U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                  FORM 10-QSB/A
                                 AMENDMENT NO. 1

[X]  QUARTERLY  REPORT  UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
     OF  1934

     For the quarterly period ended March 31, 2006.

[ ]  TRANSITION  REPORT  UNDER  SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT  OF  1934

                        COMMISSION FILE NUMBER: 000-27879

                           GATEWAY DISTRIBUTORS, LTD.
                 (Name of small business issuer in its charter)

                    NEVADA                               88-0301278
         (State or other jurisdiction       (I.R.S. Employer Identification No.)
       of incorporation or organization)

        2555 EAST WASHBURN ROAD,                           89081
        NORTH LAS VEGAS, NEVADA                         (Zip Code)
   (Address of principal executive offices)

                                 (702) 317-2400
                           (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 [X]
No [ ]

     Indicate by check mark whether the registrant is a shell company as defined
in  Rule  12b-2  of  the  Exchange  Act.  Yes [ ]  No [X]

     State  the  number of shares outstanding of each of the issuer's classes of
common  equity,  as  of  the  latest  practicable date:  As of May 19, 2006, the
issuer  had  10,117,010,636  shares  of its common stock issued and outstanding.

     Transitional  Small  Business Disclosure Format (check one): Yes [ ] No [X]


<PAGE>
<TABLE>
<CAPTION>
                                TABLE OF CONTENTS

<S>                                                                       <C>
PART I - FINANCIAL INFORMATION. . . . . . . . . . . . . . . . . . . . . .  2
    Item 1.  Financial Statements . . . . . . . . . . . . . . . . . . . .  2
    Item 2.  Management's Discussion and Analysis or Plan of Operation. .  3
    Item 3.  Controls and Procedures. . . . . . . . . . . . . . . . . . .  7
PART II - OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . . .  8
    Item 1.  Legal Proceedings. . . . . . . . . . . . . . . . . . . . . .  8
    Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.  8
    Item 3.  Defaults Upon Senior Securities. . . . . . . . . . . . . . .  8
    Item 4.  Submission of Matters to a Vote of Security Holders. . . . .  8
    Item 5.  Other Information. . . . . . . . . . . . . . . . . . . . . .  8
    Item 6.  Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . .  9
SIGNATURES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  9
CERTIFICATIONS PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002. 10
CERTIFICATIONS PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002. 12
</TABLE>


                                        i
<PAGE>
                                EXPLANATORY NOTE

     On  May  22, 2006, we filed with the Securities and Exchange Commission our
Quarterly  Report on Form 10-QSB, for the quarterly period ended March 31, 2006.
This  Amendment  to  our Quarterly Report on Form 10-QSB is being filed to amend
the  introductory  paragraph  contained  in  Item 2, Management's Discussion and
Analysis  or  Plan  of  Operation,  and  the information in Item 3, Controls and
Procedures.  Subsequent to the filing of Quarterly Report on Form 10-QSB for the
quarterly  period  ended  March  31, 2006, the Registrant's management and Audit
Committee,  after  consultation  with  the Registrant's independent accountants,
determined  that  the  financial statements for the year ended December 31, 2005
required  restatement  to  correct the accounting for two transactions occurring
during  that period which did not comply with U.S. generally accepted accounting
principles.  The  filing  of  this  Form  10-QSB/A,  Amendment  No. 1, is not an
admission that our Form 10-QSB for the quarter ended March 31, 2006, when filed,
knowingly included any untrue statement of a material fact or omitted to state a
material  fact  necessary  to  make  the statements made therein not misleading.

     Management  became  aware  of  an  accounting  error  on  October  18, 2006
pertaining to the annual financial statements issued for the year ended December
31,  2004.

     The  accounting  error contained two components.  The first related to debt
forgiveness  income  recognized in 2004 in the amount of $1,282,886.  The second
pertained  to  $400,000  of  liabilities  remaining  on  the  balance  sheet.

     Prior  to  2004 the company had recognized $1,682,886 of liabilities.  Many
of  these liabilities went back to 1999 and previous.  The liabilities consisted
of  liabilities  assumed  on  acquisition  of  other  companies  as well as some
duplication  of liabilities through accounting system changes.  The company went
through  the  stated liabilities vendor by vendor trying to ascertain the actual
amount  owed  during  the end of 2004. The liabilities could be categorized into
three  segments.  The  first segment was international commissions owed prior to
changing  business  operations  in  Japan.  The  second  segment  was  duplicate
commissions  entered  for product sales reps that had already been paid, and the
third  segment  was liabilities assumed through acquisition that were previously
satisfied.

     The  liabilities  could  not  be  confirmed  and so the company relied upon
Nevada  state  law which states that after three years, indebtedness is forgiven
if  there  have been no lawsuits filed.  This would be consistent with paragraph
16  B of SFAS 140, however, the adjustment pertains to prior years and therefore
will  be  treated as a prior period adjustment and a correction of an error even
though  the  liabilities  were  determined  to  be  not  valid  in  2004.

     The  company  had isolated and determined that $1,282,886 was not valid and
therefore  under  State law and per the guidance of SFAS 140 16B determined that
these debts were discharged and wrote them down to debt forgiveness income.  The
company  however  could  not  determine  weather  the  remaining  $400,000  was
discharged  as  a  result  of  previous  business  acquisitions  and mergers and
therefore  left  this  balance  as  a contingent liability on the balance sheet.
There  have  not  been any claims or law suits filed on this amount even through
late  2006 and therefore can only be concluded that the adjustments pertain to a
prior  period.

     Management  has also addressed and modified its internal controls to review
and  confirm  all  of  its  ongoing  liabilities  to  ensure  the  accuracy  and
reliability  of  the  information  contained  in  its  accounting  systems.

     Management  has contacted it's independent certified public accountant firm
about  the  above  situation and determined that the best course of action is to
restate  and  amend  the  2004  filing  of  its  10KSB.

     The  effect of the 2004 restatement also changed the 2005 balance sheet and
statement  of  stockholders  equity (deficiency) as well as the first quarter of
2006  balance  sheet  and  statement  of  stockholders  equity (deficiency).  In
conjunction with this change an additional financial statement  foot note number
18  has  been  added.

     Except  as  described  herein,  no  other  changes  have  been  made to our
Quarterly  Report  on  Form 10-QSB.  We have not updated the disclosures in this
Form 10-QSB/A, Amendment No. 1, to speak as of a later date or to reflect events
which  occurred  at  a  later  date,  except  as  noted.


                                        1
<PAGE>
                         PART I - FINANCIAL INFORMATION

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.  Unaudited,  interim,  condensed,  consolidated  financial statements
including  a  balance sheet for the Company as of the period March 31, 2006, and
statements  of  operations, and statements of cash flows, for interim periods 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-14 and are incorporated herein
by  this  reference.

BASIS  OF  PRESENTATION

     The  accompanying  consolidated  interim unaudited financial statements are
presented  in  accordance  with  accounting principles generally accepted in the
United  States of America for interim financial information and the instructions
for  Form  10-QSB  and  Item 310 under subpart A of Regulation S-B. Accordingly,
they  do not include all of the information and footnotes required by accounting
principles  generally  accepted  in  the  United  States of America for complete
financial  statements. The accompanying statements should be read in conjunction
with  the  audited financial statements for the year ended December 31, 2005. In
the opinion of management, all adjustments considered necessary in order to make
the  financial  statements  not misleading have been included. Operating results
for  the  quarter and period ended March 31, 2006 are not necessarily indicative
of  results  that  may  be  expected  for  the year ended December 31, 2006. The
financial  statements  are  presented  on  the  accrual  basis.


                      [THIS SPACE LEFT BLANK INTENTIONALLY]


                                        2
<PAGE>
                   GATEWAY DISTRIBUTORS, LTD. AND SUBSIDIARIES

                                  - CONTENTS -

<TABLE>
<CAPTION>
                                                       PAGE NUMBER
                                                       -----------
<S>                                                    <C>
               Financial Statements:

                   Balance Sheet                            F-1

                   Statement of Operations                  F-3

                   Statement of Stockholders - Equity       F-4

                   Statement of Cash Flows                  F-5

                   Notes to Financial Statements            F-7
</TABLE>


<PAGE>
<TABLE>
<CAPTION>
                   GATEWAY DISTRIBUTORS, LTD AND SUBSIDIARIES
                      UNAUDITED CONSOLIDATED BALANCE SHEET
                    (CONDENSED, INTERIM FINANCIAL STATEMENTS)

                                                                 March 31,
                                                                   2006
                                                                -----------
<S>                                                             <C>
                                   ASSETS

CURRENT ASSETS:
    Cash and cash equivalents                                   $   11,032
    Accounts Receivable                                             23,756
    Inventories                                                    351,279
    Due From Chelsea Collection                                     90,000
    Prepaids                                                             -
                                                                -----------
                                          Total Current Assets     476,067
                                                                -----------

PROPERTY & EQUIPMENT
    Property and Equipment, at cost                              1,676,980
    (Less) accumulated depreciation and amortization              (335,084)
                                                                -----------
                                    Total Property & Equipment   1,341,896
                                                                -----------

MINORITY INTEREST IN SUBSIDIARY                                          -
                                                                -----------

OTHER ASSETS
    Prepaid Advertising                                            230,572
    Product Awaiting Marketing                                     183,650
    Formulas                                                       536,500
    Cal-Bay International Restricted Stock Held for Investment   1,361,005
    Chelsea Collection Restricted Stock Held for Investment        400,000
    Other Assets                                                    15,238
                                                                -----------
                                            Total Other Assets   2,726,965
                                                                -----------

Total Assets                                                     4,544,928
                                                                ===========
</TABLE>

                      SEE NOTES TO THE FINANCIAL STATEMENTS


                                     F-1
<PAGE>
<TABLE>
<CAPTION>
                   GATEWAY DISTRIBUTORS, LTD AND SUBSIDIARIES
                      UNAUDITED CONSOLIDATED BALANCE SHEET
                    (CONDENSED, INTERIM FINANCIAL STATEMENTS)

                                                 (Restated)
                                                  March 31,
                                                    2006
                                                -------------
<S>                                             <C>
LIABILITIES
CURRENT LIABILITIES:

Accounts payable:
  Trade Regular                                 $    220,393
  Set aside for prior amounts due and payable
Accrued expenses:
  Payroll and employee benefits                      222,282
  Payroll taxes                                      173,113
  Interest                                           420,944
  Other                                               46,251
Stock Investors                                      288,078
Current maturities of long-term debt               1,663,590
                                                -------------
Total current liabilities                          3,034,651
                                                -------------

LONG-TERM DEBT                                       939,099

                                                -------------
Total Liabilities                                  3,973,750
                                                -------------

STOCKHOLDERS' EQUITY

Preferred stock - $.001 par value
  Authorized - 400,000,000 shares
    Series A Preferred
      Authorized - 100,000,000 shares
      14,972,125 issued and outstanding               14,972
    Series B Preferred
      Authorized - 100,000,000 shares
      15,000,000 issued and outstanding               15,000
    No Series Designated Preferred
      Authorized - 200,000,000 shares
      Issued and outstanding - none
Common stock, - $.001 par value
  Authorized - 25,000,000,000 shares
  Issued and outstanding - 6,817,010,636           6,817,010
  Additional paid-in capital                      15,022,204
  Accumulated (deficit)                          (21,298,008)

                                                -------------
Net Stockholders' Equity                             571,178
                                                -------------

Total Liabilities & Stockholders' Equity        $  4,544,928
                                                =============
</TABLE>

                      SEE NOTES TO THE FINANCIAL STATEMENTS


                                     F-2
<PAGE>
<TABLE>
<CAPTION>
                                GATEWAY DISTRIBUTORS, LTD AND SUBSIDIARIES
                             UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
                                 (CONDENSED INTERIM FINANCIAL STATEMENTS)

                                                                          Quarter Ended    Quarter Ended
                                                                            March 31,        March 31,
                                                                              2006             2005
                                                                         ---------------  ---------------
<S>                                                                      <C>              <C>
SALES                                                                    $      203,570   $      201,686

COST OF SALES                                                                    44,119           45,584
                                                                         ---------------  ---------------

GROSS PROFIT                                                                    159,451          156,102
                                                                         ---------------  ---------------

                           SELLING, GENERAL AND ADMINISTRATIVE EXPENSES:
    Depreciation Expense                                                          7,266           24,709
    Professional Services Not Classified Elsewhere                            1,446,461          124,360
    Development of Jeunesse by Francois Product Line                             81,229           62,071
    Product Development                                                          17,285          250,626
    All Other Selling, General and Administrative                               369,760          198,758
                                                                         ---------------  ---------------

TOTAL SELLING, GENERAL AND ADMINISTRATIVE EXPENSES                            1,922,001          660,524
                                                                         ---------------  ---------------

INCOME (LOSS) FROM OPERATIONS                                                (1,762,550)        (504,422)
                                                                         ---------------  ---------------

                                    OTHER INCOME (EXPENSE):
    Gain on Sale of Property held for short term investment                           -           37,139
    Debt Forgiveness Income                                                      40,465                -
    (Loss) on Sale of Subsidiary - Los Cabos Beverage                                 -           (8,256)
    (Loss) change in reporting QDS of Arizona as an investment                        -          (68,535)
    (Impairment)  reporting Subsidiary QDS of Arizona as an investment                -           (9,101)
    (Loss) on Investment in QDS                                                (200,000)               -
    Interest Expense                                                                  -          (45,905)
    Other Income                                                                      -                -

                                                                         ---------------  ---------------
TOTAL OTHER INCOME (EXPENSE):                                                  (159,535)         (94,658)
                                                                         ---------------  ---------------

NET INCOME (LOSS) BEFORE MINORITY INTEREST                                   (1,922,085)        (599,080)

MINORITY INTEREST                                                                     -                -
                                                                         ---------------  ---------------
NET INCOME (LOSS) BEFORE PROVISION FOR INCOME TAX                            (1,922,085)        (599,080)

PROVISION FOR INCOME TAX                                                              -                -
                                                                         ---------------  ---------------

NET INCOME (LOSS)                                                        $   (1,922,085)  $     (599,080)
                                                                         ===============  ===============

BASIC AND DILUTED EARNINGS (LOSS) PER SHARE                              $        (0.00)  $        (0.25)
                                                                         ---------------  ---------------

BASIC & DILUTED WEIGHTED AVERAGE SHARES OF COMMON STOCK                   4,108,677,303        2,440,660
                                                                         ===============  ===============
</TABLE>

                      SEE NOTES TO THE FINANCIAL STATEMENTS


                                     F-3
<PAGE>
<TABLE>
<CAPTION>
                                            GATEWAY DISTRIBUTORS, LTD AND SUBSIDIARIES
                                     UNAUDITED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                                    FOR THE PERIODS ENDED MARCH 31, 2006 AND DECEMBER 31, 2005

                                        Preferred Stock            Common Stock
                                        Par Value $0.001         Par Value $0.001         Paid in      (Restated)     (Restated)
                                     ---------------------  -------------------------     Excess       Accumulated    Net Equity
                                       Shares     Amount       Shares        Amount       of Par        (Deficit)    (Deficiency)
                                     ----------  ---------  -------------  ----------  ------------  -------------  -------------
<S>                                  <C>         <C>        <C>            <C>         <C>           <C>            <C>
Balance - December 31, 2004           4,972,125  $   4,972         98,590  $       99  $19,224,980   $(18,472,196)  $    757,855

Common Stock Issued:
  For Services - Restricted Stock                           1,975,100,042   1,975,100   (1,262,199)                      712,901
  Cancelled Not Sold                                         -242,749,998    -242,750       22,750                      (220,000)
  For Services - Unrestricted Stock                           853,400,002     853,400     (375,173)                      478,227
  For Cash                                                    381,162,000     381,160      (68,153)                      313,007
Loss for the Period                                                                                      (903,728)      (903,728)
Preferred Stock Issued
  Preferred Stock B                  15,000,000     15,000                                                                15,000
  Preferred Stock A                  10,000,000     10,000                                                                10,000

                                     ----------  ---------  -------------  ----------  ------------  -------------  -------------
Balance for December 31, 2005        29,972,125     29,972  2,967,010,636   2,967,009   17,542,205    (19,375,924)     1,163,262

Common Stock Issued:
  For Services - Unrestricted Stock                         3,850,000,000   3,850,000   (2,520,000)                    1,330,000

Loss for the Period                                                                                    (1,922,085)    (1,922,085)

                                     ----------  ---------  -------------  ----------  ------------  -------------  -------------
Balance for March 31, 2006           29,972,125     29,972  6,817,010,636   6,817,009   15,022,205    (21,298,009)       571,177
</TABLE>

                      SEE NOTES TO THE FINANCIAL STATEMENTS


                                     F-4
<PAGE>
<TABLE>
<CAPTION>
                                GATEWAY DISTRIBUTORS, LTD AND SUBSIDIARIES
                              UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (CONDENSED INTERIM FINANCIAL STATEMENTS)

                                                                            Quarter Ended     Year Ended
                                                                              March 31,      December 31,
                                                                                2006             2005
                                                                           ---------------  --------------
<S>                                                                        <C>              <C>
                                    OPERATING ACTIVITIES:
Net (loss)                                                                 $   (1,922,085)  $    (903,728)
                             Adjustments to reconcile Net (loss)
                         to net cash from (to) operating activities:
  Stock issued for Services                                                     1,330,000         862,022
  Stock issued for Debt                                                                 -               -
  Depreci. & Amortization Prop & Equip                                              7,266          47,132
  Loss on Sale of Fixed Assets                                                          -               -
  Minority Interest                                                                     -          72,364
  Forgiveness of Debt                                                                   -               -
                  Loss on Formulas, Trademark, Goodwill, & Debt Elimination
                     of Grandma Hammans in Exchange for 51% of Los Cabos
           Changes in operating assets & liabilities which increase (decrease) cash
                                            flow:
  Accounts Receivable                                                             200,000        (178,122)
  Inventories                                                                      21,997         120,923
  Properties Held for Short Term Investments                                            -         179,741
  Prepaid Expenses & Other Current Assets                                               -          25,500
  Accounts Payable and Commissions                                                 19,585        (128,532)
  Accrued Liabilities                                                              83,362          26,989
                                                                           ---------------  --------------
Net cash provided by operating activities                                        (259,875)        124,289
                                                                           ---------------  --------------

                            CASH FLOWS FROM INVESTING ACTIVITIES:
  Product Development Awaiting Production                                               -          (4,000)
  Capital (Outlays)  / Disposals                                                        -       4,237,309
  (Purchase) of Formulas                                                                -               -
  Purchase of Property                                                         (1,266,001)              -
  Other Assets                                                                     25,530           7,938
                                                                           ---------------  --------------
Net cash provided (used) from investing activities                             (1,240,471)      4,241,247
                                                                           ---------------  --------------

                            CASH FLOWS FROM FINANCING ACTIVITIES:
  Net Proceeds from Term Debt After Principal Payments                          1,224,073               -
  Principal Payment on Debts (over) net proceeds Term Debt                              -      (2,820,033)
  Stock Sales for Cash; Net                                                             -         338,009
  Investments                                                                     194,000      (1,827,366)
                                                                           ---------------  --------------
Net cash provided (used) from financing activities                              1,418,073      (4,309,390)
                                                                           ---------------  --------------

NET INCREASE (DECREASE) IN CASH EQUIVALENTS                                       (82,273)         56,146

CASH AND CASH EQUIVALENTS - Beginning of Period                                    93,305          37,159
                                                                           ---------------  --------------

Cash at end of period                                                      $       11,032   $      93,305
                                                                           ===============  ==============
</TABLE>

                      SEE NOTES TO THE FINANCIAL STATEMENTS

                                     F-5
<PAGE>
<TABLE>
<CAPTION>
                      GATEWAY DISTRIBUTORS, LTD AND SUBSIDIARIES
                   CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED

                                                           Quarter Ended   Year Ended
                                                             March 31,    December 31,
                                                               2006           2005
                                                           -------------  ------------
<S>                                                        <C>            <C>
                               SUPPLEMENTAL DISCLOSURE

                                    CASH PAID FOR:
Interest                                                               0       192,645
Taxes                                                                  0             0

                     NON CASH INVESTING AND FINANCING ACTIVITIES

                                  STOCK ISSUED FOR:
Services                                                       1,330,000       862,022
Debt                                                                   0             0
Investors                                                        194,000       338,009

                          FORMULA EXCHANGED FOR DEBT PAYOFF
Payoff of Grandma Hamman's debt in exchange for formula                0             0
</TABLE>

                      SEE NOTES TO THE FINANCIAL STATEMENTS


                                     F-6
<PAGE>
                   GATEWAY DISTRIBUTORS, LTD. AND SUBSIDIARIES

                          NOTES TO FINANCIAL STATEMENTS

                                 March 31, 2006

NOTE  1  -  BASIS  OF  PRESENTATION:

The  consolidated  interim  condensed financial statements at March 31, 2006 and
for  the  periods  ended  March 31, 2006 and 2005 are unaudited, but include all
adjustments,  which  the  Company  considers  necessary for a fair presentation.

The  accompanying unaudited financial statements are for the interim periods and
do not include all disclosures normally provided in annual financial statements,
and  should  be  read in conjunction with the Company's Form 10-KSB for the year
ended  December  31,  2005.  The  accompanying  consolidated  unaudited  interim
financial  statements  for  the  periods  ended  March 31, 2006 and 2005 are not
necessarily indicative of the results which can be expected for the entire year.

The preparation of financial statements in conformity with accounting principles
generally  accepted  in the United States of America requires management to make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities  at the date of the financial statements and the reported amounts of
revenues  and  expenses during the reporting period. Actual results could differ
from  those  estimates.

NOTE  2  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES:

                           PRINCIPLES OF CONSOLIDATION
                           ---------------------------

As  of  March 31, 2006, the Company has the following wholly owned subsidiaries:

- The Right Solution Gateway (multilevel marketing and retail sales)
- Grandma Hammans Specialty Foods (an inactive corporation)
- Gateway Venture Holdings, Inc. (house and manage the real estate, vehicles and
equipment of the Company)
- Gateway Corporate Administration, Inc. (an inactive corporation)

The  Company  also  owns  a  51%  interest  in  Quality Distribution Services of
Arizona,  a  wholesale distributor of non-alcoholic beverages and food. In 2004,
the Company reported the operations of QDS in the financial statement. Beginning
in  2005,  the  Company  did  not  report  the operations of this company in the
financial  statements,  but  recognized  it  as  an investment, not as an equity
position  (See  Note  "Investment  in  Quality Distribution Services of Arizona"
("QDS")).  During  the first quarter 2006, the Company wrote off it's investment
in  QDS as the sale of the interest in the subsidiary has received no commitment
from  potential  buyers.  The search for buyers will continue, although there is
little  interest  in  QDS  at  this  time.

The  accompanying  consolidated financial statements include the accounts of its
subsidiaries,  except  for  QDS.  All  significant  intercompany  balances  and
transactions  have  been  eliminated.

NOTE  3  -  GRANDMA  HAMMANS  AND  LOS  CABOS  BEVERAGE:

The  Company purchased the assets of Grandma Hamman's Specialty Foods, LLC, from
Blaine  Wendtland  on  August  15,  2002.  On  December  21, 2004 the assets and
liabilities  of  Grandma Hammans, other than some minor residual receivables and
payables,  passed to Blaine Wendtland in exchange for a 51% interest in the sale
of  private  label  water  that  Blaine  Wendtland  had  developed.  To date the
subsidiary,  Grandma  Hammans,  remains  inactive.

On December 30, 2004, the Company formed a corporation named Los Cabos Beverage,
Inc.  ("Los Cabos") and acquired a 51% ownership with the remaining 49% going to
Blaine  Wendtland.  Los Cabos was formed to handle the operations of the sale of
private  label  water discussed in the prior paragraph. Operations were to begin
in


                                     F-7
<PAGE>
2005.  The  Company invested no initial money for this joint venture, but it did
provide  a  place  of operation in its warehouse and limited funding for payroll
and  selected  other  expenses.

During  January  and February of 2005 Los Cabos sales did not meet expectations.
Management  determined  that  the operations would not be cost effective for the
Company.  On February 28, 2005 the Company entered into an agreement with Blaine
Wendtland  wherein  he  assumed  all  ownership  and obligations and the Company
terminated  its  commitments  and  relationships  with Los Cabos and with Blaine
Wendtland.  There  is  a  loss  on the disposal of this subsidiary of $8,256 for
operations  while  the  Company  owned  it  during  2005.

NOTE  4  -  LICENSING  /  PURCHASE AGREEMENT WITH THE CHELSEA COLLECTION INC. (A
RELATED  PARTY):

The  Company  entered  into  an  agreement  December  12,  2003 with The Chelsea
Collection  Inc,  a Nevada corporation ("Chelsea Collection") that was finalized
on  March  15,  2004  and  later  clarified on a few points May 4, 2004. Chelsea
Collection  is  now  being  traded  on  pink  sheets as a public entity. Chelsea
Collection  is  majority  owned  by  the  officers  of  the Company and Francois
Vautour,  an  unrelated  third  party  of  the Company. Chelsea Collection in an
agreement  dated  November  25,  2003  acquired among other things from Francois
Vautour  and  assigns,  except for Romania, all United States and Canada rights,
trademarks,  formulas  and  licenses of the Jeunesse by Fran ois Vautour and the
GH3  skin  care  line.

In  the agreement the Company has with Chelsea Collection, the Company will have
the opportunity to acquire the same Francois Vautour skin care line from Chelsea
Collection  for  virtually  the  same  price  and terms as Chelsea Collection is
buying  it from Francois Vautour. The terms of the agreement involves a purchase
price  of $4,000,000, payments are computed based on 15% of the gross sales less
cost  of  goods sold with a minimum weekly payment of $10,000. Once the purchase
price is paid, then a royalty of up to 15% of the gross sales less cost of goods
sold  steps  into  place  and  continues  thereafter. The cost outlays have been
charged  to the statement of operations as a selling, general and administrative
expense,  which  were $487,863 for all of 2005 and $81,229 for the period, ended
March  31,  2006.

No  title  or ownership passes to the Company or to Chelsea Collection until the
November  25,  2003 agreement between Chelsea Collection and Francois Vautour is
satisfied, the payment of which is described in the prior paragraph. The Company
has  opted not to capitalize the purchase price. Therefore, all monies paid have
been  expensed.

The  Company is responsible for all product research and development for current
and  future marketing as well as carrying inventory on all Gateway Distributors'
products.  An infomercial developed late in 2004 has been charged to the balance
sheet  as  an  asset  under  "Prepaid  Advertising"  for  $230,573. This remains
unchanged during 2005 and 2006. At year end (December 31, 2006), management will
evaluate  the  infomercial  for  impairment.

During  the  third  quarter  2005,  the  Company  sold to Chelsea Collection its
controlling  block  of preferred restricted stock in Polar WearZ, Inc. (refer to
note  "Real  Estate  Sales")  for  $250,000. Chelsea Collection name changed the
corporation  to  "The  Chelsea  Collection,  Inc." As of March 31, 2006, Chelsea
Collection  had  paid  off  all  but approximately $90,000 of the $250,000 sales
price.

NOTE  5  -  INVESTMENT  IN  QUALITY  DISTRIBUTION  SERVICES  OF ARIZONA ("QDS"):

On  May  30, 2004, an agreement was signed with Quality Distribution Services of
Nevada creating a wholesale beverage distribution center in the Phoenix, Arizona
area.  For  this  joint  venture,  Quality Distribution Services of Arizona, Inc
("QDS")  was  incorporated  in  Nevada on June 7, 2004, of which 51% is owned by
Gateway.

The  Company invested $282,700 during 2004 and another $50,000 through March 31,
2005  to  assist in the development of the company. The other party to the joint
venture  has  secured the warehouse and equipment and has guaranteed payments of
such  as  well  as  continue  providing  for  the  operations  of  QDS.


                                     F-8
<PAGE>
Management  has  determined  it  is  in  the best interest of the Company not to
continue  funding  this  joint  venture.  Negotiations  are presently in process
wherein the Company would dispose of its interest. Management is unsure what the
settlement price will be upon disposing of this investment. In 2005, the Company
recognized  an investment of $200,000 out of a total investment of $332,700. The
difference  of  $132,700  was  recognized  as  a  loss in 2004 as well as $9,101
impairment  loss in 2005 upon presenting QDS as an investment in 2005 instead of
a  subsidiary  as  in  2004. Management evaluated this investment and decided to
write-off  the $200,000 in the first quarter of 2006. In addition, no operations
of  this  subsidiary  are recognized in the consolidated statement of operations
for  2005  and 2006, as management has taken the position that the subsidiary is
not  under  its  control.

NOTE  6  -  REAL  ESTATE  SALES:

During  the  first  quarter of 2005, the Company borrowed an additional $400,000
from  a  financial  institution  on a 6.5% equity line secured by the office and
warehouse property located at 3220 Pepper Lane, Las Vegas, Nevada. Proceeds were
used  for  remodeling  the office and warehouse property. This loan was paid off
upon  sale  of  the  building  on  September  30,  2005.

On  February  28, 2005 the Company sold the Shellstone residential property real
estate  in  Las Vegas for approximately $369,000. The gain on this sale has been
recognized  in  the 2005 Statement of Operations as part of the "Gain on Sale of
Property  Held  for  Short  Term  Investment".

In  a  single  agreement  on  June  2,  2005, the Company sold Aspen Cove Resort
(property)  and the subsidiary Aspen Cove Resort, Inc. (operations of Aspen Cove
Resort),  hereafter  referred  to  as  "Aspen  Cove,"  to  Cal-Bay International
("Cal-Bay").  Aspen  Cove  sold  for  approximately  $2,600,000, adjusted to the
estimated  fair  value  of  the  Cal-Bay  stock received in exchange for partial
payment  as  discussed  later  in  this  note.  The  sale  was paid for with (1)
restricted  Preferred  Series  B  stock of Cal-Bay, (2) the controlling block of
stock  (restricted  preferred  stock) in Polar WearZ, Inc., an inactive no asset
corporation  trading  on  the pink sheets, valued at $200,000, (3) mortgage debt
assumption,  and  (4)  cash paid to the mortgage holder catching up the past due
mortgage  payments.  The Mortgage Note was paid off in March 2006. Because there
was  no  distinction  made  between  the  sale  of  the  Aspen Cove property and
operations  (subsidiary),  the transaction was recognized as one sale and netted
into  one  gain, effective June 2, 2005. The operations of Aspen Cove Resort are
reflected  only  thru  June  2,  2005,  the  date  the Company ceased owning the
operations.  In  July  2005. Cal-Bay included as part of the payment in exchange
for  Aspen  Cove  approximately  800,000  free trading shares of common stock in
Polar  WearZ,  Inc  (approximately  15% of the common stock) valued at $400,000.

The  valuation  of  Cal-Bay  stock  received from the sale of Aspen Cove and the
Valley  Drive  real estate, is for a guaranteed minimum sales price of $0.05 per
share  upon  conversion  from  preferred  "B"  non voting stock to voting common
stock. The preferred stock is non-dilutable and, as per the agreement, upon sale
as  common  stock  it is guaranteed to sell for no less than $0.05 per share, or
additional  shares  will  be  issued  to compensate for any shortage. The market
value  of  the  common stock of Cal-Bay International remained relatively stable
for  over  two  years  until  November 25, 2005 when a reverse split took place.
Since  then,  the  stock  has  retained  a  value well above the $0.05 per share
guarantee.  It is unknown if this will continue. Based on that history, and that
the  stock  is  non-dilutable  and  it  has a minimum sales value of $1,600,000,
Management  has  assigned  the  32,000,000  shares of preferred stock a value of
$1,600,000  discounted  by $348,501 to a present value of 10% per year for 3 1/2
years  giving  an  estimated  fair  value of $1,251,499. The unrestricted common
stock  received in the third quarter 2005 in Polar WearZ, Inc. (assigned a value
of  $400,000)  was  not  included  in  the second quarter 2005. This changes the
recognized sales price from approximately $2,200,000 as previously recognized in
the  second  quarter  2005  to  $2,600,000.  The  adjusted  gain on this sale of
approximately $1,276,000 has been recognized in the 2005 Statement of Operations
as  part  of  the  "Gain  on  Sale  of  property."

In  addition,  during  the  second  quarter 2005, the Company sold a residential
property  in Las Vegas for approximately $250,000 to Cal-Bay. Under the terms of
the  agreement  the  purchase  payment  is  made  up  of  (1)


                                     F-9
<PAGE>
3,200,000,  later  adjusted  to  2,800,000,  shares  of  Cal-Bay  International
non-dilutable  Preferred "B" stock, guaranteed value at $0.05 per share, (2) and
debt  assumption  of the underlying mortgage, and, (3) cash paid to the mortgage
holder  catching  up  the  past due mortgage payments. The value of the stock is
$140,000  (previously  recognized  in  the  second  quarter  2005  at  $160,000)
discounted to the present value at 10% per year for 3 1/2 years, computing to an
estimated  fair  value  of $109,506 (previously recognized in the second quarter
2005  at  $125,150).  This changes the recognized sales price from approximately
$250,000  to $235,365 instead of approximately $251,000 as previously recognized
in  the  second  quarter  2005. The loss on this sale has been recognized in the
2005  Statement  of  Operations as "Loss on Sale of Valley Dr House" of $26,024,
previously  recognized  in  the  second  quarter  2005  as  $10,380).

On  September  30, 2005, the Company closed on the sale of its Las Vegas, Nevada
property  located  at  3220  Pepper  Lane, which housed its warehouse and office
facilities  for  a  gain  that has been reported as part of the "Gain on Sale of
Property"  on  the  statement  of  operations  in  2005.

The  Company  purchased  a  smaller  commercial  property on March 13. 2006. The
warehouse/operations  have  been  moved  to  the  new  building. The offices are
operating  out  of a temporary location while the office portion of the building
is  completed.

NOTE  7  -  REVERSE  STOCK  SPLIT:

On  March  28,  2005,  the  Company  did  a  500  for 1 reverse stock split. The
financial  statements  have  reflected this reverse stock split retroactively to
inception.

NOTE  8  -  EMPLOYEE  STOCK  INCENTIVE  PLAN  ("ESIP"):

Since  2003,  the  Company  has  filed with the Security and Exchange Commission
("SEC")  forms  S-8 notifying of Employee Stock Incentive Plans ("ESIP") and its
increases  in  stock approved to issue under such plans. No additional increases
in  stock have been submitted or approved to issue under such plans since August
2004.

During  2004,  the  total  number of shares approved to issue in these plans was
18,200,000,000  (18 billion, 200 million). Stock issued to employees through the
plan  is  not  affected  by  reverse  splits  until  after it has been sold. The
remaining  unissued  stock at any time remains unchanged despite what happens to
the  stock  once it is issued. i.e., stock reverse splits, dividends, etc. As of
March  31, 2006, the remaining shares approved to issue under the ESIP plans are
2,301,150,000.

During 2005, the Company issued 1,433,250,000 shares out of the ESIP plan before
stock  splits.  The  number  of  shares  after stock splits is recognized on the
statement  of stockholders equity. The net proceeds to the Company from employee
stock  sales  during  2005  were  approximately  $228,000.

During  January  1  through  March  31, 2006 no stock was issued out of the ESIP
plan.  There  are  currently  no  shares  issued and unsold under the ESIP plan.

NOTE  9  -  RECEIVABLE  ESIP  STOCK  PLAN:

Stock sales through the Employee Stock Incentive Plan (ESIP) sold at quarter end
are  reported  as  a  receivable  rather  than negative equity provided they are
received  within  45  days after quarter end. Funds to be received from the ESIP
Plan  are  reported  as  "Receivable  ESIP Stock Plan" as a current asset in the
amount of $0. There is no receivable on stock issued by March 31, 2006, the sale
proceeds  of  which  would  have been received by the Company during April 2006.


                                      F-10
<PAGE>
NOTE  10  -  NON-EMPLOYEE,  DIRECTORS  AND  CONSULTANTS  RETAINER  STOCK  PLAN
("RSP"):

The  Company  continually  seeks  to  improve  its financial position by seeking
investors in exchange for equity in the Company. The value assigned to the stock
for  these  transactions  will  vary  based  on the market value of the stock or
services  performed  at  the  time,  whichever  is  more  readily ascertainable.

Since  2003,  the  Company  has  filed with the Security and Exchange Commission
("SEC")  forms  S-8 notifying of Non-Employee Directors and Consultants Retainer
Stock  Plans  ("RSP")  and  its  increases in stock approved to issue under such
plans. No additional increases in stock have been submitted or approved to issue
under  such  plans  since  August  2004.

During  2004,  the  total number of shares approved to issue in these plans were
8,500,000,000  (8  billion  500 million). The number of shares approved to issue
through the plan is not affected by reverse stock splits. The remaining unissued
stock at any time remains unchanged despite what happens to the stock once it is
issued.  i.e.,  stock  reverse splits, dividends, etc. As of March 31, 2006, the
total  remaining  shares  approved  to issue under the RSP plans are 43,000,000.
During  2005, the Company issued 1,093,000,000 shares out of the RSP plan before
stock  splits.  The  number  of  shares  after stock splits is recognized on the
statement  of  stockholders  equity.

During January 1 through March 31, 2006, the Company issued 3,850,000,000 shares
out  of  the  RSP  plan.

NOTE 11 - AUTHORIZATION OF SERIES "B" PREFERRED STOCK AND ISSUANCE OF RESTRICTED
PREFERRED  "B"  STOCK  TO  CONSULTANTS:

On  January  18,  2005,  the  Company  authorized 100,000,000 shares of Series B
Preferred Stock with a par value of 0.001 per share. Series B preferred stock is
convertible  to  common  stock  on a one for one basis and has no voting rights.

During  2005,  the  Company  issued  15,000,000  restricted  shares  of Series B
preferred  stock  to consultants for services rendered with an assigned value of
$15,000.

During  January 1 through March 31, 2006, the Company issued no shares of Series
B  preferred  stock

NOTE  12  -  RESTRICTED  STOCK  ISSUED TO OFFICERS (RELATED PARTY TRANSACTIONS):

During  2005,  the  Company  issued  to officers 23,000,000 shares of restricted
common  stock,  valued  at  approximately  $10,000.

During  January  1  through  March  31,  2006,  the  Company  did  not issue any
restricted  common  stock  to  officers.

NOTE  13  -  NEPOTISM  DISCLOSURE  (RELATED  PARTY  TRANSACTIONS):

The  son  of the Chief Operations Officer serves as Vice President of Operations
with  additional  responsibilities in Information Technology. Two other children
of  the  officers  work  part  time for the Company in non-managerial positions.
During  2005,  the  daughter  of the Chief Executive Officer worked as Marketing
Representative  (reassigned March 1, 2005 to non-managerial responsibilities and
has  since  terminated  employment).


                                      F-11
<PAGE>
NOTE  14  -  RECLASSIFICATION  AND  RESTATEMENTS:

Selected items in the March 31, 2005 financial statements as previously reported
have  been  reclassified  and  restated  to  be  consistent  with  the unaudited
financial  statements  as  of  March  31,  2006.

The  Company  has  no  off-balance  sheet  arrangements.

NOTE 15 - PRODUCTS PENDING PRODUCTION RECLASSISFIED TO PREPAID ADVERTISING COSTS
AND  PRODUCT  AWAITING  MARKETING:

During  2004  and  before,  Company  acquired  sizeable  capital  investments.
Management,  in  an effort to use wisely and prudently the funds received, looks
at  different alternatives in which to invest. Some of the funding goes into the
search  and  subsequent  development  of  selected  projects  and  products.

The  types  of  costs  the Company incurs for product development include direct
costs  associated  with  the search, evaluation and market study for the product
development  involved.  These  costs  include:  1)  outside  services,
2)  travel, 3) testing and analysis, and 4) other direct cost that may arise. In
accounting  for  these  costs, the Company charges to operations all preliminary
and research costs as well as all costs stemming from all issuances of stock for
services.  The Company only recognizes as an asset those direct costs associated
with  those  projects  the  Company  considers  are beyond research and that the
Company  has  concluded  are  viable  for the future benefit of the Company. The
Company  expenses  all  amounts  paid for services and products that are paid by
stock,  including  the  common  stock  that  is  issued by the Company under its
Non-Employee,  Directors  and  Consultants  Retainer  Stock  Plan  ("Plan").

On  June  30,  2005,  management  reclassified  $230,572  from "Products Pending
Production"  to  "Prepaid  Advertising Costs" as an "Other Asset" on the Balance
Sheet.  This  is  for  an  infomercial  completed  and  ready to use in selected
geographic  areas.  Amortization of this prepaid advertising will begin when the
advertising  campaigns  begin,  expected to be sometime after March 31, 2006 and
will  be based over an estimated useful life yet to be determined. Management is
of  the opinion that the estimated fair value of prepaid advertising exceeds the
cost  recognized  on  the  Balance Sheet. Management will evaluate the estimated
fair  value  at  December  31,  2006  (year  end)  for  impairment.

The  remaining  $187,650  left  in  "Products  Pending  Production"  has  been
reclassified  to  "Product  Awaiting Marketing" as an "Other Asset." This is the
first  product  within  the  Pete Rose line. It is now completed with product on
hand and it is awaiting dissemination pending negotiations with third parties as
to  how  it  will  be  marketed.  The  Company  does  not  recognize products as
inventory,  or  as a current asset, until the marketing approach is established.
The  Company  originally  had  a  marketing  approach  worked out, but has since
stopped  the route originally selected to reconsider other marketing approaches.
Management  is  of the opinion that the estimated fair value of product awaiting
marketing  exceeds  the  cost  recognized  on the Balance Sheet. Management will
evaluate  the  estimated  fair  value  at  December  31,  2006  (year  end)  for
impairment.

NOTE  16  -  CONSIDERATIONS  AFFECTING  THE  COMPANY'S  ABILITY TO CONTINUE AS A

                                 GOING CONCERN:

There  have  been  significant  recurring  losses  and  negative cash flows from
operations,  which  have  resulted in a working capital deficiency. In the event
the  Company is unable to raise additional operating capital, 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.

The  Company has reassessed its operating commitments and continues taking steps
to  assure  that  it  focus  on  its  core  business  going forward. The Company
continues  seeking  means  and  ways  to  raise  funds  and  to  make


                                      F-12
<PAGE>
operations  profitable.  Management is of the opinion that the Company is taking
adequate  measures  to  assure  itself that it has the ability to remain a going
concern.

NOTE  17  -  COMMITMENTS  AND  CONTINGENCIES:

                                  COMMITMENTS:
                                  ------------

On  or about November 27, 2003 the Company entered into an arrangement to invest
in  the  development and marketing of a cosmetic line owned by Francois Vautour.
The  products  of  Francois  Vautour  were  previously  successfully marketed in
various  parts  of  the world. To acquire the full rights, exclusive of Romania,
the  cosmetic line required a $4,000,000 commitment plus the costs of marketing.

Although the Company desired to acquire the rights and ownership of the line, it
was  greater  than  the Company felt was prudent for it to do. So, to put a stop
loss  feature in the agreement the two key officers of the Company, Rick Bailey,
CEO  and  Flo Ternes, COO, formed The Chelsea Collection, LLC ("LLC"), an entity
to  provide  the  spring  board  for  the  Company  to acquire the rights and to
minimize  the  Company's risk. This was agreeable with Francois Vautour and LLC.
Refer  to  Note  above  "Products  Pending  Production  Reclassed  to  Prepaid
Advertising  Costs  and  Product  Awaiting  Marketing".

On  a separate matter, dealing with a marketing consultant the Company signed in
August  of  2003  a  consulting  agreement  committing to a ten-year contract to
provide training for the company distributors. Compensation will be based on the
ability  of  the  consultant to sign up new distributors. Management believes it
will  be  a  self-funding  and  revenue  generating program. Management has also
signed  another agreement, dated December 19, 2005 with an additional consultant
for  additional  training  and  recruitment  services.

                             CONTINGENT LIABILITIES:
                             -----------------------

The  Company  has  no  errors or omissions insurance for Directors and Officers.

In the normal course of business the Company experienced a change in position by
the  Bureaus  of  Consumer  Protection of Nevada and Maryland dealing with a now
discontinued  product  the  Company  previously  sold to the public. See Note 18
Subsequent  Events.

A  creditor  of  the  Company, Allergy Research group / Nutricology filed in the
District  Court  of  Clark  County,  Nevada  an action against the Company on an
unpaid  open account for goods and merchandise, Case No. A-487334, in the amount
of  $168,000.  The  Company  contested  the  amount claimed and has made payment
toward  the  uncontested amount while negotiations with the plaintiff continued.
The  Company  offered to pay, through counsel, the sum of $50,000 with a payment
of  $10,000  upon  acceptance  of the offer and $5,000 per month until paid. The
offer  was  accepted and payments are being made with a balance of $30,000 owing
as  of  March  31,  2006.

The  Company  has recognized, in the financial statements, part of the "accounts
payable"  in  the liabilities of the balance sheet to cover these contingencies.

                                     OTHER:
                                     ------

The Company originally acquired TRSG Corporation ("TRSG"), effective January 11,
2001,  by  passing  all  of its assets and selected debt to TRSG in exchange for
approximately  78%  of  the stock ownership of TRSG. When the Company later sold
its approximately 76% interest in TRSG, effective December 31, 2002, it received
$15,000  for  the  stock.  It  also  acquired  all  of  the  assets of TRSG, its
operations,  and selected debt from TRSG. The disposal of TRSG December 31, 2002
effectively brought back into the Company what it had before it acquired TRSG in
the  first  place,  effective  January  11,  2001.  These transactions, both the
original  acquisition  as  well  as


                                      F-13
<PAGE>
the  subsequent  disposal, are reported under the purchase method of accounting,
with  reported costs recognized as it was in the hands of the predecessor. Under
the terms of the agreement, TRSG chooses which creditors it continues to owe for
$200,000  in  debt,  and  all others are passed to the Company. The creditors of
TRSG  have  not  agreed upon this agreement. TRSG has ongoing legal matters that
may  or  may  not  implicate  the  Company. Management is unable to estimate the
possible  loss exposure, but believes the ultimate outcome to be minimal for the
Company  because the debts of TRSG paid by the Company are debts of TRSG and not
the  Company.

In  addition,  complaints  filed by the Security and Exchange Commission against
Suburban  Capital  also  names  the  Company and its CEO is not settled. At this
juncture,  legal counsel is unable to predict what the possible outcome of these
matters  will  be.

As of March 31, 2006, Management continues negotiations, initiated in 2003, with
the  Internal  Revenue  Service  ("IRS")  to  settle  back payroll taxes due and
anticipates  a  settlement  by  the-end  of  2006.

The  Company  has  not  recognized  any  contingent  liability  for these items.

NOTE  18  -  RESTATEMENT  OF FINANCIAL STATEMENTS TO CORRECT AN ACCOUNTING ERROR

The Company has restated its financial statements to correct an accounting error
in  the  recording  of  $1,282,886  as  income from the reduction of liabilities
during  the  year  ended December 31, 2004.  Management has made a determination
that  the  liabilities  are  not  owed by the Company and that the write down of
these  liabilities should have been reported in a period prior to the year ended
December  31,  2004.  In  addition  to  the $1,282,886 in liabilities identified
above,  the  company originally had left an estimated $400,000 in liabilities on
the  balance  sheet  at  December 31, 2004.  Management has made a determination
that he Company should restate its financial statements to correct an accounting
error  in  the  recording  these $400,000 liabilities.  The Company does not owe
these  amounts  and  the  $400,000  has  been included with the $1,282,886 as an
adjustment  to  a  prior  period.  Management  has determined that following the
guidelines of SFAS 140 the Company has been legally discharged from all of these
obligations.

The  effects  of  the  restatement  on  the balance sheet are illustrated below:

<TABLE>
<CAPTION>
                        BALANCE SHEET-DECEMBER 31, 2005
                        -------------------------------

                         Restated                  Originally
                          Amount     Adjustment     Reported
                       ------------  -----------  ------------
<S>                    <C>           <C>          <C>
Accounts payable           200,808     (400,000)      600,808
Current liabilities      2,452,730     (400,000)    2,852,730
Accumulated (deficit)  (19,375,923)     400,000   (19,775,923)
Total liabilities &
  Equity                 3,615,993                  3,615,993
</TABLE>

<TABLE>
<CAPTION>
                          BALANCE SHEET-MARCH 31, 2006
                          ----------------------------

                         Restated                  Originally
                          Amount     Adjustment     Reported
                       ------------  -----------  ------------
<S>                    <C>           <C>          <C>
Accounts payable           220,393     (400,000)      620,393
Current liabilities      3,034,651     (400,000)    3,434,651
Accumulated (deficit)  (21,298,008)     400,000   (21,698,008)
Total liabilities &
  Equity                 4,544,928                  4,544,928
</TABLE>


                                      F-14
<PAGE>
There  was  no change in total assets or weighted average shares of common stock
outstanding  due  to  restatement  correction

NOTE  19  -  SUBSEQUENT  EVENTS:

The SEC has requested the company respond to questions they had raised regarding
the  filing  of  the  Company's 10-KSB as of December 31, 2004 due to changes in
filing  requirements.  Management responded to these questions and also filed an
Amended  2004  10-KSB  ("10-KSB/A").  The 10-KSB/A expanded the explanations and
disclosures to the financial statements. Subsequent to filing the 10-KSB/A 2004,
the  SEC  raised  additional questions seeking further clarification. Management
has  filed  responses to these additional questions, and regards these questions
as  ones  seeking  clarification.  Management  does  not  anticipate any further
changes  to  the  prior  reported  statements.

A  settlement  was  made with the Maryland Attorney General on the investigation
regarding  a  change in position by the Bureaus of Consumer Protection of Nevada
and Maryland dealing with a now discontinued product the Company previously sold
to  the public. On May 4, 2006, Assurance of Voluntary Compliance documents were
signed.  This  includes a Civil Penalty of $100,000 and restitution to consumers
of $25,000. If the amount paid to consumers for claims is less than $25,000, the
Civil Penalty will be increased to the difference between $25,000 and the amount
paid  in  restitution.  The  Civil Penalty is payable in monthly installments of
$5,000  and  the  restitution  is  to  be  paid  as  claims  are  presented.


                                      F-15
<PAGE>
ITEM 2. MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OR  PLAN  OF  OPERATIONS.

FORWARD-LOOKING  INFORMATION

     Much of the discussion in this Item is "forward looking". Actual operations
and  results  may  materially  differ  from present plans and projections due to
changes  in  economic  conditions,  new business opportunities, changed business
conditions,  and  other  developments. Other factors that could cause results to
differ materially are described in the Company's filings with the Securities and
Exchange  Commission.

     There  are  several  factors  that  could cause actual results or events to
differ  materially  from  those anticipated, and include, but are not limited to
general  economic,  financial and business conditions, changes in and compliance
with  governmental  laws  and  regulations,  including various state and federal
environmental  regulations, the Company's ability to obtain additional financing
from  outside  investors  and/or  bank  and  mezzanine lenders and the Company's
ability  to  generate sufficient revenues to cover operating losses and position
the  Company  to  achieve  positive  cash  flow.

     Readers  are  cautioned  not to place undue reliance on the forward-looking
statements contained herein, which speak only as of the date hereof. The Company
believes  the  information  contained in this Form 10-QSB/A to be accurate as of
the  date hereof. Changes may occur after that date. The Company will not update
that  information  except  as required by law in the normal course of its public
disclosure  practices.

     Additionally,  the  following  discussion regarding the Company's financial
condition  and  results  of  operations  should  be read in conjunction with the
financial  statements  and  related  notes contained in Item 1 of Part I of this
Form  10-QSB/A,  as well as the financial statements in Item 7 of Part II of the
Company's  Form  10-KSB  for  the  fiscal  year  ended,  December  31,  2005.

MANAGEMENT'S  PLAN  OF  OPERATIONS

GENERAL

     The  Company  was originally incorporated in the State of Nevada on May 26,
1993.  The  Company  markets and distributes different nutritional and/or health
and  skin  care  products.  The products which the Company sells are intended to
provide  nutritional supplementation to the users; the products are not intended
to  diagnose,  treat,  cure  or  prevent  any  disease.

CURRENT  BUSINESS  PLAN

     The  Company's  current  purpose  is  to  seek,  investigate  and,  if such
investigation  warrants, acquire an interest in business opportunities presented
to  the  Company  by  persons or firms who or which desire to seek the perceived
advantages  of  a  corporation which is registered under the Securities Exchange
Act  of  1934,  as  amended.  The  Company  does  not restrict its search to any
specific  business;  industry  or geographical location and may participate in a
business  venture  of  virtually  any  kind  or  nature.

     The  Company  may  seek  a  business  opportunity  with entities which have
recently  commenced  operations, or which wish to utilize the public marketplace
in  order  to  raise  additional capital in order to expand into new products or
markets,  to  develop  a new product or service or for other corporate purposes.
The  Company  may  acquire  assets  and  establish  wholly owned subsidiaries in
various  businesses  or  acquire  existing  businesses  as  subsidiaries.

     As  part of the Company's investigation of potential merger candidates, the
Company's  officers  and  directors will meet personally with management and key
personnel,  may  visit  and  inspect  material  facilities,  obtain  independent
analysis  or  verification  of certain information provided, check references of
management  and  key personnel and take other reasonable investigative measures,
to the extent of the Company's financial resources and management expertise. The
manner  in  which  the Company participates in an opportunity will depend on the
nature  of  the opportunity, the respective needs and desires of the Company and
other  parties,  the  management  of  the  opportunity,  the  Company's relative
negotiation  strength  and  that  of  the  other  management.


                                        3
<PAGE>
     The  Company  intends to concentrate on identifying preliminary prospective
business  opportunities  that  may be brought to the Company's attention through
present  associations  of  its  officers  and  directors, or by stockholders. In
analyzing  prospective  business  opportunities,  the Company will consider such
matters  as the available technical, financial and managerial resources; working
capital  and  other  financial  requirements;  history  of  operations,  if any;
prospects  for  the  future;  nature  of  present  and expected competition; the
quality  and  experience  of  management services which may be available and the
depth  of  that  management;  the potential for further research, development or
exploration;  specific  risk  factors  not now foreseeable but which then may be
anticipated  to  impact  the  Company's  proposed  activities; the potential for
growth  or expansion; the potential for profit; the perceived public recognition
or  acceptance  of  products, services or trades; name identification; and other
relevant  factors.

     The  Company's  officers and directors will meet personally with management
and  key personnel of the business opportunity as part of the investigation. The
Company  will  not acquire or merge with any company for which audited financial
statements  cannot  be obtained within a reasonable period of time after closing
of  the  proposed  transaction,  as  required  by  the  Exchange  Act.

     The Company will not restrict its search to any specific kind of firms, but
may acquire a venture which is in its preliminary or development stage, which is
already  in  operation,  or  which  is in essentially any stage of its corporate
life.  It  is  impossible  to predict at this time the status of any business in
which  the  Company  may  become engaged, in that such business may need to seek
additional  capital,  may  desire to have its shares publicly traded or may seek
other  perceived  advantages  which  the  Company  may  offer.

RECENT  CHANGES  IN  CAPITAL  STRUCTURE

None.

RESULTS  OF  OPERATIONS

CONTINUING  OPERATIONS

FIRST  QUARTER  COSTS  AND  CHANGES  IN  FINANCIAL  CONDITIONS

     The  balance  of  current  assets  at  December  31, 2005 was approximately
$580,000  compared  to  a  balance  of $476,000 at March 31, 2006, a decrease of
$104,000.  The  balance  of  current  liabilities  was $2,853,000 and $3,435,000
respectively,  for  the  same  periods,  an  increase of $582,000. The resulting
current ratio at December 31, 2005 was 0.20 to 1. The current ratio at March 31,
2006  is .14 to 1. The current ratio indicates that the Company's ability to pay
the  Company's  obligations  has  worsened  since  December  31,  2005.

REVENUE  &  OPERATING  EXPENSES

THREE  MONTHS  ENDED MARCH 31, 2006 COMPARED TO THE THREE MONTHS ENDED MARCH 31,
--------------------------------------------------------------------------------
2005
----

     Total  net  sales and revenues were at approximately $204,000 for the three
months  ended  March  31,  2006 compared to $202,000 for the prior period a year
earlier,  an  increase  of  1  percent. This insignificant increase reflects the
slight  increase  in  sales.

     The  Company's  gross  profit  for  the  three  months ended March 31, 2006
compared  to  2005  increased  to  $159,000  from  $156,000.  Gross  profit as a
percentage  of  sales  increased  to 78 percent in 2006 from 77 percent in 2005.

     Total operating expenses (selling, general and administrative expenses) for
the  three  months ended March 31, 2005 compared to 2005 increased by $1,261,000
to  $1,922,000  from  $661,000  in the prior period. This was primarily due to a
significant increase in services paid with stock issuances for professional fees
of  the  Company  during  the  period.

     Loss from operations for the three months ended March 31, 2006 increased to
a  loss  of $1,763,000 from a loss of $504,000 compared to the same period 2005,
an  increase  of  $1,258,000.  The  Company's increase in the operating loss was
primarily  the  result of the increase in services paid with stock issuances for
professional  services and marketing efforts. Sales still remain insufficient to
cover  the  Company's  operating  needs.


                                        4
<PAGE>
     Net  interest  expense  for the three months ended March 31, 2006 was $0 as
compared  to  the  same  period  in  2005 of $46,000, down $46,000. The interest
expense will return in the 2nd Quarter, 2006 as a new building was purchased the
end  of  the 1st Quarter, 2006 replacing the building sold in the 3rd Quarter of
2005  the  mortgage  on  which  interest  is  paid.

     Net loss increased $1,323,000 from a loss of $599,000 to $1,922,000 for the
three  months  ended  March 31, 2005 and 2006 respectively. This net increase is
primarily  attributable to the increase of professional services paid with stock
and  the  write-off  of  the  investment  in  QDS.

LIQUIDITY  AND  CAPITAL  RESOURCES

     As  of  March  31, 2006, the Company had a deficiency in working capital of
$2,959,000.

     Net  cash  used  for  the  first  three months operating activities came to
approximately  $1,590,000,  up  $880,000 from this period last year of $710,000.

     Cash  provided  from  investing activities during the first three months of
this  year  netted  $1,550,000,  of which approximately $1,330,000 came from the
issuance  of  stock.

     During  the  first three months of 2006, the Company's financing activities
provided  the Company with $42,000 from the purchase of the office and warehouse
building,  gaining  an  asset,  but,  acquiring  mortgage  debt.

CRITICAL  ACCOUNTING  POLICIES

     The  preparation  of  the  Company's  consolidated  financial statements in
conformity  with  accounting  principles generally accepted in the United States
requires  the  Company to make estimates and judgments that affect the Company's
reported  assets,  liabilities,  revenues,  and  expenses, and the disclosure of
contingent assets and liabilities. The Company bases its estimates and judgments
on  historical  experience  and  on  various  other  assumptions  believed to be
reasonable  under the circumstances. Future events, however, may differ markedly
from  current  expectations  and  assumptions.  While  there  are  a  number  of
significant accounting policies affecting the consolidated financial statements,
the  Company believes the following critical accounting policy involves the most
complex,  difficult  and  subjective  estimates  and  judgments.

STOCK  BASED  COMPENSATION

     In December 2002, the FASB issued SFAS No. 148 - Accounting for Stock-Based
Compensation  -  Transition and Disclosure. This statement amends SFAS No. 123 -
Accounting  for  Stock-Based  Compensation,  providing  alternative  methods  of
voluntarily  transitioning  to  the fair market value based method of accounting
for  stock  based employee compensation. FAS 148 also requires disclosure of the
method  used  to account for stock-based employee compensation and the effect of
the  method  in both the annual and interim financial statements. The provisions
of  this  statement related to transition methods are effective for fiscal years
ending  after  December  15,  2002,  while  provisions  related  to  disclosure
requirements  are  effective  in financial reports for interim periods beginning
after  December  31,  2002.

     The  Company  elected  to  continue to account for stock-based compensation
plans using the intrinsic value-based method of accounting prescribed by APB No.
25,  "Accounting  for  Stock  Issued to Employees," and related interpretations.
Under  the  provisions  of  APB  No. 25, compensation expense is measured at the
grant  date  for  the  difference  between  the  fair value of the stock and the
exercise  price.

RECENT  ACCOUNTING  PRONOUNCEMENTS

     The Company adopted SFAS No. 142.  Under the new rules, the Company will no
longer  amortize goodwill and other intangible assets with indefinite lives, but
such  assets  will  be  subject to periodic testing for impairment. On an annual
basis,  and  when  there  is  reason  to  suspect  that  their  values have been
diminished  or  impaired,  these  assets  must  be  tested  for  impairment, and
write-downs to be included in results from operations may be necessary. SFAS No.
142  also  requires  us  to complete a transitional goodwill impairment test six
months  from  the  date  of  adoption.  Based


                                        5
<PAGE>
upon the information at the Company's disposal, Management elected not to adjust
the  value  of  goodwill  after  making  the  annual  review.

     Any  goodwill  impairment  loss  recognized as a result of the transitional
goodwill  impairment test will be recorded as a cumulative effect of a change in
accounting  principle no later than the end of fiscal year 2002. The adoption of
SFAS  No.  142  had no material impact on the consolidated financial statements.
SFAS  No.  143  establishes  accounting  standards  for  the  recognition  and
measurement  of  an  asset  retirement  obligation  and  its  associated  asset
retirement  cost.  It  also  provides  accounting guidance for legal obligations
associated  with  the  retirement of tangible long-lived assets. SFAS No. 143 is
effective  in  fiscal  years  beginning after June 15, 2002, with early adoption
permitted. The Company expects that the provisions of SFAS No. 143 will not have
a  material  impact  on  the  consolidated  results  of operations and financial
position.  We  adopted  SFAS  No.  143  effective  January  1,  2005.

     SFAS  No.  144  establishes a single accounting model for the impairment or
disposal  of  long-lived assets, including discontinued operations. SFAS No. 144
superseded  Statement of Financial Accounting Standards No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of"
(SFAS  No.  121), and APB Opinion No. 30, "Reporting the Results of Operations -
Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary,
Unusual and Infrequently Occurring Events and Transactions." The Company adopted
SFAS  No.  144  effective  January  1, 2002. The adoption of SFAS No. 144 had no
material  impact  on  the  consolidated  financial  statements.

     In  April  2002,  the  FASB  issued  Statement No. 145, "Rescission of FASB
Statements  No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical
Corrections." This Statement rescinds FASB Statement No. 4, "Reporting Gains and
Losses  from  Extinguishment  of Debt," and an amendment of that Statement, FASB
Statement  No.  64,  "Extinguishments  of  Debt  Made  to  Satisfy  Sinking-Fund
Requirements"  and  FASB  Statement No. 44, "Accounting for Intangible Assets of
Motor  Carriers."  This  Statement amends FASB Statement No. 13, "Accounting for
Leases,"  to  eliminate  an  inconsistency  between  the required accounting for
sale-leaseback  transactions  and  the  required  accounting  for  certain lease
modifications  that  have  economic  effects  that are similar to sale-leaseback
transactions. The Company does not expect the adoption to have a material impact
to  the  financial  position  or  results  of  operations.

     In  June  2002,  the  FASB  issued Statement No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities." This Statement addresses financial
accounting  and  reporting for costs associated with exit or disposal activities
and  nullifies  Emerging  Issues  Task  Force  (EITF) Issue No. 94-3, "Liability
Recognition for Certain Employee Termination Benefits and Other Costs to Exit an
Activity  (including Certain Costs Incurred in a Restructuring)." The provisions
of  this  statement  are  effective  for  exit  or  disposal activities that are
initiated  after  December  31,  2002,  with  early  application encouraged. The
Company  does not expect the adoption to have a material impact to the financial
position  or  results  of  operations.

     In  October  2002,  the  FASB  issued  Statement  No. 147, "Acquisitions of
Certain  Financial  Institutions-an  amendment of FASB Statements No. 72 and 144
and  FASB  Interpretation  No.  9,"  which  removes  acquisitions  of  financial
institutions  from  the  scope  of  both  Statement  72 and Interpretation 9 and
requires  that those transactions be accounted for in accordance with Statements
No.  141,  Business  Combinations,  and  No.  142, Goodwill and Other Intangible
Assets.  In  addition,  this  Statement  amends SFAS No. 144, Accounting for the
Impairment  or  Disposal of Long-Lived Assets, to include in its scope long-term
customer-relationship  intangible  assets  of  financial  institutions  such  as
depositor  and  borrower-relationship  intangible  assets  and credit cardholder
intangible  assets.  The  requirements  relating  to  acquisitions  of financial
institutions are effective for acquisitions for which the date of acquisition is
on  or  after  October  1,  2002.  The  provisions related to accounting for the
impairment  or  disposal  of  certain long-term customer-relationship intangible
assets  are effective on October 1, 2002. The adoption of this statement did not
have a material impact to the financial position or results of operations as the
Company  has  not  engaged  in  either  of  these  activities.

     In  December  2002,  the  FASB  issued  Statement  No. 148, "Accounting for
Stock-Based Compensation-Transition and Disclosure," which amends FASB Statement
No. 123, Accounting for Stock-Based Compensation, to provide alternative methods
of  transition  for  a  voluntary  change  to  the  fair  value  based method of
accounting  for  stock-based  employee compensation. In addition, this statement
amends  the  disclosure  requirements  of  Statement  123  to  require prominent
disclosures  in both annual and interim financial statements about the method of
accounting  for  stock-based  employee compensation and the effect of the method
used  on  reported  results.  The  transition  guidance  and


                                        6
<PAGE>
annual  disclosure  provisions  of  Statement 148 are effective for fiscal years
ending  after  December  15, 2002, with earlier application permitted in certain
circumstances.  The  interim  disclosure  provisions are effective for financial
reports  containing  financial  statements  for  interim periods beginning after
December 15, 2002. The adoption of this statement did not have a material impact
on  our  financial  position  or results of operations as we have not elected to
change  to  the  fair  value based method of accounting for stock-based employee
compensation.

     In  January  2003, the FASB issued Interpretation No. 46, "Consolidation of
Variable Interest Entities." Interpretation 46 changes the criteria by which one
company  includes  another  entity  in  its  consolidated  financial statements.
Previously,  the  criteria  were  based  on  control  through  voting  interest.
Interpretation  46  requires  a variable interest entity to be consolidated by a
company  if  that  company is subject to a majority of the risk of loss from the
variable  interest  entity's activities or entitled to receive a majority of the
entity's  residual  returns  or  both.  A  company  that consolidates a variable
interest  entity  is  called  the  primary  beneficiary  of  that  entity.  The
consolidation  requirements  of  Interpretation 46 apply immediately to variable
interest entities created after January 31, 2003. The consolidation requirements
apply  to  older  entities  in the first fiscal year or interim period beginning
after  June  15,  2003.  Certain  of  the  disclosure  requirements apply in all
financial  statements  issued  after  January  31,  2003, regardless of when the
variable  interest entity was established. We do not expect the adoption to have
a  material  impact  to  our  financial  position  or  results  of  operations.

     In  April 2003, the FASB issued Statement of Financial Accounting Standards
(SFAS)  No.  149,  Amendment  of Statement No. 133 on Derivative Instruments and
Hedging Activities. SFAS 149 amends SFAS No. 133 to provide clarification on the
financial  accounting  and  reporting  of  derivative  instruments  and  hedging
activities and requires that contracts with similar characteristics be accounted
for  on  a  comparable  basis.  The  provisions  of  SFAS  149 are effective for
contracts  entered  into  or  modified  after  June  30,  2003,  and for hedging
relationships  designated  after June 30, 2003. The adoption of SFAS 149 did not
have  a  material  impact  on  the  results of operations or financial position.

     In May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial
Instruments  with  Characteristics  of  Both  Liabilities  and  Equity. SFAS 150
establishes standards on the classification and measurement of certain financial
instruments  with characteristics of both liabilities and equity. The provisions
of  SFAS  150  are  effective for financial instruments entered into or modified
after  May  31, 2003 and to all other instruments that exist as of the beginning
of  the  first interim financial reporting period beginning after June 15, 2003.
The  adoption  of  SFAS  150  did  not  have a material impact on the results of
operations  or  financial  position.

OFF-BALANCE  SHEET  ARRANGEMENTS

     The  Company  does  not  have  any  off-balance  sheet  arrangements.

ITEM  3.     CONTROLS  AND  PROCEDURES.

     Disclosure  controls  and procedures are controls and other procedures that
are  designed  to ensure that information required to be disclosed by Gateway in
the  reports  that  are  filed or submitted under the Exchange Act are recorded,
processed,  summarized  and  reported,  within the time periods specified in the
Securities  and  Exchange Commission's rules and forms.  Disclosure controls and
procedures  include,  without  limitation,  controls  and procedures designed to
ensure  that information required to be disclosed by Gateway in the reports that
are filed under the Exchange Act are accumulated and communicated to management,
including  the  principal  executive  and  financial officers, as appropriate to
allow  timely  decisions  regarding  required  disclosure.

     Evaluation  of disclosure and controls and procedures. As of the end of the
period  covered by this Quarterly report, Gateway conducted an evaluation, under
the  supervision  and  with the participation of the chief executive officer and
chief  financial  officer, of the disclosure controls and procedures (as defined
in  Rules  13a-15(e)  of  the Exchange Act). Based on this evaluation, the chief
executive  officer  and  chief  financial  officer  concluded  that  Gateway's
disclosure  controls  and  procedures  are  effective to ensure that information
required to be disclosed by Gateway in reports that are filed or submitted under
the  Exchange  Act  are  recorded, processed, summarized and reported within the
time  periods  specified  in Securities and Exchange Commission rules and forms.

     Changes in internal controls over financial reporting.  There was no change
in  Gateway internal controls, which are included within disclosure controls and
procedures,  during  the  most  recently  completed  fiscal  quarter  that  has
materially  affected,  or  is  reasonably  likely  to materially affect, Gateway
internal  controls.


                                        7
<PAGE>
                           PART II - OTHER INFORMATION

ITEM 1. LEGAL  PROCEEDINGS.

     Incorporated by reference from the Registrant's report on Form 10-QSB dated
May  22,  2006.

ITEM 2. UNREGISTERED  SALES  OF  EQUITY  SECURITIES  AND  USE  OF  PROCEEDS.

     None.

ITEM 3. DEFAULTS  UPON  SENIOR  SECURITIES.

     None.

ITEM 4. SUBMISSION  OF  MATTERS  TO  A  VOTE  OF  SECURITY  HOLDERS.

     None.

ITEM 5. OTHER  INFORMATION.

     None.


                                        8
<PAGE>
Item 6. Exhibits.

<TABLE>
<CAPTION>
EXHIBIT
  NO.                                         IDENTIFICATION OF EXHIBIT
-------                                       -------------------------
<S>      <C>
  31.1*  Certification of Richard A. Bailey, Chief Executive Officer of Gateway Distributors, Ltd., pursuant to 18
         U.S.C. Sec.1350, as adopted pursuant to Sec.302 of the Sarbanes-Oxley Act of 2002.
  31.2*  Certification of Richard A. Bailey, Chief Financial Officer of Gateway Distributors, Ltd., pursuant to 18
         U.S.C. Sec.1350, as adopted pursuant to Sec.302 of the Sarbanes-Oxley Act of 2002.
  32.1*  Certification of Richard A. Bailey, Chief Executive Officer of Gateway Distributors, Ltd., pursuant to 18
         U.S.C. Sec.1350, as adopted pursuant to Sec.906 of the Sarbanes-Oxley Act of 2002.
  32.2*  Certification of Richard A. Bailey, Chief Financial Officer of Gateway Distributors, Ltd., pursuant to 18
         U.S.C. Sec.1350, as adopted pursuant to Sec.906 of the Sarbanes-Oxley Act of 2002.
</TABLE>

__________
*    Filed Herewith.
**   Previously  Filed

                                   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.


                                        Gateway Distributors, Ltd.
Dated: November 1, 2006.
                                        By /s/ Richard A. Bailey
                                           ---------------------------
                                            Richard A. Bailey,
                                            Chief Executive Officer
                                            and Chief Financial Officer


                                        9