iRobot Extends Waiver Period for Credit Agreement to August 14, 2025

iRobot Corporation has extended the waiver period for its credit agreement to August 14, 2025. The company has also made a $4 million prepayment and issued warrants to purchase 1.56 million shares of common stock to lenders. The warrants have an exercise price of $0.01 per share and expire on June 5, 2035.

iRobot Corporation (NASDAQ: IRBT) has extended its credit agreement waiver period to August 14, 2025, according to a recent SEC filing [1]. The company, valued at $104.2 million in market capitalization, has entered into Amendment No. 3 of its Credit Agreement, which allows it to bypass certain covenant obligations. This waiver period was previously set to expire on May 6, 2025, and later extended to June 6, 2025.

As part of the latest amendment, iRobot is required to make a $4 million prepayment using cash from a restricted account. This prepayment will be applied to reduce the outstanding principal of the Term Loan. Additionally, iRobot has 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 [2].

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 [2].

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 [1].

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 [1].

The recent news also reported a significant decline in iRobot’s 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 [3].

The company 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 [3].

Institutional investors have also shown interest in iRobot. Squarepoint Ops LLC bought a new position in shares of iRobot Co. (NASDAQ: IRBT) during the 4th quarter, according to its most recent filing with the Securities & Exchange Commission [4]. Several other institutional investors and hedge funds have also recently added to or reduced their stakes in IRBT.

References:
[1] https://www.investing.com/news/sec-filings/irobot-extends-waiver-period-with-lenders-issues-stock-warrants-93CH-4084673
[2] https://www.marketscreener.com/quote/stock/IROBOT-CORPORATION-9722/news/IRobot-Corporation-Enters-into-Amendment-No-3-to-the-Credit-Agreement-Which-Further-Extended-the-I-50177766/
[3] https://www.tipranks.com/news/company-announcements/irobot-extends-credit-agreement-waiver-period
[4] https://www.marketbeat.com/instant-alerts/filing-squarepoint-ops-llc-purchases-new-position-in-irobot-co-nasdaqirbt-2025-06-02/