SecProbe.io

CORRESP
1
filename1.htm

                  Robert
                    H. Cohen

                  212-801-6907

                  CohenR@gtlaw.com
                   December 6,
                    2005

VIA
            EDGAR TRANSMISSION

      Andrew
        Schoeffler, Esq.

      Chris
        Edwards, Esq.

      Office
        of
        Chief  Counsel

      Division
        of Corporation Finance

      Securities
        and Exchange Commission

      100
        F
        Street, N.E.

      Washington,
        D.C. 20549

      Mail
        Stop: 7010

                        Re:  Re:
          Xethanol Corporation

          Amendment
        No.
        1 to Registration Statement

          on
        Form SB-2
        (File No. 333-129191)

          Form
        10-QSB/A
        for the quarter ended September 30, 2005 (File No.
        000-50154)

      Ladies
        and Gentlemen:

      On
        behalf
        of Xethanol Corporation, a Delaware corporation (the “Registrant”), we transmit
        herewith for filing with the Securities and Exchange Commission (the
“Commission”), pursuant to Section 6 of and Regulation C under the Securities
        Act of 1933, as amended (the “Securities Act”), and Rule 101(a)(1)(i) of
        Regulation S-T under the Commission's Electronic Data Gathering and Retrieval
        System (EDGAR), one complete electronic version of Amendment No. 1 (“Amendment
        No. 1”) to the Registrant’s Registration Statement on Form SB-2 (No.
        333-129191), originally filed with the Commission on October 21, 2005 (the
        “Registration Statement”), including one complete electronic version of the
        exhibits listed as filed therewith, for the registration under the Securities
        Act of the offer and resale of up to 19,462,047 shares of the Registrant’s
        common stock, par value $.001 per share (the “Common Stock”).

      Amendment
        No. 1 responds to the comments heretofore received from the Commission’s staff
        (the “staff”) by a letter dated November 16, 2005 (the “Comment Letter”) with
        respect to the Registration Statement. For the staff’s convenience, the staff’s
        comments have been restated below in bold type (the numbers thereof
        corresponding to the numbers of the staff’s comments contained in the Comment
        Letter) and the responses to each comment appear immediately below such comment.
        For the further convenience of the staff, to the extent there have occurred
        pagination changes with respect to certain text contained in the Registration
        Statement, the Registrant has indicated in each response the new page numbers
        on
        which the beginning of such revised text now appears in Amendment No. 1.
        All
        capitalized terms used and not defined herein have the respective meanings
        assigned to them in the Comment Letter.

      The
        Registrant notes that a filing fee of $10,918.59 calculated by the Registrant
        in
        accordance with Rule 457(g) under the Securities Act was paid by the Registrant
        on October 21, 2005 by wire transfer to the Commission’s depository account
        maintained at Mellon Bank N.A. (Receiving Bank ABA No. 04300261) in connection
        with the original filing of the Registration Statement with the Commission
        on
        such date.

      Three
        courtesy copies of Amendment No. 1, marked to show changes made to the
        Registration Statement as originally filed with the Commission on October
        21,
        2005, together with three hardcopies of this letter, are concurrently being
        provided to the staff via overnight courier to the attention of Andrew
        Schoeffler, Esq., Staff Attorney.

      In
        addition, as per a telephonic conference with Mr. Schoeffler on November
        28,
        2005, the Registrant is also concurrently providing to the staff via overnight
        courier, three copies of Amendment No. 1 on Form 10-QSB/A to the Registrant’s
        Quarterly Report on Form 10-QSB for the fiscal quarter ended September 30,
        2005
        (the “Form 10-QSB/A”). The Form 10-QSB/A is responsive to comments 32 through 35
        contained in the Comment Letter relating to Item 3 of Part I of the Registrant’s
        Form 10-QSB originally filed with the Commission on November 14, 2005 (the
        “Original Form 10-QSB”). For the staff’s convenience, the Form 10-QSB/A has been
        marked to show changes made to Item 3 of Part I of the Original Form 10-QSB.
        All
        of the other Items contained in the Original Form 10-QSB, including, without
        limitation, all of the financial statements and the related notes thereto,
        remain unchanged and, accordingly, have not been restated in the Form 10-QSB/A.
        Upon resolution of the staff’s comments in respect of the Registration Statement
        and the Registrant’s 10-QSB and prior to the Registrant’s request for
        acceleration of the effective date of the Registration Statement, the Registrant
        will file the 10-QSB/A electronically via EDGAR.

        Andrew
          Schoeffler, Esq.

        Chris
          Edwards, Esq.

        December
          6, 2005

        Page
          2

      The
        Comment Letter

      Registration
        Statement on Form SB-2

      General

              1.

                We
                  note that you have registered 303,556 shares of your common stock
                  that you
                  issued to Fusion Capital as a commitment fee under the common stock
                  purchase agreement. We also note that Fusion Capital is restricted
                  in its
                  ability to transfer or sell these shares for a period of at least
                  25
                  months. It appears to us, therefore, that the registration of these
                  shares
                  is premature at this time. Please delete these shares from your
                  registration statement. See Rule 415(a)(2) of Regulation
                  C.

      The
        Registrant respectfully submits to the staff that the 303,556 shares issued
        to
        Fusion Capital (the “Commitment Shares”) should not be deleted from the
        Registration Statement. The Purchase Agreement provides that Fusion Capital
        may
        not transfer the Commitment Shares until the earlier of 500 trading days
        (25
        monthly periods) from the date of execution of the Purchase Agreement (October
        18, 2005), or the date on which the Purchase Agreement is terminated.
        Accordingly, the restriction on transfer on the Commitment Shares expires
        before
        the date that is 24 months from the date of effectiveness of the Registration
        Statement and may reasonably be expected to be sold prior to such
        time.

              2.

                Please
                  be advised that following the effectiveness of your registration
                  statement, you must file a prospectus
                  supplement:

              ·

                to
                  reflect changes in the equity line arrangement with Fusion Capital,
                  such
                  as increases or decreases in the Daily Purchase Amount, your exercise
                  of a
                  put right with respect to the Block Purchase Amount and the suspension
                  of
                  Fusion Capital’s obligation to purchase shares,
                  and

              ·

                to
                  reflect changes in selling stockholder information, including the
                  sale of
                  material amounts of
                  securities.

      The
        Registrant acknowledges its obligation to file prospectus supplements
        and
        is so advised.

        Andrew
          Schoeffler, Esq.

        Chris
          Edwards, Esq.

        December
          6, 2005

        Page
          3

      Cover
        Page of Registration Statement

              3.

                We
                  note the disclosure in footnote 6 to the registration fee table.
                  Please
                  provide us with a copy of your calculation of the maximum offering
                  price
                  per share with respect to the shares issuable upon conversion of
                  your
                  royalty income notes and exercise of your warrants. See Rule 457(g)
                  of
                  Regulation C.

      The
        Registrant respectfully advises the staff that each of the royalty income
        notes
        is convertible at a price of $4.00 per share of common stock, as indicated
        in
        footnote 4 to the registration fee table. Additionally, set forth below is
        a
        table summarizing our calculation of the weighted average exercise price
        for the
        Registrant’s outstanding warrants.

                Exercise
                  Price

                Warrant
                  Shares

                Proceeds
                  to Company if all

                Warrants
                  Exercised

                $

                1.90

                390,294

                $

                741,559.39

                $

                2.00

                176,088

                $

                352,179.59

                $

                2.50

                629,884

                $

                1,574,711.14

                $

                3.25

                17,656

                $

                57,382.61

                $

                3.25

                61,797

                $

                200,839.12

                $

                3.75

                45,312

                $

                169,921.40

                $

                4.00

                107,656

                $

                430,624.00

                $

                5.25

                20,000

                $

                105,000

                Total

                1,431,032

                $

                3,574,830.64

                Weighted
                  Average Exercise Price per Warrant

                $

                2.50

      Summary,
        page 1

              4.

                This
                  section is very detailed and lengthy and provides too much information
                  for
                  summary disclosure. In particular, we note the subsections “Our Business”
                  and “Corporate History and Recent Developments.” Your summary section
                  should provide a brief overview of the most important aspects of
                  your
                  business and the key aspects of your offering. Please revise
                  accordingly.

      The
        Registrant has revised the referenced disclosure, as requested. The Registrant’s
        revisions begin on page 1 and appear throughout the Summary
        section.

      Fusion
        Capital Common Stock Purchase Agreement, page 5

              5.

                We
                  note that you may not sell shares to Fusion Capital if the shares
                  to be
                  issued in connection with a sale would result in Fusion Capital
                  owning
                  more than 9.9% of your outstanding common stock. Please disclose
                  the 9.9%
                  threshold and the number of shares that Fusion Capital would have
                  to own
                  to reach this threshold.

      The
        Registrant has added the referenced disclosure, as requested, on page 2
        of
        the Summary section.

              6.

                Please
                  disclose that Fusion Capital’s sales of shares will likely cause the
                  market price of your common stock to decline and that such a decline
                  will
                  cause you to issue additional shares to Fusion Capital. In this
                  regard,
                  please disclose in your summary section the table set forth on
                  page 58 of
                  your prospectus.

      The
        Registrant has added the referenced disclosure, as requested, on page 3
        of
        the Summary section.

        Andrew
          Schoeffler, Esq.

        Chris
          Edwards, Esq.

        December
          6, 2005

        Page
          4

      Special
        Note Regarding Forward-Looking Information, page 16

              7.

                We
                  note the disclaimer set forth in the last sentence. You may not
                  disclaim
                  any obligations under the federal securities laws. Please revise
                  accordingly.

      The
        Registrant has revised the referenced disclosure, as requested, on page 13
        of Amendment No. 1.

      Use
        of Proceeds, page 18

              8.

                Please
                  describe in greater detail the anticipated use of the net proceeds
                  you may
                  receive under the common stock purchase agreement. Please also
                  describe
                  how you will allocate these net proceeds based on an assumed range
                  of net
                  proceeds. See Item 504 of Regulation
                  S-B.

      The
        Registrant has added the referenced disclosure, as requested, on page 15
        of
        Amendment No. 1.

      Principal
        and Selling Stockholders, page 46

              9.

                Please
                  revise this section heading to clarify that this section only discusses
                  your selling stockholders. In this regard, we note the “Stock Ownership”
                  section on page 42.

      The
        Registrant has revised the section heading, as requested.

              10.

                Please
                  disclose how the selling stockholders received the shares to be
                  offered
                  for resale. Alternatively, please provide cross references to this
                  information.

      The
        Registrant has revised the referenced disclosure, as requested, on page 45
        of Amendment No. 1.

              11.

                Please
                  advise us as to whether any entity listed in your selling stockholder
                  table is a broker-dealer or an affiliate of a broker-dealer. If
                  a selling
                  stockholder is a broker-dealer, your prospectus should state that
                  the
                  selling stockholder is an underwriter. If a selling stockholder
                  is an
                  affiliate of a broker-dealer, please provide the following representations
                  in your prospectus:

              ·

                the
                  selling stockholder purchased the securities to be resold in the
                  ordinary
                  course of business; and

              ·

                at
                  the time of the purchase of the securities to be resold, the selling
                  stockholder had no agreements or understandings, directly or indirectly,
                  with any person to distribute the
                  securities.

      The
        Registrant respectfully submits to the staff that to the best of its knowledge,
        Brookstreet Securities Corporation is the only broker-dealer registered with
        the
        National Association of Securities Dealers, Inc. who is a selling stockholder
        in
        this offering. Footnote 16 to the selling stockholder table in