SecProbe.io

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						July 13, 2005

Mail Stop 4561

Via U.S. Mail and Fax (801) 973-4188
Mr. Christopher Foley
Chief Financial Officer
NBO Systems, Inc.
3676 West California Avenue, Building D
Salt Lake City, UT 84104

	RE:	NBO Systems, Inc.
      Form 10-KSB for the fiscal year ended December 31, 2004
		Filed March 31, 2005
		File No. 0-33037

Dear Mr. Foley:

      We have reviewed your response letter dated June 13, 2005
and
have the following additional comments.  In our comments, we ask
you
to provide us with information so we may better understand your
disclosure.  After reviewing this information, we may 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.

Item 1. Description of Business

Risk Factors, page 13
1. Your response to prior comment 2 states that "the likelihood of
a
state successfully asserting transactional jurisdiction is remote
or
only reasonably possible".  Please tell us which level of
likelihood
you believe the contingency to be.  If the contingency is
reasonably
possible, explain to us how you have satisfied the requirements of
paragraph 10 of SFAS 5.
2. Related to prior comment 2, although Maryland escheatment laws
do
not relate to your business, tell us what consideration you have
given to the effect of Utah`s escheatment laws as they relate to
gift
cards and gift certificates sold while you were incorporated in
that
state.  Tell us the amount of revenues recorded that could be
subject
to escheatment laws while incorporated in Utah.  We may have
further
comment.

Note A - Organization and Summary of Significant Accounting
Policies

11. Revenue Recognition
3. We have read and reviewed your response to comment 4.  We
believe
that GMRI is the primary obligor in these transactions.  Clarify
to
us whether a consumer has recourse against you if they are not
satisfied with goods purchased from GMRI using a gift card or gift
certificate.  It appears that GMRI is responsible for fulfillment
and
the customer service role in this process.  See examples 6 and 12
of
EITF 99- 19.  In addition, you disclose on page 25 that Darden
(GMRI)
has expressed intent from time to time to change their fulfillment
process in a manner that would affect how you record revenue
(change
from gross to net).  Simply changing the terms of your contract
with
GMRI should not drive the accounting for this transaction and the
substance of the transaction should remain the same.  Tell us how
the
changes in the terms of the contract results in a different
accounting method.  We may have further comment.
4. Your response to prior comment 6 indicates that estimated
breakage
is not recorded as revenues.  This appears to contradict the
revenue
recognition policy discussed in your letter to the Office of the
Chief Accountant dated January 31, 2004.  Please explain how your
response reconciles to your letter to the Office of the Chief
Accountant.
5. Your response to prior comment 6 states that revenue from
breakage, relating to gift cards, is recognized when the breakage
is
received from the financial institution holding the restricted
funds.
However, it was our understanding that it is your practice to
withdraw cash from the restricted accounts in amounts equal to
your
estimates of future breakage.  Please explain to us the difference
between this policy and recognizing revenue based on estimated
breakage.

      Please respond to the comments included in this letter
within
ten business days.  If you have any questions, you may contact
William Demarest at (202) 551-3432 or me at (202) 551-3486.

Sincerely,

Daniel L. Gordon
Branch Chief
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NBO Systems, Inc.
July 13, 2005
Page 1

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