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September 15,
2005

Mr. Matthew
J. Maulbeck

Staff
Accountant

Division
of Corporation Finance

United
States Securities and Exchange Commission

Washington,
D.C. 20549

  Re:

  Crdentia Corp.

  Form 10-KSB from the Year Ended
  December 31, 2004

  Filed March 31, 2005

  File No.

  0-31152

Dear
Mr. Maulbeck:

The
following are our responses to questions raised in an August 15, 2005
letter concerning our filings:

Form 10-KSB for the Year Ended December 31, 2004

Note 5—Goodwill and Other Intangible Assets, pages F-17—F-19

Comment No. 1

We
note your intangible asset impairment of $1,800,000.  With respect to this impairment, please give
us a more detailed description of the facts and circumstances that led you to
believe that certain intangible assets were impaired, which reporting unit(s)
held these impaired intangible assets, and how you came to the conclusion that
goodwill and other long lived assets within these reporting unit(s) were not
also impaired.

Response No. 1

Subsequent
to its allocation of purchase price and recording of goodwill and intangibles,
Crdentia experienced a decline in revenue related to the loss of certain
customers, including a significant customer relationship.  Also new immigration regulations were
implemented by the Federal Government limiting access to foreign nurses.  Management had specifically assigned values
to intangibles for customer relationships and international nurse contracts and
concluded that it was appropriate to write down these specific intangibles due
to changes in circumstances as discussed above.
Although the international nurse contracts and the lost customers were
initially elements of the single reporting unit evaluated for goodwill
purposes, the overall indication of value ($15 million) exceeded the carrying
value ($9.5 million after write down of intangibles of $1.8 million), and
management concluded that no further write down of goodwill was required.  Also, no further write-down of amortizable
intangibles was necessary after writing down the specific intangibles for the loss
of customer related to the New Age Staffing, Inc.

acquisition
and for the international nurse contracts related to PSR Nurse Recruiting, Inc.
and PSR Nurses Holding Corp.

KPMG
was the independent party who performed our annual evaluation of goodwill for
the year ended December 31, 2004.
We agreed with their valuation which grouped all of Crdentia’s business
into one reporting unit comprised of domestic travel nurses, domestic per diem
nurses and a small group of international nurses (largely nurses from the
Philippines).  All of Crdentia’s business
is grouped into one reporting unit since there is considerable sharing of
domestic and international nurses between travel and per diem; travel and per
diem to a large extent serve the same hospital customer base; and travel and
per diem are managed more as one unit because of the placement of travel nurses
in per diem shifts.  KPMG reasonably
estimated the fair value of Crdentia’s total equity in this single reporting
unit to be approximately $15 million as of the valuation date and the carrying
value of the equity was approximately $9.5 million.

Note 13—Long Term Bonus Payable, page F-26

Comment No. 2

Please
tell us what service period these bonuses relate to and in which period(s) you
have recognized or will recognize the associated expense.  In addition, please explain the terms of the
bonuses and tell us whether the amounts are forfeitable under any
circumstances.

Response No. 2

A
Form 8-K was filed in connection with these bonus payments on January 12,
2004.  Exhibit 10.3 to that filing
includes a discussion about the bonus.
As the Exhibit indicates, “The Executive shall be entitled to
receive bonus payments on December 31, 2006 in the amount of $540,000 and
on January 4, 2007 in the amount of $540,000.  The payment of the bonuses shall not be
affected by the termination for any reason (including death or disability) of
the Executive’s employment or service to the Company prior to December 31,
2006 or January 4, 2007.”

The
bonuses were granted on December 16, 2003, and related to services
provided prior to December 16, 2003.
The present value of the bonuses was recorded in the December 31,
2003 financial statements as compensation expense at the Company’s estimated
incremental cost of borrowing of 10%.
Interest is being charged to operations until payment in late 2006 and
early 2007.

Note 15—Stockholders’ Equity, pages F-31—F-37

Comment No. 3

We
note that you recorded approximately $5.8 million in compensation expense upon
the return of 1,016,000 shares of your common stock by certain
shareholders.  In light of the fact that
no consideration was provided to these shareholders, please tell us your basis
in GAAP for recording the compensation expense.
We are unclear as to what guidance in APB 25 applies to this situation.

Response No. 3

Effective
August 6, 2003, 1,016,000 shares were returned to the Company for
cancellation by shareholders who had no direct involvement in the company and
were shareholders prior to August 15, 2002.

The
shareholders that returned stock were a small group of passive investors in the
Company who continued to hold shares in the Company.  These shareholders believed that it was in
their best

interest
to return some of their shares and protect the value of their remaining
shares.  Not all shareholders returned
shares, and no shares were returned by individuals who were currently employed
or consulting with the Company.

Because
not all shareholders shared equally in the share forfeiture, the return of shares
is similar to a reverse stock split and then a granting of additional shares to
the non-participating shareholders.  The
granting of this benefit to shareholders who are also employees, consultants or
directors of the Company is considered compensation for accounting
purposes.  If the company’s objective was
to merely reduce the number of outstanding shares, the Company could have
completed a reverse stock split.  In this
case, employees or consultants to the company received benefits not shared by
other shareholders who were required to return their shares without
compensation.

The
compensation expense was calculated to be the difference between the fair value
of the shares held by employees, consultants and directors immediately after
the forfeiture less the value of their holdings immediately prior to the
forfeiture, and non-cash compensation expense of $5,750,593 was recorded due to
the imputed increase in ownership percentage of the Company’s stock held by
employees, consultants and directors at the date of return.

ARB
43 Chapter 13B and APB 25 suggest that compensation expense should be
recognized for benefits received from employees (or other service
providers).  Similar positions are
further supported by arguments in Staff Accounting Bulletin Topic 5T which
states that it is inappropriate to permit accounting according to the form of
the transaction.  In this case, the
economic position is that the employee (or other service provider) received
economic benefits as a result of Company shareholder actions.  AICPA Interpretation 1 to APB Opinion No. 25
deals with stock plans established by a principal stockholder.  Although this is not directly on point, there
were stockholders in this situation who forfeited some of their stock in an
attempt to increase or maintain the value of their remaining investment.  The Interpretation concludes that in these
situations “Compensation cost should be recognized as an expense of one or more
periods in accordance with the provisions of APB Opinion No. 25, paragraphs
12 through 15.”

Form 10-QSB for the Quarter Ended March 31, 2005

Note 13—Subsequent Events, page 22

Comment No. 4

We
note your acquisition of Prime Staff LP and Mint Medical Staffing Odessa in May of
2005.  Please tell us whether you
evaluated the significance of these acquisitions using the guidance in Item 310(c) (2) of
Regulation S-B.

Response No. 4

We
did evaluate the significance of these acquisitions using the appropriate guidance.  These two related acquisitions are collectively
too small to trigger any audit requirements individually or when aggregated
with other acquisitions that we did not audit.

*  *
*  *  *
*  *  *  *

We
appreciate your review of our filings and if you have any questions about our
responses, please call me at (972) 850-0780.

Sincerely,

  /S/ James J. TerBeest

  James J. TerBeest

  Chief Financial Officer