SecProbe.io

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<FILENAME>filename1.txt
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Mail Stop 0407

      May 5, 2005

Via U.S. Mail and Fax (818-953-9844)

Mr. Daniel M. Solberg
Chief Financial Officer
The Neptune Society, Inc.
4312 Woodman Avenue,
Third Floor
Sherman Oaks, CA 91423

	RE:	The Neptune Society, Inc.
      Form 10-KSB for the Year ended December 31, 2004
		Filed March 31, 2005
		File No. 000-31182

Dear Mr. Solberg:

      We have reviewed the above referenced filing and have the
following comments.  We have limited our review to only your
financial statements and related disclosures and will make no
further
review of your document.  As such, all persons who are responsible
for the adequacy and accuracy of the disclosure are urged to be
certain that they have included all information required pursuant
to
the Securities Exchange Act of 1934.  Where indicated, we think
you
should revise your document in response to these comments.  If you
disagree, we will consider your explanation as to why our comment
is
inapplicable or a revision is unnecessary.  Please be as detailed
as
necessary in your explanation.  In some of our comments, we may
ask
you to provide us with supplemental information so we may better
understand your disclosure.  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.

Form 10-KSB for the Year Ended December 31, 2004:
Management `s Discussion and Analysis or Plan of Operation, page
16
1. We note you disclose that `Management and finance fee income
improved ...This increase was driven by improved sales volume and
current period marketing allowances received when our trustees
acquired life insurance policies.`  Please explain to us how under
GAAP current period marketing allowances affect your management
and
finance fees.
Consolidated Statements of Operations, page 23
2. Please separately present your service and merchandise revenues
and their corresponding costs and expenses on the face of the
consolidated statements of operations.

Note 2. Summary of Significant Accounting Policies

Revenue Recognition

Pre-arrangement Revenue Recognition, page 27

3. Advise us and disclose the business reason(s) behind your
change
in business practice now that you implemented a full merchandise
delivery policy for new pre-need contracts sold in all locations
except in three states where the practice is not permitted.

4. Advise us and disclose the type of merchandise (personalized or
non-personalized or both) you included in a full merchandise
delivery. Clarify to us if a customer accepts and takes physical
delivery and title of merchandise in a pre-need contractual
arrangement in this case.  Also, clarify if there remains any
obligation for additional performance or delivery, especially in
the
case of personalized merchandise.

5. We note that you allocate your pre-arrangement revenue to
merchandise, travel contracts, administrative fees when the pre-
need
contracts are sold and merchandise delivered in all locations
beginning in 2003 except in three states.  Are the deliverables
separate units of accounting under the guidance within EITF 00-21?
Are you allocating the revenues based on vendor specific objective
evidence (`VSOE`) of fair value? Advise us how you apply EITF 00-
21
in allocating the pre-arrangement revenues among these multiple
deliverables and the cremation services.

6. Further, advise us and disclose the revenue earning processes
of
each deliverable and explain how your policies comply with SAB
Topic
13.A.3.  Support your accounting for immediate revenue recognition
for merchandise sold, travel contracts placed and administrative
fees
charged at the time the pre-need contracts are sold. In your
response, cite the relevant accounting literature you relied on in
your explanations, as appropriate.
      Sales Commissions and Obtaining Costs, page 28
7. We note your change in accounting for sales commissions and
obtaining costs, commencing January 1, 2003.  Explain to us, and
clarify in your disclosures, the nature and type of costs
classified
as sales commissions and obtaining costs. Also, advise us why you
did
not include the costs in the `costs and expenses` line item to
arrive
at gross profit.
8. Further, explain why a full delivery of merchandise would
affect
the accounting for deferral and expensing of commissions and
obtaining costs.
Gross vs Net Revenues
9. Advise us and disclose if you are reporting cremation service
revenues on a net or on a gross basis when you use the services of
third party crematories, and explain to us why. Refer to EITF 99-
19.
Goodwill (Names and Reputations), page 36
10. We note that the fair value of the Company, as a single
reporting
unit under FASB 142, exceeded the carrying value of the net assets
including goodwill.  In view of the different state regulations
among
your business locations, explain to us the basis for your
conclusion
that you have only one reporting unit.  Refer to EITF Topic No.D-
101.
Returns and Refunds
11. You state on page 6 that a client has the right to cancel a
Pre-
need Plan within 30 days of the initial purchase and receive a
full
refund.  After this initial period, a Pre-need contract may be
cancelled by the purchaser with proper notice and any refunds
would
be made subject to individual state regulations. Tell us and
disclose
your accounting policy for returns and refunds in these
circumstances.
Marketing Allowances
12. Advise us the nature of your marketing allowances for the
purchase of group insurance coverage for pre-arrangements and the
revenue earning process. Also, advise us why you did not account
for
the allowances as reductions of marketing expenses in the income
statements. Refer to EITF 02-16 and examples in Exhibit 02-16A.

Recent Accounting Prononcements, page 34
13. We note that the adoption of FIN 46R did not have a material
impact on the Company`s financial position or results of
operations.
Advise us if your pre-need arrangement trust funds are variable
interest entities (the `VIE`). Refer to the guidance within
paragraph
5 of FIN 46R. If not , explain why not.  If so, advise us your
basis
in determining that you are or you are not the primary
beneficiaries
of the trust funds.  Refer to paragraphs 14-15 of FIN 46R.
      Discontinued Operations
14. Refer to Iowa acquisition and disposition section on page 7.
You
state that you disposed of your Iowa assets for $180,000 cash.
Advise
us and disclose the gain/losses incurred as a result of the
disposition. Also, explain why you did not report discontinued
operations for this disposition in accordance with SFAS 144.

*    *    *    *

      As appropriate, please amend your Forms 10-K and 10-Q and
respond to these comments within 10 business days or tell us when
you
will provide us with a response.  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 file
your cover letter on EDGAR.  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 filings;

* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filings; 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 our review of your filings or
in
response to our comments on your filings.

      You may contact Andrew Mew, Staff Accountant, at (202) 551-
3377
or Robert S. Littlepage, Jr., Accountant Branch Chief, at (202)
551-
3361 if you have questions regarding comments on the financial
statements and related matters.  Please contact me at (202) 551-
3810
with any other questions.

							Sincerely,

							Larry Spirgel
							Assistant Director

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The Neptune Society, Inc.
May 5, 2005
Page 1

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