SecProbe.io

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                           Fulbright & Jaworski l.l.p.
                   A Registered Limited Liability Partnership
                          666 Fifth Avenue, 31st Floor
                          New York, New York 10103-3198

                                www.fulbright.com

snussbaum@fulbright.com                               telephone: (212) 318-3000
direct dial:  (212) 318-3254                          facsimile: (212) 318-3400

August 11, 2005

BY EDGAR

Michael Fay
Branch Chief
United States Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549

Re:      Shells Seafood Restaurants, Inc.
         File No. 0-28258
         Form 10-K for the fiscal year ended January 2, 2005

Dear Mr. Fay:

On August 2, 2005, Ms. Teresa Messinese of the Commission orally advised us of
an additional comment from the Staff with respect to the above-referenced Form
10-K (the "Form 10-K"). The Staff's oral comment is provided below followed by
the response of Shells Seafood Restaurants, Inc. (the "Company" or "Shells") to
the comment.

The Staff requested that the Company provide clarification with respect to the
accounting treatment of warrants, recorded as liabilities instead of equity.

Response: The warrants in question were issued by the Company on three separate
occasions, in total, during calendar years 2002 and 2004, and always in
connection with and as an integral part of the simultaneous issuance or
extension of troubled debt. These debt financings and warrant issuances are
described in detail in the Form 10-K (see the Liquidity and Capital Resources
section of Item 7 - Management's Discussion and Analysis of Financial Condition
and Results of Operations.) In January 2002, when the Company issued the first
of these warrants, the Company had negative working capital of $7,580,000,
negative cash flow, and capital requirements exceeding $2,500,000 for vendor and
lease termination settlements relating to its Midwest divestiture. During 2001,
the Company discontinued operations in 16 Midwest restaurants. This divestiture
had an adverse effect on Shells' cash position for several years. As such, the
debt was considered "troubled debt," without which funds the Company would
likely not have continued as a going concern.

<PAGE>
Michael Fay
United States Securities and Exchange Commission
August 11, 2005
Page 2

In August 2004, under similar circumstances, additional warrants were issued to
the note holders as an inducement to extend the maturity date of the notes
issued in connection with the 2002 troubled debt financing. Again, at the time
of the extension, the Company's financial position consisted of negative working
capital of $4,664,000, a recent history of reported losses, and total negative
book value of $372,000 (stockholders' equity less goodwill). Various financing
options for repaying this $2 million of indebtedness at that time were explored
but were not otherwise available to the Company; and management and the Board
determined that the prospects of obtaining alternative financing to permit
repayment of the debt at maturity were weak.

Finally, in December 2004, additional warrants to purchase shares of Shells
common stock were issued by the Company in connection with a bridge financing of
$2,375,000. At that time, the Company had a working capital deficiency of
$3,469,000, a cash balance of $590,000, total negative book value of $1,063,000,
and capital requirements of $2,600,000 relating to remodeling requirements of
existing restaurants, working capital requirements and hurricane-related capital
expenditures in excess of insurance recoveries. Again the Company's immediate
need for interim capital resulted in a blended interest rate to the transaction
at a troubled debt cost of capital.

At the time the Company negotiated each of the financing transactions, the
respective lenders insisted that they be issued common stock warrants as part of
the financing, and that these warrants contain registration rights with respect
to the underlying shares of common stock, due to, among other things, the
Company's lack of liquidity and limited public float in its thinly traded common
stock. Over the prior several years, the Company's stock had historically traded
at average weekly trading levels below 40,000, often with no trades made on a
given day. The common stock is traded on the OTC Bulletin Board, with limited
exposure; and there is no analyst coverage for the stock. In addition, as
disclosed in the Form 10-K, there is a high concentration of stock held in an
extremely limited number of hands, and there were approximately 250 shareholders
of record on January 31, 2005. As a result of this lack of current and
prospective liquidity, the Company believed that it was extremely unlikely that
the warrantholders would exercise their warrants and hold the shares for future
sale. The Company is and was under the firm belief that the granting of such
registration rights, including the demand registration rights, was necessary and
integral to completing these financing transactions.

The requirement of registration rights was borne out in time, as the shares of
common stock underlying these warrants are included in the Registration
Statement on Form S-1 (File No. 333-126487) filed by the Company on July 8, 2005
(the "Registration Statement"). This Registration Statement is a "shelf"
registration and, as indicated, the underlying shares may be sold on a delayed
basis. It is Shells' belief that none of these shares (or at most, a minimal
number of these shares) will be acquired upon exercise of the warrants and not
immediately sold. Further, the warrants most recently issued in connection with
the private placement in May 2005 possess timely filing and registration
requirements, with liquidated damages to be paid by the Company if the Company
does not file or obtain an effective registration within a certain time frame,
or at all. Continual maintenance of an effective registration is also required
under the warrant purchase agreements. Please see Exhibit A, an excerpt from the
Company's Registration Statement on Form S-1, for a detailed discussion of
registration rights and requirements relative to liquidated damages.

<PAGE>
Michael Fay
United States Securities and Exchange Commission
August 11, 2005
Page 3

In accordance with Emerging Issues Task Force Issue 00-19 ("EITF 00-19"),
"Accounting for Derivative Financial Instruments to, and Potentially Settled in,
a Company's Own Stock," under the circumstances described above, the Company's
contractual requirement for registering the shares (as evidenced by the demand
registration rights) was not within the control of the Company. Pursuant to EITF
00-19, since the delivery of registered shares is not within the Company's
control, the Company is required to report the value of the warrants as a
liability until the Registration Statement covering the resale of the shares of
common stock underlying the warrants is declared effective. Please refer to
Exhibit B, an excerpt from the Company's Registration Statement on Form S-1,
which further describes the Company's accounting treatment of its warrants and
liabilities that were recorded. For the Staff's information, at the effective
date of the Registration Statement registering the shares of common stock
underlying these warrants (and assuming there are no additional material factors
then outside of the control of the Company), Shells intends to reclassify the
fair value of the warrants to equity, consistent with the requirements of EITF
00-19.

                                      * * *

If you have any further questions or need any further clarification, please call
the undersigned at (212) 318-3254.

                                                     Very truly yours,

                                                     /s/ Sheldon G. Nussbaum

cc:      Ms. Teresa Messinese (the Commission)
         Shells Seafood Restaurants, Inc.

<PAGE>

                                    EXHIBIT A

The following is an excerpt from the Form S-1 filing of July 8, 2005, pages 60
and 61, which describes the registration rights:

         We have agreed to use reasonable best efforts to prepare and file with
         the SEC, within 45 days after the closing of the May 2005 financing, a
         registration statement to enable the resale of the shares of common
         stock issuable upon the conversion of the Series B Preferred Stock
         issued in our May 2005 financing, shares of common stock issued or
         issuable upon exercise of the warrants issued in the financing and all
         shares of common stock issued or issuable in respect of the shares
         referred to above by virtue of any stock split, stock dividend,
         recapitalization or similar event by the investors on a delayed or
         continuous basis under Rule 415 of the Securities Act. If the
         registration statement is not filed with the SEC within 45 days after
         the closing of the May 2005 financing, we are required to pay to the
         investors liquidated damages in the amount of 1.0% of the total
         purchase price of the units purchased by the investor in the May 2005
         financing, and an additional 1.0% of the total purchase price of the
         units purchased by the investor for each full 30-day period, or partial
         portion of the 30-day period, that the registration statement has not
         been filed with the SEC. In addition, if the failure to become
         effective is primarily due to our fault, we will be required to pay to
         the investor liquidated damages in the amount of (i) 1.0% of the total
         purchase price of the units purchased by the investor in the event the
         registration statement has not been declared effective by the SEC
         within 90 days after the filing of the registration statement, and (ii)
         an additional 1.0% of the total purchase price of the units purchased
         by the investor for each 30-day period, or partial portion of the
         30-day period, in the event the registration statement has not been
         declared effective by the SEC within 120 days after the filing of the
         registration statement, until the registration statement has been
         declared effective by the SEC. In connection with the placement agent
         warrants to purchase units issued to JMP Securities LLC, the underlying
         shares of common stock issuable upon the conversion of the Series B
         Preferred Stock and the shares of common stock issuable upon the
         exercise of the warrants to purchase common stock (both, to the extent
         the warrants to purchase units are exercised) have all of the rights of
         registration granted to the common stock issuable upon conversion of
         the Series B Preferred Stock or exercise of the warrants issued in our
         May 2005 financing described above.

         In regards to the warrants issued to investors in our December 2004
         financing, we have agreed to notify all holders of the warrants issued
         in writing at least thirty (30) days before the filing of any
         registration statement under the Securities Act for purposes of
         effectuating a public offering of our securities and to use our best
         efforts to afford each holder an opportunity to include in such
         registration statement all or any part of the warrant shares issued or
         issuable upon exercise of the warrant issued in the December 2004
         financing then held by such holder.

         In regards to the warrants issued to GCM, Trinad and Frederick R. Adler
         in connection with the August 2004 extension of the maturity date of
         promissory notes issued in our 2002 financing, we have agreed that,
         with certain exceptions, at any time after January 1, 2003 and after
         receipt of a written request from the holders of at least 50 % of the
         shares of common stock issued or issuable upon the exercise of the
         warrants stating that registration of the shares of common stock held
         by them issued or issuable upon the exercise of the warrants is
         desired, we will, after giving notice, use our reasonable best efforts
         to prepare, file and cause a registration statement to be effective
         under the Securities Act and remain effective for six months or a
         shorter period of time if all shares involved are sold. In addition to
         this "demand registration right", we have agreed that in the event that
         we propose to file a registration statement under the Securities Act
         with respect to any equity securities, we will give written notice of
         such to all of the warrant holders at least twenty (20) days before the
         anticipated filing. The notice will offer to the warrant holders the
         opportunity to include in such registration statement such number of
         shares of common stock issuable upon exercise of these warrants as the
         warrant holders may request.
<PAGE>

         In our 2002 financing, we have agreed that, in regards to the warrants
         issued, with certain exceptions, at any time after January 1, 2003 and
         after receipt of a written request from the holders of at least 50 % of
         the shares of common stock issued or issuable upon the exercise of the
         warrants stating that registration of the shares of common stock held
         by them issued or issuable upon the exercise of the warrants is
         desired, we will, after giving notice, use our reasonable best efforts
         to prepare, file and cause a registration statement to be effective
         under the Securities Act and remain effective for six months or a
         shorter period of time if all shares involved are sold. In addition to
         this "demand registration right," we have agreed that in the event that
         we propose to file a registration statement under the Securities Act
         with respect to any equity securities, we will give written notice of
         such to all of the warrant holders at least twenty (20) days before the
         anticipated filing. The notice will offer to the warrant holders the
         opportunity to include in such registration statement such number of
         shares of common stock issuable upon exercise of these warrants as the
         warrant holders may request.

<PAGE>

                                    EXHIBIT B

The following is an excerpt from the Form S-1 filing of July 8, 2005, page F-18,
which describes the Company's accounting of its warrants:

         The warrant valuation reserve consists of the following:

<TABLE>
<CAPTION>
                                                                                                      Pro Forma
                                                             January 2,   December 28,   April 3,      April 3,
              Date and description                             2005          2003          2005          2005
                                                             --------      --------      --------      --------
                                                                                                (Unaudited)
                                                                                         ----------------------
<S>                                                          <C>           <C>           <C>           <C>
January 2002 at inception of $2,000,000 financing            $ 61,364      $105,977      $     --      $     --
August 2004 for the extension of maturity date of above       446,000            --       223,000            --
December 2004 at inception of debentures                      440,000