SecProbe.io

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Mail Stop 6010

      August 12, 2005

Gregory Witchel
Chief Executive Officer
DiaSys Corporation
81 West Main Street
Waterbury, CT 06702

      Re:	DiaSys Corporation
		Amendment to Annual Report on Form 10-KSB
      for the fiscal year ended June 30, 2004
      Filed June 30, 2005
		Quarterly Report on Form 10-QSB for the quarters ended
       	September 30, 2004, December 31, 2004 and March 31, 2005
 		File No. 1-16285

Dear Mr. Witchel:

      We have reviewed your filings and have the following
comments.
Where indicated, we think you should revise your documents in
response to these comments.  If you disagree, we will consider
your
explanation as to why our comment is inapplicable or a revision is
unnecessary.  Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask 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.

Amendment to Form 10-KSB for the fiscal year ended June 30, 2004

Item 1.  Description of Business, page 1
1. Please refer to prior comment 2.  Please disclose the basis for
your cost claims in the first paragraph.  Also, clarify that you
do
not have independent, objective evidence to supporting the cost
claims.
2. Regarding your response to prior comment 3:
* Please file complete agreements, including all attachments.  For
example, we note the reference to exhibits to exhibit 10.15 that
do
not appear to be attached.  Refer to Staff Legal Bulletin No. 1A
(February 28, 1997 with July 11, 2001 addendum) regarding the
process
for omission of immaterial, confidential information from the
publicly filed version of your exhibits.  Also apply this comment
to
all of your filings; for example, we note missing attachments to
exhibits in your Form 8-K filed July 28, 2005.
* Please disclose the material terms of your agreements.  Material
information must be disclosed, even if confidential.
* Please provide us a marked copy of your 10-KSB that identified
the
exhibit number of each agreement you cite in the text.  Where you
have deleted disclosure about an agreement since the original
filing
of your Form 10-KSB, please tell us the reason for the deletion.
3. We note your response to comment 4.  However, we also note
reports
of developments regarding your products, patents and distribution
agreements that do not appear to be reflected in your document.
Please provide us a table that lists each announcement you made
during the period covered by your 10-KSB and identifies (1) where
in
the 10-KSB you have discussed the development and (2) the exhibit
number of each related agreement.  To the extent you believe that
your announcements of developments during the period do not
require
disclosure in your Form 10-KSB, please explain to us your
conclusions.  Also please ensure that you have reviewed all of the
other disclosure in the document to ensure that it has been
properly
updated.

Workstation Systems, page 3
4. Please refer to prior comment 6.  Please disclose the dates of
the
evaluations and publications mentioned in the third paragraph.

Competition, page 7
5. Please expand your disclosure in response to prior comment 7 to
clarify whether competitors offer products that overcome the
disadvantages of your products.  Also ensure that you have
described
all material disadvantages.

Equity Compensation Plan Information as of June 30, 2004, page 14
6. We reissue prior comment 10 regarding the need to provide the
disclosure required by Regulation S-B Item 201(d)(3).  From your
disclosure, investors should be able to clearly understand the
material features of each applicable plan.  The disclosure also
should be clearly tied to the applicable row of the table.

Issuance of Unregistered Securities, page 14
7. Please refer to prior comment 11.  Please provide the
disclosure
required by Item 701 of Regulation S-B, including all required
details in this section.
* Provide more specific disclosure than shares issued to "four
persons" or as "compensation for services."
* Explain who the people were and the nature of the services.
* More specifically indicate the date of the issuances.
* Disclose the terms of exercise of the warrants.

Regarding your reference in your response to disclosure in another
filing, please refer to General Instruction E of Form 10-KSB
regarding the proper scope and manner of incorporation by
reference.

Financial Condition, page 15
8. Please refer to prior comment 16.  Please provide sufficient
disclosure for investors to appreciate your cost of capital and
the
trends during the period addressed.  For example, discuss the
terms
of the securities issued or issuable, including any discounts to
the
market price of your securities.
Results of Operations, page 16
9. Please refer to prior comment 17.  Please discuss why your
largest
client reduced orders during the year.

Item 8A.  Controls and Procedures, page 17
10. We note the disclosure that your controls were effective in
your
Form 10-KSB filed September 29, 2004.  However, you disclose in
your
amendment to your Form 10-KSB filed June 30, 2005 that the
controls
were not effective.  You should not retroactively change your
conclusions concerning effectiveness.  You should discuss, if
applicable, how you subsequently determined that your internal
controls are not effective. Also, apply this comment to your
subsequently filed Form 10-QSB.
11. Please refer to prior comment 30.  Please describe the
"instituted additional controls."

Item 9.  Directors and Executive Officers of the Registrant, page
17
12. Please refer to prior comment 22.  Please provide the
disclosure
required by Item 402 of Regulation S-B, including information for
the
fiscal year ended June 30, 2004. Likewise, update the information
throughout the disclosure incorporated from your proxy statement
so
that is current at least as of the date you filed the Form 10-KSB.
13. Please refer to prior comment 23.  Please provide the
disclosure
required by Item 406(a) of Regulation S-B.
Item 12.  Certain Relationships and Related Transactions, page 17
14. Please refer to prior comment 24.  Please disclose any
discounts
to the market price indicated in the issuance or conversion rates
of
securities issued to related parties. For example, we note that
the
convertible note of $50,000 issued to Mr. Bloom.
15. Please expand the table provided in response to prior comment
25
to address the documents evidencing the transactions described in
the
disclosure incorporated by reference.

Section 16(a)
16. We note your reference in response 26 to forms correctly
reflecting stock ownership; however, if remains unclear whether
all
transactions have been correctly reported.  Therefore, we reissue
the
comment.
17. Please expand your response to comment 27 to clarify whether
you
have the right to recover any additional profit.

Item 14.  Principal Accountant Fees and Services, page 19
18. Please provide the disclosure for the fiscal year ended June
30,
2004.

Revenue Recognition, page 32

19. We note the revisions to your footnote in response to prior
comments 36 and 37.  Please expand to also disclose why it is
appropriate to recognize revenue upon shipment.  For instance,
disclose that there are no build to "spec" sales which require
customer acceptance and that all products are shipped F.O.B.
Diasys.
20. Additionally, we presume that distributor discounts and
incentives are not significant.  Otherwise, please expand to
describe
how you estimate and record distributor discounts and incentives.
Refer to EITF 01-9.
21. As a related matter, we see that you recognize sales returns
as a
reduction of revenue and cost of sales when products are returned.
Tell us why you do not estimate and record amounts for returns
when
products are sold.  If returns cannot be estimated, tell us why it
is
appropriate to recognize revenue upon shipment.  That is, tell us
why
revenue should not be deferred until the period where returns are
permitted expires. Refer to paragraph 6 of SFAS 48.

Patent Costs, page 33

22. We note the revisions made in response to prior comment 42.
Please expand to disclose the nature of the expenditures
capitalized
as "patent costs."  Please also make specific disclosure about
actual
useful lives of the patents and expected future amortization.  The
expanded disclosure should fully conform to the requirements of
SFAS
142.

Note 13.  Major Customers, page 39

23. We see the revisions made in response to prior comment 51.  To
the extent that revenue from external customers attributed to an
individual foreign country is material, those revenues should be
disclosed separately.  Refer to paragraph 38 of SFAS 131.

Note 14.  Common Stock, page 39

24. We note the revisions made in response to prior comment 52.
We
see from the statement of cash flows for fiscal 2004 that you
received proceeds from loans from shareholders of $450,000 and
that
you made payments on loans from shareholders totaling $100,000.
Yet,
we do not see any discussion of these borrowings in the notes to
your
financial statements.  Please expand the notes to financial
statements to describe related party borrowings, repayments and
conversions during the year.  Your disclosures should also discuss
material terms of the debt agreements, including interest
provisions,
maturity dates, conversion rates, debt issue costs, beneficial
conversion features, and warrants issued in connection with the
loans.  Please also note that SFAS 57 requires detailed
disclosures
about related party transactions.
25. Refer to prior comments 53 and 54.  We see the disclosure
about
the 600,000 warrants issued with convertible promissory notes.
Please disclose how you valued those warrants.  Please disclose
the
model and assumptions applied in estimating the $305,000 assigned
fair value. Also, apply this guidance to any similar warrant
issues
in the future.
26. As a related matter, we see that warrants were issued in
conjunction with a sale of common stock in June 2004 and that the
fair value of those warrants was expensed as interest.  The fair
value of warrants issued with common stock is not normally
accounted
for as interest expense.  Please clarify the basis in GAAP for
your
accounting.

Form 10-QSB for the quarter ended September 30, 2004
27. Please refer to prior comment 57.  In future filings, please
disclose the effect of abstentions and broker-non-votes in your
proxy
statement as required by Schedule 14A Item 21.

Form 10-QSB for the quarter ended December 31, 2004
28. Regarding your response to comment 58, please note that Form
8-K
requires disclosure based on the date you enter into the
agreement,
regardless of the need for subsequent shareholder approval.
29. Please refer to prior comment 59.  Please tell us where you
filed
copies of the agreements discussed in your various press releases
concerning agreements with distributors, such as your January 24,
2005 press release and your December 21, 2004 press release.

Form 10-QSB for the fiscal quarter ended March 31, 2005

Note 4.  Common Stock, page 8

30. We see that you issued shares of stock to Mr. Silverman as
partial consideration for loans.  The footnotes in future filings
should describe how you valued and accounted for that stock.
Please
apply the substance of this guidance to similar transactions where
you issue equity instruments as compensation.

Results of Operations, page 9
31. Please refer to prior comment 60.  Please tell us where you
discuss the impact related to your December 21, 2004 press release
concerning agreements with distributors that you "believe that
these
... favorably impact our revenue next year."

Gross Profit and Gross Profit Margin, page 10

32. In future filings, please provide an explanation for
fluctuations
in gross profit margin.  In general, MD&A should describe reasons
for
significant changes in gross margin on product sales.

Selling, General & Administrative (SG&A Expense), page 10

33. We note your response to prior comment 68.  Please tell us how
you are accounting for the re-pricing of employee stock options
during fiscal 2005.  It appears as though the revised options
should
be accounted for under variable plan accounting as a result of
these
modifications.   Please refer to Questions 10 and 11 of FIN 44.
Those paragraphs address the accounting for acceleration of
vesting
and reduction of exercise prices for existing employee options.

Controls and Procedures, page 10
34. Please confirm our understanding that your reference to Rule
13a-
14 should be to Rule 13a-15, and correct in future filings.

      As appropriate, please amend your filing and respond to
these
comments within 10 business days or tell us when you will provide
us
with a response.  You may wish to provide us with marked copies of
the amendment to expedite our review.  Please furnish a cover
letter
with your amendment that keys your responses to our comments and
provides any requested supplemental information.  Detailed cover
letters greatly facilitate our review.  Please understand that we
may
have additional comments after reviewing your amendment and
responses
to our comments.

	You may contact Kristin Lochhead at (202) 551-3664 or Gary
Todd
at (202) 551-3605 if you have questions regarding comments on the
financial statements and related matters.  Please contact Tom
Jones
at (202) 551-3602 or me at (202) 551-3617 with any other
questions.

Sincerely,

							Russell Mancuso
							Branch Chief

cc: (via fax): Richard T. Keppelman
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DiaSys Corporation
August 12, 2005
Page 7

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