iRobot 2005 Annual Report Download - page 31

‚ our collaborators may pursue higher priority programs or change the focus of their development
programs, which would weaken our collaborators' commitment to us.
We depend on the experience and expertise of our senior management team and key technical employees,
and the loss of any key employee may impair our ability to operate effectively.
Our success depends upon the continued services of our senior management team and key technical
employees, such as our project management personnel and roboticists. Moreover, we often must comply with
provisions in government contracts that require employment of persons with specified levels of education and
work experience. Each of our executive officers, key technical personnel and other employees could terminate
his or her relationship with us at any time. The loss of any member of our senior management team might
significantly delay or prevent the achievement of our business objectives and could materially harm our
business and customer relationships. In addition, because of the highly technical nature of our robots, the loss
of any significant number of our existing engineering and project management personnel could have a material
adverse effect on our business and operating results.
We are subject to extensive U.S. federal government regulation, and our failure to comply with
applicable regulations could subject us to penalties that may restrict our ability to conduct our business.
As a contractor and subcontractor to the U.S. federal government, we are subject to and must comply
with various government regulations that impact our operating costs, profit margins and the internal
organization and operation of our business. Among the most significant regulations affecting our business are:
‚ the Federal Acquisition Regulations and supplemental agency regulations, which comprehensively
regulate the formation and administration of, and performance under government contracts;
‚ the Truth in Negotiations Act, which requires certification and disclosure of all cost and pricing data in
connection with contract negotiations;
‚ the Cost Accounting Standards, which impose accounting requirements that govern our right to
reimbursement under cost-based government contracts;
‚ the Foreign Corrupt Practices Act, which prohibits U.S. companies from providing anything of value to
a foreign official to help obtain, retain or direct business, or obtain any unfair advantage;
‚ the False Claims Act and the False Statements Act, which, respectively, impose penalties for payments
made on the basis of false facts provided to the government, and impose penalties on the basis of false
statements, even if they do not result in a payment; and
‚ laws, regulations and executive orders restricting the use and dissemination of information classified for
national security purposes and the exportation of certain products and technical data.
Also, we need special clearances to continue working on and advancing certain of our projects with the
U.S. federal government. For example, if we were to lose our security clearance, we would be unable to
continue to participate in the U.S. Army's Future Combat Systems program. Classified programs generally
will require that we comply with various Executive Orders, federal laws and regulations and customer security
requirements that may include restrictions on how we develop, store, protect and share information, and may
require our employees to obtain government clearances.
Our failure to comply with applicable regulations, rules and approvals could result in the imposition of
penalties, the loss of our government contracts or our suspension or debarment from contracting with the
federal government generally, any of which would harm our business, financial condition and results of
operations.
27