iRobot 2007 Annual Report Download - page 90

This credit facility contains customary events of default, including for payment defaults, breaches of
representations, breaches of affirmative or negative covenants, cross defaults to other material indebtedness,bank-
ruptcy and failure to discharge certain judgments. If a default occurs and is not cured within any applicable cure
period or is not waived, our obligations under the credit facility may be accelerated. At December 29, 2007, we were
in compliance with all covenants under the credit facility.
Equipment Financing Facility
On June 5, 2007, we entered into a $15 million secured equipment facility with Banc of America Leasing and
Capital, LLC under which we can finance the acquisition of equipment, furniture and leasehold improvements. We
may borrow amounts under the equipment facility until July 1, 2008 and any amounts borrowed during that period
will accrue interest at 30-day LIBOR plus 1%. After July 1, 2008, all amounts then outstanding under the equipment
line will be repaid in 60 equal monthly installments commencing in July 2008 and will accrue interest, at our
election, at either a fixed or variable rate of interest. Our obligations under the equipment facility will be secured by
any financed equipment. As of December 29, 2007, we had no amounts outstanding and $15.0 million available
under our equipment financing line of credit.
This equipment facility contains customary terms and conditions for equipment facilities of this type,
including, without limitation, restrictions on our ability to transfer, encumber or dispose of the financed equipment.
In addition, we are required to meet certain financial covenants customary to this type of agreement, including
maintaining a minimum specified tangible net worth, a minimum specified ratio of current assets to current
liabilities and a minimum specified annual net income.
This equipment facility contains customary events of default, including for payment defaults, breaches of
representations, breaches of affirmative or negative covenants, cross defaults to other material indebtedness,
bankruptcy and failure to discharge certain judgments. If a default occurs and is not cured within any applicable
cure period or is not waived, or if we repay all of our indebtedness under our credit facility with Bank of America,
N.A., our obligations under this equipment facility may be accelerated. At December 29, 2007, we were in
compliance with all covenants under the equipment facility.
Working Capital and Capital Expenditure Needs
We currently have no material cash commitments, except for normal recurring trade payables, expense
accruals and operating leases, all of which we anticipate funding through our existing working capital line of credit,
working capital and funds provided by operating activities. We do anticipate making significant capital commit-
ments in the next four months for expenditures associated with the planned move to our new corporate headquarters
on or about May 1, 2008. These expenditures will be jointly funded by the landlord for this site and by us. Other than
this project, we do not currently anticipate significant investment in property and equipment, and we believe that our
outsourced approach to manufacturing provides us with flexibility in both managing inventory levels and financing
our inventory. We believe our existing cash, cash equivalents, cash provided by operating activities, and funds
available through our working capital line of credit will be sufficient to meet our working capital and capital
expenditure needs over at least the next twelve months. In the event that our revenue plan does not meet our
expectations, we may eliminate or curtail expenditures to mitigate the impact on our working capital. Our future
capital requirements will depend on many factors, including our rate of revenue growth, the expansion of our
marketing and sales activities, the timing and extent of spending to support product development efforts, the timing
of introductions of new products and enhancements to existing products, the acquisition of new capabilities or
technologies, and the continuing market acceptance of our products and services. Moreover, to the extent that
existing cash, cash equivalents, cash from operations, and cash from short-term borrowing are insufficient to fund
our future activities, we may need to raise additional funds through public or private equity or debt financing.
Although we are currently not a party to any agreement or letter of intent with respect to potential investments in, or
acquisitions of, businesses, services or technologies, we may enter into these types of arrangements in the future,
which could also require us to seek additional equity or debt financing. Additional funds may not be available on
terms favorable to us or at all.
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