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, 2000 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 15, 2000 as reported on the Nasdaq National Market,  was approximately
$356,213,894.  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 15, 2000, registrant had outstanding  10,804,127 shares
of common stock.

                       DOCUMENTS INCORPORATED BY REFERENCE

         Portions of the definitive  proxy statement for the 2000 Annual Meeting
to be held on November  10, 2000 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.
The  forward-looking  statements  are  contained  principally  in  the  sections
entitled   "Business,"   "Factors   Affecting  Future  Operating   Results"  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 prospectus.

         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 solutions to our customers
in many industries including the semiconductor, 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 customers'
increasingly complex manufacturing requirements.

         We offer our customers a comprehensive and tailored automation solution
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 customized  engineering and reduced dependence
on production  engineers.  We intend to continue to enhance our RDA capabilities
by  providing  differentiated,  value  added  integrated  solutions  to  further
penetrate high growth markets.

                                       2
<PAGE>
         We market and sell our products  worldwide through more than 300 system
integrators,  our direct sales force and original  equipment  manufacturers,  or
OEMs. This global presence, when combined with our extensive service and support
infrastructure,  enables us to effectively understand our customers,  as well as
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  July  16,  1999,  Adept  completed  the  acquisition  of  BYE/OASIS
Engineering,  Inc.,  a  Texas  corporation.   BYE/OASIS  is  a  manufacturer  of
mini-environment  systems  and  Standard  Mechanical  Interfaces  (SMIF) 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.

         On April 28, 2000, we completed the acquisition of Pensar Tucson, Inc.,
an Arizona corporation.  Pensar is a precision automation integrator of standard
work cells. 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  platform  solutions  for
microelectrical, fiber optic and photonic assembly automation.

         On  May  31,  2000,   we  completed  the   acquisition   of  NanoMotion
Incorporated, a California corporation. NanoMotion is manufacturer of ultra-high
precision  positioning and alignment stages and 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 photonics industries.

         On  July  21,  2000,  we  completed  the   acquisition   of  HexaVision
Technologies,  Inc.,  a Canadian  corporation.  HexaVision  is a machine  vision
research and development  company.  In connection with the acquisition,  we paid
$5.1  million  in cash and will be  issuing  shares of our  common  stock to the
shareholders  of  HexaVision  with a value of $1.2  million  subject  to certain
conditions.  In addition, the terms of the acquisition provide that we will make
two payments  totaling  approximately  $1.6 million in cash,  subject to certain
conditions contingent upon the achievement of certain operational  milestones by
HexaVision.  We intend to account 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 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.

Products  and Technology Comprising Rapid Deployment Automation

Overview

         Our  vision of  making  automation  easy to  install  is  called  Rapid
Deployment  Automation.  We have  developed a product  strategy to enable  Rapid
Deployment  Automation.  This product strategy includes simulation tools to help
design  automation   systems,   application   software  packages  which  contain
automation process knowledge,  very powerful software and hardware for real-time
motion control and integrated sensing,  and a family of mechanisms for different
applications.

                                       3

<PAGE>

                 [Chart illustrating our technology with respect
                      to the four levels of RDA Approach]

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 of
mechanisms  allows  system  integrators  and end  users  to  develop  automation
solutions for many industries and applications.

Robot Mechanisms

         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.  The links and
joints of a SCARA robot are somewhat analogous to the shoulder,  elbow and wrist
of a human. This  configuration is well suited to a large number of assembly and
material  handling tasks. Of the floor standing  models,  the AdeptOne-XL is the
faster model, while the Adept Three-XL offers a larger work envelope and handles
a larger  payload.  Each of these  robots uses  direct-drive  motor  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 work envelope when space is limited.

         We also offer a line of linear modules,  called AdeptModules,  which we
purchase from NSK Ltd. These single axis devices can be coupled  together by the
user to form a custom robot  mechanism for  applications  requiring a robot with
fewer than four axes. In addition,  we offer these linear modules in combination
with our own Z-Theta  module to provide  customers  with a line of  configurable
Cartesian robots.

         During fiscal 2000, we introduced  SmartModules,  which is a new family
of precision linear modules  utilizing Adept SmartAmps.  Adept SmartAmps utilize
the industry  standard IEEE 1394 Firewire  protocol to multiplex  motion control
signals,  video signals from cameras,  and I/O signals over a single  high-speed
cable. Adept  SmartModules  reduce the amount of cabling required in a workcell,
and  also  reduce  costs,   installation   time  and  the  module's   footprint.
SmartModules  also come in single-axis  standalone  versions,  which can operate
without   any   additional   controller,   saving  cost  and  space  for  simple
applications.

         We also offer a line of flat  panel and  semiconductor  wafer  handling
robots.  The  mechanisms  are sourced from Samsung  Corporation.  The AdeptAtlas
series is designed for flat panel display transfer  applications and consists of
two models:  the Adept Atlas 720S  (single arm) and 720D (dual arm) are designed
to handle large-scale  substrates up to 600 by 720 mm. The AdeptVicron series is
designed  for  semiconductor  wafer  handling  applications  and consists of two
models:  the AdeptVicron  300S (single arm) and 300D (dual arm) models handle up
to 300mm wafers.

High Precision Microstages

         With the  acquisition  of  NanoMotion  in the fourth  quarter of fiscal
2000,  we gained the ability to design and  manufacture  advanced  nanometer and
sub-nanometer positioning and alignment systems. Recently the NanoLine L3 series
of  precision  microstages  was  introduced  for  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  microstages.  Unlike many
microstages which were developed for a relatively benign laboratory environment,
these  are  rugged,  production-ready  devices  intended  for  integration  into
continuous production factory environments.

         Versions of these  microstages  are under  development  for fiber optic
component  assembly,  fiber  alignment,  laser welding,  and  semiconductor  OEM
applications.

Vision-Based Flexible Feeder

         Part feeding has  historically  been  accomplished by designing  custom
devices that could only accommodate a single part or class of parts. We recently
developed  the Adept Flex  Feeder 250 that 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.


                                       4

<PAGE>

Environmental Control Products

         We offer  both  standard  and  customized  products  for  contamination
control in both mini and micro environments,  Standard Mechanical Interfaces, or
SMIF, and Front Opening Unified Pods, or FOUP openers, and integration and front
end wafer handling solutions for both semiconductor OEMs and end users.

         The Adept Flexible  Front End Systems,  including the Adept FFE 200 and
the Adept FFE 300,  combine  wafer  sorting  and SMIF  load  functions  into one
compact  tool  integrated  front-end  system;   reducing  cycle  times,  process
complexity  and cost.  The Adept FFE  200/300  units  combine  wafer value added
operations such as wafer orientation, optical character reader, or OCR, sort and
merge into a compact front-end system, eliminating the need for wafer sorters in
the factory.

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  automation  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 a multitasking,
multiprocessor,  time-sliced,  deterministic,  real-time  operating system. 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.  The development  environment for V+ is Windows 95, 98 and NT
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 provide closed-loop
control  for our robots as well as other  vendors'  robots.  The servo  software
layer includes algorithms for adaptive feed-forward control,  direct-drive motor
control,  force control,  position control and a number of 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 the  guidance  applications,
AdeptVision  is added into the  controller by inserting a printed  circuit board
and enabling the vision system  software.  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  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.  The
ability to  precisely  locate  random parts and guide the robot in a closed loop
fashion 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.

         With the addition of HexaVision products, we now offer a shrink-wrapped
library of machine vision software tools for OEM's.  These tools run directly in
a PC environment or can be adapted to run on OEM's custom vision hardware.


                                       5

<PAGE>

Machine Controllers

         Our controller products are currently based on the VME bus architecture
standard,  but are migrating to a distributed control architecture which depends
on high-speed networks such as Firewire (IEEE 1394), 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, graphical
user interface  capability 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 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   fieldbus   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 95, 98 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,
including:  special ASICs for controlling  direct-drive motors, reading encoders
and  controlling  power up  sequencing  of complex  high power  systems;  safety
circuits  that meet  domestic and  international  specifications;  technology to
protect  the  controller  from  voltage  spikes,   electrical  noise  and  power
brownouts;  high wattage (6000 watt) switching power amplifiers;  and networking
circuitry for local area network and field buses.

 Process Knowledge Products

         Our 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 work cells
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 part  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.


                                       6

<PAGE>

         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,  flexible part feeding,  and semiconductor
wafer handling. 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 95, 98 and NT  enviroments.  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.  On April 17,  2000,  we  announced an
agreement with Sony  Corporation to embed their 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.

         PILOT Cell supercedes an earlier SILMA product called AdeptRapid.  This
module allows the detailed animation of a workcell,  checks for collisions,  and
predicts actual  production  cycle times to an accuracy 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.


                                       7

<PAGE>

         The CimStation Inspection product simulates the operation of Coordinate
Measurement  Machines,  or CMM, and generates  programs that would be tedious to
program manually given the complex inspection tasks CMMs 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
saturation  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 acquired Pensar in
the fourth quarter of fiscal 2000. We believe Pensar's  experience in delivering
standard  high  precision  automated  platforms,  combined  with our  automation
component products,  we can deliver a more unified offering in selected markets.
We  currently  are  developing   manufacturing   automation  platforms  for  the
semiconductor  and photonics  markets.  In the  photonics/fiber  optic  assembly
market we are in the  process  of  building  a unified  product,  consisting  of
SmartModules,  MV Controller,  AdeptVision VXL, Adept Nanostages, a machine base
and AIM software.  We also are pursuing a similar strategy in the  semiconductor
front-end market, where we are combining robots, SMIF's,  contamination control,
machine vision and control software into a standard wafer handling platform.

         OEMs, integrators, end users, and as well as ourselves can then quickly
configure  these  standard  platforms to add specific  manufacturing  processes.
Platform  products  represent  a  further  extension  of  our  Rapid  Deployment
Automation  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  control and mechanism  products,  and
developing generic control software.

                                        8

<PAGE>

Customers and Applications

         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
electronics,  communications,  semiconductor, automotive components, appliances,
pharmaceutical, food processing and fiber optics 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
generally not regional and are mutually  nonexclusive.  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  specific  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,  2000,  our  North  American  sales
organization included approximately 26 individuals.  We have four North American
sales and customer support offices located in San Jose,  California;  Southbury,
Connecticut;  Southfield,  Michigan; and Cincinnati,  Ohio. As of June 30, 2000,
our international sales organization included  approximately 11 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 46 persons as
of June 30, 2000,  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
industrial 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 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.

Backlog

         Our product backlog at June 30, 2000 was  approximately  $20.9 million,
as compared with approximately $21.2 million at June 30, 1999.

                                      9
<PAGE>

         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.  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.  See
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations,"  including the section titled "Factors  Affecting  Future Operating
Results."

Services and Support

         Our service and support organization,  which consisted of approximately
99 full-time  employees as of June 30, 2000, is designed to support the customer
from the design of the automation  line through ongoing support of the installed
system.  This  organization  included   approximately  51  RDA  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 instructors
as of June 30, 2000, 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 53 persons as of
June  30,  2000,  is  based  in  eight  service  centers  located  in San  Jose,
California;  Cincinnati,  Ohio; Massy, France; Dortmund, Germany; Arezzo, Italy;
Kobe,  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.

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,
2000, we had 114 persons, including 11 temporary or contract personnel,  engaged
in  research,   development  and  engineering.  Our  research,  development  and
engineering  expenses were  approximately  $14.6 million for 2000, $11.6 million
for 1999 and $11.8  million for 1998 and  represented  14.7% of net revenues for
2000, 13.3% for 1999 and 11.2% for 1998.

Manufacturing

         Our  manufacturing   activities  include  the  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

                                       10
<PAGE>

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  work  force  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

         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.  Some of these large manufacturing  companies have
greater  flexibility  in pricing than we have because they generate  substantial
unit volumes of robots for internal  demand.  They may have access through their
parent companies to large sources of capital. Any of our competitors may seek to
expand their  presence in other  markets in which we compete.  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.

         Our  principal  competitors  in the  U.S.  robot  market  include  U.S.
subsidiaries of the Japanese  companies Fanuc Ltd.,  Seiko  Instruments,  Yamaha
Corporation, Sony Corporation,  Sankyo Company Limited, and other Japanese robot
companies.  In the European  robot market,  we  principally  compete with Robert
Bosch GmbH,  which to date has sold most of its  products  in Germany,  and with
Fanuc,  Seiko,  Yamaha,  Sony,  Sankyo,  and other  Japanese  companies.  In the
Japanese robot market,  over a dozen robot companies  compete with us, including
Fanuc, Nippon Denso, Panasonic Company,  Sankyo, Seiko, Sony and Yamaha. Some of
these large manufacturing  companies have greater flexibility in pricing than we
have  because  they  generate  substantial  unit  volumes of robots for internal
demand and may have access  through  their parent  companies to large sources of
capital. In addressing the Japanese market, we are at a competitive disadvantage
as compared to Japanese suppliers, many of whom have long-standing collaborative
relationships   with  Japanese   manufacturers.   Because  of  this  competitive
disadvantage,  we closed  our  Japanese  subsidiary  in the fall of 1998 and now
operate  through a joint  venture in Japan.  Although  we expect to  continue to
invest significant resources in the Japanese market in the future, we may not be
able to achieve significant sales growth in the Japanese intelligent  automation
market.

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

         Our  principal  competitors  in the market for motion  control  systems
include Allen-Bradley Co., a subsidiary of Rockwell  International  Corporation,
in the United  States,  and Siemens AG in Europe.  In  addition,  we face motion
control  competition  from two major suppliers of motion control  boards,  Galil
Motion  Control,  Inc. and Delta Tau Data  Systems,  Inc.  These motion  control
boards are purchased by end users which engineer their own custom motion control
systems.  In the simulation  software market, our competitors include Tecnomatix
Technologies,  Inc.,  an  Israel-based  company  which  sells  mostly  to  major
automotive  manufacturers,  and Deneb  Robotics,  Inc., a subsidiary of Dassault
Systemes.  In the  machine  vision  market,  we  face  competition  from  Cognex
Corporation, and Robotic Vision Systems Inc.

ITEM 2.  PROPERTIES

                                       11
<PAGE>

         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
annual lease  payments of  approximately  $1.2 million in calendar year 2000 and
$2.0 million in calendar year 2001. We lease an additional 31,000 square feet in
an adjacent  building in San Jose for our SILMA  division.  The lease expires in
December 2003 and provides for annual lease payments of  approximately  $320,000
in calendar  year 2000 and  $224,000 in  calendar  year 2001.  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 June 2004 and provides for
annual  lease  payments of  approximately  $121,000  in  calendar  year 2000 and
$211,000  in  calendar  year 2001.  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 annual lease payments of approximately $93,000 in calendar
year 2000. We lease a 5,000 square foot facility in City of Industry, California
at which our software development group is based. The lease expires in September
2001 and  provides  for annual  lease  payments  of  approximately  $115,000  in
calendar  year 2000 and $89,000 in calendar  year 2001. 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 January 2000.
This lease  expires in October 2003 and  provides  for annual lease  payments of
approximately $290,000 in calendar year 2000 and $306,000 in calendar year 2001.
We  also  lease  facilities  for  sales  and  customer  training  in  Southbury,
Connecticut; Southfield, Michigan; Cincinnati, Ohio; Massy, France; Dortmund and
Munich,  Germany;  Arezzo,  Italy;  Kobe,  Japan  (through  our joint  venture);
Kenilworth, the United Kingdom; Seoul, South Korea; and Singapore.

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.  Management  has reviewed  pending legal matters and believes that the
resolution  of such  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.
Certain 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.

                      EXECUTIVE OFFICERS OF THE REGISTRANT

         Adept's executive officers are:

                  Name   Age                           Position
                  ----   ---                           --------

Brian R. Carlisle....... 49  Chairman of the Board of Directors and Chief
                             Executive Officer
Bruce E. Shimano........ 51  Vice President, Research and Development, Secretary
                                      and Director
Marcy R. Alstott........ 43  Vice President, Operations
Richard J. Casler, Jr... 48  Vice President, Engineering
Michael W. Overby....... 43  Vice President, Finance and Chief Financial Officer

         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.,  where he was  responsible  for new product  strategy  and
development for Unimation's

                                     12
<PAGE>

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.

         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.

         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.

         Richard J. Casler,  Jr. has served as our Vice President of Engineering
since April 1993 and from  October  1992 to March 1993 served as our Director of
Robot  Interface  Development.  In October 1986, Mr. Casler  co-founded  Genesis
Automation, Inc., a developer of robots and automation for the service industry,
and served as its president  until October  1992.  Mr. Casler  received B.S. and
M.S.  degrees in  Mechanical  Engineering  from the  Massachusetts  Institute of
Technology.

         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 and is a Certified Public Accountant.

                                       13

<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

<TABLE>
         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:
<CAPTION>
                                               Three Months Ended

         Jun. 30,    Mar. 31,     Dec. 31,    Sep. 30,    Jun. 30,     Mar. 31,    Dec. 31,    Sep. 30,
           2000        2000         1999        1999        1999         1999        1998        1998
           ----        ----         ----        ----        ----         ----        ----        ----
<S>     <C>         <C>           <C>        <C>         <C>           <C>         <C>         <C>
High    $ 47.50     $ 16.69       $ 7.97     $ 11.25     $ 10.50       $ 8.50      $ 8.50      $ 8.00
Low     $  8.75     $  6.00       $ 5.44     $  6.13     $  6.00       $ 6.00      $ 4.25      $ 4.75
</TABLE>

         At June 30, 2000, there were approximately 316 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

         On April 28, 2000, we completed the acquisition of Pensar Tucson, Inc.,
an Arizona corporation, in a stock for stock transaction. 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 shares  were  issued  pursuant  to
exemptions by reason of Section 4 (2) of the Securities Act of 1933. These sales
were made in private transactions without general solicitation or advertising.

         On  May  31,  2000,   we  completed  the   acquisition   of  NanoMotion
Incorporated,  a California  corporation,  in a stock for stock transaction.  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 shares were issued  pursuant to
exemptions by reason of Section 4 (2) of, and Regulation D of the Securities Act
of  1933.  These  sales  were  made  in  private  transactions  without  general
solicitation or advertising.

                                       14
<PAGE>

ITEM 6.  SELECTED FINANCIAL DATA
<TABLE>

         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 2000  results also
include  the  financial  results of Pensar and  NanoMotion  subsequent  to their
acquisitions on April 28, 2000 and May 31, 2000, respectively.
<CAPTION>
 (in thousands, except per share data)                                      Years Ended June 30,
                                                            -----------------------------------------------------
                                                               2000       1999       1998       1997       1996
                                                            -----------------------------------------------------
<S>                                                         <C>         <C>        <C>        <C>        <C>
Results of Operations:

Net revenues                                                $ 99,212    $ 87,374   $105,440   $ 88,511   $ 85,098
Cost of revenues                                              56,173      47,902     60,841     52,017     48,938
                                                            --------    --------   --------   --------   --------
    Gross margin                                              43,039      39,472     44,599     36,494     36,160
                                                            --------    --------   --------   --------   --------
Operating expenses:
    Research, development and engineering                     14,629      11,591     11,844      9,738      8,495
    Selling, general and administrative                       29,503      24,676     26,890     22,758     20,821
    Merger-related charges (1)                                   988        --         --         --         --
    Restructuring and other non-recurring charges                --         --        2,756       --         --
    Amortization of goodwill and other intangibles               685        --         --         --         --
                                                            --------    --------   --------   --------   --------
Total operating expenses                                      45,805      36,267     41,490     32,496     29,316
                                                            --------    --------   --------   --------   --------
Operating income (loss)                                       (2,766)      3,205      3,109      3,998      6,844
Interest income, net                                             746         926        971        693        490
                                                            --------    --------   --------   --------   --------
Income (loss) before provision for (benefit from)  income     (2,020)      4,131      4,080      4,691      7,344
taxes

Provision for (benefit from) income taxes                       (593)      1,620      1,819      1,534      1,304
                                                            --------    --------   --------   --------   --------
Net income (loss)                                           $ (1,427)   $  2,511   $  2,261   $  3,157   $  6,030
                                                            ========    ========   ========   ========   ========


Net income (loss) per share:(2)
    Basic                                                   $  (0.15)   $   0.27   $   0.25   $   0.36   $   0.79
                                                            ========    ========   ========   ========   ========
    Diluted                                                 $  (0.15)   $   0.26   $   0.23   $   0.34   $   0.72
                                                            ========    ========   ========   ========   ========

Number of shares used in computing per share amounts:(2)
    Basic                                                      9,774       9,302      9,154      8,739      7,659
                                                            ========    ========   ========   ========   ========
    Diluted                                                    9,774       9,484      9,689      9,159      8,404
                                                            ========    ========   ========   ========   ========


(in thousands)                                                                   As of June 30,
                                                            -----------------------------------------------------
                                                              2000        1999       1998       1997       1996
                                                            --------    --------   --------   --------   --------
Balance Sheet Data:

Cash, cash equivalents and short-term investments           $ 20,437    $ 27,016   $ 20,939   $ 18,642   $ 11,141
                                                            ========    ========   ========   ========   ========
Working capital                                               46,593      47,614     45,928     39,703     35,477
                                                            ========    ========   ========   ========   ========
Total assets                                                  93,523      71,677     70,310     61,480     57,599
                                                            ========    ========   ========   ========   ========
Long-term liabilities                                          1,222        --           78        109         79
                                                            ========    ========   ========   ========   ========
Total shareholders' equity                                    70,728      55,186     53,399     48,114     43,225
                                                            ========    ========   ========   ========   ========

<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
     (loss) income per share.

</FN>
</TABLE>
                                       15

<PAGE>

Quarterly Results of Operations (Unaudited)

<TABLE>
     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.
<CAPTION>
                                                                                 Three  Months Ended, (1)
                                                  --------------------------------------------------------------------------------
                                                  Jun. 30,  Mar. 31,  Dec. 31,  Sep. 30,  Jun. 30,  Mar. 31,   Dec. 31,   Sep. 30,
                                                    2000      2000      1999      1999      1999      1999       1998       1998
                                                  --------  --------  --------  --------  --------  --------   --------   --------
<S>                                               <C>       <C>       <C>       <C>       <C>       <C>        <C>        <C>
(in thousands, except per share data)
Net revenues .................................... $ 28,058  $ 26,253  $ 24,267  $ 20,634  $ 24,283  $ 21,590   $ 20,508   $ 20,993
Cost of revenues ................................   15,389    14,327    13,710    12,747    13,273    11,603     11,083     11,943
                                                  --------  --------  --------  --------  --------  --------   --------   --------
Gross margin ....................................   12,669    11,926    10,557     7,887    11,010     9,987      9,425      9,050
                                                  --------  --------  --------  --------  --------  --------   --------   --------
Operating expenses:
   Research, development and engineering ........    4,346     3,708     3,116     3,459     3,284     2,937      2,786      2,584
   Selling, general and administrative ..........    7,405     7,450     7,391     7,257     6,815     6,120      5,680      6,061
   Merger-related charges (2) ...................     --        --        --         988      --        --         --         --
   Amortization of goodwill and other
     intangibles ................................      685      --        --        --        --        --         --         --
                                                  --------  --------  --------  --------  --------  --------   --------   --------
Total operating expenses ........................   12,436    11,158    10,507    11,704    10,099     9,057      8,466      8,645
                                                  --------  --------  --------  --------  --------  --------   --------   --------
Operating income (loss) .........................      233       768        50    (3,817)      911       930        959        405
Interest income, net ............................      115        80       242       309       268       230        224        204
                                                  --------  --------  --------  --------  --------  --------   --------   --------
Income (loss) before provision for income taxes .      348       848       292    (3,508)    1,179     1,160      1,183        609
Provision for (benefit from) income taxes .......       98       254       117    (1,062)      506       476        437        201
                                                  --------  --------  --------  --------  --------  --------   --------   --------
Net income (loss) ............................... $    250  $    594  $    175  $ (2,446) $    673  $    684   $    746   $    408
                                                  ========  ========  ========  ========  ========  ========   ========   ========
Net income (loss) per share:
   Basic ........................................ $    .02  $    .06  $    .02  $   (.26) $    .07  $    .07   $    .08   $     04
                                                  ========  ========  ========  ========  ========  ========   ========   ========
   Diluted ...................................... $    .02  $    .06  $    .02  $   (.26) $    .07  $    .07   $    .08   $    .04
                                                  ========  ========  ========  ========  ========  ========   ========   ========
Number of shares used in computing
    per share amounts:
   Basic ........................................   10,677     9,788     9,583     9,491     9,352     9,230      9,266      9,360
                                                  ========  ========  ========  ========  ========  ========   ========   ========
   Diluted ......................................   11,395    10,460     9,752     9,491     9,594     9,438      9,421      9,484
                                                  ========  ========  ========  ========  ========  ========   ========   ========
As a percentage of net revenues:
Net revenues ....................................    100.0%    100.0%    100.0%    100.0%    100.0%    100.0%     100.0%     100.0%
Cost of revenues ................................     54.8      54.6      56.5      61.8      54.7      53.7       54.0       56.9
                                                  --------  --------  --------  --------  --------  --------   --------   --------
Gross margin ....................................     45.2      45.4      43.5      38.2      45.3      46.3       46.0       43.1
                                                  --------  --------  --------  --------  --------  --------   --------   --------
Operating expenses:
   Research, development and engineering ........     15.5      14.1      12.8      16.7      13.5      13.6       13.6       12.3
   Selling, general and administrative ..........     26.4      28.4      30.5      35.2      28.1      28.4       27.7       28.9
   Merger-related charges (2) ...................    --        --        --          4.8     --        --         --         --
   Amortization of goodwill and other intangibles      2.5     --        --        --        --        --         --         --
                                                  --------  --------  --------  --------  --------  --------   --------   --------
Total operating expenses ........................     44.4      42.5      43.3      56.7      41.6      42.0       41.3       41.2
                                                  --------  --------  --------  --------  --------  --------   --------   --------
Operating income (loss) .........................       .8       2.9        .2     (18.5)      3.8       4.3        4.7        1.9
Interest income, net ............................       .4        .3       1.0       1.5       1.1       1.1        1.1        1.0
                                                  --------  --------  --------  --------  --------  --------   --------   --------
Income (loss) before provision for income taxes .      1.2       3.2       1.2     (17.0)      4.9       5.4        5.8        2.9
Provision for (benefit from) income taxes .......       .3        .9        .5      (5.1)      2.1       2.2        2.1        1.0
                                                  --------  --------  --------  --------  --------  --------   --------   --------
Net income (loss) ...............................       .9%      2.3%       .7%    (11.9)%     2.8%      3.2%       3.7%       1.9%
                                                  ========  ========  ========  ========  ========  ========   ========   ========
<FN>


(1)  Amounts for the fiscal  quarters  ended  September  30, 1998,  December 31,
     1998,  March 31, 1999 and June 30,  1999 have been  restated to reflect the
     acquisition of BYE/OASIS which was accounted for as a pooling of interests.

(2)  In July 1999, we incurred  charges of $988,000  relating to the acquisition
     of BYE/OASIS.
</FN>
</TABLE>
                                       16
<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, 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,  or RDA,  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.  Most recently, we 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  approximately  between 30%-40% of revenues on any
given quarter. We expect that this trend will continue.

         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. For example,
our net revenues  decreased as a result of reduced  product  bookings in each of
the three previous fiscal  quarters  ending March 1999. In addition,  during the
fiscal quarter  ending  September  fiscal 2000 our revenue  declined for similar
reasons. As a whole, our revenues were adversely affected by a decline in orders
from  customers  primarily in the  disk-drive  industry  during  fiscal 2000 and
fiscal 1999 and to a lesser  extent the  communications  markets in fiscal 1999.
Although  our  revenues  increased  in the last  quarter  of fisca1  2000,  this
increase may not be  indicative  of increased  future  revenues or a sustainable
recovery in our product markets.

         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, 2000,  referred to as fiscal 2000,
1999,  and 1998.  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, 2000,  Adept acquired four
companies,  as described  below.  Adept's  acquisitions of NanoMotion and Pensar
completed  during 2000 have been accounted for as purchases,  with the excess of
the  purchase  price over the  estimated  fair value of the net assets  acquired
recorded  as  goodwill.  The  Company's  mergers  with  BYE/OASIS  in  1999  and
RoboElektronik in 1998 have been accounted for as a pooling of interests.

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 stages and 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.

                                       17

<PAGE>

Pensar

         On April 28, 2000, we completed the acquisition of Pensar Tucson, Inc.,
an Arizona corporation.  Pensar is a precision automation integrator of standard
work cells. 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.

BYE/OASIS

         On July 16, 1999, we completed the acquisition of BYE/OASIS Engineering
Inc., a Texas  corporation.  BYE/OASIS  is a  manufacturer  of  mini-environment
systems  and SMIF 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.  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.

RoboElektronik

         On February 13, 1998, we completed the  acquisition  of  RoboElektronik
GmbH  ("RoboElektronik")  through the issuance of 24,562 shares of the Company's
common stock,  which were exchanged for all of the outstanding  capital stock of
RoboElektronik.  RoboElektronik GmbH was renamed Adept Technology,  GmbH on June
26, 1998.  The results of operations of  RoboElektronik  have been  consolidated
with Adept's financial statements since the acquisition.

Results of Operations

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.  Although we experienced some improvement in our targeted markets in
fiscal 2000, we cannot predict if this  improvement  will continue in the market
we currently serve.  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.  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 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. We expect

                                       18
<PAGE>

to  continue  to  receive  third  party  development  funding  from the  federal
government as well as other third parties  during 2001 but anticipate a decrease
in this  funding  as  compared  to  funding  received  in 2000.  There can be no
assurance  that any funds  budgeted by the government or other third parties for
our development projects will not be curtailed or eliminated at any time.

         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 differs from the
federal  statutory  income tax rate of 34% primarily due to the  utilization  of
foreign tax and other federal and state  credits in 2000. 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.

         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. During 2000, we began
a foreign  currency  hedging  program 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
losses of $50,000 for the year ended June 30, 2000.

         We make yen-denominated  purchases of certain components and mechanical
subsystems  from  Japanese  suppliers.  Based on the  amount of such  purchases,
current exchange rate fluctuations  would not typically be expected to result in
material unfavorable foreign exchange transactions included in cost of revenues.
From  time  to  time,   we  manage  the  currency  risk   associated   with  the
yen-denominated purchases using forward rate currency contracts.

Comparison of 1999 to 1998

         Net Revenues.  Our net revenues  decreased by 17.1% to $87.4 million in
1999 from $105.4  million in 1998.  The  decrease in net  revenues for 1999 over
1998 was primarily due to decreased  product sales,  including  robot and motion
controller  sales,  decreased  service and upgrade  revenues,  offset in part by
increased  software revenue,  primarily from our SILMA products.  Revenue growth
slowed  substantially  starting  in the second half of 1998 as a result of lower
sales to the customers in the computer disk-drive, communications, semiconductor
and  electronics  industries.  Additionally,  while our  direct  sales  into the
Asia-Pacific  region  have been  relatively  insignificant  to date,  the widely
reported  economic  instability in that region has affected certain domestic and
OEM customers who have experienced a decline in their Asia-Pacific revenues. The
revenue  decline  continued into fiscal 1999 and was seen throughout the markets
and  industries we serve.  International  sales,  including  sales to Canada and
export sales, were $41.2 million, or 47.2% of net revenues, in 1999, as compared
with $39.8 million, or 37.8% of net revenues, in 1998.  International sales as a
percentage of total net revenues  increased due to the greater  relative decline
in our  domestic  sales in fiscal 1999 as  compared  to the prior year.  Because
international  revenues  constitute a  significant  portion of our net revenues,
adverse  economic  conditions or instability in foreign markets where we operate
directly  can be expected to have an adverse  effect on our revenues and results
of operations. In addition,  fluctuations in economic conditions internationally
can also affect our  revenues and  operating  results  indirectly  to the extent
significant  customers  (or  industry  segments  on which  we are  significantly
dependent) are affected by such international fluctuations.

                                       19
<PAGE>

         Gross Margin.  Gross margin as a percentage of net revenue was 45.2% in
1999  compared to 42.3% in 1998.  The  increase in gross margin  percentage  was
primarily  attributable to reduced sales of lower margin hardware products,  and
to a lesser  extent,  to  relatively  higher  margin  software  revenue and cost
reductions  on our  products.  We expect  that we will  continue  to  experience
fluctuations in gross margin  percentage due to changes in our sales and product
mix.

         Research,  Development and Engineering Expenses. Research,  development
and  engineering  expenses  decreased  by 2.1% to $11.6  million or 13.3% of net
revenues  in 1999 from $11.8  million  or 11.2% of net  revenues,  in 1998.  The
absolute  dollar  decrease in expenses in 1999 was  primarily  due to  decreased
project  material  spending,  and travel  expenses.  Research,  development  and
engineering  expenses in 1999 were  partially  offset by $681,000 of third party
development funding as compared with $629,000 in 1998.

         Selling,  General and  Administrative  Expenses.  Selling,  general and
administrative  expenses  decreased  8.2% to  $24.7  million,  or  28.2%  of net
revenues,  in 1999 from $26.9  million,  or 25.5% of net revenues,  in 1998. The
decreased  level of spending was  primarily  attributable  to the closure of our
Japanese office, lower compensation related expenses,  including  commissions of
$256,000, and to a lesser extent, to lower travel expenses of $108,000,  reduced
foreign currency losses on balance sheet  remeasurement  of $230,000,  partially
offset by an increase in outside consulting  services of $410,000.  The increase
in selling,  general and  administrative  expenses as a percentage  of total net
revenues was due to the relative decline in the level of net revenues.

         Restructuring  and  Other  Nonrecurring  Charges.  We did not incur any
restructuring or other  nonrecurring  charges in 1999.  During 1998, we recorded
restructuring  charges of  approximately  $1.0  million  and other  nonrecurring
charges of approximately $1.7 million. The restructuring charges of $1.0 million
included a write-off of certain assets and excess  facilities  equal to $651,000
in connection  with the closing of our branch in Japan . We now operate in Japan
through a joint  venture in which we have a  minority  interest.  The  remaining
$362,000 relates to severance for the termination of certain employees.

         The  nonrecurring   charges  of  approximately  $1.7  million  included
$675,000  for  non-cash  compensation  expenses  related to our  employee  stock
purchase plan (see Note 1 of Notes to  Consolidated  Financial  Statements)  and
$383,000  related to the write off of certain  information  system  hardware and
software which had become  obsolete.  Additionally,  $413,000 was related to the
write off of the remaining balance of capitalized  purchased software associated
with the acquisition of SILMA. Due to  technological  changes in 1998 related to
the SILMA  operating  platform,  we determined the net  realizable  value of the
purchased software was impaired.

         We reported the charge of $675,000 in the second quarter of fiscal 1998
for  compensation  expense  related to the Emerging  Issues Task Force  ("EITF")
Issue No.  97-12,  "Accounting  for  Increased  Share  Authorizations  in an IRS
Section 423 Employee  Stock  Purchase Plan under APB Opinion No. 25,  Accounting
for Stock Issued to Employees" which was approved by the EITF in September 1997.
This nonrecurring, non-cash charge represented the difference between 85% of the
fair market value of common  stock on the date of the  beginning of the offering
period and the fair market  value of common  stock on the date the  shareholders
approved the  increase in shares  authorized  for  issuance,  multiplied  by the
number of shares in the 1995 Employee Stock  Purchase  Plan, or 1995 ESPP,  that
had been  subscribed  for  purchase  by  employees,  but not  authorized  by the
shareholders,  prior to our 1998  Annual  Meeting of  Shareholders.  Shareholder
approval was granted to make available for issuance an additional 500,000 shares
under the 1995 ESPP on October 31, 1997.

         Interest  Income,  Net.  Interest  income,  net in  1999  was  $926,000
compared to $971,000 in 1998. The decrease was due to a higher  concentration of
tax advantaged investments yielding lower gross interest income.

         Provision for Income Taxes.  Our effective tax rate for 1999 was 39% as
compared  to 45% in 1998.  Our tax  rates  for 1999 and 1998  differed  from the
federal  statutory  rate of 34%,  due to 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.

                                       20
<PAGE>

Liquidity and Capital Resources

         As of June 30,  2000,  we had working  capital of  approximately  $46.6
million,  including $13.5 million in cash and cash  equivalents and $7.0 million
in short-term investments.

         During the year ended June 30,  2000,  cash and short term  investments
decreased by  approximately  $6.6 million.  These funds were  primarily  used to
acquire Pensar and NanoMotion (see Note 2 of the Notes to Consolidated Financial
Statements).  Additionally,  we made investments in inventories for safety stock
related to components with long lead times.  Generally  other cash  requirements
during the year ended June 30, 2000 were met primarily  through cash provided by
investing  activities and financing  activities partially offset by cash used in
operating  activities.  Specifically,  cash and cash equivalents  increased $1.7
million from June 30, 1999  primarily  as a result of $2.7  million  provided by
investing activities and $2.6 million provided by financing activities offset by
$3.6 million used in operations.

         Net cash used by operating activities was primarily attributable to the
net loss adjusted by depreciation and amortization and the increase in inventory
and accounts  receivable.  Cash  provided by financing  activities  consisted of
proceeds from employee stock options and stock purchase plans.  Cash provided by
investing  activities was primarily  attributable to the net sales of short term
investments  offset by business  acquisitions  and the  purchase of property and
equipment.

         We believe that the existing cash and cash equivalent  balances as well
as short-term  investments  and  anticipated  cash flow from  operations will be
sufficient to support our working capital  requirements for at least the next 12
months.

         We currently  anticipate  capital  expenditures of approximately  $15.0
million in fiscal 2001.

New Accounting Pronouncements

Staff Accounting Bulletin No. 101 - Revenue Recognition

         In December  1999,  the SEC issued Staff  Accounting  Bulletin No. 101,
"Revenue  Recognition  in  Financial  Statements"  or SAB 101.  SAB 101 provides
guidance on the recognition, presentation and disclosure of revenue in financial
statements.  In  recent  actions,  the  SEC has  further  delayed  the  required
implementation  date which,  for us, will be the fourth  quarter of fiscal 2001,
retroactive  to the  beginning of the fiscal year.  The SEC has  indicated  that
additional   implementation   guidance  will  be  forthcoming  in  the  form  of
"Frequently  Asked  Questions",  however,  such  guidance has not been issued to
date. We cannot fully assess the impact of SAB 101 until the additional guidance
from the SEC is issued. Accordingly we are still in the process of assessing the
impact of SAB 101 on our consolidated results of operations, financial position,
and cash flows based upon the most current information.

Statement of Financial  Accounting Standards No. 133 - Accounting for Derivative
Instruments and Hedging Activities

         In June 1998, the Financial Accounting Standards Board issued Statement
of Financial Accounting  Standards,  or SFAS, No. 133, Accounting for Derivative
Instruments and Hedging Activities. SFAS No. 133, as amended by SFAS No. 137 and
138, establishes methods of accounting for derivative financial  instruments and
hedging  activities  related  to  those  instruments  as well as  other  hedging
activities. We will be required to implement SFAS No. 133 as of the beginning of
our fiscal year 2001. Our foreign currency exchange rate hedging activities have
been  insignificant  to date and we do not believe that SFAS No. 133 will have a
material impact on our financial position, results of operations or cash flows.

Reclassification

         Certain  amounts  presented in the financial  statements of prior years
have been reclassified to conform to the current presentation for 2000.

Acquisitions
                                       21
<PAGE>

         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, 2000:

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.

February 13, 1998          Acquisition   of   RoboElectronik,    an   automation
                           consulting  business  based in  Munich,  Germany.  We
                           believe this acquisition will enhance Adept's ability
                           to provide  systems  integrators  and OEMs throughout
                           Europe with customized consulting services.

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.

         Our past revenue growth and other operating results may not be accurate
indicators of our future performance.  Our quarterly 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  capital  spending,   cyclicality  and  other
                  economic conditions domestically and internationally in one or
                  more industries in which we sell our products;

         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; and

         o        extraordinary events such as litigation or acquisitions.

         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 and the first  quarter of fiscal 2000
were  adversely  affected by a  continuing

                                       22
<PAGE>

downturn  in  hardware  purchases  by  customers  in the  electronics  industry,
particularly  disk-drive  manufacturers  and to a  lesser  extent  communication
manufacturers.  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  habits of our customers,
which tend to be cyclical.

         Intelligent  automation  systems  using our products can range in price
from $75,000 to several million  dollars.  Accordingly,  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
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,  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 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 and their procurement requires lengthy lead times.

                                       23
<PAGE>

         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 P.P.D., Inc. for the supply of our linear modules, Yaskawa for the supply of
our 6-axis  robots,  Samsung  for the  supply of  semiconductor  robots,  Hirata
Corporation  for the  supply  of our Adept  Cobra 600 and Adept  Cobra 800 robot
mechanisms and  ITI/Matrox  for the supply of our vision  boards.  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 such
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.

         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. For
example,  with the exception of the quarter  ending March 1999, our net revenues
decreased  as a result of reduced  product  bookings in each of the two previous
fiscal  quarters  ending  December 1999. In addition,  during the quarter ending
September  1999 our  revenue  declined  for  similar  reasons.  As a whole,  our
revenues were adversely affected by a decline in orders from customers primarily
in the  disk-drive  industry  during fiscal 2000 and fiscal 1999 and to a lesser
extent the communications markets in fiscal 1999.

         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.

                                       24
<PAGE>

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.  Similar
delivery  schedule  changes and order  cancellations  may  adversely  affect our
operating results in the future.

         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.  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 have begun 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 have begun development of intelligent  automation  solutions  targeted at the
photonics industry. We expect to devote significant  financial,  engineering and
management  resources to develop and market 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.

         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.

We rely on systems integrators and OEMs to sell our products.

                                       25
<PAGE>

         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  are  to  system
integrators  that  specialize  in designing  and building  production  lines for
manufacturers.  Many of  these  companies  are  small  operations  with  limited
financial  resources,  and we have from time to time  experienced  difficulty in
collecting  payments from certain of these  companies.  As a result,  we perform
ongoing  credit  evaluations  of our  customers.  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  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  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 and delay the generation of revenue.

Our international operations may subject us to divergent regulatory requirements
and other risks that may harm our operating results.

         International  sales were $44.9  million for the fiscal year ended June
30,  2000,  $41.2  million  for the fiscal  year  ended June 30,  1999 and $39.8
million for the fiscal year ended June 30, 1998. This represented 45.2%,  47.2%,
and 37.8% of net revenues for the  respective  periods.  We also  purchase  some
components and mechanical  subsystems from foreign  suppliers.  As a result, our
operating  results are subject to the risks inherent in international  sales and
purchases, which include the following:

         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.

                                       26
<PAGE>

         Foreign exchange  fluctuations may render our products less competitive
relative to locally manufactured  product offerings,  or could result in foreign
exchange  losses.  In calendar 2000, 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.

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 effect 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  assure  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.

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 such 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

                                       27
<PAGE>

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.

Our internal systems may experience  difficulties responding to the introduction
of the Single European Currency.

         We  are  in  the  process  of  addressing  the  issues  raised  by  the
introduction of the Single European Currency, or the euro, as of January 1, 1999
and transition to full adoption as of January 1, 2002. Our internal systems that
are affected by the initial  introduction  of the euro were  euro-capable  as of
January 1, 1999. We do not presently expect that the introduction and use of the
euro will materially affect our foreign exchange and hedging activities,  or our
use of derivative instruments,  or will result in any material increase in costs
to us. However,  we cannot assure that all issues related to the euro conversion
have been  identified and that any additional  issues would not materially  hurt
our results of operations or financial condition. For example, the conversion to
the  euro  may  have  competitive  implications  on our  pricing  and  marketing
strategies and we may be at risk to the extent its principal  European suppliers
and  customers  are  unable  to deal  effectively  with the  impact  of the euro
conversion.  We have not yet completed our  evaluation of the impact of the euro
conversion on our currency and hedging activities.

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.

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 additional
experienced engineers,  senior management and sales and marketing personnel. The
robust economy and  opportunities  available in other high technology  companies
has  made  and  could  continue  to make  recruiting  and  retaining  employees,
especially  design  engineers,  more  difficult  for us.  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 operation 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.

                                       28
<PAGE>

         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.

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
has been  attributable  to acquisitions  of other  businesses and  technologies.
Although we have no specific  commitments or understandings  with respect to any
acquisitions currently, 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.  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 and NanoMotion. 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  operation  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
shareholders'  equity  interest.  Fluctuations  in  our  stock  price  may  make
acquisitions  more  expensive or prevent us from being able to complete on terms
that are acceptable to us.

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,  copyright 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  copyright  law and trade secret  protection  may not be
adequate  to  deter  third  party  infringement  or

                                       29
<PAGE>

misappropriation  of our copyrights,  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.  As claims arise, we evaluate their merits.  Any claims of infringement
brought of 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 make
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.

New accounting guidance could result in delayed recognition of our revenues.

         In December  1999,  the SEC issued Staff  Accounting  Bulletin No. 101,
"Revenue  Recognition  in  Financial  Statements"  or SAB 101.  SAB 101 provides
guidance on the recognition, presentation and disclosure of revenue in financial
statements.  In  recent  actions,  the  SEC has  further  delayed  the  required
implementation  date which,  for us, will be the fourth  quarter of fiscal 2001,
retroactive  to the  beginning of the fiscal year.  The SEC has  indicated  that
additional   implementation   guidance  will  be  forthcoming  in  the  form  of
"Frequently  Asked  Questions",  however,  such  guidance has not been issued to
date. We cannot fully assess the impact of SAB 101 until the additional guidance
from the SEC is issued. Accordingly we are still in the process of assessing the
impact of SAB 101 on our consolidated results of operations, financial position,
and cash flows based upon the most current  information.  In certain situations,
application  of the new accounting  could delay the  recognition of revenue that
might  otherwise  have been  recognized  in earlier  periods.  As a result,  our
reported  revenue may fluctuate  more widely among fiscal periods in the future,
and reported revenue for a particular fiscal period may not meet expectations.

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;

                                       30
<PAGE>

         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 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;

                                       31
<PAGE>

         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 or required for field upgrades.

         For example, we are currently in the process of releasing our new micro
and nano positioning  mechanisms,  NanoMotion  process  modules,  Smart Modules,
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.

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.

Failure to obtain export licenses could harm our business.

         We must comply with U.S. Department of Commerce regulations in shipping
its software  products and other  technologies  outside the U.S. 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, 1999 and June 30, 2000, the sales price of our common
shares,  as reported  on the Nasdaq  National  Market,  has ranged from a low of
$5.44 to a high of $47.50. 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;

                                       32
<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; or

         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 or international  currency  fluctuations,
may adversely affect the market price of our common stock.

                                       33
<PAGE>

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

<TABLE>
         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.
<CAPTION>
                                                                                       Fair
         (in thousands)                  2000       2001       2002       Total        Value
                                         ----       ----       ----       -----        -----
<S>                                  <C>            <C>        <C>      <C>           <C>

Cash equivalents
  Fixed rate .....................   $   13,487      --         --      $ 13,487      $13,487
  Average rate ...................         3.90%     --         --          3.90%
Auction rate securities

  Fixed rate .....................   $    3,500      --         --      $  3,500      $ 3,500
  Average rate ...................         4.49%     --         --          4.49%
Auction rate preferred

  Variable rate ..................   $    3,450      --         --      $  3,450      $ 3,450
  Average rate ...................         4.64%     --         --          4.64%
                                     ----------    ------     ------    --------      -------
     Total Investment Securities .   $   20,437      --         --      $ 20,437      $20,437
                                     ----------    ------     ------    --------      -------
  Average rate ...................         4.13%     --         --          4.13%
</TABLE>

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

         We conduct  business  on a global  basis.  As such,  we are  exposed to
adverse or beneficial movements in foreign currency exchange rates. We may enter
into foreign currency forward  contracts to minimize the impact of exchange rate
fluctuations  on  certain  foreign  currency   committments  and  balance  sheet
positions.  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,  2000 and 1999 and for each of the three  years in the period  ended
June 30, 2000 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

         Not applicable.
                                       34
<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  10,  2000 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.

                                       35
<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

                  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          Bylaws of the Registrant, as amended to date .

                  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
                               10.2 to the Registrant's Form 10-K for the fiscal
                               year ended June 30, 1997 (the "1997 Form 10-K")).

                  10.3 *****   1998 Employee Stock Purchase Plan as amended, and
                               form  of  agreements  thereto   (incorporated  by
                               reference  to  Exhibit  10.3 to the  Registrant's
                               Form 10-K for the fiscal year ended June 30, 1999
                               (the "1999 Form 10-K")).

                  10.4  *****  1995 Director Option Plan as amended, and form of
                               agreement  thereto  (incorporated by reference to
                               Exhibit 10.4 to the 1997 Form 10-K).

                  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).

                  10.6.1       Lease   Agreement   between  the  Registrant  and
                               Technology  Associates I dated July 18, 1986,  as
                               amended  (incorporated  by  reference  to Exhibit
                               10.6.1 to the 1995 Form S-1).

                  10.6.2       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).

                  10.6.3       Standard  Office  Lease  -  Gross  between  SILMA
                               Incorporated  and South  Bay/Copley Joint Venture
                               dated   November   11,  1992   (incorporated   by
                               reference  to  Exhibit  10.6.3  to the 1995  Form
                               S-1).

                  10.6.4       Fifth  Amendment to Lease between  Registrant and
                               Metropolitan  Life Insurance  Company dated as of
                               December 5, 1996  (incorporated  by  reference to
                               Exhibit 10.6.4 to the 1997 Form 10-K).

                  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).

                  10.7.1 ***** Promissory  Note between  Registrant  and Charles
                               Duncheon dated August 20, 1998  (incorporated  by
                               reference  to  Exhibit  10.7.1  to the 1999  Form
                               10-K).

                  10.7.2 ***** 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).

                  10.7.3 ***** 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).

                                       36
<PAGE>

                  10.7.4 ***** 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).

                  10.8 *****   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")).

                  10.8.1 ***** 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).

                  10.8.2 ***** 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).

                  10.8.3 ***** 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).

                  10.9         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).

                  10.10        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).

                  10.10.1      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).

                  10.10.2      Sublease  between the Registrant and Ascent Logic
                               Corporation   dated   as   of   July   31,   1998
                               (incorporated  by reference to Exhibit 10.10.2 to
                               the 1998 Form 10-K).

                  10.10.3      Second  Amendment to Lease  Agreement dated March
                               31, 2000 between Registrant and Technology Centre
                               Associates LLC dated July 31, 1998.

                  10.10.4      First  Addendum to Lease  Agreement  dated August
                               18, 1999  between  Registrant  and Joseph and Eda
                               Pell Revocable Trust dated August 18, 1989.

                  10.10.5      Lease  Agreement  dated  April 28,  2000  between
                               Registrant  and  Michael  and Diane  Edwards  for
                               premises located in Tucson, Arizona.

                  10.10.6      Lease   Agreement  dated  May  19,  2000  between
                               NanoMotion  Inc.  and  United  Insurance  Co.  of
                               America for  premises  located at Santa  Barbara,
                               California.

                  13.1         Portions  of   Registrant's   Annual   Report  to
                               Shareholders  for the fiscal  year ended June 30,
                               2000.

                  21.1         Subsidiaries of the Registrant.

                  23.1         Consent  of  Ernst  &  Young   LLP,   Independent
                               Auditors.

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

                  27.1         Financial Data Schedule.

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

 *****   Management contract or compensatory plan or arrangement.

(b)      Reports on Form 8-K.

              On July 28, 1999, we filed a Form 8-K to announce the  acquisition
of BYE/Oasis Engineering, Inc.

              On October 27, 1999, we filed a Form 8-K to announce first quarter
earnings for fiscal year 2000.

               On April 12, 2000, we filed a Form 8-K relating to the signing of
              a letter of intent with Pensar  Tucson,  Inc., and we filed a Form
              8-K on May 1, 2000 announcing the acquisition of Pensar.

              On June 1, 2000, a Form 8-K was filed  announcing the  acquisition
of NanoMotion Incorporated.

              On July 24, 2000, we filed a Form 8-K to report the acquisition of
HexaVision Technologies, Inc.

         (c)      Exhibits.  See Item 14(a)(3) above.

(d)      Financial Statement Schedules.  See Item 14(a)(2) above.

                                       37
<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 28, 2000

                                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.

<TABLE>
         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:

<CAPTION>
------------------------------- -------------------------------------------------- -------------------------
            Signature                             Title                                  Date
            ---------                             -----                                  ----

<S>                             <C>                                                <C>
/s/ Brian R. Carlisle           Chairman of the Board of Directors and Chief       September 28, 2000
-----------------------------   Executive Officer (Principal Executive Officer)
(Brian R. Carlisle)

/s/ Michael W. Overby           Vice President, Finance and Chief Financial        September 28, 2000
-----------------------------   Officer (Principal Financial and Accounting
(Michael W. Overby)             Officer)


/s/ Bruce E. Shimano            Vice President, Research and Development,          September 28, 2000
-----------------------------   Secretary and Director
(Bruce E. Shimano)

                                       38
<PAGE>
------------------------------- -------------------------------------------------- -------------------------
            Signature                             Title                                  Date
            ---------                             -----                                  ----

/s/ Ronald E. F. Codd           Director                                           September 28, 2000
-----------------------------
(Ronald E. F. Codd)

/s/ Michael P. Kelly            Director                                           September 28, 2000
-----------------------------
(Michael P. Kelly)

/s/ Cary R. Mock                Director                                           September 28, 2000
-----------------------------
(Cary R. Mock)

/s/ John E. Pomeroy             Director                                           September 28, 2000
-----------------------------
(John E. Pomeroy)

</TABLE>
                                                   39

<PAGE>


<TABLE>
                                    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                                              ADEPT TECHNOLOGY, INC.

                                    INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<CAPTION>

<S>                                                                                                            <C>
Report of Ernst & Young, LLP, Independent Auditors........................................................     F-1

Consolidated Balance Sheets at June 30, 2000 and June 30, 1999............................................     F-2

Consolidated Statements of Operations for each of the three years in the period
     ended June 30, 2000..................................................................................     F-3

Consolidated Statements of Cash Flows for each of the three years in the period
     ended June 30, 2000..................................................................................     F-4

Consolidated Statements of Shareholders' Equity for each of the three years in the period
     ended June 30, 2000..................................................................................     F-5

Notes to Consolidated Financial Statements................................................................     F-6

</TABLE>

<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, 2000 and 1999,  and the  related  consolidated
statements of operations,  shareholders'  equity, and cash flows for each of the
three years in the period  ended June 30,  2000.  Our audits also  included  the
financial  statement schedule listed in the Index as Item 14(a). 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, 2000 and 1999, and the consolidated  results
of its  operations  and its cash flows for each of the three years in the period
ended June 30, 2000, 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
August 2, 2000


                                      F-1

<PAGE>

<TABLE>
                                                   ADEPT TECHNOLOGY, INC.
                                                CONSOLIDATED BALANCE SHEETS
<CAPTION>
(in thousands)
                                                                                       June 30,               June 30,
                                                                                         2000                   1999
                                                                                     --------------         --------------
<S>                                                                                  <C>                    <C>
ASSETS
Current assets:
    Cash and cash equivalents                                                        $    13,487            $    11,816
    Short-term investments                                                                 6,950                 15,200
    Accounts receivable, less allowance for doubtful accounts of
        $637 in 2000 and $716 in 1999                                                     25,527                 19,707
    Inventories                                                                           15,153                 11,781
    Deferred tax and other current assets                                                  7,049                  5,601
                                                                                     --------------         --------------
            Total current assets                                                          68,166                 64,105

Property and equipment at cost                                                            25,675                 24,822
Less accumulated depreciation and amortization                                            20,092                 18,940
                                                                                     --------------         --------------
Property and equipment, net                                                                5,583                  5,882
Goodwill and other intangibles, net                                                       16,963                      -
Other assets                                                                               2,811                  1,690
                                                                                     --------------         --------------
            Total assets                                                             $    93,523            $    71,677
                                                                                     ==============         ==============

LIABILITIES AND SHAREHOLDERS' EQUITY
 Current liabilities:
    Accounts payable                                                                 $    10,841            $     6,838
    Accrued payroll and related expenses                                                   4,727                  3,336
    Accrued warranty                                                                       1,915                  1,408
    Deferred revenue                                                                       1,511                  1,274
    Taxes payable and other accrued liabilities                                            2,579                  3,635
                                                                                     --------------         --------------
            Total current liabilities                                                     21,573                 16,491

Long term liabilities:
    Deferred income tax                                                                    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:
        25,000 shares authorized, 10,677 shares issued
            and outstanding in 2000, and 9,459 shares in 1999                             67,184                 50,215
    Retained earnings                                                                      3,544                  4,971
                                                                                     --------------         --------------
            Total shareholders' equity                                                    70,728                 55,186
                                                                                     --------------         --------------
            Total liabilities and shareholders' equity                               $    93,523            $    71,677
                                                                                     ==============         ==============

<FN>
                                                 See accompanying notes.
</FN>
</TABLE>
                                                           F-2

<PAGE>

<TABLE>
                                                   ADEPT TECHNOLOGY, INC.
                                           CONSOLIDATED STATEMENTS OF OPERATIONS
<CAPTION>
(in thousands, except per share data)
                                                                                     Year Ended June 30,
                                                                       -------------------------------------------------
                                                                           2000              1999              1998
                                                                       --------------    --------------    -------------
<S>                                                                    <C>               <C>               <C>
Net revenues                                                           $    99,212       $     87,374      $    105,440
Cost of revenues                                                            56,173             47,902            60,841
                                                                       --------------    --------------    -------------
Gross margin                                                                43,039             39,472            44,599
Operating expenses:
     Research, development and engineering                                  14,629             11,591            11,844
     Selling, general and administrative                                    29,503             24,676            26,890
     Merger-related charges                                                    988                  -                 -
     Restructuring and other nonrecurring charges                                -                  -             2,756
     Amortization of goodwill and other intangibles                            685                  -                 -
                                                                       --------------    --------------    -------------
Total operating expenses                                                    45,805             36,267            41,490
                                                                       --------------    --------------    -------------

Operating (loss) income                                                     (2,766)             3,205             3,109

Interest income                                                              1,031                967               998

Interest and other expense                                                     285                 41                27
                                                                       --------------    --------------    -------------

(Loss) income before (benefit from) provision for income taxes              (2,020)             4,131             4,080

(Benefit from) provision for income taxes                                     (593)             1,620             1,819
                                                                       --------------    --------------    -------------

Net (loss) income                                                      $    (1,427)      $      2,511      $      2,261
                                                                       ==============    ==============    =============

Net (loss) income per share:

          Basic                                                        $     (0.15)      $       0.27      $       0.25
                                                                       ==============    ==============    =============
          Diluted                                                      $     (0.15)      $       0.26      $       0.23
                                                                       ==============    ==============    =============

Number of shares used in computing per share amounts:

          Basic                                                              9,774              9,302             9,154
                                                                       ==============    ==============    =============
          Diluted                                                            9,774              9,484             9,689
                                                                       ==============    ==============    =============

<FN>
                                                 See accompanying notes.
</FN>
</TABLE>
                                                           F-3

<PAGE>

<TABLE>
                                                 ADEPT TECHNOLOGY, INC.
                                          CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>
(in thousands)                                                                          Year Ended June 30,
                                                                            --------------------------------------------
                                                                                2000           1999            1998
                                                                            -------------  --------------  -------------
<S>                                                                         <C>            <C>             <C>
Operating activities
  Net (loss) income                                                         $    (1,427)   $     2,511     $      2,261
  Adjustments to reconcile net income to net cash provided
  by (used in) operating activities:
   Depreciation                                                                   3,140          3,154            2,832
   Amortization                                                                     843             79              277
   Deferred taxes                                                                  (834)           300           (1,844)
   Gain on disposal of property and equipment                                       (50)           (37)            (278)
   Compensation expense related to employee stock purchase plan                       -              -              675
   Write-off of certain assets relating to restructuring and nonrecurring
   charges                                                                            -              -            1,062
   Tax benefit from stock plans                                                     591            164              544
   Changes in operating assets and liabilities, net of effects of
   acquisitions:
        Accounts receivable                                                      (5,581)         1,668           (2,692)
        Inventories                                                              (3,590)         3,307           (2,771)
        Other current assets                                                       (152)        (1,106)            (405)
        Other assets                                                             (1,279)          (404)            (172)
        Accounts payable                                                          3,695            762            1,421
        Accrued expenses                                                          2,071           (710)           1,360
        Accrued restructuring and nonrecurring charges                                -         (1,019)           1,019
        Taxes payable and other accrued liabilities                              (1,068)         1,048           (1,247)
                                                                            -------------  --------------  -------------
   Total adjustments                                                             (2,214)         7,206             (219)
                                                                            -------------  --------------  -------------
  Net cash (used in) provided by operating activities                            (3,641)         9,717            2,042
                                                                            -------------  --------------  -------------
Investing activities
   Business acquisitions                                                         (3,250)             -                -
   Purchase of property and equipment                                            (2,406)        (2,469)          (3,100)
   Proceeds from the sale of property and equipment                                 116            187              470
   Sales of long-term available-for-sale investments                                  -              -            1,000
   Purchases of short-term available-for-sale investments                       (44,117)       (31,206)         (21,003)
   Sales of short-term available-for-sale investments                            52,367         27,306           17,069
                                                                            -------------  --------------  -------------
   Net cash provided by (used in) investing activities                            2,710         (6,182)          (5,564)
                                                                            -------------  --------------  -------------
Financing activities

   Proceeds from employee stock incentive program and employee
       stock purchase plan, net of repurchases and cancellations                  2,602          2,306            1,995
   Revolving bank line of credit                                                     -            (470)            (109)
   Repurchase of common stock                                                        -          (3,194)               -
                                                                            -------------  --------------  -------------
   Net cash provided by (used in) financing activities                            2,602         (1,358)           1,886
                                                                            -------------  --------------  -------------
Increase (decrease) in cash and cash equivalents                                  1,671          2,177           (1,636)
Cash and cash equivalents, beginning of period                                   11,816          9,639           11,275
                                                                            -------------  --------------  -------------
Cash and cash equivalents, end of period                                    $    13,487    $    11,816     $      9,639
                                                                            =============  ==============  =============
Supplemental disclosure of noncash activities:

   Inventory capitalized into property and equipment including related tax  $       228    $       561     $        863
   Addition to capital lease obligation                                     $         -    $         -     $         13
Cash paid during the period for:

   Interest                                                                 $         -    $        41     $         54
   Taxes paid (refunded)                                                    $     1,373    $      (189)    $      3,894

<FN>
                                                 See accompanying notes.
</FN>
</TABLE>
                                                          F-4

<PAGE>

<TABLE>
                                                 ADEPT TECHNOLOGY, INC.
                                     CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
<CAPTION>
(in thousands)
                                                                                                         Total
                                                             Common Stock              Retained      Shareholders'
                                                       Shares           Amount         Earnings         Equity
                                                    --------------------------------------------------------------
<S>                                                       <C>      <C>           <C>             <C>
Balance at June 30, 1997                                  8,960    $   46,951    $      1,163    $      48,114

 Common stock issued under employee stock
   incentive program and  employee
   stock purchase plan                                      458         1,995               -            1,995
 Tax benefit from stock plans                                 -           544               -              544
 Compensation charge                                          -           675               -              675
 Acquisition of RoboElektronik                               25           114            (304)            (190)
 Net income                                                   -             -           2,261            2,261
                                                    ------------- -------------- --------------- ----------------

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                                                   -             -           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                                                     -             -          (1,427)          (1,427)
                                                    ------------- -------------- --------------- ----------------

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

<FN>
                                                 See accompanying notes.
</FN>
</TABLE>
                                                          F-5

<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, telecommunications and semiconductor industries throughout the world.

Basis of Presentation

        The accompanying  consolidated financial statements include the accounts
of  the  Company  and  its  wholly-owned  subsidiaries,  Adept  Technology  GmbH
(formerly  known as  RoboElektronik  GmbH,  "RoboElectronik"),  acquired  by the
Company on  February  13, 1998 (see Note 2), and SILMA  Incorporated  ("SILMA"),
acquired by the Company on June 28, 1995. All material intercompany accounts and
transactions have been eliminated.

         As more fully described in Note 2, the Company merged with BYE/OASIS in
July 1999 in a pooling of  interests  transaction.  The  Company's  consolidated
financial  statements  for prior  periods  have been  restated  to  include  the
financial position,  results of operations and cash flows of BYE/OASIS. On April
28,  2000  and  on  May  31,  2000,  respectively,  the  Company  completed  the
acquisitions  of  Pensar  Tucson,   Inc.  and  NanoMotion   Incorporated.   Both
acquisitions  were accounted for under the purchase  method of  accounting.  The
financial  results of these two companies are included in the financial  results
of Adept subsequent to the acquisition date.

         The notes to the Company's  consolidated  financial  statements are for
the  three  year  period  ended  June  30,  2000.  Unless  otherwise  indicated,
references to any year in these Notes to Consolidated Financial Statements refer
to the Company's fiscal year ended June 30.

Use of Estimates

         The  preparation  of  the  financial   statements  in  conformity  with
generally accepted  accounting  principles 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
$394,000 in 2000, $87,000 in 1999 and $376,000 in 1998.  Transaction losses were
$17,000 in 2000 and $52,000 in 1999. Transaction gains were $6,000 in 1998.

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.


                                       F-6

<PAGE>

<TABLE>
         At  June  30,  2000  and  1999,  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.
<CAPTION>
         (in thousands)                                                                          June 30,
                                                                                        ---------------------------
                                                                                           2000             1999
                                                                                        ---------         ---------
<S>                                                                                     <C>               <C>
         Cash and cash equivalents
           Cash.......................................................................  $   9,096         $   2,209
           Money market funds.........................................................      1,166             1,653
           Commercial paper............................................................         -             2,554
           Municipal notes and bonds .................................................      3,225             5,400
                                                                                        ---------         ---------
         Cash and cash equivalents....................................................  $  13,487         $  11,816
                                                                                        =========         =========

         Short-term investments

           Auction rate securities....................................................  $   3,500         $   9,400
           Market auction preferred stock.............................................      3,450             5,800
                                                                                        ---------         ---------
         Short-term investments.......................................................  $   6,950         $  15,200
                                                                                        =========         =========
</TABLE>
         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 2000, 1999 or 1998.

Comprehensive Income
<TABLE>
         For the three years in the period  ended June 30,  2000,  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:
<CAPTION>
         (in thousands)                                                                         June 30,
                                                                                      -----------------------------
                                                                                          2000             1999
                                                                                      -----------       -----------
<S>                                                                                   <C>               <C>
         Short-term loans to employees.............................................   $       856       $       904
         Long-term loans to employees..............................................           617               342
                                                                                      -----------       -----------
                                                                                      $     1,473       $     1,246
                                                                                      ===========       ===========
</TABLE>
         Short-term  loans to employees  are included in other  current  assets.
Long-term loans to employees are included in other assets.


                                      F-7

<PAGE>

Inventories
<TABLE>
         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:
<CAPTION>
         (in thousands)                                                                         June 30,
                                                                                      -----------------------------
                                                                                          2000             1999
                                                                                      -----------       -----------
<S>                                                                                   <C>               <C>
         Raw materials.............................................................   $     6,097       $     5,617
         Work-in-process...........................................................         3,036             2,059
         Finished goods............................................................         6,020             4,105
                                                                                      -----------       -----------
                                                                                          $15,153           $11,781
                                                                                      ===========       ===========

Property and Equipment

         Property and equipment are recorded at cost.

         The components of property and equipment are summarized as follows:

         (in thousands)                                                                         June 30,
                                                                                      -----------------------------
                                                                                          2000             1999
                                                                                      -----------       -----------
         Cost:
           Machinery and equipment.................................................   $    13,303       $    13,558
           Computer equipment......................................................         8,975             8,153
           Office furniture and equipment..........................................         3,397             3,111
                                                                                      -----------       -----------
                                                                                           25,675            24,822
           Accumulated depreciation and amortization...............................        20,092            18,940
                                                                                      -----------       -----------
           Net property and equipment..............................................   $     5,583       $     5,882
                                                                                      ===========       ===========
</TABLE>
         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  generally  recognizes  revenue on products 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 are 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-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


                                      F-8

<PAGE>

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  $516,000,  $389,000  and
$346,000 in 2000, 1999 and 1998, 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 $309,000 in 2000, $681,000 in 1999, and $629,000
in 1998. 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
$16.9 million and $0 at June 30, 2000 and June 30, 1999, and is presented net of
accumulated  amortization  of $0.7  million and $0 at June 30, 2000 and June 30,
1999.  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.

         There are no unamortized  software  development and purchased  software
costs at June 30, 2000 or 1999. In 1998,  $359,000 of purchased  software  costs
were written off and included in the nonrecurring charges. Software amortization
was  $180,000 in 1998.  There were no software  amortization  costs for 2000 and
1999. See "Restructuring and Other Nonrecurring Charges."

Advertising Costs

         Advertising  costs are  expensed  in the period  incurred.  Advertising
costs were $224,000 in 2000,  $143,000 in 1999, and $212,000,  1998. 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.


                                      F-9

<PAGE>

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 Company has elected to account for stock-based compensation to
employees in accordance  with Opinion 25,  providing  only  proforma  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.
Merger-related  expenses  were  $558,000,  expenses  relating  to the closure of
facilities  in  Texas  were  $195,000,   and  other  expenses  relating  to  the
acquisition were $235,000.

Restructuring and Other Nonrecurring Charges

         During   1998,   the   Company   recorded   restructuring   charges  of
approximately $1.0 million and other nonrecurring  charges of approximately $1.7
million.  The  restructuring  charges  of $1.0  million  included  $651,000  for
relinquishing  control of the  Company's  Japan  branch,  which  resulted in the
write-off  of certain  assets  and excess  facilities.  The  remaining  $362,000
relates to severance for the termination of certain employees.

         The  nonrecurring   charges  of  approximately  $1.7  million  included
$675,000 for compensation  expenses related to the Company's employee 1998 stock
purchase  plan (see Note 5) and  $383,000  related to the  write-off  of certain
information  system  hardware and software which had become obsolete as a result
of decisions  related to the Company's  information  system  implementation  and
upgrade made in the fourth quarter of 1998. Additionally $413,000 related to the
write-off of the remaining balance of capitalized  purchased software associated
with the acquisition of SILMA. Due to  technological  changes in 1998 related to
the SILMA  operating  platform,  the Company  determined that the net realizable
value of the purchased software was impaired.


                                      F-10

<PAGE>

<TABLE>
         The following table  summarizes the Company's  restructuring  and other
nonrecurring  charges and accrual  activity  for the years ended June 30,  2000,
1999 and 1998:
<CAPTION>
Restructuring Charges

                                                                                Intangible and
                                                Severance                        Fixed Assets
                                                  and               Japan          and Other
               (in thousands)                   Benefits         Operations         Charges            Total
               --------------                   --------         ----------         -------            -----
<S>                                           <C>                 <C>             <C>               <C>
Restructuring charges in 1998                 $        362        $      651      $         -       $     1,013
Non-cash charges in 1998                                 -              (266)               -              (266)
                                              ----------------   --------------  ----------------   --------------
Amounts included in accrued liabilities as of
June 30, 1998                                          362               385                -               747
                                              ================   ==============  ================   ==============


Cash paid during 1999                                 (362)             (385)               -              (747)
                                              ----------------   --------------  ----------------   --------------
Amounts included in accrued liabilities as of
June 30, 1999 and June 30, 2000                          -                 -                -                 -
                                              ================   ==============  ================   ==============


Nonrecurring Charges

                                                                          Intangible and
                                                                           Fixed Assets
                                               Compensation                 and Other
               (in thousands)                    Expense                     Charges                   Total
               --------------                    -------                     -------                   -----

Nonrecurring charges in 1998                  $        675                $      1,068              $      1,743
Non-cash charges in 1998                              (675)                       (796)                   (1,471)
                                              -----------------           ----------------          --------------
Accrued liabilities as of June 30, 1998                  -                         272                       272
                                              -----------------           ----------------          --------------


Cash paid or non-cash charges during 1999                -                        (272)                     (272)
                                              -----------------           ----------------          --------------
Accrued liabilities as of June 30, 1999
   and June 30, 2000                                     -                           -                         -
                                              =================           ================          ==============

</TABLE>

                                                        F-11

<PAGE>

New Accounting Pronouncements

Staff Accounting Bulletin No. 101 - Revenue Recognition

         In December  1999,  the SEC issued Staff  Accounting  Bulletin No. 101,
"Revenue  Recognition  in  Financial  Statements"  or SAB 101.  SAB 101 provides
guidance on the recognition, presentation and disclosure of revenue in financial
statements.  In  recent  actions,  the  SEC has  further  delayed  the  required
implementation  date which,  for us, will be the fourth  quarter of fiscal 2001,
retroactive  to the  beginning of the fiscal year.  The SEC has  indicated  that
additional   implementation   guidance  will  be  forthcoming  in  the  form  of
"Frequently  Asked  Questions",  however,  such  guidance has not been issued to
date. We cannot fully assess the impact of SAB 101 until the additional guidance
from the SEC is issued.  Accordingly,  we are still in the process of  assessing
the  impact of SAB 101 on our  consolidated  results  of  operations,  financial
position, and cash flows based upon the most current information.

Statement of Financial  Accounting Standards No. 133 - Accounting for Derivative
Instruments and Hedging Activities

         In June 1998, the Financial Accounting Standards Board issued Statement
of Financial Accounting  Standards,  or SFAS, No. 133, Accounting for Derivative
Instruments and Hedging Activities. SFAS No. 133, as amended by SFAS No. 137 and
138, establishes methods of accounting for derivative financial  instruments and
hedging  activities  related  to  those  instruments  as well as  other  hedging
activities. We will be required to implement SFAS No. 133 as of the beginning of
our fiscal year 2001. Our foreign currency exchange rate hedging activities have
been  insignificant  to date and we do not believe that SFAS No. 133 will have a
material impact on our financial position, results of operations or cash flows.

Reclassification

         Certain  amounts  presented in the financial  statements of prior years
have been reclassified to conform to the current presentation for 2000.

2.       Mergers and Acquisitions

         During the three-year  period ended June 30, 2000,  Adept acquired four
companies,  as described  below.  Adept's  acquisitions of NanoMotion and Pensar
completed  during 2000 have been accounted for as purchases,  with the excess of
the  purchase  price over the  estimated  fair value of the net assets  acquired
recorded  as  goodwill.  The  Company's  mergers  with  BYE/OASIS  in  1999  and
RoboElektronik in 1998 have been accounted for as a pooling of interests.

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   stages  and  devices  for
nanometer-scale  movement,  positioning  and  alignment  for  the  fiber  optic,
semiconductor  and metrology  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 and cash of $250,000.  The financial results of NanoMotion
have been included in Adept's financial results since May 31, 2000.

Pensar

         On April 28, 2000, we completed the acquisition of Pensar Tucson, Inc.,
an Arizona corporation.  Pensar is a precision automation integrator of standard
work cells.  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  Tucson 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 price of NanoMotion and Pensar was allocated,  based on an
independent  valuation,  to  goodwill  and  other  intangible  assets.  Goodwill
represents  the excess of the purchase  price of the net tangible


                                      F-12

<PAGE>

and intangible assets acquired over their estimated fair value. Other intangible
assets primarily represent developed technology and assembled workforce.
<TABLE>
         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:
<CAPTION>
                                                                                                        Annual
                                                                               Amortization          Amortization
                                                Acquisition Cost                   Life             of 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 leading  manufacturer  of  mini-environment  systems  and
Standard Mechanical  Interfaces ("SMIF") 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.


                                      F-13

<PAGE>

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

                                                                            1999                     1998
                                                                         -----------             ----------
<S>                                                                      <C>                     <C>
         Net sales
                  Adept                                                  $    82,027             $   98,394
                  BYE/OASIS                                                    5,347                  7,046
                                                                         -----------             ----------
                      Total sales                                        $    87,374             $  105,440
                                                                         ===========             ==========

         Net income (loss)
                  Adept                                                  $     2,622             $    2,551
                  BYE/OASIS                                                     (111)                  (290)
                                                                         -----------             ----------
                      Total net income (loss)                            $     2,511             $    2,261
                                                                         ===========             ==========
</TABLE>
         Revenue  generated  for the period from July 1, 1999  through  July 16,
1999 (date of acquisition) was not significant.

RoboElektronik

         On  February  13,  1998,  the  Company  acquired   RoboElektronik  GmbH
("RoboElektronik") through the issuance of 24,562 shares of the Company's common
stock,  which  were  exchanged  for  all of the  outstanding  capital  stock  of
RoboElektronik.  The  acquisition  was  accounted for as a pooling of interests.
RoboElektronik  GmbH was renamed Adept  Technology,  GmbH on June 26, 1998.  The
results of  operations of  RoboElektronik  have been  consolidated  with Adept's
financial statements since the acquisition.

3.       Derivative Financial Instruments

         From time to time, the Company may enter into forward foreign  exchange
contracts  primarily to hedge against the short-term  impact of foreign currency
fluctuations of purchase  commitments  denominated in yen. The maturities of the
forward exchange contracts are short term in nature,  generally 90 days. Because
the impact of movements in currency  exchange rates on forward foreign  exchange
contracts offsets the related impact on the underlying items being hedged, these
financial  instruments do not subject the Company to speculative risk that would
otherwise  result  from  changes  in  currency  exchange  rates.   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, 2000. The Company has deferred recognition of transaction
gains of $76,000,  relating to foreign exchange  contracts treated as accounting
hedges.  The Company  expects to realize  these  transaction  gains in the first
quarter of 2001.


                                      F-14

<PAGE>

4.       Commitments and Contingencies

Commitments

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

          (in thousands)

            Fiscal Year                                     Leases
                                                            ------
                2001....................................    $  3,386
                2002....................................       3,387
                2003....................................       3,283
                2004....................................       1,809
                2005....................................          85
                Later years.............................          14
                                                            --------
            Total minimum lease payments................    $ 11,964
                                                            ========

         Rent  expense net of sublease  income of $18,480,  $312,000  and $0 was
$3,019,000 in 2000, $2,507,000 in 1999 and $2,024,000 in 1998.

Contingencies

         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.
Certain end users have  notified us that they may seek  indemnification  from us
for  damages or  expenses  resulting  from this  matter.  We cannot  predict the
outcome  of this or any  similar  litigation,  which  may  arise in the  future.
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 such
alleged  infringement.  While it is not  feasible  to predict or  determine  the
outcome of the 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.


                                      F-15

<PAGE>

Stock Option Plans

         The Company's 1983 Employee Stock  Incentive  Program (the "1983 Plan")
was adopted by the Board of Directors in August 1983. The 1983 Plan provided for
the grant 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 1983 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 1983 Plan, the Company may exercise an option
to repurchase such shares at their original issue price.  The Board of Directors
determines  the  exercise  price which must be at least equal to the fair market
value of shares on the date of grant.  The 1983 Plan  expired  according  to its
terms in August  1993.  Currently  outstanding  options  under the 1983 Plan and
common stock purchased  pursuant to stock purchase rights granted under the 1983
Plan  continue to be  governed by the terms of the 1983 Plan and the  respective
option and stock purchase and stock restriction  agreements  between the Company
and the holders thereof.

         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. The terms of the 1993 Plan are similar to the 1983 Plan, and 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 the issuance of
1,000,000  additional shares to the 1993 Plan. In August 2000, the 1993 Plan was
amended by the Board of Directors,  subject to shareholder approval, to increase
the  number  of  shares  authorized  for  issuance  under  the  1993  Plan by an
additional 1,000,000 shares.

         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 the year ended June 30, 2000 and 1999,  99,000 and 87,000 options,
respectively 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.


                                      F-16

<PAGE>

<TABLE>
         The following table  summarizes  option  activities under the Company's
stock option plans:
<CAPTION>

                                                                            Options
                                                 -----------------------------------------------------------------
         (in thousands, except per share data     Available     No. of Shares    Aggregate     Weighted Average
                                                  for Grant      Outstanding       Price        Exercise Price
                                                 ------------ ----------------- ------------ ---------------------

<S>                                                   <C>            <C>           <C>                <C>
         Balance at June 30, 1997................       443          1,096         $   6,378          $  5.82
              Additional shares authorized.......     1,000             --                --               --
              Granted............................      (413)           413             4,908            11.87
              Canceled...........................        47            (47)             (484)           10.27
              Shares Expired.....................        (1)            --                --              --
              Exercised..........................        --           (270)             (706)            2.61
                                                 ----------      ---------         ---------
         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
                                                 ==========      ==========        ==========
</TABLE>
<TABLE>
         The following table summarizes  information  concerning outstanding and
exercisable options at June 30, 2000.  Approximately  540,000 stock options were
exercisable at June 30, 1999:
<CAPTION>
         (shares in thousands)                   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
              ------                    -----------           ----          -----       -----------       -----
<S>      <C>         <C>                    <C>                 <C>      <C>                 <C>         <C>
         $    0.16 - $   5.56                 396               8.48     $   4.01            122         $  2.66
         $    5.56 - $   6.50                 441               7.18     $   6.20            288         $  6.34
         $    6.63 - $   6.63                 104               8.15     $   6.63             46         $  6.63
         $    7.00 - $   7.00                 368               8.30     $   7.00            133         $  7.00
         $    7.03 - $  24.00                 435               8.65     $  11.24            128         $  9.98
                                     -------------------                              ----------------

         $    0.16 - $  24.00               1,744               8.14     $   7.15            717         $  6.50
                                     ===================                              ================
</TABLE>

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) such amount
as may be determined by the Board of Directors.


                                      F-17

<PAGE>

         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, subject to shareholder  approval,  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) such amount as
may be determined by the Board of Directors.

         As of June 30, 2000,  300,000 shares of the Company's common stock were
issued under the 1998 ESPP and 562,000  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 2000.

Stock Based Compensation
<TABLE>
         At June 30, 2000, 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:
<CAPTION>
(in thousands, except per share data)
                                                                                         June 30,
                                                                       --------------------------------------------
                                                                         2000              1999             1998
                                                                       ---------        ---------         ---------
<S>                                                                    <C>              <C>               <C>
Net (loss) income                       As reported...............     ($  1,427)       $   2,511         $   2,261
                                        Pro forma ................     ($  5,532)       $     190         $     289

Basic net (loss) income per share       As reported...............     ($    .15)       $     .27         $     .25
                                        Pro forma.................     ($    .57)       $     .02         $     .03

Diluted net (loss) income per share     As reported...............     ($    .15)       $     .26         $     .23
                                        Pro forma.................     ($    .57)       $     .02         $     .03
</TABLE>
     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.

         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,  2000,  1999 and 1998,
risk-free  interest rates of 6.04% for 2000, 4.84% for 1999, and 5.77% for 1998;
a dividend yield of 0% for all three years; a weighted-average  expected life of
3.1 years for 2000,  3.5 years for 1999 and 3.4 years for 1998; and a volatility
factor of the expected  market price of the  Company's  common stock of 1.02 for
2000, .99 for 1999 and .65 for 1998. The weighted  average grant date fair value
of options  was $6.65 for  options  granted in 2000,  $3.83 in 1999 and $5.86 in
1998.

         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 2000,  1999 and 1998;  a  dividend  yield of 0% for all three
years;  expected  life of 6 months for all three years;  expected  volatility of
1.02 for 2000, .99 for 1999 and .65 for 1998;  and a risk-free  interest rate of
5.81% for 2000,  4.78% for 1999 and 5.59% for 1998.  The  weighted  average fair
market  value of the  purchase  rights  granted was $3.35 for rights  granted in
2000, $3.11 for 1999 and $2.90 for 1998.


                                      F-18

<PAGE>

         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 $274,000 in 2000,  $125,000 in 1999 and
$252,000 in 1998.

7.       Income Taxes
<TABLE>
         The  (benefit  from)   provision  for  income  taxes  consists  of  the
following:
<CAPTION>
         (in thousands)                                                             Year Ended June 30,
                                                                       --------------------------------------------
                                                                         2000              1999             1998
                                                                       ---------        ---------         ---------
<S>                                                                    <C>              <C>               <C>
         Current:
              Federal..............................................    $     161        $     285         $   2,970
              State................................................          (86)             184               363
              Foreign..............................................          166              851               330
                                                                       ---------        ---------         ---------
         Total current.............................................          241            1,320             3,663

         Deferred:
              Federal..............................................         (515)             389            (1,580)
              State................................................         (319)             (89)             (264)
                                                                       ----------       ----------        ----------
         Total deferred............................................         (834)             300            (1,844)
                                                                       ----------       ---------         ----------
         (Benefit from) provision for income taxes.................    ($    593)       $   1,620         $   1,819
                                                                        =========       =========         =========

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

         (in thousands)                                                             Year Ended June 30,
                                                                       --------------------------------------------
                                                                         2000              1999             1998
                                                                       ---------        ---------         ---------
         Tax at federal statutory rate.............................    ($    687)       $   1,404         $   1,387
         State taxes, net of federal benefit.......................          (33)              63                33
         Foreign taxes.............................................          441              562               218
         Tax credits...............................................         (791)            (350)             (180)
         Merger and acquisition related expenses...................          255                -                 -
         Non-deductible meals, entertainment and exchange losses...          125               81               185
         Other.....................................................           97             (140)              176
                                                                       ---------        ---------         ---------
         (Benefit from) provision for income taxes.................    ($    593)       $   1,620         $   1,819
                                                                        =========       =========         =========
</TABLE>

                                                           F-19

<PAGE>

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

         (in thousands)                                                                          June 30,
                                                                                        ---------------------------
                                                                                           2000             1999
                                                                                        ---------         ---------
<S>                                                                                     <C>               <C>
         Deferred tax assets:
           Net operating loss carryforwards...........................................  $     367         $     459
           Tax credit carryforwards...................................................      1,626               553
           Inventory valuation accounts...............................................      1,238             1,146
           Warranty reserves..........................................................        734               785
           Other accruals and reserves not currently deductible for tax purposes......      2,880             2,239
           Other......................................................................        237               202
                                                                                        ---------         ---------
           Total deferred tax assets..................................................      7,082             5,384
           Valuation allowance........................................................       (888)             (836)
                                                                                        ----------        ----------
           Net deferred tax assets....................................................      6,194             4,548
                                                                                        ---------         ---------

         Deferred tax liabilities:
           Purchased intangibles......................................................       (759)                -
           Foreign earnings...........................................................       (463)             (410)
                                                                                        ----------        ----------
           Net deferred tax liabilities...............................................     (1,222)             (410)
                                                                                        ----------        ----------

         Total net deferred tax assets................................................  $   4,972         $   4,138
                                                                                        =========         =========
</TABLE>

         The  change  in  the   valuation   allowance  was  a  net  increase  of
approximately  $52,000 for 2000 and a net decrease of approximately  $91,000 for
1999.

         At June 30, 2000, the Company had net operating loss  carryforwards for
federal  income tax purposes of  approximately  $1.0 million which will begin to
expire  in  2001 if  unused.  The  Company  also  had  credit  carryforwards  of
approximately  $1.6  million  which  will  begin to  expire  in 2000 if  unused.
Utilization  of the net operating  loss  carryforwards  and a portion of the tax
credit carryforwards is limited to approximately $300,000 per year.

         For financial reporting purposes, a valuation allowance of $888,000 has
been established  primarily to offset the deferred tax assets related to certain
tax credits and net operating loss carryforwards.

         Pretax  income  (losses)  from  foreign  operations  was  approximately
$267,000 in 2000, $1.5 million in 1999, and ($605,000) in 1998.

8.       Net Income (Loss) Per Share
<TABLE>
         Net (loss) income per share is calculated as follows:
<CAPTION>
         (in thousands, except per share amounts)                                   Year Ended June 30,
                                                                       --------------------------------------------
                                                                         2000              1999             1998
                                                                       ---------        ---------         ---------
<S>                                                                    <C>              <C>               <C>
           Net (loss) income                                           $  (1,427)       $   2,511         $   2,261
                                                                       ==========       =========         =========
           Basic:
              Weighted-average shares outstanding                          9,774            9,302             9,154
                                                                       =========        =========         =========
              Net (loss) income per share                              $  (0.15)        $    0.27         $    0.25
                                                                       =========        =========         ========

           Diluted:
              Weighted-average shares outstanding                          9,774            9,302             9,154
              Effect of dilutive securities:
                Stock options                                                  -              182               535
                                                                       ---------        ---------         ---------
              Weighted-average shares outstanding                          9,774            9,484             9,689
                                                                       =========        =========         =========
              Net (loss) income per share                              $  (0.15)        $    0.26         $    0.23
                                                                       =========        =========         =========
</TABLE>


                                                        F-20

<PAGE>

         Stock  options to purchase  160,480 and 463,054  shares of common stock
were  outstanding  during the years ended June 30, 1999 and 1998,  respectively,
but were not  included in the  calculations  of diluted EPS 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, 2000, the  calculation of diluted net income per share would have
included approximately 1,658,000 additional common equivalent shares relating to
outstanding  employee  stock options not included  above  (determined  using the
treasury stock method).

9.       Segment Information

         The Company adopted Statement of Financial Accounting Standards No. 131
(SFAS  131),   "Disclosures   about   Segments  of  an  Enterprise  and  Related
Information," in 1999. SFAS 131 establishes  standards for reporting information
about operating  segments and related  disclosures  about  products,  geographic
information  and major  customers.  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),   Standard  Mechanical
Interfaces  ("SMIF")  integration  and front-end  wafer  handling  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  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.
<TABLE>
         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.
<CAPTION>
         (in thousands)                                                            Year Ended June 30,
                                                                       --------------------------------------------
                                                                         2000              1999             1998
                                                                       ---------        ---------         ---------
<S>                                                                    <C>              <C>               <C>
         Revenue:
           Assembly and Material Handling operations ..............    $  81,454        $  74,858         $  94,308
           Semiconductor operations................................       12,438            5,347             7,046
           SILMA Software operations...............................        5,320            7,169             4,086
                                                                       ---------        ---------         ---------
               Total revenue                                           $  99,212        $  87,374         $ 105,440
                                                                       =========        =========         =========

         Operating (loss) income:
           Assembly and Material Handling operations...............    $  19,378        $  18,803         $  24,962
           Semiconductor operations................................        1,674        (     207)        (     145)
           SILMA Software operations...............................    (     548)           2,372         (     501)
                                                                       ---------        ---------         ---------
           Segment profit (loss)                                          20,504           20,968            24,316


                                                            F-21

<PAGE>

           Unallocated research, development and engineering
              and selling, general and administrative..............    (  23,270)       (  17,763)        (  21,207)
           Interest income.........................................        1,031              967               998
           Interest expense........................................         (285)             (41)              (27)
                                                                       ---------        ---------         ---------
           (Loss) income before provision for (benefit from)
              income taxes                                             $  (2,020)       $   4,131         $   4,080
                                                                       =========        =========         =========

         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:

         (in thousands)                                                            Year Ended June 30,
                                                                       --------------------------------------------
                                                                         2000              1999             1998
                                                                       ---------        ---------         ---------

         Revenue:
           United States...........................................    $  54,320        $  46,119         $  65,630
           Germany.................................................       12,865           12,701            10,088
           France..................................................       12,665           10,991            11,834
           Other European countries................................       13,575           12,955            12,815
           All other countries.....................................        5,787            4,608             5,073
                                                                       ---------        ---------         ---------
                                                                       $  99,212        $  87,374         $ 105,440
                                                                       =========        =========         =========

         Long-lived assets:
           United States...........................................    $  24,888        $   7,099         $   7,112
           All other countries.....................................          469              473               508
                                                                       ---------        ---------         ---------
              Total long-lived assets                                  $  25,357        $   7,572         $   7,620
                                                                       =========        =========         =========


         Total long-lived assets...................................    $  25,357        $   7,572         $   7,620
         Other assets including current............................       68,166           64,105            62,690
                                                                       ---------        ---------         ---------
              Total consolidated assets                                $  93,523        $  71,677         $  70,310
                                                                       =========        =========         ---------
</TABLE>
         No single  customer  accounted  for more than 10% of the  Company's net
revenue in 2000, 1999 and 1998.

10.      Subsequent event

         On July 21, 2000, the Company acquired  HexaVision  Technologies,  Inc.
("HexaVision"), a Canadian corporation.  HexaVision is a machine vision research
and development company. Under the terms of the purchase agreement,  the Company
paid $ 5.1 million in cash and will be issuing shares of its common stock to the
shareholders  of  HexaVision  with a value of $1.1  million  subject  to certain
conditions.  In addition,  two payments totaling  approximately  $1.6 million in
cash are contingent  upon the achievement of certain  operational  milestones by
HexaVision.  The  Company  intends  to  account  for the  acquisition  under the
purchase  method and will include the results of  operations  of  HexaVision  in
Adept's results of operations beginning July 21, 2000.


                                      F-22

<PAGE>

<TABLE>
                                                                                                            SCHEDULE II
                                                  ADEPT TECHNOLOGY, INC.
                                            VALUATION AND QUALIFYING ACCOUNTS
                                                      (in thousands)
<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, 1998:
          Allowance for doubtful accounts      $       459       $       346         $        343           $       462

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



<FN>
----------
(1) Includes write offs net of recoveries.
</FN>
</TABLE>
<PAGE>
         (a)(3)   Exhibits

                  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          Bylaws of the Registrant, as amended to date .

                  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
                               10.2 to the Registrant's Form 10-K for the fiscal
                               year ended June 30, 1997 (the "1997 Form 10-K")).

                  10.3 *****   1998 Employee Stock Purchase Plan as amended, and
                               form  of  agreements  thereto   (incorporated  by
                               reference  to  Exhibit  10.3 to the  Registrant's
                               Form 10-K for the fiscal year ended June 30, 1999
                               (the "1999 Form 10-K")).

                  10.4  *****  1995 Director Option Plan as amended, and form of
                               agreement  thereto  (incorporated by reference to
                               Exhibit 10.4 to the 1997 Form 10-K).

                  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).

                  10.6.1       Lease   Agreement   between  the  Registrant  and
                               Technology  Associates I dated July 18, 1986,  as
                               amended  (incorporated  by  reference  to Exhibit
                               10.6.1 to the 1995 Form S-1).

                  10.6.2       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).

                  10.6.3       Standard  Office  Lease  -  Gross  between  SILMA
                               Incorporated  and South  Bay/Copley Joint Venture
                               dated   November   11,  1992   (incorporated   by
                               reference  to  Exhibit  10.6.3  to the 1995  Form
                               S-1).

                  10.6.4       Fifth  Amendment to Lease between  Registrant and
                               Metropolitan  Life Insurance  Company dated as of
                               December 5, 1996  (incorporated  by  reference to
                               Exhibit 10.6.4 to the 1997 Form 10-K).

                  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).

                  10.7.1 ***** Promissory  Note between  Registrant  and Charles
                               Duncheon dated August 20, 1998  (incorporated  by
                               reference  to  Exhibit  10.7.1  to the 1999  Form
                               10-K).

                  10.7.2 ***** 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).

                  10.7.3 ***** 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).
<PAGE>

                  10.7.4 ***** 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).

                  10.8 *****   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")).

                  10.8.1 ***** 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).

                  10.8.2 ***** 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).

                  10.8.3 ***** 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).

                  10.9         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).

                  10.10        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).

                  10.10.1      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).

                  10.10.2      Sublease  between the Registrant and Ascent Logic
                               Corporation   dated   as   of   July   31,   1998
                               (incorporated  by reference to Exhibit 10.10.2 to
                               the 1998 Form 10-K).

                  10.10.3      Second  Amendment to Lease  Agreement dated March
                               31, 2000 between Registrant and Technology Centre
                               Associates LLC dated July 31, 1998.

                  10.10.4      First  Addendum to Lease  Agreement  dated August
                               18, 1999  between  Registrant  and Joseph and Eda
                               Pell Revocable Trust dated August 18, 1989.

                  10.10.5      Lease  Agreement  dated  April 28,  2000  between
                               Registrant  and  Michael  and Diane  Edwards  for
                               premises located in Tucson, Arizona.

                  10.10.6      Lease   Agreement  dated  May  19,  2000  between
                               NanoMotion  Inc.  and  United  Insurance  Co.  of
                               America for  premises  located at Santa  Barbara,
                               California.

                  13.1         Portions  of   Registrant's   Annual   Report  to
                               Shareholders  for the fiscal  year ended June 30,
                               2000.

                  21.1         Subsidiaries of the Registrant.

                  23.1         Consent  of  Ernst  &  Young   LLP,   Independent
                               Auditors.

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

                  27.1         Financial Data Schedule.

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 *****   Management contract or compensatory plan or arrangement.