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CORRESP
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Thomas
        Equipment, Inc.

Amendment
        # 5 to Registration Statement on Form S-1

      File
        No. 333-124217

      Responses
        to SEC Comment Letter dated October 20, 2005

      Pertinent
        Current Events

      On
        October 28, 2005, the Company and Laurus Master Fund Ltd. (“Laurus”) entered
        into an agreement pursuant to which the registration rights agreement dated
        as
        of November 9, 2004 between the Company and Laurus was terminated in its
        entirety. As a result of such agreement, all of the shares of common stock
        being
        registered for resale on behalf of Laurus will be removed from the registration
        statement upon the filing of Amendment No. 5. In connection with the agreement,
        the Company and Laurus also agreed:

                ·

                  To
                    remove all adjustments to the interest rate payable on the convertible
                    notes resulting from changes in the trading price of the Company’s common
                    stock;

                ·

                  To
                    remove the requirement that the shares be registered before they
                    can be
                    used for repayment of obligations due under the notes;
                    and

                ·

                  To
                    remove the provisions in the notes which adjust the fixed conversion
                    price
                    in the event of a lower priced issuance by the Company and replace
                    such
                    provisions with traditional value-weighted anti-dilution
                    provisions.

      In
        full
        consideration for all amounts due or which might otherwise have become due
        to
        Laurus pursuant to the registration rights agreement, the Company agreed
        to pay
        Laurus the sum of $600,000. A copy of the agreement between Laurus and the
        Company was included as an exhibit to our Form 8-K filed on November 2,
        2005.

      Additional
        Material Provided

      Marked
        copies of certain financial statement footnotes (Note 4 - Accounting Policies;
        Notes 12 and 13 - Convertible Debt and Credit Facilities; Note 16 - Derivative
        Liabilities; Note 17 - Redeemable Preferred Shares; Note 20 - Common Stock
        Warrants), together with a schedule summarizing the valuation of derivative
        liabilities, have been forwarded separately to the Staff. The footnotes are
        being provided to illustrate additional disclosures being made or modified
        in
        response to the Staff’s comments. The actual amounts in the footnotes have not
        yet been modified to reflect the affect of accounting for certain options
        and
        warrants as derivative liabilities.

      Response

Note
        12. Convertible long term debt page F-35, and Convertible credit facility,
        page
        F-36

                1.

                Please
                  tell us how you have applied the guidance in EITF Issue 00-19 in
                  evaluating
                  whether the debt conversion features for the convertible term loans
                  issued
                  to Laurus and the convertible credit facility with Laurus are embedded
                  derivatives that you should separate from the debt host and account
                  for at
                  fair value
                  under SFAS 133. It appears that these agreements may not meet the
                  definition
                  of conventional convertible debt in paragraph 4 of EITF Issue 00-19
                  since
                  they have a feature wherein the conversion price is reset if you
                  issue
                  shares at a price less than the fixed conversion price in the note.

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      As
        a result, you would be
        required to analyze the conversion feature under paragraphs 12-32 of EITF
        00-19.
        In
        this regard, we note that your registration rights agreement requires you
        to
        file a registration statement that is declared effective by the SEC and to
        keep
        the registration statement continuously effective for a preset time period,
        or
        else you are required to pay a liquidated damages payment equal to 2% of
        the
        product of the original principal amount of the note per month until the
        event
        is cured, with no
        cap on
        the maximum penalty that could be incurred. Additionally, you will incur
        these liquidated damages if your common stock is not listed or quoted, or
        is
suspended
        from trading for the periods outlined in the agreement. It appears that these
        provisions would result in liability classification under EITF 00-19. If
        true,
        you would be required to bifurcate the conversion feature from the debt host
        and
        account for the feature as a derivative liability with changes in fair value
        being recorded
        in the income statement. Additionally, we note that if you conclude that
        this
        is
        the appropriate accounting, you would not account for any beneficial
conversion
        under EITFs 98-5 and 00-27.

                Response

                We
                  have not bifurcated the conversion feature of the Laurus loans
                  because, at
                  the time that these loans were entered into (November 2004 and
                  January and
                  February 2005), and in accordance with EITF 00-19, we viewed them
                  as
                  “conventional convertible debt in which the holder may only realize
                  the
                  value of the conversion option by exercising the option and receiving
                  the
                  entire proceeds in a fixed number of shares”. Accordingly, in accordance
                  with paragraph 4 of EITF 00-19, the requirements of paragraphs
                  12 - 32 of
                  EITF 00-19 do not apply and the embedded derivative was not bifurcated
                  and
                  accounted for separately.

      EITF
        Issue 00-19 does not define the meaning of the term “conventional convertible
        debt” or what is meant by “a fixed number of shares”. That issue has now been
        specifically addressed in EITF Issue 05-02, as follows -

      “…
        the
        Task Force reached a consensus that instruments that provide the holder with
        an
        option to convert into a fixed number of shares (or equivalent amount of
        cash at
        the discretion of the issuer) for which the ability to exercise the option
        is
        based on the passage of time or a contingent event should be considered
        "conventional" for purposes of applying Issue 00-19. Instruments that contain
        "standard" antidilution provisions would not preclude a conclusion that the
        instrument is convertible into a fixed number of shares. Standard antidilution
        provisions are those that result in adjustments to the conversion ratio in
        the
        event of an equity restructuring transaction (as defined in the glossary
        of
        Statement 123(R) that are designed to maintain the value of the conversion
        option.”

      The
        Laurus loan agreements contain antidilution provisions related to the effect
        of
        common stock reclassifications, stock splits, combinations, dividends, and
        similar re-organization transactions. They also include a provision that,
        in the
        event that we issue shares at a price less than the Laurus conversion price,
        the
        Laurus conversion price is lowered to the same price. Given that the issuance
        of
        shares at a price lower than the Laurus exercise price is solely within our
        control and that the provision lowering the conversion price is, prima facie,
        intended “to maintain the value of the conversion option”, we concluded that the
        Laurus loans are convertible into a “fixed number of shares”. Accordingly, the
        requirements of EITF 00-19 were not applicable and the conversion option
        was not
        bifurcated.

      We
        acknowledge that the definition in Statement 123(R) does not specifically
        include the issuance of shares at a price less than the (Laurus) conversion
        price. However, we understand from our telephone discussions with the Staff
        that
        they would view as acceptable an adjustment of the conversion price based
        on a
        formula that is intended to keep the holder, as far as practical, in the
        same
        relative position as they were in prior to the sale of stock at a lower price.
        Because the lowering of the Laurus conversion price is on a “dollar-for-dollar”
        basis, it does not meet this requirement and therefore, at this time, the
        conversion option in the Laurus loans would not be deemed to meet the definition
        provided in EITF 05-02 and, therefore, the bifurcation exemption provided
        by
        EITF 00-19.

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      Paragraph
        4 of EITF 05-02 acknowledges that because the term “conventional convertible
        debt” was not defined in detail in EITF 00-19, there was diversity in practice
        in evaluating whether convertible debt instruments were considered conventional
        for purposes of determining whether those debt instruments qualified for
        the
        exception in paragraph 4 of EITF 00-19. EITF 05-02 was intended to address
        the
        lack of clear guidance on this specific topic, which it has (partially) done
        (though it does not articulate the notion of a “keep whole” formula adjustment
        being acceptable (although we, and we understand the Staff, believe it should
        be). We note that the guidance provided by EITF 05-02 is to be applied
        prospectively to new instruments entered into and instruments modified in
        periods beginning after June 29, 2005, the date the FASB ratified the EITF
        consensus. We recognize that the EITF consensus has clarified this issue
        but we
        believe that EITF 05-02 acknowledges that there was diversity in making this
        evaluation and our interpretation of the literature, at the time that it
        was
        made, was appropriate.

                2.

                It
                  is unclear how you apply the monthly conversion repayment and conversion
                  rights in Articles II and III of the Laurus term notes. To help
                  us
                  understand the application and relationship between these provisions,
                  please provide examples illustrating how these operate. Please
                  ensure your
                  response and examples include a clear discussion as to whether
                  you are
                  required to pay the monthly amount in shares
                  if you meet the criteria outlined in Article II, or whether it
                  is your
                  option to pay
                  the monthly amount in cash or shares if you meet the criteria outlined
                  in
                  Article II. Please also explain in greater detail what the "repayment
                  notice” is, whether Laurus is required to provide you with the "repayment
                  notice" and what happens if the "repayment notice" is not
                  provided.

      Response

                Whether
                  or not repayments are made in cash or shares is initially at the
                  option of
                  Laurus. Once registration of the shares is effective, we can require
                  Laurus to take repayments in shares, subject to certain limits
                  related to
                  stock price and trading volume. These limits in effect allow us
                  to ‘force’
                  conversion in circumstances where the shares are registered, the
                  stock is
                  trading at a price above the conversion price and there is reasonable
                  trading volume.

                Laurus’
                  right to request payment (including interest) in shares and our
                  right to
                  make payment in (registered) shares (subject to certain limits),
                  prima
                  facie, constitute a series of call and put options. However, these
                  options
                  are simply the embodiment of the conversion option embedded in
                  the debt
                  instrument. As discussed in our response to comment 1, this conversion
                  option (and, by extension, these calls and puts) have not been
                  bifurcated
                  and accounted for separately.

      As
        explained in Article II, Laurus will provide us each month with a “repayment
        notice” stating whether they require to be paid in cash or shares. As further
        explained in Article II, if Laurus does not provide notification, payments
        are
        to be made in cash (subject to our right to make payment in registered shares).
        To date, all payments have been made in cash.

                3.

                In
                  addition, it appears that the warrants and options issued to Laurus
                  would
                  also be
                  required to be accounted for as derivative liabilities under EITF
                  00-19
                  since these warrants and options are subject to the same registration
                  rights agreement noted
                  above for the secured convertible term note. Please
                  advise.

      Response

                As
                  discussed in our previous response and in the Registration Statement,
                  we
                  viewed the Registration Rights Agreement as a separate instrument
                  and do
                  not believe that, at this time, it is required to (or that practice
                  supports) accounting for penalties under a registration rights
                  agreement
                  as a derivative instrument. We view the potential cash penalties
                  under the
                  agreement as a contingent liability, to be accounted for as
                  such.

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      From
        our
        discussions with the Staff, we understand that the Staff would not object
        to
        that accounting (i.e., the Registration Rights Agreement penalties are not
        required, under current practice, to be accounted for as a derivative instrument
        and the penalties under the Agreement are accounted for as a contingent
        liability under FAS 5). However, we understand that the Staff’s view is that the
        existence of these potential cash penalties means that they must be included
        in
        the evaluation (if not the valuation) of other instruments with which they
        are
        associated. Accordingly, the Staff believes that, under EITF 00-19, the
        existence of these potential cash payments requires that the warrants and
        options be accounted for as derivative liabilities and not as
        equity.

      The
        effect of these penalties on the accounting for these other instruments is
        addressed in EITF 05-04, which at this time is unresol