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FORM 10-KSB FOR THE YEAR ENDED AUGUST 31, 2004

Item 6?Management?s Discussion and Analysis

2.The revised disclosure will read as follows

Sales of $488,282 represented an increase of $60,498 or 14.2% from the $427,784
in the prior year

The main components of the changes were an increase of $101,200 in licensing.
fees and a decrease of $44,629 in product sales.

The net loss of $3,783,704 for the fiscal year 2004 was $2,676,281 or 242%
greater than the net loss of $1,107,418 in the prior year.

General and administrative expenses of $1,211,660 in fiscal year 2004 were
$56,151 or 0.5% less than the prior year.

The main components of the changes are as follows:

                            8/31/2004       8/31/2003       Difference

Material                   $  167,982       $  224,814   $  (56,832)
Testing                        62,969           41,811        21,158
Mfg O/H                        54,147           43,448        10,699
Commissions                    66,886           13,152        53,734
Officers Salaries             488,213          435,762        52,451
Repricing warrants               -             (44,000)       44,000
Professional Fees             162,980          188,434       (25,454)
Travel and Entertainment        4,776            11,061	      (6,285)
Salaries and Fringes           75,773           68,600         7,173
NJ Tax Refund                  43,290          180,557      (137,267)
Interest Expense            2,943,971          331,861      2,612,110
                            ----------        ---------   -----------
                           $ 4,070,987      $ 1,495,500   $ 2,575,487

The $2,612,110 increase in interest expense resulted mainly from an amount
charged for the value of warrants issued to officers and directors in
conjunction with the debt conversion on August 30, 2004.

During the fiscal years 2003 and 2004, the Company realized approximately
$180,000 and $43,000 through the sale of a portion of its New Jersey Net
Operating Loss Carry Forward under a program sponsored by that state.

Item 9-Directors and Executive Officers, Page 14

3. We have adopted a code of ethics. We have attached such code of ethics for
your perusal. We will attach the adopted code as an exhibit to the amended 10K.

4. The statement on page 22 was made in error with regards to not having an
audit committee and will be eliminated in the refilling.

5. Mr. Bernard Koster has been designated the financial expert and will be
disclosed in the amended 10K

Item 10- Executive Compensation, Page 16

6. The reason for the differences are that the 10K is on a fiscal basis and the
salary increase to $213,000 is on a calendar basis.

7. The note on page 20 will be revised to read as follows:

During three fiscal years ended 2004, the officers deferred a total of $814,015
of their salaries.
Effective June 2, 2002, interest at the annual rate of 6% was accrued on the
salaries deferred. The total interest accrued was $79,973 at August 30, 2004.
The accrued salaries and interest were converted to a debenture on August 30,
2004 (see above)

The deferred salaries shown in the Summary Compensation Table above represents
deferred salaries accrued prior to the fiscal year 2002. Under a shareholders
agreement with NF Partners these salaries could only be paid when revenues and
financings permit.

NF Partners sold their interest in the Company on December 30, 2004, Therefore
that agreement is no longer in force.

Item 11- Security Ownership of Certain Beneficial Owners and Management, Page 11

8. The Company does not have a equity compensation plan, therefore the form is
not applicable.

9 & 10. We will provide such disclosure as requested in the future filings.

The revised disclosure will read as follows.

ITEM 14.   PRINCIPAL ACCOUNTANT FEES AND SERVICES

AUDIT FEES

         The aggregate fees billed for the fiscal year ended August 31, 2004
and 2003 for professional services rendered by our principal accountants for
the audits of our annual financial statements, and the review of our financial
statements included in our quarterly reports on Form 10-QSB were $18,000 and
$21,844, respectively.

AUDIT-RELATED FEES

         The aggregate fees billed for the fiscal year ended August 31, 2004
and 2003 for assurance and related services rendered by our principal
accountants related to the performance of the audit or review of our financial
statements, specifically accounting research, were $-0-, each year.

TAX FEES

         There aggregate fees billed for the fiscal years ended August 31, 2004
and 2003 for tax related services rendered by our principal accountants in
connection with the preparation of our federal and state tax returns were
$3,000 and $3,000, respectively.

OTHER FEES

	The aggregate fees billed for the fiscal years ended August 31, 2004 and 2003
for other services were $-0-, for each year.

Certifications

11. We will refile the 10KSB in its entirety including currently dated
certifications (copies attached) using Exhibits 31.1 and 31.2.

12. Based on our current auditors experience with filing financials without the
prior auditors consent for such previously audited amounts we have presented
such amounts as unaudited. Once we have resolved the outstanding fees due to
the prior auditor to enable the auditor to render a consent to allow the
Company to utilize such audited numbers, we will amend the Form 10KSB to
include the audited statements of operations, cash flows and stockholders
equity for the year ended August 31, 2003.  Currently, such financial amounts
for 2003, included in the 2004 Form 10KSB are identical to those previously
filed with the Commission on the 2003 Form 10KSB, which were certified at the
time of the 2003 10KSB filing.

13.  Our research and development costs for fiscal 2004 and 2003 was $62,957
and $41,810, respectively. In the future filings we will include a separate
line in the statement of operations for such research and development costs,
reducing the General and Administrative costs line item respectively for such
research and development costs.

In addition we will add a footnote to our accounting policies to be read as
follows:

Research and Development Costs

Expenditures relating to the development of new products and processes,
including significant improvements to existing products are expensed as
incurred. The Company has not incurred any research and development costs to be
 capitalized.

14. We have no cash flows from investing activities. We will amend in our
future filings the statement of cash flows to clarify that there was no ?cash
flows from investing activities?.

15. Our revenue recognition policy is to record revenues once the product has
been shipped. Our terms are FOB shipping point pursuant to our agreements with
our customers.  Our sales agreements do not contain rights of inspection,
damaged goods replacement or lost in transit clauses. FOB shipping point
transfers the insurable interest of the inventory, upon leaving the warehouse.

We will include in our future filings disclosure on our revenue recognition
policy as a note to the accounting policies. Our revenue recognition note will
read as follows;

Revenue Recognition

Revenues are recognized when our products are shipped.

16. We wish to clarify that our Company is a very small company and the
officers will also from time to time be involved in purchasing, receiving and
shipping. Aside from management we have one employee to perform several
functions such as shipping, receiving, testing for research purposes, testing
for quality control purposes and general maintenance around the facility. Our
products are manufactured on an outsourced basis and on a as needed basis to
minimize working capital requirements. Salaries of management is recorded all
to officers salaries in general and administrative expenses.

Expenditures included in cost of sales are as follows; material costs, freight
in, direct labor and packaging costs.

Our purchasing, receiving costs, inspection costs and warehousing costs are all
recorded in selling, general and administrative expenses. We have no network
distribution costs as such costs if applicable would be built into the
commission expenses paid to representatives selling our products. Our warehouse
space is largely comprised of quality control, research and development space
and under utilized space. Inventory shipped to our facility is performed
largely to enable the testing of such batched product for quality control
purposes prior to shipment to the customer.

We propose to add in our accounting policies the following footnote:

Cost of Sales

Cost of sales includes the following costs; material costs, freight in, direct
labor and packaging costs.  Indirect costs of sale items included as selling,
general and administrative costs for the years ended August 31, 2004 and 2003
are as follows; shipping and handling costs $12,551 and $4,856, respectively,
shipping and receiving labor of $10,900 and $8,361, respectively.

17. The comment to discuss the accounting for the warrants issued with regards
to the debt is covered also by comment 26, which requested discussion on the
accounting of the warrants issued. Please see the response to comment 26 for
answers to this comment.

18. We have tracked the footnote number 7 with our responses to your request.

a) In August 2003, the Company issued a $200,000 convertible debenture,
convertible into stock at a rate of $.226 per share by Feb 28, 2004, plus
100,000 shares and 1,000,000 warrants exercisable at $.30 per share. Under EITF
98-5 and EITF 00-27, there was a $160,000 interest expense recorded as part of
this financing, which was expensed at issuance date since such debt was
convertible at will.  The $160,000 was comprised of   $65,000 allocated to the
beneficial conversion feature, $87,000 the warrants issued and $9,000 to the
common stock issued. The $65,000 was calculated by determining the intrinsic
value of  the conversion price of $.074 ($.30 market price less $.226 exercise
price) times the shares if converted of 885,000 ($200,000 / $.226).  The
allocated portion of Black-Scholes model value of the warrants of $151,245 was
determined to be $87,000, due to its relative weighted percentage of the total
value of the debt and equity rights issued. The allocated portion of the common
stock issued of $30,000 was determined to be $9,000, due its relative weighted
percentage of the total value of the debt and equity rights issued.

This debt remained outstanding at August 31, 2004 and was renegotiated to have
a conversion rate of $.14 per share, which was the market price at the time of
such negotiation. Since the conversion price equaled the market price, there
was no beneficial conversion feature to value.

b) The note ?Between September and November 2003, six accredited investors
invested $355,000 into convertible debentures in the Company.............? has
been amended for typing errors to read.

Between September and November 2003, the Company issued to five accredited
investors $230,000 of convertible debentures which mature between May and
November 2004 bearing interest at 8% per annum. The debentures entitle the
holders to convert the debt into common stock at a rate of one share for each
$0.336 principal amount plus any outstanding accrued interest. In conjunction
with this transaction, the Company issued warrants to the five investors, to
purchase a total of 1,165,000 shares of the Company?s common stock for $0.30-
$0.32 per share, expiring in five years. The warrants vested immediately. There
was no beneficial conversion feature to value, since the debt conversion price
equaled the market price of such common stock upon issuance of the convertible
debentures.

The value attributed to the warrants issued along with the debenture
transactions above, totaling $138,000, has been charged to interest expense.

c) The note ? In August 2004, two debentures totaling $100,000, were
 converted into common stock at a rate of 1 share for $.14.? has been
amended to read;

In July 2004, $15,000 of debt was converted to equity at $.15 a share or
 100,000 shares and another 30,000 shares were issued for services valued
at $4,500.

In August 2004, two debentures totaling $81,000, including accrued interest,
 was converted to common stock at $.12 or 675,000 shares. The $.12 per share
 was market price at the conversion date.

These debentures matured of $81,000 including interest and did not have
conversion terms. Management offered the abilities to the debt holders to
convert such debt to equity upon such debentures maturing or nearly reaching
maturity. There is no additional accounting for such conversion of the arms
length negotiations of converting such debt to equity.

We also have modified the statement of stockholders equity for typing errors
related to the above.

d) On Aug 30, 2004, the Company provided for certain already existing debt of
$1,610,294 and to be converted to a convertible debenture with conversion terms
into 11,658,388 shares of common stock with 34,506,249 detachable warrants. The
debt holders intent of the transaction was to convert such debt to equity,
which $1,283,400 was converted post year end and prior to the filing of the
Form 10KSB in mid December 2004. The balance was converted on December 31,
2004.  The conversion terms of the debt was convertible into common stock at
$.14 per share. The market price was $.12 a share on such date the convertible
instruments were issued.

19 & 20. We did not compute a beneficial conversion feature with regards to the
$1,610,294, since the conversion price exceeded the market price. See EITF
98-5. Although EITF 00-27 would have required an allocation to be made of the
warrant value to the total financing value, we expensed the full value the
34,506,249 warrants using the Black Scholes model, using the following
assumptions, market price of stock $.12, exercise price of warrants $.14, term
of warrants 10 years, volatility of stock price 51%, discount bond rate of
3.75% and annual rate of dividends zero. The value attributed to these warrants
using the Black Scholes model was $2,588,056. This amount was charged to
expense as such convertible instruments were convertible at will.

21. The footnote regarding Admiral Retz actually needs to be reworded. Such
amount was derived from using the Black-Scholes model, which approximates the
$25,000 recorded. The revised footnote will read as follows.

 In February 2003 the Company entered into a consulting agreement with Admiral
Retz for the period of one year, whereby he will receive $3,000 per month from
February 1, 2003 to July 31, 2003 and $5,000 per month from August 1, 2003 to
January 31, 2004. In conjunction with this agreement the Company issued fully
vested warrants to purchase 500,000 shares of the Company?s common stock at
$0.5625 per share. Such warrants have been valued utilizing the Black Scholes
model, accordingly $25,000 has been charged to consulting expense as a bonus
for the value of such warrants issued.

22. Management has recorded the proceeds from the realization of the state tax
net operating losses as a realization of the related deferred income tax bene
fit after ?Loss before Income Taxes? on the statement of operations. The
proceeds from the realization of the state tax benefits of its net operating
losses incurred is a state supported program to aid companies with losses for
continuing operations in the state. There is no accounting pronouncement that
specifically addresses the ?sale? of state net operating losses. FASB 109
paragraph 45(d) and (e) does state that the financial statements shall present
or disclose in the notes thereto ?(d) government grants (to the extent
recognized as a reduction of income tax expense? and  ?(e) the benefits of
operating loss carryforwards?. We believe the presentation of