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PROSPECTUS SUPPLEMENT FILED PURSUANT TO RULE 424(b)(3) and (c)
(TO PROSPECTUS DATED JULY 12, 1996) REGISTRATION STATEMENT NO. 333-8089
ZYCAD CORPORATION
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COMMON STOCK, PAR VALUE $.10 PER SHARE
ISSUABLE UPON CONVERSION OF 6% CONVERTIBLE SUBORDINATED DEBENTURES DUE 1999
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This Prospectus Supplement ("Supplement") relates to the resale by certain
security holders named herein (the "Selling Securityholders") of an
indefinite number of 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 issued upon conversion
of up to $2,950,000 aggregate unconverted principal amount of 6% Convertible
Subordinated Debentures due 1999 (the "Debentures") or the exercise of
certain Stock Purchase Warrants (the "Warrants"). The Debentures and the
Warrants were issued in a private placement on May 24, 1996 (the "Offering")
and the resale of Common Stock issuable upon conversion of the Debentures by
the holders thereof from time to time was registered pursuant to Registration
Statement No. 333-8089 (the "Registration Statement"), effective August 6,
1996. This Supplement should be read in conjunction with the Prospectus,
dated July 12, 1996 (the "Prospectus") contained within such Registration
Statement, to be delivered with this Supplement. All capitalized terms used
but not defined in this Supplement shall have the meanings given them in the
Prospectus.
The Debentures are or were 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) during the period May 24, 1996
through August 22, 1996 (provided the Market Price was 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. Up to 3,970,000 remaining authorized shares of Common Stock were
reserved for issuance upon conversion of the Debentures and the exercise of
the Warrants. Due to a decline in the Market Price since the issuance of the
Debentures and the Warrants (and the antidilutive effect of having the
conversion price of the Debentures based upon the Market Price), the
authorized and reserved shares of Common Stock became insufficient to allow
full conversion of the Debentures and exercise of the Warrants. On December
5, 1996, the stockholders of the Company approved an increase in the number
of shares of Common Stock authorized to be issued by the Company making
available up to an additional 10,000,000 Shares for issuance upon conversion
of the Debentures and the Warrants. Such additional indeterminate number
of Shares issuable upon conversion of the Debentures and
exercise of the Warrants are deemed to be covered by the Registration
Statement pursuant to Rule 416 promulgated under the Securities Act of 1933,
as amended.
The Common Stock of the Company is traded on the Nasdaq National Market
(symbol: "ZCAD"). On January 9, 1997, the lowest reported sale price of the
Common Stock on the Nasdaq National Market was $2.56 per share.
Based upon information provided to the Company, the following table sets
forth as to each current holder of Debentures (the "Selling Securityholders")
information concerning the remaining unconverted
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principal amount of Debentures outstanding and the number of shares of Common
Stock issuable upon conversion of the Debentures (the "Conversion Shares").
Based upon information provided to the Company, the Selling Securityholders
hold no shares of Common Stock as of January 9, 1996 and will hold no shares
of Common Stock after sales of the Conversion Shares (unless they acquire
shares in transactions unrelated to those described in the Prospectus and
Prospectus Supplement). The Conversion Shares may be offered for sale from
time to time by such Selling Securityholders pursuant to this Supplement and
the 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.
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Number of
Conversion Shares
Outstanding That May be
Principal Amount(1) Sold(1)(2)
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<S> <C> <C>
Halifax Fund L.P. . . . . . . . . . . . . . $ 1,700,000 646,388
Capital Ventures International . . . . . . 1,250,000 475,285
</TABLE>
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(1) The information set forth herein is as of January 9, 1997 and will be
updated as required.
(2) This number includes only the number of share which would be issuable upon
conversion in full of the outstanding Debentures at a conversion price
based upon the last reported sale on the Nasdaq National Market on
January 9, 1997 of $2.63 per share. An additional indeterminate number
of shares may be issuable upon conversion by reason of adjustments and
fluctuations of the conversion price. Under the terms of the Debentures,
fractional shares will not be issued upon conversion of the Debentures;
cash will be paid in lieu of fractional shares, if any.
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.
Although the Company may receive up to $1,000,000 upon exercise of the
Warrants which have an exercise price of $10.00 per share, the Company will
not receive any proceeds from the offering of the Shares by the Selling
Securityholders. The Company has agreed to bear certain expenses in
connection with the registration of the resale of the Shares being offered by
the Selling Securityholders and the preparation of this Supplement.
SEE "RISK FACTORS" BEGINNING ON PAGE 5 OF THE PROSPECTUS 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 SUPPLEMENT IS JANUARY 15, 1997.
