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18 June 2025

Electric Guitar PLC

("Electric Guitar" or the "Company")

Placing to raise £775,000

Appointment of Joint Broker

and

Total Voting Rights

The Board of Electric Guitar PLC (LSE: ELEG) is pleased to announce that it has raised £775,000 (before expenses) by way of a placing (the "Placing") of a total of 968,750,000 new ordinary shares of 0.01 pence each in the Company ("Ordinary Shares") at a price of 0.08 pence per new Ordinary Share (the "Issue Price").

Transaction highlights

·      Placing to raise approximately £775,000 (before expenses) through the issue of 968,750,000 new Ordinary Shares (the "Placing Shares") at the Issue Price.

·      The Placing Shares have been placed with existing and new investors.

·      The Placing Shares will represent approximately 44.66 per cent. of the issued share capital of the Company, as enlarged by the issue of the Placing Shares.

·      The estimated net proceeds of the Placing, which will be approximately £730,000, will be used to fund the Company's anticipated costs of an acquisition (which would be a reverse takeover under the AIM Rules for Companies ("RTO")) and for general working capital.

Background to and reasons for the Placing

As an AIM Rule 15 cash shell under the AIM Rules for Companies (the "AIM Rules"), the Company is required to make an acquisition or acquisitions which constitute an RTO or seek re-admission to AIM as an investing company (as defined under the AIM Rules) on or before 24 June 2025 (being the date falling six months from the Company's re-classification as an AIM Rule 15 cash shell), failing which the Company's Ordinary Shares would be suspended from trading on AIM and the Company would then have a further six months to complete such a transaction to preserve its admission to AIM.

As announced on 30 April 2025, following approval by creditors and members of the Company Voluntary Arrangement on 27 March 2025, the Company has been presented with a number of acquisition opportunities, the most promising being in the energy and AI sectors. The Company has since been in active discussions with potential acquisition targets for an RTO, but has not yet agreed terms, and it is therefore expected that the Ordinary Shares will be suspended from trading on AIM on 25 June 2025 as an RTO will not have completed by then.

The Placing has been undertaken to secure sufficient funds to finance the Company's anticipated costs of an RTO and enable the Company to bring these discussions to fruition. Further announcements will be made in due course as matters progress.

Details of the Placing

A total of 968,750,000 Placing Shares are to be issued at a price of 0.08 pence per Placing Share. The Placing has been conducted utilising the Company's existing share authorities to issue shares for cash on a non-pre-emptive basis.

The Placing is conditional, inter alia, on admission of the Placing Shares to trading on AIM becoming effective.

The Placing was completed by Novum Securities Limited ("Novum") pursuant to a placing agreement (the "Placing Agreement") under which Novum has agreed to use its reasonable endeavours to procure subscribers for the Placing Shares at the Issue Price. The Placing Agreement contains certain warranties and indemnities from the Company in favour of Novum. The Placing is not being underwritten by Novum nor any other person.

The Placing Shares will represent approximately 44.66 per cent. of the Company's issued share capital as enlarged by the Placing Shares. The Issue Price represents a discount of approximately 11.11 per cent. to the closing mid-market price of 0.09 pence per Ordinary Share on 17 June 2025.

The Placing Shares will be credited as fully paid and will rank equally in all respects with the existing Ordinary Shares.

The Placing Shares have been placed with certain existing and new investors. The Directors value the Company's retail shareholders, but due to the size of the Placing and the cost of undertaking a retail offer, the Board determined that it was not in the Company's interests to make the Placing available to all existing shareholders. However, this will be kept under review should the Company seek to raise further funds in the future.

Related party transaction

Sanderson Capital Partners Limited ("Sanderson Capital"), which currently holds 166,546,025 Ordinary Shares representing 13.88 per cent. of the Company's issued share capital, and Mayford 1TN Limited ("Mayford"), which currently holds 350,000,000 Ordinary Shares representing 29.16 per cent. of the Company's issued share capital, have agreed to subscribe for 187,500,000 Placing Shares and 187,500,000 Placing Shares, respectively, as part of the Placing. As substantial shareholders of the Company, Sanderson Capital and Mayford are defined as 'related parties' in accordance with the AIM Rules and their participation in the Placing is a related party transaction pursuant to Rule 13 of the AIM Rules. The Directors of the Company save for Sarfraz Munshi (who is an employee of Sanderson Capital) consider, having consulted with the Company's nominated adviser, that the terms of Sanderson Capital and Mayford's participation in the Placing are fair and reasonable insofar as shareholders are concerned.

Admission to trading of the Placing Shares

Application has been made to the London Stock Exchange plc for the Placing Shares to be admitted to trading on AIM ("First Admission"). It is expected that First Admission will become effective and that dealings in the Placing Shares on AIM will commence at 8:00 a.m. on or around 20 June 2025.

Appointment of Joint Broker

The Company announces that Novum has been appointed as a Joint Broker to the Company with immediate effect. To keep the Company's running costs low, it has agreed to issue 37,500,000 new Ordinary Shares (the "Fee Shares") to Novum at the Issue Price in lieu of its annual broking retainer fee. Accordingly, application has been made to the London Stock Exchange plc for the Fee Shares to be admitted to trading on AIM ("Second Admission"). It is expected that Second Admission will become effective and that dealings in the Fee Shares on AIM will commence at 8:00 a.m. on or around 23 June 2025.

Significant shareholdings

As a result of the issue of the Placing Shares and the Fee Shares, from Second Admission, the Company is aware of the following revised interests of Significant Shareholders (as defined in the AIM Rules) in the Company:

Total voting rights

On First Admission, the Company's issued ordinary share capital will consist of 2,169,043,699 Ordinary Shares, with one vote per share. The Company does not hold any Ordinary Shares in treasury. Therefore, on First Admission, the total number of Ordinary Shares and voting rights in the Company will be 2,169,043,699. With effect from First Admission, this figure may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company under the FCA's Disclosure Guidance and Transparency Rules.

On Second Admission, the Company's issued ordinary share capital will consist of 2,206,543,699 Ordinary Shares, with one vote per share. The Company does not hold any Ordinary Shares in treasury. Therefore, on Second Admission, the total number of Ordinary Shares and voting rights in the Company will be 2,206,543,699. With effect from Second Admission, this figure may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company under the FCA's Disclosure Guidance and Transparency Rules.

Contacts: