Annual report pursuant to Section 13 and 15(d)

Note 5 - Capital stock

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Note 5 - Capital stock
 12 Months Ended
Jan. 01, 2012
Stockholders' Equity Note Disclosure [Text Block]
5.
Capital stock

Common shares

Authorized share capital:

The authorized share capital of the Company at January 1, 2012 and January 2, 2011 consisted of:

 
(i)
26,000,000 shares of common stock, par value $0.01 per share: Holders are entitled to one vote per share and the right to share in dividends pro rata subject to any preferential dividend rights of any then outstanding preferred stock.

 
(ii)
5,000,000 shares of special voting stock, par value $0.01 per share: From time to time the Company may issue special voting stock in one or more series and will fix the terms of that series at the time it is created.

Issued and outstanding:

The outstanding number of common shares included in shareholders’ equity consisted of the following as at the following dates:

   
January 1, 2012
   
January 2, 2011
   
January 3, 2010
 
   
Number
of shares
      $     
Number
of shares
      $     
Number
of shares
      $   
Common Stock
                                         
Exchangeable shares:
                                         
Balance at beginning of the period
    583,848     $ 5,524       711,048     $ 6,728       749,448     $ 7,091  
Shares issued pursuant to:
                                               
Conversion to common stock
    (29,100 )     (275 )     (127,200 )     (1,204 )     (38,400 )     (363 )
                                                 
Balance at end of the period
    554,748     $ 5,249       583,848     $ 5,524       711,048     $ 6,728  
                                                 
Common shares
                                               
Balance at beginning of the period
    15,329,732     $ 379       13,935,284     $ 365       13,896,884     $ 365  
Shares issued pursuant to:
                                               
Exercise of stock options
    292,194       3       1,267,248       13       —       —  
Conversion of exchangeable shares
    29,100       —       127,200       1       38,400       —  
                                                 
Balance at end of the period
    15,651,026     $ 382       15,329,732     $ 379       13,935,284     $ 365  
                                                 
Special voting stock
                                               
Balance at beginning of the period
    1     $ —       1     $ —       1     $ —  
                                                 
Balance at end of the period
    1     $ —       1     $ —       1     $ —  
                                                 
Total Common stock
          $ 5,631             $ 5,903             $ 7,093  
                                                 
Warrants
                                               
Common share warrants
                                               
Balance at beginning of the period
    —     $ —       —     $ —       11,166,947     $ 2,755  
                                                 
Expired
    —       —       —       —      
(11,166,947
)     (2,755 )
Balance at end of the period
    —     $ —       —     $ —       —     $ —  

Exchangeable shares:

During the periods ended January 1, 2012, January 2, 2011 and  January 3, 2010, exchangeable shares of 29,100, 127,200 and 38,400 with a carrying value of $275, $1,204 and $363, respectively, were exchanged for common stock, with a carrying value of nil, $1 and nil, respectively, with the difference recorded as additional paid-in capital.

Exchangeable shares of SMTC Manufacturing Corporation of Canada (“SMTC Canada”), an indirect subsidiary of the Company, can be exchanged on a one-for-one basis for one share of the common stock of the Company. Each exchangeable share of SMTC Canada, as nearly as practicable, is intended to be the economic equivalent of a share of common stock of the Company and holders of the exchangeable shares of SMTC Canada are able to exercise essentially the same voting rights with respect to the Company as they would have if they had exchanged their exchangeable shares of SMTC Canada for common stock of the Company. Upon the earlier of July 27, 2015, or the number of outstanding exchangeable shares falling below 500,000, subject to certain adjustment and acceleration provisions, SMTC Canada will have the right to redeem all of the outstanding exchangeable shares by delivering common shares of the Company on a one-for-one basis. Subsequent to year end, 60,200 exchangeable shares as at March 5, 2012 were converted into common shares, resulting in 494,548 exchangeable shares outstanding.

Common Share Warrants:

On June 1, 2004, the Company’s pre-existing lenders exchanged $10,000 of outstanding debt and warrants for 2,233,389 shares of common stock and 11,166,947 warrants (the “Conversion Warrants”). Each warrant was exercisable for one-tenth of one share of common stock of the Company at an exercise price of $6.90 per share of common stock. The Conversion Warrants expired on March 4, 2009. Upon expiry of the unexercised warrants, the amount attributed to the Conversion Warrants was recorded as additional paid-in capital.

Exchangeable Share Warrants:

On March 3, 2004, the Company completed a private placement, fully underwritten by a syndicate of Canadian investment dealers, of 33,350,000 Special Warrants (each “Special Warrant” and collectively, the “Special Warrants”) of SMTC Manufacturing Corporation of Canada (“SMTC Canada”), an indirect subsidiary of the Company. Each Special Warrant was issued at a price of CDN $1.20 per Special Warrant, resulting in aggregate proceeds of CDN $40,020.

Each Special Warrant was exercisable for one unit, consisting of one-fifth of an exchangeable share of SMTC Canada, and one-half of a warrant to purchase one-fifth of an exchangeable share of SMTC Canada. Each whole warrant (a “Purchase Warrant”) was exercisable for one-fifth of an exchangeable share of SMTC Canada at an exercise price of CDN $9.25 per share. The Purchase Warrants expired on March 3, 2009.

Upon the adoption of guidance under ASC 815 on determining whether an instrument (or embedded feature) is indexed to an entity’s own stock on January 5, 2009, the Purchase Warrants were retrospectively reclassified as liabilities, without restatement of prior periods. As the fair value of these instruments at that date was determined to be nil, the amount attributed to these warrants was recorded as a reduction of opening deficit on January 5, 2009.