SMTC Corporation Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Note 6 - Capital Stock

Note 6 - Capital Stock

6 Months Ended

Jul. 01, 2018

Stockholders' Equity Note Disclosure [Text Block]

6.	Capital stock

Common shares

Issued and outstanding:

The issued and outstanding number of common shares included in shareholders’ equity consisted of the following:

	Number of shares		$

Balance at December 31, 2017		16,992,627		396
Share issuance (1)		310,883		3
Balance at July 1, 2018		17,303,510		399

(

)

310,883

new common shares resulted from

211,135

exercised stock options and

99,748

vested RSUs during the period.

Stock Options

For more detailed information regarding the Company’s stock option arrangements, see Note

of the consolidated financial statements within the Company’s Form

-K for the fiscal period ended

December 31, 2017.

The Company granted

335,929

stock options during the

three

and

six

months period ended

July 1, 2018.

A summary of stock option activity for the

six

months period ended

July 1, 2018

is as follows:

	Number of options			Weighted average exercise price		Aggregate intrinsic value		Weighted average remaining contractual term (years)
Outstanding at December 31, 2017		1,870,753		$	1.39		61		8.6

Options granted		335,929		$	2.07
Exercised		(211,135	)		1.71
Forfeited		(316,180	)	$	1.25
Outstanding at July 1, 2018		1,679,367		$	1.52	$	585		8.8
Exercisable at July 1, 2018		480,741		$	1.60	$	556		8.1

During the

three

month periods ended

July 1, 2018

and

July 2, 2017,

the Company recorded stock-based compensation expense related to stock options and a corresponding increase in additional paid-in capital of

$34

and

$11,

respectively. During the

six

month periods ended

July 1, 2018

and

July 2, 2017,

the Company recorded stock-based compensation expense related to stock options and a corresponding increase in additional paid-in capital of

$59

and

$23,

respectively.

Certain stock options outstanding have market conditions such that the awards are vested and exercisable only if the Company’s stock exceeds specified targets during the vesting period. If the market conditions are

not

met, the stock options will

not

vest and will expire.

Restricted Stock Units

For more detailed information regarding the Company’s Restricted Stock Units (“RSUs”) arrangements, see Note

of the consolidated financial statements within the Company’s Form

-K for the fiscal period ended

December 31, 2017.

There were

25,000

RSUs granted during the

six

months ended

July 1, 2018.

A summary of the RSUs activity for the

six

month period ended

July 1, 2018

is as follows:

	Outstanding RSU s			Weighted average stock price		Weighted average remaining contractual term (years)
Outstanding balance at December 31, 2017		576,023		$	1.13		1.84
RSUs granted		25,000		$	2.37
RSUs vested and issued in shares		(99,748	)	$	1.40
RSUs forfeited		(67,689	)	$	0.97
Outstanding balance at July 1, 2018		433,586		$	0.98		1.33

Certain RSUs outstanding have a market condition such that the awards are vested and issuable only if the market price of the Company’s stock meets or exceeds a specified target during the vesting period. If the market condition is

not

met, the RSUs will

not

vest and will be forfeited.

Stock based compensation expense (recovery) recognized during the

three

month periods ended

July 1, 2018

and

July 2, 2017

related to the RSUs was

$43

and (

$18

), respectively. The recovery of stock based compensation was due to the reversal of unvested RSUs for terminated employees. Stock based compensation recognized during the

six

month periods ended

July 1, 2018

and

July 2, 2017

related to the RSUs was

$144

and

$173,

respectively.