SecProbe.io

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      November 18, 2005

Mail Stop 6010

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

Re:	Thomas Equipment, Inc.
	Amendment No. 4 to Registration Statement on Form S-1
	Filed October 3, 2005
	         File No. 333-124217
Dear Mr. Marks:
      We have reviewed your response filed on November 4, 2005 and
have the following comments.

Form S-1, Amendment 4 filed October 3, 2005

General

1. We note that you have entered into an agreement with Laurus
Master
Fund Ltd ("Laurus") on October 28, 2005 that provides for certain
modifications of your existing arrangements.  In your response to
us
dated November 4, 2005 you highlighted the significant terms that
have been modified.  In light of the modifications, please provide
to
us your analysis under the guidance in EITF 96-19 as to whether
these
changes to your debt were a modification or an extinguishment of
debt
and creation of new debt.  In addition, tell us how you will
account
for the payment of $600,000 that was paid by you in full
consideration for all amounts due or which might otherwise have
become due under the registration rights agreement.

Note 12. Convertible long term debt, page F-35, and Convertible
credit facility, page F-36
2. We have evaluated response 1 and 2 and continue to believe that
you have not provided a sufficient basis to consider the
convertible
term note and convertible credit facility as conventional
convertible
debt as defined under paragraph 4 of EITF 00-19.  It appears since
the conversion feature resets upon certain events, you would be
unable to conclude that the conversion option is settled in a
fixed
number of shares.  The reference in paragraph 4 of EITF 00-19 to
"at
the discretion of the issue" relates to a choice of settlement
(i.e.
shares or and equivalent amount of cash), not whether the issuer
has
the ability to change the number of shares.  Additionally, it also
appears that the monthly conversion repayment feature does not
result
in the holder receiving a fixed number of shares or an equivalent
amount of cash (at the discretion of the issuer) since the
provisions
require you to pay 103% of the principal amount in cash if certain
criteria are not met.  This cash settlement value differs from the
value of the shares that would be required to be issued if you
were
permitted to pay in shares. Please advise or revise.

3. Please refer to prior comment 4.  Please provide us with the
following requested information:

* We note that you believe the interest rate adjustment feature
described in our prior comment 4 is an embedded derivative that is
required under SFAS 133 to be separated from the host contract.
We
do not believe the reasons you cite provide a sufficient basis to
not
comply with SFAS 133.
* Refer to the redemption option and the guarantee provided by the
Province of New Brunswick.  In your response you cite the
accounting
literature that you considered in reaching a conclusion that
separate
accounting for these embedded features is not required.  In order
to
facilitate our evaluation of your conclusion, please give us your
analysis of these features under the accounting literature to
which
you referenced.  Please also refer us to the financial statement
disclosure related to each feature.
* It is unclear whether you identified all potential embedded
derivatives.  For example, please tell us how you evaluated the
interest rate floor of 7.5% in the convertible credit facility
under
SFAS 133.

4. Please provide the revised footnote disclosure you propose to
make
in response to prior comment 5.  We may have further comments
after
reviewing your response.

Note 16. Redeemable preferred shares, page F-39

5. We are continuing to evaluate response 7.
6. Since you have concluded that the convertible preferred stock
is
conventional convertible, and therefore the embedded conversion
option is outside of the scope of EITF 00-19 and SFAS 133, it
would
appear that you would be required to account for the beneficial
conversion feature that exists on the date of issuance pursuant to
the provisions of EITF 98-5 and EITF 00-27.   If you determine
that a
beneficial conversion feature exists, you are required to record a
discount that would be accreted from the date of issuance to the
stated redemption date of the convertible instrument (unless you
meet
the conditional provisions that are outlined in the footnote),
regardless of when the earliest conversion date occurs.  Please
revise your accounting to comply with the provisions of paragraph
19
of EITF 00-27.

7. Please provide the revised footnote disclosure you propose to
make
in response to prior comment 9.  In this regard, it appears that
the
convertible, redeemable preferred stock, which you are accounting
for
as temporary equity, has multiple redemption features.  Please
ensure
your disclosure describes the nature of these redemption features
and
related accounting treatment with any disclosures required by EITF
D-
98.  We may have further comments after reviewing your response.

Note 19. Stock options and warrants, page F-42

8. Please refer to prior comment 10.  We note that you have
provided
a range of expected volatility factors that vary significantly by
issuance.  Please tell us how you determined these volatility
factors.  One of the factors considered in estimating expected
volatility is historical volatility of the underlying common stock
over the most recent period that is generally commensurate with
the
expected option/warrant life.  If the option/warrant being valued
is
transferable, it is generally inappropriate to use an expected
life
shorter than the contractual term.  Since the operations of the
successor entity commenced on October 1, 2004, it is unclear
whether
you only considered the historical volatility of the common stock
since October 1, 2004 in estimating expected volatility or whether
your estimate considered the historical volatilities of similar
entities following a comparable period in their lives.  Refer to
the
analogous guidance in paragraphs 277 and 285 of SFAS 123.

9. We note from your response to comment 11 that you have assumed
an
expected term of seven years for the 4,020,000 options issued to
Laurus on November 9, 2004 that have no stated expiration date.
Please note that footnote 7 in SAB 107 states that if factors such
as
non-transferability, non-hedgability and the truncation of the
contractual term are not present in a non-employee share option
arrangement, the use of an expected term assumption shorter than
the
contractual term would generally not be appropriate in estimating
the
fair value of the non-employee share options.  It appears that the
4,020,000 options are transferable.  If our understanding is
correct,
it does not appear that the use of a seven year life appropriately
captures the value inherent in options that have indefinite lives.
In order to help us assess whether the fair value of the 4,020,000
options you determined using a seven year expected term is
materially
different than the fair value of the 4,020,000 options using an
indefinite term, please quantify for us how the use of longer
contractual terms would impact the fair value of the 4,020,000
options.

10. Refer to Exhibit A of your response.  We note a number of your
options and warrants that you account for as derivative
liabilities
are exercisable at any time.  Please tell whether you believe such
derivative liabilities represent current or non-current
liabilities
and the basis for your conclusion.  Please clarify your current
disclosure.

Closing Comments
      As appropriate, please amend your registration statement in
response to these comments along with the comments in our letter
dated October 19, 2005.  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 responses to our
comments and provides any requested 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.
      You may contact Tara Harkins at (202) 551-3639 or me at
(202)
551-3327, in her absence, if you have questions regarding comments
on
the financial statements and related matters.  Please contact Jay
Mumford at (202) 551-3637 or Peggy Fisher at (202) 551-3800 with
any
other questions.
      Sincerely,

							Michele Gohlke
							Branch Chief

cc: 	Thomas A. Rose

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