenses and equipment costs.
Research and development expenses increased by $417,000 (41%) and $1.2 million
(66%) for the three and six month periods ended June 30, 1997, respectively,
from the same periods of the prior year primarily due to the hiring of
engineering personnel and related expenses to develop new software products
and a one-time charge of $289,000 for in-process research and development as a
result of the Willows acquisition. The Company anticipates that it will
continue to devote substantial resources to product research and development
and that such expenses will continue to increase in absolute dollars.
 
  Sales and Marketing. Sales and marketing expenses consist primarily of
personnel and related expenses, sales commissions and travel costs. Sales and
marketing expenses increased by $512,000 (73%) and $993,000 (79%) for the
three and six month periods ended June 30, 1997, respectively, from the same
periods of the prior year primarily due to the hiring of sales and marketing
personnel and related expenses, higher sales commissions for increased
revenues, increased participation in trade shows and higher professional
services fees.
 
  General and Administrative. General and administrative expenses consist
primarily of personnel and related expenses, professional services and
facilities costs. General and administrative expenses increased by $484,000
(106%) and $781,000 (75%) for the three and six month periods ended June 30,
1997, respectively, from the same periods of the prior year primarily due to
higher public company expenses, the hiring of general and administrative
personnel and related expenses, higher professional services fees and higher
facilities costs. During the second half of 1995, the Company recorded
$297,000 of deferred stock compensation related to the difference between the
exercise price of certain Common Stock options and the deemed fair value of
the Common Stock on the date of grant. Amortization of deferred compensation
expense of $19,000 and $37,000 is included in general and administrative
expenses for the three and six month periods ended June 30, 1997,
respectively.
 
  Interest income, net. Interest income, net consists primarily of interest
expense associated with short-term borrowings and interest income on cash and
cash equivalents, net of expenses. Interest income, net increased by $190,000
and $366,000 for the three and six month periods ended June 30, 1997,
respectively, from the same periods of the prior year primarily due to an
increase in interest income earned on higher cash balances partially offset by
interest expense on a short-term borrowing.
 
  Provision for Income Taxes. The Company's effective tax rate decreased to
32% from 36% for the three month periods ended June 30, 1997 and June 30,
1996, respectively, and decreased to 33% from 36% for the six month periods
ended June 30, 1997 and June 30, 1996, respectively, primarily due to an
increase in income taxable in Taiwan at rates lower than the applicable
statutory rates in the U.S. and Germany.
 
                                      10
<PAGE>
 
LIQUIDITY AND CAPITAL RESOURCES
 
  The Company has funded its operations primarily through the private sale of
equity securities and from cash generated from operations. As of June 30,
1997, the Company had cash and cash equivalents of $22.8 million and working
capital of $25.1 million. Net cash used in operating activities was $396,000
for the six month period ended June 30, 1997 and was primarily due to
reductions in accrued liabilities and an increase in accounts receivable
partially offset by higher income and collections on accounts receivable from
related parties.
 
  Net cash used in investing activities was $777,000 for the six month period
ended June 30, 1997 and was primarily due to the purchase of equipment
resulting from the Willows acquisition and an increase in capitalized software
development costs.
 
  Net cash provided by financing activities was $329,000 for the six month
period ended June 30, 1997 and was primarily due to proceeds from purchases of
stock under the Employee Stock Purchase Plan and exercises of stock options
under the 1995 Stock Option Plan.
 
  On October 25, 1996, the Company completed the initial offering of its
Common Stock to the public ("IPO"). Pursuant to the IPO, the Company sold an
aggregate of 1,250,000 shares of common stock at $8.00 per share, resulting in
net proceeds to the Company of approximately $7.8 million. The Company
believes that the net proceeds from the sale of Common Stock, together with
anticipated cash flows from operations and existing cash balances, will
satisfy the Company's projected expenditures through 1997 for working capital
and general corporate purposes, including an increase in the Company's
internal product development, staffing in connection with new product
introductions and other related product development expenditures. From time to
time, in the ordinary course of business, the Company enters into strategic
relationships with its customers or other participants in the PC industry.
Such strategic relationships may include equity investments in the Company. If
additional funds are raised through the issuance of equity securities, the
percentage ownership of the shareholders of the Company will be reduced,
shareholders may experience additional dilution, or such equity securities may
have rights, preferences or privileges senior to those of the holders of the
Company's Common Stock. Other than its relationships with Vobis Microcomputer
AG and Advanced Micro Devices, Inc., the Company has no current commitments or
agreements with respect to any strategic relationships, including any equity
investments.
 
NEW ACCOUNTING PRONOUNCEMENTS
 
  In February 1997, the Financial Accounting Standards Board issued Statements
of Financial Accounting Standards No. 128 ("SFAS No. 128"), "Earnings per
Share." SFAS No. 128 establishes financial accounting and reporting standards
for calculation of basic earnings per share and diluted earnings per share.
SFAS No. 128 supersedes APB No. 15 and is effective for the periods ending
after December 15, 1997, including interim periods. The Company will adopt the
standards in the year ending December 31, 1997. The cumulative effect of
adopting SFAS No. 128 will not have a material impact on the condensed
consolidated financial statements for the three and six month periods ended
June 30, 1997 and 1996, respectively.
 
  In June 1997, the Financial Accounting Standards Board issued Statements of
Financial Accounting Standards No. 130 ("SFAS No. 130"), "Reporting
Comprehensive Income," and No. 131 ("SFAS No. 131"), "Disclosures About
Segments of an Enterprise and Related Information." SFAS No. 130 establishes
standards for reporting and display of comprehensive income and its components
in a full set of general purpose financial statements. SFAS No. 130 is
effective for fiscal years beginning after December 15, 1997. Reclassification
of financial statements for earlier periods provided for comparative purpose
is required. SFAS No. 131 supersedes SFAS No. 14 and requires segment
information to be reported on the basis that is used entirely for evaluating
segment performance and deciding how to allocate resources to segments in
quarterly and annual reports. SFAS No. 131 is effective for annual reports for
fiscal years beginning after December 15, 1997 and applicable to interim
financial statements beginning the second year of application, along with
comparative information for interim periods in the initial year of
application.
 
                                      11
<PAGE>
 
BUSINESS RISKS
 
 Dependence Upon the Underlying PC Industry; Dependence on Current PC Industry
   Standards
 
  The demand for the Company's system management software depends principally
on (i) PC manufacturers and other customers licensing the Company's software
rather than developing their own system management software, (ii) the market
acceptance of the products incorporating the Company's software sold by the
Company's original equipment manufacturer ("OEM") customers, (iii) the
emergence of new PC technologies that require system management software
solutions to provide functionality, user value and performance, and (iv) the
technological competence of the Company's core products. Sales of PCs fluctuate
substantially from time to time based on numerous factors, including general
economic conditions in the markets for the Company's customers' products, new
hardware and software product introductions, demand for new applications and
shortages of key components. Further, the markets in the PC industry are
extremely competitive and characterized by rapid and frequent price reductions.
 
  The introduction of new hardware architectures, microprocessors, peripheral
equipment and operating systems within the PC industry has increased the
complexity, time to market and cost to develop PCs. A number of computer
manufacturers, including IBM Corporation ("IBM") and Compaq Computer
Corporation ("Compaq"), develop their own BIOS products to achieve
compatibility with and integrate new technologies into their products. While
the Company believes that price and time-to-market pressures will continue to
foster a trend among its customers and potential customers to out-source system
management software requirements to third parties, there can be no assurance
that this trend will continue or will not reverse itself, which would have a
material adverse effect on the Company's business, financial condition and
results of operations.
 
  The Company's software to date has been primarily based on central processing
units ("CPUs") designed by or compatible with those of Intel Corporation
("Intel") and operating system software designed by Microsoft Corp.
("Microsoft"). If the market for Intel and Intel-compatible CPUs with x86
architecture is materially diminished or if another CPU, such as Motorola,
Inc.'s "PowerPC," achieves a high degree of success, demand for the Company's
current software would be reduced. In addition, most of the Company's software
has been installed on computers using Microsoft's MS/DOS or Windows operating
systems. If Microsoft's operating systems cease to be the dominant operating
systems for the PC industry, or if PC manufacturers use other operating
systems, which are not compatible with MS/DOS or Windows, the Company could
experience increased product development costs and/or diminished revenues.
 
 Concentration of Revenues from Desktop BIOS
 
  The Company depends on sales of desktop BIOS for a substantial majority of
its revenues. The Company has not generated substantial revenues from the sale
of other products to date, including sales of mobile PC products. If sales of
the Company's desktop BIOS decline for any reason, the Company's business,
financial condition and results of operations would be adversely affected
unless the Company is able to replace those sales with increased sales of other
products. Sales of desktop BIOS could decline for a number of reasons,
including a shift in the market for PCs away from desktop PCs in favor of
mobile PCs and a delay in expected new hardware and software technologies from
Intel and Microsoft.
 
 Competition from System Management Software Companies and Other Participants,
   including Microsoft and Intel, in the PC Industry
 
  The markets for the Company's software are highly competitive. The Company
faces competition primarily from other system management software companies,
including American Megatrends, Inc., Phoenix Technologies Ltd. ("Phoenix
Technologies") and SystemSoft Corporation ("SystemSoft"), as well as in-house
software development staffs of current and prospective customers. Certain of
the companies with which the Company competes or may in the future compete have
substantially greater financial, marketing, sales and support resources and
greater brand name and technology leadership recognition than the Company.
There can be no assurance that the Company will be able to develop software
comparable or superior to software offered
 
                                       12
<PAGE>
 
by its competitors. In addition, the PC market experiences intense price
competition and the Company expects that, in order to remain competitive, it
may have to decrease unit prices on some or all of its software products. Any
such decrease would have a material adverse effect on the Company's business,
financial condition and results of operations.
 
  The Company believes that interdependencies may develop between system
management software companies and their customers, which would need to be
overcome in order to replace an entrenched competitor. While the Company
believes that such entrenchment may benefit the Company in its existing
relationships with key participants in the desktop PC market, customer
entrenchment may make it more difficult for the Company to displace entrenched
competitors or increase market presence, particularly in the mobile PC market,
where competitors may already have strong relationships with certain mobile PC
manufacturers. Intel has entered into formal agreements with, and has become a
significant shareholder in, Phoenix Technologies and SystemSoft. In addition,
SystemSoft has entered into agreements with Microsoft, IBM and Compaq to
license its PC Card software.
 
  Operating system software vendors may in the future enter the Company's
primary markets as direct competitors or incorporate enough features into
their products so as to reduce the need for the Company's products. Microsoft
includes basic PC Card software in its Windows 95 operating system and has
announced the inclusion of full PC Card software support in its next
generation Windows 98 and Windows NT operating systems. Microsoft's recently
released Windows CE operating system includes Hardware Abstraction Layer (HAL)
software that incorporates system management software features. As software
developers provide greater functionality and features, user value and
performance in their products that eliminate or reduce the need for the
Company's system management software, the market for the Company's products
could be materially diminished. In addition, chipset manufacturers, including
Intel, may increase their presence in the motherboard manufacturing market,
which may have an adverse effect on the Company's OEM customers. There can be
no assurance that other participants in the PC industry will not develop
products and solutions that reduce the demand or obviate the need for the
Company's products.
 
 Ability to Respond to Rapid Technological Change
 
  The market for system management software is characterized by rapidly
changing technology, evolving industry standards and frequent new product
introductions. The general trend in the PC industry is toward shorter product
life cycles, resulting in rapid product and technology obsolescence. The life
cycle of the Company's products is highly dependent on the life cycles of the
products sold by its customers, who are primarily in the desktop PC industry.
Although the Company's core products, specifically, the desktop and embedded
device BIOS and PC Card software, may have a life cycle as long as several
years, specific customized adaptations of the Company's core products are
generally expected to have a life cycle of six months to one year. The
Company's future success will depend upon its ability to enhance its core
software and to develop and introduce new software which keeps pace with
technological developments and evolving industry standards as well as to
respond to its customers' and end-users' demand for greater features and
functionality. The Company is currently developing certain technologies that
it will need to remain competitive. There can be no assurance that the Company
will be successful in developing such enhancements or new software, or, even
if successful, that it will not experience delays in achieving such
developments. Any failure or delay by the Company to develop such enhancements
or new software or the failure of its software to achieve market acceptance
would adversely affect the Company's business, financial condition and results
of operations. In addition, there can be no assurance that products or
technologies developed by others will not render the Company's software or
technologies non-competitive or obsolete.
 
 Dependence on Key Customer Relationships; Concentration of Credit Risk
 
  The Company believes that its success to date has been largely due to its
relationship with participants in the desktop PC industry, particularly OEMs
in the desktop PC market. The Company works closely with its customers to
provide quick response to their product design needs and assists them in
evaluating new
 
                                      13
<PAGE>
 
technological developments as they affect future products and enhancements to
be sold by the Company's customers. The loss of any one of these strategic
relationships or any other significant customer in the PC industry could
adversely affect the Company's product development efforts, business,
financial condition and results of operations.
 
  For the three and six month periods ended June 30, 1997, a related party
accounted for approximately 4% and 6% of the Company's total revenues,
respectively. The loss of any key customer or the inability of the Company to
replace revenues provided by a key customer would have a material adverse
effect on the Company's business, financial condition and results of
operations. Revenues from the distribution of the Company's PC Card software
accounted for 7% and 4% of the Company's total revenues in the three and six
month periods ended June 30, 1997.
 
  The Company's customer base consists primarily of motherboard manufacturers
and OEMs in the desktop PC market, and as a result the Company maintains
individually significant receivable balances from these customers. If these
customers fail to satisfy their payment obligations, the Company's business,
financial condition and results of operations would be adversely affected.
 
 Uncertain Acceptance in New and Developing Markets
 
  The Company's future success is dependent on customer acceptance of new
products and penetration of markets outside the desktop PC market. There can
be no assurance that the Company will be able to expand its products and
technologies into the mobile PC, embedded device and network computing and
Internet markets or that the Company will be able to increase its market
presence in the desktop PC market. Expansion of the Company's software and
technology into the mobile PC market will depend primarily on the Company's
ability to replace entrenched competitors. Penetration of markets outside the
desktop PC market, such as the embedded device market, will depend upon the
development and availability of system management software providing the
necessary functionality and customer acceptance of such new technology. There
can be no assurance that the Company will be able to develop or obtain from
third parties the necessary software and technology to penetrate these
markets, or that, if such software and technology is developed by the Company
or obtained from third parties through licensing, which may include payments
of license fees or royalties in advance, the Company will be able to
successfully distribute such products. There can be no assurance that such
products will not be developed by others rendering the Company's products non-
competitive or obsolete. There can be no assurance that the Company will not
experience difficulties that could delay or prevent the successful
development, introduction and marketing of such new products, or that such
products will achieve market acceptance. In addition, there can be no
assurance that the introduction of Microsoft Windows CE into the embedded
device and Internet appliance market will not have a material impact on the
Company's new products for these markets.
 
  Any increase in the demand for the Company's embedded device products is
dependent upon the increasing use and complexity of embedded computer systems
in new and traditional products. No assurance can be given that this trend
will continue or, even if it does, that the Company will be able to design
system management software that will address the unique requirements of the
embedded device market. Further, since the Company's experience and expertise
are based on Intel x86 architecture, the Company's success in the embedded
device market is significantly dependent on Intel's continued commitment to,
and the increased presence of x86 architecture in, this market. There can be
no assurance that Intel will not de-emphasize or withdraw its support of the
embedded device market, or that the trend toward x86 architecture in the
embedded device market will continue, any of which could result in a material
adverse effect on the Company's growth strategies, financial condition and
results of operations.
 
  Certain of the markets for the Company's existing and future products, such
as the Internet and private internet protocol networks ("Intranet"), have only
recently begun to develop and are rapidly evolving. Demand and market
acceptance for recently introduced or developing products are subject to a
high level of uncertainty and risk. Critical issues concerning the commercial
use of the Internet remain unresolved and could adversely affect the growth of
Internet use. There can be no assurance that commerce and communication over
the Internet
 
                                      14
<PAGE>
 
or Intranet will become widespread, or that the Company's planned products
addressing the Internet and Intranet markets will become widely accepted.
Because these markets for the Company's existing and developing products are
new and rapidly emerging, it is difficult to predict the future growth rate,
if any, and size of these markets. There can be no assurance that such markets
for the Company's existing and developing products and technology will develop
or that such products will be accepted. If these markets fail to develop,
develop more slowly than anticipated or become saturated with competitors, or
if the Company's products do not obtain customer acceptance, the Company's
business, financial condition and results of operations could be materially
adversely affected.
 
 Fluctuations In Quarterly Operating Results; Seasonality
 
  The Company has experienced and expects to continue to experience
fluctuations in its quarterly results of operations. The Company's revenues
are affected by a number of factors, including the demand for PCs and embedded
devices, timing of new product introductions, product mix, volume and timing
of customer orders, activities of competitors and the ability of the Company
to penetrate new markets. The Company's business is seasonal with revenues
generally increasing in the fourth quarter as the result of increased PC
shipments during the holiday season. Consequently, during the three quarters
ending in March, June and September, the Company has historically not been as
profitable as in the quarter ending in December. In addition, the Company's
revenues and profits have historically decreased in the first quarter of each
year as compared with the fourth quarter of the previous year. The Company
generally ships orders as they are received and, as a result, has little or no
backlog. Quarterly revenues and results of operations therefore depend on the
volume and timing of orders received during the quarter, which are difficult
to forecast. Because the Company's staffing and other operating expenses are
based on anticipated revenues, delays in the receipt of orders can cause
significant variations in results of operations from quarter to quarter. The
Company also may choose to reduce prices, increase spending in response to
competition or pursue new market opportunities, each of which decisions may
adversely affect the Company's business, financial condition and results of
operations. Therefore, the Company believes that period-to-period comparisons
of its revenues and operating results are not necessarily meaningful and
should not be relied upon as indicators of future performance.
 
  Due to all of the foregoing factors, it is likely that in some future
quarters the Company's operating results will be below the expectations of
public market analysts and investors. Regardless of the general outlook for
the Company's business, the announcement of quarterly results of operations
below analyst and investor expectations is likely to result in a decline in
the trading price of the Company's Common Stock.
 
 Variations in Operating Results
 
  The revenue growth rates experienced by the Company to date may not be
indicative of future growth rates and there can be no assurance that the
Company will remain profitable in the future. Future results of operations may
fluctuate significantly based upon numerous factors including the demand for
PCs and embedded devices, the timing of new product introductions, product
mix, volume and timing of customer orders, activities of competitors and the
ability of the Company to penetrate new markets. The volume and timing of new
contracts and delays in the achievement of milestones could have a significant
impact on operating results for a particular quarter.
 
 Dependence on Key Personnel; Ability to Attract and Retain Key Technical
Employees
 
  The Company's success to date has depended to a significant extent upon a
number of key management and technical employees. The loss of services of one
or more of these key employees, particularly George C. Huang, the Company's
Chairman of the Board, President and Chief Executive Officer; Lyon T. Lin,
General Manager, Taiwan and President, Award Software Hong Kong Limited,
Taiwan Branch; and Maurice W. Bizzarri, the Company's Vice President,
Engineering could have a material adverse effect on the Company's business,
financial condition and results of operations. Except for the Company's
employees in Germany, none of the Company's employees is party to an
employment agreement with the Company. The Company believes that its
 
                                      15
<PAGE>
 
future success will also depend in large part upon its ability to attract and
retain highly skilled technical, management and sales and marketing personnel.
Moreover, because the development of the Company's software requires knowledge
of computer hardware, operating system software, system management software
and application software, key technical personnel must be proficient in a
number of disciplines. Competition for such technical personnel is intense,
and the failure of the Company to hire and retain talented technical personnel
or the loss of one or more key employees could have an adverse effect on the
Company's business, financial condition and results of operations.
 
  Future growth, if any, of the Company will require additional engineering,
sales and marketing, and financial and administrative personnel to expand
customer services and support and to expand operational and financial systems.
There can be no assurance that the Company will be able to attract and retain
the necessary personnel to accomplish its growth strategies or that it will
not experience constraints that will adversely affect its ability to satisfy
customer demand in a timely fashion. If the Company's management is unable to
manage growth effectively, the Company's business, financial condition and
results of operations could be adversely affected.
 
 Management of Growth
 
  The growth of the Company's business and, in particular, the Company's
customer base, has placed, and is expected to continue to place, a strain on
the Company's management systems and resources. The Company's ability to
compete effectively and manage future growth, if any, will require the Company
to continue to improve its financial and management controls, reporting
systems and procedures on a timely basis and expand, train and manage its work
force. There can be no assurance that the Company will be able to do so
successfully, and the failure to do so would have a material adverse effect
upon the Company's business, financial condition and results of operations.
The Company's success will depend to a significant degree on the ability of
its executive officers and other members of its senior management, none of
whom has any prior experience managing public companies in their current
roles, to manage future growth, if any.
 
 International Operations; Currency Fluctuations; International Unrest
 
  The Company operates on a multinational basis, and a significant portion of
its business is conducted in currencies other than the U.S. Dollar. As a
result, the Company is subject to various risks, including exposure to
currency fluctuations, greater difficulty in administering its global
business, multiple regulatory requirements and other risks associated with
international sales, such as import and export licenses, political and
economic instability, overlapping or differing tax structures, trade
restrictions, changes in tariff rates, different legal regimes, difficulty in
protecting intellectual property, enforcing agreements and collecting accounts
receivable. For both the three and six month periods ended June 30, 1997,
approximately 40% and 3% of the Company's revenues were denominated in New
Taiwan Dollars and German Marks, respectively. The Company's revenues
denominated in Japanese Yen were inmaterial during the three and six month
periods ended June 30, 1997. While the impact of foreign exchange rate
movements have not had a material impact on the Company's financial
statements, there can be no assurance that fluctuation in foreign currency
exchange rates will not have a material adverse effect on the Company's
business, financial condition and results of operations. The Company does not
currently engage in foreign currency hedging transactions. There can be no
assurance that exchange rate fluctuations will not have a material adverse
effect on the Company's business, financial condition or results of
operations. The Company's business, financial condition or results of
operations could be adversely affected by factors associated with
international operations such as changes in foreign currency exchange rates,
uncertainties relative to regional economic circumstances, political
instability in emerging markets, and difficulties in staffing and managing
foreign operations, as well as by other risks associated with international
activities.
 
  Award Software Hong Kong Limited, the company's wholly owned subsidiary, is
incorporated under the laws of Hong Kong ("Award Hong Kong"). Substantially
all of the Company's Asian desktop motherboard and OEM manufacturing and
design facilities are operated through Award Hong Kong's branch office located
in Taipei, Taiwan. These operations could be severely affected by national or
regional political instability in China,
 
                                      16
<PAGE>
 
including instability which may occur in connection with a change in
leadership in China, change of control of Hong Kong from the United Kingdom to
China, by evolving interpretation and enforcement of legal standards, by
conflicts, embargoes, increased tensions or escalation of hostilities between
China and Taiwan and by other trade customs and practices that are dissimilar
to those in the United States. Interpretation and enforcement of China's laws
and regulations continue to evolve and the Company expects that differences in
interpretation and enforcement will continue in the foreseeable future.
 
 Intellectual Property and Proprietary Rights
 
  The Company's success depends in significant part on the development,
maintenance and protection of its intellectual property. The Company regards
all of its software as proprietary and attempts to protect it with a
combination of patents, copyrights, trademarks and trade secrets, employee and
third-party nondisclosure agreements and other methods of protection. Despite
these precautions and the protection of copyright laws, it may be possible for
unauthorized third parties to copy the Company's software or to reverse
engineer or obtain and use information that the Company regards as
proprietary. The Company has patent applications pending in the U.S. and/or
abroad on six inventions, three of which are owned jointly with a third party.
There are currently no issued patents covering the Company's products.
However, the Company does not generally rely on patents to protect its
products. The Company licenses its object and source code under written
license agreements. Certain provisions of such licenses, including provisions
protecting against unauthorized use, copying, transfer and disclosure of the
licensed programs, may be unenforceable under the laws of certain
jurisdictions. In addition, the laws of some foreign jurisdictions, including
Taiwan, do not protect the Company's proprietary rights to the same extent as
do the laws of the United States. There can be no assurance that the
protections put in place by the Company will be adequate.
 
  Significant and protracted litigation may be necessary to protect the
Company's intellectual property to determine the scope of the proprietary
rights of others or to defend against claims of infringement. Moreover,
although the Company is not currently involved in any litigation with respect
to intellectual property rights, in the past there have been allegations that
certain portions of the Company's core BIOS infringed on a third party's
copyrights. In response, the Company rewrote certain software routines in a
"clean room" procedure and upgraded its customers to the new version of such
software routines in order to avoid any further allegations of infringement.
The Company believes that its software does not infringe the copyrights of any
third parties. However, there can be no assurance that other parties will not
make allegations of infringement in the future. Such assertions could require
the Company to discontinue the use of certain software codes or processes, to
cease the manufacture, use and sale of infringing products, to incur
significant litigation costs and expenses and to develop non-infringing
technology or to obtain licenses to the alleged infringing technology.
Although the Company has been able to acquire licenses from third parties in
the past, there can be no assurance that the Company would be able to develop
alternative technologies or to obtain such licenses or, if a license were
obtainable, that the terms would be commercially acceptable to the Company in
the event such assertions are made in the future.
 
 Volatile Market for Stock
 
  The market for the Company's stock is highly volatile. The trading price of
the Company's Common Stock has been and will continue to be subject to
fluctuations in response to financial condition and results of operations,
announcements of technological innovations or new products by the Company and
its competitors, changes in the Company's or its competitors' product mix or
product direction, changes in the Company's revenue mix and revenue growth
rates, changes in expectations of growth for the PC industry, as well as other
events or factors which the Company may not be able to influence or control.
Statements or changes in opinions, ratings or earnings estimates made by
brokerage firms and industry analysts relating to the market in which the
Company does business, companies with which the Company competes or relating
to the Company specifically could have an immediate and adverse effect on the
market price of the Company's stock. In addition, the stock market has from
time to time experienced extreme price and volume fluctuations that have
particularly affected the market price for many high-technology companies and
that often have been unrelated to the operating
 
                                      17
<PAGE>
 
performance of these companies. These broad market fluctuations may adversely
affect the market price of the Company's Common Stock.
 
 Shares Eligible for Future Sale
 
  Sales of a substantial number of shares of Common Stock in the public market
could adversely affect the market price for the Company's Common Stock.
Certain shares of Common Stock held by existing shareholders are "restricted
securities" as such term is defined in Rule 144 under the Securities Act of
1933, as amended (the "Act") (the "Restricted Shares"). Restricted Shares may
be sold in the public market only if registered or if they qualify for an
exemption from registration under Rules 144, 144(k) or 701 or Regulation S
promulgated under the Act. Recently, the Securities and Exchange Commission
enacted a new rule effective April 29, 1997 shortening the holding periods
under Rule 144 to permit re-sales of limited amounts of Restricted Shares
after one year and unlimited amounts of Restricted Shares by non-affiliates of
the Company after two years. Further, the Company, all directors and executive
officers and certain shareholders of the Company had agreed not to sell or
otherwise dispose of any shares of Common Stock for a period of 180 days after
October 24, 1996, which period expired April 23, 1997.
 
 
                                      18
<PAGE>
 
                          PART II. OTHER INFORMATION
 
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
 
  (a) Exhibits
 
    The following exhibits are filed herewith:
 
<TABLE>
       <C>           <S>
       Exhibit 10.24 Memorandum of Understanding By and Among Sun Corporation,
                     Axis Corporation and Award Software International, Inc.
       Exhibit 11.1  Computation of Net Income per Share.
       Exhibit 21.2  Subsidiaries of the Registrant.
       Exhibit 27    Financial Data Schedule.
</TABLE>
 
  (b) Reports on Form 8-K
 
    A Current Report on Form 8-K dated May 30, 1997 was filed on June 16,
  1997. The Current Report on Form 8-K was filed pursuant to Item 2 of Form
  8-K announcing the completion of the acquisition of Unicore by means of a
  merger with and into a wholly owned subsidiary of the Company pursuant to
  an Agreement and Plan of Merger and Reorganization, dated as of May 29,
  1997, by and among the Company, its wholly owned subsidiary, Unicore and
  Pierre A. Narath. In addition, the Current Report on Form 8-K dated May 30,
  1997 contained Exhibits required pursuant to Item 7 of Form 8-K.
 
 
                                      19
<PAGE>
 
                                   SIGNATURES
 
  Pursuant to the requirements 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.
 
                                          AWARD SOFTWARE INTERNATIONAL, INC.
 
August 11, 1997                                   /s/ George C. Huang
                                          By: _______________________________
                                                      George C. Huang
                                             Chairman of the Board, President
                                                         and Chief
                                                     Executive Officer
 
August 11, 1997
                                                  /s/ Kevin J. Berry
                                          By: _______________________________
                                                      Kevin J. Berry
                                              Vice President, Finance, Chief
                                                    Financial Officer,
                                                  Treasurer and Secretary
 
                                       20
<PAGE>
 
                                 EXHIBIT INDEX
 
<TABLE>
<CAPTION>

  EXHIBIT NO.                     DESCRIPTION 
  -----------                     ----------- 
 <C>           <S>                                             
 Exhibit 10.24 Memorandum of Understanding By and Among Sun
                Corporation, Axis Corporation and Award Software
                International, Inc.                                
 Exhibit 11.1  Computation of Net Income per Share.                
 Exhibit 21.2  Subsidiaries of the Registrant.                     
 Exhibit 27    Financial Data Schedule.                            
</TABLE>
 
                                       21