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<SEC-DOCUMENT>0000000000-05-029834.txt : 20060519
<SEC-HEADER>0000000000-05-029834.hdr.sgml : 20060519
<ACCEPTANCE-DATETIME>20050614131106
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0000000000-05-029834
CONFORMED SUBMISSION TYPE:	UPLOAD
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20050614

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>






Mail Stop (Room 4561)
      June 14, 2005


David W. Brunton
Chief Financial Officer, Vice President of
     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, amended June 6, 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:

      We have reviewed your amendment and response letter dated
June
3, 2005, 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, amended June 6,
2005

Pro Forma Unaudited Financial Statements of SBE

Unaudited Pro Forma Consolidated Balance Sheet, page 42

1. We note from the revision to pro forma adjustment (b) that the
amount allocated to intellectual property was increased to
$7,913,000
from $7,088,000 in Amendment No. 1.  Explain the basis for this
increase and how you determined the fair value of the intellectual
property.  Provide us with an explanation of the assumptions used
in
your calculation.

2. Please refer to comment No. 3 in our letter dated May 26, 2005.
We note that you do not consider the stock options to be assumed
to
be part of the purchase price calculation.  However, paragraph 85
of
FIN 44 indicates that the fair value of unvested stock options
should
be considered part of the purchase price for an acquiree and the
purchase price should be allocated to unearned compensation based
on
the intrinsic value of the unvested options.  As explained in
paragraph 148 of FIN 44, the unvested awards represent a form of
residual equity interests that should be included in the purchase
price for the combination.  Explain how you considered this
guidance
in determining not to include the fair value of the stock options
to
be assumed in your calculation of the purchase price.

Unaudited Pro Forma Condensed Combined Statements of Operations,
page
44

3. Revise to indicate the number of securities that could
potentially
dilute pro forma basic loss per share in the future that were not
included in the computation of pro forma diluted loss per share
because to do so would have been antidilutive for the periods
presented.

Management`s Discussion and Analysis of Financial Condition and
Results of Operations of PyX

Results of Operations, page 52

4. In your discussion of the comparison of the quarters ended
March
31, 2005 and 2004, you state that operating expenses for the
quarter
ended March 31, 2005 were $293,850 and net loss for the same
period
was $294,850.  Reconcile these figures to those reported on the
face
of the statements of operations of PyX on page 58.



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

Financial Statements

Note 1. Summary of Significant Accounting Policies

Refundable Deposit, page 55

Prior Comment No. 4

5. We note that the negotiated termination terms include a
provision
for the execution of a Services Agreement that you entered into on
April 28, 2003.  Further explain how you considered this
additional
deliverable in determining that all the criteria for revenue
recognition had occurred at the point the renegotiated contract
was
executed.

Note 15. Loan to Officer, page 69
Prior Comment No. 5

6. You indicate that since the stock sale transaction that
provided
the proceeds for the remaining $239,000 occurred subsequent to the
end of fiscal 2003, the reversal of the remaining loan reserve was
not recorded until the first quarter of fiscal 2004.  Based on
your
disclosure on page 35, the remaining $239,000 was received in
November 2003, which was prior to the issuance of your fiscal 2003
financial statements.  Further explain why it was appropriate to
provide for a full valuation allowance against the remaining loan
balance of $239,000 as of October 31, 2003 in light of this
subsequent event.


*	*	*	*	*


      As appropriate, please amend your filings in response to
these
comments.  You may wish to provide us with marked copies of any
amendment to expedite our review.  Please furnish a cover letter
with
any 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 any amendment and your
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.

	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.
June 14, 2005
Page 1



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