Sonic Foundry Exercises Redemption Provisions of Common Stock Purchase Warrants

Sonic Foundry, Inc. (Nasdaq: SOFO) today issued a Notice of Redemption to holders of its public warrants and has fixed February 21, 2000, as the redemption date. The approximately 900,000 currently outstanding public warrants were to expire on April 22, 2003. The Company expects to receive a maximum of $10.0 million in gross proceeds from the exercise of such warrants.

Each public warrant is exercisable to purchase one share of common stock at a price of $11.25 until 5:30 p.m. Eastern Standard Time on February 18, 2000. If the warrants are not exercised by such time, the warrant holders of record shall be entitled only to payment of the redemption price of $0.10 per warrant upon surrender of the warrant. Any warrants not surrendered will not be entitled to payment.

As of the close of business on January 19, 2000, the Company reported that 254,423, or 22%, of the originally issued 1,145,387 public warrants have been voluntarily exercised, providing the Company with $2.8 million of proceeds.

Information regarding the exercise and the redemption of the warrants is provided in the Notice of Redemption, which has been mailed to all registered holders of the warrants. In addition, holders may obtain further information regarding the exercise or the redemption of the warrants by contacting Continental Stock Transfer & Trust Company at (212) 509-4000 or our financial advisors, H.C. Wainwright & Co., Inc., at (617) 788-9594.