<Page>


                                  UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549
                            ------------------------

                                    FORM 10-Q


/X/   Quarterly report pursuant to Section 13 or 15(d) of the
      Securities Exchange Act of 1934 for the quarterly period ended
      June 30, 2001


                                       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: 000-20923



                                 INNOVEDA, INC.
             (Exact Name of Registrant as Specified in Its Charter)


          DELAWARE                                     93-1137888
          --------                                     ----------
(State or Other Jurisdiction of             (I.R.S. Employer Identification No.)
Incorporation or Organization)


          293 BOSTON POST ROAD WEST, MARLBORO, MASSACHUSETTS 01752-4615
          -------------------------------------------------------------
              (Address and Zip Code of Principal Executive Offices)


       Registrant's Telephone Number, Including Area Code: (508) 480-0881


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 / /

As of August 10, 2001, the Registrant had outstanding 39,132,737 shares of
Common Stock, $0.01 par value per share.


<PAGE>


IMPORTANT NOTE ABOUT FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q includes forward-looking statements within
the meaning of section 27A of the Securities Act of 1933 and Section 21E of
the Securities Exchange Act of 1934 that are subject to a number of risks and
uncertainties. All statements, other than statements of historical fact
included in this Quarterly Report on Form 10-Q, regarding our strategy,
future operations, financial position, estimated revenues, projected costs,
prospects, plans and objectives of management are forward-looking statements.
When used in this Quarterly Report on Form 10-Q, the words "will", "believe",
"anticipate", "intend", "estimate", "expect", "project", "plans", and similar
expressions are intended to identify forward-looking statements, although not
all forward-looking statements contain these identifying words. We cannot
guarantee future results, levels of activity, performance or achievements and
you should not place undue reliance on our forward-looking statements. Our
forward-looking statements do not reflect the potential impact of any future
acquisitions, mergers, dispositions, reorganizations, restructurings, joint
ventures or strategic alliances. Our actual results could differ materially
from those anticipated in these forward-looking statements as a result of
various factors, including those set forth in the following discussion, and,
in particular, the risks discussed below under the subheading "Additional
Risk Factors that Could Affect Operating Results and Market Price of Stock".
The forward-looking statements provided by Innoveda in this Quarterly Report
on Form 10-Q represent Innoveda's estimates as of the date this report is
filed with the SEC. Innoveda anticipates that subsequent events and
developments will cause its estimates to change. While Innoveda may elect to
update its forward-looking statements in the future, it specifically
disclaims any obligation to do so. Innoveda's forward-looking statements
should not be relied upon as representing its estimates as of any date
subsequent to the date this report is filed with the SEC.

<PAGE>



                                 INNOVEDA, INC.

                          QUARTERLY REPORT ON FORM 10-Q

                                      INDEX

<Table>
<Caption>
PART 1                   FINANCIAL INFORMATION                                                         PAGE
<S>                      <C>                                                                           <C>
ITEM 1                   Condensed Consolidated Financial Statements

                         Condensed Consolidated Balance Sheets as of June 30, 2001
                         (unaudited) and December 30, 2000                                               4

                         Condensed Consolidated Statements of Operations for the Quarters
                         and Six Months Ended June 30, 2001 (unaudited) and July 1, 2000
                         (unaudited)                                                                     5

                         Condensed Consolidated Statements of Cash Flows for the Quarters
                         and Six Months Ended June 30, 2001 (unaudited) and July 1, 2000
                         (unaudited)                                                                     6

                         Notes to Condensed Consolidated Financial Statements                            7


ITEM 2                   Management's Discussion and Analysis of Financial Condition and
                         Results of Operations                                                          14


ITEM 3                   Quantitative and Qualitative Disclosures about Market Risk                     30


PART II                  OTHER INFORMATION


ITEM 4                   Submission of Matters to a Vote of Security Holders                            31

ITEM 6                   Exhibits and Reports on Form 8-K                                               31

Signature                                                                                               32

Exhibit Index                                                                                           33
</Table>

                                       3

<PAGE>


                                 INNOVEDA, INC.
                           CONSOLIDATED BALANCE SHEETS
                                 (IN THOUSANDS)

<Table>
<Caption>
                                                          JUNE 30,    DECEMBER 30,
                                                            2001         2000
                                                        (unaudited)
                                                        -----------   ------------
<S>                                                      <C>          <C>
                         ASSETS
Current assets:
   Cash and cash equivalents                             $  14,814    $  20,799
   Accounts receivable, net                                 19,882       27,260
   Prepaid expenses and other                                2,732        2,800
   Deferred income taxes                                     7,489        6,626
                                                         ---------    ---------
      Total current assets                                  44,917       57,485

Equipment and furniture, net                                 7,435        7,642
Capitalized software costs, net                              2,396        2,358
Purchased technology and other intangibles, net             53,532       62,198
Goodwill and other                                          12,007       12,941
                                                         ---------    ---------
         Total assets                                    $ 120,287    $ 142,624
                                                         =========    =========

                       LIABILITIES

Current liabilities:
   Long-term debt, current portion                       $   7,500    $   3,550
   Capital lease obligations, current portion                  452          548
   Accounts payable                                          3,807        3,652
   Accrued liabilities                                      14,562       20,565
   Deferred revenue                                         21,827       24,514
                                                         ---------    ---------
      Total current liabilities                             48,148       52,829

Long-term debt                                                --          5,750
Capital lease obligations                                       63          250
Other long-term liabilities                                  1,500        1,553
Deferred income taxes                                       25,075       27,642
                                                         ---------    ---------
         Total liabilities                                  74,786       88,024
                                                         ---------    ---------

                  STOCKHOLDERS' EQUITY

Common stock, $0.01 par value, 100,000 authorized,
  39,657 oustanding at June 30, 2001, 39,347
    outstanding at December 30, 2000                           397          393
Treasury stock                                              (1,663)        (832)
Additional paid-in-capital                                 116,854      116,047
Notes due from stockholders                                   (932)        (932)
Deferred compensation                                         (820)      (1,113)
Accumulated deficit                                        (67,857)     (59,013)
Accumulated other comprehensive income (expense)              (478)          50
                                                         ---------    ---------
   Total stockholders' equity                               45,501       54,600
                                                         ---------    ---------
         Total liabilities and stockholders' equity      $ 120,287    $ 142,624
                                                         =========    =========
</Table>

The accompanying notes are an integral part of the condensed consolidated
financial statements.

                                       4

<Page>


                                 INNOVEDA, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                   (UNAUDITED)

<Table>
<Caption>
                                         SECOND QUARTER ENDED       SIX MONTHS ENDED
                                         --------------------   ----------------------
                                          JUNE 30,    JULY 1,    JUNE 30,      JULY 1,
                                           2001        2000       2001          2000
                                         ----------  --------   ---------    ---------
<S>                                      <C>         <C>         <C>         <C>
Revenue:
   Software                              $  9,993    $ 11,613    $ 25,374    $ 19,241
   Services and other                      12,084       9,947      23,961      16,704
                                         --------    --------    --------    --------
      Total revenue                        22,077      21,560      49,335      35,945
                                         --------    --------    --------    --------
Cost and expenses:
   Cost of software                         1,815       1,956       3,574       3,472
   Cost of services and other               2,832       2,050       5,436       3,612
   Sales and marketing                     11,265       8,486      22,553      14,937
   Research and development                 7,547       5,743      15,199       9,271
   General and administrative               2,154       1,519       4,320       2,779
   Amortization of intangibles              4,608       2,603       9,310       3,080
   Amortization of stock compensation         147         147         293         294
   In-process research and development       --          --          --         2,400
   Merger costs                              --          --          --         2,243
   Restructuring costs                        594        --           594        --
                                         --------    --------    --------    --------
      Total operating expenses             30,962      22,504      61,279      42,088
                                         --------    --------    --------    --------
         Operating loss                    (8,885)       (944)    (11,944)     (6,143)

Other income (expense)                       (151)        263        (169)       (140)
                                         --------    --------    --------    --------
Loss before income tax benefit             (9,036)       (681)    (12,113)     (6,283)

Income tax benefit                         (2,299)        (12)     (3,269)     (1,172)
                                         --------    --------    --------    --------
Net loss                                 $ (6,737)   $   (669)   $ (8,844)   $ (5,111)
                                         ========    ========    ========    ========

Net loss per share:
   Basic                                 $  (0.17)   $  (0.02)   $  (0.23)   $  (0.21)
                                         ========    ========    ========    ========
   Diluted                               $  (0.17)   $  (0.02)   $  (0.23)   $  (0.21)
                                         ========    ========    ========    ========
Weighted average shares outstanding:
   Basic                                   39,090      32,500      39,063      24,087
                                         ========    ========    ========    ========

   Diluted                                 39,090      32,500      39,063      24,087
                                         ========    ========    ========    ========
</Table>

The accompanying notes are an integral part of the condensed consolidated
financial statements.

                                       5

<Page>


                                 INNOVEDA, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                   (UNAUDITED)

<Table>
<Caption>
                                                                  FOR THE SIX MONTHS ENDED
                                                                  ------------------------
                                                                    JUNE 30,     JULY 1,
                                                                     2001         2000
                                                                  -----------   ----------
<S>                                                                 <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                                            $ (8,844)   $ (5,111)

Adjustments to reconcile net loss to net cash provided by
 (used in) operating activities:
    Depreciation and amortization                                     12,261       6,011
    Compensation under stock option agreements                           293         294
    Write-off of in-process research and development                    --         2,400
Changes in assets and liabilities:
    Accounts receivable                                                7,184       3,383
    Prepaid and other current assets                                     (12)        872
    Deferred income taxes                                             (3,430)     (1,875)
    Accounts payable                                                    (448)     (1,217)
    Accrued liabilities                                               (5,693)        445
    Tax benefit on stock option exercises                                 43        --
    Deferred revenue                                                  (2,687)     (1,660)
                                                                    --------    --------
    Net cash provided by (used in) operating activities               (1,333)      3,542
                                                                    --------    --------
CASH FLOWS FROM INVESTING ACTIVITIES:
    Purchases of property and equipment                               (1,868)     (1,417)
    Capitalized software costs                                          (544)     (1,146)
    Cash acquired in acquisition of Summit, net of purchase costs       --        27,036
                                                                    --------    --------
    Net cash provided by (used in) investing activities               (2,412)     24,473
                                                                    --------    --------
CASH FLOWS FROM FINANCING ACTIVITIES:
    Payments of principal on debt                                     (1,800)     (7,006)
    Proceeds from exercise of stock options and employee stock
      purchase plan                                                      768         445
    Repayments of capital lease obligations                             (283)       (194)
    Purchase of treasury stock                                          (831)       --
                                                                    --------    --------
    Net cash used in financing activities                             (2,146)     (6,755)
                                                                    --------    --------
EFFECT OF EXCHANGE RATE CHANGES ON CASH                                  (94)        (83)
                                                                    --------    --------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                  (5,985)     21,177

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                        20,799         531
                                                                    --------    --------
CASH AND CASH EQUIVALENTS, END OF PERIOD                            $ 14,814    $ 21,708
                                                                    ========    ========
</Table>

The accompanying notes are an integral part of the condensed consolidated
financial statements.

                                       6

<PAGE>


                                 INNOVEDA, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                      (In Thousands, Except per Share Data)

1.     BASIS OF PRESENTATION

       Innoveda, Inc. (the "Company"), a Delaware corporation, was created by
       the business combination of Summit Design, Inc. ("Summit") and Viewlogic
       Systems, Inc. ("Viewlogic"), which was consummated on March 23, 2000. In
       addition, the Company subsequently acquired PADS Software, Inc. ("PADS")
       on September 22, 2000. The business combination of Summit with Viewlogic
       was effected by means of the merger of a wholly owned subsidiary of
       Summit with and into Viewlogic, with Viewlogic surviving as a wholly
       owned subsidiary of Summit. The business combination was accounted for as
       a reverse acquisition, as former stockholders of Viewlogic owned the
       majority of the outstanding stock of Summit subsequent to the business
       combination. Therefore, for accounting purposes, Viewlogic is deemed to
       have acquired Summit. The business combination of Innoveda and PADS was
       accounted for as a purchase of PADS by Innoveda.

       The accompanying unaudited financial statements have been prepared in
       accordance with generally accepted accounting principles for interim
       financial information and the instructions to Form 10-Q and Article 10 of
       Regulation S-X. Accordingly, they do not include all the information and
       notes required by generally accepted accounting principles for complete
       financial statements. In the opinion of management, all adjustments
       necessary to present fairly the information set forth therein have been
       included.

       The fiscal 2000 financial information presented in the consolidated
       statements of operations, and the consolidated statements of cash flows
       represents the results for Viewlogic for the periods stated and includes
       the financial results for Summit commencing March 24, 2000, and the
       financial results for PADS commencing September 23, 2000.

2.     ACQUISITIONS

       ACQUISITION BY INNOVEDA OF PADS - On June 2, 2000, Innoveda entered into
       a merger agreement with PADS. The merger was consummated on September 22,
       2000. The merger agreement provided that a wholly owned subsidiary of
       Innoveda would merge with and into PADS, with PADS surviving as a wholly
       owned subsidiary of Innoveda following the merger. For the merger,
       Innoveda issued 6,473 shares of its common stock and paid approximately
       $2.0 million to the PADS stockholders. PADS capital stock outstanding at
       the merger date was exchanged for shares of Innoveda common stock at the
       rate of approximately 1 to 1.9 per share, plus $0.579 per share in cash.
       In addition, each outstanding option to purchase shares of PADS common
       stock was converted into an option to purchase 2.0355 shares of Innoveda
       common stock, and the option exercise prices were adjusted accordingly.

       The operating results of PADS have been included in the accompanying
       consolidated financial statements from the date of acquisition. Under the
       purchase method of accounting, the acquired assets and assumed
       liabilities have been recorded at their estimated fair values at the date
       of acquisition.

                                       7

<PAGE>


2.     ACQUISITIONS (CONTINUED)


       Innoveda recorded merger costs of approximately $0.5 million in merger
       related charges relating to the PADS merger. This was primarily comprised
       of severance payments related to one employee and exit costs to close
       Innoveda duplicative facilities as a result of the merger.

       BUSINESS COMBINATION OF VIEWLOGIC AND SUMMIT - On March 23, 2000, the
       stockholders of Viewlogic and the stockholders of Summit approved an
       Agreement and Plan of Reorganization. Summit was a publicly held company
       engaged in a business similar to that of Viewlogic. In connection with
       the business combination contemplated by the Agreement and Plan of
       Reorganization, (1) each share of Viewlogic common stock and preferred
       stock issued and outstanding at the effective time of the business
       combination was converted into 0.67928 (the "Exchange Ratio") of a share
       of Summit common stock, and (2) each option to purchase shares of
       Viewlogic common stock was converted into an option to purchase Summit
       common stock based upon the Exchange Ratio.

       The business combination was accounted for under the purchase method of
       accounting and was treated as a reverse acquisition, as the stockholders
       of Viewlogic received the majority portion of the voting interests in the
       combined company. Viewlogic was considered the acquirer for accounting
       purposes and recorded Summit's assets and liabilities based upon their
       estimated fair values. The operating results of Summit have been included
       in the accompanying consolidated financial statements from the date of
       acquisition. Under the purchase method of accounting, the acquired assets
       and assumed liabilities have been recorded at their estimated fair values
       at the date of acquisition.

       During the first quarter ended April 1, 2000, Innoveda recorded
       approximately $2.2 million in merger costs relating to the Summit
       business combination. This primarily included severance and other costs
       relating to the consolidation of duplicative facilities as a result of
       the business combination between Summit and Viewlogic. Other costs
       relating to property and equipment lease contracts (less any applicable
       sublease income) after the properties were abandoned, lease buyout costs,
       restoration costs associated with certain lease arrangements, and costs
       to maintain facilities during the period after abandonment are also
       included. Further action was taken to restructure the Innoveda sales and
       services business in Japan as a result of an exclusive distributor
       agreement executed with Marubeni Solutions Corporation during the first
       quarter of fiscal 2000. Charges associated with the Japanese
       reorganization include severance and benefit continuance for
       approximately 14 employees, costs associated with office closings and
       subsequent lease termination, and other facility and exit related costs.

                                       8

<PAGE>


2.     ACQUISITIONS (CONTINUED)

       The following table presents the components of the merger costs accrued
       during the mergers with PADS and Summit and the charges against these
       reserves through June 30, 2001. All significant amounts are expected to
       be settled within the third quarter of fiscal 2001.

<Table>
<Caption>
                                        TOTAL       NON-CASH      AMOUNT   JUNE 30, 2001
                                       ACCRUAL     WRITE-OFF      PAID     ACCRUAL BALANCE
                                       -------     --------       -----    ---------------
       <S>                             <C>         <C>            <C>      <C>
       PADS MERGER COSTS
       Severance                        $  250       $   32       $  218       $ --
       Non-cancelable commitments          199         --            199         --
       Capitalized software                 44           44         --           --
                                        ------       ------       ------       ------
                                        $  493       $   76       $  417       $ --
                                        ------       ------       ------       ------

       SUMMIT MERGER COSTS
       Severance                        $  780       $    5       $  775       $ --
       Non-cancelable commitments        1,389         --            939          450
       Capitalized software                 74           74         --           --
                                        ------       ------       ------       ------
                                        $2,243       $   79       $1,714       $  450
                                        ------       ------       ------       ------
       TOTALS                           $2,736       $  155       $2,131       $  450
                                        ======       ======       ======       ======
</Table>

                                       9

<PAGE>


3.     EARNINGS PER SHARE

       Basic earnings per share is calculated using weighted average number of
       common shares outstanding. Diluted earnings per share is computed on the
       basis of the weighted average number of common shares plus the effect, if
       dilutive, of outstanding stock options using the treasury stock method.

<Table>
<Caption>
                                             SECOND QUARTER ENDED              SIX MONTHS ENDED
                                            -----------------------         -----------------------
                                            JUNE 30,        JULY 1,         JUNE 30,        JULY 1,
                                             2001            2000            2001            2000
                                            --------        -------         --------        -------
       <S>                                 <C>             <C>             <C>             <C>
       Net Loss                            $ (6,737)       $   (669)       $ (8,844)       $ (5,111)
                                           ========        ========        ========        ========

       Weighted average number of
           common shares - Basic             39,090          32,500          39,063          24,087
                                           ========        ========        ========        ========
       Weighted average number of
         common and potential common
           shares - Diluted                  39,090          32,500          39,063          24,087
                                           ========        ========        ========        ========
       Net loss per share:
           Basic                           $  (0.17)       $  (0.02)       $  (0.23)       $  (0.21)
                                           ========        ========        ========        ========
           Diluted                         $  (0.17)       $  (0.02)       $  (0.23)       $  (0.21)
                                           ========        ========        ========        ========
</Table>

       For the quarters ended June 30, 2001 and July 1, 2000, there were 8,460
       and 4,891 anti-dilutive weighted average potential common shares,
       respectively, not included in the table above.

                                       10

<PAGE>


4.     BUSINESS SEGMENTS AND GEOGRAPHIC DATA

       Innoveda operates in a single industry segment comprising the electronic
       design automation industry. Net revenue by geographic region (in
       thousands) and as a percentage of total revenue for each region is as
       follows:

<Table>
<Caption>
                                           FOR THE SECOND QUARTER ENDED    FOR THE SIX MONTHS ENDED
                                           ----------------------------    ------------------------
                                               JUNE 30,      JULY 1,        JUNE 30,       JULY 1,
                                                2001          2000            2001          2000
                                           -------------   ------------    ----------    -----------
       <S>                                    <C>            <C>            <C>            <C>
       Revenue:
         North America                        $14,370        $14,240        $32,792        $23,939
         Europe                                 3,591          3,189          7,931          4,741
         Japan                                  2,863          2,833          4,879          5,505
         Other                                  1,253          1,298          3,733          1,760
                                              -------        -------        -------        -------
       Total Revenue                          $22,077        $21,560        $49,335        $35,945
                                              =======        =======        =======        =======

       As a percentage of Total Revenue
         North America                             65%            66%            66%            67%
         Europe                                    16%            15%            16%            13%
         Japan                                     13%            13%            10%            15%
         Other                                      6%             6%             8%             5%
                                              -------        -------        -------        -------
       Total                                      100%           100%           100%           100%
                                              =======        =======        =======        =======
</Table>

5.     COMPREHENSIVE LOSS

       The following table presents the components of comprehensive loss for the
       periods indicated.

<Table>
<Caption>
                                                    FOR THE SECOND QUARTER ENDED   FOR THE SIX MONTHS ENDED
                                                    ----------------------------   ------------------------
                                                       JUNE 30,       JULY 1,       JUNE 30,        JULY 1,
                                                         2001          2000           2001           2000
                                                    -------------  -------------   -----------    ---------
       <S>                                            <C>            <C>            <C>            <C>
       Net income (loss)                              $(6,737)       $  (669)       $(8,844)       $(5,111)

       Foreign currency translation adjustments          (164)          (103)          (528)          (129)
                                                      -------        -------        -------        -------
       Comprehensive income (loss)                    $(6,901)       $  (772)       $(9,372)       $(5,240)
                                                      =======        =======        =======        =======
</Table>

                                       11

<PAGE>


6.     DEBT

       CREDIT FACILITY -The Company has a credit facility with a commercial bank
       consisting of a $6.0 million revolving line of credit ("Line of Credit")
       and a $7.5 million term loan (the "Term Loan") (together, the "Credit
       Facility"), secured by substantially all of the assets of the Company.
       Interest terms on the Line of Credit and the Term Loan are determined, at
       the option of the Company, for varying periods. The Company may elect to
       have the interest rate based on the bank's prime rate or based on the
       LIBOR rate at the time of the election, depending on the Company's
       leverage financial ratio, as defined, in the Credit Facility. The
       interest rates on the Line of Credit at June 30, 2001 and December 30,
       2000 were 7.25% and 10%, respectively. The interest rates on the Term
       Loan at June 30, 2001 and December 30, 2000 were 6.9% and 9.2%,
       respectively. Payments of principal outstanding under either the Line of
       Credit or the Term Loan may be made at any time and must be repaid in
       full by September 30, 2003.

       The Credit Facility contains certain limitations on additional
       indebtedness and capital expenditures, and includes financial covenants,
       which include, but are not limited to, the maintenance of certain minimum
       levels of profitability, interest and debt service coverage ratios and
       maximum leverage ratios and minimum working capital ratios.

       For the quarter ended June 30, 2001, the Company did not meet certain of
       its financial covenants, as required by its Credit Facility agreement.
       Under the terms of the Credit Facility agreement, the lender may demand
       immediate payment of all principal, interest and other amounts when
       limitations and covenants are not met and therefore, the Term Loan has
       been classified as current debt on the condensed consolidated balance
       sheet. The Company is currently negotiating with the lender for a
       revised Credit Facility agreement and expects to obtain a revised
       agreement that will allow Innoveda to maintain its current Line of
       Credit and to continue to repay its Term Loan as previously scheduled.
       As of August 14th, 2001, the lender had not demanded payment and the
       Company does not expect the lender to demand immediate payment.


7.     ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

       On January 1, 2001, the Company adopted Statement of Financial Accounting
       Standards No. 133, "Accounting for Derivative Instruments and Hedging
       Activities" (SFAS 133), which established accounting and reporting
       standards for derivative instruments. All derivatives, whether designated
       in hedging relationships or not, are required to be recorded on the
       balance sheet at fair value. If the derivative is designated as a fair
       value hedge, the changes in the fair value of the derivative and of the
       hedged item attributable to the hedged risk are recognized in earnings.
       If the derivative is designated as a cash flow hedge, the effective
       portions of changes in fair value of the derivative are recorded in other
       comprehensive income and are recognized in the income statement when the
       hedged item affects earnings. Ineffective portions of changes in the fair
       value of cash flow hedges are recognized in earnings. Adoption of SFAS
       133 did not have a material effect on the Company's consolidated
       financial position or results of operations.


                                       12

<PAGE>


8.     RESTRUCTURING COSTS

       On May 4, 2001, the Company decided to close an office located in
       Pittsburgh, Pennsylvania and transfer the operations to other offices in
       the United States and overseas. The total charge of $594 consists of
       intangible asset and fixed asset impairment charges of $415, $64 of
       severance related to the termination of 8 employees and $115 of other
       costs incurred due to the closure. All significant amounts are expected
       to be settled within a year of the office closure.

<Table>
<Caption>
                                      TOTAL     NON-CASH    AMOUNT   JUNE 30, 2001
                                     ACCRUAL    WRITE-OFF   PAID    ACCRUAL BALANCE
                                     -------    ---------   ------  ---------------
       <S>                             <C>      <C>         <C>     <C>
       Impairment of intangibles
         and fixed assets              $415       $415       $--        $--
       Severance                         64        --          64        --
       Lease commitment                  48        --          10         38
       Other                             67        --          12         55
                                       ----       ----       ----       ----
                                       $594       $415       $ 86       $ 93
                                       ----       ----       ----       ----
</Table>

9.     SUBSEQUENT EVENT

       Subsequent to June 30, 2001, the Company determined to restructure its
       operations towards a return to future profitability and to be positioned
       to operate effectively during the current economic downturn. The
       restructuring includes an August 2001 global workforce reduction of
       approximately 140 people. At the time of this filing the company has not
       fully evaluated the effect of this restructuring, therefore, the amount
       of any charge for the restructuring is not currently determinable.

10.    NEW ACCOUNTING PRONOUNCEMENTS

       In June 2001, the Financial Accounting Standards Board ("FASB") issued
       SFAS No. 141, "Business Combinations" and SFAS 142, "Goodwill and Other
       Intangible Assets". SFAS No. 141 requires that an entity account for
       business combinations using the purchase method and eliminates the
       pooling method. In addition, SFAS No. 141 provides guidance regarding the
       initial recognition and measurement of goodwill and other intangible
       assets. SFAS No.142 requires that goodwill no longer be amortized and
       instead be tested annually for impairment. The provisions of SFAS No. 141
       apply to all business combinations completed after June 30, 2001 and the
       provisions of SFAS No. 142 are required to be applied starting with
       fiscal years beginning after December 15, 2001. The Company is currently
       evaluating the impact of adopting these statements.

                                       13

<PAGE>


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

       You should read the following discussion together with the condensed
       consolidated financial statements and related notes appearing elsewhere
       in this Quarterly Report on Form 10-Q. This Item contains forward-looking
       statements within the meaning of Section 27A of the Securities Act of
       1933 and Section 21E of the Securities Exchange Act of 1934 that involve
       risks and uncertainties. Actual results may differ materially from those
       included in such forward-looking statements. Factors which could cause
       actual results to differ materially include those set forth under
       "Additional Risk Factors that Could Affect Operating Results and Market
       Price of Stock" commencing on page 21, as well as those otherwise
       discussed in this section and elsewhere in this Quarterly Report on Form
       10-Q. See "Important Note About Forward-Looking Statements".

       OVERVIEW

       Innoveda, Inc., a Delaware corporation, was created by the business
       combination of Summit Design, Inc. and Viewlogic Systems, Inc., which was
       consummated on March 23, 2000. The merger of Summit Design with Viewlogic
       was accounted for as a reverse acquisition as former stockholders of
       Viewlogic owned a majority of the outstanding stock of Summit subsequent
       to the business combination. For accounting purposes, Viewlogic is deemed
       to have acquired Summit Design. On September 22, 2000, Innoveda completed
       its acquisition of PADS Software, Inc. Accordingly, all financial
       information presented herein includes the results for Viewlogic for the
       entire period, the results of Summit from March 24, 2000 and the results
       of PADS from September 22, 2000.

       Innoveda operates in the United States and international markets
       developing, marketing and providing a comprehensive family of software
       tools used by engineers in the design of advanced electronic products and
       systems, and technical support and consulting services for those software
       tools. Innoveda currently markets and sells its products worldwide
       through multiple distribution channels, including independent
       distributors, value-added resellers, direct sales and telesales.

                                       14

<PAGE>


       RESULTS OF OPERATIONS

       The following table sets forth, for the periods indicated, the percentage
       of revenue of certain items in Innoveda's consolidated statements of
       operations:

<Table>
<Caption>
                                                     FOR THE SECOND QUARTER ENDED      FOR THE SIX MONTHS ENDED
                                                     ----------------------------      ------------------------
                                                        JUNE 30,        JULY 1,         JUNE 30,        JULY 1,
                                                         2001            2000            2001             2000
                                                     ------------     -----------      ----------      ---------
       <S>                                           <C>              <C>              <C>             <C>
       Revenue:
         Software                                          45%             54%             51%             54%
         Services and other                                55%             46%             49%             46%
                                                         ----            ----            ----            ----
       Total Revenue                                      100%            100%            100%            100%
                                                         ----            ----            ----            ----

       Costs and expenses:
         Cost of software                                   8%              9%              7%             10%
         Cost of services and other                        13%             10%             11%             10%
         Sales and marketing                               51%             39%             46%             41%
         Research and development                          34%             26%             31%             26%
         General and administrative                        10%              7%              9%              8%
         Amortization of intangibles and stock
           compensation                                    21%             13%             19%              9%
         In-process research and development                0%              0%              0%              7%
         Merger and restructuring costs                     3%              0%              1%              6%
                                                         ----            ----            ----            ----
       Total operating expenses                           140%            104%            124%            117%
                                                         ----            ----            ----            ----
       Loss from operations                               -40%             -4%            -24%            -17%

       Other expense, net                                  -1%              1%              0%              0%
                                                         ----            ----            ----            ----
       Loss before income taxes                           -41%             -3%            -24%            -17%
                                                         ----            ----            ----            ----
       Income tax benefit                                 -10%              0%             -6%             -3%
                                                         ----            ----            ----            ----
       Net loss                                           -31%             -3%            -18%            -14%
                                                         ====            ====            ====            ====
</Table>

       QUARTERS ENDED AND SIX MONTHS ENDED JUNE 30, 2001 AND JULY 1, 2000

       REVENUE

       For the quarter ended June 30, 2001, total revenue increased 2% to $22.1
       million from $21.6 million for the quarter ended July 1, 2000. The
       increase in revenue consisted of a 21% increase in services and other
       revenue to $12.1 million from $9.9 million, offset by a 14% decrease in
       software license revenue to $10.0 million from $11.6 million. For the six
       months ended June 30, 2001, total revenue increased 37% to $49.3 million
       from $35.9 million for the six months ended July 1, 2000. The increase
       consisted of a 43% increase in services and other revenue to $24.0
       million from $16.7 million and a 32% increase in software license
       revenue to $25.4 million from $19.2 million. The increase in total
       revenue for the second quarter ended June 30, 2001 is primarily
       attributable to the products acquired as part of the acquisition of
       PADS. The decrease in

                                       15
<PAGE>


       software revenue in the second quarter year over year is primarily
       related to delays or postponements in several large orders from major
       electronics companies associated with generally slowing economic
       conditions particularly in the telecommunications and equipment
       manufacturing industries. The decrease is also attributable to the
       Company no longer realizing revenue from its VirSim product line,
       which was sold in the third quarter of 2000. Software revenue increased
       for the six-month period ended June 30, 2001 over the same period of
       the prior year due primarily to additional product sales in the first
       quarter related to Visual products acquired as part of the acquisition
       of Summit Design in March 2000 and products acquired as part of the
       acquisition of PADS Software in September 2000. Furthermore, the
       Company realized increased consulting revenue during the first and
       second quarters of 2001 versus the same periods in 2000 attributable
       to an increased focus in this area.

       As a percentage of total revenue, software license revenue decreased to
       45% for the quarter ended June 30, 2001 from 54% for the quarter ended
       July 1, 2000 and decreased to 51% for the six months ended June 30, 2001
       from 54% for the six months ended July 1, 2000. As a percentage of total
       revenue, services and other revenue increased to 55% for the quarter
       ended June 30, 2001 from 46% for the quarter ended July 1, 2000, and
       increased to 49% for the six months ended June 30, 2001 from 46% for the
       six months ended July 1, 2000.

       COST OF SOFTWARE

       Cost of software revenue consists primarily of cost of product media,
       documentation, duplication, packaging, and royalties. Cost of software
       revenue decreased 7% to $1.8 million for the quarter ended June 30, 2001
       from $2.0 million for the quarter ended July 1, 2000. For the six months
       ended June 30, 2001, cost of software revenue increased 3% to $3.6
       million from $3.5 million for the six months ended July 1, 2000. The
       decrease in the second quarter of 2001 versus the same period in 2000 was
       due primarily to decreased royalty costs consistent with the decrease in
       software license revenue for the same period. The increase in the
       six-month period ended June 30, 2001 was primarily due to increased
       salary and related costs of additional headcount resulting from the
       acquisitions of Summit Design in March 2000 and PADS Software in
       September 2000.

       As a percentage of total revenue, cost of software decreased to 8% for
       the quarter ended June 30, 2001 from 9% for the quarter ended July 1,
       2000, and decreased to 7% for the six months ended June 30, 2001 from 10%
       for the six months ended July 1, 2000. The decrease was primarily due to
       the economies of scale resulting from Innoveda's acquisitions of Summit
       Design and PADS Software.

       COST OF SERVICES AND OTHER

       Cost of services and other consists primarily of costs of providing
       technical support, education and consulting services. Cost of services
       and other increased 38% to $2.8 million for the quarter ended June 30,
       2001 from $2.1 million for the quarter ended July 1, 2000. For the six
       months ended June 30, 2001, cost of services and other increased 50% to
       $5.4 million from $3.6 million for the six months ended July 1, 2000.
       These increases are primarily due to increased salary and related costs
       of additional headcount resulting from the acquisitions of Summit Design
       in March 2000 and PADS Software in September 2000, as well as increased
       staffing and related costs in the Company's consulting organization
       necessary to build the infrastructure to support expansion in that area
       of our business.

       As a percentage of total revenue, cost of services and other increased to
       13% for the quarter ended June 30, 2001 from 10% for the quarter ended
       July 1, 2000, and increased to 11% for the six months ended June 30, 2001
       from 10% for the six months ended July 1, 2000.

                                       16

<Page>


       SALES AND MARKETING

       Sales and marketing expenses increased 33% to $11.3 million for the
       quarter ended June 30, 2001 from $8.5 million for the quarter ended July
       1, 2000. For the six months ended June 30, 2001, sales and marketing
       expense increased 51% to $22.6 million from $14.9 million for the six
       months ended July 1, 2000. These increases are primarily due to increased
       salary and related costs of additional headcount resulting from the
       acquisition of Summit Design in March 2000 and PADS Software in September
       2000 as well as additional new hires in the sales area. Innoveda also
       incurred increased costs associated with variable compensation plans as a
       result of its increase in revenue during the second quarter and six
       months ended June 30, 2001. Additionally, discretionary marketing
       spending for trade shows, direct mail solicitations and advertising
       campaigns designed to increase awareness of the Innoveda name, and
       marketing of our product lines resulted in higher sales and marketing
       expenses.

       As a percentage of total revenue, sales and marketing expenses increased
       to 51% for the quarter ended June 30, 2001 from 39% for the quarter ended
       July 1, 2000, and increased to 46% for the six months ended June 30, 2001
       from 41% for the six months ended July 1, 2000.

       RESEARCH AND DEVELOPMENT

       Research and development expenses increased 31% to $7.5 million for the
       quarter ended June 30, 2001 from $5.7 million for the quarter ended July
       1, 2000. For the six months ended June 30, 2001, research and development
       expense increased 64% to $15.2 million from $9.3 million for the six
       months ended July 1, 2000. These increases are primarily due to
       increased salary and related costs of additional headcount resulting
       from the acquisition of Summit Design in March 2000 and PADS Software
       in September 2000. These increases are also attributable to the
       development of new products, including Visual Elite, a product that
       provides added functionality to existing tools, FabFactory, a tool for
       printed circuit board (PCB) fabricators, and TransOVM and TransBridge,
       for the design of complex wiring harnesses for large electrical
       systems. The Company also released the latest version of the CAM350 PCB
       design tool, which further integrates the design and manufacturing
       tasks in the printed circuit board design flow.

       As a percentage of total revenue, research and development expenses
       increased to 34% for the quarter ended June 30, 2001 from 26% for the
       quarter ended July 1, 2000, and increased to 31% for the six months ended
       June 30, 2001 from 26% for the six months ended July 1, 2000.

       The amount of software development costs capitalized for the quarter
       ended June 30, 2001 was approximately $0.3 million or 4% of research and
       development expense for that period, and for the quarter ended July 1,
       2000 was $0.3 million or 5% of research and development expense for that
       period. For the six months ended June 30, 2001, approximately $0.5
       million was capitalized versus $0.6 million in 2000 for the same period,
       or 4% versus 6% of research and development costs for the same six-month
       period of 2001 and 2000, respectively.

       GENERAL AND ADMINISTRATIVE

       General and administrative expenses include the costs of the
       administrative, finance, human resources, legal, and information systems
       departments of Innoveda. General and administrative expenses increased
       42% to $2.2 million for the quarter ended June 30, 2001 from $1.5
       million for the quarter ended July 1, 2000. For the six months ended
       June 30, 2001, general and administrative expenses increased 55% to
       $4.3 million from $2.8 million for the six months ended July 1, 2000.
       These increases are primarily a result of Innoveda building its
       general and administrative infrastructure to support the planned

                                       17

<PAGE>


       growth in revenue of Innoveda's products and services and related
       acquisitions. This increase was also due to increased salary and
       related costs of additional headcount resulting from the
       acquisition of PADS Software. To a lesser extent, the increase is
       due to expenses associated with becoming a publicly traded company.

       As a percentage of total revenue, general and administrative expenses
       increased to 10% for the quarter ended June 30, 2001 from 7% for the
       quarter ended July 1, 2000, and increased to 9% for the six months ended
       June 30, 2001 from 8% for the six months ended July 1, 2000.

       AMORTIZATION OF INTANGIBLES

       Amortization expense increased 77% to $4.6 million in the quarter ended
       June 30, 2001 from $2.6 million for the quarter ended July 1, 2000, and
       increased 202% for the six months ended June 30, 2001 to $9.3 million
       from $3.1 million for the six months ended July 1, 2000. These increases
       in amortization expense are mainly due to the increase in intangibles
       from the acquisitions of Summit and PADS. Innoveda had $64.3 million in
       intangible assets as of June 30, 2001, consisting primarily of purchased
       technology, goodwill, workforce, customer base and trademarks, resulting
       from the Summit Design business combination in March 2000, the PADS
       acquisition in September 2000, and the remaining intangible assets from
       the acquisition of Transcendent Design Technology, Inc. and certain
       assets from OmniView, Inc., both in 1999. As of July 1, 2000, Innoveda
       had $38.1 million in intangible assets consisting of purchased
       technology, goodwill, workforce and customer base from the Summit Design
       acquisition along with certain assets acquired from OmniView, Inc. in
       March 1999, and purchased technology related to the acquisition of
       Transcendent Design Technology, Inc. in August 1999. Innoveda's
       intangible assets are being amortized over periods ranging from three to
       seven years.

       RESTRUCTURING CHARGES RELATED TO CLOSING THE PITTSBURGH OFFICE

       On May 4, 2001, the Company decided to close an office located in
       Pittsburgh, Pennsylvania and transfer the operations to other offices in
       the United States and overseas. This office was used primarily to support
       the Company's e-Architect product. The total charge of $594 consists of
       intangible asset and fixed asset impairment charges of $415, $64 of
       severance related to the termination of 8 employees and $115 of other
       costs incurred due to the closure. All significant amounts are expected
       to be settled within a year of the office closure.

<Table>
<Caption>
                                      TOTAL     NON-CASH    AMOUNT  JUNE 30, 2001
                                      ACCRUAL   WRITE-OFF   PAID    ACCRUAL BALANCE
                                      -------   ---------   ------  ---------------
       <S>                            <C>       <C>         <C>     <C>
       Impairment of intangibles
         and fixed assets              $415       $415       $--        $--
       Severance                         64        --          64        --
       Lease commitment                  48        --          10         38
       Other                             67        --          12         55
                                       ----       ----       ----       ----
                                       $594       $415       $ 86       $ 93
                                       ----       ----       ----       ----
</Table>


                                       18

<PAGE>


       MERGER RELATED CHARGES

       During the six months ended July 1, 2000, Innoveda recorded approximately
       $2.2 million in merger related charges relating to the Summit merger.
       This primarily included severance and other costs relating to the
       consolidation of duplicative facilities. Other costs relating to property
       and equipment lease contracts (less any applicable sublease income) after
       the properties were abandoned, lease buyout costs, restoration costs
       associated with certain lease arrangements, and costs to maintain
       facilities during the period after abandonment are also included. Further
       action was taken to restructure the Innoveda sales and services business
       in Japan as a result of an exclusive distributor agreement executed with
       Marubeni Solutions Corporation during the first quarter of fiscal 2000.
       Charges associated with the Japanese reorganization include severance and
       benefit continuance for approximately 14 employees, costs associated with
       office closings and subsequent lease termination, and other facility and
       exit related costs.

       IN-PROCESS RESEARCH AND DEVELOPMENT CHARGES

       In conjunction with the business combination of Summit and Viewlogic in
       the six months ended July 1, 2000, Innoveda charged to expense $2.4
       million representing acquired in-process research and development that
       had not yet reached technological feasibility and had no alternative
       future use, as determined by an independent appraiser.

       OTHER INCOME/EXPENSE

       Other income/expense consists of the net of interest expense relating to
       Innoveda's term loan and revolving credit line, interest income from cash
       and cash equivalent balances, and currency exchange rate differences
       resulting from foreign operations conducted in local currencies. Other
       income/expense increased by $0.4 million, to a $0.2 million expense for
       the second quarter ended June 30, 2001 from $0.3 million of income for
       the second quarter ended July 1, 2000. For the six months ended June 30,
       2001, other expense increased less than $0.1 million. The net increase in
       expense is primarily a result of a decrease in interest income due to the
       reduction of cash and cash equivalents to $14.8 million as of June 30,
       2001 from $21.7 million as of July 1, 2000.

       INCOME TAX BENEFIT

       The benefit for income taxes increased to $2.3 million for the
       quarter ended June 30, 2001 from less than $0.1 million for the
       quarter ended July 1, 2000. For the six months ended June 30, 2001,
       the benefit for income taxes increased by $2.1 million to $3.3 million
       from $1.2 million for the six months ended July 1, 2000. Quarterly tax
       provisions are based on the estimated effective tax rates for the
       respective fiscal year.

       LIQUIDITY, CAPITAL RESOURCES AND FINANCIAL CONDITION

       As of June 30, 2001, Innoveda had approximately $14.8 million in
       cash and cash equivalents. Innoveda has a $6.0 million revolving Line
       of Credit with Fleet Bank. As of June 30, 2001, no balance was
       outstanding under this Line of Credit. Innoveda has a Term Loan with
       Fleet Bank, with $7.5 million outstanding as of August 13, 2001.
       Borrowings under the Credit Facility are secured by substantially all
       of Innoveda's assets. The Credit Facility contains limitations on
       additional indebtedness and capital expenditures, and includes financial
       covenants, which include but are not limited to the maintenance of
       minimum levels of profitability, interest and debt service coverage
       ratios and maximum leverage ratios and minimum working capital ratios.

                                       19

<PAGE>





       For the quarter ended June 30, 2001, the Company did not meet certain
       of its financial covenants, as required by its Credit Facility
       agreement. Under the terms of the Credit Facility agreement, the
       lender may demand immediate payment of all principal, interest and
       other amounts when limitations and covenants are not met and therefore,
       the Term Loan has been classified as current debt on the condensed
       consolidated balance sheet. The Company is currently negotiating with
       the lender for a revised Credit Facility agreement and expects to obtain
       a revised agreement that will allow Innoveda to maintain its current
       Line of Credit and to continue to repay its Term Loan as previously
       scheduled. As of August 14th, 2001, the lender had not demanded payment
       and the Company does not expect the lender to demand immediate payment.

       For the six months ended June 30, 2001, net cash used in operating
       activities was approximately $1.3 million. This was primarily due
       to a net loss of $8.8 million, a decrease in accounts payable of
       approximately $0.5 million, a decrease in accrued liabilities of
       $5.7 million, a $2.7 million decrease in deferred revenue and a
       $3.4 million increase in deferred income taxes offset by non-cash
       depreciation and amortization of approximately $12.3 million and a
       decrease in accounts receivable of $7.2 million.

       Net cash used in investing activities for the six months ended June 30,
       2001 was approximately $2.4 million, primarily due to the purchase of
       property and equipment.

       Innoveda considers all highly liquid debt instruments with a remaining
       maturity of three months or less when purchased to be cash equivalents.
       At June 30, 2001 and July 1, 2000, substantially all of Innoveda's cash
       and cash equivalents were invested in interest-bearing deposits and other
       short-term investments with an original maturity of three months or less
       as of the date of purchase. By policy of Innoveda's board of directors,
       all debt instruments must have quality ratings no lower than an A rating.

       Net cash used in financing activities was approximately $2.1 million for
       the six months ended June 30, 2001, primarily due to the repayment of
       principal on debt and the repurchase of Innoveda common stock.

       On October 19, 2000, Innoveda's board of directors authorized Innoveda to
       repurchase up to 2 million shares of its common stock during the period
       ending October 31, 2001. The repurchased shares will be held as treasury
       shares and used in company stock option plans, employee stock purchase
       plans and for general corporate purposes. As of August 13, 2001, Innoveda
       had purchased 550,606 shares of common stock at an aggregate cost of
       $1,663,371 under its stock re-purchase program.

       Innoveda believes that its current cash and cash equivalents, combined
       with cash generated from operations and amounts available under the
       revolving line of credit, will satisfy Innoveda's anticipated working
       capital and other cash requirements for at least the next 12 months.


                                      20

<PAGE>


       NEW ACCOUNTING PRONOUNCEMENTS

       In June 2001, the Financial Accounting Standards Board ("FASB") issued
       SFAS No. 141, "Business Combinations" and SFAS 142, "Goodwill and Other
       Intangible Assets". SFAS No. 141 requires that an entity account for
       business combinations using the purchase method and eliminates the
       pooling method. In addition, SFAS No. 141 provides guidance regarding the
       initial recognition and measurement of goodwill and other intangible
       assets. SFAS No.142 requires that goodwill no longer be amortized and
       instead be tested annually for impairment. The provisions of SFAS No. 141
       and SFAS No. 142 apply to all business combinations completed prior to
       June 30, 2001. The Company is evaluating the impact of adopting these
       statements.

       ADDITIONAL RISK FACTORS THAT COULD AFFECT OPERATING RESULTS AND MARKET
       PRICE OF STOCK

       INNOVEDA'S DEPENDENCE ON THE ELECTRONIC INDUSTRY MAKES IT VULNERABLE TO
       GENERAL INDUSTRY-WIDE DOWNTURNS.

       Innoveda's future operating results may reflect substantial fluctuations
       from period to period as a consequence of industry patterns, general
       economic conditions affecting the timing of orders from customers and
       other factors. The electronics industry involves:

       o    rapid technological change;

       o    short product life cycles;

       o    fluctuations in manufacturing capacity; and

       o    pricing and margin pressures.

       Correspondingly, certain segments, including the computer, semiconductor,
       semiconductor test equipment and telecommunications industries, have
       experienced sudden and unexpected economic downturns. During these
       periods, capital spending and research and development budgets often
       fall, and the number of design projects often decreases. Because
       Innoveda's sales depend upon capital spending trends, research and
       development budgets and new design projects, negative factors affecting
       the electronics industry could have a material adverse effect on
       Innoveda's business, financial condition, results of operations, or cash
       flows.

                                       21

<PAGE>


       VARIOUS FACTORS WILL CAUSE INNOVEDA'S QUARTERLY RESULTS TO FLUCTUATE AND
       FLUCTUATION MAY ADVERSELY AFFECT THE STOCK PRICE OF INNOVEDA COMMON
       STOCK.

       Innoveda's quarterly operating results and cash flows have fluctuated in
       the past and have fluctuated significantly in certain quarters. These
       fluctuations resulted from several factors, including, among others:

       o    the size and timing of orders;

       o    large one-time charges incurred as a result of restructurings,
            acquisitions or consolidations;

       o    seasonal factors;

       o    the rate of acceptance of new products;

       o    product, customer and channel mix;

       o    lengthy sales cycles; and

       o    level of sales and marketing staff.

       These fluctuations will likely continue in future periods because of the
       above factors. Additional factors potentially causing fluctuations
       include, among others:

       o    the timing of new product announcements and introductions by
            Innoveda and Innoveda's competitors;

       o    the rescheduling or cancellation of customer orders;

       o    the ability to continue to develop and introduce new products and
            product enhancements on a timely basis;

       o    the level of competition;

       o    purchasing and payment patterns, pricing policies of competitors;

       o    product quality issues;

       o    currency fluctuations; and

       o    general economic conditions.

                                       22

<PAGE>


       Innoveda believes that period-to-period comparisons of Innoveda's
       operating results are not necessarily meaningful. As a result, you should
       not rely on these comparisons as indications of Innoveda's future
       performance. In addition, Innoveda operates with high gross margins, and
       a downturn in revenue could have a significant impact on income from
       operations and net income. Innoveda's results of operations could be
       below investors' and market makers' expectations in future quarters,
       which could have a material adverse effect on the market price of
       Innoveda's common stock.

       INNOVEDA'S REVENUE IS DIFFICULT TO FORECAST BECAUSE OF THE TIMING OF
       REVENUE RECOGNITION AND UNPREDICTABLE NATURE OF CUSTOMER BEHAVIOR.

       Innoveda's revenue is difficult to forecast for several reasons. Innoveda
       operates with little product backlog because Innoveda typically ships its
       products shortly after it receives orders. Consequently, license backlog
       at the beginning of any quarter has in the past represented only a small
       portion of that quarter's expected revenue. Correspondingly, license fee
       revenue in any quarter is difficult to forecast because it is
       substantially dependent on orders booked and shipped in that quarter.
       Moreover, Innoveda generally recognizes a substantial portion of its
       revenue in the last month of a quarter, frequently in the latter part of
       the month. Any significant deferral of purchases of Innoveda's products
       could have a material adverse affect on its business, financial condition
       and results of operations in any particular quarter. If significant sales
       occur earlier than expected, operating results for subsequent quarters
       may also be adversely affected. Quarterly license fee revenue is
       difficult to forecast also because Innoveda's typical sales cycle ranges
       from six to nine months and varies substantially from customer to
       customer. In addition, Innoveda makes a portion of its sales through
       indirect channels, and these sales can be difficult to predict.

       IF INNOVEDA CANNOT SUCCESSFULLY INTEGRATE THE ACQUISITION BY INNOVEDA OF
       PADS, THE ANTICIPATED ADVANTAGES OF THE BUSINESS COMBINATION BETWEEN
       INNOVEDA AND PADS MAY NOT BE REALIZED, IN FULL, IF AT ALL.

       Innoveda acquired PADS Software, Inc. in September 2000. The integration
       of Innoveda and PADS requires the dedication of Innoveda management
       resources. This may distract management's attention from the management
       of the day-to-day business of Innoveda. Employee uncertainty and lack
       of focus during integration may also disrupt the business of Innoveda.
       Retention of key employees by Innoveda has been, and will remain,
       critical to ensure continued advancement, development and support of
       the Company's technologies and ongoing sales and marketing efforts.
       During the integration phase, competitors may intensify their efforts to
       recruit key employees. The inability to successfully integrate Innoveda
       and PADS and to retain key technical, sales or marketing personnel after
       the merger of Innoveda and PADS would adversely affect the combined
       company's business.

       SHORTFALLS IN REVENUE COULD ADVERSELY IMPACT QUARTERLY OPERATING RESULTS.

       Innoveda establishes its expenditure levels for product development,
       sales and marketing and other operating activities based primarily on
       Innoveda's expectations as to future revenue. Because a high percentage
       of Innoveda's expenses are relatively fixed in the near term, if revenue
       in any quarter falls below expectations, expenditure levels could be
       disproportionately high as a percentage of revenue and materially
       adversely affect Innoveda's operating results.

                                       23

<PAGE>

       IF THE SYSTEM DESIGN PORTION OF THE ELECTRONIC DESIGN AUTOMATION INDUSTRY
       ON WHICH INNOVEDA PRIMARILY FOCUSES DOES NOT GROW, INNOVEDA'S BUSINESS
       MAY SUFFER.

       Innoveda focuses on the electro-mechanical, printed circuit board and
       system-level design automation markets while most major competitors focus
       their resources on the application-specific integrated circuit and
       integrated circuit design automation markets. Innoveda has adopted this
       focus because it believes that the increased complexity of
       application-specific integrated circuits and integrated circuit designs,
       and the resulting increase in design time, will cause electronic product
       manufacturers to differentiate their products at the system level. If the
       system design portion of the electronic design automation industry does
       not grow, it could have a material adverse effect on Innoveda's business,
       financial condition, results of operations or cash flows.

       INNOVEDA HAS SUBSTANTIAL SECURED DEBT, WHICH MAY SUBSTANTIALLY RESTRICT
       INNOVEDA'S ABILITY TO REACT TO THE RAPIDLY CHANGING ENVIRONMENT OF THE
       ELECTRONIC DESIGN AUTOMATION INDUSTRY, AND WHICH IT MAY NOT BE ABLE TO
       REPLACE.

       As of June 30, 2001, Innoveda had borrowings of approximately $7.5
       million under its Credit Facility. Borrowings under the Credit Facility
       are secured by substantially all of Innoveda's assets. The Credit
       Facility contains limitations on additional indebtedness and capital
       expenditures, and includes financial covenants, which include but are not
       limited to the maintenance of minimum levels of profitability, interest
       and debt service coverage ratios and maximum leverage ratios and
       minimum working capital ratios. Collectively, these limitations and
       covenants may substantially restrict the flexibility of Innoveda's
       management in quickly adjusting its financial and operational
       strategies to react to changing economic and business conditions and
       may compromise Innoveda's ability to react to the rapidly evolving
       environment of the electronic design automation industry. To avoid
       default under this credit facility, Innoveda must remain in compliance
       with these limitations and covenants and make all required repayments
       or Innoveda must obtain replacement financing.

       The Company is currently not in compliance with certain financial
       covenants under its Credit Facility. See Note 6 to the Company's
       Condensed Consolidated Financial Statements contained herein and
       Management's Discussion and Analysis of Financial Condition and
       Results of Operations.

       INNOVEDA FACES INTENSE COMPETITION IN THE INDUSTRY AND MUST COMPETE
       SUCCESSFULLY IN VARIOUS ASPECTS OR ITS BUSINESS MAY SUFFER.

       The electronic design automation industry is highly competitive, and
       Innoveda expects competition to increase as other electronic design
       automation companies introduce products. In the electronic design
       automation market, Innoveda principally competes with Mentor Graphics and
       Cadence and a number of smaller firms. Indirectly, Innoveda also competes
       with other firms that offer alternative products. These other firms could
       also offer more directly competitive products in the future. Some of
       these companies have significantly greater financial, technical and
       marketing resources and larger installed customer bases than Innoveda.
       Some of Innoveda's current and future competitors offer a more complete
       range of electronic design automation products.


                                       24

<PAGE>



       Innoveda competes on the basis of various factors including, among
       others:

       o    product capabilities;

       o    product performance;

       o    price;

       o    support of industry standards;

       o    ease of use;

       o    first to market; and

       o    customer technical support and service.

       Innoveda believes that its products are competitive overall with
       respect to these factors. However, in particular cases, Innoveda's
       competitors may offer products with functionality sought by
       Innoveda's prospective customers and which differs from those
       Innoveda offers. In addition, some competitors may achieve a
       marketing advantage by establishing formal alliances with other
       electronic design automation vendors. Further, the electronic
       design automation industry in general has experienced significant
       consolidation in recent years, and the acquisition of one of
       Innoveda's competitors by a larger, more established electronic
       design automation vendor could create a more significant
       competitor. Innoveda may not compete successfully against current
       and future competitors, and competitive pressures may have a
       material adverse effect on Innoveda's business, financial
       condition, results of operations, or cash flows. Innoveda's current
       and future competitors may develop products comparable or superior
       to Innoveda's or more quickly adapt new technologies, evolving
       industry trends or customer requirements. Increased competition
       could result in price reductions, reduced margins and loss of
       market share, all of which could have a material adverse effect on
       Innoveda's business, financial condition, results of operations or
       cash flows.

       INNOVEDA DEPENDS ON THIRD PARTIES FOR PRODUCT INTEROPERABILITY, AND THAT
       MAKES INNOVEDA VULNERABLE IF THESE THIRD PARTIES REFUSE TO COOPERATE WITH
       INNOVEDA ON ECONOMICALLY FEASIBLE TERMS.

       Because Innoveda's products must interoperate, or be compatible, with
       electronic design automation products of other companies, Innoveda must
       have timely access to third party software to perform development and
       testing of products. Although Innoveda has established relationships with
       a variety of electronic design automation vendors to gain early access to
       new product information, any of these parties may terminate these
       relationships with limited notice. In addition, these relationships are
       with companies that are Innoveda's current or potential future
       competitors, including Synopsys, Mentor Graphics and Cadence. If any of
       these relationships terminate and Innoveda were unable to obtain, in a
       timely manner, information regarding modifications of third party
       products, Innoveda would not have the ability to modify its software
       products to interoperate with these third party products. As a result,
       Innoveda could experience a significant increase in development costs,
       the development process would take longer, product introductions would be
       delayed, and Innoveda's business, financial condition, results of
       operations or cash flows could be materially adversely affected.

                                       25

<PAGE>

       IF INNOVEDA CANNOT DEVELOP NEW PRODUCTS TO KEEP PACE WITH TECHNOLOGICAL
       CHANGE AND EVOLVING INDUSTRY STANDARDS, INNOVEDA'S BUSINESS WILL SUFFER.

       If Innoveda cannot, for technological or other reasons, develop and
       introduce products in a timely manner in response to changing market
       conditions, industry standards or other customer requirements,
       particularly if Innoveda has pre-announced the product releases, its
       business, financial condition, results of operations or cash flows will
       be materially adversely affected. The electronic design automation
       industry is characterized by extremely rapid technological change,
       frequent new product introductions and evolving industry standards. The
       introduction of products with new technologies and the emergence of new
       industry standards can render existing products obsolete and
       unmarketable. In addition, customers in the electronic design automation
       industry require software products that allow them to reduce time to
       market, differentiate their products, improve their engineering
       productivity and reduce their design errors. Innoveda's future success
       will depend upon its ability to enhance its current products, develop and
       introduce new products that keep pace with technological developments and
       emerging industry standards and address the increasingly sophisticated
       needs of Innoveda's customers. Innoveda may not succeed in developing and
       marketing product enhancements or new products that respond to
       technological change or emerging industry standards. It may experience
       difficulties that could delay or prevent the successful development,
       introduction and marketing of these products. Innoveda's products may not
       adequately meet the requirements of the marketplace and achieve market
       acceptance.

       INNOVEDA'S SOFTWARE MAY HAVE DEFECTS.

       Innoveda's software products may contain errors that may not be detected
       until late in the products' life cycles. Innoveda has in the past
       discovered software errors in certain of its products and has experienced
       delays in shipment of products during the period required to correct
       these errors. Despite testing by Innoveda and by current and prospective
       customers, errors may persist, resulting in loss of, or delay in, market
       acceptance and sales, diversion of development resources, injury to
       Innoveda's reputation or increased service and warranty costs, any of
       which could have a material adverse effect on its business, financial
       condition, results of operations or cash flows.

       INNOVEDA DEPENDS ON ITS DISTRIBUTORS TO SELL ITS PRODUCTS, ESPECIALLY
       INTERNATIONALLY, BUT THESE DISTRIBUTORS MAY NOT DEVOTE SUFFICIENT EFFORTS
       TO SELLING INNOVEDA'S PRODUCTS OR THEY MAY TERMINATE THEIR RELATIONSHIPS
       WITH INNOVEDA.

       DISTRIBUTORS' CONTINUED VIABILITY. If any of Innoveda's distributors
       fails, Innoveda's business may suffer. Innoveda relies on distributors
       for licensing and support of Innoveda's products, particularly in Japan
       and other parts of Asia. Innoveda depends on the relationships with its
       distributors to maintain or increase sales. Since Innoveda's products are
       used by skilled design engineers, distributors must possess sufficient
       technical, marketing and sales resources and must devote these resources
       to a lengthy sales cycle, customer training and product service and
       support. Only a limited number of distributors possess these resources.
       Accordingly, Innoveda depends on the continued viability and financial
       stability of these distributors.

                                       26

<PAGE>

       DISTRIBUTORS' EFFORTS IN SELLING INNOVEDA'S PRODUCTS. Innoveda's
       distributors may offer products of several different companies, including
       Innoveda's competitors. Innoveda's current distributors may not continue
       to market or service and support Innoveda's products effectively. Any
       distributor may discontinue to sell Innoveda's products or devote its
       resources to products of other companies. The loss of, or a significant
       reduction in, revenue from Innoveda's distributors could have a material
       adverse effect on its business, financial condition, results of
       operations or cash flows.

       JAPAN. Innoveda has exclusive distribution agreements with two
       distributors in Japan, which collectively cover a significant portion of
       Innoveda's products in Japan. If either of these distributors terminates
       its relationship with Innoveda, it could have a material adverse affect
       on Innoveda's business, financial condition, results of operations or
       cash flows.

       INNOVEDA FACES THE RISKS ASSOCIATED WITH INTERNATIONAL SALES AND
       OPERATIONS, INCLUDING ITS BUSINESS ACTIVITIES IN ISRAEL, EUROPE AND ASIA.

       International revenue and expenses represent a significant portion of
       Innoveda's total revenue and expenses, and Innoveda expects this trend to
       continue. International sales and operations involve numerous risks,
       including, among others:

       o    fluctuations in the value of the dollar relative to foreign
            currencies can make Innoveda's products and services more expensive
            in foreign markets or increase Innoveda's expenses;

       o    tariff regulations and other trade barriers;

       o    requirements for licenses, particularly with respect to the export
            of certain technologies;

       o    collectibility of accounts receivable;

       o    changes in regulatory requirements; and

       o    difficulties in staffing and managing foreign operations and
            extended payment terms.

       These factors may have a material adverse effect on Innoveda's future
       international sales and operations and, consequently, on its business,
       financial condition, results of operations or cash flows. In addition,
       financial markets and economies in the Asia Pacific region have been
       experiencing adverse conditions, and these adverse economic conditions
       may worsen. Demand for and sales of Innoveda's products in this region
       may decrease.

       In order to successfully expand international sales, Innoveda may need to
       establish additional foreign operations, hire additional personnel and
       recruit additional international distributors. This will require
       significant management attention and financial resources and could
       adversely affect Innoveda's operating margins. In addition, to the extent
       that Innoveda cannot effect these additions in a timely manner, Innoveda
       can only generate limited growth in international sales, if any. Innoveda
       may not maintain or increase international sales of its products, and
       failure to do so could have a material adverse effect on its business,
       financial condition, results of operations or cash flows.

                                       27

<PAGE>

       INNOVEDA MUST MANAGE GROWTH AND ACQUISITIONS EFFECTIVELY, OR ITS
       FINANCIAL CONDITION OR RESULTS OF OPERATIONS MAY SUFFER.

       Innoveda's ability to achieve significant growth will require it to
       implement and continually expand its operational and financial systems,
       recruit additional employees and train and manage current and future
       employees. Innoveda expects any growth to place a significant strain on
       its operational resources and systems. Failure to effectively manage any
       growth would have a material adverse effect on Innoveda's business,
       financial condition, results of operations or cash flows. Innoveda
       regularly evaluates acquisition opportunities. Innoveda's future
       acquisitions, if any, could result in potentially dilutive issuances of
       equity securities, the incurrence of debt and contingent liabilities and
       amortization expenses related to goodwill and other intangible assets,
       and large one-time charges which could materially adversely affect
       Innoveda's results of operations. Product and technology acquisitions
       entail numerous risks, including difficulties in the assimilation of
       acquired operations, technologies and products, diversion of management's
       attention to other business concern, risks of entering markets in which
       Innoveda has no or limited prior experience and potential loss of key
       employees of acquired companies. Innoveda may not integrate successfully
       the operations, personnel or products that have been acquired or that
       might be acquired in the future, and the failure to do so could have a
       material adverse affect on its results of operations.

       INNOVEDA FACES THE RISKS ASSOCIATED WITH OPERATIONS IN ISRAEL, INCLUDING
       POLITICAL AND COORDINATION RISKS.

       POLITICAL RISKS AND GOVERNMENTAL REGULATIONS. Innoveda's research and
       development operations related to Visual HDL and Visual Elite products
       are located in Israel. Economic, political and military conditions may
       affect Innoveda's operations in that country. Hostilities involving
       Israel, for example, could materially adversely affect Innoveda's
       business, financial condition and results of operations. Innoveda's
       ability to manufacture or transfer outside of Israel any technology
       developed under research and development grants from the government of
       Israel is subject to Israeli government restrictions which may limit
       Innoveda's ability to extract the full benefit of that technology.

       COORDINATION RISKS. In addition, coordination with and management of the
       Israeli operations requires Innoveda to address differences in culture,
       regulations and time zones. Failure to successfully address these
       differences could disrupt Innoveda's operations.

       INNOVEDA DEPENDS ON ITS KEY PERSONNEL, AND FAILURE TO HIRE OR RETAIN
       QUALIFIED PERSONNEL COULD CAUSE INNOVEDA'S BUSINESS TO SUFFER.

       Innoveda's future success will depend in large part on its key technical
       and management personnel and its ability to continue to attract and
       retain highly skilled technical, sales and marketing and management
       personnel. Innoveda's business could be seriously harmed if it lost the
       services of its President and Chief Executive Officer, William J. Herman,
       or if it fails to attract and retain other key personnel.

                                       28

<PAGE>

       Competition for personnel in the software industry in general, and the
       electronic design automation industry in particular, is intense. Innoveda
       has in the past experienced difficulty in retaining and recruiting
       qualified personnel. Innoveda may fail to retain its key personnel or
       attract and retain other qualified technical, sales and marketing and
       management personnel in the future. The loss of any key employees or the
       inability to attract and retain additional qualified personnel may have a
       material adverse effect on Innoveda's business, financial condition,
       results of operations or cash flows. Additions of new personnel and
       departures of existing personnel, particularly in key positions, can be
       disruptive and can result in departures of additional personnel, which
       could have a material adverse effect on Innoveda's business, financial
       condition, results of operations or cash flows.

       IF INNOVEDA FAILS TO EXPAND AND TRAIN ITS SALES AND MARKETING
       ORGANIZATIONS, ITS BUSINESS MAY SUFFER.

       Innoveda's success will depend on its ability to build and expand its
       sales and marketing organizations. Innoveda's future success will depend
       in part on its ability to hire, train and retain qualified sales and
       marketing personnel and the ability of these new persons to rapidly and
       effectively transition into their new positions. Competition for
       qualified sales and marketing personnel is intense, and Innoveda may not
       be able to hire, train and retain the number of sales and marketing
       personnel needed, which would have a material adverse effect on its
       business, financial condition, results of operations or cash flows.

       INNOVEDA MUST CONTINUE TO ADD VALUE TO ITS CURRENT PRODUCTS TO SERVE ITS
       INSTALLED CUSTOMER BASE OR ITS REVENUE DERIVED FROM MAINTENANCE
       AGREEMENTS WILL DECREASE.

       A substantial portion of Innoveda's revenue is derived from maintenance
       agreements for existing products. In order to maintain that revenue,
       Innoveda must continue to offer those customers updates for those
       products or convert those customers to new products. Innoveda may not be
       able to do so.

                                       29

<PAGE>


       ITEM 3:
       QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

       INTEREST RATE RISK

       Innoveda is exposed to interest rate risk primarily through its credit
       facility. Innoveda has a credit facility with a commercial bank
       consisting of a $6.0 million revolving line of credit ("Line of Credit")
       and a $7.5 million term loan as of June 30, 2001 (the "Term Loan")
       (together, the "Credit Facility"). Interest terms on the Line of Credit
       and the Term Loan are determined, at the option of Innoveda, for varying
       periods. Innoveda may elect to have the interest rate based on the bank's
       prime rate or based on the LIBOR rate at the time of the election,
       depending on Innoveda's leverage financial ratio, as defined, in the
       Credit Facility. The interest rates on the Line of Credit and the Term
       Loan at June 30, 2001 was 7.25% and 6.90%, respectively.

       Payments of principal outstanding under either the Line of Credit or the
       Term Loan may be made at any time and must be repaid in full by September
       30, 2003.

       As required under the Credit Facility, Innoveda entered into a no fee
       interest rate-swap agreement with a bank to reduce the impact of changes
       in interest rates on its floating rate Credit Facility. This agreement
       effectively converts a portion of the floating-rate obligation into a
       fixed-rate obligation of 7.4% for a period of 60 months, expiring on
       March 31, 2003. The notional principal amount of the interest rate-swap
       agreement was $7.5 million as of June 30, 2001. The counter parties to
       the interest rate-swap agreement expose Innoveda to credit loss in the
       event of nonperformance. Open interest rate contracts are reviewed
       regularly by Innoveda to ensure that they remain effective as hedges of
       interest rate exposure. Management of Innoveda believes that the
       rate-swap agreement approximates fair value.

       Innoveda invests its excess cash in debt instruments of the U.S.
       Government and its agencies, and in high-quality corporate issuers and,
       by policy, limits the amount of credit exposure to any one issue.
       Innoveda attempts to protect and preserve its invested funds by limiting
       default, market and reinvestment risk. Investments in both fixed rate and
       floating rate interest earning instruments carry a degree of interest
       rate risk. Fixed rate securities may have their fair market value
       adversely impacted due to a rise in interest rates, while floating rate
       securities may produce less income than expected if interest rates fall.
       Due in part to these factors, Innoveda's future investment income may
       fall short of expectations due to changes in interest rates and Innoveda
       may suffer losses in principal if forced to sell securities which have
       declined in market value due to changes in interest rates.

       Innoveda considers all highly liquid debt instruments with a remaining
       maturity of three months or less when purchased to be cash equivalents.
       At June 30, 2001 and December 30, 2000, substantially all of the
       Company's cash and cash equivalents were invested in interest-bearing
       deposits and other short-term investments with an original maturity of
       three months or less as of the date of purchase. By policy of Innoveda's
       board of directors, all debt instruments must have quality ratings no
       lower than A rating.

                                       30

<PAGE>


       FOREIGN CURRENCY EXCHANGE RATE RISK

       Innoveda is also exposed to the impact of foreign currency fluctuations.
       Since Innoveda translates foreign currencies into U.S. dollars for
       reporting purposes, weakened currencies in its subsidiaries have a
       negative, though immaterial, impact on its results. Innoveda also
       believes that the exposure to currency exchange fluctuation risk is
       insignificant because its international subsidiaries sell to customers,
       and satisfy their financial obligations, almost exclusively in their
       local currencies. Innoveda entered into foreign exchange contracts as a
       hedge against certain accounts receivable denominated in foreign
       currencies during the twelve months ended June 30, 2001. Realized and
       unrealized gains and losses on foreign exchange contracts for the six
       months ended June 30, 2001 were insignificant. There were no outstanding
       foreign exchange contracts as of June 30, 2001.


       PART II  OTHER INFORMATION

       ITEM 4:
       SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

       On June 15, 2001, Innoveda held its Annual Meeting of Stockholders. At
       the meeting, the votes cast for the sole matter presented to Innoveda's
       stockholders were as follows:

       Election of two Class I directors, for the ensuing three years and
       until their successors are duly elected and qualified.

<Table>
<Caption>
                                                 FOR                 WITHHELD
                                              ----------             --------
<S>                                          <C>                    <C>
        (i) Lorne J. Cooper                   35,688,883             712,498
       (ii) Steven P. Erwin                   36,255,272             146,109
</Table>

       ITEM 6:
       EXHIBITS AND REPORTS ON FORM 8-K

       (a)  EXHIBITS

       No exhibits are filed with this Current Report on Form 10-Q.

       (b)  REPORTS ON FORM 8-K

       The Company did not file any current reports on Form 8-K during the
       fiscal quarter ended June 30, 2001.

                                       31

<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.

                                        INNOVEDA, INC.

                                        By: /s/ Kevin P. O'Brien
                                           -------------------------------------
                                           Kevin P. O'Brien
                                           Vice President, Finance and
                                           Chief Financial Officer
                                           (Principal Financial Officer and
                                           Chief Accounting Officer)


Date:  August 14, 2001



                                       32

<PAGE>


EXHIBIT INDEX

No exhibits are filed with this Current Report on Form 10-Q.












                                       33