EGI.L Regulatory News (EGI)

Electrical Geodesics, Inc.

Annual General Meeting Statement

EUGENE, OREGON, US, 2 July 2015 - Electrical Geodesics, Inc. ("EGI" or the "Company"), a leading neurodiagnostic medical technology company will today hold its Annual General Meeting at which Don Tucker, Chairman and CEO of EGI, will provide the following trading update to shareholders.

 "While EGI has made solid progress towards our key, potentially transformational products for imaging and modulating electrical activity in the brain, these products are not yet fully revenue-generating. Revenues from our current product line in the first half have not met our expectations. Internal factors contributing to this shortfall have included shipment delays for our GES 400MR product where supplier changes resulted in longer lead times for key components and customers delaying purchases until the next update of our operating software, Net Station 5.2, becomes available which is now scheduled for release later this month. A number of external factors have provided headwinds including the strong US dollar which has impacted export sales and a decline in Chinese imports as the industry responds to changing anti-corruption regulation which has increased the regulatory burden on our clients and potential clients and therefore sales cycle time. We are therefore going to report a disappointing first half that is expected to show revenues below those reported in the equivalent period last year.

We are reducing expenditure that is not directly related to the goals of delivering on our key products, including GeoSource 3.0 imaging and localisation software, our NOLIS database and, most importantly, delivering GTEN for research use in the autumn. Interest in GTEN for research use has been encouraging, with customers placing orders in advance of the product's availability.

Our feasibility study seeking to demonstrate the effect of GTEN in modulating epilepsy is progressing well. We plan to run this in our Eugene facility and at Harborview Hospital in the University of Washington and are delighted that the FDA has also approved the expansion of our investigational device exemption to include Huashan Hospital in Shanghai, China. Huashan physicians already use our imaging technology in planning epilepsy brain surgeries, understanding the utility of our products that capitalise on the reciprocity of identifying and reading electrical activity in the brain and delivering targeted electrical modulation through the same pathways and the numbers of epilepsy patients treated at the hospital are highly significant. Accordingly we believe the inclusion of Huashan as a trial site will allow us to accelerate recruitment into the study without any additional cost, keeping the expected study costs well within the $0.3m-$0.5m forecast disclosed earlier this year.

We are now collecting pre-clinical data with normal healthy subjects at our Eugene site and expect the recruitment of patients to start later in the summer. Our confidence in the beneficial effect of neuromodulation in epilepsy and other important conditions including stroke, stress disorders and coma evaluation has increased with the publication of increasing amounts research data from leading institutions.

We were pleased to receive advice of the award of a three year grant worth up to $1.2m which will support development, alongside Yale University, of a clinically-approved surgical planning software product with explicit support for intracranial electrodes that is integrated with the image-guided navigation software systems already used for neurosurgery that could add significantly to our epilepsy management product suite.

EGI's cash balance was $2.1m as of 31 May 2015. Historically, the Company's revenues are H2 weighted and the Board expects this to be the case in the current financial year and the level of cash burn through the year also reflects this seasonality. The Board is maintaining tight cost control and will pursue discussions with a number of banks and other institutions to secure a suitable debt facility.

With a growing pipeline of routine and innovative products to meet the needs of the research market, together with our access to a range of products for the US clinical market, our prospects for the second half of 2015 are good and we continue to expect year on year revenue growth. However, due to the disappointing H1 outcome, it will now be very challenging to deliver our stated expectation of top line growth in excess of 20% in the current financial year despite the key product launches which are scheduled over the coming months.

Christine Soden, who has worked with EGI since before its IPO, has advised she wishes to step down from her executive role as CFO to pursue other opportunities. Her resignation as CFO is effective today, but I am delighted she will stay with the Company as a non-executive director, providing oversight through an audit committee role. We are pleased to retain Christine's services and experience and she will continue to have an active role in the discussions with banks and other institutions mentioned above. Our General Manager, will supervise our financial controller and will resume the oversight of the finances of the Company with guidance from Christine until a permanent replacement is found."

For more information contact:

Notes to Editors

Electrical Geodesics, Inc. in Summary

Founded in 1992, EGI designs, develops and commercialises a range of non-invasive neurodiagnostic and neuromodulation products used to monitor, interpret and modulate brain activity, based on its proprietary dense array electroencephalography ("dEEG") platform technology. The Company's technology uses up to 256 sensors, providing much higher resolution brain activity data compared to conventional 8 or 16 channel EEG and is used in medical, clinical and research settings in a diverse range of applications including important areas such as the diagnosis and monitoring of epilepsy, neurosurgical planning, sleep assessment, and many others.

EGI's dEEG systems, available in the GES 300 and now the GES 400 lines, capitalise on the Company's unique Geodesic Sensor Net which allows faster, easier, and more convenient placement of many EEG sensors in an even distribution over the entire scalp, providing more accurate and precise diagnosis and measurement. EGI's technology is now widely used in neuroscience research laboratories and is becoming more commonly used in clinics, care centers, and hospitals around the world. Data is measured and visualised using EGI's proprietary amplifier technology and software, providing a complete, advanced, high-resolution EEG platform. The Company's products are compatible with multiple diagnostic and imaging technologies, including magnetic resonance (MR) imaging, functional MRI (fMRI), and magneto-encephalography (MEG).

See our website www.egi.com

Glossary

In April 2013 EGI commenced trading on the London Stock Exchange AIM market under the symbol EGI.L. See www.egi.com for more information on the Company.