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Proc-Type: 2001,MIC-CLEAR
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<SEC-DOCUMENT>0001193125-07-158371.txt : 20080324
<SEC-HEADER>0001193125-07-158371.hdr.sgml : 20080324
<ACCEPTANCE-DATETIME>20070719202714
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0001193125-07-158371
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20070719

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			Advanced Growing Systems, Inc.
		CENTRAL INDEX KEY:			0001369608
		STANDARD INDUSTRIAL CLASSIFICATION:	WHOLESALE-MISCELLANEOUS NONDURABLE GOODS [5190]
		IRS NUMBER:				204281128
		STATE OF INCORPORATION:			NV
		FISCAL YEAR END:			0930

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		3050 ROYAL BOULEVARD SOUTH
		STREET 2:		SUITE 135
		CITY:			ALPHARETTA
		STATE:			GA
		ZIP:			30022
		BUSINESS PHONE:		678-387-5061

	MAIL ADDRESS:	
		STREET 1:		3050 ROYAL BOULEVARD SOUTH
		STREET 2:		SUITE 135
		CITY:			ALPHARETTA
		STATE:			GA
		ZIP:			30022

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	Advanced Growing Systems, Inc.
		DATE OF NAME CHANGE:	20070301

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	Advanced Growing Systems Inc
		DATE OF NAME CHANGE:	20060720
</SEC-HEADER>
<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.htm
<TEXT>
<HTML><HEAD>
<TITLE>Correspondence Letter</TITLE>
</HEAD>
 <BODY BGCOLOR="WHITE">

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B><I>ADVANCED GROWING SYSTEMS, INC. </I></B></FONT></P> <P
STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="50%"></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD WIDTH="48%"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2"><B><I>c/oLyle J. Mortensen CPA</I></B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2"><B><I>Telephone (817) 416-2533</I></B></FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2"><B><I>230 N. Park Blvd., Suite 106</I></B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2"><B><I>Facsimile (817) 416-2535</I></B></FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2"><B><I>Grapevine, Texas 76051</I></B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2"><B><I>email <U>lylemort@aol.com</U></I></B></FONT></TD></TR>
</TABLE><HR SIZE="1" NOSHADE COLOR="#000000" ALIGN="left"> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">June&nbsp;28, 2007 </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Securities and Exchange Commission </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Attention: Anita Karu </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">100 F. Street, N.E. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Washington, D.C. 20549 </FONT></P> <P
STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">Re:</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Advanced Growing Systems, inc. </FONT></TD></TR></TABLE> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Form 10-SB, File No.
0-52572 </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Dear Mr.&nbsp;Owings; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">We are in
receipt of your correspondence dated May&nbsp;17, 2007, with respect to the above-referenced filing. For your review, we have filed a copy of an amended registration statement that has been marked to indicate where appropriate changes have been
made. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B><U>General </U></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B>1.</B> We
acknowledge that our registration statement will automatically become effective on June&nbsp;18, 2007. We understand and agree to become subject to the reporting requirements of the Securities Exchange Act of 1934. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B>2.</B> The Company has prepared the financial statements and related disclosures through March&nbsp;31, 2007 and those financial statements are
included in the amended registration statement. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Part I </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman"
SIZE="2"><B><U>Item I. Description of Business, page 1 </U></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Q3.</B> Your disclosure is not clear as to your structure, how long you have actually
been in business and the extent of your activities and principal sources of revenue. For example, you state ANI is a wholesale group of commercial nurseries located in the Southeastern US, but you do not specifically identify them or their locations
in your description of business nor explain how they are operated. You imply OGSI created a scientifically-based organic fertilizer, but you do not explain how and when this was done. You state that AGWS provides executive management, accounting,
sales and marketing support for its two subsidiary companies, yet you do not describe how and by whom these services are provided. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">These are just a few
examples. Please generally revise your description of business to describe in reasonable detail your current business, activities, products, methods of distribution, sources and availability of raw materials, etc, See item 101 of Reg. S-B.
</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>A3.</B> We have noted your comments and revised to include additional disclosures. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Q4.</B> Your disclosure also contains a significant amount of unsubstantiated language such as &#147;scientifically advanced&#148; organic fertilizer manufacturer on
page 2, &#147;unique&#148; organic chemical manufacturing process on page 5 and &#147;massive&#148; experience on page 13. Please generally review your document to remove language of this nature. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>A4.</B> We have noted your comments and where appropriate we have revised our language in order to removed unsubstantiated language. </FONT></P> <P
STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B><U>Risk Factors, page 1 </U></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Q5.</B> Please delete the first
clause in the first sentence, as it mitigates the risk that your forward-looking statements may not prove to have been correct. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>A5.</B> Deleted.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Q6.</B> The third sentence in the first paragraph of this section and the first sentence in the second paragraph imply that you are not setting forth
the material risks involved in your business. Please set them forth and revise these sentences as necessary to remove this implication. Also revise similar language elsewhere in your document. See, for example, the last sentence in the first
paragraph on Page 6. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>A6.</B> Revised as requested. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman"
SIZE="2"><B>Q7.</B> Please clearly and concisely describe your material risks. Do not include risks that could apply equally to other businesses that are similarly situated and are generic in nature. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>A7.</B> We have deleted those risk factors that are general in nature and revised or expanded others as applicable to the Company. </FONT></P> <P
STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B><U>Business Development, page 1 </U></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Q8. </B>In the first
paragraph on page 2 you state &#147;AGWS is directly involved in the $413 billion fertilizer market and the $66 billion Green Industry.&#148; This statement is inappropriate given your limited operations and minimal impact on either industry. Please
delete here and elsewhere in your document.<B> </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>A8.</B> This paragraph has been revised. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Q9.</B> You also state that &#147;AGWS was founded by a skilled group of industry professionals each with over 20 years of direct experience in the &#147;Green&#148;
industry.&#148; This is not apparent from the biographies of your executive officers and directors. Please delete or provide further detail. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>A9.</B>
Revised &#150; see employment contracts as exhibits. </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B><U>Principal Products and Services, page 2 </U></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2"><B>Q10.</B> Please explain how &#147;the company is positioned to take advantage of the massive &#147;southern migration&#148; currently happening as baby boomers relocate from the Northeastern seaboard to the
Southern United States.&#148; In addition, provide support appropriately notated substantiating this migration. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>A10.</B> Additional information has
been added from Census information and specific locations of the existing facilities. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Q11.</B> Please provide support for your claim that ANI is a key
supplier for several of the largest landscape contractors in the nation. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>A11.</B> We changed the language to read from in the <U>nation to in the
region.</U> </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Q12.</B> Please describe the distribution channels and end-user base of AN1 and OGSI. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>A12. </B>We have revised to include the distribution channels and end-user base of ANI and OGSI. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2"><B>Q13.</B> Explain in every day language references to industry jargon such as &#147;base poultry litter.&#148; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>A13.
</B>The language has been changed as requested to everyday references. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Q14.</B> Your reference to being positioned to take advantage of &#133;
consumers, increasing desire for organic foods, safe drinking water and the ever-increasing health costs directly associated with &#147;synthetic chemistry&#148; appears inappropriate given the limited time you have been in business. Please delete.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>A14.</B> We have deleted the requested sentences. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman"
SIZE="2"><B><U>Our Principal Competitive Strengths, page 2 </U></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Q15.</B> Given your short time in business, references to becoming a dominant player
in your industry are inappropriate. Please delete here and elsewhere. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>A15.</B> These references have been deleted as requested. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Q16.</B> Please state the size of your &#147;large customer base&#148; and how it compares to your direct competition. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>A16.</B> We have included information that shows over five hundred (500)&nbsp;active contractors purchase from all combined locations. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Q17.</B> Please state precisely how long you have been engaged in business and indicate your net losses rather than your net sales. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>A17</B>. We have revised our information to show our inception of business was February&nbsp;2, 2006. We have further revised to show our loss for the eight months
ended September&nbsp;30, 2006 was $534,170. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Q18.</B> Please describe your &#147;strong equity base&#148; and provide support for &#147;strong
shareholder support.&#148; We note that as of February&nbsp;28, 2007 you had approximately 70 holders of record and your officers and directors control a significant portion of your common stock. </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>A18.</B> We have deleted the language referenced in the above question. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Q19.</B> Please describe the provisions for converting debt incurred to equity. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman"
SIZE="2"><B>A19.</B> We have included additional comments describing the conditions of conversion of debt to common stock in the Company. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Q20.</B>
Please describe the debt incurred in acquiring your manufacturing facility in March 2007. Also state when and how you will provide quantity and quality controls for the products manufactured. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>A20.</B> We have inserted a description of the purchase price and the other requested information for the above referenced question. </FONT></P> <P
STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B><U>Our Growth Strategies, page 2 </U></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Q21.</B> Please specifically
explain each of your growth strategies, how and when you intend to achieve them, and describe the funds required for each of these goals. We may have further comments. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2"><B>A21.</B> Revisions included in Our Growth Strategies, page 3. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B><U>Targeted Markets, page 3 </U></B></FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Q22.</B> Given your short time in business, references to total market size are inappropriate. Please delete. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>A22.</B> We have deleted some parts and modified others. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman"
SIZE="2"><B><U>Competition, page 4 </U></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B><U>Advanced Nurseries, Inc. </U></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2"><B>Q23.</B> The reference in the first sentence to &#147;local brands and Fortune 500 entities (ie. John Deere)&#148; is unclear. Please explain. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2"><B>A23.</B> We have revised this section in order to make clear &#147;local brands.&#148; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Q24.</B> Delete the second
and third sentences or provide additional detail substantiating the claims. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>A24.</B> We have deleted and provided additional detail as requested.
</FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B><U>Organic Growing Systems, Inc. </U></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Q25.
</B>Please provide support for management&#146;s opinion expressed in the second sentence. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>A25. </B>We have deleted this opinion. </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Q26. </B>Please revise the statement that &#147;society&#146;s losses are self-evident...&#148; and provide instead
supportable data. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>A26</B>. As requested it has been deleted and revised. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2"><B>Q27.</B> The first sentence in the second paragraph refers to your &#147;scientific research efforts,&#148; yet you have not described any. Please advise or revise. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>A27.</B> As requested this sentence has been deleted and parts revised. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman"
SIZE="2"><B>Q28.</B> Revise the second sentence to provide a description of your support and the basis for your claim. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>A28.</B> We have amended.
</FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B><U>Patents. Trademarks. Licenses. Franchises, Royalty Agreements, page 5 </U></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2"><B>Q29.</B> We note the reference to your chemical manufacturing process. Please describe it here or elsewhere in your description of business. Delete &#147;unique&#148; or provide further supporting detail.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>A29.</B> Please see the new description. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman"
SIZE="2"><B><U>Employees, page 5 </U></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Q30.</B> Please specifically indicate the states where your employees are employed and eliminate
&#147;nationwide.&#148; Also describe the number of employees serving in the various capacities, such as nurserymen, scientists, engineers, etc. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman"
SIZE="2"><B>A30.</B> Revised as requested. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B><U>Regulatory Mandates, page 5 </U></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2"><B>Q31</B>. Please explain the statement that &#147;currently all products and/or licenses are secured prior to shipments of inventory items.&#148; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2"><B>A31.</B> Revised. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Q32.</B> Please describe more clearly the need for any government approval of your principal
products or services, particularly with respect to your organic fertilizer facility and TOP Organic Fertilizer. Discuss the costs and effects of compliance with environmental laws (federal, state and local). </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>A32.</B> Revised. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Q33.</B> Please explain what tests were conducted
by Environmental Management Services, Inc. Describe that entity, its qualifications and whether it is an independent third party. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>A33</B>. Revised.
</FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><U>Reports to Security Holders, page 5 </U></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Q34</B>.
Please revise our zip code to refer to 20549, not 20002. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>A34.</B> As requested. </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B><U>Item&nbsp;2 Management&#146;s Discussion and Analysis or Plan of Operation, page 6 </U></B></FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Q35.</B> Please discuss the operations of the facility acquired from Agreaux in your description of Business. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>A35.</B> The operations of the facility have been described. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman"
SIZE="2"><B>Q36.</B> Please explain the statement that &#147;developers, contractors, growers, specialty retailers, etc have shown interest in OGSI products. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman"
SIZE="2"><B>A36.</B> Deleted. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Q37</B>. Please describe the tests by Dr.&nbsp;Bill Evans, Mississippi State University, as well as the ongoing testing
by Joe Bradford of the USDA. Please explain the objectives of those tests, their results and whether these individuals are independent third parties. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman"
SIZE="2"><B>A37.</B> Revised. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Q38.</B> Please describe the changes OGSI&#146;s engineering team is planning for the fertilizer facility and the cost
and financing of these changes. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>A38.</B> See revision and new information stated in the revisions. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Q39</B>. Please identify the private investment banking firm you refer to in the penultimate paragraph on page 6. Identify the private investment company you refer to
in the second paragraph on page 7. Describe any affiliation of those firms with your officers or directors. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>A39. </B>See revisions. TBeck Capital,
Inc., is the private investment banking firm and Vision Opportunity Master Investment Fund, Ltd., is the private investment company. In addition other sales occurring after the March&nbsp;31, 2007 quarter end is also described. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Q40.</B> In light of the losses you have incurred inception to date, please discuss the positive evidence that supports your determination not to record a valuation
allowance for any portion of your net operating loss carryforwards. Refer, for guidance, to paragraphs 20-25 of SFAS 109. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>A40.</B> See additional
discussion under Management&#146;s Discussion and Analysis of Financial Condition and Results of Operations. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B><U>Item&nbsp;4. Security Ownership of
Certain Beneficial Owners and Management, page 11 </U></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Q41.</B> Please indicate, by footnotes to the tables or otherwise, the amount of shares with
respect to which the beneficial owners shown have the right to acquire beneficial ownership as specified in Exchange Act Rule 13d-3(d)(1). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>A41.</B>
Footnote added and percentage changed for ownership changes. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B><U>Item&nbsp;6. Executive Compensation. page 14 </U></B></FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Q42.</B> The amounts of salary shown for the officers listed in your Summary Compensation Table do not appear consistent with the disclosure under Employment
Agreements on page 15. Please reconcile. </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>A42.</B> The amounts under the table for executive compensation are for the amounts paid during the calendar year
ended 12-31-06. Full salary was not paid since the corporation was only in existence since February&nbsp;2, 2006. Chris Nichols received a reduced amount during the year as he was transitioning from another employer to AGSI as a full time employee.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Q43.</B> In view of the stock issuances to Mr.&nbsp;Hammond and Dr.&nbsp;Reiner within 10 days of the execution of their employment agreements and the
issuance of founder&#146;s stock to Dr.&nbsp;Reiner, it is unclear why the awards are not reflected in your Summary Compensation Table. Please revise or advise us why you do not believe it is appropriate. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>A43.</B> Revised to include compensation for founders stock issued at time of employment and organization of the Company. It was considered minimal value as the
Company had no operations at the time of issue. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Q44.</B> We note your caption &#147;Changes in Pension Value and...&#148; in the Summary Compensation
Table and the Directors Compensation table follows the format set forth in Regulation S-K and not Regulation S-B. In future filings please revise. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman"
SIZE="2"><B>A44</B>. Noted and will be revised in future filings. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B><U>Employment Agreements, page 15 </U></B></FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Q45.</B> In connection with the employment agreements of Messrs. Hammond and Reiner, you refer to &#147;monthly base pay&#148; although it appears the information is
on an annual basis, please revise the third sentence to refer to &#147;base pay&#148; or advise us. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>A45.</B> Revised to show Annual Salary. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B><U>December&nbsp;31 Director Compensation Table page 17 </U></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman"
SIZE="2"><B>Q46.</B> Please revise to show the director&#146;s compensation paid to Messrs. Nichols, Reiner and Hammond. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>A46.</B> Directors&#146;
compensation was revised to indicate that no director compensation is paid to the employees, Chris Nichols, Martin Reiner and Jon Hammond. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Q47.</B>
Please indicate by footnote the aggregate number of stock awards made to each of Messrs. Cowan and Riegler. See the instructions to Item&nbsp;402(f)(2)(iii) of Regulation S-B. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2"><B>A47</B>. See additional comments under Director Compensation. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B><U>December&nbsp;31 Potential Payments Upon
Termination or Change in Control Table, page 18 </U></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Q48.</B> The significance of the column captioned &#147;Benefit&#148; is unclear. Please revise
or advise us. </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>A48</B>. Revised </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman"
SIZE="2"><B><U>Item&nbsp;7. Certain Relationships and Related Transactions and Director </U></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B><U>Independence, page 18 </U></B></FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Q49.</B> We note that TBECK Capital, Inc., a shareholder of the company, in December of 2006 agreed to lend the company up to $750,000 as additional working capital on
a convertible promissory note. Please advise us if the ownership of TBECK Capital, Inc. is an affiliated party, In addition, provide the terms of the note.<B> </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman"
SIZE="2"><B>A49</B>. See Additional Disclosures indicated in item 7.Certain Relationships and Related Transactions. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Q50.</B> Please tell us the
conversion ratio of the convertible promissory note end whether it is dependent on the market price of the stock at the time of conversion. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>A50</B>.<B>
See Additional Disclosures indicated in item 7. Certain Relationships and Related Transactions.</B> </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Q51.</B> Please state whether the terms of your
related party transactions are on terms comparable to those available from unaffiliated third parties. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>A51. </B>See Additional Disclosures indicated in
item 7. Certain Relationships and Related Transactions. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B><U>Item&nbsp;8. Description of Securities, page 18 </U></B></FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B><U>Share Purchase Warrants, page 19 </U></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Q52.</B> Please update the
table through the most recent practicable date, as it appears that you recently Issued a significant number of additional warrants </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>A52</B>. Stock
Warrant Schedule is updated for additional warrants issued. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Q53.</B> It is unclear whether the promissory note with an expiration date of
December&nbsp;20, 2011 you refer to on page 19 is the note you discuss on page 6 which appears to have an expiration date of December&nbsp;31, 2010, Please advise or revise. Please ensure that your disclosure is consistent throughout your filing.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>A53.</B> The promissory note does have an expiration date of December&nbsp;31, 2010. There does appear to be inconsistencies in the promissory note.
However, the warrant that is attached is exercisable for a period of five (5)&nbsp;years from the date of the note. The warrant would expire on December&nbsp;20, 2011. The inconsistency in the promissory note does not appear to be a problem since
the Company, under the terms of the note, plans to convert the promissory note to preferred stock in the quarter ending June&nbsp;30, 2007. </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Part II </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman"
SIZE="2"><B><U>Item&nbsp;1. Market Price of and Dividends on the Registrant&#146;s Common Equity and Related Stockholder Matters, page 20 </U></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Q
54</B>. Please address the following with respect to your market price table: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TR>
<TD WIDTH="9%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">Tell us and disclose what the market price data prior to June 2006 represents as it is our understanding that your initial quotation on the pink sheets was in June
2006. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TR>
<TD WIDTH="9%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">Revise the line items in the table to coincide with your quarterly and annual fiscal periods. For example, October-December 2006 should be presented as the first
fiscal quarter of 2007, rather than the fourth fiscal quarter of 2006. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="9%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">We assume your reference to a 1 for 10,000 reverse stock split on June&nbsp;22, 2006 is a clerical error that should refer to the 10,000 for 1 stock spilt on
June&nbsp;20, 2006 that you discuss in note B to your financial statements. If this assumption is incorrect, please advice. Otherwise revise your disclosure to clarify and ensure consistency. </FONT></P></TD></TR></TABLE> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>A54</B>. Prior quotes were for the public company into which AGWS was merged prior to trading under the symbol AGWS. The Table has been revised to coincide with the
Company&#146;s fiscal year. The disclosure of a 10,000 for 1 has been changed to read 1 for 10,000 stock split. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B><U>Item&nbsp;2. Legal Proceeding, page
20 </U></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Q55.</B> Please advise the staff of any legal proceedings currently pending against Lyle Mortensen or any of his affiliates. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>A55</B>. Legal proceedings have been disclosed. Nothing against the Company, but one case disclosed against Aritex Consultants, Inc. and Lyle J. Mortensen.
Mr.&nbsp;Mortensen&#146;s position is that it is without merit and has no impact on the Company or any of its other Officers and Directors. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman"
SIZE="2"><B><U>Item&nbsp;4. Recent Sales of Unregistered Securities. page 21 </U></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Q56.</B> We note by reference to the Series A Convertible Preferred
Stock Purchase Agreement filed as Exhibit 10.1 that you sold 3,000,000 shares of preferred stock on March&nbsp;9, 2007. As such, please revise your disclosure to indicate the sale of 3,000,000 rather than 300,000 shares. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>A56</B>. Revised and updated for additional preferred stock sales </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman"
SIZE="2"><B>Q57</B>. Please provide with respect to each of the issuances you describe the section of the Securities Act or the rule of the Commission under which you claimed exemption from registration and the facts relied upon to make the
exemption available, See Item&nbsp;701(d) of Regulation S-B. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>A57.</B> Please see the additional wording on the exemption relied upon for the sales of
unregistered securities. </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B><U>Financial Statements </U></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman"
SIZE="2"><B><U>Consolidated Audited Financial Statements. Page F-1 </U></B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B><U>Consolidated Statement of Stockholders&#146; Equity, page F-5
</U></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Q58.</B> Reference is made to your disclosure on page 15 regarding shares of common stock issued to executive officers Hammond and Reiner in
connection with entering into employment agreements with these individuals. It does not appear that these issuances are reflected in your statement of stockholders equity. statement of operations, or executive compensation table. Please advise and
tell us and disclose the terms of and how you are accounting for these stock grants. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>A58.</B> The stock issued to both Hammond and Reiner was issued to
them in connection with the formation of the subsidiaries in the private company prior to the merger and reorganization. The stock was issued to them at par and the charge was to the expenses in the subsidiary corporation. Their interest in the
subsidiaries is accounted for as a minority interest and shown separately in the Balance Sheet. The executive compensation table has been revised to reflect this stock grant. $1,000 was attributable to the stock in ANI for Jon Hammond and $500
attributable to Martin Reiner for his share in the OGSI subsidiary. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B><U>Consolidated Statement of Cash Flows, page F-6 </U></B></FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Q59</B>. Please disclose the amount of interest paid during each period presented. Refer to paragraph 29 of SFAS 95. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>A59 </B>Interest was accrued, but not paid as of the period ended September&nbsp;30, 2006 and therefore no interest paid was disclosed. Additional line indicating $ 0
interest paid for the year end September&nbsp;30, 2006 and a line is included in the financial statements for March&nbsp;31, 2007 indicating the amount of cash paid for interest expense. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2"><B><U>Note: 3 &#150; Summary of Significant Accounting Policies, page F-8 </U></B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B><U>Property and Equipment, page F-8
</U></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Q60.</B> We note your disclosure that leasehold improvements are amortized on a straight-line basis over the lease terms, including the options
to renew. Please revise your disclosure to clarify, if true, that leasehold improvements are amortized over the lesser of the asset&#146;s useful life or the lease term, with the lease tents including only these renewal periods that are reasonably
assured. Refer, by analogy, to paragraph 11. b. of SFAS 13. Refer also to paragraphs 5.f. and 5.0. of SFAS 13 and EITF 05-6. Similarly, we note your disclosure in note 10 that rent expense is recorded using the straight-line method over the initial
lease term. Please revise this disclosure to clarify, if true, that rent expanse is recorded using the straight-line method over the lease term as defined in paragraph 5.f of SFAS 13. If your accounting policies are inconsistent with the guidance in
SFAS 13, please advise. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>A60</B>. Revised disclosure. </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B><U>Minority Interest page F-9 </U></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2"><B>Q61.</B> Please tell us and revise your disclosure to clarify how executive officers Hammond and Reiner and former executive officer Musgrove acquired their respective minority interests in your subsidiaries, For
example, tell us whether the subsidiary stock was issued to the executives pursuant to employee compensation arrangements or whether the shares represent founders stock. If the former, please tell us how compensation expense is reflected in your
financial statements. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>A61. </B>Revised disclosure &#150; see addition to footnote. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2"><B><U>Earnings Per Common Stock, page F-10 </U></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Q62.</B> Please disclose the number of securities that could
potentially dilute basics EPS in the future that were not included in the computation of diluted earnings per share because to do so would have been antidilutive for the period presented. Ensure you consider those shares issuable upon conversion of
outstanding notes. See paragraph 40.c. of SFAS 12E. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>A62</B>. See additional paragraph for note 3 of the consolidated financial statements. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B><U>Note 5 &#150; Notes Payable. page F-10 </U></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Q63</B>. Please
revise your disclosure to clarify whether the convertible notes are convertible any time at the discretion of the holder or whether conversion is contingent on the occurrence of the specified conversion events. Also disclose whether interest on the
notes is payable in kind through the issuance of additional convertible instruments, and if so, whether payment in kind is required or at the holder&#146;s or your discretion. Disclose how you account for paid-in-kind interest, as applicable. Refer
to EITF 98-5 and Issue 10 of EITF 00-27. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>A63</B>. See additional paragraph for note 3 of the consolidated financial statements. </FONT></P> <P
STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B><U>Note 8 &#150; Shareholders Equity, page F-12 </U></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Q64.</B> As
the merger and stock split did not result in proceeds of $880,000, it appears you misplaced the last sentence of the first paragraph of this note. Please revise or advise. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2"><B>A64</B>. Revised &#150; see deletion and insertion for the second paragraph. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B><U>Consolidated Balance Sheets page
F-16 </U></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Q65.</B> Please disclose the terms and amounts of all significant new borrowings that occurred subsequent to your fiscal year end. Refer to
the instructions to Item&nbsp;310(b) of Regulation S-B, for convertible note issuance, also disclose: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TR>
<TD WIDTH="9%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">How you accounted for the notes </FONT></P></TD></TR></TABLE>

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<TR>
<TD WIDTH="9%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">The amount of debt issue discount and how you computed the amounts; </FONT></P></TD></TR></TABLE> <P
STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="9%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">The assumptions used in valuing detachable warrants, including the assumed market price of the underlying stock; and </FONT></P></TD></TR></TABLE> <P
STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="9%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">Whether the instruments contain a beneficial conversion feature under ETIFs 98-5 and 00-27, and how you arrived at your conclusion. </FONT></P></TD></TR></TABLE> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>A65. </B>See revised financial statements for the six months ended March&nbsp;31, 2007. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2"><B><U>Note 5 &#150; Subsequent Events, page F-20 </U></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Q66.</B> Please tell us and disclose the terms of and how you
accounted for the February 2007 issuance of restricted stock to your Chief Financial Officer (via Artitex Consultants, Inc.). Also tell us how your accounting is consistent with the guidance in paragraphs 39 through 42 and A79 through A85 of SFAS
123R. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>A66. </B>See revised financial statements for the six months ended March&nbsp;31, 2007. </FONT></P> <P
STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B><U>Items 1 and 2. Index to Exhibits and Description of Exhibits page 22 </U></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman"
SIZE="2"><B>Q67</B>. It does not appear you have filed any of the exhibits required by Item&nbsp;601 of Regulation S-B. For example, it does not appear you have filed the debt agreements entered into during the year ended September&nbsp;30, 2006 and
on December&nbsp;20, 2006; the employment agreements discussed on page 15, etc. Please revise. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>A67. </B>Additional exhibits included see Index of
Exhibits. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">The company acknowledging that: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="5%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">The Company is responsible for the adequacy and accuracy of the disclosure in the filling; </FONT></P></TD></TR></TABLE> <P
STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="5%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">Staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and
</FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="5%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">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. </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Respectfully submitted, </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Lyle J.
Mortensen CFO </FONT></P>
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