SecProbe.io

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<TYPE>LETTER
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      August 3, 2005

Mail Stop 4561

VIA U.S. MAIL AND FAX (702) 312-3590

Mr. Richard A. Bailey
Chief Executive Officer and Chief Executive Officer
Gateway Distributors, Ltd.
3220 Pepper Lane, Suite 14
Las Vegas, NV  89120

Re:	Gateway Distributors, Ltd.
Form 10-KSB for the year ended December 31, 2004
      Filed April 15, 2005
      File No. 000-27879

Dear Mr. Bailey:

      We have reviewed your response letter dated July 20, 2005
and
have the following additional comments.  Feel free to call us at
the
telephone numbers listed at the end of this letter.

1. We read your response to comment 2 and reissue our prior
comment
2.  Please tell us in sufficient detail how and why you
simultaneously sold your interest in and subsequently purchased
all
of the assets of TRSG on December 31, 2002.  Please include, but
do
not limit your response, to the following:

a. The name of the acquiror and a description of the primary
reasons
for the transaction;

b. Summarized balance sheet of TRSG immediately prior to the
acquisition;

c. The cost of assets and selected debt acquired from TRSG and, if
applicable, the number of shares of equity interest issued or
issuable, the value assigned to those interests, and the basis for
determining the value;

d. A condensed balance sheet showing the amount assigned to each
major asset and liability acquired and assumed from TRSG.

2. Your response to comment 2 suggests that the original
acquisition
and subsequent disposal were reflected in the financial statements
at
historical cost.  We also note that you recorded an intangible
asset
in the amount of $475,000 as a result of the purchase of assets
from
TRSG on December 31, 2002.  Please advise us how this acquisition
gave rise to the initial recognition of an intangible asset that
was
acquired from a majority-owned subsidiary that had no operations
and
nominal net assets immediately prior to you acquiring control of
TRSG
in January 2001.  In addition, please confirm that the assets re-
acquired from TRSG were not recorded at their fair value.

3. Notwithstanding your response to our comments above, please
tell
us how you determined that your purchased formulas have an
indefinite
useful life.  In your response, tell us how you considered all of
the
factors in paragraph 11 of SFAS 142.  In addition, tell us whether
you have a patent, license, trademark or tradename associated with
your formulas and what limitations, if any, this has on the useful
life of your intangible asset.

4. We read your revised impairment policy in response to comment 2
and 3.  Please tell us how you estimated the fair value of your
formulas using the guidance in paragraphs 23-25 of SFAS 142.  In
your
response, please provide us with summaries of any impairment
analyses
performed under SFAS 142, including significant assumptions used
in
your analyses.

5. We read your revised disclosure in response to comments 6 and
7.
Paragraph 10(a) of APB 25 and paragraph 9 of SFAS 123 requires the
use of quoted market prices to measure compensation cost related
to
issuing both restricted and unrestricted stock.  You do not have a
reasonable basis for determining that the fair value of
consideration
received is more reliably measurable than the equity instruments
issued to measure employee stock-based compensation under APB 25
and
non-employee compensation under SFAS 123.  As such we reissue our
prior comments 6 and 7 in part. Please explain to us in sufficient
detail why you could not estimate the fair value of your
restricted
stock and preferred stock.  Please also clarify the circumstances
in
which you issued 15,673 shares of unrestricted stock including to
whom and when they were issued and the basis for that valuation.
In
addition, please tell us how you considered the price per share of
the 34,906 shares of common stock issued during the year when
measuring compensation cost under APB 25 and SFAS 123 related to
the
above issuances.

6. We read your response to comment 8.  Given your lack of ability
to
understand what gave rise to the initial recognition of these
liabilities, we do not understand your basis for making any of the
conclusions to (1) write-off $1.3 million of recorded liabilities,
(2) estimate a "cushion" of $400,000 for future contingencies and
(3)
your conclusion that this does not fall under unclaimed property
reportable or payable to the State of Nevada.  Please advise us
how
you are able to reach the aforementioned conclusions in light of
your
lack of ability to understand what gave rise to the initial
recognition of these liabilities.

7. Notwithstanding your response to our comment above, please
advise
us how you reached the conclusion that your financial statements
should not be restated as a correction of an error considering the
guidance in APB 20.  We refer you to your response to comment 8
where
you state "whether the liabilities written off the books....are
debt
forgiveness...or whether they are from duplicated or erroneous
liability recognition of the past is not known" and "management
believes it is most likely a combination of all of the above."

8. We read your response to comment 9.  Please explain in greater
detail the types of capitalized costs you incur for product
development.  In your response, tell us which product lines these
costs relate to and the timing of such expenditures in relation to
your expectation of actual production.  In addition, tell us in
detail how you considered each of the characteristics in paragraph
9
of SFAS 2, in reaching your conclusion.

9. Please file your July 20, 2005 letter on EDGAR in response to
this
comment.

*  *  *  *

	You may contact Josh Forgione, at (202) 551-3431, or me, at
(202) 551-3403, if you have questions. Please respond to the
comments
included in this letter within 10 business days or tell us when
you
will provide us with a response.  Please file your response on
EDGAR.

								Sincerely,

      Steven Jacobs
      Accounting Branch Chief
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Mr. Richard A. Bailey
Gateway Distributors, Ltd.
August 3, 2005
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