Sonic Foundry, Inc. (“Sonic Foundry” or the “Company”) (NASDAQ: SOFO), the trusted leader in video capture, management and streaming solutions, today 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,” 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.”
About Sonic Foundry
Founded in 1991 and headquartered in Madison, Wis., Sonic Foundry (NASDAQ: SOFO) is dedicated to transforming how the world works and learns through innovative and scalable technology solutions. We help customers maximize the value of their video initiatives and infrastructure while leveraging our expertise and global footprint to help unlock a smarter, more connected world for learners, workers, and entrepreneurs everywhere. Sonic Foundry’s family of brands includes Mediasite®, Video Solutions, Vidable™ and Global Learning Exchange™ which are trusted by thousands of educational institutions, corporations, and health care organizations in dozens of countries around the world. For more information on how Sonic Foundry’s solutions can empower you and your organization to seize today’s opportunities as well as those of the future, visit www.sonicfoundry.com.
Forward Looking Statements
This news release contains forward-looking statements about the products and services of Sonic Foundry within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include statements about our products and services, our customer base, strategic investments, new partnerships, our future operating results, and any statements we make about the company’s future. These types of statements address matters that are subject to many risks and uncertainties. Actual results could differ materially from the forward-looking guidance we provide. Any forward-looking statements should be considered in context of the risk factors disclosed in our periodic forms 10Q, 10K and other filings with the SEC. These filings can be accessed on-line at www.sec.gov and other websites or can be obtained from the company’s investor relations department. All of the information and disclosures we make in this news release regarding our business, including any forward-looking guidance, are as of the date given and we assume no obligation to update or change this information, regardless of subsequent events.
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