1 October 2026

Dillistone Group Plc

("Dillistone", the "Company" or the "Group")

Conditional Loan Conversion Agreement

Dillistone Group Plc (AIM: DSG) announces that, further to its announcement of 25 September 2026, the Company has entered into a conditional conversion agreement dated 30 September 2026 (the "Conversion Agreement") with all of the holders of its loan notes and its 2025 loan (the "Loans"). Under the Conversion Agreement, each holder has irrevocably agreed to convert 100 per cent of their outstanding principal into new ordinary shares of 5 pence each in the Company ("Ordinary Shares") at a price of 14 pence per share (the "Conversion"). The Conversion is conditional upon the approval of shareholders which will be sought at a general meeting expected to be held on or around 26 October 2026 (“General Meeting”).

The Conversion

The Loans total £794,750 and comprise unsecured loan notes issued in 2017 (£374,750, repayable June 2028), unsecured convertible loan notes issued in 2024 (£300,000, repayable August 2028) and an unsecured loan made in 2025 (£120,000, repayable June 2029). The Conversion will result in the issue of 5,676,780 new Ordinary Shares (the "Conversion Shares"). The price of 14 pence is the conversion price of the 2024 loan notes, now applied to all of the Loans.

The Conversion will remove £794,750 of debt from the Group's balance sheet and save approximately £73,000 a year in interest. The Board believes the Conversion strengthens the balance sheet ahead of any debt or equity fundraising the Group's new strategy may need.

Only the principal of the Loans will convert. Interest will continue to accrue until the resolutions are passed at the General Meeting, and all accrued interest up to that date will be paid in cash within seven days. The holders have waived interest from that date until the Conversion Shares are issued. Any small balance of principal left over from rounding down to whole shares will be paid in cash.

Following the Conversion, the Company's issued share capital will comprise 41,094,801 Ordinary Shares, of which the Conversion Shares will represent approximately 13.8 per cent. The Conversion Shares will rank equally in all respects with the existing Ordinary Shares.

Conditions and General Meeting

The Conversion is conditional only on shareholders passing the resolution(s) at the General Meeting to approve the Conversion, and to authorise the allotment of the Conversion Shares and to disapply statutory pre-emption rights. As previously announced, the General Meeting will also consider, inter alia, the Group's proposed change of strategy.

A circular containing further details and the notice of General Meeting will be sent to shareholders shortly. If the resolutions are not passed by 30 November 2026 (which the Company may extend once, by up to 45 days), the Conversion Agreement will lapse and the Loans will continue on their existing terms.

Loan holders

Related party transaction

The Conversion is a related party transaction under AIM Rule 13 of the AIM Rules for Companies, because the Loans are held mainly by current and former Directors (including the Chairman) and by Yuriko Starr, the wife of Jason Starr, a Director. Gareth Hawkins and Aakash Vanchi Nath, being the Directors independent of the Conversion and associated arrangements, having consulted with Zeus, the Company's Nominated Adviser, consider that the terms of the Conversion are fair and reasonable insofar as the Company's shareholders are concerned.

Arrangement relating to shares held by Yuriko Starr

The Company has been informed that Yuriko Starr, the wife of Jason Starr, a Director of the Company, has reached an informal arrangement to sell all of the 857,142 Conversion Shares to be issued to her at 14 pence per share, the same as the conversion price. Under the arrangement, 50 per cent of these shares (428,571 Ordinary Shares) are expected to be acquired by Matthias Riechert, a Non-Executive Director of the Company, and 50 per cent (428,571 Ordinary Shares) by another investor. Yuriko Starr holds no other Ordinary Shares and will hold no shares following the sales.

The arrangement is not legally binding. The proposed acquisition by Matthias Riechert is subject to completion of all applicable legal, regulatory and governance checks and to receipt of any necessary clearances or consents, including under the Takeover Code and the Company’s share dealing procedures. The sales are expected to take place as soon as practicable after the Conversion Shares are admitted to trading on AIM.

Admission and total voting rights

Subject to the resolutions being passed at the General Meeting, application will be made for the Conversion Shares to be admitted to trading on AIM ("Admission"). A further announcement will be made at that time, including the Company's total voting rights following Admission.

Giles Fearnley, Non-Executive Chairman, commented:

"We are pleased that all of our Loan holders have agreed to convert their Loans into equity. This significantly reduces our interest costs and shows the continued support of our Loan holders as we pursue our new strategy."

The person responsible for arranging the release of this announcement on behalf of the Company is Gareth Hawkins.

For further information

Notes to Editors

Dillistone Group Plc is a leader in the supply and support of software and services to the recruitment industry. Dillistone operates through the Ikiru People (www.IkiruPeople.com) brand.

The Group develops, markets and supports the Talentis, FileFinder, Infinity, Mid-Office, ISV and GatedTalent products.

Dillistone was admitted to AIM, a market operated by the London Stock Exchange plc, in June 2006.

Learn about our products:

•          Talentis Software: https://www.talentis.global/recruitment-software/

•          Voyager Software: https://www.voyagersoftware.com

•          Online Timesheets: https://www.voyagersoftware.com/online-timesheets/