Corporate update

26 February 2025

Electric Guitar PLC

("Electric Guitar" or the "Company")

Corporate update

On 24 December 2024, Electric Guitar announced that the Company was now classified as a cash shell pursuant to Rule 15 of the AIM Rules for Companies (the "AIM Rules") and would therefore be required to complete an acquisition or acquisitions that would constitute a reverse takeover pursuant to Rule 14 of the AIM Rules or seek re-admission to AIM as an investing company. 

Since then, the Board of Electric Guitar has been in discussions to restructure and refinance the Company (the "Proposed Refinancing") and hopes to complete matters and provide further details shortly. In the meantime, in order to fund initial costs of this process and other Company expenses in the short term, the Company has received £45,000 from Sanderson Capital Partners Limited ("Sanderson"), a substantial shareholder of the Company, and £10,000 from Grahame Cook, a Non-Executive Director of the Company. It is intended that these funds will be applied to an unsecured, interest free, senior convertible loan note ("CLN") to be entered into as part of a wider fundraising and restructuring of the Company in order to pursue a new acquisition strategy. 

In recognition of the support provided by these investors at this time, it is intended that as part of the CLN Sanderson and Grahame Cook will receive warrants over new ordinary shares in the Company in the ratio of 1 warrant for every 2 new ordinary shares received for the conversion of the CLN, such conversion to take place immediately upon completion of the Proposed Refinancing. In addition, Sanderson and Grahame Cook will have first refusal if there is any equity or debt raised by the Company within 18 months from 7 February 2025.

The investments described above by Sanderson and Grahame Cook constitute related party transactions pursuant to Rule 13 of the AIM Rules. Accordingly, the independent Directors (being the directors of the Company excluding Grahame Cook) consider, having consulted with the Company's nominated adviser, Allenby Capital Limited, that the terms of the investments are fair and reasonable insofar as Electric Guitar's shareholders are concerned.

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