SecProbe.io

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							December 1, 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 filing and have the following
comments.
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
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.
General
1. We note your response to prior comment 1.  Please address the
following:

*  In calculating the present value of the cash flows for purposes
of
applying the 10% test, tell us how you applied the following
guidance
provided in EITF 96-19:

-If either the new debt instrument or the original debt instrument
is
callable or puttable, then separate cash flow analyses are to be
performed assuming exercise and non-exercise of the call or put.
The
cash flows assumptions that generate the smaller change would be
the
basis for determining whether the 10 percent threshold is met.

-If the debt instruments contain contingent payment terms or
unusual
interest rate terms, judgment should be used to determine the
appropriate cash flows.

* Likewise, please explain why it is reasonable to assume the
maximum
amount of registration penalties for purposes of the cash flow
analysis.

* Confirm to us that you treated the $600,000 penalty as part of
the
cash flows related to the old debt or explain why it is
appropriate
to treat the payment as part of the new debt.

Note 12. Convertible long term debt and Convertible credit
facility,
page F-35

2. We note from your response to prior comments 2 and 4 that you
have
bundled the conversion option, the expected future interest stream
settled in shares, and the interest rate reset feature into a
single,
compound derivative.
* Please clearly describe to us what you mean by the "conversion
option" and the "expected future interest stream settled in
shares"
and highlight the differences between them.
* Please revise your proposed footnote disclosure in Exhibit A to
present the freestanding and compounded derivatives separately.

3. You state that you used the Black-Scholes option pricing model
to
determine the fair value of the "single compounded embedded
derivative".
* Please explain to us how you concluded that the Black-Scholes
option pricing model was an appropriate method to determine the
fair
value of the compound derivative which appears to include certain
non-option features such as the interest rate reset feature.
Explain
how the Black-Scholes option pricing model is able to capture the
value of the different elements of the compound derivative.
* Tell us how the Black-Scholes option pricing model compared to
any
other fair value models you considered.
4. In light of the materiality of the amounts in question, please
revise the critical accounting policies section of MD&A to include
a
description of the methodology used by management in determining
the
fair value of your derivative instruments; including the
significant
assumptions made and the significant estimates used in developing
such estimate of fair value.  Refer to the guidance provided in
FR-
72.
5. Please refer to prior comment 3.  Tell us how you considered
the
fact that you have the option to redeem the term notes at 105% of
the
outstanding principal and accrued interest at any time in reaching
your conclusion that the call option is clearly and closely
related
to the host instrument and should not be separated from the host
contract.  We note that if the redemption option is exercised
immediately, the investor`s initial rate of return is doubled and
would appear to meet the condition outlined in paragraph 13(b) of
SFAS 133.  Alternatively, please provide us with a revised
detailed
analysis which clearly shows how you considered the guidance in
paragraphs 13 and 61(d) of SFAS 133 and DIG Issues B-16 and B-39.

Note 16. Redeemable preferred shares, page F-39

6. We have evaluated your response to comment 7 in your letter
dated
November 4, 2005. We note that the conversion reset formula is
triggered by a reciprocal transaction with new investors and
therefore does not appear to meet the ETIF 05-2 definition of a
standard anti-dilution provision.  Because the conversion reset
formula is triggered by a reciprocal transaction with some
shareholders rather than a nonreciprocal transaction with all
shareholders, it appears that there are circumstances where the
formula would increase the fair value of the conversion option.
For
example, on a fair value basis, it appears that the reset formula
would increase the fair value of the conversion option in
circumstances where there is an issuance of common stock at a fair
value below the conversion price.  As a result, we are unable to
concur with the company`s conclusion that the convertible
preferred
stock is "conventional" under EITF 00-19.
* Please tell us whether or not the embedded conversion option
would
be classified as equity based on the additional conditions in EITF
00-19.
* In your response, please analyze of each of the conditions in
EITF
00-19, paragraphs 12 to 32.

7. It appears that the 5% Series A redeemable convertible
preferred
stock may contain other embedded derivatives that you should
evaluate
under SFAS 133 and EITF Issue 00-19.  Please provide us with the
analysis you performed to determine whether to bifurcate the
following:

* At any time commencing after three years from the closing date,
the
company can redeem the preferred stock.  If the redemption occurs
in
the fourth year after issuance, the redemption amount is 200% of
the
stated value.  If the redemption occurs during the fifth year
after
issuance, the redemption amount is 225% of the stated value.
* The holder can require the company to redeem the preferred stock
at
110% of the stated value, together with accrued dividends, after
five
years or upon certain events.

8. We note the proposed disclosure provided in response to prior
comment 7.   In accordance with EITF D-98, the remaining discount
and
premium noted in your proposed disclosure in exhibit B should be
amortized or accreted from the date of issuance to the earliest
redemption date, which appears to be five years, unless you
believe
that the certain events outlined in your agreement are probable to
occur at the balance sheet date.  Please revise your accounting
accordingly or advise us.

Note 19. Stock options and warrants, page F-42
9. Please refer to prior comment 8.  We have evaluated your
response
and continue to believe that, consistent with the guidance in
paragraph 285(b) of SFAS 123, the average volatilities of similar
entities along with the limited historical volatility of your
common
stock provide a more meaningful volatility measure.  In addition,
it
appears unlikely that you have no readily comparables entities.
In
evaluating similarity of entities, you should consider factors
such
as industry, stage of life cycle, and financial leverage.   Please
refer to the guidance in paragraphs 277 and 285 of SFAS 123,
footnote
60 to paragraph A32(c) of SFAS 123(R), and Question 6 of SAB Topic
14D and revise the filing accordingly.
10. We note from your response to prior comment 9 that you believe
that the life assumed beyond seven years within the Black-Scholes
option pricing model would not significantly impact your
determination of fair value for the 4,020,000 options issued to
Laurus.  To help us better understand your conclusion, please
provide
us with an analysis that shows the impact of different longer
contractual lives on fair value using the Black-Scholes option
pricing model.
Closing Comments
      As appropriate, please amend your registration statement in
response to these comments.  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.
      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 all information required under the Securities Act
of
1933 and that they have provided all information investors require
for an informed investment 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 comments, 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.
      You may contact Tara Harkins at (202) 551-3639 or in her
absence, Michelle Golhlke at (202) 551-3327, if you have questions
regarding comments on the financial statements and related
matters.
Please contact Jay Mumford at (202) 551-3637 or me at (202) 551-
3800
with any other questions.
      Sincerely,

							Peggy Fisher
							Assistant Director

cc: 	Thomas A. Rose

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