SecProbe.io

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MAIL STOP 3561

      July 25, 2005

Roger W. Stone, Chief Executive Officer
Stone Arcade Acquisition Corporation
One Northfield Plaza, Ste. 480
Northfield, IL 60093

Re:	Stone Arcade Acquisition Corporation
Registration Statement on Form S-1
Filed on July 14, 2005
File No. 333-124601

Dear Mr. Stone,

      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
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.

Prospectus Summary, page 1

1. Disclose here, and elsewhere as appropriate, whether the
redemption of the warrants by the company would include the
warrants
held by Morgan Joseph as a result of the exercise of the
Underwriters` option.  If such warrants are not included, discuss
the
reasons why such warrants are not included.

Risk Factors, page 7

2. We note the additional disclosure in the last sentence of risk
factor 14.  Please revise to clarify if you are referring to the
initial $25,000 as the equity stake that is at stake.  If you are
referring to the public market warrant purchases, such references
appear somewhat speculative in light of the fact that the prices
are
uncertain, the obligation could be assigned to a designee, and it
is
unclear how the representatives will exercise their "sole
discretion"
in making the purchases.

Use of Proceeds, page 18

3. We note your response to comment four of our letter dated July
7,
2005.  The revision states that you "believe" that funds not held
in
trust would be sufficient.  Considering you have taken no measures
and have no company under consideration, it would appear you are
not
able to quantify or approximate how much a potential lockup or
deposit would require.  In the event that you make a deposit and
such
deposit is of a size that would deplete enough of your non-trust
proceeds, you may need additional funds to satisfy all of the
expenses attendant with consummating a business combination.
Please
revise to clarify how you will satisfy such expenses.  Is it
possible
that you will have to rely upon advances from insiders there by
increasing the amount excess out-of-pocket expenses that could be
reimbursed following a business combination?

Proposed Business, page 26

4. We note your response to comment seven.  We note that you
believe
that the recent consolidation has "resulted in the desire . . . to
shed non-core assets as a way of generating free cash flow."
Please
revise to provide the basis for your belief that there will be a
desire to shed non-core assets and that such "non-core assets"
will
be companies in the industry you are targeting.

5. We note your response to comment 9 on page 27.  Please clarify
if
the additional disclosure means that finder`s fees "will" be based
on
the dollar value of the transaction.  Also, clarify your use of
the
term "based."  Is it a set percentage of the dollar value?  The
additional disclosure also appears to indicate that any finder`s
fees
will not be determined and paid until after a business
combination.
Please revise to clarify.

Conflicts of Interest, page 36

6. We reissue comment 12.  Please revise to include the discussion
of
conflicts in risk factors 8 and 14 under this caption.

Principal Stockholders, page 38

7. We note the deletion of the sentence stating the purpose of the
public market warrant purchases.  Please revise to discuss the
purpose of this arrangement.

8. We note your response to comment 15 and the modification of
exhibit 10.7.  We note that Morgan Joseph will "fill such order in
such amounts and at such times as it may determine, in its sole
discretion."  Please revise to discuss here and in the prospectus
the
factors Morgan Joseph will consider in making these purchases and
how
such purchases will be timed.  Is it possible for you to seek the
"best price and execution"?

Certain Transactions, page 39

9. We note the disclosure that you may effect a stock dividend in
the
future to maintain your initial investor`s percentage ownership in
the event you increase the size of the offering.  Please revise to
clarify how investors who have or will purchase your units or
shares
will become aware of this further dilution.

10. We reissue comment 16.  Item 404(d) of Regulation S-K requires
that you identify promoters and discuss all transactions involving
such persons.  Please review Rule 405 of Regulation C and revise
to
identify your promoters without qualifying the disclosure.

Underwriting, page 45

11. Tell us whether Morgan Joseph or any members of the
underwriting
syndicate will engage in any electronic offer, sale or
distribution
of the shares and describe their procedures to us supplementally.
If
you become aware of any additional members of the underwriting
syndicate that may engage in electronic offers, sales or
distributions after you respond to this comment, promptly
supplement
your response to identify those members and provide us with a
description of their procedures.  Briefly describe any electronic
distribution in the filing, and confirm, if true, that the
procedures
you will follow with respect to any electronic distribution will
be
consistent with those previously described to and cleared by the
Office of Chief Counsel.

12. Tell us whether you or the underwriters have any arrangements
with a third party to host or access your preliminary prospectus
on
the Internet.  If so, identify the party and the website, describe
the material terms of your agreement, and provide us with a copy
of
any written agreement.  Provide us also with copies of all
information concerning your company or prospectus that has
appeared
on their website.  Again, if you subsequently enter into any such
arrangements, promptly supplement your response.

13. Does the company or do the underwriters intend to engage a
directed unit program?  If so, supplementally describe to us the
mechanics of how and when these units were or will be offered and
sold to investors in the directed unit program for this offering.
For example, tell us how the prospective recipients and number of
reserved shares is determined.  Tell us how and when the company
and
underwriter notified or will notify the directed unit investors,
including the types of communications used.  Discuss the
procedures
these investors must follow in order to purchase the offered
securities, including how and when any communications are sent or
received or funds are received by the underwriters or you.  How do
the procedures for the directed unit program differ from the
procedures for the general offering to the public?  Provide us
with
copies of all written communications with prospective purchasers
about the directed unit program.

Financial Statements

14. We note your response to prior comment 18 and have the
following
additional comments regarding the UPO:
* We believe that disclosures similar to those made in MD&A should
also be made in the footnotes to the financial statements.  Please
revise the financial statements accordingly.
* Please clarify your disclosure regarding the timing of the
issuance
of the UPO, and clarify whether the issuance of the UPO is
dependent
on, or in any way related to, the effectiveness of the
registration
statement.
* We note your disclosure of an expected life of four years, while
the UPO appears to have a five year life from the date of
issuance.
In general, we believe that equity instruments issued to non-
employees should be valued using the full contractual life as the
expected life assumption.  Please revise your disclosure
accordingly,
or tell us your basis for using a shorter expected life.  We note
that you are a recently formed registrant and as such, presumably
would not have relevant experience issuing similar instruments to
the
underwriter that may support a shorter expected life assumption.
* We note your disclosure of a volatility assumption of 23.9%.
Revise to clarify whether this is based on the volatility of the
referenced index or of specific companies included in the index.
Note the use of an index to estimate volatility may not always be
representative of the volatility of the underlying securities.
Please refer to paragraph 285 of FAS 123 in your response.  Also,
please clarify the exact name of the index and provide us with
information regarding the nature and market capitalization of the
companies used as a guide.

Part II

Exhibits

15. We note your response to comment 19.  You state that the
underwriters must purchase the firm units if the offering is not
terminated in the event of a default.  The staff is unable to
locate
such provision in the agreement.  Section 1.1 states that the
representations and warranties are subject to terms and conditions
that appear later in the agreement. Please advise or revise.
Also,
the underwriters are only "severally and not jointly" liable.
There
does not appear to be a statement that contains a clause that
states
the offering "will" or "shall" terminate if defaulted shares are
not
covered.  Again, if it will terminate, there is no use for the
term
"may" in section 6.2 of the agreement.  Please advise and direct
us
to the language that clearly states that the offering will be
terminated or that the underwriters must purchase the defaulted
units
over 10 percent.

16. Please revise your legality opinion to indicate that it opines
upon Delaware law including the statutory provisions, all
applicable
provisions of the Delaware Constitution and all reported judicial
decisions interpreting those laws.

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 supplemental 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 filings reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed 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.

      We will consider a written request for acceleration of the
effective date of the registration statement as a confirmation of
the
fact that those requesting acceleration are aware of their
respective
responsibilities under the Securities Act of 1933 and the
Securities
Exchange Act of 1934 as they relate to the proposed public
offering
of the securities specified in the above registration statement.
We
will act on the request and, pursuant to delegated authority,
grant
acceleration of the effective date.

      We direct your attention to Rules 460 and 461 regarding
requesting acceleration of a registration statement.  Please allow
adequate time after the filing of any amendment for further review
before submitting a request for acceleration.  Please provide this
request at least two business days in advance of the requested
effective date.

      You may contact Carlton Tartar (202) 551-3387 if you have
questions regarding comments on the financial statements and
related
matters.  Questions on other disclosure issues may be directed to
Duc
Dang at (202) 551-3386.

						Sincerely,

						John Reynolds, Assistant Director
						Office of Emerging Growth Companies

Cc:  	Fran Stoller
	Fax #  (212) 407-4990

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Roger W. Stone, Chief Executive Officer
Stone Arcade Acquisitions Corporation
July 25, 2005
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