Ann: Letter to Shareholders, page-7

Letter to Shareholders : Melbourne, 22 nd January 2020

Dear Shareholder,

Understandably, the Company is receiving a number of requests for “updates”, inparticular with regard to its court action against the ASX, the commencement of whichwas explained in our announcement dated 5 th December 2019, found here: https://www.asx.com.au/asxpdf/20191205/pdf/44c9v8l5yp3yhn.pdf

I have compiled responses to many queries we have received recently fromshareholders.

Court Action - ASX ats ISX
There are no further updates since ISX lodged a statement of claim with the FederalCourt, as previously announced on the ASX platform on the 5/12/19.
The first directions hearing before the Court is 7 th February.

Any updates to the action will be posted by the courthere:
https://www.comcourts.gov.au/file/Federal/P/VID1315/2019/actions

Whatever information is posted on the court website is also the extent ofthe information that the Company can disclose. Therefore, please check the courtwebsite for updates.

Is the ASX a Regulator?

The ASX is not a regulator. It is a public company that has been granted a ‘marketlicence' by the Australian Securities and Investment Commission (ASIC) and is alsosupervised by the Reserve Bank of Australia (RBA) to operate an organised market fortrading in securities and associated clearing, settlement and payment systems. See https://www.asx.com.au/regulation/regulatory-compliance/regulatory-authorities.htm

From the ASX website (emphasis added):

The limits on ASX’s investigation and enforcement powers. ASX is not an arm of thegovernment that can exercise police powers. It cannot conduct searches, seize evidence,examine people on oath or arrest people who don’t co-operate, in the way that ASIC or othergovernment regulators can. Its ability to investigate is limited to its power under the ListingRules to request information from a listed entity mentioned above.

ASX can only investigate and take action in relation to matters that are regulated by theListing Rules.

Many of the complaints ASX receives relate to conduct that is not regulated by the ListingRules. In particular, ASX often receives complaints about matters that are regulated by ASICunder the Corporations Act or the Market Integrity Rules made by ASIC under that Act, ratherthan by ASX under the Listing Rules. ASX is powerless to do anything about these types ofcomplaints, other than to refer them to ASIC under the provisions mentioned above.”
https://www.asx.com.au/documents/regulation/listing-rules-enforcement.pdf


Why hasn’t the ASX announced the Court Action under its code?

When lodging the ‘court action’ release on the 5 th December, ISX marked the release forcross release under the ISX Code. Under the new listing rules dated 1 st December 2019,Listing Rule 3.1 requires disclosure if “becoming a plaintiff or defendant in a materiallawsuit”. Any queries should be directed to the ASX, or ASIC who supervise the ASXagainst tw own listing rules.

Appendix 4C

Appendix 4C will be released on or before the 31st January 2020, per our ASXListing Rule obligations.

Annual Report FY 2019

The Company’s annual report for FY2019 (January to December), will be released on orbefore the 28th February 2020. The Company was profitable during FY2019.

Continuous Disclosure Whilst Securities Suspended

Under continuous disclosure requirements, we are required to continue to communicateto shareholders via the ASX announcements platform when there is a material change ofcircumstances, per the ASX Listing RulesThere are no new factors at present that are ‘sufficiently definite’ that require disclosure.

Prospectus

The Company confirms that it will need at some stage to issue a prospectus, as thesecurities in the Company have been suspended for longer than 5 days. The prospectusis not a bar to lifting suspension and is not required for the securities to be re-quoted.The prospectus is a bar to new share issues being able to be traded within 12 months ofissue. This includes options being converted to shares. However, as the Company is notat this stage contemplating any new share issue, this is a minor factor.

ISS ESG Prime (Proxy Reports)

We continue to maintain a prime rating from ISS (www.iss-esg.com).The Company was provided with ISS’s 32-page report, which is available from ISSdirectly for a fee, and has been accessed by many of our institutional shareholdersalready.The Company has still not directly received from the Melbourne based start-up,Ownership Matters, a verified copy of their report, nor, has the Company been affordedthe opportunity input to their report.By way of contrast, ISS which is the world’s leading global provider of corporategovernance and responsible investment solutions, market intelligence and fund services,

and editorial content for institutional investors and corporations, interacted with theCompany to produce its report.

We are currently under review by another international proxy advisory firm, who havealso engaged with the Company via a preliminary report for discussion. The preliminary‘for comment’ issue appears to be favourable for the Company, and we will beresponding over the next 4-6 weeks to the draft.

The Company has not made any financial contribution towards the production of any ofthese reports, which are independent.

Ownership Matters have not (yet) disclosed who sponsored and paid for the productionof their report. Nor has Ownership Matters complied with its own engagement policy asrepresented to ASIC, as set out in ASIC report 578
https://download.asic.gov.au/media/4778954/rep578-published-27-june-2018.pdf

We have raised these issues with ASIC, and we have reserved our legal rights withregard to future legal action against Ownership Matters.

General Business Update

The ASX imposed suspension is affecting our growth and has dampened some demandfrom potential customers. Existing customers by and large are unaffected by thesuspension.

The Company remains positive in outlook, and continues with business as usual, with theimpact of the suspension continuing to be assessed. The negative connotations ofsuspension diminish rapidly upon re-quotation of ISX securities.

Thanking you for your support.
N J Karantzis
Managing Director
iSignthis Ltd (ASX : ISX)