Filed Pursuant to Rule 424(b)(4)
Registration No. 333-86945
PROSPECTUS
459,832 SHARES
[GRAPHIC OMITTED]
COMMON STOCK
These shares may be offered and sold from time to time by the shareholders
of Adept Technology, Inc. ("Adept," "we," "us," or "our") identified in this
prospectus. See "Selling Shareholders." The Selling Shareholders acquired the
shares on July 14, 1999 in connection with our acquisition of BYE/OASIS
Engineering, Inc. ("BYE/OASIS") under the Agreement of Merger and Plan of
Reorganization between Adept and BYE/OASIS, dated as of June 28, 1999 (the
"Merger Agreement").
The Selling Shareholders will receive all of the net proceeds from the
sale of the shares. The shareholders will pay all underwriting discounts and
selling commissions, if any, applicable to the sale of the shares. Adept will
not receive any proceeds from the sale of the shares.
YOU SHOULD CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE 3 OF THIS
PROSPECTUS BEFORE PURCHASING ANY OF OUR COMMON STOCK.
Our common stock is quoted on the Nasdaq National Market under the symbol
"ADTK." On October 26, 1999, the last reported sale price of our common stock
was $7.125 per share.
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The Securities and Exchange Commission and state securities regulators
have not approved or disapproved these securities, or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
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November 1, 1999
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TABLE OF CONTENTS
Page
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FORWARD-LOOKING INFORMATION ......................................... 2
RISK FACTORS ........................................................ 3
WHERE TO FIND MORE INFORMATION ABOUT ADEPT .......................... 13
INFORMATION INCORPORATED BY REFERENCE ................................ 13
USE OF PROCEEDS ..................................................... 13
SELLING SHAREHOLDERS ............................................... 15
PLAN OF DISTRIBUTION ............................................... 15
LEGAL MATTERS ........................................................ 16
EXPERTS .............................................................. 16
You should rely only on the information contained in this prospectus. We
have not authorized anyone to provide you with information different from that
contained in this prospectus. The Selling Shareholders are offering to sell,
and seeking offers to buy, shares of our common stock only in jurisdictions
where offers and sales are permitted. The information contained in this
prospectus is accurate only as of the date of this prospectus, regardless of
the time of delivery of this prospectus or of any sale of the shares.
In this prospectus, unless indicated otherwise, "Adept," "we," "us," and
"our" refer to Adept Technology, Inc. and its subsidiaries.
FORWARD-LOOKING INFORMATION
This prospectus, including the information incorporated by reference
herein, contains "forward-looking statements" within the meaning of the federal
securities laws. You should not place undue reliance on these forward-looking
statements. Our actual results could differ materially from those projected in
the forward-looking statements as a result of the risk factors identified in
this prospectus. You should review these risk factors, which are set forth
under the caption "Risk Factors," carefully. In addition, you should review the
section captioned "Management's Discussion and Analysis of Financial Condition
and Results of Operations" in our annual report on Form 10-K for the fiscal
year ended June 30, 1999 and our subsequently filed Quarterly Reports on Form
10-Q. These reports are incorporated by reference in this prospectus along with
other reports we may subsequently file.
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RISK FACTORS
You should carefully consider the risks described below before making an
investment decision. The risks and uncertainties described below are not the
only ones facing our company. Additional risks and uncertainties not presently
known to us or that we currently deem immaterial may also impair our business
operations. This prospectus contains forward-looking statements that involve
risks and uncertainties. Our actual results could differ materially from those
anticipated in these forward-looking statements as a result of a variety of
factors, including those set forth in the following risk factors and elsewhere
in, or incorporated by reference into, this prospectus.
If any of the following risks actually occur, our business, financial
condition, or results of operations could be adversely affected. Among other
consequences, our revenues could decline, our earnings could decrease, or we
could experience a loss. The trading price of our common stock could decline,
and you could lose all or part of your investment.
You should not rely on our past results to predict our future performance
because our operating results may fluctuate.
Our historical operating results may not be accurate indicators of our
future performance. Our operating results have been subject to significant
quarterly and annual fluctuations in the past, and we expect these fluctuations
to continue in the future. For example, in the quarter ended September 30,
1999, we experienced a substantial shortfall in our revenues and a net loss.
Our loss was attributable to several factors, including an ability to close
sales as originally forecast, particularly sales of our higher-margin software
products, and component supply problems. Factors that may contribute to these
fluctuations in the future include:
* fluctuations in capital spending domestically and internationally in one
or more industries in which we sell our products;
* changes in product mix and pricing by us, our suppliers or our
competitors;
* availability of components and raw materials for our products;
* new product introductions by us or by our competitors;
* our failure to manufacture a sufficient volume of products in a timely
and cost-effective manner;
* our failure to anticipate the changing product requirements of our
customers;
* a lack of market acceptance of our products or a shift in demand for our
products; * changes in the mix of sales by distribution channels;
* changes in the spending patterns of our customers; and
* extraordinary events such as litigation or acquisitions.
Our operating results and gross margins vary from period to period
depending on capital spending cycles and the mix of sales of lower margin
hardware products and higher margin software products.
Our operating results may also be affected by general economic and other
conditions affecting the timing of customer orders and capital spending as well
as the mix of product sales. For example, our operations during the third and
fourth quarters of fiscal 1998 and the first three quarters of fiscal 1999 were
adversely affected by a continuing downturn in hardware purchases by customers
in the electronics industry, particularly disk-drive and telecommunication
manufacturers. Although we experienced some improvements in our markets in the
third and fourth quarter of fiscal 1999, these improvements were not sustained
in the first quarter of fiscal 2000, in which our revenues were materially less
than anticipated, resulting in a net loss. We cannot estimate when or if a
sustained revival in our key hardware markets will occur. In addition, we
experienced an adverse product mix in the first quarter of fiscal 2000 as
reduced sales of higher margin software products reduced gross margins and
contributed to our net loss. If we are unable to increase sales of our software
products, our gross margins would continue to be adversely affected.
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We generally recognize product revenue upon shipment or, for certain
international sales, upon receipt by the customers. As a result, our net
revenues and results of operations for a fiscal period will be affected by the
timing of orders received and orders shipped during the period. A delay in
shipments near the end of a fiscal period, for example due to product
development delays or delays in obtaining materials, could materially adversely
affect our business, financial condition and operating results for the period.
In addition, our continued investments in research and development,
capital equipment and ongoing customer service and support capabilities result
in significant fixed costs that we cannot reduce rapidly. As a result, if our
sales for a particular fiscal period are below expected levels, as occurred in
the first quarter of fiscal 2000, our operating results for the period could be
materially adversely affected, and we could experience a loss.
In the event that in some future fiscal quarter our net revenues or
operating results fall again below the expectations of public market analysts
and investors, the price of our common stock may fall. We cannot assure you
that we will be able to increase or sustain our profitability on a quarterly or
annual basis in the future.
Because our product sales are seasonal, we may not be able to maintain a steady
revenue stream.
Our product sales are seasonal. We have historically had higher bookings
for our products during the June quarter of each fiscal year and lower bookings
during the September quarter of each fiscal year, due primarily to the slowdown
in sales to European markets and summer vacations. In the past, we have
generally been able to maintain revenue levels during the September fiscal
quarter by filling backlog from the June fiscal quarter. If our backlog at the
end of the June fiscal quarter is reduced as a result of lower bookings in the
June quarter or is otherwise insufficient to compensate for lower bookings in
the September fiscal quarter, our revenues and operating results for the
September fiscal quarter and future quarters would be reduced. For example, as
a result of reduced product bookings in each of the three fiscal quarters prior
to the quarter ending March 27, 1999, net revenues fell in the quarters ended
September 26, 1998 and December 26, 1998. In addition, during fiscal 1999 as a
whole, our net revenues were adversely affected by a decline in orders from
customers in the disk-drive and telecommunications markets.
In addition, you should not rely on our backlog as a useful measure of
anticipated activity or future revenues. The orders constituting our backlog
are subject to changes in delivery schedules and in certain instances are
subject to cancellation without significant penalty by the customer. We have in
the past experienced changes in delivery schedules and customer cancellations
that resulted in our revenues in a given quarter being materially less than
would have been anticipated based on backlog at the beginning of the quarter.
We expect that these delivery changes and order cancellations may adversely
affect our revenues in future quarters.
A significant percentage of our product shipments occur in the last month
of each fiscal quarter. Historically, this has been due in part, at times, to
our inability to forecast the level of demand for our products or of the
product mix for a particular fiscal quarter. To address this problem, we
periodically stock inventory levels of completed robots, machine controllers
and certain strategic components. If shipments of our products fail to meet
forecasted levels, our revenues would be decreased, and we would have increased
our operating expenses in anticipation of unrealized increases in sales of our
products.
Sales of our products depend on the capital spending habits of our customers,
which tend to be cyclical.
Intelligent automation systems using our products can range in price from
$75,000 to several million dollars. Accordingly, purchases of our products
represent a substantial capital investment by our customers, and our success
depends directly on their capital expenditure budgets. Our future operations
may be subject to substantial fluctuations as a consequence of domestic and
foreign economic conditions, industry patterns and other factors affecting
capital spending. Although the majority of our international customers are not
in the Asian-Pacific region, we believe that recent instability in the
Asian-Pacific economies had a material adverse effect on our operations as a
result of a reduction in sales by our customers to those markets. We have
continued to see weakness in our markets and cannot predict when, or if, a
sustained
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recovery will occur. Domestic or international recessions or a downturn in one
or more of our major markets, such as the electronics, telecommunications,
semiconductor, appliances, pharmaceutical, food processing or automotive
components industries, and resulting cutbacks in capital spending would have a
direct, material adverse impact on our business.
Many of the key components and materials of our products come from single
source suppliers and their procurement requires lengthy lead times.
We obtain many key components and materials and some significant
mechanical subsystems from sole or single source suppliers. We have no
guaranteed supply arrangements with these suppliers. In addition, some of our
sole or single sourced components and mechanical subsystems incorporated into
our products have long procurement lead times. Our reliance on sole or single
source suppliers involves several significant risks, including the following:
* loss of control over the manufacturing process;
* potential absence of adequate supplier capacity;
* potential inability to obtain an adequate supply of required components,
materials or mechanical subsystems; and
* reduced control over manufacturing yields, costs, timely delivery,
reliability and quality of components, materials and mechanical
subsystems.
If any significant sole or single source supplier were unable or unwilling
to manufacture our components, materials or mechanical subsystems we need in
the volumes we require, we would have to identify and qualify acceptable
replacements. The process of qualifying suppliers may be lengthy, and
additional sources may not be available to us on a timely basis, on acceptable
terms, or at all. If supplies of these items were not available from our
existing suppliers and a relationship with an alternative vendor could not be
developed in a timely manner, shipments of our products could be interrupted,
and we could be required to reengineer our products. In the past, we have
experienced quality control or specification problems with key components
provided by sole source suppliers and have had to design around the particular
flawed item. We have also experienced delays in filling customer orders due to
the failure of certain suppliers to meet our volume and schedule requirements.
Some of our suppliers in the past have also ceased manufacturing components
that we require for our products, and we have been required to purchase
sufficient supplies for the estimated life of our product line. Problems of
this type with our supplies may occur in the future.
Disruption or termination of our supply sources could require us to seek
alternative sources of supply, and could delay our product shipments and damage
relationships with current and prospective customers. Any of these events could
result in an increase in our expenses and reduction in our revenues and could
result in a net loss. If we incorrectly forecast product mix for a particular
period and we are unable to obtain sufficient supplies of any components or
mechanical subsystems on a timely basis due to long procurement lead times, our
business, financial condition and results of operations would be substantially
impaired. Moreover, if demand for a product for which we have purchased a
substantial amount of components fails to meet our expectations, we would be
required to write off the excess inventory. A prolonged inability to obtain
adequate timely deliveries of key components would also impair our business and
results of operations.
Any problems we encounter integrating BYE/OASIS Engineering Inc. into our
business could increase our expenses and adversely affect our operating
results.
We recently completed the acquisition of BYE/OASIS Engineering Inc.
BYE/OASIS is a manufacturer of contamination control systems and standard
mechanical interfaces for semiconductor fabrication facilities, a business in
which we have no operational experience. This acquisition will require us to
integrate two geographically separated companies that previously operated
independently. We have limited experience with integration of acquired
companies. We may encounter difficulties integrating our product offerings and
operations with those of BYE/OASIS. In addition, we may not be able to
successfully market BYE/OASIS's products or develop any new products as a
result of the acquisition. The public
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announcement of our acquisition of BYE/OASIS could result in suppliers,
distributors, or customers of BYE/OASIS canceling or otherwise terminating
their arrangements with BYE/OASIS. If we fail to achieve the product,
marketing, distribution, and other operational benefits and efficiencies we
originally anticipated in the merger, we will have overpaid for the
acquisition, and our shareholders will have experienced substantial dilution
without off-setting benefits. In addition, our future financial performance
would be impaired.
We face intense competition in the market for intelligent automation products.
The market for intelligent automation products is highly competitive. We
believe that the principal competitive factors affecting the market for our
products are:
* product functionality and reliability;
* customer service;
* price; and
* product features such as flexibility, programmability and ease of use.
We compete with a number of robot companies, motion control companies,
machine vision companies and simulation software companies. Many of our
competitors have substantially greater financial, technical, marketing and
other resources than we. In addition, we may in the future face competition
from new entrants in one or more of our markets.
Many of our competitors in the robot market are integrated manufacturers
of products that produce robotics equipment internally for their own use and
may also compete with our products for sales to other customers. Some of these
large manufacturing companies have greater flexibility in pricing than we have
because they generate substantial unit volumes of robots for internal demand.
They may also have access through their parent companies to large sources of
capital. Any of our competitors may seek to expand their presence in other
markets in which we compete.
Our current or potential competitors may develop products comparable or
superior in terms of price and performance features to those developed by us.
They may also adapt more quickly than we can to new or emerging technologies
and changes in customer requirements. We may be required to make substantial
additional investments in connection with our research, development,
engineering, marketing and customer service efforts in order to meet any
competitive threat, and these investments may not prove successful. We expect
that in the event the intelligent automation market expands, competition in the
industry will intensify, as additional competitors enter our markets and
current competitors expand their product lines. Increased competitive pressure
could result in a loss of sales or market share, or cause us to lower prices
for our products, any of which could harm our business and operating results.
Our principal competitors in the U.S. robot market include U.S.
subsidiaries of the Japanese companies Fanuc Ltd., Seiko Instruments, Yamaha
Corporation, Sony Corporation, Sankyo Company Limited, and other Japanese robot
companies. In the European robot market, we principally compete with Robert
Bosch GmbH, which to date has sold most of its products in Germany, and with
Fanuc, Seiko, Yamaha, Sony, Sankyo, and other Japanese companies. In the
Japanese robot market, over a dozen robot companies compete with us, including
Fanuc, Nippon Denso, Panasonic Company, Sankyo, Seiko, Sony and Yamaha. Some of
these large manufacturing companies have greater flexibility in pricing than we
have because they generate substantial unit volumes of robots for internal
demand and may have access through their parent companies to large sources of
capital. In addressing the Japanese market, we are at a competitive
disadvantage as compared to Japanese suppliers, many of who have long-standing
collaborative relationships with Japanese manufacturers. Because of this
competitive disadvantage, we closed our Japanese subsidiary in the fall of 1998
and now operate through a joint venture in Japan. Although we expect to
continue to invest significant resources in the Japanese market in the future,
we may not be able to achieve significant sales growth in the Japanese
intelligent automation market.
Our principal competition in the semiconductor atmospheric wafer handling
market comes from Asyst Technologies, Inc. The majority of Asyst's revenue
comes from adaptive Standard Mechanical Interface, or SMIF, devices sold to end
users. They have been the leader in SMIF and isolation technology in the
semiconductor industry. Additional competitors in the semiconductor robot
market are Brooks Automation, Inc. and Equipe, a division of PRI Automation,
Inc.
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Our principal competitors in the market for motion control systems include
Allen-Bradley Co., a subsidiary of Rockwell International Corporation, in the
United States, and Siemens AG in Europe. In addition, we face motion control
competition from two major suppliers of motion control boards, Galil Motion
Control, Inc. and Delta Tau Data Systems, Inc. These motion control boards are
purchased by end users which engineer their own custom motion control systems.
In the simulation software market our competitors include Tecnomatix
Technologies, Inc., an Israeli company which sells principally to major
automotive manufacturers, and Deneb Robotics Inc., a subsidiary of Dassault
Systemes. In the machine vision market, we face competition from Cognex
Corporation, and Robotic Vision Systems Inc.
We may not be able to keep up with the rapid pace of technological change and
new product development that characterize the intelligent automation industry.
The intelligent automation industry is characterized by rapid
technological change and new product introductions and enhancements. Our
ability to remain competitive and our future success depend greatly upon the
technological quality of our products and processes relative to those of our
competitors. We must continue to develop new and enhanced products and to
introduce these new products at competitive prices and on a timely and
cost-effective basis. We may not be successful in selecting, developing and
manufacturing new products or in enhancing our existing products on a timely
basis or at all. Our new or enhanced products may not achieve market
acceptance. If we cannot successfully develop and manufacture new products,
timely enhance our existing technologies, or meet customers' technical
specifications for any new products, our products could lose market share, our
revenues and profits could decline, and we could experience operating losses.
New technology or product introductions by our competitors could also cause a
decline in sales or loss of market share for our existing products or force us
to significantly reduce the prices of our existing products.
From time to time, we have experienced and will likely continue to
experience delays in the introduction of new products. We have also experienced
and may continue to experience technical and manufacturing difficulties with
introductions of new products and enhancements. Any failure by us to develop,
manufacture and sell new products in quantities sufficient to offset a decline
in revenues from existing products or to manage product and related inventory
transitions successfully could harm our business. Our success in developing,
introducing, selling and supporting new and enhanced products depends upon a
variety of factors, including timely and efficient completion of hardware and
software design and development, timely and efficient implementation of
manufacturing processes and effective sales, marketing and customer service.
Because of the complexity of our products, significant delays may occur between
a product's initial introduction and commencement of our volume production.
The development and commercialization of new products involve many
difficulties, including the following:
* the identification of new product opportunities;
* the retention and hiring of appropriate research and development
personnel;
* the definition of the product's technical specifications;
* the successful completion of the development process;
* the successful marketing of the product, the risk of having customers
embrace new technological advances;
* additional customer service costs associated with supporting new product
introductions; and
* additional customer service costs required for field upgrades.
For example, we are currently in the process of releasing our new Digital
Workcell, semiconductor robots and Production PILOT. These products include
significant new networking, communications, and hardware and software
technology. The development of these products may not be completed in a timely
manner and these products may not achieve acceptance in the market. The
development of these products has required, and will require, that we expend
significant financial and management resources. If we are unable to continue to
successfully develop these or other new products that respond to customer
requirements or technological changes, our business would be harmed, and our
operating results would suffer.
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Our software products may contain defects that could harm our reputation and
future business prospects.
New or existing software products or enhancements may contain errors or
performance problems when first introduced, when new versions or enhancements
are released or even after such products or enhancements have been used in the
marketplace for a period of time. Despite our testing, product defects may be
discovered only after a product has been installed and used by customers.
Errors and performance problems may be discovered in future shipments of our
products. These errors could result in expensive and time consuming design
modifications or large warranty charges, damage customer relationships and
result in loss of market share, any of which could harm our reputation and
future business prospects.
We rely on systems integrators to sell our products.
We believe that our ability to sell products to system integrators will
continue to be important to our success. A substantial portion of our sales are
to system integrators that specialize in designing and building production
lines for manufacturers. Many of these companies are small operations with
limited financial resources, and we have from time to time experienced
difficulty in collecting payments from certain of these companies. As a result,
we perform ongoing credit evaluations of our customers. From time to time,
because we do not require collateral, we may require customers to make payments
in advance of shipment or to provide a letter of credit. We provide reserves
for potential credit losses, and to date losses of this type have been within
our expectations. To the extent we are unable to mitigate this risk of
collections from system integrators, our results of operations may be
materially adversely affected.
Our relationships with system integrators are generally not exclusive, and
some of our system integrators may expend a significant amount of effort or
give higher priority to selling products of our competitors. In the future, any
of these system integrators may discontinue their relationships with us or form
additional competing arrangements with our competitors. Although to date none
of our system integrators has accounted for a material percentage of our net
revenues, the loss of, or a significant reduction in revenues from, system
integrators to which we sell a significant amount of our product could have a
material adverse effect on our results of operations.
As we enter new geographic and applications markets, we must locate system
integrators to assist us in building sales in those markets. We may not be
successful in obtaining effective new system integrators or in maintaining
sales relationships with them. If a number of our system integrators experience
financial problems, terminate their relationships with us or substantially
reduce the amount of our products they sell, or if we fail to build an
effective systems integrator channel in any new markets, our revenues and
operating results would be materially adversely affected.
Our presence in international markets exposes us to risk.
We anticipate that international sales will continue to account for a
significant portion of our net revenues; however, we cannot assure you that
international sales will increase or that the current level of international
sales will be sustained. Net revenues from international sales, including sales
to Canada, have accounted for a significant portion of net revenues.
International sales were $41.2 million, $39.8 million and $29.6 million for the
fiscal years ended June 30, 1999, 1998 and 1997. This represented 50.2%, 40.5%,
and 35.8% of net revenues for the respective periods. We also purchase some
components and mechanical subsystems from foreign suppliers. As a result, our
operating results are subject to the risks inherent in international sales and
purchases, which include the following:
* different regulatory requirements;
* political and economic changes and disruptions;
* transportation delays;
* foreign currency fluctuations;
* export/import controls;
* tariff regulations;
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* higher freight rates;
* difficulties in staffing and managing foreign sales operations;
* greater difficulty in accounts receivable collection; and
* potentially adverse tax consequences.
In addition, duty, tariff and freight costs can materially increase the
cost of crucial components for our products. Foreign exchange fluctuations may
render our products less competitive relative to locally manufactured product
offerings, or could result in foreign exchange losses. Moreover, because
substantially all of our foreign sales are denominated in United States
dollars, increases in the value of the dollar relative to the local currency
would increase the price of our products in foreign markets and make our
products relatively more expensive and less price competitive than competitors'
products that are priced in local currencies. Any of these factors may result
in a reduction in our revenues, a decrease in our earnings, or in our incurring
operating or net losses.
We anticipate that recent turmoil in Asian financial markets and the
deterioration of the underlying economic conditions in certain Asian countries
will continue to have an impact on our sales to customers located in or whose
projects are based in those countries due to the impact of currency
fluctuations on the relative price of the our products and restrictions on
government spending imposed by the International Monetary Fund on those
countries receiving the International Monetary Fund's assistance. In addition,
customers in those countries may face reduced access to working capital to fund
component purchases, such as our products, due to higher interest rates,
reduced bank lending due to contractions in the money supply or the
deterioration in the customer's or our bank's financial condition or the
inability to access local equity financing.
We make yen-denominated purchases of certain components and mechanical
subsystems from Japanese suppliers. Depending on the amount of yen-denominated
purchases, we may engage in hedging transactions in the future. However,
notwithstanding these precautions, we remain subject to the transaction
exposures that arise from foreign exchange movements between the dates foreign
currency export sales or purchase transactions are recorded and the dates cash
is received or payments are made in foreign currencies. We cannot assure you
that our current or any future currency exchange strategy will be successful in
avoiding exchange related losses or that any of the factors listed above will
not impair our business or operating results.
If our hardware products do not comply with standards set forth by the European
Union, we will not be able to sell them in Europe.
Our hardware products are required to comply with European Union Low
Voltage, Electro-Magnetic Compatibility, and Machinery Safety Directives in
certain European countries, including the United Kingdom, France, Germany and
Italy. The European Union mandates that our products carry the CE mark denoting
that these products are manufactured in strict accordance to design guidelines
in support of these directives. These guidelines can change and are subject to
varying interpretation. New guidelines impacting machinery design go into
effect each year. To date, we have retained TUV Rheinland to help certify that
our VME controller-based products, including some of our robots, meet
applicable European Union directives and guidelines. Although our existing
certified products meet the requirements of the applicable European Union
directives, we cannot assure you that future products can be designed, within
market window constraints, to meet future requirements. In the event any of our
robot products or any other major hardware products do not meet the
requirements of the European Union directives, we would be unable to legally
sell these products in Europe. As a result, our business, financial condition,
and operating results could be impaired.
If we do not comply with environmental regulations, our business may be harmed.
We are subject to a variety of environmental regulations relating to the
use, storage, handling, and disposal of certain hazardous substances used in
the manufacturing and assembly of our products. We believe that we are
currently in compliance with all material environmental regulations in
connection with
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our manufacturing operations and that we have obtained all necessary
environmental permits to conduct our business. However, our failure to comply
with present or future regulations could subject us to a variety of
consequences that could harm our business, including:
* the imposition of substantial fines;
* suspension of production; and
* alteration of manufacturing processes or cessation of operations.
Compliance with environmental regulations could require us to acquire
expensive remediation equipment or to incur substantial expenses. Our failure
to control the use, disposal, removal, or storage of, or to adequately restrict
the discharge of, or assist in the cleanup of, hazardous or toxic substances,
could subject us to significant liabilities, including joint and several
liability under certain statutes. The imposition of liabilities of this kind
could harm our financial condition.
We could lose revenues and incur significant costs if our systems, the systems
of our customers or third-party systems that we use are not Year 2000
compliant.
We may experience significant problems and costs associated with Year 2000
compliance that could adversely affect our business, operating results, and
financial conditions. Significant uncertainty exists in the software industry
concerning the potential effects associated with such compliance.
In fiscal 1998, we commenced a program, to be substantially completed by
the Fall of 1999, to review the Year 2000 compliance status of the software and
systems used in our internal business processes, to obtain appropriate
assurances of compliance from the manufacturers of these products, and to
obtain an agreement to modify or replace all non-compliant products. We have
contacted our critical suppliers and major customers to determine whether the
products obtained from such vendors or sold by the customer to third parties
are Year 2000 compliant. Our suppliers and customers are under no contractual
obligation to provide such information to us. In addition, we have implemented
at our San Jose headquarters the initial phase of a Year 2000 compliant
enterprise resource planning system from a third-party vendor and are also
considering converting certain of our other software and systems to commercial
products that are known to be Year 2000 compliant. Additionally, in Europe, we
are in the process of upgrading our management information systems. We have
been advised by the third party suppliers of these systems and upgrades that
the upgrades will render our European management information systems Year 2000
compliant. Implementation of software products of third parties, however, will
require the dedication of substantial administrative and management information
resources, the assistance of consulting personnel from third party software
vendors, and the training of our personnel using such systems.
Based on the information available to date, we believe we will be able to
complete our Year 2000 compliance review and make necessary modifications prior
to the end of calendar year 1999. Software or systems, which are deemed
critical to our business, are scheduled to be Year 2000 compliant by the end of
calendar year 1999. Nevertheless, particularly to the extent we rely on the
products of other vendors to resolve Year 2000 issues, there can be no
assurances that we will not experience delays in implementing such products. If
our key systems, or a significant number of our systems were to fail as a
result of Year 2000 problems, or we were to experience delays implementing Year
2000 compliant software products, we could incur substantial costs and
disruption of our business, which would potentially have a material adverse
effect on our business and results of operations.
In the ordinary course of our business, we test and evaluate our own
software products. We believe that our software products are generally Year
2000 compliant, meaning that the use or occurrence of dates on or after January
1, 2000 will not materially affect the performance of our software products
with respect to four digit date dependent data or the ability of these products
to correctly create, store, process and output information related to such date
data. To the extent our software products are not fully Year 2000 compliant,
our software products may not contain all necessary software routines and codes
necessary for the accurate calculation, display, storage and manipulation of
data involving dates. To the extent that our products are sold through system
integrators or other third parties, our products may experience Year 2000
problems as a result of the integration of our software with noncompliant Year
2000 products
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of such third party suppliers. In addition, in certain circumstances, we have
warranted that the use or occurrence of dates on or after January 1, 2000 will
not adversely affect the performance of our products with respect to four digit
date dependent data or the ability to create, store, process and output
information related to such data. If any of our licensees experience Year 2000
problems, these licensees could assert claims for damages against us.
To date, we have not identified a complete and separate budget for
investigating and remedying issues related to Year 2000 compliance whether
involving our own software products or the software of systems used in our
internal operations. We have incurred costs of approximately $3.3 million and
expect to incur in total, approximately $3.5 million in connection with our
implementation of a new enterprise resource planning software system and
upgrades for other systems at our San Jose headquarters and in our European
offices, which is Year 2000 compliant. Additionally, we are currently in the
process of developing a contingency plan related to Year 2000. Our resources
spent on investigating and remedying Year 2000 compliance issues will not have
a material adverse effect on our business, financial condition and results of
operations.
We may experience problems associated with the introduction of the Single
European Currency.
We are in the process of addressing the issues raised by the introduction
of the Single European Currency, or the Euro, as of January 1, 1999 and
transition to full adoption as of January 1, 2002. Our internal systems that
are affected by the initial introduction of the Euro were Euro-capable as of
January 1, 1999. We do not presently expect that the introduction and use of
the Euro will materially affect our foreign exchange and hedging activities, or
our use of derivative instruments, or will result in any material increase in
costs to us. While we will continue to evaluate the impact of the Euro
introduction over time, based on currently available information, management
does not believe that the introduction of the Euro currency will have a
material adverse impact on our financial condition or overall trends in results
of operations.
The success of our business depends on our key employees.
We are highly dependent upon the continuing contributions of our key
management, sales, and product development personnel. In particular, we would
be materially adversely affected if we were to lose the services of Brian
Carlisle, Chief Executive Officer and Chairman of the Board of Directors, who
has provided significant leadership to us since our inception, or Bruce
Shimano, Vice President, Research and Development and a Director, who has
guided our research and development programs since our inception. In addition,
the loss of the services of any of our senior managerial, technical or sales
personnel could materially adversely affect our business, financial condition,
and results of operations. We do not have employment contracts with any of our
executive officers and do not maintain key man life insurance on the lives of
any of our key personnel.
Our future success also heavily depends on its continuing ability, to
attract, retain, and motivate highly qualified managerial, technical and sales
personnel. Competition for qualified technical personnel in the intelligent
automation industry is intense. Our inability to recruit and train adequate
numbers of qualified personnel on a timely basis would adversely affect our
ability to design, manufacture, market and support our products.
We are subject to the risks associated with acquisitions.
From time to time, we may consider the acquisition of companies or
technologies that management believes may complement or extend our current
products, businesses, or technologies. In the last three years, we have made
some acquisitions of various sizes, including the recent acquisition of
BYE/OASIS. In the future, we may make material acquisitions of, or large
investments in, other businesses that offer products, services, and
technologies that management believes will further our strategic objectives.
Any future acquisitions or investments we might make would present risks
commonly associated with these types of transactions, including:
* difficulty in combining the technology, operations, or work force of the
acquired business;
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* disruptions of our on-going businesses;
* difficulties in realizing our potential financial and strategic position
through the successful integration of the acquired business;
* difficulty in maintaining uniform standards, controls, procedures, and
policies;
* potential negative impact in results of operation due to amortization of
goodwill or other intangible assets acquired;
* the diversion of management attention.
The risks described above, either individually or in the aggregate, could
materially impair our business, operating results, and financial condition. We
expect that future acquisitions, if any, could provide for consideration to be
paid in cash, shares of our common stock, or a combination of cash and common
stock.
Our failure to protect our intellectual property and proprietary technology may
significantly impair our competitive advantage.
Third parties may infringe or misappropriate our copyrights, trademarks
and similar proprietary rights. We cannot be certain that the steps we have
taken to prevent the misappropriation of our intellectual property are
adequate, particularly in foreign countries where the laws may not protect our
proprietary rights as fully as in the United States. We rely on a combination
of patent, copyright and trade secret protection and nondisclosure agreements
to protect our proprietary rights. However, we cannot be certain that patent
and copyright law and trade secret protection will be adequate to deter
misappropriation of our technology, that any patents issued to Adept will not
be challenged, invalidated or circumvented, that the rights granted thereunder
will provide competitive advantages to us, or that the claims under any patent
application will be allowed. We may be subject to or may initiate interference
proceedings in the United States Patent and Trademark Office, which can demand
significant financial and management resources. The process of seeking patent
protection can be time consuming and expensive, and there can be no assurance
that patents will issue from currently pending or future applications or that
our existing patents or any new patents that may be issued will be sufficient
in scope or strength to provide meaningful protection or any commercial
advantage to us.
We may in the future initiate claims or litigation against third parties
for infringement of our proprietary rights in order to determine the scope and
validity of our proprietary rights or the proprietary rights of our
competitors. These claims could result in costly litigation and the diversion
of our technical and management personnel.
We may face costly intellectual property infringement claims.
We have from time to time received communications from third parties
asserting that we are infringing certain patents and other intellectual
property rights of others or seeking indemnification against the alleged
infringement. As claims arise, we evaluate their merits. Any claims of
infringement brought by third parties could result in protracted and costly
litigation, in our paying damages for infringement, and in the need for us to
obtain a license relating to one or more of our products or current or future
technologies. Such a license may not be available on commercially reasonable
terms or at all. Litigation, which could result in substantial cost to us and
diversion of our resources, may be necessary to enforce our patents or other
intellectual property rights or to defend us against claimed infringement of
the rights of others. Any intellectual property litigation and the failure to
obtain necessary licenses or other rights could have a material adverse effect
on our business, financial condition and results of operations.
For example, some end users of our products have notified us that they
have received a claim of patent infringement from the Jerome H. Lemelson
Foundation, alleging that their use of our machine vision products infringes
certain patents issued to Mr. Lemelson. In addition, we have been notified that
other end users of our AdeptVision VME line and the predecessor line of
Multibus machine vision products have received letters from the Lemelson
Foundation which refer to Mr. Lemelson's patent portfolio and offer the end
user a license to the particular patents. Some of our end users have notified
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us that they may seek indemnification from us for damages or expenses resulting
from this matter. We cannot predict the outcome of this or any similar
litigation which may arise in the future. Litigation of this kind may have a
material adverse effect on our business, financial condition or results of
operations.
WHERE TO FIND MORE INFORMATION ABOUT ADEPT
We file annual, quarterly and special reports, proxy statements, and other
information with the SEC. You may read and copy any document we file at the
SEC's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference rooms. Our SEC filings are also available
to the public from our web site at http://www.adept.com or at the SEC's web
site at http://www.sec.gov.
INFORMATION INCORPORATED BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents that we have previously filed with the SEC or
documents that we will file with the SEC in the future. The information
incorporated by reference is considered to be part of this prospectus, and
later information that we file with the SEC will automatically update and
supersede this information. We incorporate by reference the documents listed
below, and any future filings made with the SEC under Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act of 1934 (the "Exchange Act"), until the Selling
Shareholders sell all of their shares or the Registration Statement of which
this Prospectus forms a part is no longer effective. The documents we
incorporate by reference are:
1. Adept's Annual Report on Form 10-K for the fiscal year ended June 30,
1999;
2. Adept's Current Report on Form 8-K filed July 28, 1999 relating to the
acquisition of BYE/OASIS;
3. The description of Adept's common stock contained in its Registration
Statement on Form 8-A as filed on October 31, 1995; and
4. Adept's Current Report on Form 8-K filed November 1, 1999 relating to
press release reporting Adept's financial results for the first quarter
of its fiscal year 2000.
We also incorporate by reference all documents subsequently filed by us
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to
the filing of a post-effective amendment which indicates that all securities
registered have been sold or which deregisters all securities then remaining
unsold.
Any statement contained in a document incorporated or deemed to be
incorporated by reference in this Registration Statement or Prospectus shall be
deemed to be modified or superseded for purposes of the Registration Statement
or this Prospectus to the extent that a statement contained herein, in a
Prospectus Supplement or in any other document subsequently filed with the
Commission which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of the Registration Statement or this Prospectus.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address: Adept Technology, Inc., 150 Rose
Orchard Way, San Jose, CA 95134; telephone number (408) 432-0888.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the shares by the Selling
Shareholders.
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SELLING SHAREHOLDERS
The following table sets forth certain information regarding the
beneficial ownership of our common stock by the Selling Shareholders. All
information contained in the table below is based on beneficial ownership as of
October 26, 1999. Unless otherwise noted, no Selling Shareholder holds any
position or office or has a material relationship with Adept or any of our
affiliates, and no Selling Shareholder has had a relationship of this nature
with us within the past three years, other than as a result of the ownership of
Adept's common stock.
The Selling Shareholders acquired their shares in connection with our
acquisition of BYE/OASIS. All of the shares are being offered by the Selling
Shareholders. Pursuant to the terms of the Registration Rights Agreement, dated
as of July 14, 1999, which was made in connection with the acquisition of
BYE/OASIS, we undertook to use our best efforts to effect the registration of
the shares issued to the Selling Shareholders. The Registration Rights
Agreement also includes certain indemnification arrangements with the Selling
Shareholders.
The applicable percentage ownership is based on 8,806,350 shares of common
stock outstanding as of October 26, 1999. Beneficial ownership is determined in
accordance with the rules of the SEC and generally includes voting or
investment power with respect to securities, subject to community property
laws, where applicable.
<TABLE>
<CAPTION>
Beneficial Ownership Beneficial Ownership
Prior to Offering After Offering
--------------------- ---------------------
Number
of Shares
Selling Shareholders Number Percent Offered Number Percent
- --------------------------------- --------- --------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C>
Donald Allen .................. 30,846 * 27,618 3,228 *
Donald Briner .................. 124,125 1.4 23,545 100,580 1.1
Suzanne Briner ............... 124,125 1.4 111,132 12,993 *
Allen Dellenbaugh ............ 84,210 1.0 39,607 44,603 *
Douglas Fode .................. 5,264 * 4,713 551 *
Andrew Gause .................. 8,553 * 3,960 4,593 *
Randall Hughes ............... 16,521 * 13,680 2,841 *
Chris Laramore .................. 119,297 1.4 82,441 36,856 *
Michael Riggins(1) ............ 84,210 1.0 26,178 58,032 *
Jeffrey Rydman ............... 7,018 * 1,967 5,051 *
Bruce Shand ..................... 1,755 * 1,213 542 *
Lawrence & Nancy Wiertel ...... 12,501 * 11,193 1,308 *
Julianne Yeaman ............... 62,105 * 55,605 6,500 *
Don Yeaman ..................... 65,177 * 56,980 8,197 *
<FN>
* Less than 1%.
(1) Includes an option to purchase 46,329 shares of common stock that is exercisable within
60 days.
</FN>
</TABLE>
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PLAN OF DISTRIBUTION
The shares covered by this prospectus may be offered and sold from time to
time by the Selling Shareholders. Such sales may be made on the Nasdaq National
Market, in the over-the-counter market or otherwise, at prices and under terms
then prevailing or at prices related to the then current market price, or in
negotiated transactions. The shares may be sold by means of one or more of the
following: (a) a block trade in which the broker-dealer so engaged will attempt
to sell the shares as agent, but may position and resell a portion of the block
as principal to facilitate the transaction; (b) purchases by a broker-dealer as
principal and resale by such broker-dealer for its account pursuant to this
prospectus; (c) an over-the-counter distribution in accordance with the rules
of the Nasdaq National Market; (d) ordinary brokerage transactions in which the
broker solicits purchasers; and (e) privately negotiated transactions. In
effecting sales, broker-dealers engaged by the Selling Shareholders may arrange
for other broker-dealers engaged by the Selling Shareholders to participate in
resales.
In connection with distributions of the shares or otherwise, the Selling
Shareholders may enter into hedging transactions with broker-dealers. In
connection with such transactions, broker-dealers may engage in short sales of
the shares registered hereunder in the course of hedging the positions they
assume with the Selling Shareholders. The Selling Shareholders may also sell
the shares short and redeliver the shares to close out such short positions.
The Selling Shareholders may also enter into option or other transactions with
broker-dealers which require the delivery to the broker-dealer of the shares
registered hereunder, which the broker-dealer may resell or otherwise transfer
pursuant to this prospectus. The Selling Shareholders may also loan or pledge
shares registered hereunder to a broker-dealer, and the broker-dealer may sell
the shares so loaned or upon a default the broker-dealer may effect sales of
the pledged shares pursuant to this prospectus.
Broker-dealers or agents may receive compensation in the form of
commissions, discounts or concessions from the Selling Shareholders in amounts
to be negotiated in connection with the sale. Such broker-dealers and any other
participating broker-dealers may be deemed to be "underwriters" within the
meaning of the Securities Act, in connection with such sales and any such
commission, discount or concession may be deemed to be an underwriting discount
or commission under the Securities Act.
We have advised the Selling Shareholders that the anti-manipulation rules
under the Exchange Act may apply to sales of shares in the market and to the
activities of the Selling Shareholders and their affiliates. In addition, we
will make copies of this prospectus available to the Selling Shareholders and
has informed them of the need for delivery of copies of this prospectus to
purchasers at or prior to the time of any sale of the shares offered hereby.
All costs, expenses and fees in connection with the registration of the
shares will be borne by us. Commissions, discounts and any other fees or
expenses, if any, attributable to the sales of the shares will be borne by the
Selling Shareholders. The Selling Shareholders may agree to indemnify any
broker-dealer or agent that participates in transactions involving sales of the
shares against certain liabilities, including liabilities arising under the
Securities Act. We will not receive any proceeds from the sale of the shares.
We may suspend the use of this prospectus if, in our reasonable judgment,
a development has occurred or condition exists as a result of which the
Registration Statement or the prospectus does not contain material non-public
information which in our reasonable judgment is required to be included in the
Registration Statement or the Prospectus for sales of the shares to be made
hereunder. We are obligated in the event of such suspension to amend the
Registration Statement or the prospectus to take all actions necessary to
ensure that the use of the prospectus may be resumed as soon as practicable.
We have agreed to keep the registration statement of which this prospectus
constitutes a part effective until the sooner of (A) the date on which all of
the shares have been sold or (B) February 28, 2000. Trading of any unsold
shares after the cessation of effectiveness of this registration statement will
be subject to compliance with all applicable securities laws, including Rule
144.
There can be no assurance that the Selling Shareholders will sell any or
all of the shares of common stock offered by them hereunder.
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LEGAL MATTERS
The validity of the shares of common stock offered hereby has been passed
upon for Adept by Wilson Sonsini Goodrich & Rosati, Professional Corporation,
Palo Alto, California.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements and schedule at June 30, 1999 and 1998, and for each of
the three years in the period ended June 30, 1999, as set forth in their
report. We have included our financial statements and schedule in the
prospectus and elsewhere in the registration statement in reliance on Ernst &
Young LLP's report, given on their authority as experts in accounting and
auditing.
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