Smart Online executives have agreed to unspecified salary cuts as part of a deal to increase support from one of its creditors.
The RTP-based firm, which offers various business software solutions through a software-as-a-service model, said Monday afternoon that the salary cuts were part of a deal to get an increase in credit from Atlas Capital. Atlas Capital is already a stockholder of Smart Online.
Stock in Smart Online (OTCBB: SOLN) closed at $2.70 per share on Friday. Markets were closed Monday in observance of the Martin Luther King Holiday.
According to a statement released by the company, Atlas Capital has agreed to increase a line of credit for Smart Online to $2.5 million from $1.3 million. In exchange, Smart Online executives agreed to the salary cuts and performance based quarterly bonuses.
The funds will be used for further growth efforts and to pay costs related to the acquisition of iMart.
The executives made the decision voluntarily, the company said.
Executives include co-founder and chief executive officer Michael Nouri, co-founder and executive vice president Henry Nouri, chief financial officer Nicholas Sinigaglia, chief technology officer Anil Kamath, and chief operating officer Thomas Furr.
Atlas Capital also received options to purchase as many as 444,444 shares of Smart Online at a price of $2.70 per share.
Smart Online stock has recovered from a 52-week low of 90 cents reached on Nov. 27 and 28 of 2006. The stock was trading at $10 a year ago.
Financial results for 2006 have yet to be posted. However, through three quarters, Smart Online reported a loss of $3.5 million, or 23 cents a share.
“We are pleased our investors and executive management are committed to the opportunities that lie ahead for Smart Online without the need for immediate share dilution,” said Michael Norui, the CEO, in a statement. “In addition, I am pleased by the dedication of our executives to look at the upside of our profitability by electing to cut their base salaries in support of Smart Online’s future.”