Sonic Foundry Board Approves One-for-Ten Reverse Stock Split

MADISON, Wis. - November 2, 2009 - Sonic Foundry, Inc. (NASDAQ: SOFO) today announced that its Board of Directors has authorized a one-for-ten reverse stock split of its common stock. The reverse split will be effective at 6:01 p.m. ET on November 16, 2009. The reverse stock split affects all issued shares of the Company's common stock outstanding immediately prior to the effectiveness of the reverse stock split. The number of shares reserved for issuance under Sonic Foundry's equity compensation plans will also be reduced proportionately.

Sonic Foundry's common stock will start trading on a split-adjusted basis on the NASDAQ Capital Market at market open on November 17, 2009. Letters of transmittal are expected to be sent to stockholders shortly thereafter.

The number of shares of Sonic Foundry's common stock issued and outstanding will be reduced from approximately 36,069,000 shares to approximately 3,606,900 shares post-split, without accounting for fractional shares. Sonic Foundry will not issue any fractional shares of its common stock as a result of the reverse stock split. Instead, stockholders who would otherwise hold fractional shares will be entitled to receive cash (without interest or deduction) in lieu of such fractional shares in an amount equal to the fraction to which the stockholder would otherwise be entitled multiplied by the closing sales price of Sonic Foundry's common stock as reported on the NASDAQ Capital Market on November 16, 2009, as adjusted for the reverse stock split.

Sonic Foundry has retained American Stock Transfer & Trust Company to act as exchange agent for the reverse stock split. American Stock Transfer & Trust Company will manage the exchange of old, pre-reverse stock split shares for new, post-reverse stock split shares. Stockholders of record as of the effective time, which is November 16, 6:01 p.m. ET, will receive a letter of transmittal providing instructions for the exchange of their shares. Stockholders who hold their shares in "street name" will be contacted by their banks or brokers. No action by Sonic Foundry's stockholders is required at this time.