SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

[X]   Annual report  pursuant to Section 13 or 15(d) of the Securities  Exchange
      Act of 1934 for the fiscal year ended June 30, 2001 or

[ ]   Transition  report  pursuant  to  Section  13 of 15(d)  of the  Securities
      Exchange Act of 1934 for the transition period from  __________________ to
      ____________________.

Commission file number: 0-27122

                             ADEPT TECHNOLOGY, INC.
             (Exact name of registrant as specified in its charter)

              California                                    94-2900635
   (State or other jurisdiction of                       (I.R.S. Employer
    incorporation or organization)                    Identification Number)

150 Rose Orchard Way, San Jose, California                     95134
 (Address of principal executive office)                     (zip code)

Registrant's telephone number, including area code: (408) 432-0888

           Securities registered pursuant to Section 12(b) of the Act:

                                                 NAME OF EACH EXCHANGE
          TITLE OF EACH CLASS                     ON WHICH REGISTERED
          -------------------                     -------------------
                  None                                    None

           Securities registered pursuant to Section 12(g) of the Act:
                           Common Stock, no par value
                                (Title of Class)

    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 if disclosure of delinquent  filers  pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best  of  the  registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K.  [X]

    The aggregate market value of the voting stock held by non-affiliates of the
registrant,  based upon the closing  sale price of the common stock on September
10,  2001  as  reported  on  the  Nasdaq  National  Market,   was  approximately
$44,973,291.33.  Shares of common stock held by each officer and director and by
each  person  who owns 5% or more of the  outstanding  common  stock  have  been
excluded in that such persons may be deemed to be affiliates. This determination
of affiliate  status is not  necessarily  a conclusive  determination  for other
purposes.

    As of September 10, 2001,  registrant had outstanding  13,184,453  shares of
common stock.

                       DOCUMENTS INCORPORATED BY REFERENCE

    Portions of the definitive proxy statement for the 2001 Annual Meeting to be
held on November 16, 2001 are incorporated by reference into Part III hereof.


<PAGE>
                                     PART I

                SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

    This  Annual  Report  on  Form  10-K  contains  forward-looking  statements.
Forward-looking  statements are contained  principally in the sections  entitled
"Business,"  "Risk  Factors"  and  "Management's   Discussion  and  Analysis  of
Financial  Condition and Results of Operations."  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:

     o   marketing and commercialization of our products under development;

     o   our  estimates  regarding  our capital  requirements  and our needs for
         additional financing;

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

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

     o   our intellectual property;

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

     o   plans  for  future  acquisitions  and for  the  integration  of  recent
         acquisitions; and

     o   sources  of  revenues   and   anticipated   revenues,   including   the
         contribution from the growth of new products and markets.

    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 and are based
on   assumptions   and   subject  to  risks  and   uncertainties.   Given  these
uncertainties,  you should not place  undue  reliance  on these  forward-looking
statements.  We discuss many of these risks in this prospectus in greater detail
under the heading  "Factors  Affecting  Future  Operating  Results." Also, these
forward-looking  statements  represent our estimates and assumptions  only as of
the date of this Annual Report.

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

    This  report  contains  trademarks  and  trade  names  of  Adept  and  other
companies.

ITEM 1. BUSINESS

OUR COMPANY

    We provide  intelligent  production  automation  systems to our customers in
many industries including the semiconductor, wireless communications, photonics,
food  processing,  automotive,  life  sciences and  electronics  industries.  We
utilize our  comprehensive  product  portfolio to provide  automation  solutions
consisting of high precision assembly components, material handling robotics and
application  development  software to meet our customer's  increasingly  complex
manufacturing requirements.

    We offer our customers a  comprehensive  approach to automation that we call
Rapid Deployment  Automation,  or RDA, that reduces the time and cost to design,
engineer and launch products into high-volume production.  Other benefits of our
RDA solution  include  increased  manufacturing  flexibility  for future product
generations,  less


                                       1

<PAGE>

customized engineering and reduced dependence on production engineers. We intend
to continue to enhance our RDA capabilities by providing  differentiated,  value
added integrated systems to further penetrate - selected emerging markets.

    We market  and sell our  products  worldwide  through  more than 300  system
integrators,  our direct sales force and original equipment manufacturers.  This
global  presence,   when  combined  with  our  extensive   service  and  support
infrastructure,  enables us to effectively understand our customers' current and
future technological automation requirements.

    We were incorporated in California in 1983. Our principal  executive offices
are located at 150 Rose Orchard Way, San Jose,  California  95134. Our telephone
number at that address is (408) 432-0888.

Recent Developments

    On June 27, 2001, we signed a definitive agreement to acquire privately-held
CHAD  Industries,  Inc. in exchange for a  combination  of equity and cash to be
paid out over three years.  Completion  of the  acquisition  remains  subject to
obtaining required approvals and other standard closing  conditions.  Completion
of the  acquisition  of CHAD is the  latest  step in Adept's  ongoing  photonics
automation  strategy.  The acquisition is expected to be completed in the second
quarter of fiscal 2002.  CHAD's  extensive  experience  developing  and building
standardized  precision  workcells based on Adept  software,  controls and robot
systems  was  paramount  in our  acquisition  decision.  Adept plans to leverage
CHAD's  expertise  in small part  feeding,  precision  tooling  design,  and the
handling of odd-form components to add capacity in photonics automation.  CHAD's
initial role within Adept  following  completion of the  acquisition  will be to
develop  process  module  tooling for both Adept  NanoLine  stage  products  and
NanoCell automated process ready platforms. In addition,  Adept plans to support
and grow CHAD's existing odd-form standard machine business,  which has been the
cornerstone of CHAD for the last two decades.

    On February 18, 2001, Adept completed a public offering of its common stock.
Adept sold a total of 2,000,000  shares of common stock at a price of $18.00 per
share.  The offering  resulted in net proceeds to Adept of  approximately  $32.4
million,  net of an underwriting  discount of $2.5 million and offering expenses
of $1.1 million.

    On July 21, 2000, we completed the  acquisition  of HexaVision  Technologies
Inc., now named Adept Technology Canada Co., a Canadian corporation.  HexaVision
was a machine vision  research and development  company.  In connection with the
acquisition,  we paid $5.5 million in cash, which includes  transaction costs of
$0.4  million,  and issued  shares of our common  stock to the  shareholders  of
HexaVision with a value of $1.1 million. On July 21, 2001, pursuant to the terms
of the share purchase  agreement  relating to the acquisition of HexaVision,  we
issued  116,000  shares  of our  common  stock  to the  former  shareholders  of
HexaVision with a value of $1.1 million,  made cash payments totaling $3,500 and
released $313,000 in cash from an escrow account. In addition,  a second payment
of  approximately  $1.3  million in cash is  payable  on the second  anniversary
closing,  contingent upon the achievement of certain  operational  milestones by
HexaVision.  We have set aside restricted cash in the amount of $1.6 million for
future  contingent  payments  including the payments made on July 21, 2001,  and
such  restricted  cash is included in Other  Assets on the June 30, 2001 balance
sheet.  These contingent cash payments and share issuances will be accounted for
as additional  purchase price when the contingencies are resolved.  Any payments
made and shares issued will be allocated to goodwill.  We have accounted for the
acquisition  under the purchase method. We believe the acquisition of HexaVision
has  already  enhanced  our  machine  vision  products  for all markets and will
facilitate our entry into the PC-based machine vision market.  HexaVision's core
technology incorporates techniques to achieve accuracies up to 1/40th of a pixel
with machine vision measurement algorithms that has increased our performance in
critical  and   demanding   applications   such  as  vision   servoing  for  the
microelectrical, fiber optic, semiconductor, metrology and photonics industries.

PRODUCTS AND TECHNOLOGY COMPRISING RAPID DEPLOYMENT AUTOMATION

OVERVIEW

    Our vision of making  automation easy to install is called Rapid  Deployment
Automation,  or RDA. We have  developed a product  strategy to enable RDA.  This
product strategy includes  simulation tools to help design  automation  systems,
application  software packages which contain automation process knowledge,  very
powerful


                                       2

<PAGE>

software and hardware for real-time motion control and integrated sensing, and a
family of mechanisms for different applications.


[Chart  illustrating our technology with respect to the following four levels of
RDA Approach:
RDA System Design Layer
RDA Process Knowleger Layer
RDA Real-time Control Layer
RDA Mechanical Component Layer]

MECHANICAL COMPONENTS

    We provide a large  number of  automation  mechanisms  to address  different
application  needs.  All of these  mechanisms are controlled by the software and
hardware control  architecture  described below.  This broad product line allows
system  integrators  and end  users to  develop  automation  solutions  for many
industries and applications.


                                       3
<PAGE>

ROBOT MECHANISM

    We offer two floor  standing  Selective  Compliance  Assembly  Robot Arm, or
SCARA, style robot mechanisms called the AdeptOne-XL and the  AdeptThree-XL,  as
well as two table top robot  mechanisms  called the Adept Cobra 600 and 800, all
of which are designed for assembly  and material  handling  tasks.  SCARA robots
utilize a combination of rotary and linear joints for high speed, high precision
material handling,  assembly and packaging. The Adept-XL robots use direct-drive
technology. Direct-drive technology eliminates gears and linkages from the drive
train  of the  mechanism,  thereby  significantly  increasing  robot  speed  and
precision and improving the robot's product life,  reliability and accuracy. The
Adept Cobra series  robots are  light-duty  SCARA  mechanisms  that can be table
mounted and offer an efficient range of motions in limited space.

    We also offer a family of linear  modules called Adept  SmartModules.  These
single  axis  devices can be coupled  together  by the user to form  application
specific custom robot mechanisms  ranging from 2 to 4 axes.  Adept  SmartModules
are powered by Adept  SmartAmps,  which utilize the industry  standard IEEE 1394
Firewire protocol to combine motion control signals and input/output signals for
transmission over a single high-speed cable. Adept SmartModules lowers costs and
installation  time by reducing  the amount of software  programming  and cabling
required in a workcell,  or a robotic system that performs a specific automation
function.  SmartModules  are also offered in  single-axis  standalone  versions,
which can operate without any additional controllers,  saving cost and space for
simple applications.

    We  also  offer  a  line  of  semiconductor  wafer  handling  robots.  These
mechanisms  are sourced  from Samsung  Corporation.  The  AdeptVicron  series is
designed  for  semiconductor  wafer  handling  applications  and consists of two
models:  the  AdeptVicron  300S  (single  arm) and 310D (dual arm) models  which
handle up to 300mm wafers.

    In 2001  we  expanded  our  product  line  to  include  a  family  of 6 axis
articulated  mechanisms,  which are manufactured for us by Yaskawa  Corporation.
The AdeptSix 300 is a tabletop robot ideally  suited for precision  assembly and
material handling  applications.  We also make available larger models and clean
room versions.

HIGH PRECISION MICRO POSITIONERS

    Adept  NanoStages  are  a  series  of  advanced  nanometer  positioners  for
alignment  applications  in  fiber  optic  assembly  and  other  high  precision
applications.  These  devices  increase the  resolution  of our  mechanisms by a
factor of 1000, from 25 microns for our standard robots to 25 nanometers for our
standard micro positioners.  Unlike many micro positioners, which were developed
for  laboratory  environments,  these  products  are  durable,  production-ready
devices   intended  for   integration   into   continuous   production   factory
environments.  We are developing  versions of these micro  positioners for fiber
optic component assembly,  fiber alignment,  laser welding and semiconductor OEM
applications.

PROGRAMMABLE PARTS FEEDER

    Part feeding has historically  been accomplished by designing custom devices
that  could only  accommodate  a single  part or class of parts.  The Adept Flex
Feeder 250 can be rapidly  reconfigured  through  software  to  accommodate  new
products and a wide variety of parts ranging from simple rectangular  objects to
complex  molded or  machined  parts,  thus  preserving  the  flexibility  of the
workcell  or  production  line.  The Adept Flex  Feeder 250  integrates  machine
vision,  software and motion control  technology with a simple mechanical device
for separating parts from bulk. The Adept Flex Feeder 250 recirculates the parts
and separates them, relying on vision to identify individual parts.

ENVIRONMENTAL CONTROL PRODUCTS

    We offer front end wafer handling  solutions for both semiconductor OEMs and
end users.  These  offerings  include both standard and customized  products for
contamination  control including robotics for wafer handling and transport.  The
Adept Flexible Front End Systems,  including the Adept FFE 200 and the Adept FFE
300,  combine wafer sorting and wafer cassette  handling load functions into one
compact integrated  front-end system;  reducing cycle times,  process complexity
and cost. The Adept FFE 200/300 units combine value added wafer  operations such
as wafer orientation, optical character recognition, or OCR, sort and merge into
a  compact  front-end  system,  eliminating  the need for wafer  sorters  in the
factory.

                                       4
<PAGE>

REAL TIME CONTROL PRODUCTS

MACHINE CONTROL SOFTWARE

    Our V+ real-time  programming  language allows software developers to create
automation  software  systems  and  is  the  key  enabling  technology  for  our
intelligent  automation  approach.   This  programming  environment  provides  a
high-level  language  coupled with a multitasking  operating system and built-in
capability for integrating robots, machine vision, sensors, workcell control and
general   communications.   These   capabilities   enable  the   development  of
sophisticated  application  software  that  can  adaptively  control  mechanical
systems  based upon  real-time  sensory input while  simultaneously  maintaining
communication with other factory equipment.

    V+  offers  the user  approximately  300  instructions  for  programming  an
intelligent   automation  workcell.  It  includes  a  trajectory  generator  and
continuous path planner, which compute the path of the robot's tool in real-time
based  upon  predefined  data or  sensory  input.  V+ also  includes a number of
network   communication   facilities   and   supports  a  variety  of   standard
communication protocols. In addition, this software includes an operating system
specifically  designed for factory automation and robot control.  This operating
system allows V+ to execute dozens of tasks  concurrently and permits control to
pass between tasks in a predictable manner, often several times per millisecond.
The V+ operating  system also allows the  installation of additional  processors
into the controller and automatically reassigns tasks to optimize overall system
performance, providing a key scalability feature not found in other controllers.
An optional development  environment for V+ is Windows 98, NT and 2000 based and
allows the customer to utilize industry standard personal computers.

SERVO SOFTWARE

    The most basic level of our  software  architecture  is the servo  software,
which directs  individual  motors to follow motion  commands  generated from the
higher V+ software  level.  This  software  has been  designed to control  Adept
robots, standard robots manufactured by other companies, and many custom robotic
mechanisms  built for special  application.  The servo  software  layer includes
advanced control, safety and diagnostic features.

GUIDANCE AND INSPECTION VISION PRODUCTS

    AdeptVision  is a line of machine  vision  products  that are used for robot
guidance and inspection applications. For guidance applications,  AdeptVision is
added into the controller by inserting a printed  circuit board and enabling the
vision system  software.  The  integration  of our controller and vision systems
software enables high speed vision  applications  such as vision  servoing.  For
inspection  applications  such as  gauging  and  dimensioning,  the  AdeptVision
product  is  sold as an  integrated  inspection  vision  system  comprised  of a
controller with the vision board and software.

    AdeptVision features a unique tool for robot and machine guidance, the Adept
ObjectFinder  2000.  ObjectFinder  quickly  recognizes  parts that are  randomly
positioned  and  have an  unknown  orientation  ranging  up to 360  degrees,  as
compared with other solutions,  which simply locate  translated images with very
limited  rotation.  Our  vision  servoing  ability  is  critical  for  precision
processes  such as the assembly of  electronic  or fiber optic  components.  Our
machine  vision  software  can  also  measure  part  dimensions  for  inspection
purposes.  Machine vision can be used to acquire parts from stationary locations
or from conveyors. Cameras can be fixed in the workcell or attached to a robot.

    We also offer HexSight, a shrink-wrapped  library of machine vision software
tools for OEMs and dedicated machine vision  integrators.  HexSight includes the
ObjectFinder locator tool in addition to other general purpose image enhancement
and analysis algorithms. These tools run directly in a PC environment and can be
adapted to run in an OEM's custom software solution.

MACHINE CONTROLLERS

    Our controller products are currently based on the VersaModule  Eurocard, or
VME, bus  architecture  standard,  but are  migrating to a  distributed  control
architecture  which depends on high-speed  networks such as IEEE 1394

                                       5
<PAGE>

Firewire,  Ethernet, and DeviceNet,  to link processors and sensors which may be
distributed  around a workcell.  A large array of controller  configurations are
possible depending on the features selected by the customer. Our VME controllers
are configured in four,  five, or ten slot chassis.  All  controllers  include a
system processor module.  Additional functionality can be incorporated by adding
printed circuit boards and additional software.  For example,  motion control is
added by inserting a motion control board.  Printed  circuit boards can be added
for  machine  vision  and  additional  communication  inputs  and  outputs.  The
controller  products are sold  independently  for machine control and inspection
vision  applications and are also sold as a component of the robot systems.  The
heart of our VME machine  controllers is the AdeptWindows  Controller  board, or
AWC, a single slot  central  processing  unit board based on Motorola  68040/060
processors.  All AWC boards include solid-state,  mass storage,  direct ethernet
connectivity,  DeviceNet  industrial data network connectivity and international
safety circuitry.

    Our AWC controller  offers  plug-and-play  integration of personal  computer
hardware and software for users of the Windows platform.  Specifically, this new
technology  allows  customers  to do  all  development  work,  including  vision
applications,  on personal  computers  using  Windows 98, 2000 and NT  operating
systems. This open architecture product allows customers to combine the features
of our AIM and V+ software products with other personal  computer-based software
products using industry  standard software tools such as Active X, Visual Basic,
and Visual C++. Finally, all of our controller products support the same Windows
NT-based graphical user interface and can execute the same application programs,
thereby  allowing  software  development  investments  to be leveraged  across a
number of applications.

    The controller  includes a number of technologically  advanced  capabilities
designed  specifically  to address  the  intelligent  automation  market.  These
capabilities  include  special  application  specific  integrated  circuits  for
controlling  direct-drive motors,  reading encoders, or sensors, and controlling
power up sequencing of complex high power systems.  The controller also includes
safety  circuits  that  meet  domestic  and  international   specifications  and
technology to protect the controller from voltage spikes,  electrical  noise and
power  brownouts.  Additionally the controller  features high wattage  switching
power amplifiers, and networking circuitry for local area network and industrial
data networks.

    In  2001,  we  began   shipments  of  our  newest   controller,   the  Adept
SmartController.  Designed  to work with the Adept  SmartAmp  distributed  servo
control network,  SmartControllers offer reduced costs, the smallest form factor
in the industry,  and simplified  installation,  wiring, and support costs while
maintaining compliance with domestic and international safety specifications.

PROCESS KNOWLEDGE PRODUCTS

    Assembly Information  Manager, or AIM software,  simplifies the integration,
programming and operation of automation  workcells and lines.  AIM  accomplishes
this goal by  providing  a formal  method  for  capturing  application  specific
process knowledge and then allowing users lacking advanced programming expertise
to use this embedded knowledge to accomplish a specific task.

    AIM simplifies the  implementation  of intelligent  automation  workcells by
combining  a point  and  click  graphical  user  interface  with  an  icon-based
programming method that does not require advanced computer  programming  skills.
This method combines  task-level  statements with a high performance,  real-time
database and a structure for representing process knowledge.

    The AIM task level  statements allow the developer to specify at a very high
level what  operations  the workcell is to perform,  such as "insert a component
into a socket  using  vision to correct  for  irregularities".  This  command is
automatically  coupled  with  data  contained  in the  real-time  database  that
specifies the physical aspects of the workcell,  such as the location of a part.
The  information  contained in the databases can be created or downloaded from a
computer or simulation system at any time. Finally, the AIM system automatically
invokes the  routines  that  contain the process  knowledge  and dictate how the
specified  operation  will be  performed.  In this way, an AIM  workcell  can be
programmed by a person who understands as few as ten process actions rather than
hundreds of programming instructions or thousands of lines of conventional code.

    We sell several application specific versions of AIM, including  MotionWare,
which  addresses  motion  applications  such as  those  requiring  sophisticated
conveyor  tracking,  and VisionWare,  which simplifies the use of vision in both
guidance and  inspection  applications,  as well as other packages which address
dispensing,  packaging,

                                       6
<PAGE>

flexible  part feeding,  semiconductor  wafer  handling and precision  photonics
bonding operations. In addition, end users and system integrators,  many of whom
have  developed  their own AIM  application-specific  packages,  can add process
knowledge.  AIM can be accessed via the Windows 98, 2000,  and NT  environments.
AIM programs are written in the V+ language.

SYSTEM DESIGN SOFTWARE

    Adept provides  simulation  tools to help system  integrators  and end users
both  design  automation  systems  and  evaluate  product  designs  for  ease of
manufacture.  These tools are  developed by our SILMA  division,  a developer of
simulation  software.  SILMA's  products  allow  machines to be modeled  with 3D
graphics and then animated in response to software control programs.  Mechanisms
can be defined graphically and the mathematics  necessary to animate them, known
as kinematic  models,  are generated  automatically.  Dynamics of mechanisms can
also be modeled,  which enables machine cycle times to be accurately  predicted.
SILMA products can either create new computer aided design, or CAD, geometry for
simulations,   import  CAD  models  from  standard  libraries  of  machines  and
peripheral  devices,  or import models  directly from common CAD systems.  SILMA
products are available on both PC and several workstation platforms.

    SILMA's  newest  product,  Production  PILOT,  consists of three modules for
assembly  automation  process design,  simulation,  and analysis,  built into an
easy-to-use, yet powerful, 3-D graphical simulation environment.

    PILOT Yield allows assembly  sequences to be analyzed for  interferences and
to be scored for ease of  automation.  Pursuant to a sublicense  agreement  with
Adept Japan,  which had entered into an agreement with Sony Corporation on March
24,  2000,  we  acquired  the  right  to embed  Sony  Corporation's  design  for
assembly/disassembly  capability,  or DAC,  product  in PILOT  Yield.  DAC is an
assembly/disassembly and cost-effectiveness rating methodology or scoring system
used by  designers  to measure and analyze the  effectiveness  of their  factory
assembly  designs.  It includes a scoring system that rates product  designs for
ease of assembly and disassembly.

    PILOT  Cell  allows  the  detailed  animation  of  a  workcell,  checks  for
collisions,  and predicts actual production cycle times to an accuracy of better
than 5%. End user  programs can be developed at a high level of  abstraction  in
PILOT Cell using our AIM software and later  optimized at a detailed level using
Adept Digital Workcell.

    PILOT Line allows  multiple cells on an assembly line to be linked  together
and provides  discrete event  simulation  tools for analyzing how material flows
through the line based on the cycle times of individual  workcells.  This allows
production   lines  to  be  balanced  to  optimize   throughput   and  eliminate
bottlenecks.  We have found that  balancing  lines which have not been optimized
can increase  throughput by 20% to 30%,  increasing return on investment by this
amount.

    The  CimStation  Inspection  product  simulates  the operation of coordinate
measurement  machines and  generates  programs  that would be tedious to program
manually given the complex inspection tasks these machines perform.

    Adept Digital  Workcell  allows  engineers to program a workcell with actual
production  software without the physical robot or cell hardware.  Adept Digital
Workcell increases  productivity by allowing the user to anticipate cycle times,
program logic  errors,  location  errors,  collision  errors and motor  overload
errors far  earlier in the  development  process.  In  addition,  Adept  Digital
Workcell allows users to quickly  generate  alternative  conceptual  layouts and
cycletime estimates for project proposals.

PLATFORMS

    In response to end customer  and  integrator  needs,  we now offer a growing
family of process ready platforms for the semiconductor  and photonics  markets.
These   platform   offerings   include   Flexible  Front  End  systems  for  the
semiconductor  tool market and Adept NanoCell for the photonics assembly market.
The NanoCell platform  integrates all automation  components on a single control
architecture  and unified  vibration  damped  mechanical  base.  Typical systems
include a material handling mechanism such as SmartModules or AdeptSix robot, MV
Controller,  AdeptVision VXL, up to 3 multi axis Adept NanoStages,  AIM software
and an integrated PC user interface.  We also are pursuing a similar strategy in
the semiconductor  wafer handling  front-end market,  where Adept Flexible Front
Ends typically include robots, contamination control, load ports, machine vision
and control software.

                                       7
<PAGE>

    Our OEMs,  integrators  and end users can quickly  configure  these standard
platforms to add specific manufacturing processes. Platform products represent a
further  extension of our RDA strategy.  For industries  where high volumes of a
similar basic machine are needed, an integrated platform eliminates the time and
cost of  designing  equipment  frames,  assembling  and  validating  control and
mechanism products and developing and debugging generic control software.

CUSTOMERS

    We sell our products to system integrators, end users and OEMs. End users of
our  products  include  a  broad  range  of   manufacturing   companies  in  the
semiconductor, wireless communications, photonics, food, automotive, appliances,
life sciences and  electronics  industries.  These companies use our products to
perform a wide variety of functions in assembly, material handling and precision
process  applications,  including  mechanical  assembly,  printed  circuit board
assembly,  dispensing and inspection. No customer accounted for more than 10% of
our revenues in any of the past three years.

SALES, DISTRIBUTION AND MARKETING

SALES AND DISTRIBUTION

    We market our products  through system  integrators,  our direct sales force
and OEMs.

    System  Integrators.  We ship a substantial  portion of our products through
system  integrators,  and we view our relationships with these  organizations as
important to our success. We have established relationships with over 300 system
integrators  worldwide that provide  expertise and process  knowledge for a wide
range of specific  applications.  These relationships are mutually  nonexclusive
and generally are not limited to specific geographical  territories.  In certain
international  markets,  the system  integrators  perform  marketing and support
functions directly.

    Direct Sales Force.  We employ a direct sales force which  directs its sales
efforts to end users to communicate the capabilities of our products and support
services and obtain up-to-date  information  regarding market requirements.  Our
sales force possesses expertise in automation solutions and advises end users on
alternative production line designs,  special application techniques,  equipment
sources and system  integrator  selection.  Our sales force works  closely  with
system  integrators  and OEMs to integrate our product line into their  systems,
provide  sales  leads to  certain  system  integrators  and  obtain  intelligent
automation  system quotes from system  integrators for end users. As of June 30,
2001, our North American sales organization included approximately 24 employees.
We have seven North American sales and customer  support  offices located in San
Jose,  California;  Southbury,  Connecticut;  Southfield,  Michigan;  Livermore,
California;  Charlotte, North Carolina;  Cincinnati, Ohio; and Dallas, Texas. As
of June 30, 2001, our international  sales organization  included  approximately
nine  persons  covering  Europe,  Singapore,  and  South  Korea.  We have  eight
international  sales and  customer  support  offices  located  in Europe and the
Pacific Rim.

    Some  of  our  larger   manufacturing   end  user  customers  have  in-house
engineering  departments  that are  comparable to a captive  system  integrator.
These  captive   engineering   groups  can  establish  a  corporate   integrator
relationship  with us that  offers  benefits  similar to those  provided  to our
system integrators.

    OEMs.   Our  OEM   customers   typically   purchase  one  standard   product
configuration,  which the OEM integrates with  additional  hardware and software
and sells under the OEM's label to other resellers and end users.

MARKETING

    Our  marketing  organization,  which  consisted of 30 persons as of June 30,
2001, supports our system integrators, direct sales force and OEM customers in a
variety of ways.  Our  product  management  group  works with end users,  system
integrators, corporate integrators and our sales engineers to continually gather
input on product  performance  and end user needs.  This  information is used to
enhance existing  products and to develop new products.  Our marketing  programs
group generates and qualifies new business through industry trade shows, various
direct  marketing  programs  such  as  direct  mail  and  telemarketing,  public
relations efforts,  internet marketing and advertising in industry  periodicals.
This marketing team is responsible for tracking  customers and prospects through

                                       8
<PAGE>

our marketing database. Our marketing group also publishes a document called the
MV Partner  catalog,  which lists software and hardware  components that we have
certified  as  compatible  with our product  line.  We also expend  considerable
effort on the development of thorough  technical  documentation and user manuals
for  our  product  line,  and we  view  well-designed  manuals  as  critical  to
simplifying the installation, programming, use and maintenance of our products.

SERVICES AND SUPPORT

    Our service and support  organization,  which consisted of approximately 101
full-time  employees as of June 30, 2001,  is designed to support our  customers
from the design of our automation  line through ongoing support of the installed
system. This organization  included  approximately 45 consulting and application
engineers/programmers based in a number of our sales offices in the U.S., Europe
and Asia.  This team is experienced in applying our product line to solve a wide
array of application  issues and operates  toll-free  telephone support lines to
provide advice on issues such as software programming structure, layout problems
and system  installation.  End users and system  integrators can also hire these
experts on a  consulting  basis to help  resolve  new or  difficult  application
issues.

    We also maintain a team of instructors,  consisting of eight  individuals as
of June 30, 2001, who develop  training  courses on subjects  ranging from basic
system  maintenance to advanced  programming.  These courses are geared both for
manufacturing  engineers  who  design  and  implement  automation  lines and for
operators who operate and maintain  equipment once it is in production,  and are
taught in Adept offices and customer sites throughout the world.

    Our field service organization, which consisted of 48 persons as of June 30,
2001,  is  based in eight  service  centers  located  in San  Jose,  California;
Cincinnati,  Ohio; Massy, France;  Dortmund,  Germany;  Arezzo, Italy; Kanagawa,
Japan; Seoul, South Korea and Singapore.  In addition, we have service resources
located inside some key customers' facilities. Our field-based service engineers
maintain and repair our products at the end user's  facilities.  Personnel based
at these  service  centers  also  provide  advice to  customers  on spare parts,
product upgrades and preventative maintenance.

BACKLOG

    Our product  backlog at June 30, 2001 was  approximately  $10.5 million,  as
compared with approximately $20.9 million at June 30, 2000.

    We have  experienced  a  significant  decline in orders  during the last two
quarters  of fiscal  year  2001,  reflecting  substantial  excess  manufacturing
capacity  across most of the industries we serve.  In addition,  our backlog has
historically  been  booked late in the  quarter  and  shipped  primarily  in the
following quarter. Both the combination of a significant decline in activity due
to our customer's  excess capacity status and timing of bookings  contributed to
the change in backlog at June 30, 2001 as compared to June 30, 2000.

    Increasingly  our business is characterized by short-term order and shipment
schedules.  Because  orders  constituting  our  current  backlog  are subject to
changes  in  delivery  schedules  and in  certain  instances  may be  subject to
cancellation  without  significant  penalty to the customer,  our backlog at any
date may not be indicative of demand for our products or actual net revenues for
any period in the future.

RESEARCH AND DEVELOPMENT

    Our  research  and  development   efforts  are  focused  on  the  design  of
intelligent  automation  products,  which  address the  challenges of designing,
implementing, installing, operating and modifying automated production lines. We
intend to focus our research and  development  efforts on the  development of an
integrated  product  line which  further  implements  our RDA approach and which
reduces cost, enhances performance and improves ease of use.

    We have devoted,  and intend to devote in the future, a significant  portion
of our resources to research and development  programs.  As of June 30, 2001, we
had 147 persons engaged in research,  development and engineering. Our research,
development and engineering  expenses were approximately $22.7 million for 2001,

                                       9
<PAGE>

$14.6 million for 2000 and $11.6 million for 1999 and  represented  22.7% of net
revenues for 2001, 14.7% for 2000 and 13.3% for 1999.

MANUFACTURING

    Our manufacturing  activities  include the selective  assembly,  testing and
configuration of our products.  We believe that by performing these  operations,
we can better ensure the quality and  performance of our products.  We outsource
low value added manufacturing operations,  including standard and build-to-print
fabricated  parts such as  machinery,  sheet  metal  fabrication  and  assembled
printed circuit boards. We also outsource some robot  mechanisms.  The purchased
robot  mechanisms  are  tested  to  meet  defined  quality  standards  and  then
configured into complete  products which are tested again before shipment to the
customer.   This   strategy   enables  us  to  leverage   product   development,
manufacturing  and management  resources  while  retaining  greater control over
product  delivery,  final  product  configuration  and the timing of new product
introductions, all of which are critical to meeting customer expectations.

    Our manufacturing organization has expertise in mechanical,  electrical, and
software assembly and testing.  Because outstanding quality and reliability over
the life of our products are key to customer  satisfaction and customers' repeat
purchases of automation products,  we believe our quality plans and organization
are  a  key  part  of  our  business  strategy.  Our  manufacturing  engineering
organization  develops  detailed  instructions  for all  manufacturing  and test
operations.  These instructions are established in writing,  implemented through
training of the manufacturing  workforce and monitored to assure compliance.  In
addition,  our manufacturing  organization works closely with vendors to develop
instructions and to remedy quality problems if they arise.

    In February 2000, we were awarded ISO 9002  certification  for our corporate
San Jose location from TUV Rheinland of North America,  Inc. The ISO 9000 series
standards are internationally  recognized quality management standards developed
by  the  International   Organization  for   Standardization   (ISO).  ISO  9002
registration focuses on quality system requirements for a company's  production,
delivery and servicing of products and services around the world.

COMPETITION

    Our principal competition in the photonics industry for high precision micro
positioners are Newport  Corporation,  Axsys, Melles Griot Inc.,  Aerotech,  and
Polytec PI, Inc.  Historically,  these companies have primarily  marketed to the
research community to supply positioners for use in laboratory environments.  We
also compete with Newport  Corporation and various automation solution providers
to deliver semi-automatic and fully automatic  manufacturing platforms for fiber
optic component assembly.  This market is in its early stages of development and
is changing  rapidly;  therefore,  new competitors could emerge with alternative
processes and solutions.

    The market for intelligent  automation  products is highly  competitive.  We
compete with a number of robot  companies,  motion  control  companies,  machine
vision companies and simulation software  companies.  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.

    Our principal  competitors in the assembly robot and linear modules  markets
include   subsidiaries  of  Japanese  companies,   including  Fanuc  Ltd,  Seiko
Instruments,  Yamaha Corporation, Denso Corporation and Intelligent Actuator. We
also compete with a narrow group of European companies, principally Robert Bosch
GmbH,  and some  divisions of Parker  Hannifin.  In the material  handling robot
market, we compete with the above companies,  as well as manufacturers of 6-axis
robots including Motoman, Kawasaki Robotics, Inc., Reis Robotics, Kuka Robotics,
CRS Robotics Corporation and Asea Brown Boveri.

    Our principal  competition in the  semiconductor  atmospheric wafer handling
and  contamination  control  market  comes from  Asyst  Technologies,  Inc.  The
majority of Asyst's  revenue  comes from  adaptive  wafer  handling and transfer
devices  sold to end  users.  They have been the  leader in wafer  handling  and
transfer and isolation  technology  in the  semiconductor  industry.  Additional
competitors in the semiconductor  robot market are Brooks  Automation,  Inc. and
Equip, a division of PRI Automation, Inc.

                                       10
<PAGE>

    Our principal  competitors  in the market for motion  control system 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  Israel-based  company  which  sells  mostly  to  major
automotive  manufacturers,  and Deneb  Robotics,  Inc., a subsidiary of Dassault
Systemes.  In the machine vision market, our primary  competition is from Cognex
Corporation.

INTELLECTUAL PROPERTY

    We primarily  pursue  patent,  trademark  and copyright  protection  for our
technology  and  products.  We currently  hold eight  patents and three  pending
patent  applications in the United States and two patents and one pending patent
application outside of the United States. There can be no assurance that patents
will be issued  from any of these  pending  applications  or that any  claims in
existing  patents,  or  allowed  from  pending  patent  applications,   will  be
sufficiently broad to protect our technology.

ITEM 2. PROPERTIES

    Our  headquarters and principal  research and development and  manufacturing
facilities  are located in a 92,000  square foot  building we lease in San Jose,
California.  The lease expires in December 2003 and provides for lease  payments
of approximately $2.0 million in calendar year 2001 and $2.1 million in calendar
year 2002. We lease an additional  10,417 square feet in an adjacent building in
San Jose for our SILMA division. The lease expires in December 2003 and provides
for lease payments of  approximately  $233,000 in calendar year 2002. We lease a
12,000  square foot facility in Santa  Barbara,  California  for our  NanoMotion
operations,  which  commenced on June 1, 2000. The lease expires in May 2005 and
provides for lease payments of approximately  $220,000 in calendar year 2002. We
lease a 17,000 square foot facility in Tucson, Arizona, which commenced in April
28, 2000.  The lease  expires in April 2005 and  provides for lease  payments of
approximately  $137,000  in  calendar  year 2002.  We also  lease a facility  in
Livermore,  California  consisting  of 13,000  square feet that  houses  certain
research  and  development  activities  and  exercised  our  option  to lease an
additional  13,000 square feet adjacent to the current  facility in August 1999.
This  lease  expires  in  October  2003  and  provides  for  lease  payments  of
approximately $321,000 in calendar year 2002. We also lease a 75,000 square foot
facility  in  Livermore,   California  for  certain   research  and  development
activities,  which  commenced  in  March,  2001,  with an  option  to  lease  an
additional 145,000 square foot location.  The lease expires in 2011 and provides
for lease payments of $1.3 million in 2002 with a four percent  annual  increase
thereafter.  We also lease a 10,500 square foot facility in Quebec City,  Canada
for certain machine vision sales, research and development activities. The lease
expires in 2009 and  provides  for lease  payments of  approximately  $50,000 in
2002. We also lease facilities for sales and/or customer  training in Southbury,
Connecticut;  Southfield, Michigan; Charlotte, North Carolina; Cincinnati, Ohio;
Dallas,  Texas; Massy,  France;  Dortmund and Munich,  Germany;  Arezzo,  Italy;
Kanagawa, Japan (through our joint venture);  Kenilworth, United Kingdom; Seoul,
South Korea; Singapore; and Cerdanyola, Spain.

ITEM 3. LEGAL PROCEEDINGS

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

    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 Mr. Lemelson which refer to Mr.  Lemelson's
patent  portfolio  and offer the end user a license to the  particular  patents.
Some of these end users have notified us that they may seek indemnification from
us for any damages or expenses resulting from this matter.

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

    Not Applicable.

                                       11
<PAGE>

                      EXECUTIVE OFFICERS OF THE REGISTRANT

    Adept's executive officers are:

<TABLE>
<CAPTION>
              NAME                      AGE                                    POSITION
              ----                      ---                                    --------
<S>                                      <C>
Brian R. Carlisle                        50         Chairman of the Board of Directors and Chief
                                                    Executive Officer
Bruce E. Shimano                         52         Vice President, Research and Development, Secretary
                                                    and Director
John W. Schwartz                         46         Treasurer, Director of Finance and Chief Accounting Officer
Marcy R. Alstott                         44         Vice President, Operations
Michael W. Overby                        44         Vice President, Finance and Chief Financial Officer
</TABLE>

    Brian R. Carlisle has served as Adept's Chief Executive Officer and Chairman
of the Board of Directors since he co-founded Adept in June 1983. From June 1980
to June  1983,  he served as  General  Manager  of the West  Coast  Division  of
Unimation,  Inc., a manufacturer of industrial robots,  where he was responsible
for new product  strategy  and  development  for  Unimation's  electric  robots,
control systems,  sensing systems and other robotics applications.  Mr. Carlisle
received  B.S.  and  M.S.  degrees  in  Mechanical   Engineering  from  Stanford
University.   Mr.  Carlisle  was  President  of  the  U.S.  Robotic   Industries
Association for 3 years, is currently a member of the Board of Directors for the
National  Coalition for Manufacturing  Sciences,  served as General Chair in May
2000 for the IEEE International Conference on Robotics and Automation, and is on
the Board of the National Coalition for Advanced Manufacturing.

    Bruce E. Shimano has served as our Vice President, Research and Development,
Secretary and a director since he co-founded  Adept in June 1983.  Prior to that
time, he was Director of Software Development at Unimation. Mr. Shimano received
B.S., M.S. and Ph.D. degrees in Mechanical Engineering from Stanford University.

    John W. Schwartz  joined Adept in December 2000 as Treasurer and Director of
Finance and has served as Adept's  Chief  Accounting  Officer  since April 2001.
From  January  2000 to  December  2000,  Mr.  Schwartz  was self  employed as an
attorney providing merger and acquisition and corporate  transactional services.
From  1996 to 2000,  he was a Senior  Manager  at  Ernst & Young  LLP  providing
corporate tax consulting and tax controversy  representation.  From 1990 to 1996
he founded and managed a business law practice.  Mr. Schwartz is an attorney and
Certified Public  Accountant.  He holds a B.S. in Business  Administration  from
University of Missouri-St.  Louis, a Juris  Doctorate from St. Louis  University
School of Law, and a LL.M.-Taxation  degree from Washington University School of
Law.

    Marcy R. Alstott joined Adept in March 1998 as Vice President of Operations.
From  August  1995 to  March  1998,  Ms.  Alstott  served  as  Program  Director
responsible for switching product development at 3Com Corporation,  a networking
company.  Ms.  Alstott  has  a  B.S.  in  Mechanical   Engineering  from  Purdue
University,  an M.S. in Mechanical  Engineering from Stanford  University and an
M.B.A. from the University of Santa Clara.

    Michael W. Overby has served as Adept's Vice  President of Finance and Chief
Financial Officer since March 2000. From December 1999 to March 2000, Mr. Overby
held the position of Corporate  Controller at Adept. Prior to joining Adept, Mr.
Overby was the financial executive for DG Systems, a leading provider of digital
distribution services to the broadcast  advertising industry.  From 1996 to 1998
he was  Corporate  Controller  and  Director of  Information  Systems at Inprise
Corporation,  formerly Borland,  a public software  company.  Mr. Overby holds a
B.S. in Business Administration from California Polytechnic State University.

                                       12
<PAGE>

                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS

MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED SHAREHOLDER MATTERS

    Our common  stock is traded on the Nasdaq  National  Market under the symbol
"ADTK".  The following  table  reflects the range of high and low sale prices as
reported on the Nasdaq National Market for the quarters identified below:

<TABLE>
<CAPTION>
                                                          THREE MONTHS ENDED
                JUN. 30,      MAR. 31,     DEC. 31,     SEP. 30,     JUN. 30,     MAR. 31,     DEC. 31,      SEP. 30,
                  2001          2001         2000         2000         2000         2000         1999          1999
                  ----          ----         ----         ----         ----         ----         ----          ----
<S>             <C>          <C>           <C>           <C>         <C>          <C>          <C>           <C>
High            $ 14.50      $ 31.38       $ 53.25       $ 58.19     $ 47.50      $ 16.69      $ 7.97        $ 11.25
Low             $  7.45      $ 11.00       $ 12.38       $ 21.50     $  8.75      $  6.00      $ 5.44        $  6.13
</TABLE>

    At June 30, 2001, there were approximately 264 shareholders of record.

    To date, we have neither  declared nor paid cash  dividends on shares of our
common stock. We currently intend to retain all future earnings for our business
and  do  not  anticipate  paying  cash  dividends  on our  common  stock  in the
foreseeable future.


RECENT SALES OF UNREGISTERED SECURITIES

    In connection with our acquisition of HexaVision  Technologies  Inc.,  Adept
issued  116,000  shares  of its  common  stock  to the  former  shareholders  of
HexaVision  Technologies  Inc.,  in July  2001  pursuant  to an  exemption  from
registration under Regulation S under the Securities Act of 1933.

                                       13
<PAGE>

ITEM 6. SELECTED FINANCIAL DATA

    The following selected financial data should be read in conjunction with the
Consolidated Financial Statements and Notes thereto and "Management's Discussion
and Analysis of Financial Condition and Results of Operations"  included in this
Form 10-K.  The  historical  results are not  necessarily  indicative  of future
results.   On  July  16,  1999,  we  completed  the   acquisition  of  BYE/Oasis
Engineering,  Inc. in a pooling of interests transaction. The selected financial
data prior to June 30, 2000 has been restated to include the historical  results
of BYE/Oasis  Engineering,  Inc.  Fiscal 2001 results also include the financial
results of Pensar, NanoMotion and HexaVision subsequent to their acquisitions on
April 28, 2000, May 31, 2000 and July 21, 2000, respectively.
<TABLE>
<CAPTION>
                                                                          YEARS ENDED JUNE 30,
                                                       -----------------------------------------------------------
                                                          2001        2000         1999         1998        1997
                                                          ----        ----         ----         ----        ----
RESULTS OF OPERATIONS:                                             (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                                    <C>          <C>          <C>         <C>         <C>
Net revenues .......................................   $ 100,313    $  99,212    $  87,374   $ 105,440   $  88,511
Cost of revenues ...................................      65,303       56,173       47,902      60,841      52,017
                                                       ---------    ---------    ---------   ---------   ---------
      Gross margin .................................      35,010       43,039       39,472      44,599      36,494
                                                       ---------    ---------    ---------   ---------   ---------
Operating expenses:
      Research, development and engineering ........      22,727       14,629       11,591      11,844       9,738
      Selling, general and administrative ..........      36,002       29,503       24,676      26,890      22,758
      Merger-related charges (1) ...................        --            988         --          --          --
      Restructuring and other non-recurring charges         --           --           --         2,756        --
      Amortization of goodwill and other intangibles       6,818          685         --          --          --
                                                       ---------    ---------    ---------   ---------   ---------
Total operating expenses ...........................      65,547       45,805       36,267      41,490      32,496
                                                       ---------    ---------    ---------   ---------   ---------
Operating income (loss) ............................     (30,537)      (2,766)       3,205       3,109       3,998
Interest income, net ...............................         733          746          926         971         693
                                                       ---------    ---------    ---------   ---------   ---------
Income (loss) before provision for (benefit from)
   income taxes ....................................     (29,804)      (2,020)       4,131       4,080       4,691

Provision for (benefit from) income taxes ..........       5,396         (593)       1,620       1,819       1,534
                                                       ---------    ---------    ---------   ---------   ---------
Net income (loss) ..................................   $ (35,200)   $  (1,427)   $   2,511   $   2,261   $   3,157
                                                       =========    =========    =========   =========   =========


Net income (loss) per share:(2)
     Basic .........................................   $   (3.02)   $   (0.15)   $    0.27   $    0.25   $    0.36
                                                       =========    =========    =========   =========   =========
     Diluted .......................................   $   (3.02)   $   (0.15)   $    0.26   $    0.23   $    0.34
                                                       =========    =========    =========   =========   =========

Number of shares used in computing per share
   amounts:(2)
     Basic .........................................      11,637        9,774        9,302       9,154       8,739
                                                       =========    =========    =========   =========   =========
     Diluted .......................................      11,637        9,774        9,484       9,689       9,159
                                                       =========    =========    =========   =========   =========
</TABLE>


<TABLE>
<CAPTION>
                                                                     AS OF JUNE 30,
                                                    ------------------------------------------------
                                                     2001      2000       1999      1998       1997
                                                     ----      ----       ----      ----       ----
                                                                   (IN THOUSANDS)
BALANCE SHEET DATA:
<S>                                                 <C>       <C>       <C>        <C>       <C>
Cash, cash equivalents and short-term investments   $21,500   $20,437   $ 27,016   $20,939   $18,642
                                                    =======   =======   ========   =======   =======
Working capital .................................    39,784    46,593     47,614    45,928    39,703
                                                    =======   =======   ========   =======   =======
Total assets ....................................    95,573    93,523     71,677    70,310    61,480
                                                    =======   =======   ========   =======   =======
Long-term liabilities ...........................     1,284     1,222       --          78       109
                                                    =======   =======   ========   =======   =======
Total shareholders' equity ......................    71,482    70,728     55,186    53,399    48,114
                                                    =======   =======   ========   =======   =======
<FN>
----------------
(1)  In July 1999, we incurred  charges of $988,000  relating to the acquisition
     of BYE/OASIS.

(2)  See  Notes 1 and 8 of  Notes to  Consolidated  Financial  Statements  for a
     discussion of the computation of net income (loss) per share.
</FN>
</TABLE>

                                       14
<PAGE>

QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

We operate and report financial results ending on the last Saturday of a 13 week
period for each of our first three fiscal quarters and at June 30 for our fiscal
year end. For  convenience,  we have indicated in this annual report on Form 10K
our fiscal quarters end on March 31, December 31 and September 30.

<TABLE>
<CAPTION>
                                                                    THREE MONTHS ENDED,
                                                  ----------------------------------------------------------
                                                    JUN. 30,      MAR. 31,      DEC. 31,        SEP. 30,
                                                     2001           2001          2000            2000
                                                     ----           ----          ----            ----
                                                           (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                               <C>            <C>            <C>            <C>
Net revenues ..................................   $   20,745     $   23,913     $   28,034     $   27,621
Cost of revenues ..............................       20,845         14,393         15,282         14,783
                                                  ----------     ----------     ----------     ----------
Gross margin (loss) ...........................         (100)         9,520         12,752         12,838
                                                  ----------     ----------     ----------     ----------
Operating expenses:
 Research, development and
  engineering .................................        7,671          5,182          5,008          4,866
 Selling, general and administrative ..........       10,498          9,297          8,371          7,836
 Merger-related charges (1) ...................         --             --             --             --
 Amortization of goodwill and
   other intangibles ..........................        1,798          2,077          1,518          1,425
                                                  ----------     ----------     ----------     ----------
Total operating expenses ......................       19,967         16,556         14,897         14,127
                                                  ----------     ----------     ----------     ----------
Operating income (loss) .......................      (20,067)        (7,036)        (2,145)        (1,289)
Interest income, net ..........................          313            165             66            189
                                                  ----------     ----------     ----------     ----------
Income (loss) before provision for
     income taxes .............................      (19,754)        (6,871)        (2,079)        (1,100)
Provision for (benefit from) income taxes .....          568          4,828            385           (385)
                                                                 ----------     ----------     ----------
Net income (loss) .............................   $  (20,322)    $  (11,699)    $   (2,464)    $     (715)
                                                  ==========     ==========     ==========     ==========
Net income (loss) per share:
 Basic ........................................   $    (1.55)    $     (.99)    $     (.23)    $     (.07)
                                                  ==========     ==========     ==========     ==========
 Diluted ......................................   $    (1.55)    $     (.99)    $     (.23)    $     (.07)
                                                  ==========     ==========     ==========     ==========
Number of shares used in computing
   per share amounts:
 Basic ........................................       13,101         11,795         10,886         10,743
                                                  ==========     ==========     ==========     ==========
 Diluted ......................................       13,101         11,795         10,886         10,743
                                                  ==========     ==========     ==========     ==========
As a percentage of net revenues:
Net revenues ..................................        100.0%         100.0%         100.0%         100.0%
Cost of revenues ..............................        100.5           60.2           54.5           53.5
                                                  ----------     ----------     ----------     ----------
Gross margin ..................................         (0.5)          39.8           45.5           46.5
                                                  ----------     ----------     ----------     ----------
Operating expenses:
 Research, development and engineering ........         37.0           21.6           17.9           17.6
 Selling, general and administrative ..........         50.6           38.9           29.9           28.4
 Merger-related charges (1) ...................         --             --             --             --
 Amortization of goodwill and other intangibles          8.6            8.7            5.4            5.2
                                                  ----------     ----------     ----------     ----------
Total operating expenses ......................         96.2           69.2           53.2           51.2
                                                  ----------     ----------     ----------     ----------
Operating income (loss) .......................        (96.7)         (29.4)          (7.7)          (4.7)
Interest income, net ..........................          1.5             .7             .3             .7
                                                  ----------     ----------     ----------     ----------
Income (loss) before provision for income taxes        (95.2)         (28.7)          (7.4)          (4.0)
Provision for (benefit from) income taxes .....          2.8           20.2            1.4           (1.4)
                                                                 ----------     ----------     ----------
Net income (loss) .............................        (98.0)%        (48.9)%         (8.8)%         (2.6)%
                                                  ==========     ==========     ==========     ==========
</TABLE>

<TABLE>
<CAPTION>
                                                                     THREE MONTHS ENDED,
                                                  -------------------------------------------------------
                                                      JUN. 30,      MAR. 31,      DEC. 31,      SEP. 30,
                                                        2000          2000          1999          1999
                                                        ----          ----          ----          ----
                                                            (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                                  <C>           <C>           <C>           <C>
Net revenues ..................................      $   28,058    $   26,253    $   24,267    $   20,634
Cost of revenues ..............................          15,389        14,327        13,710        12,747
                                                     ----------    ----------    ----------    ----------
Gross margin (loss) ...........................          12,669        11,926        10,557         7,887
                                                     ----------    ----------    ----------    ----------
Operating expenses:
 Research, development and
  engineering .................................           4,346         3,708         3,116         3,459
 Selling, general and administrative ..........           7,405         7,450         7,391         7,257
 Merger-related charges (1) ...................            --            --            --             988
 Amortization of goodwill and
   other intangibles ..........................             685          --            --            --
                                                     ----------    ----------    ----------    ----------
Total operating expenses ......................          12,436        11,158        10,507        11,704
                                                     ----------    ----------    ----------    ----------
Operating income (loss) .......................             233           768            50        (3,817)
Interest income, net ..........................             115            80           242           309
                                                     ----------    ----------    ----------    ----------
Income (loss) before provision for
     income taxes .............................             348           848           292        (3,508)
Provision for (benefit from) income taxes .....              98           254           117        (1,062)
                                                     ----------    ----------    ----------    ----------
Net income (loss) .............................      $      250    $      594    $      175    $   (2,446)
                                                     ==========    ==========    ==========    ==========
Net income (loss) per share:
 Basic ........................................      $      .02    $      .06    $      .02    $     (.26)
                                                     ==========    ==========    ==========    ==========
 Diluted ......................................      $      .02    $      .06    $      .02    $     (.26)
                                                     ==========    ==========    ==========    ==========
Number of shares used in computing
   per share amounts:
 Basic ........................................          10,677         9,788         9,583         9,491
                                                     ==========    ==========    ==========    ==========
 Diluted ......................................          11,395        10,460         9,752         9,491
                                                     ==========    ==========    ==========    ==========
As a percentage of net revenues:
Net revenues ..................................           100.0%        100.0%        100.0%        100.0%
Cost of revenues ..............................            54.8          54.6          56.5          61.8
                                                     ----------    ----------    ----------    ----------
Gross margin ..................................            45.2          45.4          43.5          38.2
                                                     ----------    ----------    ----------    ----------
Operating expenses:
 Research, development and engineering ........            15.5          14.1          12.8          16.7
 Selling, general and administrative ..........            26.4          28.4          30.5          35.2
 Merger-related charges (1) ...................            --            --            --             4.8
 Amortization of goodwill and other intangibles             2.5          --            --            --
                                                     ----------    ----------    ----------    ----------
Total operating expenses ......................            44.4          42.5          43.3          56.7
                                                     ----------    ----------    ----------    ----------
Operating income (loss) .......................              .8           2.9            .2         (18.5)
Interest income, net ..........................              .4            .3           1.0           1.5
                                                     ----------    ----------    ----------    ----------
Income (loss) before provision for income taxes             1.2           3.2           1.2         (17.0)
Provision for (benefit from) income taxes .....              .3            .9            .5          (5.1)
                                                     ----------    ----------    ----------    ----------
Net income (loss) .............................              .9%          2.3%           .7%        (11.9)%
                                                     ==========    ==========    ==========    ==========
<FN>

(1)  In July 1999, we incurred  charges of $988,000  relating to the acquisition
     of BYE/OASIS.
</FN>
</TABLE>

                                       15
<PAGE>

ITEM 7. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

OVERVIEW

    We provide intelligent  production  automation solutions to our customers in
many industries including the semiconductor, wireless communications, photonics,
food,  automotive,  life  sciences and  electronics  industries.  We utilize our
comprehensive  portfolio of high precision mechanical components and application
development  software to deliver  automation  solutions that meet our customer's
increasingly  complex  manufacturing  requirements.  We offer  our  customers  a
comprehensive  and tailored  automation  solution that we call Rapid  Deployment
Automation  that  reduces  the time  and cost to  design,  engineer  and  launch
products into high-volume production.  Our products currently include simulation
software,  machine vision systems,  machine controllers for robot mechanisms and
other  flexible  automation  equipment,  and a family  of  mechanisms  including
robots, linear modules, vision-based flexible part feeders, as well as a line of
Cartesian scalable robots targeted for the electronics and assembly applications
markets. In recent years, we have expanded our robot product lines and developed
advanced software and sensing technologies that have enabled robots to perform a
wider range of functions.  We recently  announced a new line of robots expressly
designed  for  use in the  semiconductor  fabrication  industry.  We  have  also
expanded  our  channel of system  integrators  and our  international  sales and
marketing  operations.  As a  result  of  these  developments,  the  nature  and
composition  of our  revenues  have changed  over time.  Specifically,  software
license and service  revenues,  although still  relatively  insignificant,  have
increased as a percentage of total revenues in recent periods, and international
sales comprise between approximately 30%-40% of revenues on any given quarter.

    We market  and sell our  products  worldwide  through  more than 300  system
integrators,  our direct sales force and OEMs.  System  integrators and OEMs add
application-specific  hardware  and  software  to our  products,  enabling us to
provide  solutions to a diversified  industry base,  including the  electronics,
communications,  semiconductor,  appliances, pharmaceutical, food processing and
automotive  components  industries.  Due to a  worldwide  slowdown in disk drive
markets and to a lesser extent the communications and semiconductor markets, our
net revenues have declined in four of the last six fiscal quarters.

    This   discussion   summarizes  the   significant   factors   affecting  our
consolidated  operating results,  financial  condition,  liquidity and cash flow
during the  three-year  period ended June 30, 2001,  referred to as fiscal 2001,
2000,  and 1999.  Unless  otherwise  indicated,  references  to any year in this
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operation refer to our fiscal year ended June 30. This discussion should be read
with the consolidated  financial  statements and financial  statement  footnotes
included in this Annual Report on Form 10-K.

    During  the  three-year  period  ended  June  30,  2001,  we  acquired  four
companies: HexaVision Technologies, Inc. NanoMotion Incorporated, Pensar-Tucson,
Inc. and BYE/OASIS. These acquisitions are described below.

HEXAVISION

    On July 21, 2000, we completed the  acquisition  of HexaVision  Technologies
Inc., now named Adept Technology Canada Co., a Canadian corporation.  HexaVision
is a machine vision  research and  development  company.  In connection with the
acquisition,  we paid $5.5 million in cash, which includes  transaction costs of
$0.4  million,  and issued  shares of our common  stock to the  shareholders  of
HexaVision with a value of $1.1 million. On July 21, 2001, pursuant to the terms
of the share purchase  agreement  relating to the acquisition of HexaVision,  we
issued  116,000  shares  of our  common  stock  to the  former  shareholders  of
HexaVision with a value of $1.1 million,  made cash payments totaling $3,500 and
released $313,000 in cash from an escrow account. In addition,  a second payment
of  approximately  $1.3  million in cash is  payable  on the second  anniversary
closing,  contingent upon the achievement of certain  operational  milestones by
HexaVision.  We have set aside restricted cash in the amount of $1.6 million for
future  contingent  payments  including the payments made on July 21, 2001,  and
such  restricted  cash is included in Other  Assets on the June 30, 2001 balance
sheet.  These contingent cash payments and share issuances will be accounted for
as additional  purchase price when the contingencies are resolved.  Any payments
made and shares issued will be allocated to goodwill.  We have accounted for the
acquisition  under the purchase method. We believe the acquisition of HexaVision
will  enhance our machine  vision  products for all markets and  facilitate  our

                                       16
<PAGE>

entry into the PC-based  machine vision  market.  HexaVision's  core  technology
incorporates  techniques  to  achieve  accuracies  up to 1/40th of a pixel  with
machine  vision  measurement  algorithms  that can increase our  performance  in
critical  and   demanding   applications   such  as  vision   servoing  for  the
microelectrical, fiber optic, semiconductor, metrology and photonics industries.

NANOMOTION

    On May 31, 2000, we completed the acquisition of NanoMotion Incorporated,  a
California  corporation.  NanoMotion is a manufacturer  of ultra-high  precision
positioning and alignment devices. In connection with the acquisition, we issued
600,000 shares of our common stock to the  shareholders of NanoMotion  valued at
$21 per share,  which was the fair market  value of our common  stock at May 31,
2000.  The  acquisition  was  accounted  for as a purchase.  We believe that our
acquisition  of  NanoMotion  will  enhance  our  ability  to  offer  intelligent
automation  solutions  to  the  microelectrical,   fiber  optic,  semiconductor,
metrology, and precision machining and photonics industries.

PENSAR

    On April 28, 2000, we completed the acquisition of  Pensar-Tucson,  Inc., an
Arizona  corporation.   Pensar  is  a  design  and  engineering  company,  which
integrates factory automation  systems.  In connection with the acquisition,  we
issued 100,000 shares of our common stock to the  shareholders  of Pensar valued
at $11.75  per share,  which was the fair  market  value of our common  stock at
April 28, 2000. In addition,  we paid  $3,000,000 in cash,  resulting in a total
purchase price of $4.2 million. The acquisition was accounted for as a purchase.
We believe  that our  acquisition  of Pensar  will  enhance our ability to offer
standard  solutions  for  microelectrical,  fiber optic and  photonics  assembly
automation.

BYE/OASIS

    On July 16, 1999, we completed  the  acquisition  of BYE/OASIS  Engineering,
Inc.,  a  Texas  corporation.  BYE/OASIS  is  a  manufacturer  of  environmental
filtering and control systems,  which create a clean room  environment  inside a
semiconductor manufacturing machine or tool, and wafer cassette handling devices
for the microelectronics industry. In connection with the acquisition, we issued
720,008  shares  of our  common  stock  to the  shareholders  of  BYE/OASIS.  In
addition, we assumed outstanding options to acquire BYE/OASIS shares, which were
converted  into  options to acquire  185,361  shares of our  common  stock.  The
acquisition  constituted a tax-free  reorganization  under Section 368(a) of the
Internal  Revenue Code of 1986.  The  acquisition  was  accounted  for using the
pooling of interests method,  and,  accordingly,  all prior period  consolidated
financial  statements  have been  restated  to include the  combined  results of
operations, financial position and cash flows of BYE/OASIS. Prior to the merger,
BYE/  OASIS's  fiscal year ended on  September  30. In  recording  the  business
combination, BYE/OASIS's prior period financial statements have been restated to
conform to our fiscal year. We believe this acquisition will broaden our factory
automation offerings in the wafer and microelectronic manufacturing industry and
enhance our experience and marketing and service infrastructure.

RESULTS OF OPERATIONS

Comparison of 2001 to 2000

    Net Revenues.  Our net revenues  increased by 1.1% to $100.3 million in 2001
from $99.2  million in 2000,  with all of the growth  occurring in the first two
quarters.  During the last two  quarters  of the year,  we  experienced  reduced
demand in our core  North  American  markets  of  Electronics  & Mobile  Phones,
Semiconductor,  Photonics and  Automotive as well as some  softening in our base
business in Europe. We believe that substantial  excess  manufacturing  capacity
across most of the industries we serve  contributed to this decline in activity.
We expect  this  reduction  in demand will  adversely  affect our sales in these
markets  over at least the next  several  quarters.  Although  we have  recently
experienced  decreased  demand in  Photonics,  in general,  we continued to make
progress and revenues  from this  industry  increased to 8% of total  revenue in
fiscal year 2001, as compared to less than 1% of revenue in fiscal 2000.

                                       17
<PAGE>

    Our domestic  sales were $63.9  million in 2001 compared to $54.3 million in
2000,  an  increase  of 17.6%.  The  growth in  domestic  sales was  principally
attributable   to  increased  sales  to  customers  in  the  photonics  and  OEM
industries.

    Our international sales were $36.4 million in 2001 compared to $44.9 million
in 2000, a decrease of 18.9%.  The general economic  downturn has  significantly
affected our European markets.  This,  coupled with pricing pressures due to the
strength  of the U.S.  dollar  against the euro,  contributed  to lower sales in
2001. We may experience continued price pressure in European markets,  which may
have a negative effect on future revenues.

    Gross Margin.  Gross margin as a percentage of net revenue was 34.9% in 2001
compared  to 43.4% in 2000.  The  decrease  in gross  margin  percentage  is due
primarily to a $5.8 million inventory write-down,  which was attributable to the
rapid decline in sales we experienced during the last quarter of fiscal 2001 and
associated  lower forecasted  demand for fiscal 2002. In addition,  margins were
generally negatively impacted by a significant decline in revenue with customers
in our base business,  especially the semiconductor  industry, and significantly
reduced shipments in relation to a relatively fixed overhead cost structure.  We
expect to continue to experience fluctuations in our gross margin percentage due
to changes in availability of components,  changes in product  configuration and
changes in sales mix.

    Research,  Development and Engineering Expenses.  Research,  development and
engineering  expenses  increased  by  55.4% to  $22.7  million,  or 22.7% of net
revenues in 2001,  from $14.6  million,  or 14.7% of net  revenues in 2000.  The
increase for the period was attributable  primarily to increased personnel costs
as research,  development  and  engineering  headcount  increased 28% during the
first nine months of the year ending June 30, 2001 from June 30, 2000, with more
than half of these employees  being hired as a result of our three  acquisitions
during  calendar year 2000.  In addition,  facilities  expenses  increased by $1
million or 422% attributable to the addition of the HexaVision  facility,  Santa
Barbara  facility and the new Livermore  building  that was occupied  during the
year ended June 30, 2001.

    We spent much of fiscal 2001 in intense  product  development  advancing our
line of  controllers  and  integrating  the  products  and  technologies  of the
acquisitions  noted  previously,  and began  releasing new products based on the
technologies  resulting  from our  development  efforts  in the  March  and June
quarters.  These new products  include the Nanoline  microstages  for  photonics
assembly  and the  HexSight  and Adept AVI  vision  systems  for high  precision
assembly and material handling.  In addition,  we invested heavily in developing
new products for our base business  including  6-axis robots,  smaller and lower
cost Smart Series of  controllers  and Cartesian  robots with  integrated  power
amplifiers.  We also  developed  the  NanoCell,  a platform to  integrate  these
technologies,  and developed two key  processes  for photonics  assembly,  epoxy
bonding and laser welding.

    Over  the  past   several   years,   we  have  been   involved   in  several
federally-funded  consortiums,  which partially  offset some of our research and
development  expenses.  We completed the last of these funded  projects in early
2001. We do not  anticipate  entering into any such  consortiums  in fiscal year
2002.  Funding  from these  consortiums  were $49,000 and $309,000 for the years
ended June 30, 2001 and 2000, respectively.

    Selling,   General  and  Administrative   Expenses.   Selling,  general  and
administrative  expenses  increased  22.0%  to  $36.0  million  or  35.9% of net
revenues  in 2001 from  $29.5  million  or 29.7% of net  revenues  in 2000.  The
increased level of spending was primarily attributable to increased headcount of
15% from June 30, 2000 to June 30, 2001 and  compensation-related  expenses  and
additional costs from companies  acquired.  We expect that selling,  general and
administrative  expenses  will  decrease or remain  flat  through our efforts to
reduce expenses in response to the general decline in the industries we serve.

    Merger-Related  Charges.  There  were no  merger-related  charges  in  2001.
Merger-related  charges were  $988,000 in 2000  relating to the  acquisition  of
BYE/OASIS  and the  closure of  BYE/OASIS  facilities  in Texas.  Merger-related
expenses were $558,000,  expenses relating to the closure of facilities in Texas
were $195,000 and other non-recurring  expenses relating to the acquisition were
$235,000.

    Interest Income, Net. Interest income, net, in 2001 was $733,000 compared to
$746,000 in 2000,  with higher average  investable cash balances offset by lower
average yields.

                                       18
<PAGE>

    Provision for (benefit  from) Income Taxes.  Our effective tax rate for 2001
was 18% as compared to (29%) for 2000.  Our tax rate for 2001  differs  from the
federal  statutory  income  tax rate of 34%  primarily  due to the  increase  in
valuation  allowance to fully offset Adept's  deferred tax assets.  In 2000, our
tax rate differed from the federal  statutory rate of 34% primarily due to items
not deductible for income tax purposes.

    Derivative  Financial  Instruments.  Our  product  sales  are  predominantly
denominated in U.S. dollars.  However,  certain international operating expenses
are predominately paid in their respective local currency.  Our foreign currency
hedging program is used to hedge our exposure to foreign currency  exchange risk
on  local  international   operational  expenses  and  revenues.   Realized  and
unrealized gains and losses on forward currency  contracts that are effective as
hedges of assets and liabilities are recognized in income.  We recognized a gain
of $322,000  for the year ended June 30, 2001 and a loss of $50,000 for the year
ended June 30, 2000.  Realized and  unrealized  gains and losses on  instruments
that hedge firm  commitments are deferred and included in the measurement of the
subsequent  transaction;  however,  losses  are  deferred  only to the extent of
expected  gains on the future  commitment  at June 30,  2001.  We have  deferred
recognition  of a  transaction  loss of $62,000,  relating  to foreign  exchange
contracts treated as accounting hedges. We realized this transaction loss in the
first quarter of 2002.

Comparison of 2000 to 1999

    Net Revenues.  Our net revenues  increased by 13.5% to $99.2 million in 2000
from $87.4 million in 1999.  The increase in net revenues for 2000 over 1999 was
primarily due to strong demand in the semiconductor  and electronic  industries.
International  sales,  including  sales to Canada and export  sales,  were $44.9
million or 45.2% of net  revenues in 2000 as  compared  with $41.2  million,  or
47.2% of net revenues,  in 1999.  International revenue as a percentage of total
net revenues  decreased due to the addition of our semiconductor  business whose
revenue  was  derived   primarily  from  domestic  sources  in  2000.   Domestic
semiconductor  revenue was greater than our international  semiconductor revenue
causing  the total  international  revenue  as a  percent  of total  revenue  to
decline.

    Gross Margin.  Gross margin as a percentage of net revenue was 43.4% in 2000
compared to 45.2% in 1999. The decrease in gross margin percentage was primarily
attributable to the increase in operational and manufacturing  overhead expenses
related to supplier  changes during the first quarter of fiscal 2000 and general
increases in component costs.

    Research,  Development and Engineering Expenses.  Research,  development and
engineering  expenses  increased  by  26.2% to  $14.6  million,  or 14.7% of net
revenues in 2000,  from $11.6  million,  or 13.3% of net  revenues in 1999.  The
absolute  dollar  increase in expenses in 2000 was primarily due to increases in
payroll and related expenses of $2.0 million, increases in project and operating
expenses  which were $1.1  million,  partially  offset by decreased  spending in
outside services.  Research,  development and engineering  expenses in 2000 were
partially offset by approximately $309,000 of third party development funding as
compared with $681,000 of third party development funding in 1999.

    Selling,   General  and  Administrative   Expenses.   Selling,  general  and
administrative  expenses  increased  20.7%  to  $29.5  million  or  29.7% of net
revenues  in 2000 from  $24.7  million  or 28.2% of net  revenues  in 1999.  The
increased level of spending was primarily attributable to increases in corporate
administration  expenses  of $1.6  million  related to the  opening of new sales
offices,  increases  in payroll  and  related  expenses  of $4.0  million due to
increased headcount from acquisition activity,  and increases in travel expenses
of $446,000  associated  with  increased  sales  activity.  The  increases  were
partially  offset by  decreased  spending in outside  services  of $162,000  and
reduced spending in project supplies.

    Merger-Related  Charges.   Merger-related  charges  were  $988,000  in  2000
relating to the acquisition of BYE/OASIS and the closure of BYE/OASIS facilities
in Texas.  Merger-related  expenses  were  $558,000,  expenses  relating  to the
closure of facilities in Texas were $195,000,  and other non-recurring  expenses
relating to the acquisition were $235,000.

    Interest Income,  Net. Interest income, net in 2000 was $746,000 compared to
$926,000 in 1999.  The  decrease was  primarily as a result of a lower  interest
yield rate on investments in 2000 compared to 1999.

    Provision for (benefit  from) Income Taxes.  Our effective tax rate for 2000
was (29%) as compared to 39% for 1999.  Our tax rate for 2000  differed from the
federal  statutory income tax rate of 34% primarily due items not

                                       19
<PAGE>

deductible  for income tax  purposes.  In 1999,  our tax rate  differed from the
federal  statutory  rate of 34%  primarily  due to  future  foreign  losses  not
utilized for U.S.  federal and state tax purposes and foreign  taxes,  partially
offset by the benefits of federal and state tax credits.

IMPACT OF INFLATION

    The effect of inflation on our business and financial  position has not been
significant to date.

LIQUIDITY AND CAPITAL RESOURCES

    As of June 30, 2001, we had working capital of approximately  $39.8 million,
including $21.5 million in cash equivalents and short term investments.

    During  the year  ended  June 30,  2001,  cash and  short  term  investments
increased by approximately $1.1 million.  Net cash used in operating  activities
of  $19.3  million  was  primarily  attributable  to the net  loss  adjusted  by
depreciation,  amortization, increase in valuation allowance for deferred taxes,
and a decrease in accounts  receivables,  offset by increased  inventories.  The
increase  in  inventories  of $7.4  million  during the year ended June 30, 2001
related primarily due to new product introductions and decrease of sales, less a
$4.8  million  provision  for  inventory  in the fourth  quarter of fiscal 2001,
resulting in a net increase in inventory of $2.6 million.  This  write-down  was
due to the rapid decline in activity we experienced during the fourth quarter of
fiscal 2001, as well as our current sales outlook for fiscal 2002.

    Cash used in  investing  activities  during  the year  ended  June 30,  2001
included  $7.1  million  in cash  paid as part  of the  purchase  price  for the
acquisition of  HexaVision,  which was completed  during the first  quarter.  We
added $8.5 million in fixed assets and capital equipment,  of which $3.1 million
was related to computer equipment and software,  $2.1 million was related to the
rollout of our enterprise  resource planning software,  $1.1 million was related
to test equipment for new product introductions, $0.7 million was related to the
buildout of our Livermore  facility and $1.2 million was related to fixtures and
office equipment.  In February 2001, we completed a public offering of 2,000,000
shares of common  stock at $18.00 per share.  Realized  net  proceeds to us were
$32.4  million.  Cash  flows  from  financing  activities  during  the 12 months
consisted of the $32.4 million from the public offering, as well as $3.5 million
in proceeds from our employee stock incentive plan.

    We continue to pursue multiple  options to address our capital  requirements
to take advantage of opportunities in the semiconductor  and photonics  markets,
which may include  acquisitions  of  complimentary  products,  technologies,  or
businesses.  However,  we believe  that our  existing  cash and cash  equivalent
balances  as well as  short-term  investments  and  anticipated  cash  flow from
operations will be sufficient to support our normal capital  requirements for at
least the next 12 months.  If we pursue  additional  opportunities,  we may seek
additional financing sources.

    We currently  anticipate net new capital  expenditures of approximately $3.0
million in fiscal 2002.

    On April 9, 2001,  we signed a set of  agreements  establishing  a revolving
line of credit  with The CIT  Group/Business  Credit,  Inc.  to borrow up to the
lesser  of  $25.0  million  or the  sum of 85%  of  eligible  domestic  accounts
receivables,  plus 90% of eligible foreign accounts receivables, less a dilution
reserve  equivalent  to one percent of eligible  domestic  and foreign  accounts
receivables for every one percentage  point in excess of a standard five percent
dilution rate. The agreements have an initial term of three years with automatic
renewals on identical  terms  thereafter  unless  terminated by the either party
within  60 days of the  then  current  term.  We are  required  to meet  certain
restrictive  covenants  as  defined  by the  new  credit  agreement.  We were in
compliance  with these  covenants at June 30, 2001. To date,  the Company has no
outstanding borrowings under this revolving line of credit.

NEW ACCOUNTING PRONOUNCEMENTS

STATEMENT OF FINANCIAL ACCOUNTING STANDARDS NO. 141 - BUSINESS  COMBINATIONS AND
NO. 142 - GOODWILL AND OTHER INTANGIBLE ASSETS

    In June 2001, the Financial  Accounting Standards Board issued Statements of
Financial  Accounting  Standards No. 141,  Business  Combinations,  and No. 142,
Goodwill and Other Intangible Assets, effective for fiscal years

                                       20
<PAGE>

beginning after December 15, 2001. Under the new rules, goodwill (and intangible
assets deemed to have indefinite  lives) will no longer be amortized but will be
subject to annual  impairment  tests in accordance  with the  Statements.  Other
intangible assets will be amortized over their useful lives.

    We will apply the new rules on accounting for goodwill and other  intangible
assets  beginning  in the first  quarter  of  fiscal  2002.  Application  of the
non-amortization  provisions  of  Statement  No. 142 is  expected to result in a
decrease  in net loss of $7.5  million per year.  During  fiscal  2002,  we will
perform the first of the required  impairment  tests of goodwill and  indefinite
lived  intangible  assets as of January 1, 2002 and have not yet determined what
the effect of these tests will be on our earnings and financial position.

ACQUISITIONS

    To expand our capabilities in the  manufacturing  and marketing of precision
robotics,  simulation and motion control  products for production  environments,
automated  material handling and assembly,  and to strengthen our core business,
we completed the following  acquisitions during the three year period ended June
30, 2001:

July 21, 2000        Acquisition  of  HexaVision  Technologies  Inc.,  a machine
                     vision  research and  development  company.  We believe the
                     acquisition  of HexaVision  will enhance our machine vision
                     products for all markets and  facilitate our entry into the
                     PC-based   machine   vision   market.   HexaVision's   core
                     technology incorporates techniques to achieve accuracies up
                     to 1/40th of a pixel with guidance  vision  algorithms that
                     can increase  our  performance  in critical  and  demanding
                     applications   such  as  vision   servoing  for  the  micro
                     electrical,  fiber  optic,  semiconductory,  metrology  and
                     photonics industry.

May 31, 2000         Acquisition  of  NanoMotion  Incorporated,  a developer and
                     manufacturer  of  advanced   nanometer  and   sub-nanometer
                     positioning   and  alignment   systems.   We  believe  this
                     acquisition  will  facilitate  expansion of our  leadership
                     role in precision robotics by adding  NanoMotion's  rugged,
                     production-ready  micro and nano positioning  mechanisms to
                     Adept's product offerings.

April 28, 2000       Acquisition  of  Pensar-Tucson  Inc., a  design/engineering
                     automation   company   specializing  in  advanced  material
                     handling   and   assembly   processes.   We  believe   this
                     acquisition  will expand our high precision and fiber optic
                     assembly offerings.

July 16, 1999        Acquisition  of  BYE/OASIS  Engineering   Incorporated,   a
                     manufacturer of  mini-environment/microenvironment  systems
                     and SMIF interfaces for the microelectronics  industry.  We
                     believe   this   acquisition   will   broaden  our  factory
                     automation  offerings  in  the  wafer  and  microelectronic
                     manufacturing industry experience and marketing and service
                     infrastructure.

FACTORS AFFECTING FUTURE OPERATING RESULTS

RISKS RELATED TO OUR BUSINESS

YOU SHOULD  NOT RELY ON OUR PAST  RESULTS  TO  PREDICT  OUR  FUTURE  PERFORMANCE
BECAUSE OUR  OPERATING  RESULTS  FLUCTUATE DUE TO FACTORS WHICH ARE DIFFICULT TO
FORECAST, AND WHICH CAN BE EXTREMELY VOLATILE.

    Our past revenues and other operating results may not be accurate indicators
of  our  future  performance.   Our  operating  results  have  been  subject  to
significant  fluctuations  in the past,  and we expect  this to  continue in the
future. The factors that may contribute to these fluctuations include:

    o    fluctuations  in  aggregate  capital  spending,  cyclicality  and other
         economic  conditions  domestically and  internationally  in one or more
         industries in which we sell our products;

    o    changes in demand in the semiconductor and electronics industries;

                                       21
<PAGE>

    o    new product introductions by us or by our competitors;

    o    changes  in  product  mix  and  pricing  by us,  our  suppliers  or our
         competitors;

    o    availability of components and raw materials for our products;

    o    our failure to manufacture a sufficient  volume of products in a timely
         and cost-effective manner;

    o    our failure to  anticipate  the changing  product  requirements  of our
         customers;

    o    a change in market  acceptance of our products or a shift in demand for
         our products;

    o    changes in the mix of sales by distribution channels;

    o    exchange rate fluctuations;

    o    extraordinary events such as litigation or acquisitions; and

    o    slower than expected growth in the photonics industry.

    Our gross  margins may vary  greatly  depending on the mix of sales of lower
margin hardware  products,  particularly  mechanical  subsystems  purchased from
third party vendors, 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.  For
example, our operations during the third and fourth quarters of fiscal 1998, the
first three quarters of fiscal 1999, the first quarter of fiscal 2000 and all of
fiscal  2001 were  adversely  affected  by a  continuing  downturn  in  hardware
purchases by  customers in the  electronics  industry,  particularly  disk-drive
manufacturers and to a lesser extent communication  manufacturers.  In addition,
we have  experienced  reduced  demand  during the last two  quarters in our base
industries,  especially the semiconductor  industry, as OEMs reduced inventories
as they  adjusted  their  businesses  from a period of high  growth to  moderate
growth.  We cannot estimate when or if a sustained revival in these key hardware
markets will occur.

    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  may cause  sales to fall
below expectations and harm our 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,  our operating results
for the period could be materially adversely affected.

    In the  event  that in some  future  fiscal  quarter  our  net  revenues  or
operating  results fall below the  expectations  of public  market  analysts and
investors,  the  price  of our  common  stock  may  fall.  We may not be able to
increase or sustain our  profitability  on a  quarterly  or annual  basis in the
future.

SALES OF OUR PRODUCTS DEPEND ON THE CAPITAL SPENDING  PATTERNS OF OUR CUSTOMERS,
WHICH TEND TO BE CYCLICAL;  WE ARE CURRENTLY  EXPERIENCING REDUCED DEMAND IN THE
ELECTRONICS  AND  SEMICONDUCTOR  INDUSTRIES,  WHICH  MAY  ADVERSELY  AFFECT  OUR
REVENUES.

    Intelligent  automation  systems  using our products can range in price from
$75,000  to several  million  dollars.  Accordingly,  our  success  is  directly
dependent  upon the capital  expenditure  budgets of our  customers.  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

                                       22
<PAGE>

are not in the  Asia-Pacific  region,  we believe  that any  instability  in the
Asia-Pacific  economies could also have a material adverse effect on the results
of our  operations as a result of a reduction in sales by our customers to those
markets.  Domestic or  international  recessions or a downturn in one or more of
our  major  markets,   such  as  the   electronics,   wireless   communications,
semiconductor,   appliances,   pharmaceutical,  food  processing  or  automotive
components  industries,  and resulting cutbacks in capital spending would have a
direct,  negative impact on our business. We are currently  experiencing reduced
demand  in some  of the  industries  we  serve  including  the  electronics  and
semiconductor  industries and expect this reduced demand to adversely affect our
revenues for at least the first two  quarters of fiscal  2002.  During the third
and fourth  quarter of fiscal 2001,  Adept  received fewer orders than expected,
experienced  delivery schedule  postponements on several existing orders and had
some order  cancellations.  Such changes in orders may adversely  affect revenue
for future quarters.

    We sell some of our products to the semiconductor industry, which is subject
to sudden,  extreme,  cyclical  variations  in product  supply and  demand.  The
timing,  length and severity of these cycles are  difficult to predict.  In some
cases,  these cycles have lasted more than a year.  Semiconductor  manufacturers
may contribute to these cycles by misinterpreting the conditions in the industry
and  over-  or  under-investing  in  semiconductor  manufacturing  capacity  and
equipment. We may not be able to respond effectively to these industry cycles.

    Downturns in the  semiconductor  industry often occur in connection with, or
anticipation  of, maturing product cycles for both  semiconductor  companies and
their customers and declines in general economic conditions.  Industry downturns
have  been  characterized  by  reduced  demand  for  semiconductor  devices  and
equipment,  production  over-capacity and accelerated decline in average selling
prices.  During a period of  declining  demand,  we must be able to quickly  and
effectively  reduce expenses and motivate and retain key employees.  Our ability
to reduce expenses in response to any downturn in the semiconductor  industry is
limited by our need for  continued  investment in  engineering  and research and
development and extensive ongoing customer service and support requirements. The
long lead time for  production  and delivery of some of our  products  creates a
risk that we may incur  expenditures or purchase  inventories for products which
we cannot sell. A downturn in the  semiconductor  industry could  therefore harm
our revenues and gross margin if demand drops or average selling prices decline.

    Industry  upturns have been  characterized by abrupt increases in demand for
semiconductor  devices and equipment  and  production  under-capacity.  During a
period  of  increasing  demand  and  rapid  growth,  we must be able to  quickly
increase  manufacturing capacity to meet customer demand and hire and assimilate
a sufficient number of qualified personnel. Our inability to ramp-up in times of
increased  demand  could harm our  reputation  and cause some of our existing or
potential customers to place orders with our competitors.

MANY OF THE KEY COMPONENTS AND MATERIALS OF OUR PRODUCTS COME FROM SINGLE SOURCE
SUPPLIERS;  THEIR  PROCUREMENT  REQUIRES  LENGTHY LEAD TIMES OR SUPPLIES OF SUCH
COMPONENTS ARE LIMITED.

    We obtain many key components and materials and some significant  mechanical
subsystems from sole or single source  suppliers with whom we have no guaranteed
supply arrangements.  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  certain
significant risks including:

    o    loss of control over the manufacturing process;

    o    potential absence of adequate supplier capacity;

    o    potential   inability   to  obtain  an  adequate   supply  of  required
         components, materials or mechanical subsystems; and

    o    reduced control over  manufacturing  yields,  costs,  timely  delivery,
         reliability  and  quality  of  components,   materials  and  mechanical
         subsystems.

    We depend on Sanmina  Corporation for the supply of our circuit boards,  NSK
Corporation for the supply of our linear modules,  which are mechanical  devices
powered by an  electric  motor that move in a  straight  line,  and which can be
combined as building  blocks to form simple robotic  systems,  Yaskawa  Electric
Corp. for the supply of our 6-axis robots, Samsung Electronics Co., Ltd. for the
supply of semiconductor  robots,  Hirata Corporation for the supply

                                       23
<PAGE>

of our Adept Cobra 600 robot mechanism and Adept Cobra 800 robot  mechanisms and
we are transitioning from Imaging  Technology  Incorporated to Matrox Electronic
Systems Ltd. for the supply of our computer vision processors, which are used to
digitize images from a camera and perform measurements and analysis.  If any one
of these  significant sole or single source supplier were unable or unwilling to
manufacture  the 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  reengineering  of
these  products  could be required.  In the past,  we have  experienced  quality
control or specification  problems with certain 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  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 its product line.  Problems of this nature with our suppliers
may occur in the future.

    In addition, some of the components that we use in our products are in short
supply.  Many of our products have longer lives than those of the components and
materials included in our products. As a result,  supplies of components for our
products may not be available throughout the life span of our products.

    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 which could have a
material adverse effect on our business.  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 could 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  could  have a material
adverse effect on our business, financial condition and results of operations.

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 event bookings for our
products in the June fiscal quarter are lower than  anticipated  and our backlog
at the end of the June fiscal  quarter is  insufficient  to compensate for lower
bookings in the September  fiscal  quarter,  our results of  operations  for the
September fiscal quarter and future quarters will suffer.

    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,  the
increased  inventory levels and increased  operating expenses in anticipation of
sales that do not materialize could adversely affect our business.

ORDERS CONSTITUTING OUR BACKLOG ARE SUBJECT TO CHANGES IN DELIVERY SCHEDULES AND
CUSTOMER CANCELLATIONS RESULTING IN LOWER THAN EXPECTED REVENUES.

    Backlog  should not be relied on as a measure  of  anticipated  activity  or
future  revenues,  because  the orders  constituting  our backlog are subject to
changes  in  delivery   schedules  and  in  certain  instances  are  subject  to
cancellation  without significant  penalty to 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
experienced  greater  customer  delays and  cancellations  in the second half of
fiscal 2001 compared to prior periods,  and this increase may continue.  Similar
delivery  schedule  changes and order  cancellations  may  adversely  affect our
operating results in the future.

                                       24
<PAGE>

BECAUSE WE DO NOT HAVE LONG-TERM  CONTRACTS  WITH OUR CUSTOMERS,  THEY MAY CEASE
PURCHASING OUR PRODUCTS AT ANY TIME.

    We generally do not have long-term contracts with our customers and existing
contracts may be cancelled.  As a result,  our agreements  with our customers do
not provide any  assurance of future  sales.  Accordingly  our customers are not
required to make minimum  purchases and may cease purchasing our products at any
time without penalty.  Because our customers are free to purchase  products from
our competitors, we are exposed to competitive price pressure on each order. Any
reductions,  cancellations or deferrals in customer orders could have a negative
impact on our financial condition and results of operations.

WE ARE  EXPANDING  DEVELOPMENT  OF  INTELLIGENT  AUTOMATION  SOLUTIONS  FOR  THE
PHOTONICS INDUSTRY,  AND OUR ENTRY INTO THIS INDUSTRY WILL REQUIRE US TO DEVELOP
SIGNIFICANT NEW CAPABILITIES AND MAY NOT BE SUCCESSFUL.

    We  are  expanding  development  of  our  intelligent  automation  solutions
targeted at the photonics industry.  We expect to devote significant  financial,
engineering and management  resources to expand our development and marketing of
these solutions.  Our success in the photonics industry depends upon our ability
to, among other things:

    o    accurately  determine the features and functionality that our photonics
         customers require or prefer;

    o    successfully design and implement intelligent automation solutions that
         include these features and functionality;

    o    enter  into  agreements  with  system  integrators,  manufacturers  and
         distributors; and

    o    achieve market acceptance for our photonics solutions.

Our photonics solutions may not achieve broad market acceptance for a variety of
reasons including:

    o    photonics  companies may continue their current  production methods and
         may not adopt our intelligent automation solutions;

    o    photonics companies may determine that the costs and resources required
         to switch to our intelligent  automation  solutions are unacceptable to
         them;

    o    system  integrators,   manufacturers,  and  OEMs  may  not  enter  into
         agreements with us; and

    o    competition from traditional,  well-established photonics manufacturing
         methods.

    We have limited  experience  in developing  and  marketing  products for the
photonics  industry.  If we do  not  successfully  develop  and  achieve  market
acceptance of products for the photonics  industry,  our ability to increase our
revenue  may be limited and our  business  and our  results of  operations  will
suffer.

WE CHARGE A FIXED PRICE FOR A CERTAIN  PRODUCTS  WHICH MAY MAKE US VULNERABLE TO
COST OVERRUNS.

    Our operating  results  fluctuate  when our gross  margins  vary.  Our gross
margins vary for a number of reasons, including:

    o    the mix of products we sell;

    o    the average selling prices of products we sell;

    o    the costs to manufacture,  market, service and support our new products
         and enhancements;

    o    the costs to customize our systems; and

    o    our efforts to enter new markets.

                                       25
<PAGE>

We charge a fixed price for certain of our products, including the products that
we added as a result  of our  acquisition  of  Pensar.  If the costs we incur in
completing  a customer  order for these  products  exceed our  expectations,  we
generally cannot pass those costs on to our customer.

WE HAVE SIGNIFICANT FIXED COSTS WHICH ARE NOT EASILY REDUCED DURING A DOWNTURN.

    We continue to invest in research and  development,  capital  equipment  and
extensive  ongoing  customer  service and support  capability  worldwide.  These
investments  create  significant  fixed  costs  that we may be  unable to reduce
rapidly  if we do not meet our  sales  goals.  Moreover,  if we fail to obtain a
significant  volume of customer  orders for an extended  period of time,  we may
have difficulty planning our future production and inventory levels, which could
also cause fluctuations in our operating results.

IF OUR  TARGETED  PHOTONICS  MARKET  DEVELOPS  MORE SLOWLY  THAN WE EXPECT,  OUR
REVENUE WILL NOT GROW AS FAST AS ANTICIPATED, IF AT ALL.

    Segments of the photonics  market that we target as an element of our growth
strategy are either emerging or rapidly changing and the potential size of these
market segments and the timing of their development are difficult to predict. If
our targeted  segments of this market  develop  more slowly than we expect,  our
ability to increase  our revenue may be limited.  We depend,  in part,  upon the
broad  acceptance  by  photonic  manufacturers  of  our  material  handling  and
component  assembly  solutions,  as well as our  simulation  software  and robot
vision and motion control  technology.  Much of our  acquisition  and subsequent
development  efforts have been directed  toward this market,  and a delay in the
evolution  and growth of this market could  significantly  adversely  impact the
return on these  investments,  or even  prevent the  realization  of a return on
these investments.

WE RELY ON SYSTEMS INTEGRATORS AND OEMS TO SELL OUR PRODUCTS.

    We believe that our ability to sell products to system  integrators and OEMs
will  continue to be  important to our success.  Our  relationships  with system
integrators  and OEMs  are  generally  not  exclusive,  and  some of our  system
integrators  and OEMs may expend a  significant  amount of effort or give higher
priority to selling  products  of our  competitors.  In the  future,  any of our
system  integrators or our OEMs may discontinue their  relationships  with us or
form additional competing  arrangements with our competitors.  The loss of, or a
significant  reduction in revenues from, system  integrators or OEMs to which we
sell a significant  amount of our product could negatively  impact our business,
financial condition or results of operations.

    As we enter new geographic and applications  markets,  we must locate system
integrators and OEMs to assist us in building sales in those markets. We may not
be  successful  in  obtaining  effective  new system  integrators  or OEMs or in
maintaining sales  relationships  with them. In the event a number of our system
integrators  and/or  OEMs  experience   financial   problems,   terminate  their
relationships  with us or  substantially  reduce the amount of our products they
sell,  or in the event we fail to build an effective  systems  integrator or OEM
channel in any new markets,  our  business,  financial  condition and results of
operations could be adversely affected.

    In addition,  a  substantial  portion of our sales is 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.  To the  extent  we are  unable  to  mitigate  this  risk  of
collections from system integrators, our results of operations may be harmed.

OUR PRODUCTS GENERALLY HAVE LONG SALES CYCLES AND IMPLEMENTATION  PERIODS, WHICH
INCREASE OUR COSTS IN  OBTAINING  ORDERS AND REDUCES THE  PREDICTABILITY  OF OUR
EARNINGS.

    Our products are technologically  complex.  Prospective  customers generally
must commit  significant  resources  to test and  evaluate  our  products and to
install and integrate them into larger  systems.  Orders expected in one quarter
may shift to another  quarter or be cancelled  with little  advance  notice as a
result of the customers' budgetary constraints, internal acceptance reviews, and
other  factors  affecting  the  timing  of  customers'  purchase  decisions.  In
addition,  customers often require a significant number of product presentations
and  demonstrations,  in some  instances  evaluating  equipment on site,  before
reaching a sufficient  level of  confidence  in the  product's  performance  and
compatibility  with the customer's  requirements to place an order. As a result,
our sales process is often subject


                                       26
<PAGE>

to delays  associated with lengthy approval  processes that typically  accompany
the design and testing of new products.  The sales cycles of our products  often
last for many months or even  years.  In  addition,  the time  required  for our
customers to incorporate our products into their systems can vary  significantly
with the needs of our customers  and generally  exceeds  several  months,  which
further complicates our planning processes and reduces the predictability of our
operating  results.  Longer  sales  cycles  require  us  to  invest  significant
resources  in  attempting  to make sales,  which may not be realized in the near
term and  therefore  may delay the  generation  of revenue,  or which may not be
realized at all.


IF WE ARE UNABLE TO IDENTIFY  AND MAKE  ACQUISITIONS,  OUR ABILITY TO EXPAND OUR
OPERATIONS AND INCREASE OUR REVENUE MAY SUFFER.

    In the latter half of fiscal 2000, a  significant  portion of our growth was
attributable  to acquisitions of other  businesses and  technologies.  We expect
that acquisitions of complementary  companies,  products and technologies in the
future will play an important role in our ability to expand our operations, hire
additional  personnel  and  increase  our revenue.  We are  currently  reviewing
several  possible  acquisition  candidates  as part of our  strategy  to  market
intelligent  automation solutions targeted at the photonics industry.  If we are
unable to identify suitable targets for acquisition or complete  acquisitions on
acceptable  terms, our ability to expand our service  offerings and increase our
revenue may be impaired. Even if we are able to identify and acquire acquisition
candidates,  we may be unable to realize the benefits anticipated as a result of
these acquisitions.

ANY  ACQUISITIONS WE MAKE COULD DISRUPT OUR BUSINESS,  INCREASE OUR EXPENSES AND
ADVERSELY AFFECT OUR FINANCIAL CONDITION OR OPERATIONS.

    During fiscal 2000, we acquired  Pensar,  NanoMotion and BYE/Oasis.  In July
2000, we acquired HexaVision. These acquisitions introduced us to industries and
technologies in which we have limited previous experience.  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.  We cannot  be  certain  that we would  successfully
integrate any businesses,  technologies or personnel that we might acquire,  and
any  acquisitions  might divert our  management's  attention  away from our core
business.  Any future  acquisitions  or  investments we might make would present
risks commonly associated with these types of transactions, including:

    o    difficulty  in combining  the product  offerings,  operations,  or work
         force of an acquired business;

    o    potential loss of key personnel of an acquired business;

    o    adverse effects on existing relationships with suppliers and customers;

    o    disruptions of our on-going businesses;

    o    difficulties  in  realizing  our  potential   financial  and  strategic
         position through the successful integration of the acquired business;

    o    difficulty in maintaining uniform standards,  controls,  procedures and
         policies;

    o    potential  negative impact on results of operations due to amortization
         of  goodwill,   other  intangible  assets  acquired  or  assumption  of
         anticipated liabilities;

    o    risks  associated  with  entering  markets  in  which  we have  limited
         previous experience; and

    o    the diversion of management attention.

    The risks described above,  either  individually or in the aggregate,  could
significantly harm our business,  financial condition and results of operations.
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.  In addition,  we may issue  additional  equity in connection with future
acquisitions,  which  could  result  in  dilution  of our

                                       27
<PAGE>

shareholders'  equity  interest.  Fluctuations  in  our  stock  price  may  make
acquisitions   more  expensive  or  prevent  us  from  being  able  to  complete
acquisitions on terms that are acceptable to us.

OUR INTERNATIONAL OPERATIONS MAY SUBJECT US TO DIVERGENT REGULATORY REQUIREMENTS
AND OTHER RISKS THAT MAY HARM OUR OPERATING RESULTS.

    International  sales were $36.4  million  for the fiscal year ended June 30,
2001,  $44.9  million for the fiscal year ended June 30, 2000 and $41.2  million
for the fiscal year ended June 30, 1999.  This  represented  36.3%,  45.2%,  and
47.2%  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:

    o    unexpected changes in regulatory requirements;

    o    political and economic changes and disruptions;

    o    transportation costs and delays;

    o    foreign currency fluctuations;

    o    export/import controls;

    o    tariff regulations and other trade barriers;

    o    higher freight rates;

    o    difficulties in staffing and managing foreign sales operations;

    o    greater  difficulty  in  accounts  receivable   collection  in  foreign
         jurisdictions; and

    o    potentially adverse tax consequences.

    Foreign  exchange  fluctuations  may render our  products  less  competitive
relative to locally manufactured  product offerings,  or could result in foreign
exchange  losses.  In calendar 2001, the value of major European  currencies has
dropped against the U.S.  dollar.  To date, we have not reflected that change in
currency value in our selling prices.  In order to maintain a competitive  price
for our  products  in Europe,  we may have to  provide  discounts  or  otherwise
effectively  reduce our prices,  resulting in a lower margin on products sold in
Europe.  Continued change in the values of European currencies or changes in the
values of other foreign currencies could have a negative impact on our business,
financial condition and results of operations.

    In addition, duty, tariff and freight costs can materially increase the cost
of crucial components for our products. We anticipate that past turmoil in Asian
financial markets and the deterioration of the underlying economic conditions in
certain Asian countries may 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
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.

    Maintaining   operations  in  different  countries  requires  us  to  expend
significant  resources  to keep our  operations  coordinated  and subjects us to
differing laws and regulatory  regimes that may affect our service offerings and
revenue.

                                       28
<PAGE>

WE MAY INCUR CURRENCY EXCHANGE-RELATED LOSSES IN CONNECTION WITH OUR RELIANCE ON
OUR SINGLE OR SOLE SOURCE FOREIGN SUPPLIERS.

    We make  yen-denominated  purchases  of certain  components  and  mechanical
subsystems  from  certain  of our  sole or  single  source  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. Our current or any future currency exchange strategy may not
be successful in avoiding  exchange-related  losses. Any exchange-related losses
or exposure may negatively affect our business,  financial  condition or results
of operations.

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. 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  are  subject  to change and 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
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 provide any assurance that future products can be designed, within market
window  constraints,  to  meet  the  future  requirements.  If 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.  Thus,  our business,  financial  condition and results of operations
could be harmed.  Such  directives  and  guidelines  could change in the future,
forcing us to redesign or withdraw  from the market one or more of our  existing
products that may have been originally approved for sale.

OUR HARDWARE AND SOFTWARE  PRODUCTS MAY CONTAIN  DEFECTS THAT COULD INCREASE OUR
EXPENSES  EXPOSURE TO LIABILITIES  AND HARM OUR  REPUTATION AND FUTURE  BUSINESS
PROSPECTS.

    Our  hardware  and software  products  are complex  and,  despite  extensive
testing,  our new or existing  products  or  enhancements  may contain  defects,
errors or  performance  problems  when first  introduced,  when new  versions or
enhancements are released or even after these products or enhancements have been
used in the  marketplace  for a period of time. We may discover  product defects
only after a product has been  installed and used by customers.  We may discover
defects,  errors or  performance  problems in future  shipments of our products.
These problems could result in expensive and time consuming design modifications
or large warranty charges,  expose us to liability for damages,  damage customer
relationships  and result in loss of market  share,  any of which could harm our
reputation and future business prospects. In addition, increased development and
warranty costs could reduce our operating profits and could result in losses.

    The existence of any defects,  errors or failures in our products could also
lead  to  product  liability  claims  or  lawsuits  against  us or  against  our
customers. A successful product liability claim could result in substantial cost
and divert  management's  attention and  resources,  which could have a negative
impact on our business, financial condition and results of operations.  Although
we are not aware of any product  liability  claims to date, the sale and support
of our products entail the risk of these claims.

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
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 inception.  In addition, the loss of the services
of any of our senior  managerial,  technical or sales personnel could impair 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.

                                       29
<PAGE>

OUR FUTURE  SUCCESS  DEPENDS ON OUR  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.

    In  addition,  our  success  will  depend on our  ability to hire and retain
experienced  engineers,  senior  management  and sales and marketing  personnel.
Competition  for these personnel is intense,  particularly  in geographic  areas
recognized as high technology centers such as the Silicon Valley area, where our
principal  offices are located,  and other  locations  where we maintain  design
sites. To attract and retain individuals with the requisite expertise, we may be
required to grant large option or other stock-based  incentive awards, which may
be dilutive to  shareholders.  We may also be required to pay  significant  base
salaries and cash bonuses,  which could harm our operating results. If we do not
succeed in hiring and retaining candidates with appropriate  qualifications,  we
will not be able to grow our business and our operating results will be harmed.

IF WE BECOME SUBJECT TO UNFAIR HIRING CLAIMS,  WE COULD BE PREVENTED FROM HIRING
NEEDED  PERSONNEL,  INCUR LIABILITY FOR DAMAGES AND INCUR  SUBSTANTIAL  COSTS IN
DEFENDING OURSELVES.

    Companies in our industry whose employees  accept positions with competitors
frequently claim that these  competitors have engaged in unfair hiring practices
or that the  employment of these persons would involve the  disclosure or use of
trade secrets.  These claims could prevent us from hiring  personnel or cause us
to incur  liability  for  damages.  We could  also  incur  substantial  costs in
defending  ourselves or our employees against these claims,  regardless of their
merits.  Defending ourselves from these claims could divert the attention of our
management away from our operations.

OUR FAILURE TO PROTECT OUR INTELLECTUAL PROPERTY AND PROPRIETARY  TECHNOLOGY MAY
SIGNIFICANTLY IMPAIR OUR COMPETITIVE ADVANTAGE.

    Our success and ability to compete depend in large part upon  protecting our
proprietary technology.  We rely on a combination of patent, trademark and trade
secret  protection  and  nondisclosure  agreements  to protect  our  proprietary
rights.  The  steps  we  have  taken  may  not  be  sufficient  to  prevent  the
misappropriation of our intellectual property, particularly in foreign countries
where the laws may not protect our proprietary  rights as fully as in the United
States.  The patent and  trademark  law and trade secret  protection  may not be
adequate to deter third party infringement or  misappropriation  of our patents,
trademarks and similar proprietary rights. In addition,  patents issued to Adept
may be challenged,  invalidated or circumvented.  Our rights granted under those
patents may not provide  competitive  advantages to us, and the claims under our
patent  applications  may not 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 patents may
not be issued  from  currently  pending or future  applications.  Moreover,  our
existing  patents or any new patents that may be issued may not 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 such alleged infringement.
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.

                                       30
<PAGE>

As claims arise, we evaluate their merits. Any claims of infringement brought by
third parties could result in protracted and costly litigation, that damages for
infringement,  and the necessity of obtaining a license  relating to one or more
of our products or current or future technologies, which 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.  Some of our end  users  have  notified  us that  they  may seek
indemnification  from us for damages or expenses  resulting from any claims made
by the Jerome H. Lemelson  Foundation.  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.

RISKS RELATED TO OUR INDUSTRY

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:

    o    product functionality and reliability;

    o    customer service;

    o    price;

    o    delivery; and

    o    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  and  marketing
resources than us. 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  because  they
generate  substantial  unit volumes of robots for  internal  demand and may have
access  through their parent  companies to large amounts 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 or
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, so that we
will be able to compete  successfully in the future. 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.

WE OFFER  PRODUCTS  FOR  MULTIPLE  INDUSTRIES  AND MUST FACE THE  CHALLENGES  OF
SUPPORTING THE DISTINCT NEEDS OF EACH OF OUR MARKETS.

    We  market  products  for  the   semiconductor,   wireless   communications,
photonics, food processing, automotive, lie sciences and electronics industries.
Because we operate in multiple industries, we must work constantly to understand
the needs,  standards and technical requirements of several different industries
and must devote significant resources to developing different products for these
industries.  Product  development  is  costly  and time  consuming.  Many of our
products are used by our  customers to develop,  manufacture  and test their own
products.  As a result, we must anticipate  trends in our customers'  industries
and develop products before our customers' products are commercialized. If we do
not accurately predict our customers' needs and future activities, we may invest
substantial  resources in  developing  products that do not achieve broad market
acceptance.  Our decision to

                                       31
<PAGE>

continue to offer  products  to a given  market or to  penetrate  new markets is
based in part on our  judgment of the size,  growth rate and other  factors that
contribute  to  the  attractiveness  of a  particular  market.  If  our  product
offerings  in any  particular  market are not  competitive  or our analyses of a
market are incorrect, our business and results of operations could be harmed.

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  depends greatly upon the technological  quality of our products and
processes  compared to those of our competitors and our ability both to continue
to  develop  new and  enhanced  products  and to  introduce  those  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.  Our failure to successfully select,
develop and manufacture new products, or to timely enhance existing technologies
and  meet  customers'   technical   specifications   for  any  new  products  or
enhancements on a timely basis, or to  successfully  market new products,  could
harm our  business.  If we  cannot  successfully  develop  and  manufacture  new
products or meet  specifications,  our  products  could lose market  share,  our
revenues and profits could decline, or we could experience operating losses. New
technology  or  product  introductions  by our  competitors  could  also cause a
decline in sales or loss of market acceptance for our existing products or force
us to significantly reduce the prices of our existing products.

    From time to time we have  experienced  delays in the  introduction  of, and
certain technical and manufacturing difficulties with, some of our products, and
we may experience technical and manufacturing  difficulties and delays in future
introductions  of  new  products  and  enhancements.  Our  failure  to  develop,
manufacture  and sell new products in quantities  sufficient to offset a decline
in revenues from existing products or to successfully manage product and related
inventory transitions 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,
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 volume
production.

The development and commercialization of new products involve many difficulties,
including:

    o    the identification of new product opportunities;

    o    the  retention  and  hiring of  appropriate  research  and  development
         personnel;

    o    the determination of the product's technical specifications;

    o    the successful completion of the development process;

    o    the  successful  marketing  of the  product  and  the  risk  of  having
         customers embrace new technological advances; and

    o    additional  customer  service  costs  associated  with  supporting  new
         product  introductions  and/or  effecting  subsequent  potential  field
         upgrades.

    For example,  we have recently  released our new micro and nano  positioning
mechanisms,  NanoMotion  process modules,  SmartModules,  Standard Platforms and
Semiconductor  front-ends.  These products  include  significant new networking,
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 in response to
customer requirements or technological changes, our business may be harmed.

                                       32
<PAGE>

IF WE FAIL TO ADEQUATELY INVEST IN RESEARCH AND DEVELOPMENT, WE MAY BE UNABLE TO
COMPETE EFFECTIVELY.

    We have limited  resources to allocate to research and  development and must
allocate our  resources  among a wide  variety of  projects.  Because of intense
competition in our industry, the cost of failing to invest in strategic products
is high. If we fail to adequately invest in research and development,  we may be
unable to compete effectively in the intelligent  automation markets in which we
operate.

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 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:

    o    the imposition of substantial fines;

    o    suspension of production; and

    o    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,  storage,  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 RELY ON A CONTINUOUS  SUPPLY OF ELECTRICAL  POWER TO CONDUCT OUR  OPERATIONS,
AND CALIFORNIA'S CURRENT ENERGY CRISIS COULD DISRUPT OUR OPERATIONS AND INCREASE
OUR EXPENSES.

    California  is in the midst of an  energy  crisis  that  could  disrupt  our
operations and increase our expenses.  In the event of an acute power  shortage,
that is,  when power  reserves  for the State of  California  fall  below  1.5%,
California has on some occasions implemented,  and may in the future continue to
implement,  rolling blackouts  throughout  California.  We currently do not have
backup generators or alternate sources of power in the event of a blackout,  and
our  current  insurance  does not  provide  coverage  for any  damages we or our
customers may suffer as a result of any  interruption  in our power  supply.  If
blackouts interrupt our power supply, we would be temporarily unable to continue
operations at our facilities.  Any such  interruption in our ability to continue
operations at our facilities  could damage our  reputation,  harm our ability to
retain existing customers and to obtain new customers,  and could result in lost
revenue,  any of which  could  substantially  harm our  business  and results of
operations.

FAILURE TO OBTAIN EXPORT LICENSES COULD HARM OUR BUSINESS.

    We must comply with U.S. Department of Commerce  regulations in shipping our
software  products  and  other  technologies  outside  the  United  States.  Any
significant  future  difficulty in complying could harm our business,  financial
condition and results of operations.

RISKS RELATED TO OUR STOCK

OUR STOCK PRICE HAS FLUCTUATED AND MAY CONTINUE TO FLUCTUATE WIDELY.

    The market price of our common  stock has  fluctuated  substantially  in the
past.  Between  June 30, 2000 and June 30,  2001,  the sales price of our common
shares,  as reported  on the Nasdaq  National  Market,  has ranged from a low of
$7.45 to a high of $53.25. The market price of our common stock will continue to
be subject to significant fluctuations in the future in response to a variety of
factors, including:

    o    future announcements concerning our business or that of our competitors
         or customers;

                                       33
<PAGE>

    o    the introduction of new products or changes in product pricing policies
         by us or our competitors;

    o    litigation regarding proprietary rights or other matters;

    o    change in analysts' earnings estimates;

    o    developments in the financial markets;

    o    quarterly fluctuations in operating results; and

    o    general conditions in the intelligent automation industry.

    Furthermore,  stock prices for many companies, and high technology companies
in  particular,  fluctuate  widely for reasons  that may be  unrelated  to their
operating results. Those fluctuations and general economic, political and market
conditions,  such as  recessions,  damage  caused by terrorist  actions or other
military actions, or international currency  fluctuations,  may adversely affect
the market price of our common stock.

WE MAY BE SUBJECT TO  SECURITIES  CLASS ACTION  LITIGATION IF OUR STOCK PRICE IS
VOLATILE,  WHICH COULD RESULT IN  SUBSTANTIAL  COSTS,  DISTRACT  MANAGEMENT  AND
DAMAGE OUR REPUTATION.

    In the past,  securities  class  action  litigation  has often been  brought
against  companies  following periods of volatility in the market price of their
securities. Companies, like us, that are involved in rapidly changing technology
markets  are  particularly  subject  to  this  risk.  We may be  the  target  of
litigation of this kind in the future. Any securities litigation could result in
substantial  costs,  divert  management's   attention  and  resources  from  our
operations and negatively affect our public image and reputation.

WE MAY NEED TO RAISE ADDITIONAL  CAPITAL IN THE FUTURE,  AND IF WE ARE UNABLE TO
SECURE  ADEQUATE  FUNDS ON  ACCEPTABLE  TERMS,  WE MAY BE UNABLE TO EXECUTE  OUR
BUSINESS  PLAN OR MAKE FUTURE  ACQUISITIONS  DEEMED  ESSENTIAL  TO OUR LONG TERM
STRATEGY.

    If our capital requirements vary significantly from those currently planned,
we may require  additional  financing sooner than  anticipated.  If our existing
cash balances and cash flow expected from future  operations  are not sufficient
to meet our liquidity needs, we will need to raise additional funds. If adequate
funds are not  available  on  acceptable  terms or at all, we may not be able to
take advantage of market opportunities,  develop or enhance new products, pursue
acquisitions that would complement our existing product offerings or enhance our
technical  capabilities,  execute  our  business  plan or  otherwise  respond to
competitive pressures or unanticipated requirements.

ITEM 7A. 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 which ensures the
safety and preservation of our invested funds by limiting  default risk,  market
risk and reinvestment risk. The table below presents principal cash flow amounts
and  related  weighted-average  interest  rates  by  year  of  maturity  for our
investment portfolio.

<TABLE>
<CAPTION>
                                         2001       2002             2003            TOTAL
                                         ----       ----             ----            -----       FAIR
                                                                (IN THOUSANDS)                   VALUE
                                                                --------------                   -----
Cash equivalents
<S>                                   <C>             <C>             <C>         <C>          <C>
 Fixed rate......................     $   15,953      --              --          $   15,953   $  15,953
 Average rate....................          4.20%      --              --               4.20%
Auction rate securities
 Fixed rate......................     $    2,800      --              --          $    2,800   $   2,800
 Average rate....................          3.89%      --              --               3.89%
                                      ----------      --              --          ----------

    Total Investment Securities..     $   18,753      --              --          $   18,753   $  18,753
                                      ==========      ==              ==          ==========   =========

 Average rate....................          4.16%      --              --               4.16%
</TABLE>

                                       34
<PAGE>

    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 of guarantor. Our portfolio includes
only  marketable  securities  with active  secondary or resale markets to ensure
portfolio  liquidity  and  maintains  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 enter into foreign
currency forward  contracts to minimize the impact of exchange rate fluctuations
on certain  foreign  currency  commitments  and balance sheet  positions and may
enter into foreign exchange forward contracts in the future.  The realized gains
and losses on these  contracts  are  deferred  and offset  against  realized and
unrealized gains and losses when the transaction occurs.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

    Consolidated  Financial  Statements and Financial  Statement Schedules as of
June 30, 2001 and 2000 and for each of the three years in the period  ended June
30, 2001 are included in Items  14(a)(1) and (2) included in this Annual  Report
on Form 10-K.

ITEM  9.  CHANGES  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
FINANCIAL DISCLOSURE

    None.

                                       35
<PAGE>

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

    The   information   required  by  this  item  concerning  our  directors  is
incorporated  by reference  from the section  captioned  "Election of Directors"
contained in our Proxy  Statement  related to the Annual Meeting of Shareholders
to be held on  November  16,  2001 to be  filed by us with  the  Securities  and
Exchange  Commission  within 120 days of the end of our fiscal year  pursuant to
General Instruction G(3) of Form 10-K,  referred to as the Proxy Statement.  The
information  required by this item concerning executive officers is set forth in
Part I of  this  Report.  The  information  required  by  this  item  concerning
compliance  with Section 16(a) of the Exchange Act is  incorporated by reference
from  the  section  captioned  "Section  16(a)  Beneficial  Ownership  Reporting
Compliance" contained in the Proxy Statement.

ITEM 11. EXECUTIVE COMPENSATION

    The information  required by this item is incorporated by reference from the
section captioned  "Executive  Compensation and Other Matters"  contained in the
Proxy Statement.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

    The information  required by this item is incorporated by reference from the
section  captioned   "Security   Ownership  of  Certain  Beneficial  Owners  and
Management" contained in the Proxy Statement.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

    The information  required by this item is incorporated by reference from the
sections captioned "Compensation Committee Interlocks and Insider Participation"
and "Certain Transactions" contained in the Proxy Statement.

                                       36
<PAGE>

                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.

(a)(1)   Financial Statements

         The financial  statements  (including  the Notes thereto  listed in the
         Index to Consolidated Financial Statements (set forth in Item 8 of Part
         II of this Form 10-K) are filed as part of this  Annual  Report on Form
         10-K.

(a)(2)   Financial Statement Schedules

         The following financial statement schedule is included herein:
         Schedule II - Valuation and Qualifying Accounts
         Additional  schedules  are not  required  under  the  related  schedule
         instructions or are inapplicable, and therefore have been omitted.

(a)(3) Exhibits

             2.1        Share  Purchase  Agreement  among Marc  Tremblay,  Alain
                        Rivard, Eric St-Pierre,  Pierre Boivin, 9044-0108 Quebec
                        Inc., Societe Innovatech Quebec et Chaudiere-Appalaches,
                        Sofinov,  Societe Financiere d'Innovation Inc., Business
                        Development  Bank of Canada,  Christian  Labbe,  Patrick
                        Murphy and certain  other  shareholders  named  therein,
                        Adept  Technology  Canada  Holding Co., and  Registrant,
                        dated  July  21,  2000  (incorporated  by  reference  to
                        Exhibit 2.1 to the  Registrant's  Current Report on Form
                        8-K/A filed with the Securities and Exchange  Commission
                        on October 25, 2000).+

             3.1        Amended and Restated  Articles of  Incorporation  of the
                        Registrant  (incorporated by reference to Exhibit 3.1 to
                        the  Registrant's  Registration  Statement  on Form S- 1
                        (No. 33-98816) (the "1995 Form S-1")).

             3.2        Certificate of Amendment of Articles of Incorporation of
                        the  Registrant  filed  with the  Secretary  of State of
                        California  on  November  17,  2000   (incorporated   by
                        reference   to   Exhibit   3.2   to   the   Registrant's
                        Registration Statement on Form S-1 (No. 333-48638)).

             3.3        Bylaws   of  the   Registrant,   as   amended   to  date
                        (incorporated   by  reference  to  Exhibit  3.4  to  the
                        Registrant's  Annual  Report on Form 10-K for the fiscal
                        year ended June 30, 2000) (the "2000 Form 10-K")).

             4.1        Form of Stock Certificate  (incorporated by reference to
                        Exhibit 4.2 to the 1995 Form S-1).

            10.1*       1983 Stock  Incentive  Program,  and form of  agreements
                        thereto  (incorporated  by  reference to Exhibit 10.1 to
                        the 1995 Form S-1).

            10.2*       1993  Stock  Plan as  amended,  and  form  of  agreement
                        thereto (incorporated by reference to Exhibit 4.1 to the
                        Registrant's  Registration  Statement  on Form S-8 filed
                        with the Securities and Exchange  Commission on November
                        20, 2000, No. 333-50292).

            10.3*       1998 Employee Stock  Purchase Plan as amended,  and form
                        of  agreements  thereto  (incorporated  by  reference to
                        Exhibit 4.1 to the Registrant's  Registration  Statement
                        on Form S-8  filed  with  the  Securities  and  Exchange
                        Commission on November 20, 2000, No. 333-50296).

            10.4*       1995  Director  Option  Plan  as  amended,  and  form of
                        agreement thereto  (incorporated by reference to Exhibit
                        10.4 to the  Registrant's  Form 10-K for the fiscal year
                        ended June 30, 1997 (the "1997 Form 10-K")).

                                       37
<PAGE>

            10.5        Form of Indemnification Agreement between the Registrant
                        and  its  officers  and   directors   (incorporated   by
                        reference to Exhibit 10.5 to the 1995 Form S-1).

            10.6        Office  Building  Lease  between  Registrant  and Puente
                        Hills Business  Center II dated May 20, 1993, as amended
                        (incorporated by reference to Exhibit 10.6.2 to the 1995
                        Form S-1).

            10.7*       Loan Payoff Plan dated August 3, 1993 between Registrant
                        and  Charles  Duncheon  (incorporated  by  reference  to
                        Exhibit 10.7 to the 1995 Form S-1).

            10.8*       Promissory Note between  Registrant and Charles Duncheon
                        dated  August 20, 1998  (incorporated  by  reference  to
                        Exhibit  10.7.1  to the  Registrant's  Form 10-K for the
                        fiscal year ended June 30, 1999 (the "1999 Form 10-K")).

            10.9*       Promissory  Note between  Registrant  and Richard Casler
                        dated  April 16,  1999  (incorporated  by  reference  to
                        Exhibit 10.7.2 to the 1999 Form 10-K).

            10.10*      Promissory  Note between  Registrant  and Brian Carlisle
                        dated May 7, 1999  (incorporated by reference to Exhibit
                        10.7.3 to the 1999 Form 10-K).

            10.11*      Promissory  Note between  Registrant  and Bruce  Shimano
                        dated May 7, 1999  (incorporated by reference to Exhibit
                        10.7.4 to the 1999 Form 10-K).

            10.12*      Offer Letter  between the  Registrant  and Marcy Alstott
                        dated  February 19, 1998,  as amended  (incorporated  by
                        reference to Exhibit 10.8 to the Registrant's  Form 10-K
                        for the fiscal  year ended June 30, 1998 (the "1998 Form
                        10-K")).

            10.13*      Promissory  Note between  Registrant  and Marcy  Alstott
                        dated  April 27,  1998  (incorporated  by  reference  to
                        Exhibit 10.8.1 to the 1998 Form 10-K).

            10.14*      Offer Letter between the Registrant and Kathleen  Fisher
                        dated  July  16,  1999  (incorporated  by  reference  to
                        Exhibit 10.8.2 to the 1999 Form 10-K).

            10.15*      Promissory  Note between  Registrant and Kathleen Fisher
                        dated  August  2, 1999  (incorporated  by  reference  to
                        Exhibit 10.8.3 to the 1999 Form 10-K).

            10.16       Lease  Agreement  dated as of April 30, 1998 between the
                        Registrant and the Joseph and Eda Pell  Revocable  Trust
                        dated  August 18, 1989  (incorporated  by  reference  to
                        Exhibit 10.9 to the 1998 Form 10-K).

            10.17       Lease   Agreement   dated  June  1,  1998   between  the
                        Registrant and Technology  Centre Associates LLC for the
                        premises  located  at 180 Rose  Orchard  Way,  San Jose,
                        California  (incorporated  by reference to Exhibit 10.10
                        to the 1998 Form 10-K).

            10.18       First  Amendment to Lease  Agreement  dated June 1, 1998
                        between the Registrant and Technology  Centre Associates
                        LLC dated July 31, 1998  (incorporated  by  reference to
                        Exhibit 10.10.1 to the 1998 Form 10-K).

            10.19       Lease  Agreement  dated June 1, 1998 between  Registrant
                        and  Technology  Centre  Associates LLC for the premises
                        located at 150 Rose Orchard  Way,  San Jose,  California
                        (incorporated  by  reference  to  Exhibit  10.2  to  the
                        Registrant's  Form  10-Q for the  fiscal  quarter  ended
                        September   30,  2000  (the  "2001  First  Quarter  Form
                        10-Q")).

            10.20       Second Amendment to Lease Agreement dated March 31, 2000
                        between  Registrant and Technology Centre Associates LLC
                        dated  July  31,  1998  (incorporated  by  reference  to
                        Exhibit 10.10.3 to the 2000 Form 10-K).

                                       38
<PAGE>

            10.21       First Addendum to Lease  Agreement dated August 18, 1999
                        between  Registrant  and Joseph  and Eda Pell  Revocable
                        Trust dated August 18, 1989  (incorporated  by reference
                        to Exhibit 10.10.4 to the 2000 Form 10-K).

            10.22       Lease Agreement dated April 28, 2000 between  Registrant
                        and Michael and Diane  Edwards for  premises  located in
                        Tucson,  Arizona  incorporated  by  reference to Exhibit
                        10.10.5 to the 2000 Form 10-K).

            10.23       Lease  Agreement  dated May 19, 2000 between  NanoMotion
                        Inc.  and United  Insurance  Co. of America for premises
                        located at Santa Barbara,  California  (incorporated  by
                        reference to Exhibit 10.10.6 to the 2000 Form 10-K).

            10.24**     Agreement   between   Registrant   and  Altron   Systems
                        Corporation  (acquired  by  Sanmina  Corporation)  dated
                        January 30, 1998  (incorporated  by reference to Exhibit
                        10.27 to the 200 Form 10-K).

            10.25       Agreement  between  Registrant  and  Ramix  Incorporated
                        dated  October 27, 1998  (incorporated  by  reference to
                        Exhibit 10.28 to the 2000 Form 10-K).

            10.26       Robot  Module  Purchase  and Service  Agreement  between
                        Registrant  and NSK  Corporation  dated January 19, 1995
                        (incorporated  by reference to Exhibit 10.29 to the 2000
                        Form 10-K).

            10.27**     Original   Equipment   Manufacturer   Agreement  between
                        Registrant and Hirata Corporation dated January 31, 1995
                        (incorporated  by reference to Exhibit 10.31 to the 2000
                        Form 10-K).

            10.28**     Original  Equipment   Manufacturing   Agreement  between
                        Registrant  and  Samsung   Electronics  Co.,  LTD  dated
                        February 26, 1999  (incorporated by reference to Exhibit
                        10.32 to the 2000 Form 10-K).

            10.29**     Sublicense   Agreement   between   SILMA   Division   of
                        Registrant and Adept Japan Co., LTD dated  September 26,
                        2000  (incorporated by reference to Exhibit 10.33 to the
                        2000 Form 10-K).

            10.30**     Original  Equipment   Manufacturing   Agreement  between
                        Registrant and Yaskawa  Electric Corp.  dated August 29,
                        2000  (incorporated by reference to Exhibit 10.34 to the
                        2000 Form 10-K).

            10.31       Industrial  R&D Lease  Agreement  dated October 31, 2000
                        between  Registrant  and  Tri-Valley  Campus  I, LLC for
                        premises located at Livermore,  California (incorporated
                        by reference  to Exhibit 10.1 to the 2001 First  Quarter
                        Form 10-Q).

            10.32       Amendment  No.  1 dated  September  9,  1997  to  Office
                        Building  Lease  between  Registrant  and  Puente  Hills
                        Business Center II dated May 20, 1993  (incorporated  by
                        reference to Exhibit 10.3 to the 2001 First Quarter Form
                        10-Q).

            10.33       Amendment  No. 2 dated June 17, 1998 to Office  Building
                        Lease  between  Registrant  and  Puente  Hills  Business
                        Center II dated May 20, 1993  (incorporated by reference
                        to Exhibit  10.4 to the 2001 First  Quarter  Form 10-Q).

            10.34       First  Amendment  to  Export-Import  Bank of the  United
                        States  Working  Capital   Guarantee   Program  Borrower
                        Agreement  dated April 5, 2001 between  Registrant,  the
                        Export-Import  Bank  of the  United  States  and The CIT
                        Group/Business  Credit,  Inc. dated July 10, 2001.

            10.35       Export-Import  Bank of the United States Working Capital
                        Guarantee Program Borrower Agreement dated April 5, 2001
                        between Registrant, the Export-Import Bank of the United
                        States and The CIT Group/Business Credit, Inc.

            10.36       Loan and Security  Agreement  (Non-Exim  Facility) dated
                        April   5,   2001   between   Registrant   and  The  CIT
                        Group/Business Credit, Inc.

                                       39
<PAGE>

            10.37       Loan and Security  Agreement (Exim Facility) dated April
                        5, 2001 between  Registrant  and The CIT  Group/Business
                        Credit, Inc.

            21.1        Subsidiaries   of  the   Registrant   (incorporated   by
                        reference to the Exhibit 21.1 to the 2000 Form 10-K).

            23.1        Consent  of   Independent   Auditors   regarding   Adept
                        Technology, Inc.

            24.1        Power of  Attorney  (See  Signature  Page to this Annual
                        Report on Form 10-K).

------------------

*     Management contract or compensatory plan or arrangement.
**    Confidential  treatment has been requested as to certain  portions of this
      exhibit.  An unredacted  version of this exhibit has been filed separately
      with the SEC.
+     Schedules have been omitted and will be provided to the SEC upon request.


    (B)  REPORTS ON FORM 8-K.

         On May 8, 2001, a Form 8-K was filed by Adept  announcing its financial
         results for its third quarter ending March 31, 2001.

         On June 29, 2001, a Form 8-K was filed by Adept  announcing the signing
         of a definitive agreement to acquire CHAD Industries, Inc.

         On July 27,  2001,  a Form 8-K was  filed by Adept  announcing  a press
         release  related to a cost  reduction  program  and a  revision  to its
         business outlook for its fourth quarter ending June 30, 2001

         On  August  2,  2001,  a Form 8-K was  filed by  Adept  announcing  its
         financial results for its fourth quarter and fiscal year ended June 30,
         2001.

    (C)  EXHIBITS.

         See Item 14(a)(3) above.

    (D)  FINANCIAL STATEMENT SCHEDULES.

         See Item 14(a)(2) above.

                                       40
<PAGE>

                                   SIGNATURES

    Pursuant  to the  requirements  of  Section  13 or 15(d)  of the  Securities
Exchange Act of 1934, as amended,  the Registrant has duly caused this Report to
be signed on its behalf by the undersigned, thereunto duly authorized.

                                            ADEPT TECHNOLOGY, INC.

                                            By: /s/ Michael W. Overby
                                               ----------------------
                                               Michael W. Overby
                                               Vice President, Finance and
                                               Chief Financial Officer



Date: September 19, 2001

                                       41
<PAGE>

                                POWER OF ATTORNEY

     KNOW ALL  PERSONS  BY THESE  PRESENTS,  that each  person  whose  signature
appears below  constitutes  and appoints Brian R. Carlisle and Michael W. Overby
and each of them, his or her true and lawful  attorneys-in-fact and agents, each
with  full  power  of  substitution  and  resubstitution,  to  sign  any and all
amendments (including  post-effective  amendments) to this Annual Report on Form
10-K and to file the same,  with all  exhibits  thereto and other  documents  in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing  requisite  and necessary to be done
in connection therewith, as fully to all intents and purposes as he or she might
or  could  do  in  person,   hereby  ratifying  and  confirming  all  that  said
attorneys-in-fact  and agents,  or their  substitute or  substitutes,  or any of
them, shall do or cause to be done by virtue hereof.

     Pursuant to the  requirements  of the  Securities  Exchange Act of 1934, as
amended, this Report has been signed below by the following persons on behalf of
the Registrant and in the capacities and on the dates indicated:

<TABLE>
<CAPTION>
           SIGNATURE                                   TITLE                                 DATE
           ---------                                   -----                                 ----

<S>                              <C>                                                <C>
     /s/ Brian R. Carlisle       Chairman of the Board of Directors and Chief       September 19, 2001
     ---------------------       Executive Officer (Principal Executive Officer)
      (Brian R. Carlisle)


     /s/ Michael W. Overby       Vice President, Finance and Chief Financial        September 19, 2001
     ---------------------       Officer (Principal Financial and Accounting
      (Michael W. Overby)        Officer)


     /s/ Bruce E. Shimano        Vice President, Research and Development,          September 19, 2001
     --------------------        Secretary and Director
      (Bruce E. Shimano)


     /s/ Ronald E. F. Codd       Director                                           September 19, 2001
     ---------------------
      (Ronald E. F. Codd)


     /s/ Michael P. Kelly        Director                                           September 19, 2001
     --------------------
      (Michael P. Kelly)


       /s/ Cary R. Mock          Director                                           September 19, 2001
       ----------------
        (Cary R. Mock)


      /s/ John E. Pomeroy        Director                                           September 19, 2001
      -------------------
       (John E. Pomeroy)
</TABLE>

                                       42
<PAGE>


<TABLE>
<CAPTION>

                   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                             ADEPT TECHNOLOGY, INC.

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


<S>                                                                                             <C>
Report of Ernst & Young, LLP, Independent Auditors.......................................       44

Consolidated Balance Sheets at June 30, 2001 and June 30, 2000...........................       45

Consolidated Statements of Operations for each of the three years in the period
 ended June 30, 2001.....................................................................       46

Consolidated Statements of Cash Flows for each of the three years in the period
 ended June 30, 2001.....................................................................       47

Consolidated Statements of Shareholders' Equity for each of the three years in the period
 ended June 30, 2001.....................................................................       48

Notes to Consolidated Financial Statements...............................................       49
</TABLE>

                                       43
<PAGE>

                REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

The Shareholders and Board of Directors
Adept Technology, Inc.

    We have  audited  the  accompanying  consolidated  balance  sheets  of Adept
Technology,  Inc.  as of June 30, 2001 and 2000,  and the  related  consolidated
statements of operations,  shareholders'  equity, and cash flows for each of the
three years in the period  ended June 30,  2001.  Our audits also  included  the
financial  statement  schedule  listed  in the  Index  as Item  14(a)(2).  These
financial  statements  and  schedule  are the  responsibility  of the  Company's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements and schedule based on our audits.

    We conducted our audits in  accordance  with  auditing  standards  generally
accepted in the United States.  Those standards require that we plan and perform
the audit to obtain reasonable  assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.  An
audit also includes  assessing the accounting  principles  used and  significant
estimates  made by  management,  as well as  evaluating  the  overall  financial
statement  presentation.  We believe that our audits provide a reasonable  basis
for our opinion.

    In our opinion,  the  consolidated  financial  statements  referred to above
present fairly, in all material respects, the consolidated financial position of
Adept Technology,  Inc. at June 30, 2001 and 2000, and the consolidated  results
of its  operations  and its cash flows for each of the three years in the period
ended June 30, 2001, in conformity with accounting principles generally accepted
in the United  States.  Also, in our opinion,  the related  financial  statement
schedule,  when  considered in relation to the basic  financial  statements as a
whole,  presents  fairly in all  material  respects  the  information  set forth
therein.

                                           Ernst & Young LLP

San Jose, California
July 30, 2001


                                       44
<PAGE>

                             ADEPT TECHNOLOGY, INC.
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                         JUNE 30,       JUNE 30,
                                                                                           2001           2000
                                                                                           ----           ----
ASSETS                                                                                       (IN THOUSANDS)
<S>                                                                                   <C>             <C>
Current assets:
     Cash and cash equivalents.................................................       $ 18,700        $ 13,487
     Short-term investments....................................................          2,800           6,950
     Accounts receivable, less allowance for doubtful accounts of $742 in
          2001 and $637 in 2000................................................         21,272          25,527
     Inventories, net..........................................................         17,750          15,153
     Deferred tax and other current assets.....................................          2,069           7,049
                                                                                      --------        --------
         Total current assets..................................................         62,591          68,166

Property and equipment at cost.................................................         34,520          25,675
Less accumulated depreciation and amortization.................................         23,789          20,092
                                                                                      --------        --------
Property and equipment, net....................................................         10,731           5,583
Goodwill and other intangibles, net............................................         16,332          16,963
Other assets...................................................................          5,919           2,811
                                                                                      --------        --------
         Total assets..........................................................       $ 95,573        $ 93,523
                                                                                      ========        ========

LIABILITIES AND SHAREHOLDERS' EQUITY
 Current liabilities:
     Accounts payable..........................................................       $ 10,369        $ 10,841
     Accrued payroll and related expenses......................................          5,267           4,727
     Accrued warranty..........................................................          2,072           1,915
     Deferred revenue..........................................................          2,061           1,511
     Taxes payable and other accrued liabilities...............................          3,038           2,579
                                                                                      --------        --------
         Total current liabilities.............................................         22,807          21,573

Long term liabilities:
     Deferred income tax and other long term liabilities.......................          1,284           1,222

Commitments and contingencies

Shareholders' equity:
 Preferred stock, no par value:  5,000 shares authorized, none issued and
     outstanding...............................................................              -               -
 Common stock, no par value:  70,000 shares authorized, 13,165 shares issued
    and outstanding in 2001, and 10,677 shares in 2000.........................        103,138          67,184
 Retained earnings (accumulated deficit).......................................        (31,656)          3,544
                                                                                      ---------       --------
         Total shareholders' equity............................................         71,482          70,728
                                                                                      --------        --------
         Total liabilities and shareholders' equity............................       $ 95,573        $ 93,523
                                                                                      ========        ========
<FN>
                             See accompanying notes.
</FN>
</TABLE>

                                       45
<PAGE>

                             ADEPT TECHNOLOGY, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                                        YEAR ENDED JUNE 30,
                                                                                        -------------------
                                                                             2001              2000              1999
                                                                             ----              ----              ----
                                                                               (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                                                       <C>                <C>               <C>
Net revenues......................................................        $100,313           $99,212           $87,374
Cost of revenues..................................................          65,303            56,173            47,902
                                                                           -------           -------           -------
Gross margin......................................................          35,010            43,039            39,472
Operating expenses:
      Research, development and engineering.......................          22,727            14,629            11,591
      Selling, general and administrative.........................          36,002            29,503            24,676
      Merger-related charges......................................               -               988                 -
      Amortization of goodwill and other intangibles..............           6,818               685                 -
                                                                           -------           -------           -------
Total operating expenses..........................................          65,547            45,805            36,267
                                                                           -------           -------           -------

Operating (loss) income...........................................         (30,537)           (2,766)            3,205

Interest income...................................................             745             1,031               967
Interest and other expense........................................              12               285                41
                                                                           -------           -------           -------

(Loss) income before provision for (benefit from) income taxes....         (29,804)           (2,020)            4,131
Provision for (benefit from) income taxes.........................           5,396              (593)            1,620
                                                                           -------           -------           -------

Net (loss) income.................................................         $(35,200)         $(1,427)          $ 2,511
                                                                           ========          =======           =======

Net (loss) income per share:

      Basic.......................................................         $  (3.02)         $  (0.15)         $   0.27
                                                                           ========          ========          ========
      Diluted.....................................................         $  (3.02)         $  (0.15)         $   0.26
                                                                           ========          ========          ========

Number of shares used in computing per share amounts:

      Basic.......................................................          11,637             9,774             9,302
                                                                           =======           =======           =======
      Diluted.....................................................          11,637             9,774             9,484
                                                                           =======           =======           =======
<FN>
                             See accompanying notes.
</FN>
</TABLE>

                                       46
<PAGE>

                             ADEPT TECHNOLOGY, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                         YEAR ENDED JUNE 30,
                                                                                         -------------------
                                                                                  2001          2000           1999
                                                                                  ----          ----           ----
                                                                                            (IN THOUSANDS)
OPERATING ACTIVITIES
<S>                                                                             <C>            <C>            <C>
 Net (loss) income......................................................        $ (35,200)     $ (1,427)      $  2,511
 Adjustments to reconcile net income to net cash (used in)
    provided by operating activities:
    Depreciation........................................................            3,646         3,140          3,154
    Amortization........................................................            6,818           843             79
    Provision for inventory.............................................            4,839         1,256           (399)
    Deferred taxes......................................................            4,971          (834)           300
    (Gain)/loss on disposal of property and equipment...................               37           (50)           (37)
    Tax benefit from stock plans........................................                -           591            164
    Changes in operating assets and liabilities, net of effects of
       acquisitions:
       Accounts receivable..............................................            4,358        (5,581)         1,668
       Inventories......................................................           (7,436)       (4,846)         3,706
       Other current assets.............................................              303          (152)        (1,106)
       Other assets.....................................................           (1,024)       (1,279)          (404)
       Accounts payable.................................................           (1,207)        3,695            762
       Accrued expenses.................................................             (226)        2,071           (710)
       Accrued restructuring and nonrecurring charges...................                -             -         (1,019)
       Taxes payable and other accrued liabilities......................              803        (1,068)         1,048
                                                                                 --------      --------       --------

    Net cash (used in) provided by operating activities.................          (19,318)       (3,641)         9,717
                                                                                 --------      --------       --------

INVESTING ACTIVITIES
    Business acquisitions...............................................           (7,050)       (3,250)             -
    Purchase of property and equipment..................................           (8,523)       (2,406)        (2,469)
    Proceeds from the sale of property and equipment....................                -           116            187
    Purchases of short-term available-for-sale investments..............          (36,500)      (44,117)       (31,206)
    Sales of short-term available-for-sale investments..................           40,650        52,367         27,306
                                                                                 --------      --------       --------
    Net cash (used in) provided by investing activities.................          (11,423)        2,710         (6,182)
                                                                                 ---------     --------       --------

FINANCING ACTIVITIES
    Proceeds from issuance of common stock, net.........................           32,424             -              -
    Proceeds from employee stock incentive program and employee
       stock purchase plan, net of repurchases and cancellations........            3,530         2,602          2,306
    Revolving bank line of credit.......................................                -             -           (470)
    Repurchase of common stock..........................................                -             -         (3,194)
                                                                                 --------      --------       --------
    Net cash (used in) provided by financing activities.................           35,954         2,602         (1,358)
                                                                                 --------      --------       --------
Increase in cash and cash equivalents...................................            5,213         1,671          2,177
Cash and cash equivalents, beginning of period..........................           13,487        11,816          9,639
                                                                                 --------      --------       --------
Cash and cash equivalents, end of period................................         $ 18,700      $ 13,487       $ 11,816
                                                                                 ========      ========       ========

Supplemental disclosure of noncash activities:

 Inventory capitalized into property and equipment including related tax         $      -      $    228       $    561

Cash paid during the period for:

 Interest...............................................................         $     12      $      -       $     41
 Taxes paid (refunded) .................................................         $   (264)     $  1,373       $   (189)
<FN>
                             See accompanying notes.
</FN>
</TABLE>

                                       47
<PAGE>

                             ADEPT TECHNOLOGY, INC.
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY


<TABLE>
<CAPTION>

                                                                                         RETAINED
                                                               COMMON STOCK              EARNINGS/          TOTAL
                                                      -------------------------------  (ACCUMULATED     SHAREHOLDERS'
                                                          SHARES          AMOUNT         DEFICIT)           EQUITY
                                                          ------          ------         --------           ------
                                                                               (IN THOUSANDS)
<S>             <C> <C>                                    <C>             <C>            <C>              <C>
Balance at June 30, 1998...........................        9,443           $50,279        $ 3,120          $53,399

       Common stock issued under employee stock
          incentive program and employee
          stock purchase plan......................          466             2,306              -            2,306
       Repurchase of shares........................         (450)           (2,534)          (660)          (3,194)
       Tax benefit from stock plans................            -               164              -              164
       Net income and comprehensive income.........            -                 -          2,511            2,511
                                                          ------          --------        -------         --------

Balance at June 30, 1999...........................        9,459            50,215          4,971           55,186

       Common stock issued under employee stock
          incentive program and employee
          stock purchase plan......................          518             2,602              -            2,602
       Tax benefit from stock plans................            -               591              -              591
       Common stock issued for acquisitions........          700            13,776              -           13,776
       Net loss and comprehensive loss.............            -                 -         (1,427)          (1,427)
                                                          ------          --------        -------         --------

Balance at June 30, 2000...........................       10,677            67,184          3,544           70,728

       Common stock issued under employee stock
          incentive program and employee stock
          purchase plan............................          488             3,530              -            3,530
       Common stock issued in conjunction with
          follow-on offering (less issuance
          costs of $1,056) ........................        2,000            32,424              -           32,424
       Net loss and comprehensive loss.............            -                 -        (35,200)         (35,200)
                                                          ------          --------        -------         --------

Balance at June 30, 2001...........................       13,165         $ 103,138      $( 31,656)        $ 71,482
                                                          ======         =========        ========        ========
<FN>
                             See accompanying notes.
</FN>
</TABLE>

                                       48
<PAGE>

                             ADEPT TECHNOLOGY, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.       ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

    Adept Technology, Inc. ("Adept" or the "Company") was incorporated under the
laws of the  state  of  California  on  June  14,  1983.  The  Company  designs,
manufactures and sells factory  automation  components and systems for the fiber
optic,  wireless  communications  and  semiconductor  industries  throughout the
world.

Basis of Presentation

    The notes to the Company's  consolidated  financial  statements  are for the
three year period ended June 30, 2001. Unless otherwise indicated, references to
any  year in these  Notes  to  Consolidated  Financial  Statements  refer to the
Company's fiscal year ended June 30.

Follow-on offering

    On February 18, 2001, Adept completed a public offering of its common stock.
Adept sold a total of 2,000,000  shares of common stock at a price of $18.00 per
share.  The offering  resulted in net proceeds to Adept of  approximately  $32.4
million,  net of an underwriting  discount of $2.5 million and offering expenses
of $1.1 million.

Use of Estimates

    The  preparation of the financial  statements in conformity  with accounting
principles  generally accepted in the United States requires  management to make
estimates and assumptions that affect reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting period. Actual results could differ from those estimates.

Foreign Currency Translation

    The Company applies  Financial  Accounting  Standards Board Statement No. 52
("SFAS 52"),  "Foreign Currency  Translation," with respect to its international
operations,  which are sales and  service  entities.  All  monetary  assets  and
liabilities  are  remeasured  at the  current  exchange  rate  at the end of the
period, nonmonetary assets and liabilities are remeasured at historical exchange
rates,  and revenues and expenses are  remeasured at average  exchange  rates in
effect  during the  period.  Translation  losses  resulting  from the process of
remeasuring  foreign  currency  financial  statements  into  U.S.  dollars  were
$119,000 in 2001, $394,000 in 2000 and $87,000 in 1999.  Transaction losses were
$326,000 in 2001, $17,000 in 2000 and $52,000 in 1999.

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 in marketable  securities  consist  principally of debt  instruments
with  maturities  between  three and 12 months.  Investments  are  classified as
held-to-maturity, trading, or available-for-sale at the time of purchase.

    At June 30, 2001 and 2000,  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 day of the year. The cost of the securities is based upon the
specific identification method.

                                       49
<PAGE>


                             ADEPT TECHNOLOGY, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)





                                                                JUNE 30,
                                                                --------
                                                            2001         2000
                                                            ----         ----
                                                             (IN THOUSANDS)
   Cash and cash equivalents
        Cash.....................................        $  2,747     $  9,096
        Money market funds.......................          15,953        1,166
        Municipal notes and bonds................               -        3,225
                                                         --------     --------
   Cash and cash equivalents.....................        $ 18,700     $ 13,487
                                                         ========     ========

   Short-term investments
        Auction rate securities..................        $  2,800     $  3,500
        Market auction preferred stock...........               -        3,450
                                                         --------     --------
   Short-term investments........................        $  2,800     $  6,950
                                                         ========     ========


    Realized gains or losses,  interest,  and dividends are included in interest
income.   Realized  and  unrealized  gains  or  losses  from  available-for-sale
securities were not material in 2001, 2000 or 1999.

Comprehensive Income

    For the  three  years in the  period  ended  June 30,  2001,  there  were no
significant  differences between the Company's  comprehensive  (loss) income and
its net (loss) income.

Loans to Employees

    Loans to employees are summarized as follows:

                                                                 JUNE 30,
                                                                 --------
                                                             2001       2000
                                                             ----       ----
                                                             (IN THOUSANDS)
       Short-term loans to employees..................     $    80     $   856
       Long-term loans to employees...................         415         617
                                                           -------     -------
                                                           $   495     $ 1,473
                                                           =======     =======

    Short-term  loans  to  employees  are  included  in  other  current  assets.
Long-term loans to employees are included in other assets.

Inventories

    Inventories  are stated at the lower of standard  cost,  which  approximates
actual (first-in,  first-out method) or market (estimated net realizable value).
The components of inventories are as follows:

                                                                 JUNE 30,
                                                                 --------
                                                             2001        2000
                                                             ----        ----
                                                              (IN THOUSANDS)
        Raw materials................................     $   7,397   $   6,097
        Work-in-process..............................         4,908       3,036
        Finished goods...............................         5,445       6,020
                                                          ---------   ---------
                                                          $  17,750   $  15,153
                                                          =========   =========

    During the fourth quarter of fiscal 2001, the Company recorded an additional
inventory provision of $5.8 million for excess and obsolete inventory.

                                       50
<PAGE>

                             ADEPT TECHNOLOGY, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)


Credit Facility

    On April 9, 2001,  the Company  signed a set of  agreements  establishing  a
revolving line of credit with The CIT Group/Business  Credit,  Inc. to borrow up
to the lesser of $25.0 million or the sum of 85% of eligible  domestic  accounts
receivables,  plus 90% of eligible foreign accounts receivables, less a dilution
reserve  equivalent  to one percent of eligible  domestic  and foreign  accounts
receivables for every one percentage  point in excess of a standard five percent
dilution rate. The agreements have an initial term of three years with automatic
renewals on identical  terms  thereafter  unless  terminated by the either party
within 60 days of the then current term. The Company is required to meet certain
restrictive covenants as defined by the new credit agreement. The Company was in
compliance  with these  covenants at June 30, 2001. To date,  the Company has no
outstanding borrowings under this revolving line of credit.

Property and Equipment

    Property and equipment are recorded at cost.

    The components of property and equipment are summarized as follows:

                                                                  JUNE 30,
                                                             2001          2000
                                                             ----          ----
                                                               (IN THOUSANDS)
        Cost:
             Machinery and equipment......................  $14,922    $  13,303
             Computer equipment...........................   14,779        8,975
             Office furniture and equipment...............    4,819        3,397
                                                            -------    ---------
                                                             34,520       25,675
             Accumulated depreciation and amortization....   23,789       20,092
                                                            -------    ---------
             Net property and equipment...................  $10,731    $   5,583
                                                            =======    =========

    Depreciation is computed using the  straight-line  method over the estimated
useful lives of the assets, which range from three to five years.

Revenue Recognition

    The Company  recognizes  revenue on products when title and risk of loss are
transferred,   which  generally  is  at  the  time  of  shipment.   For  certain
international  sales  where  title  and  risk of  loss  are  transferred  at the
customer's site,  revenue is recognized upon receipt of product by the customer.
A provision for the estimated cost to repair or replace  products under warranty
at the time of sale is recorded in the same period as the related revenues.

    The Company recognizes software revenue, primarily related to its simulation
software products, in accordance with the American Institute of Certified Public
Accountants'  Statement  of  Position  97-2  ("SOP  97-2") on  Software  Revenue
Recognition.  License revenue is recognized on shipment of the product  provided
that no significant vendor or post-contract  support obligations remain and that
collection  of the  resulting  receivable  is  deemed  probable  by  management.
Insignificant  vendor and  post-contract  support  obligations  are accrued upon
shipment.  Service revenue includes  training,  consulting and customer support.
Revenues from training and  consulting are recognized at the time the service is
performed.

    Deferred revenue  primarily  relates to software support contracts sold. The
term of the software  support  contract is generally  one year,  and the Company
recognizes  the  associated  revenue  on a pro rata  basis  over the life of the
contract.

Concentration of Credit Risk

    Financial instruments that potentially subject the Company to concentrations
of credit risk consist  primarily of cash  equivalents,  auction rate securities
and trade  receivables.  The Company places its cash  equivalents and short-

                                       51
<PAGE>

                             ADEPT TECHNOLOGY, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

term investments with high credit-quality  financial  institutions.  The Company
invests its excess cash in commercial paper, readily marketable debt instruments
and collateralized funds of U.S., state and municipal government entities. Adept
has  established  guidelines  relative to credit  ratings,  diversification  and
maturities that seek to maintain safety and liquidity.

    The Company  manufactures and sells its products to system integrators,  end
users and OEMs in diversified  industries.  The Company  performs ongoing credit
evaluations  of its  customers  and does not require  collateral.  However,  the
Company  may  require  customers  to make  payments in advance of shipment or to
provide a letter of credit.  The Company provides  reserves for potential credit
losses, and such losses have been within management's expectations.

    Amounts charged to bad debt expense were $214,000,  $516,000 and $389,000 in
2001, 2000 and 1999, respectively.

Research, Development and Engineering Costs

    Research,  development and engineering  costs, other than purchased computer
software,  are charged to expense when incurred.  The Company has received third
party funding of $49,000 in 2001,  $309,000 in 2000,  and $681,000 in 1999.  The
Company has offset research,  development and engineering  expenses by the third
party  funding  as the  Company  retains  the rights to any  technology  that is
developed.

Goodwill and Other Intangible Assets

    The excess of the  purchase  price over the fair value of  identifiable  net
assets of acquired  companies is allocated to goodwill and amortized  over three
to four years. Other intangible assets primarily represent developed  technology
and assembled  workforce.  Goodwill and other  intangible  assets  totaled $16.3
million and $16.9 million at June 30, 2001 and June 30, 2000, respectively,  and
is presented net of accumulated amortization of $7.5 million and $0.7 million at
June 30,  2001 and June 30,  2000.  The  recoverability  of  goodwill  and other
intangible  assets has been  evaluated to determine  whether  current  events or
circumstances  warrant  adjustments to the carrying value.  Management  believes
that no  significant  impairment  of goodwill  and other  intangible  assets was
indicated.

Software Development Costs

    The Company  capitalizes  software  development costs incurred subsequent to
the  time  the  product   reaches   technical   feasibility.   All   capitalized
internally-developed  software costs and purchased  software costs are amortized
to the cost of revenues on a straight-line  basis based on the estimated  useful
lives of the  products  or the ratio of current  revenue to the total of current
and   anticipated   future   revenue,   whichever   is   greater.    Capitalized
internally-developed  software and purchased software are stated at the lower of
amortized cost or net realizable value.

Advertising Costs

    Advertising  costs are expensed in the period  incurred.  Advertising  costs
were $307,000 in 2001,  $224,000 in 2000 and $143,000 in 1999.  The Company does
not incur any direct response advertising costs.

Income Taxes

    The  liability  method is used to account  for income  taxes.  Deferred  tax
assets and liabilities are determined based on differences between the financial
reporting  and tax bases of assets and  liabilities  and are measured  using the
enacted  tax rates and laws that  will be in  effect  when the  differences  are
expected to reverse.

Stock-Based Compensation

    In 1995,  the  Financial  Accounting  Standards  Board  issued  Statement of
Financial Accounting Standards No. 123 ("SFAS 123"), "Accounting for Stock-Based
Compensation",  which  provides an  alternative  to APB Opinion No. 25 ("Opinion
25"), "Accounting for Stock Issued to Employees", in accounting for stock issued
to employees. The

                                       52
<PAGE>
                             ADEPT TECHNOLOGY, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Company has elected to account for  stock-based  compensation  to  employees  in
accordance with Opinion 25, providing only pro forma disclosure required by SFAS
123.

Net Income (Loss) Per Share

    SFAS No. 128,  "Earnings Per Share"  ("EPS"),  requires the  presentation of
basic and diluted EPS.  Basic EPS excludes  dilution and is computed by dividing
net income  (loss)  available  to common  shareholders  by the  weighted-average
number of common  shares  outstanding  for the period.  Diluted EPS reflects the
potential  dilution that could occur if  securities or other  contracts to issue
common stock were  exercised  or converted  into common stock or resulted in the
issuance of common stock that then  participates in the earnings of the Company.
Dilutive common equivalent shares consist of stock options  calculated using the
treasury stock method.

Merger-Related Charges

    In July 1999,  the  Company  incurred  charges of  $988,000  relating to the
acquisition  of  BYE/OASIS  and the closure of  BYE/OASIS  facilities  in Texas.
Included in this  amount were  merger-related  expenses  of  $558,000,  expenses
relating to the closure of facilities in Texas of $195,000,  and other  expenses
relating to the acquisition of $235,000.

New Accounting Pronouncements

    In June 2001, the Financial  Accounting Standards Board issued Statements of
Financial  Accounting  Standards No. 141,  Business  Combinations,  and No. 142,
Goodwill and Other Intangible Assets, effective for fiscal years beginning after
December 15, 2001. Under the new rules,  goodwill (and intangible  assets deemed
to have  indefinite  lives) will no longer be  amortized  but will be subject to
annual  impairment  tests in accordance  with the Statements.  Other  intangible
assets will be amortized over their useful lives.

    The Company  will apply the new rules on  accounting  for goodwill and other
intangible assets beginning in the first quarter of fiscal 2002.  Application of
the non-amortization  provisions of Statement No. 142 is expected to result in a
decrease in net loss of $7.5 million per year.  During fiscal 2002,  the Company
will  perform  the  first  of the  required  impairment  tests of  goodwill  and
indefinite  lived  intangible  assets  as of  January  1,  2002  and has not yet
determined  what the  effect  of these  tests  will be on the  earnings  and the
financial position of the Company.

Reclassification

    Certain  amounts  presented in the financial  statements of prior years have
been reclassified to conform to the current presentation for 2001.

2.       MERGERS AND ACQUISITIONS

    During the  three-year  period  ended June 30,  2001,  Adept  acquired  four
companies: HexaVision Technologies Inc., NanoMotion Incorporated, Pensar-Tucson,
Inc. and BYE/OASIS. These acquisitions are described below.

HexaVision Technologies Inc.

    On July 21, 2000,  Adept acquired  HexaVision  Technologies  Inc., now named
Adept Technology Canada Co. ("HexaVision"),  a Canadian corporation.  HexaVision
is a machine vision  research and  development  company.  Under the terms of the
purchase  agreement,  Adept initially paid $5.5 million in cash,  which includes
transaction  costs of $0.4 million.  On July 21, 2001,  pursuant to the terms of
the share purchase  agreement  relating to the acquisition of HexaVision,  Adept
issued  116,000  shares  of its  common  stock  to the  former  shareholders  of
HexaVision with a value of $1.1 million,  made cash payments totaling $3,500 and
released  $313,000 in cash from an escrow  account  upon  resolution  of certain
contingencies.  In addition,  a second payment of approximately  $1.3 million in
cash  is  payable  on  the  second  anniversary  closing,  contingent  upon  the
achievement of certain operational milestones by HexaVision. The Company has set
aside  restricted  cash in the  amount of $1.6  million  for  future  contingent
payments,  and such  restricted cash is included in Other Assets on the June 30,
2001 balance sheet.  These

                                       53
<PAGE>
                             ADEPT TECHNOLOGY, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

contingent cash payments and share issuances will be accounted for as additional
purchase price when the contingencies are resolved. Any payments made and shares
issued will be allocated to goodwill.  The  acquisition  of HexaVision  has been
accounted for under the purchase  method of  accounting.  Adept has included the
results of operations of HexaVision in Adept's  results of operations  beginning
July 21, 2000.

    The purchase  price of HexaVision  was  allocated,  based on fair value,  to
tangible assets,  goodwill and other intangible assets.  Goodwill represents the
excess of the purchase price of the net tangible and intangible  assets acquired
over their fair value.  Other intangible  assets primarily  represent  developed
technology and assembled workforce and non-compete covenants.  The allocation of
the  purchase  price is based upon an  independent  valuation  of the assets and
liabilities of HexaVision.

    For the HexaVision  acquisition,  below is a table of the acquisition  cost,
purchase price  allocation  and annual  amortization  of the  intangible  assets
acquired:

<TABLE>
<CAPTION>
                                                                                                        ANNUAL
                                                                                AMORTIZATION         AMORTIZATION
                    (IN THOUSANDS)                     ACQUISITION COST             LIFE            OF INTANGIBLES
                    --------------                     ----------------             ----            --------------
<S>                                                    <C>                          <C>             <C>
      Cash                                             $          5,085
      Transaction costs.....................                        352
                                                       ----------------
           Total acquisition cost...........           $          5,437
                                                       ================

      Purchase Price Allocation
         Net liabilities assumed............           $           (629)
         Developed and core technology......                        201            30 months         $             80
         Non-compete covenant...............                        130            30 months                       52
         Assembled workforce................                        177            30 months                       71
         Goodwill...........................                      5,558            30 months                    2,223
                                                       ----------------                              ----------------
           Total............................           $          5,437                              $          2,426
                                                       ================                              ================
</TABLE>

    The following  unaudited pro forma  summary  results of operations  data has
been  prepared  assuming  that the  HexaVision  acquisition  had occurred at the
beginning of the period presented.  The consolidated results are not necessarily
indicative  of  results  of future  operations  nor of  results  that would have
occurred had the acquisitions been consummated as of the beginning of the period
presented.  As the acquisition was completed on July 21, 2000, pro forma results
for the fiscal  year ended June 30,  2001 would not differ  materially  from the
actual results.



       (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)            2000
                                                           ====

      Net revenues..........................           $   99,311
      Net loss..............................           $   (5,502)
      Basic and diluted net loss per share..           $    (0.56)

NanoMotion

    On May 31,  2000,  the  Company  completed  the  acquisition  of  NanoMotion
Incorporated,  a  California  corporation.   NanoMotion  is  a  manufacturer  of
ultra-high  precision  positioning  and  alignment  devices for  nanometer-scale
movement,  positioning  and  alignment  for the fiber optic,  semiconductor  and
metrology, or precision machining,  markets. In connection with the acquisition,
the Company issued 600,000 shares of its common stock valued at $21 per share to
the shareholders of NanoMotion which was the fair market value of Adept's common
stock at May 31, 2000.  The  acquisition  of  NanoMotion  was accounted for as a
purchase,  and the financial results of NanoMotion have been included in Adept's
consolidated financial results since May 31, 2000.

                                       54
<PAGE>
                             ADEPT TECHNOLOGY, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Pensar

    On April 28, 2000, the Company  completed the acquisition of  Pensar-Tucson,
Inc., an Arizona  corporation.  Pensar is a design and engineering company which
integrates factory automation systems.  In connection with the acquisition,  the
Company  issued 100,000 shares of its common stock valued at $11.75 per share to
the  shareholders  of Pensar,  which was the fair market value of Adept's common
stock at April 28, 2000. In addition,  the Company paid  $3,000,000 in cash. The
financial  results of Pensar  have been  included in Adept's  financial  results
since April 28, 2000.

    The purchase  prices of NanoMotion  and Pensar were  allocated,  based on an
independent  valuation,  to  goodwill  and  other  intangible  assets.  Goodwill
represents  the excess of the purchase  price of the net tangible and intangible
assets  acquired  over their  estimated  fair  value.  Other  intangible  assets
primarily represent developed technology and assembled workforce.

    For  the  NanoMotion  and  Pensar  acquisitions,  below  is a  table  of the
acquisition  cost,  purchase  price  allocation and annual  amortization  of the
intangible assets acquired, in thousands:
<TABLE>
<CAPTION>
                                                                                               ANNUAL
                                                                                            AMORTIZATION
                                                                ACQUISITION  AMORTIZATION       OF
                                                                   COST          LIFE       INTANGIBLES
                                                                   ----          ----       -----------

<S>                                                                  <C>      <C>             <C>
      Common stock..........................................     $  13,776
      Cash..................................................         3,250
      Transaction costs.....................................            83
                                                                 ---------
           Total acquisition cost...........................     $  17,109
                                                                 =========
      Purchase Price Allocation
        Net tangible assets.................................     $     230
        Developed and core technology.......................         1,120      4 years       $   280
        Non-compete covenant................................           380      4 years            95
        Assembled workforce.................................           480    3-4 years           131
        Goodwill............................................        15,658    3-4 years         4,474
        Deferred tax liability..............................          (759)
                                                                 ---------                    -------
           Total............................................     $  17,109                    $ 4,980
                                                                 =========                    =======
</TABLE>

BYE/OASIS

    On July 16,  1999,  the  Company  completed  the  acquisition  of  BYE/OASIS
Engineering,  Inc., a Texas corporation.  BYE/OASIS is a leading manufacturer of
environmental  filtering and control systems and wafer cassette handling devices
for the  microelectronics  industry.  In connection  with the  acquisition,  the
Company  issued  720,008  shares  of its  common  stock to the  shareholders  of
BYE/OASIS.  In  addition,  the Company  assumed  outstanding  options to acquire
BYE/OASIS shares, which were converted into options to acquire 185,361 shares of
Adept's  common  stock.  The  acquisition  was intended to constitute a tax-free
reorganization  under Section  368(a) of the Internal  Revenue Code of 1986. The
acquisition  was  accounted  for using  the  pooling  of  interests  method  and
accordingly  all  prior  period  consolidated  financial  statements  have  been
restated to include the combined results of operations,  financial  position and
cash flows of BYE/OASIS.

    Prior  to the  merger,  BYE/OASIS's  fiscal  year  ended  on  September  30.
BYE/OASIS's  prior period financial  statements have been restated to conform to
Adept's year-end.

    The following  information  presents  certain  income  statement data of the
separate companies for the periods preceding the merger:

                                       55
<PAGE>
                             ADEPT TECHNOLOGY, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

                                                                       1999
                                                                       ----

                       Net sales
                         Adept...................................   $  82,027
                         BYE/OASIS...............................       5,347
                                                                    ---------
                            Total sales..........................   $  87,374
                                                                    =========
                       Net (loss) income
                         Adept...................................   $   2,622
                         BYE/OASIS...............................        (111)
                                                                    ---------
                            Total net income (loss)..............   $   2,511
                                                                    =========

Revenue  generated  for the period from July 1, 1999 through July 16, 1999 (date
of acquisition) was not significant.

CHAD Industries, Inc.

On June  27,  2001,  the  Company  signed  a  definitive  agreement  to  acquire
privately-held CHAD Industries, Inc. in exchange for a combination of equity and
cash to be paid out over three  years.  Completion  of the  acquisition  remains
subject to obtaining required approvals and other standard closing conditions.

3.       DERIVATIVE FINANCIAL INSTRUMENTS

    The Company's product sales are  predominantly  denominated in U.S. dollars.
However,  certain  international  operating  expenses are predominately  paid in
their respective  local currency.  A foreign currency hedging program is used to
hedge  the  Company's  exposure  to  foreign  currency  exchange  risk on  local
international  operational expenses and revenues.  Realized and unrealized gains
and losses on forward currency  contracts that are effective as hedges of assets
and liabilities  are included under SG&A in the statement of operations.  A gain
of  $322,000  was  recognized  for the year  ended  June 30,  2001 and a loss of
$50,000 for the year ended June 30,  2000.  Realized  and  unrealized  gains and
losses on instruments  that hedge firm  commitments are deferred and included in
the measurement of the subsequent transaction; however, losses are deferred only
to the extent of expected  gains on the future  commitment at June 30, 2001. The
Company has deferred  recognition of a transaction loss of $62,000,  relating to
foreign exchange  contracts treated as accounting  hedges.  The Company realized
this transaction loss in the first quarter of 2002.

4.       COMMITMENTS AND CONTINGENCIES

Commitments

    The Company's  lease on its primary  facility will expire in December  2003.
Future  minimum lease  payments  under  non-cancelable  operating  leases are as
follows:

                                                                LEASES
                                                             (IN THOUSANDS)
                                                             --------------
         Fiscal Year
           2002.........................................      $   5,363
           2003.........................................          7,326
           2004.........................................          6,442
           2005.........................................          5,200
           2006.........................................          4,705
           Later years..................................         26,094
                                                              ---------
         Total minimum lease payments...................      $  55,130
                                                              =========


    Rent  expense net of sublease  income of $16,000,  $18,480 and  $312,000 was
$4,102,000 in 2001, $3,019,000 in 2000 and $2,507,000 in 1999.

                                       56
<PAGE>
                             ADEPT TECHNOLOGY, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Contingencies

    Some end users of the Company's products have notified the Company that they
have  received  a claim of  patent  infringement  from the  Jerome  H.  Lemelson
Foundation,  alleging that their use of the Company's  machine  vision  products
infringes certain patents issued to Mr. Lemelson.  In addition,  the Company has
been notified that other end users of the Company's AdeptVision VME line and the
predecessor  line of Multibus machine vision products have received letters from
Mr. Lemelson which refer to Mr.  Lemelson's  patent  portfolio and offer the end
user a license to the  particular  patents.  Certain end users have notified the
Company  that they may seek  indemnification  from the  Company  for  damages or
expenses  resulting from this matter.  The Company cannot predict the outcome of
this or any  similar  litigation,  which may arise in the future.  However,  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.

    The Company has from time to time received communications from third parties
asserting that the Company is infringing  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 actions  brought  against it, 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.

5.       SHAREHOLDERS' EQUITY

Preferred Stock

    The Board of Directors has the authority to issue, without further action by
the  shareholders,  up to  5,000,000  shares of  preferred  stock in one or more
series and to fix the price,  rights,  preferences,  privileges and restrictions
thereof,  including dividend rights,  dividend rates,  conversion rights, voting
rights, terms of redemption,  redemption prices, liquidation preferences and the
number  of  shares  constituting  a series or the  designation  of such  series,
without any further vote or action by the Company's  shareholders.  The issuance
of preferred  stock,  while providing  desirable  flexibility in connection with
possible  acquisitions  and other corporate  purposes,  could have the effect of
delaying,  deferring or  preventing  a change in control of the Company  without
further action by the shareholders and may adversely affect the market price of,
and the voting and other rights of, the holders of common stock.

Common Stock

     In August  2000,  the Board of  Directors  amended the  Company's  Restated
Articles of  Incorporation,  approving  an increase in the number of  authorized
shares  of  its  common  stock  from  25,000,000  to  70,000,000   shares.   The
shareholders approved this amendment on November 10, 2000.

Stock Option Plans

    The Company's  1993 Stock Plan (the "1993 Plan") was adopted by the Board of
Directors in April 1993 and approved by the  shareholders of the Company in June
1993. The 1993 Plan provides for grants of incentive  stock options to employees
(including  officers and employee  directors) and nonstatutory  stock options to
employees  (including  officers and employee  directors) and  consultants of the
Company.  In  general,  options  and common  stock  purchased  pursuant to stock
purchase rights granted under the 1993 Plan vest and become exercisable starting
one year after the date of grant,  with 25% of the shares  subject to the option
exercisable  at that time and an additional  1/48th of the shares subject to the
option  becoming  exercisable  each  month  thereafter.  Upon the  voluntary  or
involuntary  termination  of  employment  (including  as a  result  of  death or
disability)  by a holder  of  unvested  shares  of the  Company's  common  stock
purchased  pursuant to stock  purchase  rights  granted under the 1993 Plan, the
Company may exercise an option to repurchase such shares at their original issue
price.  The terms of the options  granted under the 1993 Plan  generally may not
exceed ten years.  The Board of Directors  determines  the exercise price of the
options  which  must be at least  equal to the fair  market  value of the common
stock on the date of grant.

    On August  12,  1999,  the Board of  Directors  authorized  an  increase  of
1,000,000  shares  issuable  under  the 1993  Plan  which  was  approved  by the
shareholders  in November 1999. In August 2000, the 1993 Plan was amended by

                                       57
<PAGE>
                             ADEPT TECHNOLOGY, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

the Board of Directors to increase the number of shares  authorized for issuance
under  the 1993 Plan by an  additional  1,000,000  shares.  This  amendment  was
approved by the Company's shareholders on November 10, 2000.

    The Company's 1995 Director Option Plan (the "Director Plan") was adopted by
the Board of  Directors  and  approved  by the  shareholders  of the  Company in
October  1995.  The option  grants under the  Director  Plan are  automatic  and
nondiscretionary,  and the  exercise  price of the options is at the fair market
value of the  Company's  common  stock on the date of grant.  A total of 150,000
shares of common stock has been reserved for issuance  under the Director  Plan.
During both years ended June 30, 2001 and 2000,  12,000 options were granted and
no options were exercised.

    The options may be exercised at the time or times determined by the Board of
Directors.

    In August  1998,  the Company  offered  all  employees  holding  options the
opportunity  to exchange  their  outstanding  options for options with  exercise
prices equal to the then fair market value of the company's common stock.  Under
the August 1998 offer,  options to purchase  367,827 shares with exercise prices
exceeding  $7.00 per share were  exchanged for similar  options  exercisable  at
$7.00 per share. The vesting schedule of all exchanged options was delayed by 12
months and the expiration date of the exchanged options will be August 2008. The
effect of the  exchange  has been  included  in the table in 1999  activity  for
options granted and canceled.

    The following table summarizes  option  activities under the Company's stock
option plans:

<TABLE>
<CAPTION>
                                                                             OPTIONS
                                                  ---------------------------------------------------------------
                                                    AVAILABLE     NO. OF SHARES    AGGREGATE    WEIGHTED AVERAGE
                                                    FOR GRANT      OUTSTANDING       PRICE       EXERCISE PRICE
                                                    ---------      -----------       -----       --------------
                                                              (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                 <C> <C>                          <C>             <C>           <C>              <C>
    Balance at June 30, 1998................         1,076           1,192         $  10,096        $     8.47
      Granted...............................          (913)            913             5,757              6.31
      Canceled..............................           451            (451)           (5,156)            11.43
      Exercised.............................            --            (250)           (1,199)             4.80
                                                     -----          ------         ---------
    Balance at June 30, 1999................           614           1,404             9,498              6.76
      Additional shares authorized..........         1,000              --                --                --
      Granted...............................          (845)            845             5,765              6.83
      Canceled..............................           197            (197)           (1,268)             6.45
      Exercised.............................            --            (308)           (1,518)             4.92
                                                     -----          ------         ---------
    Balance at June 30, 2000................           966           1,744            12,477              7.15
      Additional shares authorized..........         1,000              --                --                --
      Granted...............................          (844)            844            16,285             19.29
      Canceled..............................           122            (122)           (2,584)            21.18
      Exercised.............................            --            (252)           (1,370)             5.44
                                                     -----          ------         ---------
    Balance at June 30, 2001................         1,244           2,214         $  24,808       $     11.21
                                                     =====       =========        ==========
</TABLE>

    The  following  table  summarizes  information  concerning  outstanding  and
exercisable options at June 30, 2001:

<TABLE>
<CAPTION>
                                      OPTIONS OUTSTANDING                    OPTIONS EXERCISABLE
                         ---------------------------------------------- ------------------------------
                                           WEIGHTED
                                            AVERAGE        WEIGHTED                       WEIGHTED
                                           REMAINING       AVERAGE                        AVERAGE
   RANGE OF EXERCISE        OPTIONS       CONTRACTUAL      EXERCISE        OPTIONS        EXERCISE
        PRICES            OUTSTANDING        LIFE           PRICE        EXERCISABLE       PRICE
        ------            -----------        ----           -----        -----------       -----
                                                    (SHARES IN THOUSANDS)
<S>         <C>                <C>            <C>           <C>               <C>          <C>
$  0.33  -  $   6.38           451            7.63          $  4.92           201          $  4.67
$  6.44  -  $   7.00           605            6.67          $  6.78           448          $  6.74
$  7.03  -  $   9.93           511            8.92          $  8.66           108          $  8.51
$  9.94  -  $ 23.75            579            8.82          $ 20.05           141          $ 17.56
$24.00  -  $ 49.75              68            9.16          $ 35.87             7          $ 26.50
                              ----                                            ---

$  0.33  -  $ 49.75           2,214           8.02          $ 11.21           905          $   8.32
                              =====                                           ===
</TABLE>

                                       58
<PAGE>
                             ADEPT TECHNOLOGY, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Employee Stock Purchase Plan

    The 1998  Employee  Stock  Purchase  Plan (the "1998 ESPP") has  overlapping
12-month  offering  periods  that begin every six months,  starting on the first
trading  day on or  after  May 1 and  November  1 of each  year.  Each  12-month
offering period is divided into two six-month purchase periods.  The plan allows
eligible  employees,  through  payroll  deductions,  to  purchase  shares of the
Company's  common  stock at 85% of fair market  value on either the first day of
the offering period or the last day of the purchase period,  whichever is lower.
The plan includes a provision for an annual automatic  increase in the number of
shares  reserved for  issuance by the lesser of (i)  300,000,  (ii) 3% of common
stock  outstanding  on the last day of the prior fiscal year,  or (iii) a lesser
amount as may be determined by the Board of Directors.

    In May 2000,  the Board  approved an amendment to the 1998 ESPP for 24-month
offering periods  including four six-month  purchase  periods,  effective May 1,
2001 and  approved  an  amendment  to the 1998  ESPP to  provide  for an  annual
automatic  increase in the number of shares  reserved for issuance by the lesser
of (i) 600,000, (ii) 3% of common stock outstanding on the last day of the prior
fiscal  year,  or (iii) a lesser  amount  as may be  determined  by the Board of
Directors.

    As of June 30,  2001,  537,000  shares of the  Company's  common  stock were
issued under the 1998 ESPP and 624,000  shares  remain  unissued  under the 1998
ESPP.

Repurchase of Company's Stock

    In August 1998, the Board of Directors  authorized the Company to repurchase
up to 450,000  shares of the  Company's  common  stock on the open  market or in
privately negotiated  transactions at prices not to exceed $8.50 per share and a
total  purchase  price  not to  exceed  $3,825,000.  During  1999,  the  Company
repurchased  450,000  shares at an  average  purchase  price of $7.10 per share.
There were no repurchases of the Company's stock during 2001 or 2000.

Stock Based Compensation

    At June 30, 2001, the Company had three  stock-based  compensation  plans as
described   above.   The  Company   applies  APB  Opinion  No.  25  and  related
interpretations  in  accounting  for its  compensation  plans.  Accordingly,  no
compensation  cost has been  recognized for its fixed stock option plans and its
ESPP. If compensation cost for the Company's stock-based  compensation plans had
been determined  consistent with Statement of Financial Accounting Standards No.
123 ("SFAS  123"),  the  Company's  net income  (loss) and net income (loss) per
share would have been adjusted to the pro forma amounts indicated below:

                                                          JUNE 30,
                                                          --------
                                              2001          2000         1999
                                              ----          ----         ----
                                           (IN THOUSANDS, EXCEPT PER SHARE DATA)
Net (loss) income
As reported...............................($35,200)      ($1,427)      $ 2,511
 Pro forma................................($43,165)      ($5,532)      $   190

Basic net (loss) income per share
As reported...............................($  3.02)      ($  .15)      $   .27
 Pro forma................................($  3.71)      ($  .57)      $   .02

Diluted net (loss) income per share
As reported...............................($  3.02)      ($  .15)      $   .26
 Pro forma................................($  3.71)      ($  .57)      $   .02

    Because the method of accounting prescribed by SFAS 123 has not been applied
to options  granted prior to July 1, 1995, the resulting pro forma  compensation
cost may not be representative of that to be expected in future years.

                                       59
<PAGE>
                             ADEPT TECHNOLOGY, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

    The fair value of each option  grant is estimated on the date of grant using
the  Black-Scholes  option  pricing  model with the  following  weighted-average
assumptions  for grants  during the years  ended June 30,  2001,  2000 and 1999:
risk-free  interest rates of 3.83% for 2001, 6.04% for 2000, and 4.84% for 1999;
a dividend yield of 0% for all three years; a weighted-average  expected life of
8.6 years for 2001,  3.1 years for 2000 and 3.5 years for 1999; and a volatility
factor of the expected  market price of the  Company's  common stock of 1.54 for
2001, 1.02 for 2000 and .99 for 1999. The weighted average grant date fair value
of options  was $18.86 for options  granted in 2001,  $6.65 in 2000 and $3.83 in
1999.

    Compensation cost is estimated for the fair value of the employees' purchase
rights using the Black-Scholes  model with the following  assumptions for rights
granted  in 2001,  2000 and 1999:  a dividend  yield of 0% for all three  years;
expected life of 6 months for all three years;  expected  volatility of 1.17 for
2001, 1.02 for 2000 and .99 for 1999; and a risk-free  interest rate of 5.6% for
2001,  5.81% for 2000 and 4.78% for 1999. The weighted average fair market value
of the purchase  rights granted was $8.19 for rights granted in 2001,  $3.35 for
2000 and $3.11 for 1999.

    The Black-Scholes option valuation model was developed for use in estimating
the fair value of traded  options  which have no  vesting  restrictions  and are
fully  transferable.  In  addition,  option  models  require the input of highly
subjective  assumptions  including the expected stock price volatility.  Because
the  Company's  employee  stock  options  have   characteristics   significantly
different from those of traded  options,  and because  changes in the subjective
assumptions  can  materially  affect the fair value  estimate,  in  management's
opinion,  the  existing  models do not  necessarily  provide a  reliable  single
measure of the fair value of its employee stock options.

6.       EMPLOYEE SAVINGS AND INVESTMENT PLAN

    In May 1988, the Company  adopted a 401(k)  savings and  investment  plan in
which employees are eligible to participate. During 1999, the Company's matching
contributions were suspended for part of the year to reduce costs. The Company's
matching  contributions were $600,000 in 2001,  $274,000 in 2000 and $125,000 in
1999.

7.       INCOME TAXES

The provision for (benefit from) income taxes consists of the following:


<TABLE>
<CAPTION>
                                                               YEAR ENDED JUNE 30,
                                                  -----------------------------------------
                                                       2001           2000         1999
                                                  -------------  -------------  -----------
                                                                (IN THOUSANDS)
 Current:
<S>                                                   <C>            <C>            <C>
   Federal.....................................       $    -         $  161         $  285
   State.......................................            -            (86)           184
   Foreign.....................................          425            166            851
                                                      ------         ------         ------
 Total current.................................          425            241          1,320
 Deferred:
   Federal.....................................        4,033           (515)           389
   State.......................................          938           (319)           (89)
                                                      ------         ------         ------
 Total deferred................................        4,971           (834)           300
                                                      ------         ------         ------
 Provision for (benefit from) income taxes.....        5,396          ($593)        $1,620
                                                      ======         ======         ======
</TABLE>

The  difference  between the provision  for (benefit  from) income taxes and the
amount  computed by applying  the  federal  statutory  income tax rate to (loss)
income before provision for (benefit from) income taxes is explained below:

                                       60
<PAGE>
                             ADEPT TECHNOLOGY, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

<TABLE>
<CAPTION>
                                                                   YEAR ENDED JUNE 30,
                                                           --------------------------------
                                                             2001        2000        1999
                                                           --------    --------    --------
                                                                   (IN THOUSANDS)
<S>                                                        <C>         <C>         <C>
 Tax at federal statutory rate .........................   ($10,133)   ($   687)   $  1,404
 State taxes, net of federal benefit ...................     (1,387)        (33)         63

 Foreign taxes .........................................        436         441         562
 Tax credits ...........................................     (1,082)       (791)       (350)
 Merger and acquisition related expenses ...............      1,373         255        --
 Non-deductible meals, entertainment and exchange losses         65         125          81

Change in valuation allowance ..........................     16,179        --          --

 Other .................................................        (55)         97        (140)
                                                           --------    --------    --------
 Provision for (benefit from)income taxes ..............   $  5,396    ($   593)   $  1,620
                                                           ========    ========    ========
</TABLE>

Significant  components of the Company's deferred tax assets and liabilities are
as follows:

<TABLE>
<CAPTION>
                                                                            JUNE 30,
                                                                            --------
                                                                          2001      2000
                                                                          ----      ----
                                                                         (IN THOUSANDS)
 Deferred tax assets:
<S>                                                                    <C>         <C>
     Net operating loss carryforwards..............................    $  7,469    $   367
     Tax credit carryforwards......................................       2,813      1,626
     Inventory valuation accounts..................................       3,239      1,238
     Warranty reserves.............................................         799        734
     Depreciation /amortization....................................         910        208
     Other accruals and reserves not currently deductible for tax
       purposes....................................................       3,275      2,672

     Capitalized research and development expenses.................         660          -
     Other.........................................................         192        237
                                                                       --------    -------
     Total deferred tax assets.....................................      19,357      7,082
     Valuation allowance...........................................     (18,794)      (888)
                                                                       --------    -------
     Net deferred tax assets.......................................         563      6,194
                                                                       --------    -------

 Deferred tax liabilities:
     Purchased intangibles.........................................        (563)      (759)
     Foreign earnings..............................................           -       (463)
                                                                       --------    -------
     Net deferred tax liabilities..................................        (563)    (1,222)
                                                                       --------    -------

 Total net deferred tax assets.....................................    $      -    $ 4,972
                                                                       ========    =======
</TABLE>

     For financial  reporting  purposes,  the Company's deferred tax assets have
been  fully  offset by a  valuation  allowance  due to  uncertainties  about the
Company's ability to generate future taxable income. The change in the valuation
allowance was a net increase of  approximately  $17,900,000 for 2001 and $52,000
for 2000.

     In 2001, the tax benefits  associated with employee stock options provide a
deferred  benefit  of  approximately  $848,000,  which  has been  offset  by the
valuation allowance. The deferred tax benefit associated with the employee stock
options will be credited to additional paid-in capital when realized.

     At June 30, 2001,  the Company had net  operating  loss  carryforwards  for
federal income tax purposes of approximately $20.9 million,  which will begin to
expire in 2002 if unused.  The Company had net operating loss  carryforwards for
state income tax purposes of  approximately  $6.6  million,  which will begin to
expire  in  2002 if  unused.  The  Company  also  had  credit  carryforwards  of
approximately  $2.8  million,  which  will  begin to expire  in

                                       61
<PAGE>
                             ADEPT TECHNOLOGY, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

2002 if unused. Utilization of a portion of the net operating loss carryforwards
and the tax credit carryforwards is limited to approximately $300,000 per year.

     Pretax income (losses) from foreign operations was approximately ($754,000)
in 2001, $267,000 in 2000, and $1.5 million in 1999.

8.       NET INCOME (LOSS) PER SHARE

    Net (loss) income per share is calculated as follows:

<TABLE>
<CAPTION>
                                                                     YEAR ENDED JUNE 30,
                                                                     -------------------
                                                            2001            2000            1999
                                                            ----            ----            ----
                                                          (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S>                                                       <C>              <C>             <C>
 Net (loss) income.................................       $(35,200)        $(1,427)        $2,511
                                                          ========         =======         ======
 Basic:
     Weighted-average shares outstanding...........         11,637           9,774          9,302
                                                          =========        =======         ======
     Net (loss) income per share...................       $  (3.02)        $ (0.15)        $ 0.27
                                                          ========         ========        =======

 Diluted:
     Weighted-average shares outstanding...........         11,637           9,774          9,302
     Effect of dilutive securities:
        Stock options..............................             -                -            182
                                                          -------          -------         ------
     Weighted-average shares outstanding...........         11,637           9,774          9,484
                                                          =========        =======         ======
     Net (loss) income per share...................       $  (3.02)        $ (0.15)       $  0.26
                                                          ========         ========        =======
</TABLE>

    Stock options to purchase  160,480  shares of common stock were  outstanding
during the year ended June 30, 1999,  but were not included in the  calculations
of diluted  earnings per share because the option's  exercise  price was greater
than the average market price of the Company's  common stock during those years.
If the Company had  reported net income for the year ended June 30, 2001 or June
30, 2000,  the  calculation  of diluted net income per share would have included
approximately   1,963,000  and  1,658,000,   respectively,   additional   common
equivalent  shares  relating to outstanding  employee stock options not included
above (determined using the treasury stock method).

9.       SEGMENT INFORMATION

    The  Company  has three  reportable  business  segments,  the  Assembly  and
Material  Handling ("AMH")  operations  segment,  the  Semiconductor  operations
segment and the SILMA Software operations segment.

    The AMH operations  segment  provides  intelligent  automation  software and
hardware products for assembly, material handling and packaging applications.

    The Semiconductor  operations segment provides  semiconductor  contamination
control  products,  such as, standard and customized  products for contamination
control (mini and micro  environments),  wafer  integration  and front-end wafer
handling and  transport  solutions  for  semiconductor  OEMs.  In addition,  the
segment provides end users guidance and inspection vision products and robots to
end users.

    The SILMA  Software  ("SILMA")  operations  segment  provides 3-D  graphical
simulation tools for assembly process design, simulation and analysis.

    The reportable segments are each managed separately because they manufacture
and distribute distinct products with different production processes.

    The Company evaluates  performance and allocates  resources based on segment
revenues and segment  operating income (loss).  Segment  operating income (loss)
comprises  income  before   unallocated   research  and  development

                                       62
<PAGE>
                             ADEPT TECHNOLOGY, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

expenses, unallocated selling, general and administrative expenses, amortization
of intangibles, interest income, interest and other expenses and income taxes.

    Management  does not fully allocate  research and  development  expenses and
selling,  general  and  administrative  expenses  when making  capital  spending
decisions,  expense funding  decisions or assessing segment  performance.  There
were no intersegment sales or transfers between segments.

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

<TABLE>
<CAPTION>
                                                                             YEAR ENDED JUNE 30,
                                                                             -------------------
                                                                     2001           2000           1999
                                                                     ----           ----           ----
                                                                               (IN THOUSANDS)
 Revenue:
<S>                                                                 <C>            <C>            <C>
       Assembly and Material Handling operations............        $ 80,474       $ 81,454       $ 74,858
       Semiconductor operations.............................          14,085         12,438          5,347
       SILMA Software operations............................           5,754          5,320          7,169
                                                                    --------       --------       --------
           Total revenue....................................        $100,313       $ 99,212       $ 87,374
                                                                    ========       ========       ========

 Operating (loss) income:
       Assembly and Material Handling operations............        $  4,281       $ 19,378       $ 18,803
       Semiconductor operations.............................           1,479          1,674           (207)
       SILMA Software operations............................            (926)          (548)         2,372
                                                                    --------       --------       --------
       Segment profit (loss) ...............................           4,834         20,504         20,968
       Unallocated research, development and engineering
          and selling, general and administrative...........         (35,371)       (23,270)       (17,763)
       Interest income......................................             745          1,031            967
       Interest expense.....................................             (12)          (285)           (41)
                                                                    --------       --------       --------
       (Loss) income before provision for (benefit from)
          income taxes......................................        $(29,804)      $ (2,020)      $  4,131
                                                                    ========       ========       ========
</TABLE>

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

<TABLE>
<CAPTION>
                                                          YEAR ENDED JUNE 30,
                                                          -------------------
                                                   2001           2000           1999
                                                   ----           ----           ----
                                                             (IN THOUSANDS)
 Revenue:
<S>                                               <C>            <C>            <C>
      United States......................         $ 63,896       $ 54,320       $ 46,119
      Germany............................           10,523         12,865         12,701
      France.............................           12,445         12,665         10,991
      Other European countries...........           10,537         13,575         12,955
      All other countries................            2,912          5,787          4,608
                                                  --------       --------       --------
                                                  $100,313       $ 99,212       $ 87,374
                                                  ========       ========       ========

 Long-lived assets:
      United States......................         $ 32,557       $ 24,888       $  7,099
      All other countries................              426            469            473
                                                  --------       --------       --------
           Total long-lived assets.......         $ 32,983       $ 25,357       $  7,572
                                                  ========       ========       ========

 Total long-lived assets.................         $ 32,983       $ 25,357       $  7,572
 Other current assets....................           62,590         68,166         64,105
                                                  --------       --------       --------
           Total consolidated assets.....         $ 95,573       $ 93,523       $ 71,677
                                                  ========       ========       ========
</TABLE>

    No single customer  accounted for more than 10% of the Company's net revenue
in 2001, 2000 and 1999.

                                       63
<PAGE>

                                                                     SCHEDULE II

                             ADEPT TECHNOLOGY, INC.
                        VALUATION AND QUALIFYING ACCOUNTS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                          BALANCE       ADDITIONS
                                                             AT         CHARGED TO                       BALANCE
                                                         BEGINNING      COSTS AND                        AT END
                     DESCRIPTION                         OF PERIOD       EXPENSES     DEDUCTIONS (1)    OF PERIOD
                     -----------                         ---------       --------     --------------    ---------
<S>                                                        <C>            <C>              <C>            <C>
Year ended June 30, 1999:
 Allowance for doubtful accounts                           $462           $389             $135           $716

Year ended June 30, 2000:
 Allowance for doubtful accounts                            716            516              595            637

Year ended June 30, 2001:
 Allowance for doubtful accounts                            637            214              109            742

<FN>
-------------------
(1)      Includes write offs net of recoveries.
</FN>
</TABLE>