SecProbe.io

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                        [ADVANCE NANOTECH INC LETTERHEAD]

August 25, 2005

VIA MAIL & FACSIMILE:  (202) 772-9205

Al Rodriguez
Securities and Exchange Commission
Division of Corporation Finance
100 F Street, N.E. - Office 3536 - Mail Stop 0407
Washington, DC 20549

Re: SEC Comment Letter Dated June 22, 2005.

Dear Mr. Rodriguez:

We have received the above referenced comment letter from you via Fax on June
22, 2005. In response to your queries, we provide the following responses:

Form 10-KSB for the year ended December 31, 2004
------------------------------------------------

Report of independent accountants, page F-2
-------------------------------------------

1.    Ask your independent accountants to revise their report to disclose the
      city and state where they issued the report.

Our auditors, Hall & Company, Certified Public Accountants and Consultants,
Inc., did disclose the city and state where they issued the report on their
company letterhead. However, after the report was prepared for filing, the city
and state was inadvertently omitted. They will amend their signature to include
the city and state in future filings. We will file a Form 10KSB/A for December
31, 2004 to include this change.

Form 10-QSB for fiscal quarter ended March 31, 2005
---------------------------------------------------

Note 4: Stock Transactions
--------------------------

2.    We note your disclosure of warrants being issued to investors and
      placement agents to purchase shares of your common stock at $3.00 and
      $2.00 per share, respectively. It appears to us that no value has been
      attached to the warrants. Addressing relevant guidance tell us how you
      accounted for the issuance of these warrants.

As per FAS 123, we will use the Black-Scholes model to calculate the value of
the referenced warrants going forward. We have calculated a valuation for these
warrants on the basis of our external auditor's advice, especially with regard
to the assumptions we used in the model. In reaching the conclusion regarding
the Equity classification for the Warrants (i.e., written call options), we
applied EITF 00-19, "Accounting for Derivative Financial Instruments Indexed to,
and Potentially Settled in, a Company's Own Stock".

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Specifically, the Company issued the Warrants in connection with its equity
offering and the warrant agreement requires physical settlement of the contract
with common shares when exercised. In addition, the contracts/warrants appear to
have met the additional conditions necessary as described in paragraphs 12 -32
of EITF 00-19.

Subject to your comment, we will add the following footnote to our Form 10QSB/A
for March 31, 2005:

      "In March 2005, the Company completed its private placement of 11,778,650
      shares of its common stock for aggregate gross proceeds of $23,557,300.
      Net proceeds from the transaction, after issuance costs and placement
      fees, were $20,805,610. In connection with this transaction, the Company
      also issued one warrant to purchase one share of common stock to each
      investor for every two shares of common stock purchased in the private
      placement resulting in an aggregate of 5,889,325 warrants ("Investor
      Warrants") being issued to investor at an exercise price of $3.00 per
      share. The Company also issued warrants to the placement agent ("Agent
      Warrants") to purchase 984,866 shares of its common stock at $2.00 per
      share. The shares and the warrants were sold by the Company to the
      investors on the terms and conditions set forth in the Securities Purchase
      Agreement filed as Exhibit 10.10 in a Current Report on Form 8-K filed on
      March 4, 2005, which is specifically incorporated herein by reference. The
      fair value of the Investor Warrants was estimated at $19,626,913 using the
      Black-Scholes option pricing model with the following assumptions: no
      dividend, risk-free interest rate of 3.5%, the contractual life of 3 years
      and volatility of 30%. The fair value of the Agent Warrants was estimated
      at $4,256,164 using the Black-Scholes option pricing model with the
      following assumptions: no dividend, risk-free interest rate of 3.5%, the
      contractual life of 5 years and volatility of 30%. The fair value of the
      Agent Warrants was considered to be additional placement fees and has been
      offset against additional paid in capital."

3.    We note that you issued common stock in private placement transactions at
      prices significantly lower than your trading prices at the date of the
      issuances. Tell us about the reasons of the significant discrepancies.

We recognize that common stock was issued in private placement transactions at
prices significantly lower than the trading prices of our common stock at the
dates of issuance. This common stock was issued at the price we were able to
obtain in negotiated transactions with unrelated third party investors in the
placement. Investors with whom we negotiated did not feel that the market price
of the common stock in a thinly traded market was indicative of the appropriate
price for their investment. Investors also noted that the previous investment in
the Company had been made at $1.00 per share, and appeared to believe that was a
more relevant benchmark than the then-current trading price of our common stock.

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Item 3. Controls and Procedures
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4.    We note that you use a definition of disclosure controls and procedures
      that differs from the one provided in Rule 13a-15(e) of the Exchange Act.
      Please revise to disclose that your disclosure controls and procedures are
      effective in ensuring that (i) information required to be disclosed in the
      reports that you file or submit under the Exchange Act is recorded,
      processed, summarized and reported, within the time periods specified in
      the Commission's rules and forms, and (ii) information required to be
      disclosed in the reports that you file or submit under the Exchange Act is
      accumulated and communicated to management, including your principal
      executive and principal financial officers, or persons performing similar
      functions, as appropriate to allow timely decisions regarding required
      disclosure. See Rule 13a-15(e) of the Exchange Act. Alternatively, if
      true, you may simply state that your disclosure controls and procedures
      are effective.

Our disclosure and controls are effective as stated in Form 10QSB for fiscal
quarter ended March 31, 2005. However, in future filings, including our most
recently filed 10-QSB for quarter ending June 30, 2005, we intend to use the
following control language:

"As of the end of the period covered by this report, the Company carried out an
evaluation, under the supervision and with the participation of the Company's
management, including the Company's Chief Executive Officer and the Company's
Chief Financial Officer, of the effectiveness of the design and operation of the
Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and
15d-15(e) under the Securities Exchange Act of 1934, as amended). Based on this
evaluation, the Company's Chief Executive Officer and Chief Financial Officer
concluded that the Company's disclosure controls and procedures were effective
in ensuring that (i) information required to be disclosed in the reports that
the Company files or submits under the Securities Exchange Act of 1934, as
amended, is recorded, processed, summarized and reported, within the time
periods specified in the rules and forms of the Securities and Exchange
Commission and (ii) information required to be disclosed in the reports the
Company files or submits under the Securities Exchange Act of 1934, as amended,
is accumulated and communicated to management, including the Company's Chief
Executive Officer and Chief Financial Officer, or persons performing similar
functions, as appropriate to allow timely decisions regarding required
disclosure."

In addition to the above response, this is to certify that I acknowledge the
following:

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

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      o     Staff comments or changes to disclosure in response to staff
            comments do not foreclose the Commission from taking any action with
            respect to the filings; 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.

Sincerely yours,

Linden J. Boyne
Chief Financial Officer
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