SecProbe.io

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[LOGO] SofTech

August 1, 2005

Craig Wilson
Senior Assistant Chief Accountant
United States
Securities and Exchange Commission
Room 4561
Washington, D.C. 20549

Re: SEC Letter Dated July 19, 2005 of Comments on SofTech, Inc. Filings between
May 31, 2004 and April 12, 2005

Dear Mr. Wilson:

Thank you for your response dated July 19, 2005 to our correspondence. Below
please find our responses to each of the items keyed in such a manner to
correspond to the Staff's comments in that letter.

CONSOLIDATED STATEMENTS OF OPERATIONS, PAGE 24

     1)   After further consideration, we understand and agree with the Staff's
          position that SFAS 142 does not preclude us from classifying the
          amortization of capitalized software costs as a component of cost of
          revenue and that SFAS 86 is applicable accounting literature for our
          capitalized software costs. As such, the FASB Staff Implementation
          Guide, SFAS 86, Question 17 does conclude that these amortization
          costs should be classified as a component of cost of sales.

          The Staff has directed us to revise our Form 10-K for fiscal 2004 to
          reclassify these amortized costs previously classified as part of
          operating expenses to cost of revenue. Further, the Staff has directed
          us to revise our MD&A to address these reclassifications.

          The Company's Form 10-K filing for the fiscal year ended May 31, 2005
          is due August 29, 2005. The audit fieldwork has been completed and we
          are currently drafting our Form 10-K filing. We expect to file this
          report on or before the due date.

          Given the fact that the current year filing is imminent, the filing is
          expected to be timely, the agreed upon change relates to
          reclassification of expenses and has no

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          net impact on reported revenue, total expenses, net loss or cash flow,
          we respectfully request that the SEC allow for this revision of prior
          year reclassification of expenses to be dealt with as part of our Form
          10-K filing for the current year. We will disclose in our notes to the
          financial statements and in MD&A that reclassifications took place and
          will detail the changes. All future quarterly filings will likewise
          include the revised classification and a conforming reclassification
          of the prior period.

          It is management's strong belief that the effort and time required to
          revise our Form 10-K filing for fiscal 2004 and have the audit
          opinions and consents from our current and predecessor independent
          accountants reissued would be an undue burden and an unjustified cost
          given the very limited impact that the reclassification might have on
          the theoretical investor.

FORM 8-K FILED AUGUST 31, 2004, OCTOBER 15, 2004, JANUARY 6, 2005 AND APRIL 12,
2005

     2)   We accept the SEC's position that our earnings press releases do not
          adequately explain management's use of non-GAAP measures in our
          analysis of results and we accept that the information is not self
          evident. We propose the following disclosure in our future earnings
          press releases.

          "The Company's revenue is derived almost entirely from technology
          acquisitions completed between 1997 and 2002. As a result, management
          believes the Company's financial profile is very unique, at least in
          the industry in which it operates. Approximately 80% of its assets are
          composed of intangible assets related to these acquisitions. The
          amortization of these intangible assets is approximately 18% of its
          total expenses and 21% of its revenue. Further, the periods over which
          these intangible costs are expensed are highly judgmental and not
          subject to adjustment in the event whereby a shorter period of
          amortization was estimated at the acquisition date than was justified
          by actual experience.

          It is management's opinion that comparing results of operations from
          period to period and to other companies in our industry absent these
          non-cash expenses related to acquisitions is a more meaningful measure
          of our performance given the Company's unique financial profile
          detailed above. It is also management's belief that this Non-GAAP
          measure of performance is one of the most critical measures of Company
          valuation for investors. Lastly, this measure of performance has been,
          and is expected to continue to be, a significant component of the
          incentive compensation plan for the Company's President."

     3)   In our press releases we consistently provided two Non-GAAP
          adjustments to our GAAP net loss. We have also consistently provided a
          reconciling table that starts with the GAAP net loss subtracts
          non-cash amortization related to acquisitions to derive a result
          identified as "Pro Forma Net Income". We provide further information
          by adding non-cash depreciation and subtracting capital expenditures
          to derive a sum identified as "Free Cash Flow". In the past, it was
          management's belief that the additional information regarding
          depreciation and capital expenditures

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          was important to investors in that our depreciation expense was
          significantly higher than our required capital investment in new
          equipment. This was due to the fact that our facilities were
          dramatically consolidated subsequent to the end of fiscal year 2001
          and the replacement cost of computer equipment had decreased
          significantly. Given that "Free Cash Flow" is not materially different
          now than the measure previously identified as "Pro Forma Net Income",
          we propose deleting the reference to Free Cash Flow in all future
          earnings press releases.

     4)   The SEC has concluded that the use of the term "pro forma" to describe
          our Non-GAAP measure of performance discussed above in response to
          item 2 is not appropriate. The SEC has directed that in future
          earnings releases we instead identify such measures as "non-GAAP
          financial measures". We agree to revise future disclosures
          accordingly.

I can be reached at (781)890-8373 or by e-mail at JMULLANEY@SOFTECH.COM if you
require any additional information or would like to discuss further.

We acknowledge that the Company is responsible for the adequacy and accuracy of
the disclosure in the filing. We understand that 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. 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.

Sincerely,

/s/Joseph P. Mullaney

Joseph P. Mullaney
President
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