Sonic Foundry, Inc.

 Sonic Foundry, Inc. (Nasdaq: SOFO) reported a GAAP net income of $0.06 per share for its third quarter of its fiscal year ending September 30, 2010.  Sonic Foundry also reported revenues of $5.6 million for 3Q10, a 12% increase over 3Q09.  Sonic Foundry continues to enjoy increasing renewals and new customers in its education segment.  Sonic Foundry is enjoying higher sales penetration to community colleges and trade schools.  While sales to top education institutions has affirmed Sonic Foundry’s leadership position in rich media capture and presentation, the community college niche is very large and is a focus of national priorities on education and retraining.  Sonic Foundry has again reduced overhead, including marketing and administration, without reducing sales of product development.  We agree with management that Sonic Foundry may have passed an inflection point with potential to experience significant operating leverage.  The third and fourth quarter’s of Sonic Foundry’s fiscal years are typically its financially strongest.