IOT Group Limited

Level 14

39 Martin Place

SYDNEY NSW 2000

10 May 2016

ASX Limited

20 Bridge Street

Sydney NSW 2000

Transmission via email

IOT Group Limited ('IOT') ASX price query

Dear Sirs

Thank you for your letter of 9 May 2016 concerning the above matter. IOT respond to this letter as follows:

1. IOT is not aware of any information that has not been announced to the market which, if known by some in the market, could explain the change in its share price on 9 May 2016.

   The company advises;

   • that the company and its products, particularly its Roam-e product, have been reported in over 100 media stories around the world;

   • there is extraordinarily strong interest in the Roam-e selfie drone which has some revolutionary features and expects to have a low retail price point of $US399. This compares favourably to other products that do not have all the features of the Roam-e and are at a much higher price point. In the short term the success of the Roam-e is likely to be a key driver of IOT's share price;

   • there is strong social media interest in the company's products including significant Twitter traffic and the company's Facebook page has currently over 47,000 'likes'; and

   • there is some speculation in chat sites concerning the potential sales volume of the Roam-e.

     Concerning earnings for the 6 months ending 30 June 2016, the company advises that no guidance has been provided to the market to date aside from actual cashflows for the quarter ended 31 March 2016 via the company's March 2016 Quarterly Report including Appendix 4C.

     The Company does not believe that its earnings for the 6 months ending 30 June 2016, when known and released to the ASX in September 2016, is unlikely in isolation to be a surprise to the market based on announcements made to date.

2. N/A.

3. IOT do not have any explanations to explain the recent trading volume in its securities and/or change in its share price other than media reports about the company.

4. IOT confirm that it is compliance with the ASX Listing Rules, in particular, Listing Rule 3.1. Yours sincerely

Ron Hollands Company Secretary