EGI.L Regulatory News (EGI)

Electrical Geodesics, Inc.

Trading Update

EUGENE, OREGON, US, 25 November 2013 - Electrical Geodesics, Inc. ("EGI" or the "Company"), a leading neurodiagnostic medical technology company, today provides a trading and business update.

Since its IPO on AIM in April 2013, EGI has been strategically focused not only on expanding its commercial infrastructure, but also on the final stages of development and initial staged roll-out of the new generation of its dense-array EEG (dEEG) system, the Company's core proprietary product offering. This product range includes a major new hardware platform, the GES 400 series of dEEG systems based on upgraded amplifiers with on-board computing capability and a fully updated application software platform, NetStation 5.0. These enhanced products will enable EGI both to expand its ability to deliver competitive dEEG products with increased functionality to its core research customers and to compete effectively in hospital and clinical markets.

EGI has continued to attract customers in leading epilepsy centres in China and Europe and key US centres of excellence in EEG where the value of the level of precision delivered by dEEG for example in pin-pointing or localising the source of epileptic seizures, is becoming increasingly acknowledged by leading experts in the field.

The Company has also made good progress in the commercial delivery of the GES 400 series of products which was launched with CE Mark in May 2013 in Europe and certain other international markets and has been positively received. As is typical with such a launch, early customers have provided constructive feedback which the Company has translated into a number of product upgrades that are now being finalised. These enhancements will provide even better access to the full power and functionality of the GES 400. While EGI's NetStation 5.0 application software is now ready for final beta testing, the prioritisation of resources required to ensure the delivery of the upgrades to the GES 400 has meant that commercial launch of the software package has been delayed and is now anticipated in early 2014. The GES 400 systems were submitted to the FDA for US marketing clearance in September but the Company is experiencing a longer than anticipated review cycle due in part to the FDA's recent implementation of a revised 510(k) process. In order to penetrate the routine clinical market in the US, 510(k) clearance of the GES 400 product and the release of NetStation 5.0 are essential and accordingly the anticipated increase in penetration of this customer base is now not expected to come through until 2014.

As originally highlighted in the interim results announcement in early September, the Company's financial performance this year continues to be impacted by the severity of fiscal austerity measures in both the US and Europe on the Company's core research market which represented some 80% of 2012 revenues and is heavily dependent on grant funding. While the Company's performance in Asia in the year to date is ahead of expectations, this has only partially offset the difficult conditions faced in research markets in Europe and in the US. Interest in EGI's products remains strong, but grant funding awards and related purchasing commitments are taking longer than in recent years with the US governmental shutdown further delaying decisions. Taken together with delays in penetrating the routine US clinical market as a result of the later than forecast launch of the next generation systems, the Company now expects, subject to the inherent uncertainty around timing of receipt of orders and delivery of systems in the weeks before the year end, to secure sales for the year ending 31 December 2013 in the $11.5m to $12.0m range and consequentially the results for the full year are anticipated to be below market expectations.

Don Tucker, CEO of EGI, said: "The market for products for measuring, monitoring and modulating the electrical activity of the brain is becoming increasingly active, while major governmental initiatives in Europe and the US are expected to impact positively the research funding climate in 2014 and potentially beyond. Additionally, our enhanced clinical product line is nearing completion and through 2013 we have built an expanded and highly experienced clinical sales team. While we have seen challenging conditions this year, the Directors remain confident in EGI's ability to deliver double-digit sales growth in 2014 and to continue to increase significantly its foothold in this growing area of medicine in the medium and longer-term."

The preliminary results for the year to 31 December 2013 will be announced on 26 February 2014.

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About EGI

Founded in 1992, EGI designs, develops and commercialises a range of non-invasive neurodiagnostic products used to monitor and interpret 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, capitalize on the Company's unique Hydrocel 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).

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.