Sonic Foundry Secures $8.5 Million in Debt Financing

Additional $1.2 million raised in equity agreement

Sonic Foundry, Inc, the trusted leader in video capture, management and streaming solutions, announced that it has secured $9.7 million in financing with three separate transactions. It entered into a Loan and Security Agreement with Neltjeberg Bay Enterprises, LLC (“NBE”) for a $5.5 million loan at an annual rate of 12% interest. In addition, the Company closed a Security Agreement and Promissory Note with Mark Burish, Chairman of the Sonic Foundry Board, for $3 million at the same interest rate as the NBE note. Mark Burish also purchased 1.2 million shares of common stock at a price of $1.02 per share.

“The total sum of $9.7 million gives us meaningful liquidity to continue the build out of our Vidable™ and Global Learning Exchange™ (GLX) initiatives. We are very optimistic that both new business lines will be significant contributors to revenues and long-term value creation for our shareholders”

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“The total sum of $9.7 million gives us meaningful liquidity to continue the build out of our Vidable™ and Global Learning Exchange™ (GLX) initiatives. We are very optimistic that both new business lines will be significant contributors to revenues and long-term value creation for our shareholders,” said Sonic Foundry CEO Joe Mozden, Jr. “In the current interest rate environment, it is especially gratifying that we could raise capital at favorable rates relative to other companies in the broad middle market. Access to growth capital has become increasingly more difficult, especially at fixed rates versus variable rates, which have become more prevalent. With these financing arrangements, we are confident that our growth strategy will allow us to readily cover the debt payments, while giving us the time and runway to achieve our objectives. While we have no control over the macro environment, we are committed to responsible management of our capital and business to the benefit of all our stakeholders.”

Mark Burish, Chairman of the Sonic Foundry Board, added, “These financing transactions, including my personal participation, demonstrate the tremendous confidence that our board has in Sonic Foundry’s future. It’s also important to note that the debt agreement was headed by Fred Kopko, who is managing director of NBE and a former board member of Sonic Foundry. Fred resigned from our board to focus his attention on investing in high-growth companies like the transaction we announced today. It has been an honor to work with Fred and on behalf of our board and management, I thank him for his leadership and commitment to our vision.”

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