March 7, 2005

Ms. Linda Van Doorn
Senior Assistant Chief Accountant
Division of Corporate Finance
Securities and Exchange Commission
Mail Stop 0409
Washington, DC 20549

Re: RCG Companies Incorporated
Form 10-K for the year ended June 30, 2004
Form 10-K/A for the year ended June 30, 2004
Form 10-Q for the quarter ended September 30, 2004
File no. 001-8662

Dear Ms. Van Doorn:

We have addressed below each of the staff's comments in your letter of January
28, 2005 (the "Comment Letter").

Liquidity and Capital Resources, page 18

1. In future filings, please confirm that you will increase disclosure in
accordance with Item 303 of Regulation S-K in respect to off-balance sheet
commitments, i.e., purchase obligations, recent acquisitions consummated
and agreements entered into as well as known trends and other sources and
uses of funds.

RESPONSE: We confirm we will increase disclosure in accordance with
Item 303 of Regulation S-K in respect to off-balance
sheet commitments, i.e., purchase obligations, recent
acquisitions consummated and agreements entered into as
well as known trends and other sources and uses of funds.

2. In addition, please confirm that you will expand in future filings your
disclosure of Quantitative and Qualitative Disclosures about Market Risk
regards to your investment portfolio. According to the financial
statements, material gains have been recognized on investments and material
unrecognized losses have been disclosed. Associated market risks should be
discussed and quantified. Refer to Item 305 of Regulation S-K for further
guidance.

RESPONSE: As of June 30, 2004 and September 30, 2004 our investment
portfolio totaled approximately $300,000. Since this
amount totaled 0.6 % and 1.1% of total current assets at
June 30, 2004 and September 30, 2004, we did not deem
this amount material to the financials statements for
detailed disclosure, but the Company does monitor the
investments for impairments. With respect to the
unrecognized losses, subsequent to September 30, 2004 it
was determined that the investments related to the
unrecognized losses were worthless with no recovery and
were considered permanently impaired with a charge to the
statement of operations recognizing the losses. We
recognized a loss of $276,347, which was 3.6% of
pretax-loss for the period ended September 30, 2004.

Auditor's Report, page 22

3. Include the reports of the accountants that the principal accountant is
relying on in accordance with Rule 2-05 of Regulation S-X. If these other
accountants are not registered with the PCAOB, please supplementally advise
why such registration was not required.

RESPONSE: In accordance with Rule 2-05 of Regulation S-X we have
attached a copy of the report of the accountants that the
principal accountants were relying on. The other
accountants, Guest and Company, are registered with the
PCAOB.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 - Significant Accounting Policies

Operations and Liquidity, page 28

4. In future filings include a more detailed discussion of the Company's
ability or inability to generate sufficient cash to support its operations
in the ensuing twelve months. Refer to Section 607.02 of the Financial
Reporting Codification and revise future periodic filings accordingly.

RESPONSE: In future filings we will include a more detailed
discussion of the Company's ability or inability to
generate sufficient cash to support its operations in the
ensuing twelve months.

Consolidation, page 28

5. Please tell us and disclose in future filings, the impact that the adoption
of FIN 46R had on the Company. Specifically, clarify to us how you
evaluated your investment in Lifestyle Innovations under FIN 46R.

RESPONSE: The adoption of FIN 46R had no effect on the Company.
Lifestyle Innovations was already being consolidated
because of conventional consolidation guidance of ARB 51,
Consolidation of Financial Statements. We evaluated our
investment in Lifestyles pursuant to the criteria in FIN
46R and it does not meet the criteria of a variable
interest entity.

Concentration of Credit Risk, page 29

6. We note that revenues from Vacation Express, a MyTravel Group company,
represented approximately 73% of the Company's revenues in 2003 and that
Vacation Express was acquired effective October 31, 2003. Prior to the
acquisition were there any other affiliations between the Company and
Vacation Express such as common owners or officers or was Vacation Express
an independent third party?

RESPONSE: Vacation Express was an independent third party prior to
the October 31, 2003 acquisition. There were no other
affiliations between the Company and Vacation Express
such as common owners or officers.

Investments, page 30

7. Refer to the first paragraph under this heading. Please confirm that these
available for sale securities are reported at their fair value rather than
"estimated values" and that when quoted market price is not available, fair
value is determined using alternative valuation methodologies as discussed
in Appendix C to SFAS 115.

RESPONSE: We confirm that our investments are recorded at their
estimated fair values as determined using alternative
valuation prescribed in SFAS 115. Our remaining
investment, as noted previously, is a $300,000
investment in a private company with no readily
available market price. The Company does monitor this
investment for impairment and does not feel there is an
impairment at the reporting dates.

Please provide us with the disclosure you will include in future filings to
describe your accounting policy in accordance with SFAS 115.

RESPONSE: Investments, including certificates of deposit with
maturities of greater than three months, not readily
marketable equity securities and other marketable
securities, are classified as available for sale.
Investment securities that are not readily marketable
include securities (a) for which there is no market on a
securities exchange or no independent publicly quoted
market, (b) that cannot be publicly offered or sold
unless registration has been effected under the
Securities Act of 1933, or (c) that cannot be offered or
sold because of other arrangements, restrictions, or
conditions applicable to the securities or the Company.
Certificates of deposit are recorded at cost plus
accrued interest. Marketable equity securities are
recorded at fair values based on quoted market values
for marketable securities of the issuer, discounted for
trading restrictions. If there is no quoted market
value, the estimated fair values are determined based on
an alternative valuation method prescribed in SFAS 115,
Accounting for Certain Investments in Debt and Equity
Investments. The difference between cost and fair value
is recorded as unrealized gain or loss on available for
sale securities as a component of comprehensive income.

Additionally, we assess whether an other-than-temporary
impairment loss on our investment has occurred due to
declines in fair value or other market conditions.
Declines in fair value that are considered other than
temporary are recorded as an impairment of certain
equity investments in the consolidated statement of
operations.

8. Please clarify to us why the stock purchase warrants the Company
periodically receives as compensation for services are accounted for under
SFAS 133 rather than SFAS 115. Specifically, how did you determine that the
instruments meet the criteria of paragraph 6 of SFAS 133? In addition, tell
us and disclose in future filings how you have applied the guidance of EITF
00-8 to these transactions.

RESPONSE: The initial recording of the warrants were determined
under SFAS 133 because the value of a warrant is derived
from another financial product. In reviewing paragraph 6
of SFAS 133 we believe that a warrant meets the three
specific characteristics specified. After the value of the
warrant was initially established, its fair market value
was adjusted and recorded in accordance with SFAS 115. The
fair value of warrants was $101,000 at June 30, 2002 with
none valued at June 30, 2004 and 2003. Base on the
insignificant amount in the prior years and currently no
value the note will be removed from all future filings.

Goodwill and Intangible Assets, page 31

9. Please tell us and disclose in future filings, the date of your annual
assessment of goodwill for impairment. In addition, disclose the date the
$1,199,690 write down was recorded and clarify whether or not it was
associated with the annual impairment test. Further, include all of the
disclosures required by paragraph 47 of SFAS 142, including how the fair
value of the reporting units was determined.

RESPONSE: The reference date of the Company's annual assessment of
goodwill is April 1, 2004, the first day of our fourth
quarter and we will disclose this in future filings. The
$1,199,690 write down was recorded at two different
times. As required by SFAS 142 when there is reason to
believe that the value of reporting units and of goodwill
has been diminished or impaired an interim test is
required.

o $1,000,000 impairment charge was recorded in the
quarter ended December 31, 2003. During that
quarter the Company's investment advisory
activity ceased and accordingly the goodwill
associated with the advisory business was
considered fully impaired and written off.

o $199,690 impairment charge was recorded in the
quarter ended March 31, 2004. Because of changes
in the business model associated with the
technology solutions business an interim test
was performed.

The Company estimates fair value based on a discounted cash flow model.

Technology Solutions, page 33

10. We note that you are recognizing revenue on fixed fee contract for web site
development services using a cost to cost methodology. Assuming these
service contracts are outside of the scope of SOP 81-1, a cost to cost
approach is generally not appropriate as it rarely gives a good estimate of
proportional performance. Please clarify to us why you are using an input
measure rather than an output measure such as milestones for recognizing
revenue. Refer to SAB 104.

RESPONSE: After further review of the relevant literature we
agree with staff's position. The amount of revenue
recognized related to website development is however
insignificant as compared to total revenues. Contracts
for website development range from one to six months
depending on the complexity of the site. Revenue
recognized related to website development for the year
ended June 30, 2004 was approximately $131,000 or 0.9%
of technology solutions segment revenues and 0.1% of
consolidated revenues and for the period end September
30, 2004 approximately $74,000 or 1.6% of total of
technology solutions segment revenues and 0.1% of
consolidated revenues. We will use the output measure
on a go forward basis.

Note 2 - Business Acquisitions and Discontinued Operations

Acquisitions, page 34

11. Please tell us and disclose in future filings the nature of the
relationship between MyTravel Canada and the Company before and after the
acquisition.

RESPONSE: Prior to the October 31, 2003 acquisition, Vacation
Express and SunTrips, the acquired businesses, were
customers with no other affiliations; they were both
subsidiaries of MyTravel Canada. We will disclose in
future filings the nature of the relationship before and
after the acquisition.

12. Please clarify to us and in future filings when the Acquired Companies
entered into the three-year agreement with MyTravel Canada, i.e., was it
before, after or in connection with the acquisition. In addition, clarify
whether any value was ascribed to the agreement in connection with the
acquisition, and why or why not. Is the contract a market value contract?
What consideration was given to the nature of this agreement being that of
a license?

RESPONSE: We entered the three-year agreement with MyTravel Canada
in connection with the acquisition. We will clarify this
in future filings. MyTravel wanted and the Company agreed
to this type of a structure as part of the purchase price.
The agreement does not give us the right or permission to
do specific things, thus it is not a not a license
arrangement. The agreement is a non-cancelable service
agreement, with the primary service of purchasing of hotel
accommodations. If MyTravel elects not to continue to
provide service to the Company, we have to continue to
honor the payments. We considered the discounted value of
the contract as part of the purchase consideration. We
evaluated the market value of the direct services provided
under the contract and allocated $700,000 as a fair value
and are amortizing this over three years.

13. Tell us and include in future filings all of the disclosures required by
paragraph 51 of SFAS 141 including the primary reasons for the acquisition
which result in a substantial amount of goodwill as required by paragraph
51(b). In addition, show the components of the purchase price of the
Acquired Companies as required by paragraph 51(d) of SFAS 141.

RESPONSE: The primary reason for the acquisition was it allowed the
Company to vertically integrate its travel segment. By
owning the companies rather than providing the air
charter services to them; it is the Company's belief that
the acquisition will result in the Company being able to
obtain better purchasing power and increase margins. Also
with the Company's knowledge in the Travel industry we
believe we can operate the acquired business at lower
cost level. We will disclose as required in future
filings.

In a supplemental response to us clarify why the acquisitions resulted in
such a minor amount attributed to intangible assets.

As required the Company tried to identify and recognize
as an asset apart from goodwill other intangible assets.
An important asset and a valued asset was the trained
skilled workforce in the two call centers. However for
purposes of SFAS 141, an assembled workforce shall not be
recognized as an intangible asset apart from goodwill.
Utilizing the illustrative list of intangibles that meet
the recognition criteria of an acquired intangible asset
apart from goodwill the Company did identify two other
intangible assets. We assigned a value of $440,000 to
Tradenames and $50,000 to the URL (website name). Because
the life of the two intangibles were indefinite and not
subject to amortization and because of the immaterial
amount, they were not separately disclosed but included
in a single line on the balance sheet as - Goodwill and
other intangible assets.

In addition, show the components of the purchase price of the Acquired
Companies as required by paragraph 51(d) of SFAS 141.

The acquisition footnote describes the following
components of the purchase price:

In connection with the acquisition, the Company issued a
$10 million non-interest bearing seven-year promissory
note discounted to $5.3 million at 12.00% per annum for
imputed interest (the "Promissory Note"). Additionally,
the Acquired Companies entered into a three-year agreement
with MyTravel Canada Holidays, Inc. for certain services,
including the purchasing of hotel accommodations on an
exclusive basis. MyTravel Canada will be paid
approximately $4.5 million over three years under this
agreement discounted to $3.8 million at 12.00% per annum
for imputed interest (the "Service Agreement Obligation").

Acquisition cost of $314,091 was included with the
consideration.

Summary of the above narrative:

Promissory note $5.3
Service Agreement Obligation 3.8
Acquisition cost .3
------
Total purchase price $9.4
======

We have an error, though not material, in the table in
the footnote. This will be corrected in future filings.

The purchase price was allocated to the net assets
acquired, including the liabilities assumed as of October
31, 2003, based upon their estimated fair values as of
that date with the remainder being recorded as goodwill.
The consideration, which included acquisition cost of
$314,091, was allocated as follows.

Reported Corrected

Current assets............................ $ 25,115,629 $ 25,115,629
Property and equipment.................... 628,775 628,775
Goodwill.................................. 15,050,524 15,050,524
Other intangible assets................... 702,000 702,000
-------------------- ------------------
Total assets acquired................ 41,496,928 41,496,928
Current liabilities....................... 32,646,344 32,109,197
-------------------- ------------------
Net assets acquired.................. $ 8,850,584 $ 9,387,731
==================== ==================

14. In Note 10 on page 40, you indicate that the issuance of 2,500,000 shares
of restricted common stock was in connection with the acquisition. Please
clarify to us and in future filings the relationship between the issuance
and the acquisition.

RESPONSE: The 2,500,000 shares were issued concurrently with the
acquisition and the proceeds from the issuance were used
for working capital purposes and not as part of the
acquisition of the entities. We will clarify this in
future filings.

15. Please tell us and clarify in future filings the nature of the current
liabilities you recognized from the acquisitions. If they represent
unearned income, describe how you applied the guidance of EITF 01-3.

RESPONSE: Approximately $21.5 million of liabilities assumed were
related to unearned income (customer deposits). In the
charter airline industry, customers are required to make
a deposit for their future travel. The Department of
Transportation requires these deposits be held in escrow
until the trip is complete to protect the customer.
Accordingly when we receive the deposit we credit
unearned income (customer deposits). Based on the nature
of the unearned income (i.e. refundable) EITF 01-3 does
not apply. We will clarify this in future filings.

16. What consideration did you give to including the disclosures required by
SFAS 142 related to your intangible assets?

RESPONSE: The amount of intangible assets originally recorded of
$702,000 has not been disclosed separately because of its
immaterial nature. We did however disclose in Note 6,
Goodwill and Other Intangible Assets, the cumulative
amount amortized of $156,000. We disclosed the remaining
balance of $546,000 is estimated to be amortized in 2005
at $234,000, and in 2006 at $234,000.

Discontinued Operations, page 35

17. Please clarify to us the form of your "effective 45.5% beneficial
ownership" in LFSI. In addition clarify what is meant by "restoring the
negative carrying value" and the basis in GAAP for recording a gain on
deconsolidation in the statement of operations. What consideration did you
give to recording this as an equity transaction?

RESPONSE: The ownership percentage is arrived after giving
consideration to conversion of the outstanding LFSI
Preferred Stock. The change to the equity method from the
previous method of consolidating the entity resulted in a
negative carrying value of the investment. Under equity
method of accounting you cannot reduce your carrying value
of the investment below zero; accordingly the Company
restored the carrying value to zero upon deconsolidation.
Since the effect of the deconsolidation was to restore the
negative carrying value to zero it should be recorded in
the Company's statement of operation and not as an equity
transaction.

Note 3 - Investments, page 36

18. What consideration did you give to recording an other than temporary
impairment of your investments? We note that their carrying value has
exceeded fair value for a while. Refer to EITF 03-1.

RESPONSE: See response to comment No. 2 above.

Note 6 - Goodwill and Other Intangible Assets, page 37

19. We note that you have reported the amortization of unfavorable airline
contract of $2,184,773 in 2004 as a reconciling item to arrive as cash flow
from operating activities in the statement of cash flows. Where is this
reflected in the statement of operations? In addition tell us and expand
future disclosure to clarify the origin and nature of this unfavorable
contract.

RESPONSE: The amortization of an unfavorable airline contract of
$2,184,773 in 2004 is included on the Cost of Revenues
in the Statement of Operations. It is considered a
reduction of direct air cost. As required by SFAS 141 we
evaluate all contracts, some of which have an
unfavorable result. One such contract was an airline
charter agreement which was significantly greater than
market. The Company calculated the over-value and
appropriately recorded a liability for the above market
cost. The liability is being amortized over the
remaining life of the contract, based on a specific
flying schedule. The contract ended December 31, 2004.
We will clarify this in future filings.

Note 12 - Related Party Transactions, page 44

20. We note that Robert Brooks resigned from the Company's Board of Directors
after less than four months of service. Please advise us of the nature of
any disagreements which led to his resignation.

RESPONSE: Mr. Brooks stated "due to numerous and competing time
constraints on my schedule" as his reason for resigning
and was not a result of any disagreement.

21. Please tell us and disclose in future filings how you accounted for the
shares of common stock and warrants issued to Mr. Brooks. We would assume
that any difference between the fair value of the equity issued and the
cash consideration received was accounted for as a financing cost, as
consideration for the waiver of the requirement to deliver a letter of
credit.

RESPONSE: We allocated the proceeds from Mr. Brooks between the
common stock and warrants issued. Using the Black-Scholes
option pricing model, we arrived at a value for a warrant.
We used this value and the market price of our common
stock on the day of issuance. Based on this we allocated
$0.56 to the common stock and $0.24 to the warrant. If we
deliver a $1 million letter of credit, the associated
financing cost would have been approximately $11,000. The
company considered the prescribed accounting treatment but
deemed the noted amount as immaterial.

As requested, in connection with our response to your comments, we
acknowledge that:

o the Company is responsible for the adequacy and accuracy of the
disclosure in the filings;

o staff comments or changes to disclosure in response to staff
comments so not foreclose the Commission form taking any action
with respect to the filing; and

o 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.

We believe the Company has addressed all comments of the staff. Please contact
the under signed at (701) 366-5054 if you have questions or further comments.

Very truly yours,

s/s Michael D. Pruitt

cc: Joel Mayersohn
Mark Nelson
Marc Bercoon

GUEST & COMPANY, P.C.
7170 S. Braden Ave., Suite 100
Tulsa, Oklahoma 74136-6333

- --------------------------------------------------------------------------------
INDEPENDENT AUDITORS' REPORT
- --------------------------------------------------------------------------------

To the Board of Directors
Lifestyle Innovations, Inc. and Subsidiaries
Colleyville, Texas

We have audited the accompanying consolidated balance sheets of Lifestyle
Innovations, Inc. and Subsidiaries (the Company), as of June 30, 2004 and 2003,
and the related consolidated statements of operations, stockholders' equity
(deficit) and cash flows for the years ended June 30, 2004, 2003 and 2002. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the consolidated financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Lifestyle Innovations, Inc. and Subsidiaries as of June 30, 2004 and 2003, and
the consolidated results of their operations and their consolidated cash flows
for the years ended June 30, 2004, 2003 and 2002, in conformity with accounting
principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming
the Company will continue as a going concern. As discussed in Note 1(e) to the
consolidated financial statements, the Company has a significant working capital
deficit as of June 30, 2004, and does not have sufficient cash flows to meet its
obligations currently due. In addition, the Company suffered a significant loss
in fiscal year 2004, as well as the prior two years, and has a significant
deficit in its equity section of the June 30, 2004, consolidated balance sheet.
At June 30, 2004, the Company has only one operating subsidiary with continuing
operations, and all other subsidiaries of the Company have been discontinued or
were sold in fiscal year 2004. These conditions raise substantial doubt about
the Company's ability to continue as a going concern. Management's plans in
regard to these matters are also described in Note 1(e). The consolidated
financial statements do not include any adjustments that might result from the
outcome of these uncertainties.

/s/ GUEST & COMPANY, P.C.

Tulsa, Oklahoma
October 5, 2004