SecProbe.io

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

                                 LAW OFFICES OF
                   EHMANN, VAN DENBERGH, TRAINOR & SCOTT, P.C.

TWO PENN CENTER PLAZA, SUITE 220                    TELEPHONE:  (215) 851-9800
1500 JOHN F. KENNEDY BOULEVARD                          DIRECT DIAL:  EXT. 222
PHILADELPHIA, PENNSYLVANIA 19102                          FAX:  (215) 851-9820

                                                                 June 30, 2005
VIA FAX AND REGULAR MAIL
------------------------

Securities and Exchange Commission
Division of Corporate Finance
Office of Small Business Review
450 Fifth Street, N.W.
Washington, D.C. 20549-00405
ATTN:  Mr. Kevin Stretzel
Fax No: 202-772-9220

                  Re:      Daleco Resources Corporation
                           File No: 0-12214

Gentlemen,

Form 1O KSB/A for the Fiscal Year Ended September 30, 2004
----------------------------------------------------------

Financial Statements
--------------------

Note 2D. Site Restoration, Dismantlement and Abandonment Costs, page 48
-----------------------------------------------------------------------

1.       We note your response to our prior comment one. It remains unclear to
         us why you have not recognized any liabilities associated with your
         asset retirement obligations. Please address each of the following:

         o        You indicate that you have met various state bonding
                  requirements dealing with "orphan well" situations. Please
                  explain why this is relevant to the determination of how to
                  account for an asset retirement obligation. Please note that
                  providing assurance that your company will be able to satisfy
                  your asset retirement obligation, does not satisfy or
                  extinguish the related liability. Please refer to paragraph 16
                  of SFAS 143.
<PAGE>

EHMANN, VAN DENBERGH, TRAINOR & SCOTT, P.C.                               Page 2

         o        You indicate that you sell or dispose of properties with the
                  buyer assuming the plugging and abandonment obligations. Tell
                  us whether or not the negotiated sales price takes into
                  account the asset retirement obligations assumed by the buyer.
                  We would expect that the sales price would be reduced by the
                  fair value of the asset retirement obligations assumed. Please
                  explain why this is relevant to your determination of whether
                  or not a liability has been incurred.

         Based on the items noted above, it appears that you need to modify your
         financial statements to reflect your asset retirement obligations based
         on the guidance provided in SFAS 143.

         ANSWER:

                  (Proposed modification to Note 2.d. to the Financial
                   Statements:)

                  OIL AND GAS PROPERTIES
                  Historically the value of the salvageable equipment associated
         with the Company's oil and gas wells and production facilities have
         exceeded the cost of their abandonment and associated site
         restorations. It has been the Company's practice to divest it
         non-producing oil and gas properties to other local production
         operators or to equipment salvage companies for the assumption of all
         abandonment liabilities and, if applicable, a net residual value
         consideration. Any net residual value received is recorded on the
         Company's books and financial statements as "other income-oil and gas".

                  In accordance with SFAS 143, the Company has re-assessed its
         asset retirement obligations associated with its oil and gas
         properties. This re-assessment assumes that the Company will be unable
         to divest its future non-producing properties and/or will not be able
         to recoup any residual values from the sale of potentially salvageable
         equipment associated with those properties. Based on this
         re-assessment, the Company has estimated its future potential oil and
         gas retirement costs at roughly $180,400 through the year 2025.
         Accounting for the potential timing of these expenditures yields a net
         present value of $127,000 utilizing a credit adjusted risk free
         interest rate of 9%.

                  Since the above gross asset retirement obligation is not
         material and since there is a degree of uncertainty as to whether the
         net asset retirement obligation will be incurred after considering the
         residual and salvage values, the Company has not accrued any amounts
<PAGE>

EHMANN, VAN DENBERGH, TRAINOR & SCOTT, P.C.                               Page 3

         for future oil and gas property abandonment costs on its financial
         statements for the fiscal year ending 9/30/04.

                  MINERALS PROPERTIES
                   (See prior response)

Note 5--Mineral Properties, page 50
-----------------------------------

2.       As stated in our prior comment two, we noted your auditor has provided
         an explanatory paragraph within their opinion that further states the
         Company "has uncertainty relative to full recoverability of its assets
         including Clean Age Minerals, Incorporated." We have reviewed your
         response and it continues to be unclear why your auditor has included
         this explanatory paragraph. Please contact us regarding this matter at
         your earliest convenience.

         ANSWER:

         The auditor's explanatory paragraph is for emphasis of matter regarding
         going concern. The sentence about Clean Age Minerals should be read in
         conjunction with the rest of the explanatory paragraph regarding going
         concern and the same sentence should not be read by itself. The auditor
         proposes to modify and clarify the sentence below, but the auditor
         proposes to delete the sentence about Clean Age Minerals, if it is
         confusing:

                  The accompanying financial statements have been prepared
                  assuming that the Company will continue as a going concern. As
                  discussed in Note 1 to the financial statements, the Company
                  has suffered significant recurring net losses and negative
                  operating cash flow which raise doubt about its ability to
                  continue as a going concern. If the Company is unable to
                  continue as a going concern, there is uncertainty relative to
                  full recoverability of its assets including Clean Age
                  Minerals, Incorporated acquisition of $20 Million.
                  Management's plans regarding those matters are also described
                  in Note 1 to the financial statements. The financial
                  statements do not include any adjustments that might result
                  from the outcome of these uncertainties.

3.       We have reviewed your response to prior comment two. Please clarify
         whether the cumulative projected cash flows included in your
         supplemental analysis are on a net basis (cash inflows less associated
         cash outflows).

         ANSWER:

         The cumulative projected cash flows included in the supplemental
         analysis are on a net basis. As previously stated, the assessment takes
         into consideration the terms of the Company's various operating
         agreements, expected cost structure and the targeted development and
         marketing plans for the various mineral deposits.

Note 6-Patents and Technology, page 51
--------------------------------------

4.       We note your response to our prior comment three. Based on the denial
         of the patent, please explain why you did not believe the value of this
         technology was impaired in 2003. Please provide us with an
         understanding of how you were able to conclude the book value was not
         impaired at the date of the patent denial or thereafter.

         ANSWER: The Company's initially recorded an investment of $1,060,000
         for its investment in the 16/6 Inc. entity based on the value of the
         consideration paid by Daleco. At the time, the 16/6 entity had
         developed two (2) IT related assets: the I-Squared and the I-Top
         Technologies and was involved in various other transaction consulting
         projects. Upon the completion of the transaction, the Company began to
         amortize its investment in the 16/6 entity as is its historical
         practice while it attempted to commercialize not only the IT
         technologies but also the consulting component. The Company's efforts
         to "patent" the I-Squared technology proved to be too costly to pursue
<PAGE>

EHMANN, VAN DENBERGH, TRAINOR & SCOTT, P.C.                               Page 4

         in the face of the objections of the US Patent review office. The
         Company elected instead to pursue the deployment and/or sale of that
         technology with several parties without making further efforts to
         secure and "method' patent. These efforts were ongoing throughout the
         Company's 2004 fiscal years (period ending 9/30/04, and were eventually
         successful with the signing of the finial Asset Acquisition Agreement
         with PSNet Communications in December 2004 (the Company's first fiscal
         quarter of 2005). The Company merged the consulting aspects of 16/6
         Inc. into Daleco Resources eliminating 16/6 as a stand-alone entity.

          As of the end of December 2004, Daleco had amortized its investment in
         16/6 Inc. to the point where its book value was $542,621. This is the
         residual value that was assigned to the two IT assets, which were sold.

         The Company believes the value of the technology was not impaired as of
         2003. The Company's efforts to "patent" the I-Squared technology proved
         to be too costly to pursue in the face of the objections of the US
         Patent review office. The Company elected instead to pursue the
         deployment and/or sale of that technology with several parties without
         making further efforts to secure and "method' patent. These efforts
         were ongoing throughout the Company's 2004 fiscal years (period ending
         9/30/04, and were eventually successful with the signing of the final
         Asset Acquisition Agreement with PSNet Communications in December 2004
         (the Company's first fiscal quarter of 2005). The Company considered
         the technology as long-lived asset to be disposed of by sale. The net
         book value of $542,621 was not material and not presented separately in
         the balance sheet.

5.       We have reviewed your response to prior comment three. Support your
         conclusion that the consideration given in exchange for your technology
         at December 1, 2004 was of equivalent value and why you believe this
         transaction should be accounted for as a "swap".

         ANSWER:

                  The word "swap" was probably not the most appropriate word to
         use in describing the transaction between Daleco Resources and Ostara
         Corporation as successor in interest to PS Net Communication Inc. The
         transaction should have been categorized as one in which no monetary
         exchange occurred. The Company was not able to determine the value of
         privately held PSNet at December 2004. The Company used its more
         apparent carrying amount of $542,621. The Company assigned over its
         rights and title to the residual IT assets of the former 16/6 Inc.
         entity to Ostara Corporation in exchange for the receipt of 3,000,000
         common shares of freely trading stock. At that time the price of Ostara
         was over $1 per share and the Company believed that the consideration
         received was at least of equivalent value, even with a substantial
         discount for illiquidity. The Company did not quantify the discount for
         illiquidity. The Company continued with its more apparent carrying
         amount of $542,621. The Company then distributed a portion (2,000,050)
         of the Ostara shares it received to its shareholders as a special
         dividend.

6.       We note in your response that you state "no specific value could be
         placed on the PSNet securities" and that "no value was assigned to the
         warrant rights...since they were priced significantly "out of the
         money". Explain why you were not able to determine the fair value of
         the shares received but were able to determine that the warrants were
         "out of the money." Additionally, explain why the intrinsic value is

<PAGE>

EHMANN, VAN DENBERGH, TRAINOR & SCOTT, P.C.                               Page 5

         relevant to determining the fair value of the warrants received as a
         component of the consideration you received for your technology assets.

         ANSWER:

         No specific value could be placed on the PSNet securities because the
         Company was not able to determine the value of PSNet, a privately held
         company. The Company used its more apparent carrying amount of
         $542,621.

         The Company received common stock when the price of Ostara was over $1
         per share and the Company believed that the consideration received was
         at least of equivalent value to its carrying amount, even with a
         substantial discount for illiquidity. The Company did not quantify the
         discount for illiquidity. The Company continued with its more apparent
         carrying amount of $542,621.

         The Company received common stock and warrants. Warrants, like options,
         have strike price. If the price of the underlying stock is less than
         the strike price, the warrants can be determined by anyone as "out of
         the money". The Company used the Black Scholes option pricing model and
         determined that the fair value of the warrants was zero. The Company
         mentioned the intrinsic value of the warrants as an indicator that the
         warrants may expire worthless and unexercised.

                  As a result of the uncertainty in the market for the Ostara
         Stock and as an inducement for incremental purchases of their share,
         Ostara awarded Daleco warrant rights to acquire and additional
         15,000,000 shares. These warrant rights, in Daleco's opinion, contained
         provisions (i.e. price and term) at the time of the transaction was
         consummated such that the likelihood of their exercise was remote. The
         relatively large spread between the current market price for Ostara
         shares and the warrant exercise price indicates that they (the
         warrants) are "out of the money" and will probably not be exercise
         prior to their expiration.

Report of Independent Registered Public Accounting Firm on Supplemental
Financial Information, page 65
-----------------------------------------------------------------------

7.       We note your response to our prior comment four. Please amend your
         document to provide an audit opinion that clearly indicates the scope
         of information to which it opines.

         ANSWER: The Company will file a Second Amendment to Form 10-KSB for the
period ending September 30, 2004 incorporating a corrected audit opinion. See
Draft attached.

Form 1O-QSB for the Fiscal Quarter Ended March 31. 2005
-------------------------------------------------------

Note