SecProbe.io

<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.txt
<TEXT>
GPS industries
the ability to do more

                                                                 VIA FAX & EDGAR
December 1, 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
         Filed April 18, 2005

         Form 10-Q for the quarters ended March 31 and June 30, 2005 File No.
         0-30104

Dear Mr. Monsour:

We have received your letter dated November 10, 2005 and respond as follows:

Annual Report filed on form 10-KSB for the year ended December 31, 2004

Note 2 - Acquisitions, pages F-6 - F-8

1. We note your responses to comments 1 and 2. We note that based on your
analysis of EITF 98-3, you concluded that you acquired an asset and not a
business. Given this determination, and in light of your response to comment 1
and 2 in your first response letter, we ask that you revalue the patent asset at
its total fair value. Recording the patent asset at its fair value is required
by the general concepts with respect to accounting for asset acquisitions set
forth in paragraphs 3-8 of SPAS 141. While we acknowledge you are not within the
scope of SFAS 141 as this does not represent a business combination, we believe
it would be appropriate to look to the general concepts set forth therein.
Specifically, we ask that in addition to the value you assigned based on the NPV
of future cash flows derived from third party licensing of the patent, you also
consider the NPV of future cash flows you are saving by owning the patent, i.e.
by applying the "relief from royalty" method. If it is determined that this dual
valuation gives you a total less than the amount you paid, you may take a day
one impairment representing this overpayment premium.

<PAGE>

As you have stated in our phone conversations, and in accordance with FAS 144,
paragraph 8, you performed an impairment test as of December 31, 2004 for
recoverability. We ask that you confirm that this recoverability testing of the
cash flows was done at the lowest level for which identifiable cash flows are
largely independent of other cash flows for other groups of assets and
liabilities as required by paragraph 10 of SFAS 144. In your situation, it would
appear that this level would be the underlying business, as contemplated by
paragraph 11 of SFAS 144. Testing would be performed at this level because the
requirements of SFAS 144, paragraph 7, would indicate to look to the sum of
undiscounted cash flows expected to result from the use and eventual disposition
of the asset or asset group. Accordingly, while the cash flows prepared to
calculate the value of the patent asset under the "relief from royalty" method
would be appropriate for initial fair value determination, in testing the asset
for impairment under SFAS 144 such a method would not be appropriate. Once you
have completed your impairment test with respect to the patent asset under SFAS
144, if the amount is different than the impairment loss you had previously
reported, please revise or advise.

Company Response:

We have reviewed our treatment of the patent asset acquired from Optimal Golf
Solutions Inc. (the 093 patent), with particular reference to the application of
SFAS 144 and in the light of the general concepts set forth in paragraphs 3-8 of
SFAS 141.

We have also considered the NPV of the future cash flows we are saving by owning
the patent, using the "relief from royalty" method you mention in your letter.
In this calculation we referred to the cash flow already generated by existing
third party licenses to ensure comparability and consistency.

We note that in the FAS 144 paragraph 7, under the heading "Long-Lived Assets to
Be Held and Used" the statement retains the requirements of Statement 121 to
recognize an impairment loss if the carrying amount of the asset is not
recoverable from its undiscounted cash flows and to measure the impairment loss
as the difference between the carrying amount and the fair value of the asset
and that Paragraph 8 e. requires that an asset be tested for recoverability if
there is a current period loss combined with a history of losses. Paragraph 23
of Statement 144 states that a present value technique is often the best
valuation technique to measure the fair value of a long-lived asset.

The provisions of FAS 144 we considered in our valuation were those in
paragraphs 10 and 16 requiring that the lowest level of cash flows identifiable
with the asset that are expected to arise as a direct result of the use of the
asset be used as the basis for calculation. The valuation also considered the
requirement in paragraph 18 that the recoverability be based on the remaining
useful life of the asset and the requirement in paragraph 19 that the future
cash flows be based on the existing service potential of the asset at the date
it is tested without regard to future capital expenditures that may increase the
service potential of the asset.

<PAGE>

The applicability of the above review to the 093 patent is as follows:

     1.   GPS  Industries  Inc. had a current  operating  loss, and a history of
          operating  losses at the time of the  acquisition  of the 093  patent.
          Therefore a recoverability test is required under paragraph 8 e.
     2.   The lowest level of  identifiable  cash flows for the patent which are
          largely  independent of the cash flows of other assets and liabilities
          are  considered to be the cash flows for the underlying  business,  as
          the  underlying  business  requires  either  ownership of or a license
          under the patent to operate.
     3.   A "relief from  royalty"  amount of $1.68  million,  comparable  to an
          existing third party full term license payment, was added to the third
          party royalty  license  revenues  already  being  generated by the 093
          patent to calculate the  undiscounted  cash flow service  potential of
          the asset at the date of acquisition. The carrying amount of the asset
          at the date of acquisition  exceeded and was not recoverable  from the
          total of the  undiscounted  cash flow of both the third party  revenue
          and "relief from  royalty"  revenue.  Therefore  the  recognition  and
          measurement of an impairment loss was required.
     4.   The day one  measurement of the impairment  loss was calculated on the
          present  value of the third  party cash flows being  generated  by the
          patent on the date of valuation plus the amount added for a "relief of
          royalty" full term license.  This calculation  results in a fair value
          impairment at the date of acquisition of $2.25 million.
     5.   An impairment test under FAS 144 was also done as of December 31, 2004
          but,  guided by the  provisions  of  paragraphs  10, 16, 18 and 19 the
          "relief from  royalty"  cash flow was  excluded  from the test and the
          test was  performed  upon the cash flows of the  underlying  business.
          This test  resulted in the valuation of the fair value of the asset at
          the $1.5 million recorded as of December 31, 2004.

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 me at 604-576-7442 at any time to discuss these matters further.

Yours sincerely,

Michael Martin
Corporate Controller

cc. Robert C. Silzer, President & CEO
</TEXT>
</DOCUMENT>