Here’s why the iSignthis (ASX:ISX) share price is halted

iSignthis is pushing forward with its claim against the ASX and plans to demerge its European business.
The post Here’s why the iSignthis (ASX:ISX) share price is halted appeared first on The Motley Fool Australia. –

iSignthis Ltd (ASX: ISX) is accelerating its lawsuit against ASX Ltd (ASX: ASX), claiming the exchange operator unjustly suspended the company’s stock.

At the same time, it has announced it’s planning to demerge its European subsidiary, effectively splitting the company in two.

Additionally, iSignthis has posted its half-year results for the 6 months ended 30 June 2021.

The iSignthis share price is $1.07, as it has been since 2019.

According to the company’s new statement of claim, the ASX suspended its stock without cause and, in doing so, breached the Corporations Act. iSignthis first brought the claim against the ASX this time last year.

Let’s take a look at the latest news from the payment and authentication company.

Demerger of European assets

iSignthis has announced its intention to demerge its subsidiary, ISX Financial EU Ltd.

Under the plan, iSignthis’ shareholders would hold 100% of ISX Financial EU following the split. The subsidiary would then probably seek to list on another exchange, giving shareholders the chance to trade its stock.

Following the demerger, iSignthis will hold a $6 million convertible note in ISX Financial EU, 100% of ISX Financial EU’s shares, and around $4.3 million in cash.

Additionally, iSignthis notes its legal claim against the ASX as part of its balance sheet. It commented it has the funds to “pursue its Federal Court litigation against ASX, which it will continue to do with vigour.”

The company’s Cyprus-based non-executive director Christakis Taoushanis has today become chair of ISX Financial EU.

The demerger is dependant on shareholder approval. iSignthis will put it to a shareholder vote at its annual general meeting, which will likely happen in October.

Half-year results

Here’s how iSignthis performed over the first half of 2021:

A quick note: all values are converted from euro at the exchange rate at the time of writing.

$17.29 million revenue, down 7.58% on that of the prior comparable period
Loss after tax of $607,841. For the first half of 2020 the company recorded a profit of $738,271.54.
The company paid $1.94 million in legal costs towards its suits against ASIC and the ASX
Revenue from customers fell 7.58% to $17.27 million

iSignthis stated the drop in customer revenue was due to its move away from card acquiring and towards instant and batched interbank payments and the creation of a multi-rail ecosystem centred on its flykk service.

New statement of claim

According to iSignthis’ new statement of claim, the ASX suspended it from the exchange due to “mere suspicion” and representatives of both ASX and ASIC had had a conversation in which they “spitball(ed)” the best method to suspend the company’s stock.

iSignthis was suspended from trading pending an ASIC and ASX investigation into its share price’s volatility in October 2019. It is still suspended.

iSignthis is also claiming it was treated differently than 13 other listed companies in similar situations. Additionally, it alledges ASX made false representations about the suspension.

The company has lodged its new statement of claim with the Federal Court of Australia.

It’s seeking $464.4 million in damages for the suspension.

The company claims representatives of ASIC and ASX spoke on the phone the morning of its suspension. An ASIC representative is said to have stated they were looking into iSignthis’ 2018 revenue but it “did not reveal a ‘smoking gun.’”

According to iSignthis, ASX’s representative stated they’d considered a suspension but didn’t have hard evidence. Some participants of the phone call also allegedly noted the suspension was a “major litigation risk”.

iSignthis states that, due to the suspension, it has incurred $159,836 of public and media relations costs, fees of $156,815 from an independent expert’s review, and has lost commercial arrangements.

The post Here’s why the iSignthis (ASX:ISX) share price is halted appeared first on The Motley Fool Australia.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of August 16th 2021

More reading

ASX 200 midday update: Metcash update, Wesfarmers goes ex-div

AGL Energy (ASX:AGL) hits record low, slides a further 12% in August
RAIZ Invest (ASX:RZI) share price crashes 16% amid leadership fight
Afterpay (ASX:APT) ‘Touch Ventures’ eyes IPO
What’s happening with the Sydney Airport (ASX:SYD) share price?

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!