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As filed with the Securities and Exchange Commission on August 2, 1996
Registration No. 333-08089
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
ZYCAD CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 41-1404495
(State of Incorporation)
(I.R.S. Employer
Identification No.)
47100 Bayside Parkway
Fremont, CA 94538
510-623-4400
(Address and telephone number of Registrant's principal executive offices)
Phillips W. Smith
Chairman and Chief Executive Officer
47100 Bayside Parkway
Fremont, CA 94538
(510) 623-4480
(Name, Address and telephone number of Agent for service)
Copies to:
Wilson, Sonsini, Goodrich & Rosati Zycad Corporation
Professional Corporation Douglas E. Klint, Esq.
Andrew J. Hirsch, Esq. Vice President, Secretary & General Counsel
650 Page Mill Road 47100 Bayside Parkway
Palo Alto, CA 94304-1050 Fremont, CA 94538
(Agents to receive comments and other communications)
(Name, address and telephone number of agents for service)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, check the following box.
/ /
<PAGE>
If any of the securities being registered on this form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities
Act of 1933, other than securities offered only in connection with dividend
or interest reinvestment plans, check the following box. /x/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier
effective registration statement for the same offering.
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. / /
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The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
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ZYCAD CORPORATION
3,970,000 Shares
Common Stock, par value $.10 per share
This Prospectus relates to the resale by certain security holders named
herein (the "Selling Securityholders") of up to 3,970,000 shares
(the "Shares") of the Common Stock, par value $.10 per share (the
"Common Stock") of Zycad Corporation, a Delaware corporation ("Zycad" or the
"Company") which may be isused upon conversion of $10,000,000 aggregate
principal amount of 6% Convertible Subordinated Debentures due 1999 (the
"Debentures") or the exercise of the Stock Purchase Warrants (the "Warrants")
issued in a private placement on May 24, 1996 (the "Offering"). See "Plan of
Distribution". Information concerning the Selling Securityholders may change
from time to time and will be set forth in Supplements to this Prospectus.
Although the Company may receive up to $1,000,000 upon exercise of the
Warrants, the Company will not receive any proceeds from the offering of the
Shares.
The Debentures are convertible at any time prior to maturity, unless
previously redeemed or repurchased, into shares of Common Stock at a
conversion price of 100% of the Market Price (the average of the lowest
reported sales price of the Common Stock on each of the five trading days
immediately preceding the conversion date) for the period May 24, 1996
through August 22, 1996 (provided the Market Price is at least $6.00 per
share); and 85% of the Market Price for the period August 23, 1996 through
September 21, 1996 (with a maximum conversion of one third of the
Debentures); and 84% of the Market Price for the period September 22, 1996
through October 21, 1996 (with a maximum conversion of two thirds of the
Debentures); and 83% of the Market Price for the period October 22, 1996
through November 20, 1996 (with no limit on conversion); and 82% of the
Market Price for the period November 21, 1996 through December 20, 1996; and
81% of the Market Price for the period December 21, 1996 through January 19,
1997; and 80% of the Market Price for the period January 20, 1997 through May
24, 1999. The Common Stock of the Company is traded on the Nasdaq National
Market (symbol: "ZCAD"). On July 9, 1996, the lowest reported sale price of
the Common Stock on the Nasdaq National Market was $5.125 per share.
The Warrants are exercisable at any time beginning November 24, 1996 and
ending November 24, 1998 for that number of Shares as is determined by
dividing the Outstanding Principal Amount (as defined therein) of the Related
Debenture (as defined therein) on November 24, 1996 by $100.00 at a purchase
price per share of $10.00.
Interest on the Debentures is payable semi-annually on May 20 and November
20 of each year commencing on November 20, 1996. The Debentures are not
redeemable by the Company prior to May 24, 1997. On or after May 24, 1997,
the Debentures are redeemable, in whole or in part, at the option of the
Company at a redemption price of 120%
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of par value (principal plus accrued interest) for the period May 24, 1997
through May 23, 1999. On May 24, 1999 (the maturity date) those Debentures
that cannot be converted due to insufficient shares of Common Stock available
for issuance upon conversion may be redeemed by the Company at a redemption
price equal to 100% of the principal amount thereof, plus accrued interest.
The Debentures are redeemable at the option of the holder upon the occurrence
of an Event of Default (as defined) at 120% of the principal amount thereof,
plus accrued interest or the market value of the Company's Common Stock which
would be issuable upon conversion of such Debentures, whichever is higher.
The Company has been advised by the Selling Securityholders
that the Selling Securityholders, acting as principals for their own account,
directly, through agents designated from time to time, or through brokers,
dealers, agents or underwriters also to be designated, may sell all or a
portion of the Shares which may be offered hereby by them from time to time
on terms to be determined at the time of sale.
The aggregate proceeds to the Selling Securityholders from the sale of the
Shares which may be offered hereby by the Selling Securityholders will be the
purchase price of such Shares less commissions, if any.
The Selling Securityholders and any brokers, dealers, agents or
underwriters that participate with the Selling Securityholders in the
distribution of the Shares may be deemed to be "underwriters" within the
meaning of the Securities Act, in which event any commissions received by
such broker-dealers, agents or underwriters and any profit on the resale of
the Shares may be deemed to be underwriting discounts under the Securities
Act.
The Company has agreed to bear certain expenses in connection with the
registration of the Shares being offered by the Selling Securityholders.
The Company intends that the Registration Statement of which this
Prospectus is a part will remain effective until three years after the date
of the effectiveness of this Registration Statement or such earlier date as
of which such Registration Statement is no longer required for the transfer
of the subject securities.
SEE "RISK FACTORS" BEGINNING ON PAGE 11 FOR A DISCUSSION OF CERTAIN
FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE SECURITIES
OFFERED HEREBY.
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THESE SECURITIES HAVE NOT BEEN APPROVED
OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE. THE DATE OF THIS PROSPECTUS IS JULY 12, 1996.
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<TABLE>
<CAPTION>
TABLE OF CONTENTS PAGE
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<S> <C>
AVAILABLE INFORMATION................................... 4
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.......... 4
THE COMPANY.............................................. 6
RISK FACTORS............................................. 7
SELLING SECURITYHOLDERS.................................. 14
LEGAL MATTERS............................................ 17
EXPERTS.................................................. 17
</TABLE>
No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus in connection
with the offering made hereby, and if given or made, such information or
representations must not be relied upon as having been authorized by the
Company or by any other person. Neither the delivery of this Prospectus nor
any sale made hereunder shall, under any circumstances, create any
implication that information herein is correct as of any time subsequent to
the date hereof. This Prospectus does not constitute an offer to sell or a
solicitation of an offer to buy any security other than the securities
covered by this Prospectus, nor does it constitute an offer to or
solicitation of any person in any jurisdiction in which such offer or
solicitation may not lawfully be made.
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AVAILABLE INFORMATION
The Company is subject to the information and reporting requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy and information statements and
other information with the Securities and Exchange Commission (the
"Commission"). Such reports, proxy and information statements and other
information can be inspected and copied at the offices of the Commission at
Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549,
as well as the following regional offices of the Commission: Northwestern
Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661;
and Seven World Trade Center, Suite 1300, New York, New York 10048. Copies
of such material can also be obtained from the Public Reference Section of
the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at
prescribed rates. Such reports, proxy and information statements and other
information concerning the Company may be inspected at the office of the
National Association of Securities Dealers, Inc., 1735 K Street, N.W.,
Washington, D.C. 20006. The Commission maintains a World Wide Web site that
contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission. The
address of the site is http://www.sec.gov.
This Prospectus does not contain all the information set forth in the
Registration Statement on Form S-3 (the "Registration Statement") of which
this Prospectus is a part, including exhibits relating thereto, which has
been filed with the Commission under the Securities Act in Washington, D.C.
Statements made in this Prospectus as to the contents of any referenced
contract, agreement or other document are not necessarily complete, and each
such statement shall be deemed qualified in its entirety by reference
thereto. Copies of the Registration Statement and the exhibits and schedules
thereto may be obtained, upon payment of the fee prescribed by the
Commission, or may be examined without charge, at the office of the
Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed by the Company with the Commission
(File No. 13244) pursuant to the Exchange Act and are incorporated by
reference in this Prospectus:
(a) The Company's Annual Report on Form 10-K for the year
ended December 31, 1995, including the portions of the Company's Proxy
Statement for its 1996 Annual Meeting of Stockholders incorporated by
reference therein;
(b) The Company's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1996;
(c) The Company's Current Report an Form 8-K dated May 24, 1996.
(d) The description of the Company's Common Stock offered for resale
hereby contained in the Company's Registration Statement on Form 8-A dated
April 23, 1984, including any amendment or report filed for the purpose of
updating such description.
In addition, all reports and other documents subsequently filed by the
Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act
after the date of this Prospectus and prior to the termination of the
Offering shall be deemed to be incorporated by reference in this Prospectus
from the date of filing such documents. Any statement contained in a
document incorporated by reference herein shall be deemed to be modified
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or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any subsequently filed document that also is
or is deemed to be incorporated by reference herein modifies or supersedes
such statement. Any such statement so modified or superseded shall not be
deemed, except as to modified or superseded, to constitute a part of this
Prospectus. The Company will provide without charge to each person,
including any beneficial owner, to whom this Prospectus is delivered, upon
the written or oral request of such person, a copy of any and all of the
documents that are incorporated herein by reference (other than exhibits to
such documents, unless such exhibits are specifically incorporated by
reference into such documents). Requests for such documents should be
directed to Douglas E. Klint, Vice President, Secretary and General Counsel
at the principal executive offices of Zycad Corporation, 47100 Bayside
Parkway, Fremont, CA 94538 or by telephone at (510) 623-4492.
THE COMPANY
Zycad Corporation ("Zycad" or the "Company") designs, develops,
manufactures, markets and supports high performance simulation accelerators
and emulation/rapid prototyping systems which assist designers of integrated
circuits (ICs) and IC-based electronic systems verify the accuracy of their
designs prior to committing these designs to silicon. Zycad's primary product
emphasis has been simulation accelerators, which combine proprietary hardware
design and simulation software to achieve faster simulation results than can
be attained using software simulation tools operating on standard work
station platforms. Since 1993, the Company has marketed emulation/rapid
prototyping systems, which are proprietary products based on field
programmable gate array (FPGA) technology that also provide faster design
verification results to electronic systems designers. In December 1995, Zycad
completed its first beta-shipment of its own flash technology based
high-density FPGA. These FPGA's, which are designed and developed by the
Company's GateField division (GateField) and manufactured by a Japanese
foundry, currently range in logic densities from 9,000 gates to 100,000 gates
and are targeted for sale to custom and/or semi-custom IC designers for use
both in design verification and as product components, in lieu of using
application specific ICs (ASICs) in their products. Additionally, Zycad
offers customers consulting engineering services to further assist them in
more quickly completing and verifying their designs to get their products to
market sooner.
The Company markets it products and services to a broad range of customers
who design electronic components, products and systems in a variety of
electronics industries, including aerospace, computer, consumer electronics,
multimedia, networking, semi-conductor and telecommunications. Customers
include Intel, AMD, IBM, AT&T, Hughes, Siemens, Alcatel, Hitachi, Toshiba,
NEC, and Hyundai.
As IC manufacturing process technology continues to advance to deeper
submicron technologies, the average IC design continues to increase in
complexity and density; reaching over a million gates in many of today's
designs. The traditional software simulation products operating on
workstations are inadequate to provide the quick simulation and verification
results needed to bring these complex designs to market faster. Zycad's
accelerator products are designed specifically to meet the customer needs for
faster simulation and verification results. The current LightSpeed simulation
server product uses a
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massively paralleled special purpose computer architecture, which
incorporates proprietary simulation algorithms to rapidly complete the
simulation tasks. The Company's accelerators operate in conjunction with Sun
Microsystems and Hewlett-Packard workstations.
The recent entry into the FPGA market is consistent with the Company's
strategy to be the leading supplier of high performance design verification
systems and extends that strategy to now offer customers the silicon to
implement their designs and get their product to market faster than the 12 to
16 week wait for foundries to complete these designs in ASICs. While other
companies currently offer FPGA's, Zycad believes that its FPGA's will offer
customers certain advantages, including methodology and gate capacity, that
will allow it to successfully compete in this market.
The Company, through one of its subsidiaries, Zycad International,
acquired Attest Software, Inc. (Attest) effective June 1, 1996 for $2,400,000
of the Company's common stock. Attest's products include a suite of
testability analysis and test generation software tools that operate on
workstations, including Sun Microsystems and Hewlett-Packard. These products
are complimentary to Zycad's high performance fault simulation accelerators
and expand the market coverage for fault simulation and test generation
products.
Zycad's products and services are sold primarily through its direct sales
organization, which includes sales, application engineering and consulting
engineering personnel. Distributors and manufacturers representatives are and
will continue to be also used to market the Company's products. Zycad's uses
third party manufacturing sources to assemble its accelerator product
components and its FPGA products are produced by a foundry in Japan, with
packaging and assembly done in the Philippines. However, final assembly and
test for all products are performed at the Company's Fremont, California
facilities. The Company was incorporated in Delaware in June 1981 and has its
principal executive offices at 47100 Bayside Parkway, Fremont, California
94538, (510) 623-4400. Except as the context may otherwise require, the
terms "Zycad" and the "Company" also include all subsidiaries.
RISK FACTORS
The Common Stock offered by this Prospectus involves a high degree of
risk. Where this Prospectus contains forward-looking statements within the
meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act, the actual results could differ materially from any projected in such
forward-looking statements as a result of certain factors, including without
limitation, the risk factors set forth below and elsewhere in this
Prospectus. In addition to the other information in this Prospectus, the
following factors should be considered carefully in evaluating an investment
in the shares of Common Stock offered by this Prospectus.
POTENTIAL FLUCTUATIONS IN QUARTERLY RESULTS
The Company's quarterly operating results have in the past and may in the
future vary significantly depending on factors including the timing of
customer development projects and related purchase orders for the Company's
simulation accelerators and FPGA
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products, new product announcements and
releases by the Company and its competitors, gain or loss of significant
customers, price discounting of the Company's products, the timing of
expenditures, customer product delivery requirements, availability and cost
of components or labor and economic conditions, generally and in the
electronics industry, specifically. Any unfavorable change in these or other
factors could have a material adverse effect on the Company's operating
results for a particular quarter. Many of the Company's customers order on
an as-needed basis and often delay issuance of firm purchase orders until
their design project reaches a development stage requiring the Company's
products to accelerate design verification and completion. As a result, the
Company has in the past operated and expects to continue to operate with no
significant backlog. Quarterly revenue and operating results will therefore
depend on the volume and timing of orders received during the quarter, which
can be difficult to forecast accurately. Moreover, a significant portion of
the Company's revenue in each quarter generally results from orders received
and then shipped during the last few weeks of the quarter. The absence of
significant backlog and the concentration of sales at the end of the quarter
limit the Company's ability to plan or adjust operating expenses and
production and inventory levels. Therefore, if anticipated shipments in any
quarter do not occur or are delayed, expenditure levels could be
disproportionately high as a percentage of revenue, and the Company's
operating results for that quarter would be adversely affected. In addition,
revenues generated from individual systems with high sales prices can
constitute a significant percentage of the Company's quarterly revenue.
Operating results in any period should not be considered indicative of the
results to be expected for any future period, and there can be no assurance
that the Company's net revenues will increase, that its recent rate of
quarterly revenue and earnings growth will be sustained, or that the Company
will be profitable in any future period.
DEVELOPING MARKET; ACCEPTANCE OF THE cOMPANY'S PRODUCTS
The Company began shipping commercial volumes of its PXP simulation
accelerators in fiscal 1993. Substantially all of the Company's product
revenues (which constitute the majority of the Company's revenue) since
fiscal 1993 have been derived from the sale of its PXP simulation
accelerators. The Company introduced its LightSpeed simulation accelerators
in the second quarter of fiscal year 1996 with production shipments expected
in third quarter of fiscal year 1996. In addition the Company shipped its
first Gatefield FPGA products in fourth quarter of fiscal year 1995 with
limited production shipments expected in second quarter of fiscal year 1996.
There can be no assurance that there will be market acceptance of these
products. The adoption of the Company's simulation accelerator products for
the verification of IC and system designs is expected to depend on the
continued increasing complexity of ICs designed for electronic systems,
integration of the Company's products with other tools for IC design and
simulation, the ability of hardware-assisted simulation accelerators to
shorten the time of simulation of IC designs, the development and market
acceptance of design verification technologies such as cycle-based software
simulation and FPGA-based emulation, and continuation of industry acceptance
of the need for gate-level hardware-assisted simulation accelerators. In
addition, the adoption of the Company's FPGA products is expected to depend
on the increasing complexity of ASIC designs, the high costs of non-recurring
engineering expenses and lengthy manufacturing process for ASICs, the ability
of FPGA's to shorten the time to market for ASIC designs, the integration of
the Company's FPGA products with EDA
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tools and methodologies, and the
development and market acceptance of alternative prototyping systems. Because
the market for hardware-assisted simulation products and FPGA's is evolving,
it is difficult to predict with any assurance whether the market for
simulation accelerators or FPGA's will continue to expand. There can be no
assurances that such market will expand or, even if such market expands, that
the Company's products will achieve the market acceptance required to
maintain revenue growth and profitability in the future.
COMPETITION
The EDA and IC industries are highly competitive and rapidly changing.
The Company's products are specifically targeted at a growing segment of the
industry involving more complex designs that can benefit from using
simulation methodology to verify their designs more quickly and/or FPGA's for
either rapid prototyping verification purposes or for use in lieu of ASIC's
as components with their product offering. In each case the desired result
is to introduce the product to the market in the shortest possible time. To
date, substantially all of the Company's product revenue has resulted from
sales of simulation accelerators to this segment of the market. The
Company's competition currently comes from hardware-assisted simulation-based
systems sold by IKOS Systems Inc. ("IKOS") and traditional software
verification methodologies provided by EDA vendors such as Cadence Design
Systems, Inc. ("Cadence") and Mentor Graphics Corporation ("Mentor
Graphics"). In addition the Company faces competition from FPGA products sold
by Xilinx Inc. ("Xilinx") and Altera Corporation ("Altera"), among others. As
a result of the lack of education and training by potential users of
simulation accelerators and FPGA's on how to use them for "time to market"
benefits, the Company must educate potential customers, thereby lengthening
the sales cycle, in order for such customers to consider the Company's
products for use within their EDA and IC design process. The Company expects
competition in the market for verification tools and for FPGA's to increase
as other companies attempt to introduce new products and product
enhancements. Moreover, the Company competes, and expects that it will
continue to compete, with established EDA and FPGA companies. A number of
these companies have longer operating histories, significantly greater
financial, technical and marketing resources, greater name recognition and
larger installed customer bases than the Company. In addition, many of these
competitors and potential competitors have established relationships with
current and potential customers of the Company and offer a broader and more
comprehensive product line. Increased competition could result in price
reductions, reduced margins and loss of market share, all of which could
materially adversely affect the Company. In addition, current competitors or
other entities may develop other products that have significant advantages
over the Company's products. There can be no assurance that the Company will
be able to compete successfully against current and future competitors or
that competitive pressures faced by the Company will not materially adversely
affect its operating results. In the event the Company is unable to compete
effectively with these or any other companies, the Company's business,
financial condition or results of operations could be materially adversely
affected.
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NEW PRODUCTS AND TECHNOLOGICAL CHANGE
The EDA and IC industry is characterized by extremely rapid technological
change in both hardware, software and IC development, frequent new product
introduction, evolving industry standards and changing customer requirements.
The introduction of products embodying new technologies and the emergence of
new industry standards can render existing products obsolete and
unmarketable. The Company's future success will depend upon its ability to
enhance its current series of simulation accelerators and FPGA products and
to design, develop and support its next-generation products on a timely
basis. Those efforts require continuing investment in research and
development by the Company to address the increasingly sophisticated needs of
the customers. There can be no assurance that the Company will be successful
in developing and marketing product enhancements or new products that respond
to technological change or evolving industry standards or changing customers
requirements, that the Company will not experience difficulties that could
delay or prevent the successful development, introduction and marketing of
these products, or that its new products and product enhancements will
adequately meet the requirements of the marketplace, will be of acceptable
quality or will achieve market acceptance. Moreover, from time to time, the
Company may announce new products or technologies that have the potential to
replace the Company's existing product offerings. There can be no assurance
that the announcement of new product offerings will not cause customers to
defer purchases of existing Company products, which could adversely affect
the Company's results of operations.
In addition, technological advances or the development of new technologies
could result in the introduction of competitive products with superior
performance to and substantially lower prices than the Company's products.
Further, the Company's new products and components are subject to significant
technical risks. If the Company experiences delays in the commencement of
commercial shipments of new products or components, the Company could
experience delays or loss of product sales. If the Company is unable, for
technological or other reasons, to develop and introduce new products in a
timely manner in response to changing market conditions or customer
requirements, the Company's business, operating results and financial
condition would be materially adversely affected.
DEPENDENCE ON ELECTRONICS INDUSTRY
The Company is dependent upon new system and IC design projects and
volatility of the purchasing cycles in the electronics industry. The
volatility is characterized by rapid technological change, short product life
cycles, fluctuations in manufacturing capacity and pricing and margin
pressures. As a result, the electronics industry has historically
experienced sudden and unexpected downturns, at which time the number of new
system and IC design projects decrease. Because most of the Company's sales
occur related to the commencement of new projects for system and IC products,
the Company is dependent upon the rate of commencement of these design
projects. Accordingly, negative factors affecting the electronics industry
could have a material adverse effect on the Company's results of operations.
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DEPENDENCE UPON CERTAIN SUPPLIERS
Certain key components used in the Company's products are presently
available from sole or limited sources. The inability to develop alternative
sources for these sole or limited source components or to obtain sufficient
quantities of these components could result in delays or reductions in
product shipments which could adversely affect the Company's operating
results. The Company's simulation accelerators use proprietary ASICs that
are currently manufactured by LSI Logic, Inc. ("LSI") and subassemblies and
components that are provided by other third party manufacturers. In addition
the Company's FPGA's are manufactured by ROHM, a foundry located in Kyoto,
Japan and packaged by Anam located in the Philippines.
CURRENT RISK
The Company generally purchases these components, including semiconductor
memories used in the Company's simulation accelerators, pursuant to purchase
orders placed from time to time in the ordinary course of business and has no
long-term supply arrangements with any of these source suppliers that require
the suppliers to provide components in guaranteed quantities or at set
prices. Moreover, the manufacture of these components can be extremely
complex, and the Company's reliance on the suppliers of these components
exposes the Company to production difficulties and quality variations that
may be experienced by these suppliers. Therefore, the Company's reliance on
its sole and limited source suppliers involves several risks, including a
potential inability to obtain an adequate supply of required components,
reduced control over pricing and timely delivery and quality of acceptable
components. While the timeliness and quality of deliveries to date from such
suppliers have been acceptable, there can be no assurance that problems will
not occur in the future. Any prolonged inability to obtain components or
subassemblies in sufficient quantities or quality or on favorable pricing or
delivery terms, or any other circumstances that would require the Company to
seek alternative sources of supply, could have a material adverse effect on
the Company's operating results and could damage the Company's relationships
with its customers.
CUSTOMER CONCENTRATION
A relatively limited number of customers have historically accounted for a
substantial portion of the Company's net revenues. For the three months
ended March 31, 1996, and in fiscal 1995, sales to the Company's top five
customers accounted for approximately 60% and 33% respectively, of the
Company's net revenues. The Company expects that sales of its products to a
limited number of customers will continue to account for a high percentage of
net revenues for the foreseeable future. The loss of a major customer or any
reduction in orders by such customers, including reductions due to market or
competitive conditions in the electronics, IC or EDA industry, would have an
adverse effect on the Company's results of operations. Moreover, the
Company's ability to increase its sales will depend in part upon its ability
to obtain orders from new customers, as well as the financial condition and
success of its existing customers and the general economy; there can be no
assurance that such increases will occur.
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LENGTHY SALES CYCLE
Sales of the Company's products depend, in significant part, upon the
commencement of and schedule adherence to projects for the design and
development of complex ICs and systems. In view of the significant amount of
time and commitment of capital involved, the Company may experience delays in
product shipment sales following initial qualification of the Company's
systems due to delays in commencement of the project or schedule shippage by
a customer. For this and other reasons, the Company's products typically
have a lengthy sales cycle during which the Company may expend substantial
funds and management effort. Lengthy sales cycles subject the Company to a
number of significant risks, including fluctuations in operating results,
over which the Company has little or no control.
PROPRIETARY RIGHTS
The Company's success and ability to compete is dependent in part upon its
proprietary technology. The Company relies on patent, trademark, trade
secret and copyright law to protect its technology. The Company currently
holds five U.S. patents. However, there can be no assurance that any patent
owned by the Company will not be invalidated, circumvented or challenged,
that the right granted thereunder will provide competitive advantages to the
Company or that any of the Company's future patent applications, whether or
not challenged by applicable governmental patent examiners, will be issued
with the scope of the claims sought by the Company, if at all. Furthermore,
there can be no assurance that others will not develop technologies that are
similar or superior to the Company's technology, duplicate the Company's
technology or design around the patents owned by the Company. The Company
generally enters into confidentiality or license agreements with its
employees, distributors and customers, and limits access to and distribution
of its software, documentation and other proprietary information. Despite
these precautions, it may be possible for a third party to copy or otherwise
obtain and use the Company's products or technology without authorization or
to develop similar technology independently. In addition, effective
copyright and trade secret protection may be unavailable or limited in
certain foreign countries.
Although none presently exist, from time to time the Company has received,
and may receive in the future, notice of claims of infringement or potential
infringement of other parties' proprietary rights. Although the Company
does not believe that its products infringe the proprietary rights of any
third parties, there can be no assurance that infringement or invalidity
claims (or claims for indemnification resulting from infringement claims)
will not be asserted against the Company or that any such assertions will not
materially adversely affect the Company' business, financial condition or
results of operations. Irrespective of the validity or the successful
assertion of such claims, the Company could incur significant costs with
respect to the defense thereof which could have a material adverse effect on
the Company's business, financial condition or results of operations. If any
claims or actions are asserted against the Company, the Company may seek to
obtain a license under a third party's intellectual property rights. There
can be no assurance, however, that under such circumstances, a license would
be available under reasonable terms or at all.
12
<PAGE>
The Company also relies on certain software which it licenses from third
parties, including software which is integrated with internally developed
software and used in the Company's products to perform key functions. There
can be no assurance that these third party software licenses will continue to
be available to the Company on commercially reasonable terms or otherwise.
The loss of or inability to maintain any of these software licenses could
result in delays or reductions in product shipments until equivalent software
could be identified, licensed and integrated, which would adversely affect
the Company's operating results.
INTERNATIONAL SALES
International sales accounted for approximately 67% and 53% of the
Company's net revenues for the three month periods ended March 31, 1996 and
March 31, 1995, respectively, and 30%, 26% and 29% of the Company's net
revenues in fiscal 1995, 1994 and 1993, respectively. The Company expects
that international sales will continue to account for a significant portion
of its revenues, and plans to continue to expand its international sales and
distribution channels. These revenues involve a number of inherent risks,
including traditionally slower adoption of the Company's products
internationally, the impact of recessionary environments in economies outside
the United States, generally longer receivable collection periods, unexpected
changes in or impositions of legislative or regulatory requirements, reduced
protection for intellectual property rights in some countries, potentially
adverse taxes, delays resulting from difficulty in obtaining export licenses
for certain technology and other trade barriers. There can be no assurance
that such factors will not have a material adverse effect on the Company's
future international sales and, consequently, on the Company's results of
operations. Currency exchange fluctuations in countries in which the Company
sells its systems could have a material adverse effect on the Company by
resulting in pricing that is not competitive with prices denominated in local
currencies.
DEPENDENCE UPON KEY PERSONNEL
The Company's future performance depends in significant part upon
attracting and retaining key technical, sales, senior management and
financial personnel. Competition for such personnel is intense, and the
inability to retain its key personnel or to attract, assimilate or retain
other highly qualified personnel in the future on a timely basis could have a
material adverse effect on the Company's results of operations. In
particular, there are only a limited number of qualified EDA, IC design and
test engineers, and the competition for such individuals is especially
intense. In addition, the Company's ability to compete effectively and to
manage future growth, if any, will require the Company to continue to retain
and manage its employee workforce. There can be no assurance that the
Company will be able to do so successfully. The Company' failure to do so
could have a materially adverse effect upon the Company's results of
operations.
GATEFIELD NEW BUSINESS RISK
The GateField FPGA Products represent the start of a new and different
business by the Company. In addition to all of the previously mentioned
risks, there is the additional risk associated with starting this new FPGA
business in a different market with different
13
<PAGE>
manufacturing, marketing and distribution channels. The GateField division
was established in August 1993 and from that date to the present, GateField
has been in a research and development mode of operation. It has now
completed the design of a 100,000 gate family of products for production in
.8 micron process technology. With the R&D and manufacturability phases
complete the Company is now beginning to market its products. The risks
previously identified in this section are magnified in relation to GateField
as the Company has had no prior experience in marketing FPGA's. The current
FPGA market leaders include Xilinx, Altera, Actel Corporation ("Actel") and
AT&T Corporation ("AT&T"). These companies use manufacturing process
technologies that are more advanced than the .8 micron technology that
GateField is currently using and they have well established distribution
channels and excellent reputations. These companies have comparable products
with similar densities and, in some instances, faster performance. The
Company's ability to effectively compete with these established FPGA
companies is dependent upon the Company's ability to move quickly to the more
advanced process technologies and to establish distribution channels to
market its products. Currently, GateField is dependent upon Zycad's
accelerator business to finance its successful product introduction. Any
deterioration in the financial results of the Company's accelerator business
could adversely affect the GateField business.
RISKS ASSOCIATED WITH INTERNATIONAL BUSINESS ACTIVITIES
International revenues have accounted for a significant portion of the
Company's net revenues in the past, and Zycad believes that international
revenues will continue to account for a significant portion of net revenues.
The Company's success will depend in part upon its ability to manage
international marketing and sales operations and manufacturing relationships.
In addition, Zycad purchases a substantial portion of its FPGA parts from
foreign suppliers. Zycad's international manufacturing and sales are subject
to changes in foreign political and economic conditions and to other risks
including currency or export/import controls and changes in tax laws, tariffs
and freight rates. In addition, the Company sells certain of its products in
international markets and buys certain products in international markets in
currencies other than the U.S. dollar, and the Company does not currently
hedge its exposure to foreign currency fluctuations. As a result, currency
fluctuations could have a material adverse effect on the Company's business
and results of operations. With respect to international sales that are
denominated in U.S. dollars, increases in the value of the U.S. dollar
relative to foreign currencies can increase the effective price of and reduce
demand for the Company's products relative to competitive products priced in
the local currency. The United States has considered trade sanctions against
Japan. If trade sanctions were imposed, Japan could enact trade sanctions in
response. Because a number of the Company's current and prospective
customers and suppliers are located in Japan, trade sanctions, if imposed,
could have a material adverse effect on Zycad's business and results of
operations. Similarly, protectionist trade legislation in either the United
States or foreign countries could have a material adverse effect on the
Company's ability to manufacture or to sell its products in foreign markets.
14
<PAGE>
POSSIBLE VOLATILITY OF STOCK PRICE
The market price of the Company's Common Stock has been, and is likely to
continue to be, highly volatile. Future announcements concerning the Company
or its competitors, quarterly variations in operating results, announcements
of technological innovations, the introduction of new products or changes in
product pricing policies by the Company or its competitors, proprietary
rights or other litigation, changes in earnings estimates by analysts or
other factors could cause the market price of the Common Stock to fluctuate
substantially. In addition, the stock market has from time-to-time
experienced significant price and volume fluctuations that have particularly
affected the market prices for the common stocks of technology companies and
that have often been unrelated to the operating performance of particular
companies. These broad market fluctuations may also adversely affect the
market price of the Company's Common Stock. In the past, following periods
of volatility in the market price of a company's securities, securities class
action litigation has occurred against the issuing company. There can be no
assurance that such litigation will not occur in the future with respect to
the Company. Such litigation could result in substantial costs and a
diversion of management's attention and resources, which could have a
material adverse effect on the Company's business, financial condition and
results of operations. Any adverse determination in such litigation could
also subject the Company to significant liabilities.
15
<PAGE>
SELLING SECURITYHOLDERS
The Debentures were issued by the Company on May 24, 1996 pursuant to
Subscription Agreements dated May 23, 1996, and, were acquired by the Selling
Securityholders. The following table sets forth information concerning
the number of, shares of Common Stock issuable upon conversion of the
Debentures (the "Conversion Shares") which may be offered from time to time
pursuant to this Prospectus. Other than their ownership of Company
securities, none of the Selling Securityholders has had any material
relationship with the Company within the past three years.
<TABLE>
<CAPTION>
MAXIMUM
NUMBER OF
CONVERSION
SHARES
THAT MAY
BE SOLD(1)(2)
--------------
<S> <C>
Halifax Fund L.P. 1,985,000
Capital Ventures 1,985,000
International
</TABLE>
16
<PAGE>
(1) The information set forth herein is as of July 9, 1996 and will
be updated as required.
(2) This number includes the maximum number of such additional
indeterminate number of shares as may be issuable upon conversion by
reason of adjustments and fluctuations of the conversion price and
assumes conversion of the full amount of Debentures held by such
holder at a rate of $2.52 in principal amount of Debentures per share
of Common Stock. The last reported sale on the Nasdaq National Market
on July 9, 1996 was $5.125 per share. At a conversion rate of $5.125
per share, the Debentures held by each Selling Shareholder would be
converted into 975,609 shares each. Under the terms of the Debenture,
fractional shares will not be issued upon conversion of the Debentures;
cash will be paid in lieu of fractional shares, if any.
The information concerning the Selling Securityholders may change from
time to time and will be set forth in Supplements to this Prospectus. In
addition, the per share conversion price and, therefore, the number of Shares
issuable upon conversion of the Debentures is subject to adjustment under
certain circumstances. Accordingly, the aggregate principal amount of
Debentures and the number of Shares issuable upon conversion of the
Debentures may increase or decrease. As of the date of this Prospectus, the
aggregate principal amount of Debentures outstanding is $10,000,000 which may
be converted into 1,951,219 Shares assuming a conversion price of $5.125 per
share. The maximum number of Shares reserved for issuance is 3,970,000
including up to 100,000 shares reserved for exercise of the Warrants.
The Company and the Selling Securityholders have agreed to indemnify each
other against certain liabilities arising under the Subscription Agreement.
The Company has agreed to pay all expenses incident to the registration of
the offer and sale of the shares of Common Stock to the public pursuant to
this Prospectus other than selling commissions and fees.
Because the Selling Securityholders may offer all or some of the Shares
pursuant to the offering contemplated by this Prospectus, and to the
Company's knowledge there are currently no agreements, arrangements or
understandings with respect to the sale of any of the Shares that may be held
by the Selling Securityholders after completion of this offering, no estimate
can be given as to the principal amount of Shares that will be held by the
Selling Securityholders after completion of this offering. See "Plan of
Distribution."
PLAN OF DISTRIBUTION
This Prospectus relates to the resale of up to 3,970,000 Shares
which may become issuable upon conversion of Debentures
The Company will not receive any of the proceeds from the offering of the
shares of Common Stock issuable upon conversion thereof by the Selling
Securityholders and which are sold pursuant to the Registration Statement (of
which this Prospectus is a part). The Company has been advised by the
Selling Securityholders that the Selling Securityholders
17
<PAGE>
may sell all or a portion of the shares of Common Stock beneficially owned by
them and which my be offered hereby from time to time on any exchange or
market an which the securities are listed or quoted, as applicable, on terms
to be determined at the times of such sales. The Selling Securityholders may
also make private sales directly or through a broker or brokers.
Alternatively, any of the Selling Securityholders may from time to time offer
the shares of Common Stock which may be offered hereby and beneficially
owned by them through underwriters, deniers or agents, who may receive
compensation in the form of underwriting discounts, commissions or
concessions from the Selling Securityholders and the purchasers of the
Debentures of shares of Common Stock for whom they may act as agent.
To the extent required, the number of shares of Common Stock to be offered
hereby, the names of the Selling Securityholders, the purchase price, the
name of any such agent, dealer or underwriter and any applicable commissions,
discounts or other terms constituting compensation with respect to a
particular offer will be set forth in an accompanying Prospectus Supplement.
The aggregate proceeds to the Selling Securityholders from the sale of the
Shares offered by them hereby will be the purchase price of such Shares less
discounts and commissions, if any.
The shares of Common Stock which may be offered hereby may be sold from
time to time in one or more transactions at fixed offering prices, which may
be changed, or at varying prices determined at the time of sale or at
negotiated prices. Such prices will be determined by the holders of such
securities or by agreement between such holders and underwriters or dealers
who may receive fees of commissions in connection therewith.
The outstanding Common Stock is listed for trading on the Nasdaq National
Market, and the shares of Common Stock issuable upon conversion of the
Debentures have been authorized for listing on the NASDAQ upon official
notice of issuance.
In order to comply with the securities laws of certain states, if
applicable, the Debentures and shares of Common Stock offered hereby will be
sold in such jurisdictions only through registered or licensed brokers or
dealers. In addition, in certain states the Debentures and shares of Common
Stock offered hereby may not be sold unless they have been registered or
qualified for sale in the applicable state or an exemption from the
registration or qualification requirement is available and compliance with
same is effected.
The Selling Securityholders and any broker-dealers, agents or underwriters
that participate with the Selling Securityholders in the distribution of the
Debentures of shares of Common Stock offered hereby may be deemed to be
"underwriters" within the meaning of the Securities Act, in which event any
commissions or discounts received by such broker-dealers, agents or
underwriters and any profit on the resale of the Debentures or shares of
Common Stock offered hereby and purchased by them may be deemed to be
underwriting commissions or discounts under the Securities Act.
18
<PAGE>
LEGAL MATTERS
The validity of the Common Stock has been passed upon for the Company
by Wilson, Sonsini, Goodrich & Rosati, Professional Corporation, Palo Alto,
California.
EXPERTS
The financial statements and the related financial statement schedule
incorporated in this prospectus by reference from the Company's Annual Report
on Form 10-K for the year ended December 31, 1995 have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their reports,
which are incorporated herein by reference, and have been so incorporated in
reliance upon the reports of such firm given upon their authority as experts
in accounting and auditing.
19
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth an itemized statement of all
estimated expenses in connection with the issuance and distribution
of the securities being registered:
<TABLE>
<S> <C>
SEC registration fee $ 7,016
Legal expenses 5,000
Accounting fees and expenses 5,000
Miscellaneous 500
--------
Total $17,516
</TABLE>
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
Section 145 of the Delaware General Corporation Law, under which law
Registrant is incorporated, grants corporations the power to indemnify their
directors, officers, employees and agents in accordance with the provisions
therein set forth. The provisions governing the indemnification by
Registrant of its directors, officers, employees and agents are set forth in
Section Ten of Registrant's Restated Certificate of incorporation.
Article Ten provides as follows:
No Director of the Corporation shall be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty by such Director as a Director, provided, however, that this Article 10
shall not eliminate or limit the liability of a Director to the extent
provided by applicable law (I) for any breach of the Director's duty of
loyalty to the Corporation or its stockholders, (ii) for acts or omissions
not in good faith or which involve intentional misconduct or a knowing
violation of law; (iii) under Section 174
II-1
<PAGE>
of the General Corporation Law of the State of Delaware, or (iv) for any
transaction from which the Director derived an improper personal benefit. No
amendment to or repeal of this Article 10 shall apply to or have any effect
on the liability or alleged liability of any Director of the Corporation for
or with respect to any acts or omissions of such Director occurring prior to
such amendment or repeal.
Registrant maintains and pays the premium on contracts insuring Registrant
(with certain exclusions) against any liability to directors and officers it
may incur under the above indemnity provisions and insuring each director and
officer of Registrant (with certain exclusions) against liability and
expense, including legal fees, which he may incur by reason of his
relationship to Registrant, even if Registrant does not have the obligation
or right to indemnify him against such liability or expense.
ITEM 16. EXHIBITS
<TABLE>
<S> <C>
5.1* Opinion of Wilson, Sonsini, Goodrich & Rosati, Professional
Corporation, as to legality of securities being registered.
23.1* Consent of Counsel (contained in Exhibit 5.1 hereto).
23.2 Consent of Deloitte & Touche L.L.P., independent auditors.
24.1* Power of Attorney
</TABLE>
- ---------------
* Previously filed.
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(a) to include any prospectus required by Section 10(a)(3) of the
Securities Act;
(b) to reflect in the prospectus any facts or events arising after the
effective date of this Registration Statement (or the most recent
post-effective amendment hereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
Registration Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission pursuant
to Rule 424(b), if in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate offering price
set forth in the "Calculation of Registration Fee" table in the effective
registration statement.
(c) to include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement or any
material change to such information in this Registration Statement.
provided, however, that the undertakings set forth in paragraph (a) and (b)
above shall not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic reports
filed by the Registrant pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 (the "Exchange Act") that are incorporated by reference
in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of
the offering.
II-2
<PAGE>
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Securities Act of 1933 and is, therefore, unenforceable. in
the event that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by a
director, officer or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of
the Securities Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4)
or 497(h) under the Securities Act of 1933 shall be deemed to be part of this
Registration Statement as of the time it was declared effective. For the
purpose of determining any liability under the Securities Act of 1933, each
post-effective that contains a form of prospectus shall be deemed to be a
new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing this Amendment No. 1 to Form S-3 and has duty caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Fremont, State of California on
this 31st day of July, 1996.
ZYCAD CORPORATION
By: /s/ Phillips W. Smith.
-------------------------------
Phillips W. Smith,
President and
Chief Executive Officer
II-3
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
<S> <C> <C>
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Phillips W. Smith President, and July 31, 1996
- ------------------------ Chief Executive Officer
Phillips W. Smith (principal executive officer)
and Director
/s/ Peter J. Cassidy Exec. VP, CFO July 31, 1996
------------------------ and Director
Peter J. Cassidy (principal accounting officer)
/s/ * President, GateField July 31, 1996
------------------------ Division and Director
Horst G. Sandfort
/s/ * Director July 31, 1996
------------------------
Benjamin Huberman
/s/ * Director July 31, 1996
--------------------------
James R. Fiebiger
*By: /s/ Phillips W. Smith
-----------------------------------
Phillips W. Smith, Attorney-in-Fact
</TABLE>
<PAGE>
ZYCAD CORPORATION
REGISTRATION STATEMENT ON FORM S-3
INDEX TO EXHIBITS
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER PAGE
5.1* Opinion of Wilson, Sonsini, Goodrich & Rosati,
Professional Corporation, as to legality of
securities being registered.
23.1* Consent of Counsel (contained in Exhibit 5.1
hereto).
23.2 Consent of Deloitte & Touche L.L.P., independent
auditors.
24.1* Power of Attorney (see page II-4)
- ------------------
* Previously filed
<PAGE>
Exhibit 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Amendment No. 1 to
Registration Statement No. 333-08089 of Zycad Corporation on Form S-3 of our
reports dated March 27, 1996 appearing in and incorporated by reference in
the Annual Report on Form 10-K of Zycad Corporation for the year ended
December 31, 1995 and to the reference to us under the heading "Experts" in
the Prospectus, which is part of this Registration Statement.
DELOITTE & TOUCHE LLP
San Jose, California
August 1, 1996
