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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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95-4439334
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(State or other jurisdiction of incorporation
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(I.R.S. Employer Identification
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or organization)
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No.)
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4505 Emperor Blvd., Ste. 320
Durham, North Carolina
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27703
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Name of each exchange on which registered
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N/A
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N/A
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Large accelerated filer
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o
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Accelerated filer
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o
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Non-accelerated filer
(Do not check if a smaller reporting company)
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o
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Smaller reporting company
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Exhibit | Description | |
101
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The following materials from the Company's Annual Report on Form 10-K for the year ended December 31, 2012, formatted in XBRL (eXtensible Business Reporting language): (i) the Balance Sheets, (ii) the Statements of Operations, (iii) the Statements of Cash Flows (iv) the Statements of Stockholders’ Deficit and (v) related notes to these financial statements, tagged as blocks of text and in detail.
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Smart Online, Inc.
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By:
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/s/ Robert M. Brinson, Jr.
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Robert M. Brinson, Jr.
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Chief Executive Officer
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4. PROPERTY AND EQUIPMENT AND CAPITALIZED SOFTWARE (Details Narrative) (USD $)
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12 Months Ended | |
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Dec. 31, 2012
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Dec. 31, 2011
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Property And Equipment And Capitalized Software Details Narrative | ||
Depreciation and amortization expense | $ 91,428 | $ 44,119 |
9. INCOME TAXES (Details 1) (USD $)
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12 Months Ended | |
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Dec. 31, 2012
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Dec. 31, 2011
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Income Tax Disclosure [Abstract] | ||
Tax benefit computed at statutory rate of 34% | $ (1,362,000) | $ (1,097,000) |
State income tax benefit, net of federal effect | (192,000) | (161,000) |
Change in valuation allowance | 1,566,000 | 1,273,000 |
Stock based compensation | (13,000) | (16,000) |
Intangible impairment | 1,000 | |
Other permanent differences | 1,000 | |
Totals |
8. STOCKHOLDERS DEFICIT (Details Narrative) (USD $)
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Dec. 31, 2012
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Dec. 31, 2011
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Stockholders Deficit Details Narrative | ||
Unvested expense yet to be recorded related to all restricted stock outstanding | $ 0 | $ 2,850 |
Unvested expense yet to be recorded related to all incentive stock options outstanding | 159,485 | 77,320 |
Outstanding options, intrinsic value | $ 25,050 |
3. BALANCE SHEET ACCOUNTS (Details 1)
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Dec. 31, 2012
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Dec. 31, 2011
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Balance Sheet Accounts Details 1 | ||
Shares into which financial instrument liability can be settled: Unrestricted shares of common stock, when issued | 1,475,000 | 1,475,000 |
Settlement related financial instrument liability at fair value: Fair value of unrestricted shares of common stock (Level 1 Measurement) | 2,065,000 | 1,770,000 |
8. STOCKHOLDERS EQUITY (Tables)
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12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2012
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2004 Equity Compensation Plan |
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Schedule of Stock Options |
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Schedule of Stock Options Outstanding |
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10. MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK (Details) (USD $)
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12 Months Ended | |
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Dec. 31, 2012
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Dec. 31, 2011
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Revenues | $ 480,122 | $ 467,308 |
% of Total Revenues | 100.00% | 100.00% |
Customer A
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Revenues | 283,564 | 376,860 |
% of Total Revenues | 59.00% | 81.00% |
Customer B
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Revenues | 49,091 | 86,685 |
% of Total Revenues | 10.00% | 18.00% |
Others
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Revenues | $ 147,467 | $ 3,763 |
% of Total Revenues | 31.00% | 1.00% |
6. NOTES PAYABLE (Details) (USD $)
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Dec. 31, 2012
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Dec. 31, 2011
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Notes Payable Details | ||
IDB credit facility, short term | $ 5,000,000 | $ 5,000,000 |
Insurance premium note, short term | 23,987 | 21,421 |
Various capital leases, short term | 17,754 | 16,394 |
Various capital leases, long term | 132,318 | 150,075 |
Convertible notes, long term | 20,500,000 | 15,475,000 |
Totals | 25,674,059 | 20,662,890 |
Short term portion total | 5,041,741 | 5,037,815 |
Long term portion total | $ 20,632,318 | $ 15,625,075 |
IDB Bank Maturity | 05/01/2013 | 05/01/2012 |
Insurance premium note Maturity | 06/01/2013 | 06/01/2012 |
Various capital leases Maturity | 08/01/2019 | Various |
Convertible notes Maturity | 11/01/2016 | 11/01/2016 |
IDB Bank Rate | 4% | 4% |
Insurance premium note Rate | 6.9% | 6.1% |
Various capital leases Rate | 8% | 8.0-18.9% |
Convertible notes Rate | 8% | 8% |
4. PROPERTY AND EQUIPMENT AND CAPITALIZED SOFTWARE (Details) (USD $)
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Dec. 31, 2012
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Dec. 31, 2011
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Property gross | $ 373,849 | $ 348,860 |
Less accumulated depreciation | (208,908) | (184,203) |
Property and equipment, net | 164,941 | 164,657 |
Computer hardware
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Property gross | 170,278 | 151,450 |
Computer software
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Property gross | 45,986 | 40,967 |
Furniture and fixtures
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Property gross | 88,946 | 88,946 |
Office equipment
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Property gross | 15,360 | 14,218 |
Leasehold improvements
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Property gross | $ 53,279 | $ 53,279 |
11. EMPLOYEE BENEFIT PLAN (Details Narrative) (USD $)
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12 Months Ended | |
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Dec. 31, 2012
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Dec. 31, 2011
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Employee Benefit Plan Details Narrative | ||
Company contribution to employee benefit plan | $ 20,928 | $ 16,346 |
9. INCOME TAXES (Details) (USD $)
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Dec. 31, 2012
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Dec. 31, 2011
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Net current deferred income tax assets related to: | ||
Allowance for doubtful accounts | $ 0 | $ 260,000 |
Depreciation | 131,000 | 114,000 |
Stock-based expenses | 91,000 | 226,000 |
Accrued liabilities – litigation expenses | 833,000 | 768,000 |
Other | 7,000 | 8,000 |
Net operating loss carryforwards | 26,677,000 | 24,692,000 |
Total | 27,739,000 | 26,068,000 |
Less valuation allowance | (27,739,000) | (26,068,000) |
Net current deferred income tax | $ 0 | $ 0 |
3. BALANCE SHEET ACCOUNTS
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12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2012
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Notes to Financial Statements | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3. BALANCE SHEET ACCOUNTS |
Accounts Receivable
Settlement Related Financial Instrument Liability
The Company generally does not use derivative instruments to hedge exposures to cash-flow risks or market-risks that may affect the fair values of its financial instruments. However, in connection with the Companys Class Action lawsuit settlement approved by the United States District Court for the Middle District of North Carolina (the District Court) on July 1, 2011 (the Class Action) (see Note 7, Commitments and Contingencies Legal Proceedings), we are required to issue 1,475,000 shares of our common stock to the Class Action class. Through July 1, 2011, our liability related to these shares was accounted for as an accrued liability on our balance sheet and changes in the value of the shares were generally not reflected on our statements of operations, absent certain significant events, such as the approval of the settlement. Now that the Class Action has been settled, because we have not yet issued the shares, the liability is now accounted for as a financial instrument liability on our balance sheet and, until the shares are issued, changes in their value will be reflected on our statements of operations as losses or gains, as applicable. The number of shares to be issued will not change, and these losses or gains are not cash items that will impact our income or loss from operations.
The following tabular presentation reflects the components of derivative assets and liabilities as of December 31, 2012 and December 31, 2011:
The following tabular presentation reflects the (loss) in the fair value of financial instruments for the twelve-month periods ended December 31, 2012 and 2011:
Accrued Liabilities
Deferred Revenue
Deferred revenue is comprised of the following items:
The components of deferred revenue for the periods indicated were as follows:
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