Washington,
D.C. 20549
SCHEDULE
13D
Under the
Securities Exchange Act of 1934
Smart
Online, Inc.
Common
Stock, par value $0.001
83171V 10
0
Michael
Nouri
Smart
Online, Inc.
2530
Meridian Parkway
Durham,
North Carolina 27713
with a
copy to:
James F.
Verdonik, Esq.
Daniels
Daniels & Verdonik, P.A.
1822 NC
Highway 54 East, Suite 200
Durham,
North Carolina 27713
(919)
544-5444
February
15, 2005
If the
filing person has previously filed a statement on Schedule 13G to report the
acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following
box: |_|
1.
|
NAME
OF REPORTING PERSONS.
I.R.S.
IDENTIFICATION NOS. OF ABOVE PERSONS
Michael
Nouri |
2.
|
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a)
o
(b)
x |
3.
|
SEC
USE ONLY
|
4.
|
SOURCE
OF FUNDS
PF
and OO
(see Item 3) |
5.
|
CHECK
IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR
2(E): |
o |
6.
|
CITIZENSHIP
OR PLACE OF ORGANIZATION:
United
States |
NUMBER
OF
SHARES
BENEFICIALLY
OWNED
BY
EACH
REPORTING
PERSON
WITH
|
7. SOLE
VOTING POWER:
460,043
8. SHARED
VOTING POWER:
2,841,984
9. SOLE
DISPOSITIVE POWER:
460,043
10. SHARED DISPOSITIVE
POWER:
2,841,984
|
11.
|
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON:
3,302,027 See
Item 5(a) |
12. |
CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN
SHARES:
x
See Item 5(a) |
13.
|
PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11):
28% |
14.
|
TYPE
OF REPORTING PERSON (SEE INSTRUCTIONS):
IN |
Schedule
13D
Item
1. Security
and Issuer.
This
statement on Schedule 13D (this “Schedule
13D”)
relates to the Common Stock, par value $0.001 per share (the “Common
Stock”), of
Smart Online, Inc., a Delaware corporation (the “Company”). The
principal executive office of the Company is located at 2530 Meridian Parkway,
Durham, North Carolina 27713.
Item
2. Identity
and Background.
(a) This
Schedule 13D is being filed on behalf of Michael Nouri (the “Reporting
Person”).
(b) The
business address of the Reporting Person is c/o Smart Online, Inc., 2530
Meridian Parkway, Durham, North Carolina, 27713.
(c) The
Reporting Person is a director of the Company and its Chief Executive
Officer.
(d) The
Reporting Person has not, during the five years prior to the date of this
Schedule 13D, been convicted in a criminal proceeding.
(e) The
Reporting Person has not, during the five years prior to the date of this
Schedule 13D, been a party to a civil proceeding of a judicial or administrative
body of competent jurisdiction, as a result of which the Reporting Person was or
is subject to a judgment, decree or final order enjoining future violations of,
or prohibiting or mandating activities subject to, Federal or State securities
laws or finding any violation with respect to such laws.
(f) The
Reporting Person is a citizen of the United States of America.
Item
3. Source
and Amount of Funds or Other Consideration.
Reporting
Person acquired the shares when the Reporting Person started the Company and
subsequent purchases from the Company, as part of compensation arrangements of
the Company and through purchases from the shareholders from 1996 through 2004.
Personal funds and $4,200,000 of loans obtained in years 1998 and 1999 from a
business associate, Michael Gause, were used to finance these
purchases.
Item
4. Purpose
of Transaction.
The
Reporting Person acquired the shares of Common Stock of the Company for
investment purposes.
(a) Except as
set forth below in this paragraph (a), the Reporting Person does not have any
plans or proposals that relate to, or would result in, the acquisition by any
person of additional securities of the Company or the disposition of securities
of the Company.
The
securities of the Company held by the Reporting Person constitute a significant
portion of the Reporting Person’s total personal net worth. One of the Reporting
Person’s investment goals is diversification, which would require some sales of
the securities of the Company by the Reporting Person. Accordingly, the
Reporting Person may, from time to time, make decisions to sell securities of
the Company based upon then-prevailing market conditions.
From time
to time the Reporting Person may receive stock options or other grants of
securities of the Company as part of his compensation as an officer and
director.
The
Reporting Person entered into Put Agreements dated March 10, 2004 and August 13,
2004 with Atlas Capital, SA (“Atlas”). The Company is not a party to this
agreement, but these agreements were entered into at the time of an investment
in the Company by Atlas to provide comfort to Atlas that would fulfill its
promise to cause its common stock to become publicly traded. The Put Agreements
give Atlas the right to require Mr. Nouri and another shareholder of the
Company, Mr. Doron Roethler, to purchase for $2,700,000 the 728,571 shares of
common stock and warrants to purchase 188,571 shares of common stock Atlas
purchased from the Company in March 2004 and August 2004. The Put Agreements can
be exercised in the sole discretion of Atlas during the month of March 2005 or
during the month of March 2006, but the Put Agreements terminate and the put
options cannot be exercised after (i) the common stock of the Company is listed
or quoted for pubic trading, or (ii) the stockholders of the Company vote to
approve any action reasonably necessary to cause stock of the Company to be
publicly traded, but Atlas votes against the action, or (iii) Atlas transfers
any of its common stock or warrants of the Company. The Put Agreements are
not assignable and terminate if Atlas transfers the securities covered by the
Put Agreements.
The
Reporting Person signed a lock-up agreement (the “Lock-up Agreement”) that
restrict the sale of all the shares owned by the Reporting Person reported in
this Report. These transfer restrictions include, among other restrictions, a
“lock-up” agreement preventing the sale or transfer of the shares (other than
transfers to certain related parties). The restrictions are effective through
September 30, 2006, but commencing October 1, 2005, the Reporting Person,
subject to the provisions of the Lock-up Agreement may transfer up to 8.5% of
such holder’s shares of Common Stock during each calendar month.
(b)
The
Reporting Person does not have any plans or proposals that relate to or would
result in an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Company or any of its subsidiaries.
The Company will, however, be evaluating acquiring all or parts of other
companies as part of its business strategy and may from time to time do such
acquisitions.
(c) The
Reporting Person does not have any plans or proposals that relate to or would
result in a sale or transfer of a material amount of assets of the Company or
any of its subsidiaries.
(d The
Reporting Person does not have any specific plans to change the present Board of
Directors or management of the Company. The Company, however, as a goal to
increase the number of independent directors and to add experienced management.
The Company will, therefore, be evaluating suitable candidates from time to
time.
(e) The
Reporting Person does not have any plans or proposals that relate to or would
result in any material change in the present capitalization or dividend policy
of the Company, except that the Company may from time to time sell additional
securities to raise capital.
(f) The
Reporting Person does not have any plans or proposals that relate to or would
result in any other material change in the Company’s business or corporate
structure.
(g) The
Reporting Person does not have any plans or proposals that relate to or would
result in changes in the Company’s charter, bylaws or instruments corresponding
thereto or other actions that may impede the acquisition of control of the
Company by any person.
(h) The
Reporting Person does not have any plans or proposals that relate to or would
result in causing a class of securities of the Company to be delisted from a
national securities exchange or to cease to be authorized to be quoted in an
inter-dealer quotation system of a registered national securities association.
(i) The
Reporting Person does not have any plans or proposals that relate to or would
result in a class of equity securities of the Company becoming eligible for
termination of registration pursuant to Section 12(g)(4) of the Securities
Exchange Act of 1934, as amended.
(j) The
Reporting Person does not have any plans or proposals that relate to or would
result in any action similar to any of those enumerated above.
Item
5. Interest
in Securities of the Issuer.
(a) The
Reporting Person beneficially owns 3,302,027 shares of Common Stock, which,
based on the Company’s most recent Registration Statement on Form SB-2 Form,
represents approximately 28% of the issued and outstanding shares of Common
Stock. Of this amount, (i) 2,841,984 shares are owned by American Investment
Holding Group, a Delaware corporation, owned by Michael and Henry Nouri, and as
to which they share the power to vote and the power to dispose of such shares,
(ii) 87,043 shares are owned by Charter Holding LLC, a Nevada limited liability
company, owned by Michael Nouri, (iii) 23,000 shares of common stock are owned
by a trust for which Michael Nouri is the trustee and is not a beneficiary, and
(iv) 250,000 shares can be acquired upon the exercise of options, which can be
exercised at any time.
Ronna
Loprete, the wife of the Reporting Person owns 340,631 shares of Common Stock of
the Company, which number includes 75,000 shares that can be acquired upon the
exercise of options, which can be exercised at any time. The Reporting Person
disclaims beneficial ownership of these shares of Ms. Loprete.
The
Reporting Person’s brother, Henry Nouri, owns an additional 250,000 shares of
Common Stock (in addition to the shares reported as jointly owned with the
Reporting Person above), which includes 250,000 shares that can be acquired upon
the exercise of options which can be exercised at any time. The Reporting Person
disclaims beneficial ownership of these shares of Henry Nouri.
(b) The
Reporting Person has sole power to vote or to direct the vote and sole power to
dispose or to direct the disposition of 460,043 shares of Common Stock reported
in Item 5(a) of this Schedule 13D. Henry Nouri shares with the Reporting Person
the power to vote and to dispose of or to direct the disposition of 2,841,984 of
the shares of the Reporting Person.
The
business address of the Henry Nouri is c/o SmartOnline, Inc., 2530 Meridian
Parkway, Durham, North Carolina, 27713. Henry Nouri is a director of the Company
and its Chief Executive Officer. Henry Nouri has not, during the five years
prior to the date of this Schedule 13D, been convicted in a criminal proceeding.
Henry Nouri has not, during the five years prior to the date of this Schedule
13D, been a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction, as a result of which Henry Nouri was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, Federal or State securities laws or finding
any violation with respect to such laws. Henry Nouri is a citizen of the United
States of America.
(c) The
Reporting Person acquired all the shares reported prior to 60 days before the
date of this Report.
(d Except
for the Reporting Person and his brother, Henry Nouri with respect to 2,841,984
shares owned by the Reporting Person, no other person has the right to received
dividends or proceeds from the sale of securities reported herein, or to direct
receipt of dividends or proceeds from the sale of securities reported
herein.
(e Not
applicable.
Item
6. Contracts,
Arrangements, Understandings or Relationships with Respect to the Securities of
the Issuer.
Except as
disclosed in this Schedule 13D, the Reporting Person does not have any other
contracts, arrangements, understandings or other relationships with respect to
the securities of the Company. See Answer to Item 4(a) for description of
relevant contracts.
Item
7. Material
to be Filed as Exhibits.
1. Not
applicable.
2. (a) Put
Agreement dated March 10, 2004
(b) Put
Agreement dated August 13, 2004
(c ) Lock-Up
Agreement dated as of January 1, 2004
3. Not
applicable.
SIGNATURE
After
reasonable inquiry and to the best knowledge and belief of the undersigned, the
undersigned certifies that the information set forth in this Statement is true,
complete and correct.
Dated:
February 22, 2005 |
/s/
Michael Nouri |
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Signature |
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Type
Name:: Michael Nouri |
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