<PAGE>

                                  UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

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

                                    FORM 10-K

   (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, 1999

      [   ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
                 OF THE SECURITIES EXCHANGE ACT OF 1934

                 For the transition period from __________ to __________

                             Commission File Number

                                     1-9812

                                  TENERA, INC.

             (Exact name of registrant as specified in its charter)

                      Delaware                            94-3213541
           (State or other jurisdiction of             (I.R.S. Employer
            incorporation or organization)            Identification No.)

    One Market, Spear Tower, Suite 1850, San Francisco, California 94105-1018
               (Address of principal executive offices) (Zip Code)

       Registrant's telephone number, including area code: (415) 536-4744

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

           Securities registered pursuant to Section 12(b) of the Act:

                                  Common Stock

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

                                      None

     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          .
   ---------      ----------

     Indicate by check mark if disclosure of delinquent  filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's  knowledge,  in definitive proxy as information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ X ]

     As of March 1, 2000, the aggregate market value of the Registrant's  Common
Stock held by nonaffiliates of the Registrant was $10,717,937  based on the last
transaction  price as reported on the American Stock Exchange.  This calculation
does not reflect a  determination  that certain  persons are  affiliates  of the
Registrant for any other purposes.

     The number of shares outstanding on March 1, 2000 was 9,933,759.


<PAGE>









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<PAGE>




                                     PART I

Item 1.  Business

General

      TENERA, Inc. ("TENERA" or the "Company"),  a Delaware corporation,  is the
parent company of the subsidiaries described below.

      TENERA Rocky Flats,  LLC ("Rocky  Flats"),  a Colorado  limited  liability
company,  was formed in 1995 to provide  consulting and  management  services in
connection with  participation in the Performance Based  Integrating  Management
Contract  ("Rocky  Flats  Contract")  at the  DOE's  Rocky  Flats  Environmental
Technology Site ("Site").

      In 1997,  the Company  formed TENERA Energy,  LLC  ("Energy"),  a Delaware
limited liability company,  to consolidate its commercial electric power utility
business into a separate legal entity.

      In November  1997, the Company  consummated  the sale of all of the assets
("Asset  Sale")  of  its  TENERA  Technologies,   LLC  ("Mass   Transportation")
subsidiary (see Notes 1 and 8 to Consolidated Financial Statements).

      In 1999, the Company formed TENERA  GoTrain.Net,  LLC  ("GoTrain.Net"),  a
Delaware  limited  liability  company,  to engage in the joint  venture  design,
development,  marketing,  sale and maintenance of a web-based Corporate Distance
Learning Center ("CDLC").  The joint venture  operation was established with its
minority interest partner,  SoBran,  Inc., an Ohio corporation,  specializing in
Internet  technologies.  The CDLC is a robust, fully scaleable  application tool
for managing all levels of training  needs,  from corporate  universities to the
individual learner. The CDLC is also the Internet delivery platform for TENERA's
line  of  interactive,  multi-media,  regulatory-driven  training  products  and
services (Technology Enhanced Training or "TET").

      In February 2000, the Company purchased the Internet-based development and
support  services  business of SoBran,  Inc.,  to provide  support for  TENERA's
Technology  Enhanced  Training  Services group ("TET Group") and for its line of
Internet-based,   regulatory-driven   training   products  and   services.   The
acquisition also included SoBran's minority interest in TENERA GoTrain.Net, LLC.

      The  Company's   subsidiaries   provide  a  broad  range  of  professional
consulting,  management, and technical services, along with business-to-business
(B2B) delivery of web-based driven training  services ("TET Courses"),  to solve
complex management, engineering, environmental, and safety challenges associated
with the operation,  asset  management,  and maintenance of electric  generating
plants, federal government properties, and capital intensive industries.

      TENERA provides services and TET Courses to assist its commercial electric
power  generation  clients with respect to nuclear and fossil plant  operations,
maintenance,   and  safety.   This  includes   accelerated   change  management,
organizational diagnostics and effectiveness, online, interactive compliance and
regulatory-driven  training  applications,  strategic business management,  risk
management,  and  ecological  services.  For its  governmental  clients,  TENERA
provides  the  Department  of  Energy  ("DOE")  and DOE prime  contractors  with
assistance  in devising,  implementing,  and  monitoring  strategies  to improve
performance   and  cost   effectiveness   from  an  operational,   safety,   and
environmental  perspective  at  DOE-owned  nuclear  reactor  sites and  national
research laboratories.

      TENERA has developed expertise in providing solutions to complex technical
and regulatory issues facing the commercial electric power generation  industry.
Over the past several years,  commercial  electric  utilities  have  experienced
increased  competitive  pressure  due to  continued  deregulation.  For example,
utilities  are no longer  able to  recover  capital  expenditures  through  rate
increases,  due to increasing  competition  from  independent  power  producers,
alternative  energy  production,  and  cogeneration.  During  the  same  period,
utilities and independent power producers have responded to continued regulatory
pressures to comply with complex  safety and  environmental  guidelines.  Safety
problems and environmental issues have also emerged at government-owned  weapons
production  facilities.  The end of the "Cold War" has prompted DOE to shut down



                                       1
<PAGE>



many of its aging weapons  production  facilities and begin the challenging task
of dismantling,  disposal, and clean-up of the facilities.  A massive program is
underway throughout the DOE complex of nuclear weapons production facilities and
national  laboratories to implement this new shutdown  mission,  while complying
with health, safety, and environmental  requirements similar to those applicable
to  commercial  facilities,  principally  in  the  areas  of  hazardous  wastes,
decontamination, decommissioning, and remediation. Electric power generators, as
well as a  variety  of  other  industries,  have  been  subjected  to  extensive
regulation regarding environmentally safe handling of hazardous materials.

      Responding  to this  shift in  national  defense  mission,  as well as the
associated emerging regulatory  compliance issues, the Company,  using its joint
venture  operation  and  strategic  alliances,  created  the CDLC and a suite of
regulatory-driven  training  courses for delivery to its clients in a productive
and cost-effective manner, interactively via the Internet.

      It has been  TENERA's  strategy to provide  solutions  to these  issues by
providing clients with a high level of professional  skills and a broad range of
scientific,  technological, and management resources. These include software and
databases,  which are used  either in support of  consulting  projects or as the
basis for development of stand alone software products and systems.  The Company
assists its clients in the initial identification and analysis of a problem, the
implementation of a feasible solution that the client believes will be sensitive
to business and public interest constraints,  and the ongoing monitoring of that
solution.

Background

      The  Company's  principal  markets  are the  DOE-owned  nuclear  materials
production  sites and national  research  laboratories,  and the electric  power
generation industry, including regulated and deregulated producers. The emerging
market for the Company's TET Courses includes those  commercial  operations that
are  subject  to  compliance  with  federally   mandated   regulatory   training
requirements.

      The Company's largest business area,  DOE-owned nuclear weapons production
sites, faces close scrutiny  resulting from public concern over health,  safety,
and the  environment.  The  Company  believes  that DOE's new mission of closing
aging weapons plants,  coupled with increased  enforcement of environmental laws
and  regulations  continues to be prompted by publicity and public  awareness of
environmental problems and health hazards posed by hazardous materials and toxic
wastes.  The  dismantlement  and  cleanup  of  the  aging  DOE  weapons  complex
represents a significant market for the Company's service offerings.

      The DOE has  begun  the  implementation  of  programs  to  address  safety
problems  and  environmental  concerns,   which  have  emerged  at  its  nuclear
facilities.  These programs are designed to bring the operations into compliance
with a variety of health,  safety,  and environmental  requirements,  similar to
those  applicable  to  the  commercial  electric  utility  industry.  The  DOE's
decontamination,  decommissioning,  and  remediation  programs are also aimed at
achieving  significant  cleanup of its hazardous  waste  production  and storage
facilities  and the partial  shutdown of nuclear  operations  at a number of its
sites

      The electric utility industry has undergone  considerable change in recent
years and faces a complex mix of economic  and  regulatory  pressures.  There is
continuing  deregulation  of the production  and  distribution  of  electricity,
accompanied  by the desire of utilities to meet demand for  electricity  through
higher  operating  efficiency.  Some of the Company's  largest  electric utility
clients have responded to a more competitive  environment by  implementation  of
significant  cost control  measures  and activity in the merger and  acquisition
arena.

      Economic  pressures  have  resulted  in  certain  changes  in the focus of
electric utility management.  For example, the ratemaking process now represents
a significant area of risk to utilities.  This has highlighted the importance of
careful  planning and  documentation  in connection with rate case  preparation.
Furthermore,   utilities  appear  to  be  shifting  their  emphasis  to  ongoing
performance  reviews  in making  their  rate  base  decisions,  related  to such
measures as plant  capacity  factors.  These changes in the  ratemaking  process
subject the  utilities to  substantial  economic  penalties  for extended  plant
outages and have stimulated actions by them to assure more reliable operations.



                                       2
<PAGE>



      The markets for electric  utility and DOE facility  professional  services
and software products cover a broad range of activities. Typical markets include
waste management,  outage support, operating plant services,  licensing support,
safety  and   health   management,   maintenance   and   information   services,
decommissioning  consulting,  risk  assessment,  quality  assurance and control,
organizational  effectiveness,  engineering  support,  records management,  fuel
related services, plant security, and surplus asset disposal.

      The  market  for  the  Company's  emerging  technology  enhanced  training
services is broad and encompasses  those commercial  operations that are subject
to compliance and regulatory-driven training requirements. The Company's initial
market   penetration  has  been  focused  in  the  electric  utility   industry.
Traditionally a marketplace for  instructor-led  training,  the Company believes
that Internet-based  training will grow significantly over the next few years as
an important resource to meet the needs of this market.

Services and Products

      The Company provides its services by utilizing its professional skills and
technological  resources in an integrated  approach,  which  combines  strategic
consulting, technical, and project management capabilities with software systems
and databases.  Services  performed by the Company typically include one or more
of the following: consultation with the client to determine the nature and scope
of the problem,  identification  and  evaluation  of the problem and its impact,
development  and design of a process for correcting the problem,  preparation of
business plans,  preparation of reports for obtaining regulatory agency permits,
and  analysis  in support  of  regulatory  and legal  proceedings.  The  Company
operates in one business segment providing  services,  which cover these general
areas: strategic consulting, management, and technical services.

      The following  table reflects the percentage of revenues  derived for each
of these areas for the period  indicated  during the fiscal years ended December
31, 1997 through 1999:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
                                                                                 Year Ended December 31,
                                                                          --------------------------------------
                                                                             1999         1998         1997
----------------------------------------------------------------------------------------------------------------
<S>                                                                        <C>          <C>           <C>
Consulting, Management, and Technical Services ........................     100.0%       100.0%        86.4%
Software Services, Products, and Systems* .............................         0%           0%        13.6%

----------------------------------------------------------------------------------------------------------------
</TABLE>
  *   Reflects only 10 months of revenues in 1997 due to the Asset Sale.

      Consulting  and  Management   Services.   The  Company's   consulting  and
management  services  involve  determining  a solution  to client  problems  and
challenges in the design,  operation, and management of large facilities.  Focus
is also placed on providing expertise in the wide range of disciplines  required
to resolve complex legal and regulatory issues and offering  executives guidance
in strategic planning and implementing a coordinated, effective response to such
issues. The Company applies its professional skills,  software,  and specialized
databases  to all aspects of these  problems  and  challenges  in the  following
general areas:

        o        Strategic business management

        o        Organizational effectiveness and change management

        o        Web-based technology enhanced training services

        o        Risk management

        o        Environmental and ecological issues at DOE and electric
                 utility facilities

        o        Operations and maintenance performance improvement

        o        Plant safety

        o        Nuclear safety and criticality at DOE facilities

        o        Engineering design review and verification

        o        Company/organized labor union consulting

        o        Surplus property management and disposal services



                                       3
<PAGE>



Marketing and Clients

      Marketing.  The Company's  marketing  strategy  emphasizes  its ability to
offer a broad range of  services  designed to meet the needs of its clients in a
timely and cost-efficient manner. The Company can undertake not only small tasks
requiring a few professionals  but also the management,  staffing,  design,  and
implementation  of major  projects  which may last for many  months and  involve
large  numbers  of  professionals  and   subcontractors  in  several  geographic
locations.   Characteristic  of  TENERA's  marketing  strategy  are  significant
projects in which  initial  contracts  have been only a fraction of the ultimate
sale.

      The Company  provides  financial  incentives to attract  senior  technical
professionals with extensive utility industry  experience and to encourage these
individuals  to  market  the  complete  range of  TENERA's  services  throughout
existing and potential customer organizations.

      TENERA's marketing efforts are facilitated by the technical reputation and
industry   recognition  often  enjoyed  by  its  professional  staff.   TENERA's
reputation in the electric power industry and as a DOE contractor often leads to
invitations  to  participate  at an early  stage in the  conceptualization  of a
project.  During  this phase,  the  Company  assists  clients in  developing  an
approach for efficiently and productively  solving a problem. If new services or
products  are  developed  for a client,  they  generally  are  marketed to other
clients with similar needs.

      The Company's  reputation  also leads to  invitations  to  participate  in
multi-company teams assembled to bid on large DOE or utility projects.

      Clients. During the year ended December 31, 1999, TENERA provided services
to over 35 clients  involving over 55 contracts.  During the year ended December
31,  1998,  TENERA  provided  services  to over  35  clients  involving  over 65
contracts. Over 80% of TENERA's clients during the year ended December 31, 1999,
had previously used its services.

      During  the year ended  December  31,  1999,  three  clients,  Kaiser-Hill
Company,  LLC  ("Kaiser-Hill"),  prime  contractor of the Rocky Flats  Contract,
Rocky Mountain Remediation Services,  LLC ("RMRS"), a prime subcontractor of the
Rocky Flats Contract,  and Safe Sites of Colorado,  LLC ("Safe Sites"),  a prime
subcontractor  of the Rocky Flats  Contract,  accounted for 75% of the Company's
total revenue (Kaiser-Hill - 32%; RMRS - 26%; Safe Sites - 17%). During the year
ended  December 31, 1998, two clients  accounted for 64% of the Company's  total
revenue  (Kaiser-Hill  - 37%;  Safe Sites - 27%;).  The Company  has  maintained
working  relationships  with  Kaiser-Hill,  RMRS, and Safe Sites for five years,
during which time various contracts have been completed and replaced with new or
follow-on contracts.  There can be no assurance that these relationships will be
maintained at current levels or beyond the existing  contracts,  and the loss of
these  clients  would  have  a  material  adverse  effect  on the  Company  (see
"Operating Risks").

Operations

      The Company  primarily  contracts  for its  services in one of three ways:
time and materials ("T & M"), time and materials plus incentive fee ("TMIF"), or
fixed  price.  T & M and TMIF  contracts,  which cover the  majority of TENERA's
revenues,  are  generally  billed  monthly by  applying a  multiplier  factor to
specific  labor  costs or by use of a fixed  hourly  labor rate  charged to each
project.  T  &  M  and  TMIF  contracts  are  generally  structured  to  include
"not-to-exceed"  ceilings;  however,  if after initial  review or after work has
started, it is noted that additional work is required, the contract normally can
be  renegotiated  to include such  additional  work and to increase the contract
ceiling accordingly. Also, prior to the Asset Sale, the Company received license
and annual maintenance fees from contracts  involving software products.  During
the year ended December 31, 1997, such fees amounted to $600,000.



                                       4
<PAGE>



      Fixed-price  contracts  are  generally  applicable  where  TENERA has been
requested to deliver  services  and/or  products  previously  developed by it or
deliverable  to  multiple  customers.   At  December  31,  1999,  of  the  total
outstanding contracts, less than 10% were fixed-price.

      TENERA generally  receives  payments on amounts billed 30 to 90 days after
billing,  except for retention under  contracts.  Since the majority of TENERA's
clients  are  utility  companies,   DOE,  or  DOE  prime   contractors,   TENERA
historically  has  experienced  a low  percentage  of losses due to poor  credit
risks.

Backlog

      As of December 31, 1999,  TENERA had contracted a backlog of approximately
$15.3  million,  all of which is cancelable by the clients.  The Rocky Flats and
Energy subsidiaries account for $14.9 million and $.4 million,  respectively, of
the backlog.  Contracted backlog represents the aggregate of the remaining value
of those active contracts  entered into by TENERA for services which are limited
by a  contractual  amount  and does not  include  any  estimates  of  open-ended
services  contracts  or  unfunded  backlog  that may result  from  additions  to
existing contracts.

      Since all outstanding contracts are cancelable, there is no assurance that
the  revenues  from these  contracts  will be  realized by the  Company.  If any
contract is canceled,  there is no assurance that the Company will be successful
in replacing such contract.

Competition

      The market for consulting and  management  services is highly  competitive
and  TENERA  competes  with  several  larger  firms with  significantly  greater
resources.  The  primary  competitive  factor in the market for  consulting  and
management  services is price,  and certain of TENERA's  competitors are able to
offer  similar  services at prices  that are lower than those  offered by TENERA
(see "Operating Risks").

Research and Development

      It has been TENERA's policy to undertake development projects of software,
systems,  and  data  bases  only if they can be  expected  to lead  directly  to
proprietary  products  that may be generally  marketable.  A portion of TENERA's
research  and  development  effort  may  be  funded  through  customer-sponsored
projects, although the rights to the systems and databases generally remain with
TENERA.  Because  TENERA's  research  and  development  activities  involve  the
integration of customer-funded,  cost sharing, and TENERA-funded projects, it is
not  possible to  segregate  on a  historical  basis all of the  specific  costs
allocable as research and development  costs. In 1999 and 1998,  TENERA spent in
excess of  $100,000  annually  on  software  development  related to its TET and
consulting  services  businesses,  in  contrast to  expending  in excess of $1.5
million  in 1997 on  software  development  related  to its Mass  Transportation
business prior to the Asset Sale.

Patents and Licenses

      The Company  does not hold any patents  material to its  business.  TENERA
relies upon trade secret laws and contracts to protect its proprietary rights in
software systems and databases.  The service and license  agreements under which
clients  acquire certain rights to access and use TENERA's  software  technology
generally  restrict the clients' use of the systems to their own  operations and
prohibit disclosure to others.

Personnel

      At December 31,  1999,  the Company  employed a total of 164  consultants,
engineers, and scientists and a supporting administrative staff of 23 employees.
Eight employees hold doctorates and 52 employees hold master's  degrees.  TENERA
also  retains  the  services  of numerous  independent  contractors  in order to
fulfill specific needs for particular  projects.  None of TENERA's employees are
represented by a labor union.



                                       5
<PAGE>



Item 2.  Properties

      The Company's headquarters are located in San Francisco,  California,  and
consist of approximately 13,500 square feet of leased office space,  expiring in
October 2000. TENERA also leases  approximately 6,500 square feet in Louisville,
Colorado,  expiring  in  October  2000 and  approximately  3900  square  feet in
Knoxville, Tennessee, expiring in December 2000. Additionally,  TENERA maintains
a  900  square  feet  project  office  in  San  Luis  Obispo,  California  on  a
month-to-month  lease basis.  As a result of the Asset Sale,  TENERA vacated its
office space in Hartford,  Connecticut,  and is subleasing the space until lease
expiration in May 2000.

      The Company  believes that its facilities are well maintained and adequate
for its current  needs.  However,  the Company  expects to face a  substantially
higher lease rate upon  expiration of its San  Francisco  lease in October 2000,
which may result in relocation of its headquarters.

Item 3.  Legal Proceedings

      None.


Item 4.  Submission of Matters to a Vote of Security Holders

      None.



                                       6
<PAGE>



                                     PART II

Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters

      Shares of the Company's  Common Stock are listed for trading on AMEX under
the symbol TNR. The first  trading day on AMEX was June 30, 1995,  at which time
10,417,345 shares were outstanding. There were approximately 500 shareholders of
record as of March 1, 2000.

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
                                     1999                          1998                          1997
                           -------------------------     -------------------------     -------------------------
                                Price Range of                Price Range of                Price Range of
                             TENERA, Inc. Shares           TENERA, Inc. Shares           TENERA, Inc. Shares
                           -------------------------     -------------------------     -------------------------
                             High            Low           High            Low           High            Low
----------------------------------------------------------------------------------------------------------------
<S>                       <C>            <C>            <C>            <C>            <C>            <C>
First Quarter ......       $   2.00       $   1.0625     $   0.875      $   0.50       $   0.9375     $   0.625
Second Quarter .....           1.625          1.00           1.00           0.5625         0.8125         0.50
Third Quarter ......           1.50           1.00           1.6875         0.6875         0.625          0.50
Fourth Quarter .....           1.125          0.75           2.75           0.75           0.8125         0.50
----------------------------------------------------------------------------------------------------------------
</TABLE>

      The  Board of  Directors  of the  Company  determines  the  amount of cash
dividends  which the Company may make to  shareholders  after  consideration  of
projected cash  requirements and a determination of the amount of retained funds
necessary to provide for growth of the Company's business.  The Company has made
no  distributions  since 1991.  The Company does not  anticipate  resumption  of
dividends in the foreseeable future.



                                       7
<PAGE>



Item 6.  Selected Financial Data

      The following  consolidated selected financial data of the Company for the
five prior years should be read in conjunction with the  consolidated  financial
statements and related notes included elsewhere.

                                  TENERA, INC.
                              FINANCIAL HIGHLIGHTS

  (In thousands, except per share and statistical amounts)
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
                                                                       Year Ended December 31,
                                                       ---------------------------------------------------------
                                                         1999        1998         1997       1996        1995
----------------------------------------------------------------------------------------------------------------
<S>                                                   <C>         <C>          <C>         <C>         <C>
OPERATIONS DATA

Revenue .........................................      $37,922     $27,445      $21,121     $24,003     $25,545
Operating Income (Loss) .........................        2,336       1,874       (2,139)     (1,382)      1,203
Net Earnings (Loss) .............................        1,342       1,674       (1,890)     (1,080)        898
Earnings (Loss) per Share-- Basic ...............         0.13        0.17        (0.19)      (0.11)       0.07
Earnings (Loss) per Share-- Diluted .............         0.13        0.16        (0.19)      (0.11)       0.07
Weighted Average Shares-- Basic..................       10,050      10,124       10,123      10,248       9,920
Weighted Average Shares-- Diluted................       10,409      10,450       10,123      10,248      10,014

CASH FLOW DATA

Net Cash Provided (Used) by Operating Activities       $   631     $   906      $(2,681)    $ 2,954     $  (286)
Net Increase (Decrease) in Cash and Cash Equivalents       132       1,069       (1,672)      2,490        (469)

FINANCIAL POSITION AT DECEMBER 31

Cash and Cash Equivalents .......................        3,493       3,361        2,292       3,964       1,474
Working Capital .................................        5,467       4,474        2,831       4,555       5,836
Total Assets ....................................       10,710       9,206        6,052       7,940      10,087
Total Liabilities ...............................        4,950       4,538        3,065       3,062       3,912
Stockholders' Equity.............................        5,760       4,668        2,987       4,878       6,175
OTHER INFORMATION
Number of Employees .............................          187         196          187         208         270
----------------------------------------------------------------------------------------------------------------
</TABLE>



                                       8
<PAGE>



Item 7.  Management's  Discussion  and  Analysis  of  Results  of Operations and
Financial Condition


                                  TENERA, INC.
                              RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
                                                                                   Percent of Revenue
                                                                        -----------------------------------------
                                                                                Year Ended December 31,
                                                                        -----------------------------------------
                                                                         1999           1998          1997
-----------------------------------------------------------------------------------------------------------------
<S>                                                                     <C>           <C>           <C>

Revenue .............................................................    100.0%        100.0%        100.0%

Direct Costs ........................................................     77.4          75.5          61.7

General and Administrative Expenses .................................     16.4          19.7          38.5

Software Development Costs...........................................     --            --             7.2

Special Item Income .................................................     --             1.1           1.7

Litigation Judgment Cost.............................................     --            (0.1)          4.5

Other Income ........................................................      *             0.8           0.1
                                                                        ---------     ---------     ----------

   Operating Income (Loss) ..........................................      6.2           6.8         (10.1)

Interest Income, Net ................................................      0.3           0.5           0.5
                                                                        ---------     ---------     ----------
Net Earnings (Loss) Before Income Tax Expense (Benefit)..............      6.5%          7.3%         (9.6)%
                                                                        =========     =========     ==========
-----------------------------------------------------------------------------------------------------------------
</TABLE>
  * Less than 0.05%

Year Ended December 31, 1999 versus Year Ended December 31, 1998

      The Company's  increased revenue in its Rocky Flats subsidiary resulted in
net earnings, before income tax expense of $2,455,000,  compared to net earnings
of $1,653,000 in 1998 before income tax expense, special item, and adjustment to
litigation judgment costs.

      The revenue  increase in 1999 is primarily  the result of increased  Rocky
Flats  Contract  activity.  For 1999,  the  concentration  of  revenue  from the
government  sector  increased to 81% of total revenue from 78% in 1998.  Revenue
concentration from the government sector is expected to remain high in 2000. The
number of clients served during 1999 totaled over 35,  approximately the same as
1998.

      Direct  costs  were  higher in 1999,  primarily  as a result of  increased
revenue  generation and the related use of  subcontractor  teams under the Rocky
Flats Contract. Gross margins decreased to 23%, in 1999 from 25% in 1998, mainly
due to an  increase  in the  proportion  of revenue  derived  from lower  margin
government projects.

      General  and  administrative  costs were  higher  compared  to a year ago,
primarily  reflecting  increased  costs  associated  with the development of TET
Courses and the establishment of GoTrain.Net,  and higher performance bonuses to
employees based on higher operating income. However,  general and administrative
expenses, as a percentage of revenue, decreased to 16% in 1999 from 20% in 1998.

      The special  item of $300,000 in 1998,  reflects the  additional  realized
gain from the Asset Sale  associated  with the repayment of the Promissory  Note
(see Notes 1 and 8 to Consolidated Financial Statements).

      The litigation  judgment cost adjustment in 1998 relates to the settlement
of  litigation  for $50,000 less than the amount  accrued in 1997 (see Note 7 to
Consolidated Financial Statements).

      Other income in 1999 was immaterial. Other income in 1998 reflects certain
accounting  and  administrative  services  provided on a temporary  basis to the
purchaser in the Asset Sale.  These services ceased during the fourth quarter of
1998.



                                       9
<PAGE>



      Net  interest  income  in 1999  and  1998  represents  earnings  from  the
investment  of  cash  balances  in  short-term,  high-quality,   government  and
corporate debt  instruments.  The lower net interest income in 1999, as compared
to a year ago,  primarily  reflects  lower  interest  rates.  The Company had no
borrowings under its line of credit during 1999 and 1998.

Year Ended December 31, 1998 versus Year Ended December 31, 1997

      The  Company's  increased  revenue in its Rocky  Flats  subsidiary,  lower
overall general and administrative  expenses, and the elimination of significant
ongoing development costs as a result of the Asset Sale in the fourth quarter of
1997,  resulted in net earnings,  before income tax expense,  special item,  and
adjustment to litigation  judgment costs,  of $1,653,000,  compared to a loss of
$1,434,000  in 1997 before  income tax benefit,  special  item,  and accrual for
litigation judgment costs.

      The revenue  increase in 1998 was primarily the result of increased  Rocky
Flats Contract activity,  partially offset by the absence of Mass Transportation
revenue as a result of the Asset Sale.  For 1998, the  concentration  of revenue
from the government  sector  increased to 78% of total revenue from 53% in 1997.
Approximately  one-half of the increase in revenue  concentration related to the
loss of Mass  Transportation  revenue as a result of the Asset  Sale.  The other
one-half of the revenue concentration increase was due to higher levels of Rocky
Flats  Contract  activity  versus 1997.  The number of clients served during the
year  decreased to 35 from 40  (excluding  20 clients  associated  with the Mass
Transportation business) in 1997.

      Direct  costs  were  higher in 1998,  primarily  as a result of  increased
revenue  generation and the related use of  subcontractor  teams under the Rocky
Flats Contract. Gross margins decreased to 25%, in 1998 from 38% in 1997, mainly
due to an  increase  in the  proportion  of revenue  derived  from lower  margin
government projects.

      General and  administrative  costs were lower  compared to the prior year,
primarily  reflecting  increased  utilization of employees on billable contracts
and  reduced  corporate  and  subsidiary   administrative  staffs.  General  and
administrative  expenses also decreased,  as a percentage of revenue,  to 20% in
1998 from 39% in 1997.

      Due  to  the  Asset  Sale,  the  Company's  software  product  development
expenditures were not material in 1998, as compared to $1,531,000 in 1997.

      Effective  November 14, 1997, the Company  consummated  the sale of all of
the assets related to the Mass Transportation business for $1,300,000 in cash, a
promissory  note in the amount of $300,000,  a warrant to acquire 4% of the then
outstanding shares of the buyer's common stock,  exercisable upon the occurrence
of an  initial  public  offering  or a change  of  control  (as  defined  in the
warrant),  plus  the  assumption  of all  liabilities  associated  with the Mass
Transportation business. The Mass Transportation  subsidiary was not expected to
produce   profitable  results  in  the  subsequent  twelve  months  due  to  the
anticipated  high level of investment  needs to develop its products and for its
business development activities.  The special item of $355,000 in 1997 reflected
the realized  gain  (exclusive  of the effect of the note and warrant)  from the
Asset Sale (see Notes 1 and 8 to Consolidated  Financial  Statements).  The note
was repaid in full in February  1998,  and an  additional  gain of $300,000  was
reported in 1998 as a special item. In December  1999, the warrant was exchanged
for  convertible  preferred  stock  equivalent to 4% ownership of the buyer on a
fully diluted basis under the capital structure at the time of the exchange, and
a  redemption  right equal to  $525,000 in the event of the buyer's  liquidation
(see Note 8 to Consolidated Financial Statements).

      On February 10, 1998,  the Company was notified by the Superior  Court for
Alameda  County of the trial  judge's  decision  against the  defendants  in the
action entitled PLM Financial  Services,  Inc. v TERA Corporation,  et al. (Case
No. 743 439-0, the "PLM  Litigation"),  in which TENERA and others were named as
defendants.  Damages were not  specified in the Court's  decision,  but based on
exposure  estimates by the Company's  counsel,  the Company  accrued  litigation
judgment  expenses of $950,000 in 1997 related to this matter.  In May 1998, the
Company  settled the case for $950,000 in cash, of which  approximately  $50,000
was paid by a co-defendant,  TERA Corporation  Liquidating Trust. The litigation
judgment cost  adjustment of $50,000 in 1998  reflected the lower amount paid by
the Company versus the accrual  established in 1997 (see Note 7 to  Consolidated
Financial Statements).



                                       10
<PAGE>



      Other income in 1998 reflected  temporary  accounting  and  administrative
services  provided to the buyer in the Asset Sale.  These services ceased during
the fourth  quarter of 1998.  Other income in 1997 reflects gains on the sale of
assets related to facility downsizing.

      Net  interest  income  in 1998  and  1997  represents  earnings  from  the
investment  of  cash  balances  in  short-term,  high-quality,   government  and
corporate debt instruments.  The higher net interest income in 1998, as compared
to a year ago, primarily reflects larger average cash balances.  The Company had
no borrowings under its line of credit during 1998 and 1997.

Liquidity and Capital Resources

      Cash and cash equivalents  increased by $132,000 during 1999. The increase
was due to cash provided by operations  ($631,000),  partially offset by the net
acquisition of equipment  ($249,000) and the repurchase of the Company's  Common
Stock ($250,000).

      Receivables  increased by $1,127,000 from December 31, 1998, primarily due
to an increase in revenue in 1999. The allowance for sales adjustments decreased
$2,000 from December 31, 1998.

      Accounts  payable  increased by $598,000 since the end of 1998,  primarily
associated  with higher  direct costs  supporting  increased  revenues.  Accrued
compensation  and related expenses  decreased by $86,000 during 1999,  primarily
reflecting lower usage of self-insured medical benefits in 1999.

       No cash dividend was declared in 1999.

      The impact of  inflation  on project  revenue and costs of the Company was
minimal.

      At December 31, 1999, the Company had available $2,500,000 of a $3,000,000
revolving  loan facility with its lender which expires in May 2000.  The Company
expects to renew on substantially the same terms. The Company has no outstanding
borrowing  against the line;  however,  $500,000 was assigned to support standby
letters of credit.

      Management believes that cash expected to be generated by operations,  the
Company's  working  capital,  and its loan  facility  are  adequate  to meet its
anticipated liquidity needs through the next twelve months.

Impact of Year 2000

      In prior years, the Company discussed the nature and progress of its plans
to become Year 2000 ready.  In late 1999, the Company  completed its remediation
and  testing  of  systems.  As a result  of those  planning  and  implementation
efforts, the Company experienced no significant  disruptions in mission critical
information technology and non-information technology systems and believes those
systems  successfully  responded  to the Year  2000  date  change.  The  Company
expensed  approximately  $40,000 during 1999 in connection with  remediating its
systems.  The Company is not aware of any material problems  resulting from Year
2000 issues, either with its products, its internal systems, or the products and
services  of third  parties.  The Company  will  continue to monitor its mission
critical computer applications and those of its suppliers and vendors throughout
the year 2000 to ensure  that any latent  Year 2000  matters  that may arise are
addressed promptly (see "Operating Risks").

Operating Risks

      Statements  contained in this report which are not historical  facts,  are
forward-looking  statements  as that term is defined in the  Private  Securities
Litigation  Reform Act of 1995. Such  forward-looking  statements are subject to
the  risks  and  uncertainties  which  could  cause  actual  results  to  differ
materially  from  those  projected,  including  those  risks  and  uncertainties
discussed below.

      Reliance on Major Customers;  Concentration of Revenue from the Government
Sector. During fiscal 1999, three customers,  Kaiser-Hill, RMRS, and Safe Sites,
accounted for  approximately  75% of the Company's  total  revenues,  and during
1998, two customers, Kaiser-Hill and Safe Sites, accounted for approximately 64%
of the Company's total revenues.  Additionally,  for 1999, the  concentration of



                                       11
<PAGE>



the Company's total revenue from the government sector increased to 81% of total
revenue from 78% in 1998. This level of concentration of revenues from the lower
margin  government  sector is expected to continue and possibly  increase in the
future.  Further,  all outstanding customer contracts are cancelable upon notice
by either party,  and therefore,  there can be no assurance  that  relationships
with  customers  will  be  maintained  at  existing  levels,   or  at  all.  The
discontinuation  or material  reduction of business  relations with any of these
customers would have a material adverse impact on TENERA's business (see Item 1,
"Business -- Marketing and Clients").

      History of  Losses;  Uncertainty  of Future  Profitability.  Although  the
Company had net earnings of $0.8 million in 1992, $1.7 million in 1998, and $1.3
million in 1999,  net  (losses)  over the period  1991  through  1997 were $(6.4
million) in 1991,  $(0.3 million) in 1993,  $(1.2 million) in 1994, $0.9 million
in 1995,  $(1.1  million)  in 1996,  $(1.9  million)  in 1997.  There  can be no
assurance  of the level of  earnings,  if any,  that the Company will be able to
derive in the future.

      Uncertainty  Regarding Industry Trends and Customer Demand. As a result of
the  slowdown in the  construction  of power plants and the absence of new power
plants scheduled for  construction,  as well as the gradual  deregulation of the
production and distribution of electricity,  the market for engineering services
relating to licensing and  construction of power plants has contracted,  and the
market for services  related to efficient and  profitable  operation of existing
capacity has expanded.  There can be no assurance  that (i) TENERA will have the
financial  and other  resources  necessary to  successfully  research,  develop,
introduce,  and market new products  and  services,  (ii) if, or when,  such new
products or services are introduced,  they will be favorably accepted by current
or potential  customers,  or (iii) TENERA will be otherwise able to fully adjust
its services and products to meet the changing  needs of the industry  (see Item
1, "Business -- Background").

      Uncertainty of Access to Capital.  Management currently believes that cash
expected to be generated from operations, the Company's working capital, and its
available loan facility,  are adequate to meet its anticipated  near-term needs.
If cash from operations is less than currently  anticipated,  TENERA may need to
seek other sources of capital.  There can be no guarantee that such sources will
be available in sufficient amounts or on terms favorable to TENERA, or at all.

      Reliance  on Key  Personnel.  Due  to the  nature  of the  consulting  and
professional services business,  the Company's success depends, to a significant
extent,  upon the continued services of its officers and key technical personnel
and  the  ability  to  recruit  additional  qualified  personnel.   The  Company
experienced a  historically  high rate of turnover as revenue and earnings began
to decline in 1991 and  thereafter.  Further loss of such officers and technical
personnel,   and  the  inability  to  recruit  sufficient  additional  qualified
personnel, could have a material adverse effect on the Company.

      Government  Contracts  Audits.  The  Company's  United  States  government
contracts  are  subject in all cases to audit by  governmental  authorities.  In
1994, an audit was concluded,  which began in 1991, of certain of its government
contracts  with  the  DOE  relating  to the  allowability  of  certain  employee
compensation  costs. The Company made a special charge to earnings in 1991 for a
$2.4 million  provision for the potential rate  adjustments then disputed by the
Company  and the  government.  As a result of  resolving  certain  issues in the
dispute,  the Company  recognized  increases to earnings of $500,000 in 1994 and
$250,000 in 1996. Cash payments to clients associated with the settlement, which
are estimated to be between $400,000 and $500,000, which were accrued for in the
1991 Special Charge to earnings, are expected to be made as government contracts
with  individual  clients  are closed  out.  There can be no  assurance  that no
additional  charges to earnings of the Company may result from future  audits of
the Company's government contracts.

      Competition.  The market for management and consulting  services is highly
competitive  and TENERA  competes with several  larger firms with  significantly
greater resources. Significant competitive factors in the market for engineering
and  management  services  are price and the ability to offer new  products  and
services  designed  to meet  changing  customer  demand.  A number  of  TENERA's
competitors  are able to offer such services at prices that are lower than those
offered by TENERA, and to devote far greater resources toward the development of
new products and services. This competition has had, and is expected to continue
to have, a material adverse impact on TENERA's business.



                                       12
<PAGE>



      Year 2000 Issue.  The Company has corrected  its known  internal Year 2000
system problems and has received  notification from key vendors and clients that
their  systems  are  Year  2000  compliant.  Furthermore,  the  Company  has not
experienced any material problems  subsequent to the date change.  However,  the
Company has no control over the systems of third parties and it is possible that
Year 2000 problems may occur at a later date, which could materially  affect the
Company's business operations and financial  condition.  For example, if a major
client has a Year 2000 problem with its accounts payable system,  payment of the
Company's invoices could be delayed, adversely affecting cash flow.

Item 7A.   Quantitative and Qualitative Disclosure about Market Risk

      The  Company  has  minimal  exposure  to market and  interest  risk as the
Company invests its excess cash in instruments, which mature within 90 days from
the date of purchase. The Company does not have any derivative instruments.



                                       13
<PAGE>



Item 8.  Financial Statements and Supplementary Data

                                  TENERA, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS

  (In thousands, except per share amounts)
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
                                                                             Year Ended December 31,
                                                                  ----------------------------------------------
                                                                      1999            1998             1997
----------------------------------------------------------------------------------------------------------------
<S>                                                              <C>              <C>              <C>
Revenue ....................................................      $   37,922       $   27,445       $   21,121
Direct Costs ...............................................          29,351           20,718           13,038
General and Administrative Expenses ........................           6,236            5,416            8,131
Software Development Costs .................................              --               --            1,531
Special Item Income ........................................              --              300              355
Litigation Judgment Cost ...................................              --              (50)             950
Other Income ...............................................               1              213               35
                                                                  -------------    ------------     ------------
   Operating Income (Loss)..................................           2,336            1,874           (2,139)
Interest Income, Net .......................................             119              129              110
                                                                  -------------    ------------     ------------
   Net Earnings (Loss) Before Income Tax Expense (Benefit)..           2,455            2,003           (2,029)
Income Tax  Expense (Benefit)...............................           1,113              329             (139)
                                                                  -------------    ------------     ------------
Net Earnings (Loss).........................................      $    1,342       $    1,674       $   (1,890)
                                                                  =============    ============     ============
Net Earnings (Loss) per Share-- Basic ......................      $     0.13       $     0.17       $    (0.19)
                                                                  =============    ============     ============
Net Earnings (Loss) per Share-- Diluted ....................      $     0.13       $     0.16       $    (0.19)
                                                                  =============    ============     ============
Weighted Average Number of Shares Outstanding-- Basic.......          10,050           10,124           10,123
                                                                  =============    ============     ============
Weighted Average Number of Shares Outstanding-- Diluted.....          10,409           10,450           10,123
                                                                  =============    ============     ============
----------------------------------------------------------------------------------------------------------------
</TABLE>
  See accompanying notes.



                                       14
<PAGE>



                                  TENERA, INC.
                           CONSOLIDATED BALANCE SHEETS

  (In thousands, except share amounts)
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
                                                                                           December 31,
                                                                                   -----------------------------
                                                                                      1999             1998
----------------------------------------------------------------------------------------------------------------
<S>                                                                               <C>              <C>
ASSETS

Current Assets

   Cash and cash equivalents ...............................................       $    3,493       $    3,361
   Receivables, less allowances of $1,298 (1998 - $1,300)
     Billed ................................................................            3,587            2,692
     Unbilled ..............................................................            2,968            2,734
   Other current assets ....................................................              369              225
                                                                                   ------------     ------------
       Total Current Assets ................................................           10,417            9,012
Property and Equipment, Net ................................................              293              194
                                                                                   ------------     ------------
         Total Assets ......................................................       $   10,710       $    9,206
                                                                                   ============     ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities

   Accounts payable.........................................................       $    3,112       $    2,514
   Accrued compensation and related expenses ...............................            1,838            1,924
   Income taxes payable ....................................................               --              100
                                                                                   ------------     ------------
       Total Current Liabilities ...........................................            4,950            4,538
Stockholders' Equity
   Common Stock, $0.01 par value, 25,000,000 authorized, 10,417,345 issued .              104              104
   Paid in capital, in excess of par .......................................            5,699            5,699
   Retained earnings (Accumulated deficit)..................................              507             (835)
   Treasury stock-- 483,586 shares (1998 - 287,942 shares) .................             (550)            (300)
                                                                                   ------------     ------------
       Total Stockholders' Equity ..........................................            5,760            4,668
                                                                                   ------------     ------------
         Total Liabilities and Stockholders' Equity ........................       $   10,710       $    9,206
                                                                                   ============     ============
----------------------------------------------------------------------------------------------------------------
</TABLE>
  See accompanying notes.



                                       15
<PAGE>



                                  TENERA, INC.
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

  (In thousands, except share amounts)
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------
                                                    Paid-In        Retained
                                                   Capital in      Earnings
                                       Common        Excess      (Accumulated      Treasury
                                        Stock        of Par        Deficit)         Stock           Total
--------------------------------------------------------------------------------------------------------------
<S>                                 <C>           <C>            <C>            <C>            <C>
December 31, 1996 ......             $    104      $ 5,698        $   (619)      $   (305)      $   4,878
Repurchase of 1,694 Shares                 --           --              --             (1)             (1)
Net Loss ...............                   --           --          (1,890)            --          (1,890)
                                    ------------- -------------  -------------  -------------- ---------------
December 31, 1997 ......                  104        5,698          (2,509)          (306)          2,987
Issuance of 6,250 Shares                   --            1              --              6               7
Net Earnings ...........                   --           --           1,674             --           1,674
                                    ------------- -------------  -------------  -------------- ---------------
December 31, 1998 ......                  104        5,699            (835)          (300)          4,668
Repurchase of 195,644 Shares               --           --              --           (250)           (250)
Net Earnings ...........                   --           --           1,342             --           1,342
                                    ------------- -------------  -------------  -------------- ---------------
December 31, 1999 ......             $    104      $ 5,699        $    507       $   (550)      $   5,760
                                    ============= =============  =============  ============== ===============

--------------------------------------------------------------------------------------------------------------
</TABLE>
  See accompanying notes.



                                       16
<PAGE>



                                  TENERA, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

  (In thousands)
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
                                                                             Year Ended December 31,
                                                                  ----------------------------------------------
                                                                      1999            1998             1997
----------------------------------------------------------------------------------------------------------------
<S>                                                              <C>              <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net earnings (loss)......................................      $    1,342       $    1,674       $   (1,890)
   Adjustments  to reconcile  net  earnings  (loss) to
   cash provided (used) by operating activities:
     Depreciation ..........................................             151              108              231
     Gain on sale of equipment .............................              (1)              (2)             (21)
     Gain on sale of Mass Transportation business ..........              --             (300)            (355)
     Decrease in allowance for sales adjustments ...........              (2)             (58)            (146)
     Changes in assets and liabilities:
       Receivables .........................................          (1,127)          (1,999)          (1,243)
       Other current assets ................................            (144)              10              222
       Accounts payable ....................................             598            1,876             (128)
       Accrued compensation and related expenses ...........             (86)             447             (301)
       Litigation judgment accrual .........................              --             (950)             950
       Income taxes payable ................................            (100)             100               --
                                                                  -------------    ------------     ------------
         Net Cash Provided (Used) by Operating Activities ..             631              906           (2,681)

CASH FLOWS FROM INVESTING ACTIVITIES
   Acquisition of property and equipment ...................            (250)            (146)            (311)
   Proceeds from sale of equipment .........................               1                2               21
   Proceeds from sale of Mass Transportation business ......              --              300            1,300
                                                                  -------------    ------------     ------------
         Net Cash (Used) Provided  by Investing Activities .            (249)             156            1,010

CASH FLOWS FROM FINANCING ACTIVITIES
   Repurchase of Common Stock ..............................            (250)              --               (1)
   Issuance of common stock from Treasury...................              --                7               --
                                                                  -------------    ------------     ------------
         Net Cash (Used) Provided by Financing Activities ..            (250)               7               (1)
                                                                  -------------    ------------     ------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS .......
                                                                         132            1,069           (1,672)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR .............
                                                                       3,361            2,292            3,964
                                                                  -------------    ------------     ------------
CASH AND CASH EQUIVALENTS AT END OF YEAR ...................      $    3,493       $    3,361       $    2,292
                                                                  =============    ============     ============

----------------------------------------------------------------------------------------------------------------
</TABLE>
  See accompanying notes.



                                       17
<PAGE>



                                  TENERA, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 1999

Note 1. Organization

      TENERA, Inc.(the "Company"), a Delaware corporation, is the parent company
of the subsidiaries described below.

      TENERA Rocky Flats,  LLC ("Rocky  Flats"),  a Colorado  limited  liability
company,  was formed by the Company in 1995, to provide  consulting  services in
connection with  participation in the Performance Based  Integrating  Management
Contract  ("Rocky Flats  Contract") at the Department of Energy's  ("DOE") Rocky
Flats Environmental Technology Site. In May 1997, the Company's other government
business  was  consolidated  within the Rocky Flats  subsidiary.  This  business
provides  consulting  and  management  services to the DOE  directly and through
subcontracts with DOE prime  contractors.  These services provide  assistance to
DOE-owned  nuclear   facilities  in  devising,   implementing,   and  monitoring
strategies  to  upgrade  from  an   operational,   safety,   and   environmental
perspective.

      TENERA Energy, LLC ("Energy"),  a Delaware limited liability company,  was
formed by the Company in May 1997, to consolidate its commercial  electric power
utility business into a separate legal structure. The Energy subsidiary provides
consulting,  management  services,  and technology enhanced training programs in
organizational  effectiveness  and  organizational  development,   environmental
outsourcing and  monitoring,  risk analysis and modeling,  and business  process
improvement.

      TENERA  Technologies,  LLC ("Mass  Transportation"),  a  Delaware  limited
liability company, was formed by the Company in May 1997 to consolidate its mass
transportation  business  into a separate  legal  entity.  Before the Asset Sale
described  below,  Mass   Transportation   provided   computerized   maintenance
management software and consulting to the mass transit industry. On November 14,
1997,  the  Company  consummated  the sale of all of the assets  ("Asset  Sale")
related  to the  Mass  Transportation  business,  to  Spear  Technologies,  Inc.
("Spear"),  a  California  corporation  newly  formed by former  members  of the
Company's management (see Note 8).

      TENERA  GoTrain.Net,  LLC  ("GoTrain.Net"),  a Delaware limited  liability
company, was formed by the Company in October 1999, as a joint venture operation
to design, develop, market, and maintain a web-based Corporate Distance Learning
Center ("CDLC").  The joint venture was established  with its minority  interest
partner,   SoBran,   Inc.,  an  Ohio   corporation   specializing   in  Internet
technologies.  In  February  2000,  the  Company  purchased  the  Internet-based
development and support business of SoBran,  Inc.,  including  SoBran's minority
interest in GoTrain.Net.

Note 2. Summary of Significant Accounting Policies

      Basis of Presentation. The accompanying  consolidated financial statements
include  the accounts  of  the Company  and  its subsidiaries.  All intercompany
accounts and transactions have been eliminated.

      Use of Estimates.  The  preparation of 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 materially from
these estimates.

      Cash and Cash  Equivalents.  Cash and cash  equivalents  consist of demand
deposits,  money market accounts,  and commercial paper issued by companies with
strong credit  ratings.  Cash and cash  equivalents  are carried at cost,  which
approximates fair value. The Company includes in cash and cash equivalents,  all
short-term,  highly  liquid  investments,  which  mature  within three months of
acquisition.

      Concentrations  of Credit  Risk and  Credit  Risk  Evaluations.  Financial
instruments,  which potentially  subject the Company to concentrations of credit
risk,  consist  primarily of cash and cash equivalents and accounts  receivable.
Cash and cash equivalents  consist  principally of demand deposit,  money market
accounts,  and commercial  paper issued by companies with strong credit ratings.
Cash and cash equivalents are held with various domestic financial  institutions



                                       18
<PAGE>



with high  credit  standing.  The Company has not  experienced  any  significant
losses on its cash and cash  equivalents.  The Company  conducts  business  with
companies  in various  industries  primarily in the United  States.  The Company
performs  ongoing  credit  evaluations  of its customers and generally  does not
require  collateral.  Allowances are maintained for potential credit issues, and
such losses to date have been within management's expectations.

      Property  and  Equipment.  Property  and  equipment  are  stated  at  cost
($2,587,000 and $2,382,000 at December 31, 1999 and 1998, respectively),  net of
accumulated  depreciation  ($2,294,000  and  $2,188,000 at December 31, 1999 and
1998,  respectively).  Depreciation is calculated using the straight-line method
over the estimated useful lives, which range from three to five years.

      Revenue.  The Company  primarily  offers its services to the United States
electric power  industry and the DOE.  Revenue from  time-and-material  and cost
plus fixed-fee contracts is recognized when costs are incurred; from fixed-price
contracts,  on the basis of  percentage  of work  completed  (measured  by costs
incurred relative to total estimated project costs).

      The Company performs credit evaluations of these clients and normally does
not require collateral.  Reserves are maintained for potential sales adjustments
and  credit  losses;   such  losses  to  date  have  been  within   management's
expectations.  Actual  revenue and cost of contracts in progress may differ from
management  estimates  and such  differences  could be material to the financial
statements.

      During  1999,  three  clients  accounted  for 32%,  26%,  and 17% of total
revenue.  In 1998, two clients accounted for 37%, and 27% of the Company's total
revenue,  and in 1997,  three  clients  accounted for 43%, 14%, and 10% of total
revenue.

      Income Taxes.  The Company uses the liability method to account for income
taxes.  Under this method,  deferred tax assets and  liabilities  are determined
based on  differences  between  financial  reporting and tax bases of assets and
liabilities.  Deferred tax assets and liabilities are measured using enacted tax
rates and laws  that will be in effect  when the  differences  are  expected  to
reverse.  The Company is a C Corporation  subject to federal and state statutory
income tax rates for  income  earned.  Due to a net loss in 1997,  an income tax
benefit was  recorded for that year.  During 1998, a provision  for income taxes
was made after  taking  into  account  net  operating  loss  carryforwards  from
previous years. In 1999, a provision for federal and state income taxes was made
at a combined rate of 45% (see Note 5).

      Accounting for Stock-Based Compensation. The Company accounts for employee
stock  options in accordance  with  Accounting  Principles  Board Opinion No. 25
("APB 25") and has provided the pro forma  disclosures  required by Statement of
Financial Standards No. 123,  "Accounting for Stock-Based  Compensation,"  ("FAS
123") in Note 4.

      Per Share  Computation.  Basic  earnings  (loss) per share is  computed by
dividing net earnings  (loss) by the weighted  average  number of common  shares
outstanding  for the period.  Diluted  earnings per share reflects the potential
dilution of securities by adding other common stock equivalents, including stock
options,  warrants and  convertible  preferred  stock,  in the weighted  average
number of common shares  outstanding for a period, if dilutive.  Due to the loss
from operations in 1997, loss per share is based on the weighted  average number
of common shares only, as the effect of including  equivalent  shares from stock
options would be anti-dilutive.



                                       19
<PAGE>



      The following table sets forth the computation of basic and diluted (loss)
earnings per share as required by Financial Accounting Standards Board Statement
No. 128:

  (In thousands, except per share amounts)
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
                                                                             Year Ended December 31,
                                                                  ----------------------------------------------
                                                                      1999            1998             1997
----------------------------------------------------------------------------------------------------------------
<S>                                                              <C>              <C>              <C>
Numerator:
   Net earnings (loss) .....................................      $    1,342       $    1,674       $   (1,890)
Denominator:
  Denominator for basic earnings per share--
  weighted-average shares outstanding.......................          10,050           10,124           10,123
  Effect of dilutive securities:
     Employee & Director stock options (Treasury stock
method) ....................................................             359              326               --
  Denominator for diluted earnings per share--
  weighted-average common and common equivalent shares .....          10,409           10,450           10,123
                                                                  =============    ============     ============
Basic earnings (loss) per share  ...........................      $     0.13       $     0.17       $    (0.19)
                                                                  =============    ============     ============
Diluted earnings (loss) per share  .........................      $     0.13       $     0.16       $    (0.19)
                                                                  =============    ============     ============

----------------------------------------------------------------------------------------------------------------
</TABLE>


      Comprehensive Income (Loss). The Company does not have material components
of other comprehensive income.  Therefore,  comprehensive income (loss) is equal
to net earnings (loss) reported for all periods presented.

      Disclosures  about  Segments of an  Enterprise.  The Financial  Accounting
Standards Board Statement No. 131,  "Disclosures about Segments of an Enterprise
and Related  Information," (FAS 131"),  which establishes  standards for the way
public business  enterprises  report  information  about  operating  segments in
annual financial  statements.  The Company has one reportable  operating segment
under this  statement,  which is providing  services with respect to operations,
maintenance,    safety,   strategic   business   and   risk   management,    and
environmental/ecological issues for electric utility and DOE facilities.

      Recent Accounting  Pronouncements.  In June 1998, the Financial Accounting
Standards  Board issued  Statement of Financial  Accounting  Standards  No. 133,
"Accounting  for Derivative  Instruments  and Hedging  Activities"  ("FAS 133"),
which establishes  accounting and reporting standards for derivative instruments
and  hedging  activities.   FAS  133  requires  that  an  entity  recognize  all
derivatives  as either  assets or  liabilities  in the balance sheet and measure
those  instruments at fair value.  The Company will be required to adopt FAS 133
effective  January 1, 2001.  Management  of the  Company  does not  believe  the
adoption  of  this  statement  will  have a  material  effect  on the  Company's
consolidated financial position, results of operations, or cash flows.

Note 3. Related Party Transactions

      TERA Corporation Liquidating Trust ("Trust"). The Trust was established by
TERA Corporation ("Predecessor  Corporation") in 1986, to facilitate the orderly
sale or other  disposition  of the  remaining  assets  and  satisfaction  of all
remaining debts and liabilities of the  Predecessor  Corporation.  As of May 31,
1998,  the Trust was  terminated  after the total  liquidation  of its assets in
connection with the settlement of litigation with PLM Financial  Services,  Inc.
(see Note 7). The Company did not recognize any income or expense from the Trust
in 1999, 1998, and 1997.



                                       20
<PAGE>



Note 4. Employee Benefit Plans

      401(k)  Savings Plan. The 401(k)  Savings Plan is  administered  through a
trust that covers substantially all employees.  Employees can contribute amounts
to the plan, not exceeding 15% of salary. Effective January 1, 1998, the Company
matches employee  contributions equal to 50% of the first 4% of salary deferred.
The Company,  at its discretion,  may also contribute  funds to the plan for the
benefit  of  employees.  In 1999 and 1998,  charges to  earnings  for the 401(k)
Savings Plan were $164,000 and $233,000,  respectively. There were no charges to
earnings in 1997 for the 401(k)  Savings Plan.  During 1999,  1998, and 1997, no
discretionary amounts were contributed to the plan by the Company.

      Stock Option  Plans.  The Company has elected to follow APB 25 and related
interpretations  in  accounting  for its  employee  stock  options  because,  as
discussed below,  the alternative  fair value accounting  provided for under FAS
123 requires use of option  valuation  models that were not developed for use in
valuing 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 recognized.

      Under the provisions of the Company's 1992 Option Plan,  1,500,000  shares
are reserved for issuance upon the exercise of options  granted to key employees
and  consultants.  During 1999,  options  were granted for 285,000  shares at an
exercise  price of  $1.3625,  the then fair market  value,  expiring on March 9,
2005. In 1998, options were granted for 300,000,  20,000 and 50,000 shares at an
exercise price of $0.725, $0.5875 and $0.675, respectively, the then fair market
values,  expiring  on  February  19,  2004,  April  20,  2004 and July 1,  2004,
respectively.  In 1997, options were granted for 370,000 and 50,000 shares at an
exercise  price of $0.70 and $0.65,  respectively,  the then fair market values,
expiring on March 12, 2003 and May 1, 2003,  respectively.  During 1999, options
for 94,000  shares were  canceled  due to  employee  terminations  (660,750  and
122,500 in 1998 and 1997, respectively). Options for 6,250 shares were exercised
in 1998,  but no options  were  exercised  in 1999 and 1997.  As of December 31,
1999,  options for  1,272,500  shares were  outstanding  and options for 921,250
shares were exercisable.

      Under the provisions of the 1993 Outside Directors Compensation and Option
Plan, which was approved by the Board of Directors,  effective March 1, 1994, as
amended in 1998,  300,000  shares are reserved for issuance upon the exercise of
options granted to non-employee directors. During 1999, options were granted for
62,500  shares at an  exercise  price of  $1.375,  the then fair  market  value,
expiring on March 1, 2009.  In 1998,  options were granted for 37,500 and 25,000
shares at an exercise  price of $0.5625 and $0.75,  respectively,  the then fair
market value, expiring on March 1, 2008 and July 1, 2008, respectively. In 1997,
options were granted for 32,000 shares at an exercise price of $0.6875, the then
fair market value,  expiring on March 1, 2007.  During 1999, 12,500 options were
forfeited  (8,000 share  options were  canceled in 1998 and 12,500 in 1997).  No
options were exercised in 1999, 1998, and 1997. As of December 31, 1999, options
for 254,000 shares were outstanding and 204,000 were exercisable.



                                       21
<PAGE>



      The combined  stock option  activity of the  Company's two option plans is
summarized below:

  (In thousands, except per share amounts)
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
                                                          Year Ended December 31,
                           -------------------------------------------------------------------------------------
                                     1999                          1998                          1997
                           -------------------------     -------------------------     -------------------------
                                          Weighted-                     Weighted-                     Weighted-
                                           Average                       Average                       Average
                                           Exercise                      Exercise                      Exercise
                            Options         Price         Options         Price          Options        Price
----------------------------------------------------------------------------------------------------------------
<S>                       <C>            <C>            <C>            <C>            <C>            <C>
Outstanding--
Beginning of Year ..           1,285      $    0.91          1,528      $    0.98          1,211      $    1.09

Granted ............             347           1.36            432           0.70            452           0.69
Exercised ..........              --             --             (6)          1.19             --             --
Forfeited ..........            (106)          1.05           (669)          0.90           (135)          1.18
                           ----------     ----------     ----------     ----------     ----------     ----------
Outstanding--
End of Year ........           1,526      $    1.00          1,285      $    0.91          1,528      $    0.98
                           ==========     ==========     ==========     ==========     ==========     ==========
Exercisable at
End of Year ........           1,125      $    0.99            811      $    1.01            813      $    1.09

----------------------------------------------------------------------------------------------------------------
</TABLE>

      Exercise  prices for options  outstanding as of December 31, 1999,  ranged
from $0.5625 to $1.75. The weighted-average  remaining contractual life of those
options is 4.4 years.

      Proforma Disclosures of the Effect of Stock-Based Compensation.  Pro forma
information  regarding  net  earnings  (loss) and  earnings  (loss) per share is
required by FAS 123 for fiscal years  beginning after December 31, 1994, and has
been  determined as if the Company had accounted for its stock options under the
fair value method of FAS 123. The fair value for these  options was estimated at
the date of grant using a Black-Scholes  option pricing model with the following
weighted-average  assumptions for 1999, 1998, and 1997: risk-free interest rates
of 5.3% for the March 1999 grants; 5.0% each for the February, March, April, and
July 1998 grants; and 6.0% and 5.85%,  respectively,  for the March and May 1997
grants;  dividend yield of 0% for all years;  volatility factors of the expected
market  price  of  the  Company's   common  stock  of  0.56,   0.48,  and  0.51,
respectively;  and a weighted-average  expected life of the option of five years
for all employee grants and seven years for director grants.

      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,  options valuation models require the
input of highly  subjective  assumptions  including  the  expected  stock  price
volatility.   Because  the   Company's   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 stock options.

      For purposes of pro forma  disclosures,  the  estimated  fair value of the
options is  amortized to expense  over the vesting  periods of the options.  The
Company has elected to base its initial estimate of compensation  expense on the
total  number  of  options  granted.  Subsequent  revisions  to  reflect  actual
forfeitures  are made in the period  the  forfeitures  occur  through a catch-up
adjustment.



                                       22
<PAGE>



      Pro forma  information  regarding the  Company's  net earnings  (loss) and
earnings (loss) per share follows:

  (In thousands, except per share amounts)
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
                                                                             Year Ended December 31,
                                                                  ----------------------------------------------
                                                                      1999            1998             1997
----------------------------------------------------------------------------------------------------------------
<S>                                                              <C>              <C>              <C>
Net Earnings (Loss)-- As Reported ..........................      $    1,342       $    1,674       $   (1,890)
Pro Forma Net Earnings (Loss)--FAS 123 .....................           1,278            1,672           (1,940)


Net Earnings (Loss) per Share-- As Reported Basic ..........      $     0.13       $     0.17       $     (0.19)
                                                                  =============    ============     ============
Net Earnings (Loss) per Share-- As Reported Diluted ........      $     0.13       $     0.16       $     (0.19)
                                                                  =============    ============     ============
Pro Forma Net Earnings (Loss) per Share-- FAS 123 Basic ....      $     0.13       $     0.17       $     (0.19)
                                                                  =============    ============     ============
Pro Forma Net Earnings (Loss) per Share-- FAS 123 Diluted ..      $     0.12       $     0.16       $     (0.19)
                                                                  =============    ============     ============

----------------------------------------------------------------------------------------------------------------
</TABLE>

      The  weighted-average  grant-date fair value of options granted,  which is
the value assigned to the options under FAS 123, was $0.75, $0.35, and $0.36 for
grants made during years ended December 31, 1999, 1998, and 1997, respectively.

 Note 5. Income Taxes

      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 assets and  liabilities  as of December 31, 1999 and
1998, are as follows, using the liability method:

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
                                                                                           December 31,
                                                                                   -----------------------------
                                                                                      1999             1998
----------------------------------------------------------------------------------------------------------------
<S>                                                                               <C>              <C>

Current Deferred Tax Assets

     Contract provisions not currently deductible ..........................       $       --       $      466
     Accrued expenses not currently deductible .............................              771              427
     Fixed assets ..........................................................               40               --
     Other .................................................................               15               --
                                                                                   ------------     ------------
         Total Current Gross Deferred Tax Assets ...........................              826              893
                                                                                   ------------     ------------
     Less:  Valuation Allowance ............................................             (727)            (772)

Current Deferred Tax Liabilities

     Revenue differences related to timing .................................               99              121
                                                                                   ------------     ------------
         Net Current Deferred Tax Liabilities ..............................       $       --       $       --
                                                                                   ============     ============

----------------------------------------------------------------------------------------------------------------
</TABLE>



                                       23
<PAGE>


      The current tax provision (benefit) for the years ended December 31, 1999,
1998, and 1997, are as follows:

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
                                                                              Year Ended December 31,
                                                                    ---------------------------------------------
                                                                       1999            1998             1997
-----------------------------------------------------------------------------------------------------------------
<S>                                                                <C>             <C>              <C>

Current:
     Federal .....................................................  $      927      $      256       $     (137)

     State .......................................................         186              73               (2)
                                                                    -----------     ------------     ------------
     Tax Provision (Benefit) .....................................  $    1,113      $      328       $     (139)
                                                                    ===========     ============     ============

-----------------------------------------------------------------------------------------------------------------
</TABLE>

      The  valuation  allowance  decreased  by  $45,000,  during  the year ended
December 31, 1999, for those deferred tax assets, which may not be realized. The
decrease  primarily  relates to the  reduction of employee  vacation and holiday
accrual balances during 1999.

      The provision (benefit) for income taxes differed from the amount computed
by applying the statutory  federal and state income tax rate for the years ended
December 31, 1999, 1998, and 1997, as follows:

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
                                                                              Year Ended December 31,
                                                                    ---------------------------------------------
                                                                       1999            1998             1997
-----------------------------------------------------------------------------------------------------------------
<S>                                                                <C>             <C>              <C>

Federal Statutory Rate ...........................................      34%             34%             (34)%
State Taxes, Net of Federal Benefit ..............................       5%              2%              (3)%
Permanent Differences ............................................       1%              1%              (2)%
Valuation Allowance ..............................................      (2)%           (21)%             39 %
Other ............................................................       7%             --               --
Net Operating Loss Carryback .....................................      --              --               (7)%
                                                                    -----------     ------------     ------------
Income Tax (Benefit) Provision ...................................      45%             16%              (7)%
                                                                    ===========     ============     ============

-----------------------------------------------------------------------------------------------------------------
</TABLE>

      The Company paid income taxes of $1,363,000 in 1999 and $222,000 in 1998.

Note 6. Commitments and Contingencies

      Leases.  The Company  occupies  facilities under  noncancelable  operating
leases expiring at various dates through 2000. The leases call for proportionate
increases  due to  property  taxes and  certain  other  expenses.  Rent  expense
amounted to $349,000 for the year ended  December 31, 1999 ($309,000 in 1998 and
$524,000 in 1997).

      Minimum rental  commitments under operating  leases,  principally for real
property, are as follows (in thousands):

  (Year Ending December 31)
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
<S>                                                                                                <C>

2000 .........................................................................................      $      458
                                                                                                    ============

----------------------------------------------------------------------------------------------------------------
</TABLE>

      Revolving  Loan  Agreement.  A loan  agreement  with a bank provides for a
revolving line of credit of $3,000,000,  through May 2000. At December 31, 1999,
$2,500,000 was available  under the credit line,  and in addition,  $500,000 was


                                       24
<PAGE>



assigned to support standby letters of credit.  Amounts  advanced under the line
of credit are secured by the Company's eligible accounts  receivable.  Under the
agreement,  the Company is obligated to comply with certain covenants related to
equity, quick ratio, debt/equity ratio, and profits. The interest rate under the
agreement  is the bank's prime rate (8.5% at December  31,  1999).  During 1999,
1998,  and  1997,  the  Company  paid no  interest  expense,  as  there  were no
borrowings.

Note 7. Litigation Judgment

      On November 4, 1994, PLM Financial Services, Inc. ("PLM") filed an action,
entitled PLM Financial Services, Inc. v. TERA Corporation,  et al., Case No. 743
439-0,  against TENERA,  L.P. (the predecessor of the Company;  the "Predecessor
Partnership"),  among others, in the Superior Court of California for the County
of Alameda,  seeking damages in excess of $4.6 million in unpaid  equipment rent
and other  unspecified  damages  allegedly owing to PLM under an equipment lease
dated September 29, 1984 between PLM and TERA Power Corporation  ("TERA Power"),
a former  subsidiary of TERA Corporation (the  "Predecessor  Corporation").  PLM
named the  Predecessor  Partnership  in the action  pursuant to a Guaranty dated
September  24,  1984  of  the  lease  obligations  of  TERA  Power  made  by the
Predecessor Corporation.  Upon the liquidation of the Predecessor Corporation in
late  1986,  the stock of TERA  Power was  transferred  to the TERA  Corporation
Liquidating Trust (the "Trust") and was thereafter sold to Delta Energy Projects
Phases II, IV, and VI pursuant to a stock purchase agreement dated May 31, 1991.
TERA Power asserted various defenses to the claims asserted by PLM in the action
and the trial in this matter was concluded in August 1997. In February 1998, the
trial judge issued a minute order rendering his decision  against the defendants
in the action.  Accordingly,  for the year 1997, the Company accrued  litigation
judgment  expenses of $950,000 related to this matter.  In April 1998, the trial
judge entered a judgment in the amount of approximately  $830,000 plus costs and
attorney fees, against TERA Power and TENERA, as guarantor.  Counsel for PLM had
advised  counsel  for  TENERA  that PLM had  incurred  costs and  attorney  fees
exceeding $600,000,  and, if this matter was not settled,  PLM would file a cost
bill and motion for attorney fees in the action for such amounts.

      On May 1, 1998, the Company  settled the case for $950,000 in cash,  which
was less than the Company's  total exposure in the  litigation.  Of this amount,
approximately  $50,000  was paid by the Trust (to the extent of its  assets) and
the remainder was paid by the Company.

Note 8. Special Items

      On  November  14,  1997,  the Company  consummated  the sale of all of the
assets related to Mass  Transportation'  mass  transportation  business to Spear
Technologies,  Inc., a California  corporation newly formed by former members of
the Company's management.  The Company received $1,300,000 in cash, a promissory
note in the amount of  $300,000,  and a warrant  to  acquire 4% of Spear's  then
outstanding  shares of common stock  exercisable upon an initial public offering
or a change of control  (as  defined in the  warrant).  Spear also  assumed  all
liabilities  associated with the Mass Transportation  business. The special item
of $355,000 in 1997, reflects the gain on sale from the Asset Sale, exclusive of
the effect of the note and warrant.  Full  repayment of the note was  contingent
upon a minimum amount of equity funding of the buyer,  which had not occurred at
December  31,  1997.  Therefore,  the  Company  provided  an  allowance  for the
potential  uncollectability  of the note in 1997. The note was repaid in full in
February  1998,  and the  additional  gain of $300,000 was reported as a special
item in 1998.  In  December  1999,  the warrant was  exchanged  for  convertible
preferred  stock,  equivalent  to 4% ownership of Spear on a fully diluted basis
under the capital structure at the time of the exchange,  and a redemption right
equal to $525,000 in the event of Spear's  liquidation.  Neither the warrant nor
the preferred  stock has been assigned any value in the financial  statements as
the Company is not able to determine the recoverability of these assets.



                                       25
<PAGE>



Note 9. Selected Quarterly Combined Financial Data (Unaudited)

      A summary of the Company's quarterly financial results follows.

  (In thousands, except per share amounts)
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
                                 Quarter Ended                                    Quarter Ended
                  ---------------------------------------------    ---------------------------------------------
                  12/31/99     9/30/99     6/30/99     3/31/99     12/31/98     9/30/98     6/30/98     3/31/98
----------------------------------------------------------------------------------------------------------------
<S>              <C>          <C>         <C>         <C>         <C>          <C>         <C>         <C>
Revenue .....     $ 9,065      $10,163     $ 9,412     $ 9,282     $ 7,887      $ 7,014     $ 6,453     $ 6,091
Direct Costs        6,881        7,970       7,215       7,285       6,060        5,363       4,797       4,498
General and
Administrative
Expenses ....       1,847        1,385       1,515       1,489       1,486        1,283       1,345       1,302
Special Item
Income  .....          --           --          --          --          --           --          --         300
Litigation
Judgment Cost          --           --          --          --          --           --         (50)         --
Other Income           --           --           1          --          32           42          53          86
                  --------     --------    --------    --------    --------     --------    --------    --------
Operating
Income ......         337          808         683         508         373          410         414         677
Interest
Income ......          36           30          26          27          33           31          34          31
                  --------     --------    --------    --------    --------     --------    --------    --------
Net Earnings
Before Income
Tax Expense..         373          838         709         535         406          441         448         708

Income Tax
Expense .....         174          404         305         230          80           20          54         175
                  --------     --------    --------    --------    --------     --------    --------    --------
Net Earnings      $   199      $   434     $   404     $   305     $   326      $   421     $   394     $   533
                  ========     ========    ========    ========    ========     ========    ========    ========
Net Earnings Per
Share-- Basic     $  0.02      $  0.04     $  0.04     $  0.03     $  0.03      $  0.04     $  0.04     $  0.05
                  ========     ========    ========    ========    ========     ========    ========    ========
Net Earnings Per
Share-- Diluted   $  0.02      $  0.04     $  0.04     $  0.03     $  0.03      $  0.04     $  0.04     $  0.05
                  ========     ========    ========    ========    ========     ========    ========    ========

----------------------------------------------------------------------------------------------------------------
</TABLE>



                                       26
<PAGE>



                         REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Shareholders
TENERA, Inc.

      We have audited the  accompanying  consolidated  balance sheets of TENERA,
Inc. at December 31, 1999 and 1998, and the related  consolidated  statements of
operations,  stockholders' equity, and cash flows for each of the three years in
the period  ended  December  31, 1999.  Our audits also  included the  financial
statement schedule listed in the Index at Item 14(a). These financial statements
and  schedule  are  the   responsibility  of  the  Company's   management.   Our
responsibility  is to  express  an opinion  on these  financial  statements  and
schedule based on our audits.

      We conducted our audits in accordance  with auditing  standards  generally
accepted in the United States.  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 consolidated financial position of
TENERA, Inc. at December 31, 1999 and 1998, and the consolidated  results of its
operations  and its cash flows for each of the three  years in the period  ended
December 31, 1999, in conformity with accounting  principles  generally accepted
in the United  States.  Also, in our opinion,  the related  financial  statement
schedule, when considered in relation to the basic financial statements taken as
a whole presents  fairly,  in all material  respects,  the information set forth
therein.

                                                           /s/ ERNST & YOUNG LLP

Walnut Creek, California
January 21, 2000



                                       27
<PAGE>



Item 9.    Changes in  and  Disagreements  with  Accountants on  Accounting  and
         Financial Disclosure

      Not applicable.











                                       28
<PAGE>



                                    PART III

Item 10.  Directors and Executive Officers of the Registrant

      The  following  tables set forth certain  information  with respect to the
directors and executive officers of the Company.

      The directors of the Company are as follows:

           William A.  Hasler, 58, has served as a Director of the Company since
      his election in  March 1992 and Chairman of the Board of the Company since
      July 1998. Mr. Hasler is Co-Chief Executive Officer of Aphton Corporation,
      a bio-technology firm.  Previously,  Mr. Hasler was  dean of the Walter A.
      Hass School of Business at the University of California,  Berkeley.  Prior
      to  his  appointment as  dean in 1991,  Mr.  Hasler was Vice  Chairman  of
      Management Consulting for KPMG Peat Marwick from 1986 to 1991.  Mr. Hasler
      is also a director of  Solectron  Corporation., Aphton Corporation, Walker
      Systems, and TCSI Corporation.

           Jeffrey R.  Hazarian,  44, has  served as a Director  of the  Company
      since his  election  in October  1996,  and was named its  Executive  Vice
      President  in November  1997.  He has also  served as its Chief  Financial
      Officer and Corporate Secretary since 1992. Previously,  Mr. Hazarian held
      the position of Vice President of Finance from 1992 to 1997.

           Thomas S. Loo,  Esq., 56, was elected as a Director of the Company in
      February 1997.  He previously served  as a  Director  of the Company  from
      August 1987 to September  1993.  Mr.Loo has been a partner, since 1986, of
      Bryan Cave LLP, general counsel to the Company.  Mr.Loo has also served as
      a director of Teknekron Corporation since March 1989.

           Robert C. McKay,  48, has served as a Director  of the Company  since
      his election in June 1997, and was appointed its Chief  Executive  Officer
      and President in November 1997. Previously,  Mr. McKay was Chief Operating
      Officer of the  Company  since  April  1997.  He was  elected  Senior Vice
      President of the Company in December 1992.

           Andrea W. O'Riordan, 28, has served as Director of the Company  since
      her  election in  June 1998.  Ms.  O'Riordan is an Applications  Marketing
      Coordinator  for  Oracle   Corporation.   Prior  to  her  joining   Oracle
      Corporation in 1996, Ms.O'Riordan was Marketing Coordinator,Latin America,
      for a Reuters Company, from 1993 to 1995.

           George L. Turin,  Sc.D.,  70, has served as a Director of the Company
      since his  election  in March  1995.  Previously,  Mr.  Turin  served as a
      Professor of Electrical Engineering and Computer Science at the University
      of California at Berkeley from 1960 to 1990. Mr. Turin also served as Vice
      President, Technology for Teknekron Corporation from 1988 to 1994.

      Officers  of the  Company  hold  office  at the  pleasure  of the Board of
Directors.  There  are no  familial  relationships  between  or among any of the
executive officers or directors of the Company.



                                       29
<PAGE>



Item 11.  Executive Compensation

      The following tables set forth certain information  covering  compensation
paid by TENERA to the Chief  Executive  Officer and each of the Company's  other
executive  officers,  whose total annual salary and bonus exceeded $100,000 (the
"named  executives") for services to TENERA in all their  capacities  during the
fiscal years ended December 31, 1999, 1998, and 1997.

                           SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------

                                                   Annual Compensation             Awards
                                              ------------------------------    -------------
                                                                                 Securities        All Other
         Name and                                                                Underlying        Compensa-
    Principal Position            Year           Salary          Bonus(1)        Options(2)         tion(3)
---------------------------------------------------------------------------------------------------------------
<S>                              <C>         <C>               <C>               <C>             <C>

Robert C. McKay, Jr.              1999        $ 223,958         $  90,000          40,000         $   3,200
Chief Executive Officer           1998          200,000          152,500               --             3,200
President                         1997          179,375            2,179           90,000                --

Jeffrey R. Hazarian               1999          181,064           67,500           40,000             3,200
Executive                         1998          159,000           50,400           75,000             3,180
Vice President and                1997          145,875           25,000               --                --
Chief Financial Officer

---------------------------------------------------------------------------------------------------------------
</TABLE>
[FN]
  (1) Includes  $100,000 retention  bonus paid  to Mr. McKay in 1998 (see "Other
      Compensation  Arrangements" below).  Mr.  Hazarian's bonus amounts in 1999
      and 1998  include accrued bonuses of $4,000 and $3,000, respectively, paid
      in the beginning of the subsequent years.

  (2) Reflects the number of options  granted  under the  Company's  1992 Option
      Plan.  The options  expire at the earlier of the end of the option period,
      generally six years, or three months after employment termination.

  (3) These  amounts represent the  amounts accrued for the benefit of the named
      executives under the Company's  401(k) Plan.
</FN>



      The following  table sets forth  certain  information  concerning  options
granted during 1999 to the named executives:

                             OPTIONS GRANTS IN 1999
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
                                                                                          Potential Realizable
                                                                                            Value at Assumed
                                                                                         Annual Rates of Stock
                                                 Individual Grants                         Price Appreciation
                                                                                            for Option Term
                                ----------------------------------------------------     -----------------------
                                            % of Total
                                 Number of    Options
                                 Securities  Granted to     Exercise
                                 Underlying   Employees     or Base
                                 Options      in Fiscal       Price       Expiration
         Name                    Granted         Year       ($/Share)        Date            5%           10%
----------------------------------------------------------------------------------------------------------------
<S>                               <C>           <C>      <C>               <C>       <C>           <C>
Robert C. McKay, Jr. .....        40,000        14.04    $     1.3625      3/09/05   $     18,535  $     42,050
Jeffrey R. Hazarian.......        40,000        14.04          1.3625      3/09/05         18,535        42,050

----------------------------------------------------------------------------------------------------------------
</TABLE>



                                       30
<PAGE>



Other Compensation Arrangements

      The   Company's   1992  Option  Plan  provides  that  options  may  become
exercisable over such periods as provided in the agreement evidencing the option
award.  Options granted to date, including options granted to executive officers
and set forth in the above tables,  generally  call for vesting over a four-year
period.  The 1992 Option Plan  provides  that a change in control of the Company
will  result in  immediate  vesting of all options  granted  and not  previously
vested.

      Other than as set forth below for Mr. McKay, the Company has no employment
contracts or arrangements for its executive officers.

      Mr.  McKay,  upon  appointment  to Chief  Operating  Officer in 1997,  was
granted a retention bonus arrangement, amounting to $100,000, dependent upon his
continued  employment  through June 30, 1998. The bonus was paid to Mr. McKay in
1998 in accordance with the arrangement.

Directors Compensation

      Except as  described  below,  the  directors  of the  Company  are paid no
compensation by the Company for their services as directors.  William A. Hasler,
Thomas S.  Loo,  Andrea  W.  O'Riordan,  and  George  L.  Turin as  non-employee
directors, are paid a retainer of $1,000 per month. These non-employee directors
are also paid a fee of  $1,000  for each  meeting  of the  Board,  and any Board
Committee  meeting  not  held on the  same day as a Board  meeting,  which  they
attend. The 1993 Outside Directors  Compensation and Option Plan was approved by
the Board effective March 1, 1994, as amended by the Board in 1998, and reserves
up to 300,000  options for  issuance to  non-employee  directors.  During  1999,
12,500 stock options were issued to each of Messrs.  Hasler,  Loo, Turin,  Bunch
(resigned in July 1999), and Ms.  O'Riordan.  During 1998,  12,500 stock options
were granted to each of Messrs.  Hasler,  Loo, Turin,  Bunch, and Ms. O'Riordan.
During 1997,  8,000 stock  options were issued to each of Messrs.  Hasler,  Loo,
Turin,  and Williams  (resigned in December  1997).  The options expire ten (10)
years  after,  vest one (1) year after the date of grant,  and have an  exercise
price equal to the fair market value of the shares of the Company's Common Stock
on the date of grant.  Upon exercise of the options,  a director may not sell or
otherwise  transfer  more than 50% of the shares  until six (6) months after the
date on which the director ceases to be a director of the Company.  Due to their
resignations,  Mr.  Bunch's 1999 options and Mr.  Williams' 1997 options did not
vest and were forfeited.

Compensation Committee Interlocks and Insider Participation

      During 1999, the Compensation Committee was composed of William A. Hasler,
Thomas S. Loo, Andrea W. O'Riordan, and George Turin. Thomas S. Loo is a partner
in the law firm of Bryan Cave LLP,  general counsel to the Company and Teknekron
Corporation, and is a director of Teknekron Corporation.  Andrea W. O'Riordan, a
director  of the  Company  since June 29,  1998,  is the  daughter  of Harvey E.
Wagner,  the Company's  largest  stockholder by virtue of a limited  partnership
interest in Incline Village Investment Group Limited  Partnership (see Item 12).
Mr. Wagner is also the sole stockholder and a director of Teknekron Corporation.



                                       31
<PAGE>



Item 12.  Security Ownership of Certain Beneficial Owners and Management

      (a)  Security Ownership of Certain Beneficial Owners

      The following  table sets forth certain  information  as of March 1, 2000,
with  respect  to  beneficial  ownership  of the  shares of Common  Stock of the
Company by each person who is known by the Company to own beneficially more than
5% of the shares of Common Stock:

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
                                                                                                     Approximate
                                                                                      Shares           Percent
                                                                                   Beneficially      Beneficially
                              Name and Address                                        Owned             Owned
----------------------------------------------------------------------------------------------------------------
<S>                                                                                <C>                 <C>
Harvey E. Wagner ..........................................................        3,708,658           37.3%(1)
P.O. Box 7463
Incline Village, NV  89450

Dr. Michael John Keaton Trust .............................................        1,106,887           11.1%(2)
C/O Bryan Cave LLP
120 Broadway, Suite 500
Santa Monica, CA  90401
----------------------------------------------------------------------------------------------------------------
</TABLE>
[FN]
  (1) Such shares are held of record by Incline Village Investment Group Limited
      Partnership,  a Georgia limited partnership,  and were contributed to such
      partnership  by Mr.  Wagner  in  exchange  for a 99%  limited  partnership
      interest.  An additional  37,462 shares,  as to which Mr. Wagner disclaims
      beneficial ownership, were contributed to such partnership by Mr. Wagner's
      spouse, Leslie Wagner, in exchange for a 1% general partner interest. Such
      partnership has sole voting and investment  power with respect to all such
      shares. Mr. Wagner  subsequently  transferred a 14.7% limited  partnership
      interest in the partnership to Ms.  O'Riordan,  a director of the Company,
      who  disclaims  beneficial  ownership  of all  the  shares  held  by  such
      partnership.

  (2) Mr. Keaton has sole voting and investment power with respect to all shares
      shown as  beneficially  owned by him,  subject to community  property laws
      where applicable.
</FN>



                                       32
<PAGE>



      (b)  Security Ownership of Management

      The  following  table sets  forth  information  as of March 1, 2000,  with
respect to current beneficial ownership of shares of Common Stock by (i) each of
the  directors of the Company,  (ii) each of the named  executive  officers (see
Item  11.  "Executive  Compensation"),  and  (iii)  all  current  directors  and
executive officers as a group.

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
                                                                       Shares           Shares
                                                                    Beneficially      Acquirable         Percentage
                             Name                                     Owned(1)        Within 60         Ownership(2)
                                                                                      Days(3)(4)
-------------------------------------------------------------------------------------------------------------------
<S>                                                                 <C>              <C>               <C>
William A. Hasler .............................................       20,000           70,500(3)            *
Jeffrey R. Hazarian ...........................................        7,186          156,250(4)            1.6%
Thomas S. Loo..................................................         --             33,000(3)            *
Robert C. McKay, Jr............................................        1,789          225,500(4)            2.2%
Andrea W. O'Riordan (5)........................................         --             25,000               *
George L. Turin................................................       45,504           60,500(3)            1.0%
                                                                    ------------     -------------     ------------
All Directors and Executive Officers as a Group (6 persons) ...       74,479          570,750               6.1%

-------------------------------------------------------------------------------------------------------------------
</TABLE>
[FN]
  (1) The persons named above have sole voting and investment power with respect
      to all shares of Common Stock shown as beneficially owned by them, subject
      to community property laws where applicable.

  (2) Based on the number of shares outstanding at, or acquirable within 60 days
      of March 1, 2000. Asterisks represent less than 1% ownership.

  (3) Represents options under the Company's 1993 Outside Directors Compensation
      and Option Plan which are  exercisable on March 1, 2000, or within 60 days
      thereafter.

  (4) Represents  options  under  the  Company's  1992  Option  Plan  which  are
      exercisable on March 1, 2000, or within 60 days thereafter.

  (5) Ms. O'Riordan is the daughter of Harvey E. Wagner, the  Company's  largest
      stockholder by virtue of a limited partnership interest in Incline Village
      Investment Group Limited Partnership (see Item 12(a), "Security  Ownership
      of Certain Beneficial Owners").
</FN>

      Beneficial  ownership as shown in the tables above has been  determined in
accordance  with Rule 13d-3 under the  Exchange  Act.  Under this Rule,  certain
securities may be deemed to be beneficially  owned by more than one person (such
as  where  persons  share  voting  power  or  investment  power).  In  addition,
securities are deemed to be beneficially owned by a person if the person has the
right to acquire the securities (for example,  upon exercise of an option or the
conversion  of a  debenture)  within  60  days  of  the  date  as of  which  the
information is provided; in computing the percentage of ownership of any person,
the  amount  of  securities  outstanding  is  deemed to  include  the  amount of
securities beneficially owned by such person (and only such person) by reason of
these acquisition  rights. As a result,  the percentage of outstanding shares of
any  person as shown in the  preceding  tables do not  necessarily  reflect  the
person's actual voting power at any particular date.

Item 13.  Certain Relationships and Related Transactions

      See "Compensation Committee Interlocks and Insider Participation."



                                       33
<PAGE>



                                     PART IV

Item 14.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K

      (a)(1)  Financial Statements

      The  following  financial  statements  of the  Company are filed with this
      report and can be found in Part II, Item 8, on the pages indicated below:

                                                                            PAGE

           Consolidated Statements of Operations--
           Years Ended December 31, 1999, 1998, and 1997 .................    13
           Consolidated Balance Sheets-- December 31, 1999 and 1998 ......    14
           Consolidated Statements of Stockholders' Equity--
           Years Ended December 31, 1999, 1998, and 1997 .................    15
           Consolidated Statements of Cash Flows--
           Years Ended December 31, 1999, 1998, and 1997 .................    16
           Notes to Consolidated Financial Statements ....................    17
           Report of Independent Auditors ................................    27
      (a)(2)  Financial Statement Schedules

      The following  financial  statement  schedules with respect to the Company
are filed in this report:

           Schedule VIII-- Valuation and Qualifying Accounts and Reserves .   36

      All other schedules  are omitted because  they are either not  required or
      not applicable.

      (a)(3)  Exhibits

  2.1          Agreement  and  Plan  of  Merger  dated as of June 6, 1995  among
                  the  Registrant,   Teknekron  Technology  MLP  I  Corporation,
                  TENERA,  L.P., and TENERA Operating  Company,  L.P. (a form of
                  which  is  attached  as  Annex A to the  Registrant's  Consent
                  Solicitation Statement/Prospectus included in the Registration
                  Statement on Form S-4  (Registration  No.  33-58393)  declared
                  effective by the Securities and Exchange Commission ("SEC") on
                  June  2,  1995   (the   "Registration   Statement"),   and  is
                  incorporated herein by this reference).

   2.2         Asset  Acquisition  Agreement dated  November  14, 1997,  between
                  the Registrant and Spear Technologies,  Inc. (filed as Exhibit
                  2.1 to  the  Registrant's  Form  8-K  filed  with  the  SEC on
                  November 14, 1997 and  incorporated  by reference  herein (the
                  "Form 8-K")).

  2.3(1)       Series C Preferred Stock Purchase Agreement dated March __, 2000
                  between the Registrant and Spear Technologies, Inc.

  2.4(1)       Asset  Acquisition  Agreement dated February 10, 2000 between the
                  Registrant and SoBran, Inc.

  3.1          Certificate of Incorporation of the Registrant dated October 27,
                  1994 (filed by  incorporation by  reference  to Exhibit 3.3 to
                  the Registration Statement).

  3.2          By-Laws of the Registrant (filed by incorporation by reference to
                  Exhibit 3.4 to the Registration Statement).

  4.1          Form of Certificate of Common Stock of the Registrant (filed by
                  incorporation by reference to Exhibit 4.5  to the Registration
                  Statement).
     ------------------------------------

  (1) Filed herewith.



                                       34
<PAGE>



  11.1         Statement regarding computation of per share earnings:  See "Note
                  5 to Consolidated Financial Statements."


  21.1(1)      List of Subsidiaries of the Registrant.

  23.1(1)      Consent of Ernst & Young LLP, Independent Auditors.

  27.1(1)      Financial Data Schedule.

      (b)  Reports on Form 8-K
       No reports  on Form 8-K  were  filed by the  Registrant  during  the last
       quarter of 1999.

      (c)  Exhibits (see Item 14(a)(3) above.)

      (d)  Financial Statement Schedules

      The schedules  listed in Item 14(a)(2) above should be used in conjunction
with the  Consolidated  Financial  Statements  of the Company for the year ended
December 31, 1999.








  -----------------------------
 (1) Filed herewith.



                                       35
<PAGE>



                                                                   SCHEDULE VIII

                                  TENERA, INC.
                 VALUATION AND QUALIFYING ACCOUNTS AND RESERVES

  (In thousands)

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
                                                      Additions              Deductions
                                                     ------------    ---------------------------
                                       Balance       Charged to
                                      Beginning       Costs and      Credited to                     Balance at
          Description                  of Year        Expenses       Special Item      Other         End of Year
----------------------------------------------------------------------------------------------------------------
<S>                                   <C>            <C>             <C>               <C>           <C>
1997

Reserve for Sales Adjustment
and Credit Losses .............         $ 1,626        $    36         $   122         $   182         $ 1,358
1998

Reserve for Sales Adjustment
and Credit Losses .............           1,358              9              --              67           1,300
1999

Reserve for Sales Adjustment
and Credit Losses .............           1,300             --              --               2           1,298

----------------------------------------------------------------------------------------------------------------
</TABLE>



                                       36
<PAGE>



                                   SIGNATURES

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

Dated:  March 28, 2000



                                     TENERA, INC.

                                     By        /s/ JEFFREY R. HAZARIAN
                                        ----------------------------------------
                                               Jeffrey R. Hazarian
                                             Chief Financial Officer

      Pursuant to the requirements of the Securities  Exchange Act of 1934, this
report  has  been  signed  below  by the  following  persons  on  behalf  of the
registrant and in the capacities and on the dates indicated.

         Signature                      Title                         Date


/s/ WILLIAM A. HASLER                  Director                   March 28, 2000
--------------------------
  (William A. Hasler)
                           Director, Chief Financial Officer,
                              Executive Vice President, and
                                  Corporate Secretary
/s/ JEFFREY R. HAZARIAN         (Principal Financial Officer)     March 28, 2000
--------------------------
   (Jeffrey R. Hazarian)


/s/ THOMAS S. LOO                      Director                   March 28, 2000
--------------------------
    (Thomas S. Loo)

                                       Director,
                          Chief Executive Officer, and President
/s/ ROBERT C. MCKAY           (Principal Executive Officer)       March 28, 2000
--------------------------
   (Robert C. McKay)


/s/ ANDREA W. O'RIORDAN                Director                   March 28, 2000
--------------------------
  (Andrea W. O'Riordan)

                                 Controller and Treasurer
/s/ JAMES A. ROBISON, JR.      (Principal Accounting Officer)     March 28, 2000
--------------------------
 (James A. Robison, Jr.)


/s/ GEORGE L. TURIN                    Director                   March 28, 2000
--------------------------
   (George L. Turin)



                                       37
<PAGE>




                                  EXHIBIT INDEX

Ex.  2.3          Series C Preferred Stock Purchase Agreement between the
                   Registrant and Spear Technologies, Inc.

Ex.  2.4          Asset Acquisition Agreement between the Registrant and SoBran,
                  Inc.

Ex. 21.1          List of Subsidiaries of the Registrant

Ex. 23.1          Consent of Ernst & Young LLP, Independent Auditors

Ex. 27.1          Financial Data Schedule