Mail Stop 3561
										January 12, 2006


By U.S. Mail and Facsimile

Mr. Daniel Laikin
Chief Executive Officer
National Lampoon, Inc.
10850 Wilshire Blvd., Suite 1000
Los Angeles, California  90024


	RE: 	National Lampoon, Inc.
		Form 10-KSB for the Fiscal Year Ended July 31, 2005
      Form 10-QSB for the Quarterly Period Ended October 31, 2005
      File No. 0-15284


Dear Mr. Laikin:

      We have reviewed the above-referenced documents based upon
an
examination restricted solely to considerations of the Financial
Statements, Management`s Discussion and Analysis and Selected
Financial Data.  Certain comment require amendments to your
filings
and certain comments require the submission of supplemental
information.  After our review of your response, we may have
further
comments.  Comply with the remaining comments in future filings.
Please confirm that such comments will be complied with, or, if
certain of the comments are deemed inappropriate, advise us of the
reason(s) for your position.  Pursuant to Rule 101(a)(3) of
Regulation S-T, your response should be submitted in electronic
form,
under the label "corresp".  Please respond within fifteen (15)
business days.

	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
filings.
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 July 31, 2005

Item 1.  Business
- - Our Business, page 2
Item 6.  Management`s Discussion and Analysis of Financial
Condition
or Plan of Operation
- - Overview, page 14

1. You state in this section that your 2005 revenues were derived
from the following sources:  43% from National Lampoon Networks,
Inc., 37% from Motion Picture and Feature Film, 2% from Television
Production, and 12% from Home Entertainment DVD.  In addition, you
state in MD&A that your 2005 revenues were derived from the
following
sources:  54% from Licensing, 36% from National Lampoon Networks,
and
6% from Home Entertainment.  As these disclosures appear to be
inconsistent, please reconcile and revise the revenues and related
percentage contribution to fiscal year 2005 revenues for each
segment
discussed in the Business and MD&A sections of the filing in
future
filings.

Management`s Discussion and Analysis of Financial Condition or
Plan
of Operation -
Results of Operations, page 18

2. We note from the disclosure included in the last paragraph on
page
18 that you have changed the way in which you present segment
revenue
for the year ended July 31, 2005 as compared to the year ended
July
31, 2004 due to the evolving nature of your business. However,
based
on the disclosures provided in your consolidated statements of
operations, we note that you have not revised your segment
disclosures for 2004 so that they are presented consistently with
the
2005 presentation.  In this regard, please revise your segment
disclosures in the table included in MD&A and in Note I to your
financial statements for the year ended July 31, 2004 so that they
are presented consistently with the 2005 presentation as required
by
paragraph 34 of SFAS No. 131.  Please note that since it appears
that
the required revenue and related cost information can be easily
derived from your statement of operations for this period, it does
not appear that it would be impracticable to restate your 2004
segment disclosures as provided in paragraph 34 of SFAS No.131.

3. We note the disclosure on page 20 indicating that many direct
television production costs that were expensed immediately in
prior
years are now being capitalized as they are incurred and amortized
as
revenue is recognized in accordance with the ultimate schedules.
Please tell us in further detail the nature of the costs which you
are now capitalizing which were expensed immediately in prior
years
and explain why you believe both your current and prior treatment
of
these costs was appropriate.  We may have further comment upon
receipt of your response.



Financial Statements

Balance Sheets, page F-2
Note A - Business Organization and Summary of Significant
Accounting
Policies
- - Intangible Assets, page F- 8

4. We note that you have had continuing net losses of $8,669,170
and
$5,127,107 and net cash used in operating activities of $6,803,573
and $4,003,355 for the years ended July 31, 2005 and 2004,
respectively.  This is an indication that the carrying amounts of
your long-lived assets, especially capitalized production costs
and
intangible assets may not be recoverable.  In this regard,
supplementally provide us with your most recent impairment
analysis
for your long-lived assets.  Your impairment analysis should
describe
the methodology and assumptions or estimates used to test your
capitalized production costs and intangible assets for impairment.
See paragraphs 43 through 47 of SOP 00-2 regarding impairment
testing
related to your capitalized production costs and SFAS No. 144
regarding impairment testing related to your intangible assets
(i.e.,
National Lampoon trademark).  Also, describe any groupings of
assets
used for purposes of analyzing or measuring impairment.  In
addition,
revise future filings to include full and clear disclosure of your
impairment policy.  We may have further comments.

5. Revise Note A in future filings to disclose your accounting
policy
for capitalized production costs and related amortization as
discussed on page 17 of MD&A under the caption, Critical
Accounting
Policies.  Also, include the disclosures required by paragraphs 51
through 55 of SOP 00-2.  In addition, supplementally tell us why
you
have you have reduced your capitalized production costs by
$425,500
film financing at July 31, 2005 (as reflected on your balance
sheet
on page F-2) and the literature that supports your accounting
treatment.  We may have further comments.

Consolidated Statements of Operations, page F-4

6. We note from your discussion in MD&A on page 21 that interest
expense is included in selling, general and administrative
expenses
for each period presented.  In this regard, please revise future
filings to classify interest expense as a separate line item under
the caption, other income (expense).

Statements` of Stockholders` Deficit, page F-5

7. We note that you have reflected the accrual of dividends
related
to your Series B and Series C Convertible Preferred Stock of
$591,806
and $521,713, respectively on the statements of stockholders`
deficit
during the year ended July 31, 2005 and as an increase to net loss
to
arrive at net loss available to common shareholders for this
period.
In this regard, supplementally tell us where you have reflected
dividends related to the Series B Convertible Preferred Stock in
the
statements of stockholders` deficit and in your statements of
operations for periods prior to fiscal year 2005.  If no dividends
were recognized in connection with the Series B Preferred Shares
prior to the fiscal year ended July 31, 2005, please explain why.
We
may have further comments.

Note A - Business Organization and Summary of Significant
Accounting
Policies
- - Intangible Assets, page F- 8

8. Supplementally tell us, with a view toward expanded disclosure
in
future filings, how you determined that you control the operations
of
National Lampoon Clubhouse, Inc. supporting your conclusion to
consolidate the entity.  If you do not have control over the
operations of this entity, please explain in detail why you
believe
consolidation of this entity is appropriate.  Your response should
include the literature that supports your accounting treatment.
We
may have further comments.

- - Income Taxes, page F-9

9. Revise future filings to include the disclosures required by
paragraph 43 and paragraphs 45 through 48 of SFAS No. 109, as
applicable.

- - General

10. Revise future filings to disclose your status as a "controlled
company" and the terms of the Voting Agreement entered into on May
17, 2002 as discussed on page 5 of your Proxy Statement filed on
December 13, 2005.  See the requirements of SFAS No. 57.

Note C - Accrued Series B and Series C Convertible Preferred
Stock,
page F-13

11. Please ensure that you have included all the disclosures
required
by paragraphs 4 and 6 of SFAS No. 129 related to your Series B and
Series C Convertible Preferred Stock.   In this regard,
supplementally advise us of your compliance and revise future
filings
as necessary.

Note H - Stockholders` Equity

12. Based on the disclosures provided in Note H, it appears that
you
recognized a beneficial conversion feature only for the portion of
the Series C Convertible Preferred Stock that was issued in
exchange
for cash proceeds and not for the $4.5 million issued in exchange
for
the conversion of debt and for payment of salaries.  Please revise
your financial statements to recognize a beneficial conversion
feature associated with the Series C Convertible Preferred Stock
that
was issued in exchange for non-cash proceeds of $4.5 million. We
do
not believe that the fact that non-cash proceeds were received in
this transaction precludes the requirement to apply the guidance
outlined in EITF 98-5 and 00-27 with regards to the Series C
Preferred Shares issued in this transaction.

Note I - Segment Data, page F-19

13. Please revise future filings to include all the disclosures
required by paragraph 27 of SFAS No. 131 for each period
presented.
Your revised disclosures should include, but not be limited to,
information related to total assets and interest expense for each
reportable segment.

14. We note that your reconciliation of the total reportable
segments` measures of loss does not agree to your consolidated
loss
before minority interest and income taxes for each period
presented
in your statements of operations.  In this regard, please revise
future filings to comply with paragraph 32 of SFAS No. 131.

Exhibits 31.1 and 31.2  Section 13a-14(a)/15d-14(a)Certifications

15. Please revise the certifications to comply with the
requirements
set forth in Rules 13a-14(a) and 15d-14(a).  Your revisions should
include, but not be limited to, disclosures regarding the
certifying
officers` responsibility for establishing and maintaining internal
control over financial reporting as defined in Exchange Act Rules
13a-15(f) and 15d-15(f) and their involvement regarding the design
of
internal control over financial reporting.  In this regard, please
revise the certifications to comply with the language set forth in
Item 601(b)(31) of Regulation S-B.

Form 10-QSB for the Quarterly Period Ended October 31, 2005
Financial Statements
Note D - Film Financing

16. Please tell us and revise Note D to explain in future filings
your rationale for consolidating your investment in Totally Baked
LLC.  As part of your response and your revised disclosure, please
indicate the nature and amount of your investment in this entity
and
explain why you believe consolidation of this entity is
appropriate.

General

17. Comply with the comments on the Form 10-KSB for the year ended
July 31, 2005 as they apply to filings on Form 10-QSB.  Please
note
that your Form 10-QSB should be revised to comply with the comment
on
Exhibits 31.1 and 31.2 above.



Closing

      You may contact Katherine Mathis at (202) 551-3383 or me at
(202) 551-3813 if you have any questions.


      Sincerely,


								Linda Cvrkel
								Branch Chief
Mr. Daniel Laikin
National Lampoon, Inc.
Page 6