SecProbe.io

<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.txt
<TEXT>
August 18, 2005

Paul Monsour
Staff Accountant
United States Securities And Exchange Commission
450 Fifth Street, N.W.
Washington, D.C.  20549

Dear Mr. Monsour:

Re:  GPS Industries, Inc. ("GPSI")
        Form 10-K For The Fiscal Year Ended December 31, 2004 &
        Form 10-Q For The Quarter Ended March 31, 2005

Dear Mr. Monsour:

We have received your letter dated August 9 and our comments are noted below for
your review:

2004 10K

1. & 2. Note 2 - Acquisitions, Pages F-6 To F-8.

On November 19, 2005 GPSI  acquired  100% of the  outstanding  common  shares of
Optimal  Golf  Solutions,  Inc.("Optimal").  The only asset of real value was US
Patent No. 5,364,093 which had seven years of life left until November 11, 2011.
Our Company  needed  either to acquire or license this patent from Optimal to be
able to sell our GPS golf  management  system in the United States,  the world's
largest  market of golf  courses.  Because  Optimal did not feel we responded to
their licensing offer quickly enough and in good faith (we disputed that),  they
elected to deny us a license. We believe this could have been partly inspired by
a fairly close  relationship they had with a major competitor that we had in the
US called ProLink  Parview,  LLC ("PPL").  Optimal then advised  prospective and
existing  customers of ours that we did not have a license to sell our system in

<PAGE>

the  US.  That  became  a major  stumbling  block  for us and  could  have  been
disastrous  if we did not  act  quickly.  We  also  became  aware  that  PPL was
attempting to acquire either Optimal or the 093 patent (one in the same really).
Had PPL been successful,  they could have denied us a license in the US. Our CEO
took the only action that seemed open to GPSI, which was to acquire Optimal.  We
used an experienced  senior  consultant with a strong  background in patents and
their  acquisitions to assist us with those negotiations which were conducted on
an arms-length basis. We closed the transaction on November 19, knowing that PPL
was also trying to do the same thing.  We tried to pay the lowest price we could
but  under the  circumstances,  Optimal  knew  that  they had us in a  difficult
position.  Only $1,100,000 of the $5,250,000  purchase price was cash,  however,
and  balance  was to be paid in  stock,  subject  to  certain  restrictions  and
conditions.

During our audit,  Sherb & Co took a very strict  accounting  theory approach to
this  acquisition  stating  that under US GAAP,  this  intangible  asset must be
valued based on the NPV of a future  stream of known  license  revenue which was
approximately  $600,000 per year, primarily from our two major competitors,  PPL
and UpLink.  Our determination of the importance of this patent to us in the USA
and internationally as a major component of our international  patent portfolio,
and the  potential  for us to earn  additional  license  revenue from  potential
infringers of the patent, did not affect their valuation approach. Thus, because
we were able to  substantiate  a NPV of $1,500,000  from these known future cash
flows,  that is the value settled on and the difference was immediately  applied
to goodwill which they  recommended  we write-off at our year-end  (December 31,
2004), and review the value each year-end thereafter, adjusting as necessary (in
accordance  with  US  GAAP).  All R & D costs  relating  to  development  of new
products,  software and their related  patents have been expensed in the year in
which  they have been  incurred  by us.  Given the  financial  position  of this
Company, we believe this is the most conservative  approach to take at this time
and which we believe follows US GAAP.

We will revise future filings to include the primary reasons for the acquisition
and a  description  of the factors  that  contributed  to a purchase  price that
resulted in the recognition of goodwill.

<PAGE>

3.  Note 8 - Gain On Extinguishment Of Debt

Following is the additional detail related to the securities that collateralized
the loan we wrote off in 2004 and how we feel it was realized:

In  February  2001 the  Company  received  a loan of  $1,185,000.  This loan was
collateralized  by the transfer of 2,044,000 shares of the Company to the lender
from various existing shareholders of the Company.  These shares were to be held
as security  for the loan but it was not agreed  that they could be  liquidated.
However we are of the opinion that they were in fact  liquidated  by the lenders
thus discharging the loan liability. Factors supporting this opinion are:

     a)   The volume of shares of the Company traded in the two months following
          the transfer of these shares to the lenders was 7,976,100  compared to
          a volume of  2,065,200  in the two  months  prior to the  transfer,  a
          nearly fourfold increase in trading activity.
     b)   The share price at the end of January 2001 was $1.75, this declined to
          $0.84 at the end of  February,  on a  trading  volume  in the month of
          3,440,900  shares,  and further  declined to $0.22 by the end of March
          2001 on a monthly trade volume of 4,535,200
     c)   The Company has received no  communication  from the lenders since the
          initial loan transaction completed.
     d)   Subsequent  efforts by both the Company and its auditors to locate the
          lenders have been unsuccessful.

Therefore the Company is of the opinion that the lenders immediately  liquidated
in full the shares issued to them for  collateral  against the loan and realized
their  return  on the  monies  lent in this  way,  to  what we  believe  was the
considerable   detriment  of  the  Company's  stock  trading  price  and  market
capitalization. As the lenders could not be located by the efforts of either our
auditors or GPSI,  this loan  liability was written off in the fiscal year ended
December 31, 2004. Our auditors  concurred in this decision.  The full amount of
the book value of the loan was  treated as a gain on  extinguishment  of debt as
the Company is of the opinion that the full value of the loan has been  realized
by the lenders through the liquidation of the collateral shares.

We will revise our future filings to include enhanced disclosure  regarding this
item.

<PAGE>

2005 10 QSB For 3 Months Ended March 31, 2005
---------------------------------------------

4. The loan from Great White Shark Enterprises  ("GWSE") is correctly  long-term
debt and should be shown as such on our balance  sheet.  The term on the loan is
to November, 2011, i.e. seven years and ties into the expiry date of the Optimal
patents which provided some security and license  revenue to repay this loan. We
corrected that  presentation in our amended 10K, which was filed after our 10QSB
for the Q1 ended March 31, 2005. At the time of filing the 10Q for Q1,  however,
we were aware of the change required from current to long-term but our President
was having  discussions  with GWSE about  converting  that debt into shares as a
condition of closing a major financing. At the time of filing the 10Q for Q1, we
believed that GWSE were going to agree to do the debt conversion into shares and
thus took what we thought was a  conservative  position at the time and left the
debt as current  debt.  Although  those  discussions  continue  now,  it is less
certain  to us that they will  convert  their  debt into  shares and thus we are
following  the proper  accounting  treatment  of this  debt.  We will be sure to
include  some of this  discussion  in future  filings in  Footnote 4 relating to
Debt.

8-K Dated November 26, 2004
---------------------------

5. The financial statements of Optimal

We discussed  and reviewed  the various  tests for filing the audited  financial
statements  of Optimal with the 8K.  However at the time our  understanding  was
that they were not required and thus limited our  disclosure to the 8K (with all
related  agreements)  and the  2004  10K.  The  consolidated  audited  financial
statements in that 10K included the financial  results of Optimal as at December
31, 2004 since the date of acquisition on November 19, 2004. Optimal was a small
private company which had limited  license revenue from three patent  licensees.
That is the only business in which they were involved.  We received and reviewed
their financial statements (which were not audited) prior to acquisition. We are
currently  reassessing  whether  or not we need to file  audited  financials  of
Optimal.  If we determine  that we do, we will have our  independent  registered
accountants, Sherb & Co. LLP, audit them and file an Amendment to the 8K as soon
as possible.  The accounting records are with the former Optimal shareholders in
Texas and we will have to arrange  delivery of them for audit  purposes.  I look
forward to discussing this issue with you.

<PAGE>

Finally, we confirm the following:

     1.   GPSI is responsible for adequacy and accuracy of the disclosure in the
          filings;

     2.   Staff  comments  or changes to  disclosure  in  response  to SEC staff
          comments do not foreclose the  Commission  from taking any action with
          respect to the filings; and

     3.   GPSI may not assert  staff  comments  as a defence in any  proceedings
          initiated by the Commission or any person under the federal securities
          laws of the United States.

     4.   We  acknowledge  that the  Division of  Enforcement  has access to all
          information  we provide to the staff of the  Division  of  Corporation
          Finance in your review of our filings or in response to your  comments
          on our filings.

We look  forward to working  with you and your  staff and  cooperating  fully to
answer your questions and clarify any further  issues you may have.  Please feel
free to call myself or Michael Martin,  Corporate  Controller at 604-576-7442 at
any time to discuss these matters further.

Yours sincerely,

/s/George Dorin
--------------------------
George Dorin
Chief Financial Officer

  cc. Robert C. Silzer, President & CEO
  dd. Michael Martin, Corporate Controller
</TEXT>
</DOCUMENT>