Shares of Electro Optic Systems Holdings soared 5.33% during intraday trading on Tuesday, marking a significant upward movement.

The surge follows the company's strong rebuttal to a critical report from short-seller Grizzly Research. Electro Optic Systems firmly rejected the conclusions of the report, noting that Grizzly has disclosed holding a short position in the company's securities. The firm has directed its legal advisers in Australia and Germany to consider all available legal remedies in response.

Grizzly Research's report had questioned the validity of a previously announced $80 million contract, casting doubt on the counterparty's capacity. The company's public defense and proactive legal stance appear to have reassured investors, contributing to the positive price action.