SecProbe.io

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MAIL STOP 05-11

December 30, 2004

Mr. Bryan Klinger, President
Q Matrix, Inc.
475 Aviation Boulevard
Suite 100
Santa Rosa, California  95043

      Re: 	Q Matrix, Inc.
  Registration Statement on Form SB-2
  File No. 333-120688
  Filed November 23, 2004

Dear Mr. Klinger:

      We have reviewed your filing and have the following
comments.
Where indicated, we think you should revise your document 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.

      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 comments or on any other
aspect
of our review.  Feel free to call us at the telephone numbers
listed
at the end of this letter.

Prospectus Cover Page

1. Please provide pricing information on the front cover of the
prospectus.  If a fixed price has yet to be determined, please
note
that Item 501(a)(8) of Regulation S-B requires that there be a
bona
fide estimate of the range of the maximum offering price.

2. Please provide the dealer prospectus delivery obligation on the
outside back cover page of the prospectus as set forth in Item
502(b)
of Regulation S-B.

Prospectus Summary, page 2

3. Revise the introductory paragraph to indicate that you are
describing the key or most significant aspects of the offering.
Likewise, indicate in the introductory paragraph of "Risk Factors"
that you are discussing all material risks in that section.

4. Please include summary financial information in this section.
Indicate as well that your auditors have expressed substantial
doubt
as to your ability to continue as a going concern.

5. We note that you have agreed to pay the expenses related to
this
offering.  Please disclose the amount of these expenses both here
and
in the Plan of Distribution section.

Risk Factors, page 3

6. You should present as risk factors only those factors that
represent a material risk to investors in this offering.  Some of
your risk factors appear generic and could apply to any company
within your industry as well as other industries.  We note, in
particular, risk factors 5 and 9.  Please revise this risk factor
to
clearly reflect the specific material risk to your company and
your
investors.

7. In most of your risk factor subheadings, you allude to a risk
but
do not clearly state the material risk to investors.  Generally,
the
subheading should clearly state the particular risk and the
consequences that may result if that risk should occur.  In
addition,
stating in the subheading that the risk may "adversely affect"
your
business or have an "adverse" effect on operations does not
adequately address the material risk to investors.  Revise your
subheadings to present the risks you are addressing in concrete
terms.  For example, we note that risk factors 1-5 and 7-11 do not
clearly state the risks and potential consequences to an investor
and
should be revised accordingly.

8. Please avoid the broad conclusion you reach in many of your
risk
factor narratives that the risk would have a material adverse
affect
on your business or operations or that your financial condition
could
be materially adversely affected.  Instead, replace this language
with specific disclosure of how your business and operations in
particular would be affected.  See, for example, risk factors 3,
4,
6, 7, 8 and 10.

9. Please disclose the number of claims that have been filed
against
you as referenced in risk factor 3 and the amount of the various
judgments sought.  Update as to the status of these.  You state
that
you believe you can settle these matters without adversely
affecting
your operations.  Provide the basis for this belief.

10. We note reference to "required funds" in risk factor 5.
Please
disclose the amount of funds you will require.

11. We note the reference to "required funds" in risk factor 5.
Please disclose the amount of
Funds the company will require to conduct its operations for the
next
12 months.  See Item 303 Reg. S-B.

12. Please advise supplementally the reason Xerox Corporation will
no
longer market your service agreements to their customers and why
there is no assurance why Xerox will continue to do business with
the
company in the future.

13. Given that you will need to raise additional funding, please
include a risk factor addressing the dilutive affects this will
have
on new and existing shareholders should you raise this funding
through the issuance of your securities.

14. We note the disclosure in risk factor 1, that we do not
believe
we can achieve profitability until we obtain additional financing
and
start acquiring other companies.  Given the financial condition of
this company please explain in detail your specific business plan
and
the means in which the company can make such acquisitions.  In
addition, please disclose if there are any preliminary agreements
or
understandings with respect to any acquisitions.

15. Please fully explain in detail this change in business
strategy
in the management discussion and analysis and elsewhere as
appropriate.  Upon receipt we may have additional comments.

16. Given the recent change in business strategy, please provide
by
supplemental letter an analysis as to why Rule 419 does not apply.

  Management`s Discussion and Analysis, page 7

Overview

17. The purpose of an "Overview" subheading is to provide
investors
with an executive level introduction of Q Matrix, Inc. and the
matters with which management is concerned primarily in evaluating
the company`s financial condition and operating results.  As such,
a
good introduction would include the following:  the economic or
industry-wide factors relevant to the company; a discussion of how
the company earns revenue and income; the identity of the
company`s
primary business lines, location(s) of operations, and principal
products and services; and insight into material opportunities,
challenges, risks, and material trends and uncertainties.  In
providing this information, it is important that it not merely
duplicate what may be in other parts of the MD&A section or in the
Business section of the prospectus.  In this regard, consider
supplementing this "Overview" section to include an introduction
of
the industry-wide factors that management views as most relevant
to
the company.  Discuss the company`s various operating segments and
briefly discuss how each segment generates revenues for the
company
and the primary services and product lines offered by each.  In
doing
so, discuss the various contract arrangements and terms offered by
the company to clients and the financial impact that each type has
had on your results of operations.  Finally, and to the extent
known,
provide insight into challenges, risks and opportunities of which
management is aware and discuss any actions being taken to address
the same.  This latter point seems especially significant given
the
company`s recent transition to remanufactured toner cartridges,
your
proposed distribution network, your proposed acquisition strategy
and
your apparent difficulty in raising cash.  For a more detailed
discussion of what is expected in both this subheading and the
MD&A
section in general, please refer to:
http://www.sec.gov/rules/interp/33-8350.htm.  See also, Item 303
of
Regulation S-B.

Results of Operations

18. Please revise to describe your "roll-up" acquisition strategy
and
the potential impact this may have on your results of operations
and
financial position.  Discuss whether any acquisitions are
probable.
Please note that financial statements are required to be filed in
the
registration statement for acquisitions that are probable and
significant.  Refer to Item 310(c) of Regulation S-B.

19. Please revise to describe clearly the specific nature of your
revenue-generating activities.  As indicated below in our
financial
statement comments, it is not clear if you are the primary obligor
in
your service and product arrangements or if you are functioning as
an
agent for third-party service providers or product vendors.

20. Please revise to discuss service revenue separately from
product
sales and the related cost of services and cost of products sold.
Discuss service margins and product sale margins separately as
well
if material to an understanding of the business as a whole.

21. Please revise to explain why annual service contracts have not
been renewed in light of your disclosure that many long-time
customers continue to request service.  Discuss also the reasons
for
the "continued erosion" of the service contract business and why
you
opted to switch to the toner segment of the market.

22. Please ensure to quantify separately the effect of each causal
factor that you cite for material changes in your financial
statement
amounts, as required in Financial Reporting Codification Section
501.04.

23. Expand to discuss the changes in material components of
general
and administrative expenses.

      Comparison of Year Ended 12/31/2003 to Year Ended 12/31/2002

24. Please explain the reason for the $500,000 drop in annualized
service contracts.  We note that there were $1.4 million of
contracts
in force as of December 31, 2003.  Please compare this amount to
2002.

25. We note that many of the annual service contracts are not
being
renewed.  Please explain the reason for this.

26. Please identify the high profit margin customer that was lost
in
mid 2002 and the reason for the loss.

27. Please explain the reason the drop in selling, general and
administrative expenses for 2003.  Discuss Sales and Marketing
expense separate from General and Administrative expense.

28. Please explain the statement that management is "confident
that
the remaining staff represents the core the Q Matrix competency."

Comparison of the Nine Months Ended 9/30/2003 to the Nine Months
Ended 9/30/2004

29. As appropriate, please incorporate here your responses to the
above comments for the Year Ended 12/31/2003 and 12/31/2002.

30. In the first paragraph of this subheading, you state
"[o]perating
results for the nine months ended September 30, 2004 continued to
reflect the necessary changes in our operations as we prepare to
pursue the `roll-up` acquisition strategy...."  Please elaborate
on
this statement and define "roll-up."

31. We note the decrease in revenues attributable "to the loss of
a
few large customers and the continued erosion of [y]our service
contract business."  Please identify these customers, the
percentage
impact the loss of their business has had, and the reason for the
continued erosion in this aspect of your business.

32. We note your decision to terminate a large, but unprofitable
customer relationship.  Please identify this customer, the reason
you
terminated the relationship and quantify the impact this will
have.

33. We note that the loss of $189,086 excludes the write-off and
fees
associated with preparing this registration statement.  Disclose
the
extent of the loss including these amounts.

34. Please elaborate on the last sentence beginning with "We have
maintained key customer relationships...."

35. Please include a comparison of Sales and Marketing and General
and Administrative expenses.

Liquidity and Capital Resources

36. Please disclose the amount of cash on hand as of the most
recent
practicable date.

37. Please allocate the amounts necessary over the next 12 months
to
cover all budgeted expenses deemed material.  Discuss the
anticipated
milestones in implementing your plan of operation and the time
frame
for beginning and completing each.

38. Please identify the major customer that had excessive service
costs and quantify the amount of these costs and their impact on
liquidity and cash flows.

39. We note your disclosure describing that a major customer had
excessive unanticipated costs associated with a very large
contract.
Revise to explain the reasons for these costs, explain the facts
and
circumstances surrounding the $136,000 write-off of all or part of
this customer`s receivable.  Be sure to explain why the "excessive
unanticipated" costs were limited to this one customer and did not
extend to other customers.

40. Please identify your Preferred Service Providers and fully
discuss all debts owed by the company.  Such disclosure would
include
the identify of the parties, the principal amounts outstanding,
time
to maturity, interest rates and all efforts undertaken or planned
to
satisfy payment obligations.  File all notes as exhibits.

Summary of Cash Flows, page 9

41. Explain the reasons for the significant changes in current
assets
and liabilities, such as accounts payable, accounts receivable and
deferred revenue.

Business, page 10

	Overview

42. Include a discussion of the business development for the
company
and its predecessor(s), including the identity of all promoters,
control persons and affiliates and the dates and places of
incorporation.  See Item 101(a)(3) of Regulation S-B.

43. In the fifth paragraph, you state, "We believe we are uniquely
positioned to service and support customers on a nationwide
basis...."  Please provide the basis for this belief.  In
addition,
explain the rationale behind this statement given your transition
to
the remanufactured toner market and apparent move away from
service
and support contracts.

44. Under "Re-Manufactured Toner Cartridges" on page 11, please
identify your selected re-manufactures and indicate the
availability
of re-manufactured cartridges from sources other than those you
have
identified.

Competition

45. Please indicate your competitive position in the industry as
required by Item 101(b)(4) of Regulation S-B.

46. Either substantiate or delete your statement that "no other
company is as well positioned to accomplish [the] roll-up
strategy"
as you.

Proposed Acquisition Strategy

47. Please explain the basis for your statement that "management
believes that there is practically no existing exit strategy for
75%
of companies in the market."

Legal Proceedings

48. Please disclose the payment dates for the $50,000 settlements.
File the settlement agreements as exhibits.

Intellectual Property

49. Please describe and list all intellectual property rights as
required by Item 101(b) (7) of Regulation S-B.

Research and Development [new heading]

50. Please provide the disclosure required by Item 101(b) (10) of
Regulation S-B regarding research and development.

Management, page 16

	Executive Officers and Directors

51. If any of your officers do not anticipate devoting all of
their
time to company business, please disclose in percentage terms the
amount of time they will contribute.  In this regard, we note that
certain officers are also engaged in outside endeavors.

52. For each director holding outside directorships, please
indicate
those companies that are "reporting companies."  See Item
401(a)(5)
of Regulation S-B.

Executive Compensation, page 19

53. Under "Option/SAR Grants in Last Fiscal Year," please explain
the
column headings "5%($)" and "10%($)."

54. Under "Employment Arrangements" on page 20, we note that
certain
officers will receive compensation adjustments upon completion of
an
equity offering.  Please clarify whether "equity offering" refers
to
a primary offering by the company.  In addition, please disclose
that
Mr. Klinger will receive a $40,000 signing bonus once a PIPE
offering
has been completed.

Security Ownership of Certain Beneficial O