FILE# 1-11061







April 7, 2005


United States Securities and Exchange Commission
450 Fifth St., N.W., Stop 4-5
Washington, D.C. 20549
Attn: Rufus Decker, Accounting Branch Chief
Division of Corporation Finance


Dear Mr. Decker:

Pursuant to our verbal conversation last week we have evaluated the
convertible debentures transactions for the period September 1, 2003 through
November 30, 2004 with regards to compliance with EITF 00-27.

Our discussions are being presented in reverse order as to the date of such
transactions so as to address the single largest matter first.

We noted in our response to comments 19 and 20 of the initial SEC inquiry dated
February 8, 2005 that we did not comply with the provisions of EITF 00-27
with regards to the $1,610,294 of 8% convertible debentures issued.  We
had recorded the substance of the transaction instead. Approximately, 98%
of such convertible debt issued was already subject to an interest accrual on
such amount at 6% per annum. All of such $1,610,294 was already recorded
as a payable, hence there was no new monies received by the Company with the
issuance of these 8% convertible debentures. These 8% convertible debentures
were for already existing debts owed to officers, directors and the controller,
which recorded as primarily accrued and deferred salaries and interest. The
issuance of the 8% convertible debentures was part of a planned transaction
that essentially provided for management to gain effective control of the
Company. The 8% convertible debentures were converted to common shares in
November and December 2004. We considered the related party nature of the
transaction for purposes of recording the appropriate expense for the large


amount of equity rights issued to record an effective change in ownership
control of the Company by management.  To record an overall estimate for such
compensation attributed to providing for a change in ownership control via
a transaction structured by management, we utilized the Black Scholes method
of valuing the warrants at the highest possible value, equating to $2,588,056.
This recorded amount would have been limited had we followed the relevant
EITF 00-27 to the total debt proceeds of $1,610,924.

See the attached Schedule A for analysis of recording all of the convertible
debenture transactions for the period September 1, 2003 through November 30,
2004 under the terms promulgated by EITF 00-27 as compared to what was
recorded by the Company for such period. We did not evaluate, on a quarterly
 basis, the debt discount amortization expense over the relevant term of the
debt of one year,as such amortizable amount related to the $230,000 of debt
received in September through November of 2003 and the $107,028 of reissued
debt which matures in February 2005. The 8% convertible debt of $1,610,294 was
convertible immediately and at will by the related party holders.

Separately, with regards to obtaining the prior auditors consent for the
re-issuance of their audit opinion for the year ended August 31, 2003, we
believe we have a settlement in principal. As a result we should be in the
position shortly to file an amended Form 10KSB with the audited financials
for fiscal 2003.

Please contact us directly at 210-818-1616 or our accountant Carlton Vogt III
at Sherb & Co., LLP 212-838-5100 for any further questions

Sincerely,


Sam Oolie, CFO.



note  schedule A faxed