iRobot 2009 Annual Report Download - page 62

• our existing collaborations are and future collaborations may be subject to termination on short notice;
• our collaborators may be pursuing alternative technologies or developing alternative products, either on their
own or in collaboration with others, that may be competitive with our products, which could affect our
collaborators’ commitment to the collaboration with us;
• reductions in marketing or sales efforts or a discontinuation of marketing or sales of our products by our
collaborators could reduce our revenue;
• our collaborators may terminate their collaborations with us, which could make it difficult for us to attract
new collaborators or harm our reputation in the business and financial communities; and
• 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 senior engineers. 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 reimburse-
ment 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;
• 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;
• Certain contracts from the U.S. federal government may require us to maintain certain certifications
including but not limited to AS9100 and CMMI;
• Contractor Purchasing Systems review (CPSR) requirements, which evaluate the efficiency and effective-
ness with which we spend U.S. Government funds; and
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