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 * Atlas Capital SA   2. Issuer Name and Ticker or Trading Symbol SMART ONLINE INC [SOLN] 5. Relationship of Reporting Person(s) to Issuer (Check all applicable) _____ Director __X__ 10% Owner _____ Officer (give title below) _____ Other (specify below) (Last) (First) (Middle) 116 RUE DU RHONE 3. Date of Earliest Transaction (Month/Day/Year) 01/19/2007 (Street) GENEVA, V8 CH-1204 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 01/19/2007   P   10,000 A $ 2.99 2,267,950 D   Common Stock 01/19/2007   P   5,000 A $ 2.95 2,272,950 D   Common Stock 01/19/2007   P   56,206 A (1) 2,329,156 D

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

Common Stock Warrant (right to buy)

$ 2.7

01/15/2007

J(2)

444,444

08/01/2008(3)

08/31/2008(4)

Common Stock

444,444

(2)

444,444

D

Reporting Owners

Reporting Owner Name / Address	Relationships
	Director	10% Owner	Officer	Other
Atlas Capital SA 116 RUE DU RHONE GENEVA, V8 CH-1204		X

Signatures

/s/ Avy Lugassy, Atlas Capital, S.A.		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)	These shares were acquired pursuant to a note cancellation agreement. In exchange for the shares, principal and interest totalling $85,117.28 was cancelled.
(2)	The warrant was issued as consideration for a $1,200,000 increase in a letter of credit provided by Atlas Capital, S.A. which secures a line of credit that Smart Online, Inc. entered into with Wachovia, N.A.
(3)	The warrant is exercisable is Smart Online is in default under the line of credit or within thirty (30) days following the termination of the line of credit on August 1, 2008.
(4)	The warrant expires thirty (30) days following the termination of the line of credit on August 1, 2008.

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