SecProbe.io

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 September 26, 2025

Jonathan Hugh
Chief Financial Officer
ALT5 Sigma Corporation
325 E. Warm Springs Road, Suite 102
Las Vegas, Nevada 89119

 Re: ALT5 Sigma Corporation
 Preliminary Proxy Statement on Schedule 14A
 Filed September 12, 2025
 File No. 000-19621
Dear Jonathan Hugh:

 We have completed our review of your filing. We remind you that the
company and
its management are responsible for the accuracy and adequacy of their
disclosures,
notwithstanding any review, comments, action or absence of action by the staff.

 Sincerely,

 Division of Corporation
Finance
 Office of Life Sciences
cc: Faith Charles
</TEXT>
</DOCUMENT>

<DOCUMENT>
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 September 22, 2025

Jonathan Hugh
Chief Financial Officer
ALT5 Sigma Corporation
325 E. Warm Springs Road, Suite 102
Las Vegas, Nevada 89119

 Re: ALT5 Sigma Corporation
 Preliminary Proxy Statement on Schedule 14A
 Response dated September 19, 2025
 File No. 000-19621
Dear Jonathan Hugh:

 We have reviewed your September 19, 2025 response to our comment letter
and have
the following comment.

 Please respond to this letter within ten business days by providing the
requested
information or advise us as soon as possible when you will respond. If you do
not believe a
comment applies to your facts and circumstances, please tell us why in your
response.

 After reviewing your response to this letter, we may have additional
comments.

Preliminary Proxy Statement on Schedule 14A
Proposal 1
The Issuance and Appointment Proposal, page 7

1. We note your response to prior comment 1 regarding the Issuance and
Appointment
 Proposal (Proposal 1). Please revise your proxy to present the share
issuance as one
 proposal and the appointment of a second director candidate as a
separate proposal. In
 this regard, please refer to staff guidance provided in Compliance and
Disclosure
 Interpretation 101.01 Regarding Unbundling under Rule 14a-(3) Generally,
which
 explains that two separate matters are not deemed to be inextricably
intertwined
 merely because the matters were negotiated as part of a transaction with
a third party,
 nor because the matters represent terms of a contract that one or the
other of the
 parties considers essential to the overall bargain.
 We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence
 September 22, 2025
Page 2

of action by the staff.

 Please contact Jimmy McNamara at 202-551-7349 or Joe McCann at
202-551-6262
with any other questions.

 Sincerely,

 Division of Corporation
Finance
 Office of Life Sciences
cc: Faith Charles
</TEXT>
</DOCUMENT>

CORRESP
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 filename1.htm

 VIA
EDGAR

 September
19, 2025

 Mr.
Jimmy McNamara

 Mr.
Joe McCann

 U.S.
Securities and Exchange Commission

 Division
of Corporation Finance

 Office
of Life Sciences

 100
F Street, N.E.

 Washington,
D.C. 20549

 Re:
 ALT5 Sigma Corporation

 Preliminary Proxy Statement
 on Schedule 14A

 Filed September 12, 2025

 File No. 001-19621

 Dear
Messrs. McNamara and McCann:

 On
behalf of ALT5 Sigma Corporation (the "Company"), we submit this letter in response to the comments from the staff (the " Staff ")
of the Division of Corporation Finance of the United States Securities and Exchange Commission (the " SEC ") set forth
in the Staff's comment letter, dated September 18, 2025, with respect to the Company's Preliminary Proxy Statement on Schedule
14A (File No. 001-19621), which was filed by the Company with the SEC on September 12, 2025 (the " PRE14A ").

 For
your convenience, the Staff's comments have been produced in bold and italics herein with the Company's response immediately
following each comment.

 Preliminary
Proxy Statement on Schedule 14A

 Proposal
1

 The
Issuance and Appointment Proposal, page 7

 1. We
 refer to Proposal 1, which seeks shareholder approval for (i) the issuance of 119,000,000
 shares of common stock upon the exercise of pre-funded warrants and common stock purchase
 warrants, and (ii) the appointment of a nominee to the board of directors. Please tell us
 why these two matters should not be in separate proposals. Refer to Rule 14a-4(a)(3).

 RESPONSE:
We respectfully acknowledge the Staff's comment and note that Proposal 1 is to approve, for purposes of Nasdaq Listing Rule 5635,
the contractual requirements related to a private placement offering that closed on August 12, 2025 (the "Private Placement"),
including the issuance of 119,000,000 shares of our common stock, par value $0.001 per share, upon the exercise of pre-funded warrants
and common stock purchase warrants held by World Liberty Financial, Inc. ("WLFI") and the appointment to the board of directors
of the Company (the "Board"), by the Board, of a second director candidate selected by WLFI.

 Faith.Charles@thompsonhine.com
 Fax: 212.344.6101 Phone: 212.908.3905

 300 Madison
 Avenue, 27th Floor
 New York, New York 10017-6232
 www.ThompsonHine.com
 O: 212.344.5680
 F: 212.344.6101

 September
19, 2025

 Page
2

 Proposal
1 does not require the appointment of any specific director to the Board, it seeks approval from the stockholders to allow WLFI to select
a second member of the Board, who will be appointed by the Board in accordance with applicable laws and the Company's governing
documents.

 The
Company intends to revise Proposal 1 to read as follows in its Definitive Proxy Statement on Schedule 14A. The concepts of the revised
Proposal 1, including removing the reference to any specific individual being appointed to the board, will be reflected throughout the
Definitive Proxy Statement.

 To
approve, for purposes of Nasdaq Listing Rule 5635, the contractual requirements related to a private placement offering that closed on
August 12, 2025, including the issuance of 119,000,000 shares of our common stock, par value $0.001 per share ("Common Stock"),
upon the exercise of pre-funded warrants and common stock purchase warrants held by World Liberty Financial, Inc. ("WLFI")
and the appointment to the board of directors of the Company (the "Board") by the Board of a second director candidate selected
by WLFI.

 2. We
 note that the appointment of the director to the board appears to be an action taken with
 respect to the election of a director. Accordingly, please revise the proxy to include all
 information required by Items 7 and 8 of Schedule 14A, or advise.

 RESPONSE:
We respectfully acknowledge the Staff's comment and refer the Staff to our response to the first comment, which includes a clarification
that Proposal 1 will not require the appointment of a specific individual to Board.

 *****

 September
19, 2025

 Page
3

 Please
direct any questions to the undersigned at (212) 908-3905.

 Sincerely,

 /s/
 Faith L. Charles

 Faith L. Charles

 cc:

 Mr.
Jonathan Hugh, ALT5 Sigma Corporation

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<TEXT>
 September 18, 2025

Jonathan Hugh
Chief Financial Officer
ALT5 Sigma Corporation
325 E. Warm Springs Road, Suite 102
Las Vegas, Nevada 89119

 Re: ALT5 Sigma Corporation
 Preliminary Proxy Statement on Schedule 14A
 Filed September 12, 2025
 File No. 000-19621
Dear Jonathan Hugh:

 We have reviewed your filing and have the following comments.

 Please respond to this letter within ten business days by providing the
requested
information or advise us as soon as possible when you will respond. If you do
not believe a
comment applies to your facts and circumstances, please tell us why in your
response.

 After reviewing your response and any amendment you may file in
response to this
letter, we may have additional comments.

Preliminary Proxy Statement on Schedule 14A
Proposal 1
The Issuance and Appointment Proposal, page 7

1. We refer to Proposal 1, which seeks shareholder approval for (i) the
issuance of
 119,000,000 shares of common stock upon the exercise of pre-funded
warrants and
 common stock purchase warrants, and (ii) the appointment of a nominee to
the board
 of directors. Please tell us why these two matters should not be in
separate
 proposals. Refer to Rule 14a-4(a)(3).
2. We note that the appointment of the director to the board appears to be
an action taken
 with respect to the election of a director. Accordingly, please revise
the proxy to
 include all information required by Items 7 and 8 of Schedule 14A, or
advise.
 We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence
of action by the staff.
 September 18, 2025
Page 2

 Please contact Jimmy McNamara at 202-551-7349 or Joe McCann at
202-551-6262
with any other questions.

 Sincerely,

 Division of Corporation
Finance
 Office of Life Sciences
cc: Faith Charles
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CORRESP
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 ALT5 SIGMA CORPORATION

 325 E. Warm
Springs Road, Suite 102

 Las Vegas,
Nevada 89119

 August 7, 2025

 VIA EDGAR

 Office of Life Sciences

 Division of Corporate Finance

 U.S. Securities and Exchange
Commission

 100 F. Street, N.E.

 Washington, DC 20549-7010

 Re:
 Alt5 Sigma Corporation

 Registration Statement on Form S-3;

 Commission File No. 333-289176

 REQUEST FOR ACCELERATION OF EFFECTIVENESS

 Requested Date: August 8, 2025

 Requested Time: 5:00 pm, Eastern Time

 To Whom It May Concern:

 Pursuant
to Rule 461 promulgated under the Securities Act of 1933, as amended, Alt5 Sigma Corporation (the "Company") hereby requests
that the effectiveness of the Company's Registration Statement on Form S-3 (File No. 333-289176) be accelerated by the U.S. Securities
and Exchange Commission to 5:00 pm Eastern Time on Friday, August 8, 2025, or as soon thereafter is practicable.

 The
Company hereby authorizes Peter Campitiello of Lucosky Brookman LLP to orally modify or withdraw this request for acceleration. Please
contact Mr. Campitiello at (732) 395 4517 with any questions you may have concerning this request, and please notify him when this request
for acceleration has been granted.

 Thank you for your courtesy and cooperation in this matter.

 Very truly yours,

 ALT5 SIGMA CORPORATION

 By:
 /s/ Peter Tassiopoulos

 Peter Tassiopoulos

 Chief Executive Officer

<DOCUMENT>
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<TEXT>
 August 6, 2025

Peter Tassiopoulos
Chief Executive Officer
ALT5 Sigma Corporation
325 E. Warm Springs Road, Suite 102
Las Vegas, NV 89119

 Re: ALT5 Sigma Corporation
 Registration Statement on Form S-3
 Filed August 1, 2025
 File No. 333-289176
Dear Peter Tassiopoulos:

 This is to advise you that we have not reviewed and will not review your
registration
statement.

 Please refer to Rules 460 and 461 regarding requests for acceleration.
We remind you
that the company and its management are responsible for the accuracy and
adequacy of their
disclosures, notwithstanding any review, comments, action or absence of action
by the staff.

 Please contact Jessica Dickerson at 202-551-8013 with any questions.

 Sincerely,

 Division of
Corporation Finance
 Office of Life
Sciences
cc: Peter Campitiello, Esq.
</TEXT>
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CORRESP
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Document

JANONE INC.

325 E. Warm Springs Road, Suite 102

Las Vegas, Nevada 89119

April 23, 2024

VIA EDGAR AND E-MAIL

Mr. Tyler Howes, Attorney Advisor

Office of Life Sciences

Division of Corporate Finance

U.S. Securities and Exchange Commission

100 F. Street, N.E.

Washington, DC 20549-7010

Re:    JanOne Inc. Registration Statement on Form S-3;
    Commission File No. 333-278784

Dear Mr. Howes:

Pursuant to Rule 461 promulgated under the Securities Act of 1933, as amended, JanOne Inc. (the “Company”) hereby requests that the effectiveness of the Company’s Registration Statement on Form S-3 (File No. 333-278784) be accelerated by the U.S. Securities and Exchange Commission to 12:00 noon Eastern Time on Thursday, April 25, 2024, or as soon thereafter is practicable.

The Company hereby authorizes Randy Katz of Clark Hill LLP to orally modify or withdraw this request for acceleration.  Please contact Mr. Katz at (213) 417-5310 with any questions you may have concerning this request, and please notify him when this request for acceleration has been granted.

Thank you for your courtesy and cooperation in this matter.

Very truly yours,

JANONE INC.

By:        /s/ Tony Isaac

    Tony Isaac, Chief Executive Officer

JanOne acceleration request for S-3 April 2024.1

United States securities and exchange commission logo
April 23, 2024
Tony Isaac
Chief Executive Officer
JanOne Inc.
325 E. Warm Springs Road, Suite 102
Las Vegas, NV 89119
Re:JanOne Inc.
Registration Statement on Form S-3
Filed April 18, 2024
File No. 333-278784
Dear Tony Isaac:
            This is to advise you that we have not reviewed and will not review your registration
statement.
            Please refer to Rules 460 and 461 regarding requests for acceleration. We remind you
that the company and its management are responsible for the accuracy and adequacy of their
disclosures, notwithstanding any review, comments, action or absence of action by the staff.
            Please contact Tyler Howes at 202-551-3370 with any questions.
Sincerely,
Division of Corporation Finance
Office of Life Sciences
cc:       Randolf W. Katz, Esq.

CORRESP
1
filename1.htm

jan-corresp.htm

December 29, 2020

VIA EDGAR AND E-MAIL

Ms. Katherine Bagley

U.S. Securities and Exchange Commission

Division of Corporation Finance

100 F. Street, N.E.

Washington, DC 20549-7010

Re:

JanOne Inc.

Registration Statement on Form S-3

Filed December 23, 2020

File No. 333-251645

Ms. Bagley:

Pursuant to Rule 461 promulgated under the Securities Act of 1933, as amended, JanOne Inc. (the “Company”) hereby requests that the effectiveness of the Company’s Registration Statement on Form S-3 (File No. 333-251645) be accelerated by the U.S. Securities and Exchange Commission to 5:00 PM Eastern Time on December 29, 2020, or as soon as possible thereafter.

*    *    *    *    *

The Company hereby authorizes Randy Katz of Clark Hill LLP to orally modify or withdraw this request for acceleration. Please contact Mr. Katz at (213) 417-5310 with any questions you may have concerning this request, and please notify him when this request for acceleration has been granted.

Very truly yours,

JanOne Inc.

By: ___/s/ Tony Isaac_____

Title:  President and CEO

United States securities and exchange commission logo
December 28, 2020
Tony Isaac
President and Chief Executive Officer
JanOne Inc.
325 E. Warm Springs Road, Suite 102
Las Vegas, Nevada 89119
Re:JanOne Inc.
Registration Statement on Form S-3
Filed December 23, 2020
File No. 333-251645
Dear Mr. Isaac:
            This is to advise you that we have not reviewed and will not review your registration
statement.
            Please refer to Rules 460 and 461 regarding requests for acceleration.  We remind you
that the company and its management are responsible for the accuracy and adequacy of their
disclosures, notwithstanding any review, comments, action or absence of action by the staff.
            Please contact Katherine Bagley at (202) 551-2545 with any questions.
Sincerely,
Division of Corporation Finance
Office of Trade & Services
cc:       Randolf W. Katz, Esq.

Mail Stop 3561
December 13, 2016

Tony Isaac
Chief Executive Officer
Appliance Recycling Centers of America, Inc.
175 Jackson Avenue North Suite 102
Minneapolis, Minnesota 55343 -4565

Re:  Appliance Recycling Centers o f America, Inc.
                    Preliminary Information Statement on Schedule 14A
        Filed November 1, 2016
        File No. 000 -19621

Dear Mr. Isaac :

As of November 23, 2016  we have no further comments  and have completed our review
of your filings.  We remind you that the company and its management are responsible for the
accuracy and adequacy of the ir disclosure s, notwithstanding any review, comments, action or
absence of ac tion by the staff .

Sincerely,

 /s/ Lisa M. Kohl for

 Mara L. Ransom
Assistant Director
        Office of Consumer Products

CORRESP
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Appliance Recycling Centers of America,
Inc.

175 Jackson Avenue North, Suite 102

Minneapolis, Minnesota 55343

November 18, 2016

Via EDGAR

Scott Anderegg

United States Securities and Exchange Commission

Division of Corporation Finance

100 F Street, N.E.

Washington, D.C. 20549

    Re:
    Appliance Recycling Centers of America, Inc.

    Preliminary Proxy Statement on Schedule
14A

    Filed November 1, 2016

    File No. 000-19621

Dear Mr. Anderegg:

We acknowledge receipt of a verbal comment
from the staff of the U.S. Securities and Exchange Commission (the “Staff”) on November 10, 2016 with respect to Appliance
Recycling Centers of America, Inc.’s (the “Company”) Preliminary Proxy Statement on Schedule 14A filed on November
1, 2016 (the “Preliminary Proxy Statement”), File No. 000-19621. We submit this letter in response to such comment,
and we appreciate the Staff’s prompt consideration of this response. For ease of reference, we have set forth the Staff’s
comment in bold and italics and our response in plain type immediately following the comment.

1. 	In Proposal 3 regarding the amendment to the Company’s
Articles of Incorporation to increase the number of authorized shares, please add language to the effect that the Company does
not currently have any plans to enter into an acquisition or merger.

Per the comment above, the Company will
add the following to the end of the fourth paragraph of Proposal Three in the Company’s Definitive Proxy Statement on Schedule
14A: “We have no current plans to enter into any acquisition or merger.”

We believe our response adequately addresses
your request for information and enhanced disclosure. However, if you should require additional information or have any additional
questions, please contact me at 952-930-9000 or the Company’s counsel, Eric Madson of Fredrikson & Byron, P.A. at 612-492-7394.

Sincerely,

/s/ Tony Isaac

Tony Isaac

Chief Executive Officer

cc: Eric Madson, Fredrikson & Byron, P.A.

February 20, 2014

Via Email
Edward R. Cameron
President and Chief Executive Officer
Appliance Recycling Centers of America, Inc.
7400 Excelsior Boulevard
Minneapolis, Minnesota 55426 -4517

Re: Appliance Recycling Centers of America, Inc.
 Form 10-K for Fiscal Year Ended December 29, 2012
Filed March 22, 2013
File No. 0 -19621

Dear Mr. Cameron :

We have completed our review of your filing .  We remind you that our comments or
changes to disclosure in response to our comments do not foreclose the Commission from taking
any action with respect to the company or the filing and the company may not assert staff
comments as a defense in any proceeding initiated by the Commission o r any person under the
federal securities laws of the United States.  We urge all persons who are responsible for the
accuracy and adequacy of the disclosure in the filing to be certain that the filing includes the
information the Securities Exchange Act o f 1934 and all applicable rules require.

Sincerely,

 /s/ James Allegretto

James Allegretto
Senior Assistant Chief Accountant

CORRESP
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		SEC Comment Letter 01.2014

February 10, 2014

VIA EDGAR

United States Securities and Exchange Commission

Division of Corporate Finance

100 F Street NE, Mail Stop 3720

Washington, DC 20549

Attn: James Allegretto, Senior Assistant Chief Accountant

Re:

 Appliance Recycling Centers of America, Inc.

Form 10-K for Fiscal Year Ended December 29, 2012 Filed on March 22, 2013

Form 10-Q for Fiscal Quarter Ended September 28, 2013 Filed on November 7, 2013

File No. 0-19621

Dear Mr. Allegretto:

On behalf of Appliance Recycling Centers of America, Inc. (the “Company” or “we”), this letter is submitted in response to the comments set forth in your letter to me dated January 27, 2014.  For your convenience, we have set forth below each of your numbered comments, followed by our response.

We respectfully request that the Staff review the responses in this letter and allow the Company to modify or expand its disclosures in future filings and not amend the Form 10-K for the Fiscal Year Ended December 29, 2012 and the Form 10-Q for the Fiscal Quarter Ended September 28, 2013.

Form 10-K for Fiscal Year Ended December 29, 2012

Note 1. Nature of Business and Basis of Presentation, page 36

1.

 We reviewed your response to comment one in our letter dated December 27, 2013.  Please provide additional information regarding the factors considering in determining that the AAP joint venture is a variable interest entity subject to the variable interest entity (VIE) subsections of ASC 810.  In particular, please address the following:

•

 Please provide us a copy of the AAP joint venture agreement and tell us your consideration of filing the agreement as an exhibit pursuant to Item 601 of Regulation S-K.

•

 Tell us why the “business” exclusion from the scope of the VIE subsections of ASC 810 is not applicable in this case.  Refer to ASC 810-10-15-17.d.  If you believe AAP was designed such that substantially all of its activities either involve or are conducted on behalf of you, as opposed to you and the joint venture partner, please tell us the rights and obligations of 4301 Operations under the joint venture agreement, including your understanding of why 4301 Operations entered into the joint venture agreement. If you believe you have provided more than ½ of the total equity, subordinated debt and other forms of subordinated financial support to the entity, please provide us your analysis of the fair values of each of the interests in the entity.

•

 Notwithstanding the preceding bullet point and based on your assumption that the business exclusion from the scope of the VIE subsections of ASC 810 does not apply to AAP, please provide us additional support for your determination that AAP is a variable as described in

Page 1

ASC 810-10-15-14.  In particular, please tell us the specific provisions in the joint venture agreement which lead you to conclude that by design:

◦

 The total equity investment at risk is not sufficient to permit AAP to finance its activities without additional subordinated financial support; and

◦

 Your voting rights are not proportional to your obligations to absorb the expected losses of AAP, your rights to receive the expected residual returns of AAP, or both.  Please note the phrase by design refers to entities that meet the condition of being a VIE because of the way they are structured.  An entity under the control of its equity investors that originally was not a VIE does not become one because of operating losses.

We may have further comment regarding your analysis of the primary beneficiary of AAP once we have a clearer understanding as to why you believe AAP is a variable interest and not a voting interest entity under ASC 810.

In any event, please further revise the disclosure you propose to include in future filings regarding the consolidation of AAP, as the proposed disclosure remains unclear in terms of your basis in GAAP for consolidating this entity.  For example, having a controlling financial interest in AAP would be the basis in GAAP for consolidation, whereas having “significant influence” over the economic performance of AAP would not be a basis for consolidation.

Company Response:  The Company will file the AAP joint venture agreement and related amendments as an exhibit to its 2013 Annual Report on Form 10-K in March 2014 and will provide a copy to the Staff for review prior to that filing.  The joint venture agreement has not been filed previously as exhibit to its Annual Reports on Form 10-K since 2009 due to an oversight.

The Company concluded the business scope exception was not met under ASC 810-10-15-17(d) due to several factors. The Company, with their legal counsel, set up and designed the legal entity for the sole purpose of servicing ARCA’s contract with General Electric (GE) which mandated the installation of an UNTHA URT recycling system. Although AAP is an operating joint venture, it is not jointly controlled by the Company and 4301 due to the fact that the Company has the power to direct activities of AAP through the GE contract which has a significant impact on AAP’s financial performance as approximately 80% of AAP’s total volume for the year ended December 29, 2012 was from the GE contract. Additionally, all payments made to and from GE for recyclable materials are conducted through the Company as GE does not acknowledge AAP as a party to the contract and therefore, without the Company’s involvement, AAP would not be able to purchase any recyclable materials from GE.  As a result, the Company concluded that AAP was designed so that substantially all of its activities involve and are conducted on behalf of the Company.

The Company obtained its 50% interest in the joint venture through its $2 million initial cash contribution.  4301’s obligation for its 50% interest included contributing its metal shredder operations consisting of fixed assets, working capital, debt and assembled workforce including management expertise of more than 20 years of industry knowledge. The fair value of the assets contributed by 4301 of $1 million was determined primarily based on purchase cost of the fixed assets as they were newly purchased. The remaining assets and liabilities contributed by 4301were related to working capital and the fair value approximated the book value.  4301 also contributed

Page 2

“sweat equity” however; this does not qualify as equity at risk.  4301’s rights included the right to a 50% allocation of the profits and loss of AAP as well as a 50% voting right for business related matters.  Since the Company’s cash contribution was in excess of the fair value of the contribution of 4301, the Company concluded they provided more than half of the total equity, subordinated debt, and other forms of subordinated financial support to AAP.

The Company noted that ASC 810-10-25-37 requires that upon the initial determination of whether an entity is a VIE, the determination is to be based on the circumstances on the date the reporting entity becomes involved with a VIE and is to include future changes that are required in existing governing documents and contractual arrangements.  The requirement to install the UNTHA URT recycling system was specifically contemplated at the inception of the joint venture and is referenced under Item 5 of the Recitals section of the Joint Venture Agreement. Although there were contributions made by both parties upon formation of the joint venture, it was understood that the initial capital contributions were insufficient to support the $6 million cost of the UNTHA recycling system.  In order to secure financing to purchase the URT system, guarantees were required by both the Company and 4301 as noted in the Joint Venture Agreement in Article 4.2; however, the Company determined that it was the only party with the financial means to perform under the guarantee.  Since 4301 did not have the ability to contribute additional financial support to the venture, the Company concluded it would need to provide additional financial support to the venture to fund the acquisition of the UNTHA URT recycling system.  This conclusion was subsequently confirmed by subsequent infusions of cash from the Company to AAP in the form of subordinated debt which began concurrent with the commencement of AAP’s operations, and loan guarantees by ARCA on secured borrowings which were later obtained by AAP.  There were no cash infusions by 4301 to AAP during this time.

Since the amount of financial support contributed to the joint venture was insufficient at the date of inception to fund the contractual requirement to purchase and install the UNTHA recycling system, the Company concluded that the amount of equity at risk was not sufficient to allow AAP to finance its activities without additional support.  For this same reason, the Company concluded that the design of the joint venture caused the voting rights to be not proportional to the Company’s obligations to absorb expected losses or receive the residual returns of AAP.

The Company will revise its disclosure in future filings to include the following: “The financial position of and results of operations of AAP are consolidated in our financial statements based on our conclusion that AAP is a variable interest entity due to ARCA’s contribution in excess of 50% of the total equity, subordinated debt and other forms of financial support. Additionally, we have a controlling financial interest in AAP, through our contractual agreement with GE which is material to the VIE and has provided substantially all of the financial support to fund the operations of AAP since its inception.”

Page 3

Form 10-Q for Fiscal Quarter Ended September 28, 2013

Note 10. Income Taxes, page 12

2.

 We reviewed your response to comment seven in our letter dated December 27, 2013.  We note the most significant item impacting the effective rate reconciliation for the nine months ended September 28, 2013 is the release of your deferred tax valuation allowance.  However we note the statement of cash flows does not reflect any change in the valuation allowance against deferred tax assets during the period.  Please advise.

Company Response:  The Company recorded a full valuation allowance against its deferred tax assets related to Net Operating Loss Carryforwards (NOLs) as of December 29, 2012, as there was significant uncertainty surrounding the Company’s ability to utilize its NOLs.  Throughout 2013, the Company generated operating profits that were not expected as of December 29, 2012, and as a result, the valuation allowance related to the NOL deferred tax asset was released for those NOL’s utilized during the nine months ended September 28, 2013. The statement of cash flows was not impacted because the utilization of the deferred tax asset and the related release of the valuation allowance offset each other.

Note 12. Segment Information, page 14

3.

 We reviewed your response to comment eight in our letter dated December 27, 2013.  Please note that any current period revision to your methodology for attributing costs between reportable segments and unallocated corporate costs should be reflected retroactive to the beginning of the periods presented in order to conform to the current year presentation.  Please revise your segment disclosures accordingly in future filings.

Company Response:  The Company will revise its segment disclosures in future filings.  However, the Company would like to clarify that based on a review of the corporate services it made a change to the estimate of costs allocated to its reportable segments.  Because the change was the result of a “change in estimate”, the Company believes that a retroactive reclassification was not appropriate.

Sincerely,

/s/Edward R. Cameron

Edward R. Cameron

President and Chief Executive Officer

Page 4

January 27, 2014

Via U.S. Mail
Edward R. Cameron
President and Chief Executive Officer
Appliance  Recycling Centers of America, Inc.
7400 Excelsior Boulevard
Minneapolis, Minnesota 55426 -4517

Re: Appliance Recycling Centers of America, Inc.
 Form 10-K for Fiscal Year Ended December 29, 2012
Filed March 22, 2013
Form 10 -Q for Fiscal Quarter Ended September 28, 2013
Filed November 7, 2013
File No. 0 -19621

Dear Mr. Cameron :

We have reviewed your response dated January 10, 2014  and have the following
additional comments.  In some of our comments, we may ask you to provide us with information
so we may better understand your disclosure.

Please respond to this letter within ten  business days by amending your filing s, by
providing the requested information, or by advising us when you will provide the requested
response.   If you do not believe our comments apply  to your facts and circumstances or do not
believe an amendment is app ropriate, please tell us why in your response.

After reviewing any amendment to your filing s and the information you provide in
response to these  comments , we may have  additional comments.

Form 10 -K for Fiscal Year Ended December 29, 2012

Note 1. Nature of Business and Basis of Presentation, page 36

1. We reviewed your response to comment one in our letter dated December 27, 2013.
Please provide additional information regarding the factors considering in determining
that the AAP joint ventu re is a variable interest entity subject to the variable interest
entity (VIE) subsections of ASC 810.  In particular, please address the following:

 Please provide us a copy of the AAP joint venture agreement and tell us your
consideration of filing the a greement as an exhibit pursuant to Item 601 of Regulation
S-K.

Edward R. Cameron
Appliance Recycling Centers of America, Inc.
January 27, 2014
Page 2

  Tell us why the “business” exclusion from the scope of the VIE subsections of ASC
810 is not applicable in this case.  Refer to ASC 810 -10-15-17.d.  If  you believe AAP
was designed such  that su bstantially all of its activities either involve or are
conducted on behalf of you, as opposed to you and the joint venture partner, please
tell us the rights and obligations of 4301 Operations under the joint venture
agreement, including your understandin g of why 4301 Operations entered into the
joint venture agreement. If you believe you have provided more than ½ of the total
equity, subordinated debt and other forms of subordinated financial support to the
entity, please provide us your analysis of the f air values of each of the interests in the
entity.
 Notwithstanding the preceding bullet point and based on your assumption that the
business exclusion from the scope of the VIE subsections of ASC 810  does not apply
to AAP, please provide us additional su pport for your determination that AAP is a
variable as described in  ASC 810 -10-15-14.  In  particular, please tell us  the specific
provisions  in the joint venture agreement which lead you to conclude that by design :
o The total equity investment at risk i s not sufficient to permit AAP to finance
its activities without additional subordinated financial support; and
o Your voting rights are not proportional to your obligations to absorb the
expected losses of AAP, your rights to receive the expected residual r eturns of
AAP, or both.
Please note the phrase by design refers to entities that meet the condition of being a
VIE because of the way they are structured.  An entity under the control of its equity
investors that originally was not a VIE does not become one because of operating
losses.

We may have further comment regarding your analysis of the primary beneficiary of
AAP once we have a clearer understanding as to why you believe AAP is a variable
interest and not a voting interest entity under ASC 810.

In any event , please further revi se the disclosure you propose to include in future
filings regarding the consolidation of AAP, as the proposed disclosure remains unclear in
terms of your basis in GAAP for consolidating this entity.  For example, having a
controlling financial interest in  AAP  would be the basis in GAAP for consolidation,
whereas  having “significant influence” over the economic performance of AAP  would
not be a basis for consolidation .

Form 10 -Q for Fiscal Quarter Ended September 28, 2013

Note 10. Income Taxes, page 12

2. We reviewed your response to comment seven in our letter dated December 27, 2013.
We note the most significant item impacting the effective rate reconciliation for the nine
months ended September 28, 2013 is the release of your deferred tax valuation

Edward R. Cameron
Appliance Recycling Centers of America, Inc.
January 27, 2014
Page 3

 allow ance.  However we note the statement of cash flows does not reflect any change in
the valuation allowance against deferred tax assets during the period.  Please advise.

Note 12. Segment Information, page 14

3. We reviewed your response to comment eight in  our letter dated December 27, 2013.
Please note that any current period revision to your methodology for attributing costs
between reportable segments and unallocated corporate costs should be reflected
retroactive to the beginning of the periods present ed in order to conform to the current
year presentation.  Please revise your segment disclosures accordingly in future filings.

You may contact  Robyn Manuel , Staff Accountant , at (202) 551 -3823  or me at (202)
551-3849  if you have questions regarding our comments or any other questions.

Sincerely,

 /s/ James Allegretto

James Allegretto
Senior Assistant Chief Accountant

CORRESP
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		SEC Comment Letter 12.2013

January 10, 2014

VIA EDGAR

United States Securities and Exchange Commission

Division of Corporate Finance

100 F Street NE, Mail Stop 3720

Washington, DC 20549

Attn: James Allegretto, Senior Assistant Chief Accountant

Re:

 Appliance Recycling Centers of America, Inc.

Form 10-K for Fiscal Year Ended December 29, 2012 Filed on March 22, 2013

Form 10-Q for Fiscal Quarter Ended September 28, 2013 Filed on November 7, 2013

File No. 0-19621

Dear Mr. Allegretto:

On behalf of Appliance Recycling Centers of America, Inc. (the “Company” or “we”), this letter is submitted in response to the comments set forth in your letter to me dated December 27, 2013.  For your convenience, we have set forth below each of your numbered comments, followed by our response.

We respectfully request that the Staff review the responses in this letter and allow the Company to modify or expand its disclosures in future filings and not amend the Form 10-K for the Fiscal Year Ended December 29, 2012 and the Form 10-Q for the Fiscal Quarter Ended September 28, 2013.

Form 10-K for Fiscal Year Ended December 29, 2012

Note 1. Nature of Business and Basis of Presentation, page 36

1.

 Please refer to ASC 810-10-15-14 and tell us the factors considered in determining that the AAP joint venture is a variable interest entity (VIE).  Additionally, we note your disclosure that AAP is consolidated in your financial statements based on your ability to significantly influence the economic performance of the entity through your contractual agreement with GE.  Please explain to us in detail with a view toward summary disclosure whether your variable interests in AAP provide you a controlling financial interest in AAP, which is the condition precedent to being the primary beneficiary and consolidator of the VIE.  Refer to ASC 810-10-25-38 and 38A for guidance.

Additionally, please tell us your consideration of disclosing your methodology for determining that you are the primary beneficiary of the VIE, including, but not limited to, significant judgments and assumptions made.  As suggested in ASC 810-10-50-12, one way to meet this disclosure requirement would be to provide information about the types of involvements you consider significant, supplemented with information about how the significant involvements were considered in determining that you are the primary beneficiary.

Company Response: By definition, under ASC 810-10-15-14, if by design, the total equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support provided by any of the parties, the entity is a VIE.  Furthermore, since by design ARCA contributed more than half of the total of the equity, subordinated debt and other forms of subordinated financial support to the entity, ARCA concluded that its voting rights were in fact not proportional to its obligation to absorb the expected losses or its rights to residual returns of the entity, given that the planned allocation of earnings under the joint venture agreement was 50/50.

ARCA therefore concluded that it was the primary beneficiary based on its determination that ARCA possessed a controlling financial interest in the entity based primarily upon its power to direct the activities that would most directly influence the financial viability and success of the venture through its recycling contract with GE, and based on its obligation to absorb losses and finance capital expenditures of the VIE that could be potentially significant to the VIE by virtue of

- 1 -

having provided more than 50% of the equity at risk, subordinated debt or other forms of subordinated financing.

The following were factors considered in determining that the AAP joint venture is a VIE:

•

 The Company, since inception of the joint venture, has financed losses and capital expenditures of the joint venture through subordinated debt, advances and loan guarantees in excess of additional capital contributions/debt from 4301 Operations.

•

 The joint venture was formed as a result of the Company’s contract, and not the joint venture’s, with General Electric (GE) mandating the installation of an UNTHA URT recycling system in the Philadelphia area.

•

 GE related volume represented approximately 80% of the joint venture’s total volume for the year ended December 29, 2012, which is significant to the joint venture.

•

 The Company has a 50% interest in the joint venture through its $2 million initial cash contribution.

•

 4301 Operations contributed its metal shredder operations consisting of fixed assets, working capital, debt and assembled workforce with a net book value of $1 million for 50% interest in the joint venture.

As a result of the Company’s contractual obligation to GE, the Company contributing more than half of the total equity, subordinated debt and other forms of financial support to the joint venture, it was concluded the joint venture is a VIE.  The Company concluded it was the primary beneficiary based on its determination the Company possessed a controlling financial interest in the entity based primarily upon: (i) its power to direct the activities that would most directly influence the financial viability and success of the joint venture through its recycling contract with GE, and (ii) based on its obligation to absorb losses and finance capital expenditures of the VIE that could be potentially significant to the VIE by virtue of having provided more than 50% of the equity at risk, subordinated debt or other forms of subordinated financing.

The Company will expand its disclosure in future filings to include the following:

The financial position of and results of operations of AAP are consolidated in our financial statements based on our conclusion that AAP is a variable interest entity due to ARCA’s contribution in excess of 50% of the total equity, subordinated debt and other forms of financial support.  Additionally, we have the ability to significantly influence the economic performance of the entity through our contractual agreement with GE which is material to the VIE and has provided substantially all of the financial support to fund the operations of AAP since its inception.

Note 2. Significant Accounting Policies, page 37.

2.

 Please tell us your consideration of disclosing the types of expenses you include in cost of revenues and the types of expenses you include in selling, general and administrative expenses, including disclosure of the types of expenses included in the cost of processed metals from recycled appliances.  As it relates to cost of retail revenues, please tell us your consideration of disclosing specifically whether you include inbound freight charges, purchasing and receiving costs, inspection costs, warehousing costs, internal transfer costs and the other costs of your distribution network in cost of retail revenues.

Company Response: The Company will expand its disclosure in future filings under Note 2, Significant Accounting Policies, to include the following:

Retail Segment Cost of Revenues.  Costs of revenues in our retail segment are comprised primarily of the following:

•

 Purchase of appliance inventories, including freight to and from our distribution centers;

- 2 -

•

 Shipping, receiving and distribution of appliance inventories to our retail stores, including employee compensation and benefits;

•

 Delivery and service of appliances, including employee compensation and benefits, after it is sold to the consumer;

•

 Early payment discounts and allowances offered by appliance manufacturers;

•

 Inventory markdowns and shortages.

Recycling Segment Cost of Revenues.  Costs of revenues in our recycling segment are comprised primarily of the following:

•

 Transportation costs, including employee compensation and benefits, related to collecting appliances for recycling and delivering appliances under our replacement programs;

•

 Purchase of appliance inventories, including freight to our recycling center warehouses, early payment discounts, and warehousing costs for appliances used in our replacement programs;

•

 Cost of recyclable appliances purchased under our GE contract;

•

 Processing costs, including employee compensation and benefits, related to recycling and processing appliances.

Selling, General and Administrative Expenses.  Selling, general and administrative expenses are comprised primarily of the following:

•

 Employee compensation and benefits related to management, corporate services, and retail sales;

•

 Outside and outsourced corporate service fees;

•

 Occupancy costs related to our retail stores and corporate office;

•

 Advertising costs;

•

 Bank charges and costs associated with credit and debit card interchange fees;

•

 Other administrative costs, such as supplies, travel and lodging.

Revenue Recognition, page 39

3.

 Please disclose your revenue recognition policy for appliance replacement programs where you recycle and replace old appliances with new energy efficient appliances. Please specify the timing of revenue recognition; e.g., at the time of collection of the old appliance and replacement with the new appliance or upon completion of the recycling of the old unit. Tell us whether the appliance replacement programs represent multiple element arrangements containing more than one unit of accounting pursuant to ASC 605-25 and how you arrived at your conclusion.  If these programs have more than one unit of accounting, tell us and disclose how the overall arrangement consideration is measured and allocated to the separate units of accounting in the arrangement.

Company Response: The Company recognizes revenue generated under appliance replacement programs after the new appliance is delivered and the old appliance is collected and processed.  The price is fixed and the delivery, collection and processing activities are required to complete the earnings process.  Typically, the delivery, collection and processing activities occur within one business day.  The Company does not believe the revenue recognition under our replacement programs fall under multiple element arrangements pursuant to ASC 605-25 as there are not any contractual arrangements to perform multiple revenue-generating activities.

The Company will expand its disclosure in future filings to include the following:

We recognize revenue generated from appliance replacement programs when we deliver the new appliance and collect and process the old appliance.  The delivery, collection and processing activities typically occur within one business day and are required to complete the earnings process.  There is no further performance obligation by the Company.

4.

 Please explain to us the process by which you receive revenue for producing carbon offsets.  Please explain to us the exact point in the process in which you record revenue.

- 3 -

Company Response: The Company recovers Chlorofluorocarbon (CFC) refrigerants from refrigerators, freezers, room air conditioners and dehumidifiers it recycles under its electric utility and GE contracts.  CFC refrigerants are submitted to various third parties for verification and destruction to generate carbon offset certificates to be sold in the California carbon offset market.  There are various steps in the conversion of CFC refrigerants into carbon offset certificates, which include the following:

1)

 CFC refrigerants recovered are sent to a third party for verification and destruction, no revenue recognized;

2)

 Verification and destruction reports are submitted to American Carbon Registry (ACR), founded in 1996 to develop science-based carbon offset standards and methodologies and oversee carbon offset projects, no revenue recognized;

3)

 Verification from ACR is submitted to the California Air Resources Board (ARB), a regulatory agency formed in 1967, for the issuance of carbon offset certificates, no revenue recognized;

4)

 Certificates issued by the ARB are sold and converted to cash, revenue is recognized at the time when all of the following requirements have been met:

i.

 there is persuasive evidence of an arrangement,

ii.

 the sales price is fixed or determinable,

iii.

 title, ownership and risk of loss associated with the certificates  have been transferred to the customer, and

iv.

 collectability is reasonably assured.

Due to uncertainty around collectability and the involvement of various third parties and partners, the Company has historically recognized revenues related to carbon offsets on a cash basis.

The Company will modify its disclosure in future filings related to revenue for producing carbon offsets as follows:

We record revenue from the sale of carbon offsets in the period when all of the following requirements have been met: (i) there is persuasive evidence of an arrangement, (ii) the sales price is fixed or determinable, (iii) title, ownership and risk of loss associated with the credits have been transferred to the customer, and (iv) collectability is reasonably assured.  These requirements are met upon collection of cash due to the uncertainty around collectability and the involvement of various third parties and partners.

5.

 We note your disclosure of accrued rebate and incentive checks on page 42.  Please tell us your consideration of disclosing: the nature of the rebate and incentive programs offered to customers; your accounting policy for each of these programs, including the Statements of Comprehensive Income line item in which the cost of these programs is included; and the timing of recognition of the rebates and incentives.  If the rebates and incentives are treated as expenses rather than a reduction of revenues, please tell us the basis for such classification.  Please refer to ASC 605-50-45.

Company Response: To encourage the permanent removal of energy inefficient appliances from use, many electric utility companies sponsor programs through which their residential customers can retire working appliances.  Electric utility companies often provide rebates and incentives for consumers to discontinue use of a surplus appliance or to replace their old, inefficient appliances with newer, more energy efficient models.  The Company provides rebate and incentive fulfillment services for its electric utility clients.  These services involve processing and mailing a rebate or incentive check to customers of our electric utility clients that qualify.  The Company issues rebate and incentive checks to the electric utility’s customer and the Company passes the cost of the rebate or incentives directly back to the electric utility and bills the electric utility for the amount of rebates

- 4 -

and incentives issued.  There is no revenue reported or expense incurred for these types of payments as the Company is a flow-through for the process and nets the amounts to zero on the Consolidated Statements of Comprehensive Income.

The accrual includes uncashed incentive checks related to our various recycling programs.  Our accrued liability is adjusted as the incentive checks are presented for payment, which is typically shortly after the issuance of the rebate or incentive check.  The Company records a liability in the amount of rebate and incentive checks that remain outstanding and complies with escheatment laws in each state to remit unclaimed property to appropriate governmental jurisdiction.

The Company does not believe further disclosure is required in its filings.

Signatures, page 57

6.

 Please refer to the Signature Page and General Instruction D to Form 10-K and provide conforming signatures in future filings.  In this regard, please note the report should be signed on behalf of the registrant by your principal executive officer, principal financial officer, controller or principal accounting officer and at least a majority of the

December 27, 2013

Via U.S. Mail
Edward R. Cameron
President and Chief Executive Officer
Appliance Recycling Centers of America, Inc.
7400 Excelsior Boulevard
Minneapolis, Minnesota 55426 -4517

Re: Appliance Recycling Centers of America, Inc.
 Form 10-K for Fiscal Year Ended December 29, 2012
Filed March 22, 2013
Form 10 -Q for F iscal Quarter Ended September 28, 2013
Filed November 7, 2013
File No. 0 -19621

Dear Mr. Cameron :

We have reviewed your filing s and have the following comments.  We have limited our
review to only your financial statements and related disclosures and do not intend to expand our
review to ot her portions of your documents.  In some of our comments, we ma y ask you to
provide us with information so we may better understand your disclosure.

Please respond to this letter within ten business days by amending your filing s, by
providing the requested information, or by advising us when you will provide the requ ested
response.   If you do not believe our comments apply to your facts and circumstances or do not
believe an amendment is appropriate, please tell us why in your response.

After reviewing any amendment to your filing s and the information you provide i n
response to these  comments, we may have  additional comments.

Form 10 -K for Fiscal Year Ended December 29, 2012

Note 1. Nature of Business and Basis of Presentation, page 36

1. Please refer to ASC 810 -10-15-14 and tell us the factors consider ed in determining that
the AAP joint venture is a variable interest entity (VIE).  Additionally, we note your
disclosure that AAP is consolidated in your financial statements based on your ability to
significantly influence the economic performance of the entity through your contractual
agreement with GE.  Please explain to us in detail with a view toward summary
disclosure whether your variable interests in AAP provide you a controlling financial
interest in AAP, which is the condition precedent to being t he primary beneficiary and
consolidator of the VIE.  Refer to ASC 810 -10-25-38 and 38A for guidance.

Edward R. Cameron
Appliance Recycling Centers of America, Inc.
December 27, 2013
Page 2

 Additionally, please tell us your consideration of disclosing your methodology for
determining that you are the primary beneficiary of the VIE, including,  but not limited to,
significant judgments and assumptions made.   As suggested in ASC 810 -10-50-12, one
way to meet this disclosure requirement would be to provide information about the types
of involvements you consider significant, supplemented with inf ormation about how the
significant involvements were considered in determining that you are the primary
beneficiary.

Note 2. Significant Accounting Policies, page 37

2. Please tell us your consideration of disclosing the types of expenses you include in co st
of revenues and the types of expenses you include in selling, general and administrative
expenses, including disclosure of the types of expenses included in the cost of processed
metals from recycled appliances.  As it relates to cost of retail revenues , please tell us
your consideration of disclosing specifically whether you include inbound freight
charges, purchasing and receiving costs, inspection costs, warehousing costs, internal
transfer costs and the other costs of your distribution network in cos t of retail revenues.

Revenue Recognition, page 39

3. Please disclose your revenue recognition policy for appliance replacement programs
where you recycle and replace old appliances with new energy efficient appliances.
Please specify the timing of reven ue recognition; e.g., at the time of collection of the old
appliance and replacement with the new appliance or upon completion of the recycling of
the old unit.  Tell us whether the appliance replacement programs represent multiple
element arrangements con taining more than one unit of accounting pursuant to ASC 605 -
25 and how you arrived at your conclusion.  If these programs have more than one unit of
accounting, tell us and disclose how the overall arrangement consideration is measured
and allocated to th e separate units of accounting in the arrangement.

4. Please explain to us the process by which you receive revenue for producing carbon
offsets .  Please explain to us the exact point in the process in which you record revenue.

5. We note your disclosure of accrued rebate and incentive checks on page 42.  Please tell
us your consideration of disclosing: the nature of the rebate and incentive programs
offered to customers; your accounting policy for each of these programs, including the
Statements of Comprehensive Income line item in which the cost of these programs is
included; and the timing of recognition of the rebates and incentives.  If the rebates and
incentives are treated as expenses rather than a reduction of revenues, pleas e tell us the
basis for such classification.  Please refer to ASC 605 -50-45.

Edward R. Cameron
Appliance Recycling Centers of America, Inc.
December 27, 2013
Page 3

 Signatures, page 57

6. Please refer to the Signature Page and General Instruction D to Form 10 -K and provide
conforming signatures in future filings.  In this regard, please note the report should be
signed on behalf of the registrant by your principal executive officer, princip al financial
officer, controller or principal accounting officer and at least a majority of the board of
directors.  Any person who occupies more than one of the specified positions shall
indicate each capacity in which he signs the report.

Form 10 -Q for Fiscal Quarter Ended September 28, 2013

Note 10. Income Taxes, page 12

7. Please reconcile for us your effective tax rate of 15% for the nine month period ended
September 28, 2013 to your federal statutory tax rate.  Please also refer to ASC 740 -270-
50-1 and tell us your consideration of disclosing in your interim financial statements the
reasons for significant variations in the customary relationship between income tax
expense and pretax income.

Note 12. Segment Information, page 14

8. Please explain to  us and tell us your consideration of discussing in Management’s
Discussion and Analysis of Financial Condition and Results of Operations the significant
increase in unallocated corporate costs during the three and nine months ended
September 28, 2013 as c ompared to the three and nine months ended September 29,
2012.

We urge all persons who are responsible for the accuracy and adequacy of the disclosure
in the filing s to be certain that the filing s include the information the Securities Exchange Act of
1934 and all applicable Exchange Act rules require.   Since the company and its management are
in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy
and adequacy of the disclosures they have made.

 In respondi ng to our comments, please provide  a written statement from the company
acknowledging that:

 the company is responsible for the adequacy and accuracy of the disclosure in the filing s;

 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 s; and

 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 Stat es.

Edward R. Cameron
Appliance Recycling Centers of America, Inc.
December 27, 2013
Page 4

You may contact Robyn Manuel, Staff Accountant,  at (202) 551 -3823  or me at (202)
551-3849  if you have questions regarding our comments or any other questions.

Sincerely,

 /s/ James Allegretto

James Allegretto
Senior Assistant Chief Accountant

February 2, 2011
  Edward R. Cameron President and Chief Executive Officer Appliance Recycling Centers of America, Inc. 7400 Excelsior Boulevard Minneapolis, Minnesota 55426-4517
Re: Appliance Recycling Centers of America, Inc.
 Form 10-K for Fiscal Year Ended January 2, 2010
Filed March 18, 2010 Definitive Proxy Statement on Schedule 14A Filed April 1, 2010 Forms 10-Q for Fiscal Quarters Ended April 3, 2010 and July 3, 2010 Filed May 18, 2010 and August 16, 2010 File No. 000-19621

Dear Mr. Cameron:
 We have completed our review of your fili ngs and do not have any further comments at
this time.
Sincerely,
   /s/ Andrew D. Mew

Andrew D. Mew Accounting Branch Chief
cc: Jeff Cammerrer

CORRESP
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January 7, 2011

VIA EDGAR

United States Securities and Exchange Commission

Division of Corporate Finance

100 F Street NE, Mail Stop 3720

Washington, DC 20549

Attn: Andrew Mew, Accounting Branch Chief

Re:                               Appliance Recycling Centers of America, Inc.

Form 10-K for Fiscal Year Ended January 2, 2010 filed on March 18, 2010

Definitive Proxy Statement on Schedule 14A filed on April 1, 2010

Forms 10-Q for Fiscal Quarters Ended April 3, 2010 and July 3, 2010 filed on May 18, 2010 and August 16, 2010

File No. 000-19621

Dear Mr. Mew:

On behalf of Appliance Recycling Centers of America, Inc. (the “Company” or “we”), this letter is submitted in response to the comments set forth in your letter to me dated December 8, 2010.  For your convenience, we have set forth below each of your numbered comments, followed by our response.

Form 10-K For the Fiscal Year Ended January 2, 2010

Note 13. Shareholders’ Equity, page 52

1.               We note your response to prior comment 10 and your conclusion that the warrant to purchase 248 shares of common stock with anti-dilution provisions that provides settlement in an indeterminate number of shares did not meet all the requirements of a derivative liability.  Despite your determination of the financial instrument not meeting all the criteria to qualify as a derivative liability, the warrant should still be evaluated to determine whether it should be accounted for as a liability or equity.  Please explain how you reasonably concluded equity classification was appropriate in-light of the settlement terms that do not provide an explicit share limit. Reference is made FASB ASC 815-40-25-26.

Company Response: The Company acknowledges that, due to the anti-dilution features in the Warrant Agreement, there is not an explicit limit on the number of shares that could be required to settle the warrant.  However, the Company believes that the number of shares required for settlement of the warrant is within its control.  The number of shares to be issued in settlement of the warrant will not change unless the Company issues additional shares of equity, warrants or other convertible instruments on terms that trigger the anti-dilution provisions in the Warrant Agreement.  This is an event that is within the Company’s control; the number of shares does not change simply because of changes in the market price of the Common Stock.

Equity classification of the warrant is also consistent with the fact that the warrant only provides for settlement of the warrant with shares, and not with cash.  In addition, numerous provisions in the Warrant Agreement, including the following provisions, align the warrant holder’s interests with those of holders of the Company’s common stock:

1)             Sections 4.1, 4.2, 4.4, 4.5 and 4.9 provide that the rights of the Warrant holder will be adjusted to reflect changes that affect the holders of Common Stock,

2)             Section 5.2 requires the Company to give notice to the Warrant holder before it takes certain corporate actions that affect the rights of holder of Common Stock,

3)             Section VI provides that the Company will take any action that is necessary to ensure that the Warrant holder will receive Common Stock upon exercise of the Warrant, and

4)             Section VII requires the Company to at all times have a sufficient number of shares of Common Stock reserved for issuance upon exercise of the Warrant.

The Company currently has approximately 3.6 million shares of Common Stock available for settlement of the warrant (more than 14 times the number of shares currently covered by the warrant), calculated as follows:

Shares Authorized

10,000,000

Shares Issued and Outstanding

(5,492,777

)

Potential Shares to be Issued Under Stock Option Agreements

(618,500

)

Potential Shares to be Issued Under Warrant Agreements

(254,042

)

3,634,681

The Company had approximately 4.5 million shares of Common Stock available for settlement of the warrant on the date the Warrant Agreement was executed.

The Company also believes that if it had to increase the number of authorized shares of Common Stock in order to settle the warrant, it is remote that the shareholders would not approve the proposal.

Since the only features in the Warrant Agreement that render the number of shares to be issued in settlement of the warrant to be indeterminate relate to anti-dilution features and not market conditions, and since the Company has and will continue to have a sufficient number of shares of Common Stock at all times reserved for issuance upon the exercise of the warrant, the Company believes that net share settlement is within its control and that equity classification is appropriate.

Exhibits, 31.1 and 31.2

2.               We note your response to prior comment 13.  Please also include with your amended Form 10-K your financial statements and the certifications required by Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350).  See Exchange Act Rule 12b-15.

Company Response: The Company will amend its Form 10-K filed January 2, 2010 to include the certifications required by Section 1350 of Chapter 63 of Title 18 of the United States (18 U.S.C. 1350) and as described in our response to prior comment 13.  The amendment will be filed after the completion of the comment process.

Definitive Proxy Statement on Schedule 14A

Proposal One — Election of Directors, page 6

Nominees, page 7

3.               We note your response to prior comment 14. In future filings, please state in the introductory paragraph in this section that the biographies for your nominees for director disclose the specific experience, qualifications, attributes or skills that led to your conclusion that each nominee for directors should serve as your director. Also discuss in greater detail in each biography that these applicable factors led to this conclusion.  For guidance see Question 116.05 of the Division of Corporation Finance Compliance and Disclosure Interpretations (Regulation S-K), which is available on our website.

Company Response: The Company will comply with the Staff’s comment in future filings.

2

Sincerely,

/s/Edward R. Cameron

Edward R. Cameron

President and Chief Executive Officer

3

December 8 , 2010

Via U.S. Mail and facsimile to ( 952) 930-1803
 Edward R. Cameron
President and Chief Executive Officer
Appliance Recycling Centers of America, Inc.
7400 Excelsior Boulevard Minneapolis, Minnesota 55426- 4517

Re: Appliance Recycling Centers of America, Inc.
 Form 10- K for Fiscal Year Ended January 2, 2010
Filed March 18, 2010 Definitive Proxy Statement on Schedule 14A
Filed April 1, 2010 Forms 10- Q for Fiscal Quarters Ended April 3, 2010 and July 3, 2010
Filed May 18, 2010 and August 16, 2010 File No. 000 -19621
 Dear Mr. Cameron :
 We have reviewed your response letter dated November 22, 2010 and have the following
comments.
Form  10-K For the Fiscal Year Ended January 2, 2010

Note 13. Shareholders’ Equity, page 52

1. We note your response t o prior comment 10 and your conclusion that the warrant to
purchase 248 shares of common stock with anti -dilution provisions that provides
settlement in an indeterminate number of shares did not meet all the requirements of a
derivative liability. Despite your determination of the financial instrument not meeting all
the criteria to qualify as a derivative liability, the warrant should still be evaluated to
determine whether it should be accounted for as a liability or equity.  Please explain how you reason ably concluded equity classification was appropriate in- light of the settlement
terms that do not provide an explicit share limit.  Reference is made FASB ASC 815 -40-
25-26.

Exhibits 31.1 and 31.2

2. We note your response to prior comment 13.  Please also in clude with your amended
Form 10- K your financial statements and the certifications required by Section 1350 of

Edward R. Cameron
Appliance Recyclin g Centers of America, Inc.
December 8 , 2010
Page 2

Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350).  See Exchange Act Rule 12b- 15.

Definitive Proxy Statement on Schedule 14A

Proposal One – Election of Directors, page 6

Nominees, page 7

3. We note your response to prior comment 14.  In future filings, please state in the
introductory paragraph in this section that the biographies for your nominees for director disclose the specifi c experience, qualifications, attributes or skills that led to your
conclusion that each nominee for directors should serve as your director.  Also discuss in greater detail in each biography that these applicable factors led to this conclusion. For guidan ce see Question 116.05 of the Division of Corporation Finance Compliance and
Disclosure Interpretations (Regulation S -K), which is available on our website.

As appropriate, please amend your filings and respond to these comments within 10
business days o r tell us when you will provide us with a response.  You may wish to provide us
with marked copies of the amendments to expedite our review.  Please furnish a cover letter with your amendments that keys your responses to our comments and provides any reque sted
information.  Detailed cover letters greatly facilitate our review.  Please submit your cover letter over EDGAR.  Please understand that we may have additional comments after reviewing your amendments and responses to our comments.
You may contact Ch arles Lee, Attorney -Advisor, at (202) 551- 3427, or Brigitte
Lippmann, Special Counsel, at (202) 551- 3713 if you questions regarding comments on legal
matters.  You may contact Scott Stringer, Staff Accountant, at (202) 551- 3272 if you have
questions regarding comments on the financial statements and related matters.  Please contact me at (202) 551- 3377 if you have any other questions.

Sincerely,
 James Allegr etto for
Andrew Mew
Accounting Branch Chief

cc: Jeff Cammerrer

CORRESP
1
filename1.htm

November 22, 2010

VIA EDGAR

United States Securities and
Exchange Commission

Division of Corporate
Finance

100 F Street NE, Mail Stop
3720

Washington, DC 20549

Attn: H. Christopher Owings,
Assistant Director

Re:                               Appliance
Recycling Centers of America, Inc.

Form 10-K for Fiscal
Year Ended January 2, 2010 filed on March 18, 2010

Definitive Proxy Statement
on Schedule 14A filed on April 1, 2010

Forms 10-Q for Fiscal
Quarters Ended April 3, 2010 and July 3, 2010 filed on May 18,
2010 and August 16, 2010

File No. 000-19621

Dear Mr. Owings:

On behalf of Appliance
Recycling Centers of America, Inc. (the “Company” or “we”), this letter is
submitted in response to the comments set forth in your letter to me dated November 2,
2010.  For your convenience, we have set
forth below each of your numbered comments, followed by our response.

We intend to file an
amendment to our Annual Report on Form 10-K for the fiscal year ended January 2,
2010, to respond to comments 5, 11, 12 and 13 below.  In future filings, we will revise our
disclosures as described herein to address other concerns raised in your
letter.  Prior to the filing of the
amendment to the Form 10-K, the Company respectfully requests that the
Staff review this letter and advise us as to whether it has an additional
comments.

Form 10-K for Fiscal
Year Ended January 2, 2010

Management’s Discussion and
Analysis of Financial Condition and Results of Operations, page 22

1.               Please expand this section
to elaborate on known material trends and uncertainties that will have, or are
reasonably likely to have, a material impact on your net sales or income from
continuing operations or result in your liquidity decreasing or increasing in
any material way.  In doing so, please
provide additional information about the quality and variability of your
earnings and cash flows so that investors can ascertain the likelihood of the
extent past performance is indicative of future performance.  In addition, please discuss in reasonable detail:

·                  economic or
industry-wide factors relevant to your company, and

·                  material
opportunities, challenges and risks in short and long term and the actions you
are taking to address them.

See Item 303(a) of
Regulation S-K and SEC Release No. 33-8350.

Company Response: We will expand
our Management’s Discussion and Analysis in future filings to include the
following with respect to known material trends and uncertainties, the quality
and variability of our earnings and cash flows for the applicable periods, relevant
economic or industry-wide factors relevant to our Company, and opportunities
and challenges and actions we are taking as a Company to address them:

Our business, like that of many
retailers, is seasonal for our retail segment.
Historically, the fourth quarter is our weakest quarter in terms of both
revenue and earnings.  We believe this is
primarily because the fourth quarter includes various holidays and consumers
tend to focus less on purchasing major household appliances.

Similarly, revenues and earnings
in our recycling segment are also impacted by seasonal variances, with the
later part of the first quarter and both the second and third quarters for

the recycling segment generally
having higher levels of revenue and earnings.
This seasonality is primarily due to our customers supporting more
marketing and advertising during the spring and summer months of the year.  Additionally, some of our recycling customers
only have seasonal programs operating from April to September.

Since the second half of 2009, we
have heightened our focus on carefully managing our expenses.  We have also temporarily halted any plans to
open any new retail stores in 2010 but have instead focused on improving
profitability within our existing stores.
We are accomplishing this by focusing on our operating costs, including
overhead, and by evaluating the cost and ongoing effectiveness of our marketing
programs.

We reduced our corporate general
and administrative expenses by $1.0 million in 2009 as a result establishing
process improvements, implementing salary reductions and headcount
eliminations.  These cost-cutting
initiatives are intended to be permanent with the exception of the salary
reductions.  As a result of implementing
salary reductions in June 2009 we reduced compensation expense by $0.6
million in 2009.

Along with the cost-cutting
efforts related to corporate general and administrative expenses, we also
implemented various cost reduction initiatives in our retail segment.  This included closing one underperforming
factory outlet store in Georgia and a second factory outlet store in Texas by
choosing not to renew the lease.  We
recorded a lease termination charge of $0.3 million in October 2009 as a
result of closing our factory outlet store in Georgia, which effectively offset
our 2009 expense savings.  We expect to
save approximately $0.8 million in 2010 as a result of closing the factory
outlet stores in Georgia and Texas.  After
a thorough analysis, other cost-cutting efforts were taken including the
reorganization of our factory outlet store management and employee compensation
and the reduction of various other costs with an expected annual savings of
$1.5 million.  We believe these
initiatives will be sustainable into 2010 and beyond.   In
2010, we plan to evaluate our marketing expenses and our overall advertising
and brand message.

We monitor country-specific
economic factors such as retail trends, consumer confidence, manufacturing by
the major appliance companies, sales of existing homes and mortgage interest
rates as key indicators of industry demand, particularly in our retail segment.

Competition in the home appliance
industry is intense in all markets we serve.
This includes competition from not only independent retailers in the
four markets we serve but also intense competition from such major retailers as
Sears, Best Buy, Home Depot and Lowes.

We believe the outlook for our
recycling segment remains strong in 2010 and beyond.  Electric utility companies throughout the
United States continue to support and add appliance recycling programs as part
of their broader demand side management energy efficiency programs.  We believe we will be able to continue to
expand our recycling customer base as a result.

Results of Operations, page 24

2.               Please expand your
discussion under results of operations for all periods to quantify each factor
you cite as impacting your operations.
For example, you disclose that the
decrease in recycling revenues for 2009 was due primarily to a planned volume
reduction for one contract in California and lower recycling volumes on other
contracts, combined with a later-than-anticipated start and a lower level or
sign-ups from a major utility’s annual appliance replacement program in 2009,
without quantifying the impact attributed to each component.  Also describe unusual or infrequent events,
significant economic changes, and significant components of revenue and
expenses.  For example, your discussion
of the decrease in recycling revenues for 2009 does not explain why there are
lower recycling volumes on your contracts, a later-than-anticipated start and a
lower level of sign-ups.  See Item 303(a)(3) of
Regulation S-K.

Company Response: We will expand
our Management’s Discussion and Analysis in future filings to include the
following with respect to quantifying each factor impacting our operations for
the applicable periods and describing any unusual or infrequent events,
significant economic changes and significant components of revenues and
expenses relevant to our Company and actions we are taking as a Company to
address them:

2

In 2009, we experienced a 33.7%
decline in volumes related to a major electric utility’s recycling contract in
California compared to 2008.  The
reduction in volume was the result of losing 25% of the territory under the
contract and lower volume from the utility’s participants.  We expected the decrease in volume under the
contract and anticipate renegotiating this contract in 2010 to increase our
volume of recycled appliances.
Additionally in 2009, the appliance replacement program volume sponsored
by a California utility decreased 38.7% compared to 2008.  The decrease in volume was the result of a
delay in completing and servicing the contract along with a decrease in
customer enrollment.  We anticipate a
continued decrease in volume in 2010.  We
plan to renew the appliance replacement program contract in 2010 with the
expectation that the volume will increase in 2011.

Liquidity and Capital
Resources, page 27

3.               Please disclose the specific
terms of material debt covenants in your debt agreement.  Also disclose the required ratios as well as
the actual ratios as of each reporting date to allow investors to understand
how much cushion there is between these ratios.
See Sections I.D. and IV.C of SEC Interpretive Release No. 33-8350.

Company Response: We have
expanded the Company’s disclosures of covenants contained in its General Credit
and Security Agreement entered into on August 30, 1996, as amended, (the “Credit
Agreement”) in its Form 10-Q for the fiscal quarter ended October 2,
2010, filed on November 15, 2010,
with the applicable portions of following disclosure:

The Company has two financial
covenants within its Credit Agreement:

1)             A
minimum profitability covenant that requires the Company to report $1 of net
income for all quarterly periods between Q1 2008 and Q4 2010.

2)             A
minimum annual tangible net worth covenant that requires the Company to report
an annual tangible net worth of $2,900,000 plus the annual net income, if
applicable, for fiscal years 2008 and 2009 and $3,000,000 plus the annual net
income, if applicable, for fiscal year 2010.

The following table illustrates
the Company’s covenant compliance for 2008 through 2010:

  Covenant/Period

  Actual

  Required

  Waiver

  Received

  Outstanding

  Amount

  Profitability

  Q1
  2008

  $

  117,000

  $

  1

  n/a

  n/a

  Q2
  2008

  $

  837,000

  $

  1

  n/a

  n/a

  Q3
  2008

  $

  1,141,000

  $

  1

  n/a

  n/a

  Q4
  2008

  $

  (1,735,000

  )

  $

  1

  Yes

  $

  14,527,000

  Q1
  2009

  $

  (1,962,000

  )

  $

  1

  Yes

  $

  11,381,000

  Q2
  2009

  $

  (411,000

  )

  $

  1

  Yes

  $

  12,361,000

  Q3
  2009

  $

  416,000

  $

  1

  n/a

  n/a

  Q4
  2009

  $

  (1,381,000

  )

  $

  1

  Yes

  $

  12,419,000

  Q1
  2010

  $

  102,000

  $

  1

  n/a

  n/a

  Q2
  2010

  $

  719,000

  $

  1

  n/a

  n/a

  Q3
  2010

  $

  885,000

  $

  1

  n/a

  n/a

  Tangible
  Net Worth

  Fiscal
  Year 2008

  $

  4,083,000

  $

  3,260,000

  n/a

  n/a

  Fiscal
  Year 2009

  $

  3,241,000

  $

  2,900,000

  n/a

  n/a

The Company will update the form
of the disclosure above in future filings.

3

4.               Please disclose the
financial covenants that you were not in compliance with and describe the
waiver you received from the lender.
Disclose whether you are currently in compliance with your debt
agreement.

Company Response: As noted in the
Company’s response to comment No. 3 above, the Company expanded its
disclosures of covenants contained in its Credit Agreement in its Form 10-Q
for fiscal quarter ended October 2, 2010, filed on November 15,
2010.  The Company will update the form
of disclosure included in response to comment No. 3 in future filings.

5.               Please identify the lender
and the date of your debt agreement.  We
also note that your line of credit was increased from $16 million to $18
million on February 5, 2008.  Please
tell us where you have filed the exhibit for this amendment to your debt
agreement.

Company Response: On August 30,
1996, the Company entered into a General Credit and Security Agreement, as
amended, (the “Credit Agreement”) with Spectrum Commercial Services that
provides the Company with an $18 million line of credit.  As discussed in the Company’s Management’s
Discussion and Analysis and Note 9 to the financial statements, the Credit
Agreement was amended on February 5, 2008 to increase the maximum
borrowings from $16 million to $18 million.
The Company has not filed amendments 18 through 26 of its Credit
Agreement as Exhibits, but will do so as indicated below.

The Company will identify the
lender and original date of the Credit Agreement in future filings, beginning
with its Form 10-Q for the fiscal quarter ended October 2, 2010,
filed on November 15, 2010.  Upon
resolution of all the Staff’s comments, the Company will amend its Form 10-K
for the fiscal year ended January 2, 2010, filed on March 18, 2010 to
include the Exhibits related to Amendments 18 through 26 under its Credit
Agreement.

Note 3. Significant
Accounting Policies, page 41

Depreciation and
Amortization Expense, page 42

6.               You state that depreciation
and amortization expense related to building and equipment from your recycling
centers is presented in cost of revenues.
With a view to enhance the disclosures, please also disclose the amount
of such expenses classified within cost of revenues.

Company Response: The Company
will expand its disclosures of depreciation and amortization expense in future
filings in accordance with the Staff’s comment to include disclosure for the
periods being reported consistent with the following:

Depreciation and amortization
included in cost of revenues was $350,000 and $428,000 for the fiscal years
ended January 2, 2010 and January 3, 2009, respectively.

Note 6. Investments, page 46

7.               Please explain to us and
disclose how you reasonably determined the October 21, 2009 recycling
agreement you entered in to
be an intangible asset.

Company Response: As part of our Appliance Recycling and Sales
Agreement with General Electric whereby General Electric has agreed to sell us
recyclable appliances, the Company issued a fully vested, nonforfeitable stock
warrant to General Electric.  General
Electric is not required to perform any additional services to retain the stock
warrant.  The Company applied FASB ASC
505-50-45-1 at the measurement date of October 21, 2009 in concluding that
an asset had been received in return for the fully vested, nonforfeitable stock
warrant issued in connection with the agreement with General Electric.

4

Note 9. Line of Credit, page 47

8.               Please reconcile for us the
amount of outstanding borrowings on your line of credit on the face of the
balance sheet to your disclosures on the total line and the unused borrowing
capacity as disclosed here.

Company Response: Below is a
reconciliation of the Company’s outstanding borrowings to the unused borrowing
capacity under its $18 million Credit Agreement:

  Available
  borrowing from 80% of eligible accounts receivable

  $

  2,304,000

  Available
  borrowing from eligible inventory (1)

  10,356,000

  Less:
  reserve for unpaid financing authorizations (2)

  (185,000

  )

  Gross
  availability — net of reserve for unpaid financing authorizations (3)

  12,475,000

  Less:
  outstanding loan balance

  (12,419,000

  )

  Net
  availability (unused borrowing capacity)

  $

  56,000

(1)         Eligible
inventory is determined by the lesser of 50% of Non-Whirlpool inventory less
than one year old and 80% of Whirlpool inventory less than one year old OR
$12,000,000.

(2)         The
reserve for unpaid financing authorizations is determined by multiplying the
unpaid Non-Whirlpool financing authorization by 50% and multiplying the unpaid
Whirlpool financing authorizations by 20%.

(3)         The
gross availability is calculated by taking the lesser of the Gross
availability, net of reserve for unpaid financing authorizations OR $18,000,000
less the total

November 2, 2010

Edward R. Cameron President and Chief Executive Officer Appliance Recycling Centers of America, Inc. 7400 Excelsior Boulevard
Minneapolis, Minnesota 55426-4517

Re: Appliance Recycling Centers of America, Inc.  Form 10-K for Fiscal Year Ended January 2, 2010
Filed March 18, 2010 Definitive Proxy Statement on Schedule 14A Filed April 1, 2010 Forms 10-Q for Fiscal Quarters Ended April 3, 2010 and July 3, 2010 Filed May 18, 2010 and August 16, 2010 File No. 000-19621
 Dear Mr. Cameron:
 We have reviewed your filing and have the following comments.  In some of our
comments, we may ask you to provide us with  information so we may better understand your
disclosure.
 You should comply with the comments in all future filings, as applicable.  Please confirm
in writing that you will do so and also explain to us in sufficient detail for an understanding of
the disclosure how you intend to comply by providing us with your proposed revisions.
 Please respond to this letter within ten business days by amending your filing, by
providing the requested information, or by advi sing us when you will provide the requested
response.  If you do not believe our comments apply to your fact s and circumstances or do not
believe an amendment is appropriate, pl ease tell us why in your response.
 After reviewing any amendment to your filing and the information you provide in
response to these comments, we ma y have additional comments.
 Form 10-K for Fiscal Year Ended January 2, 2010

Management’s Discussion and Analysis of Financ ial Condition and Results of Operations, page
22

1. Please expand this section to elaborate on know n material trends a nd uncertainties that
will have, or are reasonably likely to have, a material impact on your net sales or income
from continuing operations or result in your  liquidity decreasing or increasing in any

Edward R. Cameron  Appliance Recycling Centers of America, Inc.
November 2, 2010 Page 2

material way.  In doing so, please provide additional information a bout the quality and
variability of your earnings and cash flows so that investors can as certain the likelihood
of the extent past performance is indicative of future performance.  In addition, please
discuss in reasonable detail:

• economic or industry-wide factors relevant to your company, and

• material opportunities, challe nges and risks in short and long term and the actions you
are taking to address them.

See Item 303(a) of Regulation S-K and SEC Release No. 33-8350.

Results of Operations, page 24

2. Please expand your discussion under results of ope rations for all periods to quantify each
factor you cite as impacting your operations.  For example, you disclose that the decrease in recycling revenues for 2009 was due primarily to a planned volume reduction for one contract in California and lower recycling vo lumes on other contracts, combined with a
later-than-anticipated start and a lower level of sign-ups from a major utility’s annual
appliance replacement program in 2009, without qua ntifying the impact a ttributed to each
component.  Also describe unusual or infre quent events, significant economic changes,
and significant components of revenue and expenses.  For example, your discussion of
the decrease in recycling revenues for 2009 does not explain why there are lower
recycling volumes on your contr acts, a later-than-anticipated start and a lower level of
sign-ups.  See Item 303(a)(3) of Regulation S-K.
 Liquidity and Capital Resources, page 27

3. Please disclose the specific terms of materi al debt covenants in your debt agreement.
Also disclose the required ratios as well as th e actual ratios as of each reporting date to
allow investors to understand how much cush ion there is between these ratios.  See
Sections I.D and IV.C of SE C Interpretive Release No. 33-8350.

4. Please disclose the financial covenants that you were not in compliance with and describe
the waiver you received from the lender.  Disclose whether y ou are currently in
compliance with your debt agreement.

5. Please identify the lender and the date of your debt agreement.  We also note that your
line of credit was increased from $16 million to $18 million on February 5, 2008.  Please
tell us where you have filed the exhibit for this amendment to your debt agreement.

Edward R. Cameron  Appliance Recycling Centers of America, Inc.
November 2, 2010 Page 3

Note 3. Significant Accounting Policies, page 41

Depreciation and Amortization Expense, page 42

6. You state that depreciation a nd amortization expense relate d to building and equipment
from your recycling centers is presented in co st of revenues. With a view to enhance the
disclosures, please also disclo se the amount of such expenses  classified within cost of
revenues.

Note 6. Investments, page 46

7. Please explain to us and disclose how you reasonably determined the October 21, 2009
recycling agreement you entered into  to be an intangible asset.

Note 9. Line of Credit, page 47

8. Please reconcile for us the amount of outst anding borrowings on your line of credit on the
face of the balance sheet to your disclosure s of the total line and the unused borrowing
capacity as disclosed here.

9. In future filings please revise to state the amount of the obligations under which you have
received waivers from your lender and the period of each applicable waiver.

Note 13. Shareholders’ Equity, page 52

10. We note you recorded as equity a warrant to  purchase 248 shares of common stock with
settlement terms that are not fixed, allowing th e exercise price to be reduced if you issue
and sell additional common shares at a price lo wer than the then current warrant exercise
price and that it will trigger an increase in the number of shares to be issued. Please
explain how you reasonably concluded equity  classification rather than derivative
liability classification was appropriate under GAAP.  Reference is made to FASB ASC
815-40-15-5 through 15-7 and the example provided in FASB ASC 815-40-55-33
through 55-34.
 Index to Exhibits, page 64

11. It appears that you have not provided all of the schedules and exhibits to Exhibit 10.5 –
Line of credit dated August 30, 1996 a nd Exhibit 10.20 – Loan Agreement dated
September 10, 1998.  While Item 601(b)(2) of  Regulation S-K permits you to provide
omitted information supplementally, there is not a similar provision in Item 601(b)(10) of
Regulation S-K.  Please file the complete  agreements, including all schedules and
exhibits, with your amended Form 10-K.

Edward R. Cameron  Appliance Recycling Centers of America, Inc.
November 2, 2010 Page 4

12. Please file a list of all of your  subsidiaries, including the st ate or other jurisdiction of
incorporation or organization, and the names under which such  subsidiaries do business.
See Item 601(b)(21) of Regulation S-K.
 Exhibits 31.1 and 31.2

13. The certifications filed as Exhibits 31.1 a nd 31.2 do not conform to the form of such
certifications set forth in Item 601(b)(31)(i) of Regulation S-K.  For example, you should
not include the title of the individual in th e introductory paragraph; you should not refer
to your “annual” report in paragraph 2; you shoul d state that your certifying officers are
responsible for establishing and maintaining internal control over fi nancial reporting in
the introductory language in paragraph 4; and the statements included as paragraph 4(d)
should be included as paragraph 4(b).  Please file an amendment to the Form 10-K that
consists of the cover page, an explanator y note, full Item 9A disclosure, financial
statements, the signature page and the certifi cations, with such paragraphs conforming to
the form set forth in Item 601(b)(31)(i) of Regulation S-K.
 Definitive Proxy Statement on Schedule 14A

 Proposal One – Election of  Directors, page 6

 Nominees, page 7

14. Please briefly discuss the specific experience, qua lifications, attributes or skills that led to
your conclusion that each nominee for director should serve as your di rector, in light of
your business and structure.  If  material, this disclosure should cover more than the past
five years, including information about such nominee’s particular ar eas of expertise or
other relevant qualifications.  See Item 401(e)(1) of Regulation S-K.
 Form 10-Q for Fiscal Quarter Ended April 3, 2010

 Controls and Procedures, page 22

 Evaluation of Disclosure Cont rols and Procedures, page 22

15. You state in the first paragraph, second sent ence that “controls and procedures, no matter
how well designed and operated, can provide only reasonable assura nce of achieving the
desired control objectives.”  Please confirm to us and revise future filings to clarify, if
true, that your disclosure controls and procedures are desi gned to provid e reasonable
assurance of achieving their objectives and that your principal executive officer and
principal financial officer c oncluded that your disclosure controls and procedures are
effective at that reasonable assurance level.

Edward R. Cameron  Appliance Recycling Centers of America, Inc.
November 2, 2010 Page 5

16. You state in the second paragraph that your “management, including the principal
executive officer and principal financial officer…have concluded that the design and
operation of [your] disclosure controls and procedures were effective to ensure information required to be disclosed by [you] in the reports [you] f ile or submit under the
Exchange Act is processed, recorded, summarized and reported with in the time periods
specified in [our] rules and forms.” This is an  incomplete definition of disclosure controls
and procedures per Rules 13a- 15(e) and 15d-15(e) of the Exch ange Act.   Please confirm
to us and revise future filings to also cl arify, if true, that you r management, including
your principal executive officer and principal financial officer, has concluded that your
disclosure controls and proce dures are also effective to ensure that information required
to be disclosed in the reports that you file or submit under the Exchange Act is
accumulated and communicated to your mana gement, including your principal executive
and principal financial officers, or persons pe rforming similar functions, as appropriate to
allow timely decisions regarding required disc losure.   Otherwise please simply conclude
that your disclosure controls a nd procedures are effective.
 Exhibits 31.1 and 31.2

17. In future filings, please revise  the certifications  filed as Exhibits 31.1 and 31.2 so that
such certifications conform to the form set forth in Item 601( b)(31)(i) of Regulation S-K.
 Form 10-Q for Fiscal Quarter Ended July 3, 2010

18. Please provide the confirmations requested  by comments 15 and 16, as such comments
apply to your Form 10-Q for fiscal quar ter ended July 3, 2010, and comply with
comments 15, 16 and 17 in future filings.
 Note 6. Variable Interest Entity, page 10

19. We note your disclosure that you contribu ted cash in the amount of $1,969 for your
ownership interests in AAP on February 8, 2010. However, we cannot locate where you
reflected the payout in your cash flow statement on page five. Please explain.
Unregistered Sales of Equity Securities and Use of Proceeds, page 24

20. Please tell us whether you have filed a Fo rm D for the warrants issued on May 13, 2010
pursuant to Rule 506 of Regulation D.

We urge all persons who are responsible for th e accuracy and adequacy of the disclosure
in the filing to be certain that the filing include s the information the Securities Exchange Act of
1934 and all applicable Exchange Act rules requir e.  Since the company and its management are
in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy
and adequacy of the disclosures they have made.

Edward R. Cameron  Appliance Recycling Centers of America, Inc. November 2, 2010 Page 6

 In responding to our comments, please provi de a written statement from the company
acknowledging that:
• the company is responsible for the adequacy and accuracy of the disclo sure in the filing;

• 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 under the federa l securities laws of  the United States.

You may contact Scott String er, Staff Accountant, at ( 202) 551-3272 or Andrew Mew,
Accounting Branch Chief, at (202) 551-3377 if you have questions regarding comments on the financial statements and related matters.  Please  contact Charles Lee, A ttorney-Advisor, at (202)
551-3427, Brigitte Lippmann, Special Counsel, at (202) 551-3713 or me at (202) 551-3720 with
any other questions.
Sincerely,

H. Christopher Owings Assistant Director
cc: Jeff Cammerrer

Mail Stop 3561

        January 17, 2008

By Facsimile and U.S. Mail

 Edward R. Cameron President and Chief Executive Officer Appliance Recycling Centers of America, Inc. 7400 Excelsior Boulevard Minneapolis, MN 55426-4517
  Re: Appliance Recycling Centers of America, Inc.
   Form 10-K for Fiscal Year Ended December 30, 2006
   Filed March 29, 2007    File No. 000-19621
Dear Mr. Cameron:
  We have reviewed your response dated January 8, 2008 to our comment letter dated November 21, 2007 and have the following additional comments.  Please understand that the purpose of our review is to assist you in your compliance with the applicable disclosure requirements and to enhance the overall disclosure in your filing.  We look forward to working with you in these respects.  Feel free to call us at the telephone numbers listed at the end of this letter.
Segment Information, page 41

1. We note your response to comment 12 in our letter dated November 21, 2007 and
we reissue our comment.  Please provide a reply that responds to the entire comment including each bullet item.  Also provide us with all of the financial information available to the CODM and the most recent copy of your organizational chart including employee names and titles.
 Note 4. Accrued Expenses, page 44

2. We note your response to comment 16 in our letter dated November 21, 2007.  Please clearly explain the operating substance of the accrued incentive checks, the accounting principles applied and important judgments made by management.  Please tell us how you account for the associated asset and why the liability is classified as current even though it has not changed between the balance sheet

Mr. Edward R. Cameron Appliance Recycling Centers of America, Inc. January 17, 2008 Page 2

 dates.  You should also include a policy note that describes the applied accounting principles and how they materially affect your financial position, cash flows and results of operations.  See paragraph 12 of APB 22.
  Please respond to these comments within 10 business days or tell us when you will provide a response.  Please furnish a letter that keys your responses to our comments and provides any requested information.  Please understand that we may have additional comments after reviewing your amendment and responses to our comments.    You may contact Brian McAllister, Staff Accountant, at (202) 551- 3341, or
Donna Di Silvio, Review Accountant, at (202) 551-3202, if you have any questions regarding the financial statements and related matters.  Please contact me at (202) 551-3841 with any other questions.               S i n c e r e l y ,              M i c h a e l  M o r a n             A c c o u n t i n g  B r a n c h  C h i e f

Mail Stop 3561

            March 28, 2008

By Facsimile and U.S. Mail

Edward R. Cameron
President and Chief Executive Officer
Appliance Recycling Centers of America, Inc.
7400 Excelsior Boulevard
Minneapolis, MN 55426-4517

  Re: Appliance Recycling Centers of America, Inc.
   Form 10-K for Fiscal Year Ended December 30, 2006
   Filed March 29, 2007
   File No. 000-19621

Dear Mr. Cameron:

 We have completed our review of your Form 10-K and have no further comments
at this time.

        S i n c e r e l y ,

        M i c h a e l  M o r a n
        A c c o u n t i n g  B r a n c h  C h i e f

CORRESP
1
filename1.htm

  APPLIANCE
  RECYCLING CENTERS OF AMERICA, INC.

  7400 Excelsior
  Blvd. Minneapolis, MN 55426-4517

  TELEPHONE: (952)
  930-9000                          FACSIMILE:
  (952) 930-1800

March 21, 2008

Mr. Michael
Moran

Accounting
Branch Chief

Securities
and Exchange Commission

Mail
Stop 3561

Washington,
DC  20549

Re:  Appliance Recycling Centers of America, Inc.

       Comment Letter dated January 17,
2008

       Form 10-K for Fiscal Year Ended December 30,
2006

       File No. 000-19621

Dear
Mr. Moran:

We
have received your comment letter dated January 17, 2008, with respect to
the above-referenced filing by Appliance Recycling Centers of America, Inc.

As
requested, we are providing the following responses and supplemental
information.  To facilitate your review
of our responses, we have set forth below the full text of each comment,
followed by our response thereto.

Segment Information, page 41

1.  We note your
response to comment 12 in our letter dated November 21, 2007 and we
reissue our comment.  Please provide a
reply that responds to the entire comment including each bullet item.  Also provide us eith all of the financial
information available to the CODM and the most recent copy of your
organizational chart including employee names and titles.

Response:  Through 2005, the company was managed as a
single unit by the CEO who is the CODM.
We did not allocate corporate overhead or the administrative costs of
each individual center to either recycling or retail activities.  In 2006, the company began the process of
allocating these costs to match the two main sources of revenue and the process
has been refined in the last year.  We
also saw a negative trend in the percentage of total revenues that were made up
of recycling activities that led management to operate and evaluate the company
as a single unit.  That changed in 2007
with the addition of several new recycling contracts.  We also have reviewed the Commission’s
Rulemaking Release 33-8876, Smaller Reporting Company Regulatory Relief and
Simplification, and anticipate presenting only the current and

prior
income statement, cash flow and statement of changes in stockholders equity in
filing our 2007 financial statements on Form 10-K. Based on these new
facts, the company is planning to report the results of our two main operating
segments prospectively in our 2007 10-K filing.
We will present segment information for both 2006 and 2007 for our
retail and recycling operations and present the quarterly results prospectively
in our 2008 10-Q filings.  Since
byproduct revenue is generated primarily from recycling activities, it will be
considered part of the recycling segment and reported as such.  The individual bulleted items from the
original comment are addressed in the following paragraphs.

The
environmental regulations that exist pertaining to our recycling activity also
apply to product we receive as part of our haul-away and recycle services
offered to our retail customers and in the recycling of product that does not
meet our standards for sale.

There
is also some overlap in the customer base for each activity.  While the retail stores generally serve the
general public and the recycling activities generally serve electric utilities,
both types of customers generate by-product revenue. Through our outlet stores,
we are a reverse logistics partner with appliance manufacturers providing them
with a distribution channel for appliances that fall outside their normal
distribution and sales channels.

Due
to the multi-use nature of our facilities and resources, the company believes
it would be impractical and inaccurate to try to separate the activities of the
company into reportable segments prior to 2006, and therefore potentially
misleading to the users of our financial statements.

Note 4.  Accrued
Expenses, page 44

2.  We note your
response to comment 16 in our letter dated November 21, 2007.  Please clearly explain the operating
substance of the accrued incentive checks, the accounting principles applied
and important judgments made by management.
Please tell us how you account for the associated asset and why the
liability is classified as current even though it has not changed between the
balance sheet dates.  You should also
include a policy note that describes the applied accounting principles and how
they materially affect your financial position, cash flows, and results of
operations.  See paragraph 12 of APB 22.

Response:  The amount reported as accrued incentive
checks reflects uncashed incentive checks related to our various recycling
programs.  We recognize incentives
offered to our customers as a reduction of revenue in accordance with EITF
01-9, Accounting for Consideration Given by a Vendor to a
Customer (Including a Reseller of the Vendor’s Products). Our
accrued liability is adjusted as the incentive checks are presented for
payment, which is typically shortly after the issuance of the incentive rebate
check.  This balance reflects uncashed
checks that have become aged and will eventually become escheat property and
payable to the state in which the programs were administered.  Management reclassified them from cash to
accrued expenses after the checks went uncashed for at least three years.  We continue to monitor if any of these
payments have been presented for payment and would adjust the accrual
accordingly if paid.  Management feels
that classifying these as a liability rather than as a credit in our cash
accounts more accurately reflects these items as probable obligations to
pay.  The company is currently in the
process of accumulating the data necessary to turn these over to the various
states as unclaimed property and anticipates resolution on

many
of the older items in 2008.  The Company
believes that the rebate incentive checks offered to customers are consistent
with the definition of a current liability set forth in ARB 43, Chapter 3, para
7, whereby the current liability classification is intended to include
obligations that, by their terms are due on demand, even though liquidation may
not be expected within that period.

The
company will include a description of the accounting principles applied and the
effect of these items  prospectively
beginning with our 2007 10K filing.

In
connection with these responses, the Company hereby acknowledges that:

·                  The company is responsible for the adequacy
and accuracy of the disclosure in the filing;

·                  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 under the
federal securities laws of the United States.

Please
contact Patrick Winters at 952-930-1782 if you have any questions about these
responses.

Sincerely,

Appliance
Recycling Centers of America, Inc.

By

Controller/Primary
Accounting Officer

CORRESP
1
filename1.htm

  APPLIANCE
  RECYCLING CENTERS OF AMERICA, INC.

  7400 Excelsior Blvd. Minneapolis, MN 55426-4517

  TELEPHONE: (952)
  930-9000

  FACSIMILE: (952)
  930-1800

January 8,
2008

Mr. Michael
Moran

Accounting
Branch Chief

Securities
and Exchange Commission

Mail
Stop 3561

Washington,
DC  20549

  Re:

  Appliance
  Recycling Centers of America, Inc.

  Comment
  Letter dated November 21, 2007

  Form 10-K
  for Fiscal Year Ended December 30, 2006

  File
  No. 000-19621

Dear
Mr. Moran:

We
have received your comment letter dated November 21, 2007, with respect to
the above-referenced filing by Appliance Recycling Centers of America, Inc.

As
requested, we are providing the following responses and supplemental
information.  To facilitate your review
of our responses, we have set forth below the full text of each comment,
followed by our response thereto.

Report of Independent Registered Public Accounting Firm, page 31

1.  Please have your
independent accounting firm tell us what consideration was given to the fact
that you were in violation of your debt covenants at the time they opined on
your financial statements on March 16, 2007.  We note the waiver was not obtained from your
lender until March 28, 2007 subsequent to the audit report date of March 16,
2007.

Response
from our accounting firm:  The existence
of the covenant violation was considered at the time we opined on the Company’s
financial statements but had no impact on the dating of the audit report due to
the existing demand feature of the instrument.

Report of Independent Registered Public Accounting Firm, page 32

2.  Please clarify
which audit report provides assurance for each individual period included in
Schedule II on page 52.  The
McGladrey & Pullen audit report refers to the year ended January 1,
2005 while the Virchow, Krause & Company, LLP does not refer to any
periods presented.

Also, please tell us why the schedule does not include an
annual balance as of December 31, 2005.

Response:  Virchow, Krause & Company, LLP
audited both the 2005 and 2006 fiscal years.
Data from both 2005 and 2006 should have been included in Schedule II on
page 52, and will be included in future filings.

Consolidated Balance Sheets, page 33

3.  Please add a line
item to correspond with Note 5.  See Rule 5-02.25
of Regulation S-X.

Response:  In future filings, the company will add a
line to the balance sheet corresponding to Note 5, “Commitments and
Contingencies.”

Consolidated Statement of Income, page 34

4.  Please separately
present cost of revenue to be consistent with revenues.  See Rule 5-03(b)2 of Regulation
S-X.  Alternatively, please tell us why
it is impracticable to separate, identify or reasonably allocate a significant
amount of the costs disclosed as cost of revenues.

Response:  Many of the company’s employees and assets
are used in both retail and recycling activities.  This makes it impractical for the company to
identify costs associated with each activity.
Byproduct revenue, for example, is generated from both retail and
recycling activities as the company’s retail stores offer free removal and
recycling of the customer’s replaced appliances. The company does not generate
separate financial statements reporting on the different activities.

Consolidated Statement of Cash Flows, page 36

5.  Please revise your
disclosure to clarify why the line of credit cash flows are eligible for net
reporting.  You disclose this line of
credit has a stated maturity date of one year and requires minimum monthly
interest payments.  In your response
please include your consideration of the net reporting requirement that debt be
due on demand or have a stated maturity of three months or less to be reported
net.  See paragraph 13 of SFAS No. 95.  Alternatively, please tell us you will
present the cash flows on a gross basis in future filings.

Response:  As stated in Note 2, the lender may demand
payment in full of the entire outstanding balance of the loan at any time,
therefore we determined it qualifies for net reporting under FAS 95 paragraph
13, footnote 3.

6.  The cash flow
statement shows long-term obligation payments of $260,000 yet the balance sheet
shows no net change between periods.
Help us understand the reason for these changes between periods and how
the changes are reflected in cash flows.
In your response please also explain the net change of $180,000 between
the mortgage balances and capital leases shown in Note 3.

Response:  The Company reported non-cash financing for
new capital leases in the amount of $260,000, which in 2006 coincidentally
offset the other debt payments in the same amount.

Notes to Consolidated Financial Statements, page 37

Note 1. Nature of Business and Significant Accounting
Policies, page 37

Revenue Recognition, page 38

Product Warranty, page 38

7.  Please tell us why
you combine extended warranty agreement sales with retail product sales.  See rule 5-03(b) of Regulation S-X.

Response:
 Extended warranty sales amounted to less
then 1.5% of total retail sales in 2006 and the amount was deemed immaterial
and therefore not split out on the income statement.

8.  In future filings
please disclose the basis for recognizing revenue over the term of the
contract.  We refer you to the discussion
of 12 month contracts with retained service obligations in the fourth paragraph
on page 22.  Please include an
example of your revised disclosure.

Response:  Here is the proposed disclosure for future
filings:  The company recognizes revenue
on extended warranties with retained service obligations on a straight-line
basis over the period of the warranty in accordance with FASB Technical
Bulletin 90-1, “Accounting for Separately Priced Extended Warranty and Product
Maintenance Contracts.

9.  Please tell us If
the third party service provider or the company is the named legal obligor for
extended warranty agreements where the service provider is responsible for risk
of loss or service costs.  In either
scenario, please tell us your basis for revenue recognition for these
agreements and the applicable accounting guidance.  Specifically please confirm you recognize the
price of the extended warranty agreement, less commission, at inception and the
basis for this treatment.

Response:  The third party service provider is the named
legal obligor for extended warranty agreements where the service provider is
legally responsible for risk of loss or service costs.  The company has no obligation under these
agreements and the amount the Company earns is fixed per the agreement with the
service provider, so we recognize revenue net of cost and commissions immediately
per Emerging Issues Task Force No. 99-19, Reporting Revenue Gross as a
Principal vs. Net as an Agent.

Property and Equipment, page 39

10.  Please tell us if
retirement obligations exist, and if so how you have accounted for these costs
and how you satisfy the disclosure requirements in 22 of SFAS No. 143.

Response:  The Company has no contractual asset
retirement obligations.

Software development costs, page 39

11.  Please disclose
the total amount of capitalized software developed for internal use included in
each balance sheet and identify the line item that includes capitalized
software.

Response:  The total amount of unamortized capitalized
software was $609,000 and $611,000 respectively for the years 2006 and
2005.  These amounts are included in the
line item “equipment” under the Property and Equipment section of the balance
sheet.  The Company

plans
to present this as a separate line item in with Property and Equipment per the
requirements of SFAS 86 paragraph 11a in future filings.

Segment Information, page 41

12.  We observe the
filing contains many disclosures indicating the company has various unrelated
business activities and that these activities could be viewed as operating
segments which may not satisfy all of the aggregating criteria in paragraph 17
of SFAS No. 131.  Please tell us how
management concluded the company has one reportable segment.  In your response please provide us with the
financial information available to your chief operating decision maker (CODM)
as well as an organizational chart that describes the titles and functions of
managers within the company.  In your
response please also specifically address the following:

·                  the dissimilarities of your
operations includes retail appliance outlets, providing recycling , reverse
logistics and byproduct activities services;

·                  the regulatory environment
that exists for recycling and byproduct activities but not retail stores, and

·                  customer dissimilarities
where retail stores serve the general public, recycling activities serves
electric utilities, reverse logistics serves appliance manufacturers and
retailers and byproduct activities serves waste haulers.

Response:
 The company is managed as a single
operating unit as referenced by the attached organizational chart.  The CEO is the sole chief operating decision
maker and he is not furnished with financial statements that separate the assets,
revenues, and associated costs by business activity.  Revenues from recycling and by-product
activities are generated from both retail and recycling activities through
recycling services provided by the company and the free removal and recycling
of appliances through our retail stores.
Assets and staff are used in both activities and the Company does not
separate the use of these resources by activity.  Financial information provided to our CEO and
management does not separate results by activity due to the multi-use nature
each location.   Copies of the income statement and balance
sheet provided to the CEO and management are attached.

13.  Please tell us
why you do not present the geographic segment information required by paragraph
38 of SFAS No. 131.  We note you
disclose opening ARCA Canada, Inc. in 2006.  To the extent your response states the
information is not material to your annual report; please tell us your
consideration of materiality with respect to subsequent  interim periodic filings.

Response:  The results of operations from ARCA Canada
were less than 1% of total revenues and assets for the fiscal year 2006.  The company evaluates the impact of this
operation as a percent of total revenues and assets during each interim period
to determine if reporting as a separate segment is appropriate.  During the first two quarters of 2007, the
results from ARCA Canada remained less than 1% of total revenues.  The third quarter results were less than 8%
of total revenues.

Note 5. Commitments and Contingencies, page 44

14.  We note your
recycling centers are registered as hazardous waste generators with the
EPA.  Please tell us if there are any
environmental costs or obligations associated with

compliance with environmental laws for this business
activity.  Tell us whether you use a
third party to dispose of hazardous waste.
Revise your disclosure here and/or MD&A as appropriate.  See item 101 of Regulation S-K.

Response:  The Company uses internally developed equipment
at each of our centers to recover refrigerants before any units are
recycled.  The company uses only licensed
hazardous waste companies to transport, recycle or dispose of any hazardous
materials we generate. As of the balance sheet date, the company has no
environmental remediation liabilities or contingencies.  We have not had any required environmental
remediation at any of our locations in the past and based on the safety programs
ARCA employs, as well as the use of only licensed companies to handle our
hazardous waste, we do not anticipate any liability associated with
environmental laws.

Note 2. Line of Credit, page 42

15.  We note from your
disclosure that the payment of dividends is limited.  Please expand your disclosure to state the
amount of income or retained earnings restricted and free of restrictions, as
applicable.  See Rule 4-08(e) of
Regulation S-X.

Response:  The agreement with our lender provides that
the company may not declare or pay any dividends, or make any distributions to
stockholders of any assets of the company.
In future filings, the company will revise its disclosure to indicate
that the agreement with our lender prohibits (rather than limits) payments of
dividends and distributions to stockholders.

Note 4.  Accrued
Expenses, page 44.

16.  Please explain
the facts and circumstances surrounding the accrual for recycling incentive
checks.  In addition, we note the amount
of the accrual has remained the same for several periods.  Please tell us when you anticipate paying the
amounts accrued.

Response:  The amount accrued for incentive checks
reflects the amount of checks written in connection with our recycling program
that have not been cashed. These amounts are cleared as the checks are
presented for payment. After a period of time, these amounts will become
escheat property and be payable to the state associated with the program.

Note 7. Shareholders’ Equity, page 47

17.  Please explain
the discrepancy of 500 stock options between the note and the statement of
shareholders’ equity.  For example, we
note 21,500 stock options presented in this note and 21,000 in the statement of
equity for 2006.

Response:  This discrepancy is due to rounding on the
equity statement.  In future filings we
will present the actual number of shares throughout our filing, rather than
rounding to the nearest thousand as is done with dollar amounts.

In
connection with these responses, the Company hereby acknowledges that:

·                  The
company is responsible for the adequacy and accuracy of the disclosure in the
filing;

·                  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 under the federal securities laws of the United
States.

Please
contact Patrick Winters at 952-930-1782 if you have any questions about these
responses.

Sincerely,

Appliance
Recycling Centers of America, Inc.

By

Controller/Primary
Accounting Officer

Appliance
Recycling Centers of America, Inc.

Consolidated
Income Statement

For the Month
Ending November 24, 2007

  JAN

  FEB

  MAR

  APR

  MAY

  JUN

  JUL

  AUG

  SEP

  OCT

  NOV

  DEC

  TOTAL

  SALES

  Boxed-New

  $

  2,754,729

  $

  2,974,453

  $

  3,925,281

  $

  2,723,917

  $

  2,733,779

  $

  3,976,075

  $

  2,774,185

  $

  2,790,284

  $

  2,778,128

  $

  2,115,721

  $

  1,863,925

  $

  0

  $

  31,410,477

  Unboxed - Special
  Buy

  1,946,324

  2,289,011

  3,069,934

  2,618,916

  2,815,947

  3,228,047

  2,799,520

  2,783,096

  3,087,000

  2,791,402

  4,689,116

  0

  32,118,313

  Wholesale - Fixed

  235

  48,791

  32,550

  0

  0

  0

  56,000

  2,997

  800

  0

  33,904

  0

  175,277

  Net Appl. Sales

  $

  4,701,288

  $

  5,312,255

  $

  7,027,765

  $

  5,342,833

  $

  5,549,726

  $

  7,204,122

  $

  5,629,705

  $

  5,576,377

  $

  5,865,928

  $

  4,907,123

  $

  6,586,945

  $

  0

  $

  63,704,067

  Wholesale-Unfixed

  10,090

  3,655

  9,160

  5,540

  7,265

  6,810

  9,580

  5,280

  9,725

  6,415

  9,314

  0

  82,834

  Warranty Income

  68,562

  86,525

  118,414

  81,461

  80,653

  106,007

  91,955

  47,638

  (28,072

  )

  73,685

  122,298

  0

  849,126

  Service &
  Labor Income

  2,454

  2,796

  2,514

  2,805

  4,312

  4,185

  2,577

  2,184

  3,466

  587

  1,393

  0

  29,273

  Parts S
  Accessories Income

  29,018

  47,890

  59,474

  42,597

  44,008

  53,579

  44,189

  45,911

  47,034

  40,903

  45,750

  0

  500,353

  Delivery Income

  53,029

  62,830

  90,980

Mail Stop 3561

    November 21, 2007
 By Facsimile and U.S. Mail

 Edward R. Cameron President and Chief Executive Officer Appliance Recycling Centers of America, Inc. 7400 Excelsior Boulevard Minneapolis, MN 55426-4517
  Re: Appliance Recycling Centers of America, Inc.
   Form 10-K for Fiscal Year Ended December 30, 2006
   Filed March 29, 2007    File No. 000-19621
Dear Mr. Cameron:

We have reviewed your filing and have the following comments.  Please provide
a written response to our comments.  Please be as detailed as necessary in your explanation.  In some of our comments, we may ask you to provide us with information so we may better understand your disclosure.  After reviewing this information, we may raise additional comments.
Please understand that the purpose of our review process is to assist you in your
compliance with the applicable disclosure requirements and to enhance the overall disclosure in your filing.  We look forward to working with you in these respects.  We welcome any questions you may have about our comments or any other aspect of our review.  Feel free to call us at the telephone numbers listed at the end of this letter.
Report of Independent Registered Public Accounting Firm, page 31

1. Please have your independent accounting firm tell us what consideration was
given to the fact that you were in violation of your debt covenants at the time they opined on your financial statements on March 16, 2007.  We note the waiver was not obtained from your lender until March 28, 2007 subsequent to the audit report date of March 16, 2007.  See AU530.

Report of Independent Registered Public Accounting Firm, page 32

Mr. Edward R. Cameron
Appliance Recycling Centers of America, Inc. November 21, 2007  Page 2

2. Please clarify which audit report provides assurance for each individual period included in Schedule II on page 52.  The McGladrey & Pullen audit report refers to the year ended January 1, 2005 while the Virchow, Krause & Company, LLP does not refer to any periods presented.  Also, please tell us why the schedule does not include an annual balance as of December 31, 2005.
 Consolidated Balance Sheets, page 33

3. Please add a line item to correspond with Note 5.  See Rule 5-02.25 of Regulation S-X.

Consolidated Statements of Income, page 34

4. Please separately present cost of revenue to be consistent with revenues.  See
Rule 5-03(b)2 of Regulation S-X.  Alternatively please tell us why it is impracticable to separate, identify or reasonably allocate a significant amount of the costs disclosed as cost of revenues.
 Consolidated Statement of Cash Flows, page 36

5. Please revise your disclosure to clarify why the line of credit cash flows are eligible for net reporting.  You disclose this line of credit has a stated maturity date of one year and requires minimum monthly interest payments.  In your response please include your consideration of the net reporting requirement that debt be due on demand or have a stated maturity of three months or less to be reported net.  See paragraph 13 of SFAS No. 95.  Alternatively, please tell us that you will present the cash flows on a gross basis in future filings.
6. The cash flow statement shows long-term obligation payments of $260,000 yet the balance sheet shows no net change between periods.  Help us understand the reason for these changes between periods and how the changes are reflected in cash flows.  In your response please also explain the net change of $180,000 between the mortgage balances and capital leases shown in Note 3.

Mr. Edward R. Cameron
Appliance Recycling Centers of America, Inc. November 21, 2007  Page 3
 Notes to Consolidated Financial Statements, page 37

Note 1. Nature of Business and Significant Accounting Policies, page 37
Revenue Recognition, page 38
Product Warranty, page 38
7. Please tell us why you combine extended warranty agreement sales with retail product sales.  See Rule 5-03(b) of Regulation S-X.
8. In future filings please disclose the basis for recognizing revenue over the term of the contract.  We refer you to the discussion of 12 month contracts with retained service obligations in the fourth paragraph on page 22.  Please include an example of your revised disclosure.
9. Please tell us if the third party service provider or the company is the named legal obligor for extended warranty agreements where the service provider is responsible for risk of loss or service costs.  In either scenario, please tell us your basis for revenue recognition for these agreements and the applicable accounting guidance.  Specifically please confirm you recognize the price of the extended warranty agreement, less commission, at inception and the basis for this treatment.
 Property and Equipment, page 39

10. Please tell us if retirement obligations exist, and if so how you have accounted for these costs and how you satisfy the disclosure requirements in 22 of SFAS No. 143.
 Software development costs, page 39

11. Please disclose the total amount of capitalized software developed for internal use included in each balance sheet and identify the line item that includes the capitalized software.
 Segment Information, page 41

12. We observe the filing contains many disclosures indicating the company has various unrelated business activities and that these activities could be viewed as operating segments which may not satisfy all of the aggregating criteria in paragraph 17 of SFAS No. 131.  Please tell us how management concluded the company has one reportable segment.  In your response please provide us with the financial information available to your chief operating decision maker (CODM) as well as an organizational chart that describes the titles and functions of

Mr. Edward R. Cameron
Appliance Recycling Centers of America, Inc. November 21, 2007  Page 4

managers within the company.  In your response please also specifically address the following:
• the dissimilarities of your operations includes retail appliance outlets,
providing recycling, reverse logistics and byproduct activities services;
• the regulatory environment that exists for recycling and byproduct activities but not retail stores, and
• customer dissimilarities where retail stores serve the general public, recycling activities serves electric utilities, reverse logistics serves appliance manufacturers and retailers and byproduct activities serves waste haulers.
13. Please tell us why you do not present the geographic segment information required by paragraph 38 of SFAS No. 131.  We note you disclose opening ARCA Canada, Inc. in 2006.  To the extent your response states the information is not material to your annual report; please tell us your consideration of materiality with respect to subsequent interim periodic filings.
 Note 5. Commitments and Contingencies, page 44

14. We note your recycling centers are registered as hazardous waste generators with the EPA.  Please tell us if there are any environmental costs or obligations associated with compliance with environmental laws for this business activity.  Tell us whether you use a third party to dispose of hazardous waste.  Revise your disclosure here and/or MD&A as appropriate.  See Item 101 of Regulation S-K.
 Note 2. Line of Credit, page 42

15. We note from your disclosure that the payment of dividends is limited.  Please expand your disclosure to state the amount of income or retained earnings restricted and free of restrictions, as applicable.  See Rule 4-08(e) of Regulation S-X.

Mr. Edward R. Cameron
Appliance Recycling Centers of America, Inc. November 21, 2007  Page 5
 Note 4. Accrued Expenses, page 44

16. Please explain the facts and circumstances surrounding the accrual for recycling incentive checks.  In addition, we note the amount of the accrual has remained the same for several periods.  Please tell us when you anticipate paying the amounts accrued.
 Note 7. Shareholders’ Equity, page 47

17. Please explain the discrepancy of 500 stock options between the note and the statement of shareholders’ equity.  For example, we note 21,500 stock options presented in this note and 21,000 in the statement of equity for 2006.

Please respond to these comments within 10 business days or tell us when you
will provide us with a response.  Please furnish a letter that keys your responses to our comments and provides any requested information.  Detailed letters greatly facilitate our review.  Please understand that we may have additional comments after reviewing your responses to our comments.   We urge all persons who are responsible for the accuracy and adequacy of the disclosure in the filing reviewed by the staff to be certain that they have provided all information investors require for an informed decision.  Since the company and its management are in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy and adequacy of the disclosures they have made.

In connection with responding to our comments, please provide, in writing, a
statement from the company acknowledging that:
• the company is responsible for the adequacy and accuracy of the disclosure in the filing;

• 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 under the federal securities laws of the United States.
   In addition, please be advised that the Division of Enforcement has access to all information you provide to the staff of the Di vision of Corporation Finance in our review
of your filing or in response to our comments on your filing.

Mr. Edward R. Cameron Appliance Recycling Centers of America, Inc. November 21, 2007  Page 6

  You may contact Brian McAllister, St aff Accountant, at (202) 551- 3341,  or
Donna Di Silvio at (202) 551-3202, Review Accountant, if you have any questions
regarding the financial statements and related matters.  Please contact me at (202) 551-3841 with any other questions.
    Sincerely,
              Michael Moran
   Accounting Branch Chief

<DOCUMENT>
<TYPE>LETTER
<SEQUENCE>1
<FILENAME>filename1.txt
<TEXT>

Mail Stop 0308

July 12, 2005

Linda A. Koenig
Chief Financial Officer
Appliance Recycling Centers of America, Inc.
7400 Excelsior Boulevard
Minneapolis, Minnesota  55426-4517

      Re: 	Appliance Recycling Centers of America, Inc.
		Form 10-K for the Fiscal Year Ended January 1, 2005
		Form 10-Q for the Fiscal Quarter Ended April 2, 2005
		File No.  0-19621

Dear Ms. Koenig:

	We have reviewed your response dated June 17, 2005 to our
comment letter dated May 25, 2005.  We have completed our review
of
your Form 10-K and related filings and have no further comments at
this time.

Sincerely,

Michael Moran
Branch Chief

??

??

??

??

Stanley Works
Form 10-K
Page 1

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-0308

         DIVISION OF
CORPORATION FINANCE

</TEXT>
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  APPLIANCE RECYCLING CENTERS OF AMERICA,
  INC.

  7400 Excelsior Blvd. Minneapolis, MN 55426-4517

  TELEPHONE: (952) 930-9000

  FACSIMILE: (952) 930-1800

June 17, 2005

Mr. Michael Moran

Branch Chief

Securities and Exchange Commission

Division of Corporation Finance

Mail Stop 03-08

Washington, D.C.  20549

  Re:

  Appliance Recycling Centers of America, Inc.

  Comment Letter dated May 25, 2005

  Form 10-K for the fiscal year ended January 1,
  2005

  Form 10-Q for the fiscal quarter ended
  April 2, 2005

  File No. 0-19621

Dear Mr. Moran:

We have received your comment letter dated May 25, 2005, with
respect to the above-referenced filings by Appliance Recycling Centers of
America, Inc.  Your letter requested
a response within 10 business days.  On June 8,
2005 we contacted Dave Irving, Staff Accountant, to request an additional 10
business days to complete our responses to your comments and he granted us the
requested extension.

As requested, we are providing the following responses and supplemental
information.  To facilitate your review
of our responses, we have set forth below the full text of each comment,
followed by our response thereto.

Form 10-K for the Fiscal Year Ended January 1,
2005

Item 7. Management’s Discussion
and Analysis of Financial Condition and Results of Operations, page 16

General

1.                                      We note you operate four
processing and recycling centers.
Additionally, you state in the business section that, “under some
circumstances we may be subject to contingent liabilities because we handle hazardous
materials.”  Tell us if you have any
environmental remediation

1

liabilities or contingencies at the
balance sheet date.  Also, tell us if
these sites historically required environmental remediation.

Response:  As
of the balance sheet date we do not have any environmental remediation
liabilities or contingencies.  Also,
these sites have not required any environmental remediation in the past.  We have many processes and procedures in
place to prevent any leaks or spills of any hazardous materials that we handle
in the recycling of appliances.  Some of
these include:

a.               A Corporate Risk and Training Manager.

b.              Specific processes and procedures for
handling all hazardous materials.

c.               Emergency response procedures if a spill or
leak should occur.

d.              Employee screening, hiring and
certifications.

e.               Permits and licenses required for each
location by federal, state and local laws.

f.                 Reporting of hazardous materials handling to
the appropriate legal authorities.

g.              Periodic audits of subcontractors who provide
services for handling hazardous materials for us.

Even with all of the above in place, there is no
guarantee that a hazardous spill or leak could not occur.  However, since we have no history of a hazardous
spill or leak we have no basis to calculate a liability.

Critical Accounting Policies, page 17

2.                                      In future filings, revise
your disclosures to present a more robust discussion as to why these are
critical accounting policies.  Such
disclosure should supplement, not duplicate, the description of accounting
policies that are already disclosed in the notes to the financial
statements.  The disclosure should
provide greater insight into the quality and variability of information
regarding financial condition and operating performance.  The discussion in MD&A should present
your analysis of the uncertainties involved in applying a principle at a given
time or the variability that is reasonably likely to result from its
application over time.

•                                          Discuss why management
believes the accounting policy is critical;

•                                          Discuss how accurate your
estimates and assumptions have been in the past, how much they have changed in
the past and whether they are likely to change in the future;

•                                          Include quantitative disclosure
of your sensitivity to change based on other outcomes that are reasonably
likely to occur and that would have a material effect on the company.

Refer to Item V of Release Nos. 33-8350/34-48960.

Response:  In
future filings we will present a more robust discussion as to why these are
critical accounting policies.  Following
are examples of our anticipated discussions:

Revenue recognition:  We recognize retail revenues when the
consumer pays for the appliance with cash, check or credit card.  We recognize recycling revenue when we
collect and process a unit under our recycling contracts.  We recognize byproduct revenue when we
receive payment from the scrap metal processor, and when we ship CFCs to a
recycler.

We
also sell extended warranty agreements to consumers who purchase
appliances.  We retain the obligation to
provide the warranty service for a small number of these agreements.  In these cases, we collect funds at the time
the consumer purchases the extended warranty agreement and recognize revenue

2

over the term of the warranty contract, which is usually 12 months.  On the remaining extended warranty agreements
that we sell, we are not responsible for the service costs since the third
party service provider is responsible for them.
In these cases, we recognize revenue at the time of sale, in an amount
equal to the sale price paid by the consumer, less a commission payable by us
to the third party service provider.
Revenue from the sale of extended warranty agreements is included in
retail revenues.

We
include shipping and handling charges to customers in retail revenues.  The payment of the shipping and handling
charges to customers is deposited in our bank accounts within 48 hours.  The shipping and handling costs that we incur
related to the shipping and handling charges are included in cost of revenues.

The
application of our revenue recognition policy does not involve significant
uncertainties and is not subject to accounting estimates or assumptions having
significant sensitivity to change.

Product warranty:
Our warranty
policy states that we will repair or replace defective units at no cost to our
customers.  We are an authorized service
provider for Whirlpool, Maytag, Frigidaire and GE.  After we provide service to our customers who
purchased an appliance from us, we submit a service reimbursement claim to the
appliance manufacturer to cover the costs incurred.  There are a small number of warranties that
we offer that we are responsible for the cost of the service call.  We analyze this information to determine what
our potential future expense will be and record a liability.  Our product warranty policy contains
uncertainties because management must estimate the potential future expense for
those service calls that are not covered under the authorized service provider
agreements with the appliance manufacturers.
However, we do not believe the uncertainties relating to management’s
estimates would have a material effect on our results of operations.

Trade receivables:  We
invoice our recycling customers for recycling services with 30 day payment
terms.  Historically we have had very few
write-offs of uncollectible invoices.  We
also invoice the appliance manufacturers for credits due to us as a result of
appliances we receive that do not meet the requirements of our agreement with
them.  Some of these receivables have
been written-off when credits have not been received from the
manufacturer.  Management must apply
judgment in determining if any of these receivables will become
uncollectible.  This estimate is used to
calculate the allowance for doubtful accounts for these receivables.

Inventories:  We value our inventories of
appliances at the lower of cost, first-in, first-out (FIFO), or market and
establish an inventory reserve, which represents management’s estimate as to
the realizability of our appliance inventory.
This inventory reserve contains uncertainties since management must make
assumptions and apply judgments regarding inventory aging and adjustments to
market.  In making these assumptions and
judgments, management reviews historical aging information and margin
analyses.  Management’s estimates and the
adequacy of our inventory reserve could be affected by changes in the market
for appliances, including price changes by manufacturers, and such changes
could have material effect on our results of operations.

Property and equipment:
Management estimates the life of property and equipment based on the use
of the item.  Management estimates the
life of leaseholds based on the underlying lease and/or useful life.

Income taxes:  Deferred tax assets are reduced
by a valuation allowance when, in the opinion of our management, it is more
likely than not that some portion or all of the deferred tax assets will not be
realized.  In establishing a valuation
allowance, management must estimate whether and when we will have future
taxable income that can be reduced by deferred tax assets.

Stock-based compensation:
Currently, we use the Black-Scholes option pricing model to determine
the pro-forma compensation costs presented in Note 1 of our financial
statement.  This pricing model requires
management to estimate if and when options granted will be exercised.  In determining this estimate, management
reviews historical performance of the Company’s stock and stock option
exercises.

3

Results of Operations, page 19

3.                                      In future filings, revise
your disclosure to provide a narrative discussion of the extent to which
material financial statement increases are attributable to increases in prices
or to increases in the volume or amount of goods or services being sold or to
the introduction of new products or services.
For example, we note that retail revenues increased $7.0 million from
2003 to 2004 and that same-store sales for 2004 increased 10%.  Please revise your disclosure to state the
revenues in 2004 and 2003 that came from same-store sales, and the revenues
that came from new stores.  See Item
303(a)(3)(iii) of Regulation S-K.

Response:  In
future filings we will include additional narrative discussion regarding
increases in revenues and also quantify the increases by reason.  The increase in retail revenues of 20.2% or
$7,042,000 for 2004 compared to 2003 was a result of same-store sales increase
of 10% or approximately $2,798,000, new stores operating in 2004 with sales of
approximately $3,666,000, and approximately $578,000 from stores that were
opened during 2003 but could not be included in the same-store calculation.

4.                                      In future filings, in
circumstances where you describe more than one business reason for a
significant change between periods in key financial data or indicators, please
quantify, in dollars, to the extent possible the incremental impact of each
individual business reason on the overall change.  For example, in your discussion of the
increase in gross profit, quantify the impact of changes in the material
factors contributing to the increase in gross profit percentage.

Response:  In
future filings, we will quantify, in dollars, to the extent possible the
incremental impact of each individual business reason on the overall change
between periods in key financial data or indicators.

5.                                      We note your disclosure on page 22
that some distribution center costs are included in selling, general and
administrative expense.  Please expand
your disclosure here and in the notes to the financial statements to describe
the costs included in costs of sales. Indicate specifically whether you include
purchasing and receiving costs, inspection costs, internal transfer costs and
other costs of your distribution network. For those costs excluded, such as the
distribution center costs, please tell us why the costs are excluded and disclose:

•                                          The line item that the
excluded costs are included in, for example, selling, general and
administrative, and the amounts included in each line item for each period
presented; and,

•                                          In MD&A disclose that
your gross margins may not be comparable to others, since some entities include
the costs related to their distribution network in cost of goods sold and
others like you exclude all or a portion of them from gross margin, including
them instead in a line item such as selling, general and administrative
expenses.

Response:  We
will expand our disclosure in future filings to disclose that cost of goods
sold includes all costs other then Selling, General and Administrative
Expenses.  Cost of goods sold includes
all costs related to the purchase of inventory, including freight, costs
related to the receiving and distribution of inventory, and costs related to
the delivery and service of the inventory after it is sold to the consumer. The
costs included in Selling, General and Administrative Expenses on page 22 were
the general and administrative costs related to the opening of the combination
retail store/warehouse distribution center.
Since we do include all

4

costs related to our distribution network in cost
of goods sold, our gross margins are comparable to others.

Liquidity and Capital Resources, page 23

6.                                      Please expand your
disclosure in future filings to discuss how your debt covenants impact your
plans to open up new stores in 2005 and thereafter.  See Item IV of Release Nos. 33-8350/34-48960.

Response:  In
future filings we will expand in our disclosure to discuss how our debt
covenants may impact our plans to open new stores in 2005 and thereafter.  Our current line requires that we meet certain
financial covenants, provides payment penalties for noncompliance and
prepayment, limits the amount of other debt we can
incur, limits the amount of spending on fixed assets, and limits payments of
dividends.  Our plans for adding new
stores in 2005 and thereafter may be impacted by these covenants, particularly
the limit on the amount of spending on fixed assets and financial covenants.
Our expansion plans reflect management’s judgment that we will be able to
comply with the debt covenants or obtain amendments or waivers of such
covenants from our lender.

Item 8.  Financial
Statements and Supplemental Data, page 26

Consolidated Statement of Shareholders’
Equity, page 30

7.                                      Please include a separate
column that reconciles the number of shares held in common stock and details
the activity during each period presented.
Reference is made to APB 12.  We
note from the shares outstanding on the consolidated balance sheet that you
issued 1,772,000 shares of common stock in 2004.  It is not evident on the consolidated
statement of stockholders’ equity and consolidated statement of cash flows,
that all common stock issuances have been reflected in the periods
presented.  For example, in Note 8 you
discuss warrant exercises during 2004 totaling 606,000 shares of common
stock.  The consolidated statement of
stockholders’ equity and consolidated statement of cash flows list proceeds of
only $18,000 from the exercise of warrants.
Please clarify for us and include in your response all common stock
issuances, stock option exercises and warrant exercises herein.

Response: Below is the Consolidated Statement of
Shareholders’ Equity from our 2004 10-K with more detailed information.  Note 8 to our financial statements provides information on the warrant agreements with the
company.  These warrant agreements may
include an option for a cashless exercise transaction of the warrant to common
stock.  In future filings we will provide
this type of detail.

5

APPLIANCE RECYCLING CENTERS OF AMERICA, IN

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APPLIANCE RECYCLING CENTERS OF AMERICA, INC.

7400 Excelsior Boulevard

Minneapolis, MN 55426-4517

April 21, 2005

Via EDGAR

Securities and Exchange Commission

450 - 5th
Street N.W.

Judiciary Plaza

Washington, D.C. 20549

  Re:

  Appliance Recycling Centers of America, Inc.

  Registration Statement on Form S-2

  Commission File No. 333-123005

Ladies and Gentlemen:

Appliance Recycling Centers of
America, Inc. (the “Company”) hereby requests that the Registration Statement
identified above be declared effective on Friday, April 22, 2005, at 10:00 am,
Eastern Daylight Savings Time, or as soon thereafter as possible. This request
supersedes the Company's prior requests for accelerated effectiveness with
respect to the Registration Statement identified above.

The Company hereby acknowledges that:

•                  should the Commission
or the staff, acting pursuant to
delegated authority, declare the filing effective, it does not foreclose the Commission
from taking any action with respect to the filing;

•                  the action of
the Commission or the staff, acting pursuant to delegated authority, in declaring the filing effective, does
not relieve the Company from its full responsibility for the adequacy and
accuracy of the disclosure in the filing; and

•                  the Company may
not assert staff comments and the declaration of effectiveness as a defense in any proceeding
initiated by the Commission or any person under the federal securities laws of
the United States.

Sincerely,

  APPLIANCE RECYCLING CENTERS OF AMERICA, INC.

  By

  /s/ Edward R. (Jack) Cameron

  Edward R. (Jack) Cameron

  President

CORRESP
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APPLIANCE RECYCLING CENTERS OF AMERICA, INC.

7400 Excelsior Boulevard

Minneapolis, MN 55426-4517

April 20, 2005

Via EDGAR

Securities and Exchange Commission

450 - 5th
Street N.W.

Judiciary Plaza

Washington, D.C. 20549

  Re:

  Appliance Recycling Centers of America, Inc.

  Registration Statement on Form S-2

  Commission File No. 333-123005

Ladies and Gentlemen:

Appliance Recycling Centers of
America, Inc. (the “Company”) hereby requests that the Registration Statement
identified above be declared effective on Thursday, April 21, 2005, at noon,
Eastern Daylight Savings Time, or as soon thereafter as possible.

The Company hereby acknowledges that:

•                  should the Commission
or the staff, acting pursuant to
delegated authority, declare the filing effective, it does not foreclose the Commission
from taking any action with respect to the filing;

•                  the action of
the Commission or the staff, acting pursuant to delegated authority, in declaring the filing effective, does
not relieve the Company from its full responsibility for the adequacy and
accuracy of the disclosure in the filing; and

•                  the Company may
not assert staff comments and the declaration of effectiveness as a defense in any proceeding
initiated by the Commission or any person under the federal securities laws of
the United States.

Sincerely,

  APPLIANCE RECYCLING CENTERS OF AMERICA, INC.

  By

  /s/ Edward R. (Jack) Cameron

  Edward R. (Jack) Cameron

  President

CORRESP
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APPLIANCE RECYCLING CENTERS OF AMERICA, INC.

7400 Excelsior Boulevard

Minneapolis, MN 55426-4517

April 19, 2005

Via EDGAR

Securities and Exchange Commission

450 - 5th
Street N.W.

Judiciary Plaza

Washington, D.C. 20549

  Re:

  Appliance Recycling Centers of America, Inc.

  Registration Statement on Form S-2

  Commission File No. 333-123005

Ladies and Gentlemen:

Appliance Recycling Centers of
America, Inc. (the “Company”) hereby requests that the Registration Statement
identified above be declared effective on Thursday, April 21, 2005, at 9:00
a.m., Eastern Daylight Savings Time, or as soon thereafter as possible.

The Company hereby acknowledges that:

•                  should the Commission
or the staff, acting pursuant to
delegated authority, declare the filing effective, it does not foreclose the Commission
from taking any action with respect to the filing;

•                  the action of
the Commission or the staff, acting pursuant to delegated authority, in declaring the filing effective, does
not relieve the Company from its full responsibility for the adequacy and
accuracy of the disclosure in the filing; and

•                  the Company may
not assert staff comments and the declaration of effectiveness as a defense in any proceeding
initiated by the Commission or any person under the federal securities laws of
the United States.

Sincerely,

  APPLIANCE RECYCLING CENTERS OF AMERICA, INC.

  By

  /s/ Edward R. (Jack) Cameron

  Edward R. (Jack) Cameron

  President

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Mail Stop 0308

      March 2, 2005

VIA U.S. MAIL AND FACSIMILE

Mr. Edward R. Cameron
President
Appliance Recycling Centers of America, Inc.
7400 Excelsior Boulevard
Minneapolis, Minnesota 55426-4517

      Re:	Appliance Recycling Centers of America, Inc.
      Registration Statement on Form S-2
      Filed February 25, 2005
      File No. 333-123005

Dear Mr. Cameron:

      We have reviewed your filing and have the following comment.
Please be aware that we have limited our review to your Selling
Securities Holders section.  Where indicated, we think you should
revise your document in response to this comment.  If you
disagree,
we will consider your explanation as to why our comment is
inapplicable or a revision is unnecessary.  Please be as detailed
as
necessary in your explanation.  If appropriate, you may provide us
with supplemental information so we may better understand your
disclosure.  After reviewing this information, we may or may not
raise additional comments.

      Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects.  We welcome
any questions you may have about our comment or on any other
aspect
of our review.  Feel free to call us at the telephone numbers
listed
at the end of this letter.

Selling Securities Holders, page 35
1. For each selling shareholder, please identify the beneficial
owner
that has the ultimate voting or investment control over the shares
listed in your selling shareholder table on page 35 of your
document.
See Interpretation 60 under Section I. Regulation S-K in the
Division
of Corporation Finance`s Manual of Publicly Available Telephone
Interpretations (July 1997).

*	*	*	*	*	*

      As appropriate, please amend your registration statement in
response to this comment.  You may wish to provide us with marked
copies of the amendment to expedite our review.  Please furnish a
cover letter with your amendment that keys your response to our
comment and provides any requested supplemental information.
Detailed cover letters greatly facilitate our review.  Please
understand that we may have additional comments after reviewing
your
amendment and responses to our comments.

      We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision.  Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.

	Notwithstanding our comment, in the event the company
requests
acceleration of the effective date of the pending registration
statement, it should furnish a letter, at the time of such
request,
acknowledging that:

* should the Commission or the staff, acting pursuant to delegated
authority, declare the filing effective, it does not foreclose the
Commission from taking any action with respect to the filing;

* the action of the Commission or the staff, acting pursuant to
delegated authority, in declaring the filing effective, does not
relieve the company from its full responsibility for the adequacy
and
accuracy of the disclosure in the filing; and

* the company may not assert staff comments and the declaration of
effectiveness as a defense in any proceeding initiated by the
Commission or any person under the federal securities laws of the
United States.

	In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in connection with our review of
your
filing or in response to our comments on your filing.

      We will consider a written request for acceleration of the
effective date of the registration statement as a confirmation of
the
fact that those requesting acceleration are aware of their
respective
responsibilities under the Securities Act of 1933 and the
Securities
Exchange Act of 1934 as they relate to the proposed public
offering
of the securities specified in the above registration statement.
We
will act on the request and, pursuant to delegated authority,
grant
acceleration of the effective date.

      We direct your attention to Rules 460 and 461 regarding
requesting acceleration of a registration statement.  Please allow
adequate time after the filing of any amendment for further review
before submitting a request for acceleration.  Please provide this
request at least two business days in advance of the requested
effective date.

      You may contact John Fieldsend, Staff Attorney, at (202)
824-
5505, David Mittelman, Legal Branch Chief, at (202) 942-1921, or
me
at (202) 942-1900 with any other questions.

Sincerely,

H. Christopher Owings
      Assistant Director

cc:	Eric O. Madson, Esq.
	Robins, Kaplan, Miller & Ciresi L.L.P.
	Via Fax:  (612) 339-4181
??

??

??

??

Appliance Recycling Centers of America, Inc.
March 2, 2005
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