iRobot 2009 Annual Report Download - page 64

Acquisitions and potential future acquisitions could be difficult to integrate, divert the attention of key
personnel, disrupt our business, dilute stockholder value and impair our financial results.
As part of our business strategy, we intend to consider additional acquisitions of companies, technologies and
products that we believe could accelerate our ability to compete in our core markets or allow us to enter new
markets. Acquisitions involve numerous risks, any of which could harm our business, including:
• difficulties in integrating the operations, technologies, products, existing contracts, accounting and per-
sonnel of the target company and realizing the anticipated synergies of the combined businesses;
• difficulties in supporting and transitioning customers, if any, of the target company;
• diversion of financial and management resources from existing operations;
• the price we pay or other resources that we devote may exceed the value we realize, or the value we could
have realized if we had allocated the purchase price or other resources to another opportunity;
• risks of entering new markets in which we have limited or no experience;
• potential loss of key employees, customers and strategic alliances from either our current business or the
target company’s business;
• assumption of unanticipated problems or latent liabilities, such as problems with the quality of the target
company’s products; and
• inability to generate sufficient revenue to offset acquisition costs.
Acquisitions also frequently result in the recording of goodwill and other intangible assets which are subject to
potential impairments in the future that could harm our financial results. In addition, if we finance acquisitions by
issuing convertible debt or equity securities, our existing stockholders may be diluted, which could lower the market
price of our common stock. As a result, if we fail to properly evaluate acquisitions or investments, we may not
achieve the anticipated benefits of any such acquisitions, and we may incur costs in excess of what we anticipate.
The failure to successfully evaluate and execute acquisitions or investments or otherwise adequately address these
risks could materially harm our business and financial results.
We may not be able to obtain capital when desired on favorable terms, if at all, or without dilution to our
stockholders.
We anticipate that our current cash, cash equivalents, cash provided by operating activities and funds available
through our working capital line of credit, will be sufficient to meet our current and anticipated needs for general
corporate purposes. We operate in an emerging market, however, which makes our prospects difficult to evaluate. It
is possible that we may not generate sufficient cash flow from operations or otherwise have the capital resources to
meet our future capital needs. For example in fiscal 2007 we consumed $27 million of our cash and short term
investments. If similar consumptions of cash were to continue, we may need additional financing to execute on our
current or future business strategies, including to:
• hire additional engineers and other personnel;
• develop new, or enhance existing, robots and robot accessories;
• enhance our operating infrastructure;
• acquire complementary businesses or technologies; or
• otherwise respond to competitive pressures.
If we raise additional funds through the issuance of equity or convertible debt securities, the percentage
ownership of our stockholders could be significantly diluted, and these newly-issued securities may have rights,
preferences or privileges senior to those of existing stockholders. We cannot assure you that additional financing
will be available on terms favorable to us, or at all. If adequate funds are not available or are not available on
acceptable terms, if and when needed, our ability to fund our operations, take advantage of unanticipated
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