SecProbe.io

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<TYPE>LETTER
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May 20, 2005

Mail Stop 0306

David M. Marks
Chairman
Thomas Equipment, Inc.
1818 North Farwell Avenue
Milwaukee, WI 53202

Re:	Thomas Equipment, Inc.
	Registration Statement on Form SB-2
	Filed April 21, 2005
	         File No. 333-124217
Dear Mr. Marks:
      We have the following comments to your filing.  Where
indicated, we think you should revise your document in response to
these comments.  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.  In some
of
our comments, we may ask you to 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 note that page numbers refer to the EDGAR
filing.
      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 on any other
aspect
of our review.  Feel free to call us at the telephone numbers
listed
at the end of this letter.
Summary
1. Expand the summary to include a brief description of the series
of
transactions that recently took place so that the risk factors
that
refer to those transactions make sense to investors.  Include a
cross
reference to disclosure to be included later in the filing that
provides all material information about each of these
transactions,
including the business purpose, and explains in reasonable detail
how
and when the selling shareholders and officers and directors
obtained
their shares and what consideration they paid for them on an
aggregate and per share basis.  For each transaction, disclose
clearly all sources and uses of funds.  For each securities
issuance,
disclose all material terms, and identify the security holders.
We
note the disclosure that begins on page 15 and believe it should
be
significantly revised in response to these comments.  It should
also
identify the officers, directors, and beneficial owners who
received
more than 5 percent of the shares in each transaction.  We may
have
further comments.
2. Please explain more specifically what you mean when you say
"Pneutech is a strategic supplier to Thomas Equipment," and
quantify
the percentage of sales attributable to sales to Thomas, if
material.
Financial Summary - Page 4
Thomas Equipment and Predecessor Business (Thomas Equipment
Limited)
- Page 4
3. Revise the introductory paragraph to tell investors the periods
for which you derived the information presented from your audited
financial statements of the predecessor business and Pneutech,
Inc.
Indicate the source of the unaudited periods of the predecessor
and
successor businesses.
4. Your financial summary includes the historical results of the
predecessor and successor businesses.  In this regard, revise your
common share data to include the historical earning per share and
weighted average common shares outstanding for each period
presented.
5. Revise your financial summary information to include the
results
of operations of the predecessor business for the period July 1,
2004
to September 30, 2004 and label as "unaudited".
Pnuetech - Page 5
6. Your financial summary includes the historical results of
Pneutech
Inc.  In this regard, revise your common share data to include
their
historical earning per share and weighted average common shares
outstanding for each period presented.
7. Revise to present the summarized balance sheet data for
Pneutech,
Inc. as of October 31, 2003 or tell us supplementally why you
believe
such information is not necessary.
Risk Factors - Page 7
Thomas Equipment Limited, Our Predecessor - Page 7
8. Please quantify here and on page 17 the amount of liability
remaining and the amount of financial support McCain Foods has
agreed
to provide to the company.
Our Sales Growth is Tied to Global Economic Conditions - Page 8
9. Please revise this risk factor to describe how the factors you
describe specifically impact your business, rather than how
general
economic trends affect industry in general.
10. You state you do not engage in hedging transactions here and
on
page 36, yet at the top of page 17, you describe hedging
activities.
Please revise to reconcile.
We Are Dependent On Third Party Dealers - Page 9
11. Please briefly describe your relationship with United Rental
and
file any agreements with them.  Also, it appears that this risk
factor is printed twice, please delete one.
We Have Recently Entered into a Supply Agreement with Hyundai -
Page
9
12. Please quantify what you mean by "substantial portion" of your
revenues, when there is no minimum commitment for Hyundai.
If Our Subsidiary`s Preference Shareholder - Page 12
13. Please identify the Preference Shareholder, and explain what
the
consequences to you would be if you are unable to pay the
redemption
amount.  For example, could the Preference Shareholder seize any
assets?
Management`s Discussion and Analysis - Page 15
14. See our first comment regarding this series of transactions.
In
addition, you should include the following disclosure.
* Identify Maxim Mortgage Corporation as a shell corporation, if
true
* Disclose Mr. Rhee`s role is this series of transactions
* Identify the principals of Thomas Ventures
* Disclose who received the 16.945 million shares in the
reorganization
* Identify the officers and directors of Thomas Equipment at the
time
of the reorganization
* Explain how the acquisitions of Thomas Equipment Limited and
Pneutech were funded
* Quantify what was paid to Mr. Rhee and any other officer,
director,
or major shareholder in the Pneutech acquisition
* Identify which members of "the Company`s" Board were appointed
as
members of the Pneutech Board
* Explain how your officers, directors, and 5 percent holders
obtained their shares and what consideration they paid.  We note
they
hold 67.6% of the current outstanding shares.
15. Revise to include a section which provides a description of
the
basis of presentation during all periods presented (including the
pro
forma financial statements) in the filing.  Your discussion should
include a description of the predecessor and successor periods.
Ensure that the periods presented are labeled  as "predecessor"
and
"successor".  Please include a similar discussion also in your
basis
of presentation footnote to the Thomas Equipment, Inc.`s
consolidated
financial statements.
Acquisition of Operating Business - Pneutech, Inc. and
Subsidiaries -
Page 16
16. Revise to disclose the value of the shares issued as
consideration in the Acquisition of Pneutech, Inc. and
subsidiaries
and the method used to value those shares.
Results of Operations for the Year Ended June 30, 2003 Compared to
June 30, 2002 - Page 17
17. Revise to include the MD&A of Thomas Equipment Limited for the
year ended June 30, 2003 compared to June 30, 2002 as you include
consolidated financial statements for these respective periods.
Results of Operations for the Six Months Ended December 31, 2004
Compared to December 31, 2003 - Page 24
18. We note that you have presented combined results of operations
for the six months ended December 31, 2004 that consists of the
successor`s results of operations from October 1, 2004 to December
31, 2004 and the predecessor`s results of operations for the
period
July 1, 2004 to September 31, 2004.  We also note you compare such
combined results of operations for the six months ended December
31,
2004 to the predecessor`s historical results operations for the
six
months ended December 31, 2003.  Revise to remove your MD&A
discussion for the three and six month period ended December 30,
2004
and 2003 and include a separate discussion of your historical
operating results for the Predecessor for the period July 1, 2004
to
September 30, 2004 and the Successor for the period October 1,
2004
to December 31, 2004.
Results of Operations for Thomas Equipment Limited and Pneutech
for
the year ended June 30, 2004 and Fiscal 2005 Forward Looking
Outlook
- Page 26
19. We note that you have provided forward-looking information
primarily in regards to the operations of Thomas Equipment Ltd.
Revise this section to include any such meaningful forward-looking
information in regards to the operating results of Pneutech, Inc.
for
the near term and how their historical results may change in the
future since you acquired them.
20. Revise this section to include a MD&A discussion of your pro
forma operating results for the year ended June 30, 2004 as the
information provided appears to include only forward-looking
information.

Revenues- Page 26
21. We note you have entered into an exclusive two-year supply
agreement with Hyundai Heavy Industries that you expect to achieve
significant increases in revenues starting in the 2nd quarter of
2006
and beyond.  Revise to discuss, in detail, the significant terms
of
the supply arrangement and quantify the expected increase in
revenues.
Cost of Sales and Gross Profit - Page 26
22. You state your goal is to achieve a 22% gross margin. Revise
to
clarify what you mean by "optimizing internal manufacturing
capabilities and by maximizing our corporate vertical supply
channels" which will help to achieve this goal.
Subsequent Financing Activities - Page 34
23. You state you repaid the Roynat subordinated debenture in
April
of 2005, please disclose where you obtained the proceeds to make
such
repayment and why your board decided to repay that particular
debt.
24. Disclose the interest rate on the Roynat debt.
25. Disclose all material terms of the Laurus Master Fund
financing.
26. Clarify how many shares of common stock each share of series A
preferred stock is convertible into.  Supplementally advise
whether
any of the accredited investors are selling shareholders in this
offering.
Description of Business - Page 37
27. We note the article dated April 27, 2005, stating that sales
backlog has grown to US$69 million for shipments during 2005.
Expand
the appropriate disclosure to discuss, along with your plans to
expand production capacity.
28. We also note that you entered into an exclusive distribution
agreement with W.L. Gore Corporation that you anticipate will
generate annual revenues of US$12.5 million.  Expand the
appropriate
disclosure to discuss, and file the distribution agreement as an
exhibit.
Management - Page 45
29. Expand the biography for Mr. Marks to also discuss his role in
Farwell Equity Partners.  Also expand to provide more information
about the trusts.

Executive Employment Agreements - Page 47
30. Please disclose Mr. Rhee`s compensation in the Executive
Compensation Table on Page 46.
31. Please expand the disclosure to explain what Mr. Rhee`s
personal
guarantee and pledge of assets covered.  Also please explain how
much
Mr. Rhee had at risk in such guarantee and pledge and what
services
Mr. Rhee provided in the acquisition.
Certain Relationships and Related Transactions - Page 52
32. Revise the disclosure to explain in much greater detail the
agreement and plan of amalgamation and the benefits all affiliates
received in connection with the various transactions which took
place
leading up to the Pneutech acquisition, including the material
terms
regarding share issuances to officers, directors, and 5 percent
holders.  Please expand to explain Mr. Rhee`s involvement in this
transaction in detail.  File the agreement as an exhibit.
33. Please describe the term of the consulting agreement with Mr.
Crivello and file it as an exhibit.
34. Disclose the relationship of your Board Chairman with Farwell
Equity Partners and the equity issuance to that entity.
35. Disclose other transactions with affiliates and related
parties
noted in the footnotes to the financial statements.  For example
(and
this is only one example), we note you issued 16,945,000 shares to
your founders for $2,819,000, or an average of $.20 per share.
Expand to discuss this and other transactions, identifying the
parties, the number of shares each received, and the consideration
paid.
Description of Securities - Page 52
36. Reconcile the disclosure here with the recent issuance of
series
A preferred stock.
Selling Stockholders - Page 55
37. In footnote 1, expand to state the number of shares to be
issued
in the transactions described in (iii) and (iv).
Index to Financial Statements - Page F-1
38. Please update the financial statements and pro forma
information,
as necessary, as required by Item 310(g) of Regulation S-B.

Unaudited Consolidated Financial Statements of Thomas Equipment,
Inc.
- Page F-7
Consolidated Statement of Cash Flows - Page F-7
39. Confirm to us that the Successor Consolidated Statement of
Cash
Flows presents the changes in assets and liabilities between your
opening balance sheet on October 1, 2004, consisting of the assets
acquired and liabilities assumed, and the balance sheet on
December
31, 2004. Refer to paragraph 17(c) of SFAS 95.
40. It is unclear to us how the line items "equipment acquired on
acquisition" for $7,223,000 and "other assets acquired on
acquisition" for $20,053,000 within investing activities agrees to
the consideration discussed in note 2 to the financial statements.
Please revise or advise us.
Notes to the Consolidated Financial Statements - Page F-9
Note 2:  Acquisitions - Page F-9
41. We note from pages F-6 and F-17 that you issued 16,945,000
shares
of common stock to your founders at $0.20 per share for $2.8
million
and recognized $5.5 million as stock compensation for the
difference
in the fair value of the shares and the issuance price. It is
unclear
to us how you accounted for the proceeds from the issuance on the
Statements of Cash Flows.  Clarify to us the nature of the line
item
"Proceeds from Stock Subscription" shown in financing activities.
42. We note effective October 1, 2004, Thomas Equipment 2004 Inc.
acquired the business, fixed assets and inventory of Thomas
Equipment
Ltd and you have accounted for the acquisition as a purchase under
SFAS 141.  Tell us supplementally and revise your note to address
the
following:
* In a tabular format, detail the estimated fair values of the
assets
acquired and liabilities assumed at the date of acquisition
* Expand in great detail to discuss the consideration that was
paid
or liabilities assumed that total to the purchase price of $33.9
million.  Any cash paid should agree to the Consolidated
Statements
of Cash Flows and be labeled as cash paid for acquisition, net of
cash acquired.
* Separately quantify the total direct costs of the acquisition.
      Refer to the guidance in paragraph 51 of SFAS 141.

Note 3:  Basis of presentation and summary of significant
accounting
policies - Page F-10
Basis of Presentation - Page F-10
43. Revise this note to clearly define that as of December 31,
2004
and the three months ended December 31, 2004 are that of the
"Successor Business".  Also, label the consolidated balance sheet
on
page F-3 with "Successor Business".
44. It should be clear to investors if the successor entity has
adopted the significant accounting policies of the predecessor.
To
the extent the successor entity`s accounting policies has changed,
those changes should be discussed in detail and highlighted as
adopted by the successor.  Please revise your filing accordingly.
Revenue Recognition - Page F-11
45. We note from your revenue recognition policy that you sell
equipment to distributors and dealers.   Tell us supplementally
and
revise your filing to address the following:
* Describe to us the nature and significant terms of these
arrangements with distributors and dealers, including any post
shipment obligations or acceptance provisions and how you account
for
such obligations.
* We see on page F-12 that you give sales in