The Peoples Operator Regulatory News (TPOP)

The People's Operator plc 

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

Disposal of US Business,

Notice of General Meeting,

Trading Update and

2017 Results

Further to the announcement of 15 May 2018, The People's Operator (AIM: TPOP), the cause-based commercial mobile virtual network operator, announces that the Company has entered into a conditional sale and purchase agreement ("SPA") to transfer the subscribers of The People's Operator USA LLC, the Company's US subsidiary ("TPO USA"), to Ting Inc. ("Ting"), a US based mobile virtual network operator (the "Disposal").

The principal terms of the SPA involve the transfer of TPO USA customers to Ting. No other assets or liabilities will be transferred to, or assumed by, Ting. The key financial terms of the Disposal are as follows:

· Ting will pay US$75 for each customer of TPO USA which, prior to an agreed date, has been migrated to Ting; and

· The sums payable to TPO USA will be payable following an agreed transition period during which migration of the customers and customer balances will be agreed and monitored.

The SPA also contains certain customary provisions including (i) non solicitation provisions preventing TPO USA from soliciting migrated customers for their business for a three year period from completion of the Disposal and (ii) representations, warranties, undertakings and indemnities given by TPO USA with respect to various matters including, inter alia, the migrated customers.

Although the overall amount to be paid by Ting pursuant to the Disposal will depend upon the number of migrated customers, the Board's current estimate of the maximum amount it could expect Ting to pay is approximately US$700,000. The Board stresses that the amount could be significantly lower, depending on the levels of customer migration as defined on the basis set out in the SPA.

In accordance with the AIM Rules, completion of the Disposal is conditional on shareholder approval. It is envisaged the various sums held as deposits and assurances by the Company's US counterparties will revert to the Company on completion of the Disposal.

Further information on the Disposal

Following the Disposal, whilst the Company will retain its licence to operate in the US, the remainder of the US operation, including the small office in New York, the outsourced customer service operation and the outsourced legal and compliance functions will be closed. This will result in considerable cost savings, with the overall monthly cash burn of the Company reducing by approximately 30%. The Company will be left focused exclusively in the UK and the target overall number of customers required to reach profitability at the net level will fall significantly.

The Company has been in discussion with Barclays Bank plc ("Barclays"), its sole secured creditor, regarding the use of proceeds from the Disposal and the extent to which such proceeds will be required to repay amounts outstanding to them, which currently stand at £1,000,000. The extent to which funds received by the Company from the Disposal are not required to be used to repay facilities will dictate the ongoing strategy of the Company.

The Company's cash balance is approximately £535,000, outside of amounts that are held on deposit to support its current operations both in the UK and the US. If Barclays requires full repayment from the proceeds of the Disposal then the Board will need to consider alternative financing for the UK operation.

The Company's overall tax-deductible trading losses since flotation will remain wholly within The People's Operator plc, as will its UK customer base and existing wholesale agreements with Three.

If the Disposal does not proceed for whatever reason or fails to realise the expected proceeds or Barclays requires all of the realised proceeds to be used in paying down their facility then the Board would have to urgently seek alternative funding for the Company and there is no guarantee that this would be available.

It is therefore of the utmost importance that shareholders vote in favour of the Resolution. If the Resolution is not passed by shareholders at the General Meeting and the Disposal does not proceed, the Company will need to urgently seek alternative sources of funding and given the recent attempts by the Company to secure alternative financing , this outcome is unlikely to be successful or favourable to shareholders as in the absence of any other source of funding, there may be no alternative but to place the Company into insolvency proceedings.

Current Trading

Levels of subscriber acquisition in the UK showed a considerable improvement in May, with net new sign-ups at their highest level this year and over 50% higher than the previous high watermark in March. Average Revenues per Customer (ARPU) from new subscribers has increased and churn remains consistently low.

Update on release of 2017 results

The Company will not be in a position to send its report and accounts for 31 December 2017 to shareholders until it has shareholder approval at the General Meeting to complete the Disposal and has agreed with Barclays the quantum of its facility that will be required to be repaid from the proceeds of the Disposal. Based on the current timetable the Directors believe that the Company's annual report and accounts for the year ended 31 December 2017 can still be sent to shareholders before 30 June 2018.

Posting of Circular and Notice of General Meeting

The Disposal is conditional on shareholder approval. Therefore the Company is today publishing and sending to shareholders a Circular giving notice of a General Meeting of the Company to be convened for 11:00 a.m. on 25 June 2018 at Unit 53, The Chocolate Studios, 7 Shepherdess Place, London N1 7LJ.

As a result of the market price of an Ordinary Share now being below its nominal value of £0.0005, it is not currently possible to issue new Ordinary Shares to raise finance as it is not possible to issue a share for a subscription price which is at a discount to its nominal value. The second resolution to be proposed at the General Meeting seeks to approve the sub-division of each ordinary share of £0.0005 into one ordinary share of £0.0001 ("New Ordinary Shares") and one deferred share of £0.0004 ("Deferred Shares").

As set out above the Board may be required to raise further finance as a matter of urgency and the Board therefore wishers to be able to allot further shares for cash including, if relevant, on a non pre-emptive basis. The third resolution to be proposed at the General Meeting seeks to approve the allotment of up to £300,000 nominal in aggregate of further New Ordinary Shares, representing an amount equal to up to approximately 100 per cent. of the Company's issued share capital at the date of this document. The Board also proposes that, in order to have maximum flexibility, it be authorised to allot all such New Ordinary Shares for cash on a non pre-emptive basis and therefore the fourth resolution to be proposed at the General Meeting seeks to approve the allotment of those New Ordinary Shares on a non pre-emptive basis.

The Circular will be available on the Company's website at https://www.thepeoplesoperator.com/documentcentre/.

Further announcements will be made in due course.

For further details, please contact:

The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.