SecProbe.io

<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.txt
<TEXT>
                                  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.

                                       1
<PAGE>

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.

                                       2
<PAGE>

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.

                                       3
<PAGE>

                        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.

                                       4
<PAGE>

                        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.

                                       5
<PAGE>

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 agree