<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- --- EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1997
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 0-13244
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, CALIFORNIA 94538
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (510) 623-4400
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 the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Title of Each Class Outstanding at August 4, 1997
------------------- -----------------------------
Common stock, par value $0.10 per share 31,589,123
<PAGE>
ZYCAD CORPORATION
INDEX
<TABLE>
<CAPTION>
Page
Number
<S> <C>
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of June 30, 1997
and December 31, 1996 2
Condensed Consolidated Statements of Operations for the Three
and Six Months Ended June 30, 1997 and June 30, 1996 3
Condensed Consolidated Statements of Cash Flows for the Six
Months Ended June 30, 1997 and June 30, 1996 4
Notes to Condensed Consolidated Financial Statements, June 30, 1997 5
Item 2. Management's Discussion and Analysis of Results of Operations
and Financial Condition 7
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 9
Item 4. Submission of Matters to a Vote of Security Holders 9
Item 6. Exhibits and Reports on Form 8-K 9
Exhibit 11. Computation of Earnings per Share 10
SIGNATURE 11
</TABLE>
1
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ZYCAD CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
(IN THOUSANDS, EXCEPT SHARE AMOUNTS) 1997 1996
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 2,246 $ 1,703
Short-term investments 100 100
Accounts receivable, less allowance for doubtful
accounts of $603 in 1997 and $1,337 in 1996 3,889 12,088
Inventories, net 1,501 2,664
Other current assets 593 956
-------- --------
Total current assets 8,329 17,511
Property and equipment, net 4,206 5,101
Purchased technology, net 2,440 2,776
Other assets 2,071 4,139
-------- --------
Total assets $ 17,046 $ 29,527
-------- --------
-------- --------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Bank financing $ 164 $3,203
Current portion of long-term obligations 528 1,958
Accounts payable 3,588 5,715
Accrued expenses 4,406 5,345
Deferred revenues 1,972 2,530
-------- --------
Total current liabilities 10,658 18,751
Subordinated convertible debenture notes 1,131 7,342
Long-term obligations 292 719
Other long-term liabilities 36 146
-------- --------
Total liabilities 12,117 26,958
Commitments and contingencies - -
Stockholders' equity
Preferred stock
$0.10 par value; 2,000,000 shares authorized;
shares issued and outstanding: 93,568 in 1997 9 -
Common stock
$0.10 par value; 40,000,000 shares authorized; shares issued
and outstanding: 28,519,581 in 1997 and 23,226,444 in 1996 2,872 2,323
Additional paid-in capital, Preferred stock 3,962 -
Additional paid-in capital, Common stock 61,661 55,784
Accumulated translation adjustments (278) (48)
Accumulated deficit (63,297) (55,490)
-------- --------
Total stockholders' equity 4,929 2,569
-------- --------
Total liabilities and stockholders' equity $ 17,046 $ 29,527
-------- --------
-------- --------
</TABLE>
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
2
<PAGE>
ZYCAD CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) June 30, June 30,
- -----------------------------------------------------------------------------------------------------------
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Revenues
Product $ 1,016 $ 5,727 $ 2,176 $ 8,811
Service 2,800 3,823 5,724 7,717
------- ------- ------- -------
Total revenues 3,816 9,550 7,900 16,528
------- ------- ------- -------
Cost of revenues
Product 1,864 1,695 3,247 2,930
Service 1,456 2,183 3,274 4,477
------- ------- ------- -------
Total cost of revenues 3,320 3,878 6,521 7,407
------- ------- ------- -------
Gross profit 496 5,672 1,379 9,121
------- ------- ------- -------
Operating expenses
Sales and marketing 2,991 4,121 6,244 7,419
Research and development 2,133 4,099 4,799 8,429
General and administrative 443 891 950 1,711
------- ------- ------- -------
Total operating expenses 5,567 9,111 11,993 17,559
------- ------- ------- -------
Operating loss (5,071) (3,439) (10,614) (8,438)
------- ------- ------- -------
Other income (expense)
Interest expense, net (411) (533) (855) (593)
Other income, net 3,608 33 3,984 75
------- ------- ------- -------
Total other income (expense) 3,197 (500) 3,129 (518)
------- ------- ------- -------
Net loss $(1,874) $(3,939) $(7,485) $(8,956)
------- ------- ------- -------
------- ------- ------- -------
Net loss per share $(0.08) $(0.20) $ (0.30) $ (0.45)
------- ------- ------- -------
------- ------- ------- -------
Weighted average common shares outstanding 27,041 20,026 26,148 19,914
------- ------- ------- -------
------- ------- ------- -------
</TABLE>
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
3
<PAGE>
ZYCAD CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
Six Months Ended June 30,
(IN THOUSANDS) 1997 1996
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Operating activities
Net loss $(7,485) $ (8,956)
Reconciliation to net cash used in operating activities
Depreciation and amortization 2,398 2,038
Subordinated convertible debt interest capitalized, net 438 417
Sales under capital leases - (1,006)
Gain on sale of LightSpeed (314)
Gain on sale of QSS (3,321)
Changes in assets and liabilities
Accounts receivable 7,575 2,638
Inventories (244) (795)
Other assets 400 (533)
Accounts payable and accrued expenses (4,081) 1,070
Deferred revenues (538) 636
-------- -------
Net cash used in operating activities (5,172) (4,491)
-------- -------
Investing activities
Property and equipment purchases, net (1,205) (1,538)
Increase in capitalized software (150) (1,280)
Proceeds from sale of LightSpeed, net 5,000 -
Proceeds from sale of QSS, net 3,500 -
-------- -------
Net cash provided by (used in) investing activities 7,145 (2,818)
-------- -------
Financing activities
Proceeds from issuance of convertible debenture notes 3,500 10,000
Proceeds from sales of Common Stock 104 316
Bank financing, net (3,039) -
Increase (decrease) in debt obligation (1,967) 287
-------- -------
Net cash provided by (used in) financing activities (1,402) 10,603
-------- -------
Effect of exchange rate changes on cash and cash equivalents (28) 75
-------- -------
Net change in cash and cash equivalents 543 3,369
Cash and cash equivalents, beginning of period 1,703 3,722
-------- -------
Cash and cash equivalents, end of period $ 2,246 $ 7,091
-------- -------
-------- -------
Supplemental disclosure of cash flow information
Noncash activities
Common Stock issued in connection with the acquisition
of all the outstanding shares of Attest Software, Inc. $ - $ 2,400
Common Stock exchanges for convertible debentures $ 6,217 $ -
Preferred Stock exchanges for convertible debentures $ 3,971 $ -
Common Stock exchanges for Preferred Stock $ 289 $ -
</TABLE>
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
4
<PAGE>
ZYCAD CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
June 30, 1997
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements
contain all adjustments of a normal recurring nature that are, in the
opinion of management, necessary to present fairly the financial position
and results of operations of Zycad Corporation (the Company). Interim
results of operations are not necessarily indicative of the results to be
expected for the full year. The Company's interim fiscal quarter ended on
June 30, 1997 and 1996, respectively. The condensed consolidated financial
statements should be read in conjunction with the financial statements and
the notes thereto for the year ended December 31, 1996, included in the
Company's 1996 Annual Report on Form 10-K.
2. NET LOSS PER SHARE
Net loss per share is computed using the weighted average number of common
shares outstanding. Common share equivalents have not been included in the
net loss per share calculation because the effect would be anti-dilutive.
Pursuant to Accounting Principles Board Opinions No. 15, "Earnings Per
Share" (APB No. 15), dividends payable on preferred stock, whether to be
paid in cash or common stock, reduce income available to common
stockholders in the calculation of earnings per share. Accordingly, the
assured incremental yield imbedded in the conversion terms' discount from
fair value is accounted for as a dividend to the preferred stockholder.
The dividend is recognized in the earnings per share calculation on a pro
rata basis over the period beginning with the issuance of the preferred
stock to the first date that conversion can occur (see Exhibit 11).
3. INVENTORIES
Inventories consisted of:
June 30, December 31,
(IN THOUSANDS) 1997 1996
- --------------------------------------------------------------------------------
Raw materials and work in process $ 928 $ 2,045
Finished goods 573 619
------ --------
$1,501 $ 2,664
------ --------
------ --------
4. SUBORDINATED CONVERTIBLE DEBENTURES
In May 1996, the Company sold a total of $10,000,000 of subordinated
convertible debenture notes (the Notes) to institutional investors as part
of a private placement. The Notes accrue interest at an annual rate of 6%,
beginning on the date of issue, with the principal due and payable three
years from the date of issue if and to the extent that the Notes are not
previously converted. The Notes are convertible at the option of the
noteholders (subject to the maximum share limitations set forth below) into
Common Stock at a price equal to 80% to 85% of the average closing bid price
for the Common Stock on the Nasdaq National Market for the five trading days
prior to the date of conversion. In addition, the investors received
warrants to purchase up to 100,000 additional shares of the Company's stock
at $10.00 per share, subject to certain conditions. At June 30, 1997, the
$1,131,000 outstanding balance of the Notes consisted of $710,000 of the
original principal amount of the Notes and $421,000 of accrued interest.
At June 30, 1997, approximately 7,654,000 shares of Common Stock have been
converted and 1,116,000 shares had been reserved for conversion of the
remaining balance.
In February 1997, the Company completed a $3,500,000 private placement with
investors whereby the Company issued 6% Subordinated Convertible Debentures
(the Debentures) and Common Stock Purchase Warrants. The Debentures accrue
interest at an annual rate of 6%, beginning on the date of issue, with the
principal due and payable three years from the date of issue, if and to the
extent that the Debentures are not previously converted. The Debentures are
convertible at the option of the holder into the Company's Common Stock at a
price equal to 78% to 83% of the lowest reported sales price for the Common
Stock on the Nasdaq National Market for the five trading days prior to the
date of conversion. In addition, the investors received
5
<PAGE>
warrants to purchase up to 500,000 additional shares of the Company's stock
at $2.25 per share, subject to certain conditions. On May 15, 1997, the
Debentures were converted into 100,000 shares of the Company's Convertible
Preferred Stock having an aggregate stated value of $3,500,000 and warrants
to purchase Convertible Preferred Stock having an aggregate stated value of
$1,500,000. Expenses relating to the Subordinated Convertible Debentures
and the Convertible Preferred Stock is approximately $438,000 relating to
discount expense and $438,000 relating to accreted dividends. Subordinated
convertible debt interest capitalized was $219,000 for the three months
ended June 30, 1997 and $438,000 for the six months ended June 30, 1997.
At June 30, 1997, 6,342 shares of Preferred Stock had been converted to
432,884 shares of the Company's Common Stock at prices ranging from $0.465
to $0.606 per share.
5. PROFIT ON SALE OF ASSETS
(a) DISPOSITION OF THE LIGHTSPEED PRODUCT FAMILY
On April 15, 1997, Zycad Corporation (the Company), agreed to sell its
technology relating to its LightSpeed product family to IKOS Systems, Inc.
(IKOS). The purchase price was $5.0 million, of which $4.5 million has been
received as of June 30, 1997, and $0.5 million is due upon completion of
certain customer transition milestones. The agreement called for IKOS to
buy all of the software and hardware simulation technology related to the
LightSpeed product, and for Zycad to promote IKOS' logic verification
products to its customers. Zycad will retain its fault simulation products
in addition to its GateField division. Information contained in the
April 15, 1997 press release shown as Item 7, Exhibit 20.01 on the Company's
Form 8-K filed on April 30, 1997 further describes the LightSpeed product
family.
The details of this transaction are as follows (in thousands):
Proceeds from the sale of LightSpeed $ 5,000
Assets disposed of (3,984)
Liabilities incurred (702)
-------
Gain on sale of LightSpeed $ 314
-------
-------
(b) SALE OF QUALITY SYSTEMS SOFTWARE, INC.
In January 1996, Zycad Corporation (the Company) and Quality Systems
Software, Ltd. (QSS Ltd.), a U.K. company and owner of the DOORS technology,
established a joint venture, QSS Inc., to continue the distribution
operations of the DOORS technology and other products in the North American
market. In January 1997, QSS Inc. was restructured so that QSS Ltd. became
a subsidiary of QSS Inc. The Company's ownership as a result of the QSS Inc.
restructuring became 22% or approximately 2,420,000 shares. On April 14,
1997, the Company signed an agreement to sell its ownership in QSS Inc. for
$3.5 million cash. The agreement was approved and finalized by the QSS
Board of Directors on May 12, 1997. The Company received full payment on
May 13, 1997. Net gain on the sale of QSS was $3,321,000.
6. RECENTLY ISSUED ACCOUNTING STANDARD
In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128 (SFAS No. 128), "Earnings per
Share". The Company is required to adopt SFAS No. 128 in the fourth quarter
of fiscal 1997 and will restate at that time earnings per share (EPS) data
for prior periods to conform with SFAS No. 128. Earlier application is not
permitted. SFAS No. 128 replaces current EPS reporting requirements and
requires a dual presentation of basic and diluted EPS. Basic EPS excludes
dilution and is computed by dividing net income available to common
stockholders by the weighted average of common shares outstanding for the
period. Diluted EPS reflects the potential dilution that could occur if
securities or other contracts to issue common stock were exercised or
converted into common stock. Common share equivalents are not included in
the diluted EPS calculation where they are anti-dilutive. Earnings or net
loss per share under SFAS No. 128 would not have been significantly
different than the net loss per share currently reported for the periods.
In June 1997, the Financial Accounting Standards Board adopted Statements
of Financial Accounting Standards No. 130 (Reporting Comprehensive Income),
which requires that an enterprise report, by major components and as a
single total, the change in its net assets, during the period, from nonowner
sources; and No. 131 (Disclosures about Segments of an Enterprise and
Related Information), which establishes annual and interim reporting
standards for an enterprise's business segments and related disclosures
about its products, services, geographic areas, and major customers.
Adoption of these statements will not impact the Company's consolidated
financial position, results of operations or cash flows. Both statements
are effective for fiscal years beginning after December 15, 1997, with
earlier application permitted.
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
This Management's Discussion and Analysis of Financial Condition and Results
of Operations contains forward-looking statements that involve risks and
uncertainties. The Company's actual results may differ significantly from
the results discussed in the forward-looking statements. Factors that might
cause such a difference include, but are not limited to, those discussed in
the Company's Form 10-K for the year ended December 31, 1996, under the
caption, "Business".
RESULTS OF OPERATIONS
REVENUES
Total revenues for the quarter ended June 30, 1997 were $3.8 million, a
decrease of $5.7 million when compared to the quarter ended June 30, 1996.
Product revenues for the second quarter of 1997 were $1.0 million, a decrease
of $4.7 million when compared to the second quarter of 1996, due primarily to
decreased shipments of accelerator products. Service revenues for the second
quarter of 1997 were $2.8 million, decreasing by $1.0 million when compared
to the second quarter of 1996, as a result of reduced maintenance revenues
relating to older generation accelerator products.
Total revenues for the six months ended June 30, 1997 were $7.9 million, which
were $8.6 million less than the six months ended June 30, 1996. This decrease
is primarily related to a decrease in product revenues. Product revenues for
the first half of 1997 were $2.2 million, compared to $8.8 million for the
comparable period of 1996, as a result of decreased shipments of the Company's
accelerator product family. Service revenues were $5.7 million for the six
months ended June 30, 1997, decreasing by $2.0 million from the comparable six
months ended June 30, 1996, again attributable to reduced maintenance revenues
relating to older generation accelerator products.
GROSS PROFIT
Total gross profit was $0.5 million for the quarter ended June 30, 1997 compared
to $5.7 million for the quarter ended June 30, 1996. Loss from product revenues
at the gross margin level for the second quarter of 1997 was $0.8 million,
decreasing by $4.9 million when compared to the second quarter of 1996. Gross
profit from service revenues was $1.3 million for the second quarter of 1997, a
decrease of $0.3 million when compared to the second quarter of 1996.
Total gross profit was $1.4 million for the six months ended June 30, 1997, as
compared to $9.1 million for the comparable period of 1996. During the first
half of 1997, loss from product revenues at the gross margin level was $1.1
million, decreasing by $7.0 million when compared to the first half of 1996.
Gross profit from service revenues was $2.5 million, decreasing by $0.8 million
when compared to the first half of 1996. This decrease in gross profit from
product revenues in 1997 as compared to 1996 was primarily due to decreased
product revenues that are necessary to support fixed overhead expenses during
the same period.
OPERATING EXPENSES
SALES AND MARKETING
Sales and marketing expenses were $3.0 million for the quarter ended June 30,
1997, down by $1.1 million when compared to the quarter ended June 30, 1996.
Sales and marketing expenses were $6.2 million for the six months ended June
30, 1997, compared to $7.4 million for the six months ended June 30, 1996, a
decrease of $1.2 million. The decrease in sales and marketing expenses were due
primarily to decreased spending as a result of cost-saving measures and reduced
staffing levels.
RESEARCH AND DEVELOPMENT
Research and development expenses were $2.1 million for the quarter ended June
30, 1997, compared to $4.1 million for the quarter ended June 30, 1996 and $4.8
million for the six months ended June 30, 1997, compared to $8.4 million for the
six months ended June 30, 1996. This decrease in 1997 as compared to 1996 is
mainly due to decreased staffing levels in 1997 as projects and activities
associated with the development and introduction of LightSpeed were not
continued into 1997. Additionally, research and development expenses related to
the development of high density FPGA products decreased in 1997 as the product
moved into the production mode.
GENERAL AND ADMINISTRATIVE
General and administrative expenses for the quarter ended June 30, 1997 were
$0.4 million, compared to $0.9 million for the quarter ended June 30, 1996 and
$1.0 million for the six months ended June 30, 1997, compared to $1.7 million
for the six months ended June 30, 1996. The decrease in general and
administrative expenses in 1997 was primarily related to decreased staffing
levels as compared to 1996.
7
<PAGE>
OTHER INCOME AND EXPENSES
Interest expense was $0.4 million for the quarter ended June 30, 1997, a
decrease of $0.1 million when compared to the quarter ended June 30, 1996.
Interest expense for the six months ended June 30, 1997 was $0.9 million and
$0.6 million for the comparable period of 1996. The overall increase in the
first half of 1997 over the first half of 1996 was primarily due to $0.5 million
of interest expense related to the Subordinated Convertible Debentures. See
Note 4 of Notes to Condensed Consolidated Financial Statements.
Other income was $3.6 million and $33 thousand for the three months ended June
30, 1997 and 1996, respectively, and $4.0 million and $0.1 million for the six
months ended June 30, 1997 and 1996, respectively. This increase for both the
quarter and year ended June 30, 1997 was mainly attributable to the proceeds on
the sale of the LightSpeed product family and the sale of the Company's interest
in QSS. See Note 5 of Notes to Condensed Consolidated Financial Statements.
FACTORS AFFECTING FUTURE RESULTS
The Company continues to seek improvement in operating results through
introduction of new products. However, there can be no assurance that the
Company will be successful in its efforts. In the future, the Company's
operating results may be impacted by a number of factors, including cancellation
or delays of customer orders, interruption or delays in the supply of key
components, changes in customer base or product mix, seasonal patterns of
capital spending by customers, new product announcements by the Company or its
competitors, pricing pressures and changes in general economic conditions.
Historically, a significant portion of the Company's shipments have been made in
the last month of each quarter. As a result, a shortfall in revenue compared to
expectation may not evidence itself until late in the quarter. Additionally, the
timing of expenditures for research and development activities and sales and
marketing programs, as well as the timing of orders by major customers, may
cause operating results to fluctuate between quarters and between years.
LIQUIDITY AND CAPITAL RESOURCES
The Company has historically used internally generated funds, public and private
offerings of common stock, sale and leaseback arrangements and bank financing
and credit lines to finance its business. Cash used in operations was $5.2
million for the in the first six months of 1997 compared to cash used in
operations of $4.5 for the first six months of 1996. This increase in cash used
in operations in 1997 compared to 1996 was primarily due to a decrease in
accounts payable. Net cash provided by investing activities was $7.1 million at
June 30, 1997 compared to net cash used in investing activities of $2.8 million
at June 30, 1996. This increase in net cash provided by investing activities is
primarily due to cash receipts from the sale of the LightSpeed product family
and the sale of the Company's interest in QSS. Net cash used in financing
activities was $1.4 million at June 30, 1997, compared to net cash provided by
financing activities of $10.6 million at June 30, 1996. The decrease in net
cash provided by financing activities from 1996 to 1997 was primarily due to
decreased levels of debenture offerings in 1997, as well as reduced levels of
bank debt and financing obligations in 1997.
At June 30, 1997 the Company had cash and cash equivalents of $2.2 million and a
working capital deficit of $(2.3) million. The Company has a $5.0 million
revolving credit facility that bears interest at the bank's prime rate
(currently 8.5%) plus 2.25%, which expires on January 31, 1999, of which $0.2
million was outstanding at June 30, 1997. This line of credit carries a
borrowing limit of up to 80% of the Company's eligible accounts receivable. The
Company continues to work with certain vendors to facilitate extended trade
terms, thus reducing the Company's immediate cash requirements to meet
established payments and other normal, recurring period expenses.
The Company continues to work on attaining revenue projections through 1997 and
by relying on the new credit line, together with sources of additional liquidity
such as private or public offerings, equipment lease lines and the sale of
certain company assets, which the Company expects to meet short-term liquidity
needs. Should additional funding be required, however, there can be no
assurance that such funding will be available on acceptable terms as and when
required by the Company.
8
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) A special meeting of Stockholders was held on July 10, 1997.
(b) Not applicable.
(c) (1) To amend the Certificate of Incorporation of the Company to increase
the number of shares of Common Stock from 40,000,000 shares to
50,000,000 shares. The number of votes cast were as follows:
For: 10,913,134
Against: 1,175,048
Abstain: 227,680
Non-Vote: 11,389,764
(2) To authorize the issuance of 20% or more of the Company's outstanding
common stock upon conversion of the Series A-1 through A-5
Convertible Preferred Stock and related stock warrants. The number of
votes cast were as follows:
For: 8,577,416
Against: 975,173
Abstain: 169,918
Non-Vote: 13,983,119
(3) To amend the Certificate of Incorporation of the Company by changing
the name of the Company to GateField Corporation. The number of
votes cast were as follows:
For: 23,235,062
Against: 377,133
Abstain: 93,431
Non-Vote 0
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
Exhibit 11 Computation of Earnings per Share
Exhibit 27.1 Article 5 of Regulation S-X, Financial Data Schedule for Zycad
Corporation for the quarter ended June 30, 1997
(b) Reports on Form 8-K:
Zycad Corporation's Current Report on Form 8-K filed April 30, 1997, reporting
on the sale of LightSpeed.
Zycad Corporation's Current Report on Form 8-K filed May 15, 1997, reporting on
Nasdaq activity.
9
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
ZYCAD CORPORATION
/s/ Stephen A. Flory
-----------------------------------------
Stephen A. Flory
Vice President and Chief Financial Officer
Dated: August 14, 1997
10
<PAGE>
Exhibit 11
ZYCAD CORPORATION
COMPUTATION OF EARNINGS PER SHARE
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) 1997 1996 1997 1996
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Loss attributable to ordinary stockholders $(1,874) $(3,939) $(7,485) $ (8,956)
Preferred Stock Dividend (see Note 4) (322) - (322) -
------- ------- ------- --------
$(2,196) $(3,939) $(7,807) $ (8,956)
------- ------- ------- --------
------- ------- ------- --------
Net loss per share $ (0.08) $ (0.20) $ (0.30) $ (0.45)
------- ------- ------- --------
------- ------- ------- --------
Weighted average shares outstanding 27,041 20,026 26,148 19,914
------- ------- ------- --------
------- ------- ------- --------
</TABLE>
11
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 2,246
<SECURITIES> 100
<RECEIVABLES> 3,889
<ALLOWANCES> 0
<INVENTORY> 1,501
<CURRENT-ASSETS> 8,329
<PP&E> 4,206
<DEPRECIATION> 0
<TOTAL-ASSETS> 17,046
<CURRENT-LIABILITIES> 10,658
<BONDS> 0
0
9
<COMMON> 2,872
<OTHER-SE> 65,345
<TOTAL-LIABILITY-AND-EQUITY> 17,046
<SALES> 2,176
<TOTAL-REVENUES> 7,900
<CGS> 3,247
<TOTAL-COSTS> 6,521
<OTHER-EXPENSES> 11,993
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 855
<INCOME-PRETAX> (7,485)
<INCOME-TAX> 0
<INCOME-CONTINUING> (7,485)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (7,485)
<EPS-PRIMARY> (0.30)
<EPS-DILUTED> (0.30)
</TABLE>
