UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)

☒	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal period ended September 30, ~~2022~~2023

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 000-30407

SONIC FOUNDRY, INC.

(Exact name of registrant as specified in its charter)

Maryland		39-1783372
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

222 W. Washington Ave, Madison, WI 53703		(608) 443-1600
(Address of principal executive offices)		(Issuer’s telephone number)

Securities registered pursuant to Section 12(b) of the Act: None

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	SOFO	Nasdaq Capital Market

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a small reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☐☒ Smaller reporting company ☒ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

The aggregate market value of the registrant’s common stock held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the Registrant’s most recently completed second fiscal quarter was approximately $126,~~023~~424,~~119~~001.

The number of shares outstanding of the registrant’s common equity was 12,~~070~~139,~~654~~360 as of December 515, ~~2022~~2023.

Table of Contents

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Proxy Statement for the ~~2022~~2024 Annual Meeting of Stockholders are incorporated by reference into Part III. A definitive Proxy Statement pursuant to Regulation 14A will be filed with the Commission for required sections.

Table of Contents

Sonic Foundry, Inc.

Annual Report on Form 10-K

For the Year Ended September 30, ~~2022~~2023

TABLE OF CONTENTS

		PAGE NO.
PART I
Item 1.	Business	4
Item 1A.	Risk Factors	910
Item 1B.	Unresolved Staff Comments	2428
Item 2.	Properties	24
Item 1C.	Cybersecurity	28
Item 3.	Legal Proceedings	25
Item 2.	Properties	28
Item 4.	Mine Safety Disclosures	25
Item 3.	Legal Proceedings	29
Item 4.	Mine Safety Disclosures	29
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	2630
Item 6.	~~Selected Consolidated Financial Data~~[Reserved]	2731
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2832
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	2840
Item 8.	Consolidated Financial Statements and Supplementary Data:	3741
	Report of Wipfli, LLP, Independent Registered Public Accounting Firm (PCAOB Firm ID 344)	3741
	Consolidated Balance Sheets	3943
	Consolidated Statements of Operations	4044
	Consolidated Statements of Comprehensive Loss	4145
	Consolidated Statements of Stockholders’ Equity (Deficit)	4246
	Consolidated Statements of Cash Flows	4347
	Notes to Consolidated Financial Statements	4549
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	7077
Item 9A.	Controls and Procedures	7077
Item 9B.	Other Information	7178
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	7279
Item 11.	Executive Compensation	7279
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	7279
Item 13.	Certain Relationships and Related Transactions, and Director Independence	7279
Item 14.	Principal Accounting Fees and Services	7279

Table of Contents

Sonic Foundry, Inc.

Annual Report on Form 10-K

For the Year Ended September 30, ~~2022~~ 2023

This annual report on Form 10-K (this "Report") contains statements that are considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and its rules and regulations (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended, and its rules and regulations (the "Exchange Act"). When used in this Report, the words “anticipate”, “expect”, “plan”, “believe”, “seek”, “estimate” and similar expressions are intended to identify such forward-looking statements. These are statements that relate to future periods and include, but are not limited to, statements about the proposed sale of our Mediasite business, the features, benefits and performance of our products and services, our ability to introduce new product offerings and increase revenue from existing products, expected expenses including those related to selling and marketing, product development and general and administrative, our beliefs regarding the health and growth of the market for our products, anticipated increase in our customer base, expansion of our products functionalities, expected revenue levels and sources of revenue, expected impact, if any, of legal proceedings, the adequacy of liquidity and capital resources, and expected growth in business. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. These risks and uncertainties include, but are not limited to, the risk that the proposed saloe of our Mediasite business may not be completed in a timely manner or at all; the satisfaction of conditions to completing the transaction, including the ability to secure approval by a two-thirds vote of the Company’s stockholders; risks that the proposed transaction could disrupt current plans and operations; costs, fees and expenses related to the proposed transaction, market acceptance for our products, our ability to attract and retain customers and distribution partners for existing and new products, our ability to control our expenses, our ability to recruit and retain employees, the ability of distribution partners to successfully sell our products, legislation and government regulation, shifts in technology, global and local business conditions, our ability to effectively maintain and update our products and service portfolio, the strength of competitive offerings, the prices being charged by those competitors, and the risks discussed under the heading “Risk Factors” and elsewhere herein. These forward-looking statements speak only as of the date hereof. We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

As used in this report, the terms “we,” “us,” “our,” “Sonic Foundry” and the “Company” mean Sonic Foundry, Inc. and its subsidiaries collectively, unless the context indicates another meaning, and the term “common stock” means shares of our common stock, par value of $0.01 per share.

PART I

ITEM 1. BUSINESS

Who We Are

Sonic Foundry, Inc. (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, students, corporations, and health care organizations in dozens of countries around the world.

Founded in 1991, Sonic Foundry, Inc. was incorporated in Wisconsin in March 1994 and merged into a Maryland corporation of the same name in October 1996. Our executive offices are located at 222 West Washington Ave., Madison, Wisconsin 53703 and our telephone number is (608) 443-1600. Our Sonic Foundry International B.V. ("Sonic Foundry International") (formerly Media Mission B.V.) office is located in the Netherlands, and our Mediasite K.K. ("Mediasite KK" or "MSKK") office is located in Japan. Our corporate website is www.sonicfoundry.com. In the “Investors” section of our website we make available, free of charge, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to reports required to be filed pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as soon as reasonably practicable after the filing of such reports with the Securities and Exchange Commission.

~~Our~~On ~~Solutions~~January ~~Address~~2, ~~Today'~~2024 the Company entered into a Stock and Asset Purchase Agreement (the “Purchase Agreement”) to sell its Mediasite product and service business (the “Mediasite Asset Sale”) to Enghouse Systems Ltd. and certain of its subsidiaries (collectively, the “Buyer”). Under the terms of the Purchase Agreement, Sonic Foundry will sell the assets of its Mediasite business including its Sonic Foundry International and MSKK subsidiaries for US $15.5 million in cash (subject to certain price adjustments set forth in the Purchase Agreement). Closing of the transaction is subject to approval by the holders of at least two-thirds of the outstanding shares of common stock, as well as a number of other customary closing conditions. In connection with the execution of the Purchase Agreement, solely in their respective capacities as stockholders of the Company, each of our executive officers and directors and one other significant stockholder who beneficially owns greater than 5% of the Company’s ~~Communication~~outstanding common has executed and ~~Education~~delivered ~~Challenges~~a Support Agreement pursuant to which, among other things, each such stockholder has agreed, subject to the terms of such Support Agreement, to vote all shares of common stock beneficially owned by such stockholder in favor of the approval of the Purchase Agreement and the Mediasite Asset Sale. Upon the closing of the transaction, our business will consist solely of our Vidable® and Global Learning Exchange™ businesses. The information in this report does not give effect to the proposed transaction.

In this digital-first world, video adoption and utilization are at the core of every remote working and learning environment, helping to facilitate communication and collaboration, With Sonic Foundry’s 30-year reputation as a leader in video technology and deep relationships in higher education, the Company is well-positioned to capitalize on the fundamental needs for rapid and remote communication in the workplace and classroom. Sonic Foundry’s products and services help customers efficiently and cost-effectively address the challenge of sharing information whenever and wherever content is consumed. 4

~~Our~~ Table ~~Brands~~  of Contents

~~Mediasite~~Sonic Foundry, Inc.

~~Video~~Annual ~~Capture~~Report ~~Solutions~~on Form 10-K

~~Mediasite®~~For ~~is an integrated and scalable video management platform that quickly and cost-effectively automates~~ the ~~capture,~~Year ~~management,~~Ended ~~and~~September ~~distribution of live and on-demand video content. Ideal for a wide spectrum of use cases from higher ed classrooms~~30, virtual lab experiences to corporate townhalls and online training modules, Mediasite is used by over 1500 educational institutions, corporations, health organizations and government entities globally. 2023

~~Mediasite~~Our ~~provides~~Solutions ~~the~~Address ~~following~~Today's ~~primary~~Communication ~~flexible hardware~~ and ~~software~~Education ~~solutions~~Challenges ~~to record and upload any video-based content from anywhere, automatically:~~

•In ~~Mediasite~~this ~~Recorder~~digital-first ~~and~~world, ~~Recorder~~video ~~Pro:~~adoption ~~The Recorder~~ and ~~Recorder~~utilization ~~Pro~~ are ~~built-in~~at ~~room~~the ~~appliances~~core ~~that~~of ~~use~~every ~~schedule-based~~in ~~capture~~person and ~~advanced~~remote ~~audio/video~~working ~~integration~~or learning environment, helping to ~~fully~~facilitate ~~automate~~communication ~~high~~and collaboration.With Sonic Foundry’s 30-~~quality~~year reputation as a leader in video technology and ~~content~~deep ~~recording~~relationships in ~~lecture~~higher ~~halls~~education, ~~training~~the ~~rooms,~~Company ~~simulation~~is ~~labs~~well-positioned ~~and~~to ~~auditoriums.~~capitalize ~~The~~on ~~room~~the ~~can~~fundamental beneeds ~~scheduled~~for torapid ~~automatically record~~ and ~~publish~~remote tocommunication ~~Mediasite,~~in sothe ~~instructors~~workplace and ~~speakers~~classroom. ~~can~~Sonic ~~focus~~Foundry’s onproducts ~~teaching~~ and ~~presenting,~~services ~~free~~help ~~from~~customers ~~technology~~efficiently ~~worries~~ and ~~confident~~cost-effectively ~~that~~address ~~everything~~the ~~said~~challenge of sharing information whenever and ~~presented~~wherever content is ~~being captured~~consumed.

4 Our Brands 

~~Table of Contents~~ Mediasite

~~Sonic~~Video ~~Foundry,~~Capture ~~Inc.~~ Solutions (Hardware)

~~Annual~~Mediasite® ~~Report~~is onan ~~Form~~integrated 10and scalable video management platform that quickly and cost-K effectively automates the capture, management, and distribution of live and on-demand video content. Ideal for a wide spectrum of use cases from higher education classrooms, virtual lab experiences to corporate townhalls and online training modules, Mediasite is used by over 1,500 educational institutions, corporations, health organizations and government entities globally.

~~For~~Mediasite provides the ~~Year~~following ~~Ended~~primary ~~September~~flexible 30hardware and software solutions to record and upload any video-based content from anywhere, ~~2022~~ automatically:

• Mediasite ~~Mobile~~Recorder ~~Recorders~~and Recorder Pro: The ~~Mobile~~Recorder and Recorder isPro aare ~~portable~~built-in ~~recording~~room ~~device~~appliances ~~used~~that touse schedule-based capture and ~~stream~~advanced ~~broadcast-quality~~ audio/video ~~from~~integration ~~any~~to ~~environment~~fully ~~when~~automate ~~portability~~high-quality isvideo ~~key.~~and ~~Designed~~content ~~for~~recording ~~on-the-go~~in ~~webcasting~~lecture halls, ~~hybrid~~training ~~events~~rooms, ~~guest~~simulation ~~speakers~~labs and ~~conferences,~~auditoriums. ~~the~~The ~~lightweight~~room ~~design~~can ~~moves~~be ~~easily~~scheduled ~~from~~to ~~location~~automatically record and publish to ~~location~~Mediasite, so instructors and speakers can befocus ~~set~~on upteaching and ~~ready~~presenting, tofree ~~record~~from intechnological ~~only~~worries aand ~~few~~confident ~~minutes~~that everything said and presented is being captured.

• Mediasite Mosaic & Mosaic Pro: Formerly known as My Mediasite, Mosaic allows instructors, employees, and students to create high quality videos, screencasts and slideshows from their computers or mobile devices with just one click. From demos and video training to flipped classes, lectures and assignments, everything needed to record, upload, manage and publish personal videos is in one simple-to-use tool, requiring no pro video skills. Mosaic Pro extends those desktop software capabilities to multi-use PC’s commonly used in classrooms and training rooms by adding full automation workflows and administrative controls that allow presenters to effortlessly publish video content from shared learning spaces. 5

~~The~~ Table ~~COVID pandemic permanently disrupted the way we live, work, and learn with video emerging as critical tool to communicate and learn. As part~~ of ~~Sonic Foundry’s end-to-end video solutions, Mediasite video management and delivery solutions ensure the rapid and efficient delivery of recorded and live content.~~ Contents

~~Video~~Sonic ~~Management~~Foundry, ~~and Delivery Solutions~~ Inc.

~~Mediasite~~Annual isReport aon ~~scalable,~~Form ~~reliable, and secure solution to manage, search, analyze, publish, and stream video content. With Mediasite, government, businesses, and educational institutions can:~~ 10-K

•For ~~Automatically~~the ~~publish~~Year ~~video~~Ended toSeptember ~~a learning management system (LMS)~~30, content management system (CMS), training portal or any website • Centrally manage and secure any video • Create an enterprise or campus YouTube channel • Deepen engagement and improve learning with quizzing, annotations, comments, polls, surveys and other interactive tools • Analyze viewing metrics to measure learner engagement and outcomes • Search everything with fully indexed audio, video and slide content • Stream live and on-demand video to any device2023

• Mediasite OnMobile Recorders: The Mobile Recorder is a portable recording device used to capture and stream broadcast-~~Premises~~quality orvideo ~~Mediasite~~from ~~Cloud~~ any environment when portability is key. Designed for on-the-go webcasting, hybrid events, guest speakers and conferences, the lightweight design moves easily from location to location and can be set up and ready to record in only a few minutes.

~~Mediasite~~Video isCapture ~~available~~Solutions ~~as either an on-premises license or as a SaaS~~ (Software ~~as a Service~~) offering within our Mediasite Cloud. Customers can conveniently host and manage all their content with Mediasite Cloud, or use it as needed for large events to divert heavy viewing traffic from their on-premises Mediasite deployment. Our co-located and high availability data centers and experienced team successfully manage customers’ cloud-based video streaming in a secure, fault-tolerant environment. During 2020, the Company made an investment in a new dual redundant, high availability data center in the United Kingdom, which went online at the end of September 2020. The Company also upgraded its existing US data centers, which went online during the first calendar quarter of 2021 and in fiscal 2023 we are transitioning to a public cloud environment. 

5 • Mediasite Mosaic & Mosaic Pro: Mosaic allows instructors, employees, and students to create high quality videos, screencasts and slideshows from their computers or mobile devices with just one click. From demos and video training to flipped classes, lectures and assignments, everything needed to record, upload, manage and publish personal videos is in one simple-to-use tool, requiring no professional video skills. Mosaic Pro extends those desktop software capabilities to multi-use PC’s commonly used in classrooms and training rooms by adding full automation workflows and administrative controls that allow presenters to effortlessly publish video content from shared learning spaces. •Mediasite Capture: Released in 2023, Mediasite Capture is a simple, browser-based recording application that provides users a quick, intuitive way to record their camera, microphone, and desktop to create high quality, rich media presentations independent of a desktop-based application.

~~Table~~Video is a critical communication and learning tool that has become part of ~~Contents~~ everyday life for businesses and consumers. As part of Sonic Foundry’s end-to-end video solutions, Mediasite video management and delivery solutions ensure the rapid and efficient delivery of recorded and live content.

~~Sonic~~Video ~~Foundry,~~Management ~~Inc.~~ and Delivery Solutions

~~Annual~~Mediasite ~~Report~~is ona ~~Form~~scalable, ~~10-K~~ reliable, and secure solution to manage, search, analyze, publish, and stream video content. With Mediasite, government, businesses, and educational institutions can:

~~For~~• ~~the~~Automatically ~~Year~~publish ~~Ended~~video ~~September~~to 30a learning management system (LMS), ~~2022~~ content management system (CMS), training portal or any website • Centrally manage and secure any video • Create an enterprise or campus YouTube channel • Deepen engagement and improve learning with quizzing, annotations, comments, polls, surveys and other interactive tools • Analyze viewing metrics to measure learner engagement and outcomes • Search everything with fully indexed audio, video and slide content • Stream live and on-demand video to any device

~~Vidable™~~ Mediasite On-Premises or Mediasite Cloud

~~Vidable™~~Mediasite ~~will~~is beavailable anas ~~integrated~~either ~~collection~~an ~~of AI~~on-~~powered~~premises ~~video~~license ~~analysis~~or ~~and~~as ~~enhancement~~a SaaS ~~tools~~(Software ~~designed~~as toa ~~operate~~Service) atoffering ~~enterprise~~within ~~scale.~~our InMediasite ~~today’s~~Cloud. ~~enterprise~~Customers ~~environment,~~can ~~video~~conveniently ishost ~~everywhere.~~and ~~With~~manage soall ~~much~~their content ~~being~~with ~~created~~Mediasite ~~and shared~~Cloud, ~~traditional~~or ~~tools~~use ~~and~~it ~~processes~~as needed for ~~managing~~large ~~video~~events ~~cannot~~to ~~keep~~divert ~~up.~~heavy ~~With~~viewing ~~today’s~~traffic ~~cutting-edge~~from ~~advancements~~their inon-premises AIMediasite ~~and~~deployment. MLIn ~~technology~~2020, ~~it’s~~the ~~possible~~Company tomade ~~achieve~~an investment in ~~minutes,~~a ornew ~~seconds~~dual redundant, ~~what~~high ~~would~~availability ~~have~~data ~~previously~~center ~~required~~in ~~days~~the orUnited ~~weeks~~Kingdom, ofwhich ~~painstaking~~went ~~effort.~~online ~~Vidable~~at ~~assembles~~ the ~~most~~end ~~applicable~~of ~~and~~September ~~functional AI video capabilities and delivers access to those tools through a single integrated platform~~2020. ~~From~~The ~~simple~~Company AValso ~~quality~~upgraded ~~edits~~its ~~like~~existing ~~audio~~US ~~clean-up,~~data ~~background blurs~~centers, ~~and~~which ~~lighting~~went online ~~correction,~~during tothe ~~engagement-oriented~~first ~~enhancements~~calendar ~~like~~quarter ~~summaries~~of 2021 and ~~quizzing, Vidable can provide users with an all-~~in~~-one~~ ~~pipeline~~fiscal ~~for~~2023 ~~enhancing~~through ~~the~~early ~~quality,~~fiscal ~~accessibility,~~2024 ~~and~~we ~~engagement~~are ~~value~~transitioning ofto ~~their~~a ~~entire~~public ~~video~~cloud ~~library~~environment.  

~~Global Learning Exchange™~~ 6

~~Global~~ Table ~~Learning~~of Exchange™ (GLX) provides students in emerging countries access to higher education in flexible, cost effective, locally supported environments. GLX plans to open “hubs” in target countries, which will serve as support centers where local students can study, network with other students, obtain Wi-Fi access and receive educational and career support from a local hub team. Contents

~~The~~Sonic ~~Global Learning Exchange launched and opened its first hub in Nassau~~Foundry, ~~Bahamas in July 2022 and has begun enrolling students~~Inc. In September 2022, GLX announced a partnership with UNESCO’s Read and Earn Federation to launch and promote a Nigeria-based education and skills development program. This partnership is expected to provide access and expedite enrollment of Nigerian higher ed students as GLX looks to expand into other markets.

InAnnual ~~2022,~~Report ~~Global~~on ~~Learning~~Form Exchange signed agreements with three US universities and one skill certification provider to provide students in emerging countries with access to coursework, certifications, and degrees. The number of education providers is expected to expand as new US and UK partners come onboard to provide additional educational offerings to students. 10-K

6 For the Year Ended September 30, 2023

~~Table of Contents~~ Vidable®

~~Sonic~~Vidable® ~~Foundry~~is an AI powered solution that turns an organization’s video libraries into dynamic knowledge bases. Vidable is an integrated AI solution with 3 powerful features: Vidable Assistant which applies real-time search and content generation capabilities to single videos or entire libraries of video allowing users to quickly locate the content they need and create derivative content from any video. Vidable Insights is a video analytics tool that organizes video library data and delivers custom analytics through a customizable dashboard. Vidable Transformations is a set of AI tools used to enhance video content through automated workflow which improves production quality, ~~Inc~~accessibility and searchability of video. Vidable is delivered as a standalone platform or through integrations with Mediasite and other video platforms.

~~Annual~~Global ~~Report~~Learning ~~on Form 10-K~~ Exchange™

~~For~~Global ~~the~~Learning ~~Year~~Exchange™ ~~Ended~~(GLX) ~~September~~provides 30students in emerging countries access to higher education in a flexible, ~~2022~~ cost effective, locally supported environment. GLX offers coursework, degree programs and certifications through partnerships with 7 US and EU Universities and 2 skill-based certification providers.

~~Our~~The ~~Expanded~~Global ~~Service~~Learning ~~Offerings~~Exchange ~~Address~~opened ~~the~~its ~~New~~first ~~Virtual~~GLX ~~World~~Hub in Nassau, Bahamas in July 2022 and has since opened Hubs in Abuja and Benin City, Nigeria and Johannesburg, South Africa. GLX Hubs are used as enrollment and admissions centers and act as support centers where enrolled students can study, network with other students, obtain Wi-Fi access and other technological resources, and receive educational and career support from local Hub advisors.

~~Video Solutions (launched November 2022)~~ 7

~~Formerly~~ Table known as Mediasite Events, Video Solutions was rebranded and relaunched with expanded offerings in 2022. Video Solutions specializes in comprehensive video services and is organized around a simple value proposition: We make video easy, period. Video Solutions technicians and project managers have decades of experience successfully planning, managing, and executing video initiatives for event organizers, associations, and companies around the world. Video Solutions plugs into organizations as needed – providing self-service tools or full-service offerings supported by expert technicians and project managers. From organizing video capture and distribution for an in person, live or hybrid event, to migrating an existing video content library to the cloud to planning and executing an organization's video strategy from start to finish, Video Solutions is a full service offering that is customized specifically to an organization’s needs and objectives.Contents

~~Mediasite~~Sonic ~~Professional~~Foundry, ~~Services~~Inc.

~~Customers~~Annual ~~can~~Report ~~maximize~~on ~~the~~Form value of their Mediasite instance and their video library with additional Mediasite Professional Services including integration services, installation assistance, custom development, training, cloud migration support and monitoring services. While COVID impacted the Company’s ability to do onsite services, the majority of its professional services are completed remotely, allowing for uninterrupted year10-~~round professional services support for new users and existing customers.~~ K

~~Mediasite~~For ~~Customer~~the ~~Care~~Year Ended September 30, 2023

~~Mediasite~~Video ~~Customer~~Solutions Care plans include software upgrades for Mediasite and Mediasite capture solutions, technical support, warranty extensions and advanced replacement on hardware, as well as access to the Mediasite Community and other online resources. Nearly all our customers purchase a Customer Care plan when they purchase Mediasite or Mediasite capture solutions. Annual service contracts for Mediasite Cloud include a standard Customer Care plan.

7 Video Solutions specializes in comprehensive video services and is organized around a simple value proposition: Making video easy. Video Solutions technicians and project managers have decades of experience planning, managing, and executing video initiatives for event organizers and enterprise organizations around the world. Video Solutions plugs into organizations as needed – providing self-service tools or full-service offerings supported by expert technicians and project managers. From organizing video capture and distribution for an in person, live or hybrid event, to migrating an existing video content library to the cloud to planning and executing an organization's video strategy from start to finish, Video Solutions is a full service offering that is customized specifically to an organization’s needs and objectives.

~~Table~~Mediasite ofProfessional ~~Contents~~ Services

~~Sonic~~Customers ~~Foundry~~can maximize the value of their Mediasite instance and their video library with additional Mediasite Professional Services including integration services, ~~Inc~~installation assistance, custom development, training, cloud migration support and monitoring services. The majority of professional services are completed remotely, allowing for uninterrupted year-round professional services support for new users and existing customers.

~~Annual~~Mediasite ~~Report~~Customer ~~on Form 10-K~~ Care

~~For~~Mediasite ~~the~~Customer ~~Year~~Care ~~Ended~~plans ~~September~~include 30software upgrades for Mediasite and Mediasite capture solutions, ~~2022~~ technical support, warranty extensions and advanced replacement on hardware, as well as access to the Mediasite Community and other online resources. Nearly all our customers purchase a Customer Care plan when they purchase Mediasite or a Mediasite capture solutions. Annual service contracts for Mediasite Cloud include a standard Customer Care plan.

~~Segment Information~~ 8

In Table accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 280-10, Segment Reporting, the Company has three operating segments; however, these segments meet the criteria for aggregation for reporting purposes as one reporting segment as of ~~September 30, 2022.~~Contents

~~Billings~~Sonic Foundry, Inc.

~~Our~~Annual ~~services~~Report ~~are~~on ~~typically~~Form ~~billed and collected in advance of providing the service. Billings, which are a non~~10-GAAP measure, are an important indicator of customer activity and cash flow in addition to revenue, and is therefore used by management as a key operational indicator. Billings are computed by combining revenue with the change in unearned revenue.K

~~Our~~For ~~largest individual customers can be either value added resellers (“VARs”) or end users in~~ the ~~case~~Year ofEnded ~~large~~September ~~higher~~30, ~~education institutions. No single customer represented over 10% of billings or revenue in 2022 or 2021.~~2023

~~Sales~~Segment Information

WeIn ~~sell~~accordance ~~and~~with ~~market~~the ~~our~~Financial ~~offerings~~Accounting ~~through~~Standards aBoard ~~sales~~(“FASB”) ~~force~~Accounting ~~that~~Standards ~~manages~~Codification a(“ASC”) ~~channel of value~~280-~~added resellers~~10, ~~system~~Segment ~~integrators~~Reporting, ~~and~~the ~~consultants.~~Company ~~These~~has ~~third-party~~three ~~representatives~~operating ~~specialize~~segments; inhowever, ~~understanding~~these ~~both~~segments ~~audio/video~~meet ~~systems~~the ~~and~~criteria ITfor ~~networking.~~aggregation Wefor ~~also~~reporting ~~sell~~purposes toas ~~approximately~~one ~~300~~reporting ~~resellers,~~segment ~~and~~as ~~over~~of 1fiscal years ended September 30,~~150~~ ~~total~~2023 ~~end~~and ~~users~~2022.

~~Market expansion:~~Billings

~~Historically,~~Our ~~over~~services ~~two-thirds~~are oftypically ~~our~~billed ~~revenue~~and ~~has~~collected ~~been~~in ~~realized~~advance ~~from~~of providing the ~~education market~~service. ~~However~~Billings, ~~COVID~~which ~~escalated~~are ~~the~~a ~~rapid~~non-GAAP ~~adoption~~measure, ofare ~~video~~an asimportant aindicator ~~remote~~of ~~work~~customer activity and ~~learning~~cash ~~solution~~flow, ~~across~~in ~~all~~addition ~~industry~~to ~~sectors.~~revenue, ~~This~~and ~~development~~is ~~represents~~therefore anused ~~exciting~~by ~~trend~~management ~~that~~as ~~can~~a ~~extend~~key ~~Sonic~~operational ~~Foundry’s~~indicator. ~~market~~Billings ~~opportunity~~are ~~beyond~~computed ~~the~~by ~~traditional~~combining ~~academic~~revenue ~~customer~~with ~~base~~the ~~into~~change ~~new~~in ~~verticals~~unearned revenue.

~~For~~Our ~~our~~largest ~~higher~~individual ~~education~~customers ascan ~~well~~be aseither value ~~corporate,~~added ~~government~~resellers ~~and~~(“VARs”) ~~association~~or ~~clients,~~end weusers ~~anticipate~~in ~~economic~~the ~~conditions~~case ~~will~~of ~~expand~~large ~~market~~higher ~~demand~~education ~~for more outsourced services versus licensed, on-premises sales~~institutions. InNo ~~recent~~single ~~years,~~customer ~~the~~represented ~~Company~~over ~~has~~10% ~~made~~of ~~extensive~~billings ~~capital~~or ~~and technology investments to advance its services model, expand its cloud datacenters, grow recurring~~ revenue byin ~~migrating~~2023 ~~loyal~~or ~~customers to cloud multi-year agreements and diversifying its core offerings through expansion into adjacent growth markets~~2022.

~~The company has also diversified its core offerings through expansion into adjacent markets with the launch of Video Solutions, Vidable™ and Global Learning Exchange™ in 2022.~~Sales

~~Operations~~We sell and market our offerings through a sales force that manages a channel of value-added resellers, system integrators, and consultants. These third-party representatives specialize in understanding both audio/video systems and IT networking. We also sell to over 200 resellers, and over 1,150 total end users.

WeOur doGLX ~~not~~business ~~own~~sells or operate any manufacturing facilities. Instead, we contract with a third party to build the hardware for our Mediasite Recorders and purchase quantities sufficient to fill specific customer orders, including purchases of inventory by resellers. Quantities are maintained in inventory by the third-party provider and shipped directly to ~~the end customer or reseller~~students. The hardware manufacturer provides a limited one-year warranty on the hardware, which is passed on to our customers who purchase a Mediasite Customer Care support and maintenance plan. While we have long standing relationships with our contract manufacturer, there are other manufacturing alternatives if needed.

8 Market expansion:

~~Table~~Historically, over two-thirds of ~~Contents~~ our revenue has been realized from the education market. However, we have recently diversified our customer base due to the rapid adoption of video across verticals.

~~Sonic~~In ~~Foundry~~recent years, ~~Inc~~the Company has made extensive investments in our cloud infrastructure which has resulted in an increase in multi-year agreements and the growth of annual recurring revenue as customers have migrated to our cloud environment.

~~Annual~~Additionally, ~~Report~~the oncompany ~~Form~~has ~~10-K~~ diversified its core offerings through the launch of Vidable® and Global Learning Exchange™ which has expanded the Company into new and adjacent markets where we have the opportunity to expand and leverage relationships with existing education and enterprise customers.

~~For the Year Ended September 30, 2022~~ Operations

~~Research~~We do not own or operate any manufacturing facilities. Instead, we contract with a third party to build the hardware for our Mediasite Recorders and ~~Development~~purchase quantities sufficient to fill specific customer orders, including purchases of inventory by resellers. Quantities are maintained in inventory by the third-party provider and shipped directly to the end customer or reseller. The hardware manufacturer provides a limited one-year warranty on the hardware, which is passed on to our customers who purchase a Mediasite Customer Care support and maintenance plan. While we have long-standing relationships with our contract manufacturer, there are other manufacturing alternatives if needed.

We believe that our future success will depend on our ability to deepen our relationship with current customers and attract new customers by offering a compelling value proposition that enhances their workplace and business objectives. Accordingly, we invest a significant amount of our resources in research and development activities, with a particular focus on our SaaS offerings. During the fiscal years ended September 30, 2022 and 2021, we spent $7.6 million and $7.2 million, respectively, on internal research and development activities in our business. These amounts represent 28% in 2022 and 20% in 2021 of total revenue. 9

~~Global~~ Table ~~Expansion~~of Contents

InSonic ~~fiscal 2014~~Foundry, ~~we acquired MediaMission B~~Inc.V.in the Netherlands and Mediasite KK in Japan. With these acquisitions, we significantly expanded our global market reach in Europe and the Asia-Pacific Region and accelerated our commitment to enterprise video communication worldwide. The investment in maintaining a local presence in these regions has allowed us to better serve the ongoing sales and support demands of our customers and prospective customers in those markets. Additionally, we’ve been able to deploy customer care and cloud hosting services more quickly in each of those markets to capitalize on the trend to move data intensive applications, such as video, to the cloud.

~~Human~~Annual ~~Capital~~Report on Form 10-K

AtFor ~~September 30,~~the ~~2022~~Year ~~and~~Ended ~~2021,~~September ~~we had 193 and 180 full-time employees~~30, ~~respectively. Our employees are not represented by a labor union, nor are they subject to a collective bargaining agreement.~~2023

WeResearch ~~have a competitive compensation plan~~ and benefits plan that is designed to attract, retain, and reward individuals and includes an employee stock purchase plan and a 401k plan with a matching contribution. We offer 6 weeks of PTO and flexible work arrangements that encourage employees to achieve a comfortable work-life balance.Development

~~ITEM~~We 1Abelieve that our future success will depend on our ability to deepen our relationship with current customers and attract new customers by offering a compelling value proposition that enhances their workplace and business objectives. ~~RISK~~Accordingly, ~~FACTORS~~we invest a significant amount of our resources in research and development activities, with a particular focus on our SaaS offerings. During the fiscal years ended September 30, 2023 and 2022, we spent $11.2 million and $7.6 million, respectively, on internal research and development activities in our business. These amounts represent 50% in 2023 and 28% in 2022 of total revenue.

~~YOU~~Global SHOULD CAREFULLY CONSIDER THE RISKS DESCRIBED BELOW BEFORE MAKING AN INVESTMENT DECISION. THE RISKS DESCRIBED BELOW ARE NOT THE ONLY ONES WE FACE. ADDITIONAL RISKS THAT WE ARE NOT PRESENTLY AWARE OF OR THAT WE CURRENTLY BELIEVE ARE IMMATERIAL MAY ALSO IMPAIR OUR BUSINESS OPERATIONS. OUR BUSINESS COULD BE HARMED BY ANY OR ALL OF THESE RISKS. THE TRADING PRICE OF OUR COMMON STOCK COULD DECLINE SIGNIFICANTLY DUE TO ANY OF THESE RISKS, AND YOU MAY LOSE ALL OR PART OF YOUR INVESTMENT. IN ASSESSING THESE RISKS, YOU SHOULD ALSO REFER TO THE OTHER INFORMATION CONTAINED OR INCORPORATED BY REFERENCE IN THIS ANNUAL REPORT ON FORM 10-K, INCLUDING OUR CONSOLIDATED FINANCIAL STATEMENTS AND RELATED NOTES.Expansion

OnWe ~~August~~continue ~~26,~~to ~~2020~~operate Sonic Foundry, International B.V.in the ~~Securities~~Netherlands and ~~Exchange~~Mediasite ~~Commission~~KK ~~(“Commission”)~~in ~~announced~~Japan ~~the~~which ~~adoption~~we ofacquired ~~amendments~~in to2014. The ~~modernize~~investment ~~certain~~in ~~disclosures~~maintaining ~~registrants~~a ~~are~~local ~~required~~presence toin ~~make~~these ~~pursuant~~regions has allowed us to ~~Regulation~~better ~~S-K. The~~serve ~~amendments~~the ~~are~~ongoing ~~intended~~sales toand ~~reflect~~support ~~the~~demands ~~Commission’s~~of ~~commitment~~our tocustomers aand ~~principles-based~~prospective customers in those markets. Additionally, ~~registrant-specific~~we’ve ~~approach~~been able to ~~disclosure,~~deploy ~~rooted~~customer incare ~~materiality. The~~and ~~modernization~~cloud hosting services more quickly in each of ~~Item~~those ~~105~~markets ~~Risk~~to ~~Factor~~capitalize ~~Disclosures~~on ~~includes~~the trend to move data intensive applications, such as video, to the ~~following:~~cloud.

●In ~~The~~2022, ~~requirement~~our ~~for~~Global ~~inclusion~~Learning ofExchange business opened its first Hub in Nassau, Bahamas that provides students with local support resources and a ~~summary~~physical ~~risk~~space ~~factor~~to ~~disclosure~~connect with other students in the area. In 2023, GLX expanded its presence into Africa with the opening of noGLX ~~more~~Hubs ~~than~~in ~~two~~Nigeria ~~pages~~(2) ifand South Africa (1). These strategic locations were selected based upon the ~~risk~~dramatic ~~factor~~supply-demand ~~section~~imbalance ~~exceeds~~in 15higher ~~pages~~education that exists in these markets. The GLX Hub facilities are used for both student recruitment and for student support services, once students are enrolled in coursework or a degree program through one of GLX’s education partners.

●Human ~~Refining the principles-based approach by requiring disclosure of “material” risk factors versus “most significant.”~~Capital

●At ~~The~~September 30, ~~requirement~~2023 toand ~~organize~~2022, ~~risk~~we ~~factors~~had ~~under~~153 ~~relevant~~and ~~headings~~193 ~~for~~full-time ~~ease of understanding~~employees, ~~with~~respectively. ~~generic~~Our ~~risk~~employees ~~factors~~are ~~placed~~not atrepresented ~~the~~by ~~end~~a oflabor ~~the~~union, ~~section.~~nor ~~The~~are ~~amendments~~they dosubject ~~not~~to ~~specify~~a ~~the~~collective ~~risk~~bargaining ~~factor headings~~agreement.

~~The~~We ~~Company~~have ~~has~~a ~~reviewed~~competitive ~~its~~compensation ~~current~~plan ~~risk~~and ~~factors~~benefits plan that is designed to attract, retain, and ~~has~~reward ~~organized~~individuals ~~them~~and ~~under~~includes ~~the~~an ~~primary~~employee ~~categories~~stock ofpurchase ~~company~~plan ~~risk,~~and ~~industry~~a ~~risk,~~401k plan with a matching contribution. We offer 6 weeks of PTO and ~~investor~~flexible ~~risk~~work arrangements that encourage employees to achieve a comfortable work-life balance.

9 ITEM 1A. RISK FACTORS

~~Table~~YOU ofSHOULD ~~Contents~~ CAREFULLY CONSIDER THE RISKS DESCRIBED BELOW BEFORE MAKING AN INVESTMENT DECISION. THE RISKS DESCRIBED BELOW ARE NOT THE ONLY ONES WE FACE. ADDITIONAL RISKS THAT WE ARE NOT PRESENTLY AWARE OF OR THAT WE CURRENTLY BELIEVE ARE IMMATERIAL MAY ALSO IMPAIR OUR BUSINESS OPERATIONS. OUR BUSINESS COULD BE HARMED BY ANY OR ALL OF THESE RISKS. THE TRADING PRICE OF OUR COMMON STOCK COULD DECLINE SIGNIFICANTLY DUE TO ANY OF THESE RISKS, AND YOU MAY LOSE ALL OR PART OF YOUR INVESTMENT. IN ASSESSING THESE RISKS, YOU SHOULD ALSO REFER TO THE OTHER INFORMATION CONTAINED OR INCORPORATED BY REFERENCE IN THIS ANNUAL REPORT ON FORM 10-K, INCLUDING OUR CONSOLIDATED FINANCIAL STATEMENTS AND RELATED NOTES.

~~Sonic~~On ~~Foundry~~August 26, ~~Inc~~2020, the Securities and Exchange Commission (“Commission”) announced the adoption of amendments to modernize certain disclosures registrants are required to make pursuant to Regulation S-K. The amendments are intended to reflect the Commission’s commitment to a principles-based, registrant-specific approach to disclosure, rooted in materiality. The modernization of Item 105 Risk Factor Disclosures includes the following:

~~Annual~~● ~~Report~~The onrequirement ~~Form~~for ~~10-K~~ inclusion of a summary risk factor disclosure of no more than two pages if the risk factor section exceeds 15 pages.

~~For~~● Refining the ~~Year~~principles-based ~~Ended~~approach ~~September~~by ~~30,~~requiring ~~2022~~ disclosure of “material” risk factors versus “most significant.”

~~Risk~~● ~~Factor~~The ~~Summary~~requirement ~~Disclosure~~to organize risk factors under relevant headings for ease of understanding, with generic risk factors placed at the end of the section. The amendments do not specify the risk factor headings.

A.The Company ~~Risks~~has ~~consist~~reviewed ofits ~~both~~current ~~internal~~risk ~~and~~factors ~~external items~~ and ~~events~~has ~~that~~organized ~~impact~~them ~~Sonic~~under ~~Foundry~~the asprimary acategories of company. ~~These~~risk, ~~are~~industry ~~further~~risk, ~~categorized~~and asinvestor ~~follows:~~risk.

~~1. Financial Risks impact the financial well-being of the Company. Those risks include, but are not limited to the following:~~ 10

a. Table ~~Our~~of ~~strategy for growth is evolving.~~Contents

b.Sonic WeFoundry, ~~have a history of losses~~Inc.

c.Annual WeReport ~~may~~on ~~need~~Form ~~to raise additional capital.~~10-K

d.For Ifthe ~~customer~~Year ~~adoption~~Ended ~~has~~September ~~barriers~~30, ~~our business may not succeed.~~2023

e.Risk ~~Large,~~Factor ~~multi-unit~~Summary ~~deals are needed for continued success.~~Disclosure

fA. ~~Because~~Company ~~most~~Risks consist of ~~our~~both ~~service~~internal ~~contracts~~and ~~are~~external ~~renewable~~items onand anevents ~~annual~~that ~~basis,~~impact aSonic ~~reduction~~Foundry inas ~~our~~a ~~service~~company. ~~renewal~~These ~~rate~~are ~~could~~further ~~significantly~~categorized ~~reduce~~as ~~our revenues.~~follows:

g. If we are viewed only as a commodity supplier, our margins and valuations will shrink.

	1	Mediasite Asset Sale Risks impact our overall financial condition and ability to generate future cash flows from operations. Those risks include, but are not limited to the following:
		a. The announcement of the sale, whether or not consummated, may adversely affect our business.
		b. We cannot be sure if or when the sale will be completed.
		c. The Purchase Agreement limits our ability to pursue alternatives to the sale.
		d. Our stockholders will not receive any of the proceeds of the sale.
		e. We will incur significant expenses in connection with the sale, regardless of whether it is completed.
		f. The purchase price is subject to adjustment provisions in the Purchase Agreement.
		g. We must use a significant portion of the purchase price at closing to repay the NBE Debt.
		h. Even after repaying the NBE Debt we will have a significant amount of debt.

	2.	Financial Risks impact the financial well-being of the Company. Those risks include, but are not limited to the following:

ha. Our ~~operating~~strategy ~~results~~for ~~are~~growth ~~hard~~is ~~to predict as a significant amount of our sales typically occur at the end of a quarter, and the mix of product and service orders may vary significantly~~evolving.

ib. ~~Accounting~~We ~~regulations~~have ~~and~~breached ~~related~~financial ~~interpretations~~covenants ~~and~~in ~~policies,~~our ~~particularly~~loan ~~those~~documents ~~related~~with toour ~~revenue~~senior ~~recognition,~~secured ~~cause~~lender. usc. toWe ~~defer~~have ~~revenue~~a ~~recognition~~history ~~into future periods for all or portions~~ of ~~our products and services~~losses.

jd. ~~Because~~We wemay ~~generally~~need ~~recognize~~to ~~revenues~~raise ~~ratably~~additional ~~over the term of our service contracts, a decrease or increase in service transactions will not be fully reflected in our operating results until future periods~~capital.

ke. ~~Currency~~If ~~exchange~~customer ~~rate~~adoption ~~fluctuations~~has ~~could~~barriers, ~~result~~our inbusiness ~~higher~~may ~~costs~~not ~~and decreased margins and earnings~~succeed.

lf. ~~Our~~Large, ~~ability~~multi-unit todeals ~~utilize~~are ~~our~~needed ~~net~~for ~~operating~~continued ~~loss carryforwards may be limited~~success.

2g. ~~Operational~~Because ~~Risks~~most ~~disrupt~~of ~~fundamental~~our ~~daily~~service ~~operations~~contracts ofare ~~the~~renewable ~~Company.~~on ~~Those~~an ~~risks~~annual ~~include~~basis, ~~but~~a ~~are~~reduction ~~not~~in ~~limited~~our toservice ~~the~~renewal ~~following:~~rate could significantly reduce our revenues.

ah. ~~Operational~~If ~~failures~~we inare ~~our~~viewed ~~network~~only ~~infrastructure~~as ~~could~~a ~~disrupt~~commodity ~~our remote hosting services~~supplier, ~~cause~~our usmargins ~~to lose clients~~ and ~~sales~~valuations towill ~~potential clients and result in increased expenses and reduced revenues~~shrink.

bi. Our ~~business~~operating isresults ~~susceptible~~are hard to ~~risks~~predict ~~associated~~as ~~with~~a ~~international~~significant ~~operations~~amount of our sales typically occur at the end of a quarter, and the mix of product and service orders may vary significantly.

cj. ~~Supporting~~Accounting ~~our~~regulations ~~existing~~ and ~~growing~~related ~~customer~~interpretations ~~base~~ and ~~implementing~~policies, ~~large~~particularly ~~customer~~those ~~deployments~~related ~~could~~to ~~strain~~revenue ~~our personnel resources and infrastructure~~recognition, ~~and~~cause ifus weto ~~are~~defer ~~unable~~revenue torecognition ~~scale~~into ~~our~~future ~~operations~~periods ~~and~~for ~~increase~~all ~~productivity,~~or ~~customer~~portions ~~satisfaction~~of ~~and~~ our ~~business~~products ~~will~~and ~~be harmed~~services.

dk. IfBecause we ~~lose~~generally ~~key~~recognize ~~personnel~~revenues orratably ~~fail~~over tothe ~~integrate~~term ~~replacement~~of ~~personnel~~our ~~successfully~~service contracts, ~~our~~a ~~ability~~decrease toor ~~manage~~increase ~~our~~in ~~business~~service ~~could~~transactions will not be ~~impaired~~fully reflected in our operating results until future periods.

el. ~~Manufacturing~~Currency ~~disruption~~exchange orrate ~~capacity~~fluctuations ~~constraints~~could ~~would~~result ~~harm~~in ~~our~~higher ~~business~~costs and decreased margins and earnings.

3m. ~~Strategic~~Our ~~Risks~~ability ~~prevent~~to ~~the~~utilize ~~Company~~our ~~from~~net ~~achieving~~operating ~~its~~loss ~~strategic~~carryforwards ~~objectives.~~may ~~Those~~be ~~risks include, but are not~~ limited ~~to the following:~~.

a3. ~~The~~Operational ~~technology~~Risks ~~underlying~~disrupt ~~our~~fundamental ~~products~~daily ~~and~~operations ~~services~~of isthe ~~complex~~Company. ~~and~~Those ~~may~~risks ~~contain unknown defects that could harm our reputation~~include, ~~result~~but inare ~~product~~not ~~liability~~limited orto ~~decrease~~the ~~market acceptance of our products.~~following:

ba. ~~Our~~Operational ~~success~~failures ~~depends~~in ~~upon~~our ~~the~~network ~~proprietary~~infrastructure ~~aspects~~could ofdisrupt our ~~technology~~remote hosting services, cause us to lose clients and sales to potential clients and result in increased expenses and reduced revenues.

cb. WeOur ~~may~~business ~~not~~is besusceptible ~~able~~ to ~~innovate~~risks toassociated ~~meet~~with ~~the~~international ~~needs of our target market~~operations.

dc. IfSupporting ~~potential~~our ~~customers~~existing orand ~~competitors~~growing ~~use~~customer ~~open-source~~base ~~software~~and toimplementing ~~develop~~large ~~products~~customer ~~that~~deployments ~~are~~could ~~competitive~~strain ~~with~~ our ~~products~~personnel resources and ~~services~~infrastructure, and if we ~~may~~are ~~face~~unable ~~decreased~~to ~~demand~~scale ~~and~~our ~~pressure~~operations toand ~~reduce~~increase ~~the~~productivity, ~~prices~~customer ~~for~~satisfaction and our ~~products~~business will be harmed.

ed. WeIf ~~also~~we ~~rely~~lose ~~upon~~key ~~trademark,~~personnel ~~copyright~~or ~~and~~fail ~~trade~~to ~~secret~~integrate ~~laws,~~replacement ~~which~~personnel ~~may~~successfully, ~~not~~our beability ~~sufficient~~ to ~~protect~~manage our ~~intellectual~~business ~~property~~could be impaired.

fe. IfManufacturing ~~other~~disruption ~~parties bring infringement~~ or ~~other~~capacity ~~claims~~constraints ~~against~~would ~~us,~~harm weour ~~may incur significant costs or lose customers~~business.

g4. ~~There~~Strategic isRisks aprevent ~~great~~the ~~deal~~Company offrom ~~competition~~achieving inits ~~the~~strategic ~~market~~objectives. ~~for~~Those ~~our~~risks ~~products~~include, ~~which~~but ~~could~~are ~~lower~~not ~~the~~limited ~~demand~~to ~~for~~the ~~our products and have a negative impact on our operations.~~following:

ha. IfThe technology underlying our ~~marketing~~products and ~~lead~~services ~~generation~~is ~~efforts~~complex ~~are~~and ~~not~~may ~~successful,~~contain unknown defects that could harm our ~~business~~reputation, ~~will~~result bein ~~harmed~~product liability or decrease market acceptance of our products.

ib. ~~The~~Our ~~length~~success ofdepends ~~our~~upon ~~sales~~the ~~and~~proprietary ~~deployment~~aspects ~~cycles~~of ~~are uncertain, which may cause~~ our ~~revenue and operating results to vary significantly from quarter to quarter and year to year~~technology.

jc. We ~~depend~~may innot ~~part~~be onable ~~the~~to ~~success~~innovate ofto ~~our~~meet ~~relationships~~the ~~with~~needs ~~third-party~~of ~~resellers~~our ~~and~~target ~~integrators~~market.

kd. WeIf ~~may~~potential ~~need~~customers ~~to make acquisitions~~ or ~~form~~competitors ~~strategic~~use ~~alliances~~open-source orsoftware ~~partnerships in order~~ to ~~remain~~develop ~~competitive~~products inthat ~~our market, and acquisitions, strategic alliances or partnerships, could be difficult to integrate, disrupt our business and dilute stockholder value. l. Our Mediasite events and cloud businesses~~ are ancompetitive ~~area~~with ~~of emphasis for us and carry challenging delivery requirements. The cloud offering requires significant investment in infrastructure, willingness of~~ our ~~customers~~products ~~to move from on-premise installations to our cloud~~ and carry increased cyber and privacy risks. Our events business has been very successful in pivoting from in-person to virtual events as a result of COVID but future growth relies on a greater willingness of companies to hold eventsservices, ~~both virtual and in-person. m. Our fiscal 2023 business plan includes an expectation that~~ we ~~invest~~may ~~aggressively~~face indecreased ~~new~~demand ~~product~~ and ~~service~~pressure ~~offerings~~to inreduce ~~areas~~the ~~where~~prices wefor ~~can leverage~~ our ~~product development skills, understanding of video technologies and strength in the higher education vertical~~products. ~~These offerings will likely take a significant number of additional staff and program spending in key engineering, sales and management resources with little, impact on fiscal 2023 revenue.~~

10 e. We also rely upon trademark, copyright and trade secret laws, which may not be sufficient to protect our intellectual property.

~~Table~~f. ofIf ~~Contents~~ other parties bring infringement or other claims against us, we may incur significant costs or lose customers.

~~Sonic~~g. ~~Foundry~~There is a great deal of competition in the market for our products, ~~Inc~~which could lower the demand for our products and have a negative impact on our operations.

~~Annual~~h. ~~Report~~If onour ~~Form~~marketing ~~10-K~~ and lead generation efforts are not successful, our business will be harmed.

~~For~~i. ~~the~~The ~~Year~~length ~~Ended~~of ~~September~~our 30sales and deployment cycles are uncertain, ~~2022~~ which may cause our revenue and operating results to vary significantly from quarter to quarter and year to year.

4j. ~~Compliance~~We ~~Risks~~depend ~~result~~in ~~from~~part ~~non-compliance~~on ofthe ~~laws~~success ~~and~~of ~~regulations~~our ~~from~~relationships ~~various~~with ~~governing~~third-party ~~bodies.~~resellers ~~Those~~and ~~risks include, but are not limited to the following:~~integrators.

ak. ~~Our~~We ~~customers~~ may ~~use~~need ~~our~~to ~~products~~make acquisitions or form strategic alliances or partnerships in order to ~~share~~remain ~~confidential~~competitive ~~and~~in ~~sensitive~~our ~~information~~market, and ifacquisitions, strategic alliances or partnerships, could be difficult to integrate, disrupt our ~~system~~business ~~security~~and isdilute ~~breached~~stockholder value. l. Our Mediasite events and cloud businesses are an area of emphasis for us and carry challenging delivery requirements. The cloud offering requires significant investment in infrastructure, willingness of our ~~reputation~~customers ~~could~~to bemove ~~harmed~~from on-premise installations to our cloud and carry increased cyber and privacy risks. Our events business has been very successful in pivoting from in-person to virtual events as a result of COVID but future growth relies on a greater willingness of companies to hold events, both virtual and in-person. m. Our fiscal 2024 business plan includes an expectation that we ~~may~~invest ~~lose~~strategically ~~customers~~in new product and service offerings in areas where we can leverage our product development skills, understanding of video technologies and strength in the higher education vertical. These offerings will likely require additional resources in engineering, sales and operations, in order to successfully grow and scale new businesses.

~~b. Our business is subject to changing regulations regarding corporate governance and public disclosure that will increase both our costs and the risk of noncompliance.~~ 11

5. Table ~~Industry~~of ~~Risks are items and events that have macro-level impacts on our industry. Those risks include, but are not limited to the following:~~Contents

a.Sonic ~~Economic~~Foundry, ~~conditions could materially adversely affect the Company~~Inc.

b.Annual ~~Economic~~Report ~~conditions may have a disproportionate effect~~ on ~~the~~Form ~~sale of our products and services.~~10-K

c.For ~~We could lose revenues if there are changes in~~ the ~~spending~~Year ~~policies~~Ended orSeptember ~~budget priorities for government funding of colleges~~30, ~~universities, schools and other education providers.~~2023

d5. ~~Changes~~Compliance inRisks ~~U.S.~~result ~~trade~~from ~~policy,~~non-compliance ~~including the imposition~~ of ~~tariffs~~laws and ~~the~~regulations ~~resulting~~from ~~consequences,~~various ~~may~~governing ~~have~~bodies. aThose ~~material~~risks ~~adverse~~include, ~~impact~~but onare ~~our~~not ~~business,~~limited ~~operating~~to ~~results~~the ~~and financial condition.~~following:

ea. ~~Privacy~~Our ~~concerns~~customers ~~and~~may ~~laws,~~use ~~evolving~~our ~~regulation~~products ofto ~~cloud~~share ~~computing,~~confidential ~~cross-border~~and ~~data~~sensitive ~~transfer~~information, ~~restrictions~~ and ~~other~~if ~~domestic~~our orsystem ~~foreign~~security ~~regulations~~is ~~may~~breached, ~~limit~~our ~~the~~reputation ~~use~~could ~~and~~be ~~adoption~~harmed ~~of our solutions~~ and ~~adversely~~we ~~affect~~may ~~our~~lose ~~business~~customers.

fb. WeOur ~~face~~business ~~risks~~is ~~associated~~subject ~~with~~to ~~government~~changing ~~regulation~~regulations ofregarding ~~the~~corporate ~~internet~~governance and ~~related~~public ~~legal~~disclosure ~~uncertainties.~~that g.will ~~COVID~~increase ~~has~~both ~~negatively~~our ~~impacted~~costs ~~interest~~ and ~~ability~~the torisk ~~hold in-person events and while virtual events are often held in place~~ of ~~in-person events, some companies and attendees are less likely to hold or attend virtual events~~noncompliance.

6. ~~Investor~~Industry Risks are ~~both~~items ~~internal~~ and ~~external~~events ~~risks~~ that ~~impact~~have anmacro-level ~~investment~~impacts ~~made~~on inour ~~the Company’s stock~~industry. Those risks include, but are not limited to the following:

a. ~~The~~Economic ~~market~~conditions ~~price~~could ofmaterially ~~our~~adversely ~~common~~affect ~~stock~~the ~~may be subject to volatility~~Company.

b. ~~Our~~Economic ~~common~~conditions ~~stock~~may ishave ~~subject~~a todisproportionate ~~low~~effect ~~trading~~on ~~volume~~the ~~and~~sale ~~broad~~of ~~price~~our ~~swings~~products and services.

c. ~~Exercise~~We ofcould ~~outstanding~~lose ~~options~~revenues ~~and~~if ~~warrants~~there ~~will~~are ~~result~~changes in ~~further~~the ~~dilution~~spending policies or budget priorities for government funding of colleges, universities, schools and other education providers.

d. ~~Provisions~~Changes ofin ~~our~~U.S. ~~charter~~trade ~~documents~~policy, ~~and~~including ~~Maryland~~the ~~law,~~imposition ~~could also discourage an acquisition~~ of ~~our~~tariffs ~~Company~~and ~~that~~the ~~would~~resulting ~~benefit our stockholders and~~consequences, ~~due~~may tohave ~~our insiders control of~~ a ~~substantial~~material ~~percentage~~adverse ofimpact ~~our~~on ~~stock,~~ our ~~officers~~business, ~~directors,~~operating results and ~~major~~financial ~~stockholders will have a substantial amount of control over whether to approve or disapprove of a transaction~~condition.

~~Following~~e. isPrivacy aconcerns ~~more~~and ~~detailed~~laws, ~~discussion~~evolving regulation of ~~each~~cloud ~~risk~~computing, ~~factor~~cross-border ~~outlined~~data intransfer restrictions and other domestic or foreign regulations may limit the ~~summary~~use and adoption of our solutions and adversely affect our business.

~~Company~~f. ~~Risks~~We –face ~~Financial~~risks associated with government regulation of the internet and related legal uncertainties. g. COVID has negatively impacted interest and ability to hold in-person events and while virtual events are often held in place of in-person events, some companies and attendees are less likely to hold or attend virtual events.

~~Our~~7. ~~strategy~~Investor ~~for~~Risks ~~growth~~are isboth ~~evolving~~internal and external risks that impact an investment made in the Company’s stock. Those risks include, but are not limited to the following:

~~While~~a. ~~the~~The ~~Company~~market ~~continues~~price ~~to work at steadily improving results~~ of ~~its Mediasite business, we recognized growth constraints in~~ our ~~existing~~common ~~business,~~stock ~~and,~~may ~~therefore,~~be wesubject ~~are~~to ~~shifting our focus toward building our runway in adjacent markets for future growth strategies as follows:~~ volatility.

●b. ~~First,~~Our wecommon ~~are~~stock ~~expanding our cloud capabilities to better support our customers’ video needs. This~~ is antraded ~~important~~on ~~step~~the inOTC ~~moving~~Markets ~~Sonic~~and ~~Foundry from primarily a hardware provider to a SaaS service provider with recurring revenue streams. A key aspect of this strategy~~ is asubject ~~move from third party data centers~~ to alow ~~public~~trading ~~cloud,~~volume ~~which~~and webroad ~~are~~price ~~in the process of completing~~swings.

●c. ~~Second,~~Exercise ~~we are building a library~~ of AIoutstanding ~~-enabled~~options ~~video solutions that can deliver instant, comprehensive,~~ and ~~automated~~warrants ~~video~~will ~~enhancement~~result atin ~~scale,~~further ~~branded as Vidable~~dilution. ~~We believe the market for this technology is compelling.~~

●d. ~~The~~Provisions ~~third key component~~ of our ~~growth~~charter ~~strategy~~documents, ~~is aimed at democratizing global higher education with a solution we have branded as Global Learning Exchange (“GLX”). U.S.~~ and ~~U.K.~~Maryland ~~universities are being increasingly challenged with lower enrollment and are looking for ways to expand into new growth markets. In close collaboration with several university clients~~law, wecould ~~have~~also ~~identified~~discourage aan ~~global~~acquisition ~~supply-demand~~of ~~imbalance.~~our ~~There~~Company ~~are many students worldwide~~ that ~~can~~would ~~afford~~benefit aour ~~higher~~stockholders ~~education~~and, ~~yet~~due doto ~~not~~our ~~have~~insiders ~~access~~control toof ~~it for~~ a ~~variety~~substantial percentage of ~~reasons—geo/political~~our ~~instability;~~stock, ~~international~~our ~~travel~~officers, ~~restrictions;~~directors, and ~~inadequate~~major ~~infrastructure.~~stockholders ~~Our innovative solution~~ will ~~allow students to~~ have ana ~~in-person~~substantial ~~experience~~amount inof ~~locally~~control ~~supported,~~over ~~affordable,~~whether ~~community-centric environments that offer aggregated educational content. This is essentially master classes taught by top professors that encourage students~~ to ~~engage~~approve ~~with~~or ~~one~~disapprove ~~another~~of in a ~~collaborative and supported setting that bridges the educational gap and offers education opportunities in economically disadvantaged regions~~transaction.

~~This~~Following ~~transformation~~is from focusing solely on our Mediasite business to investing substantially, not only in our current space, but in these adjacent markets began in fiscal 2022. While we expect modest revenue in fiscal 2023 from these growth initiatives, we intend to continue to aggressively invest in them with the expectation that they will ultimately result in greater revenue than our Mediasite business. Managing a ~~business~~more ~~with~~detailed adiscussion ~~combination~~ of ~~mature~~each ~~and~~risk ~~start-up~~factor ~~brands~~outlined ~~is challenging and will likely require constant adjustment~~ in the ~~allocation of resources within the brands, particularly in the current weak economic environment~~summary. ~~Such adjustments may delay expected growth in one or more brands or make retention of customers or employees more challenging. Any such changes will negatively impact our business.~~

WeRisks ~~have~~related ato ~~history~~the ofMediasite ~~losses.~~Asset Sale

~~Our~~The ~~operations~~announcement have generated losses in most years with a revenue trend that’s been generally flat with a greater decline in fiscal 2022. We believe the downward trend in fiscal 2022 is largely isolated to our operations in Japan and ~~other~~pendency COVID related restrictions and will begin to reverse itself in fiscal 2023. Despite our plans to achieve greater growth in fiscal 2023, we still need to generate much greater growth in order to be successful. While we continue to invest in our video solutions and cloud businesses, which we believe have greater opportunities for growth than other areas of ~~our~~the Mediasite ~~business,~~Asset weSale ~~are aggressively investing in revenue streams we believe will have even greater likelihood for growth which we’ve branded as our Vidable and Global Learning Exchange businesses. We~~ may ~~not~~adversely ~~realize~~affect sufficient revenues to achieve success in these areas and will likely need to hire for certain targeted positions and invest more significantly in other areas well in advance of achieving meaningful revenue – leading to continued losses. As such, we face risks, expenses and uncertainties related to our ~~specific~~ business ~~model, as well as those typically encountered by similar companies~~. ~~Those risks include, but are not limited to our ability to successfully achieve the following:~~

●The ~~Manage~~announcement and pendency of the ~~growth~~Mediasite ~~and~~Asset ~~profitability~~Sale, whether or not consummated, may adversely affect the trading price of our common stock, our business or our relationships with customers, ~~including~~suppliers ~~known~~and employees. In addition, pending the completion of the Mediasite Asset Sale, we may be unable to attract and ~~unknown~~retain ~~challenges~~key personnel and ~~expenses;~~the focus and attention of our management and employee resources may be diverted from operational matters during the pendency of the Mediasite Asset Sale.

●We ~~Acquire~~cannot ~~new~~be ~~customers~~sure ~~and~~if ~~retain~~or ~~and~~when ~~expand~~the ~~existing~~Mediasite ~~customers;~~Asset Sale will be completed.

●The ~~Develop~~consummation ~~new~~of ~~and~~the ~~complimentary~~Mediasite Asset Sale is subject to the satisfaction or waiver of various conditions, including the approval of the Mediasite Asset Sale by our stockholders. We cannot guarantee that the closing conditions set forth in the Purchase Agreement will be satisfied. If we are unable to satisfy the closing conditions in the Buyer’s favor or if other mutual closing conditions are not satisfied, the Buyer will not be obligated to complete the Mediasite Asset Sale. In the event that the Mediasite Asset Sale is not completed, the announcement of the termination of the Purchase Agreement may adversely affect the trading price ~~competitive~~of ~~product~~our common stock, our business and ~~service~~operations ~~offerings~~or our relationships with customers, ~~both~~suppliers ~~internally~~and employees and inmay ~~partnership~~also ~~with~~cause ~~third~~Neltjeberg ~~parties;~~Bay Enterprises, LLC ("NBE”), our senior secured lender, to declare an event of default under its debt and to pursue its available legal remedies.

~~● Maintain and develop relationships with strategic partners including dealers, A/V integrators, large institutional end-users, and other channel partners;~~ 12

11 Table of Contents

~~Table~~Sonic ofFoundry, ~~Contents~~ Inc.

~~Sonic~~Annual ~~Foundry,~~Report ~~Inc.~~ on Form 10-K

~~Annual~~For ~~Report~~the onYear ~~Form~~Ended ~~10-K~~ September 30, 2023

~~For~~The ~~the~~Purchase ~~Year~~Agreement ~~Ended~~limits ~~September~~our ~~30,~~ability ~~2022~~ to pursue alternatives to the Mediasite Asset Sale.

●The ~~Compete~~Purchase ~~successfully~~Agreement contains provisions that make it more difficult for us to sell our assets or engage in another type acquisition transaction with ~~companies~~a ~~offering~~party ~~similar~~other ~~products~~than the Buyer. These provisions include a non-solicitation provision and ~~services;~~a provision obligating us to pay the Buyer a termination fee of $450,000 or be obligated to reimburse the Buyer’s transaction expenses up to a maximum of $100,000 under certain circumstances. These provisions could discourage a third party that might have an interest in acquiring Sonic Foundry or the Mediasite business from considering or proposing such an acquisition, even if that party were prepared to pay consideration with a higher value than the consideration to be paid by the Buyer.

●Our ~~Develop~~stockholders ~~targeted~~will ~~marketing~~not ~~efforts~~receive toany ~~expand~~of ~~our~~the ~~reach~~proceeds ~~into~~of ~~new~~the ~~markets~~Mediasite ~~and~~Asset ~~deepen penetration into existing markets;~~Sale.

●The ~~Manage~~proceeds from the Mediasite Asset Sale will be paid directly to Sonic Foundry. We intend to use the proceeds of the Mediasite Asset Sale, after repaying our outstanding debt (the “NBE Debt”) to NBE and ~~scale~~paying atransaction ~~high-performance~~and ~~technology~~other ~~infrastructure;~~expenses, for working capital and general corporate purposes.

●We ~~Ensure~~will aincur ~~highly~~significant ~~secure~~expenses in connection with the Mediasite Asset Sale, regardless of whether the Mediasite Asset Sale is completed and, ~~reliable~~in ~~product~~certain ~~platform;~~circumstances, may be required to pay a termination fee to the Buyer.

●We ~~Attract~~expect ~~and~~to ~~retain~~incur ~~highly~~significant ~~skilled~~expenses ~~personnel~~related to ~~execute~~the Mediasite Asset Sale. These expenses include, but are not limited to, financial advisory and opinion fees and expenses, legal fees, accounting fees and expenses, filing fees, printing expenses and other related fees and expenses. Many of these expenses will be payable by us regardless of whether the Mediasite Asset Sale is completed. In addition, if the Purchase Agreement is terminated in acertain ~~fast-paced~~circumstances, ~~rapidly~~we ~~changing~~will ~~environment;~~be required to pay Buyer a termination fee.

●The ~~Navigate~~purchase ~~the~~price ~~ongoing~~for ~~evolution~~the ofMediasite ~~changing~~Asset ~~regulatory~~Sale ~~requirements,~~is ~~such~~subject asto ~~privacy~~adjustment ~~laws~~provisions ~~and~~in ~~tax~~the ~~laws,~~Purchase ~~and~~Agreement ~~how~~which itmay ~~impacts~~reduce ~~our~~the ~~business,~~total ~~including~~amount ~~our~~we ~~products~~actually ~~and services; and~~receive.

●Although ~~Expand~~the Purchase Agreement provides for a total purchase price of up to $15.5 million, the Purchase Agreement includes a number of provisions for adjustment that are expected to reduce the total amount of proceeds we actually receive from the Mediasite Asset Sale. A holdback amount of $1 million will be deducted from the purchase price payable at closing and payable on the first anniversary of the closing date, but will be subject to claims for indemnification and based on the collectability of accounts receivable and the sale of inventory after closing. In addition, the amount of the purchase price is subject to reduction based on the amount by which our ~~competitive~~net ~~reach~~cash ~~into~~assets ~~international~~at ~~markets~~closing is less than $0. ●We ~~Fund~~currently ~~these~~estimate ~~aggressive~~that ~~investments~~the net cash asset adjustment will reduce the purchase price by approximately $4 million.

We ~~have~~must ~~experienced~~use ~~some~~a ofsignificant ~~these~~portion ~~risks~~of ~~already~~the ~~and~~purchase ~~will~~price ~~continue~~at closing to ~~encounter~~repay ~~them as~~ the ~~business~~NBE ~~evolves~~Debt. ~~Failure to successfully manage them could adversely affect our financial condition and results of operations.~~

We ~~may~~are ~~need~~required to ~~raise~~repay ~~additional~~the ~~capital~~NBE Debt upon the closing of the Mediasite Asset Sale. We estimate that the amount to repay the NBE Debt will be approximately $5.7 million, which will reduce the cash consideration that we receive at closing pursuant to the Purchase Agreement.

AtEven ~~September 30,~~after ~~2022,~~repaying wethe ~~had~~NBE ~~cash~~Debt of $3.3 million, $1.1 million of which was in our foreign operations, compared to total cash of $10.0 million and foreign operations cash of $3.8 million at September 30, 2021. We entered into two new net $8.5 million term debt facilities on November 16, 2022 which requires compliance with certain covenants, restrictions and future capital transactions. On November 16, 2022, we ~~also received $1.2 million funds through issuances of common stock. There can be no assurances that we~~ will ~~comply~~have ~~with such restrictions in the future and nor that other sources of financing will be available, or if available, on acceptable terms. The Company has~~ a ~~history~~significant ofamount ~~losses, is investing heavily in new brands in advance~~ of ~~achieving meaningful revenue and has historically financed its operations primarily through cash from sales of equity or~~ debt ~~securities, and to a limited extent, cash from operations~~. We cannot ensure that revenue will grow in fiscal 2023 or beyond, even with strategic investment of resources in business lines where we believe there is a greater opportunity for growth. If revenue is determined to be growing at a rate less than anticipated and expenses are not sufficiently matched, our cash resources may not be sufficient to support working capital needs, and we may have to attempt to borrow additional funds from other debt providers, attempt to raise equity capital or significantly reduce expenses.

InAlthough we will repay the ~~event~~NBE Debt upon the closing of the Mediasite Asset Sale, we ~~need~~do not expect to ~~borrow~~use ~~additional~~any ~~money~~of orthe ~~raise~~proceeds ~~additional~~of ~~equity~~the ~~capital~~Mediasite Asset Sale to repay our outstanding debt to Mark Burish (the “Burish Debt”). The Company owes approximately $5.75 million as of the date of this report to Mark Burish, and we may ~~not~~borrow beadditional ~~able~~amounts from Mr. Burish if he agrees in order to doprovide sofunds onfor ~~acceptable~~the ~~terms~~Company’s business. Following the closing of the Mediasite Asset Sale, our business operations will be limited to the Vidable and ~~conditions~~GLX ~~including~~businesses, ~~discounts~~both ~~from~~of ~~market~~which generate limited revenues, ~~warrants~~negative cash flow and significant losses. As a result, ~~convertible~~our ~~securities~~ability orto ~~preferred~~make ~~stock~~scheduled payments of the principal of, to pay interest on or atto ~~all~~refinance the Burish Debt will be limited. InOur ~~that~~business ~~event,~~likely wewill ~~may~~not ~~seek~~be able to ~~raise~~generate ~~money~~cash flow from ~~entities~~operations ~~that~~sufficient ~~are~~to ~~affiliated~~service ~~with~~ the ~~Company,~~Burish asDebt weunder ~~have~~its ~~done~~current interms and fund the ~~past~~Company’s operating and other expenses. ~~The~~We ~~Company~~may ~~has~~be ~~had~~required to ~~rely~~adopt onone ~~its~~or ~~Chairman~~more alternatives, ~~Mark~~such ~~Burish,~~as selling assets ("including potentially to Mr. Burish" in exchange for debt relief), torestructuring ~~provide~~the Burish Debt or obtaining additional equity capital on terms ~~reasonable~~that may be onerous or highly dilutive. Our ability to raise equity capital will depend on the capital markets and ~~acceptable~~our financial condition at such time, and will be challenging due to the ~~independent~~reduced ~~members~~size of our operations after the ~~Board~~Mediasite Asset Sale and the recent delisting of ~~Directors.~~our ~~There~~common isstock nofrom ~~assurance,~~the ~~however,~~NASDAQ ~~that~~Capital MrMarket. ~~Burish,~~We ormay not be able to engage in any ~~other~~of ~~affiliated~~these ~~party~~activities or engage in these activities on desirable terms, ~~will~~which becould ~~willing~~result in a default on our debt obligations, our inability to ~~provide~~continue ~~additional~~as ~~capital~~a going concern and the loss of all or a substantial part of the value of our common stock.

In the event we have a need to borrow money, we may incur significant interest charges, or fees, which could harm our profitability. Holders of debt would also have rights, preferences or privileges senior to those of existing holders of our common stock. In the event we are able to raise additional equity, the terms of such financing may dilute the ownership interests of current investors and cause our stock price to fall significantly. In the event additional capital is provided by executive officers or directors, then, due to the low price levels of our common stock, control by such executive officers or directors may substantially increase. 13

If Table weof cannot raise funds on acceptable terms, our business, operating results, and financial condition would be negatively impacted. The Company believes its cash position is adequate to accomplish its business plan through at least the next twelve months.Contents

IfSonic ~~the funds held by our foreign subsidiaries are needed for our operations in the United States~~Foundry, ~~the repatriation of some of these funds to the United States could require payment of additional U~~Inc.~~S. taxes.~~

12 Annual Report on Form 10-K

~~Table~~For ofthe ~~Contents~~ Year Ended September 30, 2023

~~Sonic~~Company ~~Foundry,~~Risks ~~Inc.~~ – Financial

~~Annual~~Our ~~Report~~strategy onfor ~~Form~~growth ~~10-K~~ is evolving

~~For~~While the ~~Year~~Company ~~Ended~~continues ~~September~~to 30work at steadily improving results of its Mediasite business, ~~2022~~ we recognized growth constraints in our existing business, and, therefore, we are shifting our focus toward building our runway in adjacent markets for future growth strategies as follows:

If● ~~customer~~First, ~~adoption~~we ~~has~~are ~~barriers,~~expanding our ~~business~~cloud ~~may~~capabilities ~~not~~to ~~succeed~~better support our customers’ video needs. This is an important step in moving Sonic Foundry from primarily a hardware provider to a SaaS service provider with recurring revenue streams. A key aspect of this strategy is a move from third party data centers to a public cloud, which we are in the process of completing.

~~Part~~● ~~of our strategic challenge is to convince enterprise customers of the stability~~Second, ~~productivity,~~we ~~improved~~are ~~communications,~~building ~~cost~~a ~~savings,~~library ~~suitability and other benefits~~ of ~~our~~AI-enabled ~~products~~video ~~and services, some of which are new or being developed. The market for content delivery~~ solutions ~~is very complex, includes many products and solutions~~ that ~~address~~can ~~various~~deliver ~~aspects of customer needs and as a result it is often difficult for customers and channel partners to understand how our products and services compare. Further~~instant, ~~corporate customers may use video as a tool~~comprehensive, ~~but may choose to rely upon their own IT infrastructure~~ and ~~resources~~automated ~~to manage their~~ video ~~content.~~enhancement ~~Because~~at ~~many companies generally are predisposed to maintaining control of their IT systems and infrastructure~~scale, ~~there~~branded ~~may be resistance to using software~~ as ~~a service provided by a third party~~Vidable. ~~Our~~We ~~future~~believe ~~revenue~~the ~~and revenue growth rates will depend in large part on migrating more customers to our cloud platform, on our success in delivering products effectively, creating~~ market ~~acceptance~~ for ~~these~~this ~~products~~technology inis ~~existing markets that we sell into and in new markets, and meeting customer’s needs for new or enhanced products~~compelling. If we fail to do so, our products will not achieve widespread market acceptance, or will no longer be used by our customers, and we may not generate sufficient revenue to offset our product development and selling and marketing costs, which will adversely impact the valuation of the Company, the price of our stock, and will harm our business.

~~Large~~● The third key component of our growth strategy is aimed at democratizing global higher education with a solution we have branded as Global Learning Exchange (“GLX”). U.S. and U.K. universities are being increasingly challenged with lower enrollment and are looking for ways to expand into new growth markets. In close collaboration with several university clients, ~~multi~~we have identified a global supply-~~unit~~demand ~~deals~~imbalance. There are ~~needed~~many students worldwide that can afford a higher education yet do not have access to it for ~~continued~~a ~~success~~variety of reasons—geo/political instability; international travel restrictions; and inadequate infrastructure. Our innovative solution will allow students to have an in-person experience in locally supported, affordable, community-centric environments that offer aggregated educational content. This is essentially master classes taught by top professors that encourage students to engage with one another in a collaborative and supported setting that bridges the educational gap and offers education opportunities in economically disadvantaged regions.

WeThis ~~need~~transformation tofrom ~~complete~~focusing ~~larger~~solely ~~transactions~~on ofour ~~software~~Mediasite ~~and~~business ~~service solutions~~ to ~~educational~~investing substantially, ~~corporate~~not ~~and~~only ~~government institutions~~ in ~~order~~our tocurrent ~~sell~~space, ~~most~~but ~~efficiently~~in ~~and~~these ~~become~~adjacent ~~profitable.~~markets ~~Sales~~began ofin ~~large~~fiscal ~~solutions~~2022. toWhile ~~corporate~~we ~~customers~~achieved ~~have~~modest ~~lagged~~revenue ~~behind results achieved~~ in ~~the~~fiscal ~~higher~~2023 ~~education~~from ~~market;~~these ~~consequently~~growth initiatives, we ~~have~~intend ~~allocated more resources~~ to ~~the~~continue ~~higher education market. While we have addressed a strategy~~ to ~~leverage~~invest in ~~existing~~them ~~customers,~~with ~~better address~~ the ~~needs~~expectation ofthat ~~potential~~they ~~new~~will ~~customers,~~ultimately ~~and~~achieve ~~close~~more ~~multiple~~significant ~~unit~~revenue ~~and large software and service transactions, a customer may choose not to make expected purchases of our products~~growth. Managing ~~Despite our strategy to focus on~~ a ~~customer~~business ~~base~~ with a ~~recurring~~combination ~~need~~of tomature ~~purchase our products~~ and ~~services,~~start-up webrands ~~need~~is tochallenging ~~identify~~ and ~~sell~~has ~~more~~required ~~products~~constant ~~and~~adjustment ~~services~~in tothe ~~new~~allocation ~~customers,~~of ~~enter~~resources ~~new~~within ~~markets and reduce~~ the ~~rate~~brands, ofparticularly ~~attrition~~in ~~from~~the ~~certain~~current ~~existing~~weak ~~customers,~~economic ~~typically~~environment. ~~those~~Such ~~with~~adjustments ~~smaller~~have ~~deployments.~~delayed ~~The~~expected ~~failure~~growth toin ~~develop~~one ~~effective~~or ~~strategies~~more tobrands ~~enter~~or ~~new~~made ~~markets,~~retention ~~and~~of ~~increase~~customers ~~sales~~or ~~will~~employees ~~adversely~~more ~~impact~~challenging. ~~the~~The ~~valuation~~Company ofis ~~the~~actively ~~Company~~reviewing ~~and~~strategic ~~the~~options ~~price~~to ofreduce ~~our~~distraction ~~stock,~~ and ~~will~~improve ~~harm~~access ~~our~~to ~~business~~capital.

~~Because~~We ~~most~~have ofbreached ~~our~~financial ~~service~~covenants ~~contracts are renewable on an annual basis, a reduction~~ in our ~~service~~loan ~~renewal~~documents ~~rate~~with ~~could~~our ~~significantly~~senior ~~reduce~~secured ~~our revenues~~lender.

~~Our~~As ~~clients~~of ~~have~~September no30 ~~obligation~~2023, towe ~~renew~~were ~~their~~in ~~content~~breach ~~hosting~~of ~~agreements,~~certain ~~customer~~financial ~~support~~covenants ~~contracts~~in orour ~~other~~loan ~~annual~~documents ~~service~~with ~~contracts~~NBE. ~~after~~In ~~the~~December ~~expiration~~2023, of the ~~initial~~Company ~~period,~~received ~~which~~a isConditional ~~typically~~Consent ~~one~~Agreement ~~year,~~from ~~and~~NBE ~~some~~whereby ~~clients~~NBE ~~have~~agreed ~~elected~~ not to docall ~~so.~~its Aloan ~~decline~~ in ~~renewal~~default ~~rates~~due ~~could~~to ~~cause~~breaches ~~our~~of ~~revenues~~certain tofinancial ~~decline~~covenants. ~~Our~~NBE ~~renewal~~has ~~rates~~the ~~may~~right ~~decline~~to orreconsider ~~fluctuate~~its asconsent aand ~~result~~withdraw ofsuch aconditional ~~number~~agreement ofat ~~factors,~~any ~~including~~time. ~~client~~If ~~dissatisfaction~~NBE ~~with~~were ~~our products and services, our slow response~~ to ~~customer~~do ~~technical inquiries~~so, ~~our~~it ~~failure~~could todeclare ~~update~~an ~~our~~event ~~products~~of todefault ~~maintain~~under ~~their attractiveness in~~ the ~~market,~~loan ~~deteriorating~~and ~~economic~~pursue ~~conditions~~its oravailable ~~budgetary~~legal ~~constraints~~remedies, orwhich ~~changes~~could inimpair ~~budget~~our ~~priorities~~ability ~~faced~~to bycontinue our ~~clients.~~operations Ifand cause our ~~retention~~stockholders ~~rates decrease, we may need~~ to ~~provide~~lose ~~more~~all ~~incentives, reduce pricing~~ or ~~increase~~a ~~marketing~~part ~~costs to improve lead generation through marketing in order to increase revenues, all~~ of ~~which~~their ~~could reduce profitability~~investment.

IfWe wehave ~~are viewed only as~~ a ~~commodity~~history ~~supplier,~~of ~~our margins and valuations will shrink~~losses.

WeOur ~~need~~operations tohave ~~provide~~generated ~~value-added~~losses ~~services~~in most years with a revenue trend that’s been generally flat with a greater decline in ~~order~~fiscals 2022 and 2023. Despite our plans to ~~avoid~~focus ~~being~~on ~~viewed~~businesses aswith agreater ~~commodity~~opportunities ~~supplier~~for growth, ~~which~~in ~~could~~our ~~adversely~~opinion, ~~impact~~we ~~the~~still ~~valuation~~need ofto ~~the~~generate ~~Company,~~much ~~and~~greater ~~the~~growth ~~price~~in oforder ~~our~~to ~~stock~~be successful. ~~This~~We ~~entails~~may ~~building~~not ~~long-term~~realize ~~customer~~sufficient ~~relationships~~revenues ~~and~~to ~~developing~~achieve ~~features~~success ~~that~~in these areas and will ~~distinguish~~likely ~~our~~need ~~products.~~to ~~Our~~hire ~~technology~~for iscertain ~~complex~~targeted positions and isinvest ~~often~~more ~~confused~~significantly ~~with~~in other ~~products~~areas ~~and~~well ~~technologies~~ in ~~the~~advance ~~marketplace~~of achieving meaningful revenue – leading to continued losses. As such, ~~including~~we ~~video~~face ~~conferencing~~risks, ~~streaming~~expenses and ~~collaboration~~uncertainties related to our specific business model, as well as those typically encountered by similar companies. Those risks include, but are not limited to our ability to successfully achieve the following:

We● ~~have~~Manage ~~developed lower cost hardware, software products and cloud solutions to better address~~ the ~~more~~changes ~~cost-conscious~~in ~~customers. Such products have more limited features compared to~~ our ~~existing products. While we believe we can preserve the market for our full-featured products due to differentiation between the two and migration to full featured products~~business, ~~release~~including ofknown ~~lower cost products has~~ and ~~could~~unknown ~~continue~~challenges ~~to reduce gross margins~~ and demand for products sold at higher prices, which could further adversely affect our business and operating results. Potential large-scale deployments of our products often include the lower cost products we sell, putting greater pressure on gross margin due to expectations for greater volume discounts.expenses;

~~Our~~● ~~video~~Acquire ~~solutions~~new ~~business~~customers ~~pursued~~and aretain ~~greater percentage of virtual events during the onset of COVID restrictions. Some attendees~~ and ~~companies~~expand ~~are~~existing less likely to attend virtual events which negatively impacted the number of events held yet increased per event revenue. Now that COVID restrictions have lapsed in certain geographies, some events have migrated back to in-person but at much lower levels than pre COVID, resulting in a lesser number of events without enhanced services associated with virtual events.customers;

If● weDevelop ~~fail~~new ~~to build long-term customer relationships, develop features that distinguish our products in the marketplace~~ and ~~address~~complimentary ~~the~~price ~~market~~competitive ~~for~~product ~~lower function~~ and ~~cost~~service ~~solutions~~offerings, ~~our~~both ~~margins~~internally ~~will shrink,~~ and ~~our~~in ~~stock~~partnership ~~may~~with bethird ~~adversely impacted.~~parties;

~~Our~~● ~~operating~~Maintain ~~results~~and ~~are~~develop ~~hard~~relationships towith ~~predict~~strategic aspartners aincluding ~~significant~~dealers, ~~amount~~A/V ofintegrators, ~~our~~large ~~sales~~institutional ~~typically occur at the~~ end-users, ~~of a quarter~~ and ~~the~~other ~~mix~~channel ~~of product and service orders may vary significantly.~~partners;

Revenue for any particular quarter is extremely difficult to predict with any degree of certainty. We typically ship products or invoice for services within a short time after we receive an order and therefore, we do not have an order backlog with which to estimate future revenue. Any decline or uncertainty in end-user demand could negatively impact end-user orders. Accordingly, our expectations for both short and long-term future revenue is based almost exclusively on our own estimate of future demand based on history and the pipeline of sales opportunities we manage, rather than on firm orders. The mix of product demand varies significantly from quarter to quarter, further complicating our estimated product needs. Our expense and inventory levels are based largely on these estimates. In addition, our video solutions business is particularly unpredictable and subject to variation due to the short time-frame between when we learn of an opportunity and when the event occurs. Further, the majority of our product orders are received in the last month of a quarter; thus, the unpredictability of the receipt of these orders could negatively impact our future results. Accordingly, any significant shortfall in demand for our products or services in relation to our expectations, even if the result was a short-term delay in orders, would have an adverse impact on our operating results. 14

13 Table of Contents

~~Table~~Sonic ofFoundry, ~~Contents~~ Inc.

~~Sonic~~Annual ~~Foundry,~~Report ~~Inc.~~ on Form 10-K

~~Annual~~For ~~Report~~the onYear ~~Form~~Ended ~~10-K~~ September 30, 2023

~~For~~● ~~the~~Compete ~~Year~~successfully ~~Ended~~with ~~September~~companies ~~30,~~offering ~~2022~~ similar products and services;

We● ~~have~~Develop ~~experienced~~targeted ~~growing~~marketing ~~demand~~efforts for our hosting and video solutions services as well as a growing preference from our customers in purchasing our annually licensed software. As a result, we have seen an increase in service billings and recurring revenue as a percentage of total billings, and a decrease in hardware billings. We expect this trend to ~~continue,~~expand which we expect to help improve predictability of revenue and gross margins but will delay the impact on revenue of any increase or decrease in billings during any particular quarter. We subcontract for some services required by our ~~events~~reach ~~customers,~~into ~~such~~new asmarkets onsite management labor. We typically charge for such services at a lower margin than other services. The percentage of billings represented by services, provided either directly or indirectly, is also likely to fluctuate from quarter to quarter due to seasonality of event services and ~~other~~deepen ~~factors.~~penetration ~~Since~~into ~~content~~existing hosting and support services are typically billed in advance of providing the service, revenue is initially deferred, leading to reduced current period revenue with a corresponding negative impact to profits or losses in periods of significant increase in the percentage of our billings for deferred services.markets;

~~Accounting~~● ~~regulations~~Manage and ~~related~~scale ~~interpretations~~a ~~and~~high-performance ~~policies,~~technology ~~particularly those related to revenue recognition, cause us to defer revenue recognition into future periods for all or portions of our products and services.~~infrastructure;

~~Revenue~~● ~~recognition~~Ensure for our products and services is complex and subject to multiple sources of authoritative guidance as well as varied interpretations and implementation practices for such rules. These rules require us to apply judgment in determining revenue recognition. In certain situations, we may have to defer the entire amount of revenue from a ~~transaction,~~highly ~~even~~secure when the product has already shipped. This may occur when the customer has delayed payment on the transaction, or in certain other circumstances, such as when we agree to extend payment terms on other invoices from such customer. In addition, we always defer revenue when services are included in a transaction, and ~~not~~reliable performed. Other factors that are considered in revenue recognition include those such as standalone selling price (SSP), best estimate of selling price and the inclusion of other services and contingencies to payment terms. We expect that we will continue to defer portions or, in certain circumstances with respect to a particular customer, all of our product or service billings because of these factors, and to the extent that management’s judgment is incorrect it could result in an increase in the amount of revenue deferred in any one period. The amounts deferred may be significant and may vary from quarter to quarter depending on, among other factors, compliance with payment terms, the mix of products sold, combination of products and services sold together or contractual terms.platform;

~~Additional~~● ~~changes~~Attract inand ~~authoritative~~retain ~~guidance,~~highly ~~including~~skilled ~~the~~personnel ~~interpretation~~to ofexecute ~~"Revenue from Contracts with Customers (Topic 606)", or changes~~ in ~~practice~~a ~~in applying such rules could also cause us to defer the recognition of revenue to future periods or recognize lower revenue. See Note 1~~ fast- ~~Accounting Policies of the Notes to Financial Statements (Part II~~paced, ~~Item 8~~rapidly ofchanging ~~this Form 10-K) for further discussion.~~environment;

~~Because~~● weNavigate ~~generally recognize revenues ratably over~~ the ~~term~~ongoing evolution of ~~our~~changing ~~service~~regulatory ~~contracts~~requirements, ~~decreases~~such oras ~~increases~~privacy inlaws ~~service~~and ~~transactions~~tax ~~will~~laws, ~~not~~and behow ~~fully~~it ~~reflected~~impacts in our ~~operating~~business, ~~results~~including ~~until~~our ~~future~~products ~~periods.~~and services; and

We● ~~recognize~~Expand ~~most of~~ our ~~revenues~~competitive ~~from~~reach service contracts monthly over the terms of their agreements, which are typically 12 months, although terms have ranged from less than one month to 48 months. As a result, much of the service revenue we report in each quarter is attributable to agreements entered into ~~during~~international ~~previous quarters~~markets. ~~Consequently,~~● aFund ~~decline~~these inaggressive sales, client renewals or market acceptance of our products in any one quarter will not necessarily be fully reflected in the revenues in that quarter and will negatively affect our revenues and profitability in future quartersinvestments. This ratable revenue recognition also makes it difficult for us to rapidly increase our revenues through additional sales in any period, as revenues from new clients must be recognized over the applicable agreement term.

~~Currency~~We ~~exchange~~have ~~rate~~experienced ~~fluctuations~~some ~~could~~of ~~result~~these inrisks ~~higher~~already ~~costs~~ and ~~decreased~~will ~~margins~~continue to encounter them as the business evolves. Failure to successfully manage them could adversely affect our financial condition and ~~earnings~~results of operations.

~~The~~We ~~functional~~have ~~currency~~limited ofsources ~~our foreign subsidiaries in the Netherlands is the Euro and in Japan is the Japanese Yen. They are subject to foreign currency exchange rate risk and saw significant weakening~~ of ~~foreign currencies compared to the US dollar in fiscal 2022~~liquidity. The conversion rate of the Yen to the US Dollar varied from about 112 to approximately 150 during fiscal 2022, up from as strong as 102 to the US dollar in fiscal 2021. Similarly, the Euro varied from about 0.86 to approximately 1.04 to the US Dollar during fiscal 2022. The strength of the dollar impacts our ability to export profitably to other countries and will likely continue to fluctuate. Any increase in the exchange rate of the US Dollar compared to the Euro or the Japanese Yen will negatively impact our ability to sell US dollar denominated products and services into foreign countries and dilute the translation of local billed revenue in Japan and Europe

~~Our~~At ~~ability~~September 30, 2023, we had cash of $840 thousand, $498 thousand of which was in our foreign operations, compared to ~~utilize~~total cash of $3.3 million and foreign operations cash of $1.1 million at September 30, 2022. We raised debt of $10.3 million and equity of $1.2 million in fiscal 2023 in order to fund our ~~net~~operations. There ~~operating~~can ~~loss~~be ~~carryforwards~~no assurances that we will comply with the covenants and other restrictions of our debt facilities in the future and nor that other sources of financing will be available, or if available, on acceptable terms. The Company has a history of losses, is investing heavily in new brands in advance of achieving meaningful revenue and has historically financed its operations primarily through cash from sales of equity or debt securities. We cannot ensure that revenue will grow in fiscal 2024 or beyond, even with strategic investment of resources in business lines where we believe there is a greater opportunity for growth. If revenue is determined to be growing at a rate less than anticipated and expenses are not sufficiently matched, our cash resources may not be ~~limited~~sufficient to support working capital needs, and we may have to attempt to borrow additional funds from other debt providers, attempt to raise equity capital or significantly reduce expenses. We have managed through periods of poor liquidity by working to accelerate collections from customers and delay payments to vendors. Such near-term solutions can have negative long-term effects on our relationships with customers and vendors and result in discounting of receipts and finance charges associated with delayed payments. Customers or vendors may elect to cease doing business with us as a result.

~~The~~In ~~use~~the ofevent ~~our~~we ~~net~~need ~~operating~~to ~~loss~~borrow ~~carryforwards~~additional ~~may~~money, ~~have~~raise ~~limitations~~additional ~~resulting~~equity ~~from~~capital, ~~certain future ownership changes~~ or ~~other~~sell ~~factors~~certain ~~under~~assets, ~~the~~we ~~Internal~~may ~~Revenue~~not ~~Code~~be ~~and~~able ~~other~~to ~~taxing~~do ~~authorities.~~so ~~The~~on ~~Tax~~acceptable ~~Cuts~~terms and ~~Jobs~~conditions ~~Act~~including ofdiscounts ~~2017~~from ~~changed~~market, ~~both~~warrants, ~~the~~convertible ~~federal~~securities ~~deferred~~or ~~tax~~preferred ~~value~~stock, ofor ~~the~~at ~~net~~all. ~~operating~~In ~~loss~~that ~~carryforwards~~event, ~~and~~we ~~the~~may ~~rules~~seek ofto ~~utilization~~raise ofmoney ~~federal~~from ~~net~~entities ~~operating~~that ~~loss~~are ~~carryforwards.~~affiliated ~~The~~with ~~Tax~~the ~~Cuts~~Company, ~~and~~as ~~Jobs~~we ~~Act~~have ofdone ~~2017~~in ~~lowered~~ the ~~corporate~~past. ~~tax~~The ~~rate~~Company ~~from~~has ~~35%~~had to ~~21%~~rely ~~effective~~on ~~for~~its ~~our~~Chairman, ~~2018~~Mark ~~fiscal~~Burish, ~~year~~("Mr. ~~For~~Burish") ~~net~~to ~~operating~~provide ~~loss~~capital ~~carryforwards~~on ~~generated~~terms inreasonable ~~years~~and ~~prior~~acceptable to ~~2018,~~the ~~there~~independent ismembers noof ~~annual limitation on~~ the ~~utilization~~Board ~~and~~of ~~the carryforward period remains at 20 years~~Directors. There ~~could~~is beno aassurance, ~~limitation~~however, ifthat ~~a change in ownership occurs~~Mr. ~~However~~Burish, ~~net~~or ~~operating~~any ~~loss~~other ~~carryforwards~~affiliated ~~generated~~party, ~~in years after 2017~~ will ~~only~~ be ~~available~~willing to ~~offset~~provide ~~80%~~additional ~~of future taxable income in any single year, but will not expire~~capital.

14 In the event we have a need to borrow money, we may incur significant interest charges, or fees, which could harm our profitability. Holders of debt would also have rights, preferences or privileges senior to those of existing holders of our common stock. In the event we are able to raise additional equity, the terms of such financing may dilute the ownership interests of current investors and cause our stock price to fall significantly. In the event additional capital is provided by executive officers or directors, then, due to the low price levels of our common stock, control by such executive officers or directors may substantially increase.

~~Table~~Given our history of ~~Contents~~ losses, negative cash flow and lack of available credit, management has concluded that factors exist that raise the need to consider the Company’s ability to continue as a going concern. However, management has considered its plans to continue the Company as a going concern and believes substantial doubt is alleviated. Management developed a plan to improve liquidity in its operations through reductions in expenses, incentives to accelerate cash collections, monetization of excess inventory, potential additional borrowings from Mark Burish, as well as anticipated exchange of a portion of his debt into equity, exchange of a portion of debt for the sale of certain assets and further financial support in the form of additional debt or equity, and proceeds from the proposed sale of the Company’s Mediasite business. The Company believes it will be successful in such initiatives and will be able to continue as a going concern through at least the next twelve months.

~~Sonic~~If ~~Foundry~~the funds held by our foreign subsidiaries are needed for our operations in the United States, ~~Inc~~the repatriation of some of these funds to the United States could require payment of additional U. S. taxes.

~~Annual Report on Form 10-K~~ 15

~~For~~ Table ~~the~~of ~~Year Ended September 30, 2022~~Contents

IfSonic ~~our net operating loss carryforwards are limited~~Foundry, and we have taxable income which exceeds the available net operating loss carryforwards for that period, we would incur an income tax liability even though net operating loss carryforwards may be available in future years prior to their expirationInc. ~~Any such income tax liability may adversely affect our future cash flow, financial position and financial results.~~

~~Company~~Annual ~~Risks~~Report –on ~~Operational~~Form 10-K

~~Operational~~For ~~failures~~the inYear ~~our~~Ended ~~network~~September ~~infrastructure could disrupt our remote hosting services~~30, ~~cause us to lose clients and sales to potential clients and result in increased expenses and reduced revenues.~~2023

Unanticipated problems affecting our network systems could cause interruptions or delays in the delivery of the hosting services we provide to some of our clients. We are not equipped to provide full disaster recovery to all of our hosted clients. If ~~there~~customer ~~are~~adoption ~~operational~~has ~~failures in our network infrastructure that cause interruptions~~barriers, ~~slower response times, loss of data or extended loss of service for~~ our remotely hosted clients, we may be required to issue credits or pay penalties, current clients may terminate their contracts or elect not to renew them and we may lose sales to potential clients. We have recently acquired additional hardware and systems, expect to make more significant investments in hardware and outsourced most aspects of our network infrastructure to multiple providers. We also rely on Internet systems and infrastructure to operate our business ~~and provide our services. As a result, we are reliant on third parties for network availability, so outages~~ may be outside our control and we may need to acquire additional hardware in order to provide an appropriate level of redundancy required by our customers. These hardware, data, and cloud computing platforms may not ~~be available at reasonable terms or prices~~succeed.

WePart ~~are~~of inour ~~the~~strategic ~~process~~challenge is to convince enterprise customers of ~~migrating~~the ~~our~~stability, ~~hosted~~productivity, ~~infrastructure~~improved tocommunications, acost ~~public~~savings, ~~cloud~~suitability and other benefits of our products and services, some of which weare ~~believe~~new ~~will~~or ~~improve~~being ~~reliability~~developed. The market for content delivery solutions is very complex, ~~scalability~~includes many products and ~~cost~~solutions ~~efficiency.~~that ~~This~~address ~~process~~various ~~will~~aspects ~~take~~of ~~several~~customer ~~months~~needs and as a result it is often difficult for customers and channel partners to ~~complete~~understand how our products and services compare. Further, ~~will~~corporate ~~involve~~customers ~~operational~~may ~~risks~~use ~~and~~video as a tool, but may ~~result~~choose into ~~some~~rely ~~customer~~upon ~~attrition~~their ifown ~~they~~IT ~~perceive~~infrastructure ~~that~~and resources to manage their ~~data~~video iscontent. ~~less~~Because ~~local,~~many orcompanies atgenerally ~~greater~~are ~~risk~~predisposed to maintaining control of ~~being~~their ~~compromised.~~IT ~~Any~~systems and infrastructure, there may be resistance to using software as a service ~~outage~~provided orby ~~loss~~a ofthird party. Our future revenue ~~would~~and ~~have~~revenue agrowth ~~negative~~rates ~~impact~~will depend in large part on migrating more customers to our ~~results.~~cloud Inplatform, ~~fiscal~~on ~~2022~~our success in delivering products effectively, creating market acceptance for these products in existing markets that we ~~recorded a~~sell ~~non-cash~~into ~~impairment~~and ~~charge~~in ~~related~~new markets, and meeting customer’s needs for new or enhanced products. If we fail to ~~fixed~~do ~~assets~~so, inour products will not achieve widespread market acceptance, or will no longer be used by our ~~data~~customers, ~~centers~~and ofwe ~~$328 thousand.~~may ~~The~~not ~~charge~~generate issufficient ~~based~~revenue onto anoffset ~~estimate~~our product development and selling and marketing costs, which ~~could~~will ~~require~~adversely ~~additional~~impact ~~charges~~the invaluation ~~fiscal~~of ~~2023~~the orCompany, ~~2024~~the price of our stock, and will harm our business.

~~Our~~Large, ~~business~~multi-unit isdeals ~~susceptible~~are toneeded ~~risks~~for ~~associated~~continued ~~with international operations~~success.

~~International~~We ~~product~~need to complete larger initial or multi-year transactions of software and service ~~billings~~solutions ~~were~~to ~~approximately~~educational, ~~30%~~corporate and government institutions in order to sell most efficiently and become profitable. Sales of ~~our~~large ~~total~~solutions ~~billings~~to corporate customers have lagged behind results achieved in ~~each~~the ofhigher education market; consequently, we have allocated more resources to the ~~past~~higher ~~two~~education ~~years~~market. While we have addressed a strategy to leverage existing customers, better address the needs of potential new customers, and ~~are~~close ~~expected~~multiple unit, or multiple year software and service transactions, a customer may choose not to ~~continue~~make expected purchases of our products. Despite our strategy to ~~account~~focus ~~for~~on a ~~significant~~customer ~~portion~~base ofwith a recurring need to purchase our ~~business~~products inand services, we need to identify and sell more products and services to new customers, enter new markets, and reduce the ~~future~~rate of attrition from certain existing customers, typically those with smaller deployments. ~~International~~The ~~sales~~failure ~~are~~to ~~subject~~develop effective strategies to aenter ~~variety~~new markets and increase sales will adversely impact the valuation of ~~risks,~~the ~~including:~~Company and the price of our stock.

●Because ~~Difficulties~~most inof ~~establishing~~our ~~and~~service ~~managing~~contracts ~~international~~are ~~subsidiaries~~renewable on an annual basis, ~~distribution~~a ~~channels~~reduction ~~and~~in ~~operations;~~our service renewal rate could significantly reduce our revenues.

●Our ~~Difficulties~~clients inhave ~~selling~~no obligation to renew their content hosting agreements, ~~servicing~~customer support contracts or other annual service contracts after the expiration of the initial period, which is typically one year, and ~~supporting~~some ~~overseas~~clients have elected not to do so. A decline in renewal rates would likely cause our revenues to decline. Our renewal rates may decline or fluctuate as a result of a number of factors, including client dissatisfaction with our products and services, ~~translating~~our slow response to customer technical inquiries, our failure to update our products ~~into~~to ~~foreign~~maintain ~~languages~~their ~~and~~attractiveness ~~compliance~~in ~~with~~the ~~local~~market, ~~hardware~~deteriorating ~~requirements;~~economic conditions, our deteriorating financial performance or budgetary constraints or changes in budget priorities faced by our clients. If our retention rates decrease, we may need to provide more incentives, reduce pricing or increase marketing costs to improve lead generation through marketing in order to increase revenues, all of which could reduce profitability.

●If ~~Restrictions~~we ~~related~~are toviewed ~~COVID~~only onas ~~traveling~~a tocommodity ~~support~~supplier, our ~~international~~margins ~~customers.~~and ●valuations ~~Difficulties~~will ~~in managing the demands of large international deployments, many of which distract key sales personnel from opportunities in other parts of the world;~~shrink.

●We ~~Challenges~~need ~~associated~~to provide value-added services in order to avoid being viewed as a commodity supplier, which could adversely impact the valuation of the Company, and the price of our stock. This entails building long-term customer relationships and developing features that will distinguish our products. Our technology is complex and is often confused with ~~management~~other ~~transition;~~products and technologies in the marketplace, including video conferencing, streaming and collaboration.

●We ~~Challenges~~have ~~related~~developed lower cost hardware, software products and cloud solutions to ~~language~~better oraddress ~~cultural~~the ~~differences;~~more cost-conscious customers. Such products have more limited features compared to our existing products. While we believe we can preserve the market for our full-featured products due to differentiation between the two and migration to full featured products, release of lower cost products has and could continue to reduce gross margins and demand for products sold at higher prices, which could further adversely affect our business and operating results. Potential large-scale deployments of our products often include the lower cost products we sell, putting greater pressure on gross margin due to expectations for greater volume discounts.

●Our ~~The~~video ~~uncertainty~~solutions business pursued a greater percentage of ~~laws~~virtual ~~and~~events ~~enforcement~~during inthe ~~certain~~onset ~~countries,~~of ~~such~~COVID asrestrictions. ~~China,~~Some ~~relating~~attendees and companies are less likely to attend virtual events which negatively impacted the ~~protection~~number of ~~intellectual~~events ~~property~~held oryet ~~requirements~~increased ~~for~~per ~~product~~event ~~certification~~revenue. Now that COVID restrictions have lapsed, ~~protection~~some events have migrated back to in-person but at much lower levels than pre COVID, resulting in a lesser number of ~~personal~~events ~~data~~without orenhanced ~~other~~services ~~restrictions;~~associated with virtual events.

●If ~~Competitive~~we ~~pressure~~fail ~~impacting~~to ~~other~~build ~~parts~~long-term ofcustomer relationships, develop features that distinguish our products in the ~~world;~~marketplace and address the market for lower function and cost solutions, our margins will shrink, and our stock may be adversely impacted.

●Our ~~Multiple~~operating results are hard to predict as a significant amount of our sales typically occur at the end of a quarter and ~~possibly~~the ~~overlapping~~mix ~~tax~~of ~~structures;~~product and service orders may vary significantly.

●Revenue ~~Currency~~for any particular quarter is extremely difficult to predict with any degree of certainty. We typically ship products or invoice for services within a short time after we receive an order and ~~exchange~~therefore, ~~rate~~we ~~fluctuations~~do not have an order backlog with which to estimate future revenue. Any decline or uncertainty in end-user demand could negatively impact end-user orders. Accordingly, our expectations for both short and ~~imposition~~long-term future revenue is based almost exclusively on our own estimate of ~~tariffs~~future ordemand ~~quotas~~based on history and the pipeline of sales opportunities we manage, rather than on firm orders. The mix of product demand varies significantly from quarter to quarter, further complicating our estimated product needs. Our expense and inventory levels are based largely on these estimates. In addition, our video solutions business is particularly unpredictable and subject to variation due to the short time-frame between when we learn of an opportunity and when the event occurs. Further, the majority of our product orders are received in the last month of a quarter; thus, the unpredictability of the receipt of these orders could negatively impact our future results. Accordingly, any significant shortfall in demand for our products or services in relation to our expectations, even if the result was a short-term delay in orders, would have an adverse impact on our operating results.

~~● Difficulties in collecting accounts receivable in foreign countries, including complexities in documenting letters of credit;~~ 16

● Table ~~Economic~~of ~~or political changes in international markets;~~Contents

●Sonic ~~Restrictions~~Foundry, ~~on access to the Internet; and~~Inc.

●Annual ~~Difficulty~~Report inon ~~complying~~Form ~~with international employment related requirements.~~10-K

~~Supporting~~For ~~our~~the ~~existing~~Year ~~and~~Ended ~~growing~~September ~~customer base and implementing large customer deployments could strain our personnel resources and infrastructure~~30, ~~and if we are unable to scale our operations and increase productivity, customer satisfaction and our business will be harmed.~~2023

~~Frequent~~The ~~enhancements~~demand tofor our ~~software~~hosting ~~put~~and ~~pressure~~video onsolutions ~~our~~services ~~customers~~as towell ~~install,~~as ~~maintain~~a ~~and~~growing ~~train~~preference ~~their~~from ~~personnel~~our oncustomers ~~its~~in ~~use.~~purchasing ~~Further,~~our ~~frequent~~annually ~~releases~~licensed ofsoftware ~~the~~has ~~software~~grown ~~can~~over ~~lead~~time, towhile ~~less~~sales ~~product~~of ~~stability~~our recorders have declined. As a result, ~~our~~we ~~customer~~have ~~care~~seen an increase in service billings and ~~engineering~~recurring ~~resources~~revenue ~~have~~as ~~come~~a ~~under~~percentage of total billings, and ~~are~~a ~~expected~~decrease in ~~the~~hardware ~~future~~billings. We expect this trend to ~~come~~continue, ~~under~~which ~~significant~~we ~~pressure~~expect into ~~providing~~help ~~the~~improve ~~high-quality~~predictability of ~~technical~~revenue ~~support~~and ~~our~~gross ~~customers~~margins ~~expect~~but ~~during~~will ~~periods~~delay ofthe ~~high~~impact ~~demand.~~on Werevenue ~~may~~of beany ~~unable~~increase toor ~~respond~~decrease ~~quickly~~in ~~enough~~billings toduring ~~accommodate~~any ~~short-term~~particular ~~increases~~quarter. inWe ~~customer~~subcontract ~~demand~~ for ~~support~~some services required by our events customers, such as onsite management labor. ~~Increased~~We ~~customer~~typically ~~demand~~charge for ~~these~~such services, ~~without~~at ~~corresponding~~a ~~revenues,~~lower ~~could~~margin ~~increase~~than ~~costs~~other ~~and~~services. ~~adversely~~The ~~affect~~percentage ~~our~~of ~~operating~~billings ~~results.~~represented Inby ~~addition~~services, ~~our~~provided ~~sales~~either ~~process~~directly or indirectly, is ~~highly~~also ~~dependent~~likely onto ~~our~~fluctuate ~~applications~~from ~~and~~quarter ~~business~~to ~~reputation~~quarter ~~and~~due onto ~~positive~~seasonality ~~recommendations~~of ~~from~~event ~~our~~services ~~existing~~and ~~customers~~other factors. ~~Any~~Since ~~failure~~content tohosting ~~maintain~~and ~~high-quality~~support ~~technical~~services ~~support,~~are ortypically abilled ~~market~~in ~~perception~~advance ~~that~~of weproviding dothe ~~not~~service, ~~maintain~~revenue ~~high-quality~~is ~~support~~initially deferred, ~~could~~leading ~~adversely~~to ~~affect~~reduced ~~our~~current ~~reputation,~~period ~~our~~revenue ~~ability~~with toa ~~sell~~corresponding ~~our~~negative ~~products~~impact ~~and~~to ~~services~~profits toor ~~existing~~losses ~~and~~in ~~prospective~~periods ~~customers,~~of ~~and~~significant ~~our~~increase ~~business,~~in ~~operating~~the ~~results~~percentage ~~and~~of ~~financial~~our ~~position~~billings for deferred services.

WeAccounting ~~have~~regulations ~~targeted more of our sales efforts at larger initial transactions – creating increasingly complex deployments requiring substantial technical~~ and ~~management~~related ~~resources,~~interpretations ~~including in some cases significant product customization~~ and integration with other applications or hardware. Customers making large expenditures for our products and services typically have higher expectations of product and service operability and response time if issues arise. Some of these customers have asked us to host their content and have significant amounts of legacy content to transfer to our datacenter. Such increased activity and storage demand on our data centers put additional strain on our personnel and hosting infrastructure. Our hosting customers typically require a high level of accesspolicies, ~~data~~particularly ~~security~~those ~~and~~related ~~need~~ to ~~capture~~revenue and store multiple high-definition streams. Such requirements require costly enhancements to our infrastructure. If we do not accurately plan for our infrastructure capacity requirements and we experience significant strains on our data center capacityrecognition, ~~our~~cause ~~customers could experience performance degradation or service outages that may subject~~ us to ~~financial~~defer ~~penalties,~~revenue ~~result~~recognition ininto ~~customer~~future ~~losses~~periods ~~and~~for ~~harm~~all ~~our business. As we transition from our data centers to a public cloud, we may move~~ or ~~transfer~~portions ~~our data and our customers’ data. Despite precautions taken during this process, any unsuccessful data transfers may impair the delivery~~ of our ~~services, which may damage our business. High demand on technical and management resources to manage large transactions distract personnel from existing customers, development of new~~ products and ~~other important activities which could lead to potential customer dissatisfaction, product development delays or other issues associated with the distraction~~services.

15 Revenue recognition for our products and services is complex and subject to multiple sources of authoritative guidance as well as varied interpretations and implementation practices for such rules. These rules require us to apply judgment in determining revenue recognition. In certain situations, we may have to defer the entire amount of revenue from a transaction, even when the product has already shipped. This may occur when the customer has delayed payment on the transaction, or in certain other circumstances, such as when we agree to extend payment terms on other invoices from such customer. In addition, we always defer revenue when services are included in a transaction, and not performed. Other factors that are considered in revenue recognition include those such as standalone selling price (SSP), best estimate of selling price and the inclusion of other services and contingencies to payment terms. We expect that we will continue to defer portions or, in certain circumstances, all of our product or service billings because of these factors, and to the extent that management’s judgment is incorrect it could result in an increase in the amount of revenue deferred in any one period. The amounts deferred may be significant and may vary from quarter to quarter depending on, among other factors, compliance with payment terms, the mix of products sold, combination of products and services sold together or contractual terms.

~~Table~~Additional changes in authoritative guidance, including the interpretation of ~~Contents~~ "Revenue from Contracts with Customers (Topic 606)", or changes in practice in applying such rules could also cause us to defer the recognition of revenue to future periods or recognize lower revenue. See Note 1 - Accounting Policies of the Notes to Financial Statements (Part II, Item 8 of this Form 10-K) for further discussion.

~~Sonic~~Because ~~Foundry~~we generally recognize revenues ratably over the term of our service contracts, ~~Inc~~decreases or increases in service transactions will not be fully reflected in our operating results until future periods.

~~Annual~~We ~~Report~~recognize onmost ~~Form~~of ~~10-K~~ our revenues from service contracts monthly over the terms of their agreements, which are typically 12 months, although terms have ranged from less than one month to 48 months, or more. As a result, much of the service revenue we report in each quarter is attributable to agreements entered into during previous quarters. Consequently, a decline in sales, client renewals or market acceptance of our products in any one quarter will not necessarily be fully reflected in the revenues in that quarter and will negatively affect our revenues and profitability in future quarters. This ratable revenue recognition also makes it difficult for us to rapidly increase our revenues through additional sales in any period, as revenues from new clients must be recognized over the applicable agreement term.

~~For~~Currency ~~the~~exchange ~~Year~~rate ~~Ended~~fluctuations ~~September~~could ~~30,~~result ~~2022~~ in higher costs and decreased margins and earnings.

IfThe afunctional ~~customer~~currency isof ~~not~~our ~~satisfied~~foreign ~~with~~subsidiaries in the ~~quality~~Netherlands ofis ~~work~~the ~~performed~~Euro byand usin orJapan ais ~~third~~the ~~party~~Japanese inYen. ~~performing~~They ~~our~~are ~~events~~subject ~~services,~~to weforeign ~~could~~currency ~~incur~~exchange ~~additional~~rate ~~costs~~risk toand ~~address~~saw ~~the~~significant ~~situation~~weakening ~~and~~of ~~delay~~foreign ~~recognition~~currencies ofcompared ~~revenue,~~to the ~~profitability~~US ofdollar in fiscal 2022 that ~~work~~continues ~~might~~to bethis ~~impaired,~~day. ~~and~~The conversion rate of the ~~customer’s~~Yen ~~dissatisfaction~~to ~~with~~the ~~our~~US ~~services~~Dollar ~~could~~varied ~~damage~~from ~~our~~about ~~ability~~112 to ~~obtain~~approximately ~~additional~~150 ~~work~~during ~~from~~fiscal ~~that~~2022, ~~customer.~~and Wefrom ~~could~~128 ~~face~~to ~~equipment~~150 orduring ~~Internet~~fiscal ~~connection~~2023 ~~failure~~compared ~~outside~~to ~~our~~as ~~control~~strong ~~but~~as ~~could~~102 ~~regardless~~to ~~result~~the US dollar in ~~the~~fiscal ~~customer~~2021. The ~~being~~strength ~~dissatisfied~~of ~~with~~the dollar impacts our ~~performance.~~ability Into ~~addition,~~export ~~negative~~profitably ~~publicity~~to ~~related~~other countries and will likely continue to ~~our~~fluctuate. ~~customer~~Any ~~relationships,~~increase ~~regardless~~in the exchange rate of ~~its~~the ~~accuracy,~~US ~~may~~Dollar ~~further~~compared ~~damage~~to ~~our~~the ~~business~~Euro byor ~~affecting~~the Japanese Yen will negatively impact our ability to ~~compete~~sell ~~for~~US ~~new~~dollar ~~business~~denominated ~~with~~products ~~current~~and services into foreign countries and ~~prospective~~dilute ~~customers~~the translation of local billed revenue in Japan and Europe.

IfOur weability ~~lose key personnel or fail~~ to ~~integrate~~utilize ~~replacement personnel successfully,~~ our ~~ability~~net tooperating ~~manage~~loss ~~our~~carryforwards ~~business~~may ~~could~~ be ~~impaired~~limited.

~~Our~~The ~~future~~use ~~success depends upon the continued service~~ of our ~~key~~net ~~management,~~operating ~~technical,~~loss ~~sales~~carryforwards ~~and~~may ~~other~~have ~~critical~~limitations ~~personnel,~~resulting ~~including~~from ~~our~~certain ~~Chief~~future ~~Executive~~ownership ~~Officer.~~changes ~~Most~~or ~~of our officers and~~ other ~~key~~factors ~~personnel~~under ~~are employees-at-will, and we cannot assure that we will be able to retain them. Key personnel have left our Company in~~ the ~~past,~~Internal ~~sometimes~~Revenue toCode ~~accept~~and ~~employment~~other ~~with~~taxing ~~companies that sell similar products or services to existing or potential customers of ours~~authorities. The ~~technology~~Tax ~~industry~~Cuts ~~is subject to substantial~~ and ~~continuous~~Jobs ~~competition~~Act ~~for engineers with high levels~~ of ~~experience~~2017 inchanged ~~designing,~~both ~~developing~~the ~~and~~federal ~~managing~~deferred ~~software~~tax ~~and~~value ~~Internet-related services, as well as competition for sales and operations personnel. There will likely be additional departures~~ of ~~key personnel from time to time in~~ the ~~future~~net ~~and~~operating ~~such departures could result in additional competition,~~ loss ofcarryforwards ~~customers or confusion in the marketplace. As we seek to replace such departures, or expand our business, the hiring of qualified sales, technical~~ and ~~support personnel is difficult due to~~ the ~~limited~~rules ~~number~~ of ~~qualified~~utilization ~~professionals and may be impossible to do in a timely manner. Training~~ of ~~new~~federal ~~sales,~~net ~~technical~~operating ~~and~~loss ~~support personnel can take six months or longer before they become productive~~carryforwards. ~~Sales~~The ~~and~~Tax ~~technical~~Cuts ~~strategies have changed~~ and ~~will~~Jobs ~~likely~~Act ~~change~~of ~~further~~2017 inlowered the ~~future~~corporate ~~and~~tax ~~require~~rate ~~different~~from ~~skills~~35% to ~~sell~~21% toeffective ~~different~~for ~~customer~~our ~~types~~2018 ~~and~~fiscal ~~develop~~year. ~~new~~For ~~and~~net ~~changing~~operating ~~products. The~~ loss ofcarryforwards ~~any~~generated ~~key employee could result~~ in ~~significant~~years ~~disruptions~~prior to ~~our operations~~2018, ~~including~~there ~~adversely~~is ~~affecting~~no ~~the~~annual ~~timeliness~~limitation ofon ~~product releases,~~ the ~~successful~~utilization ~~implementation~~ and ~~completion~~the ofcarryforward ~~Company~~period ~~initiatives~~remains ~~and~~at ~~the~~20 ~~results of our operations~~years. InThere ~~addition,~~could webe doa ~~not~~limitation ~~have~~if ~~life~~a ~~insurance~~change ~~policies~~in onownership ~~any~~occurs. ofHowever, ~~our~~net ~~key~~operating ~~employees.~~loss Ifcarryforwards wegenerated ~~lose~~in ~~the~~years ~~services~~after of2017 ~~any~~will ofonly ~~our~~be ~~key~~available ~~employees,~~to ~~the~~offset ~~integration~~80% of ~~replacement~~future ~~personnel~~taxable ~~could~~income bein ~~time~~any ~~consuming~~single year, ~~may~~but ~~cause~~will ~~disruptions~~not ~~to our operations and may be unsuccessful~~expire.

~~Manufacturing disruption or capacity constraints would harm our business.~~ 17

We Table ~~subcontract the manufacturing~~ of our recorders to a third-party contract manufacturer. Although we believe there are multiple sources of supply from other contract manufacturers, as well as, multiple suppliers of component parts required by our contract manufacturer, there is currently a global shortage of most component parts. Inability to get parts or completed systems required to satisfy customer demand would have a material negative impact on our revenues. Likewise, we are susceptible to any material change in terms; such as pricing, level of services performed or changes to payment terms by our contract manufacturer. In particular, the cost of our products increased this year as a result of increased tariffs, an imbalance between supply and demand, inflation and challenges finding sources of distribution. Many component parts currently have long delivery lead times or cease production of certain components with limited notice in which to evaluate or obtain alternate supply, requiring conservative estimation of production requirements. Lengthening lead times, product design changes and other third-party manufacturing disruptions have caused delays in delivery in the past and will likely continue to occur. In order to compensate for supply delays, we have sourced components from increased order lead-time from approximately three months to fifteen months, shopped other off-shore locations, used cross component parts, paid significantly higher prices or premium fees to expedite delivery for short supply components, produced alternate versions and converted inventory from one version to another. We have typically maintained greater amounts of inventory as insurance against delays. Our inventory levels at September 30, 2022 were $1.5 million compared to $442 thousand at September 30, 2021. Many of these strategies have increased our costs or require substantial resources to maintain and may not be sufficient to ensure against a product shortage. We depend on our subcontract manufacturer to produce our products efficiently while maintaining high levels of quality despite frequent changes in configuration and scheduling imposed by us. Any manufacturing or component defects, delay in production or changes in product features will likely cause customer dissatisfaction and may harm our reputation. Moreover, any incapacitation of the manufacturing site due to destruction, natural disaster or similar events could result in a loss of product inventory. As a result of any of the foregoing, we may not be able to meet demand for our products, which could negatively affect revenues in the quarter of the disruption or longer depending upon the magnitude of the event, and could harm our reputation.Contents

WeSonic ~~license technology from third parties. If we are unable to maintain these licenses~~Foundry, ~~our operations and financial condition may be negatively impacted~~Inc.

WeAnnual ~~license~~Report technology from third parties. The loss of, our inability to maintain, or changes in material terms of these licenses could result in increased cost or delayed sales of our software, and services, or may cause us to remove features from our products or services. We anticipate that we will continue to license technology from third parties in the future. This technology may not continue to be available on ~~commercially~~Form reasonable terms, if at all. Although we do not believe that we are substantially dependent on any individual licensed technology, some of the component technologies that we license from third parties could be difficult for us to replace. The impairment of these third10-party relationships, especially if this impairment were to occur in unison, could result in delays in the delivery of our software and services until equivalent technology, if available, is identified, licensed and integrated. This delay could adversely affect our operating results and financial condition.K

16 For the Year Ended September 30, 2023

~~Table~~If ofour ~~Contents~~ net operating loss carryforwards are limited, and we have taxable income which exceeds the available net operating loss carryforwards for that period, we would incur an income tax liability even though net operating loss carryforwards may be available in future years prior to their expiration. Any such income tax liability may adversely affect our future cash flow, financial position, and financial results.

~~Sonic~~Company ~~Foundry,~~Risks ~~Inc.~~ – Operational

~~Annual~~Operational ~~Report~~failures onin ~~Form~~our ~~10-K~~ network infrastructure could disrupt our remote hosting services, cause us to lose clients and sales to potential clients and result in increased expenses and reduced revenues.

~~For~~Unanticipated problems affecting our network systems could cause interruptions or delays in the ~~Year~~delivery ~~Ended~~of ~~September~~the 30hosting services we provide to some of our clients. We are not equipped to provide full disaster recovery to all of our hosted clients. If there are operational failures in our network infrastructure that cause interruptions, ~~2022~~ slower response times, loss of data or extended loss of service for our remotely hosted clients, we may be required to issue credits or pay penalties, current clients may terminate their contracts or elect not to renew them and we may lose sales to potential clients.

~~Company~~In ~~Risks~~fiscal –2023 ~~Strategic~~we began the process of migrating our hosted infrastructure to a public cloud which we believe will improve reliability, scalability and cost efficiency. We’ve migrated all but one of our data centers and expect to complete the process in the next few months. The process involves operational risks and may result in some customer attrition if they perceive that their data is less local, or at greater risk of being compromised. Any service outage or loss of revenue would have a negative impact on our results. While we believe the migration to the public cloud will allow us to avoid significant additional capital and operating costs, the contract with our public cloud provider is expensive and requires a commitment through fiscal 2026. As a result, we are reliant on third parties for network availability, so outages may be outside our control.

~~The~~Our ~~technology~~business ~~underlying our products and services~~ is ~~complex~~susceptible ~~and~~to ~~may~~risks ~~contain~~associated ~~unknown~~with ~~defects~~international ~~that could harm our reputation, result in product liability or decrease market acceptance of our products~~operations.

~~The~~International ~~technology~~product ~~underlying our products~~ and ~~services~~service isbillings ~~complex~~represented ~~and~~29% ~~includes software that is internally developed, software licensed from third parties~~ and ~~hardware~~25% ~~purchased~~of ~~from~~the ~~third~~Company’s ~~parties.~~total ~~These~~billings ~~products~~in ~~have,~~2022 and ~~will in the future~~2023, ~~contain errors or defects~~respectively, ~~particularly~~and ~~when first introduced or when new versions or enhancements~~ are ~~released.~~expected Weto ~~may~~continue ~~not~~to ~~discover~~account ~~defects~~for ~~that~~a ~~affect~~significant ~~our~~portion ~~current~~of ~~or new applications or enhancements until after they are sold, and~~ our ~~insurance~~business ~~coverage~~in ~~may~~the ~~not be sufficient to cover our exposure~~future. ~~Further,~~International ~~there~~sales are ~~third-party~~subject applications our products and services are dependent on, or integrate with, such as operating systems and learning management systems. These integrations require specialized knowledge that is difficult and expensive to ~~maintain.~~a ~~Failure~~variety ~~to maintain compatibility with such applications or identification~~ of ~~defects~~risks, ~~in our products and services could~~including:

● ~~Damage~~Difficulties ~~our~~in ~~reputation~~establishing and managing international subsidiaries, distribution channels and operations;

● ~~Cause~~Difficulties ~~our~~in ~~customers~~selling, toservicing, ~~initiate~~and ~~product~~supporting ~~liability~~overseas ~~suits~~products, ~~against~~translating usproducts into foreign languages and compliance with local hardware requirements;

● ~~Increase~~Restrictions related to COVID on traveling to support our ~~product~~international ~~development~~customers. ~~resources~~● Difficulties in managing the demands of large international deployments, many of which distract key sales personnel from opportunities in other parts of the world;

● ~~Cause~~Challenges ~~customers~~associated towith ~~cancel~~management ~~orders, ask for partial refunds or potential customers to purchase competitive products or services~~transition;

● ~~Delay~~Challenges ~~release~~related orto ~~market~~language ~~acceptance of our products,~~ or ~~otherwise~~cultural ~~adversely impact our relationships with our customers~~differences; ~~and/or~~

● ~~Cause~~The usuncertainty toof ~~allocate~~laws ~~valuable~~and ~~engineering~~enforcement ~~resources~~in tocertain ~~fix~~countries, ~~our~~such ~~existing~~as ~~products~~China, ~~which~~relating ~~may~~to ~~cause~~the usprotection toof ~~allocate~~intellectual ~~fewer~~property ~~resources~~or ~~toward~~requirements ~~developing~~for ~~new~~product ~~products~~certification, orprotection ~~toward~~of ~~adding~~personal ~~features~~data toor ~~our~~other ~~existing products.~~restrictions;

~~Our~~● ~~success~~Competitive ~~depends~~pressure ~~upon~~impacting ~~the~~other ~~proprietary~~parts ~~aspects~~ of ~~our~~the ~~technology.~~world;

~~Our~~● ~~success~~Multiple and ~~ability~~possibly tooverlapping ~~compete~~tax depend to a significant degree upon the protection of our proprietary technology. We currently have three U.S. patents that have been issued to us. We may seek additional patents in the future. However, it is possible that:structures;

● ~~Any~~Currency ~~patents~~and ~~acquired~~exchange byrate orfluctuations issued to us may not be broad enough to protect us. ● Any issued patent could be successfully challenged by one or more third parties, which could result in our loss of the right to prevent others from exploiting the inventions claimed in those patents. ● Current and ~~future~~imposition ~~competitors may independently develop similar technology, duplicate our services or design around any~~ of ~~our~~tariffs ~~patents. ● Effective patent protection, including effective legal-enforcement mechanisms against those who violate our patent-related assets, may not be available in every country in which we do~~ or ~~plan to do business. ● We may not have the resources to enforce our patents or may determine the potential benefits are not worth the cost and risk of ultimately being unsuccessful.~~quotas;

We● ~~may~~Difficulties ~~not~~in becollecting ~~able~~accounts toreceivable ~~innovate~~in toforeign ~~meet~~countries, ~~the~~including ~~needs~~complexities ofin ~~our~~documenting ~~target~~letters ~~markets.~~of credit;

~~Our~~● ~~future~~Economic ~~success~~or ~~will~~political ~~continue~~changes to depend upon our ability to create an effective product development strategy, to develop new products, product enhancements and service offerings that address future and rapidly changing needs of our existing target markets and enable us to expand the market for our products and service offerings. Our success is also dependent upon our ability to respond to changing standards and practices on a timely basis, particularly as customers move away from hardware to software solutions. The success of new strategies, products, product enhancements and service offerings depend on several factors, including timely completion, quality and stability, and market acceptance. Our Mediasite brand is highly valued by the majority of our customers but faces significant competition from other products that may include features Mediasite doesn’t include. Maintaining a competitive advantage has been and will likely continue to be challenging. Our fiscal 2023 business plan includes an expectation that we continue to develop and introduce new products and service offerings under our new Vidable and Global Learning Exchange brands. These offerings will likely take significant investment in ~~key~~international engineering, sales and management resources with little, impact on fiscal 2023 revenue. While the Company believes that investment in areas where it believes there is a much greater opportunity for growth will yield significant revenue improvement in future years, there can be no assurance we will be successful due to market acceptance, correct identification of opportunity markets~~, speed to market, unknown competitors, stability of educational and learning needs and other relevant new product development risks.~~;

~~Our~~● ~~revenue~~Restrictions ~~could be adversely impacted if we do not capitalize~~ on ~~opportunities~~access to ~~develop innovative new products, product enhancements and service offerings that will increase~~ the ~~likelihood~~Internet; ~~that our products~~ and services will be accepted in preference to the products and services of our current and future competitors. Some of our prospective customers may delay the purchase of our products or services until certain features are completed, may require custom development of certain features as part of the purchase decision, or may condition additional payments tied to completion of such features. Prioritizing such custom features can be difficult to adapt to other customers and distracts our engineering team from implementing features required by other customers.

If● ~~potential~~Difficulty ~~customers~~in orcomplying ~~competitors use open source software to develop products that are competitive~~ with ~~our~~international ~~products~~employment ~~and~~related ~~services, we may face decreased demand and pressure to reduce the prices for our products~~requirements.

~~The~~Supporting ~~growing~~our ~~acceptance~~existing and ~~prevalence~~growing ofcustomer ~~open~~base ~~source~~and ~~software~~implementing ~~may~~large ~~make~~customer itdeployments ~~easier~~could ~~for~~strain ~~competitors or potential competitors to develop software applications that compete with~~ our ~~products,~~personnel orresources ~~for customers~~ and potential customers to internally develop software applications that they would otherwise have licensed from us. One of the aspects of open source software is that it can be modified or used to develop new software that competes with proprietary software applicationsinfrastructure, ~~such as ours. Such competition can develop without the degree of overhead~~ and ~~lead~~if time required by traditional proprietary software companies. As open source offerings become more prevalent, customers may defer or forego purchases of our products, which could reduce our sales and lengthen the sales cycle for our products or result in the loss of current customers to open source solutions. If we are unable to ~~differentiate~~scale our ~~products~~operations ~~from competitive products based on open source software, demand for our products~~ and ~~services~~increase ~~may decline~~productivity, ~~and~~customer wesatisfaction ~~may face pressure to reduce the prices of our products, which would hurt our profitability. If our use of open-source is challenged~~ and ~~construes unfavorably,~~ our ~~operating~~business ~~results~~will ~~could~~ be ~~adversely impacted~~harmed.

17 Frequent enhancements to our software put pressure on our customers to install, maintain and train their personnel on its use. Furthermore, frequent releases of the software can lead to less product stability. As a result, our customer care and engineering resources have come under, and are expected in the future, to come under significant pressure in providing the high-quality of technical support our customers expect during periods of high demand. We may be unable to respond quickly enough to accommodate short-term increases in customer demand for support services. Increased customer demand for these services, without corresponding revenues, could increase costs and adversely affect our operating results. In addition, our sales process is highly dependent on our applications and business reputation and on positive recommendations from our existing customers. Any failure to maintain high-quality technical support, or a market perception that we do not maintain high-quality support, could adversely affect our reputation, our ability to sell our products and services to existing and prospective customers, and our business, operating results and financial position.

~~Table~~We have targeted more of ~~Contents~~ our sales efforts at larger initial transactions – creating increasingly complex deployments requiring substantial technical and management resources, including in some cases significant product customization and integration with other applications or hardware. Customers making large expenditures for our products and services typically have higher expectations of product and service operability and response time if issues arise. Some of these customers have asked us to host their content and have significant amounts of legacy content to transfer to our datacenter. Such increased activity and storage demand on our data centers put additional strain on our personnel and hosting infrastructure. Our hosting customers typically require a high level of access, data security and need to capture and store multiple high-definition streams. Such requirements require costly enhancements to our infrastructure. If we do not accurately plan for our infrastructure capacity requirements and we experience significant strains on our data center capacity, our customers could experience performance degradation or service outages that may subject us to financial penalties, result in customer losses and harm our business. As we transition from our data centers to a public cloud, we may move or transfer our data and our customers’ data. Despite precautions taken during this process, any unsuccessful data transfers may impair the delivery of our services, which may damage our business. High demand on technical and management resources to manage large transactions distract personnel from existing customers, development of new products and other important activities which could lead to potential customer dissatisfaction, product development delays or other issues associated with the distraction.

~~Sonic Foundry, Inc.~~ 18

~~Annual~~ Table ~~Report~~of ~~on Form 10-K~~Contents

~~For~~Sonic ~~the Year Ended September 30~~Foundry, ~~2022~~ Inc.

WeAnnual ~~use~~Report open source software in our application suite. Although we monitor our use of open source software closely, the terms of many open source licenses have not been interpreted by United States courts, and there is risk that such licenses could be construed in a manner that imposes unanticipated conditions or restrictions on ~~our~~Form ~~ability to commercialize our products. In such event, we could be required to re~~10-engineer our technology or to discontinue offering all or a portion of our products in the event re-engineering cannot be accomplished on a timely basis, any of which could adversely affect our business, operating results and financial condition.K

WeFor ~~also~~the ~~rely~~Year ~~upon~~Ended ~~trademark,~~September ~~copyright and trade secret laws~~30, ~~which may not be sufficient to protect our intellectual property.~~2023

WeIf ~~also~~a ~~rely~~customer onis anot ~~combination~~satisfied with the quality of ~~laws,~~work ~~such~~performed asby ~~copyright,~~us ~~trademark~~or ~~and~~a ~~trade~~third ~~secret~~party ~~laws~~in ~~and~~performing ~~contractual~~our ~~restrictions~~events services, ~~such~~we ascould ~~confidentiality~~incur ~~agreements~~additional costs to address the situation and ~~licenses~~delay recognition of revenue, tothe ~~establish~~profitability of that work might be impaired, and ~~protect~~the customer’s dissatisfaction with our ~~technology~~services could damage our ability to obtain additional work from that customer. We ~~have~~could ~~registered~~face ~~three~~equipment ~~U.S.~~or ~~and~~Internet ~~four~~connection ~~foreign~~failure ~~country~~outside ~~trademarks.~~our ~~These~~control ~~forms~~but ofcould ~~intellectual~~regardless ~~property~~result ~~protection~~in ~~are~~the ~~critically~~customer ~~important~~being todissatisfied with our ~~ability~~performance. toIn ~~establish~~addition, ~~and~~negative ~~maintain~~publicity related to our ~~competitive~~customer ~~position.~~relationships, ~~However~~regardless of its accuracy, itmay isfurther ~~possible~~damage ~~that:~~our business by affecting our ability to compete for new business with current and prospective customers.

●If ~~Third~~we ~~parties~~lose ~~may~~key ~~infringe~~personnel or ~~misappropriate~~fail ~~our~~to ~~copyrights~~integrate replacement personnel successfully, ~~trademarks~~our ~~and~~ability ~~similar~~to ~~proprietary~~manage ~~rights~~our business could be impaired.

●Our ~~Laws~~future success depends upon the continued service of our key management, technical, sales and ~~contractual~~other ~~restrictions~~critical ~~may~~personnel, ~~not~~including our Chief Executive Officer. Most of our officers and other key personnel are employees-at-will, and we cannot assure that we will be ~~sufficient~~able to ~~prevent~~retain ~~misappropriation~~them. ofKey personnel have left our ~~technology~~Company in the past, sometimes to accept employment with companies that sell similar products or services to ~~deter~~existing ~~others~~or ~~from~~potential customers of ours. The technology industry is subject to substantial and continuous competition for engineers with high levels of experience in designing, developing, ~~similar~~and ~~technologies~~managing software and Internet-related services, ~~particularly~~as well as competition for sales and operations personnel. There will likely be additional departures of key personnel from time to time in ~~foreign~~the ~~countries~~future ~~where~~and such departures could result in additional competition, loss of institutional knowledge, reduced capacity to execute our business, loss of customers or confusion in the ~~laws~~marketplace. As we seek to replace such departures, or expand our business, the hiring of qualified sales, technical and support personnel is difficult due to the limited number of qualified professionals and may be impossible to do in a timely manner. Training of new sales, technical and support personnel can take six months or longer before they become productive. Sales and technical strategies have changed and will likely change further in the future and require different skills to sell to different customer types and develop new and changing products. The loss of any key employee could result in significant disruptions to our operations, including adversely affecting the timeliness of product releases, the successful implementation and completion of Company initiatives and the results of our operations. In addition, we do not ~~protect~~have life insurance policies on any of our ~~proprietary~~key ~~rights~~employees. asIf ~~fully~~we orlose asthe ~~readily~~services asof ~~Unites~~any ~~States~~of ~~laws~~our key employees, the integration of replacement personnel could be time-consuming, potentially causing disruptions to our operations and may be unsuccessful.

●Manufacturing ~~There~~disruption ~~have~~or ~~been~~capacity ~~attacks~~constraints onwould ~~certain~~harm patent systems, increasing the likelihood of changes to established laws, including in the United States. We cannot predict the long-term effects of any potential changes, which could be detrimental to our ~~licensing program~~business.

●We ~~Effective~~subcontract ~~trademark~~the manufacturing of our recorders to a third-party contract manufacturer. Although we believe there are multiple sources of supply from other contract manufacturers, ~~copyright~~as well as multiple suppliers of component parts required by our contract manufacturer, there have been recent periods of global shortages of most component parts. The inability to get parts or completed systems required to satisfy customer demand would have a material negative impact on our revenues. Likewise, we are susceptible to any material change in terms, such as pricing, level of services performed or changes to payment terms by our contract manufacturer. In particular, the cost of our products increased as a result of increased tariffs, an imbalance between supply and ~~trade~~demand, ~~secret~~inflation ~~protection~~and challenges finding sources of distribution. Many component parts currently have long delivery lead times or cease production of certain components with limited notice in which to evaluate or obtain alternate supply, ~~including~~requiring ~~effective~~conservative ~~legal~~estimation of production requirements. Lengthening lead times, product design changes and other third-~~enforcement~~party ~~mechanisms~~manufacturing ~~against~~disruptions ~~those~~have ~~who~~caused ~~violate~~delays in delivery in the past and will likely continue to occur. We have a past due balance with our ~~trademark~~subcontract manufacturer which has resulted in finance charges, ~~copyright~~reduced service and has strained relationships. In order to compensate for supply delays, we have sourced components from increased order lead-time from approximately three months to fifteen months, shopped other offshore locations, used cross component parts, paid significantly higher prices or ~~trade~~premium ~~secret~~fees ~~assets~~to expedite delivery for short supply components, produced alternate versions and converted inventory from one version to another. We have typically maintained greater amounts of inventory as insurance against delays. Our inventory levels at September 30, 2023 were $1.9 million compared to $1.5 million at September 30, 2022. Many of these strategies have increased our costs or require substantial resources to maintain and may not be ~~cost~~sufficient ~~prohibitive~~to ensure against a product shortage. We depend on our subcontract manufacturer to produce our products efficiently while maintaining high levels of quality despite frequent changes in configuration and scheduling imposed by us. Any manufacturing or ~~unavailable~~component defects, delay in production or ~~limited~~changes in ~~foreign~~product ~~countries~~features will likely cause customer dissatisfaction and may harm our reputation. Moreover, any incapacitation of the manufacturing site due to destruction, natural disaster or similar events could result in a loss of product inventory. As a result of any of the foregoing, we may not be able to meet demand for our products, which could negatively affect revenues in the quarter of the disruption or longer depending upon the magnitude of the event, and could harm our reputation.

●We ~~Contractual~~license ~~agreements~~technology ~~may~~from ~~not~~third ~~provide~~parties. ~~meaningful~~If ~~protection~~we ~~for~~are ~~our~~unable ~~trade~~to ~~secrets,~~maintain ~~know-how~~these ~~or other proprietary information in the event of any unauthorized use~~licenses, ~~misappropriation~~our oroperations ~~disclosure~~and offinancial ~~such~~condition ~~trade~~may ~~secrets,~~be ~~know-how~~negatively ~~or other proprietary information~~impacted.

●We ~~Other~~license ~~companies~~technology from third parties. The loss of, our inability to maintain, or changes in material terms of these licenses could result in increased cost or delayed sales of our software, and services, or may ~~claim~~cause ~~common~~us ~~law~~to ~~trademark~~remove ~~rights~~features ~~based~~from ~~upon~~our ~~state~~products or ~~foreign~~services. ~~laws~~We anticipate that ~~precede~~we will continue to license technology from third parties in the ~~federal~~future. ~~registration~~This technology may not continue to be available on commercially reasonable terms, if at all. Although we do not believe that we are substantially dependent on any individual licensed technology, some of the component technologies that we license from third parties could be difficult for us to replace. The impairment of these third-party relationships, especially if this impairment were to occur in unison, could result in delays in the delivery of our ~~marks~~software and services until equivalent technology, if available, is identified, licensed, and integrated. This delay could adversely affect our operating results and financial condition.

~~● Policing unauthorized use of our services and trademarks is difficult, expensive and time-consuming, and we may be unable to determine the extent of any unauthorized use.~~ 19

● Table ~~Reverse engineering, unauthorized copying or other misappropriation~~ of ~~our proprietary technology could enable third parties to benefit from our technology without paying us for it, which would significantly harm our business.~~Contents

IfSonic ~~other parties bring infringement or other claims against us~~Foundry, ~~we may incur significant costs or lose customers~~Inc.

~~Other~~Annual ~~companies~~Report ~~may~~on ~~obtain~~Form patents or other proprietary rights that would limit our ability to conduct our business and could assert that our technologies infringe their proprietary rights. We have incurred substantial costs to defend against such claims in the past and could incur legal costs in the future, even if without merit, and intellectual property litigation could force us to cease using key technology, obtain a license or redesign our products. In the course of our business, we may sell certain systems to our customers, and in connection with such sale, we may agree to indemnify these customers from claims made against them by third parties for patent infringement related to these systems, which could harm our business.10-K

~~There~~For ~~is a great deal of competition in~~ the ~~market~~Year ~~for~~Ended ~~our~~September ~~product and services~~30, ~~which could lower the demand for our offerings and have a negative impact on our operations.~~2023

The market for our products and services is intensely competitive, dynamic and subject to rapid technological change. The intensity of the competition and the pace of change are expected to increase in the future, and likely will require the Company toRisks ~~compete~~– on price and our offerings more than in the past, which could adversely affect our business and operating results. Increased competition has reduced gross margins, has resulted in new customer losses and may result in loss of market share, any one of which could seriously harm our business. Competitors vary in size and in the scope and breadth of the products and services offered, many of which have greater financial resources, greater name recognition, more employees and greater financial, technical, marketing, public relations and distribution resources than we have. In addition, new competitors with greater financial resources may arise through partnerships, distribution agreements, mergers, acquisitions or other types of transactions at any time. In particular, large companies have begun to make investments in and/or partner with smaller companies to enter the lecture capture and video management markets.Strategic

~~Various~~The ~~vendors~~technology ~~provide~~underlying ~~lecture~~our ~~capture,~~products ~~enterprise~~and ~~webcasting~~services oris ~~video~~complex ~~content~~and ~~management~~may ~~capabilities,~~contain ~~but~~unknown ~~few~~defects ~~offer an end-to-end solution~~ that ~~addresses~~could ~~all~~harm ~~phases~~our ofreputation, ~~the~~result ~~video~~in ~~content~~product ~~lifecycle (capture~~liability, ~~delivery,~~or ~~transformation~~decrease ~~and~~market ~~management)~~acceptance inof aour ~~single platform like Mediasite~~products.

18 The technology underlying our products and services is complex and includes software that is internally developed, software licensed from third parties and hardware purchased from third parties. These products have, and will in the future, contain errors or defects, particularly when first introduced or when new versions or enhancements are released. We may not discover defects that affect our current or new applications or enhancements until after they are sold, and our insurance coverage may not be sufficient to cover our exposure. Further, there are third-party applications our products and services are dependent on, or integrate with, such as operating systems and learning management systems. These integrations require specialized knowledge that is difficult and expensive to maintain. Failure to maintain compatibility with such applications or identification of defects in our products and services could:

~~Table~~● ofDamage ~~Contents~~ our reputation;

~~Sonic~~● ~~Foundry,~~Cause ~~Inc.~~ our customers to initiate product liability suits against us;

~~Annual~~● ~~Report~~Increase onour ~~Form~~product ~~10-K~~ development resources;

~~For~~● ~~the~~Cause ~~Year~~customers ~~Ended~~to ~~September~~cancel 30orders, ~~2022~~ ask for partial refunds or potential customers to purchase competitive products or services;

~~Lecture~~● ~~capture~~Delay ~~solutions~~release ~~designed~~or ~~specifically~~market ~~for~~acceptance ~~higher~~of ~~education~~our ~~differ~~products, inor ~~their~~otherwise ~~technology~~adversely ~~approach.~~impact our relationships with our customers; and/or

● ~~Appliance-~~Cause orus ~~room-based~~to ~~lecture~~allocate ~~capture~~valuable ~~provides~~engineering aresources ~~fully~~to ~~integrated~~fix ~~system~~our ~~with~~existing ~~complete recording automation for live or on-demand content. The automated~~products, ~~pre-scheduled~~which ~~workflow~~may ~~results~~cause inus ~~the~~to ~~greatest~~allocate ~~faculty~~fewer ~~and~~resources ~~staff~~toward ~~adoption~~developing ~~and~~new ~~largest~~products, ~~volumes~~or oftoward ~~recorded~~adding ~~content~~features into ~~the~~our ~~shortest~~existing ~~amount of time~~products.

●Our ~~Software-based~~success ~~lecture~~depends ~~capture~~upon ~~that resides on a podium or computer in~~ the ~~classroom~~proprietary ~~also~~aspects ~~captures~~of ~~and~~our ~~publishes rich media content, but relies on campus- or user-supplied hardware~~technology.

●Our ~~Desktop~~success ~~capture~~and ~~tools~~ability ~~reside~~to oncompete ~~individual~~depend ~~users’~~to ~~laptops~~a orsignificant ~~computers~~degree ~~allowing~~upon ~~them~~the protection of our proprietary technology. We currently have three U.S. patents that have been issued to ~~record~~us. ~~user-generated~~We ~~content~~may seek additional patents in the future. However, it is possible that:

~~Few~~● ~~lecture~~Any ~~capture~~patents ~~vendors~~acquired ~~offer~~by aor ~~mix~~issued ofto ~~all~~us ~~lecture~~may ~~capture~~not ~~approaches~~be tobroad ~~best~~enough ~~suit~~to ~~customers’~~protect ~~needs~~us. ~~Most~~● ~~vendors,~~Any ~~including~~issued ~~Extron~~patent ~~and~~could ~~Panopto,~~be ~~support~~successfully ~~only~~challenged by one ~~approach~~or tomore ~~lecture~~third ~~capture. Likewise~~parties, awhich ~~very~~could ~~small~~result ~~number~~in our loss of ~~vendors~~the ~~provide~~right anto ~~integrated~~prevent ~~platform~~others ~~like~~from ~~Mediasite~~exploiting tothe ~~archive~~inventions ~~and~~claimed ~~manage~~in ~~video~~those patents. ● Current and ~~rich~~future ~~media~~competitors ~~recorded~~may ~~with~~independently ~~their~~develop ~~solution~~similar technology, duplicate our services or design around any of our patents. ~~Most~~● ~~rely~~Effective onpatent aprotection, ~~third~~including effective legal-~~party~~enforcement ~~platform~~mechanisms against those who violate our patent-related assets, ~~typically~~may ~~the~~not ~~institution’s~~be ~~learning~~available in every country in which we do or ~~course~~plan ~~management~~to ~~system,~~do business. ● We may not have the resources to ~~publish,~~enforce ~~search~~our patents or may determine the potential benefits are not worth the cost and ~~secure~~risk ~~content~~of ultimately being unsuccessful.

~~Enterprise~~We ~~video~~may ~~management~~not ~~solutions~~be ~~serve~~able asto ~~centralized~~innovate ~~media~~to ~~repositories~~meet ~~that facilitate~~ the ~~delivery,~~needs ~~publishing and management~~ of ~~on-demand~~our ~~video.~~target Unlike Mediasite, most platforms do not include a video capture, webcasting or live streaming component, but instead ingest or import video-based content captured by other third-party devices or solutionsmarkets. ~~Also, most other platforms focus on ingesting video-only content rather than rich video which combines multiple synchronous video and/or slide streams into an interactive media experience.~~

~~Some~~Our ~~current~~future ~~and~~success ~~potential~~will ~~customers~~continue ~~develop~~to ~~their~~depend ~~own~~upon ~~home-grown~~our ~~lecture~~ability ~~capture~~to create an effective product development strategy, ~~webcasting~~to ordevelop ~~video~~new ~~content~~products, ~~solutions~~product ~~which~~enhancements ~~may~~and service offerings that address future and rapidly changing needs of our existing target markets and enable us to expand the market for our products and service offerings. Our success is also ~~compete~~dependent ~~with~~upon ~~Mediasite~~our ability to respond to changing standards and practices on a timely basis, particularly as customers move away from hardware to software solutions. ~~However~~The success of new strategies, weproducts, ~~often~~product ~~find~~enhancements ~~many~~and service offerings depend on several factors, including timely completion, quality and stability, and market acceptance. Our Mediasite brand is highly valued by the majority of ~~these~~our ~~organizations~~customers ~~are~~but ~~now~~faces ~~looking~~significant ~~for~~competition from other products that may include features Mediasite doesn’t include. Maintaining a ~~commercial~~competitive ~~solution~~advantage has been and will likely continue to be challenging. Our fiscal 2024 business plan includes an expectation that ~~offers~~we ~~comprehensive~~continue ~~management~~to ~~capabilities~~develop and introduce new products and service offerings under our new Vidable and Global Learning Exchange brands. These offerings will likely take significant investment in key engineering, ~~requires~~sales ~~fewer~~and management resources with little impact on fiscal 2024 revenue. While the Company believes that investment in areas where it believes there is a much greater opportunity for growth will yield significant revenue improvement in future years, there can be no assurance we will be successful due to market acceptance, correct identification of opportunity markets, speed to market, unknown competitors, stability of educational and ~~internal~~learning ~~maintenance~~needs and ~~delivers~~other arelevant ~~less~~new ~~cumbersome~~product ~~workflow~~development risks.

~~The~~Our ~~competitive~~revenue ~~environment~~could ~~has~~be ~~required~~adversely usimpacted toif ~~make~~we ~~changes~~do innot ~~our~~capitalize ~~products,~~on ~~pricing,~~opportunities ~~licensing,~~to ~~services,~~develop orinnovative ~~marketing~~new toproducts, ~~maintain~~product enhancements and ~~extend~~service ~~our~~offerings ~~current~~that ~~technology. Price~~will ~~concessions~~increase or the ~~emergence~~likelihood ofthat ~~other~~our ~~pricing,~~products ~~licensing,~~ and ~~distribution~~services ~~strategies~~will orbe ~~technology~~accepted ~~solutions~~in ofpreference ~~competitors~~to ~~has~~the ~~impacted~~products ~~revenue growth~~ and ~~may~~services inof ~~the future further reduce~~ our ~~revenue,~~current ~~margins~~and orfuture ~~market share~~competitors. ~~Other~~Some ~~changes~~of weour ~~have~~prospective tocustomers ~~make~~may indelay ~~response~~the topurchase ~~competition,~~of ~~such as~~ our ~~desktop~~products ~~user interface~~ or ~~changes~~services tountil ~~address~~certain ~~privacy~~features ~~concerns~~are completed, ~~could~~may ~~cause~~require uscustom todevelopment ~~expend~~of ~~significant~~certain ~~financial~~features ~~and~~as ~~other~~part ~~resources,~~of ~~disrupt~~the ~~our~~purchase ~~operations~~decision, ~~strain~~or ~~relationships~~may ~~with~~condition ~~partners,~~additional ~~release~~payments ~~products~~tied ~~and~~to ~~enhancements~~completion ~~before~~of ~~they~~such ~~are~~features. ~~thoroughly~~Prioritizing ~~tested~~such orcustom ~~result~~features incan ~~customer~~be ~~dissatisfaction,~~difficult ~~any~~to ofadapt ~~which~~to ~~could~~other ~~harm~~customers and distracts our ~~operating~~engineering ~~results~~team ~~and~~from ~~stock~~implementing ~~price~~features required by other customers.

If ~~our~~potential ~~marketing~~customers ~~and~~or ~~lead~~competitors ~~generation~~use ~~efforts~~open-source software to develop products that are ~~not~~competitive ~~successful,~~with our ~~business~~products ~~will~~and beservices, ~~harmed~~we may face decreased demand and pressure to reduce the prices for our products.

WeThe ~~believe~~growing ~~that~~acceptance ~~continued~~and ~~marketing~~prevalence ~~efforts~~of ~~will~~open-source besoftware ~~critical~~may tomake ~~achieve~~it ~~widespread~~easier ~~acceptance~~for ofcompetitors ~~our~~or ~~products.~~potential ~~Our~~competitors ~~marketing~~to ~~strategies~~develop ~~and~~software ~~campaigns~~applications ~~may~~that ~~not~~compete bewith ~~successful~~our products, ~~and~~or wefor ~~may~~customers ~~not~~and bepotential ~~able~~customers to ~~generate~~internally ~~sufficient~~develop ~~cash~~software ~~flow~~applications that they would otherwise have licensed from ~~operations~~us. toOne ~~cover~~of the ~~expenses~~aspects ~~required~~of toopen-source ~~implement~~software ~~effective~~is ~~strategies~~that ~~and~~it ~~campaigns~~can orbe ~~may~~modified ~~need~~or used to ~~reallocate~~develop ~~marketing~~new ~~resources~~software ~~from~~that ~~one~~competes ~~brand~~with toproprietary ~~another.~~software ~~For example~~applications, ~~failure~~such toas ~~adequately~~ours. ~~generate~~Such ~~and~~competition can develop ~~qualified~~without ~~sales~~the ~~leads~~degree ~~could~~of ~~cause~~overhead ~~our~~and ~~future~~lead ~~revenue~~time torequired ~~decrease~~by traditional proprietary software companies. InAs ~~addition,~~open-source ~~our~~offerings ~~inability~~become tomore ~~generate~~prevalent, ~~and~~customers ~~cultivate~~may ~~qualified~~defer ~~sales~~or ~~leads~~forego ~~into~~purchases ~~large~~of ~~organizations~~our products, orwhich ~~significant~~could ~~cost~~reduce toour ~~attain~~sales and ~~maintain~~lengthen ~~leads,~~the ~~where~~sales ~~there~~cycle isfor ~~the~~our ~~potential~~products ~~for~~or ~~significant~~result ~~use~~in the loss of ~~our~~current ~~products,~~customers ~~could~~to ~~have~~open-source asolutions. ~~material~~If ~~adverse~~we ~~effect~~are onunable to differentiate our ~~business.~~products Wefrom ~~may~~competitive ~~not~~products bebased ~~able~~on toopen-source ~~identify~~software, ~~and~~demand ~~secure~~for ~~the~~our ~~number~~products ofand ~~strategic~~services ~~qualified~~may ~~sales~~decline, ~~leads~~and ~~necessary~~we tomay ~~help~~face ~~generate~~pressure ~~marketplace~~to ~~acceptance~~reduce the prices of our products, which would hurt our profitability. If our ~~marketing~~use orof ~~lead~~open-~~generation~~source ~~efforts~~is ~~are~~challenged ~~not~~and ~~successful~~construed unfavorably, our ~~business and~~ operating results ~~will~~could be ~~harmed~~adversely impacted.

~~The length of our sales and deployment cycles are uncertain, which may cause our revenue and operating results to vary significantly from quarter to quarter and year to year.~~ 20

~~During~~ Table ~~our sales cycle, we spend considerable time and expense providing information to prospective customers about the use and benefits~~ of our products without generating corresponding revenue. Our expense levels are relatively fixed in the short-term and based in part on our expectations of future revenue. Therefore, any delay in our sales cycle could cause significant variations in our operating results, particularly because a relatively small number of customer orders represent a large portion of our revenue.Contents

~~Our~~Sonic ~~largest potential sources of revenue are educational institutions~~Foundry, large corporations and government entities that often require long testing and approval processes before making a decision to purchase our products, particularly when evaluating our products for inclusion in new buildings under construction, high dollar transactions or competitive bidsInc. In general, the process of selling our products to a potential customer may involve lengthy negotiations, collaborations with consultants, designers and architects, time consuming installation processes and changes in network infrastructure in excess of what we or our VARs are able to provide. In addition, educational institutions that started with small pilots are committing to more complex installations and expanding to include undergraduate classrooms, which, due to the increased size of these types of transactions, typically require a longer sales cycle. Also, our enterprise accounts are less motivated by seasonal sales and promotions, and therefore are frequently difficult to finalize. As a result of these factors, our sales and deployment cycles are unpredictable. Our sales and deployment cycles are also subject to delays as a result of customer-specific factors over which we have little or no control, including budgetary constraints, existing infrastructure technical issues and internal approval procedures, particularly with customers or potential customers that rely on government funding.

~~Our~~Annual ~~products~~Report ~~are~~on ~~aimed~~Form toward a broadened user base within our key markets and these products are relatively early in their product life cycles. We cannot predict how the market for our products will develop, and part of our strategic challenge will be to convince targeted users of the productivity, improved communications and test scores, cost savings and other benefits. Accordingly, it is likely that delays in our sales cycles with these products will occur and this could cause significant variations in our operating results.10-K

19 For the Year Ended September 30, 2023

~~Table~~We use open-source software in our application suite. Although we monitor our use of ~~Contents~~ open-source software closely, the terms of many open source licenses have not been interpreted by United States courts, and there is risk that such licenses could be construed in a manner that imposes unanticipated conditions or restrictions on our ability to commercialize our products. In such event, we could be required to re-engineer our technology or to discontinue offering all or a portion of our products in the event re-engineering cannot be accomplished on a timely basis, any of which could adversely affect our business, operating results, and financial condition.

~~Sonic~~We ~~Foundry~~also rely upon trademark, ~~Inc~~copyright, and trade secret laws, which may not be sufficient to protect our intellectual property.

~~Annual~~We ~~Report~~also rely on ~~Form~~a ~~10-K~~ combination of laws, such as copyright, trademark and trade secret laws and contractual restrictions, such as confidentiality agreements and licenses, to establish and protect our technology. We have registered three U.S. and four foreign country trademarks. These forms of intellectual property protection are critically important to our ability to establish and maintain our competitive position. However, it is possible that:

~~For~~● ~~the~~Third ~~Year~~parties ~~Ended~~may ~~September~~infringe 30or misappropriate our copyrights, ~~2022~~ trademarks and similar proprietary rights.

~~Sales~~● ofLaws ~~some~~and ofcontractual ~~our~~restrictions ~~products~~may ~~have~~not ~~experienced~~be ~~seasonal~~sufficient ~~fluctuations~~to ~~which~~prevent ~~have~~misappropriation ~~affected sequential growth rates for these products, particularly in our first fiscal quarter. For example, there is generally a slowdown for sales~~ of our ~~products~~technology inor ~~the higher education and corporate markets in the first fiscal quarter of each year. Seasonal fluctuations could negatively affect our business, which could cause our operating results~~ to ~~fall~~deter ~~short~~others offrom ~~anticipated~~developing ~~results~~similar ~~for such quarters. As such~~technologies, weparticularly ~~believe~~in ~~that~~foreign ~~quarter-to-quarter~~countries ~~comparisons~~where ofthe ~~our~~laws ~~revenues, operating results and cash flows~~ may not beprotect ~~meaningful~~our ~~and~~proprietary ~~should~~rights ~~not~~as befully ~~relied~~or ~~upon~~ as anreadily ~~indication~~as ofUnites ~~future~~States ~~performance~~laws.

We● ~~depend~~There inhave ~~part~~been attacks on certain patent systems, increasing the ~~success~~likelihood of ~~our~~changes ~~relationships~~to ~~with~~established ~~third~~laws, including in the United States. We cannot predict the long-~~party~~term ~~resellers~~effects ~~and~~of ~~integrators~~any potential changes, which could be detrimental to our licensing program.

~~Our~~● ~~success~~Effective ~~depends on various third-party relationships~~trademark, ~~particularly in our non-higher education business~~copyright, ~~with certain international geographies~~ and ~~our~~trade ~~events~~secret ~~services operations. The relationships include third party resellers~~protection, asincluding ~~well~~effective ~~as,~~legal-enforcement ~~system~~mechanisms ~~integrators~~against ~~that~~those ~~assist~~who ~~with~~violate ~~implementations of~~ our ~~products and sourcing of our products and services. Identifying partners~~trademark, ~~negotiating~~copyright and documenting relationships with them and maintaining their relationships require significant time and resources from us. In addition, our agreements with our resellers and integrators are typically non-exclusive and do not prohibit them from working with our competitors or ~~from~~trade ~~offering~~secret ~~competing products or services. We have limited control~~assets, ~~if any, as to whether these strategic partners devote adequate resources to promoting, selling and implementing our products as compared to our competitor’s products. Our competitors~~ may be ~~effective~~cost inprohibitive ~~providing incentives to third parties to favor their products~~ or ~~services.~~unavailable ~~If we are unsuccessful in establishing~~ or ~~maintaining~~limited ~~our relationships with these third parties, our ability to compete~~ in ~~the~~foreign ~~marketplace or to maintain or grow our revenue could be impaired and our operating results would suffer~~countries.

We● ~~may~~Contractual ~~need~~agreements tomay ~~make~~not ~~acquisitions~~provide ormeaningful ~~form~~protection ~~strategic~~for ~~alliances~~our ortrade ~~partnerships~~secrets, inknow-how ~~order~~or toother ~~remain~~proprietary ~~competitive~~information in ~~our~~the ~~market,~~event ~~and~~of ~~such~~any ~~acquisitions~~unauthorized use, ~~strategic~~misappropriation ~~alliances~~ or ~~partnerships,~~disclosure ~~could~~of besuch ~~difficult~~trade ~~to integrate~~secrets, ~~disrupt~~know-how ~~our~~or ~~business~~other ~~and~~proprietary ~~dilute stockholder value~~information.

We● ~~completed~~Other ~~the~~companies ~~acquisitions of Mediasite KK in Japan and MediaMission (now Sonic Foundry International) in the Netherlands in fiscal 2014. In the future, we~~ may ~~acquire~~claim orcommon ~~form~~law ~~strategic~~trademark ~~alliances~~rights orbased ~~partnerships~~upon ~~with~~state ~~other businesses in order to remain competitive~~ or toforeign ~~acquire~~laws ~~new~~that ~~technologies.~~precede ~~Acquisitions,~~the ~~alliances~~federal ~~and~~registration ~~investments~~of ~~involve~~our ~~numerous risks, including:~~marks.

● ~~The~~Policing ~~potential~~unauthorized ~~failure~~use toof ~~achieve~~our ~~the~~services ~~expected~~and ~~benefits~~trademarks ofis difficult, expensive, and time-consuming, and we may be unable to determine the ~~combination~~extent orof ~~acquisition;~~any unauthorized use.

● ~~Difficulties~~Reverse inengineering, ~~and~~unauthorized ~~the~~copying ~~cost~~or other misappropriation of ~~integrating~~our ~~operations,~~proprietary ~~technologies~~technology could enable third parties to benefit from our technology without paying us for it, ~~services~~which ~~and~~would ~~personnel;~~significantly harm our business.

●If ~~Diversion~~other ofparties ~~financial~~bring ~~and~~infringement ~~managerial~~or ~~resources~~other ~~from~~claims ~~existing~~against ~~operations;~~us, we may incur significant costs or lose customers.

●Other ~~Risk~~companies ofmay ~~entering~~obtain ~~new~~patents ~~markets~~or inother ~~which~~proprietary werights ~~have~~that ~~little~~would limit our ability to conduct our business and could assert that our technologies or noother ~~experience~~intellectual property infringe their proprietary rights. We have incurred substantial costs to defend against such claims in the past and could incur legal costs in the future, even if without merit, and intellectual property litigation could force us to cease using key technology, obtain a license or ~~where~~redesign ~~competitors~~our products. In the course of our business, we may ~~have~~sell ~~stronger~~certain ~~market~~systems ~~positions;~~to our customers, and in connection with such sale, we may agree to indemnify these customers from claims made against them by third parties for patent infringement related to these systems, which could harm our business.

●There ~~Potential~~is ~~write-offs~~a great deal of ~~acquired~~competition ~~assets~~in orthe ~~investments,~~market for our product and ~~potential~~services, ~~financial~~which could lower the demand for our offerings and ~~credit~~have ~~risks~~a ~~associated~~negative ~~with~~impact ~~acquired~~on ~~customers;~~our operations.

●The ~~Potential~~market for our products and services is intensely competitive, dynamic and subject to rapid technological change. The intensity of the competition and the pace of change are expected to increase in the future, and likely will require the Company to compete on price and our offerings more than in the past, which could adversely affect our business and operating results. Increased competition has reduced gross margins, has resulted in new customer losses and may result in a loss of ~~key~~market share, any one of which could seriously harm our business. Competitors vary in size and in the scope and breadth of the products and services offered, many of which have greater financial resources, greater name recognition, more employees; and greater financial, technical, marketing, public relations and distribution resources than we have. In addition, new competitors with greater financial resources may arise through partnerships, distribution agreements, mergers, acquisitions, or other types of transactions at any time. In particular, large companies have begun to make investments in and/or partner with smaller companies to enter the lecture capture and video management markets.

●Various ~~Inability~~vendors toprovide ~~generate~~lecture ~~sufficient~~capture, ~~revenue~~enterprise webcasting or video content management capabilities, but few offer an end-to-end ~~offset~~solution ~~acquisition~~that oraddresses ~~investment~~all ~~costs;~~phases of the video content lifecycle (capture, delivery, transformation, and management) in a single platform like Mediasite.

~~● The inability to maintain relationships with customers and partners of the acquired business;~~ 21

● Table ~~The difficulty~~ of ~~transitioning the acquired technology onto our existing platforms and maintaining the security standards consistent with our other services for such technology;~~Contents

●Sonic ~~Potential~~Foundry, ~~unknown liabilities associated with the acquired businesses;~~Inc.

●Annual ~~Unanticipated~~Report ~~expenses~~on ~~related~~Form ~~to acquired technology and its integration into existing technology;~~10-K

●For ~~Negative impact to our results of operations because of~~ the ~~depreciation~~Year ~~and~~Ended ~~amortization~~September ~~of amounts related to acquired intangible assets~~30, ~~fixed assets and deferred compensation, and the loss of acquired deferred revenue and unbilled deferred revenue;~~2023

●Lecture ~~Delays~~capture insolutions ~~customer~~designed ~~purchases~~specifically ~~due~~for tohigher ~~uncertainty~~education ~~related~~differ toin ~~any~~their ~~acquisition;~~technological approach.

● ~~The~~Appliance- ~~need~~or toroom-based ~~implement~~lecture ~~controls~~capture provides a fully integrated system with complete recording automation for live or on-demand content. The automated, ~~procedures~~pre-scheduled workflow results in the greatest faculty and ~~policies~~staff atadoption and largest volumes of recorded content in the ~~acquired~~shortest ~~company;~~amount of time.

● ~~Challenges~~Software-based ~~caused~~lecture bycapture ~~distance,~~that ~~language~~resides on a podium or computer in the classroom also captures and ~~cultural~~publishes ~~differences;~~rich media content but relies on campus- or user-supplied hardware.

● InDesktop ~~the~~capture ~~case~~tools ofreside ~~foreign~~on ~~acquisitions,~~individual ~~the~~users’ ~~challenges~~laptops ~~associated~~or ~~with~~computers ~~integrating~~allowing ~~operations~~them ~~across~~to ~~different~~record ~~cultures~~user-generated ~~and languages and currency, technological, employee and other regulatory risks and uncertainties in the economic, social and political conditions associated with specific countries; and~~content.

●Few ~~The~~lecture ~~tax~~capture ~~effects~~vendors offer a mix of ~~any~~all ~~such~~lecture ~~acquisitions~~capture approaches to best suit customers’ needs. Most vendors, including Extron and Panopto, support only one approach to lecture capture. Likewise, a very small number of vendors provide an integrated platform like Mediasite to archive and manage video and rich media recorded with their solution. Most rely on a third-party platform, typically the institution’s learning or course management system, to publish, search and secure content.

~~Our~~Enterprise ~~failure~~video tomanagement ~~successfully~~solutions ~~manage~~serve as centralized media repositories that facilitate the ~~acquisitions~~delivery, publishing, and management of on-demand video. Unlike Mediasite, KKmost ~~and~~platforms ~~Sonic~~do ~~Foundry~~not ~~International~~include a video capture, webcasting, or ~~other~~live ~~future~~streaming ~~acquisitions~~component, ~~strategic~~but ~~alliances~~instead ingest or ~~partnerships~~import ~~could~~video-based ~~seriously~~content ~~harm~~captured ~~our~~by ~~operating~~other ~~results.~~third-party Indevices ~~addition,~~or ~~our~~solutions. ~~stockholders~~Also, ~~would~~most beother ~~diluted~~platforms iffocus weon ~~finance~~ingesting ~~the~~video-only ~~future~~content ~~acquisitions,~~rather ~~strategic~~than ~~alliances~~rich orvideo ~~partnerships~~which bycombines ~~incurring~~multiple ~~convertible~~synchronous ~~debt~~videos and/or ~~issuing~~slide ~~equity~~streams ~~securities~~into an interactive media experience.

~~Company~~Some ~~Risks~~current –and ~~Compliance~~potential customers develop their own home-grown lecture capture, webcasting or video content solutions which may also compete with Mediasite. However, we often find many of these organizations are now looking for a commercial solution that offers comprehensive management capabilities, requires fewer resources and internal maintenance, and delivers a less cumbersome workflow.

~~Our~~The ~~customers~~competitive ~~may~~environment ~~use~~has required us to make changes in our products, topricing, ~~share~~licensing, ~~confidential~~services, or marketing to maintain and ~~sensitive~~extend ~~information~~our current technology. Price concessions or the emergence of other pricing, licensing, and ifdistribution strategies or technology solutions of competitors has impacted revenue growth and may in the future further reduce our ~~system~~revenue, ~~security~~margins, isor ~~breached~~market share. Other changes we have to make in response to competition, such as our ~~reputation~~desktop user interface or changes to address privacy concerns, could because ~~harmed~~us to expend significant financial and weother ~~may~~resources, ~~lose~~disrupt ~~customers~~our operations, strain relationships with partners, release products and enhancements before they are thoroughly tested or result in customer dissatisfaction, any of which could harm our operating results and stock price.

~~Our~~If ~~customers may use~~ our ~~products~~marketing and ~~services~~lead togeneration ~~share~~efforts ~~confidential~~are ~~and~~not ~~sensitive information~~successful, ~~the~~our ~~security of which is critical to their~~ business. ~~Third~~will ~~parties~~be ~~may attempt to breach our security for customer hosted content or the networks of our customers~~harmed.

20 We believe that continued marketing efforts will be critical in achieving widespread acceptance of our products. Our marketing strategies and campaigns may not be successful, and we may not be able to generate sufficient cash flow from operations to cover the expenses required to implement effective strategies and campaigns or may need to reallocate marketing resources from one brand to another. For example, failure to adequately generate and develop qualified sales leads could cause our future revenue to decrease. In addition, our inability to generate and cultivate qualified sales leads into large organizations, or significant cost to attain and maintain leads, where there is the potential for significant use of our products, could have a material adverse effect on our business. We may not be able to identify and secure the number of strategic qualified sales leads necessary to help generate marketplace acceptance of our products. If our marketing or lead-generation efforts are not successful, our business and operating results will be harmed.

~~Table~~The length of ~~Contents~~ our sales and deployment cycles is uncertain, which may cause our revenue and operating results to vary significantly from quarter to quarter and year to year.

~~Sonic~~During ~~Foundry~~our sales cycle, ~~Inc~~we spend considerable time and expense providing information to prospective customers about the use and benefits of our products without generating corresponding revenue. Our expense levels are relatively fixed in the short-term and based in part on our expectations of future revenue. Therefore, any delay in our sales cycle could cause significant variations in our operating results, particularly because a relatively small number of customer orders represent a large portion of our revenue.

~~Annual~~Our ~~Report~~largest onpotential ~~Form~~sources 10of revenue are educational institutions, large corporations and government entities that often require long testing and approval processes before making a decision to purchase our products, particularly when evaluating our products for inclusion in new buildings under construction, high dollar transactions or competitive bids. In general, the process of selling our products to a potential customer may involve lengthy negotiations, collaborations with consultants, designers and architects, time consuming installation processes and changes in network infrastructure in excess of what we or our VARs are able to provide. In addition, educational institutions that started with small pilots are committing to more complex installations and expanding to include undergraduate classrooms, which, due to the increased size of these types of transactions, typically require a longer sales cycle. Also, our enterprise accounts are less motivated by seasonal sales and promotions, and therefore are frequently difficult to finalize. As a result of these factors, our sales and deployment cycles are unpredictable. Our sales and deployment cycles are also subject to delays as a result of customer-K specific factors over which we have little or no control, including budgetary constraints, existing infrastructure technical issues and internal approval procedures, particularly with customers or potential customers that rely on government funding.

~~For~~Our products are aimed toward a broadened user base within our key markets and these products are relatively early in their product life cycles. We cannot predict how the ~~Year~~market ~~Ended~~for ~~September~~our 30products will develop, ~~2022~~ and part of our strategic challenge will be to convince targeted users of the productivity, improved communications and test scores, cost savings and other benefits. Accordingly, it is likely that delays in our sales cycles with these products will occur and this could cause significant variations in our operating results.

Malicious third-parties may also conduct attacks designed to temporarily deny customers access to our services. Customers may take inadequate security precautions with their sensitive information and may inadvertently make that information public. We may be liable to our customers or subject to fines for a breach in security, and any breach could harm our reputation and cause us to lose customers. In addition, customers are vulnerable to computer viruses, physical or electronic break-ins and similar disruptions, which could lead to interruptions, delays or loss of data. We may be required to expend significant capital and other resources to further protect against security breaches or to resolve problems caused by any breach, including litigation-related expenses if we are sued. 22

~~Our~~ Table ~~business is subject to changing regulations regarding corporate governance and public disclosure that will increase both our costs and the risk~~ of ~~noncompliance.~~Contents

AsSonic ~~a publicly traded company we are subject to significant regulations~~Foundry, ~~including the Sarbanes-Oxley Act of 2002~~Inc. While we have developed and instituted a corporate compliance program based on what we believe are the current best practices and continue to update the program in response to newly implemented regulatory requirements and guidance, we cannot assure that we are or will be in compliance with all potentially applicable regulations. If we fail to comply with any of these regulations, we could be subject to a range of regulatory actions, fines, or other sanctions or litigation.

The SEC has changed the rules multiple times on which companies are required to have auditor attestations in its system of internal controls. While these more recent changes make it less likely the Company will be required to have such an attestation, the SEC may in the future require us to have such an attestation. We have found material weaknesses in our internal control over financial reporting in the past and cannot assure that in the future we will not find additional material weaknesses in connection with our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act. We also cannot assure that we could correct all such weaknesses to allow our management to attest that we have maintained effective internal controls over financial reporting as of the end of our fiscal year in time to enable our independent registered public accounting firm to attest that such assessment will have been fairly stated in our Annual Report on Form 10-K to be filed with the Securities and Exchange Commission or attest that we have maintained effective internal control over financial reporting as of the end of our fiscal year. In addition, the disclosure of any material weakness in our internal control over financial reporting could have a negative impact on our stock price.

~~Industry~~For ~~Risks~~the Year Ended September 30, 2023

~~Economic~~Sales ~~conditions~~of ~~could~~some ~~materially~~of ~~adversely~~our ~~affect~~products have experienced seasonal fluctuations which have affected sequential growth rates for these products, particularly in our first fiscal quarter. For example, there is generally a slowdown for sales of our products in the ~~Company~~higher education and corporate markets in the first fiscal quarter of each year. Seasonal fluctuations could negatively affect our business, which could cause our operating results to fall short of anticipated results for such quarters. As such, we believe that quarter-to-quarter comparisons of our revenues, operating results and cash flows may not be meaningful and should not be relied upon as an indication of future performance.

~~Weakness~~We independ ~~domestic markets and global uncertainties exist~~ in ~~world-wide.~~part In particular COVID 19 has impaired budgets of our customers, eliminated or restricted the ability to hold in-person events, emptied classrooms where our solutions are deployed and created significant uncertainty in the world and specifically in the learning, educational, video, instructional global markets. Many of our customers rely on local, state or Federal government funding, both domestic and international. The Japanese government provides subsidies to support higher education from time to time but has not been consistent. Such subsidies were expected in fiscal 2022 and did not occur. While we now believe they will occur in fiscal 2023 there can be no assurances they do get implemented, or have the ~~impact~~success ~~we expect. Any future delay or elimination~~ of ~~government programs will have a negative impact on~~ our ~~operations~~relationships in Japan. Any continuing unfavorable economic conditions could continue to negatively affect our business operating results or financial condition, which could in turn affect our stock price. Weak economic conditions and the resulting impact on the availability of public funds along with ~~the~~third-party ~~possibility~~resellers ~~of state~~ and ~~local budget cuts and reduced university enrollment could lead to a reduction in demand for our products and services~~integrators. In addition, a prolonged economic downturn, significant inflation, a declining stock market and challenges in obtaining labor and materials required to deliver products and services could cause insolvency of key suppliers resulting in product delays, inability of customers to obtain credit to finance purchases of the Company’s products and inability or delay of our channel partners and other customers to pay accounts receivable owed to us.

~~Economic~~Our ~~conditions~~success ~~may~~depends ~~have~~on avarious ~~disproportionate~~third-party ~~effect~~relationships, onparticularly in our non-higher education business, with certain international geographies and our events services operations. The relationships include third party resellers, as well as, system integrators that assist with the ~~sale~~implementation of our ~~product~~products and sourcing of our products and services. Identifying partners, negotiating, and documenting relationships with them and maintaining their relationships require significant time and resources from us. In addition, our agreements with our resellers and integrators are typically non-exclusive and do not prohibit them from working with our competitors or from offering competing products or services. We have limited control, if any, as to whether these strategic partners devote adequate resources to promoting, selling, and implementing our products as compared to our competitor’s products. Our competitors may be effective in providing incentives to third parties to favor their products or services. If we are unsuccessful in establishing or maintaining our relationships with these third parties, our ability to compete in the marketplace or to maintain or grow our revenue could be impaired and our operating results would suffer.

~~Many~~We ofmay ~~our~~need ~~product customers will look at the total A/V equipment and labor cost~~ to ~~outfit~~make aacquisitions ~~typical conference room~~ or ~~lecture~~form ~~hall~~strategic asalliances ~~one amount for budgetary purposes. Consequently, although our products represent only a portion of the total cost, the cost of the entire project of outfitting a room~~ or ~~conference~~partnerships hall may be considered excessive and may not survive budgetary constraints. Alternatively, our resellers may modify their quotes to end customers by eliminating our products or substituting less expensive products supplied by our competitors in order to ~~win~~remain ~~opportunities~~competitive ~~within~~in ~~budget~~our ~~constraints.~~market, ~~Event service partners may similarly suggest that customers eliminate recording~~ and ~~webcasting~~such ~~as a means of reducing event cost. Consequently~~acquisitions, ~~declines~~strategic inalliances ~~spending~~or ~~by government~~partnerships, ~~educational~~could orbe ~~corporate~~difficult ~~institutions due~~ to ~~budgetary~~integrate, ~~constraints~~disrupt ~~may~~our ~~have~~business ~~a disproportionate impact on the Company~~ and ~~result~~dilute instockholder ~~a material adverse impact on our financial condition~~value. ~~Many events are facing limited attendance or have gone completely virtual which could lead to more event cancellations.~~

21 We completed the acquisitions of Mediasite KK in Japan and MediaMission (now Sonic Foundry International) in the Netherlands in fiscal 2014. In the future, we may acquire or form strategic alliances or partnerships with other businesses in order to remain competitive or to acquire new technologies. Acquisitions, alliances, and investments involve numerous risks, including:

~~Table~~● The potential failure to achieve the expected benefits of ~~Contents~~ the combination or acquisition;

~~Sonic~~● ~~Foundry~~Difficulties in and the cost of integrating operations, ~~Inc.~~ technologies, services, and personnel;

~~Annual~~● ~~Report~~Diversion onof ~~Form~~financial ~~10-K~~ and managerial resources from existing operations;

~~For~~● ~~the~~Risk ~~Year~~of ~~Ended~~entering ~~September~~new ~~30,~~markets ~~2022~~ in which we have little or no experience or where competitors may have stronger market positions;

We● ~~could~~Potential ~~lose~~write-offs ~~revenues~~of ifacquired ~~there~~assets ~~are changes in the spending policies~~ or ~~budget~~investments, ~~priorities~~and ~~for~~potential ~~government~~financial ~~funding~~and ofcredit ~~colleges,~~risks ~~universities,~~associated ~~schools~~with ~~and~~acquired ~~other education providers.~~customers;

~~Most~~● ofPotential ~~our~~loss customers and potential customers are public colleges, universities, schools and other education providers who depend substantially on government funding and saw substantially increased costs and reduced tuition revenue during the COVID pandemic. Accordingly, any general decrease, delay or change in federal, state or local funding for colleges, universities, schools and other education providers could cause our current and potential customers to reduce or delay their purchases of ~~our~~key products and services, or to decide not to renew service contracts, either of which could cause us to lose revenues. Many of our customers were unable to renew support during the pandemic due to many of these challenges and while many are still using the product and we expect they will renew support in the coming fiscal year, there can be assurances that will happen. In addition, a specific reduction in governmental funding support for products such as ours would also cause us to lose revenues. Unfavorable economic conditions may result in further budget cuts and lead to lower overall spending, including information technology spending, by our current and potential clients, which may cause our revenues to decrease.employees;

~~Changes~~● inInability ~~U.S.~~to ~~trade~~generate ~~policy,~~sufficient ~~including~~revenue ~~the~~to ~~imposition~~offset ofacquisition ~~tariffs~~or ~~and~~investment ~~the resulting consequences, may have a material adverse impact on our business, operating results and financial condition.~~costs;

● The ~~U.S.~~inability ~~government has adopted new approaches~~ to ~~trade~~maintain ~~policy~~relationships ~~and~~with incustomers ~~some cases to renegotiate, or potentially terminate, certain existing bilateral or multi-lateral trade agreements. It has also initiated tariffs on certain foreign goods~~ and ~~has~~partners ~~raised the possibility~~ of ~~imposing significant, additional tariff increases or expanding~~ the ~~tariffs~~acquired to capture other types of goods. In response, certain foreign governments have imposed retaliatory tariffs on goods that their countries import from the U.S. Changes in U.S. trade policy have resulted in one or more foreign governments, including China, adopting responsive trade policies that make it more difficult or costly for us to do business in or import our products from those countries. As a result of tariffs in China, the cost of our products has increased. Additional trade restrictions may lead to increased prices to our customers, which may reduce demand, or, if we are unable to achieve increased prices, result in lowering our margin on products sold.;

We● ~~cannot~~The ~~predict~~difficulty ~~the extent to which the U.S. or other countries will impose quotas, duties, tariffs, taxes or other similar restrictions upon the import or export~~ of ~~our~~transitioning ~~products in~~ the ~~future,~~acquired ~~nor~~technology ~~can~~onto ~~we predict future trade policy or the terms of any renegotiated trade agreements and their impact on~~ our ~~business. The~~existing ~~adoption~~platforms and ~~expansion~~maintaining ~~of trade restrictions,~~ the ~~occurrence~~security ofstandards aconsistent ~~trade~~with ~~war,~~our or other ~~governmental~~services ~~action related to tariffs or trade agreements or policies has the potential to adversely impact demand~~ for ~~our~~such ~~products, our costs, our customers, our suppliers, and the U.S. economy, which in turn could have a material adverse effect on our business, operating results and financial condition.~~technology;

~~Privacy~~● ~~concerns~~Potential ~~and~~unknown ~~laws,~~liabilities ~~evolving~~associated ~~regulation~~with ~~of cloud computing, cross-border data transfer restrictions and other domestic or foreign regulations may limit~~ the ~~use~~acquired ~~and adoption of our solutions and adversely affect our business.~~businesses;

~~Regulation~~● ~~related~~Unanticipated toexpenses ~~the~~related ~~provision of services on the Internet is increasing, as Federal, state and foreign governments continue~~ to ~~adopt~~acquired ~~new~~technology ~~laws~~ and ~~regulations~~its ~~addressing~~integration ~~data~~into privacy and the collection, processing, storage and use of personal information, including health data. In some cases, foreign data privacy laws and regulations, such as the European Union’s General Data Protection Regulation that was enacted in May 2018, and an amended Act on the Protection of Personal Information in Japan, impose new obligations directly on us both as a data controller and a data processor, as well as on many of our customers. These new laws may require us to make changes to our services and/or our customers to meet the new legal requirements, and may also increase our potential liability exposure through higher potential penalties for non-compliance. Further, laws such as the European Union’s proposed e-Privacy Regulation are increasingly aimed at the use of personal information for marketing purposes, and the tracking of individuals’ online activities. These new or proposed laws and regulations are subject to differing interpretations and may be inconsistent among jurisdictions. These and other requirements could reduce demand for our services, require us to take on more onerous obligations in our contracts, restrict our ability to store, transfer and process data or, in some cases, impact our ability to offer our services in certain locations or our customers' ability to deploy our solutions globally. For example, ongoing legal challenges in Europe to the mechanisms allowing companies to transfer personal data from the European Economic Area to the United States could result in further limitations on the ability to transfer data across borders, particularly if governments are unable or unwilling to reach new or maintain existing agreements that support cross-border data transfers, such as the EU-U.S. and Swiss-U.S. Privacy Shield framework. Additionally, certain countries have passed or are considering passing laws requiring local data residency. In addition, domestic data privacy laws, such as the California Consumer Privacy Act (“CCPA”), which took effect in January 2020, continue to evolve and could expose us to further regulatory burdens. Further, laws such as the European Union’s proposed e-Privacy Regulation are increasingly aimed at the use of personal information for marketing purposes, and the tracking of individuals’ online activities. The costs of compliance with, and other burdens imposed by, privacy laws, regulations and standards may limit the use and adoption of our services, reduce overall demand for our services, make it more difficult to meet expectations from or commitments to customers, lead to significant fines, penalties or liabilities for noncompliance, or slow the pace at which we close sales transactions, any of which could harm our business.technology;

We● ~~likely~~Negative ~~will~~impact ~~need~~ to ~~acquire software and hardware in order to enhance~~ our ~~ability~~results toof ~~defend~~operations ~~and~~because toof ~~detect~~the ~~intrusions~~depreciation ~~to our network infrastructure, hire additional personnel experienced in data security~~ and ~~may~~amortization ~~need~~of toamounts ~~seek~~related ~~certifications we currently do not have such as SOC2, ISO 27001 or both. These enhancements will be expensive and require significant staff time~~ to ~~deploy~~acquired ~~and~~intangible ~~develop. These risks are mitigated~~assets, tofixed ~~the~~assets ~~extent possible, by our ability to maintain~~ and ~~improve~~deferred ~~business and data governance policies~~compensation, ~~enhanced processes~~ and ~~internal~~the ~~security~~loss ~~controls,~~of ~~including~~acquired ~~our~~deferred ~~ability~~revenue ~~to escalate~~ and ~~respond~~unbilled todeferred known and potential risks. Our executive management are regularly briefed on our cyber-security policies and practices and ongoing efforts to improve security, as well as periodic updates on cyber-security events. In addition, we update our Audit Committee at least annually regarding our processes for evaluating and mitigating risks including cyber related risks. Although we have developed systems and processes designed to protect our customers’ and our customers’ customers’ proprietary and other sensitive data, we can provide no assurances that such measures will be effective.revenue;

In● ~~addition~~Delays ~~to government activity, privacy advocacy and other industry groups have established, or may establish, new self-regulatory standards that may place additional burdens on us. Many of our customers~~ in ~~the~~customer ~~European~~purchases ~~Union~~due ~~face increasingly complex procurement requirements that have delayed some projects and caused us not~~ to beuncertainty ~~successful~~related ~~in winning other opportunities. If we are unable~~ to ~~maintain~~any ~~these certifications or meet these standards, it could adversely affect our ability to provide our solutions to certain customers and could harm our business.~~acquisition;

22 ● The need to implement controls, procedures, and policies at the acquired company;

~~Table~~● ofChallenges ~~Contents~~ caused by distance, language, and cultural differences;

~~Sonic~~● ~~Foundry~~In the case of foreign acquisitions, ~~Inc.~~ the challenges associated with integrating operations across different cultures and languages and currency, technological, employee and other regulatory risks and uncertainties in the economic, social, and political conditions associated with specific countries; and

~~Annual~~● ~~Report~~The ontax ~~Form~~effects ~~10-K~~ of any such acquisitions.

~~For~~Our failure to successfully manage the ~~Year~~acquisitions ~~Ended~~of ~~September~~Mediasite 30KK and Sonic Foundry International, ~~2022~~ or other future acquisitions, strategic alliances or partnerships could seriously harm our operating results. In addition, our stockholders would be diluted if we finance future acquisitions, strategic alliances or partnerships by incurring convertible debt or issuing equity securities.

~~Our~~Company ~~customers~~Risks ~~and~~– potential customers do business in a variety of industries, including financial services, the public sector, healthcare and telecommunications. Regulators in certain industries have adopted and may in the future adopt regulations or interpretive positions regarding the use of cloud computing and other outsourced services. The costs of compliance with, and other burdens imposed by, industry-specific laws, regulations and interpretive positions may limit customers’ use and adoption of our services and reduce overall demand for our services.Compliance

~~The~~Our ~~costs~~customers ofmay ~~compliance~~use ~~with,~~our ~~and~~products ~~other~~to ~~burdens~~share ~~imposed~~confidential ~~by laws, regulations~~ and ~~standards~~sensitive information, ~~may limit the use~~ and ~~adoption~~if of our ~~service~~system ~~and~~security ~~reduce~~is ~~overall demand for it~~breached, orour ~~lead~~reputation tocould ~~significant~~be ~~fines,~~harmed ~~penalties~~and orwe ~~liabilities~~may ~~for~~lose ~~any noncompliance~~customers.

~~Furthermore,~~Our ~~concerns~~customers ~~regarding data privacy~~ may ~~cause~~use ~~the users of~~ our ~~customers’~~products ~~data~~and toservices ~~resist providing the data necessary~~ to ~~allow~~share ~~our~~confidential ~~customers~~and tosensitive ~~use~~information, ~~our service effectively. Even~~ the ~~perception~~security ~~that the privacy~~ of ~~personal~~which ~~information~~ is ~~not~~critical ~~satisfactorily~~to ~~protected~~their orbusiness. ~~does~~Third ~~not~~parties ~~meet~~may ~~regulatory~~attempt ~~requirements~~to ~~could~~breach ~~inhibit sales of~~ our ~~products~~security orfor ~~services,~~customer ~~and~~hosted ~~could~~content ~~limit~~or ~~adoption~~the networks of our ~~cloud-based solutions~~customers.

~~We face risks associated with government regulation of the internet and related legal uncertainties.~~ 23

~~Currently,~~ Table few existing laws or regulations specifically apply to the Internet, other than laws generally applicable to businesses. Many Internet-related laws and regulations, however, are pending and may be adopted in the United States, in individual states and local jurisdictions and in other countries. These laws may relate to many areas that impact our business, including encryption, network and information security, and the convergence of traditional communication services, such as telephone services, with Internet communications, taxes and wireless networks. These types of regulations could differ between countries and other political and geographic divisions both inside and outside the United States. Non-U.S. countries and political organizations may impose, or favor, more and different regulation than that which has been proposed in the United States, thus furthering the complexity of regulation. Certain countries have implemented, or may implement, legislative and technological actions that either do or can effectively regulate access to the Internet, including the ability of Internet Service Providers to limit access to specific websites or content. In addition, state and local governments within the United States may impose regulations in addition to, inconsistent with, or stricter than federal regulations. The adoption of such laws or regulations, and uncertainties associated with their validity, interpretation, applicability and enforcement, may affect the available distribution channels for, and the costs associated with, our products and services. The adoption of such laws and regulations may harm our business.Contents

~~Investor~~Sonic ~~Risks~~Foundry, Inc.

~~The~~Annual ~~market~~Report ~~price~~on ofForm ~~our common stock may be subject to volatility.~~10-K

InFor the ~~past,~~Year ~~and~~Ended ~~through~~September ~~2022~~30, ~~the trading prices of the securities of technology companies have been more volatile than the broader market. Factors affecting the market price of our common stock include:~~2023

●Malicious ~~Variations~~third-parties inmay also conduct attacks designed to temporarily deny customers access to our ~~operating~~services. ~~results~~Customers may take inadequate security precautions with their sensitive information and may inadvertently make that information public. We may be liable to our customers or subject to fines for a breach in security, ~~earnings~~and ~~per~~any ~~share~~breach could harm our reputation and cause us to lose customers. In addition, ~~cash~~customers ~~flows~~are ~~from~~vulnerable ~~operating~~to ~~activities~~computer viruses, ~~deferred~~physical ~~revenue~~or electronic break-ins and ~~other~~similar ~~financial~~disruptions, ~~metrics~~which ~~and~~could ~~non-financial~~lead ~~metrics~~to interruptions, delays, or loss of data. We may be required to expend significant capital and ~~how~~other ~~those~~resources ~~results~~to ~~compare~~further protect against security breaches or to ~~investor~~resolve ~~expectations;~~problems caused by any breach, including litigation-related expenses if we are sued.

● Our ~~announcement~~business ofis ~~actual~~subject ~~results~~to ~~for~~changing aregulations ~~fiscal~~regarding ~~period~~corporate governance and public disclosure that ~~are~~will ~~higher~~increase orboth ~~lower~~our ~~than~~costs ~~expected~~and ~~results~~the risk of noncompliance.

●As ~~Changes~~a inpublicly traded company we are subject to significant regulations, including the ~~estimates~~Sarbanes-Oxley Act of ~~our~~2002. ~~operating~~While ~~results~~we orhave ~~changes~~developed and instituted a corporate compliance program based on what we believe are the current best practices and continue to update the program in ~~recommendations~~response byto ~~securities~~newly ~~analysts~~implemented regulatory requirements and guidance, we cannot assure that ~~elect~~we are or will be in compliance with all potentially applicable regulations. If we fail to ~~follow~~comply ~~our~~with ~~common~~any ~~stock;~~of these regulations, we could be subject to a range of regulatory actions, fines, or other sanctions or litigation.

●Pursuant ~~Announcements~~to Section 404 of ~~technological~~the ~~innovations~~Sarbanes-Oxley Act, ~~new~~our ~~services~~management oris ~~service~~required ~~enhancements~~annually to deliver a report that assesses the effectiveness of our internal control over financial reporting. However, ~~strategic~~for ~~alliances~~as long as we remain a “non-accelerated filer” under the rules of the SEC, our independent registered public accounting firm is not required to deliver an annual attestation report on the effectiveness of our internal control over financial reporting. We will cease to be a non-accelerated filer if (a) the aggregate market value of our outstanding common stock held by non-affiliates as of the last business day of our most recently completed second fiscal quarter is $75 million or ~~significant~~more ~~agreements~~and we reported annual net revenues of greater than $100 million for our most recently completed fiscal year or (b) the aggregate market value of our outstanding common stock held by usnon-affiliates as of the last business day of our most recently completed second fiscal quarter is $700 million or more, regardless of annual net revenues. If we cease to be a non-accelerated filer, we would again be subject to the requirement for an annual attestation report by our ~~competitors;~~independent registered public accounting firm on the effectiveness of our internal control over financial. We have found material weaknesses in our internal control over financial reporting in the past and cannot assure that in the future we will not find additional material weaknesses in connection with our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act. We also cannot assure that we could correct all such weaknesses to allow our management to attest that we have maintained effective internal controls over financial reporting as of the end of our fiscal year in time to enable our independent registered public accounting firm to attest that such assessment will have been fairly stated in our Annual Report on Form 10-K to be filed with the Securities and Exchange Commission or attest that we have maintained effective internal control over financial reporting as of the end of our fiscal year. In addition, the disclosure of any material weakness in our internal control over financial reporting could have a negative impact on our stock price.

●Industry ~~Announcements~~Risks ~~by us or by our competitors of mergers or other strategic acquisitions, or rumors of such transactions involving us or our competitors;~~

●Economic ~~Announcements~~conditions ofcould ~~customer~~materially ~~additions~~adversely ~~and~~affect ~~customer~~the ~~cancellations or delays in customer purchases;~~Company.

●Weakness ~~Recruitment~~in domestic markets and global uncertainties exist world-wide. In particular COVID 19 has impaired budgets of our customers, eliminated or ~~departure~~restricted the ability to hold in-person events, emptied classrooms where our solutions are deployed and created significant uncertainty in the world and specifically in the learning, educational, video, instructional global markets. Many of our customers rely on local, state, or federal government funding, both domestic and international. The Japanese government provides subsidies to support higher education from time to time but has not been consistent. Such subsidies were expected in fiscal 2022 and 2023 and did not occur to any material impact. There can be no assurances they do get implemented to extent to allow for meaningful revenue. Any future delay or elimination of government programs will have a negative impact on our operations in Japan. Any continuing unfavorable economic conditions could continue to negatively affect our business operating results or financial condition, which could in turn affect our stock price. Weak economic conditions and the resulting impact on the availability of public funds along with the possibility of state and local budget cuts and reduced university enrollment could lead to a reduction in demand for our products and services. In addition, a prolonged economic downturn, significant inflation, a declining stock market and challenges in obtaining labor and materials required to deliver products and services could cause insolvency of key ~~personnel;~~suppliers resulting in product delays, inability of customers to obtain credit to finance purchases of the Company’s products and inability or delay of our channel partners and other customers to pay accounts receivable owed to us.

●Economic ~~Disruptions~~conditions inmay ~~our~~have ~~service~~a ~~due~~disproportionate toeffect ~~computer~~on ~~hardware,~~the ~~software,~~sale ~~network~~of orour ~~data~~product ~~center~~and ~~problems;~~services.

●Many ~~The~~of ~~economy,~~our ~~inflation~~product customers will look at the total A/V equipment and ~~other~~labor ~~market~~cost ~~conditions~~to inoutfit a typical conference room or lecture hall as one amount for budgetary purposes. Consequently, although our ~~industry~~products ~~and~~represent only a portion of the ~~industries~~total cost, the cost of the entire project of outfitting a room or conference hall may be considered excessive and may not survive budgetary constraints. Alternatively, our resellers may modify their quotes to end customers; by eliminating our products or substituting less expensive products supplied by our competitors in order to win opportunities within budget constraints. Event service partners may similarly suggest that customers eliminate recording and webcasting as a means of reducing event cost. Consequently, declines in spending by government, educational or corporate institutions due to budgetary constraints may have a disproportionate impact on the Company and result in a material adverse impact on our financial condition. Many events are facing limited attendance or have gone completely virtual which could lead to more event cancellations.

~~● The issuance of shares of common stock and preferred stock by us, whether in connection with an acquisition or a capital raising transaction;~~ 24

● Table ~~Low trading volumes~~ of ~~our shares and inconsistent trading activity;~~Contents

●Sonic ~~Issuance of debt~~Foundry, ~~changes to, defaults or non-renewal of debt facilities and other convertible securities;~~Inc.

●Annual ~~Failure~~Report toon ~~meet~~Form ~~Nasdaq Exchange or OTC market requirements; and~~10-K

●For ~~Any~~the ~~other~~Year ~~factors~~Ended ~~discussed~~September ~~herein.~~30, 2023

●We Incould ~~addition,~~lose revenues if ~~the~~there ~~market~~are ~~for~~changes ~~technology stocks or the stock market~~ in ~~general experiences uneven investor confidence,~~ the ~~market~~spending ~~price~~policies ofor ~~our~~budget ~~common~~priorities ~~stock could decline~~ for ~~reasons~~government ~~unrelated~~funding toof ~~our business~~colleges, ~~operating results or financial condition. The market price of our common stock might also decline in reaction to events that affect other companies within~~universities, ~~or outside~~schools, ~~our~~and ~~industry~~other ~~even~~education ~~if these events do not directly affect us~~providers.

23 Most of our customers and potential customers are public colleges, universities, schools and other education providers who depend substantially on government funding and saw substantially increased costs and reduced tuition revenue during the COVID pandemic. Accordingly, any general decrease, delay or change in federal, state or local funding for colleges, universities, schools and other education providers could cause our current and potential customers to reduce or delay their purchases of our products and services, or to decide not to renew service contracts, either of which could cause us to lose revenues. Many of our customers were unable to renew support during the pandemic due to many of these challenges and while many are still using the product and we expect they will renew support in the coming fiscal year, there can be assurances that will happen. In addition, a specific reduction in governmental funding support for products such as ours would also cause us to lose revenues. Unfavorable economic conditions may result in further budget cuts and lead to lower overall spending, including information technology spending, by our current and potential clients, which may cause our revenues to decrease.

~~Table~~Changes in U.S. trade policy, including the imposition of ~~Contents~~ tariffs and the resulting consequences, may have a material adverse impact on our business, operating results, and financial condition.

~~Sonic~~The ~~Foundry~~U.S. government has adopted new approaches to trade policy and in some cases to renegotiate, ~~Inc~~or potentially terminate, certain existing bilateral or multi-lateral trade agreements. It has also initiated tariffs on certain foreign goods and has raised the possibility of imposing significant, additional tariff increases or expanding the tariffs to capture other types of goods. In response, certain foreign governments have imposed retaliatory tariffs on goods that their countries import from the U.S. Changes in U.S. trade policy have resulted in one or more foreign governments, including China, adopting responsive trade policies that make it more difficult or costly for us to do business in or import our products from those countries. As a result of tariffs in China, the cost of our products has increased. Additional trade restrictions may lead to increased prices to our customers, which may reduce demand, or, if we are unable to achieve increased prices, result in lowering our margin on products sold.

~~Annual~~We ~~Report~~cannot predict the extent to which the U.S. or other countries will impose quotas, duties, tariffs, taxes or other similar restrictions upon the import or export of our products in the future, nor can we predict future trade policy or the terms of any renegotiated trade agreements and their impact on ~~Form~~our ~~10-K~~ business. The adoption and expansion of trade restrictions, the occurrence of a trade war, or other governmental action related to tariffs or trade agreements or policies has the potential to adversely impact demand for our products, our costs, our customers, our suppliers, and the U.S. economy, which in turn could have a material adverse effect on our business, operating results and financial condition.

~~For~~Privacy ~~the~~concerns ~~Year~~and ~~Ended~~laws, ~~September~~evolving 30regulation of cloud computing, ~~2022~~ cross-border data transfer restrictions and other domestic or foreign regulations may limit the use and adoption of our solutions and adversely affect our business.

~~Our~~Regulation ~~common~~related ~~stock~~to the provision of services on the Internet is increasing, as federal, state, and foreign governments continue to adopt new laws and regulations addressing data privacy and the collection, processing, storage and use of personal information, including health data. In some cases, foreign data privacy laws and regulations, such as the European Union’s General Data Protection Regulation that was enacted in May 2018, and an amended Act on the Protection of Personal Information in Japan, impose new obligations directly on us both as a data controller and a data processor, as well as on many of our customers. These new laws may require us to make changes to our services and/or our customers to meet the new legal requirements and may also increase our potential liability exposure through higher potential penalties for non-compliance. Further, laws such as the European Union’s proposed e-Privacy Regulation are increasingly aimed at the use of personal information for marketing purposes, and the tracking of individuals’ online activities. These new or proposed laws and regulations are subject to ~~low~~differing ~~trading~~interpretations ~~volume~~and may be inconsistent among jurisdictions. These and ~~broad~~other ~~price~~requirements ~~swings~~could reduce demand for our services, require us to take on more onerous obligations in our contracts, restrict our ability to store, transfer and process data or, in some cases, impact our ability to offer our services in certain locations or our customers' ability to deploy our solutions globally. For example, ongoing legal challenges in Europe to the mechanisms allowing companies to transfer personal data from the European Economic Area to the United States could result in further limitations on the ability to transfer data across borders, particularly if governments are unable or unwilling to reach new or maintain existing agreements that support cross-border data transfers, such as the EU-U.S. and Swiss-U.S. Privacy Shield framework. Additionally, certain countries have passed or are considering passing laws requiring local data residency. In addition, domestic data privacy laws, such as the California Consumer Privacy Act (“CCPA”), which took effect in January 2020, continue to evolve and could expose us to further regulatory burdens. Further, laws such as the European Union’s proposed e-Privacy Regulation are increasingly aimed at the use of personal information for marketing purposes, and the tracking of individuals’ online activities. The costs of compliance with, and other burdens imposed by, privacy laws, regulations and standards may limit the use and adoption of our services, reduce overall demand for our services, make it more difficult to meet expectations from or commitments to customers, lead to significant fines, penalties, or liabilities for noncompliance, or slow the pace at which we close sales transactions, any of which could harm our business.

~~Our~~We ~~common~~likely ~~stock~~will isneed ~~currently~~to ~~quoted~~acquire onsoftware ~~the~~and ~~NASDAQ~~hardware ~~exchange~~in ~~under~~order ~~the~~to ~~symbol~~enhance ~~“SOFO”.~~our ~~Trading~~ability ofto ~~our~~defend ~~stock~~and ~~has~~to ~~often~~detect ~~been~~intrusions ~~subject~~ to ~~very~~our ~~low~~network ~~volumes~~infrastructure, ~~broad~~hire ~~price~~additional ~~swings~~personnel experienced in data security and ~~often~~may ~~with~~need noto ~~Company~~seek ~~news~~certifications we currently do not have such as SOC2, ISO 27001 or both. WeThese ~~previously~~enhancements ~~failed~~will tobe ~~meet~~expensive ~~continuing~~and ~~listing~~require ~~criteria~~significant ~~required~~staff bytime ~~Nasdaq~~to deploy and ~~moved~~develop. ~~our~~These ~~listing~~risks are mitigated, to the ~~OTC~~extent possible, by our ability to maintain and ~~ultimately~~improve ~~the~~business ~~“Pink~~and ~~Sheets”.~~data ~~Volume~~governance policies, ~~visibility~~enhanced processes, and ~~even~~internal ~~the~~security controls, including our ability to ~~invest~~escalate inand ~~companies~~respond ~~listed~~to onknown ~~such~~and ~~lower~~potential ~~markets~~risks. Our executive management are ~~much~~regularly ~~less~~briefed ~~than~~on ~~Nasdaq.~~our ~~Failure~~cyber-security policies and practices and ongoing efforts to ~~meet~~improve ~~Nasdaq~~security, ~~listing~~as ~~requirements~~well inas ~~the~~periodic ~~future~~updates ~~may~~on ~~require~~cyber-security aevents. ~~similar~~In ~~move~~addition, ~~which~~we ~~will~~update ~~likely~~our ~~reduce~~Audit ~~trading~~Committee inat least annually regarding our ~~common~~processes ~~stock~~for evaluating and ~~put~~mitigating ~~downward~~risks ~~pressure~~including oncyber ~~the~~related ~~stock price~~risks. ~~There~~Although ~~can~~we behave nodeveloped ~~assurance~~systems weand ~~are~~processes ~~able~~designed to ~~continue~~protect toour ~~meet~~customers’ ~~the~~and ~~requirements~~our ofcustomers’ ~~the~~customers’ ~~NASDAQ~~proprietary ~~Capital~~and ~~market~~other sensitive data, we can provide no assurances that such measures will be effective.

~~Exercise~~In addition to government activity, privacy advocacy and other industry groups have established, or may establish, new self-regulatory standards that may place additional burdens on us. Many of ~~outstanding~~our ~~options~~customers in the European Union face increasingly complex procurement requirements that have delayed some projects and ~~warrants~~caused ~~will~~us ~~result~~not to be successful in ~~further~~winning ~~dilution~~other opportunities. If we are unable to maintain these certifications or meet these standards, it could adversely affect our ability to provide our solutions to certain customers and could harm our business.

The issuance of shares of common stock upon the exercise of our outstanding options and warrants will result in dilution to the interests of our stockholders, and may reduce the trading price of our common stock. 25

At Table ~~September 30, 2022, we had 542 thousand outstanding warrants and 2.1 million~~ of ~~outstanding stock options granted under our stock option plans, 1.2 million of which are currently exercisable.~~Contents

~~While~~Sonic ~~a substantial portion of our outstanding warrants and options are currently priced above the market price of our common stock~~Foundry, ~~dilution to the interests of our stockholders will likely occur if or when they are exercised~~Inc. Additional options and warrants may be issued in the future at prices not less than 85% of the fair market value of the underlying security on the date of grant. Exercises of these options, or even the potential of their exercise may have an adverse effect on the trading price of our common stock. The holders of our options are likely to exercise them at times when the market price of the common stock exceeds the exercise price of the securities. Accordingly, the issuance of shares of common stock upon exercise of the options will likely result in dilution of the equity represented by the then outstanding shares of common stock held by other stockholders. Holders of our options can be expected to exercise or convert them at a time when we would, in all likelihood, be able to obtain any needed capital on terms, which are more favorable to us than the exercise terms provided, by these options.

~~Provisions~~Annual ofReport ~~our~~on ~~charter~~Form documents and Maryland law could also discourage an acquisition of our Company that would benefit our stockholders and, due to our insiders control of a substantial percentage of our stock, our officers, directors, and major stockholders will have a substantial amount of control over whether to approve or disapprove of a transaction.10-K

~~Provisions~~For of our articles of incorporation and by-laws may make it more difficult for a third party to acquire control of our company, even if a change in control would benefit our stockholders. Our articles of incorporation authorize our board of directors, without stockholder approval, to issue one or more series of preferred stock, which could have voting and conversion rights that adversely affect or dilute the ~~voting~~Year ~~power~~Ended ofSeptember ~~the holders of common stock. Furthermore~~30, our articles of incorporation provide for a classified board of directors, which means that our stockholders may vote upon the retention of only one or two of our five directors each year. Moreover, Maryland corporate law restricts certain business combination transactions with “interested stockholders” and limits voting rights upon certain acquisitions of “control shares.” In addition, even when there are no interested stockholders involved in a transaction, Maryland law requires that a transaction involving a merger, consolidation, transfer of assets, or share exchange, must be approved by the affirmative vote of at least two-thirds of the Company’s stockholders.2023

Our ~~executive~~customers ~~officers~~ and ~~directors~~potential ~~together~~customers ~~beneficially~~do ~~own,~~business onin ana ~~“as~~variety ~~converted~~of ~~basis”~~industries, ~~approximately~~including ~~38%~~financial ~~of our outstanding common stock~~services, ~~and~~the ~~Mr.~~public ~~Burish~~sector, ~~individually,~~healthcare ~~owns~~and ~~approximately 34% on an as converted basis~~telecommunications. AsRegulators ain ~~result,~~certain ~~these~~industries ~~stockholders,~~have ifadopted ~~they~~and ~~act~~may ~~together~~in orthe infuture aadopt ~~block,~~regulations or ~~individually~~interpretive inpositions regarding the ~~case~~use of ~~Mr.~~cloud ~~Burish,~~computing ~~could~~and ~~have~~other ~~significant~~outsourced ~~influence~~services. ~~over~~The ~~most~~costs ~~matters that require approval by our stockholders, including the approval~~ of ~~significant~~compliance ~~corporate transactions~~with, ~~even~~and if other ~~stockholders~~burdens ~~oppose~~imposed ~~them. In addition~~by, ~~under~~industry-specific ~~federal law~~laws, inregulations ~~many~~and ~~circumstances~~interpretive apositions ~~company~~may ~~such~~limit ascustomers’ ~~Sonic~~use ~~Foundry~~and isadoption ~~not required to disclose that negotiations relating to a merger or to a sale~~ of ~~its~~our ~~stock~~services orand ~~assets~~reduce ~~are~~overall ~~occurring~~demand ~~until~~for ~~a material definitive agreement has been reached. Concentration of ownership as described here might also have the effect of delaying or preventing a change of control of~~ our ~~Company that other stockholders may view as beneficial~~services.

~~ITEM~~The ~~1B.~~costs ~~UNRESOLVED~~of ~~STAFF~~compliance ~~COMMENTS~~with, and other burdens imposed by laws, regulations and standards, may limit the use and adoption of our service and reduce overall demand for it, or lead to significant fines, penalties or liabilities for any noncompliance.

~~None~~Furthermore, concerns regarding data privacy may cause the users of our customers’ data to resist providing the data necessary to allow our customers to use our service effectively. Even the perception that the privacy of personal information is not satisfactorily protected or does not meet regulatory requirements could inhibit sales of our products or services and could limit adoption of our cloud-based solutions.

~~ITEM~~We 2.face ~~PROPERTIES~~risks associated with government regulation of the internet and related legal uncertainties.

~~Our~~Currently, ~~principal~~few ~~office~~existing islaws ~~located~~or inregulations ~~Madison~~specifically apply to the Internet, ~~Wisconsin~~other inthan alaws ~~leased~~generally ~~facility~~applicable ofto ~~approximately~~businesses. 26Many Internet-related laws and regulations,~~000~~ ~~square~~however, ~~feet~~are pending and may be adopted in the United States, in individual states and local jurisdictions and in other countries. ~~The~~These ~~building~~laws ~~serves~~may asrelate to many areas that impact our ~~corporate~~business, ~~headquarters~~including encryption, ~~accommodating~~network ~~our~~and ~~general~~information security, and ~~administrative~~the convergence of traditional communication services, ~~product~~such ~~development~~as ~~and~~telephone ~~selling~~services, with Internet communications, taxes, and ~~marketing~~wireless ~~departments~~networks. WeThese ~~believe~~types ~~this~~of ~~facility~~regulations iscould ~~adequate~~differ ~~for~~between ~~our~~countries ~~needs~~and other political and geographic divisions both inside and outside the United States. ~~The~~Non-U.S. ~~current~~countries ~~lease~~and ~~term~~political ~~for~~organizations ~~this~~may ~~office~~impose, ~~expires~~or onfavor, ~~June~~more 30and different regulation than that which has been proposed in the United States, ~~2024~~thus furthering the complexity of regulation. ~~The~~ ~~rent~~Certain ~~for~~countries have implemented, or may implement, legislative and technological actions that either do or can effectively regulate access to the ~~remainder~~Internet, including the ability of Internet Service Providers to limit access to specific websites or content. In addition, state and local governments within the ~~current~~United ~~lease~~States ~~period~~may isimpose ~~approximately~~regulations ~~$58~~in ~~thousand~~addition ~~per~~to, ~~month~~inconsistent ~~for~~with, ~~2022~~or stricter than federal regulations. The adoption of such laws or regulations, and ~~$58~~uncertainties ~~thousand~~associated with their validity, interpretation, applicability, and ~~$60~~enforcement, ~~thousand for~~may affect the ~~calendar~~available ~~years~~distribution ~~2023~~channels for, and ~~January~~the tocosts ~~June~~associated ~~2024~~with, ~~respectively~~our products and services. The adoption of such laws and regulations may harm our business.

~~Our~~Investor ~~operations~~Risks in Japan are managed in Tokyo, Japan in a leased facility of approximately 9,874 square feet with a term expired on December 31, 2021. Effective January 1, 2022, the operations moved to a new leased facility of 7,870 square feet with a lease term that will expire on December 31, 2023. The facility includes sales, technical and administrative functions. The rent through December 31, 2021 was approximately $48 thousand per month and $33 thousand per month starting from January 1, 2022.

~~Our~~The ~~European~~market ~~operations~~price ~~are managed in Utrecht, Netherlands in a leased facility~~ of ~~approximately~~our ~~3,886~~common ~~square~~stock ~~feet~~may ~~with~~be asubject ~~term expiring on July 31, 2023. The Company has the option~~ to ~~renew~~volatility. ~~The facility includes sales, technical and administrative functions. The rent for the remainder of the lease period is approximately $6 thousand per month.~~

24 In the past, and through 2023, the trading prices of the securities of technology companies have been more volatile than the broader market. Factors affecting the market price of our common stock include:

~~Table~~● ofConcern ~~Contents~~ over our ability to continue as a going concern; ● Variations in our operating results, earnings per share, cash flows from operating activities, deferred revenue and other financial metrics and non-financial metrics, and how those results compare to investor expectations;

~~Sonic~~● ~~Foundry,~~Our ~~Inc.~~ announcement of actual results for a fiscal period that are higher or lower than expected results

~~Annual~~● ~~Report~~Changes onin ~~Form~~the ~~10-K~~ estimates of our operating results or changes in recommendations by securities analysts that elect to follow our common stock;

~~For~~● ~~the~~Announcements ~~Year~~of ~~Ended~~technological ~~September~~innovations, 30new services or service enhancements, ~~2022~~ strategic alliances or significant agreements by us or by our competitors;

~~ITEM~~● 3.Announcements ~~LEGAL~~by ~~PROCEEDINGS~~us or by our competitors of mergers or other strategic acquisitions, or rumors of such transactions involving us or our competitors;

~~None.~~● Announcements of customer additions and customer cancellations or delays in customer purchases;

~~ITEM~~● 4.Recruitment ~~MINE~~or ~~SAFETY~~departure ~~DISCLOSURES~~of key personnel;

~~Not~~● ~~applicable.~~Disruptions in our service due to computer hardware, software, network or data center problems;

25 ● The economy, inflation, high interest rates and other market conditions in our industry and the industries of our customers;

~~Table~~● The issuance of ~~Contents~~ shares of common stock and preferred stock by us, whether in connection with an acquisition or a capital raising transaction;

~~Sonic~~● ~~Foundry,~~Low ~~Inc.~~ trading volumes of our shares and inconsistent trading activity;

~~Annual~~● ~~Report~~Issuance onof ~~Form~~debt, 10changes to, defaults or non-K renewal of debt facilities and other convertible securities;

~~For~~● ~~the~~Any ~~Year~~other ~~Ended~~factors ~~September~~discussed ~~30, 2022~~ herein.

~~PART~~● IIIn addition, if the market for technology stocks or the stock market in general experiences uneven investor confidence, the market price of our common stock could decline for reasons unrelated to our business, operating results or financial condition. The market price of our common stock might also decline in reaction to events that affect other companies within, or outside, our industry even if these events do not directly affect us.

~~ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES~~ 26

~~Price~~ Table ~~Range~~ of ~~Common Stock~~Contents

~~Our~~Sonic ~~common stock was initially traded on the American Stock Exchange under the symbol “SFO~~Foundry,” ~~beginning with our initial public offering in April of 1998~~Inc. On April 24, 2000, our common stock began trading on the NASDAQ Global Market under the symbol “SOFO.” Effective September 16, 2009, we transferred the listing of our common stock to the NASDAQ Capital Market. Effective December 31, 2018, we transferred the listing of our common stock to the OTCQB Market under the symbol "SOFO". Effective January 25, 2022, we transferred the listing of our common stock to the NASDAQ Capital Market. The following table sets forth, for the periods indicated, the high and low sale prices per share of our common stock as reported on the NASDAQ Capital Market and prior to January 25, 2022, as reported on the OTCQB Market.

	High		Low
Year Ended September 30, 2023:
First Quarter (through November 9, 2022)		1.34		0.95
Year Ended September 30, 2022:
First Quarter		4.01		2.81
Second Quarter		4.23		2.60
Third Quarter		3.24		1.37
Fourth Quarter		2.09		1.24
Year Ended September 30, 2021:
First Quarter		3.26		3.09
Second Quarter		4.28		4.18
Third Quarter		5.10		4.61
Fourth Quarter		3.88		3.60

Annual Report on Form 10-K

~~Dividends~~For the Year Ended September 30, 2023

~~The~~Our ~~Company~~common stock has ~~not~~been ~~paid~~delisted ~~any cash dividends and does not intend to pay any cash dividends in the foreseeable future. The Company is prohibited~~ from ~~paying any cash dividends pursuant to~~ the ~~terms~~NASDAQ ofCapital ~~the loan and security agreement with U~~Market.~~S. Bank National Association.~~

26 On December 5, 2023, our common stock was delisted from the Nasdaq Capital Market and commenced trading on the OTC Markets. As a result of the delisting of our common stock, we and our stockholders could face significant material adverse consequences including:

~~Table~~● a limited availability of ~~Contents~~ market quotations for our shares;

~~Sonic~~● ~~Foundry,~~reduced ~~Inc.~~ liquidity for our shares;

~~Annual~~● ~~Report~~a ondetermination ~~Form~~that ~~10-K~~ our common stock is a “penny stock” which will require brokers trading in our common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our shares;

~~For~~● ~~the~~a ~~Year~~limited ~~Ended~~amount ~~September~~of ~~30,~~news ~~2022~~ and analyst coverage; and

~~Holders~~● a decreased ability to issue additional securities or obtain additional financing in the future, including due to our inability to use a Form S-3 for a shelf financing.

AtOur ~~November 4, 2022, there were 202~~ common ~~stockholders~~stock ofis ~~record~~subject ~~and~~to ~~approximately~~low ~~2,500 total~~trading ~~shareholders.~~volume ~~Many shares are held by brokers~~ and ~~other~~broad ~~institutions~~price ~~on behalf of shareholders~~swings.

~~Equity~~Our ~~Compensation~~common ~~Plan~~stock ~~Information~~is currently quoted on the OTC Market under the symbol “SOFO”. Trading of our stock has often been subject to very low volumes, broad price swings and often with no Company news. Volume, visibility and even the ability to invest in companies listed on such lower markets are much less than Nasdaq.

Number of

Number of securities

Weighted average

securities

to be issued upon

exercise price of

remaining

exercise of

outstanding

available for

Plan category

outstanding options and warrants

options and warrants

future issuance

Equity compensation plans approved by security holders (1)

2,095,538

3.74

1,224,917

Warrants outstanding

542,450

3.40

N/A

Total

2,637,988

3.68

1,224,917

Exercise of outstanding options and warrants will result in further dilution.

~~(1)~~The ~~Consists~~issuance of ~~the~~shares ~~2009~~of ~~Stock~~common ~~Incentive~~stock ~~Plan,~~upon the ~~2020~~exercise ~~Equity~~of ~~Incentive~~our ~~Stock~~outstanding ~~Option~~options ~~Plan~~ and ~~the~~warrants ~~2008~~will ~~Non-Employee~~result ~~Directors~~in ~~Stock~~dilution ~~Option~~of ~~Plan.~~the ~~For~~interests ~~further~~of ~~information~~our ~~regarding~~stockholders ~~these~~and ~~plans,~~may ~~reference~~reduce isthe ~~made~~trading toprice ~~Note 5~~ of ~~the~~our ~~financial~~common ~~statements~~stock.

~~ITEM~~On 6September 30, 2023, we had 988 thousand outstanding warrants and 2.4 million ~~SELECTED~~of ~~CONSOLIDATED~~outstanding ~~FINANCIAL~~stock ~~DATA~~options granted under our stock option plans, 1.5 million of which are currently exercisable.

~~The~~While ~~selected~~a ~~financial~~substantial portion of our outstanding warrants and ~~operating~~options ~~data~~are ~~were~~currently ~~derived~~priced ~~from~~above the market price of our ~~consolidated~~common ~~financial~~stock, ~~statements.~~dilution ~~The~~to ~~selected~~the ~~financial~~interests ~~data~~of ~~set~~our ~~forth~~stockholders ~~below~~will islikely ~~qualified~~occur inif ~~its~~or ~~entirety~~when ~~by,~~they are exercised. Additional options and ~~should~~warrants may be ~~read~~issued in ~~conjunction~~the ~~with~~future at prices not less than 85% of the fair market value of the underlying security on the date of grant. Exercises of these options, ~~“Management’s~~or ~~Discussion~~even ~~and~~the ~~Analysis~~potential of ~~Financial~~their ~~Condition~~exercise ~~and~~may ~~Results~~have an adverse effect on the trading price of ~~Operations”~~our ~~and~~common stock. The holders of our ~~financial~~options ~~statements~~are ~~and~~likely ~~notes~~to ~~thereto~~exercise ~~appearing~~them ~~elsewhere~~at times when the market price of the common stock exceeds the exercise price of the securities. Accordingly, the issuance of shares of common stock upon exercise of the options will likely result in ~~this~~dilution ~~annual~~of ~~report~~the onequity ~~Form~~represented ~~10-K~~by (the then outstanding shares of common stock held by other stockholders. Holders of our options can be expected to exercise or convert them at a time when we would, in ~~thousands~~all ~~except~~likelihood, ~~per~~be ~~share~~able ~~data)~~to obtain any needed capital on terms, which are more favorable to us than the exercise terms provided, by these options.

27 We are a “smaller reporting company” and will be able to avail ourselves of reduced disclosure requirements applicable to smaller reporting companies, which could make our common stock less attractive to investors.

~~Table~~We are a “smaller reporting company,” as defined in the Securities Exchange Act of ~~Contents~~ 1934, and we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “smaller reporting companies,” including reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements. We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile. We may take advantage of these reporting exemptions until we are no longer a “smaller reporting company.” We will remain a “smaller reporting company” until (a) the aggregate market value of our outstanding common stock held by non-affiliates as of the last business day of our most recently completed second fiscal quarter is $250 million or more and we reported annual net revenues as of our most recently completed fiscal year is $100 million or more, or (b) the aggregate market value of our outstanding common stock held by non-affiliates as of the last business day of our most recently completed second fiscal quarter is $700 million or more, regardless of annual revenue.

~~Sonic~~Provisions ~~Foundry~~of our charter documents and Maryland law could also discourage an acquisition of our Company that would benefit our stockholders and, ~~Inc~~due to our insiders’ control of a substantial percentage of our stock, our officers, directors, and major stockholders will have a substantial amount of control over whether to approve or disapprove of a transaction.

~~Annual~~Provisions ~~Report~~of onour ~~Form~~articles 10of incorporation and by-K laws may make it more difficult for a third party to acquire control of our company, even if a change in control would benefit our stockholders. Our articles of incorporation authorize our board of directors, without stockholder approval, to issue one or more series of preferred stock, which could have voting and conversion rights that adversely affect or dilute the voting power of the holders of common stock. Furthermore, our articles of incorporation provide for a classified board of directors, which means that our stockholders may vote upon the retention of only one or two of our five directors each year. Moreover, Maryland corporate law restricts certain business combination transactions with “interested stockholders” and limits voting rights upon certain acquisitions of “control shares.” In addition, even when there are no interested stockholders involved in a transaction, Maryland law requires that a transaction involving a merger, consolidation, transfer of assets, or share exchange, must be approved by the affirmative vote of at least two-thirds of the Company’s stockholders.

~~For~~Our executive officers and directors together beneficially own, on an “as converted basis”, approximately 47% of our outstanding common stock, and Mr. Burish, individually, owns approximately 43% on an as converted basis. As a result, these stockholders, if they act together or in a block, or individually in the ~~Year~~case ~~Ended~~of ~~September~~Mr. 30Burish, ~~2022~~ could have significant influence over most matters that require approval by our stockholders, including the approval of significant corporate transactions, even if other stockholders oppose them. In addition, under federal law, in many circumstances a company such as Sonic Foundry is not required to disclose that negotiations relating to a merger or to a sale of its stock or assets are occurring until a material definitive agreement has been reached. This concentration of ownership might also have the effect of delaying or preventing a change of control of our Company that other stockholders may view as beneficial.

	Years Ended September 30,
	2022			2021			2020			2019			2018
Statement of Operations Data:
Revenue	$	27,466		$	35,167		$	34,753		$	34,781		$	34,544
Cost of revenue		8,653			10,294			9,634			9,280			9,656
Gross margin		18,813			24,873			25,119			25,501			24,888
Operating expenses		25,736			24,066			24,383			28,009			29,118
Impairment of goodwill & intangible assets		—			—			—			—			11,809
Income (loss) from operations		(6,923	)		807			736			(2,508	)		(16,039	)
Other income (expense), net		(364	)		4			(109	)		(117	)		142
Gain on debt forgiveness		—			2,325			—			—			—
Interest expense, net		(31	)		(44	)		(658	)		(897	)		(601	)
Benefit (provision) for income taxes		235			(15	)		(148	)		(90	)		4,332
Net income (loss)	$	(7,083	)	$	3,077		$	(179	)	$	(3,612	)	$	(12,166	)
Dividends on preferred stock	$	—		$	—		$	—		$	(122	)	$	(257	)
Net income (loss) attributable to common shareholders	$	(7,083	)	$	3,077		$	(179	)	$	(3,734	)	$	(12,423	)
Basic net income (loss) per common share	$	(0.72	)	$	0.37		$	(0.02	)	$	(0.64	)	$	(2.67	)
Diluted net income (loss) per common share	$	(0.72	)	$	0.36		$	(0.02	)	$	(0.64	)	$	(2.67	)
Weighted average common shares:
– Basic		9,899,724			8,230,100			7,216,135			5,833,301			4,655,520
– Diluted		9,899,724			8,650,384			7,216,135			5,833,301			4,655,520

Balance Sheet Data at September 30:	2022			2021		2020			2019			2018
Cash and cash equivalents	$	3,299		$	9,989	$	7,619		$	4,295		$	1,189
Working capital (deficit)		(2,612	)		3,389		(1,488	)		(847	)		(5,765	)
Total assets		19,900			24,015		22,629			15,180			13,583
Long-term liabilities		2,576			3,859		5,373			7,602			3,451
Stockholders’ equity (deficit)		3,578			6,140		(1,048	)		(6,253	)		(6,458	)

Table of Contents

~~ITEM~~Sonic 7.Foundry, ~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~Inc.

~~The~~Annual ~~financial~~Report ~~and~~on ~~business~~Form analysis below provides information that Sonic Foundry, Inc. (the “Company”) believes is relevant to an assessment and understanding of the Company’s consolidated financial position and results of operations. This financial and business analysis should be read in conjunction with the consolidated financial statements and related notes.10-K

~~This~~For ~~report includes estimates, projections, statements relating to our business plans, objectives, and expected operating results that are “forward-looking statements” within~~ the ~~meaning~~Year ofEnded ~~the~~September ~~Private Securities Litigation Reform Act of 1995~~30, Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements may appear throughout this report, including the following sections: “Management’s Discussion and Analysis,” and “Risk Factors.” These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties that may cause actual results to differ materially. We describe risks and uncertainties that could cause actual results and events to differ materially in “Risk Factors” (Part 1, Item 1A of this Form 10-K), “Quantitative and Qualitative Disclosures about Market Risk” (Part II, Item 7A of this Form 10-K), and in this Item 7. We undertake no obligation to update or revise publicly any forward-looking statements, whether because of new information, future events, or otherwise.2023

28 ITEM 1B. UNRESOLVED STAFF COMMENTS

~~Table of Contents~~ None.

~~Sonic Foundry, Inc~~ITEM 1C. CYBERSECURITY

~~Annual~~Not ~~Report on Form 10-K~~ applicable.

~~For~~ITEM 2. ~~the Year Ended September 30, 2022~~ PROPERTIES

~~Overview~~Our principal office is located in Madison, Wisconsin in a leased facility of approximately 26,000 square feet. The building serves as our corporate headquarters, accommodating our general and administrative, product development and selling and marketing departments. We believe this facility is adequate for our needs. The current lease term for this office expires on June 30, 2024. The monthly rent for the remainder of the current lease period is approximately $58 thousand and $60 thousand for the calendar years 2023, and January to June 2024, respectively.

~~Sonic~~Our ~~Foundry,~~operations ~~Inc.~~in isJapan ~~the~~are ~~global~~managed ~~leader~~in ~~for video capture~~Tokyo, ~~management,~~Japan ~~and~~in ~~streaming~~a ~~solutions~~leased asfacility ~~well as virtual and hybrid events. Trusted by thousands~~ of ~~educational institutions~~7,870 ~~corporations,~~square ~~health~~feet ~~organizations~~with ~~and~~a ~~government~~lease ~~entities~~term inthat will ~~over~~expire 65on ~~countries~~December ~~with~~31, ~~solutions~~2025. ~~that~~The ~~transform~~facility ~~communication,~~includes ~~training~~sales, technical and ~~learning~~administrative functions. ~~Sonic~~ ~~Foundry’s~~The ~~brands~~rent ~~include~~is ~~Mediasite®,~~approximately ~~Mediasite~~$22 ~~Connect,~~thousand ~~Vidable™~~per ~~and Global Learning Exchange™~~month.

~~Critical~~Our ~~Accounting~~European ~~Policies~~operations are managed in Utrecht, Netherlands in a leased facility of approximately 540 square feet with a term expiring on June 30, 2025. The facility includes sales, technical and administrative functions with rent of approximately $7 thousand per month.

We have identified the following as critical accounting policies to our Company and have discussed the development, selection of estimates and the disclosure regarding them with the audit committee of the board of directors: 28

• Table ~~Revenue~~of recognition; • Inventory reserves; • Allowance for doubtful accounts; • Asset retirement obligations; • Valuation allowance for net deferred tax assets; and • Accounting for stock-based compensation.Contents

~~Revenue~~Sonic ~~recognition~~Foundry, Inc.

WeAnnual ~~recognize~~Report revenues in accordance with Financial Accounting Standards Board ("FASB"), Accounting Standards Codification ("ASC") Topic 606, Revenue from Contracts with Customers ("ASC 606"). Recording revenues requires judgment, including determining whether an arrangement includes multiple performance obligations, whether any of those obligations are distinct and cannot be combined and allocation of the transaction price to each performance obligation based on ~~the~~Form relative standalone selling prices ("SSP"). Customers receive certain contract elements over time. Changes to the elements in an arrangement or, in our determination, to the relative SSP for these elements, could materially affect the amount of earned and unearned revenues reflected in our consolidated financial statements.10-K

~~The~~For ~~primary judgments relating to our revenue recognition include determining whether (i)~~ the ~~contract~~Year ~~with~~Ended aSeptember ~~customer~~30, exists; (ii) performance obligations are identified; (iii) the transaction price is determined; (iv) the transaction price is allocated to performance obligations; and (v) the distinct performance obligations are satisfied by transferring control of the product or service to the client. Transfer of control is typically evaluated from the customer's perspective.2023

~~At contract inception, we determine whether we satisfy the performance obligation over time or at a point in time~~ITEM 3. ~~Revenues~~LEGAL from hosted software and hosting solutions are primarily recognized ratably over time or as fee-bearing usages occur. Certain software licenses are sold either on-premises or through term-based hosting agreements. These hosting arrangements provide customers with the same product functionality and differ mainly in the duration over which the customer benefits from the software. We deliver our software licenses electronically. Electronic delivery occurs when we provide the customer with access to the software and license key via a secure portal. Revenue from on-premises software licenses is generally recognized upfront at the point in time when the software is made available to the customer.PROCEEDINGS

~~Our contracts with customers for on-premises software licenses include maintenance services and may also include training and/or professional services~~None. Maintenance services agreements consist of fees for providing software updates on an if and when available basis and for providing technical support for software products for a specified term. We believe that our software updates and technical support each have the same pattern of transfer to the customer and are substantially the same. Therefore, we consider these updates and technical support to be a single distinct performance obligation. Revenues allocated to maintenance services are recognized ratably as the maintenance services are provided. Revenues related to training services are billed on a fixed fee basis and are recognized as the services are delivered. Payments received in advance of services performed are deferred and recognized when the related services are performed. Revenues related to professional services are billed on a time and materials basis and are recognized as the services are performed.

~~We also provide cloud-based subscriptions, which allow customers to access our software during a contractual period without taking possession of the software~~ITEM 4. WeMINE ~~recognize~~SAFETY ~~revenue related to these cloud-based subscriptions ratably over the life of the subscription agreement beginning when the customer first has access to the software.~~DISCLOSURES

WeNot ~~are often party to multiple concurrent contracts or contracts pursuant to which a client may purchase a combination of goods and services~~applicable. These situations require judgment to determine whether multiple contracts should be combined and accounted for as a single arrangement. In making this determination, we consider whether the economics of the individual contracts cannot be understood without reference to the whole and multiple promises represent one single performance obligation.

Table of Contents

Sonic Foundry, Inc.

Annual Report on Form 10-K

For the Year Ended September 30, ~~2022~~ 2023

~~Due~~PART to the large number, broad nature and average size of individual contracts we are a party to, the effect of judgments and assumptions we apply in recognizing revenues for any single contract is not likely to have a material effect on our consolidated operations. However, the broader accounting policy assumptions that we apply across similar arrangements or classes of clients could significantly influence the timing and amount of revenues recognized in our results of operations.II

~~Reserves~~ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES

~~Beginning~~From inJanuary ~~fiscal year 2020~~25, ~~the~~2022 ~~Company~~through ~~established~~December a4, ~~hardware~~2023, ~~inventory~~our ~~reserve.~~common Instock ~~conjunction~~traded ~~with~~on athe ~~new~~NASDAQ ~~hardware~~Capital ~~release~~Market. ~~due~~Effective inDecember ~~the~~5, ~~fourth quarter FY 2020~~2023, ~~certain~~our ~~older~~common ~~models~~stock ~~are~~was nodelisted ~~longer~~from ~~being~~the ~~actively~~NASDAQ ~~sold~~Capital Market and ~~those~~began ~~units,~~trading ~~along~~on ~~with~~the ~~their~~OTC ~~corresponding~~Pink ~~raw~~Market ~~materials,~~under ~~have~~the ~~been~~symbol ~~100% reserved~~"SOFO". ~~The~~Any ~~inventory~~over-the-counter ~~reserve~~market ~~methodology~~quotations ~~was~~reflect ~~unchanged~~inter-dealer inprices, ~~fiscal~~without ~~year~~retail ~~2022.~~mark-up, ~~The~~mark-down ~~Company~~or ~~has~~commission ~~fully~~and ~~reserved~~may ~~all~~not ~~inactive~~necessarily ~~hardware~~represent ~~due~~actual ~~to release of Media Site 8~~transactions.0.

~~Credit Evaluation and Allowance for Doubtful Accounts~~Dividends

WeThe ~~assess~~Company ~~the~~has ~~realization~~not ofpaid ~~our~~any ~~receivables~~cash bydividends ~~performing~~and ~~ongoing~~does ~~credit evaluations of our customers’ financial condition. Through these evaluations, we may become aware of a situation where a customer may~~ not beintend ~~able~~ to ~~meet~~pay ~~its~~any ~~financial~~cash ~~obligations~~dividends ~~due~~in tothe ~~deterioration~~foreseeable ~~of its financial viability, credit ratings or bankruptcy~~future. ~~Our~~ ~~reserve~~[The ~~requirements~~Company ~~are based on the best facts available to us and are reevaluated and adjusted as additional information~~ is ~~received. Our~~prohibited ~~reserves~~from ~~are~~paying ~~also~~any ~~based~~cash ondividends ~~amounts~~pursuant ~~determined by using percentages applied~~ to ~~certain~~the ~~aged~~terms ~~receivable categories. These percentages are determined by a variety~~ of ~~factors~~the ~~including,~~loan ~~but not limited to, current economic trends, historical payment~~ and ~~bad~~security ~~debt~~agreement ~~write-off~~with ~~experience~~U.S. ~~The~~Bank ~~allowance~~National ~~for doubtful accounts for accounts receivable and financing receivables was $53 thousand at September 30, 2022 and $261 thousand at September 30, 2021~~Association.]

~~Asset retirement obligation~~ 30

An Table ~~asset retirement obligation (“ARO”) represents a legal obligation associated with the retirement~~ of a tangible long-lived asset that is incurred upon the acquisition, construction, development, or normal operation of that long-lived asset. The Company’s ARO is associated with MSKK leasehold improvements that we are contractually obligated to remove at the end of a lease to comply with the lease agreement. We recognize asset retirement obligations upon construction of leasehold improvements with such conditions if a reasonable estimate of fair value can be made. The ARO is recorded in other noncurrent liabilities in the Consolidated Balance Sheets. The associated estimated ARO is capitalized as part of the carrying amount of the long-lived asset and depreciated over its useful life.Contents

30 Sonic Foundry, Inc.

~~Table~~Annual ofReport ~~Contents~~ on Form 10-K

~~Sonic~~For ~~Foundry~~the Year Ended September 30, ~~Inc.~~ 2023

~~Annual Report on Form 10-K~~ Holders

~~For~~At December 1, 2023, there were 198 holders of record of the ~~Year~~Company’s ~~Ended~~common ~~September~~stock. ~~30,~~Many ~~2022~~ shares are held by brokers and other institutions on behalf of shareholders.

~~Valuation~~ITEM 6. ~~allowance for net deferred tax assets~~[Reserved]

Deferred tax assets and liabilities are determined based on differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. We do not provide for U.S. income taxes on the undistributed earnings of our foreign subsidiaries, which we consider to be permanently invested outside of the U.S. 31

We Table ~~make judgments regarding the realizability~~ of our deferred tax assets. The balance sheet carrying value of our net deferred tax assets is based on whether we believe that it is more likely than not that we will generate sufficient future taxable income to realize these deferred tax assets after consideration of all available evidence. We regularly review our deferred tax assets for recoverability considering historical profitability, projected future taxable income, the expected timing of the reversals of existing temporary differences and tax planning strategies. In assessing the need for a valuation allowance, we consider both positive and negative evidence related to the likelihood of realization of the deferred tax assets. The weight given to the positive and negative evidence is commensurate with the extent to which the evidence may be objectively verified. As such, it is generally difficult for positive evidence regarding projected future taxable income exclusive of reversing taxable temporary differences to outweigh objective negative evidence of recent financial reporting losses. Generally, cumulative losses in recent years is a significant piece of negative evidence that is difficult to overcome in determining that a valuation allowance is not needed.Contents

AsSonic ~~of September 30~~Foundry, ~~2022 and 2021, valuation allowances have been established for all U~~Inc.S. and for certain foreign deferred tax assets which we believe do not meet the “more likely than not” criteria for recognition. If we are subsequently able to utilize all or a portion of the deferred tax assets for which a valuation allowance has been established, then we will be required to recognize these deferred tax assets through the reduction of the valuation allowance, which could result in a material benefit to our results of operations in the period in which the benefit is determined.

~~Accounting~~Annual ~~for~~Report ~~stock-based~~on ~~compensation~~Form 10-K

~~The~~For ~~Company~~the ~~uses~~Year aEnded ~~lattice~~September valuation model to account for all employee stock options granted. The lattice valuation model is a more flexible analysis to value options because of its ability to incorporate inputs that change over time30, such as actual exercise behavior of option holders. The Company uses historical data to estimate the option exercise and employee departure behavior in the lattice valuation model. Expected volatility is based on historical volatility of the Company’s stock. The Company considers all employees to have similar exercise behavior and therefore has not identified separate homogenous groups for valuation. The expected term of options granted is derived from the output of the option pricing model and represents the period of time that options granted are expected to be outstanding. The risk-free rate for periods the options are expected to be outstanding is based on the U.S. Treasury yields in effect at the time of grant. Forfeitures are based on actual behavior patterns.2023

~~All~~ITEM 7. ~~transactions~~MANAGEMENT’S inDISCUSSION ~~which~~AND ~~goods~~ANALYSIS orOF ~~services~~FINANCIAL ~~are~~CONDITION ~~the~~AND ~~consideration~~RESULTS ~~received~~OF ~~for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measured.~~OPERATIONS

~~Restructuring~~The financial and ~~exit~~business ~~activities~~analysis below provides information that Sonic Foundry, Inc. (the “Company”) believes is relevant to an assessment and understanding of the Company’s consolidated financial position and results of operations. This financial and business analysis should be read in conjunction with the consolidated financial statements and related notes.

~~The~~This ~~determination~~report ofincludes ~~when~~estimates, ~~the~~projections, ~~Company~~statements ~~accrues~~relating ~~for~~to ~~involuntary~~our ~~termination~~business ~~benefits under restructuring~~ plans, ~~depends~~objectives, onand ~~whether~~expected ~~the~~operating ~~termination~~results ~~benefits~~that are ~~provided~~“forward-looking ~~under~~statements” anwithin ~~on-going~~the ~~benefit~~meaning ~~arrangement~~of orthe ~~under~~Private aSecurities ~~one-time~~Litigation ~~benefit~~Reform ~~arrangement.~~Act ~~The~~of ~~Company~~1995, ~~accounts~~Section 27A ~~for~~of ~~on-going~~the ~~benefit~~Securities ~~arrangements~~Act inof ~~accordance~~1933, ~~with~~and ~~Accounting~~Section 21E ~~Standards~~of ~~Codification~~the ~~712~~Securities ~~("ASC~~Exchange ~~712")~~Act ~~Nonretirement~~of ~~Postemployment Benefits~~1934. ~~According~~Forward-looking tostatements ~~ASC~~may ~~712~~appear throughout this report, ~~involuntary~~including ~~termination~~the ~~benefits~~following ~~would~~sections: be“Management’s ~~measured~~Discussion and ~~recognized~~Analysis,” ~~when~~and ~~the~~“Risk ~~expense~~Factors.” isThese ~~both~~forward-looking ~~probable~~statements ~~and~~generally ~~estimatable.~~are ~~For~~identified ~~those~~by ~~employees~~the ~~who~~words ~~have~~“believe,” a“project,” ~~severance~~“expect,” ~~arrangement~~“anticipate,” ~~outlined~~“estimate,” ~~under~~“intend,” an“strategy,” ~~existing~~“future,” ~~employment~~“opportunity,” ~~agreement~~“plan,” ~~the~~“may,” ~~communication~~“should,” ~~date~~“will,” “would,” “will be,” ~~the~~“will ~~date~~continue,” of“will ~~hire~~likely ~~since~~result,” atand ~~that~~similar ~~point~~expressions. inForward-looking ~~time,~~statements ~~the~~are ~~Company~~based ~~and~~on ~~the~~current ~~employee~~expectations ~~had~~and aassumptions ~~mutual~~that ~~understanding~~are ofsubject ~~the~~to ~~agreement.~~risks ~~The measurement~~ and ~~recognition~~uncertainties ~~date~~that ofmay ~~the~~cause ~~expense~~actual ~~would~~results ~~occur~~to ~~when~~differ ~~the~~materially. ~~Company~~We isdescribe ~~committed~~risks ~~to the plan~~ and ituncertainties isthat ~~probable~~could ~~the~~cause ~~impacted~~actual ~~employee~~results isand ~~entitled~~events to ~~the~~differ ~~termination~~materially ~~benefit.~~in ~~The~~“Risk ~~Company~~Factors” ~~accounts~~(Part ~~for~~1, ~~one-time~~Item 1A ~~benefit~~of ~~arrangements~~this inForm ~~accordance~~10-K), ~~with~~“Quantitative ~~ASC~~and ~~420~~Qualitative ~~Exit~~Disclosures orabout ~~Disposal~~Market ~~Cost~~Risk” ~~Obligations.~~(Part ~~According~~II, toItem 7A ~~ASC~~of ~~420~~this Form 10-K), anand ~~arrangement~~in ~~for~~this ~~one-time~~Item 7. ~~employee~~We ~~termination~~undertake ~~benefits~~no ~~exists~~obligation atto ~~the~~update ~~date~~or ~~the~~revise ~~plan~~publicly ofany ~~termination~~forward-looking ~~meets~~statements, ~~certain~~whether ~~criteria~~because ~~and~~of ~~has~~new ~~been~~information, ~~communicated~~future toevents, ~~employees~~or otherwise.

31 32

Table of Contents

Sonic Foundry, Inc.

Annual Report on Form 10-K

For the Year Ended September 30, ~~2022~~ 2023

~~RESULTS OF OPERATIONS~~Overview

~~You~~Sonic ~~should~~Foundry, ~~read~~Inc. is the ~~following~~global ~~discussion~~leader offor ~~our~~video ~~results~~capture, management, and streaming solutions as well as virtual and hybrid events. Trusted by thousands of ~~operations~~educational institutions, corporations, health organizations and ~~financial~~government ~~condition~~entities in ~~conjunction~~over 65 countries with ~~our~~solutions ~~consolidated~~that ~~financial~~transform ~~statements~~communication, training, and ~~related~~learning. Sonic ~~notes~~Foundry’s ~~thereto~~brands ~~included~~include inMediasite®, ~~Item 8~~Mediasite ofConnect, ~~this~~Vidable® ~~Annual~~and ~~Report~~Global onLearning ~~Form 10-K~~Exchange™.

~~Revenue~~Mediasite Asset Sale

~~Revenue~~On ~~from~~January ~~our~~2, 2024 the Company entered into the Purchase Agreement to sell its Mediasite product and service business ~~includes~~that represents substantially all of the ~~sale~~Company’s revenues and the majority of its assets. Under the terms of the Purchase Agreement, Sonic Foundry will sell the assets of its Mediasite ~~recorders~~business including its Japanese and ~~server~~Dutch ~~software~~subsidiaries ~~products~~for ~~and~~$15.5 ~~related~~million ~~services~~in ~~contracts~~cash (subject to certain price adjustments set forth in the Purchase Agreement). Closing of the transaction is subject to approval by the holders of at least two-thirds of the outstanding shares of common stock, ~~such~~as well as ~~customer~~a ~~support,~~number ~~installation,~~of ~~customization~~other ~~services~~customary closing conditions. In connection with the execution of the Purchase Agreement, ~~training~~solely in their respective capacities as stockholders of the Company, ~~content~~each ~~hosting~~of our executive officers and ~~event~~directors ~~services.~~and Weone ~~market~~other ~~our~~significant ~~products~~stockholder towho ~~educational~~beneficially ~~institutions,~~owns ~~corporations~~greater than 5% of the Company’s outstanding common has executed and ~~government~~delivered ~~agencies~~a ~~that~~Support ~~need~~Agreement pursuant to ~~deploy~~which, ~~manage~~among other things, ~~index~~each ~~and~~such ~~distribute~~stockholder ~~video~~has ~~content~~agreed, onsubject ~~Internet-based~~to ~~networks.~~the Weterms ~~reach~~of ~~both~~such ~~our~~Support ~~domestic~~Agreement, to vote all shares of common stock beneficially owned by such stockholder in favor of the approval of the Purchase Agreement and ~~international~~the ~~markets~~Mediasite ~~through~~Asset ~~reseller~~Sale. ~~networks~~Upon the closing of the transaction, aour ~~direct~~business ~~sales~~will ~~effort~~consist solely of our Vidable® and ~~partnerships~~Global ~~with~~Learning ~~system~~Exchange™ ~~integrators~~businesses. The information in this report does not give effect to the proposed transaction.

~~Revenue~~Critical ~~decreased~~Accounting ~~by approximately $7.8 million from fiscal 2022 to fiscal 2021 consisting of the following:~~Policies

	•	Product and other revenue from the sale of Mediasite recorder units and server software decreased from $10.5 million in fiscal 2021 to $8.1 million in fiscal 2022. Mediasite recorder revenue decreased $1.4 million and sofeware revenue decrased $1.1 million while shipping and other hand an increase of $160 thousand.
	•	Services revenue represents the portion of fees charged for Mediasite customer support, hosting, and captioning contracts amortized over the length of the contract, typically 12 months. It also includes point in time service revenue such as installations and training, custom development, and event services. Total services revenue decreased from $24.7 million in fiscal 2021 to $19.3 million in fiscal 2022. The decrease is primarily due to reduction in event services and delays in renewals of contracts for hosting and support due to macro environment concerns and impact of foreign currency on Japanese yen and Euro to USD.

• AtRevenue ~~September~~recognition; ~~30,~~• ~~2022,~~Inventory ~~$9.7~~reserves; ~~million~~• ofAllowance ~~revenue~~for ~~was~~doubtful ~~deferred,~~accounts; of• ~~which~~Asset weretirement ~~expect~~obligations; to• ~~recognize~~Valuation ~~$8.6~~allowance ~~million~~for innet ~~the~~deferred ~~next~~tax ~~twelve~~assets; ~~months,~~and ~~including~~• ~~approximately~~Accounting ~~$3.3~~for ~~million~~stock-based ~~in the quarter ending December 31, 2022~~compensation. At• ~~September~~Restructuring ~~30,~~and ~~2021,~~exit ~~$11.0 million of revenue was deferred. The decrease in deferred revenue is due to lesser amount of billings in fiscal 2022 compared to revenue earned.~~activities

•Revenue ~~Other revenue relates to freight charges billed separately to our customers as well as an economic impact fee which was established in fiscal 2022.~~recognition

~~Gross~~We ~~Margin~~recognize revenues in accordance with the Financial Accounting Standards Board ("FASB"), Accounting Standards Codification ("ASC") Topic 606, Revenue from Contracts with Customers ("ASC 606"). Recording revenues requires judgment, including determining whether an arrangement includes multiple performance obligations, whether any of those obligations are distinct and cannot be combined and allocation of the transaction price to each performance obligation based on the relative standalone selling prices ("SSP"). Customers receive certain contract elements over time. Changes to the elements in an arrangement or, in our determination, to the relative SSP for these elements, could materially affect the amount of earned and unearned revenues reflected in our consolidated financial statements.

~~Total~~The ~~gross~~primary ~~margin~~judgments inrelating ~~fiscal~~to ~~2022~~our ~~was~~revenue ~~$18.8 million~~recognition orinclude ~~68%~~determining ~~compared~~whether to(i) ~~$24.9 million~~the orcontract ~~71%~~with ina ~~fiscal~~customer ~~2021. The decline~~exists; ~~year~~(ii) ~~over~~performance ~~year~~obligations are identified; (iii) the transaction price is ~~primarily~~determined; ~~attributed~~(iv) the transaction price is allocated to performance obligations; and (v) the ~~decrease~~distinct inperformance ~~services~~obligations ~~revenue~~are ~~without~~satisfied by transferring control of the ~~corresponding~~product ~~decrease~~or inservice ~~COGS~~to ~~expense~~the inclient. ~~cost~~Transfer ~~centers~~of ~~that~~control ~~support~~is ~~services~~typically ~~revenue~~evaluated from the customer's perspective.

32 At contract inception, we determine whether we satisfy the performance obligation over time or at a point in time. Revenues from hosted software and hosting solutions are primarily recognized ratably over time or as fee-bearing usages occur. Certain software licenses are sold either on-premises or through term-based hosting agreements. These hosting arrangements provide customers with the same product functionality and differ mainly in the duration over which the customer benefits from the software. We deliver our software licenses electronically. Electronic delivery occurs when we provide the customer with access to the software and license key via a secure portal. Revenue from on-premises software licenses is generally recognized at the point in time when the software is made available to the customer.

~~Table~~Our contracts with customers for on-premises software licenses include maintenance services and may also include training and/or professional services. Maintenance services agreements consist of ~~Contents~~ fees for providing software updates on an if and when available basis and for providing technical support for software products for a specified term. We believe that our software updates and technical support each have the same pattern of transfer to the customer and are substantially the same. Therefore, we consider these updates and technical support to be a single distinct performance obligation. Revenues allocated to maintenance services are recognized ratably as the maintenance services are provided. Revenues related to training services are billed on a fixed fee basis and are recognized as the services are delivered. Payments received in advance of services performed are deferred and recognized when the related services are performed. Revenues related to professional services are billed on a time and materials basis and are recognized as the services are performed.

~~Sonic~~We ~~Foundry~~also provide cloud-based subscriptions, ~~Inc~~which allow customers to access our software during a contractual period without taking possession of the software. We recognize revenue related to these cloud-based subscriptions ratably over the life of the subscription agreement beginning when the customer first has access to the software.

~~Annual~~We ~~Report~~are onoften ~~Form~~party ~~10-K~~ to multiple concurrent contracts or contracts pursuant to which a client may purchase a combination of goods and services. These situations require judgment to determine whether multiple contracts should be combined and accounted for as a single arrangement. In making this determination, we consider whether the economics of the individual contracts cannot be understood without reference to the whole and multiple promises represent one single performance obligation.

~~For the Year Ended September 30, 2022~~ 33

~~Operating~~ Table ~~Expenses~~of Contents

~~Selling~~Sonic ~~and~~Foundry, ~~Marketing Expenses~~Inc.

~~Selling~~Annual ~~and~~Report marketing (“S&M”) expenses include wages and commissions for sales, marketing and business development personnel, print and digital advertising, tradeshows and various promotional expenses for our products. Timing of these costs may vary greatly depending on ~~introduction~~Form ~~of new products and services or entrance into new markets, or participation in major tradeshows.~~10-K

~~S&M expense~~For ~~increased~~the ~~$294 thousand,~~Year orEnded 2%September 30, ~~from $12.0 million in fiscal 2021 to $12.3 million in fiscal 2022. Fluctuations in the major categories include:~~2023

•Due ~~Salary~~to the large number, ~~commissions~~broad nature, and ~~benefits~~average ~~decreased~~size byof ~~$1.3~~individual ~~million~~contracts ~~with~~we anare ~~offsetting~~a ~~increase~~party to, the effect of ~~$1.1~~judgments ~~million~~and assumptions we apply in ~~professional~~recognizing ~~services~~revenues ~~due~~for any single contract is not likely to ~~reclassification~~have a material effect on our consolidated operations. However, the broader accounting policy assumptions that we apply across similar arrangements or classes of ~~independent~~clients ~~contractor~~could ~~fees~~significantly ~~from~~influence ~~salary~~the totiming ~~professional~~and ~~services~~amount of revenues recognized in our results of operations.

•Inventory ~~General and administrative ("G&A") allocation increased $580 thousand due to centralizing selling and marketing executives into G&A cost centers in FY22.~~Reserves

•Beginning ~~Travel~~in fiscal year 2020, the Company established a hardware inventory reserve. In conjunction with a new hardware release due in the fourth quarter FY 2020, certain older models are no longer being actively sold and ~~expenses~~those ~~increased~~units, ~~$210~~along ~~thousand~~with their corresponding raw materials, have been 100% reserved. The inventory reserve methodology was unchanged in fiscal year 2023. The Company has fully reserved all inactive hardware due to the ~~relaxation~~release of ~~COVID~~Media ~~restrictions~~Site 8.0.

•Credit ~~Selling~~Evaluation and ~~marketing~~Allowance ~~expenses~~ for ~~Sonic~~Doubtful ~~Foundry International and MSKK accounted for $584 thousand and $3.1 million, respectively in fiscal 2022, an aggregate decrease of $332 thousand from the prior year.~~Accounts

~~General~~We assess the realization of our receivables by performing ongoing credit evaluations of our customers’ financial condition. Through these evaluations, we may become aware of a situation where a customer may not be able to meet its financial obligations due to deterioration of its financial viability, credit ratings or bankruptcy. Our reserve requirements are based on the best facts available to us and ~~Administrative~~are ~~Expenses~~reevaluated and adjusted as additional information is received. Our reserves are also based on amounts determined by using percentages applied to certain aged receivable categories. These percentages are determined by a variety of factors including, but not limited to, current economic trends, historical payment, and bad debt write-off experience. The allowance for doubtful accounts for accounts receivable and financing receivables was $245 thousand at September 30, 2023 and $53 thousand at September 30, 2022.

~~General~~Asset ~~and~~retirement administrative expenses consist of personnel and related costs associated with the facilities, finance, legal, human resources and information technology departments, as well as other expenses not fully allocated to functional areas.obligation

~~G&A~~An ~~expenses~~asset ~~increased~~retirement byobligation ~~approximately $1.1 million~~(“ARO”) represents a legal obligation associated with the retirement of a tangible long-lived asset that is incurred upon the acquisition, orconstruction, ~~22%~~development, or normal operation of that long-lived asset. The Company’s ARO is associated with MSKK leasehold improvements that we are contractually obligated to $5remove at the end of a lease to comply with the lease agreement.~~9 million~~ inWe ~~fiscal~~recognize ~~2022~~asset ~~from~~retirement $4obligations upon construction of leasehold improvements with such conditions if a reasonable estimate of fair value can be made.~~9 million~~ The ARO is recorded in ~~fiscal~~other ~~2021.~~noncurrent ~~Fluctuations~~liabilities in ~~major~~the ~~categories~~consolidated ~~include:~~balance sheets. The associated estimated ARO is capitalized as part of the carrying amount of the long-lived asset and depreciated over its useful life.

~~• Increase in facilities and supplies of $444 thousand associated with increased IT services supplies costs.~~ 34

• Table ~~Increase in professional fees~~ of ~~$413 thousand due to increased outside services and public company related costs.~~Contents

~~• G&A expenses for~~ Sonic Foundry ~~International and MSKK accounted for $743 thousand and $930 thousand~~, ~~respectively, in fiscal 2022, an aggregate increase of $298 thousand from the prior year~~Inc.

~~Product~~Annual ~~Development~~Report ~~Expenses~~on Form 10-K

~~Product~~For ~~development ("PD") expenses include salaries and wages of~~ the ~~software~~Year ~~research~~Ended ~~and~~September ~~development staff and an allocation of benefits~~30, ~~facility and administrative expenses.~~2023

~~Product~~Valuation ~~development~~allowance ~~expenses~~for ~~increased~~net ~~approximately~~deferred ~~$313 thousand,~~tax ~~or 4%, from $7.2 million in fiscal 2021 to $7.5 million in fiscal 2022. The increase is primarily due to the following:~~assets

	•	Increase in supplies of $505 thousand due to investment in software costs.
	•	Decrease in miscellaneous expenses of $75 thousand primarily due to a decrease in quality assurance related expenses.

•We ~~Increase~~make injudgments ~~G&A~~regarding ~~allocation~~the realizability of ~~$307~~our ~~thousand~~deferred ~~due~~tax assets. The balance sheet carrying value of our net deferred tax assets is based on whether we believe that it is more likely than not that we will generate sufficient future taxable income to ~~shifting~~realize these deferred tax assets after consideration of PDall ~~leadership~~available ~~headcount~~evidence. ~~into~~We ~~G&A~~regularly ~~cost~~review ~~center~~our indeferred ~~FY22~~tax assets for recoverability considering historical profitability, projected future taxable income, the expected timing of the reversals of existing temporary differences and tax planning strategies. ~~This~~In isassessing ~~offset~~the byneed for a ~~decrease~~valuation allowance, we consider both positive and negative evidence related to the likelihood of realization of the deferred tax assets. The weight given to the positive and negative evidence is commensurate with the extent to which the evidence may be objectively verified. As such, it is generally difficult for positive evidence regarding projected future taxable income exclusive of reversing taxable temporary differences to outweigh objective negative evidence of recent financial reporting losses. Generally, cumulative losses in ~~direct~~recent PDyears ~~people~~is ~~costs~~a significant piece of ~~$65~~negative ~~thousand~~evidence that is difficult to overcome in determining that a valuation allowance is not needed.

•As PDof ~~expenses~~September 30, ~~for~~2023 ~~Sonic~~and ~~Foundry~~2022, ~~International~~valuation ~~and~~allowances ~~MSKK~~have ~~accounted~~been established for ~~$230~~all ~~thousand~~U.S. and ~~$313~~for ~~thousand,~~certain ~~respectively,~~foreign deferred tax assets which we believe do not meet the “more likely than not” criteria for ~~fiscal~~recognition. ~~2022,~~If anwe ~~aggregate~~are ~~decrease~~subsequently able to utilize all or a portion of ~~$285~~the ~~thousand~~deferred ~~from~~tax assets for which a valuation allowance has been established, then we will be required to recognize these deferred tax assets through the ~~prior~~reduction ~~year~~of ~~related~~the valuation allowance, which could result in a material benefit to our results of operations in the ~~subsidiaries~~period in which the benefit is determined.

~~There~~Accounting ~~were $2.4 million software development costs in fiscal 2022 that qualified~~ for ~~capitalization.~~stock-based ~~These costs are associated with development of new AI video tools for our Vidable product. In fiscal 2021, there was no capitalization of software development costs.~~ compensation

33 The Company uses a lattice valuation model to account for all employee stock options granted. The lattice valuation model is a more flexible analysis to value options because of its ability to incorporate inputs that change over time, such as actual exercise behavior of option holders. The Company uses historical data to estimate the option exercise and employee departure behavior in the lattice valuation model. Expected volatility is based on historical volatility of the Company’s stock. The Company considers all employees to have similar exercise behavior and therefore has not identified separate homogenous groups for valuation. The expected term of options granted is derived from the output of the option pricing model and represents the period of time that options granted are expected to be outstanding. The risk-free rate for periods the options are expected to be outstanding is based on the U.S. Treasury yields in effect at the time of grant. Forfeitures are based on actual behavior patterns.

~~Table~~All transactions in which goods or services are the consideration received for the issuance of ~~Contents~~ equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measured.

~~Sonic~~Restructuring ~~Foundry,~~and ~~Inc.~~ exit activities

~~Annual~~The ~~Report~~determination of when the Company accrues for involuntary termination benefits under restructuring plans depends on ~~Form~~whether 10the termination benefits are provided under an on-K going benefit arrangement or under a one-time benefit arrangement. The Company accounts for on-going benefit arrangements in accordance with Accounting Standards Codification 712 ("ASC 712") Nonretirement Postemployment Benefits. According to ASC 712, involuntary termination benefits would be measured and recognized when the expense is both probable and predictable. For those employees who have a severance arrangement outlined under an existing employment agreement, the communication date would be the date of hire since at that point in time, the Company and the employee had a mutual understanding of the agreement. The measurement and recognition date of the expense would occur when the Company is committed to the plan and it is probable the impacted employee is entitled to the termination benefit. The Company accounts for one-time benefit arrangements in accordance with ASC 420 Exit or Disposal Cost Obligations. According to ASC 420, an arrangement for one-time employee termination benefits exists at the date the plan of termination meets certain criteria and has been communicated to employees.

~~For the Year Ended September 30, 2022~~ 35

~~Other~~ Table ~~Income~~of ~~and Expense, Net~~Contents

~~Interest~~Sonic expense for fiscal 2022 decreased $13 thousand compared to fiscal 2021. The Company also recorded $30 thousand of interest expense during fiscal 2022 related to the accretion of discounts on the PFG Loan and Warrant Debt compared to $61 thousand in the same period last year. In additionFoundry, ~~the Company recorded no amortization expense related to the back-end fee on the PFG loan for fiscal 2022 due to the debt being paid off in May 2021, compared to $32 thousand in fiscal 2021~~Inc.

~~During~~Annual ~~fiscal~~Report ~~2022, a gain in fair value of $53 thousand was recorded related to the fair value re-measurement~~ on ~~the~~Form ~~derivative liability associated with the PFG V Loan and Warrant Debt compared to a gain in fair value of $12 thousand during fiscal 2021.~~10-K

~~During~~For ~~fiscal 2022, a $364 thousand loss, as~~ the ~~net~~Year ~~result~~Ended ~~of other~~September ~~expense and income~~30, ~~was~~ ~~recorded and it is due to the foreign currency translation changes between the foreign subsidiaries, primarily due to currency changes in Japan, with MSKK.~~ 2023

~~Provisions~~RESULTS ~~Related~~OF ~~to Income Taxes~~OPERATIONS

~~The~~You ~~Company~~should ~~believes~~read the ~~valuation~~following ~~allowance~~discussion ~~for~~of ~~its~~our ~~deferred~~results ~~tax~~of ~~assets~~operations isand ~~appropriate.~~financial ~~See~~condition ~~Note~~in 6conjunction -with ~~Income~~our ~~Taxes~~consolidated ~~for~~financial ~~further~~statements ~~details.~~and ~~The~~related ~~repatriation~~notes ofthereto ~~undistributed~~included ~~foreign earnings is not expected to result~~ in aItem 8 ~~material~~of ~~change~~this toAnnual ~~our~~Report ~~financial~~on ~~results~~Form 10-K.

~~Foreign Currency Translation Adjustment~~Revenue

~~The~~Revenue ~~Company’s~~from ~~wholly-owned~~our ~~subsidiaries~~business ~~operate~~includes inthe ~~Japan~~sale ~~and~~of ~~the~~Mediasite ~~Netherlands,~~recorders and ~~utilize~~server ~~the~~software ~~Japanese~~products ~~Yen~~ and ~~Euro,~~related ~~respectively~~services contracts, such as ~~their~~customer ~~functional~~support, ~~currency.~~installation, ~~Assets~~customization ~~and~~services, ~~liabilities~~training, ofcontent ~~the~~hosting ~~Company’s~~and ~~foreign~~event ~~operations~~services. ~~are~~We ~~translated~~market ~~into~~our USproducts ~~dollars~~to ateducational ~~period~~institutions, ~~end~~corporations ~~exchange~~and ~~rates~~government ~~whiles~~agencies ~~revenues~~that ~~and~~need ~~expenses~~to ~~are~~deploy, ~~translated~~manage, ~~using~~index ~~average~~and ~~rates~~distribute ~~for~~video ~~the~~content ~~period.~~on ~~Gains~~Internet-based ~~and~~networks. ~~losses~~We ~~from~~reach ~~the~~both ~~translation~~our ~~are~~domestic ~~deferred~~ and ~~included~~international inmarkets ~~accumulated~~through ~~other~~reseller ~~comprehensive~~networks, ~~loss~~a ondirect ~~the~~sales ~~consolidated~~effort ~~statements~~and ofpartnerships ~~operations~~with system integrators.

34 Revenue decreased by approximately $5.4 million from fiscal 2022 to fiscal 2023 consisting of the following:

Table of Contents

	•	Product and other revenue from the sale of Mediasite recorder units and server software decreased from $8.1 million in fiscal 2022 to $6.1 million in fiscal 2023. Mediasite recorder revenue decreased $1.7 million and software revenue decreased $0.4 million while shipping and other revenue had an increase of $0.1 million.
	•	Services revenue represents the portion of fees charged for Mediasite customer support, hosting, and captioning contracts amortized over the length of the contract, typically 12 months. It also includes point in time service revenue such as installations and training, custom development, and event services. Total services revenue decreased from $19.3 million in fiscal 2022 to $16.0 million in fiscal 2023. The decrease is primarily due to reduction in event services and delays in renewals of contracts for hosting and support due to macro environment concerns and impact of foreign currency on Japanese yen and Euro to USD.

~~Sonic~~• ~~Foundry~~At September 30, ~~Inc~~2023, $9. 9 million of revenue was deferred, of which we expect to recognize $8.5 million in the next twelve months, including approximately $3.1 million in the quarter ending December 31, 2023. At September 30, 2022, $9.7 million of revenue was deferred.

~~Annual~~• ~~Report~~Other onrevenue ~~Form~~relates ~~10-K~~ to freight charges billed separately to our customers as well as an economic impact fee which was established in fiscal 2022.

~~For~~Gross ~~the Year Ended September 30, 2022~~ Margin

~~For~~Total ~~the~~gross ~~year~~margin ~~ended~~in ~~September 30,~~fiscal ~~2022,~~2023 ~~the~~was ~~Company’s~~$12.9 million ~~foreign~~or ~~currency~~58% ~~translation~~compared ~~adjustment~~to ~~was~~$18.8 million aor ~~loss~~68% ofin ~~$364~~fiscal 2022. The ~~thousand~~decline ~~compared~~year over year is primarily attributed to atransition ~~loss of~~costs ~~$156 thousand~~incurred inas ~~the~~we ~~year~~move ~~ended~~to ~~September 30~~a public cloud, ~~2021.~~incentive ~~The~~pricing ~~loss in~~on ~~fiscal~~recorder ~~2022 is~~and ~~attributable~~other sales components to ~~the~~drive ~~weakening~~increased ofand ~~the~~longer-term ~~Japanese~~orders, ~~Yen~~as ~~and~~well as the ~~Euro~~decrease ~~compared~~in toservices revenue without the ~~U.S.~~corresponding ~~dollar~~decrease in COGS expense in cost centers that support services revenue.

During fiscal 2022, the Company recorded an aggregate transaction loss of $63 thousand compared to an aggregate gain of $16 thousand during fiscal 2021. The aggregate transaction gain or loss is included in the other expense line of the consolidated statements of operations. 36

~~LIQUIDITY~~ Table ~~AND~~of ~~CAPITAL RESOURCES~~Contents

~~The~~Sonic ~~Company’s primary sources of liquidity are its cash from operations and debt and equity financing. During fiscal 2022~~Foundry, ~~the~~ ~~Company used $5~~Inc.6 million cash for operating activities, compared with $1.2 million of cash provided in operating activities in fiscal 2021. The primary factors effecting the $5.6 million cash used by operating activities are the $7.1 million net loss, $881 thousand change in unearned revenue, $1.0 million increase in inventory, $213 thousand change in operating lease associated liabilities, and $235 thousand change in deferred taxes, partially offset by $3.9 million other operating activities including primarily $747 thousand stock-based compensation expenses, $1.3 million depreciation expenses, $328 thousand loss on fixed asset impairment, $222 thousand change in operating lease associated ROU asset, $143 thousand change in investment type lease, $170 thousand change in capitalized commissions, $530 thousand change in accounts payable and accrued liabilities, and $365 thousand in other long term assets.

~~Capital~~Annual ~~expenditures~~Report ~~for~~on ~~property~~Form and equipment were $2.6 million in fiscal 2022 compared to $1.5 million in fiscal 2021. Capitalized software development costs were $2.4 million in fiscal 2022 compared to no capitalization in fiscal 2021. 10-K

Cash flows for financing activities provided $4.5 million during 2022. Payments on capital lease and financing arrangements of $75 thousand were offset by proceeds from stock option exercises of $122 thousand, proceeds from notes payable of $441 thousand and common stock issuance of $4.0 million. For the ~~same~~Year ~~period~~Ended inSeptember ~~fiscal 2021~~30, the Company was provided $2.7 million of cash flows from financing activities primarily due to $3.7 million proceeds from issuance of common stock partially offset by $935 thousand due to payment on notes payable.2023

~~At September 30,~~Operating ~~2022, there was no balance outstanding on the line of credit with US Bank. The line of credit with Mitsui Sumitomo Bank matured on February 28, 2022 and was not renewed.~~ Expenses

~~At September 30,~~Selling ~~2022, the Company had $921 thousand outstanding, net of warrant debt, related to notes payable with PFG V~~ and ~~Mediasite~~Marketing ~~K.K term debt. At September 30, 2021, the Company had $556 thousand outstanding, net of warrant debt and debt discounts, related to notes payable with PFG V and Mediasite K.K. term debt.~~Expenses

AtSelling ~~September~~and marketing 30(“S&M”) expenses include wages and commissions for sales, ~~2022~~marketing ~~approximately~~and $1business development personnel, print and digital advertising, tradeshows and various promotional expenses for our products.~~1 million~~ Timing of ~~cash~~these costs may vary greatly depending on introduction of new products and ~~cash~~services ~~equivalents~~or ~~was~~entrance ~~held~~into bynew ~~the~~markets, ~~Company’s~~or ~~foreign~~participation ~~subsidiaries~~in major tradeshows.

~~The~~S&M expense ~~Company~~decreased ~~believes~~$1.8 million, ~~its~~or ~~cash position~~15%, ~~including~~from ~~capital~~$12.3 ~~raised~~million in ~~November~~fiscal 2022~~, is~~ ~~adequate~~ to ~~accomplish~~$10.5 million ~~its~~in ~~business~~fiscal ~~plan~~2023. ~~through~~Fluctuations atin ~~least~~ the ~~next~~major ~~twelve~~categories ~~months.~~include:

~~The~~• ~~Company completed a common stock issuance to certain investors totaling $3.5 million~~Salary, ~~net of $88 thousand expenses~~commissions, onand ~~July~~benefits ~~27,~~decreased ~~2021.~~by The proceeds of the stock issuance were intended to satisfy the initial listing requirements of the Nasdaq Capital Market. On April 19, 2022, the Company closed a public offering of common stock issuance totaling $40.36 million~~, net of $406 thousand expenses~~. ~~The proceeds of the stock issuance will be invested in the Company's new products, GLX and Vidable.~~

On• ~~November~~General ~~16,~~and ~~2022~~administrative ~~the~~("G&A") ~~Company~~allocation ~~entered~~decreased ~~into two agreements for a total of~~ $80.57 million ~~debt~~due atto areduced ~~rate~~G&A ofcosts ~~12%~~resulting ~~interest per annum due~~ in ~~30 equal installments beginning on June 1, 2023. On November 16, 2022 The Company entered into~~ a ~~Subscription~~change ~~Agreement~~in ~~with~~the Mrshared ~~Mark~~service ~~Burish~~cost ~~for~~allocation aactivity ~~total~~driver ~~of $1.2~~in ~~million of common stock purchase with warrant attached~~FY23. ~~See Note 10. Subsequent Events for more details.~~

35 • Professional services increased $0.4 million due to increased investment in GLX.

~~Table~~• S&M expenses for Sonic Foundry International and MSKK accounted for $0.5 and $2.3 million, respectively in fiscal 2023, an aggregate decrease of ~~Contents~~ $0.9 million from the prior year.

~~Sonic~~General ~~Foundry,~~and ~~Inc.~~ Administrative Expenses

~~Annual~~General ~~Report~~and onadministrative expenses ~~Form~~consist ~~10-K~~ of personnel and related costs associated with the facilities, finance, legal, human resources, and information technology departments, as well as other expenses not fully allocated to functional areas.

~~For~~G&A ~~the~~expenses ~~Year~~decreased ~~Ended~~by ~~September~~approximately $0.9 million, 30or 16%, to $5.0 million in fiscal 2023 from $5.9 million in fiscal 2022 . Fluctuations in major categories include:

~~Contractual~~• ~~Obligations~~Employee compensation expenses decreased by $0.7 million, attributable to a lower headcount in FY23.

~~The~~• ~~following~~Depreciation ~~summarizes~~expense ~~our~~increased ~~contractual~~$0.4 ~~obligations~~million atdue ~~September 30,~~to ~~2022~~an ~~and~~increase ~~the~~in ~~effect~~fixed ~~those~~asset ~~obligations~~additions ~~are~~related ~~expected~~ to ~~have~~GLX onHub ~~our~~build-outs ~~liquidity~~throughout 2022 and ~~cash flow in future periods (in thousands):~~2023

			Less than		Years		Years		Over
Contractual Obligations:	Total		1 Year		2-3		4-5		5 years
Product purchase commitments	$	3,476	$	3,476	$	—	$	—	$	—
Service purchase commitments		1,581		664		917		—		—
Operating lease obligations		2,180		1,182		827		133		38
Capital lease obligations (a)		25		10		12		3		—
Notes payable (a)		934		563		127		124		120

•

G&A expenses from the Company’s foreign operations decreased $0.5 million compared to from the prior year.

~~(a)~~Product ~~Includes~~Development ~~fixed and determinable interest payments~~Expenses

~~ITEM~~Product ~~7A.~~development ~~QUANTITATIVE~~(“PD”) ~~AND~~expenses ~~QUALITATIVE~~include ~~DISCLOSURES~~salaries ~~ABOUT~~and ~~MARKET~~wages ~~RISK~~of the software research and development staff and an allocation of benefits, facility, and administrative expenses.

~~Derivative~~PD ~~Financial~~expenses ~~Instruments~~increased approximately $3.5 million, or 46%, from $7.5 million in fiscal 2022 to $11.0 million in fiscal 2023. The increase is primarily due to the following:

Pursuant to Item 305 of Regulation S-K, the Company, as a smaller reporting company, is not required to provide the information required by this item.

	•	Increase in software development in our Vidable products of $2.8 million.
	•	Increase in Mediasite supplies expenses of $0.2 million driven by an increase in internally used software development tools.

Interest Rate Risk

	•	Increase of $0.5 million arising from a change in the shared service cost allocation activity driver in FY23.
	•	PD expenses for Sonic Foundry International and MSKK accounted for $0.2 and $0.3 million, respectively, for fiscal 2023, or a decrease of $0.1 million compared to the prior year related to the foreign subsidiaries.

~~Our~~During ~~cash~~the ~~equivalents~~quarter ended June 30, ~~which~~2023 ~~consist~~the ofCompany ~~overnight~~made ~~money~~a ~~market~~strategic ~~funds~~decision to shift its Vidable development efforts toward events related analytics, ~~are~~access ~~subject~~and dynamic content to ~~interest~~better ~~rate~~serve ~~fluctuations~~the needs of event promoters, ~~however~~sponsors, weand ~~believe~~attendees. ~~this~~As ~~risk~~a isresult, ~~minimal~~the ~~due~~Company reevaluated its capitalization policies for costs to ~~the~~develop ~~short-term~~software ~~nature~~products to be sold to external users and ceased capitalization beginning quarter ended September 30, 2023. There were $1.5 million of ~~these~~capitalized software ~~investments~~development costs in fiscal 2023 that previously qualified for capitalization, compared to $2.4 million in fiscal 2022. These costs were associated with the development of new AI video tools for our Vidable software products.

AtImpairment ~~September 30, 2022, the Company didn't carry outstanding debt with variable rate, therefore an increase in the level~~ of ~~interest~~Intangible rates would not have a material impact on our Consolidated Financial Statements. We monitor our positions with, and the credit quality of, the financial institutions that are party to any of our financial transactions.Assets

~~Foreign~~The ~~Currency~~Company ~~Exchange~~recorded ~~Rate~~an ~~Risk~~impairment loss of $3.8 million and $0 for capitalized software development in fiscal years ended 2023 and 2022, respectively. The non-cash loss incurred in 2023 was primarily due to a strategic shift in Vidable development efforts to better serve the needs of the events industry.

The functional currency of our foreign subsidiaries in the Netherlands is the Euro and in Japan is the Japanese Yen. They are subject to foreign currency exchange rate risk. Any increase or decrease in the exchange rate of the U.S. Dollar compared to the Euro or Japanese Yen will impact our future operating results and financial position. 37

36 Table of Contents

~~Table~~Sonic ofFoundry, ~~Contents~~ Inc.

~~Sonic~~Annual ~~Foundry,~~Report ~~Inc.~~ on Form 10-K

~~Annual~~For ~~Report~~the onYear ~~Form~~Ended ~~10-K~~ September 30, 2023

~~For~~Other ~~the~~Income ~~Year~~and ~~Ended September 30~~Expense, ~~2022~~ Net

~~ITEM~~Interest 8expense for fiscal 2023 increased $1.7 ~~CONSOLIDATED~~million ~~FINANCIAL~~compared ~~STATEMENTS~~to ~~AND~~fiscal ~~SUPPLEMENTARY~~2022. ~~DATA~~The increase in interest expense is driven by monthly interest payments related to the Loan and Security Agreement and subsequent amendment with NBE as well as the Security Agreement and Promissory Note and subsequent amendment with Mark Burish.

~~REPORT~~During OFthe ~~INDEPENDENT~~year ~~REGISTERED~~ended ~~PUBLIC~~September ~~ACCOUNTING~~30, ~~FIRM~~2023, no gain in fair value was recorded related to the fair value remeasurement on the derivative liability associated with the Loan and Security Agreement and Warrant Debt with PFG V compared to a gain in fair value of $53 thousand the year ended September 30, 2022. The fair value of the derivative liability is measured at fair value based on a Black Scholes option pricing model with assumptions for stock price, exercise price, volatility, expected term, risk free interest rate and dividend yield.

ToDuring ~~the~~fiscal ~~Shareholders~~2023 and 2022, ~~Audit~~a ~~Committee~~$60 thousand gain and ~~Board~~$364 thousand loss, respectively, was recorded as the net result of other ~~Directors~~expense and income, primarily due to the foreign currency translation changes from the foreign subsidiaries.

~~Sonic~~Provisions ~~Foundry,~~Related ~~Inc.~~to ~~and~~Income ~~Subsidiaries~~Taxes

~~Opinion~~The onCompany believes the ~~Consolidated~~valuation ~~Financial~~allowance ~~Statements~~for its deferred tax assets is appropriate. See Note 6 - Income Taxes for further details. The repatriation of undistributed foreign earnings is not expected to result in a material change to our financial results.

WeForeign ~~have~~Currency ~~audited~~Translation the accompanying consolidated balance sheets of Sonic Foundry, Inc. and Subsidiaries (the “Company”) as of September 30, 2022 and 2021, and the related statements of operations, comprehensive income (loss), stockholders’ equity (deficit), and cash flows for the years ended, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material aspects, the financial position of the Company at September 30, 2022 and 2021 and the results of its operations and its cash flows for the years ended, in conformity with accounting principles generally accepted in the United States of America.Adjustment

~~Basis~~The Company’s wholly-owned subsidiaries operate in Japan and the Netherlands, and utilize the Japanese Yen and Euro, respectively, as their functional currency. Assets and liabilities of the Company’s foreign operations are translated into US dollars at period end exchange rates whiles revenues and expenses are translated using average rates for ~~Opinion~~the period. Gains and losses from the translation are deferred and included in accumulated other comprehensive loss on the consolidated statements of operations.

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. 38

We Table ~~conducted our audits in accordance with the standards~~ of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Contents

~~Our~~Sonic ~~audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements~~Foundry, ~~whether due to error or fraud, and performing procedures that respond to those risks~~Inc. Such procedures included examining on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and the significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

~~Critical~~Annual ~~Audit~~Report ~~Matter~~on Form 10-K

~~The~~For ~~critical audit matter communicated below is a matter arising from~~ the ~~current~~Year ~~period~~Ended ~~audit~~September of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging30, subjective, or complex judgements. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosure to which it relates. 2023

~~Revenue~~For ~~Recognition~~the -year ~~Evaluation~~ended ofSeptember 30, 2023, the ~~allocation~~Company’s offoreign ~~the~~currency ~~transaction~~translation ~~price~~adjustment was a gain of $111 thousand compared to ~~distinct~~a ~~performance~~loss of ~~obligations~~$364 thousand in the year ended September 30, 2022.

AsDuring ~~described~~fiscal ~~in Note 1 to the consolidated financial statements~~2023, the Company’s ~~contracts~~recorded ~~with~~an ~~customers~~aggregate ~~often~~transaction ~~include~~loss of ~~multiple~~$6 thousand ~~distinct~~compared ~~performance~~to ~~obligations,~~an ~~including~~aggregate ~~hardware~~loss of ~~products,~~$63 thousand ~~software~~during ~~licenses,~~fiscal ~~hosting arrangements, maintenance services, events and other professional services~~2022. The ~~accounting~~aggregate ~~for contracts with multiple performance obligations requires the contract’s~~ transaction ~~price~~loss tois beincluded ~~allocated~~in ~~to each distinct performance obligation based on relative stand-alone selling price (SSP). Because~~ the ~~Company~~other ~~rarely~~expense ~~sells~~line ~~its products and services on a standalone basis, significant judgement is required to determine SSP for each distinct performance obligation. We identified the determination~~ of the ~~SSP~~consolidated statements of ~~performance obligations as a critical audit matter~~operations.

37 LIQUIDITY AND CAPITAL RESOURCES

~~Table~~The Company’s primary sources of ~~Contents~~ liquidity are from debt and equity financing. During fiscal 2023, the Company used $11.3 million cash for operating activities, compared with a use of $5.6 million in operating activities in fiscal 2022. The primary factors driving the fiscal 2023 cash usage from operating activities are the $19.3 million net loss, which was partially offset by a non-cash charge for impairment of fixed assets of $3.8 million, $2.3 million of depreciation and amortization of property and equipment, and $801 thousand decrease in accounts receivable, net of allowances.

~~Sonic~~Capital ~~Foundry,~~expenditures ~~Inc~~for property and equipment were $550 thousand in fiscal 2023 compared to $2. 6 million in fiscal 2022. Capitalized software development costs were $1.5 million in fiscal 2023 compared to $2.4 million capitalization in fiscal 2022.

~~Annual~~During ~~Report~~fiscal years 2023 and 2022, cash provided from financing activities were $11.0 million and $4.5 million, respectively. During fiscal year, 2023, payments on ~~Form~~capital lease and financing arrangements of $7 thousand were offset by proceeds from stock option exercises of $2 thousand, proceeds from notes payable due to related parties of $10-K .0 million, proceeds from notes payable of $338 thousand and common stock issuance of $1.2 million. For the same period in fiscal 2022, the Company recorded $4.5 million of cash flows from financing activities primarily due to $4.0 million proceeds from issuance of common stock and $441 thousand proceeds from notes payable.

~~For~~At September 30, 2023, the ~~Year~~Company ~~Ended~~had $11.1 million outstanding ~~September~~of debt, related to notes payable with Neltjeberg Bay Enterprises, Mark Burish and MSKK term debt. The Company is currently paying a fee of approximately $31 thousand per month to defer principal payments. At September 30, 2022 , the Company had $921 thousand outstanding, net of warrant debt and debt discounts, related to notes payable with PFG V and MSKK term debt.

~~The~~At ~~primary~~September 30, ~~audit~~2023 ~~procedures~~approximately we$0.5 million ~~performed~~of tocash ~~address~~and ~~this~~cash ~~critical~~equivalents ~~audit~~was ~~matter~~held ~~included:~~by the Company’s foreign subsidiaries.

●The Weaccompanying ~~evaluated~~financial statements have been prepared assuming the ~~appropriateness~~Company ofwill continue as a going concern. In fiscal year 2023, the Company’s ~~methodology~~incurred a net loss of $19.3 million compared to ~~identify~~$7.1 million ~~performance~~in ~~obligations~~fiscal ~~with~~year ~~contracts~~2022 and ~~allocate~~has ~~the~~a ~~transaction~~deficit ~~price~~in ~~based~~stockholders’ onequity ~~each~~at ~~performance~~September 30, ~~obligation~~2023 of $13.7 million. The Company currently does not have access to capital through a line of credit nor other readily available sources of capital. Together, these factors raise substantial doubt regarding the Company’s ~~relative~~ability ~~SSP~~to continue as a going concern.

●However, Wemanagement ~~tested~~has considered its plans to continue the ~~completeness~~Company as a going concern and ~~accuracy~~believes substantial doubt is alleviated. Management developed a plan to improve liquidity in its operations through reductions in expenses, incentives to accelerate cash collections, monetization of ~~the~~excess ~~data~~inventory, ~~used~~utilization byof the ~~Company~~final to$500,000 ~~calculate~~tranche ~~each~~available ~~performance~~under ~~obligation’s~~its ~~SSP.~~existing Wecredit ~~recalculated~~agreement with Mark Burish, as well as anticipated exchange of a portion of his debt into equity, exchange of a portion of debt for the sale of certain assets and ~~validated~~further financial support in the ~~pricing~~form ~~inputs~~of ~~used~~additional bydebt or equity, and proceeds from the proposed sale of the Company’s Mediasite business. The Company believes it will be successful in such initiatives and will be able to continue as a going concern through at least the ~~calculation~~next twelve months.

● We selected a sample of revenue transactions and performed the following procedures to test the Company’s application of allocating the transaction price to each distinct performance obligation based on its relative SSP: 39

■ Table Obtained and read contract source documents to assess that all performance obligations were appropriately identified. ■ Compared the SSP indicated by the Company’s analysis to each performance obligation within the selected contract to ensure it agreed. We then recalculated the Company’s allocation of ~~relative SSP to each of the performance obligations.~~Contents

~~/s/~~Sonic ~~Wipfli~~Foundry, ~~LLP~~Inc.

WeAnnual ~~have~~Report ~~served~~on asForm ~~the Company’s auditor since 2019.~~10-K

~~Minneapolis~~For the Year Ended September 30, ~~Minnesota~~2023

~~December~~Contractual ~~8, 2022~~Obligations

38 The following summarizes our contractual obligations at September 30, 2023 and the effect those obligations are expected to have on our liquidity and cash flow in future periods (in thousands):

Table of Contents

			Less than		Years		Years		Over
Contractual Obligations:	Total		1 Year		2-3		4-5		5 years
Product purchase commitments	$	1,193	$	1,193	$	—	$	—	$	—
Service purchase commitments		917		500		417		—		—
Operating lease obligations		1,702		1,026		599		77		—
Capital lease obligations (a)		20		6		11		3		—
Notes payable (a)		13,741		10,187		3,435		226		123

~~Sonic~~(a) ~~Foundry,~~Includes ~~Inc.~~fixed and determinable interest payments

~~Consolidated~~ITEM 7A. ~~Balance~~QUANTITATIVE ~~Sheets~~AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

~~(in~~Derivative ~~thousands,~~Financial ~~except for share and per share data)~~Instruments

	September 30,
	2022			2021
Assets
Current assets:
Cash and cash equivalents	$	3,299		$	9,989
Accounts receivable, net of allowances of $53 and $261		4,923			5,167
Inventories, net		1,462			442
Investment in sales-type lease, current		281			294
Capitalized commissions, current		224			360
Prepaid expenses and other current assets		945			1,153
Total current assets		11,134			17,405
Property and equipment:
Leasehold improvements		1,460			1,111
Computer equipment		9,274			8,527
Furniture and fixtures		1,405			1,528
Total property and equipment		12,139			11,166
Less accumulated depreciation and amortization		8,705			8,368
Property and equipment, net		3,434			2,798
Other assets:
Investment in sales-type lease, long-term		221			490
Capitalized commissions, long-term		42			76
Right-of-use assets under operating leases		2,053			2,441
Deferred tax asset		275			48
Software development		2,445			—
Other long-term assets		296			757
Total assets	$	19,900		$	24,015
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable		1,904			1,072
Accrued liabilities		1,521			2,522
Current portion of unearned revenue		8,599			9,413
Current portion of finance lease obligations		10			79
Current portion of operating lease obligations		1,147			930
Current portion of notes payable and warrant debt, net of discounts		565			—
Total current liabilities		13,746			14,016
Long-term portion of unearned revenue		1,140			1,614
Long-term portion of finance lease obligations		15			26
Long-term portion of operating lease obligations		975			1,583
Long-term portion of notes payable and warrant debt, net of discounts		356			556
Derivative liability, at fair value		—			53
Other liabilities		90			27
Total liabilities		16,322			17,875
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $.01 par value, authorized 500,000 shares; none issued		—			—
9% Preferred stock, Series A, voting, cumulative, convertible, $.01 par value (liquidation preference of $1,000 per share), authorized 4,500 shares; zero shares issued and outstanding		—			—
5% Preferred stock, Series B, voting, cumulative, convertible, $.01 par value (liquidation preference at par), authorized 1,000,000 shares, none issued		—			—
Common stock, $.01 par value, authorized 25,000,000 shares; 10,905,649 and 9,064,821 shares issued and 10,892,933 and 9,052,105 shares outstanding		109			91
Additional paid-in capital		218,145			213,278
Accumulated deficit		(213,525	)		(206,442	)
Accumulated other comprehensive loss		(982	)		(618	)
Treasury stock, at cost, 12,716 shares		(169	)		(169	)
Total stockholders’ equity		3,578			6,140
Total liabilities and stockholders’ equity	$	19,900		$	24,015

Pursuant to Item 305 of Regulation S-K, the Company, as a smaller reporting company, is not required to provide the information required by this item.

~~See~~Interest ~~accompanying~~Rate ~~notes to the consolidated financial statements.~~Risk

39 Our cash equivalents, which consist of overnight money market funds, are subject to interest rate fluctuations, however, we believe this risk is minimal due to the short-term nature of these investments.

~~Table~~At September 30, 2023, the Company didn't carry outstanding debt with variable rate, therefore an increase in the level of ~~Contents~~ interest rates would not have a material impact on our Consolidated Financial Statements. We monitor our positions with, and the credit quality of, the financial institutions that are party to any of our financial transactions.

~~Sonic~~Foreign ~~Foundry,~~Currency ~~Inc.~~Exchange Rate Risk

~~Consolidated~~The ~~Statements~~functional currency of ~~Operations~~our foreign subsidiaries in the Netherlands is the Euro and in Japan is the Japanese Yen. They are subject to foreign currency exchange rate risk. Any increase or decrease in the exchange rate of the U.S. Dollar compared to the Euro or Japanese Yen will impact our future operating results and financial position.

~~(in thousands, except for share and per share data)~~ 40

	Years Ended September 30,
	2022			2021
Revenue:
Product and other	$	8,135		$	10,473
Services		19,331			24,694
Total revenue		27,466			35,167
Cost of revenue:
Product and other		3,054			4,042
Services		5,599			6,252
Total cost of revenue		8,653			10,294
Gross margin		18,813			24,873
Operating expenses:
Selling and marketing		12,264			11,970
General and administrative		5,933			4,870
Product development		7,539			7,226
Total operating expenses		25,736			24,066
Income (Loss) from operations		(6,923	)		807
Non-operating income (expenses):
Interest expense, net		(31	)		(44	)
Gain on debt forgiveness		—			2,325
Other income (expense), net		(364	)		4
Total non-operating income (expense)		(395	)		2,285
Income (loss) before income taxes		(7,318	)		3,092
Income tax benefit (expense)		235			(15	)
Net income (loss)	$	(7,083	)	$	3,077
Income (Loss) per common share:
Basic net income (loss) per common share	$	(0.72	)	$	0.37
Diluted net income (loss) per common share	$	(0.72	)	$	0.36
Weighted average common shares – Basic		9,899,724			8,230,100
– Diluted		9,899,724			8,650,384

Table of Contents

~~See~~Sonic ~~accompanying~~Foundry, ~~notes to the consolidated financial statements~~Inc.

40 Annual Report on Form 10-K

~~Table~~For ofthe ~~Contents~~ Year Ended September 30, 2023

~~Sonic~~ITEM 8. ~~Foundry,~~CONSOLIDATED ~~Inc.~~FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

~~Consolidated~~REPORT ~~Statements~~OF ofINDEPENDENT ~~Comprehensive~~REGISTERED ~~Income~~PUBLIC ~~(Loss)~~ACCOUNTING FIRM

~~(in~~To ~~thousands)~~the Shareholders, Audit Committee and Board of Directors

	Years Ended September 30,
	2022			2021
Net income (loss)	$	(7,083	)	$	3,077
Other comprehensive loss
Foreign currency translation adjustment		(364	)		(156	)
Comprehensive income (loss)	$	(7,447	)	$	2,921

Sonic Foundry, Inc. and Subsidiaries

~~See~~Opinion ~~accompanying~~on ~~notes to~~ the ~~consolidated~~Consolidated ~~financial~~Financial ~~statements.~~Statements

41 We have audited the accompanying consolidated balance sheets of Sonic Foundry, Inc. and Subsidiaries (the “Company”) as of September 30, 2023 and 2022, and the related statements of operations, comprehensive loss, stockholders’ equity (deficit), and cash flows for the years ended, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material aspects, the financial position of the Company at September 30, 2023 and 2022 and the results of its operations and its cash flows for the years ended, in conformity with accounting principles generally accepted in the United States of America.

~~Table~~Basis offor ~~Contents~~ Opinion

~~Sonic~~These ~~Foundry,~~consolidated ~~Inc~~financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

~~Consolidated~~We ~~Statements~~conducted our audits in accordance with the standards of ~~Stockholders~~the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s ~~Equity~~internal ~~(Deficit)~~control over financial reporting. Accordingly, we express no such opinion.

(Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining on a test basis, evidence regarding the amounts and disclosures in ~~thousands)~~the consolidated financial statements. Our audits also included evaluating the accounting principles used and the significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

										Accumulated
					Additional					other
	Preferred		Common		paid-in		Accumulated			comprehensive			Treasury
	stock		stock		capital		deficit			loss			stock			Total
Balance, September 30, 2020	$	-	$	80	$	209,022	$	(209,519	)	$	(462	)	$	(169	)	$	(1,048	)
Stock compensation		—		—		487		—			—			—			487
Issuance of common stock		—		10		3,506		—			—			—			3,517
Stock option exercise		—		1		263		—			—			—			263
Foreign currency translation adjustment		—		—		—		—			(156	)		—			(156	)
Net income		—		—		—		3,077			—			—			3,077
Balance, September 30, 2021		—		91		213,278		(206,442	)		(618	)		(169	)		6,140
Stock compensation		—		—		747		—			—			—			747
Issuance of common stock		—		17		3,999		—			—			—			4,016
Stock option exercise		—		1		121		—			—			—			122
Foreign currency translation adjustment		—		—		—		—			(364	)		—			(364	)
Net loss		—		—		—		(7,083	)		—			—			(7,083	)
Balance, September 30, 2022		—		109		218,145		(213,525	)		(982	)		(169	)		3,578

Critical Audit Matter

~~See~~The ~~accompanying~~critical ~~notes~~audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgements. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosure to which it relates.

42 Revenue Recognition – Evaluation of the allocation of the transaction price to distinct performance obligations

~~Table~~As described in Note 1 to the consolidated financial statements, the Company’s contracts with customers often include multiple distinct performance obligations, including hardware products, software licenses, hosting arrangements, maintenance services, events and other professional services. The accounting for contracts with multiple performance obligations requires the contract’s transaction price to be allocated to each distinct performance obligation based on relative stand-alone selling price (SSP). Because the Company rarely sells its products and services on a standalone basis, significant judgement is required to determine SSP for each distinct performance obligation. We identified the determination of ~~Contents~~ the SSP of performance obligations as a critical audit matter.

~~Sonic~~ 41 ~~Foundry, Inc.~~

~~Consolidated~~ Table ~~Statements~~ of ~~Cash Flows~~Contents

~~(in~~Sonic ~~thousands)~~Foundry, Inc.

	Years Ended
	September 30,
	2022			2021
Operating activities
Net Income (Loss)	$	(7,083	)	$	3,077
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Amortization of other intangibles		31			49
Depreciation and amortization of property and equipment		1,305			1,263
Deferred income taxes		(235	)		—
Loss on sale of fixed assets		36			37
Loss on impairment of fixed assets		328			—
Provision for doubtful accounts		(50	)		25
(Recovery of ) Provision for inventory reserve		—			(16	)
Stock-based compensation expense related to stock options		747			487
Stock issued for board of director's fees		49			70
Remeasurement gain on derivative liability		(53	)		(13	)
Gain on debt forgiveness		—			(2,325	)
Changes in operating assets and liabilities:
Accounts receivable		(37	)		821
Inventories		(1,034	)		734
Investment in sales-type lease		143			(452	)
Capitalized commissions		170			104
Prepaid expenses and other current assets		12			(121	)
Right-of-use assets under operating leases		222			(387	)
Operating lease obligations		(213	)		445
Other long-term assets		365			(438	)
Accounts payable and accrued liabilities		530			(989	)
Other long-term liabilities		90			(110	)
Unearned revenue		(881	)		(1,015	)
Net cash provided by (used in) operating activities		(5,558	)		1,246
Investing activities
Purchases of property and equipment		(2,596	)		(1,482	)
Capitalization of software development costs		(2,445	)		—
Net cash provided by (used in) investing activities		(5,041	)		(1,482	)
Financing activities
Proceeds from notes payable		441			—
Payments on notes payable		—			(935	)
Proceeds from issuance of common stock, net of issuance costs		3,967			3,447
Proceeds from exercise of common stock options		122			263
Payments on finance lease obligations		(75	)		(120	)
Net cash provided by financing activities		4,455			2,655
Changes in cash and cash equivalents due to changes in foreign currency		(546	)		(49	)
Net increase (decrease) in cash and cash equivalents		(6,690	)		2,370
Cash and cash equivalents at beginning of year		9,989			7,619
Cash and cash equivalents at end of year	$	3,299		$	9,989
Supplemental cash flow information:

Annual Report on Form 10-K

43 For the Year Ended September 30, 2023

~~Table~~The ofprimary ~~Contents~~ audit procedures we performed to address this critical audit matter included:

~~Sonic~~● ~~Foundry,~~We ~~Inc~~evaluated the appropriateness of the Company’s methodology to identify performance obligations with contracts and allocate the transaction price based on each performance obligation’s relative SSP.

~~Consolidated~~● ~~Statements~~We tested the completeness and accuracy of ~~Cash~~the ~~Flows~~data used by the Company to calculate each performance obligation’s SSP. We recalculated and validated the pricing inputs used by the Company in the calculation.

~~(in~~● ~~thousands)~~We selected a sample of revenue transactions and performed the following procedures to test the Company’s application of allocating the transaction price to each distinct performance obligation based on its relative SSP:

Interest paid	$	2	$	32
Income taxes paid, foreign		88		97
Non-cash financing and investing activities:
Property and equipment financed by finance lease or accounts payable		73		152

	■	Obtained and read contract source documents to assess that all performance obligations were appropriately identified.
	■	Compared the SSP indicated by the Company’s analysis to each performance obligation within the selected contract to ensure it agreed. We then recalculated the Company’s allocation of relative SSP to each of the performance obligations.

~~See~~/s/ ~~accompanying~~Wipfli ~~notes to the consolidated financial statements.~~LLP

44 We have served as the Company’s auditor since 2019.

~~Table~~Minneapolis, ~~of Contents~~ Minnesota

~~Sonic~~January ~~Foundry~~4, ~~Inc.~~2024

~~Annual Report on Form 10-K~~ 42

~~For~~ Table ~~the~~of ~~Year Ended September 30, 2022~~Contents

1.Sonic ~~Basis~~Foundry, ~~of Presentation and Significant Accounting Policies~~Inc.

~~Business~~Consolidated Balance Sheets

~~Sonic~~(in ~~Foundry~~thousands, ~~Inc.~~except ~~is the global leader~~ for ~~video~~share ~~capture, management,~~ and ~~streaming~~per ~~solutions~~share as well as virtual and hybrid events. Trusted by thousands of educational institutions, corporations, health organizations and government entities in over 65 countries with solutions that transform communication, training, and learning. Sonic Foundry’s brands include Mediasite®, Mediasite Connect, Vidable™ and Global Learning Exchange™.data)

Principles of Consolidation

	September 30,
	2023			2022
Assets
Current assets:
Cash and cash equivalents	$	840		$	3,299
Accounts receivable, net of allowances of $245 and $53		4,000			4,923
Inventories, net		1,855			1,462
Investment in sales-type lease, current		481			281
Capitalized commissions, current		345			224
Prepaid expenses and other current assets		603			945
Total current assets		8,124			11,134
Property and equipment:
Leasehold improvements		1,416			1,460
Computer equipment		5,850			9,274
Furniture and fixtures		1,583			1,405
Total property and equipment		8,849			12,139
Less accumulated depreciation and amortization		7,211			8,705
Property and equipment, net		1,638			3,434
Other assets:
Investment in sales-type lease, long-term		466			221
Capitalized commissions, long-term		43			42
Right-of-use assets under operating leases		1,547			2,053
Deferred tax asset		—			275
Software development costs, net of accumulated amortization and impairment		137			2,445
Other long-term assets		308			296
Total assets	$	12,263		$	19,900
Liabilities and stockholders’ (deficit) equity
Current liabilities:
Accounts payable	$	2,094		$	1,904
Accrued liabilities		1,140			1,521
Current portion of unearned revenue		8,510			8,599
Current portion of finance lease obligations		6			10
Current portion of operating lease obligations		986			1,147
Current portion of notes payable and warrant debt, net of discounts		318			565
Current portion of notes payable due to related parties		7,807			—
Total current liabilities		20,861			13,746
Long-term portion of unearned revenue		1,383			1,140
Long-term portion of finance lease obligations		13			15
Long-term portion of operating lease obligations		633			975
Long-term portion of notes payable and warrant debt, net of discounts		558			356
Long-term portion of notes payable due related parties		2,452			—
Other liabilities		102			90
Total liabilities		26,002			16,322
Commitments and contingencies
Stockholders’ (deficit) equity:
Preferred stock, $.01 par value, authorized 500,000 shares; none issued		—			—
9% Preferred stock, Series A, voting, cumulative, convertible, $.01 par value (liquidation preference of $1,000 per share), authorized 4,500 shares; zero shares issued and outstanding		—			—
5% Preferred stock, Series B, voting, cumulative, convertible, $.01 par value (liquidation preference at par), authorized 1,000,000 shares, none issued		—			—
Common stock, $.01 par value, authorized 25,000,000 shares; 12,152,076 and 10,905,649 shares issued and 12,139,360 and 10,892,933 shares outstanding		122			109
Additional paid-in capital		220,052			218,145
Accumulated deficit		(232,873	)		(213,525	)
Accumulated other comprehensive loss		(871	)		(982	)
Treasury stock, at cost, 12,716 shares		(169	)		(169	)
Total stockholders’ (deficit) equity		(13,739	)		3,578
Total liabilities and stockholders’ (deficit) equity	$	12,263		$	19,900

~~The~~See accompanying ~~consolidated~~notes ~~financial~~to ~~statements include~~ the ~~accounts~~consolidated offinancial ~~the Company and its wholly-owned subsidiaries, Sonic Foundry Media Systems, Inc~~statements., Sonic Foundry International B.V. (formerly Media Mission B.V.) and Mediasite K.K. All significant intercompany transactions and balances have been eliminated. Certain prior year amounts have been reclassified to conform with current year presentation.

~~Use of Estimates~~ 43

In Table ~~preparing financial statements in conformity with accounting principles generally accepted in the United States~~ of America (US GAAP), management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expense during the period. Actual results could differ from those estimates.Contents

~~Assets~~Sonic ~~Recognized~~Foundry, ~~from the Costs to Obtain a Contract with a Customer~~Inc.

~~Sales~~Consolidated ~~commissions~~Statements ~~and related expenses are considered incremental and recoverable costs~~ of acquiring customer contracts. These costs are capitalized and amortized on a straight-line basis over the anticipated period of benefit, which we have determined to be the contract period, typically around 12 months. Assets recorded are included in current assets and other long-term assets. Amortization expense is recorded in sales and marketing expense within our consolidated statement of operations. We calculate a quarterly average percentage based on actual commissions incurred on billings during the same period and apply that percentage to the respective periods’ unearned revenues to determine the capitalized commission amount.Operations

~~Revenue~~(in ~~Recognition~~thousands, except for share and per share data)

We generate revenues in the form of hardware sales of our Mediasite recorder and Mediasite related products, such as our server software and other software licenses and related customer support and services fees, including hosting, installations and training, and events services. Software license revenues include fees from sales of perpetual, hosted, and term licenses. Maintenance and services revenues primarily consist of fees for maintenance services (including support and unspecified upgrades and enhancements when and if they are available), hosting, installation, training and other professional services.

	Years Ended September 30,
	2023			2022
Revenue:
Product and other	$	6,099		$	8,135
Services		16,010			19,331
Total revenue		22,109			27,466
Cost of revenue:
Product and other		2,898			3,054
Services		6,357			5,599
Total cost of revenue		9,255			8,653
Gross margin		12,854			18,813
Operating expenses:
Selling and marketing		10,482			12,264
General and administrative		4,987			5,933
Product development		11,022			7,539
Impairment of capitalized software development		3,769			—
Total operating expenses		30,260			25,736
Loss from operations		(17,406	)		(6,923	)
Non-operating income (expenses):
Interest expense, net		(1,770	)		(31	)
Other expense, net		60			(364	)
Total non-operating expense		(1,710	)		(395	)
Loss before income taxes		(19,116	)		(7,318	)
Income tax (expense) benefit		(232	)		235
Net loss	$	(19,348	)	$	(7,083	)
Loss per common share:
Basic net loss per common share	$	(1.62	)	$	(0.72	)
Diluted net loss per common share	$	(1.62	)	$	(0.72	)
Weighted average common shares – Basic		11,953,389			9,899,724
– Diluted		11,953,389			9,899,724

~~Invoices~~See ~~are~~accompanying ~~issued~~notes ~~when a customer contract, purchase order or signed quote is obtained from the customer. No revenue is recognized prior~~ to ~~such a customer authorization. In some renewal circumstances, we continue to provide services, typically customer support, during~~ the ~~period~~consolidated ~~when~~financial ~~our sales team is working to obtain a customer authorization to avoid customer attrition~~statements. Typically, we would bill for this period such that the customer support contract does not lapse. Consistent with historical company practices, we would recognize revenue for the periods where services have already been rendered once customer authorization has occurred.

~~Products~~ 44

~~Products~~ Table ~~are considered delivered, and revenue is recognized, when title and risk~~ of loss have been transferred to the customer or upon customer acceptance if non-delivered products or services are essential to the functionality of delivered products. Under the terms and conditions of the sale, this occurs at the time of shipment to the customer. Product revenue currently represents sales of our Mediasite recorder and Mediasite related products such as our server software and other software licenses.Contents

~~Services~~Sonic Foundry, Inc.

~~The~~Consolidated ~~Company~~Statements sells support and content hosting contracts to our customers, typically one year in length, and records the related revenue ratably over the contractual period. Our support contracts cover phone and electronic technical support availability over and above the level provided by our dealers, software upgrades on a when-and-if-available basis, advance hardware replacement and an extension of ~~the~~Comprehensive standard hardware warranty from 90 days to one year. The manufacturers the Company contracts with to build the units provide a limited one-year warranty on the hardware. The Company also sells installation, training, event webcasting, and customer content hosting services. Revenue for those services is recognized when performed in the case of installation, training and event webcasting services. Occasionally, the Company will sell customization services to enhance the server software. Revenue from those services is recognized when performed, if perfunctory, or under contract accounting. Service amounts invoiced to customers in excess of revenue recognized are recorded as deferred revenue until the revenue recognition criteria are met.Loss

45 (in thousands)

Table of Contents

	Years Ended September 30,
	2023			2022
Net loss	$	(19,348	)	$	(7,083	)
Other comprehensive income (loss)
Foreign currency translation adjustment		111			(364	)
Comprehensive loss	$	(19,237	)	$	(7,447	)

~~Sonic~~See ~~Foundry,~~accompanying ~~Inc~~notes to the consolidated financial statements.

~~Annual Report on Form~~ 45 ~~10-K~~

~~For~~ Table ~~the~~of ~~Year Ended~~Contents ~~September 30, 2022~~

~~Revenue~~Sonic ~~Recognition~~Foundry, Inc.

InConsolidated ~~accordance~~Statements ~~with~~of ~~ASC~~Stockholders’ ~~Topic~~Equity ~~606, Revenue from Contracts with Customers~~ (~~"ASC 606"~~Deficit), revenues are recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods and services. To achieve this core principle, we apply the following five steps:

~~1. Identify the contract with a customer. A contract with a customer exists when:~~ (1) we and the customer have approved the contract and both parties are committed to perform their respective obligations; (2) we can identify each party’s rights regarding the products or services to be transferred; (3) we can identify the payment terms for the products or services to be transferred; (4) the contract has commercial substance as our future cash flows are expected to change; and (5) it is probable that we will collect substantially all of the consideration to which we are entitled in exchange for the products or services. Any subsequent contract modifications are analyzed to determine the treatment of the contract modification as a separate contract, prospectively or through a cumulative catch-up adjustment.thousands)

2. Identify the performance obligations in the contract. Performance obligations are promises to transfer a good or service to the customer. Performance obligations may be each individual promise in a contract, or may be groups of promises within a contract that significantly affect one another. To the extent a contract includes multiple promises, we must apply judgment to determine whether promises are capable of being distinct and distinct in the context of the contract. If these criteria are not met, the promises are accounted for as a combined performance obligation.

										Accumulated
					*Additional*					*other*
	*Preferred*		*Common*		*paid-in*		*Accumulated*			*comprehensive*			*Treasury*
	*stock*		*stock*		*capital*		*deficit*			*loss*			*stock*			*Total*
Balance, September 30, 2021	$	-	$	91	$	213,278	$	(206,442	)	$	(618	)	$	(169	)	$	6,140
Stock compensation		—		—		747		—			—			—			747
Issuance of common stock		—		17		3,999		—			—			—			4,016
Stock option exercise		—		1		121		—			—			—			122
Foreign currency translation adjustment		—		—		—		—			(364	)		—			(364	)
Net loss		—		—		—		(7,083	)		—			—			(7,083	)
Balance, September 30, 2022		—		109		218,145		(213,525	)		(982	)		(169	)		3,578
Stock compensation		—		—		498		—			—			—			498
Issuance of common stock and warrant		—		13		1,407		—			—			—			1,420
Stock option exercise		—		—		2		—			—			—			2
Foreign currency translation adjustment		—		—		—		—			111			—			111
Net loss		—		—		—		(19,348	)		—			—			(19,348	)
Balance, September 30, 2023		—		122		220,052		(232,873	)		(871	)		(169	)		(13,739	)

3.See ~~Determine~~accompanying ~~the~~notes ~~transaction~~to ~~price. The transaction price is~~ the ~~total~~consolidated ~~amount~~financial ~~of consideration to which we expect to be entitled in exchange for transferring promised products and services to a customer~~statements.

4. Allocate the transaction price to performance obligations in the contract. The allocation of the transaction price to performance obligations is generally done in proportion to their standalone selling prices (“SSP”). SSP is the price that we would sell a distinct product or service separately to a customer and is determined at contract inception. If SSP is not available through the analysis of observable inputs, this step is subject to significant judgment and additional analysis so that we can establish an estimated SSP. The estimated SSP considers historical information, including demand, trends and information about the customer or class of customers. 46

5. Table ~~Recognize revenues when or as the company satisfies a performance obligation. We recognize revenues when, or as, distinct performance obligations are satisfied by transferring control~~ of the product or service to the customer. A performance obligation is considered transferred when the customer obtains control of the product or service. Transfer of control is typically evaluated from the customer's perspective. At contract inception, we determine whether we satisfy the performance obligation over time or at a point in time. Revenue is recognized when performance obligations are satisfied.Contents

~~Our~~Sonic ~~contract payment terms are typically net 30 days. We assess collectability based on a number of factors including collection history and creditworthiness of the customer~~Foundry, ~~and we may mitigate exposures to credit risk by requiring payments in advance~~Inc. ~~If we determine that collectability related to a contract is not probable, we may not record revenue until collectability becomes probable at a later date.~~

~~Our~~Consolidated ~~revenues~~Statements ~~are recorded based on the transaction price, excluding amounts collected on behalf~~ of ~~third~~Cash ~~parties such as sales taxes, which are collected on behalf of and remitted to governmental authorities.~~Flows

~~Nature~~(in ~~of Products and Services~~thousands)

Certain software licenses are sold either on-premise or through term-based hosting agreements. These hosting arrangements provide customers with the same product functionality and differ mainly in the duration over which the customer benefits from the software. We deliver our software licenses electronically. Electronic delivery occurs when we provide the customer with access to the software and license key via a secure portal. Revenue from on-premise software licenses is generally recognized upfront at the point in time when the software is made available to the customer. Revenue from term-based hosted licenses are recognized ratably over the term of the agreement.

	Years Ended
	September 30,
	2023			2022
Operating activities
Net loss	$	(19,348	)	$	(7,083	)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of software development costs		33			—
Amortization of warrant debt, debt discount, debt issuance costs, and loan premium		635			31
Impairment of capitalized software development		3,769			—
Depreciation and amortization of property and equipment		2,265			1,305
Deferred income taxes		290			(235	)
Loss on sale of fixed assets		11			36
Loss on impairment of fixed assets		—			328
Provision for doubtful accounts		185			(50	)
Stock-based compensation expense related to stock options		498			747
Stock issued for board of director’s fees		42			49
Remeasurement gain on derivative liability		—			(53	)
Changes in operating assets and liabilities:
Accounts receivable		801			(37	)
Inventories		(402	)		(1,034	)
Investment in sales-type lease		(449	)		143
Capitalized commissions		(122	)		170
Prepaid expenses and other current assets		355			12
Right-of-use assets under operating leases		451			222
Operating lease obligations		(449	)		(213	)
Other long-term assets		(20	)		365
Accounts payable and accrued liabilities		(27	)		530
Other long-term liabilities		15			90
Unearned revenue		144			(881	)
Net cash used in operating activities		(11,323	)		(5,558	)
Investing activities
Purchases of property and equipment		(550	)		(2,596	)
Capitalization of software development costs		(1,494	)		(2,445	)
Net cash used in investing activities		(2,044	)		(5,041	)
Financing activities
Proceeds from notes payable		338			441
Payments on notes payable		(383	)		—
Proceeds from notes payable due to related parties		10,000			—
Payment on debt issuance costs		(193	)		—
Proceeds from issuance of common stock and warrants, net of issuance costs		1,215			3,967
Proceeds from exercise of common stock options		2			122
Payments on finance lease obligations		(7	)		(75	)
Net cash provided by financing activities		10,972			4,455
Changes in cash and cash equivalents due to changes in foreign currency		(64	)		(546	)
Net decrease in cash and cash equivalents		(2,459	)		(6,690	)
Cash and cash equivalents at beginning of year		3,299			9,989
Cash and cash equivalents at end of year	$	840		$	3,299
Supplemental cash flow information:

Our contracts with customers for on-premise and hosted software licenses include maintenance services and may also include training and/or professional services. Maintenance services agreements consist of fees for providing software updates on an if and when available basis and for providing technical support for software products for a specified term. We believe that our software updates and technical support each have the same pattern of transfer to the customer and are substantially the same. Therefore, we consider these updates and technical support to be a single distinct performance obligation. Revenues allocated to maintenance services are recognized ratably over the term of the agreement. Revenues related to training services are billed on a fixed fee basis and are recognized as the services are delivered. Payments received in advance of services performed are deferred and recognized when the related services are performed. Revenues related to professional services are recognized as the services are performed. 47

46 Table of Contents

~~Table~~Sonic ofFoundry, ~~Contents~~ Inc.

~~Sonic~~Consolidated ~~Foundry,~~Statements ~~Inc.~~ of Cash Flows

~~Annual~~(in ~~Report on Form 10-K~~ thousands)

For the Year Ended September 30, 2022

Interest paid	$	1,005	$	2
Income taxes paid, foreign		—		88
Non-cash financing and investing activities:
Property and equipment financed by finance lease or accounts payable		19		73
Equity warrant issued in conjunction with notes payable due to related parties		163		—

InSee ~~the~~accompanying ~~case~~notes ~~of the Company’s hardware products with embedded software, the Company has determined that the hardware and software components function together~~ to ~~deliver~~ the ~~product’s~~consolidated ~~essential~~financial ~~functionality, and therefore, are considered to be one performance obligation~~statements. ~~The revenue from the sale of these products along with other products and services we provide requires an allocation of transaction price based on the stand-alone selling price of each component.~~

The Company also offers hosting services bundled with events services. The Company recognizes events revenue when the event takes place and recognizes the hosting revenue over the term of the hosting agreement. 48

~~Judgments~~ Table ~~and~~of ~~Estimates~~Contents

~~Our~~Sonic ~~contracts~~Foundry, ~~with customers often include promises to transfer multiple products and services~~Inc. ~~Determining whether products and services are considered distinct performance obligations that should be accounted for separately from one another requires judgment.~~

~~Judgment~~Annual isReport ~~required to determine standalone selling prices (“SSP”) for each distinct performance obligation. We typically have more than one SSP for each of our products and services based~~ on ~~customer~~Form stratification, which is based on the size of the customer, their geographic region and market segment. We use a cost plus margin approach to determine SSPs for hardware. We use historical sales data to determine SSPs for perpetual software licenses. For both on10-premise and term-hosted agreements, events services, training and professional services, SSPs are generally observable using internally developed pricing calculators and/or price sheets. For maintenance services, SSPs are generally observable using historical renewal data.K

~~Concentration~~For ofthe ~~Credit~~Year ~~Risk~~Ended ~~and~~September ~~Other~~30, ~~Risks and Uncertainties~~2023

~~At September 30, 2022, $2~~1.~~2 million~~ isBasis ~~deposited with one major U.S. financial institution~~ of ~~the~~Presentation ~~$3.3 million total cash~~ and ~~equivalents.~~Significant AtAccounting times, deposits normally exceed the amount of insurance provided on such deposits. The Company has not experienced any losses on such amounts and believes that it is not exposed to any significant credit risk on these balances. The remaining $1.1 million of cash and cash equivalents is held by our foreign subsidiaries in financial institutions in Japan and the Netherlands and held in their local currency. The cash held in foreign financial institutions is not insured. If the funds held by our foreign subsidiaries were needed for our operations in the United States, the repatriation of some of these funds to the United States could require payment of additional U.S. taxes.Policies

47 Business

~~Table~~Sonic ofFoundry, ~~Contents~~ Inc. a global leader in developing comprehensive video recording and streaming solutions for corporations, health organizations and government. Sonic Foundry’s brands include Mediasite® and Mediasite Connect, our video recording and streaming platform, Vidable™, our AI-powered solution for enhancing and analyzing video, and Global Learning Exchange™ which brings virtual higher education to students in emerging countries.

~~Sonic~~Principles ~~Foundry,~~of ~~Inc.~~ Consolidation

~~Annual~~The ~~Report~~accompanying onconsolidated ~~Form 10~~financial statements include the accounts of the Company and its wholly-owned subsidiaries, Sonic Foundry Media Systems, Inc., Sonic Foundry International B.V. (formerly Media Mission B.V.) and Mediasite K .K. All significant intercompany transactions and balances have been eliminated.

~~For~~Liquidity ~~the~~and ~~Year~~Going ~~Ended September 30, 2022~~ Concern

The ~~Company’s~~accompanying ~~wholly-owned~~financial ~~subsidiaries~~statements ~~operate~~have inbeen ~~Japan~~prepared ~~and~~assuming the ~~Netherlands,~~Company ~~and~~will ~~utilize~~continue ~~the~~as ~~Japanese~~a ~~Yen~~going ~~and~~concern. ~~Euro,~~In ~~respectively~~fiscal year 2023, asthe ~~their~~Company ~~functional~~incurred ~~currency~~a net loss of $19.3 million ~~Assets~~compared ~~and~~to ~~liabilities~~$7.1 million ofin ~~the~~fiscal ~~Company’s~~year ~~foreign~~2022, ~~operations~~has ~~are~~a ~~translated~~deficit ~~into~~in USstockholders’ ~~dollars~~equity at September 30, ~~period~~2023 ~~end~~of ~~exchange~~$13.7 million, ~~rates~~cash ~~while revenues~~of ~~and~~$0.8 ~~expenses~~million ~~are~~and ~~translated~~a ~~using~~working ~~average~~capital ~~rates~~deficit ~~for~~of ~~the~~$12.7 ~~period~~million. ~~Gains~~The ~~and~~Company ~~losses~~currently ~~from~~does ~~the~~not ~~translation~~have ~~are~~access ~~deferred~~to ~~and~~capital ~~included~~through ina ~~accumulated~~line of credit nor other ~~comprehensive~~readily ~~loss~~available onsources of capital. Together, these factors raise substantial doubt regarding the ~~consolidated~~Company’s ~~statements~~ability ofto ~~comprehensive~~continue ~~gain~~as ~~(loss)~~a going concern.

~~During~~However, ~~fiscal~~management ~~2022,~~has considered its plans to continue the Company ~~recorded~~as ana ~~aggregate~~going ~~transaction~~concern ~~loss~~ and believes substantial doubt is alleviated. Management developed a plan to improve liquidity in its operations through reductions in expenses, incentives to accelerate cash collections, monetization of excess inventory, utilization of the final $63500,000 tranche available under its credit agreement with Mark ~~thousand~~Burish, ~~compared~~second and third amendments to its credit agreement with Mark Burish that provide an ~~aggregate~~increase ~~gain~~ in principal debt of $~~16 thousand~~1 ~~during~~million, ~~fiscal~~as ~~2021.~~well ~~The~~as ~~aggregate~~anticipated ~~transaction~~exchange ~~gain~~of ora ~~loss~~portion isof ~~included~~his debt into equity, exchange of a portion of debt for the sale of certain assets and further financial support in the ~~other~~form ~~expense~~of ~~line~~additional debt or equity, and proceeds from the sale of the ~~consolidated~~Company’s ~~statements~~Mediasite ofbusiness. ~~operations~~See Note 12 – Subsequent Events, for more information regarding additional draws from Mr. Burish and the Mediasite sale. The Company believes it will be successful in such initiatives and will be able to continue as a going concern through at least the next twelve months.

WeUse ~~assess the realization~~ of our receivables by performing ongoing credit evaluations of our customers’ financial condition. Through these evaluations, we may become aware of a situation where a customer may not be able to meet its financial obligations due to deterioration of its financial viability, credit ratings or bankruptcy. Our reserve requirements are based on the best information available to us and are reevaluated and adjusted as additional information is received. Our reserves are also based on amounts determined by using percentages applied to certain aged receivable categories. These percentages are determined by a variety of factors including, but not limited to, current economic trends, historical payment and bad debt write-off experience. Allowance for doubtful accounts for accounts receivable was $53 thousand at September 30, 2022 and $261 thousand at September 30, 2021.Estimates

~~Currently~~In ~~the~~preparing ~~majority of~~financial ~~our~~statements ~~product~~in ~~inventory~~conformity ~~purchases~~with ~~are~~accounting ~~from~~principles ~~one~~generally ~~third-party~~accepted ~~contract~~in ~~manufacturer.~~the ~~Although~~United weStates ~~believe there are multiple sources~~ of ~~supply~~America ~~from~~(US ~~other~~GAAP), ~~contract~~management ~~manufacturers~~is asrequired ~~well~~to asmake ~~multiple~~estimates ~~suppliers~~and ofassumptions ~~component~~that ~~parts~~affect ~~required by~~ the ~~contract~~reported ~~manufacturers,~~amounts ~~a disruption~~ of ~~supply~~assets ofand ~~component parts or completed products~~liabilities, ~~even~~the ifdisclosure ~~short~~of ~~term,~~contingent ~~would~~assets ~~have~~and aliabilities ~~material~~at ~~negative~~the ~~impact~~date onof ~~our~~the ~~revenues.~~consolidated Atfinancial ~~September 30,~~statements ~~2022~~ and ~~2021~~the ~~this~~reported ~~supplier~~amounts ~~represented~~of ~~approximately 23%~~revenue and ~~less~~expense ~~than~~during ~~1%,~~the ~~respectively, of accounts payable~~period. We ~~also~~Actual ~~license~~results ~~technology~~could ~~from~~differ ~~third parties that is embedded in our software. We believe there are alternative sources of similar licensed technology~~ from ~~other~~those ~~third parties that we could also embed in our software, although it could create potential programming related issues that might require engineering resources~~estimates.

~~Cash~~Assets ~~and~~Recognized ~~Cash~~from ~~Equivalents~~the Costs to Obtain a Contract with a Customer

~~The~~Sales ~~Company~~commissions ~~considers~~and ~~all~~related ~~highly~~expenses ~~liquid~~are ~~investments~~considered ~~purchased~~incremental ~~with~~and anrecoverable ~~original~~costs ~~maturity~~of acquiring customer contracts. These costs are capitalized and amortized on a straight-line basis over the anticipated period of ~~three~~benefit, ~~months~~which orwe ~~less~~have determined to be ~~cash~~the ~~equivalents~~contract period, typically around 12 months. Assets recorded are included in current assets and other long-term assets. Amortization expense is recorded in sales and marketing expense within our consolidated statement of operations. We calculate a quarterly average percentage based on actual commissions incurred on billings during the same period and apply that percentage to the respective periods’ unearned revenues to determine the capitalized commission amount.

~~Trade Accounts Receivable~~ 49

~~The~~ Table ~~majority~~ of the Company’s accounts receivable are due from entities in, or distributors or value-added resellers to, the education, corporate and government sectors. Credit is extended based on evaluation of a customer’s financial condition and, generally, collateral is not required. Accounts receivable are typically due within 30 days and are stated at amounts due from customers net of an allowance for doubtful accounts. Accounts outstanding longer than the contractual payment terms are considered to be past due. The Company determines its allowance by considering a number of factors, including the length of time trade accounts receivable are past due, the Company’s previous loss history, the customer’s current ability to pay its obligation to the Company, and the condition of the general economy and the industry as a whole. The Company writes off accounts receivable when they become uncollectible, and payments subsequently received on such receivables are credited to the allowance for doubtful accounts. Interest is not accrued on past due receivables.Contents

48 Sonic Foundry, Inc.

~~Table~~Annual ofReport ~~Contents~~ on Form 10-K

~~Sonic~~For ~~Foundry~~the Year Ended September 30, ~~Inc.~~ 2023

~~Annual~~Revenue ~~Report on Form 10-K~~ Recognition

~~For~~We generate revenues in the ~~Year~~form ~~Ended September~~of 30hardware sales of our Mediasite recorder and Mediasite related products, ~~2022~~ such as our server software and other software licenses and related customer support and services fees, including hosting, installations and training, and events services. Software license revenues include fees from sales of perpetual, hosted, and term licenses. Maintenance and services revenues primarily consist of fees for maintenance services (including support and unspecified upgrades and enhancements when and if they are available), hosting, installation, training and other professional services.

~~Investment~~Invoices inare ~~Sales-Type~~issued ~~Lease~~when a customer contract, purchase order or signed quote is obtained from the customer. No revenue is recognized prior to such a customer authorization. In some renewal circumstances, we continue to provide services, typically customer support, during the period when our sales team is working to obtain a customer authorization to avoid customer attrition. Typically, we would bill for this period such that the customer support contract does not lapse. Consistent with historical company practices, we would recognize revenue for the periods where services have already been rendered once customer authorization has occurred.

~~The Company has entered into sales-type lease arrangements with certain customers, consisting of recorders leased with terms ranging from 3-5 years.~~Products

~~Investment~~Products inare ~~sales-type~~considered ~~leases~~delivered, ~~consisted~~and revenue is recognized, when title and risk of loss have been transferred to the ~~following~~customer ~~(in~~or ~~thousands)~~upon ascustomer acceptance if non-delivered products or services are essential to the functionality of ~~September 30~~ delivered products. Under the terms and conditions of the sale, ~~2022:~~this occurs at the time of shipment to the customer. Product revenue currently represents sales of our Mediasite recorder and Mediasite related products such as our server software and other software licenses.

Investment in sales-type lease, gross:
2023	$	281
2024		157
2025		64
Gross investment in sales-type lease		502
Less: Unearned income		—
Total investment in sales-type lease	$	502
Current portion of total investment in sales-type lease	$	281
Long-term portion of total investment in sales-type lease		221
	$	502

Services

49 The Company sells support and content hosting contracts to our customers, typically one year in length, and records the related revenue ratably over the contractual period. Our support contracts cover phone and electronic technical support availability over and above the level provided by our dealers, software upgrades on a when-and-if-available basis, advance hardware replacement and an extension of the standard hardware warranty from 90 days to one year. The manufacturers the Company contracts with to build the units provide a limited one-year warranty on the hardware. The Company also sells installation, training, event webcasting, and customer content hosting services. Revenue for those services is recognized when performed in the case of installation, training and event webcasting services. Occasionally, the Company will sell customization services to enhance the server software. Revenue from those services is recognized when performed, if perfunctory, or under contract accounting. Service amounts invoiced to customers in excess of revenue recognized are recorded as deferred revenue until the revenue recognition criteria are met. During the fiscal year our Vidable business began licensing captioning solutions to Mediasite customers, typically in one year in length and our Global Learning Exchange business began selling tuition to students in the Bahamas and Africa. Tuition is typically collected in advance of each term and recognized ratably over the course of the term. Vidable revenue is recognized ratably over the contractual period.

50 ~~Table of Contents~~

~~Sonic~~ Table ~~Foundry,~~of ~~Inc.~~Contents

~~Annual~~Sonic ~~Report~~Foundry, ~~on Form 10-K~~ Inc.

~~For~~Annual ~~the~~Report ~~Year~~on ~~Ended September~~Form ~~30, 2022~~ 10-K

~~Inventory~~For the Year Ended September 30, 2023

~~Inventory~~Revenue ~~consists~~Recognition of raw materials and supplies used in the assembly of Mediasite recorders and finished units. Inventory of completed units and spare parts are carried at the lower of cost or net realizable value, with cost determined on a first-in, first-out basis. The obsolescence reserve is calculated based on how frequently an item is sold. Infrequently sold items are fully reserved and the reserve is reviewed on a recurring basis.

~~Inventory~~In ~~consists~~accordance with Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers ASC 606, revenues are recognized when control of the ~~following~~promised (goods or services is transferred to our customers, in ~~thousands)~~an amount that reflects the consideration to which we expect to be entitled in exchange for those goods and services. To achieve this core principle, we apply the following five steps:

	September 30,
	2022			2021
Raw materials and supplies	$	507		$	301
Finished goods		1,062			247
Less: Obsolescence reserve		(107	)		(106	)
Inventories	$	1,462		$	442

Identify the contract with a customer. A contract with a customer exists when: (1) we and the customer have approved the contract and both parties are committed to perform their respective obligations; (2) we can identify each party’s rights regarding the products or services to be transferred; (3) we can identify the payment terms for the products or services to be transferred; (4) the contract has commercial substance as our future cash flows are expected to change; and (5) it is probable that we will collect substantially all of the consideration to which we are entitled in exchange for the products or services. Any subsequent contract modifications are analyzed to determine the treatment of the contract modification as a separate contract, prospectively or through a cumulative catch-up adjustment.

~~Software~~2. ~~Development~~Identify ~~Costs~~the performance obligations in the contract. Performance obligations are promises to transfer a good or service to the customer. Performance obligations may be each individual promise in a contract, or may be groups of promises within a contract that significantly affect one another. To the extent a contract includes multiple promises, we must apply judgment to determine whether promises are capable of being distinct and distinct in the context of the contract. If these criteria are not met, the promises are accounted for as a combined performance obligation.

~~Software~~3. ~~development~~Determine ~~costs~~the ~~incurred~~transaction ~~in conjunction with product development are charged to research and development expense until technological feasibility is established~~price. ~~Thereafter,~~The ~~until~~transaction ~~the~~price ~~product~~ is ~~released for sale, software development costs incurred in~~ the ~~application~~total ~~development~~amount ~~stage are capitalized and reported at the lower~~ of ~~amortized~~consideration ~~cost~~to orwhich ~~net~~we ~~realizable~~expect ~~value~~to ofbe ~~the~~entitled ~~related~~in ~~product.~~exchange ~~Until~~for ~~the~~transferring ~~first quarter~~promised ~~of 2022, the period between achieving technological feasibility of the Company’s~~ products and ~~the~~services ~~general availability of the products has been short. During fiscal year 2022, the Company capitalized approximately $2.4 million in software development costs related~~ to ~~new~~a ~~products as technological feasibility was established during the period~~customer. ~~As of September 30, 2022, the product has not been released for sale.~~

~~Property~~4. Allocate the transaction price to performance obligations in the contract. The allocation of the transaction price to performance obligations is generally done in proportion to their standalone selling prices (“SSP”). SSP is the price that we would sell a distinct product or service separately to a customer and ~~Equipment~~is determined at contract inception. If SSP is not available through the analysis of observable inputs, this step is subject to significant judgment and additional analysis so that we can establish an estimated SSP. The estimated SSP considers historical information, including demand, trends and information about the customer or class of customers.

~~Property~~5. ~~and~~Recognize ~~equipment~~revenues ~~are~~when ~~recorded~~or atas ~~cost~~the ~~and~~company satisfies a performance obligation. We recognize revenues when, or as, distinct performance obligations are ~~depreciated~~satisfied ~~using~~by transferring control of the ~~straight-line~~product ~~method~~or ~~for~~service ~~financial~~to ~~reporting~~the ~~purposes~~customer. ~~The~~A ~~estimated~~performance ~~useful~~obligation ~~lives~~is ~~used~~considered totransferred ~~calculate~~when ~~depreciation~~the ~~are~~customer asobtains ~~follows:~~control of the product or service. Transfer of control is typically evaluated from the customer’s perspective. At contract inception, we determine whether we satisfy the performance obligation over time or at a point in time. Revenue is recognized when performance obligations are satisfied.

	Years
	(In Years)
Leasehold improvements		5 to 15
Computer equipment		1.5 to 5
Furniture and fixtures		3 to 15

Our contract payment terms are typically net 30 days. We assess collectability based on several factors including collection history and creditworthiness of the customer, and we may mitigate exposures to credit risk by requiring payments in advance. If we determine that collectability related to a contract is not probable, we may not record revenue until collectability becomes probable at a later date.

~~Depreciation~~Our ~~expense~~revenues ~~for~~are ~~equipment~~recorded ~~not~~based ~~used~~on in the ~~US data~~transaction ~~center~~price, UKexcluding ~~data~~amounts ~~center,~~collected ~~and~~on ~~Europe~~behalf ~~(EU) data center is not included in cost~~ of ~~revenue. In August~~third ~~2022,~~parties ~~the~~such ~~Company signed~~as asales ~~contract with Amazon Web Services (AWS) to transition the Company's cloud customers from the US~~taxes, ~~UK, and~~which ~~EU data~~are ~~centers~~collected ~~to AWS cloud. Based~~ on ~~the~~behalf ~~project~~of ~~plan, the EU data center will be retired in January 2023; the UK data center will be retired in July 2023;~~ and ~~the~~remitted ~~US data center will be retired in January 2024. The Company followed guidance provided by FASB Accounting Standards Codification (ASC) Topic 360, “Property, Plant, and Equipment,”~~ to ~~evaluate~~ ~~potential impairment.~~governmental For assets not impaired, the Company re-evaluated the estimated useful life for the data centers equipment and adjusted its depreciation expense to reflect the effect on loss from continuing operationsauthorities. As a result, the Company's depreciation expense for the US, UK, and EU data centers increased by $91 thousand for fiscal 2022. This change is due to the shortened service life of the data center equipment.

~~Impairment~~Nature of ~~Long-Lived~~Products ~~Assets~~and Services

~~Long-lived~~Certain ~~assets~~software licenses are ~~evaluated~~sold ~~for~~either ~~impairment~~on-premise ~~whenever events~~ or ~~changes~~through interm-based ~~circumstances~~hosting ~~indicate~~agreements. ~~that~~These ~~the~~hosting ~~carrying~~arrangements ~~value~~provide ofcustomers anwith ~~asset may~~the ~~not~~same beproduct ~~recoverable~~functionality ~~based~~and ondiffer ~~expected~~mainly ~~undiscounted cash flows attributable to that asset. Key assumptions utilized~~ in the ~~analysis~~duration ofover ~~undiscounted~~which ~~cash~~the ~~flows~~customer ~~for~~benefits ~~each~~from ~~asset~~the orsoftware. ~~asset~~We ~~group~~deliver ~~being~~our ~~tested~~software ~~included~~licenses 1)electronically. ~~whether~~Electronic ~~cash~~delivery ~~flows~~occurs ~~were~~when ~~attributable~~we ~~solely~~provide to the ~~asset~~customer orwith ~~group,~~access or to anthe ~~entire~~software ~~reporting unit;~~ and 2)license ~~the~~key ~~useful~~via ~~lives~~a ofsecure ~~the asset or asset group~~portal. ~~The~~Revenue ~~Company~~from ~~followed the accounting guidance provided by ASC 360~~on-10premise ~~and~~software ~~used~~licenses ~~the~~is ~~fair~~generally ~~value,~~recognized ~~quoted~~upfront ~~price~~at ~~from potential buyers, to measure~~ the ~~impairment~~point ~~loss. The Company recorded a $328 thousand impairment loss~~ in ~~the~~time ~~year~~when ~~ended September 30, 2022, due to~~ the ~~transition~~software ofis ~~hosting~~made ~~service~~available to ~~Amazon Web Services, that is recorded in~~ the ~~cost of revenue section on the statement of operations~~customer. ~~This~~Revenue ~~asset~~from isterm-based ~~located~~hosted inlicenses ~~Europe. The transition~~ is arecognized ~~strategic initiative to~~ratably ~~improve~~over the ~~Company's~~term ~~cloud environment~~of ~~for~~ the ~~customers and reduce the needs of large capital investment and operating expense on a long-term base~~agreement.

50 Our contracts with customers for on-premise and hosted software licenses include maintenance services and may also include training and/or professional services. Maintenance services agreements consist of fees for providing software updates on an if and when available basis and for providing technical support for software products for a specified term. We believe that our software updates and technical support each have the same pattern of transfer to the customer and are substantially the same. Therefore, we consider these updates and technical support to be a single distinct performance obligation. Revenues allocated to maintenance services are recognized ratably over the term of the agreement. Revenues related to training services are billed on a fixed fee basis and are recognized as the services are delivered. Payments received in advance of services performed are deferred and recognized when the related services are performed. Revenues related to professional services are recognized as the services are performed.

51 ~~Table of Contents~~

~~Sonic~~ Table ~~Foundry,~~of ~~Inc.~~Contents

~~Annual~~Sonic ~~Report~~Foundry, ~~on Form 10-K~~ Inc.

~~For~~Annual ~~the~~Report ~~Year~~on ~~Ended September~~Form ~~30, 2022~~ 10-K

~~Asset~~For ~~Retirement~~the ~~Obligation~~Year Ended September 30, 2023

AnIn ~~asset retirement obligation (“ARO”) associated with~~ the ~~retirement~~case of ~~a tangible long-lived asset is recognized as a liability in~~ the ~~period~~Company’s inhardware ~~which~~products itwith isembedded ~~incurred or becomes determinable~~software, ~~with an associated increase in~~ the ~~carrying~~Company ~~amount~~has ofdetermined ~~the~~that ~~related long-term asset. The cost of~~ the ~~tangible~~hardware ~~asset,~~and ~~including~~software ~~the~~components ~~initially~~function ~~recognized~~together ~~asset~~to ~~retirement~~deliver ~~cost, is depreciated over~~ the ~~useful~~product’s ~~life~~essential ~~of the asset. As of September 30~~functionality, ~~2022~~ and ~~2021~~therefore, ~~the~~ ~~Company~~are ~~has~~considered ~~recorded~~to abe ~~liability~~one ofperformance ~~$77 and~~obligation. ~~$129 thousand,~~The ~~respectively,~~revenue ~~for~~from ~~retirement obligations associated with returning~~ the ~~MSKK~~sale ~~leased property to the respective lessors upon the termination~~ of ~~the~~these ~~lease~~products ~~arrangement. At September~~along ~~30,~~with ~~2021, asset~~other ~~retirement~~products ~~obligations were included in short-term liabilities~~ and ~~paid~~services ~~off~~we ~~during~~provide Q1requires ~~2022. A new~~an ~~asset~~allocation ~~retirement~~of ~~obligation was~~transaction ~~recorded~~price ~~for~~based on the ~~new MSKK office lease and is included in other~~stand-~~long~~alone ~~term~~selling ~~liabilities~~price onof ~~the~~each ~~condensed consolidated balance sheets~~component.

AThe ~~summary~~Company ofalso ~~the~~offers ~~changes~~hosting inservices bundled with events services. The Company recognizes events revenue when the ~~ARO~~event istakes ~~included~~place inand recognizes the ~~table~~hosting ~~below~~revenue ~~(amounts~~over inthe ~~thousands):~~term of the hosting agreement.

Asset retirement obligation at September 30, 2020	$	134
Accretion expense		2
Foreign currency changes		(7	)
Asset retirement obligation at September 30, 2021		129
Settlement of ARO		(129	)
Additional ARO for new office lease		95
Accretion expense		1
Foreign currency changes		(19	)
Asset retirement obligation at September 30, 2022	$	77

Judgments and Estimates

~~Comprehensive~~Our ~~Income~~contracts ~~(Loss)~~with customers often include promises to transfer multiple products and services. Determining whether products and services are considered distinct performance obligations that should be accounted for separately from one another requires judgment.

~~Comprehensive~~Judgment ~~income~~is required to determine standalone selling prices (~~loss~~“SSP”) ~~includes~~for ~~disclosure~~each ofdistinct ~~financial~~performance ~~information~~obligation. ~~that~~We ~~historically~~typically ~~has~~have ~~not~~more ~~been~~than ~~recognized~~one inSSP ~~the~~for ~~calculation~~each of ~~net~~our ~~income.~~products ~~Our~~and ~~comprehensive~~services ~~income~~based ~~(loss)~~on ~~encompasses~~customer ~~net~~stratification, ~~income~~which ~~(loss)~~is ~~and~~based ~~foreign~~on

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