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<SEC-DOCUMENT>0000000000-05-025995.txt : 20060519
<SEC-HEADER>0000000000-05-025995.hdr.sgml : 20060519
<ACCEPTANCE-DATETIME>20050525190245
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0000000000-05-025995
CONFORMED SUBMISSION TYPE:	UPLOAD
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20050525

FILED FOR:		

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			SBE INC
		CENTRAL INDEX KEY:			0000087050
		STANDARD INDUSTRIAL CLASSIFICATION:	COMPUTER COMMUNICATIONS EQUIPMENT [3576]
		IRS NUMBER:				941517641
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1031

	FILING VALUES:
		FORM TYPE:		UPLOAD

	BUSINESS ADDRESS:	
		STREET 1:		4550 NORRIS CANYON ROAD
		CITY:			SAN RAMON
		STATE:			CA
		ZIP:			94583
		BUSINESS PHONE:		5103552000

	MAIL ADDRESS:	
		STREET 1:		4550 NORRIS CANYON RD
		CITY:			SAN RAMON
		STATE:			CA
		ZIP:			94583
</SEC-HEADER>
<DOCUMENT>
<TYPE>LETTER
<SEQUENCE>1
<FILENAME>filename1.txt
<TEXT>




May 26, 2005


David W. Brunton
Chief Financial Officer, Vice President,
	Finance and Secretary
SBE, Incorporated
2305 Camino Ramon
Suite 200
San Ramon, California 94583
(925) 355-2000

Re: 	SBE, Incorporated
      Preliminary Proxy Statement on Schedule 14A
      Filed May 5, 2005
      File No. 000-08419

      Form 10-K:  For the Fiscal Year Ended October 31, 2004
      Filed January 14, 2005
      File No. 000-08419

Dear Mr. Brunton:

      This is to advise you that we have conducted a limited
review
of the above filings and have the following comments.  In some of
our
comments, we may ask you to provide us with supplemental
information
so we may better understand your disclosure.  Please be as
detailed
as necessary in your explanation.  After reviewing this
information,
we may or may not raise additional comments.

      Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects.  We welcome
any questions you may have about our comments or on any other
aspect
of our review.  Feel free to call us at the telephone numbers
listed
at the end of this letter.

Preliminary Proxy Statement filed May 5, 2005

Pro Forma Unaudited Financial Statements-page 40

1. Refer to your unaudited pro forma consolidated balance sheet as
of
January 31, 2005.  Explain why it is appropriate to assume the
acquisition was consummated on November 1, 2003.  Pro forma
adjustments related to the pro forma statements of financial
condition should be computed assuming the transaction was
consummated
at the end of the most recent period for which the statement of
financial condition is presented.  Refer to Article 11-02(b)(6) of
Regulation S-X.

2. Refer to pro forma adjustments (a) and (f) to your unaudited
pro
forma consolidated balance sheet as of January 31, 2005.
Supplementally provide us with your calculation of the net cash
received from the private placement included in these adjustments.
Based on disclosure throughout your filing, it appears that the
proceeds from the offering are estimated to be $5,150,000.

3. We note from disclosures throughout your filing that in
addition
to the issuance of 2,561,050 shares of SBE common stock, you have
agreed to issue 2,038,950 options to purchase shares of SBE common
stock to replace the options to purchase shares of PyX.
Supplementally provide us with the basis for each of the
assumptions
used in your calculation of the purchase price for the acquisition
of
PyX Technologies, Inc.  Tell us how the issuance of the SBE stock
options was considered in your purchase price calculation.  Refer
to
EITF 99-12 and FIN 44.  Also indicate how you considered the stock
options in your adjustments to the pro forma financial statements.

Form 10-K:  For the Fiscal Year Ended October 31, 2004

Note 1. Summary of Significant Accounting Policies

Refundable Deposit-page 55

4. Tell us why Hewlett Packard (HP) agreed to forfeit the deposit
amount of $4,420,000 in the supply agreement restructured on
October
30, 2002 considering that the original terms of the purchase
agreement called for these amounts to be refunded based on
delivery
milestones.  In addition, explain how you considered the guidance
in
SAB Topic 13(A)(3)(f) in your recognition of the forfeited deposit
during 2002.  Tell us what consideration you received for the
products shipped to HP in the first two quarters of 2003.
Furthermore, describe your other future delivery obligations to HP
and the related consideration to be received from HP under the
restructured supply agreement.  Also describe the terms of the
services agreement that was to be in place by December 31, 2002.

Note 15.  Loan to Officer-page 69

5. We note that on October 31, 2002, you determined that is was
probable that you would be unable to fully recover the balance of
the
$743,800 loan made to your retiring President and CEO in 1998.
Supplementally, explain the facts and circumstances you considered
in
determining that a reserve in the amount of $474,000 was necessary
as
of October 31, 2002.  We further note that the officer repaid
$362,800 of the loan during the fourth quarter of the fiscal year
ended October 31, 2003 and the balance in November 2003.
Considering
that the full amount of the loan was repaid prior to issuing your
fiscal 2003 financial statements, tell us how you determined to
reverse only $235,000 of the loan reserve in fiscal 2003 and the
remaining reserve amount in fiscal 2004.  Additionally, tell us
what
consideration you gave to accounting for the uncollectibility of
the
loan as a capital transaction.  In this regard, cite the
authoritative literature relied upon in accounting for the
valuation
allowance and subsequent benefit through results of operations.


*	*	*	*	*


      As appropriate, please amend your filings in response to
these
comments.  You may wish to provide us with marked copies of the
amendment to expedite our review.  Please furnish a cover letter
with
your amendment that keys your responses to our comments and
provides
any requested supplemental information.  Detailed cover letters
greatly facilitate our review.  Please understand that we may have
additional comments after reviewing your amendment and responses
to
our comments.

      We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision.  Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.

      In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that:

* the company is responsible for the adequacy and accuracy of the
disclosure in the filing;

* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and

* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.

      In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in connection with our review of
your
filing or in response to our comments on your filing.


	You may contact Morgan Youngwood at (202) 551-3479 or Melissa
Walsh at (202) 551-3224 if you have any questions regarding
comments
on the financial statements and related matters.  You may also
contact Sara Kalin at (202) 551-3454 or me at (202) 551-3730 if
you
have any questions regarding the comments.


Sincerely,


Barbara C. Jacobs
Assistant Director



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David W. Brunton
SBE, Inc.
May 26, 2005
Page 1



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