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      Siboney Correspondence

      September
        21, 2005

      Mr.
        Daniel L. Gordon

      Branch
        Chief

      Securities
        and Exchange Commission

      Division
        of Corporation Finance

      Washington,
        D.C. 20549

                RE:

                Siboney
                  Corporation

                Form
                  10-K for the year ended December 31, 2004

                File
                  No. 1-03952

                Comment
                  letter dated September 8, 2005

      Dear
        Mr.
        Gordon:

      In
        response to your September 8, 2005 letter, Siboney Corporation (the Company)
        provides the following information and explanations.

      1.
        Please tell us what gave rise to the Refundable income taxes asset at December
        31, 2004, and your accounting policy related to this asset.

      The
        forecasted income before income taxes for the year ended December 31, 2004
        was
        significantly higher than the actual income before income taxes of $101,172.
        The
        Company made estimated tax payments totaling approximately $600,000 in the
        first
        half of the fiscal year when operating results were consistent with forecasted
        annual income before taxes. In the third quarter of 2004, income before taxes
        decreased significantly due to litigation settlement expense of approximately
        $615,000 and higher general and administrative expenses than anticipated
        due to
        increased legal fees. Lower income before taxes resulted in a refund due
        to the
        Company for the year ended December 31, 2004.

      The
        Company received a refund of $406,584 from the IRS in April 2005. The remainder
        of the refundable income taxes asset of $620,769 less the April refund will
        either be refunded from the December 31, 2004 returns or applied to 2005
        estimated payments.

      The
        Company’s accounting policy is to calculate estimated tax payments based on
        annual forecasted income before income taxes adjusted for permanent differences
        between book and tax and changes in temporary differences between book and
        tax.

      2.
        Please tell us your policy for recognizing revenues under agreements where
        goods
        shipped by you can be returned within 45 days and agreements where products
        may
        be returned after longer periods if the customer is not satisfied. Please
        cite
        the accounting literature that you have relied upon in your
        response.

      The
        Company recognizes revenue in accordance with SOP 97-2, Software
        Revenue Recognition.
        Revenue
        for software sales is recognized when persuasive evidence of an agreement
        exists, delivery of the software has occurred, the fee is fixed or determinable,
        and collectibility is probable.

      The
        Company’s product sales meet the six criteria provided in SFAS No. 48,
Revenue
        Recognition When Right of Return Exists (SFAS
        48), paragraph 6. Reserves for estimated returns and allowances are provided
        at
        the time revenue is recognized in accordance with SFAS 48, paragraph 7. Such
        reserves are recorded based upon historical rates of returns and allowances
        and
        other factors. Total returns approximated 2% of gross sales in 2004. The
        allowance for returns at December 31, 2004 was $38,005.

      While
        certain product lines previously had a return policy of 12 months, the Company
        changed the return policy to 45 days in 2005.

      3.
        Please expand your accounting policy for software development costs to address
        at least the following:

                ·
The
                  types of
                  costs that are capitalized

                ·
The
                  point at
                  which you cease capitalizing costs related to software development;
                  and

                ·
Your
                  impairment
                  policy for capitalized software development
                  costs.

      Salary
        and estimated payroll taxes are capitalized for the employees that work on
        capitalized software based on actual direct development hours. Additionally,
        consulting fees for outside consultants are capitalized.

      The
        Company ceases capitalizing costs when the product is released for sale to
        customers.

      On
        an
        annual basis, the Company reviews each capitalized project for impairment.
        If
        the remaining book value of a capitalized project cannot be supported by
        anticipated future revenue net of future costs, the Company would write down
        the
        asset to net realizable value. In future filings, the Company will expand
        the
        discussion of this accounting policy to include the foregoing, as
        appropriate.

      *
        *
        *

      We
        acknowledge that the Company is responsible for the adequacy and accuracy
        of the
        disclosure in the Form 10-K for the year ended December 31, 2004. We understand
        that 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.
        We understand that 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.

      Sincerely,

/s/
        Timothy J. Tegeler

      Timothy
        J. Tegeler

      Chairman
        and Chief Executive Officer

      Siboney
        Corporation