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
                                                                                  
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Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934 or Section 30(h) of the Investment Company Act of 1940
                      

1. Name and Address of Reporting Person *

Hughes Stephen B 		2. Issuer Name and Ticker or Trading Symbol

SMART BALANCE, INC. [ SMBL ] 		5. Relationship of Reporting Person(s) to Issuer (Check all applicable)

__ X __ Director                      _____ 10% Owner
__ X __ Officer (give title below)      _____ Other (specify below)
Chairman and CEO
(Last)          (First)          (Middle)

C/O SMART BALANCE, INC., 6106 SUNRISE RANCH DRIVE 		3. Date of Earliest Transaction (MM/DD/YYYY)

10/18/2012
(Street)

LONGMONT, CO 80503
(City)        (State)        (Zip)
4. If Amendment, Date Original Filed (MM/DD/YYYY)

 
6. Individual or Joint/Group Filing (Check Applicable Line)

_ X _ Form filed by One Reporting Person
___ Form filed by More than One Reporting Person

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1.Title of Security
(Instr. 3) 		2. Trans. Date 2A. Deemed Execution Date, if any 3. Trans. 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   (1) 10/18/2012     M    250000   A   (1) 1331586   D    
Common Stock   (1) 10/18/2012     F    102700   D $12.55   1228886   D    
Common Stock                  101000   I   By Spouse  
Common Stock                  239265   I   Trust   (2)
Common Stock                  3000   I   By Son  

Table II - Derivative Securities Beneficially Owned ( e.g. , puts, calls, warrants, options, convertible securities)
1. Title of Derivate Security
(Instr. 3) 		2. Conversion or Exercise Price of Derivative Security 3. Trans. Date 3A. Deemed Execution Date, if any 4. Trans. 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 7. Title and Amount of Securities Underlying Derivative Security
(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
Restricted Stock Unit   (1)   (1) 10/18/2012     M         250000      (3) 1/3/2022   Common Stock   250000   $0   250000   (4) D    
Option toPurchase   $9.85   11/19/2012     G     V (5)    425000      (6) 5/21/2017   Common Stock   425000   $0   325000   (7) D    

Explanation of Responses:
( 1)  Each restricted stock unit was granted under the Second Amended and Restated Smart Balance, Inc. Stock and Awards Plan and represented a right to receive one share of Common Stock. A portion of the shares were withheld by the Company to satisfy tax withholding obligations in connection with the settlement of the restricted stock units.
( 2)  Held in trust for Caroline Elise Hughes, John Trevelyn Hughes and Henry Thomas Hughes, adult family members not residing with Mr. Hughes. The reporting person disclaims beneficial ownership of these shares.
( 3)  The restricted stock units vested upon completion of the performance goal, when the closing price for a share of common stock of the Company was at least $12 for 20 of 30 consecutive trading days.
( 4)  The reporting person continues to hold 250,000 restricted stock units that vest, if at all, if the closing price for a share of common stock of the Company is at least $16 for 20 of 30 consecutive trading days.
( 5)  On 11/16/2012, the reporting person transferred 425,000 options to Sunset Oasis Limited Partnership (the "Limited Partnership"), a Delaware limited partnership of which the reporting person was then the sole limited partner. 1% of these options were transferred as a capital contribution to Hughes Enterprises, LLC (the "General Partner"), a Delaware limited liability company which is the general partner of the Limited Partnership and then by the General Partner as a capital contribution to the Limited Partnership. The reporting person was the sole member of the General Partner at that time. On 11/19/2012, the reporting person transferred 100% of his interests in the Limited Partnership by assigning as a gifts (i) all rights in the General Partner to a sibling, and (ii) all of his Limited Partnership interests to his three children and his three siblings in varying percentages.
( 6)  50,000 of the stock options become exercisable, if at all, if the closing price for a share of common stock of the Company is at least $16.75 for 20 of 30 consecutive trading days and 375,000 of the stock options become exercisable, if at all, if the closing price for a share of common stock of the Company is at least $20.25 for 20 of 30 consecutive trading days.
( 7)  The reporting person continues to hold 325,000 stock options with an expiration date of 5/21/17 that vest, if at all, if the closing price for a share of common stock of the Company is at least $16.75 for 20 of 30 consecutive trading days.

Reporting Owners
Reporting Owner Name / Address
Relationships
Director 10% Owner Officer Other
Hughes Stephen B
C/O SMART BALANCE, INC.
6106 SUNRISE RANCH DRIVE
LONGMONT, CO 80503 		X
Chairman and CEO

Signatures
/s/ Stephen B. Hughes 12/28/2012
** Signature of Reporting Person Date


Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
* 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).
Note: File three copies of this Form, one of which must be manually signed. If space is insufficient, see Instruction 6 for procedure.
Persons who respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.
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