8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): December 16, 2002

APPLIED MICROSYSTEMS CORPORATION

(Exact name of registrant as specified in its charter)

WASHINGTON	0-26778	91-1074996
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer) Identification No.)

5020 148th Avenue NE

Redmond, Washington 98052

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (425) 882-2000

TABLE OF CONTENTS

	Item 5. Other Events.
	Item 7. Financial Statements And Exhibits.
SIGNATURES
INDEX TO EXHIBITS
EXHIBIT 99.1

Item 5. Other Events.

     On December 16, 2002, Applied Microsystems Corporation (the “Company”) announced that its board of directors has unanimously decided to recommend to shareholders that the Company be liquidated. The Company’s board of directors has appointed an independent committee, consisting of directors Elwood D. Howse, Jr. and Charles H. House, to oversee the process of selling the Company’s Libra Networks assets. The special committee has been empowered to engage a financial advisor to assist it in this process. The Company plans to prepare a proxy statement as soon as practicable that will provide additional information and will submit a plan of liquidation and dissolution to its shareholders for approval. The Company is currently unable to predict the amount of any potential distribution to shareholders or the timing of any such distribution.

     The Company also announced that one of its directors, Lary L. Evans, has resigned from its board of directors. Mr. Evans was the majority owner of Reba Technologies, Inc., from which the Company purchased a portion of its Libra Networks intellectual property in May of 2002.

     A copy of the Company’s press release announcing the board of directors’ decision to liquidate and the resignation of Mr. Evans is attached hereto as exhibit 99.1 and is incorporated herein by reference.

Item 7. Financial Statements And Exhibits.

(c) Exhibits

Exhibit No.	Description
99.1	Press Release of Applied Microsystems Corporation dated December 16, 2002

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Applied Microsystems Corporation
December 17, 2002	By:	/s/ Robert C. Bateman
		Robert C. Bateman
		Chief Financial Officer

INDEX TO EXHIBITS

Exhibit No.	Description
99.1	Press Release of Applied Microsystems Corporation dated December 16, 2002

EX-99.1 3 v86578exv99w1.txt EXHIBIT 99.1 Exhibit 99.1 For more information, contact: Rob Bateman, Chief Financial Officer Applied Microsystems Corporation (425) 882-5683 rob.bateman@amc.com APPLIED MICROSYSTEMS ANNOUNCES PLANS TO LIQUIDATE REDMOND, WASH. -- DECEMBER 16, 2002 -- Applied Microsystems Corporation (NASDAQ: APMC) today reported that its board of directors has unanimously decided to recommend to shareholders that the Company be liquidated. In early September of 2002, the Company agreed to sell its embedded systems development tools business to a third party in an asset sale transaction that was subsequently approved by shareholders. In mid-October of 2002, the Company announced that it had negotiated a buyout of its remaining obligations under a multi-year facilities lease, which enabled it to accelerate its search for development-stage funding for its Libra Networks business. Libra Networks represents an expansion into development of hardware and software products aimed at end-user markets - specifically, corporate data centers. "Though we have made solid progress on Libra development efforts, the overall funding environment, coupled with our corporate structure, pose significant challenges to our ability to fund Libra Networks at this time," stated Stephen J. Verleye, President and CEO of Applied. "We previously advised our shareholders that our board would consider liquidation if it appeared to be the course of action most likely to optimize shareholder value. The feedback we have received from a variety of potential funding sources now leads us to conclude that liquidation is in fact the better alternative." The Company's board of directors has appointed an independent committee, consisting of directors Elwood D. Howse, Jr. and Charles H. House, to oversee the process of selling the Libra Networks assets. This committee has been empowered to engage a financial advisor to assist it in this process. Liquidation of a corporation is a complex process, and requires shareholder approval. Applied plans to prepare a proxy statement as soon as practicable that will 1 provide additional information and will submit a plan of liquidation and dissolution to its shareholders for approval. Even after shareholder approval of the plan of liquidation and dissolution, liquidation distributions to shareholders, if any, may be delayed for a lengthy period of time to allow the Company to sell any remaining assets (such as the Libra Networks intellectual property), and to discharge or make provision for satisfaction of the claims of known and contingent creditors (including indemnification obligations arising from the sale of the Company's embedded systems development tools business). The Company is currently unable to predict the amount of any potential distribution to shareholders or the timing of any such distribution. Applied also announced that one of its directors, Lary L. Evans, has resigned from its board of directors. Mr. Evans was the majority owner of Reba Technologies, Inc., from which the Company purchased a portion of its Libra Networks intellectual property in May of 2002. The company can be reached at P.O. Box 97002, Redmond, Wash. 98073-9702; by phone at 800-426-3925; or by e-mail at info@amc.com. Visit Applied on the Web at www.amc.com. Forward-looking statements in this press release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from historical results or those anticipated or stated or implied by such forward-looking statements. These factors include, without limitation, the Company's ability to effect an orderly wind down of its operations and to implement the plan of liquidation and dissolution in a timely manner, its ability to resolve any claims against it, its ability to sell certain of its remaining assets to generate cash to satisfy its obligations, its ability to maintain sufficient cash which could be distributed to its shareholders, its ability to retain the services of key employees or consultants to complete the wind down process or the sale of certain assets, its obligation to incur substantial expenses in complying with public company reporting and regulatory requirements, and other risks and uncertainties detailed from time to time in the Company's filings with the Securities and Exchange Commission. #### 2 -----END PRIVACY-ENHANCED MESSAGE-----

EX-99.1

                                                                    Exhibit 99.1

For more information, contact:

Rob Bateman, Chief Financial Officer
Applied Microsystems Corporation
(425) 882-5683
rob.bateman@amc.com

                APPLIED MICROSYSTEMS ANNOUNCES PLANS TO LIQUIDATE

      REDMOND, WASH. -- DECEMBER 16, 2002 -- Applied Microsystems Corporation
(NASDAQ: APMC) today reported that its board of directors has unanimously
decided to recommend to shareholders that the Company be liquidated.

      In early September of 2002, the Company agreed to sell its embedded
systems development tools business to a third party in an asset sale transaction
that was subsequently approved by shareholders. In mid-October of 2002, the
Company announced that it had negotiated a buyout of its remaining obligations
under a multi-year facilities lease, which enabled it to accelerate its search
for development-stage funding for its Libra Networks business. Libra Networks
represents an expansion into development of hardware and software products aimed
at end-user markets - specifically, corporate data centers.

      "Though we have made solid progress on Libra development efforts, the
overall funding environment, coupled with our corporate structure, pose
significant challenges to our ability to fund Libra Networks at this time,"
stated Stephen J. Verleye, President and CEO of Applied. "We previously advised
our shareholders that our board would consider liquidation if it appeared to be
the course of action most likely to optimize shareholder value. The feedback we
have received from a variety of potential funding sources now leads us to
conclude that liquidation is in fact the better alternative."

      The Company's board of directors has appointed an independent committee,
consisting of directors Elwood D. Howse, Jr. and Charles H. House, to oversee
the process of selling the Libra Networks assets. This committee has been
empowered to engage a financial advisor to assist it in this process.

      Liquidation of a corporation is a complex process, and requires
shareholder approval. Applied plans to prepare a proxy statement as soon as
practicable that will


                                       1

provide additional information and will submit a plan of liquidation and
dissolution to its shareholders for approval. Even after shareholder approval of
the plan of liquidation and dissolution, liquidation distributions to
shareholders, if any, may be delayed for a lengthy period of time to allow the
Company to sell any remaining assets (such as the Libra Networks intellectual
property), and to discharge or make provision for satisfaction of the claims of
known and contingent creditors (including indemnification obligations arising
from the sale of the Company's embedded systems development tools business). The
Company is currently unable to predict the amount of any potential distribution
to shareholders or the timing of any such distribution.

      Applied also announced that one of its directors, Lary L. Evans, has
resigned from its board of directors. Mr. Evans was the majority owner of Reba
Technologies, Inc., from which the Company purchased a portion of its Libra
Networks intellectual property in May of 2002.

      The company can be reached at P.O. Box 97002, Redmond, Wash. 98073-9702;
by phone at 800-426-3925; or by e-mail at info@amc.com. Visit Applied on the Web
at www.amc.com.

      Forward-looking statements in this press release are made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements are subject to various risks and uncertainties
that could cause actual results to differ materially from historical results or
those anticipated or stated or implied by such forward-looking statements. These
factors include, without limitation, the Company's ability to effect an orderly
wind down of its operations and to implement the plan of liquidation and
dissolution in a timely manner, its ability to resolve any claims against it,
its ability to sell certain of its remaining assets to generate cash to satisfy
its obligations, its ability to maintain sufficient cash which could be
distributed to its shareholders, its ability to retain the services of key
employees or consultants to complete the wind down process or the sale of
certain assets, its obligation to incur substantial expenses in complying with
public company reporting and regulatory requirements, and other risks and
uncertainties detailed from time to time in the Company's filings with the
Securities and Exchange Commission.

                                      ####


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