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Mail Stop 03-06

April 22, 2005

VIA U.S. MAIL AND FAX (520) 512-8019

Mr. Shaun D. McMeans
Chief Operating Officer and Chief Financial Officer
LXU Healthcare, Inc.
3708 East Columbia Street
Tucson, Arizona 85714

	Re:	LXU Healthcare, Inc.
		Form 10-K for the year ended June 30, 2004

Dear Mr. McMeans:

      We have reviewed your response dated March 2, 2005 and have
the
following comments.  We have limited our review to only your
financial statements and related disclosures and will make no
further
review of your documents. In our comments, we asked you to provide
us
with supplemental information so we may better understand your
disclosure.  After reviewing this information, we may or may not
raise additional comments.

	Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects.  We welcome
any questions you may have about our comment or on any other
aspect
of our review.  Feel free to call us at the telephone numbers
listed
at the end of this letter.

Form 10-K for the year ended June 30, 2004

Note 2. Summary of Significant Accounting Policies

Revenue Recognition - Page F-10

1. We note your response to our prior comment 5 and understand
that
the training and any additional services provided to customers by
sales representatives are part of the marketing and sales process
and
are not separate or discrete earnings events. In addition, we
noted
that you state any additional services are provided at your option
and the company has no contractual obligation. Please clarify the
following for us:
* Tell us if any customers are charged for any training or
additional
services. Tell us how you account for such revenue and at what
point
in the earnings process the revenue is recognized.
* Quantify for us the amount of revenue the company earns through
providing services in total, regardless of whether the services
are
provided in conjunction with the product sale or through the sales
and marketing process, at your option or the customers.
* Tell us if these additional services have any value to the
customer
on a standalone basis.
* Lastly, tell us if there is an objective and reliable evidence
of
the fair value of the services.

We refer you to paragraph 9 of EITF 00-21.

Note 8. Preferred Stock - Page F-17

2. We note your response to our prior comment 8. Please clarify
for
us how the company determined that the Series G stock actually
contained an embedded derivative that would be accounted for in
accordance with SFAS 133. In addition, clarify how all of the
criteria in paragraph 12 of SFAS 133 were met.

*    *    *    *

      As appropriate, please respond to these comments within 10
business days or tell us when you will provide us with a response.
Please furnish a cover letter that keys your responses to our
comments and provides any requested supplemental information.
Detailed cover letters greatly facilitate our review.  Please file
your cover letter on EDGAR.  Please understand that we may have
additional comments after reviewing your responses to our
comments.

      You may contact Julie Sherman, Staff Accountant, at (202)
824-
5506 or me at (202) 942-2813 if you have questions.  In this
regard,
do not hesitate to contact Martin James, the Senior Assistant
Chief
Accountant, at (202) 942-1984.

							Sincerely,

							Daniel Gordon
							Branch Chief

Mr. Shaun D. McMeans
LXU Healthcare, Inc.
April 22, 2005
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