SecProbe.io

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      November 4, 2005

Mail Stop 4561

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

Mr. Richard A. Bailey
Chief Executive Officer and Chief Financial 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 October 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. In your June 30, 2002 Form 10-QSB filed on August 26, 2002, we
note that you recorded an impairment charge of $1.2 million, which
reflected an impairment of your entire goodwill and intangible
assets
at June 30, 2002.  However, we note from your response to comment
1
that "TRSG evaluated the fair value of its formulas at December
31,
2002...identified impairment in the value of its
formulas...leaving
on its books after impairment a fair value of $475,000,"  which
seems
to imply that you reversed the previously recognized impairment
loss.
Please provide us with an explanation for this accounting
treatment.
Refer to paragraph 17 of SFAS 142.

2. We read your response to comment 3 and reissue our prior
comment 3
in its entirety.  Please tell us how you considered all of the
factors in paragraph 11 of SFAS 142.  We understand that you have
not
assigned any value to patents, licenses, trademark or tradenames.
Please, tell us whether you have a patent, license, trademark or
tradename associated with your formulas and how you evaluated the
limitations, if any, this may have on the useful life of your
intangible asset.  Refer to paragraph 11 of SFAS 142.

3. We read the summary of steps you performed in reaching the
conclusion that no impairment existed as of December 31, 2004.  We
note from your response to comment 4 that you applied paragraphs
16
and 17 but did not apply paragraphs 23 - 25 of SFAS 142 in
evaluating
your formula intangible asset for impairment.  However, it does
not
appear that you applied paragraph 17 in that you never determined
the
fair value of the formulas at your testing date.  Please further
explain why you did not apply paragraphs 23 - 25 to determine the
fair value of your intangible asset.  Refer to footnote 12 to
paragraph 17 of SFAS 142.  In addition, please tell us the
estimated
fair value of your formulas as of December 31, 2004 if you had
followed the guidance in paragraphs 23-25 of SFAS 142.

4. We note in your response to comment 4 that "sales of such
formulas
are inadequate to contribute much towards our operating expenses."
Please provide us with summaries of your impairment analyses
performed under SFAS 142, including significant assumptions used
in
your analyses, which supports your conclusion that no impairment
existed as of December 31, 2004.

5. We considered your response to comment 5.  Paragraph 10(a) of
APB
25 requires the use of quoted market prices to measure
compensation
cost related to issuing both restricted and unrestricted stock and
if
quoted market prices are unavailable, the best estimate of the
market
value of the stock should be used to measure compensation, such as
cash transactions with third parties.  If you have determined that
the fair value of services received is an amount other than the
fair
value of stock issued, please provide us with (1) the name and
title
of the individuals involved in the transaction(s), (2) a
description
of the services provided, (3) the estimated fair value of services
provided, (4) how you determined the estimated fair value of such
services and (5) why you feel the estimated fair value of services
provided by employees is more reliably measurable than the fair
value
of the equity instruments issued.  Finally, you should recognize
the
excess fair value of stock issued, based on the fair value using
quoted market prices or transactions with third parties less the
fair
value of services received and consideration exchanged, as a
distribution in your financial statements.

6. We reissue our prior comment 5 in part.  Please 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
for cash when measuring compensation cost under APB 25 and SFAS
123
related to the issuance of 48,010 shares of common stock and 4.2
million shares of preferred stock discussed above.

7. We read your response to comment 6.  Please summarize the
efforts
you have made to verify the accuracy, reliability and validity of
these liabilities, including what efforts you have made to contact
each of the vendors to support your position that "there is
neither
basis nor logic to retain the liabilities on the books...of the
Company."

8. Please further explain to us your basis in GAAP for recording a
"cushion" of $400,000 for what you have already concluded to be an
"unknown" liability.

9. Accounting estimates are used to estimate the effects of future
events and may change as new events occur, as more experience is
acquired, or as additional information is obtained.  Based on your
lack of ability to understand what gave rise to the initial
recognition of these liabilities and your continued lack of
ability
to timely correct and recognize these errors we disagree with your
conclusion that the write-off represents a change in estimate as
contemplated in APB 20.  Notwithstanding your response to our
comments above, please further explain to us why you feel this is
a
change in estimate rather than a correction of an error.  Refer
also
to SAB Topic 2(A)(9).

10. We read your response to comment 8.  We also note from your
disclosure in Note 14 that capitalized production costs will be
reclassified to inventory and amortized using the unit-of-
production
method when production commences.  Please tell us the specific
accounting literature you rely on in accounting for costs incurred
related to the Chelsea Collection Jeunesse by Francois as
inventoriable costs.  Since these costs primarily relate to
advertising and marketing, please tell us how you considered the
guidance in SOP 93-7 in accounting for these costs.  In addition,
please tell us how you considered the guidance in SOP 98-5 in
accounting for the costs related to the Pete Rose project.

*  *  *  *

	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.
November 4, 2005
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