<PAGE>

                       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 MARCH 31, 1999 OR

/ /  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



                              GATEFIELD 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 May 7, 1999
     -------------------                           --------------------------
Common stock, par value $0.10 per share                41,669,197

<PAGE>

                              GATEFIELD CORPORATION

                                      INDEX

<TABLE>
<CAPTION>
                                                                                 Page
                                                                                Number
<S>                                                                             <C>
PART I.    FINANCIAL INFORMATION

Item 1.    Financial Statements

              Condensed Consolidated Balance Sheets as of March 31, 1999
                  and December 31, 1998                                            3

              Condensed Consolidated Statements of Operations for the 
                  Three Months Ended March 31, 1999 and March 31, 1998             4

              Condensed Consolidated Statements of Cash Flows for the 
                  Three Months Ended March 31, 1999 and March 31, 1998             5

              Notes to Condensed Consolidated Financial Statements, 
                  March 31, 1999                                                   6

Item 2.    Management's Discussion and Analysis of Financial Condition
                  and Results of Operations                                        6


PART II.  OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K                                         18

SIGNATURES                                                                        19
</TABLE>


                                       2

<PAGE>

PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS


                             GATEFIELD CORPORATION
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                (UNAUDITED)
<TABLE>
<CAPTION>
                                                                   March 31,      December 31,
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)                                 1999            1998
----------------------------------------------------------------------------------------------
<S>                                                                <C>            <C>
ASSETS
Current assets:
   Cash and cash equivalents                                       $     1,204        $ 3,832
   Accounts receivable, less allowance for doubtful
       accounts of $359 in 1999 and $244 in 1998                            38            463
   Inventories                                                              98            117
   Other current assets                                                    330            556
                                                                   -----------    -----------
       Total current assets                                              1,670          4,968

Property and equipment, net                                              1,536          1,783
Other assets                                                                28            102
                                                                   -----------    -----------
       Total assets                                                $     3,234    $     6,853
                                                                   -----------    -----------
                                                                   -----------    -----------

LIABILITIES AND STOCKHOLDERS' EQUITY 
Current liabilities:
   Current portion of long-term obligations                        $       347    $       393
   Accounts payable                                                        656          1,372
   Accrued expenses                                                      1,483          1,941
   Deferred revenues                                                     4,625          4,772
                                                                   -----------    -----------
       Total current liabilities                                         7,111          8,478

Long-term obligations                                                      269            330
                                                                   -----------    -----------
       Total liabilities                                                 7,380          8,808
Redeemable Preferred Stock:
   $0.10 par value; 2,000,000 shares authorized; shares issued
   and outstanding:  318,000 in 1999 and 318,000 in 1998                 3,084          3,083
Stockholders' deficit
   Common stock:
     $0.10 par value; 65,000,000 shares authorized; shares issued
     and outstanding: 42,025,000 in 1999 and 41,925,000 in 1998          4,202          4,191
   Additional paid-in capital                                           78,183         78,128
   Accumulated other comprehensive loss                                   (753)          (737)
   Accumulated deficit                                                 (88,862)       (86,620)
                                                                   -----------    -----------
       Total stockholders' equity                                       (7,230)        (5,038)
                                                                   -----------    -----------
       Total liabilities and stockholders' equity                  $     3,234    $     6,853
                                                                   -----------    -----------
                                                                   -----------    -----------
</TABLE>

     See Accompanying Notes to Condensed Consolidated Financial Statements.


                                       3

<PAGE>

                              GATEFIELD CORPORATION
     CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                              Three Months Ended
                                                                   March 31,
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)                      1999          1998
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
<S>                                                         <C>            <C>
Revenues:
   Product                                                   $    142       $    640
   Service                                                        311          1,209
                                                             --------       --------
       Total revenues                                             453          1,849
                                                             --------       --------
Cost of revenues:
   Product                                                        237          1,050
   Service                                                        138            760
                                                             --------       --------
       Total cost of revenues                                     375          1,810
                                                             --------       --------
       Gross profit                                                78             39
                                                             --------       --------
Operating expenses:
   Sales and marketing                                            188            915
   Research and development                                     1,347          1,298
   General and administrative                                     740            765
                                                             --------       --------
       Total operating expenses                                 2,275          2,978
                                                             --------       --------

Operating loss                                                 (2,197)        (2,939)

Other income (expense)
   Interest expenses, net                                         (12)           (91)
   Other income (expense), net                                    (32)            67
                                                             --------       --------
     Total other income (expense)                                 (44)           (24)

Net loss                                                       (2,241)        (2,963)

Other comprehensive loss
   Currency translation adjustments                               (16)           (89)
                                                             --------       --------
Comprehensive loss                                           $ (2,257)      $ (3,052)
                                                             --------       --------
                                                             --------       --------

Loss attributable to common stockholders                       (2,242)        (2,997)
                                                             --------       --------
                                                             --------       --------

Basic and diluted net loss per share                         $  (0.05)      $  (0.07)
                                                             --------       --------
                                                             --------       --------

Basic and diluted weighted average shares outstanding          41,951         41,325
                                                             --------       --------
                                                             --------       --------
</TABLE>

     See Accompanying Notes To Condensed Consolidated Financial Statements.


                                       4

<PAGE>

                              GATEFIELD CORPORATION

                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (UNAUDITED)
<TABLE>
<CAPTION>
                                                                       Three Months Ended March 31,
(IN THOUSANDS)                                                             1999           1998
---------------------------------------------------------------------------------------------------
<S>                                                                   <C>               <C>
Operating activities:
   Net loss                                                           $(2,241)          $(2,963)
   Reconciliation to net cash used in operating activities:
     Depreciation and amortization                                        247               289
     Changes in assets and liabilities:
       Accounts receivable                                                425               (77)
       Inventories                                                         19               (41)
       Other assets                                                       193               (41)
       Accounts payable and accrued expenses                           (1,174)             (395)
       Deferred revenues                                                 (147)              236
                                                                      -------           -------
         Net cash used in operating activities                         (2,678)           (2,992)
                                                                      -------           -------
Investing activities:
   Property and equipment purchases, net                                    -               (77)
                                                                      -------           -------
         Net cash used in investing activities                              -               (77)
                                                                      -------           -------
Financing activities:
   Proceeds from issuance of common stock                                  66             4,864
   Repayments of debt obligations                                           -               (91)
                                                                      -------           -------
         Net cash provided by financing activities                         66             4,773
                                                                      -------           -------

Effect of exchange rate changes on cash and cash equivalents              (16)              (82)
                                                                      -------           -------

Net change in cash and cash equivalents                                (2,628)            1,622

Cash and cash equivalents, beginning of period                          3,832             4,189
                                                                      -------           -------

Cash and cash equivalents, end of period                              $ 1,204           $ 5,811
                                                                      -------           -------
                                                                      -------           -------

Supplemental disclosure of cash flow information:
   Noncash activities -
     Accrued dividends on preferred stock                             $     -           $    34
   Cash activities -
     Cash paid during the year for interest                           $    38           $   103

</TABLE>


     See Accompanying Notes To Condensed Consolidated Financial Statements.


                                       5

<PAGE>

                              GATEFIELD CORPORATION

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)
                                 MARCH 31, 1999

1.   BASIS OF PRESENTATION

         The accompanying financial statements have been prepared on a going 
concern basis, which contemplates the realization of assets and the 
satisfaction of liabilities in the normal course of business. As shown in the 
financial statements, during the quarters ended March 31, 1999 and 1998, 
GateField Corporation, (the "Company") incurred net losses of approximately 
$2,241,000 and $2,963,000, respectively. Additionally, the Company had 
stockholders deficits of approximately $7,230,000 at March 31, 1999 and 
$5,038,000 at December 31, 1998, and is highly dependent on obtaining 
additional financing in order to fund the current and planned operating 
levels. These factors among others raise substantial doubt about the ability 
of the Company to continue as a going concern for a reasonable period of time.

         The financial statements do not include any adjustments relating to 
the recoverability and classification of recorded asset amounts or the 
amounts and classification of liabilities that might be necessary should the 
Company be unable to continue as a going concern. The Company's continuation 
as a going concern is dependent upon its ability to obtain additional 
financing to complete its new product development and begin commercial sales, 
and ultimately obtain sufficient customer demand to attain profitable 
operations. Management intends to reduce operating expenses, begin sales of 
new products currently in development and obtain additional financing to 
cover its additional cash flow requirements until it reaches a break-even 
level of operations. No assurance can be given that the Company will be 
successful in these efforts.

         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 March 31, 1999 and 1998, 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, 
1998, included in the Company's Form 10-K.

2.   INVENTORIES

<TABLE>
<CAPTION>
                                   March 31,   December 31,
(IN THOUSANDS)                       1999         1998
--------------------------------------------------------------------
<S>                                <C>         <C>
Raw materials and supplies          $  -          $  -
Finished goods                        98           117
                                    ----          ----
                                    $ 98          $117
                                    ----          ----
                                    ----          ----
</TABLE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

THE DISCUSSION IN THIS REPORT CONTAINS FORWARD-LOOKING STATEMENTS THAT 
INVOLVE RISKS AND UNCERTAINTIES. THE STATEMENTS CONTAINED IN THIS REPORT THAT 
ARE NOT PURELY HISTORICAL ARE FORWARD-LOOKING STATEMENTS WITHIN THE MEANING 
OF SECTION 27A OF THE SECURITIES ACT OF 1933, AS AMENDED, AND SECTION 21E OF 
THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, INCLUDING STATEMENTS 
REGARDING THE COMPANY'S EXPECTATIONS, BELIEFS, INTENTIONS OR STRATEGIES 
REGARDING THE FUTURE. ALL FORWARD-LOOKING STATEMENTS INCLUDED IN THIS 
DOCUMENT ARE BASED ON INFORMATION AVAILABLE TO THE COMPANY ON THE DATE 
HEREOF, AND THE 


                                       6

<PAGE>

COMPANY ASSUMES NO OBLIGATION TO UPDATE ANY SUCH FORWARD-LOOKING STATEMENTS. 
THE COMPANY'S ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE DISCUSSED 
HEREIN. FACTORS THAT COULD CAUSE OR CONTRIBUTE TO SUCH DIFFERENCES INCLUDE, 
BUT ARE NOT LIMITED TO, THOSE DISCUSSED IN "FACTORS AFFECTING FUTURE RESULTS" 
AS WELL AS THOSE DISCUSSED IN THIS SECTION AND ELSEWHERE IN THIS REPORT, AND 
THE RISKS DISCUSSED IN THE COMPANY'S SECURITIES AND EXCHANGE COMMISSION 
FILINGS.

RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 1999 AND 1998

REVENUES

         Total revenues for the quarters ended March 31, 1999 and 1998 were 
$453,000 and $1,849,000, respectively, a decrease of 76%. Total ProASIC 
product revenues for the first quarter of 1999 declined to $142,000 from 
$640,000 in the first quarter of 1998. ProASIC product revenues include 
license fees from Rohm of approximately $300,000 in the quarter ended March 
31, 1998. The decline in ProASIC revenues was due to the company's decision 
to halt active sales efforts for the 0.72-micron product in the third quarter 
of 1998. The company anticipates termination of the 0.72-micron product sales 
in the second quarter of 1999. Most of the company's revenues in the balance 
of 1999, if any, will come from the company's anticipated introduction of its 
0.25-micron products. At this time, the company believes 0.25-micron product 
sales will begin in the second quarter of 1999. However, it does not know how 
many products will be introduced in 1999 or in what packages. Furthermore, it 
is impossible to anticipate the degree of market acceptance of this new 
technology, or whether it will be accepted at all. Therefore, the revenues 
associated with the new 0.25-micron product cannot be predicted with any 
degree of accuracy. The company's failure to introduce its 0.25-micron 
products on a timely basis and to achieve market acceptance of such products 
would have a material adverse effect on the company's business, financial 
condition and result of operations.

         Service revenues for the quarters ended March 31, 1999 and 1998 were 
$311,000 and $1,209,000, respectively. Service revenues are comprised of two 
components: (i) maintenance contracts on the company's verification systems 
and (ii) design services. Verification maintenance revenues were $299,000 in 
the first quarter of 1999 and $817,000 in the first quarter of 1998. The 
decline in verification maintenance revenues is the result of the sale of the 
verification assets in 1997. Verification maintenance revenue earned in the 
first quarters of 1999 and 1998 represent the company's portion of a profit 
sharing agreement with the purchaser of the verification products assets. The 
company expects revenues from this source to continue to decline at an 
accelerated rate and eventually to cease in 1999. Service fees related to the 
company's design service product line were $392,000 in the quarter ended 
March 31, 1998. Those assets were sold to Actel Corporation ("Actel") in 
August 1998, and, thus, these products will not generate any revenue in 1999.

GROSS PROFIT

         Gross profit for the quarters ended March 31, 1999 and 1998 was 
$78,000, and $39,000, respectively. Gross profit as a percentage of total 
revenues was 17% in the first quarter of 1999 and 2% in the first quarter of 
1998. Gross profit is affected by many factors, including but not limited to: 
license fees, pricing strategies, product mix, yield variations, inventory 
obsolescence, and increased costs incurred in the introduction of new 
products.

         Gross profit deficit from ProASIC product revenues for the quarter 
ended March 31, 1999 was ($95,000) and ($410,000) for the quarter ended March 
31, 1998. Poor manufacturing yields on the 0.72-micron product wafers caused 
the negative margins for both periods. As the design and manufacturing 
processes are different for the 0.72-micron and the 0.25-micron products, the 
yields and, hence, the gross profits on the two products are unrelated. 
Furthermore, the .25 micron product has not been manufactured in commercial 
quantities. Therefore, the company cannot predict its margins for 1999 with 
any degree of certainty. Gross profit related to 0.72-micron products is not 
expected to be significant and will cease altogether in the second quarter of 
1999.

         Gross profit from service revenues was $173,000 in the quarter ended 
March 31, 1998, and $449,000 in the quarter ended March 31, 1998. Gross 
profit related to maintenance contracts on the verification systems was 
$173,000 in the quarter ended March 31, 1998, and $443,000 in the quarter 
ended March 31, 1998. The verification maintenance revenues 


                                       7

<PAGE>

and, hence, the related gross profits will decline to zero in 1999. Margins 
related to design services were $6,000 or 2% in 1998. Because revenue from 
design services stopped in August 1998, the company does not expect any gross 
margin contribution from this source in 1999. In summary, gross profit from 
service revenues, if any, is not expected to be significant over the balance 
of 1999.

SALES AND MARKETING

         Sales and marketing expenses were $188,000 for the quarter ended 
March 31, 1999 and $915,000 for the quarter ended March 31, 1998. The 
decrease represents the termination of the company's sales and marketing 
force in connection with the sale of the company's worldwide distribution 
rights to its 0.25 and below ProASIC products to Actel in August 1998. 
Expenses incurred in the first quarter of 1999 related to its efforts to 
support strategic initiatives and product designs. The company expects 
quarterly sales and marketing expenses to remain relatively flat for the 
remainder of the year.

RESEARCH AND DEVELOPMENT

         Research and development expenses for the quarter ended March 31, 
1999 were $1,347,000 as compared to $1,298,000 for the quarter ended March 
31, 1998. The increase in quarterly expenses is due to mask costs for the 
0.25-micron product development. The company expects quarterly research and 
development expenses to remain relatively flat for the remainder of the year.

GENERAL AND ADMINISTRATIVE

         General and administrative expenses for the three months ended March 
31, 1999 and 1998 were $740,000 and $765,000, respectively. The company 
expects these expenses to remain relatively flat for the remainder of the 
year. However, G&A could experience significant increases in future quarters 
due to legal and accounting expenses incurred in connection with future 
financings.

OTHER INCOME AND EXPENSES

         Other expenses for the quarter ended March 31, 1999 were $44,000 as 
compared to other expenses of $24,000 for the quarter ended March 31, 1998.

LIQUIDITY AND CAPITAL RESOURCES

         At March 31, 1999, the company had cash and cash equivalents of 
approximately $1.2 million and a working capital deficit of $5.4 million. 
During the first quarter ended March 31, 1999, and the year ended December 
31, 1998, GateField incurred net losses of approximately $2.2 million and 
$8.3 million, respectively. The company expects to continue to generate such 
losses for at least the remainder of 1999. As a result, the company estimates 
it will have utilized all of its currently available capital resources on or 
about May 31, 1999. Thus, the company will be unable to continue as a going 
concern if sufficient funding is not immediately available.

         The Company has contacted a number of potential providers of 
additional capital, including investment banking firms, financial investors, 
customers, potential customers, strategic partners and potential strategic 
partners. In this regard, management has held discussions with Idanta 
Partners, Ltd. ("Idanta") and Actel Corporation ("Actel"), each a significant 
stockholder of the company in which both Idanta and Actel have indicated 
their preliminary interest in providing additional financing. Presently 
management is engaged in discussion with Actel in which Actel has indicated 
on a preliminary basis its willingness to extend loans to the Company, 
pursuant to a convertible promissory note (the "Note"), in the aggregate 
principal amount of up to $8 million (the "Note Financing"). It is 
anticipated that all or some portion of such Note would be convertible into 
shares of the Company's equity securities. It is also anticipated that the 
Common Stock issuable upon conversion of such equity securities would be at a 
discount to the prevailing market price to reflect the illiquidity of the 
shares, the Company's financial condition and other factors. The issuance of 
additional shares of Common Stock in the Note Financing is expected to be 
dilutive to the current stockholders, particularly in view of the fact that 
such securities will likely be issued at a discount to the prevailing market 
price of the Company's Common Stock.

         Although Actel and Idanta have indicated their preliminary interest 
in funding the Company, there can be no assurance that either the Note 
Financing or any other proposed financings will be consummated prior to May 
31, 1999, the date on which the Company will have utilized all of its 
currently available cash, on terms acceptable to the Company and its 
stockholders if at all. The terms of the Note Financing have not been 
finalized and will be subject to compliance with all applicable securities 
laws. If the Company is unable to obtain additional financing on a timely 
basis, the Company will be required to terminate its operations.

         The Company currently anticipates that capital in the aggregate 
principal amount of $6 million to $12 million would meet the Company's 
capital requirements through 1999. However, the Company's capital 
requirements may be greater than anticipated. Therefore, there can be no 
assurance that such amounts will be sufficient to meet the Company's capital 
requirements through 1999.

         GateField has historically used private offerings of convertible 
debt and convertible preferred stock, 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 $2.7 million in the first quarter of 
1999 compared to $3.0 million for the first quarter of 1998. Net cash used by 
investing activities during the three-month period ended March 31, 1998 was 
$77,000 for equipment acquisitions. GateField expects to invest a minimum of 
$300,000 and possibly as much as $800,000 in mask sets for its new 
0.25-micron product in 1999 but does not anticipate any other significant 
capital asset acquisitions during the upcoming year.

         Net cash provided by financing activities was $66,000 in the first 
quarter of 1999 and represents employee purchases of stock under certain 
option plans. That amount compares to $4.9 million for the same three month 
period in 1998 which represents the sale of the Company's common stock to 
Idanta Partners Ltd. in the amount of $4.6 million and $300,000 to other 
option and warrant holders, respectively.

                                       8

<PAGE>

YEAR 2000 ISSUES

         The following constitutes "Year 2000 Disclosure" under the Year 2000 
Information and Readiness Disclosure Act of 1998.

         GateField Corporation is aware that many existing information 
technology (IT) systems, such as computer systems and software products, as 
well as non-IT systems that include embedded technology, were not designed to 
correctly process date and time information after December 31, 1999. 
Accordingly, computer programs and software may need to be modified prior to 
the year 2000 in order to remain functional. Failure to complete necessary 
modifications could cause a disruption or failure of such program and system. 

         The company is currently assessing the impact of such "Year 2000" 
issues on its internal IT and non-IT systems, as well as on its customers, 
suppliers and service providers. The company has formed a "Year 2000 Team" to 
identify, access and resolve Year 2000 compliance issues. The Year 2000 Team 
is testing and evaluating GateField's products and the company's IT systems; 
the team recently completed an inventory of all material Year 2000 issues.

         To date, GateField has not identified any significant areas of 
noncompliance with respect to its products or IT and non-IT systems. It 
expects that the assessment and all remedial action for all of its products, 
IT systems and non-IT systems will be completed by the end of calendar year 
1999. GateField intends to take the necessary steps to make its systems Year 
2000 compliant. These steps may require the company to modify, upgrade or 
replace some of its internal financial and operational systems. The cost of 
bringing all internal systems, equipment and operations into Year 2000 
compliance has not yet been determined. While these efforts may involve 
additional costs, GateField believes, based upon currently available 
information, that these costs will not have a material adverse effect on the 
business, financial condition or results of operations of the 
company--although no assurances can be given.

         The company also has begun discussions with significant customers, 
suppliers and service providers to determine their plans to address Year 2000 
issues. Although GateField anticipates cooperation in these efforts, it may 
be difficult for the company to obtain assurances of Year 2000 readiness from 
such third parties. If any customers, suppliers or service providers fail to 
appropriately address their year 2000 issues, such failure could have a 
material adverse effect on GateField's business, financial condition and 
results of operation. The Year 2000 Team intends to develop contingency 


                                       9

<PAGE>

plans in the event any third party that provides goods or services essential 
to the company's business fails to appropriately address their Year 2000 
issues. Even if GateField's assessments, resolutions and contingency plans 
are completed and put in place on time, there can be no assurance that such 
actions will be sufficient to address any third-party failures. Nor can 
GateField be assured that unresolved or undetected internal and external Year 
2000 issues with third parties will not have a material adverse effect on the 
company's business, financial condition and results of operations.

         Although GateField believes that its Year 2000 Team will identify 
all of the company's material Year 2000 issues, given the pervasiveness of 
Year 2000 issues and the complex interrelationships among Year 2000 issues 
both internal and external to the company, there can be no assurance that the 
company will be able to identify and accurately evaluate all such issues. As 
the process of identifying, accessing and resolving Year 2000 compliance 
issues proceeds, the company may identify situations that present material 
Year 2000 risks and/or that will require substantial time and material 
expense to address. Even if the company's assessments and resolutions are 
completed on time and put in place, there can be no assurance that such plans 
will be sufficient to address any failures or that unresolved or undetected 
internal and external Year 2000 issues will not have a material adverse 
effect on the company's business, financial condition and results of 
operations. The discussion above regarding estimated completion dates, costs, 
risks and other forward-looking statements regarding Year 2000 is based on 
the company's best estimates given information that is currently available 
and is subject to change, as the company continues to progress with its Year 
2000 initiatives, it may discover that actual results will differ materially 
from these estimates.

FACTORS AFFECTING FUTURE RESULTS

IMMEDIATE NEED FOR ADDITIONAL FUNDING

         At March 31, 1999, the Company had cash and cash equivalents of 
approximately $1.2 million and a working capital deficit of $5.4 million. 
During the first quarter ended March 31, 1999, and the year ended December 
31, 1998, the Company incurred net losses of approximately $2.2 million and 
$8.3 million, respectively. The Company expects to continue to generate such 
losses for at least the remainder of 1999 and early 2000. As a result, the 
company expects that it will have utilized all of its currently available 
assets on or about May 31, 1999. If sufficient funding is not immediately 
available, the Company will be unable to continue as a going concern.

NO ASSURANCE OF FUTURE FUNDING

         The Company is in need of immediate additional financing in order to 
be able to continue as a going concern. Although Actel and Idanta have 
indicated their preliminary interest in funding the Company in the aggregate 
principal amount of up to $ 8.0 million, there can be no assurance that such 
financing will be consummated before the Company has utilized all of its 
currently available capital resources on terms acceptable to the company and 
its stockholders, if at all. If the Company is unable to obtain additional 
financing, the Company will be required to terminate its operations.

         The Company anticipates that capital in the aggregate principal 
amount of $6 million to $12 million would meet the Company's capital 
requirements through 1999. However, the Company's capital requirements may be 
greater than anticipated. Therefore, there can be no assurance that such 
amounts would be sufficient to meet the Company's capital requirements 
through 1999.

DEPENDENCE ON THE SUCCESSFUL DEVELOPMENT OF 0.25-MICRON PRODUCTS

         GateField's success is highly dependent upon the timely completion 
and introduction of new products at competitive price and performance levels, 
especially the timely introduction of its next generation of 0.25-micron 
products. GateField is currently completing initial testing of its 
0.25-micron products and related software. The joint Actel / GateField 
marketing team began sampling initial customers in the first quarter of 1999. 
Production software and a device programmer are scheduled to be available in 
the second quarter of 1999. No assurance can be given that the company's 
design and introduction schedules for such products will be met. Moreover, 
there can be no assurances that, even if such products are introduced into 
the market on a timely basis, they will be successfully developed or that 
they will achieve market acceptance. To the extent that the company's 
development and commercialization efforts with respect to the 0.25-micron 
products is unsuccessful or if these products do not achieve market 
acceptance, the company's business, financial condition and results of 
operations would be materially adversely affected.


                                       10

<PAGE>

         The company's 0.25-micron products are highly complex and may 
contain undetected or unresolved defects when first introduced or as new 
versions are released. There can be no assurance that, despite testing by the 
company, defects will not be found in new products, including the company's 
0.25-micron products, or new versions of such products following commercial 
release. This could result in loss of market share, delay in or loss of 
market acceptance or product recall. Any such occurrence could have a 
material adverse effect upon the company's business, financial condition and 
results of operations.

DEPENDENCE ON INDEPENDENT WAFER MANUFACTURERS

         GateField does not manufacture any of the wafers used in the 
production of its products, including its 0.72-micron ProASIC products. This 
dependence on independent wafer manufacturers puts GateField at risk should 
its suppliers be unable or unwilling to produce GateField's products.

         Currently, GateField's 0.72-micron ProASIC products are manufactured 
by Rohm in Japan. In addition, GateField has an agreement with Siemens to 
manufacture the company's new 0.25-micron products at Siemens' wafer 
fabrication facility located in Germany, once initial testing of the 
GateField 0.25-micron products is completed. As the company's products 
migrate to 0.25-micron geometries, GateField will become increasingly 
dependent on Siemens for the manufacture of its products. This dependence on 
a single foundry subjects the company to risks associated with an 
interruption of supply from a single source. Furthermore, Siemens is spinning 
off its semiconductor business, so there can be no assurance that the wafer 
manufacturing portion of such operations will be willing and capable of 
continuing to support the manufacture of GateField's products.

         GateField plans to initially produce its 0.25-micron products in 
relatively low volumes. Still, it will be competing with Siemens' internal 
requirements for production capacity and the attention of Siemens' process 
engineers. The company's reliance on Siemens to fabricate its 0.25-micron 
products involves significant risks, such as technical difficulties or damage 
to production facilities that could limit production and reduce yields, lack 
of control over capacity allocation and lack of control over delivery 
schedules. Also, these risks are increased by the fact that GateField does 
not have second source suppliers for any of its wafer products.

         GateField has in the past experienced delays in obtaining wafers 
from its foundries, and there can be no assurance that the company will not 
experience similar or more severe delays in the future. Although GateField 
has supply agreements with both Rohm and Siemens, a shortage of raw materials 
or production capacity could lead either of them to allocate available 
capacity to customers other than GateField. Or in the case of Siemens, 
internal uses could delay manufacture of GateField products and interrupt 
GateField's capability to meet its product delivery obligations. Any 
inability or unwillingness of GateField's independent wafer manufacturers to 
provide adequate quantities of finished wafers to satisfy GateField's needs 
in a timely manner would delay production and product shipments and could 
have a material adverse effect on GateField's business, financial condition 
and results of operations. These risks are particularly pronounced with 
respect to the company's reliance on Siemens as the only manufacturer of the 
company's 0.25-micron products.

         If GateField's independent wafer manufacturers were unable or 
unwilling to manufacture GateField's products as required, the company would 
have to identify and qualify additional foundries. The development and 
qualification process typically takes one year or longer. No assurance can be 
given that any additional qualified wafer foundries would become available or 
be able to satisfy GateField's requirements on a timely basis. In particular, 
the company has invested significant amounts of time and resources in working 
with Siemens to develop and improve the manufacturing processes relating to 
GateField's 0.25-micron product family. Although Siemens has also invested 
significant resources into its relationship with GateField, if Siemens were 
unable or unwilling to manufacture such products as anticipated by GateField, 
GateField would be unable to introduce such products to market on a timely 
basis, which would have a material adverse effect on the company's business, 
financial condition and results on operations.

RELIANCE ON ACTEL RELATIONSHIP

         In August 1998, GateField entered into a strategic relationship with 
Actel Corporation. In a product marketing agreement, Actel acquired the 
exclusive right to distribute GateField's standard ProASIC products based on 
0.25 micron and smaller geometries. In connection with the formation of the 
alliance, GateField terminated its entire sales force and does 


                                       11

<PAGE>

not anticipate creating a new sales force in the foreseeable future. 
Consequently, GateField is highly dependent on Actel's sales efforts and the 
success of its sales force in marketing GateField's 0.25-micron products.

         Actel will continue to market its own products, including products 
that are competitive with GateField's products. Accordingly, there is a risk 
that Actel may give higher priority to the Actel products, thus reducing its 
efforts to sell GateField's products. In addition, GateField's agreement with 
Actel is terminable by Actel under a variety of circumstances, including 
GateField's material breach of the product marketing agreement. As GateField 
would require significant amounts of time and resources to rebuild its sales 
force, reduction in sales efforts by Actel or a termination of its agreement 
with GateField would have a material adverse effect on GateField's business, 
financial condition and results of operations. Furthermore, if Actel's sales 
and marketing efforts do not achieve anticipated growth rates, GateField 
would be forced to reduce the amount of product that is manufactured. As a 
result, the company's profit margins on future sales of higher cost products 
would be reduced because GateField would be unable to take full advantage of 
Siemens' manufacturing cost reductions.

         The Product Marketing Agreement with Actel contains certain 
GateField milestones relating to the development schedule and manufacturing 
costs of the .25 micron product family. The agreement also contains Actel 
milestones with respect to the marketing and sale of the .25 products 
(including certain revenue targets). GateField currently anticipates that it 
will fail to meet certain of its milestones relating to the cost of 
manufacturing one of the .25 products. If GateField fails to achieve such 
cost milestones, Actel may be relieved of its milestone obligations under the 
Product Marketing Agreement and may have the right to assume control over 
GateField's operations relating to the manufacture of such product. Such loss 
of control could divert resources from other GateField development efforts 
and disrupt the company's development efforts with respect to the .25 product 
family. Also, the termination of Actel's milestone obligations would lessen 
the value of the Product Marketing Agreement to GateField. Such consequences 
of GateField's failure to achieve its milestones could have a material 
adverse effect on GateField's business, financial condition and results of 
operations.

COMPETITION

         The semiconductor industry is intensely competitive and is 
characterized by rapid rates of technological change, product obsolescence, 
and price erosion. GateField's existing competitors include suppliers of 
conventional gate arrays, complex programmable logic devices (CPLDs) and 
FPGAs. The company's two principal competitors are Xilinx, a supplier of 
FPGAs based on SRAM technology, and Altera, a supplier principally of CPLDs. 
GateField also faces competition in the future from major domestic and 
international semiconductor suppliers and suppliers of logic products based 
on new or emerging technologies. Given the intensity of the competition and 
the research and development being done, no assurance can be given that 
GateField's technology--or patents--will remain competitive.

         Important competitive factors in GateField's market are: price, 
performance, number of usable gates, ease of use and functionality of 
development system software, installed base of development systems, 
adaptability of products to specific applications, length of development 
cycle (including reductions to finer micron design rules), number of I/Os, 
reliability, adequate wafer fabrication capacity and sources of raw 
materials, protection of products by effective utilization of intellectual 
property laws and technical service and support. Failure of GateField to 
compete successfully in any of these or other areas could have a material 
adverse effect on its business, financial condition and results of operations.

         Furthermore, if there was a downturn in the market for CPLDs and 
FPGAs, GateField believes companies that have broader product lines and 
longer standing customer relationships may be in a stronger competitive 
position than GateField. Many of the company's current and potential 
competitors offer broader product lines and have significantly greater 
financial, technical, manufacturing and marketing resources than GateField 
has.

DEPENDENCE ON KEY PERSONNEL

         GateField's success is dependent in large part on the continued 
service of its key management, engineering, marketing and support employees. 
Competition for qualified personnel, particularly skilled IC engineers, is 
intense in the semiconductor industry. The loss of GateField's current key 
employees, or the inability of the company to attract other qualified 
personnel, could have a material adverse effect on GateField. The company 
does not have employment agreements 


                                       12

<PAGE>

with any of its key employees, but it does have standard non-disclosure 
agreements with all technical and management employees and it does have 
indemnity agreements with Dr. Timothy Saxe, its chief executive officer, 
president and chief operating officer, and Peter G. Feist, its senior vice 
president of marketing, and James B. Boyd, its chief accounting officer.

PRICE EROSION

         The semiconductor industry is characterized by intense competition. 
Historically, average selling prices in the semiconductor industry in 
general, and for GateField's products in particular, have declined 
significantly over the life of each product. Moreover, GateField is highly 
dependent on Actel for the marketing of the company's next generation of 
ProASIC products. While GateField expects that the average selling prices of 
its products will be reduced over time as the company achieves manufacturing 
cost reductions, GateField may from time to time be required by competitive 
pressures to reduce the prices of its products more quickly than such cost 
reductions can be achieved. In addition, GateField occasionally approves 
price reductions on specific sales to meet competition. If these reductions 
are not offset by reductions in manufacturing costs or by a shift in the mix 
of products sold toward higher-margin products, declines in the average 
selling prices of GateField's products will reduce gross margins and could 
have a material adverse effect on the company's business, financial condition 
and results of operations.

MANUFACTURING YIELDS

         GateField depends upon its independent wafer manufacturers to 
produce wafers with acceptable yields and to deliver them to GateField in a 
timely manner. Currently, substantially all of the company's revenues are 
derived from products based on GateField's proprietary ProASIC technology. 
Successful implementation of ProASIC technology requires a high degree of 
coordination between GateField and its independent wafer manufacturers. In 
particular, with respect to the manufacture of GateField's 0.25-micron 
products, Siemens will require significant lead-time to reach volume 
production on new processes. Accordingly, no assurance can be given that 
volume production or acceptable yields with respect to GateField's new 
0.25-micron product family will be achieved on a timely basis or at all.

         The manufacture of high-performance ProASIC products is a complex 
process that requires a high degree of technical skill, state-of-the-art 
equipment and effective cooperation between the wafer supplier and the 
circuit designer to produce acceptable yields. Minute impurities, errors in 
any step of the fabrication process, defects in the masks used to print 
circuits on a wafer and other factors can cause a substantial percentage of 
wafers to be rejected or numerous die on each wafer to be nonfunctional. As 
is common in the semiconductor industry, GateField has from time to time 
experienced in the past, and expects that it will experience in the future, 
production yield problems and delivery delays. Any prolonged inability to 
obtain adequate yields or deliveries of the 0.25-micron products would 
adversely affect GateField's business, financial condition and results of 
operations.

SEMICONDUCTOR INDUSTRY RISKS

         The semiconductor industry has historically been cyclical and 
periodically subject to significant economic downturns, which are 
characterized by rapid technological change, product obsolescence, diminished 
product demand, accelerated price erosion and overcapacity. Currently, the 
semiconductor industry is in the midst of such a downturn. These downturns 
often occur in connection with, or in anticipation of, maturing product 
cycles (of both the semiconductor companies and their "end customers") and 
declines in general economic conditions. Some of these downturns have lasted 
for more than a year. Also, during such periods, customers of semiconductor 
manufacturers benefiting from shorter lead times may delay some purchases of 
semiconductors into future periods.

         The current semiconductor industry downturn began in the fourth 
quarter of 1995. The economic recessions in Japan and in other countries in 
the Asia Pacific region have made the current downturn in the semiconductor 
industry worse. The economies in these regions are contracting, and demand 
for semiconductors and silicon wafers in these regions has decreased 
significantly.

         GateField has experienced in the past, and may experience again in 
the future, substantial period-to-period fluctuations in business and results 
of operations. This can adversely affect the market price of the company's 
common 


                                       13

<PAGE>

stock. The main factors affecting these fluctuations is the performance of 
the semiconductor industry, overall economic conditions, or other factors, 
including legislation and regulations governing the import or export of 
semiconductor products.

DEPENDENCE ON DESIGN WINS

         For GateField to sell its ProASIC products to a customer, the 
customer must incorporate the company's ProASIC technology into the 
customer's product in the design phase. GateField is highly dependent on 
Actel's sales marketing and FAE team, in conjunction with the support of 
GateField resources, to persuade potential customers to incorporate the 
company's standard ProASIC product into new or updated products. These 
efforts may precede by many months (and sometimes a year or more) the 
generation of volume sales, if any, by the customer. The value of any design 
win, moreover, will depend in large part upon the ultimate success of the 
customer's product. No assurance can be given that GateField will win 
sufficient designs or that any design win will result in significant revenues.

         In addition, there are some costs associated with marketing the 
company's licensing of its ProASIC technology for embedded applications. Such 
costs would not be recovered if GateField were unable to win additional 
licenses.

DEPENDENCE ON INDEPENDENT ASSEMBLY SUBCONTRACTORS

         GateField relies primarily on foreign subcontractors for the 
assembly and packaging of its products and, to a lesser extent, for the 
testing of its finished products. The company generally relies on a few key 
subcontractors to provide particular services and has from time to time 
experienced difficulties with the timeliness and quality of product 
deliveries. GateField has no long-term contracts with its subcontractors, and 
certain of those subcontractors are currently operating at or near full 
capacity. There can be no assurance that these subcontractors will continue 
to be able and willing to meet GateField's requirements for components or 
services. Any significant disruption in supplies from, or degradation in the 
quality of components or services supplied by, these subcontractors could 
delay shipments and result in the loss of customers or revenues or otherwise 
have a material adverse effect on GateField's business, financial condition 
and results of operations.

SUPPLY PROBLEMS

         In a typical semiconductor manufacturing process, silicon wafers 
produced by a foundry are sorted and cut into individual die, which are then 
assembled into individual packages and tested for performance. The 
manufacture, assembly and testing of semiconductor products are highly 
complex and subject to a wide variety of risks, including contaminants in 
materials, contaminants in the environment and performance failures by 
personnel and equipment. Any of these conditions could have a material 
adverse effect on GateField's business, financial condition and results of 
operations.

         It is common in the semiconductor industry for independent wafer 
suppliers to experience lower than anticipated yields of usable die. For 
example, GateField experienced a yield problem at one of its independent 
wafer manufacturers in fiscal years 1997 and 1998 that was severe enough to 
have a material adverse effect on GateField's operating results. To the 
extent yields of usable die decrease, the average cost to GateField of each 
usable die increases, which reduces gross margin.

         Wafer yields can decline without warning and may take substantial 
time to analyze and correct, particularly for a company such as GateField 
that does not operate its own manufacturing facility, but instead relies upon 
a single independent wafer manufacturer. Yield problems may also increase the 
time-to-market for GateField's products and create inventory shortages and 
dissatisfied customers. As the company's products migrate to 0.25-micron 
geometries, GateField anticipates that yields for such products will 
initially be low. If such yields do not improve over time, the company's 
business, financial condition and results of operations would be adversely 
affected.

         Although GateField has overcome such difficulties in the past, no 
assurance can be given that it will be able to do so with respect to its 
0.25-micron product family. Nor can any assurance be given that GateField 
will not experience wafer supply problems in the future, or that any such 
problem would not have a material adverse effect on GateField's business, 
financial condition and results of operations. See "Dependence on Independent 
Wafer Manufacturer."

PATENT INFRINGEMENT


                                       14

<PAGE>

         Although GateField has obtained patents covering aspects of its 
ProASIC and related technologies, no assurance can be given that GateField's 
patents will be determined to be valid or that any assertions of infringement 
or invalidity by other parties (or claims for indemnity from customers 
resulting from any infringement claims) will not be successful. Although the 
Company is not currently a party to any material litigation, the 
semiconductor industry is characterized by frequent claims regarding patent 
and other intellectual property rights. As is typical in the semiconductor 
industry, the Company from time to time receives communications from third 
parties asserting patents on certain of the Company's technologies. In the 
event any third party were to make a valid claim against the Company, the 
Company could be required to discontinue the use of certain processes or 
cease the use, import and sale of infringing products, to pay substantial 
damages and to develop non-infringing technologies or to acquire licenses to 
the alleged infringed technology. The Company's business, financial condition 
and results of operations could be materially and adversely affected by such 
developments. Litigation, which could result in substantial cost to and 
diversion of resources of the Company, may also be necessary to enforce 
patents or other intellectual property rights of the Company or to defend the 
Company against claimed infringement of the rights of others. The failure to 
obtain necessary licenses or the occurrence of litigation relating to patent 
infringement or other intellectual property matters could have a material 
adverse effect on the Company's business, financial condition and results of 
operations.

PROTECTION OF INTELLECTUAL PROPERTY

         GateField has historically devoted significant resources to research 
and development. It believes that the intellectual property derived from 
research and development is a valuable asset that has been and will continue 
to be important to the success of the company's business. GateField relies 
primarily on a combination of nondisclosure agreements, other contractual 
provisions, and patent and copyright laws to protect its proprietary rights. 
No assurance can be given that the steps taken by GateField will be adequate 
to protect its proprietary rights. In addition, the laws of certain 
territories in which GateField's products are or may be developed, 
manufactured or sold, including Asia and Europe, may not protect the 
company's products and intellectual property rights to the same extent as the 
laws of the United States. Failure of GateField to enforce its patents or 
copyrights or to protect its trade secrets could have a material adverse 
effect on the company's business, financial condition and results of 
operations.

RELIANCE ON INTERNATIONAL SALES

         In the past, GateField has operated sales offices in England, 
Germany and Japan. Sales from these offices were in the local currency and, 
therefore, exposed the company to currency exchange fluctuations. Sales to 
customers located outside the United States accounted for approximately 30% 
in 1998, 48% in 1997 and 31% in 1996. Of these sales, sales to customers 
located in the Asia Pacific region and Japan accounted for approximately 25%, 
28% and 18% of net revenues for 1998, 1997 and 1996, respectively.

         GateField is in the process of closing down the operations of all of 
its foreign offices and expects such closures to occur by the end of the 
third quarter of 1999. Prior to such time, the company will experience the 
risks associated with having a high concentration of international sales.

         Although GateField is closing its foreign sales offices, it expects 
that revenues derived from international sales will continue to represent a 
significant portion of the company's total revenues because of its marketing 
relationship with Actel. Further, such direct foreign sales are denominated 
in U.S. dollars. Therefore, GateField's products become less price 
competitive in countries with currencies that are declining in value against 
the dollar. International sales are subject to a variety of risks, including 
longer payment cycles, greater difficulty in accounts receivable collection, 
currency restrictions, tariffs, trade barriers, taxes, export license 
requirements and the impact of recessionary environments in economies outside 
the United States.


                                       15

<PAGE>

         In evaluating new product decisions, GateField must anticipate well 
in advance both the future demand and the technology that will be available 
to supply such demand. Failure to anticipate customer demand, delays in 
developing new products with anticipated technological advances and failure 
to coordinate the design and development of silicon and associated software 
products each could have a material adverse effect on GateField's business, 
financial condition and results of operation.

         In addition, there are greater technological and operational risks 
associated with new products. Several factors could have a material adverse 
effect on GateField's business, financial condition and results of 
operations: the inability of Siemens to produce GateField's 0.25-micron 
products; delays in commencing or maintaining volume shipments of new 
products; the discovery of product, process, software or programming 
failures; and any related product returns. No assurance can be given that any 
other new products will gain market acceptance or that GateField will respond 
effectively to new technological changes or new product announcements by 
others. Any failure of GateField or its strategic partners to successfully 
define, develop, market, manufacture, assemble or test competitive new 
products could have a material adverse effect on its business, financial 
condition and results of operations.

DEPENDENCE ON INTERNATIONAL OPERATIONS

         GateField buys all of its wafers from foreign foundries and has most 
of its commercial products assembled, packaged and tested by subcontractors 
located outside the United States. These activities are subject to the 
uncertainties associated with international business operations, including 
trade barriers and other restrictions, changes in trade policies, foreign 
governmental regulations, currency exchange fluctuations, reduced protection 
for intellectual property, war and other military activities, terrorism, 
changes in political or economic conditions and other disruptions or delays 
in production or shipments, any of which could have a material adverse effect 
on the company's business, financial condition and results of operations.

"BLANK CHECK" PREFERRED STOCK

         GateField's Certificate of Incorporation authorizes the issuance of 
up to 2,000,000 shares of "blank check" preferred stock (of which 1,682,000 
shares remain available for issuance), with such designations, rights and 
preferences as may be determined from time to time by the GateField Board of 
Directors. Accordingly, the board is empowered, without approval by holders 
of the company's common stock, to issue preferred stock with dividend, 
liquidation, redemption, conversion, voting or other rights that could 
adversely affect the voting power or other rights of the holders of the 
common stock. Issuance of the preferred stock could be used as a method of 
discouraging, delaying or preventing a change in control of GateField. In 
addition, such issuance could adversely affect the market price of 
GateField's common stock. In order to raise capital, the company may issue 
additional shares of its preferred stock in the future.

FORWARD-LOOKING STATEMENTS

         All forward-looking statements contained in this Quarterly Report on 
Form 10-Q, including all forward-looking statements contained in any document 
incorporated herein by reference, are made pursuant to the safe harbor 
provisions of the Public Securities Litigation Reform Act of 1995. Words such 
as "anticipates," "believes," "estimates," "expects," intends," "plans," 
"seeks" and variations of such words and similar expressions are intended to 
identify the forward-looking statements. The forward-looking statements 
include projections relating to trends in markets, revenues, average selling 
prices, gross margin, wafer yields, research and development expenditures, 
selling, general and administrative expenditures and the Year 2000 compliance 
issue.

         All forward-looking statements are based on current expectations and 
projections about the semiconductor industry and programmable logic market, 
and assumptions made by GateField's management that reflect its best judgment 
based on other factors currently known by management, but they are not 
guarantees of future performance. Accordingly, actual events and results may 
differ materially from those expressed or forecast in the forward-looking 
statements due to the risk factors identified herein or for other reasons. 
GateField undertakes no obligation to update any forward-looking statement 
contained in this Quarterly Report on Form 10-Q or incorporated by reference 
in the Company's Annual Report on Form 10-K.


                                       16

<PAGE>

PART II.  OTHER INFORMATION

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits

          27.1  Financial Data Schedule.

     (b)  Reports on Form 8-K

          None






                                       17

<PAGE>

                                 SIGNATURES

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.

                                        GATEFIELD CORPORATION

Date:  May 17, 1999


                                        /s/  Timothy Saxe
                                        -------------------------------------
                                        Timothy Saxe
                                        President and Chief Executive Officer


                                        /s/  James B. Boyd
                                        -------------------------------------
                                        James B. Boyd
                                        Chief Accounting Officer & Corporate 
                                        Controller




                                       18