Electric Guitar Regulatory News (ELEG)

11 April 2024

Electric Guitar plc

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("Electric Guitar" or the "Company")

Update re. intention to de-list from the standard segment of the Official List and Main Market of the London Stock Exchange and

proposed application for admission to trading on AIM in conjunction with the acquisition of 3radical Limited and

Related Party Transaction

Further to the Company's announcement on 13 March 2024, the directors of Electric Guitar provide an update regarding their intention to request the Financial Conduct Authority ("FCA") to cancel the listing of the Company's ordinary shares (ISIN: GB00BN11T727) (the "Ordinary Shares") on the standard listing segment of the Official List of the FCA (the "Standard List"), and to request London Stock Exchange plc ("LSE") to cancel the admission to trading of the Ordinary Shares on the main market for listed securities of the LSE (together, the "Delisting"), in view of its proposed application for admission of its Ordinary Shares to trading on AIM in conjunction with the acquisition of 3radical Limited ("Admission").

The Company continues to progress the acquisition of 3radical Limited, which would constitute a reverse takeover under the Listing Rules (the "Proposed Transaction"), and expects to be able to provide further details and convene a shareholder meeting to approve the Proposed Transaction in due course. Details of the Proposed Transaction were first announced on 7 July 2023.

It is now intended that the Delisting will become effective no earlier than 1 May 2024, such that the last date of listing on the Standard List and trading of the Ordinary Shares on the Main Market of the LSE would be no earlier than 30 April 2024. A further update will be provided by no later than 30 April 2024 to confirm the Delisting date.

Further details of the Proposed Transaction and a shareholder meeting to approve the Proposed Transaction will be provided before the Delisting date.

Related party transaction

On 26 March 2024, the Company entered into a facility agreement with Sanderson Capital Partners Limited (an 18.33 per cent shareholder in the Company), supplementing a term sheet with Sanderson Capital Partners Limited signed on 11 March 2024, for the provision of a loan facility to the Company conditional on, inter alia, completion of the Proposed Transaction. This agreement and the term sheet includes standard events of default, covenants and representations and warranties. The facility is an unsecured facility of up to £600,000 available to be drawn down during the period of 12 months from completion of the Proposed Transaction on 30 days' notice (first draw not to be more than £100,000). At the end of the 12 month period, the Company has an option to extend the facility for a further 8 months in exchange for a facility fee of £15,000 which is payable at the end of the 8 month period. Fees of £105,000 are payable on completion of the Proposed Transaction and will be satisfied by the issue of new ordinary shares in the Company. The loan will be convertible in whole or in part at any time by Sanderson Capital Partners Limited into new ordinary shares in the Company at a price per share equal to the 5 day volume weighted average price of an ordinary share, subject to a minimum conversion price per ordinary share of 2.1 pence (being the current suspended share price of ordinary shares).

This conditional loan facility has been entered into for the purposes of facilitating the Proposed Transaction, and will be in addition to a proposed equity fundraising for the Proposed Transaction which is expected to be finalised shortly, and therefore the directors of Electric Guitar (excluding Sarfraz Munshi who is an investment manager at Sanderson Capital Partners Limited and therefore not independent) consider the transaction to be fair and reasonable from the perspective of the Company and other shareholders.

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