SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   FORM 10-QSB


(Mark One)
   [X] Quarterly report under Section 13 or 15(d) of the Securities Exchange Act
of 1934 for the quarterly period ended September 30, 2000.

   [  ]  Transition report under Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the transition period from              to               .
                                           ------------    --------------


         Commission file number: 000-27879
                                -----------


                           GATEWAY DISTRIBUTORS, LTD.
                          ----------------------------
        (Exact name of small business issuer as specified in its charter)





                Nevada                                 65-0683539
               --------                               ------------
   (State or other jurisdiction of        (I.R.S. Employer Identification No.)
    incorporation or organization)





                500 East Cheyenne Avenue, Las Vegas, Nevada 89030
               ---------------------------------------------------
               (Address of principal executive office) (Zip Code)


                                 (702) 399-4328
                           --------------------------
                           (Issuer's telephone number)


         Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to such filing requirements for the past 90 days.

             Yes XX           No
                 --             ----


         The number of outstanding  shares of the issuer's common stock,  $0.001
par value  (the only  class of  voting  stock),  as of  September  30,  2000 was
10,957,260.



                                        1

<PAGE>




                                TABLE OF CONTENTS

                                     PART I

ITEM 1.  FINANCIAL STATEMENTS..................................................1

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.............2


                                     PART II


ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS.............................5

ITEM 5.  OTHER INFORMATION.....................................................6

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K......................................6

SIGNATURES.....................................................................7

INDEX TO EXHIBITS..............................................................8











                 [THIS SPACE HAS BEEN INTENTIONALLY LEFT BLANK]

                                        2

<PAGE>



ITEM 1.           FINANCIAL STATEMENTS

As used  herein,  the term  "Company"  refers to Gateway  Distributors,  Ltd., a
Nevada  corporation,  and its  subsidiaries  and  predecessors  unless otherwise
indicated.  Consolidated,  unaudited,  condensed  interim  financial  statements
including a balance sheet for the Company as of the quarter ended  September 30,
2000 and statements of operations,  and statements of cash flows for the interim
period up to the date of such  balance  sheet and the  comparable  period of the
preceding year are attached hereto as Pages F-1 through F-9 and are incorporated
herein by this reference.








                      [THIS SPACE LEFT BLANK INTENTIONALLY]








                                        3

<PAGE>



                           GATEWAY DISTRIBUTORS, LTD.
                                  BALANCE SHEET



                                     ASSETS

<TABLE>
<CAPTION>



                                                                                 SEPTEMBER 30,            DECEMBER 31,
                                                                                      2000                    1999
                                                                            -----------------------  ----------------------
                                                                                  (Unaudited)
<S> <C>                                                                  <C>                           <C>
     CURRENT ASSETS
            Cash                                                          $                   2,955     $            17,593
            Accounts Receivables                                                             65,041                  53,644
            Inventories                                                                     464,263                 360,441
            Prepaid expenses                                                                 25,471                  31,085
                                                                            -----------------------  ----------------------
                 Total Current Assets                                                       557,730                 462,763

     PROPERTY AND EQUIPMENT, AT COST:
            Furniture and fixtures                                                           89,491                  83,239
            Computer equipment                                                              124,464                 206,713
            Leasehold improvements                                                           29,228                  29,228
            Vehicles                                                                         12,970                       -
            Office equipment                                                                102,723                 106,208
                                                                            -----------------------  ----------------------
                                                                                            358,876                 425,388
            Less accumulated depreciation and
    amortization                                                                          (249,153)               (298,419)
                                                                            -----------------------  ----------------------
                                                                                            109,723                 126,969

     OTHER ASSETS:
            Goodwill, net of accumulated amortization
                 of $46,796 and $20,351, respectively                                       981,208                 893,883
            Other                                                                            39,407                   9,347
                                                                            -----------------------  ----------------------
                                                                                          1,020,615                 903,230
                                                                            -----------------------  ----------------------
                                                                          $               1,688,068        $      1,492,962
                                                                            -----------------------  ----------------------
</TABLE>

     The accompanying notes are an integral part of the financial statements


                                       F-1

<PAGE>



                           GATEWAY DISTRIBUTORS, LTD.
                            BALANCE SHEET (continued)




                      LIABILITIES AND SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>

                                                                         SEPTEMBER 30,                DECEMBER 31,
                                                                              2000                        1999
                                                                    -----------------------  --- ----------------------

<S>                                                              <C>                         <C>
                                                                          (UNAUDITED)
CURRENT LIABILITIES
       Checks drawn in excess of available bank
       balances                                                   $                 262,213   $                 170,394
       Current portion of long-term debt                                          1,310,590                   1,270,754
       Accounts payable:
            Trade                                                                 1,660,574                     862,796
            Commissions                                                             394,698                     201,842
       Accrued liabilities:
            Payroll and vacation pay                                                139,237                      89,045
            Interest                                                                410,549                     256,977
            Payroll taxes                                                           448,500                     265,378
            Other                                                                    22,691                      48,161

                                                                    -----------------------      ----------------------
                  Total Current Liabilities                                       4,649,052                   3,165,347
                                                                    -----------------------      ----------------------

LONG-TERM DEBT                                                                      549,756                     549,160

LONG-TERM ACCOUNTS PAYABLE                                                                -                     324,530
                                                                    -----------------------      ----------------------
                  Total Liabilities                                               5,198,808                   4,039,037

SHAREHOLDERS' EQUITY/ (DEFICIT)
       Preferred stock - $.001 par value
        Authorized 1,000,000 shares
        No shares issued and outstanding                                                  -                           -
       Common stock - $.001 par value
       Authorized 20,000,000 shares
       Issued and outstanding  -
           10,957,260 and 6,817,000 shares
           at September 30, 2000 and
           December 31, 1999, respectively                                           10,958                       6,817
       Additional paid-in capital                                                 1,631,974                   1,423,615
       Accumulated deficit                                                      (5,153,672)                 (3,976,507)
                                                                    -----------------------      ----------------------
                Total Stockholders' deficit                                     (3,510,740)                 (2,546,075)
                                                                    -----------------------      ----------------------

                                                                  $               1,688,068   $               1,492,962
                                                                   ========================      ======================
</TABLE>

The  accompanying  notes  are  an  integral  part  of thefinancial statements.




                                       F-2

<PAGE>



                           GATEWAY DISTRIBUTORS, LTD.
                            STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                              THREE MONTHS ENDED                           NINE MONTHS ENDED
                                                                 SEPTEMBER 30                                 SEPTEMBER 30
                                                          2000                  1999                    2000                1999
<S>                                        <C>                    <C>                     <C>                  <C>

SALES                                       $            1,165,309 $            944,809    $         4,024,827  $        2,489,528
COST OF SALES                                              203,448              158,787                709,744             419,344
                                               -------------------     ----------------       ----------------    ----------------
GROSS PROFIT                                               961,861              786,022              3,315,083           2,070,184

SELLING, GENERAL AND                                     1,275,322              982,542              4,305,282           2,833,325
ADMINISTRATIVE EXPENSES
                                               -------------------     ----------------       ----------------    ----------------
LOSS FROM OPERATIONS                                     (313,461)            (196,520)              (990,199)           (763,141)
OTHER INCOME (Expense):
     Interest Expense                                     (68,846)             (42,863)              (203,614)           (128,589)
     Loss on disposal of fixed
        assets                                             (7,654)                    -                (7,654)
     Miscellaneous income                                    7,621               12,479                 24,302              37,517
                                               -------------------     ----------------       ----------------    ----------------
                                                          (68,879)             (30,384)              (186,966)            (91,072)
                                               -------------------     ----------------       ----------------    ----------------
NET LOSS                                    $            (382,340) $          (299,904)    $       (1,177,165)  $        (854,213)
                                               ===================     ================       ================    ================
BASIC LOSS PER SHARE                        $               (0.03) $             (0.04)    $            (0.14)  $           (0.15)
                                               ===================     ================       ================    ================
Average Number of Shares
                                               ===================     ================       ================    ================


</TABLE>


The  accompanying  notes  are  an  integral  part  of thefinancial statements.

                                       F-3

<PAGE>



                           GATEWAY DISTRIBUTORS, LTD.
                             STATEMENT OF CASH FLOWS
                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                                                                                NINE MONTHS ENDED
                                                                                                   SEPTEMBER 30,
                                                                                          2000               1999
                                                                                 -------------------- -------------------
<S>                                                                 <C>                         <C>

CASH FLOWS FROM OPERATING ACTIVITIES
     Net loss                                                        $              (1,177,165)  $          (854,2131)
     Adjustments to reconcile net loss
          to net cash to operating activities -
               Depreciation and amortization                                             70,839                 56,260
               Loss on disposal of fixed assets                                           7,654                      -
     Changes   in operating  assets and  liabilities
     which increase  (decrease) cash flow:
                    Accounts receivable                                                (11,397)              (251,438)
                    Inventories                                                       (103,822)              (231,516)
                    Prepaid expenses                                                      5,614                 37,429
                    Accounts payable                                                    761,823              (154,622)
                    Accrued expenses                                                    361,416                107,520
                                                                         ----------------------    -------------------
                         Total adjustments                                            1,092,127               (26,665)
                                                                         ----------------------    -------------------
                         Net cash to operating activities                              (85,038)              (827,548)

     CASH FLOWS FROM INVESTING ACTIVITIES:
                 Deposits refunded                                                            -                  5,727
                 Purchase of property and equipment                                    (19,972)               (35,123)
                 Proceeds from acquisition                                                    -                 73,009
                 Cash paid for deposits                                                (30,060)                      -
                                                                         ----------------------    -------------------
                          Net cash from (to) investing activities                      (50,032)                 43,613

     CASH FLOWS FROM FINANCING ACTIVITIES:
                 Proceeds from issuance of stock                                         80,000                185,001
                 Proceeds from issuance of debt                                         118,014                676,676
                 Principle payments on debt                                            (77,582)               (42,908)
                                                                         ----------------------    -------------------
                       Net cash from financing activities                               120,432                818,769

     NET INCREASE (DECREASE) IN CASH                                                   (14,638)                 34,834
          EQUIVALENTS

     CASH AND CASH EQUIVALENTS - beginning of                                            17,593                 19,711
         period
                                                                         ----------------------    -------------------
     CASH AND CASH EQUIVALENTS - end of period                       $                    2,995  $              54,545
                                                                         ======================    ===================
</TABLE>

The  accompanying  notes  are  an  integral  part  of the financial statements.


                                       F-4

<PAGE>



                           GATEWAY DISTRIBUTORS, LTD.
                         STATEMENT OF CASH FLOWS (CONT.)
                                   (UNAUDITED)



                             SUPPLEMENTAL DISCLOSURE


                                                        NINE MONTHS ENDED
                                                          SEPTEMBER 30,

                                                     2000              1999
                                                  ----------        ----------

CASH PAID DURING YEAR FOR INTEREST                $  50,042          $     -
                                                  =========          =========



                   NON CASH INVESTING AND FINANCING ACTIVITIES


STOCK ISSUED FOR ACQUISITIONS                       $128,600          $647,407
                                                   =========         =========

STOCK ISSUED FOR SERVICES                          $   3,900         $     455
                                                   =========         =========














     The accompanying notes are an integral part of the financial statements



                                       F-5

<PAGE>



                           GATEWAY DISTRIBUTORS, LTD.
                          NOTES TO FINANCIAL STATEMENTS
                               September 30, 2000

NOTE 1 -      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

                  The  balance  sheet as of  September  30, 2000 and the related
                  statements of operations, changes in stockholders' equity, and
                  cash flows for the nine  months  ended  September  30,2000 and
                  1999  are  unaudited.  In  the  opinion  of  management,   the
                  information  reflects all  adjustments  (consisting  solely of
                  normal  recurring,adjustments)  that are  necessary  to a fair
                  presentation  of the  financial  statements.  The  results  of
                  operations  for the nine months ended  September  3O, 2000 and
                  1999  are not  necessarily  indicative  of the  results  to be
                  expected for the whole year.

                  The  notes  to  the  financial  statements  are  presented  as
                  permitted by Form 10-Q and do not contain certain  information
                  included in the Company's annual financial  statements.  These
                  financial  statements  have been  prepared  for the Company to
                  comply   with  the   Securities   and   Exhcange   Commissions
                  requirements.

                  There have been significant recurring losses and negative cash
                  flows  from  operations  for the past  two  years,  which  has
                  resulted in severe working capital deficiency. This deficiency
                  has contributed to inventory shortages and limited the ability
                  of the Company to meets its current obligations.

                  The  Company  has signed a merger  with a public  company  and
                  plans to raise capital  through a public offering of its stock
                  in early 2001. As of the date of the financial statements, the
                  Company  is  seeking  financing  from a private  investor  for
                  capital to continue  operations  until the public  offering is
                  completed.

                  In the event the Company is unable to raise capital  through a
                  public offering and/or  financing until the public offering is
                  completed,  the  aforementioned  conditions raise  substantial
                  doubt  about the  Company's  ability  to  continue  as a going
                  concern.   The   financial   statements  do  not  include  any
                  adjustments  that might  result  from the  occurrence  of such
                  conditions  and have been  prepared  assuming that the Company
                  will continue as a going concern

NOTE 2 -          INVENTORIES:

                  Inventories,  net  of  valuation  reserves,  consisted  of the
                  following at September 30, 2000:

                  Product                            $416,513
                  Promotional and literature           47,750
                                                   ----------
                                                     $464,263
                                                   ==========
                                       F-6

<PAGE>



                           GATEWAY DISTRIBUTORS, LTD.
                          NOTES TO FINANCIAL STATEMENTS
                               September 30, 2000

NOTE 3 -     LONG-TERM DEBT:

                  Long-term  debt  consisted of the  following at September  30,
2000:

                  Convertible notes payable
                                                                   $   1,156,500

                  Note payable - stockholders, interest
                  ranging from 6.5% - 10%,
                  no re-payment terms stated,
                  unsecured.                                      $      445,534

                  Note payable - stockholders,  payable
                  in monthly  installments ranging from
                  $25 - $1,278,  plus  interest at 7% - 14%,
                  due at various dates through 2003, unsecured.          197,699

                  Note payable - corporation, payable in
                  monthly installments of $9,000, plus
                  interest at 3%, due on-demand, unsecured                58,049

                  Capital leases,  payable in monthly
                  installments ranging from $130 - $180,
                  including interest at 15.6% to 26.6%,
                  maturing at various dates through
                  2003, secured by equipment.                              2,564
                                                                       ---------
                                                                       1,860,346
                  Less current portion                                 1,310,590
                                                                       ---------

                  Long-term debt                                   $     549,756


















                                                        F-7

<PAGE>



                           GATEWAY DISTRIBUTORS, LTD.
                          NOTES TO FINANCIAL STATEMENTS
                               September 30, 2000




NOTE 3 -          LONG-TERM DEBT - CONTINUED:


                  Convertible  notes  payable  are  to  individuals  which  bear
                  interest  at 12% per  annum,  due 12  months  from the date of
                  issuance.  These  notes are  convertible  at the option of the
                  holder  into  shares  of the  Company's  common  stock,  at an
                  initial  conversion price of $0.80 per share. The notes may be
                  called for  conversion  when the  average of the bid and asked
                  prices of the  common  stock  exceeds  $1.00 per share for ten
                  consecutive  days.  Although  the notes issued will be "freely
                  tradeable"  under federal  securities laws, there is currently
                  no public market for the notes or the Company's  common stock.
                  Although the Company intends to pursue the  establishment of a
                  regular   public   market  for  the  common  stock  under  the
                  Securities  Exchange  Act of 1934,  there can be no  assurance
                  that a public market for the common stock will develop.  As of
                  September  30, 2000 the  convertible  notes issued  during the
                  year ended  December 31, 1999 and 1998 have not been converted
                  to  common  stock  as the  initial  public  offering  has  not
                  transpired. Maturities of long-term debt are as follows:

                  Period ending September 30:
                           2001                                     $  1,306,020
                           2002                                          495,386
                           2003                                           37,970
                                                                   -------------
                                                                    $  1,839,376













                                       F-8

<PAGE>



                           GATEWAY DISTRIBUTORS, LTD.
                          NOTES TO FINANCIAL STATEMENTS
                               September 30, 2000



NOTE 4 -   EARNINGS PER SHARE:

       Earnings  per share (EPS) for the period ended  September  30,
       2000 and 1999 are computed as follows:

                                                                   PER SHARE
                                         INCOME          SHARES     AMOUNT

       September 30, 2000 - loss
       from continuing operations     $ (1,177,165)   8,586,140   $    (.14)
                                     ==============   =========    =========

       September 30, 1999 - loss
       from continuing operations     $ (854,213)     3,768,683   $    (.15)
                                     ==============   =========    =========

       For the period ended  September 30, 2000 and 1999,  options on
       2,390,658 and 2,332,658 shares of common stock,  respectively,
       were not  included in  computing  diluted  EPS  because  their
       effects were antidilutive.

NOTE 5 - SUBSEQUENT EVENTS:

       On October,12,  2000, the Company entered into an agreement to
       sell a majority of its assets and  operations  in exchange for
       85% of the issued and outstanding shares of a public company.





                                       F-9

<PAGE>



ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULT OF OPERATION

General

As used herein the term "Company" refers to Gateway Distributors, Ltd., a Nevada
corporation,  its subsidiaries and  predecessors,  unless the context  indicates
otherwise. The Company was originally incorporated in the State of Nevada on May
26, 1993.

The Company,  doing  business as "The Right  Solution,"  is a network  marketing
company  that sells  nutritional,  health and dietary  supplements  and products
throughout North America and Japan.

The Company's  products are marketed through network marketing within the United
States and wholesale  personal  import sales outside the United States.  Network
marketing  enables the Company's  independent  distributors in the United States
(sometimes  referred  to herein as "Team  Members")  to earn  profits by selling
Company  products to retail  consumers.  Distributors may also develop their own
distributor  downline  organizations by sponsoring  others to do business in any
market where the Company  operates,  entitling the sponsors to receive overrides
or commissions  (cash  incentives,  including  royalties and bonuses) on product
sales within their downline organizations.

The company currently markets Whole Food nutrition and Environmental  Solutions.
The Company believes that through special blends, whole foods such as grains and
vegetables can be combined to help produce optimum health.

Recent studies  reveal that  prevention  through health  maintenance is a key to
enjoying a  healthier  lifestyle.  However,  health  challenges  today are at an
all-time high. The need for proper nutrition has never been greater. The Company
markets  whole  food  products  based on the  proposition  that  pure,  natural,
unprocessed,  unpreserved,  unsprayed,  simple, organic foods provide whole food
nutrition.  The  Company  believes  that whole food  nutrition  is the key,  the
answer,  and the  solution  to  creating a long  healthy  life.  The health care
products   that  the  Company   sells  are   intended  to  provide   nutritional
supplementation  to the  product's  users.  The  products  are not  intended  to
diagnose, treat, cure or prevent any disease.

In August of 1997 the  company  opened  the Asian  market in Japan.  Japan has a
population  of 130 million,  with annual  revenues of 37.5 billion  generated in
network  marketing.  The company has more than  80,000 team  members,  10,000 of
which are in Japan.  The companies'  strength in the Japanese market  stabilized
the down turn in the U.S.  market.  In April 1999 management hired a new General
Manager  of the Asian  division.  His  expertise  has helped  overcome  cultural
barriers and  stabilize  this market.  During the year 2000  management  will be
focused on supporting the front line in Japan.

On July 1, 2000, pursuant to an asset purchase agreement dated May 16, 2000, the
Company acquired the assets and operations of Dynamic Products,  Inc.  ("Dynamic
Products")  in exchange  for 160,750  shares of Gateway  common  stock.  Dynamic
Products is a multi-level marketing company

                                      F-10

<PAGE>



focusing on cleaning  products.  The  transaction  was  accounted  for under the
purchase  method of  accounting,  therefore,  the assets were recorded  based on
their fair values at the date of acquisition.  The Company recorded  $128,600 of
cost in excess of net assets acquired, which are being amortized over 20 years.

As part of the  July 1,  2000  acquisition  of  Dynamic  Products,  the  Company
acquired the distributor base, formulas and Patents of LifeTime  Solutions.  The
company  over the last 12 months had  revenues in excess of  $360,000.  LifeTime
Solutions is a Florida based company in the business of the network marketing of
nutritional, health and dietary supplements and cleaning products.

Results of Operations

Sales for the three and nine  month  periods  ended  September  30,  2000,  were
$1,165,309  and $4,024,827  respectively  as compared to $944,809 and $2,489,528
for  the  same  periods  in  1999,  an  increase  of  $220,500  and   $1,535,299
respectively. The increase in sales is attributed to acquisitions of new product
lines and expansion into the Japanese market.

Costs of sales for the three and nine month  periods  ended  September  30, 2000
were $203,448 and 709,744  respectively as compared to $158,787 and $419,344 for
the same periods in 1999, an increase of $44,661 and $290,400 respectively.

Selling,  general  and  administrative  expenses  for the three  and nine  month
periods ended September 30, 2000, were $1,275,322 and $4,305,282 respectively as
compared to $982,542 and  $2,833,325  for the same periods in 1999.  The primary
reason for the increase  was an increase in costs of goods sold,  an increase in
marketing  costs  associated  with  expansion into the Japanese  market,  and an
increase in  administrative  costs associated with business  acquisitions by the
Company.

Operating  losses for the three and nine month periods ended  September 30, 2000
were  $313,461 and $990,199  respectively,  as compared to $196,520 and $763,141
for the same periods in 1999.  The Company's  operating  loss  increased for the
quarter ended  September 30, 2000, as a result of significant  increases in cost
of sales and selling and general and administrative expenses.

Liquidity and Capital Resources

The Company  had a net working  capital  deficit of  $4,091,322  for the quarter
ended  September  30, 2000,  as compared to a  $2,702,584  deficit at the end of
December 31, 1999.

Cash used by operations  was $85,038 for the quarter  ended  September 30, 2000,
compared with $827,548 for the quarter ended September 30, 1999.

Cash flow from investing activities for the quarter ended September 30, 2000 was
a negative  $50,032,  as compared  with a positive  cash flow of $43,613 for the
quarter ended September 30, 1999.

Cash flows  generated from financing  activities  were $ 120,432 for the quarter
ended September 30, 2000 as compared to $818,769 for the quarter ended September
30, 1999.

                                        4

<PAGE>



Due to the Company's cash flow fluctuations,  the Company experiences occasional
cash flow  shortages.  To  satisfy  its cash  requirements,  including  the debt
service,  the Company must periodically raise funds from external sources.  This
often involves the Company conducting exempt offerings of its equity securities.
However,  during the first quarter of 2000, the Company did not issue any equity
securities to finance its operations.

Impact of Inflation

The Company  believes that  inflation has had a negligible  effect on operations
over the past two years.  The Company  believes that it can offset  inflationary
increases  in the cost of  materials  and  labor  through  increased  sales  and
improved operating efficiency.

Capital Expenditures

The Company made no significant  capital  expenditures  on property or equipment
over the periods covered by this report.

Income Tax Expense (Benefit)

The Company's  income tax benefits are limited to the loss sustained in 1999 due
to the change of management.

Going Concern

The  Company's  ability to continue as a going  concern is an issue  raised as a
result of an accumulated  deficit of 5,153,672 as of September30,  2000 compared
to a deficit of  $3,976,507  at December  31,  1999.  The  Company's  ability to
continue as a going concern is subject to the ability of the Company to obtain a
profit and /or obtaining the necessary funding from outside sources.  Management
is committed to taking the necessary steps to ensure the Company remains a going
concern.  Management's  plan to address the  Company's  ability to continue as a
going concern,  includes:  (1) obtaining additional funding from the sale of the
Company's securities;  (2) increasing sales; (3) obtaining loans and grants from
various financial institutions where possible. Although management believes that
it will be able to obtain the necessary funding to allow the Company to remain a
going concern through the methods  discussed  above,  there can be no assurances
that such methods will prove successful.

PART II

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

Recent Sales of Unregistered Securities

The following is a list of all securities  sold by the Company within the period
covered by this report, including,  where applicable, the identity of the person
who purchased the securities, title of the

                                        5

<PAGE>

securities, and the date sold.

In July,  2000, the Company issued 139,250 shares of its common stock to Dynamic
Products,  Inc., a Florida Corporation  pursuant to an asset purchase agreement.
The shares were issued pursuant to section 4(2) of the Securities Act of 1933 in
an isolated  private  transaction  by the Company which did not involve a public
offering. The Company made this offering based on the following factors: (1) The
issuance  was an  isolated  private  transaction  by the  Company  which did not
involve a public  offering;  (2) there was only one offeree who was issued stock
for all of the issued and  outstanding  shares of Dynamics Inc.; (3) the offeree
did not  resell  the  stock but has  continued  to hold it since the date of the
transaction; (4) there were no subsequent or contemporaneous public offerings of
the stock; (5) the stock was not broken down into smaller denominations; and (6)
the  negotiations  for the sale of the stock took  place  directly  between  the
offeree and the Company.

ITEM 6.EXHIBITS AND REPORTS ON FORM 8-K

(a)Exhibits  Exhibits  required to be attached by Item 601 of Regulation S-B are
listed  in the  Index  to  Exhibits  on  page 9 of  this  Form  10-QSB,  and are
incorporated herein by this reference.

(b)Reports on Form 8-K. No reports were filed on Form 8-K during the quarter.



                                   SIGNATURES

         In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized, this 9th day of March 2001.




Gateway Distributors, Ltd.


By:     \s\Rick Bailey
      ------------------------------------------

Its:   President, Chief Executive Officer and
       Director









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<PAGE>



                                INDEX TO EXHIBITS


Exhibit   Page    Description

2.1       *       Agreement and Plan of Merger as of April 10, 1998

3.1       *       Amended and Restated Articles of Incorporation of the Company.

3.2       *       Bylaws of the Company, as amended.

4.1       *       Specimen Common Stock Certificate

4.2       *       Specimen 12% Convertible Note

10        10      Asset Purchase Agreement Dated May 16, 2000 between Gateway
                  Distributors, Ltd. and Dynamic Products, Inc.

27        13      Financial Data Schedule

* Incorporated by reference from Form 10-SB/A filed December 15, 1999.







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<PAGE>



                                   Exhibit 10

                            ASSET PURCHASE AGREEMENT
                            Dated as of May 16, 2000
                                      Among
                           Gateway Distributors, Ltd.
                                       and
                             Dynamic Products, Inc.
                            ASSET PURCHASE AGREEMENT

        THIS ASSET PURCHASE AGREEMENT ("Agreement"), dated as of May 16, 2000 is
byand among Gateway Distributors, Ltd., a Nevada corporation (the "Purchaser"),
Dynamic Products,Inc., a Florida corporation (the "Seller"),

                                    RECITALS
        A. The Seller owns all of the issued and  outstanding  shares of capital
stock of Dynamics,  Inc,  which is in the  business of the network  marketing of
nutritional, health and dietary supplements and products (the "Business").
        B. The parties hereto wish to provide for the terms and conditions upon
which the Purchaser will acquire  substantially all of the assets and assume all
receivables and payables agreed to at the closing of this agreement.
        C. The parties hereto wish to make certain representations,  warranties,
covenants,  agreements and conditions herein contained, the parties hereto agree
as follows:

                                    ARTICLE I
                           PURCHASE AND SALE OF ASSETS

1.  Assets  to  be  Purchased.  Upon  satisfaction  of  all  conditions  to  the
obligations of the parties contained herein (other than such conditions as shall
have been waived in accordance  with the terms  hereof),  the Seller shall sell,
transfer,  convey, assign and deliver to the Purchaser,  and the Purchaser shall
purchase from the Seller,  at the Closing (as hereinafter  defined),  all of the
Seller's right,  title and interest in and to the assets,  properties,  goodwill
and  rights  of the  Seller,  as a going  concern,  of  every  nature,  kind and
description,  tangible  and  intangible,  wherever  located  and  whether or not
carried  or  reflected  on the  books and  records  of the  Seller  (hereinafter
sometimes collectively called the "Assets"),  including without limitation:  (i)
the right to use the names and all  variations  thereof  of the  Seller  and its
products.  The assets agreed to by both parties (b) hereto; and (iii) the assets
reflected on the Latest Balance Sheet (as hereinafter

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<PAGE>

defined),  with only such  dispositions  of such assets  reflected on the Latest
Balance  Sheet as shall have  occurred in the  ordinary  course of the  Seller's
business between the date thereof and the Closing and which are permitted by the
terms hereof, and excluding only (x) the minute books,  corporate seal and stock
records of the Seller,

2. Assumptions of Certain Liabilities. Upon satisfaction of all condition to the
obligations of the parties contained herein (other than such conditions as shall
have been waived in accordance with the terms hereof),  the Purchaser,  pursuant
to a  Liabilities  Undertaking  in the form of  attached  Balance  Sheet  hereto
("Liabilities   Undertaking"),   shall  assume  those  certain  liabilities  and
obligations of the Seller listed, The Purchaser is not assuming, and will not be
obligated  or liable for any  liability  of the Seller not listed on the balance
sheet, The Purchaser will be indemnified, from and against any claims in respect
of any debts,  obligations or liabilities of the Seller of any nature whatsoever
other than the Assumed Liabilities.

        3.    Purchase Price.  The Purchaser shall pay for the Seller'
              Assets the following consideration (the "Purchase Price"):

               A. Inventory Stream.  The Purchaser shall make cash payments (the
          "Inventory Stream"),calculated and payable as follows:

                    (a) The Seller  will  continue  to  manufacture  the product
               being  purchased  and will  supply the product at $0.15 cents per
               oz. to include  bottling,  label,  and shipping to TRS warehouse.
               Payment will be on a net 15-day basis.


               B. Dynamic Product  Distributors.  Sellers  distributors  will go
          into the marketing  plan under the Seller and be positioned in centers
          designated  by  the  Seller.  Seller  will  be at the  top  of  entire
          distributors  entered into the downline.  TRS has two marketing  plans
          and Seller  will have the option of which plan his  distributors  will
          enter.

               C.  Common  Stock.  The Seller  will  receive  278,500  shares of
          restricted  stock of which  139,250  will issued  immediately  and the
          remaining  139,250 will be issued  twelve  months after the sale.  The
          condition  on the second  139,250  will require the sales from Dynamic
          Product Distributors to maintain or exceed it current level of $33,000
          per month  over the twelve  month  period.  In the event  sales do not
          maintain  or exceed  this  level the  shares  will not be  issued.  An
          additional  21,500  shares  will be  issued  to the  employees  at the
          discretion of the Seller.

         4.    Closing and Post Closing Adjustments. The determination of the
               cost  of  the   Inventory  on  the  date  of  Closing   shall  be
               accomplished  at and after the Closing in the  following  manner:

                    (a) The Seller  shall  promptly  prepare a  schedule  of the
               Seller's cost of the Inventory (the "Inventory  Schedule") within
               thirty (30) days of the date of  Closing.

                    (b) The  Seller  and the  Shareholders  shall  have five (5)
               business  days  after  receipt  of the  Inventory  Schedule  (the
               "Review Period") to review and verify the

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<PAGE>



               Inventory  Schedule.  If no  party  objects  in  writing  to  the
               Inventory  Schedule within the Review Period,  then the Inventory
               Schedule shall be final and binding on all parties.  If any party
               does so object  within the Review  Period then the parties  shall
               meet as soon as  practicable  to  attempt  to  resolve  any  such
               objection  of the Seller.  If the  parties  agree in writing on a
               final Inventory Schedule within two (2) days after the expiration
               of the Review Period.

        5      Purchaser Obligations

                    (a) Three  centers  assigned to Seller or hi  designee.  All
               rules and qualifications must be met to activate these centers.

                    (b) The Seller will designate the  sponsorship and placement
               of existing Dynamic Products distributors.

                    (c) Inventory  will be taken over by Gateway and you will be
               paid the cost of the product on a monthly  basis until the entire
               inventory is sold.  Inventory  still on the payables and not paid
               will be taken over by Gateway, however no money paid out.

                    (d) All  receivables  and  payables  will be  taken  over by
               Gateway. In the event receivables exceed current payables, excess
               money goes to you.

                    (e) All information related to discussions regardin the sale
               will remain confidential between both parties unless agreed to by
               both parties in writing.

                    (f) Rick Bailey and you will  facilitate  announcemen of the
               purchase.

                    (g) Transition between the companies will be by agreement of
               both parties.

                    (h) Any existing  employees and or investors will be allowed
               to be placed in the marketing plan with the initial costs waived.
               They  will  be  required  to  follow  all  teammember  rules  and
               qualifications thereafter,

                    (i) The $7.95 annual  membership  fee will be waived for all
               distributors  currently active in the Sellers  marketing plan and
               transitioning into the TRS marketing plan.






This letter of intent will be final and binding.



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<PAGE>


                           GATEWAY DISTRIBUTORS, LTD.




                            By: /s/ Richard A. Bailey
                                         Richard A, Bailey, President and
                                         Chief Executive Officer


                                     DYNAMIC PRODUCTS

                             BY: /s/ Ted Tidwell
                                -----------------------------
                                        Ted'Tidwell
                                        Owner






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