irobot extends waiver period with lenders, issues stock warrants

iRobot Corporation (NASDAQ:IRBT), currently valued at $104.2 million in market capitalization, has extended its waiver period with lenders, according to a recent SEC filing. The company, which InvestingPro data shows is operating with a significant debt burden of $249.38 million, entered into Amendment No. 3 of its Credit Agreement on Thursday, extending the Initial Waiver Period to August 14, 2025. This agreement involves TCG Senior Funding L.L.C., an affiliate of The Carlyle Group (NASDAQ:CG), acting as the administrative and collateral agent.

The extension follows previous amendments that initially set the waiver period to expire on May 6, 2025, and later extended to June 6, 2025. The waiver allows iRobot to bypass certain covenant obligations, including providing an auditor’s report without exceptions on its ability to continue as a going concern and maintaining a minimum level of core assets. According to InvestingPro analysis, the company’s weak financial health is evidenced by its concerning current ratio of 0.55, indicating potential liquidity challenges. Subscribers to InvestingPro can access 12 additional key financial tips about iRobot’s current situation.

As part of the latest amendment, iRobot is required to make a $4 million prepayment using cash from a restricted account. This amount will be applied to reduce the outstanding principal of the Term Loan. Additionally, iRobot issued warrants to lenders to purchase 1,556,323 shares of its common stock, representing 5% of the company’s outstanding shares as of June 4, 2025. These warrants are exercisable at $0.01 per share and expire on June 5, 2035.

The issuance of these warrants was made under an exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933. The shares associated with these warrants cannot be offered or sold in the United States without registration or an applicable exemption.

The company also updated its risk factors, highlighting the potential consequences of not securing further waivers. iRobot’s senior secured term loan credit facility includes a first-priority lien on substantially all its assets, which could limit its operational flexibility.

The filing underscores iRobot’s reliance on continued lender waivers to avoid default, as the company remains unable to meet certain financial covenants. With negative free cash flow of $61.12 million in the last twelve months and rapidly depleting cash reserves, the situation remains challenging. The earliest opportunity for compliance is expected with the filing of its Annual Report for the year ending January 3, 2026, anticipated in March 2026. For detailed analysis of iRobot’s financial health and future prospects, InvestingPro offers comprehensive coverage including exclusive financial metrics and expert insights.

This information is based on iRobot’s 8-K filing with the Securities and Exchange Commission.

In other recent news, iRobot Corp . reported a significant decline in its fourth-quarter earnings, with a loss per share of $2.06, compared to a loss of $1.82 the previous year. Revenue for the quarter fell to $172 million from $307.5 million year-over-year, missing analyst expectations. The company attributed the revenue drop to increased promotional spending and challenges from competitors. Additionally, iRobot’s full-year revenue for 2024 decreased to $681.8 million from $890.6 million in 2023. In light of these financial struggles, the company issued a going concern warning due to uncertainties about its ability to sustain operations over the next year. The board of directors has initiated a strategic review to explore alternatives such as refinancing debt or a potential sale. Meanwhile, iRobot announced changes to its board of directors’ compensation, including a new cash retainer for certain committee members. Furthermore, Dr. Ruey-Bin Kao will not seek re-election to the board, with no successor announced yet.

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