<PAGE>

                   UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                               Washington, D. C. 20549
                                           
                                           
                                     FORM 10-Q/A
                                           
                                           
 X  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
---  ACT OF 1934


                  FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1996


    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 November 1, 1996
   -------------------                       -------------------------------

Common stock, par value $0.10 per share                     22,763,297



                                          1


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PART 1 - FINANCIAL INFORMATION
                                           
ITEM 1: FINANCIAL STATEMENTS

                                  ZYCAD CORPORATION
                        CONDENSED CONSOLIDATED BALANCE SHEETS
                                    (in thousands)
                                     (unaudited)

                                                    September 30,  December 31,
                                                        1996           1995
                                                     ----------     ----------
ASSETS

Current assets
 Cash and cash equivalents                          $   4,313      $   3,722 
 Short-term investments                                   221            224 
 Accounts receivable, net                               5,205         12,123 
 Inventories                                            3,387          1,788 
 Other current assets                                   1,124            765 
                                                     ----------     ----------
   Total current assets                                14,250         18,622 
Property and equipment, net                             5,301          5,598 
Purchased technology                                    3,308          1,129 
Other assets                                            4,786          3,631 
                                                     ----------     ----------

   Total assets                                     $  27,645      $  28,980 
                                                     ----------     ----------
                                                     ----------     ----------

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
 Bank financing                                     $   1,500      $       - 
 Current portion of long-term obligations               1,197          1,028 
 Accounts payable                                       5,976          3,968 
 Accrued expenses                                       5,698          3,955 
 Deferred revenues                                      2,409          2,930 
                                                     ----------     ----------
   Total current liabilities                           16,780         11,881 
Subordinated convertible debenture notes               10,880              - 
Long-term obligations                                     807          1,207 
Other long-term liabilities                               158            213 
                                                     ----------     ----------
   Total liabilities                                   28,625         13,301 
                                                     ----------     ----------

Stockholders' equity
 Common stock, par value $0.10                          2,060          1,975 
 Additional paid-in capital                            51,490         47,837 
 Accumulated translation adjustments                      (94)           (19)
 Accumulated deficit                                  (54,436)       (34,114)
                                                     ----------     ----------
   Total stockholders' equity                            (980)        15,679 
                                                     ----------     ----------

   Total liabilities and stockholders' equity       $  27,645      $  28,980 
                                                     ----------     ----------
                                                     ----------     ----------


SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.


                                          2


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                                  ZYCAD CORPORATION
                   CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                       (in thousands, except per share amounts)
                                     (unaudited)
 

<TABLE>
<CAPTION>

                                                 Three months ended                Nine months ended
                                                    September 30,                     September 30,
                                              --------------------------      --------------------------


                                                 1996            1995            1996            1995
                                              ----------      ----------      ----------      ----------
<S>                                           <C>             <C>             <C>             <C>
 Revenues 

  Product                                     $  2,294        $  7,969        $ 11,105        $ 22,714

  Service                                        3,701           5,157          11,418          15,624
                                              ----------      ----------      ----------      ----------

    Total revenues                               5,995          13,126          22,523          38,338
                                              ----------      ----------      ----------      ----------

 Cost of revenues 

  Product                                        3,053           1,629           5,983           5,098

  Service                                        2,189           2,840           6,666           8,093
                                              ----------      ----------      ----------      ----------

    Total cost of revenues                       5,242           4,469          12,649          13,191
                                              ----------      ----------      ----------      ----------

    Gross profit                                   753           8,657           9,874          25,147
                                              ----------      ----------      ----------      ----------

 Operating expenses 

  Sales and marketing                            3,467           4,506          10,886          12,492

  Research and development                       4,271           2,686          12,699           7,992

  General and administrative                     2,738             738           4,450           2,162
                                              ----------      ----------      ----------      ----------

         Total operating expenses               10,476           7,930          28,035          22,646
                                              ----------      ----------      ----------      ----------


 Operating income (loss)                        (9,723)            727         (18,161)          2,501
                                              ----------      ----------      ----------      ----------

 Other expense 

  Interest expense                              (1,496)            (87)         (2,089)           (285)

  Other expense                                   (147)           (131)            (72)           (286)
                                              ----------      ----------      ----------      ----------


     Other expense, net                         (1,643)           (218)         (2,161)           (571)
                                              ----------      ----------      ----------      ----------

 Net income (loss)                            $(11,366)       $    509        $(20,322)       $  1,930
                                              ----------      ----------      ----------      ----------
                                              ----------      ----------      ----------      ----------

 Net income (loss) per share                  $  (0.56)       $   0.02        $  (1.01)       $   0.09
                                              ----------      ----------      ----------      ----------

 Weighted average common shares 

      and common share equivalents 

      outstanding                               20,404          21,423          20,083          21,206
                                              ----------      ----------      ----------      ----------
                                              ----------      ----------      ----------      ----------

</TABLE>
 


SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.


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                                  ZYCAD CORPORATION
                   CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                    (in thousands)
                                     (unaudited)

<TABLE>
<CAPTION>
                                                             Nine months ended
                                                         September 30,   September 30,
                                                              1996           1995
                                                            --------       --------
 <S>                                                     <C>             <C>
 Cash flows from operating activities 
 Net Income (loss)                                         $(20,322)      $  1,930 
   Adjustments to reconcile net income (loss)                                      
    to net cash generated by (used in) operating                                   
    activities                                                                     
     Depreciation and amortization                            3,223          2,872 
     Subordinated convertible debenture interest                                   
        capitalized                                           1,725              - 
     Sales under capital leases, net                           (724)          (685)
 Changes in certain assets and liabilities                                         
   Accounts receivable                                        7,409          3,656 
   Inventories                                               (1,599)          (207)
   Other assets                                                (695)         1,193 
   Accounts payable and accrued expenses                      3,737         (1,091)
   Deferred revenues                                           (537)          (263)
                                                            --------       --------
     Net cash generated by (used in) operations              (7,783)         7,405 
                                                            --------       --------
                                                                                   
 Cash flows from investing activities                                              
   Property and equipment purchases                          (1,797)          (670)
   Increase in capitalized software                          (1,554)          (600)
                                                            --------       --------
     Net cash used in investing activities                   (3,351)        (1,270)
                                                            --------       --------
                                                                                   
 Cash flows from financing activities                                              
   Net proceeds from issuance of convertible                                       
     debenture notes                                         10,000              - 
   Net proceeds from issuance of common stock                   413          1,809 
   Decrease in debt obligation                                 (342)          (618)
   Increase in (repayment of) bank debt                       1,500         (2,897)
                                                            --------       --------
     Net cash generated by (used in) financing                                     
        activities                                           11,571         (1,706)
                                                            --------       --------
                                                                                   
 Effect of exchange rate changes on cash                                           
 and cash equivalents                                           154            126 
                                                            --------       --------
 Net increase in cash and cash equivalents                      591          4,555 
 Cash and cash equivalents at beginning of period             3,722          2,861 
                                                            --------       --------
 Cash and cash equivalents at end of period                $  4,313       $  7,416 
                                                            --------       --------
                                                            --------       --------
                                                                                   
 Supplemental Disclosure of Noncash Activities                                     
 Common stock exchanged for convertible debentures         $    700       $      - 
 Common stock issued in connection with the                                        
  acquisition of all the outstanding shares of                                     
  Attest Software, Inc.                                    $  2,400       $      - 

</TABLE>

        SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.


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                                  ZYCAD CORPORATION 
                 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                     (unaudited)
                                           
1. FINANCIAL STATEMENTS
   The accompanying unaudited condensed consolidated financial statements
   contain all adjustments of a normal recurring nature and certain one-time
   charges that in the opinion of management are 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 September 30, 1996 and 1995, respectively.  The condensed
   consolidated financial statements should be read in conjunction with the
   consolidated financial statements and accompanying notes for the year ended
   December 31, 1995, included in the Company's 1995 Annual Report on Form
   10-K.

2. NET INCOME (LOSS) PER SHARE
   Net income per share is computed using the weighted average number of common
   shares outstanding during each period including dilutive common share
   equivalents (Common Stock options and warrants).

   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.

3. INVENTORIES
       Inventories consisted of (in thousand's):                   
                                            September 30, 1996 December 31, 1996
                                                    1996             1995
          Finished goods                         $   873          $   753
          Raw materials and work in process        2,514            1,035
                                               ------------    -----------
                                                 $ 3,387          $ 1,788
                                               ------------    -----------
                                               ------------    -----------

4. SUBORDINATED CONVERTIBLE DEBENTURE NOTES
   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 holder
   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, Palladin
   received warrants to purchase up to 100,000 additional shares of the
   Company's stock at $10.00 per share, subject to certain conditions. 

5. PURCHASED TECHNOLOGY
   During the second quarter of 1996, the Company issued approximately 387,000
   shares of the Company's common stock valued at approximately $2,400,000, for
   the acquisition of all the outstanding shares of Attest Software, Inc., a
   software-based fault simulation and automatic test generation (ATG) tools
   vendor. 

6. SUBSEQUENT EVENTS
   The Company had a special meeting of stockholders held on December 5, 1996,
   for the purpose of voting on a proposal to increase the number of authorized
   shares of common stock from 30,000,000 to 40,000,000 shares.  The additional
   shares are needed to prevent a potential conversion deficiency arising from
   the conversion of the Company's 6% subordinated convertible debenture notes
   due on May 24, 1999, as well as providing for the future financing needs of
   the Company's GateField Division in 1997 through a potential rights offering
   to existing shareholders  (see Note 4 of Notes to Condensed Consolidated
   Financial Statements).  The proxy statements for this special meeting of
   stockholders were mailed on or about November 8, 1996.


                                          5


<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, 1995 under the caption
"Business."

RESULTS OF OPERATIONS
In January 1996 the Company formed a joint venture with the U.K.-based owner of
the DOORS technology to market and distribute the technology in North America. 
Accordingly, the results of the joint venture will now be reported on an equity
basis rather than on the operating basis that had been the reporting method in
1995.  The 1995 third quarter and 1995 year-to-date results include revenue and
costs attributable to the Company's DOORS- related sales, as summarized below.

                                    Three months ended   Nine months ended 
($'S IN MILLIONS)                   September 30, 1995   September 30, 1995
Service revenue                           $1.1                 $3.1
Cost of service revenue                    0.4                  1.1
                                    ------------------   ------------------
Gross profit                               0.7                  2.0
Sales and marketing expense                0.5                  1.4
                                    ------------------   ------------------
Operating income                          $0.2                 $0.6
                                    ------------------   ------------------
                                    ------------------   ------------------

For the three month and nine month periods ended September 30, 1996 the
Company's 40% equity share of the joint venture profits was not material.

On June 1, 1996, the Company acquired Attest Software Inc. (Attest) (see Note 5
of Notes to Condensed Consolidated Financial Statements).  For the three months
ended September 30, 1996, revenues and expenses related to Attest, included in
the Company's results of operations were $0.2 million and $0.1 million
respectively.  For the nine months ended September 30, 1996, revenues and
expenses related to Attest, included in the Company's results of operations were
$0.5 million and $0.2 million respectively.

REVENUES
Total revenues for the quarter ended September 30, 1996 were $6.0 million
compared to $13.1 million for the quarter ended September 30, 1995.  For the
nine months ended September 30, 1996 and 1995, total revenues were $22.5 million
and $38.3 million, respectively.  Product revenues for the quarter ended
September 30, 1996 were $2.3 million compared to $8.0 million for the quarter
ended September 30, 1995 and $11.1 million compared to $22.7 million for the
nine months ended September 30, 1996 and 1995, respectively.  The decrease in
product revenues for both the quarter ended September 30, 1996 and the nine
months ended September 30, 1996 was primarily due to decreased shipments of the
Company's accelerator products, and delays in shipments of the next generation,
faster LightSpeed accelerator product family, introduced in late September. 

Service revenues for the quarter ended September 30, 1996 were $3.7 million
compared to $5.2 million for the quarter ended September 30, 1995 and $11.4
million compared to $15.6 million for the nine months ended September 30, 1996
and 1995, respectively. This decrease in service revenues is mainly due to the
exclusion of revenue related to the DOORS technology in the Company's total
revenue in 1996 and equaling $1.1 million and $3.1 million for the three months
and nine months ended September 30, 1995, respectively, as well as reduced
maintenance revenues related to older generation accelerator products and price
reductions related to government contracts.  See Results of Operations.

GROSS PROFIT
Total gross profit was $0.8 million compared to $8.7 million for the three
months ended September 30, 1996 and 1995, respectively.  Total gross profit for
the nine months ended September 30, 1996 and 1995 was $9.9 million and $25.1
million, respectively.  Gross profit from product revenues was $(0.8) million
for the three months ended September 30, 1996 compared to $6.3 million for the
same period in 1995.  This decrease was primarily due to decreased product
revenues as well as certain one-time expenses of approximately $1.1 million
related to the write-down of inventories.  Gross profit from product revenues
was $5.1 million and $17.6 million for the nine months ended September 30, 1996
and 1995 respectively.  The decline in gross profit for both the three months
and nine months ended September 30, 1996 is primarily attributed to decreased
revenues and inventory write-downs of approximately $1.1 million.  Other factors
contributing to the decrease in gross profit is product mix and higher discounts
offered to customers for older generation products. 

Gross profit from service revenues was $1.5 million and $2.3 million for the
three months ended September 30, 1996 and 1995, respectively.  For the nine
months ended September 30, 1996 and 1995, gross profit from service revenues was
$4.8 million and $7.5 million, respectively.  This decrease is primarily due to
decreased maintenance revenues in 1996 as well as the inclusion of $0.7 million
and $2.0 million in gross profit for the three months and nine months ended
September 30, 1995 related to the amount of gross profit contributed from the
DOORS technology.  See Results of Operations.


                                          6


<PAGE>

OPERATING EXPENSES

SALES AND MARKETING
Sales and marketing expenses decreased to $3.5 million for the third quarter of
1996 compared to $4.5 million for the same three month period during 1995. 
Sales and marketing expenses for the nine months ended September 30, 1996
decreased to $10.9 million compared to $ 12.5 million for the nine months ended
September 30, 1995.  The decrease was mainly due to the inclusion of $0.5
million and $1.4 million DOORS expenses for both the three month period and the
nine month period of 1995, respectively, as well as lower commission expense
related to lower revenue levels in 1996, partially offset by higher marketing
expenses in 1996 related to the introduction of the LightSpeed product.
RESEARCH AND DEVELOPMENT
Research and development expenses increased to $4.3 million for the three months
ended September 30, 1996 compared to $2.7 million during the three months ended
September 30, 1995.  Research and development expenses were $12.7 million and
$8.0 million during the nine months ended September 30, 1996 and 1995,
respectively.  The increase for both the three month period and nine month
period of 1996 is mainly due to additional staffing levels and higher levels of
engineering project activity associated with the introduction of both the
LightSpeed product and the high-density FPGA products.

GENERAL AND ADMINISTRATIVE
General and administrative expenses for the three months ended September 30,
1996 and 1995 were $2.7 million and $0.7 million, respectively.  The increase in
the third quarter of 1996 was primarily due to $1.0 million of bad debt expense
for potential uncollectable accounts receivable.  An additional  $0.8 million of
expense in the third quarter related to the Company's decision to restructure
the organization in order to seek profitability and growth.  These expenses
include severance and other fringe benefits related to a reduction in force. 
For the nine months ended September 30, 1996 and 1995, general and
administrative expenses were $4.5 million and $2.2 million, respectively.  The
increase in 1996 is primarily due to bad debt expense and  restructuring
expenses in the third quarter of 1996.

OTHER INCOME AND EXPENSES
Interest expense was $1.5 million for the third quarter of 1996 compared to $0.1
million for the third quarter of 1995 and $2.1 million compared to $0.3 million
for the nine months ended September 30, 1996 and 1995, respectively.  The
increase in interest expense for both the three months and nine months ended
September 30, 1996 is primarily due to the amortization of the discount expense
related to the subordinated convertible debenture notes, as well as higher
borrowings and interest expense (see Note 4 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, including verification tools and FPGA 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 credit lines
to finance its growth.  Cash used in operations was $7.8 million in the first
nine months of 1996 compared to cash generated by operations of $7.4 million in
the first nine months of 1995. This increase in cash used in operations was
primarily due to the net loss and an increase in inventories and other assets,
partially offset by an increase in accounts payable and a decrease in accounts
receivable.  Net cash used in investing activities was $3.4 million during the
first nine months of 1996, compared to $1.3 million during the first nine months
of 1996, relating primarily to an increase in capital equipment purchases and
increased levels of capitalized software.  Net cash generated by financing
activities was $11.6 million during the first nine months of 1996, compared to
net cash used in financing activities of $1.7 million during the first nine
months of 1995.  This increase is primarily related to the subordinated
convertible debenture note offering in the second quarter of 1996.  

As of September 30, 1996 the company had cash and cash equivalents of $4.3
million dollars.  Working capital (deficit) was $(2.5) million compared to $6.7
million as of December 31, 1995.  As of September 30, 1996, the Company was in
technical non-compliance with its bank covenants, but the bank was forbearing
and the bank line was restructured as an asset-based line.  The Company is
currently in compliance with this bank line of credit.  Because the Company's
operating and product development activities have required significant cash, the
Company, subsequent to December 31, 1996,


                                          7


<PAGE>

obtained a $5.0 million line of credit with a lender that allows for the use of
substantially all of the Company s tangible assets as collateral.

The Company is also working with certain vendors to facilitate extended trade
terms, thus reducing the Company's immediate cash requirements to established
payments and other normal, recurring period expenses. It is anticipated that
minimum working capital will be required to meet sales demands because levels of
inventories of PXP and LightSpeed should meet demands through the second quarter
of 1997.

The Company anticipates that by attaining revenue projections for 1997 and by
relying on the new credit line, together with sources of additional liquidity
such as private or public offerings and equipment lease lines 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


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ITEM 6:   EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits
    
         27  Article 5 of Regulation S-X, Financial Data Schedules for Zycad
         Corporation for the quarter ended September 30, 1996.

(b)      Reports on Form 8-K

         There were no reports on Form 8-K filed for the quarter ended
         September 30, 1996.

         No other applicable items.


                                          9


<PAGE>

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                       ZYCAD CORPORATION


                                       BY   /s/Stephen A. Flory
                                             -----------------------------
                                            Stephen A. Flory
                                            Chief Financial Officer and
                                            Treasurer

April 14, 1997


                                          10