8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 21, 2005

SONIC SOLUTIONS

(Exact name of registrant as specified in its charter)

California	72870	93-0925818
(State or other jurisdiction of organization)	(Commission File Number)	(I.R.S. Employer Identification No.)

101 Rowland Way, Suite 110 Novato, CA	94945
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (415) 893-8000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 4.01. Changes in Registrant’s Certifying Accountant.

On July 21, 2005, the Audit Committee of Sonic Solutions (the “Company”) approved the engagement of the accounting firm of BDO Seidman, LLP (“BDO Seidman”) as its independent registered public accounting firm as of July 21, 2005. In connection with its choice of BDO Seidman, the Audit Committee terminated KPMG LLP (“KPMG”), who had been the Company’s independent registered public accounting firm prior to July 21, 2005 (date of termination).

The audit reports of KPMG on the Company’s financial statements for the fiscal years ended March 31, 2004 and 2005 did not contain an adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles. The audit report of KPMG on management’s assessment of the effectiveness of internal control over financial reporting and the effectiveness of internal control over financial reporting as of March 31, 2005 did not contain an adverse opinion or disclaimer of opinion, and was not modified as to uncertainty, audit scope or accounting principle, except that KPMG’s report indicates that the Company did not maintain effective internal controls over financial reporting as of March 31, 2005 because of the effect of material weaknesses on the achievement of the objectives of the control criteria and contains an explanatory paragraph that indicates that the following material weaknesses were identified and included in management’s assessment:

• The Company did not maintain sufficient personnel with an appropriate level of accounting knowledge, experience and training in the application of generally accepted accounting principles (GAAP) commensurate with its financial reporting requirements.

• The Company did not maintain adequate controls to ensure appropriate execution of its integration plan to merge the accounting and financial reporting processes of the Roxio CSD into the Company’s existing processes.

• The Company did not maintain sufficient qualified personnel in its human resources and payroll functions.

• The Company did not maintain adequate controls over accounting for the existence and valuation of fixed assets.

• The Company did not maintain adequate controls over spreadsheets used in its financial reporting process.

Company management reported to the Audit Committee the identification of the material weaknesses identified in its assessment, and KPMG discussed the material weaknesses with the Audit Committee. For additional information, see Items 8 and 9A of the 2005 Annual Report. The Company has authorized KPMG to respond fully to the inquiries of BDO Seidman concerning the subject matter of the material weaknesses.

In connection with the audits of the two fiscal years ended March 31, 2004 and 2005, and the subsequent interim period through July 21, 2005 (the Relevant Period), there were (1) no disagreements with KPMG on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of KPMG, would have caused them to make reference thereto in their reports on the financial statements for such periods to the subject matter of the disagreement, and (2) no reportable events, except that KPMG advised the Company of the material weaknesses described in paragraph 2 of this Item 4.01.

KPMG has furnished the Company with a letter addressed to the Securities and Exchange Commission stating whether it agrees with the above statements. A copy of that letter is included as exhibit 16.1 to this Report on Form 8-K.

In connection with the engagement of BDO Seidman, during the Relevant Period, the Company did not consult with BDO Seidman on the application of accounting principles to a specified transaction, either completed or proposed; on the type of audit opinion that might be rendered on the Company’s financial statements; or on any matter that was the subject of a disagreement with BDO Seidman or a reportable event. During the Relevant Period, the Company did not receive either written or oral advice from BDO Seidman that was an important factor in reaching a decision as to any accounting, auditing or financial reporting issue.

On July 26, 2005, the Company issued a Press Release announcing the change in Auditors. A copy of the release is included as exhibit 99.1 to this Report on Form 8-K.

Item 9.01. Financial Statements and Exhibits.

Exhibit No.	Description
16.1	Letter re Change in Certifying Accountant
99.1	Press Release

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Dated July 26, 2005

SONIC SOLUTIONS

/s/ Robert J. Doris

Robert J. Doris

Chairman of the Board and

Chief Executive Officer

EX-16.1

Exhibit 16.1

(Firm Letterhead)

July 26, 2005

Securities and Exchange Commission

Washington, D.C. 20549

Ladies and Gentlemen:

We were previously principal accountants for Sonic Solutions and, under the date of June 29, 2005, we reported on the consolidated financial statements of Sonic Solutions as of and for the years ended March 31, 2005 and 2004, and management’s assessment of the effectiveness of internal control over financial reporting as of March 31, 2005, and the effectiveness of internal control over financial reporting as of March 31, 2005. On July 21, 2005, our appointment as principal accountants was terminated. We have read Sonic Solutions’ statements included under Item 4.01 of its Form 8-K dated July 26, 2005, and we agree with such statements, except that we are not in a position to agree or disagree with Sonic Solutions’ statements that the Audit Committee of Sonic Solutions (“the Company”) approved the engagement of the accounting firm of BDO Seidman, LLP (“BDO Seidman”), that the Company management reported to the Audit Committee the identification of the material weaknesses identifed in its assessment, or any of the statements made in the last paragraph under Item 4.01.

Very truly yours,

/s/ KPMG LLP

EX-99.1

Exhibit 99.1

news release

FOR RELEASE:

July 26, 2005

NASDAQ:  SNIC

Sonic Solutions Announces Change of Auditor

Novato, CA – July 26, 2005 — Sonic Solutions (NASDAQ: SNIC) today announced today that it has engaged BDO Seidman, LLP as its registered independent accountants to perform Sonic’s annual financial and controls audit for fiscal year 2006 (ending March 31, 2006) including customary review of quarterly financial statements that will be filed during the fiscal year. Sonic had previously engaged KPMG LLP and its predecessor firms to perform such services since Sonic’s IPO in 1994 up to and including its most recent annual report on Form 10-K for the 2005 Fiscal Year (ending March 31, 2005).

There were no disagreements with KPMG for the fiscal years ended March 31, 2004 or 2005 or for the interim period subsequent to March 31, 2005 (collectively, the “Relevant Period”), on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of KPMG, would have caused them to make reference thereto in their reports on the financial statements for such periods.

“Sonic has engaged KPMG for many years, and we have great respect for KPMG and the KPMG professionals with whom we have worked during that time,” said Clay Leighton, Sonic’s Senior Vice President and Chief Financial Officer. “However, it is clear that the auditing environment has shifted in recent years, especially in light of the heavy requirements imposed by Sarbanes-Oxley. We believe that BDO will provide us with audit services of the highest quality, in a manner that is more efficient and suitable for a rapidly growing company like ours.”

About Sonic Solutions

Sonic Solutions (NASDAQ: SNIC; http://www.sonic.com) is the leader in digital media software, providing a broad range of interoperable, platform independent software tools and applications for creative professionals, business and home users, and technology partners. Sonic’s products range from advanced DVD authoring systems and interactive content delivery technologies used to produce the majority of Hollywood DVD film releases, to the award-winning Roxio- and Sonic-branded CD and DVD creation, playback and backup solutions that have become the premiere choice for consumers, prosumers and business users worldwide.

Sonic products are globally available from major retailers, online at Sonic.com and Roxio.com, and are bundled with PCs, after-market drives and consumer electronic devices. Sonic’s digital media creation engine is the de facto standard and has been licensed by major software and hardware manufacturers, including Adobe, Microsoft, Scientific-Atlanta, Sony, and many others. Sonic Solutions is headquartered in Marin County, California.

Sonic, the Sonic logo, Sonic Solutions, and Roxio are trademarks or registered trademarks of Sonic Solutions or its subsidiaries in the United States and/or other countries. All other company or product names are trademarks of their respective owners and, in some cases, are used by Sonic Solutions under license.

Forward Looking Statements

This press release contains forward-looking statements that are based upon current expectations. Such forward-looking statements include Sonic’s expectations with respect to its new relationship with BDO. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. Important factors that could cause such differences include, but are not limited to, Sonic’s ability to successfully integrate Roxio’s Consumer Software Division and former employees into Sonic’s business and realize the anticipated synergies and cost savings from the acquisition; general customer and market reaction to the Roxio acquisition; the timely introduction and acceptance of new products, including but not limited to Sonic’s high definition series products; the costs associated with new product introductions and the possible adverse effect on gross margin; the transition of products to new hardware configurations and platforms; unforeseen increases in operating expenses as a result of the Roxio acquisition, new product introductions, cost of SOX compliance or business expansion; loss of significant customers due to the Roxio acquisition and other market conditions; risks related to acquisitions and international operations; and other factors, including those discussed in Sonic’s annual and quarterly reports on file with the Securities and Exchange Commission. This press release should be read in conjunction with the Sonic’s current report on Form 8-K announcing the change in its certifying accountant and Sonic’s other reports on file with the Securities and Exchange Commission, which contain a more detailed discussion of Sonic’s business including risks and uncertainties that may affect future results. Sonic does not undertake to update any forward looking statements.

Contact:

Rob Walker

Market Street Partners

415/445-3234

investinsonic@sonic.com

Sonic Solutions

Clay Leighton

415/893-8000

clay_leighton@sonic.com