SecProbe.io

October 24, 2005

Via US Mail and Facsimile

Susan Weisman
Chief Financial Officer
Coach Industries Group, Inc.
12330 SW 53rd Street, Suite 703
Cooper City, Florida 33330

Re: Coach Industries Group, Inc.
 Form 10-KSB for the year ended December 31, 2004
 Form 10-QSB for the quarter ended March 31, 2005
 Commission File Number: 000-19471

Dear Ms. Weisman:

We have reviewed your September 26, 2005 re sponse letter and have the following
comments.  Where expanded or revised disclosu re is requested, you ma y comply with these
comments in future filings.  If you disagree, we  will consider your expl anation as to why our
comments are inapplicable or a revision is unnecessary.  We also  ask you to provide us with
supplemental information so we may better underst and your disclosure.  Pl ease be as detailed as
necessary in your explanation.  We look forward to working with you in these respects and
welcome any questions you may have about any aspects of our review.

* * * * * * * * * * *

Item  6. Management’s Discussion and Analysis, page 13

1. Refer to our previous comment 2.  We note from your responses  to our previous comments 2
and 5 that the common stock issued in ex change for accrued wages and guarantees,
respectively, had certain restri ctions and therefore was discou nted 15% on issuance from the
market value of unrestricted common stoc k. Supplementally explain to us how you
determined that 15% was an appropriate discount  rate.  Also, please re vise your disclosure
here and throughout your filing to indicate that the stock issued at a 15% is restricted
common stock.  This disclosure should include a discussion of the types of restrictions placed
on the stock causing a decrease in value.  Pleas e include a draft of your intended disclosure
with your response.

Ms. Susan Weism an
Coach Industries Group, Inc.
October 24, 2005
Page 2

Note 11 – Income Taxes, page F-23

2. Refer to our previous comment 6.  Please include  a draft of your intended revised disclosure
for our review.

Debt

General
3. Refer to the table presented in your respons e to our previous comment 7.  For debt
instruments that have been grouped and for which interest rates or maturity dates vary, please
provide a range.  For example, for the Ford $2 million Floor Plan, prime plus a range of X%
to Y% would be disclosed in the table.

4. Please explain to us or revise  your table to indicate how th e $900,000 of related party notes
payable and $1,784,776 of the current portion of long term debt is reflected in your table as
presented in your response to our previous comment 7.  We may have further comment on
your response.

Laurus Transaction

5. Refer to our previous comment 7.  We note that the valuation of warrants issued in
conjunction with your convertible note has changed.  We also not e that, per your response to
our previous comment 28 in our letter dated May 18, 2005, you used the Black-Scholes
Method in your original calcu lation to arrive at a warrant  value of approximately $972,000,
and that the assumptions used in  the valuation of these warrants were consistently applied to
options granted during the year.  Please explain to us why you now feel a warrant valuation
of $313,000 is appropriate.  Your  response should include detail ed descriptions of errors
made in the calculation and determination of your original assumptions , and why you feel the
new assumptions accurately reflect your position at the date of gr ant.  This analysis should be
performed on an assumption-by-assumption basis.  For example, your response should specifically address why a volatility  of .56 is more appropriate th an the original volatility of
.75, and why it is more appropriate to use the bond equivalent yield of 2.5% rather than the
risk free rate of 3.85%.  We may ha ve further comment on your response.

6. Refer to our previous comment 8.  From the ta ble presented and per th e agreement filed in
your October 6, 2005 Form 8-K, it is uncle ar how the $300,000 was converted into 600,000
shares of common stock as $0.50 is not one of the conversion rates li sted.  Further, if
allowable, it is unclear why you have not considered the $300,000 convertible at $0.50 in
your analysis of the beneficial conversion.  Supplementally explain how  the conversion rate
was determined, how it was allowable under the existing agreement, and how such
conversion was addressed in your  beneficial conversion analys is.  We may have further
comment on your response.

Ms. Susan Weism an
Coach Industries Group, Inc.
October 24, 2005
Page 3

7. Please explain to us why the conversion prices listed in the table do not correspond with
those listed in the original agreement.  To the extent that the changes were caused by the
caveats contained in the orig inal agreement, please pr ovide these calculations.

8. Please revise your footnote disclosure to desc ribe your accounting for the convertible debt
with detached warrants issued to Laurus.  Your disclosure should include the following
information (we have included approximate amo unts for your convenience, please adjust as
appropriate):

• because the warrants are freestanding instrument s that meet the definition of a derivative
under SFAS 133, you accounted for them as such
• you measured and recognized the warrants as a liability at their fair value, as determined
using the Black-Scholes option pricing mode l, prior to the registration of shares
underlying the warrants;
• you allocated the $1.6 million of proceeds r eceived from the first borrowing as:  a
$972,000 liability for the warrants (at fair value), $628,000 of additional paid-in capital
for the benefit on conversion, and a $0 liability  for the convertible debt (net of debt
discount);
• the $628,000 of additional paid-in capital reflects the value of Laurus’ option to convert
the initial $1.6 million of debt at prices beneficial to Laurus as compared to the market
price of our common stock (the beneficial conversion option);
• the beneficial conversion option on the ini tial $1.6 million of debt was determined by
comparing the $628,000 of proceeds not allocated to the detached warrants to the
1,649,485 shares into which the $1.6 million of debt was convertible;
• effectively, the initial debt was convertibl e to common stock at $0.38 per share, which
was less than the $1.06 market price of our stock on the date of issuance, resulting in $1,120,454 value for the beneficial conversi on option.  Because the value of the
beneficial conversion option canno t be greater than the proceeds
not allocated to the
detached warrants, the benefit on conversion here is capped at $628,000;
• the liability recognized for the convertible debt subsequent to consid ering the fair value
of the warrants ($628,000) was reduced by a de bt discount to reflect the value of the
beneficial conversion option ($628,000), re sulting in convertible debt of $0;
• the proceeds of subsequent borrowings under the agreement were allocated between
additional paid-in capital (for  beneficial conversion opti ons present on the date of
borrowing, if any) and a liability for the debt (discounted to the exte nt value was assigned
to a beneficial conversion option);
• you accrete the recorded debt balances up to  their face amounts ove r the term of the
borrowings using the effective interest me thod, which results in additional interest
expense and effective interest rates on the borrowings greater than the stated interest
rates;
• your effective interest rates on the va rious tranches of  borrowings are…;

Ms. Susan Weism an
Coach Industries Group, Inc.
October 24, 2005
Page 4

• you will continue to measure the fair value of the warrants under SFAS 133 and
recognize changes in income each reporting period; and
• if debt is converted prior to the end of  the borrowing term, you will recognize additional
interest expense for the unam ortized discount on such debt.

Please also include a table containing rows for each borrowing made under the agreement
and columns disclosing the effective intere st rate on each borrowing and allocating the
proceeds for each borrowing to amounts recognized as derivatives, debt, and additional paid-
in capital.

Elm Street Warrants

9. Refer to our previous comment 10.  We note that the valuation of  warrants issued in
conjunction with the conversion of the Elm Str eet note has changed.  Please explain to us
why you have changed your assumptions a nd why you feel your assumptions are now
correct.  Your response should in clude detailed descriptions of errors made in the calculation
and determination of your or iginal assumptions, and why you feel the new assumptions
accurately reflect your position at the date of gr ant.  This analysis should be made on an
assumption-by-assumption basis and specifically  address the reasons these assumptions
materially differ from the assumptions used  in valuing options granted during 2004.  For
example, you should completely an d clearly explain why volatili ties of .56-.68 were used as
opposed to .75, and why you have used the bond e quivalent yield as opposed to the risk free
rate.  We may have further comment on your response.

* * * * * * * * * * *

As appropriate, please amend your filing and respond to these comments within 10
business days or tell us when you will provide us with a response.  You may wish to provide us
with marked copies of the amendment to expedite  our review.  Please furn ish a cover letter with
your amendment that keys your responses to  our comments and pr ovides 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 fo r 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 comp any and its management are in possession of all
facts relating to a company’s disclosure, they are responsible for the acc uracy and adequacy of
the disclosures they have made.

 In connection with responding to our comme nts, please provide, in writing, a statement
from the company acknowledging that:

‚ the company is responsible for the adequacy and accuracy of the disclo sure in the filing;

Ms. Susan Weism an
Coach Industries Group, Inc.
October 24, 2005
Page 5

‚ 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.

In addition, please be advise d that the Division of Enfo rcement has access to all
information you provide to the sta ff of the Division of Corporati on Finance in our review of your
filing or in response to our comments on your filing.

 You may contact Amy Geddes at 202- 551-3304 or Lyn Shenk at 202-551-3380 if
you have questions regarding comments on the fina ncial statements and related matters.  Please
contact me at 202-551-3211 w ith any other questions.

        S i n c e r e l y ,

        David R. Humphrey
        B r a n c h  C h i e f