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Correspondence

Confidential Treatment
Requested

   STEVEN
B. BOEHM
   DIRECT LINE:
202.383.0176
   Internet:
steven.boehm@sablaw.com

May 3, 2005

VIA FACSIMILE AND REGULAR
MAIL

Ms. Yolanda Crittendon
Staff
Accountant
Division of Corporation Finance
U.S. Securities and Exchange Commission

450 Fifth Street, NW
Washington,
DC 20549

      Re:
Cambridge Holdings, Ltd.,   File No. 000-12962

Dear Ms. Crittendon:

        On
behalf of our client, Cambridge Holdings, Ltd. (“Cambridge” or the
“Company”), this letter responds to your letter of February 17, 2005 (the
“Staff’s letter”), and pursuant to our discussion yesterday, this letter
supersedes and replaces the letter sent to you on behalf of the Company dated April 22,
2005. We have set forth your comments, followed by our responses below. Note that the
responses to items 1, 3, and 4 are based on consultation with and the advice of A.J.
Robbins, PC, Certified Public Accountants, the Company’s outside accounting firm. In
addition, please note that confidential treatment is being requested with respect to the
response to Comment No. 2.

         1.
          Tell us how you considered the interpretive guidance in FR-72 with regards to
          including a discussion of the Company’s critical accounting policies; the
          judgments and uncertainties affecting the application of those policies; and the
          likelihood that materially different amounts would be reported under different
          conditions or using different assumptions. For example, we note no discussion of
          the judgments and estimates required in your accounting for investments or
          impairments on long lived assets. Please explain.

Confidential Treatment
Requested

Ms. Yolanda Crittendon
May 3, 2005

Page 2

        Based
upon a review of the Company’s filings and consideration of the interpretive guidance
of FR-72, we concur that additional focused disclosure of the Company’s critical
accounting policies within the Management Discussion & Analysis of Form 10-KSB would
be preferable. Our proposed disclosure to be contained in such reports is as follows:

Critical
Accounting Policies

        Our
financial position, results of operations and cash flows are impacted by the accounting
policies we have adopted. In order to obtain a full understanding of our financial
statements, one must have a clear understanding of the accounting policies employed. A
summary of our critical accounting policies follows:

Investments

        We
classify our investments as either available-for-sale or held-to-maturity.
Available-for-sale securities are reported at their fair value, which is determined by
obtaining quoted market prices. Unrealized gains and losses on available-for-sale
securities are included in other comprehensive income and excluded from earnings.
Realized gains and losses and declines in fair value judged to be other than temporary
are included in earnings. The fair value of financial instruments is discussed in more
detail in the Notes to Financial Statements included in Item 7 of this report.

Long-Lived
Assets

        Our
property and equipment is recorded at cost. Depreciation of the assets is recorded on the
straight-line basis over the estimated useful lives of the assets. Dispositions of
property and equipment are recorded in the period of disposition and any resulting gains
or losses are charged to income or expense when the disposal occurs. The carrying value
of our long-lived assets is periodically reviewed to determine that such carrying amounts
are not in excess of estimated market value.

Deferred
Income Taxes

        Deferred
tax assets and liabilities are recognized for the future tax consequences attributable to
differences between the financial statement carrying amounts of existing assets and
liabilities and their respective tax bases. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the years in
which those temporary differences are expected to be recovered or settled. The effect on
deferred tax assets and liabilities of a change in tax rates is recognized in income in
the period that includes the enactment date. In addition, a valuation allowance is
established to reduce any deferred tax asset for which it is determined that it is more
likely than not that some portion of the deferred tax asset will not be realized.

Revenue
Recognition

        Our
revenues are recognized when rental revenues or property sales are complete or upon the
completion of sales of securities. The Securities and Exchange Commission’s Staff
Accounting Bulletin (SAB) No. 104, “Revenue Recognition” provides guidance on
the application of generally accepted accounting principles to select revenue recognition
issues. We concluded that our revenue recognition policy is appropriate and in accordance
with SAB No. 104.

Confidential Treatment
Requested

Ms. Yolanda Crittendon
May 3, 2005

Page 3

Stock-based
compensation

        SFAS
No. 123, “Accounting for Stock-Based Compensation,” defines a fair-value-based
method of accounting for stock-based employee compensation plans and transactions in
which an entity issues its equity instruments to acquire goods or services from
non-employees, and encourages, but does not require, companies to record compensation
cost for stock-based employee compensation plans at fair value. We have chosen to account
for employee stock-based compensation using the intrinsic value method prescribed in
Accounting Principles Board Opinion No. 25 (APB No. 25), “Accounting for Stock
Issued to Employees,” and related interpretations. Accordingly, employee
compensation cost for stock options is measured as the excess, if any, of the estimated
fair value of our stock at the date of the grant over the amount an employee must pay to
acquire the stock.

        Transactions
in which we issue stock-based compensation for goods or services received from
non-employees are accounted for based on the fair value of the consideration received or
the fair value of the equity instruments issued, whichever is more reliably measurable.
We often utilize pricing models in determining the fair values of options and warrants
issued as stock-based compensations to non-employees. These pricing models utilize the
market price of our common stock and the exercise price of the option or warrant, as well
as time value and volatility factors underlying the positions.

        In
December 2004, the FASB issued SFAS No. 123 (R) “Share-Based Payment,” which
addresses the accounting for share-based payment transactions. SFAS No. 123(R) eliminates
the ability to account for share-based compensation transactions using APB Opinion No.
25, “Accounting for Stock Issued to Employees,” and generally requires instead
that such transactions be accounted for and recognized in the statement of income based
on their fair value. SFAS No. 123 (R), will be effective for public companies that file
as small business issuers as of the first interim or annual reporting period that begins
after December 15, 2005. We are evaluating the provisions of this standard, but depending
upon the number and terms of options that may be granted in future periods, the
implementation of this standard could have a material impact on our financial position
and results of operations.

        If
the foregoing disclosure is acceptable and responsive to your comment, we will amend our
Form 10-KSB to include such disclosure.

        2.
          [Redacted
— Confidential Treatment Requested]

        3.
          We note that your investment in A4S Technologies is classified as investment
          securities – available for sale. Considering A4S is a privately-held
          company, tell us how you considered the scope of requirements of paragraph 3 of
          SFAS 115 in classifying this investment as an available for sale security. Also
          tell us how you considered the requirements of AFB 18 in accounting for this
          investment.

Confidential Treatment
Requested

Ms. Yolanda Crittendon
May 3, 2005

Page 4

        The
cost of the A4S investment that has been included with, “investment securities –
available for sale,” on the Company’s balance sheet totals $125,000. This
classification was done primarily on the basis of materiality of presentation amounts. The
A4S investment cost amount represents approximately 3% of total “investment
securities – available for sale,” and approximately 2.6% of total assets. The
Company does not believe that the inclusion of this $125,000 private company investment,
within this approximate $3.9 million financial statement line item is misrepresentative to
readers and users of the financial statements.

        The
Company’s equity investment in A4S represents a total of 345,938 common shares out of
the total of 2,711,951 common shares outstanding. This represents approximately 12.76% of
the outstanding common shares of A4S. APB 18, paragraph 18, provides that in determining
an investor’s voting stock interest for applying the equity method of accounting for
such investment, “Potential voting privileges that may become available to holders of
securities of an investee shall be disregarded.” Even if the additional 140,416
common shares (representing an additional 5.2% stake) owned by Gregory Pusey, an
affiliate, are included, the total owned is less than the 20% threshold needed to presume
the ability to control. Accordingly, the Company believes that the provisions of APB 18
are not considered applicable.

        4.
          In a supplemental response, tell us how you considered FIN 46(R) relating to
          your investment in A4S Technologies. Provide us your analysis under FIN 46 that
          supports you conclusions and clarify the manner in which you assessed
          materially. Explain how you factored into your analysis any related party
          interests and the convertible notes due from A4S. Also, tell us if you have any
          other investments that you considered for the application of FIN 46(R).

        As
part of the Company’s procedures in preparing and filing its quarterly and annual
financial statements, it does consider the implications and requirements of FIN 46(R) for
all of its material items. The Company has determined that the provisions of FIN 46(R) are
not applicable to the A4S investment accounting. The following factors were reviewed and
considered relative to the A4S investment in particular:

               1.

               The total investment owned directly by the Company in A4S is 12.7% of the common
               stock and including the affiliated ownership of Gregory Pusey in that total,
               only

Confidential Treatment
Requested

Ms. Yolanda Crittendon
May 3, 2005

Page 5

increases
it by approximately 5.2% to a total of 17.9%. For the periods under consideration, if all
convertible rights were converted in A4S, the Company’s ownership would increase to
approximately 18.3% and the affiliate holdings of Gregory Pusey would serve to add an
additional approximate 5.4% to that total.

               2.

               Other than the common stock and convertible debt and option rights, there are no
               guarantees, put arrangements, or similar obligations relative to
               Cambridge’s investment in A4S.

               3.

               There are no forward contracts, lease arrangements or service contracts that
               would impact consideration.

               4.

               Equity investment in A4S exceeded $1.5 million at December 31, 2004. The
               majority of such investment has been utilized to develop the proprietary patent
               pending software and technology that is currently estimated to have value in
               excess of several million dollars and began generating revenues in 2003-2004,
               with substantial revenues anticipated in 2005.

               5.

               Because of the structure of historical investments being mixed between common
               stock, convertible notes and other equity rights, the equity investors as a
               group in A4S do have the controlling financial interest in A4S.

               6.

               The convertible note obligation invested into A4S by Cambridge, as well as other
               holders, are convertible into A4S equity at the option of the holders. However,
               there is no right of participation in the net income or loss of A4S by the note
               holders, other than through their elective conversion rights. The convertible
               notes have a fixed rate of interest. Based upon recent analysis of the value of
               the A4S entity as determined based upon a letter of intent for a public offering
               of A4S equity, the entity value of

Confidential Treatment
Requested

Ms. Yolanda Crittendon
May 3, 2005

Page 6

A4S
approximates $20 million.  Total convertible debt outstanding is approximately than $3.5,
or less than 20% of the entity value.

        As
requested in the Staff’s letter, the Company acknowledges the following: (i) that it
is responsible for the adequacy and accuracy of the disclosures in its filing; (ii) that
Staff comments or changes to disclosures in response to Staff comments do not foreclose
the Commission from taking any action with respect to the filing; and (iii) that the
Company may not assert Staff comments as a defense in any proceeding initiated by the
Commission or any person under the federal securities laws of the United States.

*

  *
               *

        The
Company requests that the information provided in response to Comment No. 2 (the
“Information”), which is underlined, be treated as confidential and non-public
under the Freedom of Information Act (“FOIA”) (5 U.S.C. § 552), and all
applicable regulations adopted by the Securities and Exchange Commission (including 17
C.F.R. § 200.83 (d)(1)). The Company also requests that it receive notification and
an opportunity to contest disclosure if the Information is the subject of FOIA request.
The address and telephone number for any such notification are:

Steven
B. Boehm, Esq.
Sutherland Asbill & Brennan LLP
1275 Pennsylvania Avenue, N.W.

Washington, DC 20004-2415

(202)
383-0176

        Further,
if the Commission determines that confidential treatment is not warranted with respect to
the Information, the Company respectfully requests ten (10) days notice to any intended
release so that the Company may, if deemed necessary or appropriate, pursue any available
remedies.

*

  *
               *

Confidential Treatment
Requested

Ms. Yolanda Crittendon
May 3, 2005

Page 7

        If
you have any questions or require any additional information, please do not hesitate to
the foregoing at (202) 383-0176.

     Sincerely,

/s/ Steven B. Boehm

Steven B. Boehm

cc:
Mr.
Gregory Pusey
Adam Agron, Esq./Brownstein Hyatt & Farber, P.C.
FOIA Officer