Ownership Submission
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 *
Roethler Doron
  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)
Interim CEO
(Last)
(First)
(Middle)
C/O STRAUSS, ADAR, RAVIV & CO.LAW OFFICE, 7 MENACHEM BEGIN, BETZALEL STREET
3. Date of Earliest Transaction (Month/Day/Year)
02/24/2009
(Street)

RAMAT GAN, L3 52521
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

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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
See footnote (1) $ 3.05 02/24/2009   D(2)     $ 500,000 11/14/2010 11/14/2010 Common Stock 163,934 (2) $ 250,000 I See footnote (3)
See footnote (1) $ 3.05 02/24/2009   D(2)     $ 250,000 11/14/2010 11/14/2010 Common Stock 81,967 (2) $ 0 I See footnote (3)
See footnote (1) $ 2.28 (4) 02/24/2009   A(2)   $ 500,000   11/14/2010 11/14/2010 Common Stock 219,298 (2) $ 500,000 I See footnote (3)
See footnote (1) $ 2.28 (4) 02/24/2009   A(2)   $ 250,000   11/14/2010 11/14/2010 Common Stock 109,649 (2) $ 750,000 I See footnote (3)

Reporting Owners

Reporting Owner Name / Address Relationships
 Director  10% Owner  Officer  Other
Roethler Doron
C/O STRAUSS, ADAR, RAVIV & CO.LAW OFFICE
7 MENACHEM BEGIN, BETZALEL STREET
RAMAT GAN, L3 52521
  X   X   Interim CEO  

Signatures

 /s/ Margaret Cate, attorney-in-fact   02/26/2009
**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) Convertible secured subordinated note due November 14, 2010 (collectively, the "Notes").
(2) The reported transactions involved an amendment of outstanding Notes, resulting in the deemed cancellation of the "old" Notes and the deemed purchase of "replacement" Notes.
(3) Held by Crystal Management, Ltd., which is 100% owned by Doron Roethler.
(4) The Notes are convertible into Smart Online, Inc. (the "Issuer") common stock at the lowest "applicable conversion price" determined for each Note (issued to any noteholder), which shall be calculated by multiplying 120% by the lowest of (a) the average of the high and low prices of the Issuer's common stock on the OTCBB averaged over the 5 trading days prior to the closing date of the Note's issuance, (b) if the Issuer's common stock is not traded on the Over-The-Counter market, the closing price of the common stock reported on the principal exchange on which the common stock is listed, averaged over the 5 trading days prior to the closing date of the Note's issuance, or (c) the closing price of the Issuer's common stock on the OTCBB or the principal exchange on which the common stock is listed, as applicable, on the trading day preceding the date such Note is converted, in each case as adjusted for stock splits, dividends or combinations, recapitalizations or similar events.

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