SecProbe.io

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<TYPE>LETTER
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August 4, 2005

Mail Stop 0306

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

Re:	Thomas Equipment, Inc.
	Amendment No. 2 to Registration Statement on Form SB-2
	Filed July 14, 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 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.
Calculation of Registration Fee
1. The share amounts here do not agree with the share amounts
listed
on the cover page, page 3, and elsewhere.  Revise to remove the
inconsistency.
Prospectus Cover Page
2. Clarify in the second paragraph how many of those shares are
being
offered for resale by this registration statement.
3. We note your response to our first comment from our letter
dated
July 8, 2005, and reissue the second sentence in that comment
where
we asked for you to confirm that all the debt securities, warrants
and options are outstanding and to state the total amount of cash
you
have received from Laurus.

4. Your disclosure regarding the material terms of the Laurus
financing continues to be vague and confusing.  As a result, we
cannot conclude that this financing constitutes a valid PIPE
transaction.  Provide us with a detailed written response to
support
your position that this financing satisfies all the requirements
and
conforms in all respects with the staff guidance in this area.
Discuss each note separately if you are registering shares in this
offering that will be issued upon conversion, and explain how it
satisfies the PIPEs analysis.  See CF Telephone Interpretation
Manual
Supplement dated March, 1999.
Acquisition of Operating Assets From Predecessor Business - Thomas
Equipment Limited, page 4.
5. Please briefly describe the sources of funding for the
acquisition
of Thomas Equipment Limited, including financing from the seller.
Risk Factors
Satisfaction of Substantial Additional Production Orders..., page
13
6. Please update the disclosure regarding the Busan facility.
Disclose the sources of funding for this facility and the costs of
construction.
Use of Proceeds, page 17
7. Please disclose whether the proceeds from the exercise of the
option and/or warrants will be paid to affiliates, including
repayment of the note to Mr. Rhee.
Management`s Discussion and Analysis of Financial Condition and
Results of Operations, page 19
8. Please disclose the impact of not registering Laurus` shares by
June 22, 2005 including any penalties you have referenced in
earlier
filings.

Results of Operations for the Three Months Ended March 31, 2005,
page
28

9. Please refer to prior comments 10 and 12.  We note that you are
still making comparisons of the predecessor and successor
historical
statements of operations within your discussions.  For instance,
you
state on page 29 that the gross margin percentage is relatively
the
same as that of our predecessor during the same period in 2004.
Please remove any such comparisons between the predecessor and
successor entities.

Business
Backlog, page 51
10. Please describe to us to us how you have determined that the
backlogged orders are not cancelable by the purchasers.  Are there
written contracts for these items, or are they purchase orders?
Please file any material agreements related to these orders.
Executive Compensation, page 53
11. Please update tables required by Item 402 of Regulation S-K to
include the recently completed fiscal year ended June 30, 2005.
Certain Relationships and Related Party Transactions, page 58
12. We note your response to our prior comment 18 and your
additional
disclosure. As previously requested, please disclose whether there
were any other owners of the preference shares or the special
shares
of Pneutech.
Selling Stockholders, page 61
13. We reissue comment 20. The total number of shares in the
selling
shareholder table being registered for resale by Laurus is
inconsistent with the number of shares "that are being
registered,"
as described in footnote 1.  Also, the share amounts in the table
and
the footnote do not reconcile with the share amounts in the fee
table.  We also note the amount in the penultimate risk factor on
page 14 also is incorrect.  These are just a few examples-please
reconcile throughout the filing.
Index to Financial Statements, page F-1

14. 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-3

Notes to Consolidated Financial Statements, page F-10

Note 2.  Acquisitions, page F-10

-Acquisition of Thomas Equipment Limited, page F-10

15. Revise to clarify that the Preferred Shares were issued to the
Parent company of Thomas Equipment Limited.

16. Please refer to prior comment 21.  Please revise to reference
the
reader to the note which discloses the terms of the financing that
was entered into for the acquisition of Thomas Equipment Limited.

17. Please refer to prior comment 22.  We note you have determined
the fair value of the net assets acquired based upon an analysis
completed by an independent third party valuation firm.  While you
are not required to make reference to such, you should disclose
the
name of the expert and include the consent of the expert since the
reference is made in a 1933 Act filing.  Alternatively, remove
such
reference to an expert and disclose how management determined the
validity of the valuation that was obtained and used in the
purchase
price allocation.

18. You state that your acquisition of Thomas Equipment Limited
was
partially funded by cash consideration of approximately
$18,119,000.
It is unclear to us why your statement of cash flows shows
$17,782,000 as cash paid for the acquisition.  Revise or advise
us.

-Acquisition of Pneutech, Inc., page F-11

19. Please refer to prior comment 26.  It appears from your
disclosure on page F-10 that you acquired 100% of the common stock
of
Pneutech and its subsidiaries through the issuance of 1,082,641 of
shares of common stock and warrants to purchase 211,062 shares of
common stock and assumed certain liabilities of Pneutech. Also,
you
were required to redeem 929 preference shares, 500,000 special
preference shares, 30,000 special shares held by 3156176 Canada,
Inc.
and 250 shares of preferred shares and warrants issued to Royal
Merchant.   The total consideration of $3,775,000 to redeem these
respective issuances should be included as consideration paid and
removed from your net assets acquired.  Also, remove them from
your
discussion of the refinancing of Pneutech`s liabilities.  Please
revise or advise us.

20. You state on page 59 that 32.6% of 3156176 Canada Inc. is
owned
by Clifford Rhee.  Tell us who owns the remaining interests in
this
entity.

21. In connection with the refinancing of Pneutech`s liabilities
that
were assumed in the acquisition, please revise to indicate the
source
of the funds that were used to pay such obligations of Pneutech.

22. It is unclear to us why you reflect on your statements of cash
flows approximately $7,072,000 of cash paid for the Pneutech
acquisition.  Please revise or advise us.

23. It appears that you have listed the subordinated debenture
note
in the amount of $5.3 million issued to Roynat twice within your
disclosure on page F-11.  Please revise or advise us.

24. You present the unaudited pro forma financial information for
the
acquisitions as if the transactions had in fact occurred at the
beginning of the periods presented as required by SFAS 141 on page
F-
12.  Tell us why the information presented for the nine months
ended
March 31, 2005 does not agree to the pro forma combined condensed
statements of operations on page F-91.

Note 3.  Basis of Presentation and Summary of Significant
Accounting
Policies, page F-12

-Revenue Recognition, page F-13

25. We re-issue our prior comment 28.  Describe to us the nature
of
the sales incentives you give to your customers at the time of
sale.

26. Please refer to prior comment 31.  We note you have reflected
accounts receivable of $25.3 million at March 31, 2005.  You state
that the negative cash flows related to Thomas Equipment Inc`s.
operations were the direct result of sales in the first quarter of
2005 and waiting until the normal credit terms offered to
customers
started to come due.  It is unclear to us why you would have to
wait
for amounts to come due unless you are providing financing or
extended credit terms to your customers.  We understand that
approximately $12 million in receivables was acquired from
Pneutech
at February 28, 2005.  Also, it is unclear to us what your table
of
payment terms of accounts receivable at March 31, 2005 illustrates
to
the reader. Please revise or advise us.

-Restatement, page F-18

27. We note that you disclose that the Staff of the Securities and
Exchange Commission has advised you to record a beneficial
conversion
feature related to certain of your convertible debt to comply with
EITF 98-5 and EITF 00-27.  Please revise your note to remove the
statement that you are revising your filing to comply with EITF
98-5
and EITF 00-27 based upon the Securities and Exchange Staff`s
conclusions.  Your financial statements should be in prepared in
accordance with GAAP.

Note 11.  Common stock, page F-23

28. Please refer to prior comment 39.  As previously requested,
tell
us and revise your filing to address the following:
* Specifically tell us how you determined that the fair value of
your
common stock was $.50.  Explain in more detail what you mean by
"compared to the market price of the stock immediately subsequent
to
the public announcement of the reorganization."  Tell us and
revise
your filing to disclose what your published stock price was
immediately prior and subsequent to the reorganization.
* Tell us how you computed the stock compensation charge of $5.5
million.  Based on the information disclosed in this footnote, we
calculate a stock compensation charge of $6.1 million.

Audited Financial Statements of Pneutech, Inc.
General

29. Please refer to prior comment 42.  Please update the audited
financial statements of Pneutech, Inc. to include their results
for
the four months ended February 28, 2005 since your next filing is
dated more than nine months from October 31, 2004.  Refer to Item
8(A)(5) of Form 20-F for more information about the updating
requirements.

Independent Auditors` Report, page F-68

30. Please provide an auditors` report that includes the name of
your
independent public accountants as it does not appear signed, as
denoted by an appropriate signature symbol, with your next
amendment.

Pro Forma Combined Condensed Financial Statements
Pro Forma Combined Condensed Statement of Operations, page F-88
Introductory Paragraph, page F-88

31. Revise your introductory paragraph to include the facts and
circumstances surrounding the reorganization that took place
before
the acquisition of Thomas Equipment, Inc. so the reader
understands
your pro forma adjustment (g) to the nine months ended March 31,
2005
and Note 2 to the pro forma combined condensed statements of
operations.

32. We note from page 5 and F-89 your description of the financing
that you entered into with Laurus Master Funds, Ltd. includes $8
million secured convertible borrowing note.  However, we do not
find
this note disclosed within your notes to the interim consolidated
financial statements.   Please revise or advise us.

Pro Forma Combined Condensed Statement of Operations for the Year
Ended June 30, 2004, page F-90

33. Reference is made to pro forma adjustment (d).  However, there
does not appear to be a pro forma adjustment (d) within your notes
to
the pro forma combined condensed statements of operations.  Revise
your filing to eliminate such inconsistency.

Pro Forma Combined Condensed Statement of Operations for the Nine
Months Ended March 31, 2005, page F-91

34. Refer to our prior comment 44. We note that you have provided
the
statement of operations for Pneutech for the period July 1, 2004
to
February 28, 2005 from your unaudited internal financial
statements.
Such information should be conformed by starting with the audited
historical financial statements of Pneutech for the year ended
October 31, 2004 (as included in the filing) and subtracting the
period November 1, 2003 to June 30, 2004 to arrive at the period
July
1, 2004 to October 31, 2004.  Then the result should be added to
the
unaudited interim financial statements of Pneutech for the period
November 1, 2004 to January 31, 2005. Please present such
information
in a tabular format to show the reader how you conformed the
financial information of Pneutech that is used in the pro forma
financial statements for the nine months ended March 31, 2005.  In
this regard, please also revise your introductory paragraphs on
page
F-88 to explain how you conformed these financial statements.

Notes to Unaudited Pro Forma Combined Statement of Operations,
page
F-92

Note 2.  Pro Forma Adjustments-June 30, 2004, page F-92

35. Reference is made to adjustment (c).  We note that you
recorded
an adjustment of $6.6 million for the amortization of debt
discount
within the pro forma combined condensed statements of operations
for
the year ended June 30, 2004.  Please provide us with your
supporting
calculation for this pro forma adjustment.

36. We note that you have recorded an adjustment of $2.3 million
for
interest expense related to your outstanding debt of $27.2 million
at
8.2%.  It appears that the related financing for these
acquisitions
was approximately $31.7 million.  Please provide us with a listing
of
the debt outstanding which was included in your calculation.
 Note 3.  Pro Forma Adjustments-Nine Months Ended March 31, 2005,
page F-92

37. Please revise your title of this note to appropriately
reference
the nine months ended March 31, 2005 and also reflect such title
on
page F-91.

38. Reference is made to adjustment (c).  We note that you made an
adjustment of $836,000 related to warrants issued to Redwood
Consultants for consulting services.  It is unclear to us why you
made this adjustment and how this transaction related to the
acquisitions.  Also, tell us why you did not include as a pro
forma
adjustment to the annual pro forma combined condensed statements
of
operations.

39. Reference is made to adjustment (d).  We note that you
recorded
an adjustment of $933,000 for the amortization of debt discount
within the pro forma combined condensed statements of operations
for
the nine months ended year ended March 31, 2005.  Please provide
us
with the supporting calculation for this pro forma adjustment.

40. Reference is made to adjustment (d).  It appears that you have
included in this adjustment an accrual for the 8% dividend on the
Preferred Shares held by McCain Foods.  It is unclear to us why
this
adjustment is necessary since you have accrued the dividend in the
historical interim financial statements for the nine months ended
March 31, 2005.  Please revise the pro forma combined condensed
statement of