shareholders are asked to approve acquiring a division of the company and stock he issued to the public market to be traded publicly pursuant to a registration statement filed with the us you see and nobody bothers to mention that the company's profitability or the divisions profitability in this one point seven billion dollar transaction has collapsed by fifty percent now the question is whether that might be misleading to somebody and they just transaction involving an ongoing business and there's been a substantial change and what's going on in that business you have to tell people who are involved in that you have to tell the shareholders before they vote and here when when we're shareholders you've got a shareholder vote on april twenty fourth more than three weeks after the close of that first quarter and there's no question that the defendants know it's very horrible quarter indeed comms financial results in our round and then on the third page buried in the tables is a figure indicating that difficult had one point five or one point six million dollars in earnings which basically gets overlooked by the market because it's not until annual basis in its revenues and earnings and here's a dramatic collapse is that misleading not to tell people about that you bet it now there was a risk factors section in the  that's actually a registration statement which you know trying to give some information i was supposed to get some information so that shareholders could evaluate the historical performance if you recall financial  deciding to vote and other shareholders in taking shares or purchasing the newly registered shares in the open market the risk factors are supposed to include material information showing that there's a difference in the image that's painted of this company in there yet and it's been given and the reality here's the clearly wants one here and there is no question that the first quarter was a disaster no question that there's no question that c q have the material data there's no question they knew this was material and there's no question that they chose not to disclose it prior to the vote now with respect to harmonic is there reason to think that harmonic that included top officers from harmonics and top officers from given to integrate the two businesses now you think that in terms of these boats meeting every two weeks and and you do diligence going on investigating the business that's being acquired they're not paying any attention to the current quarter and aren't paying any attention to how customers are reacting to this stuff of course they were paying attention to that and we've got allegations regarding dennis beaver our director of purchas accounting fraud only the people inside the company would have known of that and that that director had no reason to know about even if you was actually sizing due diligence here we've got a problem with that sales in the ongoing quarter the directors all have a due diligence company likely in exercising due diligence and doing an investigation is going to find out about major problems within the acquired company all the stronger i mean that applies to harmonics and its officers and directors here it's all of the stronger with respect to the inside not publishing the first quarter results here i am saying that it was misleading and immaterial emission information required by law not to report that and didn't ha plane or allegations now and i've got allegations that material information was admitted their position saying well maybe it should have been in there but we didn't we didn't know or he left it out would say i've still got a section eleven a claim and if you take expand that duty far beyond the language of the federal securities laws and harvey on this court's precedents they rely on broad principles and lofty precepts about the purposes of securities law but they often ignore both the specific statutory language and the court's cases interpret and this case the question of duty arises that two points in time first on march twenty fourth two thousand one harmonic the registration statement to shareholders was their duty first date march twenty fourth is significant not only because it was when the registration statement was made but also because the registration statement had become affected by that date according to the plain language of section eleven the effect they failed to even allege the effective date of the registration statement of course but it's in the record according to the registration statement the document has been declared affected by the f c c before it was mailed on march twenty four miners argue that the registration statement was misleading as of march twenty fourth even though the quarter had ended because it failed to disclose it did become was experiencing it declining sales now there's no regulation that explicitly requires disclosure about a quarter in progress met either test so they take us to task for talking about harmonics expectations about the merger but we didn't get that hump in there that's what the regulations state requires an assessment of management what speculations about continuing operation diversify its customer base and if anything cautions one harmonic later loses sales to eighteen teams so that allegations about dependence on a t n t which are in the complying suggested harmonics shareholders would have been worse off harmonic mean no specific prediction about future earnings for the first quarter shareholders knew that they didn't have first quarter information harmonic didn't say one way or the other in fact it did warn in the risk factors that good morning please the court finding mr all i represent c q defendants before turning to my argument i'd like to answer your honest question first why should we just allow further amendment here there's the procedural barrier attempt to show how judge hamilton abused her discretion with regard to that determination and only if they can make that determination to do they then gets the su or whether we have tremendous partly tonight i'd like to turn now to the two merger was in their best interests i also plan to turn to the two reversals by the ninth circuit court of appeals and put those in the context of this case because those reversals are in stark contrast to anything that's been a completely without merit and the reason it's without merit is because that on december twenty ninth before q one ever even started my clients told its shareholders in an s d filing that in the event there was a shareholder vote approving this merger it would proceed to account who didn't come under a p b number thirty and those accounting rules have very specific rules on how do you count for a scale  never been a claim here that the numbers in the april twenty fourth press releases were false or untrue in any way and the plainest of even admitted three separate times that you complied with all  reporting requirements and they say that in their proposed new complaint which is supposedly their best chance of ever stating a claim and they say that paragraph sixty five by paragraph sixty six in paragraph fifty one so getting back to my point harmonics board had the right to terminate the merger if the thought that there had been any misrepresentations of fact and plaintiff never explained why harmonic would have wanted this acquisition to go through i information made a difference so here's where we're on these q one results they can they can see that we complied with all of our reporting requirements there was nothing false in the april twenty fourth press release the numbers were completely accurate the same as what they were on may fifteenth there's no issue on the timing of the press release reserve either sure holders who are voting and so not only is there nothing false or misleading here but where there's nothing false or misleading simply can't have a strong in front of a client or and again there can't be an intent to deceive shareholders when we announced the plan back in december for the quarter even opened i'd like to turn now to the last main argument against my clients which is the claim that humes and board told its shareholders in a practice statement that this merger was in their best interest this claims that els for multiple reasons go over to another company and it's collapsing on the proposal of that many want to just hold onto it now did they have hopes that the deal was going to work out i tell you hopes that the deal is going to work out is not a defense to