iRobot extends loan covenant waiver as strategic review continues

iRobot Corporation (NASDAQ:IRBT), currently trading at $5.58 with a market capitalization of $175 million, announced Monday that it has entered into a sixth amendment to its credit agreement with TCG Senior Funding L.L.C., an affiliate of The Carlyle Group, and its lenders. The amendment, signed October 22, extends the waiver period for certain covenant requirements under the company’s senior secured term loan credit facility to December 1, 2025.

According to the SEC filing, the lenders have waived iRobot’s obligations to provide an auditor’s report without a going concern qualification for the company’s fiscal year 2024 financial statements and to maintain a minimum level of core assets during the waiver period. This extension follows five previous amendments, which had initially set the waiver to expire October 24.

The company disclosed that its financial condition continues to decline and that it may be unable to secure additional funding needed to continue its operations if the waiver is not extended further or if new capital is not obtained. As of June 28, 2025, the fair value of iRobot’s term loan was $203.2 million, and cash and cash equivalents totaled $40.6 million. The filing states that the cash balance has continued to decline since then, despite a drawdown of $36 million in previously restricted cash.

iRobot noted that failure to comply with the loan covenants after the waiver period could result in default, acceleration of repayment obligations, and potential bankruptcy proceedings. The company indicated that in such a scenario, it may be forced to curtail or cease operations, and stockholders could lose their investment.

The filing also states that iRobot’s ongoing review of strategic alternatives, including a potential sale or refinancing, remains active. Last week, the last remaining counterparty to a potential sale withdrew after exclusive negotiations, and the company is not in advanced talks with any other parties. The company said there is no assurance that the review will result in any transaction.

This information is based on a statement in a press release filed with the Securities and Exchange Commission.

In other recent news, iRobot Corporation disclosed that its strategic review process has encountered a significant challenge. The company revealed in an SEC filing that the last remaining potential buyer proposed an acquisition price "significantly lower" than the stock’s recent trading levels, casting doubt on the likelihood of a successful sale. Additionally, iRobot announced it has extended loan covenant waivers with lenders through October 24, following an agreement with TCG Senior Funding L.L.C. and other lenders. This amendment allows iRobot to delay certain loan covenant requirements, including providing an auditor’s report on its 2024 financial statements without a going concern qualification. The auditor’s report had expressed substantial doubt about iRobot’s ability to continue as a going concern.

Meanwhile, iRobot’s stock experienced a dramatic surge of 45%, attributed to a short squeeze. This event was driven by a high level of short interest, which stood at approximately 8.2 million shares, or about 28% of the available float. These recent developments highlight the ongoing challenges and market activities surrounding iRobot Corporation.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.