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November 24, 1997
YOUR VOTE IMPORTANT FOR NASDAQ LISTING
Dear Stockholders:
In a separate envelope you will be receiving a proxy statement for the
December 15, 1997 Annual Meeting of Stockholders which includes several
stockholder proposals that must be passed for the Company to stay listed with
Nasdaq and to fund its operations. One of the key 4th quarter objectives for
GateField was to raise approximately $10,000,000 in equity financing to provide
sufficient capital to adequately fund GateField operations, to meet Nasdaq
listing requirements and to grow the company. Without an equity financing, the
Company would not have sufficient net shareholder equity to meet Nasdaq's
listing requirements and the stock could be delisted from Nasdaq. We looked at
several different financing sources and talked with many potential partners. We
found Idanta Partners Ltd. to be our best financing alternative. Idanta is
recognized for their posture as a long-term and value-added investor.
At the 1997 Annual Meeting of Stockholders to be held on December 15, 1997,
we are requesting approval to issue 9,165,000 shares of common stock at $1.00
per share (including shares issuable upon conversion of the preferred stock to
Idanta) which is greater than 20% of outstanding shares on a pre-financing
basis, to approve a board with staggered terms consisting of three classes of
directors and to approve nominees for directors consisting of Horst G. Sandfort
and myself as incumbent directors, and Jonathan S. Huberman and David J. Dunn as
new directors from Idanta. The company has already issued to Idanta, 1,000,000
shares of Series B Preferred Stock which is convertible into 4,582,500 shares of
common stock for $4,582,500. Complete details of the Idanta transaction are
found under Proposal Four in the Proxy Statement.
Consummating an alliance with Siemens was our other primary objective for 4Q
'97, as they are considered to be a semiconductor manufacturing technology
leader. I am particularly pleased that we have entered into a long term
relationship with Siemens that includes access to their 0.25 micron and below
process technology. This is a very real substantiation of our Company's
technology. As part of the transaction, Siemens is receiving a warrant to
purchase up to 9.9% of the Company's common stock. Consequently, you are also
being requested to approve an increase in the number of shares of GateField
common stock to provide Siemens the ability to purchase up to 9.9% of the
outstanding shares at a 20% discount to market price, which is set at the time
they exercise this warrant. We also need additional authorized shares of common
stock for stock options which will be required for hiring and retaining key
personnel in the extremely competitive Bay Area market.
We ask your support and vote for these very important Company matters. It is
important that all shareholders vote because an affirmative vote of greater than
50% of all outstanding and issued shares is required for the proxy proposal to
increase the number of authorized shares of common stock to pass.
Certainly, 1997 has been a year of change for the Company. We are now
GateField Corporation trading on the Nasdaq National Market System under the
symbol "GATE". The Zycad Verification business has been sold and I was appointed
President and CEO of the Company in October 1997. I believe the on-going Company
has the core technology, products and people to become a leading supplier of
high-density reprogrammable Application Specific Integrated Circuits ("ASIC's").
I feel the substantial investment by our foundry partner, Rohm, and our
technology arrangement with Siemens is further validation of the GateField
technology and products.
Our current products in the GF250F ProASIC-TM- family with densities up to
150K gates and our initial GF260F product sampled in October 1997, with 92,000
available gates and 23,000 bits of embedded Static
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Random Access Memory, have been well received in the market. Our products are
very competitive on performance, density and price with those of the leading
Field Programmable Gate Array (FPGA) suppliers and we have an ease of use
advantage, in that we fit into standard ASIC design flows. Our patented Flash
switch architecture allows us to build very competitive products with our
current manufacturing technology even though our present manufacturing
technology is well behind the advanced technology used by the FPGA leaders. We
plan to move to more advanced processes with Rohm and to leading edge 0.25
micron technology with Siemens, which will further enhance the competitive
advantage of our products.
I believe this financing and additional share authorization is critical and
needed to remain listed with Nasdaq, to provide for Siemens' investment, and to
grow the Company. Consequently, we need your support by voting for each of the
proposals on the Proxy Card. I am very excited about GateField's future and look
forward to continuing to bring our products and technology to market and to
successfully grow our business.
Very truly yours,
/s/ DR. JAMES R. FIEBIGER
Dr. James R. Fiebiger
President and CEO
Forward-looking statements in this letter are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. Investors
are cautioned that such forward-looking statements involve risks and
uncertainties, including, without limitation, continued acceptance of the
Company's products, increased levels of competition, new product introductions
and technological changes, the Company's dependence upon third party suppliers,
intellectual property rights and other risks detailed from time-to-time in the
Company's periodic reports filed with the Securities and Exchange Commission.
SJU #2100-SH1-97
