Hi staz024 How this board discretion is used depends on the...

Hi staz024

How this board discretion is used depends on the prospectus, the underwriting agreement, the company, the industry and general market conditions.

There may also be potential shareholders or institutional investors out there the company may want to include (or exclude) on (or from) the share register. The board can potentially knock back a shortfall application if they don't like the applicant and a shortfall applicant need not be a shareholder. Of course, there is nothing stopping a potential shareholder from buying "on market" should their application for additional or shortfall shares be knocked back.

The most common practice is "scale back" where applications for additional shares are scaled back on a proportionate basis if total subscriptions received are over and above the 125,516,474 available shares.

In this case, the prospectus states (section 1.9, page 19) the shortfall will be applied, firstly, to the $4M underwritten amount. So the $4M underwritten amount will be alloted ahead of any other applicant for additional or shortfall shares.

IMO, given the general market conditions and wanting to show support to retail sharholders, the Company will allocate, in full, all retail shareholder applications received for additional shares.

Please DYOR.