iRobot 2015 Annual Report Download - page 105

Form 10-K
22
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. In such
cases we may need additional financing to execute on our current or future business strategies. 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 opportunities, develop or enhance our products, or otherwise respond to competitive pressures
would be significantly limited. In addition, our access to credit through our working capital line of credit may be limited by the
restrictive financial covenants contained in that agreement, which require us to maintain profitability.
Cybersecurity risks could adversely affect our business and disrupt our operations.
The threats to network and data security are increasingly diverse and sophisticated. Despite our efforts and processes to
prevent breaches, our devices, as well as our servers, computer systems, and those of third parties that we use in our operations
are vulnerable to cybersecurity risks, including cyber attacks such as viruses and worms, phishing attacks, denial-of-service
attacks, and similar disruptions from unauthorized tampering with our servers and computer systems or those of third parties
that we use in our operations, which could lead to interruptions, delays, loss of critical data, and loss of consumer confidence.
In addition, we may be the target of email scams that attempt to acquire sensitive information or company assets. Despite our
efforts to create security barriers to such threats, we may not be able to entirely mitigate these risks. Any cyber attack that
attempts to obtain our data and assets, disrupt our service, or otherwise access our systems, or those of third parties we use, if
successful, could adversely affect our business, operating results, and financial condition, be expensive to remedy, and damage
our reputation.
If we suffer data breaches involving the designs, schematics or source code for our products, our brand, business and
financial results could be adversely affected.
We attempt to securely store our designs, schematics and source code for our products as they are created. A breach,
whether physical, electronic or otherwise, of the systems on which this sensitive data is stored could lead to damage or piracy
of our products. If we or our partners are subject to data security breaches, we may have a loss in sales or increased costs
arising from the restoration or implementation of additional security measures, either of which could materially and adversely
affect our brand, business and financial results.
Environmental laws and regulations and unforeseen costs could negatively impact our future earnings.
The manufacture and sale of our products in certain states and countries may subject us to environmental and other
regulations. We also face increasing complexity in our product design as we adjust to legal and regulatory requirements relating
to our products. There is no assurance that such existing laws or future laws will not impair future earnings or results of
operations.
Business disruptions resulting from international uncertainties could negatively impact our profitability.
We derive, and expect to continue to derive, a significant portion of our revenue from international sales in various
European and Far East markets, and Canada. For the fiscal years ended January 2, 2016, December 27, 2014 and December 28,
2013, sales to non-U.S. customers accounted for 56.0%, 60.9% and 59.5% of total revenue, respectively. Our international
revenue and operations are subject to a number of material risks, including, but not limited to:
• difficulties in staffing, managing and supporting operations in multiple countries;
• difficulties in enforcing agreements and collecting receivables through foreign legal systems and other relevant legal
issues;
• fewer legal protections for intellectual property;
• foreign and U.S. taxation issues, tariffs, and international trade barriers;