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CORRESP
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      Unassociated Document

    NETFABRIC
      HOLDINGS, INC.

    299
      Cherry Hill Road,

    Parsippany,
      NJ 07054

    Phone:
      973-537-0077

    Fax:
      973-263-4746

    November30,
      2007

    Ms.
      Tia
      Jenkins

    Senior
      Assistant Chief Accountant

    Office
      of
      Beverages, Apparel and Health Care Services

    Division
      of Corporate Finance

    U.S
      Securities and Exchange Commission

    100
      F
      Street N.E.

    Mail
      Stop
      3561

    Washington,
      D.C. 20549-4561

            Re:
            NetFabric Holdings, Inc.

              Form
                10-KSB/A

              Filed
                August 31, 2007

              File
                No. 000-31553

    Dear
      Ms.
      Jenkins:

    On
      behalf
      of NetFabric Holdings, Inc., (“NetFabric” or the “Company”), we hereby submit
      NetFabric’s responses to the comments of the Staff (the “Staff”) of the
      Securities and Exchange Commission (the “Commission”) set forth in the Staff’s
      letter, dated October 29, 2007, regarding the above referenced Form
      10-KSB/A.

    For
      the
      convenience of the Staff, each of the Staff’s comments is included herein and is
      followed by the corresponding response of NetFabric. References herein to “we,”
“us” and “our” refer to NetFabric unless the context indicates
      otherwise.

    Form
      10-KSB For Fiscal Year Ended December
      31, 2006

    Notes
      to Consolidate Financial Statements

    Note
      9- Debt Financings

    2006
      Convertible Debentures, F-20

            1.

              We
                have reviewed your response to our prior comment three, noting that
                you
                have recorded the shares of common stock and warrants issued as
                consideration for the extension of 2006 Convertible Debentures at
                their
                relative fair value based on the guidance EITF 00-27, particularly
                paragraph 32. The issuance of the shares of common stock and warrant
                appear to be consideration issued for extension and do not appear
                to
                represent the issuance of convertible instrument for repayment of
                nonconvertible instrument discussed in Issue 11 and paragraph 32
                of EITF
                00-27. It appears that shares of common stock and warrants issued
                as
                consideration for modification of debt should be recorded at their
                fair
                value. Please advise or revise.

    Response:

    The
      instruments reissued in 2006 were convertible debentures. The Company applied
      the provisions of EITF 00-27 “Application of Issue No.98-5 to Certain
      Convertible Instruments” for accounting the extensions of 2006 Convertible
      Debentures. First, the Company determined the fair value of detachable
      instruments issued in the transaction. As a next step, pursuant to paragraph
      5
      of EITF 00-27, the Company allocated the proceeds received in the financing
      to
      convertible instruments and other detachable instruments on a relative fair
      value basis. Thereafter, the Issue 98-5 Model was applied to the amount
      allocated to the convertible instrument, and an effective conversion price
      was
      calculated and used to measure the intrinsic value, if any, of the embedded
      conversion option. In order to evaluate whether the convertible instrument
      has
      intrinsic value, to comply with paragraph 7 of EITF 00-27, it was essential
      to
      allocate the proceeds on a relative fair value to various instruments issued
      in
      the transaction.

    Based
      on
      the foregoing, the Company believes that it has appropriately accounted for
      the
      extension of 2006 Convertible Debentures. However to provide the Staff with
      further analysis the Company determined that if the fair value was used the
      discount would be $227,501 instead of the amount recorded of $172,250 (based
      on
      relative fair values), an increase of $55,251. Accordingly utilizing the fair
      value would increase the discount amortized to expense by $55,251 for the year
      ended December 31, 2006, which the Company believes is immaterial considering
      the net loss for 2006 was approximately $17 million.

    Laurus
      Convertible Non-Convertible Financings, F-22

            2.

              We
                have reviewed your response to our prior comment five, noting that
                you
                applied the provisions of APB 14 for options issued with Laurus Revolving
                Note. Please note that when equity instruments are issued in conjunction
                with a revolving note, APB is not applicable and the full fair value
                of
                the equity instruments should be charged to debt issue costs and
                amortized
                over the term of the loan. Please
                revise.

    Response

    The
      Company entered into a Security Agreement with Laurus Master Fund, Ltd.
      (“Laurus”) in February 2006. Pursuant to the Security Agreement, the Company
      sold a Secured Convertible (‘Convertible Note”) and a Secured Non-Convertible
      Revolving Note (“Revolving Note”) to Laurus. As an additional consideration the
      Company issued Laurus options or warrants to purchase 4,256,550 shares of the
      Company’s stock. Although the borrowing were contained in two instruments,
      underlying Security Agreement was common to both the instruments. Similarly,
      collateral, additional consideration and other matters were treated on a
      combined basis for the entire credit facility.

        2

    It
      is
      important to note that the warrants issued were additional consideration to
      the
      investor and not a fee paid to a third party. Given the Company’s size, lack of
      historical profitability and lack of asset base, an investor looks at the
      anticipated returns from the additional consideration as a part of the overall
      economics of the investment.

    The
      Company accounted for the warrants issued to Laurus in accordance with
      Accounting Principles Board Opinion No. 14 “Accounting for Convertible Debt
      Issued with Stock Purchase Warrants”. The warrants were detachable warrants. The
      fair value of the warrants were determined and as prescribed by Paragraph 16
      pf
      APB 14 allocated to Convertible Note and Revolving Note based on the relative
      fair values at the time of issuance.

    The
      fair
      value of warrants allocated to the Convertible Note was further allocated and
      accounted in accordance provisions of EITF 00-27 “Application of Issue No.98-5
      Certain Convertible Instruments” and EITF 98-5 “Accounting for Convertible
      Securities with Beneficial Conversion Feature or Contingently Adjustable
      Conversion Ratios”.

    The
      fair
      value of warrants allocated to the Revolving Note was further allocated based
      on
      the relative fair value of debt and warrants at the time issuance. This was
      in
      accordance Paragraph 16 of APB 14.

    The
      warrants issued were to the investors as additional consideration and not to
      a
      third party as fees. Therefore, they need to be considered as a component of
      the
      transaction and treated as an issuance cost. This aspect is articulated in
      Para
      22 of EITF 0027 “ (a) issuance costs are limited to incremental and direct costs
      incurred with parties other than the investor and (b) any amounts paid to the
      investors when the transaction is consummated represent a reduction in the
      proceeds received by the issued (not issuance cost)”.

    Based
      on
      the foregoing, the Company believes its treatment of warrants is appropriate.
      However, we would appreciate if you would cite specific authoritative literature
      that should be applied if APB 14 is not applicable.

        3

    Stockholder
      and Officer Convertible Debentures, F-27

            1.

              We
                have reviewed your response to our prior comment six, noting that
                you have
                recoded the shares of common stock issued as consideration for extension
                of the Related Party Convertible Debentures at their relative fair
                value
                based on the guidance of EITF 00-27, particularly paragraph 32. The
                issuance of the shares of common stock appear to be consideration
                issued
                for the extension and do not appear to represent the issuance of
                a
                convertible instrument for the repayment of a non-convertible instrument
                as discussed in Issue 11 and paragraph 32 of EITF 00-27. It appears
                that
                the shares of common stock issued as consideration for modification
                of the
                debt should be recorded at their fair value. Please advise or
                revise.

    Response:

    The
      Company applied the provisions of EITF 00-27 “Application of Issue No.98-5 to
      Certain Convertible Instruments” for accounting the extension of the Related
      Party Convertible Debenture. First the Company determined the fair value of
      detachable instruments issued in the transaction. As a next step, pursuant
      to
      paragraph 5 of EITF 00-27, the Company allocated the proceeds received in the
      financing to convertible instruments and other detachable instruments on a
      relative fair value. Thereafter, the Issue 98-5 Model was applied to the amount
      allocated to the convertible instrument, and an effective conversion price
      was
      calculated and used to measure the intrinsic value, if any, of the embedded
      conversion option. In order to evaluate whether the convertible instrument
      has
      intrinsic value, to comply with paragraph 7 of EITF 00-27, it was essential
      to
      allocate the proceeds on a relative fair value to various instruments issued
      in
      the transaction.

    Based
      on
      the foregoing, the Company believes that it has appropriately accounted for
      the
      extension of the Related Party Convertible Debenture. However to provide the
      Staff with further analysis the Company determined that if the fair value was
      used the discount would be $75,000 instead of the amount recorded of $30,000
      (based on relative fair values), an increase of $45,000. Accordingly utilizing
      the fair value would increase the discount amortized to expense by $45,000
      for
      the year ended December 31, 2006, which the Company believes is immaterial
      considering the net loss for 2006 was approximately $17 million.

    We
      hope
      we have clarified our position. In the interest of quick resolution of the
      matter, we will like to have a follow up call with you. Accordingly, we will
      contact you in 15 days to set a conference call at a time convenient to
      you.

    The
      Company hereby acknowledges the following:

            ·

              the
                Company is responsible for the adequacy and accuracy of the disclosure
                in
                the filing;

        4

            ·

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

            ·

              the
                Company may not assert Staff comments as a defense in any proceeding
                initiated by the Commission or any person with the federal securities
                laws
                of the United States.

            Sincerely,

            /s/ Vasan
              Thatham

              Vasan
              Thatham

              cc:

              Via
                Facsimile

              Fahad
                Syed

              NetFabric
                Holdings, Inc.

              Facsimile:
                (973) 263-4746

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