SMTC Rights Offering Raises $13 Million

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EMS firm SMTC Corp. has announced the results of its rights offering to shareholders of record, which closed to subscriptions on August 22, 2018. Aggregate gross proceeds to the company were approximately $13 million, which is the maximum amount allowable under the terms of this Rights Offering and is intended to support the company’s growth plans.

Although SMTC capped the maximum offering amount at $13 million, shareholders submitted subscriptions for approximately $20 million (including backstop agreements), or 153% of the permitted subscriptions in the Rights Offering. As a result, the number of shares sold pursuant to oversubscription privileges to participants who exercised their oversubscription privilege was prorated according to the formulas described in the offering prospectus relating to the Rights Offering.

SMTC sold an aggregate of 5,777,768 shares of common stock at a purchase price of $2.25 per share. A total of 3,458,609 shares will be issued pursuant to the basic rights exercised, and 2,319,159 shares will be issued pursuant to the oversubscription privilege. Because SMTC reached the cap of its offering in connection with selling shares pursuant to the basic rights and the oversubscription privilege, no additional shares will be issued in connection with previously announced backstop commitments. Red Oak Partners LLC and Wynnefield Funds, the company's largest stockholders, as well as all of the company’s directors and CEO fully exercised their basic rights, and Red Oak LLC Partners and certain of the company’s directors also participated and exercised their oversubscription privilege.

The shares of common stock are expected to be distributed to applicable offering participants through the Company's transfer agent or through the clearing systems of the Depository Trust Company, commencing, August 29, 2018. Following this offering, SMTC will have 23,081,278 common shares outstanding.

The Rights Offering was made pursuant to a prospectus supplement, filed July 23, 2018, to its previously filed shelf Registration Statement on Form S-3 deemed effective by the Securities and Exchange Commission (SEC) on July 2, 2018.


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