SecProbe.io

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                                                      Circle Group Holdings, Inc
                                                              1011 Campus Driver
                                                             Mundelein, Il 60060
                                                                    847.549.6002
                                                                Fax:847.549.6028
                                                                    www.crgg.com
                                                                        AMEX CXN

August 11, 2005

Attention: Ms. Cicely D. Luckey
Accounting Branch Chief
Division of Corporate Finance
Securities Exchange Commission
Washington, D.C. 20549

Re: Circle Group Holdings, Inc.
Form 10-K for Fiscal Year Ended December 31, 2004
Form 10-Q for Fiscal Quarter Ended March 31, 2005
File No. 1-32134

Dear Ms. Luckey,

Your  correspondence by facsimile forwarded to the undersigned was received July
26, 2005. The responses  required of Circle Group by your letter follows and the
text of your letter has been repeated for your convenience of review.

A. SEC INFORMATION REQUESTED.

Form 10-K for the year ended December 31, 2004

Item 5 - Market Price for Common Equity and Related Stockholder Matters, page 9

1.   We note your  issuance  of common  stock for  professional  and  consulting
     services  performed.  Please  tell us how you  accounted  for  these  stock
     issuances,  the value  assigned  for these  services and the nature of your
     relationship with whom the stock was issued. Reconcile these issuances with
     the information  provided in your Consolidated  Statements of Stockholders'
     Equity for "Stock issued for services."

<PAGE>

REPLY TO 1.

     Circle Group  accounted for the stock  issuances by amortizing  the expense
     over the term of the  contracts.  The values of the shares were recorded on
     the equity  section of the balance sheet and the profit and loss  statement
     was charged for  compensation  based on the value  described in this reply.
     All of the listed stock  issuances  occurred  during the fourth  quarter of
     2004. The table below identified the recipient,  nature of the services and
     the expected dates of the amortizations.

     (i) Nature of Services  Total Number  Shares Issued  Professional  Services
     2,514,619 Consulting Services 1,200,000

     (ii) Circle  Group  assigned  the stock  price as of the  trading  price as
     traded on the  American  Stock  Exchange on the date of the  contract  that
     Circle Group agreed to issue the stock to the respective recipients.

     (iii) A summary of the transactions are provided below -
<TABLE>
<CAPTION>

<C>                                                      <C>
1. October 31, 2004,  we issued     3,022 shares of our common stock in exchange for professional services.

2. November 19, 2004, we issued 1,000,000 shares of our common stock in exchange for consulting services.

3. November 23, 2004, we issued   155,840 shares of our common stock in exchange for professional services.

4. November 21, 2004, we issued   100,000 shares of our common stock in exchange for professional services.

5. November 30, 2004, we issued     3,599 shares of our common stock in exchange for professional services.

6. December 10, 2004, we issued   200,000 shares of our common stock in exchange for consulting services.

7. December 27, 2004, we issued 2,250,000 shares of our common stock in exchange for professional services.

8. December 31, 2004, we issued     2,158 shares of our common stock in exchange for professional services.
</TABLE>

1.  Securities  issued  relating  to  numbers  1,3,5,8  from  above  is due to a
long-term  relationship developed several years ago with our corporate law firm.
They chose to take 25% of their  billable fees in  restricted  stock as payment.
This is an on going relationship.

2. This  consultant  purchased  these shares at 90 cents per share and agreed to
provide,  on terms  acceptable to the Company,  certain  consulting  services in
Greece, including, but not limited to, securing the distribution and sale of the
Company's  products  in  Greece,  securing a  manufacturing  plant in Greece and
providing investment, merger and/or acquisition opportunities to the Company

4. This company was granted shares in exchange for Public Relations Services.

6 & 7.  During  the term of this  agreement  the  consultants  shall  market and
introduce the company to the International  financial and business  community in
the Middle East.  During the term of this agreement the consultant  shall secure
distribution, sales, and locate a manufacturing plant, in Israel. The Consultant
shall  also   introduce   investors  and  provide   merger  and/or   acquisition
opportunities for the Company.

                                                                          Page 2
<PAGE>

Note 2 - Summary of Significant Accounting Policies, page F-8

Revenue Recognition

2.   We note that your On-line  bedding segment  subcontracts  the production of
     your bedding products to manufacturers and the manufacturers  drop ship the
     products to your  customers.  Please tell us how you considered  EITF 99-19
     for reporting revenue from this segment. REPLY TO 2.

     In  accordance  with EITF Issue No.  99-19  "Reporting  Revenue  Gross as a
     Principal  versus Net as an Agent,"  Circle  Group  recognizes  all amounts
     billed by Online  Bedding as gross revenue  because Circle Group is at risk
     for the payment of its direct costs,  whether or not the customers pay on a
     timely basis or at all, and Circle Group  assumes a  significant  amount of
     other risks and  liabilities  such as freight  changes,  and therefore,  is
     deemed to be a principal in regard to these transactions.

Form 10-Q for the Quarterly Period Ended March 31, 2005

Going Concern Qualification, page 4

3.   Please  explain your  consideration  of Item 310(b) of Regulation S-B as it
     related to filing the accountants'  review report given your statement that
     your independent  auditors have included an explanatory  paragraph in their
     review report on the March 31, 2005 consolidated financial statements.

REPLY TO 3.

     Under Item 310(b) of Regulation  S-B, the  Accountants  Review Report dated
May 9 2005 is provided and attached hereto. A comparable situation will arise in
the second quarter of 2005 and an updated letter will be issued related  thereto
on  Form  10-Q  for  the  Quarterly  Period  Ended  June  30,  2005  .  Note 6 -
Stockholders' equity, page F-6

4.   Please explain to us how you  determined the value of your note  receivable
     currently  in  default  is not  impaired.  In  addition,  tell us what  the
     repayment  terms are and what your plans are if these  repayment  terms are
     not met.

REPLY TO 4.

                                                                          Page 3
<PAGE>

     The original Full Recourse Promissory Note was issued in 2004 in the amount
     of  $2,040,000.  The amount of $1,075,000 was paid in 2004 in part with the
     last  payment of  $175,000  being  made on March 3, 2005 with the  original
     balance of the debt was to be paid by May 2005. To avoid unnecessary use of
     time, resources and expenses of litigation, the Company had made a decision
     in Q-1 to pursue a structured settlement in 4 payments totaling the balance
     due.  Based upon  agreed  upon a schedule  of  payments,  the Debtor made a
     second  payment of $325,000,  which came back as  non-collectible  funds in
     April of 2005 during the second quarter.  Repeated attempts to collect were
     unsuccessful  and the Company  filed an action  which is now pending in the
     Illinois  Federal  Court to collect  the  remaining  balance  of  $965,000.
     Although the Note has Full  Recourse and we believe that the Debtor has the
     assets and the  capability  to pay the balance now due, our  Auditors  have
     informed us that the entire remaining unpaid balance will be fully impaired
     in the  upcoming  10Q  Filing  for the  period  ending  June 30 2005.  This
     litigation will be updated as necessary in Q-2 and future filings.

Circle Group Holdings acknowledges the following 3 statements:

o    The company is responsible  for the adequacy and accuracy of the disclosure
     in its filings;

o    staff  comments or changes to disclosure  in response to staff  comments do
     not  foreclose  the  Commission  from taking any action with respect to the
     filings; and

o    the company may not assert  staff  comments as a defense in any  proceeding
     initiated by the Commission or any person under federal  securities laws of
     the United States.

     We hereby  respectfully  submit to you the  answers  contained  herein  and
     please do not  hesitate  to contact the  undersigned  if you would like any
     further clarification on your review of the File No. 1-32134.

                                  Kind regards,

                                  Circle Group Holdings, Inc.

                                  -----------------------------
                                  Dana L. Dabney
                                  Chief Financial Officer

Copy:    Thomas Flinn
         Gregory J. Halpern
         Ken Kwiatt, Esq.

                                                                          Page 4
<PAGE>

                                   Exhibit A

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders
of Circle Group Holdings, Inc.

We have reviewed the  accompanying  consolidated  balance sheets of Circle Group
Holdings,  Inc. as of March 31, 2005 and 2004,  and the  related  statements  of
operations,  and cash flows for the  three-month  period(s)  then  ended.  These
consolidated  financial  statements  are  the  responsibility  of the  company's
management.  We conducted  our review in  accordance  with the  standards of the
Public Company  Accounting  Oversight Board (United States). A review of interim
financial information consists principally of applying analytical procedures and
making inquiries of persons responsible for financial and accounting matters. It
is  substantially  less in scope  than an audit  conducted  in  accordance  with
standards of the Public Company Accounting  Oversight Board (United States), the
objective  of which is the  expression  of an opinion  regarding  the  financial
statements  taken as a whole.  Accordingly,  we do not express  such an opinion.
Based on our review, we are not aware of any material  modifications that should
be made to the  accompanying  interim  financial  statements  for  them to be in
conformity with accounting principles generally accepted in the United States of
America.

As  discussed  in Note 2, certain  conditions  indicate  that the Company may be
unable to continue as a going concern. The accompanying  consolidated  financial
statements  do  not  include  any  adjustments  to  the  consolidated  financial
statements that might be necessary should the Company be unable to continue as a
going concern.

/s/Spector & Wong, LLP
----------------------
Spector & Wong, LLP
Pasadena, CA
May 9, 2005

                                                                          Page 5

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