Adept Technology (ADEP) 10-Q 2008 Q1 Quarterly report

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 September 29, 2007

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from            to            

Commission File No. 0-27122

ADEPT TECHNOLOGY, INC.

(Exact name of Registrant as Specified in its Charter)

Delaware	94-2900635
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

3011 Triad Drive, Livermore, California	94551
(Address of Principal Executive Offices)	(Zip Code)

(925) 245-3400

(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    YES  x    NO  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer. See definition of “accelerated filer” and “large accelerated filer in Rule 12b-2 of the Exchange Act.

Large accelerated filer  ¨        Accelerated filer  ¨        Non-accelerated filer  x

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    YES  ¨    NO  x

The number of shares of the Registrant’s common stock outstanding as of November 12, 2007 was 7,960,404.

ADEPT TECHNOLOGY, INC.

		Page
PART I – FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets September 29, 2007 and June 30, 2007	3
	Condensed Consolidated Statements of Operations for the Three months ended September 29, 2007 and September 30, 2006	4
	Condensed Consolidated Statements of Cash Flows for the Three months ended September 29, 2007 and September 30, 2006	5
	Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	18
Item 4.	Controls and Procedures	19
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	21
Item 1A.	Risk Factors	21
Item 4.	Submission of Matters to a Vote of Security Holders	21
Item 6.	Exhibits	22
Signatures		23

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PART I – FINANCIAL INFORMATION

ITEM 1. Condensed Consolidated Financial Statements (Unaudited)

ADEPT TECHNOLOGY, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

(unaudited)

	September 29, 2007			June 30, 2007
ASSETS
Current assets:
Cash and cash equivalents	$	9,207		$	8,900
Short-term investments		652			1,962
Accounts receivable, less allowance for doubtful accounts of $597 at September 29, 2007 and $506 at June 30, 2007		12,158			10,185
Inventories, net		9,158			9,806
Other current assets		547			598
Total current assets		31,722			31,451
Property and equipment, net		3,748			3,632
Other intangible assets, net		131			—
Other assets		154			152
Total assets	$	35,755		$	35,235
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	4,999		$	5,175
Accrued payroll and related expenses		1,620			1,708
Accrued warranty expenses		1,115			1,207
Deferred revenue		78			33
Accrued restructuring charges		217			449
Other accrued liabilities		601			438
Total current liabilities		8,630			9,010
Long-term liabilities:
Restructuring charges		578			637
Other long-term liabilities		346			184
Total liabilities		9,554			9,831
Stockholders’ equity:
Common stock, $0.001 par value: 19,000 shares authorized, 7,946 and 7,914 shares issued and outstanding at September 29, 2007 and June 30, 2007, respectively		162,718			162,385
Accumulated deficit		(137,364	)		(137,457	)
Accumulated other comprehensive income		847			476
Total stockholders’ equity		26,201			25,404
Total liabilities and stockholders’ equity	$	35,755		$	35,235

See accompanying notes

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ADEPT TECHNOLOGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

(in thousands, except per share data)

	Three months ended
	September 29, 2007			September 30, 2006
Revenues	$	13,652		$	12,743
Cost of revenues		6,349			6,819
Gross margin		7,303			5,924
Operating expenses:
Research, development and engineering		1,342			1,721
Selling, general and administrative		5,142			5,248
Restructuring charges		251			—
Amortization of intangible assets		19			33
Total operating expenses		6,754			7,002
Operating income (loss)		549			(1,078	)
Interest income (expense), net		100			135
Foreign currency exchange gain (loss)		(25	)		167
Income (loss) before income taxes		624			(776	)
Provision for income taxes		331			9
Net income (loss)	$	293		$	(785	)
Basic income (loss) per share	$	0.04		$	(0.10	)
Diluted income (loss) per share	$	0.04		$	(0.10	)
Number of shares used in computing basic per share amounts		7,917			7,595
Number of shares used in computing diluted per share amounts		7,978			7,595
Comprehensive income (loss)
Net income (loss)	$	293		$	(785	)
Foreign currency translation adjustment		371			(144	)
Total comprehensive income (loss)	$	664		$	(929	)

See accompanying notes

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ADEPT TECHNOLOGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(in thousands)

	Three months ended
	September 29, 2007			September 30, 2006
Operating activities
Net income (loss)	$	293		$	(785	)
Non-cash adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation		381			292
Loss on disposal of property and equipment		74			—
Stock-based compensation		180			268
Amortization of other intangible assets		19			33
Net changes in operating assets and liabilities:
Accounts receivable, net		(1,671	)		(717	)
Inventories, net		483			(284	)
Other current assets		55			(94	)
Other assets		—			(32	)
Accounts payable		(192	)		(1,797	)
Other accrued liabilities and deferred revenues		(250	)		230
Accrued restructuring charges		(59	)		—
Other long-term liabilities		(38	)		19
Net cash used in operating activities		(725	)		(2,867	)
Investing activities
Purchase of property and equipment		(244	)		(335	)
Proceeds from sale of property and equipment		81			—
Purchase of license fees		(150	)		—
Capitalized software		(60	)		(239	)
Maturities of short-term investments		1,311			1,195
Purchase of short-term investments		—			(5,087	)
Net cash provided by (used in) investing activities		938			(4,466	)
Financing activities
Proceeds from employee stock incentive program and employee stock purchase plan		152			173
Net cash provided by financing activities		152			173
Effect of exchange rates on cash and cash equivalents		(58	)		(272	)
Net increase (decrease) in cash and cash equivalents		307			(7,432	)
Cash and cash equivalents, beginning of period		8,900			10,062
Cash and cash equivalents, end of period	$	9,207		$	2,630
Cash paid during the period for:
Interest	$	20		$	8
Taxes	$	23		$	42
Supplemental disclosure of non-cash investing and financing activities:
Transferred from inventory to property and equipment	$	324		$	—

See accompanying notes.

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ADEPT TECHNOLOGY, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. General

The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles. However, certain information or footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The information furnished in this report reflects all adjustments that, in the opinion of management, are necessary for a fair presentation of the consolidated financial position, results of operations and cash flows as of and for the interim periods. The results for such periods are not necessarily indicative of the results to be expected for the full fiscal year or for any other future period.

The condensed consolidated financial statements included in this Quarterly Report on Form 10-Q should be read in conjunction with the audited consolidated financial statements and notes thereto for the fiscal year ended June 30, 2007 included in Adept Technology, Inc.’s (“Adept” or the “Company”) Annual Report on Form 10-K as filed with the SEC on September 17, 2007.

The preparation of condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. Therefore, actual results could differ from those estimates and could have a material impact on Adept’s condensed consolidated financial statements, and it is possible that such changes could occur in the near term.

2. Stock-Based Compensation

The Company has adopted stock plans that provide for the grant to employees of stock-based awards, including stock options and restricted shares, of Adept common stock. In addition, certain of these plans permit the grant of nonstatutory stock-based awards to paid consultants and outside directors. Option awards are granted with an exercise price equal to the market price of Adept’s stock on the date of grant; and have ten-year contractual terms. The Company also has an employee stock purchase plan (“ESPP”) that allows employees to purchase a limited number of shares of its common stock at a discount of 15% of the market value at certain plan-defined dates that are established at six-month intervals.

Adept has one employee stock purchase plan and four equity compensation plans currently in effect and used by Adept, including the 2001 Stock Option Plan, 2003 Stock Option Plan, 2004 Director Option Plan and 2005 Equity Incentive Plan. As of September 29, 2007, there were 465,863 shares available for issuance under the 1998 Employee Stock Purchase Plan. The plan provides for an annual automatic increase in the number of shares available for issuance by the lesser of 120,000 shares, 3% of the shares outstanding, or a lesser amount as may be determined by the Board of Directors. There are 229,190 shares subject to outstanding options under the 2001 Stock Option Plan with 132,387 available for grant. Under the 2003 Stock Option Plan, there are 364,728 shares subject to outstanding options with 17,912 available for grant. The 2004 Director Option Plan has 57,000 shares subject to outstanding options with 74,709 available for grant. The 2005 Equity Incentive Plan has 142,842 shares subject to outstanding options with 246,367 available for grant. As approved by the Company’s stockholders at the 2007 Annual Meeting of Stockholders on November 9, 2007, the 2005 Equity Incentive Plan was amended to increase the number of shares issuable thereunder by 200,000 shares and to permit consultants to the Company to be eligible participants. Options are also outstanding pursuant to two equity compensation plans which have expired. They include the 1993 Stock Option Plan and the 1995 Director Stock Option Plan, which have, respectively, 149,099 and 11,400 shares subject to outstanding options. Under all of these plans, for employee grants, vesting is generally monthly, in equal installments over a four year period. Under the Director Option Plan, initial director grants vest one-fourth on the first anniversary of the grant, then monthly in equal installments thereafter for three years. Annual director grants vest monthly in equal installments over a four year period.

The Company accounts for stock compensation under Statement of Financial Accounting Standards No. 123 (Revised 2004) (“SFAS123R”),Share-Based Payment, which requires the recognition of fair value of stock compensation as an expense in the calculation of net income (loss). The Company recognizes the stock compensation expense ratably over the vesting period of the individual equity instruments. All stock compensation recorded during the three months ended September 29, 2007 has been accounted for as an equity instrument.

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Under the provisions of SFAS 123R, the Company recorded $180,000 and $268,000 of stock-based compensation expense on its unaudited condensed consolidated statement of operations for the three months ended September 29, 2007 and September 30, 2006, respectively, for its stock plans and ESPP. The Company did not record an income-tax benefit for the stock compensation expense because of the extent of its net operating loss carryforwards. The Company utilized the Black-Scholes valuation model using the multiple option approach for estimating the fair value of the compensation after the adoption of SFAS 123R. No options were granted in the three months ended September 29, 2007. The weighted average grant-date fair values of the shares subject to purchase under the ESPP for the three months ended September 29, 2007 was $2.01 using the following assumptions.

	Three Months Ended September 29, 2007 Purchase Plan
Average risk free interest rate	4.52	%
Expected life (in years)	.49
Expected volatility	.64
Dividend yield	0	%

The dividend yield of zero is based on the fact that the Company has never paid cash dividends and has no present intention to pay cash dividends. Expected volatility is based on the historical volatility of Adept’s common stock based on a period most indicative of future volatility. The risk-free interest rate is also based on the expected life of the options or ESPP subscription period. The expected life in years is based on the historic time to post-vesting exercise and forfeitures of the ESPP shares.

Based on its historical experience of option cancellations prior to vesting, the Company has assumed an annualized forfeiture rate of 20% for its options. Under the true-up provisions of SFAS 123R, the Company records additional expense if the actual forfeiture rate is lower than estimated, and records a recovery of prior expense if the actual forfeiture rate is higher than estimated.

A summary of stock option activity under the option plans as of September 29, 2007 and changes during the three months then ended is presented below:

Options	Shares (in thousands)		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (years)	Aggregate Intrinsic Value (in thousands)
Outstanding at June 30, 2007	1,084		$	12.24
Granted	0			0
Exercised	(15	)		4.24
Forfeited or Expired	(115	)		13.90
Outstanding at September 29, 2007	954		$	12.17	6.71	$	208
Vested/Expected to Vest at September 29, 2007	801		$	12.84	6.34	$	206
Exercisable at September 29, 2007	584		$	14.39	5.50	$	203

The intrinsic value of options exercised during the period was $22,350. During the three months ended September 29, 2007, cash received from stock option exercises and ESPP purchases was $63,182 and $89,194, respectively. As of September 29, 2007, there was $677,430 of total unrecognized compensation cost related to non-vested stock options granted and outstanding; the cost of which is expected to be recognized through fiscal year 2010, with a weighted average remaining period of 1.3 years.

During the three months ended September 29, 2007, 14,913 shares of common stock were issued upon the exercise of options under the Company’s stock option plans, and 17,168 shares of common stock were issued under the Company’s ESPP. Shares are issued semi-annually under the ESPP, in February and August. Total common shares outstanding at September 29, 2007 were 7,945,604.

3. Cash, Cash Equivalents and Short-Term Investments

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Short-term investments typically consist of marketable securities and money market investments with maturities between three and twelve months. Investments are classified as held-to-maturity, trading, or available-for-sale at the time of purchase.

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At September 29, 2007, all of the Company’s investments in marketable securities were classified as available-for-sale and were carried at fair market value, which approximated cost. Fair market value is based on quoted market prices on the last trading day of the quarter. The cost of securities is based upon the specific identification method.

	September 29, 2007		June 30 2007
	(in thousands)
Cash and cash equivalents:
Cash	$	3,630	$	4,219
Money market funds		4,928		1,093
Fixed income securities		649		3,588
Total cash and cash equivalents	$	9,207	$	8,900
Short-term investments:
Auction rate securities		652	$	1,962
Total short-term investments	$	652	$	1,962

Realized gains or losses, interest, and dividends are included in interest income. Unrealized gains or losses from available-for-sale securities were not material in the three months ended September 29, 2007 and for the year ended June 30, 2007.

4. Inventories

Inventories are stated at the lower of standard cost, which approximates actual cost under the first-in, first-out method, or market value. The components of inventory are as follows:

	September 29, 2007		June 30, 2007
	(in thousands)
Raw materials	$	6,422	$	6,639
Work-in-process		155		96
Finished goods		2,581		3,071
	$	9,158	$	9,806

Inventory reserves for estimated obsolescence or unmarketable inventory were $1.3 million at September 29, 2007 and $1.5 million at June 30, 2007.

5. Property and Equipment

Property and equipment are recorded at cost.

The components of property and equipment are summarized as follows:

	September 29, 2007		June 30, 2007
	(in thousands)
Machinery and equipment	$	5,031	$	4,622
Computer equipment		6,120		6,583
Software development costs		1,253		1,192
Office furniture and equipment		2,060		2,506
		14,464		14,903
Less accumulated depreciation and amortization		10,716		11,271
Net property and equipment	$	3,748	$	3,632

6. Warranties

The Company generally offers a two-year parts and one-year labor limited warranty for most of its hardware component products. The specific terms and conditions of those warranties are set forth in the Company’s “Terms and Conditions of Sale,” and published in sales catalogs and on each sales order acknowledgement. The Company estimates the costs that may

8

be incurred under its limited warranty, and records a liability through charges to cost of revenues at the time product revenue is recognized. Factors that affect the Company’s warranty liability include the number of installed units, historical and anticipated rates of warranty claims, and costs per claim. The Company periodically assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary.

Changes in the Company’s warranty liability are as follows for the three month periods ending September 29, 2007 and September 30, 2006:

	Three months ended
	September 29, 2007			September 30, 2006
	(in thousands)
Balance at beginning of period	$	1,207		$	1,638
Provision for warranties issued		147			293
Change in estimated warranty provision including expirations		—			(263	)
Warranty claims		(239	)		(218	)
Balance at end of period	$	1,115		$	1,450

7. Legal Proceedings

To date, other than the Company’s dispute and settlement with Crosslink, there have been no claims or litigation commenced with respect to the Company’s restatement of certain financial statements completed in fiscal 2007; however, such matters may result in litigation of varying kinds against the issuer, including without limitation, claims in connection with issuances of, or transactions in, Adept securities, or defaults of covenants or agreements with third parties. At this time, no assurances can be given regarding the potential outcome of such litigation, if it occurs, and no estimate can be made regarding any liability of Adept as a result of any potential claims.

From time to time, the Company is party to various legal proceedings or claims, either asserted or unasserted, which arise in the ordinary course of its business. The Company has reviewed pending legal matters and believes that the resolution of these matters will not have a material adverse effect on its business, financial condition or results of operations.

Adept has in the past received communications from third parties asserting that it has infringed certain patents and other intellectual property rights of others, or seeking indemnification against alleged infringement. While it is not feasible to predict or determine the likelihood or outcome of any actual or potential actions from such assertions against the Company, the Company believes the ultimate resolution of these matters will not have a material adverse effect on its financial position, results of operations or cash flows.

8. Income Taxes

The Company provides for income taxes during interim reporting periods based upon an estimate of its annual effective tax rate. The Company also maintains a liability to cover the cost of additional probable tax exposure items pertaining to the filing of federal and state income tax returns, as well as filings in foreign jurisdictions. Each of these filing jurisdictions may audit the tax returns filed and propose adjustments. Adjustments may arise from a variety of factors, including different interpretations of statutes and regulations. For the three months ended September 29, 2007, the Company has recorded a provision for income taxes of approximately $331,000 and a minimal income tax expense for the first three months of September 30, 2006.

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9. Income (Loss) per Share

The computation of diluted net income (loss) per share for the three months ended September 29, 2007 does not include the following securities because the effect of their inclusion would be anti-dilutive: 787,383 options to purchase common stock and 1,111,112 warrants to purchase common stock.

	Three months ended
(in thousands)	September 29, 2007		September 30, 2006
Net Income (loss)	$	293	$	(785	)
Basic:
Weighted average number of shares used in computing basic per share amounts		7,917		7,595
Basic net income (loss) per share	$	0. 04	$	(0.10	)
Diluted:
Weighted average number of common shares used in computing basic net income (loss) per share		7,917		7,595
Add: Weighted average number of dilutive potential Common shares		61		—
Weighted average number of common shares used in computing diluted net income (loss) per share		7,978		7,595
Diluted net income (loss) per share	$	0.04	$	(0.10	)

10. Segment Information

SFAS No. 131,Disclosures about Segments of an Enterprise and Related Information, requires disclosures of certain information regarding operating segments, products and services, geographic areas of operation and major customers. SFAS No. 131 reporting is based upon the “management approach”: how management organizes the company’s operating segments for which separate financial information is (i) available and (ii) evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. Adept’s chief operating decision maker is its Chief Executive Officer, or CEO.

Adept provides intelligent robotics systems for assembly and material handling applications under two categories: (1) Robotics and (2) Services and Support.

The Robotics segment provides intelligent production automation software and hardware component products externally to customers.

The Services and Support segment provides support services to customers including: supplies of spare parts and remanufactured and new direct drive robots; providing information regarding the use of the Company’s automation equipment; assisting with the ongoing support of installed systems; consulting services for applications; and training courses ranging from system operation and maintenance to advanced programming geared towards manufacturing engineers who design and implement automation lines.

The Company evaluates performance and allocates resources based on segment revenue and segment profit. Segment profit is comprised of income before unallocated research, development and engineering expenses, unallocated general and administrative expenses, interest income, and interest and other expenses.

Management does not fully allocate research, development and engineering expenses and general and administrative expenses when making capital spending and expense funding decisions or assessing segment performance. There is no inter-segment revenue recognized. Transfers of materials or labor between segments are recorded at cost.

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Segment information for total assets and capital expenditures is not presented as such information is not used in measuring segment performance or allocating resources between segments.

	Three months ended
(in thousands)	September 29, 2007			September 30, 2006
Revenues:
Robotics	$	9,709		$	7,957
Services and Support		3,943			4,786
Total revenues	$	13,652		$	12,743
Operating income (loss):
Robotics	$	2,824		$	252
Services and Support		1,055			1988
Segment profit		3,879			2,240
Unallocated research, development and engineering and general and administrative		(3,311	)		(3,285	)
Amortization of intangible assets		(19	)		(33	)
Operating income (loss)		549			(1,078	)
Net interest income		100			135
Foreign currency gain (loss)		(25	)		167
Income (loss) before income taxes	$	624		$	(776	)

Management also assesses the Company’s performance, operations and assets by geographic areas, and therefore revenue and long-lived tangible assets are summarized in the following table:

	Three months ended
(in thousands)	September 29, 2007		September 30, 2006
Revenue:
United States	$	5,351	$	5,509
Germany		3,460		2,636
France		906		1,331
Switzerland		384		574
Other European countries		2,295		1,052
Singapore		517		862
All other countries		739		779
Total	$	13,652	$	12,743

(in thousands)	September 29, 2007		June 30, 2007
Long-lived tangible assets:
United States	$	3,353	$	3,130
All other countries		680		654
Total long-lived tangible assets	$	4,033	$	3,784

11. Foreign Currency Translation

The Company’s foreign subsidiaries’ balance sheet accounts are translated at current period ending exchange rates and statements of operations are translated at the average rate for the period. Translation gains and losses are recorded as a separate component of accumulated other comprehensive income (loss) in stockholders’ equity. Foreign currency transaction gains (losses) were $(25,364) for the three months ended September 29, 2007, and $166,805 for the three months ended September 30, 2006, and are included in the Statements of Operations.

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12. Impact of Recently Issued Accounting Standards

We adopted FASB Interpretation 48,Accounting for Uncertainty in Income Taxes, an Interpretation of SFAS 109, or FIN 48, on July 1, 2007. As a result of adoption of FIN 48, we recognized a charge of $200,000 to the Company’s accumulated deficit as of July 1, 2007. This charge was classified as a long-term liability because payment of the liability is not anticipated within one year of the balance sheet date. Also as a result of the adoption of FIN 48, we recorded a $2.75 million reduction to deferred tax assets for unrecognized tax benefits, all of which is currently offset by a full valuation allowance that had no effect on the beginning balance of accumulated deficit or the net balance sheet. As of September 30, 2007, the total unrecognized tax benefit of $2.95 million increased to $3.0 million of which $2.8 million is offset by a full valuation allowance. In addition, we do not expect any material changes to the estimated amount of the liability associated with our uncertain tax positions within the next twelve months.

We file income tax returns in the U.S. federal jurisdiction, California and various state and foreign tax jurisdictions in which we have a subsidiary or branch operation. The tax years 1995 to 2007 remain open to examination by the U.S. and state tax authorities, and the tax years 2002 to 2007 remain open to examination by the foreign tax authorities.

Our policy is that we recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. As of the date of adoption of FIN 48, we had no accrued interest or penalties associated with unrecognized tax benefits.

13. Restructuring Charges

At the end of June 2007, the Company executed its restructuring plan which involved closure of facilities in Quebec, Canada, Connecticut and a portion of Adept’s Livermore, California facility. Any remaining work at these facilities is being either outsourced or absorbed within our Livermore facility.

Also, a reduction in force was made of approximately 34 employees, located primarily in Canada and the United States. As part of its restructuring efforts, the Company consolidated its office space at the Livermore facility, vacating approximately 20% of the building. The costs of excess space will be offset against the accrued restructuring charge through the end of the Livermore facility lease term of May 2011. Lease termination costs related to the Quebec facility and the Connecticut facility of $246,000 were expensed and paid in the first quarter of 2008.

The following table summarizes the activity in Adept’s accrued restructuring charges during the quarter ending September 29, 2007.

Fiscal 2008

(in thousands)	Balance June 30, 2007		Additional Charges/ (Reversals) Fiscal 2008			Cash Payment Fiscal 2008			Balance September 29, 2007
Employee severance costs	$	236	$	(19	)	$	(217	)	$	—
Lease commitments		850		246			(301	)		795
Other costs		—		24			(24	)		—
Total	$	1,086	$	251		$	(542	)	$	795

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

This report contains forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. Forward-looking statements include, but are not limited to, statements about:

• the economic environment affecting us and the markets we serve;

• sources of revenues and anticipated revenues, including the contribution from the growth of new products and markets;

• our expectations regarding our cash flows and the impact of the timing of receipts and disbursements;

• our estimates regarding our liquidity and capital requirements;

• marketing and commercialization of our products under development;

• our ability to attract customers and the market acceptance of our products;

• our ability to establish relationships with suppliers, systems integrators and OEMs for the supply and distribution of our products;

• plans for future products and services and for enhancements of existing products and services;

• plans for future acquisitions of products, technologies and businesses;

• claims, investigations or litigation, including such matters relating to our prior restatement and our internal controls; and

• our intellectual property.

In some cases, you can identify forward-looking statements by terms such as “may,” “intend,” “might,” “will,” “should,” “could,” “would,” “expect,” “believe,” “estimate,” “predict,” “potential,” or the negative of these terms, and similar expressions intended to identify forward-looking statements. These statements reflect our current views with respect to future events, are based on assumptions, which may or may not prove to be correct, and are subject to risks and uncertainties. Given these uncertainties, you should not place undue reliance on these statements. We discuss many of these risks in greater detail in Item 1A – Risk Factors -in this Form 10-Q filing and- in our Annual Report on Form 10-K filed on September 17, 2007. The statements made in this report represent our estimates and assumptions only as of the date of this report.

In this report, unless the context indicates otherwise, the terms “Adept,” “we,” “us,” and “our” refer to Adept Technology, Inc., a Delaware corporation, and its subsidiaries.

OVERVIEW

We provide intelligent robotics systems, the core of which are our motion controls systems and application software, which are generally sold in combination with our own vision-guidance technology and/or our third parties’ robot mechanisms. Our vision-guidance technology is tightly integrated with our motion controls technology, and this is a key differentiator for Adept. In addition, we provide robotics services and support for both our own customers and the installed base of other third party providers. We sell our robotics systems and services into a few broad industries where we believe we can provide the best solutions for particular applications. Through sales to systems integrators, original equipment manufacturer (“OEM”) partners and end-user companies, we provide specialized, cost-effective robotics systems and services to markets including high speed packaged goods, life sciences, disk drive/electronics and semiconductor/solar, as well as to traditional industrial markets, including machine tool automation and automotive electronics.

To offset declines in our traditional industrial automation business in the U.S, we have adopted a strategy focusing on four growing vertical markets: packaging, life sciences, disk drive and semiconductor/solar. In addition, we have intensified our efforts to strengthen our operational and sales capabilities in Europe, which we believe will continue to be an important growth market for our products.

In the first quarter of fiscal 2008, we experienced increased demand from the packaging and life sciences markets, which accounted for one third of our revenues in the quarter. We believe that the introduction of our Quattro robot in late 2007 will help to drive increased demand in packaging applications such as food, consumer goods, pharmaceutical and other packaged goods. While we believe that our customer relationships in the disk drive market remain strong, we expect to record only small amounts of revenue from this market until capital spending, which has been deferred for several months, is once again in an active cycle.

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Our European revenues have grown over the last several quarters, which has helped to offset declines in the industrial automation markets in the U.S. and in the disk drive market in the U.S. and Asia. In Germany, we have experienced increased demand from the automotive electronics, packaging and life sciences industries, and in France, demand is primarily from the packaging market.

At the end of fiscal 2007, we initiated a restructuring program to reduce facility and headcount costs, consolidate development activities at fewer locations and realign our U.S. sales resources around our target vertical markets. As a consequence, we have reduced our quarterly expense rate by a significant amount, which we believe will continue to have a positive effect on our operations throughout fiscal 2008 and which we believe will help us to maintain profitability in the future.

This discussion summarizes the significant factors affecting our consolidated operating results, financial condition, liquidity and cash flow during the three-month period ended September 29, 2007. Unless otherwise indicated, references to any quarter in this Management’s Discussion and Analysis of Financial Condition and Results of Operations refer to our fiscal quarter ended September 29, 2007. This discussion should be read with the unaudited condensed consolidated financial statements and related disclosures included in this Quarterly Report on Form 10-Q and in conjunction with the audited consolidated financial statements and notes thereto for the fiscal year ended June 30, 2007 included in our Annual Report on Form 10-K as filed with the SEC on September 17, 2007.

Critical Accounting Policies

The preparation of our financial statements and related disclosures in conformity with accounting principles generally accepted in the United States requires us to make judgments, assumptions and estimates that affect the amounts reported in our condensed consolidated financial statements and accompanying notes. We believe that the judgments, assumptions and estimates upon which we rely are reasonable based upon information available to us at the time that these judgments, assumptions and estimates are made. However, any differences between these judgments, assumptions and estimates and actual results could have a material impact on our statement of operations and financial condition. The accounting policies that reflect our most significant judgments, assumptions and estimates and which we believe are critical in understanding and evaluating our reported financial results include: revenue recognition; allowance for doubtful accounts; inventories; warranties; capitalization of software development costs; deferred tax valuation allowance; foreign currently translation gain (loss); long-lived assets and goodwill; and valuation of stock-based awards. There have been no material changes in our critical accounting policies and critical accounting estimates as disclosed in Part II, Item 7 of our Annual Report on Form 10-K for the year ended June 30, 2007.

Results of Operations

Revenues. Summary information by product segment for the three months ended September 29, 2007 and September 30, 2006 is as follows:

	Three Months ended September 29, 2007			% Change		Three Months ended September 30, 2006
	(In thousands)
Revenue by Segment
Robotics
Revenues	$	9,709		22	%	$	7,957
Percentage of total revenues		71	%				62	%
Services and Support
Revenues	$	3,943		(18	)%	$	4,786
Percentage of total revenues		29	%				38	%
Total revenues	$	13,652		7	%	$	12,743

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Revenues increased 7% to $13.7 million for the three months ended September 29, 2007 compared to $12.7 million for the three months ended September 30, 2006. This increase resulted primarily from increased sales in our Robotics product segment, offset by decreased sales in our Services and Support segment.

Robotics revenues, which result from the sale of our intelligent robotics systems, vision-guidance technology and/or third party robot mechanisms, were $9.7 million for the three months ended September 29, 2007, up 22% from $8.0 million for the three months ended September 30, 2006. Higher sales levels were the result of increased demand for our Viper and Cobra robots and control systems in the U.S. and Europe.

Services and Support revenues, which result from the sale of robotics services, support and remanufactured robot systems, were $3.9 million for the three months ended September 29, 2007, down 18% from $4.8 million for the three months ended September 30, 2006. The decrease was due to lower sales of remanufactured robotics to disk drive and consumer electronics manufacturers in the U.S. and Asia.

Revenue by geography for the three months ended September 29, 2007 and September 30, 2006 is as follows:

	Three months ended September 29, 2007			% Change		Three months ended September 30, 2006
	(In thousands)
Revenue by Geography
United States
Revenues	$	5,351		(3	)%	$	5,509
Percentage of total revenues		39	%				43	%
Europe
Revenues		7,045		26	%		5,593
Percentage of total revenues		52	%				44	%
Asia
Revenues		517		(40	)%		862
Percentage of total revenues		4	%				7	%
Other countries
Revenues		739		(5	)%		779
Percentage of total revenues		5	%				6	%
Total International revenues		8,301		15	%		7,234
Percentage of total revenues		61	%				57	%
Total revenues	$	13,652		7	%	$	12,743

Our domestic sales were $5.4 million for the three months ended September 29, 2007, down 3% compared to $5.5 million for the three months ended September 30, 2006. This decrease reflects reduced sales of both new robotic systems and refurbished robots to the disk drive industry, offset by increased sales of our Viper and Cobra robots for applications in our target packaging and life sciences markets.

Total international sales were $8.3 million in the three months ended September 29, 2007, up 15% compared to $7.2 million in the three months ended September 30, 2006. This increase was driven by higher sales in Europe, particularly in Germany, where we continued to experience strong demand from the automotive electronics market. In addition, we experienced increased demand from the packaging and life sciences markets in Germany in the three months ended September 29, 2007.

Asian sales continued to be depressed in the three months ended September 29, 2007 due to continued deferral of capital spending in the disk drive market.

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Gross Margin. Summary information on gross margin for the three months ended September 29, 2007 and September 30, 2006 is as follows:

	Three Months ended September 29, 2007			% Change		Three Months ended September 30, 2006
	(In thousands)
Revenues	$	13,652				$	12,743
Gross margin		7,303		23	%		5,924
Gross margin %		53.5	%				46.5	%

Gross margin as a percentage of revenues was 53.5% for the three months ended September 29, 2007, compared to 46.5% for the three months ended September 30, 2006. There were several reasons for the increase in gross margin in the 2007 period, including favorable product mix, $570,000 in incremental software license revenue which carried a very high margin, a positive currency effect on pricing in the quarter, and lower product manufacturing costs resulting from our ongoing efforts to reduce production costs. Without the effects of the incremental software margin and the positive currency effect, gross margin was approximately 50.0%.

Operating Expenses

Research, Development and Engineering Expenses.

	Three Months ended September 29, 2007			% Change		Three Months ended September 30, 2006
	(in thousands)
Expenses	$	1,342		(22	)%	$	1,721
Percentage of revenue		10	%				13.5	%

Research, development and engineering (“R&D”) costs are expensed as incurred, with the exception of software development costs incurred subsequent to establishing technological feasibility and up to the general release of the software products which are capitalized. Technological feasibility is demonstrated by the completion of a working model or a detailed program design. Capitalized costs are amortized on a straight-line basis over either two or three years, whichever term is the estimated life of the software product.

R&D expenses for the three months ended September 29, 2007 decreased by 22% to $1.3 million, or 10% of revenues, from $1.7 million, or 13.5% of revenues for the three months ended September 30, 2006. The decrease in R&D expense was due primarily to restructuring actions taken by the Company at the end of fiscal 2007, which included the consolidation of our Quebec, Canada vision development group with our engineering group in Livermore, California, and to lower expenses associated with the productization of the Quattro robot, for which the majority of development was completed before the first quarter of fiscal 2008.

Selling, General and Administrative Expenses.

	Three Months ended September 29, 2007			% Change		Three Months ended September 30, 2006
	(in thousands)
Expenses	$	5,161		(2	)%	$	5,248
Percentage of revenue		38	%				41	%

Selling, general and administrative (“SG&A”) expenses consist primarily of employee compensation, professional fees arising from legal, auditing and other consulting services, as well as tradeshow participation and other marketing costs.

SG&A expenses were $5.2 million, or 38% of revenues, for the three months ended September 29, 2007, down 2% from $5.2 million, representing 41% of revenues for the three months ended September 30, 2006.

We have not yet undertaken most of the effort related to Sarbanes-Oxley Section 404 compliance regarding internal controls, and expect to incur substantial costs in connection with that project during fiscal 2008.

Amortization. $19,000 was expensed for the amortization of intangible assets in the three months ended September 29, 2007, compared with $33,000 in the three months ended September 30, 2006.

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Stock Compensation Expense. Under the provisions of SFAS 123R we recorded $180,000 for stock-based compensation expense for the three months ended September 29, 2007 and $268,000 for the three months ended September 30, 2006 for our stock option plans, ESPP and restricted stock grants. We did not record an income-tax benefit for the stock compensation expense in either period because of the extent of our net operating loss carry forwards.

Restructuring. In the three months ended September 29, 2007, we recorded $251,000 in restructuring charges, compared with $0 in the three months ended September 30, 2006, as a result of our previously-disclosed restructuring program initiated at the end of fiscal 2007.

Interest Income (Expense), Net. Interest income, net of interest (expense), was $100,000 for the three months ended September 29, 2007 compared to $135,000 for the three months ended September 30, 2006.

Foreign Currency Exchange Gain (Loss). We recorded a loss on foreign currency exchange of $(25,000) for the three months ended September 29, 2007, compared to a gain of $167,000 for the three months ended September 30, 2006. Foreign currency exchange gains and losses resulted primarily from remittances from our sales and operating activities in Europe and the strengthening of the euro versus the U.S. dollar exchange rates for the reported periods.

Provision for Income Taxes. Adept typically provides for income taxes during interim reporting periods based upon an estimate of our annual effective tax rate. We also maintain a liability to cover the cost of additional tax exposure items on the filing of federal and state income tax returns as well as filings in foreign jurisdictions. Each of these filing jurisdictions may audit the tax returns filed and propose adjustments. Adjustments arise from a variety of factors, including different interpretations of statutes and regulations.

We recorded a tax provision of $331,000 in the three months ended September 29, 2007, which related both to an adjustment of a previously recorded tax asset for our French subsidiary and income tax related to first quarter German subsidiary income not fully offset by previously incurred net operating losses in that jurisdiction. We have net operating losses which are sufficient to offset a significant portion of our domestic and foreign tax obligations. We recorded a modest provision for minimum taxes owed for the three months ended September 30, 2006.

Liquidity and Capital Resources

Cash, Cash Equivalents and Short-Term Investments. Cash, cash equivalents and short-term investments decreased $1.0 million from June 30, 2007 to $9.9 million. Net cash used in operating activities of $725,000 was mainly attributable to an increase in accounts receivable of $1.7 million and a decrease in Accounts Payable and Accrued Liabilities of $501,000, offset by decreases in inventories of $483,000. Other items affecting the operating cash flows were net income of $293,000, augmented by non-cash charges including depreciation and amortization of $400,000, non-cash, stock-related compensation charges of $180,000 and a loss disposal of assets of $74,000 in relation to the closure of the Quebec, Canada office.

Cash used in investing activities of $938,000 reflects the net movement of cash and cash equivalents into short-term investments of $1.3 million. We also made capital expenditures of $244,000, primarily in demonstration equipment and equipment used in the assembly and testing of our products. We further capitalized $150,000 in software development costs during the first quarter of fiscal 2008.

Cash provided by financing activities of $152,000 reflects activity in our employee stock purchase program as well as stock option exercises.

Liquidity and Capital Resources Requirements. We believe our existing cash, cash equivalents and short-term investments will be sufficient to meet our cash requirements through the next 12 months. However, we may elect to use additional funding prior to that time to fund our future capital requirements, depending on many factors, including our rate of revenue growth and the timing and extent of spending to support product development efforts, expansion of sales, marketing and support operations and any acquisitions activity.

In the three months ended September 29, 2007, no material changes have occurred in our credit facilities. Our current credit facilities include an agreement with Silicon Valley Bank, or SVB, for a line of credit. The SVB loans will mature on August 14, 2008. As amended, the Loan Documents provide that Adept may borrow amounts under the credit facility not to exceed the lesser of (i) $5.0 million or (ii) the sum of 80% of Adept’s eligible accounts receivable plus any over advance loans that may be granted by SVB from time to time in its sole and absolute discretion, plus foreign accounts, plus non-formula loans that SVB may make up to $3.0 million. Such lesser amount as determined in (i) or (ii) above shall be reduced by the amount of all outstanding letters of credit and the FX Reserve, which is 10% of the total FX Forward Contracts (as discussed below) outstanding for purposes of determining the “Credit Limit” under the loan facility. The aggregate of over

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advance loans may not exceed the lesser of $1.0 million or 30% of Adept’s eligible accounts receivable. For purposes of application under the loan facility, foreign accounts must meet the same eligibility requirements as domestic receivables, and are permitted up to a maximum of 25% of the total eligible accounts receivable.

The Loan and Security Agreement includes certain financial and other covenants with which Adept must comply. Financial covenants specify that Adept must maintain a tangible net worth of at least $19.0 million plus 40% of the consideration received upon issuance of any equity securities or subordinated debt, plus 25% of Adept’s net income in each fiscal quarter. Once an increase in the minimum tangible net worth of Adept takes effect, it remains in effect thereafter, and does not decrease. Other covenants with which Adept must comply, include, but are not limited to, the payment of Adept’s tax obligations as and when due and the maintenance of Adept’s primary operating deposit accounts with SVB. Adept cannot make any transfers to any of its subsidiaries of money or other assets with an aggregate value in excess of $300,000 in any fiscal quarter and is subject to customary default provisions. In the event of default under the Loan and Security Agreement, SVB may, among other things, cease making loans to Adept; accelerate and declare all or any part of Adept’s obligations to be immediately due and payable, and enforce its security against the collateral. Adept was in compliance with the covenants of the Loan and Security Agreement as of September 29, 2007.

New Accounting Pronouncements

In June 2006, the Financial Accounting Standards Board (“FASB”) issued FASB Interpretation 48, (“FIN 48”),Accounting for Income Tax Uncertainties. FIN 48 defines the threshold for recognizing the benefits of tax return positions in the financial statements as “more likely than not” to be sustained by the taxing authority. The recently issued pronouncement also provides guidance on the de-recognition, measurement, and classification of income tax uncertainties, along with any ancillary interest and penalties. FIN 48 includes guidance concerning accounting for income tax uncertainties in interim periods. It also increases the level of disclosures related to any recorded income tax uncertainties.

FIN 48 became effective for Adept beginning in fiscal 2008.

Contractual Obligations

A summary of our contractual obligations as of September 29, 2007 follows:

	Payment due by period
	Total		Less Than 1 Year		Years 2 and 3		Years 4 and 5		More than 5 Years
Operating lease obligations	$	6,318	$	1,789	$	3,018	$	1,274	$	237
Capital lease obligations		295		150		142		3		—
Purchase obligations		14,619		14,619		—		—		—
Other long-term liabilities reflected on the balance sheet under GAAP restructuring charges		795		217		434		144		—
Total	$	22,027	$	16,775	$	3,594	$	1,421	$	237

Operating leases primarily represent commitments for facilities, along with lesser obligations for office equipment and motor vehicles. Purchase obligations are in the form of purchase orders, generally for custom components and sub-assemblies. These purchase orders typically cannot be cancelled without penalty. Penalties may range up to 30% of the canceled order, but cancellations are not common and the usual practice is to reschedule delivery dates if adjustment is needed.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our exposure to market risk for changes in interest rates relates primarily to our investment portfolio. We maintain an investment policy, that seeks to ensure the safety and preservation of our invested funds by limiting default risk, market risk and reinvestment risk. The table below presents principal cash amounts and related weighted-average interest rates for our investment portfolio, all of which matures in less than 12 months.

(in thousands)	September 29, 2007			Fair Value
Cash and cash equivalents	$	9,207		$	9,207
Average rate		2.58	%		2.58	%
Short-Term Securities	$	652		$	652
Average rate		6.30	%		6.30	%

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We mitigate default risk by investing in high credit quality securities and by positioning our portfolio to respond appropriately to a significant reduction in a credit rating of any investment issuer or guarantor. Our portfolio includes only marketable securities with active secondary or resale markets to ensure portfolio liquidity and contains what management believes to be a prudent amount of diversification.

We conduct business on a global basis. Consequently, we are exposed to adverse or beneficial movements in foreign currency exchange rates. We have historically employed, but do not currently employ, a currency hedging strategy.

We also have a line of credit with Silicon Valley Bank. We did not borrow under this facility in fiscal 2007 and have no current intention to do so in fiscal 2008; however, if we were to draw down under this facility or issue letters of credit thereunder, Adept would be subject to interest rate risk as described in Part II, Item 7 of our Annual Report on Form 10-K for the year ended June 30, 2007.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As of the end of the fiscal quarter ended September 29, 2007, Adept carried out an evaluation, under the supervision and with the participation of members of our management, including our Chief Executive Officer (“CEO”) and our Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of Adept’s disclosure controls and procedures pursuant to Rule 13a-15(b) of the Securities Exchange Act of 1934. Our CEO and our CFO have concluded that Adept’s disclosure controls and procedures were not effective at the end of the fiscal quarter in alerting them in a timely manner to material information relating to Adept (including its consolidated subsidiaries) required to be included in Adept’s periodic SEC filings, because of a material weakness in our internal controls over financial reporting identified by our independent auditors in connection with the audit of our fiscal 2007 year as discussed below and in our Form 10-K for the fiscal year ended June 30, 2007.

In connection with the annual audit and preparation of Adept’s Annual Report on Form 10-K for the fiscal year ended June 30, 2007, certain control deficiencies were noted by our independent auditors in the close process that individually were not material weaknesses, although when combined, were considered to be a material weakness. Certain computations of accounts, primarily relating to the restructuring charge, foreign inventories and stock compensation were not analyzed in sufficient detail and were not reviewed in a timely manner.

A control deficiency exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A significant deficiency is a control deficiency, or a combination of control deficiencies, that is less severe than a material weakness, yet important enough to merit attention by those responsible for oversight of the Company’s financial reporting. A material weakness is a control deficiency, or combination of control deficiencies, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

Notwithstanding this material weakness identified by our auditors, our CEO and CFO have determined that the company has strengthened its internal controls and disclosure controls during and since fiscal 2007, and that Adept has made significant progress in the implementation of the internal controls over financial reporting necessary to remediate most of the material weaknesses in such internal controls identified during Adept’s fiscal 2006 annual consolidation and audit process relating to the restatement of certain fiscal 2006 financial statements included in Adept quarterly reports on Form 10-Q.

Changes in Internal Controls over Financial Reporting

Adept has been and continues to strengthen procedures and controls as discussed below, and is currently reviewing the matters identified during the course of the 2007 audit to determine how to most effectively remedy such issues.

During fiscal 2007, we implemented, as further specified below, changes and procedures to improve the effectiveness of our internal control over financial reporting, in part to remedy control deficiencies reported for prior periods. In general, the improvements generally include, without limitation, (i) making personnel and organizational changes to improve internal communications and reporting, (ii) executing the Company’s plan for improved IT systems to standardize numerous processes, (iii) improving monitoring controls, and (iv) simplifying and improving financial processes and procedures.

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During the first quarter of fiscal 2008, we took actions to further strengthen our internal controls including:

• Continuing the process to become Sarbanes-Oxley 404 Compliant including implementing extensive review and approval procedures.

• Hiring and training an Accounting Manager.

• Continuing to train new personnel.

On an ongoing basis, we will continue to review our internal controls and disclosure controls and may identify additional measures which will enhance our internal controls over financial reporting. The process of designing and implementing effective controls is a continuous effort that requires us to anticipate and react to changes in our business and the economic and regulatory environments and to expend significant resources to maintain a system of internal control over financial reporting that is adequate to satisfy our reporting obligations as a public company. In our undertaking of this continuous effort, we may identify various control deficiencies. We will assess the significance of any control deficiencies that come to our attention and determine the extent to which such deficiencies may be mitigated or require remediation.

Our disclosure controls and procedures are designed to ensure that the information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and to reasonably assure that such information is accumulated and communicated to our management, including the CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met under all potential conditions, regardless of how remote, and may not prevent or detect all error and all fraud. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within Adept have been prevented or detected.

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PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

To date, other than our previously-disclosed dispute and settlement with Crosslink, there have been no claims or litigation commenced with respect to Adept’s restatements made in fiscal 2007; however, such matters may result in litigation of varying kinds against the issuer, including without limitation, claims in connection with issuances of, or transactions in, Adept securities, or defaults of covenants or agreements with third parties. At this time, no assurances can be given regarding the potential outcome of such litigation, if it occurs, and no estimate can be made regarding any liability of Adept as a result of any potential claims.

From time to time, the company is party to various legal proceedings or claims, either asserted or unasserted, which arise in the ordinary course of business. The company has reviewed pending legal matters and believes that the resolution of these matters will not have a material adverse effect on our business, financial condition or results of operations.

Adept has in the past received communications from third parties asserting that it has infringed certain patents and other intellectual property rights of others, or seeking indemnification against alleged infringement. While it is not feasible to predict or determine the likelihood or outcome of any actual or potential actions from such assertions against the company, the company believes the ultimate resolution of these matters will not have a material adverse effect on our financial position, results of operations or cash flows.

ITEM 1A. RISK FACTORS

Before deciding to purchase, hold or sell our common stock, you should carefully consider the cautionary statements and risks described in our Annual Report on Form 10-K, filed with the Securities and Exchange Commission on September 17, 2007, this Quarterly Report on Form 10-Q and in our other filings with the SEC. There are no material changes to the risk factors described in Item 1A of our Annual Report on Form 10-K.

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

At Adept’s 2007 Annual Meeting of Stockholders, held on November 9, 2007, the stockholders of Adept approved the following actions:

a) Election of the following six (6) directors to serve until the next Annual Meeting of Stockholders or until their successors are duly elected and qualified.

NOMINEE	FOR	WITHHELD
Robert H. Bucher	7,359,573	127,250
Charles H. Finnie	6,933,631	553,192
A. Richard Juelis	7,356,490	130,333
Michael P. Kelly	6,989,573	497,150
Robert J. Majteles	6,989,670	497,153
Herbert J. Martin	6,989,670	497,153

b) Approval of Amendment to the 2005 Equity Incentive Plan to increase the authorized shares by 200,000 and permit grants to be made thereunder to consultants to Adept.

For	Against	Abstain	Broker Non-Vote
5,275,334	1,314,681	8,305	888,503

c) Ratify selection of Armanino McKenna LLP to serve as independent auditors for the fiscal year ending June 30, 2008.

For	Against	Abstain	Broker Non-Vote
7,417,337	16,740	52,746	0

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ITEM 6. EXHIBITS

The following exhibits are filed as part of this report.

10.1	2008 Executive and Senior Management Payment Plan (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K dated October 4, 2007 filed with the Securities and Exchange Commission).
10.2	Summary of Executive Compensation for Joachim Melis (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K dated October 4, 2007 filed with the Securities and Exchange Commission).
10.3*	2005 Equity Incentive Plan, as amended (incorporated by reference to Appendix A to the Registrant’s definitive Proxy Statement on Schedule 14 A filed with the Securities and Exchange Commission on October 12, 2007).
10.4	Form of Option Agreement for Consultants under the 2005 Equity Incentive Plan.
31.1	Certification by the Chief Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a) under the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification by the Chief Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a) under the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification by the Chief Executive Officer and the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

* Management contract or compensatory plan or arrangement.

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SIGNATURES

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

ADEPT TECHNOLOGY, INC.
By:	/s/ Lisa M. Cummins
	Lisa M. Cummins
	Vice President, Finance and Chief Financial Officer
By:	/s/ Robert H. Bucher
	Robert H. Bucher
	Chief Executive Officer

Date: November 13, 2007

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INDEX TO EXHIBITS

10.1	2008 Executive and Senior Management Payment Plan (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K dated October 4, 2007 filed with the Securities and Exchange Commission).
10.2	Summary of Executive Compensation for Joachim Melis (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K dated October 4, 2007 filed with the Securities and Exchange Commission).
10.3	2005 Equity Incentive Plan, as amended (incorporated by reference to Appendix A to the Registrant’s definitive Proxy Statement on Schedule 14 A filed with the Securities and Exchange Commission on October 12, 2007).
10.4*	Form of Option Agreement for Consultants under the 2005 Equity Incentive Plan.
31.1	Certification by the Chief Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a) under the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification by the Chief Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a) under the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification by the Chief Executive Officer and the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

* Filed with this Quarterly Report on Form 10-Q

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