OOMA INC Debt Disclosure

6. DEBT

As of January 31, 2016, short-term debt of $0.6 million on the consolidated balance sheets related to equipment acquired under capital lease. The Company repaid this outstanding debt in April 2016 and did not have any debt as of January 31, 2017.

In April 2012, (amended in October 2012), the Company entered into a secured debt agreement (“Term Debt”) in the amount of $4.0 million, with an original maturity date in September 2015 and a fixed interest rate of 5.75%. In December 2012, the Company entered into an amended secured debt agreement, adding a revolving line of credit in the amount of $6.0 million (“the Revolver”) with original maturity of December 2014. The interest rate on the Revolver is 2.75% above the prime rate. In July 2014, the Company entered into an amended agreement to extend the maturity date of the Revolver until July 2016. In July 2015, the Company repaid the outstanding balance of $5.3 million under the Term Debt and the Revolver using a portion of the IPO proceeds. In July 2016, the Company entered into an amended agreement to extend the maturity of the Revolver to August 2016. The Revolver matured in August 2016.

In January 2015, the Company entered into an amended line of credit under a loan and security agreement with its current lender which increased the amount available under the Revolver to $12.0 million and added a new line of credit of up to $10.0 million. In January 2015, the Company drew down $5.0 million of this new line of credit. The interest rate on advances under the line of credit is 11%. The original maturity date of the line of credit was January 2018. The Company repaid this outstanding debt of $5.0 million in July 2015 using a portion of the IPO proceeds. In connection with the agreement, the Company issued warrants to purchase 76,630 shares of the Company’s common stock with an exercise price of $6.04 per share that are exercisable until January 2025. As of January 31, 2017, these warrants remained outstanding.

The Company has certain non-financial covenants in connection with the borrowings. As of January 31, 2016 the Company was in compliance with all the covenants under the Revolver agreement.

Total interest expense recognized was $18,000, $0.9 million and $0.3 million in each year ended January 31, 2017, 2016 and 2015, respectively. Total amortization of debt issuance costs recognized was zero, $0.1 million and $0.1 million in each year ended January 31, 2017, 2016 and 2015, respectively. Total interest expense recognized in fiscal 2016 included $0.3 million related to the write-off of non-cash deferred issuance costs due to the repayment of all of the outstanding debt in July 2015.