<PAGE>
 
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                    U.S. SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D. C. 20549
 
                             ---------------------
                                  FORM 10-Q/A
                             ---------------------
 
(Mark One)
 
[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 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 NO. 0-13836
 
                         SILICON VALLEY RESEARCH, INC.
            (Exact name of registrant as specified in its charter)
 
              CALIFORNIA                             94-2743735
    (State or other Jurisdiction of                 (IRS Employer
    incorporation or organization)               Identification No.)
 
        6360 SAN IGNACIO AVENUE                       95119-1231
             SAN JOSE, CA                            (Zip Code)
    (Address of principal executive
               offices)
 
                                (408) 361-0333
              Registrant's telephone number, including area code
 
  (Former name, former address and former fiscal year, if changed since last
                                   report.)
 
  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.
 
          Common Shares Outstanding at September 30, 1996: 11,441,892
 
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<PAGE>
 
                 SILICON VALLEY RESEARCH, INC. AND SUBSIDIARIES
 
                                     INDEX
 
<TABLE>
<CAPTION>
                                                                          PAGES
                                                                          -----
 <C>         <S>                                                          <C>
 Part I.     FINANCIAL INFORMATION......................................
             Item 1. Financial Statements...............................
             Consolidated Balance Sheets--March 31, 1996 and September
              30, 1996 (Unaudited)......................................      3
             Consolidated Statements of Operations Three and Six Months
              Ended September 30, 1995 and 1996 (Unaudited).............      4
             Consolidated Condensed Statements of Cash Flows Three and
              Six Months Ended September 30, 1995 and 1996 (Unaudited)..      5
             Notes to Consolidated Financial Statements.................    6-8
             Item 2. Management's Discussion and Analysis of Financial
                    Condition and Results
                    of Operations.......................................   9-12
 Part II.    OTHER INFORMATION..........................................  13-14
             Item 1. Legal Proceedings..................................
             Item 2. Changes in Securities..............................
             Item 3. Defaults Upon Senior Securities....................
             Item 4. Submission of Matters to a Vote of Securities
              Holders...................................................
             Item 5. Other Information..................................
             Item 6. Exhibits and Reports on Form 8-K...................
             Signature..................................................     15
 Exhibit 27. Financial Data Schedule....................................     16
</TABLE>
 
                                       2
<PAGE>
 
  The Registrant hereby amends Part I, Item 1, Financial Statements, to read in
full as follows:
 
                         PART I. FINANCIAL INFORMATION
 
ITEM 1. FINANCIAL STATEMENTS
 
                 SILICON VALLEY RESEARCH, INC. AND SUBSIDIARIES
 
                          CONSOLIDATED BALANCE SHEETS
 
                                 (IN THOUSANDS)
 
<TABLE>
<CAPTION>
                                                         MARCH 31,  SEPTEMBER 30,
                                                           1996         1996
                                                         ---------  -------------
                                                                     (RESTATED)
                                                                     (UNAUDITED)
<S>                                                      <C>        <C>
                        ASSETS
                        ------
Current Assets:                      
Cash and cash equivalents..............................  $ 10,238     $  6,073
Accounts receivable, net of allowances of $25 and $137,
 respectively..........................................     4,650        2,202
Prepaid expenses and other current assets..............       286          704
                                                         --------     --------
                                                           15,174        8,979
Fixed assets, net......................................       537          764
Other assets, net......................................     1,381        4,350
                                                         --------     --------
                                                         $ 17,092     $ 14,093
                                                         ========     ========
         LIABILITIES AND SHAREHOLDERS' EQUITY
         ------------------------------------
Current Liabilities:
Accounts payable.......................................  $    321     $    464
Accrued expenses.......................................     1,329        1,382
Deferred revenue.......................................     1,537        1,077
Current portion of long-term debt......................       139          210
                                                         --------     --------
                                                            3,326        3,133
Long-term debt.........................................        38           19
                                                         --------     --------
                                                            3,364        3,152
                                                         --------     --------
Shareholders' Equity:
Preferred stock, no par value:
  Authorized: 1,000 shares
  Issued and outstanding: none.........................        --           --
Common stock, no par value:
  Authorized: 25,000 shares
  Issued and outstanding: 11,308 shares at March 31,
  1996 and 11,442 shares at September 30, 1996.........    31,171       31,413
Accumulated deficit....................................   (17,423)     (20,437)
Cumulative translation adjustment......................       (20)         (35)
                                                         --------     --------
                                                           13,728       10,941
                                                         --------     --------
                                                         $ 17,092     $ 14,093
                                                         ========     ========
</TABLE>
 
  The accompanying notes are an integral part of these consolidated financial
                                  statements.
 
                                       3
<PAGE>
 
                 SILICON VALLEY RESEARCH, INC. AND SUBSIDIARIES
 
                     CONSOLIDATED STATEMENTS OF OPERATIONS
 
                                  (UNAUDITED)
 
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)
 
<TABLE>
<CAPTION>
                                             THREE MONTHS
                                                 ENDED        SIX MONTHS ENDED
                                             SEPTEMBER 30,     SEPTEMBER 30,
                                           ------------------ -----------------
                                            1995      1996     1995     1996
                                           ------  ---------- ------  ---------
                                                   (RESTATED)         (RESTATED)
<S>                                        <C>     <C>        <C>     <C>
Revenue:
License fees and other...................  $1,629   $   195   $3,508   $ 1,764
Maintenance fees.........................     867       748    1,631     1,401
                                           ------   -------   ------   -------
    Total revenue........................   2,496       943    5,139     3,165
                                           ------   -------   ------   -------
Cost of revenue:
Cost of license fees and other...........      88       178      154       297
Cost of maintenance fees.................      98       137      222       236
                                           ------   -------   ------   -------
    Total cost of revenue................     186       315      376       533
                                           ------   -------   ------   -------
Gross margin.............................   2,310       628    4,763     2,632
                                           ------   -------   ------   -------
Operating expenses:
Engineering, research and development....     820       844    1,634     1,512
Selling and marketing....................   1,224     1,648    2,584     3,216
General and administrative...............     194       695      384     1,103
                                           ------   -------   ------   -------
    Total operating expenses.............   2,238     3,187    4,602     5,831
                                           ------   -------   ------   -------
Operating income (loss)..................      72    (2,559)     161    (3,199)
                                           ------   -------   ------   -------
Other income (expense):
  Interest income........................      15        87       21       199
  Interest expense.......................     (18)       (8)     (46)      (16)
  Other, net.............................      (6)        1       (3)        2
                                           ------   -------   ------   -------
    Total other income (expense).........      (9)       80      (28)      185
                                           ------   -------   ------   -------
Income (loss) before provision for income
 taxes...................................      63    (2,479)     133    (3,014)
Provision for income taxes...............      --        --       --        --
                                           ------   -------   ------   -------
Net income (loss)........................  $   63   $(2,479)  $  133   $(3,014)
                                           ======   =======   ======   =======
Net income (loss) per share..............  $ 0.01   $ (0.22)  $ 0.01   $ (0.26)
                                           ======   =======   ======   =======
Shares used in per share calculation.....  10,527    11,418   10,055    11,383
                                           ======   =======   ======   =======
</TABLE>
 
  The accompanying notes are an integral part of these consolidated financial
                                  statements.
 
                                       4
<PAGE>
 
                 SILICON VALLEY RESEARCH, INC. AND SUBSIDIARIES
 
                CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
 
                                  (UNAUDITED)
 
                                 (IN THOUSANDS)
 
<TABLE>
<CAPTION>
                             SIX MONTHS ENDED
                              SEPTEMBER 30,
                            -------------------
                             1995       1996
                            -------  ----------
                                     (RESTATED)
<S>                         <C>      <C>
Cash Flows from Operating
 Activities:
Net income (loss).........  $   133   $(3,014)
Adjustments to reconcile
 net income to net
cash provided by (used in)
 operating activities:
  Depreciation and
   amortization...........      391       679
Changes in assets and
 liabilities:
  Accounts receivable.....   (1,092)    2,388
  Prepaid expenses and
   other current assets...     (114)     (422)
  Accounts payable........      142       145
  Accrued expenses........     (411)       60
  Deferred revenue........     (151)     (439)
  Other, net..............       (5)   (1,380)
                            -------   -------
Net cash used in operating
 activities...............   (1,107)   (1,983)
                            -------   -------
Cash Flows from Investing
 Activities:
Acquisition of fixed
 assets...................     (310)     (283)
Software production costs
 and software licenses....     (413)   (2,102)
                            -------   -------
Net cash used in investing
 activities...............     (723)   (2,385)
                            -------   -------
Cash Flows from Financing
 Activities:
Principal payments of
 long-term debt and other
 liabilities..............     (332)      (68)
Proceeds from issuance of
 common stock.............    3,352       242
                            -------   -------
Net cash provided by
 financing activities.....    3,020       174
                            -------   -------
Effect of exchange rate
 changes on cash..........       --        29
                            -------   -------
Net increase (decrease) in
 cash and cash
 equivalents..............    1,190    (4,165)
Cash and cash equivalents
 at beginning of period...    1,248    10,238
                            -------   -------
Cash and cash equivalents
 at end of period.........  $ 2,438   $ 6,073
                            =======   =======
</TABLE>
 
  The accompanying notes are an integral part of these consolidated financial
                                  statements.
 
                                       5
<PAGE>
 
                SILICON VALLEY RESEARCH, INC. AND SUBSIDIARIES
 
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
                         SEPTEMBER 30, 1996--UNAUDITED
 
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNT)
 
NOTE 1: BASIS OF PRESENTATION AND CONSOLIDATED FINANCIAL INFORMATION
 
  The accompanying consolidated financial statements have been prepared by the
Company, pursuant to the rules and regulations of the Securities and Exchange
Commission for interim financial statements. Therefore, they do not include
all the disclosures which were presented in the Company's annual report on
Form 10-K. These financial statements do not include all disclosures required
by generally accepted accounting principles and accordingly, should be read in
conjunction with the consolidated financial statements and notes included as
part of the Company's latest annual report on Form 10-K.
 
  In the opinion of management, the consolidated financial statements include
all adjustments (consisting only of normal recurring adjustments) necessary to
present fairly the consolidated financial position, results of operations and
cash flows for the interim period. The results of operations presented are not
necessarily indicative of the results to be expected for the full year or for
any other period.
 
REVENUE RECOGNITION
 
  Revenues are comprised of license fees for the Company's software products
(except in Japan where revenues are comprised of sales of the Company's
software products) and fees for services complementing its products, including
annual maintenance and support, training and consulting.
 
  Revenue from licenses is generally recognized when a customer purchase order
has been received, a license agreement has been executed, the software has
shipped, remaining obligations are insignificant, and collection of the
resulting account receivable is probable. Provisions for insignificant vendor
obligations are recorded at the time products are shipped.
 
  Software maintenance revenue, including maintenance revenue bundled with the
initial product license revenue is deferred and recognized ratably over the
maintenance period. The maintenance revenue bundled with the initial product
license revenue is unbundled based on prices for which maintenance is sold
separately to customers. Training and consulting revenues are recognized as
these services are performed.
 
FINANCIAL STATEMENT RESTATEMENT
 
  The Company received a commitment letter from a customer dated September 30,
1996 pursuant to which the customer agreed to purchase certain software and
services from the Company for $2,520. Due to extended payment terms associated
with this transaction the Company deferred all of the revenue and recorded the
related accounts receivable of $2,250 at September 30, 1996. In December 1996,
the Company discovered that certain documents related to this transaction had
been backdated and that the maximum commitment of the customer was reduced to
$600 by a separate memorandum. Accordingly, the Company restated its unaudited
consolidated balance sheet at September 30, 1996 to decrease accounts
receivables, long-term receivables and deferred revenue by an aggregate of
$2,250. The Company will recognize revenues on this transaction as the
payments become due.
 
  Upon the discovery of the aforementioned, the Company's Audit Committee,
through the Company's independent accountants, conducted a review of the
Company's compliance with its revenue recognition policy. As a result of this
review, the Company identified certain transactions for the six months ended
September 30, 1996, in which revenue and related expenses were recognized
other than in accordance with its accounting policies. The Company has
restated its unaudited consolidated financial statements for the quarters
ended June 30, 1996 and September 30, 1996 to reverse these transactions and
related expenses.
 
                                       6
<PAGE>
 
                SILICON VALLEY RESEARCH, INC. AND SUBSIDIARIES
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
                         SEPTEMBER 30, 1996--UNAUDITED
 
  The following summarizes the effect of the restatement on the unaudited
consolidated financial statements of the Company's for the periods presented:
 
<TABLE>
<CAPTION>
                                  THREE MONTHS ENDED       SIX MONTHS ENDED
                                  SEPTEMBER 30, 1996      SEPTEMBER 30, 1996
                                ----------------------- -----------------------
                                AS REPORTED AS RESTATED AS REPORTED AS RESTATED
                                ----------- ----------- ----------- -----------
<S>                             <C>         <C>         <C>         <C>
Total Revenues.................   $ 1,160     $   943     $ 4,271     $ 3,165
Gross Margin...................       808         628       3,701       2,632
Total Operating Expenses.......     3,320       3,187       5,964       5,831
Net loss.......................    (2,432)     (2,479)     (2,113)     (3,014)
Loss per share.................      (.20)      (0.22)       (.17)       (.26)
Shares used in per share
 calculations..................    12,271      11,418      12,406      11,383
Working capital................   $ 5,964     $ 5,846     $ 5,964     $ 5,846
Total assets...................    17,503      14,093      17,503      14,093
Total liabilities..............     5,661       3,152       5,661       3,152
Shareholders' equity...........    11,842      10,941      11,842      10,941
</TABLE>
 
NOTE 2: STATEMENT OF CASH FLOWS INFORMATION
 
<TABLE>
<CAPTION>
                                                                          SIX
                                                                        MONTHS
                                                                         ENDED
                                                                       SEPTEMBER
                                                                          30,
                                                                       ---------
                                                                       1995 1996
                                                                       ---- ----
<S>                                                                    <C>  <C>
Supplemental Cash Flow Information:
  Cash paid during the period for:
    Interest.......................................................... $46  $16
    Income taxes...................................................... $--  $13
</TABLE>
 
NOTE 3: OTHER ASSETS
 
<TABLE>
<CAPTION>
                                                         MARCH 31, SEPTEMBER 30,
                                                           1996        1996
                                                         --------- -------------
<S>                                                      <C>       <C>
Other assets comprise:
Software development costs..............................  $ 1,133     $ 1,697
Software licenses.......................................    1,211       2,744
                                                          -------     -------
                                                            2,344       4,441
Less accumulated amortization...........................   (1,330)     (1,833)
                                                          -------     -------
                                                            1,014       2,608
Loan to employees.......................................      100         217
Prepaid royalties.......................................       --       1,250
Other...................................................      267         275
                                                          -------     -------
                                                          $ 1,381     $ 4,350
                                                          =======     =======
</TABLE>
 
                                       7
<PAGE>
 
                SILICON VALLEY RESEARCH, INC. AND SUBSIDIARIES
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
                         SEPTEMBER 30, 1996--UNAUDITED
 
  In June 1996, the Company entered into an agreement whereby Silicon Valley
Research was granted the exclusive marketing rights to Bell Labs' CLOVER line
of deep submicron verification products worldwide, with the exception of Japan
and Taiwan, where the Company will co-market with Bell Labs' existing
distributors. Pursuant to the four year agreement, the Company has made
prepaid royalty payments of $1,250 and has the following guaranteed future
royalty payments due to Bell Labs: $500 in fiscal 1997, $1,250 in fiscal 1998,
and $1,000 in fiscal 1999.
 
NOTE 4: LITIGATION
 
  The Company is subject to litigation in its normal course of business. In
December, 1994, the Company was named as defendant in an action brought by a
competitor in the Santa Clara County Superior Court alleging unfair
competition and breach of contract. The third amended complaint, the operative
pleading, alleges unfair competition, breach of contract, breach of implied
covenant of good faith and fair dealing, unjust enrichment and fraud. The
plaintiff is seeking attorneys' fees and damages, and enforcement of the
contract. The litigation is in the discovery stage and the ultimate outcome
cannot presently be determined. Accordingly, no provision for any liability
that may result upon adjudication has been made in the consolidated financial
statements.
 
                                       8
<PAGE>
 
  The Registrant hereby amends Part I, Item 2, Management's Discussion and
Analysis of Financial Condition and Results of Operations to read in full as
follows:
 
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
        RESULTS OF OPERATIONS (IN THOUSANDS)
 
  This Management's Discussion and Analysis of Financial Condition and Results
of Operations includes a number of forward-looking statements which reflect
the Company's current view with respect to future events and financial
performance. These forward-looking statements are subject to certain risks and
uncertainties, including those discussed in the Other Factors section of this
Item 2, elsewhere in this Form 10-Q/A and as set forth in the Company's form
10-K on file with the SEC that could cause actual results to differ materially
from historical results or those anticipated. In this report, the words
"anticipates," "believes," "expects," "intends," "future," and similar
expressions identify forward-looking statements. Readers are cautioned not to
place undue reliance on these forward-looking statements, which speak only as
of the date hereof.
 
RESULTS OF OPERATIONS
 
REVENUE
 
  Revenue for the second quarter of fiscal year 1997, which ended September
30, 1996, decreased to $943 from $2,496 in the second quarter a year ago. The
62% decrease in revenues was due to lower license sales during the quarter
ended September 30, 1996, primarily resulting from a reduction in capital
investments, particularly by customers in Asia, and increased competition in
the EDA marketplace. Revenue for the six month period ended September 30,
1996, decreased to $3,165 from $5,139 over the six month period ended
September 30, 1995. This 38% decrease is the result of the lower license
revenues in the quarter ended September 30, 1996, primarily resulting from
reduced capital expenditures by semiconductor manufacturers, particularly in
Asia, and increased competition in the EDA marketplace. International sales,
primarily Japan and the Far East accounted for 36% of total revenue in the
second quarter of fiscal 1997 compared to 49% in the second quarter a year
ago.
 
  The Company's expense levels are based, in part, on its expectations as to
future revenue levels, which are difficult to predict. A substantial portion
of the Company's revenues in each quarter results from shipments during the
last month of that quarter, and for that reason among others, the Company's
revenues are subject to significant quarterly fluctuations. If revenue levels
are below expectations, as in the quarter ended September 30, 1996, operating
results may be materially and adversely affected. In addition, the Company's
quarterly and annual results may fluctuate as a result of many factors,
including the size and timing of software license fees, timing of co-
development projects with customers, timing of operating expenditures,
increased competition, new product announcements and releases by the Company
and its competitors, gain or loss of significant customers or distributors,
expense levels, renewal of maintenance contracts, pricing changes by the
Company or its competitors, personnel changes, foreign currency exchange
rates, and economic conditions generally and in the electronics industry
specifically.
 
COST OF REVENUE
 
  Cost of license fees and other for the second quarter of fiscal year 1997
was $178, compared to $88 in the second quarter of fiscal 1996. Cost of sales
of license fees for the six months ended September 30, 1996 was $297, compared
to $154 in the six months ended September 30, 1995. Cost of sales of license
fees is primarily the amortization of software development costs and royalty
payments due to third parties and both increased for the quarter and six
months ended September 30, 1996.
 
  Cost of maintenance fees for the second quarter of fiscal year 1997 was $137
compared to $98 in the second quarter of fiscal 1996. Cost of maintenance fees
for the six months ended September 30, 1996 was $236 compared to $222 for the
six months ended September 30, 1995. Cost of maintenance fees is primarily the
cost of providing technical support and technical documentation which
increased in fiscal 1997.
 
                                       9
<PAGE>
 
ENGINEERING, RESEARCH AND DEVELOPMENT EXPENSES
 
  Engineering, research and development expenses for the second quarter of
fiscal year 1997 were $844 compared to $820 in the second quarter a year ago.
Comparing the second quarter of fiscal 1997 and the second quarter of fiscal
1996, engineering, research and development expenses were 90% and 33% of total
revenue, respectively. The slight dollar increase in engineering, research and
development expenses during this period is due to depreciation of improved
capital equipment and software acquisitions partially offset by capitalized
software development costs and reduced costs in Taiwan with lower salary and
expense rates. The percentage increase was primarily due to lower than
anticipated revenues in the second quarter of fiscal 1997.
 
  Engineering, research and development expenses for the six months ended
September 30, 1996, were $1,512 compared to $1,634 for the six months ended
September 30, 1995. Comparing these periods, engineering, research and
development expenses were 48% and 32% of total revenue, respectively. The
decrease in absolute dollars is due to lower costs in the first quarter of
fiscal 1997 with increased capitalized software development costs and a
temporary reduction in headcount in the United States with increases in Taiwan
at lower salary and expense rates. The percentage increase was primarily due
to lower than anticipated revenues in the second quarter of fiscal 1997. The
Company continues to strengthen its engineering capabilities with increased
staffing and increased emphasis on development of new technology.
 
SELLING & MARKETING EXPENSES
 
  Selling and marketing expenses for the second quarter of fiscal year 1997
increased to $1,648 from $1,224 in the second quarter a year ago. In the
second quarter of fiscal 1997 and the second quarter of fiscal 1996, selling
and marketing expenses were 175% and 49% of total revenue, respectively.
Selling and marketing expenses for the six months ended September 30, 1996,
increased to $3,216 from $2,584 in the six months ended September 30, 1995.
Comparing the six month periods, selling and marketing expenses were 102% and
50% of total revenue, respectively. The dollar increases are due to the
addition of sales and marketing personnel and an increase in the reserve for
bad debts. The percentage increases were primarily due to lower than
anticipated revenues, however, the Company expects that selling and marketing
expenses will continue to increase if revenue increases.
 
GENERAL AND ADMINISTRATIVE EXPENSES
 
  General and administrative expenses increased to $695 for the second quarter
of fiscal year 1997, from $194 in the second quarter a year ago. In the second
quarter of fiscal 1997 and the second quarter of fiscal 1996, general and
administrative expenses were 74% and 8% of total revenue, respectively.
General and administrative expenses for the six months ended September 30,
1996, increased to $1,103 from $384 in the six months ended September 30,
1995. Comparing the six month periods, general and administrative expenses
were 35% and 8% of total revenue, respectively. The absolute dollar increase
is attributed to increases to the senior management team, relocation expenses,
consulting expenses and legal expenses and the percentage increase is
primarily due to reduced revenues. The Company expects that general and
administrative expenses will decline in future quarters due to lower head
count and cost controls.
 
OTHER INCOME (EXPENSE)
 
  Other income (expense) increased to $80 from $(9) comparing the second
quarter of fiscal year 1997 to the second quarter of fiscal 1996. Other income
(expense) increased to $185 from $(28) comparing the six months ended
September 30, 1996 with the six months ended September 30, 1995. Other
expenses are primarily interest income and expense and the increases are due
to investing the proceeds received in the secondary offering.
 
LIQUIDITY AND CAPITAL RESOURCES
 
  During the six months ended September 30, 1996, cash and cash equivalents
decreased $4,165 from $10,238 to $6,073. This decrease resulted primarily from
cash used by operating activities of $1,983 and $2,385 of cash used for
investing activities. The Company's primary unused sources of funds at
September 30, 1996, consisted
 
                                      10
<PAGE>
 
of cash and cash equivalents of $6,073 and a bank line of credit of $2,000.
The Company believes its cash and cash generated from operations and available
borrowings will be sufficient to finance its operations for at least the next
twelve months. The Company's cash requirements in the future may also be
financed through additional equity or debt financings. There can be no
assurance that such financing can be obtained at favorable terms, if at all.
The Company is obligated to make royalty payments of $2,750 over the next
three years and has open commitments for the purchase of capital assets as of
September 30, 1996 of approximately $100.
 
  The Company is currently engaged in litigation with Mentor Graphics. See
Note 4 to the Consolidated Financial Statements. Regardless of the outcome of
this pending litigation, the litigation may result in substantial cost and
expenses to the Company and significant diversion of efforts by the Company's
technical and management personnel. In addition, an adverse ruling in the
litigation could have a material adverse effect on the Company's business,
operating results or financial condition.
 
OTHER FACTORS AFFECTING FUTURE RESULTS OF OPERATIONS
 
  Revenues from sales of the SVR GARDS family of products have historically
represented a substantial majority of the Company's license revenues. Although
the Company has recently introduced its SVR FloorPlacer and SVR SonIC
products, the Company expects that revenues from the license of SVR GARDS
products will continue to account for a significant portion of the Company's
revenues for the foreseeable future. The life cycles of the Company's products
are difficult to predict due to the effect of new product introductions or
product enhancements by the Company or its competitors, market acceptance of
new and enhanced versions of the Company's products and competition in the
Company's marketplace. Declines in the demand for the SVR GARDS family of
products, whether as a result of competition, technological change, price
reductions or otherwise, could have a material adverse effect on the Company's
business, operating results and financial condition.
 
  The EDA industry is characterized by extremely rapid technological change,
frequent new product introductions and enhancements, evolving industry
standards and rapidly changing customer requirements. The development of more
complex ICs embodying new technologies will require increasingly sophisticated
design tools. The Company's future results of operations will depend, in part,
upon its ability to enhance its current products and to develop and introduce
new products on a timely and cost-effective basis that will keep pace with
technological developments and evolving industry standards and methodologies,
as well as address the increasingly sophisticated needs of the Company's
customers. The Company has in the past and may in the future experience delays
in new product development and product enhancements. The Company began
commercial shipments of its new SVR FloorPlacer software products in the
quarter ended March 31, 1995, and of its new SVR SonIC software products in
the quarter ended June 30, 1995. There can be no assurance that these new
products will gain market acceptance or that the Company will be successful in
developing and marketing product enhancements or other new products that
respond to technological change, evolving industry standards and changing
customer requirements, that the Company will not experience difficulties that
could delay or prevent the successful development, introduction and marketing
of these products or product enhancements, or that its new products and
product enhancements will adequately meet the requirements of the marketplace
and achieve any significant degree of market acceptance. In addition, all of
the Company's current products operate in, and planned future products will
operate in, the Unix operating system. In the event that another operating
system, such as Windows NT, were to achieve broad acceptance in the EDA
industry, the Company would be required to port its products to such an
operating system, which would be costly and time consuming and could have a
material adverse effect on the Company's business, operating results or
financial condition. Failure of the Company, for technological or other
reasons, to develop and introduce new products and product enhancements in a
timely and cost-effective manner would have a material and adverse effect on
the Company's business, operating results and financial condition. In
addition, the introduction or even announcement of products by the Company or
one or more of its competitors embodying new technologies or changes in
industry standards or customer requirements could render the Company's
existing products obsolete or unmarketable. Such deferment of purchases could
have a material adverse effect on the Company's business, operating results or
financial condition.
 
                                      11
<PAGE>
 
  Software products as complex as those offered by the Company may contain
defects or failures when introduced or when new versions are released. The
Company has, in the past, discovered software defects in certain of its
products and may experience delays or lost revenue to correct such defects in
the future. Although the Company has not experienced material adverse effects
resulting from any such defects to date, there can be no assurance that,
despite testing by the Company, errors will not be found in new products or
releases after commencement of commercial shipments, resulting in loss of
market share or failure to achieve market acceptance. Any such occurrence
could have a material effect upon the Company's business, operating results or
financial condition.
 
  A small number of customers account for a significant percentage of the
Company's total revenue. There can be no assurance that sales to these
entities, individually or as a group, will reach or exceed historical levels
in any future period. Any substantial decrease in sales to one or more of
these customers could have a material adverse effect on the Company's
business, operating results or financial condition. The Company currently
sells and markets its products overseas, other than in Japan, through a
limited number of distributors. The Company hired new distributors in Europe
and Singapore within the last year and is in the process of replacing a
distributor in Korea. The Company has little history of performance by its new
distributors. In addition, there can be no assurance that the distributors
will be able to successfully distribute and support the Company's products on
a timely basis or that such distributors will not reduce their efforts devoted
to selling the Company's products or terminate their relationship with the
Company as a result of competition with other suppliers' products. The loss of
or changes in the relationship with or performance by one or more of the
Company's international distributors could have a material adverse effect on
the Company's business, results of operations and financial condition. There
can also be no assurance that the Company's distributor strategy will be
successful or that the Company will be able to retain current distributors or
to identify new distributors in the future that are acceptable to the Company.
 
  The licensing and sales of the Company's software products generally
involves a significant commitment of capital by prospective customers, with
the attendant delays frequently associated with large capital expenditures and
lengthy acceptance procedures. For these and other reasons, the sales cycle
associated with the licensing of the Company's products is typically lengthy
and subject to a number of significant risks over which the Company has little
or no control. Because the timing of customer orders is hard to predict, the
Company believes that its quarterly operating results are likely to vary
significantly in the future. Actual results of the Company could vary
materially as a result of factors, including, without limitation, the high
average selling price and long sales cycle for the Company's products, the
relatively small number of orders per quarter, dependence on sales to a
limited number of large customers, timing of receipt of orders, successful
product introduction and acceptance of the Company's products and increased
competition.
 
  The Company is dependent upon the semiconductor and more generally, the
electronics industries. Each of these industries is characterized by rapid
technological change, short product life cycles, fluctuations in manufacturing
capacity and pricing and gross margin pressures. Each of these industries is
highly cyclical and has periodically experienced significant downturns, often
in connection with, or in anticipation of declines in general economic
conditions during which the number of new IC design projects often decreases.
Purchases of new licenses from the Company are largely dependent upon the
commencement of new design projects, and factors negatively affecting any of
these industries could have a material adverse effect on the Company's
business, operating results or financial condition. The Company has
experienced some order delays as the semiconductor industry is experiencing a
slowdown. The Company's business, operating results and financial condition
may, in the future, reflect substantial fluctuations from period to period as
a consequence of patterns and general economic conditions in either the
semiconductor or electronics industry.
 
                                      12
<PAGE>
 
  The Registrant hereby amends Part II, Item 6, Exhibits and Reports on Form 8-
K to read in full as follows:
 
                           PART II. OTHER INFORMATION
 
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K:
 
  (A) Exhibits:
 
<TABLE>
<CAPTION>
 EXHIBIT
 NUMBER  DESCRIPTION OF EXHIBIT
 ------- ----------------------
 <C>     <S>
  (a)(1) The financial statements filed as part of this Report at Item 1 are
         listed in the Index to Financial Statements and Financial Statement
         Schedules on page 2 of this Report.
 (a)(2)) The following exhibits are filed with this Quarterly Report on Form
         10-Q:
   3.01  Registrant's Articles of Incorporation as amended to date
         (incorporated by reference to Exhibit 3.01 of Registrant's
         Registration Statement on Form S-1 ( File No. 2-89943) filed March 14,
         1984, as amended (the "1984 Registration Statement")).
   3.02  Registrant's bylaws, as amended to date (incorporated by reference to
         Exhibit 4.01 of the 1984 Registration Statement).
  10.01* Registrant's 1990 Directors Stock Option Plan (incorporated by
         reference to Exhibit A of Registrant's Proxy Statement dated July 10,
         1990).
  10.03* Registrant's 1988 Stock Option Plan, as amended to date, including the
         stock option grant form and the stock option exercise notice and
         agreement (incorporated by reference to Exhibit 10.15 of Registrant's
         Annual Report on Form10-KSB for the fiscal year ended March 31, 1993).
  10.05* Registrant's 1993 Employee Stock Purchase Plan, as amended to date
         (incorporated by reference to Exhibit 10.20 of Registrant's Annual
         Report on Form 10-KSB for the fiscal year ended March 31, 1993).
  10.06  Stock Purchase Agreement dated February 12,1993 between the Registrant
         and several investors (incorporated by reference to Exhibit 4.01 of
         Registrant's current report on Form 8-K filed on April 15, 1993).
  10.07  Stock Purchase Agreement dated January 19,1994 between the Registrant
         and several investors (incorporated by reference to Exhibit 4.01 of
         Registrant's current report on Form 8-K filed on
         February 4, 1994).
  10.08  Warrant Agreement dated March 22, 1994 between the Registrant and
         Prutech Research and Development Partnership II (incorporated by
         reference to Exhibit 10.22 of Registrant's Annual Report on Form 10-
         KSB for the fiscal year ended March 31, 1994).
  10.09  Subordination debt agreement dated September 15, 1994 between the
         registrant and several investors (incorporated by reference to Exhibit
         4.01 of Registrant's current report on Form 8-K filed on November 4,
         1994).
  10.10* Employment Agreement dated October 31, 1995 between the Registrant and
         Glenn E. Abood (incorporated by reference to Exhibit 10.10 of
         Registrant's Registration Statement on Form S-2 filed December 6,
         1995).
  10.11  Stock Purchase Agreement dated June 6, 1995 between the Registrant and
         several investors (incorporated by reference to Exhibit 10.10 of the
         Registrant's Annual Report on Form 10-KSB for the fiscal year ended
         March 31, 1995).
  10.12  Security and Loan Agreement dated September 15, 1995 by and among
         Imperial Bank and the Registrant (incorporated by reference to Exhibit
         10.12 of the Registrant's Registration Statement on Form SB-2 filed
         December 6, 1995).
</TABLE>
 
 
                                       13
<PAGE>
 
<TABLE>
<CAPTION>
 EXHIBIT
 NUMBER  DESCRIPTION OF EXHIBIT
 ------- ----------------------
 <C>     <S>
  10.13  Master Equipment Lease Agreement dated November 9, 1995 by and between
         Financing for Science International, Inc. and the Registrant
         (incorporated by reference to Exhibit 10.13 of the Registrant's
         Registration Statement on Form SB-2 filed December 6, 1995).
  27.00  Financial Data Schedule
</TABLE>
--------
*Management Contract or Compensatory Plan or Arrangement
 
  (B) Reports on Form 8-K: None filed during period
 
                                       14
<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.
 
                                          SILICON VALLEY RESEARCH
 
Date: February 18, 1997                   /s/ Robert R. Anderson
                                          -------------------------------------
                                            Robert R. Anderson
                                            Chief Executive Officer
 
 
                                       15