Sonic Foundry Raises $24 Million in Private Financing

Sonic Foundry, Inc. (Nasdaq: SOFO), today announced it raised $24 million in a private financing of restricted common stock led by RS Investment Management and Capital Trust Management. C.E. Unterberg, Towbin acted as placement agent in the transaction.

"The funds from this transaction, combined with the proceeds from our warrant conversion, will help us realize the potential for our Media Services division," said Rimas Buinevicius, Chairman and Chief Executive Officer of Sonic Foundry. "We have received a significant amount of interest for our media encoding services, and we continue to build the infrastructure needed to support full-scale service and systems offerings for audio and video content conversion."

The Company said proceeds from the financing will be used primarily for operational and research and development expenses associated with the expansion of its media services division and for working capital and general corporate purposes.