Re: Interesting wording in Preliminary Prospectus
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Aiming to become the global leader in chip-scale photonic solutions by deploying Optical Interposer technology to enable the seamless integration of electronics and photonics for a broad range of vertical market applications
Message: Re: Interesting wording in Preliminary Prospectus
Here is another important tidbit under section 18 Edgar that will impact trading before distribution of shares
SEC rules may limit the ability of the underwriter to bid for or purchase the common shares before the distribution of the common shares is completed. However, the underwriter may engage in the following activities in accordance with the rules:
| ● | Stabilizing transactions - The underwriter may make bids or purchases for the purpose of pegging, fixing or maintaining the price of the common shares, so long as stabilizing bids do not exceed a specified maximum. | |
| ● | Over-allotments and syndicate covering transactions - The underwriter may sell more of our securities in connection with this offering than the number of securities they have committed to purchase. This over-allotment creates a short position for the underwriter. This short sales position may involve either “covered” short sales or “naked” short sales. Covered short sales are short sales made in an amount not greater than the underwriter’s over-allotment option to purchase additional securities in this offering described above. The underwriter may close out any covered short position either by exercising the over-allotment option or, as applicable, by purchasing shares in the open market. To determine how it will close the covered short position, the underwriter may consider, among other things, the price of shares available for purchase in the open market, as compared to the price at which our securities may be purchased through the exercise of the over-allotment option. Naked short sales are short sales in excess of the over-allotment option. The underwriter must close out any naked short position by purchasing shares in the open market. A naked short position is more likely to be created if the underwriter is concerned that, in the open market after pricing, there may be downward pressure on the price of our shares that could adversely affect investors who purchase securities in this offering. | |
| ● | Penalty bids - If the underwriter purchases shares in the open market in a stabilizing transaction or syndicate covering transaction, it may reclaim a selling concession from the underwriter and selling group members who sold those shares as part of this offering. | |
| ● | Passive market making - Market makers in the common shares who are underwriters or prospective underwriters may make bids for or purchases of the common shares, subject to limitations, until the time, if ever, at which a stabilizing bid is made. |
Similar to other purchase transactions, any purchases by the underwriter to cover syndicate short sales or to stabilize the market price of our common shares may have the effect of raising or maintaining the market price of our common shares or preventing or mitigating a decline in the market price of our common shares. As a result, the price of the common shares may be higher than the price that might otherwise exist in the open market. The imposition of a penalty bid might also have an effect on the price of the common shares if it discourages resales of the common shares.
Neither we nor the underwriter make any representation or prediction as to the effect that the transactions described above may have on the price of the common shares. These transactions may occur on Nasdaq or otherwise. If such transactions are commenced, they may be discontinued without notice at any time.
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