8-K

UNITED STATES

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): August 25, 2006

Applied Micro Circuits Corporation

(Exact Name of Registrant as Specified in Charter)

DELAWARE	000-23193	94-2586591
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

215 Moffett Park Drive, Sunnyvale California 94089

(Address of Principal Executive Offices)

(858) 450-9333

(Registrants telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.01. Completion of Acquisition or Disposition of Assets.

On August 25, 2006, pursuant to an Agreement and Plan of Merger (the “Merger Agreement”) by and among Applied Micro Circuits Corporation (“AMCC”), Quasar Acquisition Corporation, a Delaware corporation and wholly-owned subsidiary of AMCC (“Merger Sub”), Quake Technologies, Inc., a Delaware corporation (“Quake”), and Daniel Trepanier and The VenGrowth II Investment Fund Inc., as representatives of the stockholders of Quake, AMCC acquired all of the outstanding capital stock of Quake and the Merger Sub merged with and into Quake, with Quake surviving as a wholly-owned subsidiary of AMCC (the “Merger”).

AMCC acquired Quake in exchange for an aggregate consideration of approximately $77.65 million. Pursuant to the Merger Agreement, each holder of Quake Common Stock, Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock received an amount in cash set forth in the Merger Agreement. In addition, each outstanding and vested option to purchase Quake’s common stock as of the closing of the Merger was terminated and converted automatically into the right to receive a portion of the cash payment paid by AMCC at closing. AMCC also assumed each outstanding and unvested stock option to purchase Quake common stock as of the closing, which became options to purchase an aggregate of 1,722,488 shares of AMCC common stock on the same terms as set forth in Quake’s stock option plan, subject to adjustment to the exercise price of each option assumed. In addition, AMCC assumed an estimated $8 million in cash and other receivables of Quake outstanding as of the closing of the Merger.

Pursuant to the Merger Agreement, AMCC deposited $12 million of the cash consideration paid for Quake’s outstanding capital stock and vested stock options into an escrow fund. The amount will be held in escrow for at least one year to secure certain indemnification and other payment obligations of Quake to AMCC under the terms of the Merger Agreement. Any amount held in the escrow account that is not subject to unresolved claims as of August 25, 2007 will be distributed to the former holders of Quake capital stock and vested options as of the closing of the Merger.

AMCC issued a press release announcing the closing of the Merger on August 25, 2006, which press release is attached to this Current Report on Form 8-K as Exhibit 99.1 and incorporated herein by reference.

The foregoing description of the Merger Agreement does not purport to be a complete statement of the parties’ rights under the Merger Agreement and is qualified in its entirety by reference to the full text of the Merger Agreement, which was filed as Exhibit 2.1 to AMCC’s Current Report on Form 8-K dated August 3, 2006, and is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.	Description
2.1	Agreement and Plan of Merger dated as of August 2, 2006 by and among Applied Micro Circuits Corporation, Quasar Acquisition Corporation, Quake Technologies, Inc., Daniel Trepanier and The VenGrowth II Investment Fund Inc. (previously filed with the Securities and Exchange Commission on August 3, 2006 as an exhibit to the Registrant’s Current Report on Form 8-K, and incorporated herein by reference).
99.1	Press Release issued by the Registrant on August 25, 2006.

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 hereunto duly authorized.

Date: August 25, 2006	APPLIED MICRO CIRCUITS CORPORATION
	By:	/s/ Cynthia J. Moreland
	Name:	Cynthia J. Moreland
	Title:	Vice President, General Counsel and Secretary

EXHIBIT INDEX

Exhibit No.	Description
2.1	Agreement and Plan of Merger dated as of August 2, 2006 by and among Applied Micro Circuits Corporation, Quasar Acquisition Corporation, Quake Technologies, Inc., Daniel Trepanier and The VenGrowth II Investment Fund Inc. (previously filed with the Securities and Exchange Commission on August 3, 2006 as an exhibit to the Registrant’s Current Report on Form 8-K, and incorporated herein by reference).
99.1	Press Release issued by the Registrant on August 25, 2006.

EX-99.1

Exhibit 99.1

FOR ADDITIONAL INFORMATION:

Investor Relations Contact:	Media/Editorial Contact:
Applied Micro Circuits Corporation	The Ardell Group
Scott Dawson	Angela Edgerton
(858) 535-4217	(858) 792-2941
E-mail: sdawson@amcc.com	E-mail: angela@ardellgroup.com

Friday, August 25, 2006

Company Press Release

AMCC Completes Acquisition of Quake Technologies; Strengthens Leadership Role in Emerging, High-

Volume Market for 10G Ethernet

Technology synergies, similar customer base, and proven design expertise of both companies position AMCC as a

leading provider of Ethernet IC solutions

Sunnyvale, Calif. – August 25, 2006 – Applied Micro Circuits Corp. (AMCC) [NASDAQ: AMCC] today announced that it has completed the acquisition of Quake Technologies, Inc., the leading provider of 10 Gigabit Ethernet (10GE) PHY technology. As a pioneer in the 10GE PHY technologies, Quake was the first company to successfully deliver an entire production-worthy product line for a broad range of distances, from short to long reach.

“We are pleased to announce the successful completion of this acquisition. We look forward to integrating our technology and customer assets in order to develop 10G Ethernet solutions for the Enterprise and Service Provider markets,” said Kambiz Hooshmand, president and CEO of AMCC. “Our strategy is focused on converged information and storage networks based on IP and Ethernet. As a result of this acquisition, AMCC is now a leader in the 10G Ethernet market.”

Under the terms of the agreement, AMCC acquired all outstanding shares of Quake for approximately $69 million in cash (net of Quake’s estimated cash and receivables that AMCC assumed in the deal). AMCC plans to consolidate its design groups in Ottawa into a single facility and continue to benefit from the experienced engineering talent of the Ottawa area.

About AMCC

AMCC is a global leader in network and embedded PowerPC processing, optical transport and storage solutions. Our products enable the development of converged IP-based networks offering high-speed secure data, high-definition video and high-quality voice for carrier, metropolitan, access and enterprise applications. AMCC provides networking equipment vendors with industry-leading network and communications processing, Ethernet, SONET and switch fabric solutions. AMCC is also the leading vendor of high-port count SATA RAID controllers enabling low-cost, high-performance, high-capacity storage. AMCC’s corporate headquarters are located in Sunnyvale, California. Sales and engineering offices are located throughout the world. For further information regarding AMCC, please visit our web site at http://www.amcc.com.

Forward Looking Statements

This news release contains forward-looking statements, including statements regarding the potential growth of the market in which Quake Technologies operates, the anticipated impact of this acquisition on AMCC, and trends in business conditions. Readers are cautioned that these forward-looking statements are predictions based only on current information and expectations that are inherently subject to change and future events or results may differ

materially. Readers are referred to the documents filed by AMCC with the SEC, specifically the most recent annual report on Form 10-K and most recent quarterly reports on Form 10-Q, which identify important risk factors that could cause actual results to differ from those contained in these forward-looking statements. Among the important factors or risks that could cause actual results or events to differ materially from those in the forward-looking statements in this release are: risks associated with the successful integration of Quake Technologies’ business with AMCC’s; AMCC may not be able to retain key employees of Quake Technologies; anticipated benefits of this acquisition may not be realized; global economic conditions; uncertainties in the geopolitical environment; pricing pressure in the optical networking industry; competition in the networking industry; dependence on the introduction and market acceptance of new product offerings and standards; rapid technological and market change; Internet infrastructure problems and government regulation of the Internet; international operations; litigation involving patents, intellectual property and state and federal securities litigation matters; and possible disruption in commercial activities occasioned by terrorist activity and armed conflict. The information in this release is current as of the date of this release, but may not remain accurate as of any future date. AMCC does not undertake any duty to update the information provided in this release, whether as a result of new information, future events or otherwise, except as otherwise required by law.

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AMCC is a registered trademark of Applied Micro Circuits Corporation. The PowerPC name and logo are registered trademarks of IBM Corporation and used under license therefrom. All other trademarks are the property of their respective owners.