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      Unassociated Document

    SEC
      LAW FIRM

    11693
      San Vicente Boulevard, Suite 357

    Los
      Angeles, CA 90049

    Tel.
      310-557-3059

    Fax.
      310-388-1320

    www.seclawfirm.com

                January
                  26, 2007

    Ms.
      Ta
      Tanisha Meadows

    Ms.
      Donna
      DiSilvio

    United
      States Securities and Exchange Commission

    Division
      of Corporation Finance

    Washington,
      D.C. 20549

    Dear
      Ms.
      Meadows and Ms. DiSilvio:

    NuWay
      Medical Inc. (the “Registrant”) is responding to the written comments of the
      staff (the “Staff”) of the United States Securities and Exchange Commission (the
“Commission”) dated January 5, 2007 (the “Second Comment Letter”) and refers to
      the comments of the Staff of the Commission in its letter dated September 21,
      2006 (the “First Comment Letter”). The Registrant’s responses are keyed to the
      numbered comments of the Staff contained in the Second Comment Letter, which
      are
      set forth in full below immediately preceding each response.

    The
      Registrant believes that, as suggested by the Staff, it can modify its
      disclosure, as appropriate, in future filings and requests that the Staff
      confirm its concurrence with this proposed approach to addressing the Staff’s
      comments and that no amendment of any filing is required by the Staff, except
      as
      described below.

    Form
      10-KSB for Fiscal Year Ended December 31, 2005

    Item
      8A. Controls and Procedures. page 25

    1. We
      note in your response to our prior comment 2 in our letter dated September
      21,
      2006 that you would include the entire definition of disclosure controls and
      procedures in Exchange Act Rule 13a-15(e). However, your disclosures in Forms
      10-QSB filed on November 17 and December 14, 2006 continue to omit parts of
      the
      definition. You state that your principal executive officer and principal
      financial officer concluded that your disclosure controls and procedures are
      effective to ensure that information required to be disclosed in reports filed
      or submitted under the Exchange Act is recorded, processed. summarized and
      reported within the time periods specified in SEC rules and forms. In all future
      interim and annual filings, please revise to clarify; if true, that your
      principal executive officer and principal financial officer concluded disclosure
      controls and procedures are also effective in ensuring that material information
      required to be included in the report is made known to them by others on a
      timely basis and is accumulated and communicated to management, including your
      principal executive and principal financial officer, to allow timely decisions
      regarding required disclosure. Please refer to the definition of disclosure
      controls and procedures in Exchange Act Rule 13a-15(e).

    Response:
      In
      future filings, the Registrant will revise its disclosure regarding
      effectiveness to include the entire definition of disclosure controls and
      procedures in Exchange Act Rule 13a-15(e). The Registrant had actually filed
      its
      Quarterly Report on Form 10-QSB for the period ended September 30, 2006 before
      it had received the First Comment Letter and therefore was unaware of the
      Staff’s request at the time of such filing. The Registrant misunderstood the
      request of the Staff with respect to the undertaking to revise such disclosure
      when it filed an amendment to Form 10-QSB on December 14, 2006, erroneously
      believing that the Staff’s request was applicable to reports filed after such
      time, not amendments to reports previously filed prior to such time.

    Notes
      to Financial Statements

    Note
      8. Loan Agreement - Augustine Loan, page F-18

    2. We
      have read your response to our prior comment 3. Please tell us the basis in
      GAAP
      for recording the issuance of these warrants as a discount on Notes, citing
      relevant authoritative literature. In doing so, please tell us why your
      classification of these warrants complies with the requirements of EITF
      00-19.

    Response:
      Upon
      further review of the First Comment Letter and comment 3 therein, the Registrant
      believes that the confusion has been created by a misdescription in Note 8
      of
      the way in which the transaction in question was handled, not in the financial
      statement presentation itself. The relevant passage of Note 8 to Notes to
      Financial Statement, contained on page F-20, states:

    “Using
      the Black-Scholes pricing model, the Company allocated approximately $245,000
      of
      the Augustine Loan proceeds to the warrants and $175,000 to the note payable,
      which allocations were made on a pro rata basis based on the fair value of
      the
      warrants. The Black-Scholes calculation assumed a discount rate of approximately
      four percent, volatility of 257 percent and no dividends. Given that the
      warrants were issued in conjunction with Loan Agreement, such fair value
      represents an effective discount on the debt and will be amortized over the
      term
      of the loan. Amortization of this discount for the year ended December 31,
      2005
      was approximately $0 and $61,500 for the years ended December 31, 2005 and
      2004
      and is recorded as additional interest expense in the accompanying consolidated
      statement of operations. In conjunction with the extension of the maturity
      date
      of the Augustine Loan from February 2004 to August 2004, the warrants held
      by
      Augustine Fund to purchase 6,158,381 shares of the Company's common stock were
      re-priced to an exercise price of $.035 per share.

    This
      is
      not an accurate description of the accounting treatment of the transaction.
      Accordingly, the Registrant proposes to amend the previously-quoted disclosure
      in future filings to read as follows:

    “The
      proceeds of $420,000 were recorded as a loan payable. Using the Black-Scholes
      pricing model, the Company valued the warrants issued in conjunction with this
      loan at approximately $245,000 and recorded the amount to prepaid interest
      expense and additional paid in capital. The Black-Scholes calculation assumed
      a
      discount rate of approximately 4%, volatility of 257% and no dividends. The
      $245,000 was charged to interest expense over the maturity of the loan payable.
      During the year ended December 31, 2004 the remaining amount of prepaid interest
      expense of approximately $61,500 was charged to interest expense.”

    The
      basis
      in accounting literature for the accounting treatment of the transaction
      described above is FASB Current Text Sections D10.104 and D10.105.

    Form
      10-QSB/A for Fiscal Quarter Ended September 30, 2006

    Consolidated
      Balance Sheets. page 3

    3. We
      note that the balance of notes payable remains unchanged from June 30, 2006
      at
      $3,298,070. According to disclosures on page 39, we also note that you issued
      Fall 2006 Notes during the three months ended September 30, 2006, according
      to
      disclosures on page 39. Please tell us where you have recorded the new notes
      on
      the balance sheet or revise your filing accordingly.

    Response: Upon
      further review of the Second Comment Letter and comment 3 therein, the
      Registrant believes that some disclosure should be modified in its Quarterly
      Report on Form 10-QSB/A for the period ended September 30, 2006 (the “Form
      10-QSB/A”), because the disclosure does not unambiguously indicate that the
      $252,500 was in fact received subsequent to the end of the period ended
      September 30, 2006. The Registrant believes that the consolidated balances
      sheets are correct but that the related disclosure should be amended.
      Accordingly, the Registrant intends to amend promptly the Form 10-QSB/A (the
      “Amended Filing”).

    At
      page
      39, the first sentence, the disclosure which previously read:

    “The
      Company has received gross and net proceeds of $252,500 from eight outside
      investors and issued Fall 2006 Notes, which allow conversion into an aggregate
      of 9,181,820 shares of common stock.”

    will
      be
      amended to read:

    “As
      part
      of the Fall 2006 Offering and subsequent to the end of the period ended
      September 30, 2006, the Company received gross and net proceeds of $252,500
      from
      eight outside investors and issued Fall 2006 Notes, which allow conversion
      into
      an aggregate of 9,181,820 shares of common stock.”

    and
      a
      conforming change will be made on page 22 of the Amended Filing.

    Statements
      of Cash Flows. page 6

    4. We
      note that the amount you have disclosed as cash provided by financing activities
      during the nine months ended September 30. 2006 does not agree to amounts
      disclosed on pages 38 and 39. In particular, we note that $802,500 was received
      during the first quarter related to the Third Offering Note and $252,500 was
      received related to the issuance of the Fall 2006 Notes during the three months
      ended September 30. 2006. Please reconcile these amounts and revise your filing
      accordingly.

    Response:
      Upon
      further review of the Second Comment Letter and comment 4 therein, the
      Registrant believes that some disclosure should be modified in the Form
      10-QSB/A, because the disclosure does not unambiguously indicate that (i)
      $252,500 in respect of the Fall 2006 Offering was in fact received subsequent
      to
      the end of the period ended September 30, 2006 and (ii) $25,000 in respect
      of
      the Third Offering was in fact received in the fourth quarter of 2005. The
      Registrant believes that the statements of cash flows are correct but that
      the
      related disclosure should be amended. Accordingly, the Registrant intends to
      amend the Form 10-QSB/A.

    At
      Note
      4, “Third Offering”, first paragraph, on page 21, the disclosure which
      previously read, in relevant part:

    “Of
      this
      amount, $777,500 gross
      and
      net proceeds were recorded during the three-month period ended March 31, 2006,
      and the balance had been raised during 2005, excluding $25,000 received prior
      to
      the year end for which the Third Offering Note was not issued until the
      three-month period ended March 31, 2006.”

    will
      be
      amended to read:

    “Of
      this
      amount, $777,500 gross
      and
      net proceeds were recorded during the three-month period ended March 31, 2006,
      and the balance had been raised during 2005, excluding $25,000 received and
      recorded prior to the year end 2005 but for which the Third Offering Note was
      not issued until the three-month period ended March 31, 2006.”

    Additionally,
      at the last sentence of the first paragraph on page 38, the disclosure which
      previously read, in relevant part:

    “Of
      this
      amount, $802,500 gross and net proceeds were raised during the three-month
      period ended March 31, 2006, and the balance had been raised during
      2005.”

    will
      be
      amended to read:

    “Of
      this
      amount, $777,500 gross and net proceeds were raised during the three-month
      period ended March 31, 2006, and the balance had been raised during
      2005.”

    Additionally,
      because the $252,500 in respect of the Fall 2006 Offering was received in the
      fourth quarter of 2006, not during the third quarter of 2006, as discussed
      in
      response to comment 3 above, the Registrant will amend the disclosure as
      discussed thereinabove.

    Please
      also note, consistent with the Staff’s comment 2 in the First Comment Letter and
      comment 1 in the Second Letter, the Registrant will amend its disclosure in
      response to Part I, Item 3, “Controls and Procedures”, in the Amended Filing.

    In
      connection with the foregoing response, the Registrant acknowledges
      that:

              ·

              It
                is responsible for the adequacy and accuracy of the disclosure in
                its
                filings;

              ·

              Staff
                comments of changes to disclosure in response to Staff comments do
                not
                foreclose the Commission from taking any action with respect to the
                filing; and

              ·

              The
                Registrant 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.

    Please
      respond to the undersigned with any further comments or any other communications
      regarding the Comment Letter.

              Very
                truly yours,

              /s/
                Lance Jon Kimmel

              Lance
                Jon Kimmel