Form 10-Q ADEPT TECHNOLOGY INC For: Dec 27

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February 4, 2015 4:01 PM EST

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�

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

�

FORM 10-Q

�

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

For the quarterly period ended December�27, 2014

�

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

For the transition period from �� to ��

Commission File No. 0-27122

�

ADEPT TECHNOLOGY, INC.

(Exact Name of Registrant as Specified in its Charter)

�

Delaware

�

94-2900635

(State or Other Jurisdiction of

Incorporation or Organization)

�

(I.R.S. Employer

Identification No.)

�


5960 Inglewood Drive, Pleasanton, California	�	94588
(Address of Principal Executive Offices)	�	(Zip Code)

(925) 245-3400

(Registrant�s Telephone Number, Including Area Code)

�

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (�232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).��YES��x��NO��

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of �large accelerated filer�, �accelerated filer� and �smaller reporting company� in Rule�12b-2 of the Exchange Act.

�


Large�accelerated�filer	�	�	��	Accelerated�filer	�	x

Non-accelerated filer	�	��(Do not check if a smaller reporting company)	��	Smaller�reporting�company	�	�

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

The number of shares of the Registrant�s common stock outstanding as of January�30, 2015 was 13,103,731.

�

ADEPT TECHNOLOGY, INC.

�


�	�	�	��	Page
	�	PART I � FINANCIAL INFORMATION	��
	�		��
Item�1.	�	Condensed Consolidated Financial Statements	��
	�		��
	�	Condensed Consolidated Balance Sheets	��
	�		��
	�	Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)	��
	�		��
	�	Condensed Consolidated Statements of Cash Flows	��
	�		��
	�	Notes to Condensed Consolidated Financial Statements	��
	�		��
Item�2.	�	Management�s Discussion and Analysis of Financial Condition and Results of Operations	��
	�		��
Item�3.	�	Quantitative and Qualitative Disclosures about Market Risk	��
	�		��
Item�4.	�	Controls and Procedures	��
	�		��
	�	PART II � OTHER INFORMATION	��
	�		��
Item�1.	�	Legal Proceedings	��
	�		��
Item�1A.	�	Risk Factors	��
	�		��
Item�2.	�	Unregistered Sales of Equity Securities and Use of Proceeds	��
	�		��
Item 3.	�	Defaults Upon Senior Securities	��
	�		��
Item�4.	�	Mine Safety Disclosures	��
	�		��
Item�5.	�	Other Information	��
	�		��
Item�6.	�	Exhibits	��
	�		��
Signatures	�		��

PART I � FINANCIAL INFORMATION

ITEM�1. Condensed Consolidated Financial Statements

ADEPT TECHNOLOGY, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)

�


�	��	December�27, 2014		�	�	June�30, 2014		�
�	��	(unaudited)		�	�	�		�
ASSETS	��				�
Current assets:	��				�
Cash and cash equivalents	��	$	4,233	��	�	$	7,600	��
Restricted cash	��	�	188	��	�	�	194	��
Accounts receivable, less allowance for doubtful accounts of $538 and $610 at December�27, 2014 and June�30, 2014, respectively	��	�	7,627	��	�	�	10,974	��
Inventories	��	�	10,608	��	�	�	10,296	��
Other current assets	��	�	811	��	�	�	545	��
	��	�	�	�	�	�	�	�
Total current assets	��	�	23,467	��	�	�	29,609	��
Property and equipment, net	��	�	916	��	�	�	1,082	��
Goodwill	��	�	1,493	��	�	�	1,493	��
Other intangible assets, net	��	�	674	��	�	�	796	��
Other assets	��	�	123	��	�	�	90	��
	��	�	�	�	�	�	�	�
Total assets	��	$	26,673	��	�	$	33,070	��
	��	�	�	�	�	�	�	�
LIABILITIES AND STOCKHOLDERS� EQUITY	��				�
Current liabilities:	��				�
Accounts payable	��	$	4,291	��	�	$	7,709	��
Accrued payroll and related expenses	��	�	2,030	��	�	�	2,235	��
Accrued warranty expenses	��	�	874	��	�	�	897	��
Deferred revenue	��	�	91	��	�	�	644	��
Accrued income tax, current	��	�	��	��	�	�	10	��
Other accrued liabilities	��	�	623	��	�	�	848	��
	��	�	�	�	�	�	�	�
Total current liabilities	��	�	7,909	��	�	�	12,343	��
Long-term liabilities:	��				�
Deferred income tax, long-term	��	�	400	��	�	�	430	��
Long-term obligations	��	�	8	��	�	�	130	��
	��	�	�	�	�	�	�	�
Total liabilities	��	�	8,317	��	�	�	12,903	��
Stockholders� equity:	��				�
Common stock, $0.001 par value: 19,000 shares authorized, 13,109 shares issued and 13,104 shares outstanding at December�27, 2014, and 13,056 shares issued and 13,051 shares outstanding at June�30, 2014	��	�	190,129	��	�	�	189,427	��
Treasury stock, at cost, 5 shares at December�27, 2014 and June�30, 2014	��	�	(42	)	�	�	(42	)
Accumulated deficit	��	�	(171,644	)	�	�	(169,368	)
Accumulated other comprehensive income (loss)	��	�	(87	)	�	�	150	��
	��	�	�	�	�	�	�	�
Total stockholders� equity	��	�	18,356	��	�	�	20,167	��
	��	�	�	�	�	�	�	�
Total liabilities and stockholders� equity	��	$	26,673	��	�	$	33,070	��
	��	�	�	�	�	�	�	�

See accompanying notes

ADEPT TECHNOLOGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(unaudited)

(in thousands, except per share amounts)

�

��

Three Months Ended

�

Six Months Ended

�

��

December�27,
2014

�

December�28,
2013

�

December�27,
2014

�

December�28,
2013

�

Revenues

��

11,797

��

�

14,588

��

�

26,199

��

�

28,159

��

Cost of revenues

��

�

6,737

��

�

7,749

��

�

14,696

��

�

15,058

��

�

Gross margin

��

�

5,060

��

�

6,839

��

�

11,503

��

�

13,101

��

Operating expenses:

��

�

Research, development and engineering

��

�

1,876

��

�

1,851

��

�

3,372

��

�

3,406

��

Selling, general and administrative

��

�

5,136

��

�

4,778

��

�

9,938

��

�

9,666

��

Settlement of litigation, net

��

�

260

��

�

��

�

260

��

�

��

�

Amortization of other intangible assets

��

�

��

�

��

�

122

��

�

122

��

�

Total operating expenses

��

�

7,333

��

�

6,690

��

�

13,692

��

�

13,194

��

�

Operating income (loss)

��

�

(2,273

)�

�

149

��

�

(2,189

)�

�

(93

)�

Interest expense, net

��

�

��

�

��

�

��

�

)�

Foreign currency exchange gain (loss)

��

�

(174

)�

�

157

��

�

(96

)

�

��

�

Income (loss) before income taxes

��

�

(2,447

)

�

306

��

�

(2,285

)�

�

(37

)�

Provision for (benefit from) income taxes

��

�

(90

)�

�

102

��

�

(10

)�

�

157

��

�

Net income (loss)

��

�

(2,357

)�

�

204

��

�

(2,275

)�

�

(194

)�

��

�

Effects of redeemable convertible preferred stock:

��

�

Accretion of preferred stock to redemption value

��

�

��

�

(24

)�

�

��

�

(48

)�

Dividends allocated to preferred stockholders

��

�

��

�

(80

)�

�

��

�

(160

)�

��

�

Net income (loss) attributable to common stockholders

��

(2,357

)�

�

100

��

�

(2,275

)�

�

(402

)

��

�

Net income (loss) per share attributable to common stockholders:

��

�

Basic

��

(0.18

)

�

0.01

��

�

(0.17

)�

�

(0.04

)

Diluted

��

(0.18

)�

�

0.01

��

�

(0.17

)�

�

(0.04

)

Number of shares used in computing net income (loss) per share attributable to common stockholders

��

�

Basic

��

�

13,090

��

�

11,025

��

�

13,074

��

�

10,940

��

Diluted

��

�

13,090

��

�

13,334

��

�

13,074

��

�

10,940

��

Comprehensive income (loss):

��

�

Net income (loss)

��

(2,357

)

�

204

��

�

(2,275

)�

�

(194

)�

Foreign currency translation adjustment

��

�

��

�

(55

)�

�

(237

)�

�

258

��

�

Total comprehensive income (loss)

��

(2,310

)

�

149

��

�

(2,512

)�

�

��

�

See accompanying notes

ADEPT TECHNOLOGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(in thousands)

�


�	��	Six Months Ended						�
�	��	December�27, 2014		�	�	December�28, 2013		�
Operating activities	��				�
Net loss	��	$	(2,275	)�	�	$	(194	)�
Adjustments to reconcile net loss to net cash used in operating activities:	��				�
Deferred income taxes	��	�	(30	)�	�	�	(67	)�
Depreciation and amortization	��	�	528	��	�	�	548	��
Loss on disposal of property and equipment	��	�	��	�	�	�	49	��
Stock-based compensation	��	�	451	��	�	�	1,091	��
Net changes in operating assets and liabilities:	��				�
Accounts receivable	��	�	2,739	��	�	�	(497	)�
Inventories	��	�	(971	)�	�	�	276	��
Other current assets	��	�	(276	)�	�	�	(84	)�
Accounts payable	��	�	(3,318	)�	�	�	(1,643	)�
Other accrued liabilities and deferred revenues	��	�	(901	)�	�	�	(739	)�
Accrued restructuring charges	��	�	��	�	�	�	(19	)�
Other long-term liabilities	��	�	(151	)�	�	�	(18	)�
	��	�	�	�	�	�	�	�
Net cash used in operating activities	��	�	(4,204	)�	�	�	(1,297	)�
	��	�	�	�	�	�	�	�
Investing activities	��				�
Purchase of property and equipment	��	�	(19	)�	�	�	(107	)�
Restricted cash	��	�	6	��	�	�	(95	)
Proceeds from sale of property and equipment	��	�	��	�	�	�	17	��
	��	�	�	�	�	�	�	�
Net cash used in investing activities	��	�	(13	)�	�	�	(185	)�
	��	�	�	�	�	�	�	�
Financing activities	��				�
Principal payments on capital lease	��	�	��	�	�	�	(9	)�
Proceeds from employee stock incentive program and employee stock purchase plan	��	�	251	��	�	�	636	��
	��	�	�	�	�	�	�	�
Net cash provided by financing activities	��	�	251	��	�	�	627	��
	��	�	�	�	�	�	�	�
Effect of exchange rates on cash and cash equivalents	��	�	599	��	�	�	(87	)�
	��	�	�	�	�	�	�	�
Net decrease in cash and cash equivalents	��	�	(3,367	)�	�	�	(942	)�
	��	�	�	�	�	�	�	�
Cash and cash equivalents, beginning of period	��	�	7,600	��	�	�	6,274	��
	��	�	�	�	�	�	�	�
Cash and cash equivalents, end of period	��	$	4,233	��	�	$	5,332	��
	��	�	�	�	�	�	�	�
Cash paid during the period for:	��				�
Interest	��	$	1	��	�	$	1	��
Taxes	��	$	24	��	�	$	23	��
Supplemental disclosure of non-cash investing and financing activities:	��				�
Transferred from inventory to property and equipment	��	$	250	��	�	$	85	��
Accretion of preferred stock to redemption value	��	$	��	�	�	$	48	��

See accompanying notes

ADEPT TECHNOLOGY, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presentation

Adept Technology, Inc. (�Adept� or the �Company�) is a global, robotics-based automation supplier of industrial (fixed) and mobile robots to enable customers to improve speed, quality and efficiency of their production environments. The Company operates in two segments: Robotics and Services and Support. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with �Management�s Discussion and Analysis of Financial Condition and Results of Operations,� and the Financial Statements included in Items 7 and 8, respectively, in the Company�s Annual Report on Form 10-K for the year ended�June 30, 2014 filed with the Securities and Exchange Commission (�SEC�) on August�25, 2014.

The accompanying interim condensed consolidated financial statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States of America (�GAAP�), and the applicable rules�and regulations of the SEC for interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The�June 30, 2014, condensed consolidated balance sheet was derived from the audited financial statements as of that date, but does not include all of the information and footnotes required by GAAP for complete financial statements.

The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments, consisting of normal recurring adjustments, considered necessary to state fairly the Company�s financial position as of�December 27, 2014, the results of operations and comprehensive income (loss) for the�three and six months ended�December 27, 2014 and December�28, 2013, and cash flows for the six months ended�December 27, 2014 and December�28, 2013. The interim results for the�six months ended�December 27, 2014, are not necessarily indicative of the results that may be expected for the year ending June�30, 2015, or for any other future annual or interim period.

The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the 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 revenue and expenses during the reported periods. The primary estimates underlying the Company�s financial statements include revenue recognition, product warranty, inventory valuation, allowance for doubtful accounts receivable, assumptions used in the fair value of the Company�s equity awards, useful lives of property and equipment and intangible assets, and contingent liabilities. Actual results could differ from those estimates.

There have been no material changes to the Company�s critical accounting policies during the�six months ended�December 27, 2014, as compared to the critical accounting policies described in the Company�s Annual Report on Form 10-K for the year ended�June 30, 2014.

Recent Accounting Pronouncements

The Company does not believe that the adoption of recently issued accounting pronouncements will have a material impact on its consolidated financial statements.

2. Balance Sheet Detail

Cash and cash equivalents -The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Restricted cash consists of deposit accounts held to secure a leased facility and a credit card facility.

Inventories -Inventories are stated at the lower of standard cost, which approximates actual cost on a first-in, first-out basis, or market. The components of inventory are as follows (in thousands):

�


�	��	December�27,�2014		�	��	June�30,�2014		�
�	��	(unaudited)		�	��	�		�
Raw materials	��	$	6,986	��	��	$	6,408	��
Work-in-process	��	�	710	��	��	�	1,614	��
Finished goods	��	�	2,912	��	��	�	2,274	��
	��	�	�	�	��	�	�	�
Total inventory	��	$	10,608	��	��	$	10,296	��
	��	�	�	�	��	�	�	�

Property and equipment -Property and equipment are recorded at cost. The components of property and equipment are summarized as follows (in thousands):

�


�	��	December�27,�2014		�	�	June�30,�2014		�
�	��	(unaudited)		�	�	�		�
Machinery and equipment	��	$	4,069	��	�	$	3,991	��
Computer equipment	��	�	5,451	��	�	�	5,456	��
Software development costs	��	�	2,688	��	�	�	2,688	��
Demonstration equipment	��	�	1,627	��	�	�	1,605	��
Office furniture and equipment	��	�	955	��	�	�	1,052	��
	��	�	�	�	�	�	�	�
	��	�	14,790	��	�	�	14,792	��
Less accumulated depreciation	��	�	(13,874	)�	�	�	(13,710	)
	��	�	�	�	�	�	�	�
Net property and equipment	��	$	916	��	�	$	1,082	��
	��	�	�	�	�	�	�	�

Other intangible assets -Other intangible assets subject to amortization were as follows (in thousands):

�

��

December�27, 2014

�

��

June�30, 2014

�

��

Gross�Assets

�

��

Accumulated
Amortization

�

Impairment�of
Intangible
Assets

�

Net
Carrying
Amount

�

��

Gross
Assets

�

��

Accumulated
Amortization

�

Impairment�of
Intangible
Assets

�

Net
Carrying
Amount

�

Developed Technology/ Patents

��

1,930

��

(1,098

)

�

(158

)

�

674

��

1,930

��

(976

)

�

(158

)

�

796

��

Customer Base

��

�

340

��

�

(340

)

�

��

�

��

�

��

�

340

��

�

(340

)

�

��

�

��

�

Trademarks/ Tradenames

��

�

231

��

�

(154

)

�

(77

)

�

��

�

��

�

231

��

�

(154

)

�

(77

)

�

��

�

��

�

��

�

��

�

��

�

Total

��

2,501

��

(1,592

)

�

(235

)

�

674

��

2,501

��

(1,470

)

�

(235

)

�

796

��

�

��

�

��

�

��

�

A summary of future amortization as of December�27, 2014 is as follows (in thousands):

�

��

2015

�

��

2016

�

��

2017

�

��

2018

�

��

Total

�

Developed Technology/Patents

��

123

��

245

��

245

��

674

��

Warranty -The estimated cost of product warranty is provided for at the time revenue is recognized. Changes in the Company�s warranty liability were as follows (in thousands):

�


�	��	Six Months Ended						�
(unaudited)	��	December�27, 2014		�	�	December�28, 2013		�
Balance at beginning of period	��	$	897	��	�	$	1,070	��
Provision for warranties issued	��	�	381	��	�	�	422	��
Warranty claims	��	�	(404	)	�	�	(408	)
	��	�	�	�	�	�	�	�
Balance at end of period	��	$	874	��	�	$	1,084	��
	��	�	�	�	�	�	�	�

3. Stock-Based Compensation

The Company has adopted equity incentive plans that provide for the grant to employees, consultants and directors of stock-based awards, including stock options, restricted shares, and restricted stock units of Adept common stock. Option awards granted have an exercise price equal to or greater than the market price of the Company�s stock on the date of grant and generally have ten-year contractual terms. The Company also has an employee stock purchase plan (�ESPP�) that allows employees to purchase a limited number of shares of its common stock at a discount of 15% of the market value at certain plan-defined dates that are established at six-month intervals. As of December�27, 2014, there were options to purchase approximately 337,000 shares of common stock available for grant under all option plans and approximately 281,000 shares available for issuance under the ESPP. Outstanding employee grants under the option plans generally vest, and are expensed, monthly in equal installments over a four year period (except for certain options which have a one year cliff vesting and then vest monthly), except for performance awards which vest when achievement of the performance criteria occurs, begin to be expensed when achievement of the performance criteria is probable, and are expensed over the service period or when the criteria is met. For performance awards, the Company estimates the service period based on its analysis of when the vesting criteria (typically some or all of the following components: share price, annual revenue amounts, earnings per share, net cash, and/or new customers) will occur. Restricted stock grants made under performance programs are subject to vesting quarterly over two years following the end of the relevant fiscal year of performance.

Annual option grants of 6,000 shares to non-employee directors vest in full on the date of the annual meeting of stockholders following the meeting at which the director is elected and the annual grant is made, and the initial option grant of 10,000 shares to non-employee directors vests in the amount of 50% of the grant on the first annual meeting of stockholders following the initial appointment or election of the director and the remaining 50% vests at the second annual meeting of stockholders of the Company following the initial appointment or election of the director.

Employee option grants are subject to a change of control plan adopted by the Company in 2014 for equity awards that provides for acceleration and vesting in full of options in connection with a change of control transaction under certain circumstances. All stock compensation has been accounted for as an equity instrument, and the Company recognizes the fair value of stock-based compensation as an expense ratably over the service period of the individual equity instruments.

The Company recorded $ 0.3�million and $0.5 million of stock-based compensation expense for the three and six months ended December�27, 2014 and $0.6 million and $1.1 million for the three and six months ended December�28, 2013, respectively. The Company did not record an income-tax benefit for the stock compensation expense as a result of its net operating loss carry-forwards. The Company utilized the Black-Scholes option pricing model for estimating the fair value of the stock-based compensation. The weighted average grant-date fair values of the options granted to employees and non-employee directors under the equity incentive plans were $5.48 and $5.73 for the three and six months ended December�27, 2014 and $5.00 and $2.48 for the three and six months ended December�28, 2013, respectively.�During the six months ended December�27, 2014 and December�28, 2013, 33,000 and 21,000 shares, respectively, were purchased under the ESPP with weighted average grant date fair values of $3.85 and $2.62. The weighted average grant-date fair values were calculated using the following assumptions:

�

��

Three Months Ended

�

Six Months Ended

�

��

December�27,�2014

�

December�28,�2013

�

December�27,�2014

�

December�28,�2013

�

��

Stock

Option�Plans

�

ESPP

�

Stock�Option

Plans

�

ESPP

�

Stock

Option�Plans

�

ESPP

�

Stock�Option

Plans

�

ESPP

�

Average risk free interest rate

��

�

1.66

�

.05

�

0.76

�

0.16

�

1.66

�

.05

�

0.75

�

0.16

Expected life (in years)

��

�

5.07

��

�

0.49

��

�

5.99

��

�

0.49

��

�

4.96

��

�

0.49

��

�

5.09

��

�

0.49

��

Expected volatility

��

�

Dividend yield

��

�

The dividend yield of zero is based on the fact that the Company has never paid cash dividends on its common stock, is restricted from paying cash dividends by its credit facility, and has no present intention to pay cash dividends on its common stock. Expected volatility is based on the historical volatility of Adept�s common stock over the period commensurate with the expected life of the options. The risk-free interest rate is based on the observed and expected life of options and is indexed to the Treasury Constant Maturity rate. The expected life in years is based on the historic time to post-vesting exercise and forfeitures of the options. The Company has generally assumed an annualized forfeiture rate of 5% for each period for its options. The Company adjusts stock-based compensation expense if the actual forfeiture rate is different than estimated.

A summary of stock option activity under the option plans is presented below:

�

��

Shares
(in�thousands)

�

Weighted-
Average
Exercise�Price
Per Share

�

��

Weighted-
Average
Remaining
Contractual
Term�(years)

�

��

Aggregate
Intrinsic
Value
(in�thousands)

�

Outstanding at June�30, 2014

��

�

1,158

��

�

5.87

��

Granted

��

�

452

��

�

9.14

��

Exercised

��

�

(27

)

�

4.54

��

Forfeited or Expired

��

�

(23

)

�

7.33

��

�

��

Outstanding at December�27, 2014

��

�

1,560

��

�

6.82

��

�

8.30

��

4,260

��

�

��

�

��

�

Vested/Expected to Vest

��

�

1,501

��

�

6.75

��

�

8.26

��

4,192

��

�

��

�

��

�

Exercisable

��

�

902

��

�

5.27

��

�

7.51

��

3,550

��

�

��

�

��

�

In 2014, the Company granted restricted stock units (�RSUs�) for up to 112,500 shares of common stock to its Chief Executive Officer (�CEO�). The RSUs vest upon the earlier of the CEO�s separation from service or a change in control.�The number of shares issuable upon vesting and settlement of the RSUs, if any, will be determined based on the Company�s stock price on the vesting date and, in the case of a separation from service, the extent to which certain performance criteria has been met.�No compensation expense has been recognized on these RSUs as the fair value is not determinable.

As of December�27, 2014 , there was approximately $3.0 million of total unrecognized compensation cost related to non-vested stock options and restricted stock awards granted and outstanding, the cost of which is expected to be recognized through fiscal 2018.

4. Redeemable Convertible Preferred Stock

In 2013, the Company issued 8,000 shares of its Series A redeemable convertible preferred stock (the �redeemable convertible preferred stock�), par value $0.001 per share, at a price of $1,000 per share, subject to the terms of its Certificate of Designations, Preferences and Rights of Series A Convertible Preferred Stock for net proceeds of $7.6 million. Dividends on the redeemable convertible preferred stock accrued at the prime rate plus 3% up to a maximum amount of 4%. In February 2014, all of the outstanding redeemable convertible preferred stock plus accrued dividends through the date of conversion was converted into 1.7�million shares of common stock of the Company.

5. Bank Credit Facility

In 2014, the Company entered into a Loan and Security Agreement (the �Agreement�) with a bank. Under the Agreement, the Company may borrow an amount not to exceed the lesser of (i)�$10.0 million and (ii)�$2.5 million plus 80% of eligible domestic and foreign subsidiary accounts receivable.�The Agreement specifies the criteria for determining eligible accounts receivable and sets forth ongoing conditions precedent to the Company�s ability to borrow under the Agreement. Amounts borrowed under the Agreement may be repaid and reborrowed until its maturity on June�9, 2016, at which time all advances shall be immediately due and payable in full.�Amounts borrowed under the Agreement shall bear interest at the prime rate plus 0.75%. Adept and certain of its subsidiaries have granted the bank a security interest in substantially all of their respective assets (excluding intellectual property) to secure the outstanding obligations under the Agreement.

The Agreement contains customary representations and warranties by the Company and customary affirmative and negative covenants, including, among other requirements, requirements as to permissible use of proceeds, restrictions on Adept�s ability to dispose of assets, make acquisitions, be acquired, undergo a change of control, incur indebtedness, grant liens, transfer funds to subsidiaries, make distributions to its stockholders, make investments, or enter into certain transactions with affiliates, subject to specified exceptions. Further, the Agreement contains a financial covenant that requires the Company to achieve certain minimum EBITDA levels.

The Agreement contains customary events of default that entitle the bank to accelerate Adept�s obligations and require repayment of the outstanding indebtedness, increase the applicable interest rate by an additional 4.00%�per annum, and enforce the bank�s security interest against the collateral. These events of default include, among others, Adept�s breach of payment obligations or covenants, material misrepresentations, events constituting a material adverse change, and bankruptcy and insolvency defaults.

At December�27, 2014, the Company had no borrowings under the Agreement. As of December�27, 2014, the Company was not in compliance with certain covenants in the Agreement. The bank waived the non-compliance and amended the Agreement, to include among other changes, a reduction in the non-formula based borrowing to $1 million from $2.5 million and changes to the financial covenant.

6. Legal Proceedings

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

Adept has in the past received communications from third parties asserting that it has infringed upon certain patents and other intellectual property rights of others, or seeking indemnification against alleged infringement. While it is not feasible to predict or determine the likelihood or outcome of any actual or potential actions from such assertions against the Company or other matters, 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.

During the three months ended December�27, 2014, the Company settled a legal claim made by a former employee and recorded a $260,000 charge, which includes legal expenses and is net of insurance reimbursement and amounts previously accrued, during the quarter.

7. Income Taxes

The Company provides for income taxes during interim reporting periods using the discrete period method. The Company also maintains a liability to cover the cost of additional tax exposure items pertaining to the filing of federal and state income tax returns, as well as filings in foreign jurisdictions. Each of these filing jurisdictions may audit the tax returns filed and propose adjustments. Adjustments may arise from a variety of factors, including different interpretations of statutes and regulations.

The Company recorded a tax benefit of $0.1 million and $0.0�million for the three and six months ended December�27, 2014 and a tax provision of $0.1 million and $0.2 million for the three and six months ended December�28, 2013, respectively, primarily due to tax of certain foreign entities and a nominal amount of state minimum taxes.

The Company had gross unrecognized tax benefits of approximately $7.5 million and $7.4 million as of December�27, 2014 and June�30, 2014, respectively.�Approximately $6.1 and $6.0 million of the unrecognized tax benefit as of each period has been offset by a full valuation allowance. If all of these unrecognized tax benefits were recognized, approximately $0.4 million, as of both December�27, 2014 and June�30, 2014, would benefit the income tax provision.�In addition, the Company does not expect any material changes to the estimated amount of the liability associated with its uncertain tax positions within the next twelve months.

The Company files income tax returns in the U.S.�federal jurisdiction, California and various state and foreign tax jurisdictions in which it has a subsidiary or branch operation. The tax years 1999 to 2014 remain open to examination by the U.S.�and state tax authorities, and the tax years 2010 to 2014 remain open to examination by the foreign tax authorities. Adept�s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. As of December�27, 2014, accrued interest and penalties associated with unrecognized tax benefits was not material.

8. Net Loss per Share

The computation of diluted net income (loss) per share attributable to common stockholders does not include the following unvested restricted shares and options to purchase shares as these common stock equivalents were anti-dilutive (in thousands):

�

��

Three Months Ended

�

��

Six Months Ended

�

��

December�27,�2014

�

��

December�28,�2013

�

��

December�27,�2014

�

��

December�28,�2013

�

Unvested restricted stock

��

�

112

��

�

��

�

��

�

112

��

�

100

��

Stock options

��

�

368

��

�

��

�

��

�

400

��

�

900

��

9. Segment Information

The Company discloses certain information regarding operating segments, geographic areas of operations and major customers. This reporting is based upon the Company�s operating segments for which separate financial information is (i)�available and (ii)�evaluated regularly by the Chief Executive Officer who is the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company has two operating segments: Robotics and Services and Support. Segment operating income is comprised of income before unallocated research, development and engineering expenses, unallocated selling, general and administrative expenses, interest income, and other expenses. Management does not fully allocate research, development and engineering expenses and selling, general and administrative expenses when making capital spending and expense funding decisions or assessing segment performance. All goodwill is carried in the Robotics segment. Segment information for total assets and capital expenditures is not presented as such information is not used in measuring segment performance or allocating resources between segments. There is no inter-segment revenue recognized. Transfers of materials or labor between segments are recorded at cost. The operating results for the Company�s identified segments are presented as follows (in thousands):

�

��

Three Months Ended

�

Six Months Ended

�

(unaudited)

��

December�27,
2014

�

December�28,
2013

�

December�27,
2014

�

December�28,
2013

�

Revenues:

��

�

Robotics

��

8,839

��

�

11,384

��

�

20,122

��

�

21,741

��

Services and Support

��

�

2,958

��

�

3,204

��

�

6,077

��

�

6,418

��

�

Total revenues

��

11,797

��

�

14,588

��

�

26,199

��

�

28,159

��

�

Segment operating income (loss):

��

�

Robotics

��

(649

)

�

1,373

��

�

256

��

�

2,549

��

Services and Support

��

�

826

��

�

1,180

��

�

2,039

��

�

2,538

��

�

Segment operating income (loss)

��

�

177

��

�

2,553

��

�

2,295

��

�

5,087

��

Unallocated research, development and engineering and general and administrative expenses

��

�

(2,389

)�

�

(2,343

)�

�

(4,362

)�

�

(5,058

)�

Amortization of intangible assets

��

�

(61

)�

�

(61

)�

�

(122

)�

�

(122

)�

��

�

Operating income (loss)

��

�

(2,273

)

�

149

��

�

(2,189

)�

�

(93

)�

Net interest expense

��

�

��

�

)�

Foreign currency exchange gain (loss)

��

�

(174

)

�

157

��

�

(96

)

�

��

�

Income (loss) before income taxes

��

(2,447

)

�

306

��

�

(2,285

)�

�

(37

)�

��

�

Management also assesses the Company�s performance, operations and assets by geographic areas. Revenue and long-lived tangible assets are summarized as follows (in thousands):

�

��

Three Months Ended

�

��

Six Months Ended

�

(unaudited)

��

December�27,�2014

�

��

December�28,�2013

�

��

December�27,�2014

�

��

December�28,�2013

�

Revenues:

��

United States

��

3,128

��

3,671

��

5,477

��

6,749

��

Europe

��

�

5,346

��

�

5,737

��

�

13,625

��

�

12,085

��

Asia

��

�

2,757

��

�

4,045

��

�

5,987

��

�

7,878

��

All other countries

��

�

566

��

�

1,135

��

�

1,110

��

�

1,447

��

�

��

�

��

�

��

�

Total

��

11,797

��

14,588

��

26,199

��

28,159

��

�

��

�

��

�

��

�


(unaudited)	��	December�27,�2014		�	��	June�30,�2014		�
Long-lived tangible assets:	��				��
United States	��	$	543	��	��	$	795	��
All other countries	��	�	466	��	��	�	377	��
	��	�	�	�	��	�	�	�
Total long-lived tangible assets	��	$	1,009	��	��	$	1,172	��
	��	�	�	�	��	�	�	�

Adept�s revenues are reported by geographic region based on the ship-to location of the customer order.

10. Leases

Adept leases facilities in the United States, Germany, France, Singapore and China. Adept records lease expense on a straight-line basis over the related lease term. Rent expense for each of the three and six months ended of December�27, 2014 and December�28, 2013 was $0.5 million and $0.9 million. Future minimum lease payments under non-cancelable operating leases with original terms in excess of one year as of December�27, 2014 are as follows (in thousands):

�


Fiscal Year	��
2015	��	$	1,100	��
2016	��	�	1,400	��
2017	��	�	500	��
2018	��	�	300	��
2019	��	�	��	�
Thereafter	��	�	��	�
	��	�	�	�
Total minimum lease payments	��	$	3,300	��
	��	�	�	�

ITEM�2.

MANAGEMENT�S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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

�

the economic environment affecting us and the markets we serve;

�

the timing and impact of our restructuring actions and other expense-related matters;

�

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

�

our expectations regarding our cash flows and capital requirements and the impact of the timing of receipts and disbursements and requirements of our credit facility;

�

our new management team;

�

marketing and commercialization of our products under development and services;

�

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

�

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

�

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

�

plans for future acquisitions of products, technologies and businesses.

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, which may or may not prove to be correct, and are subject to risks and uncertainties. Given these uncertainties, you should not place undue reliance on these statements. We discuss many of these risks in greater detail in Item�1A � Risk Factors in our Annual Report on Form 10-K filed with the SEC on August�25, 2014. Statements made in this report represent our estimates and assumptions only as of the date of this report.

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

OVERVIEW

Adept is a global, leading provider of intelligent robots, autonomous mobile solutions and services that enable customers to achieve precision, speed, quality and productivity in their assembly, handling, packaging, testing, and logistical processes. With a comprehensive portfolio of high-performance motion controllers, application development software, vision-guidance technology and high-reliability robot mechanisms with autonomous capabilities, Adept provides specialized, cost-effective robotics systems and services to high-growth markets including medical, electronics, food and semiconductor; as well as to traditional industrial markets including machine tool automation and automotive components. Through sales to system integrators, distributors, OEM partners and end-user companies, we sell our products and services into a few broad industries where we believe we can provide the best solutions for particular applications. We operate in two segments: Robotics and Services and Support.

Strategy

We develop innovative and proprietary products and solutions that meet the needs of our customers and that are based on our core expertise in industrial robots, vision guidance and autonomous vehicle technologies. In pursuit of our strategy, we intend to:

�

Accelerate the launch of our mobile robot products into the global market��Our global markets for mobile products include flexible manufacturing, semiconductor, logistics and warehousing, and food.

�

Revitalize our core fixed robot business, including expanding our channels and accelerating our regional selling and marketing approach��Our global markets for our fixed products include small flexible manufacturing, food and packaging within our capacity range of 7.5 pounds and below.

�

Grow our services business��Offer our customers a broader selection of support solutions.

Our Actions in Support of our Strategy

�

We intend to integrate strategic relationships from core markets that will drive volume and visibility.

�

We intend to have collaborative new product development for innovative products.

�

We intend to continue to accelerate our service and support revenues with existing and new product offerings.

�

We have set specific sales objectives to leverage the cost of selling our products as we grow.

�

We intend to scale our engineering resources, supply chain, and operations worldwide.

�

We continue to foster our culture by providing employees with clear direction, a focus on accountability and execution, and bottom line results.

This discussion should be read with the unaudited condensed consolidated financial statements and related disclosures included in this Quarterly Report on Form 10-Q and in conjunction with the audited consolidated financial statements and notes thereto for the fiscal year ended June�30, 2014, included in our Annual Report on Form 10-K as filed with the SEC on August�25, 2014.

Revenues

Revenues by segment are shown below (in thousands, except %):

�

��

Three Months Ended

�

Six Months Ended

�

Revenue by Segment

(unaudited)

��

December�27,
2014

�

%
Change

�

December�28,
2013

�

December�27,
2014

�

%
Change

�

December�28,
2013

�

Robotics

��

�

Revenues

��

8,839

��

�

(22

)%�

�

11,384

��

�

20,122

��

�

)%�

�

21,741

��

Percentage of total revenues

��

�

%�

�

%�

�

Services and Support

��

�

Revenues

��

�

2,958

��

�

)%�

�

3,204

��

�

6,077

��

�

)%�

�

6,418

��

Percentage of total revenues

��

�

%�

�

%�

�

��

�

Total Revenues

��

11,797

��

�

(19

)%�

�

14,588

��

�

26,199

��

�

)%�

�

28,159

��

�

Total revenues were $11.8 million and $14.6 million for the three months ended December�27, 2014 and December�28, 2013, respectively, representing a decrease of 19%. Robotics segment revenues were $8.8 million and $11.4 million for the three months ended December�27, 2014 and December�28, 2013, respectively, representing a decrease of 22%. Services and support segment revenues were $3.0 million and $3.2 million for the three months ended December�27, 2014 and December�28, 2013, respectively, representing a decrease of 8%. Total revenues were $26.2 million and $28.2 million for the six months ended December�27, 2014 and December�28, 2013, respectively, representing a decrease of 7%. Robotics segment revenues were $20.0 million and $21.7 million for the six months ended December�27, 2014 and December�28, 2013, respectively, representing a decrease of 7%. Services and support segment revenues were $6.1 million and $6.4 million for the six months ended December�27, 2014 and December�28, 2013, respectively, representing a decrease of 5%.

Revenue by geography is shown below (in thousands, except�%):

�

��

Three Months Ended

�

Six Months Ended

�

��

December�27,
2014

�

%
Change

�

December�28,
2013

�

December�27,
2014

�

%
Change

�

December�28,
2013

�

United States

��

�

Revenues

��

3,128

��

�

(15

%)�

�

3,671

��

�

5,477

��

�

(19

%)�

�

6,749

��

�

Percentage of total revenues

��

�

%�

�

%�

�

%�

�

%�

��

�

Europe

��

�

Revenues

��

�

5,346

��

�

%)�

�

5,737

��

�

13,625

��

�

%�

�

12,085

��

Percentage of total revenues

��

�

%�

�

%�

�

%�

�

%�

Asia

��

�

Revenues

��

�

2,757

��

�

(32

%)�

�

4,045

��

�

5,987

��

�

(24

%)�

�

7,878

��

Percentage of total revenues

��

�

%�

�

%�

�

%�

�

%�

Other countries

��

�

Revenues

��

�

566

��

�

(50

%)�

�

1,135

��

�

1,110

��

�

(23

%)�

�

1,447

��

Percentage of total revenues

��

�

%�

�

%�

�

%�

�

%�

��

�

Total International Revenues

��

�

8,669

��

�

(21

%)�

�

10,917

��

�

20,722

��

�

%)�

�

21,410

��

�

Percentage of total revenues

��

�

%�

�

%�

�

%�

�

%�

��

�

Total Revenues

��

11,797

��

�

(19

%)�

�

14,588

��

�

26,199

��

�

%)�

�

28,159

��

�

US revenues were $3.1 million and $3.7 million for the three months ended December�27, 2014 and December�28, 2013, respectively, representing a decrease of 15%. US revenues were $5.5 million and $6.7 million for the six months ended December�27, 2014 and December�28, 2013, respectively, representing a decrease of 19%. The decrease in both periods was primarily due to a decrease in service revenue and lower sales to the medical market, offset to some extent by higher sales in the assembly market. The Company continues to implement its efforts to improve market share in the US. International revenues were $8.7 million and $10.9 million for the three months ended December�27, 2014 and December�28, 2013, respectively, representing a decrease of 21%. International revenues were $20.7 million and $21.4 million for the six months ended December�27, 2014 and December�28, 2013, respectively, representing a decrease of 3%. The decrease in both periods was primarily due to a decrease in the consumer goods and semiconductor markets. The decrease for the three months ended December�27, 2014 was also due to lower sales to the automotive and packaging markets, offset by sales to the consumer electronics market. On a year to date basis, sales to the automotive market were significantly higher in fiscal year 2015 compared to fiscal year 2014.

Gross margin

Gross margin was 42.9% and 46.9% for the three months ended December�27, 2014 and December�28, 2013, respectively. Gross margin was 43.9% and 46.5% for the six months ended December�27, 2014 and December�28, 2013, respectively. The decrease in gross margin for the three and six months was due to the lower sales which resulted in less absorption of manufacturing overhead.

We may experience significant fluctuations in our gross margin percentage from period to period due to changes in volume, changes in availability of components, changes in product configuration, increased price-based competition, fluctuations in foreign currency exchange rates, changes in sales mix of products and/or changes in operating costs.

Operating Expenses

Total operating expenses were $7.3 million and $6.7 million for the three months ended December�27, 2014 and December�28, 2013, respectively, representing an increase of 10%. Total operating expenses were $13.7 million and $13.2 million for the six months ended December�27, 2014 and December�28, 2013, respectively, representing an increase of 4%. Average headcount during the three and six month period increased 13% and 10% compared to fiscal year 2014.

Research, Development and Engineering Expenses. Research, development and engineering (�R&D�) expenses were $1.9 million for each of the three months ended December�27, 2014 and December�28, 2013, respectively. R&D expenses were $3.4 million for each of the six months ended December�27, 2014 and December�28, 2013, respectively. R&D costs are expensed as incurred, with the exception of software development costs incurred subsequent to establishing technological feasibility and up to the general release of the software products that are capitalized. Technological feasibility is demonstrated by the completion of a working model or a detailed program design. Capitalized costs are amortized on a straight-line basis over either two or three years, whichever term is the estimated life of the software product.

Selling, General and Administrative Expenses. Selling, general and administrative (�SG&A�) expenses were $5.2 million and $4.8 million for the three months ended December�27, 2014 and December�28, 2013, respectively, representing an increase of 7%. SG&A expenses were $9.9 million and $9.7 million for the six months ended December�27, 2014 and December�28, 2013, respectively, representing an increase of 3%. The increase in SG&A expense for each period was principally the result of higher average headcount. SG&A expenses consist primarily of employee compensation, professional fees arising from legal, auditing and other consulting services, indirect costs for service, as well as tradeshow participation and other marketing costs.

Amortization. For each of the three and six months ended December�27, 2014 and December�28, 2013, amortization of other intangible assets expense was $0.1 million.

Foreign Currency Exchange Gain (loss)

Adept�s foreign subsidiaries� balance sheet accounts are translated at current period ending exchange rates and statements of operations are translated at the average rate for the period. Translation gains and losses are recorded as a separate component of accumulated other comprehensive income (loss) in stockholders� equity. Foreign currency exchange gains (losses) were $(0.2) million and $0.2 million for the three months ended December�27, 2014 and December�28, 2013, respectively, and $(0.1) million and $0.1 million for the six months ended December�27, 2014 and December�28, 2013, respectively. As Adept conducts business on a global basis it is exposed to adverse or beneficial movements in foreign currency exchange rates. The dollar/euro and the dollar/yen markets currently present the largest exchange rate risk for Adept.

Provision for Income Taxes

Adept typically provides for income taxes during interim reporting periods based upon an estimate of our annual effective tax rate. We also maintain a liability to cover the cost of additional tax exposure items on the filing of federal and state income tax returns as well as filings in foreign jurisdictions. Each of these filing jurisdictions may audit the tax returns filed and propose adjustments. Adjustments arise from a variety of factors, including different interpretations of statutes and regulations. 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. The Company records a valuation allowance to reduce deferred tax assets to the amount that is expected to be realized on a more-likely-than-not basis. Deferred tax expense results from the change in the net deferred tax asset or liability between periods.

The Company recorded a tax benefit of $0.1 million and $0.0�million for the three and six months ended December�27, 2014, and a tax provision of $0.1 million and $0.2 million for the three and six months ended December�28, 2013, respectively, primarily due to tax of certain foreign entities and a nominal amount of state minimum taxes.

Liquidity and Capital Resources

As of December�27, 2014, cash and cash equivalents were $4.2 million, a decrease of $3.4 million from June�30, 2014. Cash used in operating activities for the six months ended December�27, 2014 was $4.2 million, representing net loss adjusted for non-cash depreciation, amortization and stock based compensation expenses, and the use of $2.6 million of cash for working capital purposes. Cash provided by financing activities was $0.3 million from proceeds received from employee equity programs.

Bank Line of Credit

In fiscal year 2014, the Company entered into a Loan and Security Agreement (the �Agreement�) with a bank. Under the Agreement, the Company may borrow an amount not to exceed the lesser of (i)�$10.0 million and (ii)�$2.5 million plus 80% of eligible domestic and foreign subsidiary accounts receivable.�The Agreement specifies the criteria for determining eligible accounts receivable and sets forth ongoing conditions precedent to the Company�s ability to borrow under the Agreement. Amounts borrowed under the Agreement may be repaid and reborrowed until its maturity on June�9, 2016, at which time all advances shall be immediately due and payable in full.�Amounts borrowed under the Agreement shall bear interest at the prime rate plus 0.75%. Adept and certain of its subsidiaries have granted the bank a security interest in substantially all of their respective assets (excluding intellectual property) to secure the outstanding obligations under the Agreement.

Adept has no off balance sheet arrangements and believes that its current cash and cash equivalents, together with funds available pursuant to its credit facility, provide sufficient liquidity for operations in fiscal year 2015. Based on operating needs, strategic activities and other factors, we may further utilize the line of credit in the future or seek alternative credit or other financing in the future to pursue additional expansion opportunities or make other investments in our growth.

New Accounting Pronouncements

See Notes to condensed consolidated financial statements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest rate sensitivity:�There have been no significant changes to our market interest rate risk assessment as discussed in our�2014�Annual Report on Form 10-K.

Foreign currency exchange rate sensitivity:�We transact our revenue primarily in U.S.�dollars, Euros, and to a lesser extent, Chinese RMBs and Japanese Yen.�The U.S.�dollar is our reporting currency.�The U.S. dollar is our functional currency except for our international subsidiaries in China, France and Germany, and Singapore where the Chinese Yuan, Euro, and Singapore dollar are the functional currencies, respectively.

As of December�27, 2014, we had not entered into foreign exchange forward contracts to hedge balance sheet exposures and inter-company balances against future movements in foreign exchange rates.

We maintain certain cash balances denominated in the Chinese Yuan, Euro, and Singapore dollar.�If foreign exchange rates were to weaken against the U.S. dollar immediately and uniformly by 10% from the exchange rates at December�27, 2014, the fair value of these foreign currency amounts would decline by an amount which is not material.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We are committed to maintaining disclosure controls and procedures designed to ensure that information required to be disclosed in our periodic reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC�s rules and forms, and that such information is accumulated and communicated to our management, including our Chief�Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, we recognize that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and we necessarily are required to apply our judgment in evaluating the cost-benefit relationship of possible controls and procedures and implementing controls and procedures. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all issues, if any, have been detected. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of the effectiveness of controls to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

Based on management�s evaluation, with the participation of our Chief Executive Officer (CEO) and Chief Financial Officer (CFO), as of the end of the period covered by this report, our CEO and CFO have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)), are effective to provide reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and is accumulated and communicated to management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There were no changes to our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended�December 27, 2014�that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II � OTHER INFORMATION

ITEM�1. LEGAL PROCEEDINGS

During the three months ended December�27, 2014 the Company settled a legal claim made by a former employee and recorded a $260,000 charge, which includes legal expenses and is net of insurance reimbursement and amounts previously accrued, during the quarter.

ITEM�1A. RISK FACTORS

There have been no material changes in the risk factors previously disclosed in �Item 1A. Risk Factors� in our Annual Report on Form 10-K for the fiscal year ended June�30, 2014.

ITEM�2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Not applicable.

ITEM�3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM�4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM�5. OTHER INFORMATION

None.

ITEM�6. EXHIBITS

See the Exhibit Index following the signature page to this Quarterly Report on Form 10-Q for a list of exhibits filed or furnished with this report, which Exhibit Index is incorporated herein by reference.

SIGNATURES

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

�


ADEPT TECHNOLOGY, INC.

By:	�	/s/ SETH HALIO
	�	Seth Halio
	�	Chief Financial Officer

By:	�	/s/ ROB CAIN
	�	Rob Cain
	�	President and Chief Executive Officer

Date: February 4, 2015

INDEX TO EXHIBITS

The following exhibits are filed as part of this report or incorporated by reference herein, as noted below.

�


3.1		Certificate of Incorporation of Adept-Delaware (incorporated by reference to Exhibit 3.1 to the Registrant�s Current Report on Form 8-K12G3 filed with the Securities and Exchange Commission on November�10, 2005).

3.2		Certificate of Amendment of Certificate of Incorporation of Adept-Delaware (incorporated by reference to Exhibit 3.2 to the Registrant�s Current Report on Form 8-K12G3 filed with the Securities and Exchange Commission on November 10, 2005).

3.3		Certificate of Designations, Preferences and Rights of Series A Convertible Preferred Stock (incorporated by reference to Exhibit 3.3 to the Registrant�s Annual Report on Form 10-K filed with the Securities and Exchange Commission on September 24, 2012).

3.4		Amended and Restated Bylaws of Adept-Delaware (incorporated by reference to Exhibit 3.4 to the Registrant�s Annual Report on Form 10-K filed with the Securities and Exchange Commission on September 24, 2012).

4.1		Specimen of Common Stock Certificate of Adept-Delaware (incorporated by reference to Exhibit 4.1 to the Registrant�s Current Report on Form 8-K12G3 filed with the Securities and Exchange Commission on November 10, 2005).

4.2		Specimen of Preferred Stock Certificate of Adept Delaware (incorporated by reference to Exhibit 4.2 to the Registrant�s Annual Report on Form 10-K filed with the Securities and Exchange Commission on September 24, 2012).

4.3		Form of Registration Rights Agreement, dated as of November 18, 2003 by and among the Registrant and the investors party thereto (incorporated by reference to Exhibit 4.5 to the Registrant�s Registration Statement on Form S-2 (No. 333-112360) filed on January 30, 2004).

4.4		Letter Agreement by and between Adept Technology, Inc. and Hale Capital Partners, LP, dated March 27, 2013 (incorporated by reference to Exhibit 4.1 to Registrant�s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 29, 2013).

4.5		Registration Rights Agreement, dated as of September 5, 2012, by and among Adept Technology, Inc. and Hale Capital Partners, LP (incorporated by reference to Exhibit 4.5 to the Registrant�s Annual Report on Form 10-K filed with the Securities and Exchange Commission on September 24, 2012).

4.6		Side Letter Agreement, dated as of September 5, 2012 by and among Adept Technology, Inc. and Hale Capital Partners, LP (incorporated by reference to Exhibit 4.6 to the Registrant�s Annual Report on Form 10-K filed with the Securities and Exchange Commission on September 24, 2012).

10.1+		First Amendment to Loan and Security Agreement and Waiver (dated as of January�31, 2015 by and between Comerica Bank and Adept Technology, Inc.

10.2+		Prime Referenced Rate Addendum to Loan and Security Agreement (dated as of January�31, 2015 by and between Comerica Bank and Adept Technology, Inc.

31.1+		Certification by the Chief Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a) under the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2+		Certification by the Chief Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a) under the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1+		Certification by the Chief Executive Officer and the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.1-		The following financial information from the Company�s quarterly report on Form 10-Q for the period ended December 27, 2014 is formatted in XBRL interactive data files: (i) Condensed Consolidated Balance Sheets as of December 27, 2014 and June 30, 2014 (ii) Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the Three and Six Months Ended December 27, 2014 and December 28, 2013 (iii) Condensed Consolidated Statements of Cash Flows for the Six Months Ended December 27, 2014 and December 28, 2013 and (iv) Notes to Condensed Consolidated Financial Statements.

�

+	Filed with this Quarterly Report on Form 10-Q

Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Section�11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for the purposes of Section�18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under these sections

Exhibit 10.1

FIRST AMENDMENT

LOAN AND SECURITY AGREEMENT AND WAIVER

This First Amendment to Loan and Security Agreement and Waiver (�Amendment�) is entered into as of January�31, 2015, by and between COMERICA BANK (�Bank�) and ADEPT TECHNOLOGY, INC. (�Borrower�).

RECITALS

Borrower and Bank are parties to that Loan and Security Agreement dated as June�9, 2014, as it may be amended from time to time ( �Agreement�). The parties desire to amend the Agreement further in accordance with the terms of this Amendment.

NOW, THEREFORE, the parties agree as follows:

1. Borrower failed to comply with Section�6.7 of the Agreement (Accounts) by not closing its accounts with Silicon Valley Bank by January�3, 2015 (�Covenant Violation�). Borrower requested that Bank waive the Covenant Violation. Bank hereby waives the Covenant Violation. This waiver is specific as to content and time, shall be limited precisely as written, and shall not constitute a waiver of any other current or future default or Event of Default or breach of any covenant contained in the Agreement or the terms and conditions of any other Loan Documents. Bank expressly reserves all of its various rights, remedies, powers and privileges under the Agreement and the other Loan Documents due to any other default, Event of Default or breach not waived herein.

2. Exhibit A to the Agreement is amended by adding or amending and restating the following defined terms to read in their entirety as follows:

�Non-Formula Amount� means One Million Dollars ($1,000,000).�

3. Section�6.7(a) of the Agreement is amended and restated to read in its entirety as follows:

�

�(a)

EBITDA Loss. (i)�An EBITDA loss of not greater than the following amounts for the following periods:

�


Testing Period	��	Maximum EBITDA Loss
Quarter ended December�31, 2014	��
Quarter ending March�31, 2015	��
Quarter ending June�30, 2015	��
Twelve month period ending June�30, 2015	��

(ii) An EBITDA loss of not greater than (a)�$xxx for any fiscal quarter of Borrower in 2016 and (b)�$xxx for the twelve-month period ending June�30, 2016.�

4. The term �Account Closing Date� set forth in Section�6.6 of the Agreement shall now mean January�30, 2015 and not January�3, 2015.

5. Exhibits E and F to the Agreement are deleted and replaced with Exhibits E and F attached hereto.

�

6. No course of dealing on the part of Bank or its officers, nor any failure or delay in the exercise of any right by Bank, shall operate as a waiver thereof, and any single or partial exercise of any such right shall not preclude any later exercise of any such right. Bank�s failure at any time to require strict performance by Borrower of any provision shall not affect any right of Bank thereafter to demand strict compliance and performance. Any suspension or waiver of a right must be in writing signed by an officer of Bank.

7. Unless otherwise defined, all initially capitalized terms in this Amendment shall be as defined in the Agreement. The Agreement, as amended hereby, shall be and remain in full force and effect in accordance with its respective terms and is hereby ratified and confirmed in all respects. The execution, delivery, and performance of this Amendment shall not operate as a waiver of, or as an amendment of, any right, power, or remedy of Bank under the Agreement, as in effect prior to the date hereof.

8. Borrower represents and warrants that the representations and warranties contained in the Agreement are true and correct as of the date of this Amendment , and that (except for the Existing Defaults) no Event of Default has occurred and is continuing.

9. As a condition to the effectiveness of this Amendment, Bank shall have received, in form and substance satisfactory to Bank, the following:

�

(a)

this Amendment, duly executed by Borrower;

�

(b)

Corporate Resolutions and Incumbency Certification, duly executed by Borrower;

�

(c)

a Prime Referenced Rate Addendum to Loan and Security Agreement, duly executed by Borrower;

�

(d)

affirmation of guaranty, duly executed by the guarantors;

�

(e)

a non-refundable amendment fee in the amount of $5,000, which may be debited from any of Borrower�s accounts with Bank;

�

(f)

all reasonable Bank Expenses incurred through the date of this Amendment, which may be debited from any of Borrower�s accounts with Bank; and

�

(g)

such other documents, and completion of such other matters, as Bank may reasonably deem necessary or appropriate.

10. This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one instrument.

[Remainder of Page Intentionally Left Blank]

�

IN WITNESS WHEREOF, the undersigned have executed this First Amendment to Loan and Security Agreement and Waiver as of the first date above written.

�


ADEPT TECHNOLOGY, INC.

By:		/s/ Seth Halio

Title:		Chief Financial Officer

�


COMERICA BANK

By:		/s/ Sean Noonan

Title:		Vice President

�

[Signature Page to First Amendment to Loan and Security Agreement and Waiver (5060818)]

EXHIBIT E

COMPLIANCE CERTIFICATE

�

Please send all Required Reporting to:

��

Comerica Bank

Technology�& Life Sciences Division

Loan Analysis Department

250 Lytton Avenue

3rd Floor, MC 4240

Palo Alto CA 94301

Phone: (650)�462-6060

Fax: (650)�462-6061

FROM: Adept Technology, Inc.

The undersigned authorized Officer of Adept Technology, Inc. (�Borrower�), hereby certifies that in accordance with the terms and conditions of the Loan and Security Agreement between Borrower and Bank (the �Agreement�), (i)�Borrower is in complete compliance for the period ending ��, 201�� with all required covenants, including without limitation the ongoing registration of intellectual property rights in accordance with Section�6.8, except as noted below and (ii)�all representations and warranties of Borrower stated in the Agreement are true and correct in all material respects as of the date hereof; provided, however, that those representations and warranties expressly referring to another date shall be true, correct and complete in all material respects as of such date. Attached herewith are the required documents supporting the above certification (�Supporting Documents�). The Officer further certifies the Supporting Documents are prepared in accordance with Generally Accepted Accounting Principles (GAAP) and are consistently applied form one period to the next except as explained in an accompanying letter or footnotes.

Please indicate compliance status by circling Yes/No under �Complies� or �Applicable� column,

�


REPORTING COVENANTS	��	�	��	REQUIRED	��	COMPLIES

Company Prepared Monthly F/S	��		��	Monthly, within 30 days	��	YES��	��	��NO
Company Prepared Quarterly F/S	��		��	Quarterly, within 45 days	��	YES	��	NO
Compliance Certificate	��		��	Monthly, within 30 days	��	YES	��	NO
CPA Audited. Unqualified F/S	��		��	Annually, within 90 days of FYE	��	YES	��	NO
Borrowing Base Cert, A/R�& A/P Agings	��		��	Monthly, within 30 days	��	YES	��	NO
Annual Business Plan	��		��	Annually, on or before July 31	��	YES	��	NO
Intellectual Property Report	��		��	Annually, within 90 days of FYE	��	YES	��	NO
Audit	��		��	Semi-annual	��	YES	��	NO

If Public:	��				��		��
10-Q	��		��	Quarterly, within 5 days of SEC filing (50 days)	��	YES	��	NO
10-K	��		��	Annually, within 5 days of SEC filing (95 days)	��	YES	��	NO

Total amount of Borrower�s cash and investments	��		��	Amount: $____________________________	��	YES	��	NO
Total amount of Borrower�s cash and investments maintained with Bank	��		��	Amount: $____________________________	��	YES	��	NO

�

��

�

DESCRIPTION

��

APPLICABLE

�

��

�

Legal Action > $500,000 (Sect. 6.2(iv))

��

Notify promptly upon notice

�

__________________________

��

YES

��

�

��

Inventory Disputes> $500,000 (Sect. 6.3)

��

Notify promptly upon notice

�

__________________________

��

YES

��

�

��

Mergers�& Acquisitions (Sect. 7.3)

��

Notify promptly upon notice

�

__________________________

��

YES

��

�

��

Cross default with other agreements >$500,000 (Sect. 8.6)

��

Notify promptly upon notice

�

__________________________

��

YES

��

�

��

Judgments/Settlements > $750,000 (Sect. 8.8)

��

Notify promptly upon notice

�

__________________________

��

YES

��

�

��

Capital Expenditures > $1,000,000 (Sect. 7.12)

��

Notify promptly upon notice

�

__________________________

��

YES

��

�

��

Borrower�s and Subsidiaries� aggregate foreign account balance > $2,000,000 (Sect. 6.6)

��

Notify promptly upon notice

�

__________________________

��

YES

��

�

��

Transfers to foreign accounts > $500,000 (Sect. 6.6)

��

Notify promptly upon notice

�

__________________________

��

YES

��

�

��

�

FINANCIAL COVENANTS

��

REQUIRED

��

ACTUAL��

��

COMPLIES

�

��

�

TO BE TESTED MONTHLY, UNLESS OTHERWISE NOTED

��

Maximum EBITDA Loss (tested quarterly and annually)

��

See�Section�6.7(a)

��

$_______________________

��

YES

��

�

��

Minimum Cash at Bank (maintained at all times and reported monthly)

��

$1,000,000

��

$_______________________

��

YES

��

�

��

FINANCIAL COVENANTS

��

REQUIRED

��

ACTUAL��

��

COMPLIES

�

��

�

Permitted Indebtedness for equipment leases

��

<$100,000

��

$________________________

��

YES

��

�

��

Permitted Investments for stock repurchase

��

<$100,000

��

$________________________

��

YES

��

�

��

Permitted Investments for subsidiaries by Borrower

��

��<$1,000,000 (total prior to termination��

of the Agreement)

��

$________________________

��

YES

��

�

��

Permitted Investments to subs. that are not guarantors by subs.

��

<$500,000

��

$________________________

��

YES

��

�

��

Permitted Investments for employee loans

��

<$100,000

��

$________________________

��

YES

��

�

��

Permitted Investments for employee travel advances

��

<$200,000

��

$________________________

��

YES

��

�

��

Permitted Investments for joint ventures

��

<$100,000

��

$________________________

��

YES

��

�

��

Permitted Liens for equipment leases

��

<$100,000

��

$________________________

��

YES

��

�

��

Permitted Transfers

��

<$100,000

��

$________________________

��

YES

��

�

��

Permitted Unsecured Credit Cards

��

<$100,000

��

$________________________

��

YES

��

�

��

Permitted Other Unsecured Indebtedness

��

<$200,000

��

$________________________

��

YES

��

�

��

�

Exhibit E � Page 1

Please Enter Below Comments Regarding Violations:

�

The undersigned further acknowledges that at any time Borrower is not in compliance with all the terms set forth in the Agreement, including, without limitation, the financial covenants, no Credit Extensions will be made.

Very truly yours,

�


ADEPT TECHNOLOGY, INC.

	�	�
	�	Authorized Signer

	�	�
	�	Name

	�	�
	�	Title

�

Exhibit E � Page 2

EXHIBIT F

PRICING ADDENDUM

(See Attached)

�

Exhibit F � Page 1

�

Corporation Resolutions and Incumbency Certification

Authority to Procure Loans

�

I certify that I am the duly elected and qualified Secretary of ADEPT TECHNOLOGY, INC.; that the following is a true and correct copy of resolutions duly adopted by the Board of Directors of the Corporation in accordance with its bylaws and applicable statutes.

Copy of Resolutions:

Be it Resolved, That:

�

1.	Any one (1)�of the following CEO or CFO (insert titles only) of the Corporation is authorized, for, on behalf of, and in the name of the Corporation to:

�

(a)

Negotiate and procure loans, letters of credit and other credit or financial accommodations from Comerica Bank (�Bank�), including, without limitation, that Loan and Security Agreement dated as June�9, 2014, as amended from time to time, including but not limited to that First Amendment to Loan and Security Agreement and Waiver dated as of January�31, 2015 (collectively, the �Agreement�);

�

(b)

Discount with the Bank, commercial or other business paper belonging to the Corporation made or drawn by or upon third parties, without limit as to amount;

�

(c)

Purchase, sell, exchange, assign, endorse for transfer and/or deliver certificates and/or instruments representing stocks, bonds, evidences of Indebtedness or other securities owned by the Corporation, whether or not registered in the name of the Corporation;

�

(d)

Give security for any liabilities of the Corporation to the Bank by grant, security interest, assignment, lien, deed of trust or mortgage upon any real or personal property, tangible or intangible of the Corporation;

�

(e)

Issue a warrant or warrants to purchase the Corporation�s capital stock;

�

(f)

Execute and deliver in form and content as may be required by the Bank any and all notes, evidences of Indebtedness, applications for letters of credit, guaranties, subordination agreements, loan and security agreements, financing statements, assignments, liens, deeds of trust, mortgages, trust receipts and other agreements, instruments or documents to carry out the purposes of these Resolutions, any or all of which may relate to all or to substantially all of the Corporation�s property and assets; and

�

(g)

Appoint, delegate and authorize such other person(s) (the �Delegated Person(s)�) as may be designated in writing from time to time by the above referenced Authorized Signer(s), or any one or more of them, to (i)�request loans, advances and/or letters of credit under any line of credit, loan or other credit or financial accommodation made available by Bank to or in favor of the Corporation, and to execute and/or deliver unto Bank, in form and content as may be required by the Bank, such agreements, instruments and documents as may be necessary or required to carry out such purposes, (ii)�make loan payments for and on behalf of the Corporation, and (iii)�execute and certify borrowing base certificates, account agings, inventory reports and collateral reports (together with any other documents, reports and certificates required to be delivered in connection with any of the foregoing) for and on behalf of the Corporation

�

2.	Said Bank be and it is authorized and directed to pay the proceeds of any such loans or discounts as directed by the persons so authorized to sign, in accordance with the Agreement.

3.	Any and all agreements, instruments and documents previously executed and acts and things previously done to carry out the purposes of these Resolutions are ratified, confirmed and approved as the act or acts of the Corporation.

�

These Resolutions shall continue in force, and the Bank may consider the holders of said offices and their signatures to be and continue to be as set forth in a certified copy of these Resolutions delivered to the Bank, until notice to the contrary in writing is duly served on the Bank (such notice to have no effect on any action previously taken by the Bank in reliance on these Resolutions).

�

Any person, corporation or other legal entity dealing with the Bank may rely upon a certificate signed by an officer of the Bank to the effect that these Resolutions and any agreement, instrument or document executed pursuant to them are still in full force and effect and binding upon the Corporation.

�

6.	The Bank may consider the holders of the offices of the Corporation and their signatures, respectively, to be and continue to be as set forth in the Certificate of the Secretary of the Corporation until notice to the contrary in writing is duly served on the Bank.

I further certify that the above Resolutions are in full force and effect as of the date of this Certificate; that these Resolutions and any borrowings or financial accommodations under these Resolutions have been properly noted in the corporate books and records, and have not been rescinded, annulled, revoked or modified; that neither the foregoing Resolutions nor any actions to be taken pursuant to them are or will be in contravention of any provision of the certificate of incorporation or bylaws of the Corporation or of any agreement, indenture or other instrument to which the Corporation is a party or by which it is bound; and that neither the certificate of incorporation nor bylaws of the Corporation nor any agreement, indenture or other instrument to which the Corporation is a party or by which it is bound require the vote or consent of shareholders of the Corporation to authorize any act, matter or thing described in the foregoing Resolutions.

I further certify that the following named persons have been duly elected to the offices set opposite their respective names, that they continue to hold these offices at the present time, and that the signatures which appear below are the genuine, original signatures of each respectively:

(PLEASE SUPPLY GENUINE SIGNATURES OF AUTHORIZED SIGNERS BELOW)

�


NAME (Type or Print)	�	TITLE	�	SIGNATURE
Seth Halio	�	CFO	�	/s/ Seth Halio
Rob Cain	�	CEO	�	/s/ Rob Cain
�	�	�	�	�

In Witness Whereof, I have affixed my name as Secretary and have caused the corporate seal (where available) of said Corporation to be affixed on January�31, 2015.

�

/s/ Seth Halio

Secretary

�



The Above Statements are Correct.	��	/s/ Rob Cain
	��	SIGNATURE OF OFFICER OR DIRECTOR OR, IF NONE. A SHAREHOLDER OTHER THAN SECRETARY WHEN SECRETARY IS AUTHORIZED TO SIGN ALONE.

Failure to complete the above when the Secretary is authorized to sign alone shall constitute a certification by the Secretary that the Secretary is the sole Shareholder, Director and Officer of the Corporation.

�

AFFIRMATION OF GUARANTY

This AFFIRMATION OF GUARANTY (�Affirmation�) is made as of January ��, 2015, by the undersigned (individually and collectively, �Guarantor�) in favor of Comerica Bank (�Bank�).

RECITALS

A. Adept Technology, Inc. (�Borrower�) has obtained certain loans or other credit accommodations from Bank pursuant to that certain Loan and Security Agreement, dated as of June�9, 2014, as it may be amended from time to time (the �Loan Agreement�), which loans and certain credit accommodations are guaranteed by Guarantor pursuant to the terms of a Guaranty dated June�9, 2014, executed by Guarantor in favor of Bank (as it may be amended from time to time, the �Guaranty�). Borrower and Bank propose to enter into a First Amendment to Loan and Security Agreement and Waiver dated as of the date hereof (the �Amendment�).

B. Bank has agreed to enter into the Amendment provided, among other things, that, Guarantor acknowledges the entry by Borrower into the Amendment and agrees that the Guaranty will remain effective.

AGREEMENT

NOW, THEREFORE, Guarantor:

1. Consents to the execution, delivery and performance by Borrower of the Amendment and the documents and instruments executed in connection therewith, as well as all other amendments and modifications to the Loan Documents.

2. Acknowledges and agrees that the Guaranty is and shall remain in full force and effect in accordance with its terms with respect to all Obligations (as defined in the Loan Agreement) of Borrower, subject to no setoff, defense or counterclaim.

3. Represents and warrants that the representations and warranties contained in the Guaranty are true and correct in all material respects as of the date of this Affirmation.

4. Confirms that this Affirmation is not required by the terms of the Guaranty and need not be obtained in connection with any prior or future waivers or amendments or extensions of additional credit to Borrower.

[Signature page follows]

IN WITNESS WHEREOF, each Guarantor executed this Affirmation as of the first date above written.

�


GUARANTORS:

ADEPT INMOTX, INC.

By:		/s/ Seth Halio

Title:		VP Finance

ADEPT TECHNOLOGY HOLDINGS, INC.

By:		/s/ Seth Halio

Title:		Director

ADEPT MOBILEROBOTS LLC

By:		/s/ Seth Halio

Title:		Director

ADEPT�TECHNOLOGY�INTERNATIONAL,�LTD.

By:		/s/ Seth Halio

Title:		Director

�

[Signature page to Affirmation of Guaranty (5060818)]

Exhibit 10.2

Prime Referenced Rate Addendum

To Loan and Security Agreement

This Prime Referenced Rate Addendum to Loan and Security Agreement (this �Addendum�) is entered into as of January�31, 2015, by and between Comerica Bank (�Bank�) and Adept Technology, Inc., a Delaware corporation (�Borrower�). This Addendum supplements the terms of the Loan and Security Agreement dated as of June�9, 2014 between Borrower and Bank (as the same may be amended, modified, supplemented, extended or restated from time to time, the �Agreement�).

1. Definitions. As used in this Addendum, the following terms shall have the following meanings. Initially capitalized terms used and not defined in this Addendum shall have the meanings ascribed thereto in the Agreement.

a. �Applicable Margin� means (a)�one percent (1.00%)�per annum or (b)�three quarters of one percent (0.75%) per annum upon Bank�s receipt of evidence satisfactory to it that Borrower has achieved two consecutive quarters of positive net income, as determined in accordance with GAAP.

b. �Business Day� means any day, other than a Saturday, Sunday or any other day designated as a holiday under Federal or applicable State statute or regulation, on which Bank is open for all or substantially all of its domestic and international business (including dealings in foreign exchange) in San Jose, California, and, in respect of notices and determinations relating the Daily Adjusting LIBOR Rate, also a day on which dealings in dollar deposits are also carried on in the London interbank market and on which banks are open for business in London, England.

c. �Change in Law� means the occurrence, after the date hereof, of any of the following: (i)�the adoption or introduction of, or any change in any applicable law, treaty, rule or regulation (whether domestic or foreign) now or hereafter in effect and whether or not applicable to Bank on such date, or (ii)�any change in interpretation, administration or implementation thereof of any such law, treaty, rule or regulation by any Governmental Authority, or (iii)�the issuance, making or implementation by any Governmental Authority of any interpretation, administration, request, regulation, guideline, or directive (whether or not having the force of law), including any risk-based capital guidelines. For purposes of this definition, (x)�a change in law, treaty, rule, regulation, interpretation, administration or implementation shall include, without limitation, any change made or which becomes effective on the basis of a law, treaty, rule, regulation, interpretation administration or implementation then in force, the effective date of which change is delayed by the terms of such law, treaty, rule, regulation, interpretation, administration or implementation, and (y)�the Dodd-Frank Wall Street Reform and Consumer Protection Act (Pub. L. 111-203, H.R. 4173) and all requests, rules, regulations, guidelines, interpretations or directives promulgated thereunder or issued in connection therewith shall be deemed to be a �Change in Law�, regardless of the date enacted, adopted, issued or promulgated, whether before or after the date hereof, and (z)�all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States regulatory authorities, in each case pursuant to Basel III, shall each be deemed to be a �Change in Law�, regardless of the date enacted, adopted, issued or implemented.

d. �Daily Adjusting LIBOR Rate� means, for any day, a per annum interest rate which is equal to the quotient of the following:

�

(1)

for any day, the per annum rate of interest determined on the basis of the rate for deposits in United States Dollars for a period equal to one (1)�month appearing on Page BBAM of the Bloomberg Financial Markets Information Service as of 8:00 a.m. (California time) (or as soon thereafter as practical) on such day, or if such day is not a Business Day, on the immediately preceding Business Day. In the event that such rate does not appear on Page BBAM of the Bloomberg Financial Markets Information Service (or otherwise on such Service) on any day, the �Daily Adjusting LIBOR Rate� for such day shall be determined by reference to such other publicly available service for displaying eurodollar rates as may be reasonably selected by Bank, or in the absence of such other service, the �Daily Adjusting LIBOR Rate� for such day shall, instead, be determined based upon the average of the rates at which Bank is offered dollar deposits at or about 8:00 a.m. (California time) (or as soon thereafter as practical), on such day, or if such day is not a Business Day, on the immediately preceding Business Day, in the interbank eurodollar market in an amount comparable to the outstanding principal amount of the Obligations and for a period equal to one (1)�month;

divided by

�

-1-

�

(2)

1.00 minus the maximum rate (expressed as a decimal) on such day at which Bank is required to maintain reserves on �Euro-currency Liabilities� as defined in and pursuant to Regulation D of the Board of Governors of the Federal Reserve System or, if such regulation or definition is modified, and as long as Bank is required to maintain reserves against a category of liabilities which includes eurodollar deposits or includes a category of assets which includes eurodollar loans, the rate at which such reserves are required to be maintained on such category.

e. �Governmental Authority� means the government of the United States of America or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including, without limitation, any supranational bodies such as the European Union or the European Central Bank).

f. �LIBOR Lending Office� means Bank�s office located in the Cayman Islands, British West Indies, or such other branch of Bank, domestic or foreign, as it may hereafter designate as its LIBOR Lending Office by notice to Borrower.

g. �Prime Rate� means the per annum interest rate established by Bank as its prime rate for its borrowers, as such rate may vary from time to time, which rate is not necessarily the lowest rate on loans made by Bank at any such time.

h. �Prime Referenced Rate� means, for any day, a per annum interest rate which is equal to the Prime Rate in effect on such day, but in no event and at no time shall the Prime Referenced Rate be less than the sum of the Daily Adjusting LIBOR Rate for such day plus two and one-half percent (2.50%)�per annum. If, at any time, Bank determines that it is unable to determine or ascertain the Daily Adjusting LIBOR Rate for any day, the Prime Referenced Rate for each such day shall be the Prime Rate in effect at such time, but not less than two and one-half percent (2.50%)�per annum.

2. Interest Rate Options. Subject to the terms and conditions of this Addendum, the Obligations under the Agreement shall bear interest at the Prime Referenced Rate plus the Applicable Margin.

3. Payment of Interest. Accrued and unpaid interest on the unpaid balance of the Obligations outstanding under the Agreement shall be payable monthly, in arrears, on the first (1^st)�day of each month, until maturity (whether as stated herein, by acceleration, or otherwise). In the event that any payment under this Addendum becomes due and payable on any day which is not a Business Day, the due date thereof shall be extended to the next succeeding Business Day, and, to the extent applicable, interest shall continue to accrue and be payable thereon during such extension at the rates set forth in this Addendum. Interest accruing hereunder shall be computed on the basis of a year of 360 days, and shall be assessed for the actual number of days elapsed, and in such computation, effect shall be given to any change in the applicable interest rate as a result of any change in the Prime Referenced Rate on the date of each such change.

4. Bank�s Records. The amount and date of each advance under the Agreement, its applicable interest rate, and the amount and date of any repayment shall be noted on Bank�s records, which records shall be conclusive evidence thereof, absent manifest error; provided, however, any failure by Bank to make any such notation, or any error in any such notation, shall not relieve Borrower of its obligations to repay Bank all amounts payable by Borrower to Bank under or pursuant to this Addendum and the Agreement, when due in accordance with the terms hereof.

5. Default Interest Rate. From and after the occurrence of any Event of Default, and so long as any such Event of Default remains unremedied or uncured thereafter, the Obligations outstanding under the Agreement shall bear interest at a per annum rate of four percent (4%)�above the otherwise applicable interest rate hereunder, which interest shall be payable upon demand. In addition to the foregoing, a late payment charge equal to four percent (4%)�of each late payment hereunder may be charged on any payment not received by Bank within ten (10)�calendar days after the payment due date therefor, but acceptance of payment of any such charge shall not constitute a waiver of any Event of Default under the Agreement. In no event shall the interest payable under this Addendum and the Agreement at any time exceed the maximum rate permitted by law.

6. Prepayment. Borrower may prepay all or part of the outstanding balance of any Obligations at any time without premium or penalty. Any prepayment hereunder shall also be accompanied by the payment of all accrued and unpaid interest on the amount so prepaid. Borrower hereby acknowledges and agrees that the foregoing shall not, in any way whatsoever, limit, restrict, or otherwise affect Bank�s right to make demand for payment of all or any part of the Obligations under the Agreement due on a demand basis in Bank�s sole and absolute discretion.

�

-2-

7. Regulatory Developments or Other Circumstances Relating to the Daily Adjusting LIBOR Rate.

a. If any Change in Law shall: (a)�subject Bank to any tax, duty or other charge with respect to this Addendum or any Obligations under the Agreement, or shall change the basis of taxation of payments to Bank of the principal of or interest under this Addendum or any other amounts due under this Addendum in respect thereof (except for changes in the rate of tax on the overall net income of Bank or its LIBOR Lending Office imposed by the jurisdiction in which Bank�s principal executive office or LIBOR Lending Office is located); or (b)�impose, modify or deem applicable any reserve (including, without limitation, any imposed by the Board of Governors of the Federal Reserve System), special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by Bank, or shall impose on Bank or the foreign exchange and interbank markets any other condition affecting this Addendum or the Obligations; and the result of any of the foregoing is to increase the cost to Bank of maintaining any part of the Obligations or to reduce the amount of any sum received or receivable by Bank under this Addendum by an amount deemed by Bank to be material, then Borrower shall pay to Bank, within fifteen (15)�days of Borrower�s receipt of written notice from Bank demanding such compensation, such additional amount or amounts as will compensate Bank for such increased cost or reduction. A certificate of Bank, prepared in good faith and in reasonable detail by Bank and submitted by Bank to Borrower, setting forth the basis for determining such additional amount or amounts necessary to compensate Bank shall be conclusive and binding for all purposes, absent manifest error.

b. In the event that any Change in Law affects or would affect the amount of capital required or expected to be maintained by Bank (or any corporation controlling Bank), and Bank determines that the amount of such capital is increased by or based upon the existence of any obligations of Bank hereunder or the maintaining of any Obligations, and such increase has the effect of reducing the rate of return on Bank�s (or such controlling corporation�s) capital as a consequence of such obligations or the maintaining of such Obligations to a level below that which Bank (or such controlling corporation) could have achieved but for such circumstances (taking into consideration its policies with respect to capital adequacy), then Borrower shall pay to Bank, within fifteen (15)�days of Borrower�s receipt of written notice from Bank demanding such compensation, additional amounts as are sufficient to compensate Bank (or such controlling corporation) for any increase in the amount of capital and reduced rate of return which Bank reasonably determines to be allocable to the existence of any obligations of Bank hereunder or to maintaining any Obligations. A certificate of Bank as to the amount of such compensation, prepared in good faith and in reasonable detail by Bank and submitted by Bank to Borrower, shall be conclusive and binding for all purposes absent manifest error.

8. Legal Effect. Except as specifically modified hereby, all of the terms and conditions of the Agreement remain in full force and effect.

9. Conflicts. As to the matters specifically the subject of this Addendum, in the event of any conflict between this Addendum and the Agreement, the terms of this Addendum shall control.

10. Amendment and Restatement. This Addendum amends, restates and replaces that certain Prime Referenced Rate Addendum to Loan and Security Agreement dated June�9, 2014 between Bank and Borrower.

[Remainder of Page Intentionally Left Blank]

�

-3-

IN WITNESS WHEREOF, the parties have agreed to the foregoing as of the date first set forth above.

�


COMERICA BANK		ADEPT TECHNOLOGY, INC.

By:	/s/ Sean Noonan	By:	/s/ Seth Halio



Name:	Sean Noonan	Name:	Seth Halio



Title:	Vice President	Title:	CFO

�

[Signature Page to Prime Referenced Rate Addendum to Loan and Security Agreement (5061369)]

Exhibit 31.1

CERTIFICATIONS

I, Rob Cain, President and Chief Executive Officer of Adept Technology, Inc., certify that:

�

I have reviewed this quarterly report on Form 10-Q for the fiscal quarter ended December�27, 2014 of Adept Technology, Inc.;

�

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

�

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

�

The registrant�s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules�13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant�s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant�s internal control over financial reporting that occurred during the registrant�s most recent fiscal quarter (the registrant�s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant�s internal control over financial reporting; and

�

The registrant�s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant�s auditors and the audit committee of the registrant�s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant�s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant�s internal control over financial reporting.

�



Date: February 4, 2015	�	�	�	/s/ Rob Cain
	�	�	�	Rob Cain
	�	�	�	President and Chief Executive Officer

Exhibit 31.2

CERTIFICATIONS

I, Seth Halio, Chief Financial Officer of Adept Technology, Inc., certify that:

�

I have reviewed this quarterly report on Form 10-Q for the fiscal quarter ended December�27, 2014 of Adept Technology, Inc.;

�

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant�s internal control over financial reporting.

�



Date: February 4, 2015	�	�	�	/s/ Seth Halio
	�	�	�	Seth Halio
	�	�	�	Chief Financial Officer

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q for the fiscal quarter ended December�27, 2014 of Adept Technology, Inc. (the �Company�) as filed with the Securities and Exchange Commission (the �Report�), each of the undersigned hereby certifies, in his or her capacity as an officer of the Company, pursuant to 18 U.S.C. Section�1350, as adopted pursuant to Section�906 of the Sarbanes-Oxley Act of 2002, that to such officer�s knowledge:

1. The Report fully complies with the requirements of Section�13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

�



�	�		�	/s/ Rob Cain
	�		�	Rob Cain
	�		�	President and Chief Executive Officer

	�	Dated:	�	February 4, 2015

�	�		�	/s/ Seth Halio
	�		�	Seth Halio
	�		�	Chief�Financial�Officer

	�	Dated:	�	February 4, 2015

The foregoing certification is being furnished solely pursuant to Section�906 of the Sarbanes-Oxley Act of 2002 (subsections (a)�and (b)�of Section�1350, Chapter 63 of Title 18, United States Code) and shall not be deemed filed by the Company for purposes of Section�18 of the Securities Exchange Act of 1934, as amended or incorporated by reference in any registration statement of the Company filed under the Securities Act of 1933, as amended.

A signed original of this written statement required by Section�906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section�906, has been provided to Adept Technology, Inc. and will be retained by Adept Technology, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

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Form 10-Q ADEPT TECHNOLOGY INC For: Dec 27

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