Sonic Foundry to Acquire Jedor Inc.

Sonic Foundry, Inc. (Nasdaq: SOFO), a leading developer and marketer of Internet media software tools, services, and systems, announced today that it has entered into a definitive agreement to acquire all of the outstanding stock of Jedor Inc., a Canadian-based developer of leading edge image and animation technology. Terms of the agreement were not disclosed.

Jedor has redefined the field of animation with the recent introduction of Viscosity[TM], an award-winning, Windows-based authoring tool that allows the user to seamlessly edit and arrange frames of animation or video sequences. Viscosity is a 2D animation authoring tool used for Web projects and offers options and features including on-screen thumbnails of every frame, drag and drop options for frames, and multi-frame and multi-layer editing. Viscosity was recently selected by ZDNet as a Reviewer's Pick and received a 5 star rating.

Rimas P. Buinevicius, Chairman and Chief Executive Officer of Sonic Foundry, said, "The acquisition of Jedor represents a tremendous addition of technology to the Sonic Foundry product and service offering. Viscosity will be a terrific synergistic complement to our Vegas[TM] Video technology effort. Through our previous work together, we expect the Jedor team will contribute immediately to our goal of becoming the preeminent media solutions Company in the world."

Tony Jedlovsky, President of Jedor Inc., said, "This is a terrific combination and growth opportunity with a world class technology leader. Viscosity will now have the marketing and sales power of Sonic Foundry behind it. Additionally, Jedor's technology team is excited to join the Sonic Foundry team, and we believe the addition of Viscosity to the Sonic Foundry product line will represent an unprecedented Internet media authoring solution."

The transaction is subject to customary closing conditions including the completion of due diligence.

About Jedor

Jedor Inc., incorporated in 1998, is a privately owned software development firm located in Waterloo, Ontario, Canada. Jedor specializes in multimedia software development and consulting services for the Windows platform. The Company was established with the goal of developing software tools for the increasingly demanding field of multimedia authoring. Company employees have experience from a wide range of companies including Microsoft, Corel, Sonic Foundry, and NORTEL, with extensive experience in graphics, film and television, music, and engineering.