iRobot 2008 Annual Report Download - page 101

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In addition, we are required to meet certain financial covenants customary with this type of agreement,
including maintaining a minimum specified tangible net worth and a minimum specified annual net income.
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,
bankruptcy 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.
As of December 27, 2008, we were in compliance with all covenants under the credit facility.
Equipment Financing Facility
We have a $5.0 million secured equipment facility with Banc of America Leasing & Capital, LLC under which
we can finance the acquisition of equipment, furniture and leasehold improvements. We may borrow amounts under
the equipment facility until April 30, 2009 and any amounts borrowed during that period will accrue interest at
30-day LIBOR plus 1%. After April 30, 2009, all amounts then outstanding under the equipment line will be repaid
in 60 equal monthly installments commencing in April 2009 and will accrue interest, at our election, at either a fixed
or variable rate of interest determined as a function of LIBOR at the time of borrowing. Our obligations under the
equipment facility will be secured by any financed equipment.
As of December 27, 2008, we had no amounts outstanding and $5.0 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 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.
As of December 27, 2008 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 current cash balance, existing working
capital line of credit, working capital and funds provided by operating activities. 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. Pursuant to the terms of
the Nekton acquisition agreement, additional consideration up to $5 million may be paid based on the achievement
of certain business and financial milestones. 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.
53
Form 10-K