FORM 4 Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP OF SECURITIES Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940

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(Print or Type Responses)

1. Name and Address of Reporting Person * Nouri Dennis Michael   2. Issuer Name and Ticker or Trading Symbol SMART ONLINE INC [SOLN] 5. Relationship of Reporting Person(s) to Issuer (Check all applicable) __X__ Director __X__ 10% Owner __X__ Officer (give title below) _____ Other (specify below) President and CEO (Last) (First) (Middle) 2530 MERIDAN PARKWAY 3. Date of Earliest Transaction (Month/Day/Year) 10/10/2006 (Street) DURHAM, NC 27713 4. If Amendment, Date Original Filed(Month/Day/Year) 6. Individual or Joint/Group Filing(Check Applicable Line) _X_ Form filed by One Reporting Person ___ Form filed by More than One Reporting Person (City) (State) (Zip) Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned

1.Title of Security (Instr. 3) 2. Transaction Date (Month/Day/Year) 2A. Deemed Execution Date, if any (Month/Day/Year) 3. Transaction Code (Instr. 8) 4. Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5) 5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4) 6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) 7. Nature of Indirect Beneficial Ownership (Instr. 4) Code V Amount (A) or (D) Price Common Stock 10/10/2006(1)   S   87,043 D $ 1.5176 0 I See fn. (2) Common Stock 10/10/2006(1)   S   160,000 D $ 1.5176 1,262,015.77 D   Common Stock 01/19/2007   S   192,000 (3) D (4) 1,070,015.77 D   Common Stock 01/19/2007   S   216,175 (3) D (5) 853,840.77 D   Common Stock 01/19/2007   S   57,328 (3) D (6) 796,512.77 D   Common Stock 01/19/2007   S   56,206 (3) D (7) 740,306.77 D   Common Stock 01/19/2007   S   900 (8) D $ 3 739,406.77 D   Common Stock 01/19/2007   S   900 (8) D $ 3 264,731 I By spouse. Common Stock               16,500 I See fn. (9) Common Stock               6,500 I See fn. (10)

Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
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Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned
(e.g., puts, calls, warrants, options, convertible securities)

1. Title of Derivative Security (Instr. 3)

2. Conversion or Exercise Price of Derivative Security

3. Transaction Date (Month/Day/Year)

3A. Deemed Execution Date, if any (Month/Day/Year)

4. Transaction Code (Instr. 8)

5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4, and 5)

6. Date Exercisable and Expiration Date (Month/Day/Year)

7. Title and Amount of Underlying Securities (Instr. 3 and 4)

8. Price of Derivative Security (Instr. 5)

9. Number of Derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4)

10. Ownership Form of Derivative Security: Direct (D) or Indirect (I) (Instr. 4)

11. Nature of Indirect Beneficial Ownership (Instr. 4)

Code

V

(A)

(D)

Date Exercisable

Expiration Date

Title

Amount or Number of Shares

Reporting Owners

Reporting Owner Name / Address	Relationships
	Director	10% Owner	Officer	Other
Nouri Dennis Michael 2530 MERIDAN PARKWAY DURHAM, NC 27713	X	X	President and CEO

Signatures

/s/ Dennis Michael Nouri		01/23/2007
**Signature of Reporting Person		Date

Explanation of Responses:

*	If the form is filed by more than one reporting person, see Instruction 4(b)(v).
**	Intentional misstatements or omissions of facts constitute Federal Criminal Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
(1)	The agreement to sell these shares was made on October 10, 2006. Consideration paid for the shares was made in installments over a period of time and the agreement included certain closing conditions, including the dissolution of American Investment Holding Group Company (which was fifty percent (50%) owned by Dennis Michael Nouri) and Smart Online, Inc. entering into a registration rights agreement with the purchaser. The last of these conditions was satisfied on January 19, 2007.
(2)	These shares were held by Charter Holdings, LLC, which is wholly owned by Dennis Michael Nouri.
(3)	These shares were transferred pursuant to a note cancellation agreement that was approved by the Smart Online, Inc. board of directors on October 9, 2006. The note being cancelled under this agreement was made in 2005.
(4)	Under the terms of the note cancellation agreement, a total of $809,736.49 in principal and interest was cancelled.
(5)	Under the terms of the note cancellation agreement, a total of $324,063.49 in principal and interest was cancelled.
(6)	Under the terms of the note cancellation agreement, a total of $87,261.40 in principal and interest was cancelled.
(7)	Under the terms of the note cancellation agreement, a total of $85,117.28 in principal and interest was cancelled.
(8)	These shares were sold pursuant to a Rule 10b5-1 trading plan entered into prior to the date of the transaction.
(9)	Shares held by Dennis Michael Nouri as trustee for Leon Sokolic.
(10)	Shares held by Dennis Michael Nouri as trustee for Moshe DaBush.

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