Sonic Foundry Completes $18.5 Million In Private Financing

Sonic Foundry, Inc. (Nasdaq: SOFO), a leading developer and marketer of digital media and Internet software tools, services, and systems, today announced it has completed an $18.5 MM private financing of restricted common stock. The investment consisted of funding from Societe Generale and funds managed by Essex Investment Management Company, LLC, an affiliate of Affiliated Managers Group Inc. (NYSE: AMG). Sonic Foundry also received promotional consideration to be received from Warner Bros. Online and Entertaindom, in connection with a strategic business relationship also announced today. C.E. Unterberg, Towbin acted as placement agent in the transaction.

Sonic Foundry will use the financing primarily for operational research and development expenses associated with the expansion of its Media Services division, working capital, and general corporate purposes as well as supporting recently announced strategic relationships.

Rimas P. Buinevicius, Chairman and Chief Executive Officer of Sonic Foundry, stated, "This private financing provides us with the flexibility to further position Sonic Foundry as a leading developer and marketer of digital media and Internet software tools, services, and systems." He continues, "Warner Bros.' role also further solidifies our strategic partnership with them to bring the highest quality content and entertainment to Internet users."