Ann: Share Purchase Plan Offer Booklet, page-42

The difference with buying shares through a SPP is that your money gets injected into the company as new capital. When you buy shares on the secondary market no new capital enters the company. Sometimes for small biotechs I have purposefully taken up my full offer entitlement because I consider the capital injection to be important for the success of that business and thus my investment.

In the case of most SPPs they are a take it or leave it proposition for me. Usually the SPP is a tack-on to a capital raise and is more of a token to retail investors - an opportunity to participate on the same terms as the sophisticated and institutional investors. On the other hand, us little retail investors have the agility to buy and sell on market without moving the share price about unlike institutional investors. So, given that the share price often reverts to the offer price, a lot of retail investors figure they can wait and purchase on market at the same price or perhaps a slight discount after the raise.

I think you should generally only buy in a SPP if you genuinely want to hold the stock. Selling down to buy into a SPP is dangerous because they can be scaled back significantly if oversubscribed. Thinking you will stag a profit once the shares are issued because the share price is higher going into the SPP is also risky and often doesn't pay off.

I applied for the full entitlement in one portfolio and for a reduced amount in another portfolio. I expect we will get scaled back probably at least 50%.