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

                                   FORM 10-QSB

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

     For the quarterly period ended March 31, 2005.

[ ]  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 of                    (I.R.S. Employer
     incorporation or organization)                   Identification No.)

     3220 Pepper Lane, Suite 14,                            89120
           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 [ ]

     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 9, 2005, the issuer
had  270,980,594  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 . . . . . . . . . . . . . . . . . . . . .    1
    Item 1.  Financial Statements. . . . . . . . . . . . . . . . . . . .  F-1
    Item 2.  Management's Discussion and Analysis or Plan of Operation .    2
    Item 3.  Controls and Procedures . . . . . . . . . . . . . . . . . .    5
PART II - OTHER INFORMATION. . . . . . . . . . . . . . . . . . . . . . .    6
    Item 1.  Legal Proceedings . . . . . . . . . . . . . . . . . . . . .    6
    Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds    6
    Item 3.  Defaults Upon Senior Securities
    Item 4. Submission of Matters to a Vote of Security Holders.
    Item 5.  Other Information . . . . . . . . . . . . . . . . . . . . .    6
    Item 6.  Exhibits. . . . . . . . . . . . . . . . . . . . . . . . . .    7
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    8
CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002.
CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002.
</TABLE>


<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, 2005, 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-12 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 years ended December 31, 2004 and
December  31,  2003.  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, 2005 are
not  necessarily  indicative  of results that may be expected for the year ended
December  31, 2005. The financial statements are presented on the accrual basis.




                      [THIS SPACE LEFT BLANK INTENTIONALLY]


<PAGE>
<TABLE>
<CAPTION>
                   GATEWAY DISTRIBUTORS, LTD. AND SUBSIDIARIES


                                  - CONTENTS -


                                                                   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,
                                                                   2005
                                                                 -----------
<S>                                                              <C>

                               ASSETS

CURRENT ASSETS:
  Cash and cash equivalents                                      $   37,606
  Accounts Receivable                                                19,095
  Receivable from Stock Sales                                        30,925
  Inventories                                                       393,317
  Property Held for Short Term Investment                                 0
  Prepaids                                                              500
                                                                 -----------
                                           Total Current Assets     481,443
                                                                 -----------

PROPERTY & EQUIPMENT
  Property and Equipment, at cost                                 4,855,304
  (Less) accumulated depreciation and amortization                 (363,680)
                                                                 -----------
Total Property & Equipment                                        4,491,624
                                                                 -----------

MINORITY INTEREST IN SUBSIDIARY                                           0
                                                                 -----------

OTHER ASSETS
  Product Development Awaiting Production                           418,223
  Goodwill, Trademarks & Formulas                                   536,500
  Investment in Subsidiary - QDS of Arizona                         200,000
  Other Assets                                                       28,140
                                                                 -----------
                                             Total Other Assets   1,182,863
                                                                 -----------

Total Assets                                                     $6,155,930
                                                                 ===========
</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)


                                                                    March 31,
                                                                      2005
                                                                 -------------
<S>                                                              <C>
                              LIABILITIES

CURRENT LIABILITIES:

Accounts payable:
  Trade                                                               659,512
  Commissions                                                          13,847
Accrued expenses:
  Payroll and employee benefits                                       178,391
  Payroll taxes                                                       154,047
  Interest                                                             20,944
  Other                                                                38,686
Current maturities of long-term debt                             $  1,481,780
                                                                 -------------
Total current liabilities                                           2,947,207
                                                                 -------------

LONG-TERM DEBT                                                      3,214,669

                                                                 -------------
Total Liabilities                                                   6,161,876
                                                                 -------------

                   STOCKHOLDERS' EQUITY (DEFICIENCY)

Preferred stock - $.001 par value
  Authorized - 400,000,000 shares
    Series A Preferred
        Authorized - 100,000,000 shares
        4,972,125 issued and outstanding                                4,972
    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 - 30,980,594                                  30,981
  Additional paid-in capital                                       19,414,377
  Accumulated (deficit)                                            19,471,276)

                                                                 -------------
Net Stockholders' Equity (Deficiency)                                  (5,946)
                                                                 -------------

Total Liabilities & Equity (Deficiency)                          $  6,155,930
                                                                 =============
</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          Quarter
                                                                            Ended            Ended
                                                                          March 31,        March 31,
                                                                            2005             2004
                                                                       ---------------  ---------------
<S>                                                                    <C>              <C>
SALES                                                                  $      201,686   $      266,107

COST OF SALES                                                                  45,584           44,300
                                                                       ---------------  ---------------

GROSS PROFIT                                                                  156,102          221,807
                                                                       ---------------  ---------------

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES:
  Depreciation Expense                                                         24,709            5,000
  Professional Services Not Classified Elsewhere                              124,360        2,687,482
  Development of Jeunesse by Francois Product Line                             62,071          246,657
  Product Development                                                         250,626
  All Other Selling, General and Administrative                               198,758          726,919
                                                                       ---------------  ---------------

TOTAL SELLING, GENERAL AND ADMINISTRATIVE EXPENSES                            660,524        3,666,058
                                                                       ---------------  ---------------

OTHER INCOME (EXPENSE):
  Gain on Sale of Property held for short-term investment                      37,139                0
  (Loss) on Sale of Subsidiary - Los Cabos Beverage                            (8,256)               0
  (Loss) change in reporting QDS of Arizona as an investment                  (68,535)               0
  (Impairment)  reporting Subsidiary QDS of Arizona as an investment           (9,101)               0
  Interest Expense                                                            (45,905)         (63,361)
  Other Income                                                                      0                0
                                                                       ---------------  ---------------

TOTAL OTHER INCOME (EXPENSE):                                                 (94,658)         (63,361)
                                                                       ---------------  ---------------

NET INCOME (LOSS) BEFORE MINORITY INTEREST                                   (599,080)      (3,507,612)

MINORITY INTEREST                                                                   0                0
                                                                       ---------------  ---------------

NET INCOME (LOSS) BEFORE PROVISION FOR INCOME TAX                            (599,080)      (3,507,612)

PROVISION FOR INCOME TAX                                                            0                0
                                                                       ---------------  ---------------

NET INCOME (LOSS)                                                      $     (599,080)  $   (3,507,612)
                                                                       ===============  ===============

BASIC AND DILUTED EARNINGS (LOSS) PER SHARE                                     (0.25)  $(3,507,612.00)
                                                                       ---------------  ---------------

BASIC & DILUTED WEIGHTED AVERAGE SHARES OF COMMON STOCK                $    2,440,660                1
                                                                       ===============  ===============
</TABLE>

                      See Notes to the Financial Statements


                                      F-3
<PAGE>
<TABLE>
<CAPTION>
                                           GATEWAY DISTRIBUTORS, LTD AND SUBSIDIARIES
                              UNAUDITED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIENCY)
                                   FOR THE PERIODS ENDED MARCH 31, 2005 AND DECEMBER 31, 2004


                                        Preferred Stock            Common Stock
                                        Par Value $0.001        Par Value $0.001         Paid In       Retained
                                        ----------------        ----------------         Excess        Earnings      Net Equity
                                       Shares      Amount       Shares      Amount       of Par        (Deficit)    (Deficiency)
                                     ----------  -----------  ----------  -----------  ------------  -------------  ------------
<S>                                  <C>         <C>          <C>         <C>          <C>           <C>            <C>
BALANCE - December 31, 2003             726,125  $       726           1  $         1  $ 7,737,264   $(11,478,117)  $(3,740,126)

Common Stock Issued:
  For Services - Restricted Stock                                 48,010           48       36,642                       36,690
  For Services - Unrestricted                                     15,673           16    4,729,272                    4,729,288
Stock
  For Debt - Unrestricted Stock                                        0            0       25,000                       25,000
  For Cash                                                        34,906           34    6,696,802                    6,696,836

Preferred Stock Issued
  For Services - Restricted "A"       4,246,000        4,246                                                              4,246
Series
Reclass Par to Pd in Excess                                                                                                   0

(Loss) for Year per stmt Oper                                                                          (7,394,079)   (7,394,079)

                                     ----------  -----------  ----------  -----------  ------------  -------------  ------------
Balance for December 31, 2004         4,972,125        4,972      98,590           99   19,224,980    (18,872,196)      357,855

Common Stock Issued:
  For Services - Restricted Stock                              7,000,000        7,000       (6,900)                         100
  For Services - Unrestricted Stock                               60,004           60        9,040                        9,100
  For Cash                                                    23,822,000       23,822      187,257                      211,079

Preferred Stock Issued
  For Services - Restricted "B"      15,000,000       15,000                                                             15,000
Series

(Loss) for Period                                                                                        (599,080)     (599,080)

                                     ----------  -----------  ----------  -----------  ------------  -------------  ------------
Balance for January 31, 2005         19,972,125  $    19,972  30,980,594  $    30,981  $19,414,377   $(19,471,276)  $    (5,946)
                                     ==========  ===========  ==========  ===========  ============  =============  ============

Recap Preferred Stock Issued:
  Restricted "A" Series               4,972,125  $     4,972
  Restricted "B" Series              15,000,000       15,000
                                     ----------  -----------

Total Preferred - March 31, 2005     19,972,125  $    19,972
                                     ==========  ===========
</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    Quarter Ended
                                                              March 31,        March 31,
                                                                2005             2004
                                                           ---------------  ---------------
<S>                                                        <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss)                                                       (599,080)      (3,507,612)
Adjustments to reconcile net (loss)
    to net cash from (to) operating activities:
    Stock issued for Services                                      24,200        2,687,487
    Stock issued for Debt                                               0                0
    Depreciation & Amortization Prop & Equip                       24,709            5,000
    Loss on Sale of Fixed Assets                                        0
    Minority Interest                                                   0
    Loss upon report of QDS of Arizona to an investment           (68,535)
    Impairment of Investment in QDS of Arizona                     (9,101)
    Loss on Sale of Grandma Hammans formula & rights                    0
Changes in operating assets and liabilities which
  increase (decrease) cash flow:
    Accounts Receivable                                            26,539              838
    Inventories                                                   100,882          (95,704)
    Properties Held for Short Term Investment                     179,741                0
    Prepaid Expenses and Other Current Assets                      25,000                0
    Accounts Payable and Commissions                              (55,982)         (83,940)
    Accrued Liabilities                                               872         (213,080)

                                                           ---------------  ---------------
Net cash provided (used) from operating activities               (350,755)      (1,207,011)
                                                           ---------------  ---------------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Product Development Awaiting Production                             0                0
    Capital (Outlays)/Disposals - net                            (249,960)        (209,906)
    Purchase (Sale) of Trademarks                                       0          (55,373)
    Renegotiation of Purchase of Grandma Hammans                        0          (18,600)
    Other Assets                                                    4,689          (44,068)
    Investment in QDS of Arizona                                  (50,000)               0

                                                           ---------------  ---------------
Net cash provided (used) from investing activities               (295,271)        (327,947)
                                                           ---------------  ---------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Net Proceeds from Term Debt after Principal Payments              442,680                0
Principle Payment on Debts (over) net proceeds Term Debt                0         (174,703)
Stock Sales for Cash; Net                                         203,793        2,421,989

                                                           ---------------  ---------------
Net cash provided (used) from financing activities                646,473        2,247,286
                                                           ---------------  ---------------

NET INCREASE (DECREASE) IN CASH EQUIVALENTS                           447          712,328

CASH AND CASH EQUIVALENTS - Beginning of Period                    37,159          163,190
                                                           ---------------  ---------------

                                                           ---------------  ---------------
CASH AND CASH EQUIVALENTS - End of Period                  $       37,606   $      875,518
                                                           ===============  ===============
</TABLE>

                        See Notes to Financial Statements


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


                                                            Quarter Ended   Quarter Ended
                                                              March 31,       March 31,
                                                                 2005            2004
                                                            --------------  --------------
<S>                                                         <C>             <C>
SUPPLEMENTAL DISCLOSURE

CASH PAID FOR:
  Interest                                                  $       45,905  $       24,128
  Taxes                                                     $            0               0


NON CASH INVESTING AND FINANCING ACTIVITIES

STOCK ISSUED FOR:
  Services                                                  $       24,200  $    2,587,487
  Debt                                                      $            0               0

FORMULA EXCHANGED FOR DEBT PAYOFF
  Payoff of Grandma Hamman's debt in exchange for formula   $            0  $            0

CHANGE IN REPORTING SUBSIDIARY TO AN INVESTMENT
Loss upon report change of QDS of Arizona to an investment  $       68,535  $            0
Impairment of QDS of Arizona as an investment               $        9,101  $            0
</TABLE>

                      See Notes to the Financial Statements


                                      F-6
<PAGE>
                   GATEWAY DISTRIBUTORS, LTD. AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 2005

NOTE  1  -     BASIS  OF  PRESENTATION:

     The  consolidated  interim condensed financial statements at March 31, 2005
     and  for  the  periods  ended  March  31,  2005 and 2004 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, 2004. The accompanying consolidated
     unaudited interim financial statements for the periods ended March 31, 2005
     and  2004  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

     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. (a Nevada Corporation organized
               April  30, 2004 to house and manage the real estate, vehicles and
               equipment  of  the  Company)
          -    Aspen  Cove  Resorts,  Inc  (a Nevada Corporation organized April
               30,2004  to  operate  the  Aspen  Cove  Resort.)

     The  Company  also  owns  51%  interest  in the following company, which is
     reported  on  the unaudited financial statements as an investment (See Note
     "Investment  in  Quality  Distribution  Services  of  Arizona  "QDS"):

          -    Quality  Distribution  Services  of  Arizona,  Inc  (a  Nevada
               Corporation  organized June 7, 2004 as a wholesale distributor of
               non-alcoholic  beverages  and  food.

     The  accompanying consolidated financial statements include the accounts of
     its  subsidiaries.  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.

                                      F-7
<PAGE>
     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  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.

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

     The  Company  entered  into  a  verbal agreement December 12, 2003 with The
     Chelsea  Collection  Inc, a Nevada corporation ("Chelsea Collection") which
     was  finalized on March 15, 2004 and later clarified on a few points May 4,
     2004.  Chelsea Collection is a corporation owned equally by two 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
     worldwide rights, trademarks, formulas and licenses of the Jeunesse by Fran
     ois  Vautour  and  the  GH3 skin care line. All monies that the Company has
     invested  in  this project have gone directly to Francois Vautour. No money
     has  gone  to  Gateway  Distributors  officers.

     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.
     The  minimum  weekly  payment is $10,000 a week. 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 $655,757 for all of 2004 and $62,071 for
     the  three  months  ended  March  31,  2005.

     No  title or ownership passes to the Company or to Chelsea Collection until
     the  November  25,  2003  agreement between Chelsea Collection and Fran ois
     Vautour  is  satisfied,  the  payment  of  which  is described in the prior
     paragraph.  The  Company  has  opted  not to capitalize the purchase price.

     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.  A portion of the cost outlays have been charged to
     the balance sheet as an asset under product development awaiting production
     for  $230,573.

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"). QDS was incorporated in Nevada on June 7, 2004 and is
     51%  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, but
     has  recognized a reduction by the $196,953 operating loss incurred in 2004
     out  of  the  $332,700  investment.  This is recognized in the Statement of
     Operations  as  of  March  31,  2005.  In  addition,  no operations of this
     subsidiary  are  recognized in the consolidated statement of operations, as
     management  has  taken  the  position  that the subsidiary is not under its
     control.

NOTE  6-     REAL  ESTATE  SALE:

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

     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.  Proceeds  were  used  for  remodeling.

NOTE  7  -     REVERSE  STOCK  SPLITS:

     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  as  of  December  31,  2004  and  forward.

NOTE  8  -     AUTHORIZATION  AND  ISSUANCE  OF  CLASS  "B"  PREFERRED  STOCK:

     On January 18, 2005, the Company authorized 100,000,000 Class "B" shares of
     preferred  stock  with  a  par value of 0.001. 15,000,000 restricted shares
     were  issued  through  March  31,  2005.  Class  "B"  preferred  stock  is
     convertible  to  common  stock  on  a  one  for one basis and has no voting
     rights.

NOTE  9  -     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, 2005, the remaining shares approved to
     issue  under  the  ESIP  plans  are  5,102,400,000.

     During  January  1 through March 31, 2005, the Company issued 1,432,000,000
     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  from the sale of this stock to employees during the first quarter
     of  2005  is  approximately  $211,000.

NOTE  10  -     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 were reported as "Receivable ESIP Stock Plan"
     as  a current asset in the amount of $30,925. These are for stock issued by
     March  31,  2005,  the  sale proceeds of which were received by the Company
     during  April  2005.


                                      F-9
<PAGE>
NOTE  11  -     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). Stock issued to consultants
     through  the plan is not affected by reverse splits until 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, 2005, the total remaining shares approved
     to  issue  under  the  RSP  plans  are  1,726,000,000.

     During  January  1  through  March  31, 2005, the Company issued 30,000,000
     shares  out of the RSP plan before stock splits. The number of shares after
     stock  splits  is  recognized  on  the  statement  of  stockholders equity.

NOTE  12  -     RESTRICTED  STOCK  ISSUED  TO  CONSULTANTS:

     During  January  1  through  March  31, 2005, the Company issued 15,000,000
     restricted  shares  of  preferred  "B"  stock  to  consultants for services
     rendered.  Restricted  stock  has no measurable value. However, $15,000 was
     assigned  as  a  value  for  this  stock.

NOTE  13 -     RESTRICTED STOCK ISSUED TO OFFICERS (RELATED PARTY TRANSACTIONS):

     During  January  1  through  March 31, 2005, the Company issued to officers
     7,000,000  shares  of  restricted  common  stock.  Restricted  stock is not
     marketable.  Consequently,  no  value can be determined for this restricted
     stock  issued.  However  a  nominal amount of $100 has been assigned as the
     value  for  this  non-marketable  stock  issued.

     During  January  1  through  March  31, 2005, the Company did not issue any
     shares  of  restricted preferred stock to officers. Restricted stock is not
     marketable.


NOTE  14  -     NEPOTISM  DISCLOSURE  (RELATED  PARTY  TRANSACTIONS):

     During  the  First  Quarter  of  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) and
     the  son  of  the  Chief  Operations  Officer  serves  as Vice President of
     Operations  with  additional  responsibilities  in  Information Technology.
     Other  children  of  the  officers  work  part  time  for  the  Company  in
     non-managerial  positions.

NOTE  15  -     RECLASSIFICATION  AND  RESTATEMENTS:

     Selected  items  in  the  March 31, 2004 financial statements as previously
     reported  have  been  reclassified  and  restated to be consistent with the
     unaudited  financial  statements  as  of  March  31,  2005.

     The Company has no off-balance sheet arrangements.


                                      F-10
<PAGE>
NOTE 16-     DEVELOPMENT OF PRODUCTS, PRODUCT LINES:

     The  Company has looked into several product and line ventures. Two product
     lines  that  the  Company  has  chosen  to  invest significantly in are the
     Jeunesse  by  Francois  beauty products now being offered primarily through
     multi-level marketing and the Pete Rose product line which is now developed
     with  product  on  hand  ready  to  market.

     The  Company  has  invested in various projects. Some of these projects the
     Company has determined are worth pursuing and are expected to be profitable
     while  others  the  Company  has  determined  to set aside and to pursue no
     further. Some of the costs involved finders' fees and other consulting fees
     that  were  paid with free trading common stock of the Company. This common
     stock  is  issued  by  the  Company  under  its Non-Employee, Directors and
     Consultants  Retainer  Stock  Plan  ("Plan").

     As  discussed  in  a  prior  footnote,  the  stock issued under the Plan is
     unrestricted  and is issued as "S-8" stock as defined by the Securities and
     Exchange  Commission  ("SEC"),  and  has  been  charged  to  operations.

NOTE 17 -     CONSIDERATIONS AFFECTING THE COMPANY'S ABILITY TO CONTINUE AS A
              GOING CONCERN:

     There  have  been significant recurring losses and negative cash flows from
     operations  for  the  past  years,  which have resulted in a severe working
     capital  deficiency. In the event the Company is unable to raise sufficient
     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 is taking steps to
     stop  funding  certain  phases of its operations in an order to conserve as
     well  as  to  preserve  its  working  capital.

NOTE  18  -     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.

     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.

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

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


                                      F-11
<PAGE>
     On  December  31,  2002,  the  Company  acquired  all  assets  and selected
     liabilities of TRSG Corporation ("TRSG"). Under the terms of the agreement,
     TRSG  chooses which creditors it continues to owe and all others are passed
     to the Company. This agreement has not been agreed upon by the creditors of
     TRSG.  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, and has
     therefore  not  recognized  any  contingent  liability  on  this  matter.

     In  the  normal  course  of  business  the  Company experienced a change in
     accepted  product  sold to the public by the Bureaus of Consumer Protection
     of  Nevada  and  Maryland  over  the  selling  of  a  discontinued product.
     Negotiations  are  still  in  process,  the  proposed  penalties  and costs
     associated with this matter could range from $0 to $220,000. No enforcement
     action  has  been  filed  against  the  Company  to  date.

     Presently  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 contests the amount
     claimed  and  has  made  payment  toward  the  uncontested  amount  while
     negotiations  with  the  plaintiff  continue.  The  litigation  is  in  the
     discovery  phase  with  no trial date set at this time. Management believes
     the  exposure on this claim ranges between $50,000 and $80,000, less future
     payments.

     The  Company  has  recognized  an obligation in the financial statements of
     approximately  $90,000, which is recognized as an accounts payable to cover
     the  potential  liability  exposure  of  these  proceedings.

     Also,  complaints  filed  by  the  Security and Exchange Commission against
     Suburban  Capital  which  names the Company and its CEO are not settled. At
     this juncture, legal counsel is unable to predict what the possible outcome
     of  these  matters  will  be.  The Company therefore has not recognized any
     contingent  liability  for  this  litigation.

     OTHER:
     ------

     As of March 31, 2005, 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  2005.

NOTE  19-     SUBSEQUENT  EVENTS:

     Around April 18, 2005, the Company entered into an asset purchase agreement
     selling  approximately  95%  of  Aspen  Cove  Resort,  property  located in
     Southwestern  Utah.  The  asset  purchase agreement indicates the sale will
     involve  a  combination  of stock, debt assumption and cash. The underlying
     mortgage on this property is presently in default. Management is unsure who
     will  manage  Aspen Cove Resort and whether Aspen Cove Inc. will be used in
     the  future.  This sale is contingent on the completion of due diligence by
     the  buyer.

     Around  April 18, 2005, the Company has entered into an agreement to sell a
     piece  of  real  estate  property at near cost. This agreement has not been
     closed.


                                      F-12
<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" as that term is
used  in  Section  27A  of  the Securities Act and Section 21E of the Securities
Exchange  Act  of 1934. 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 our
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,  our  ability  to  obtain  additional financing from
outside  investors and/or bank and mezzanine lenders and our ability to generate
sufficient  revenues  to  cover  operating  losses  and  position  us 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. We believe
the  information  contained  in  this  Form 10-QSB to be accurate as of the date
hereof.  Changes  may occur after that date. We will not update that information
except  as  required  by  law  in  the  normal  course  of its public disclosure
practices.

     Additionally,  the  following  discussion regarding our 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,
as  well as the financial statements in Item 7 of Part II of our Form 10-KSB for
the  fiscal  year  ended,  2  December  31,  2004.

MANAGEMENT'S PLAN OF OPERATIONS

GENERAL

     We  were originally incorporated in the State of Nevada on May 26, 1993. We
market  and  distribute  different  nutritional  and/or  health  and  skin  care
products.  The  products  which  we  sell  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

     Our  current  purpose  is  to  seek, investigate and, if such investigation
warrants,  acquire  an  interest  in  business  opportunities presented to us 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.  We  do  not  restrict our search to any specific business; industry or
geographical  location and we may participate in a business venture of virtually
any  kind  or  nature.

     We  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. We may acquire
assets  and establish wholly owned subsidiaries in various businesses or acquire
existing  businesses  as  subsidiaries.

     As  part  of our investigation of potential merger candidates, our 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 our financial
resources  and  management  expertise.  The manner in which we participate in an
opportunity  will  depend on the nature of the opportunity, the respective needs
and  desires  of  us  and  other parties, the management of the opportunity, our
relative  negotiation  strength  and  that  of  the  other  management.

     We  intend  to  concentrate on identifying preliminary prospective business
opportunities  that may be brought to our attention through present associations
of  our officers and directors, or by our stockholders. In analyzing prospective
business  opportunities,  we  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


                                        2
<PAGE>
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 our 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.

     Our  officers  and  directors  will meet personally with management and key
personnel  of  the  business opportunity as part of their investigation. We 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.

     We  will  not  restrict  our  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  we  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  we  may  offer.

RECENT CHANGES IN OUR CAPITAL STRUCTURE

     Effective  January  18,  2005,  we  designated  100,000,000  shares  of our
preferred  stock  as  the  Series  B Preferred Stock. Each share of the Series B
Preferred Stock is convertible into one share of the common stock. The shares of
the  Series  B  Preferred  Stock  do  not  have  voting  rights.

     Effective  March  28,  2005,  we  implemented  a 1-500 reverse split of our
issued  and  outstanding  common  stock.

RESULTS OF OPERATIONS

CONTINUING OPERATIONS

FIRST QUARTER COSTS AND CHANGES IN FINANCIAL CONDITIONS

     The  balance  of  current  assets  at  December  31, 2004 was approximately
$806,000  compared  to  a  balance of $481,000 at March 31, 2005. The balance of
current  liabilities  was  $2,954,000 and $2,947,000, respectively, for the same
period.  The  resulting  current  ratio  at December 31, 2004 was 0.27 to 1. The
current  ratio  at March 31, 2005 was .16 to 1. The current ratio indicates that
our  ability to pay our obligations has worsened over the first quarter of 2005.

REVENUE

THREE MONTHS ENDED MARCH 31, 2005 COMPARED TO THE THREE MONTHS ENDED MARCH 31,
2004.

     Total  net  sales and revenues were at approximately $202,000 for the three
months  ended  March  31,  2004  compared  to  $266,000  for the prior period, a
decrease  of 24 percent. This is due to the inactivity of the subsidiary Grandma
Hammans  Specialty  Foods  which  has  ceased operation at this time, but may be
utilized  for  new  wholesale  business  in  the  future.

     Our gross profit for the three months ended March 31, 2005 compared to 2004
decreased  to  $156,000  from  $222,000.  Gross  margin as a percentage of sales
decreased  to  77.4  percent  in  2005  from  83.4  percent  in  2004.

     Total operating expenses for the three months ended March 31, 2005 compared
to 2004 decreased by $3,005,000 to $661,000 from $3,666,000 in the prior period.

     Operating  loss  decreased  from a loss of $3,444,000 to a loss of $504,000
for  the  three  months  ended  March  31,  2005.

     Interest expense, net for the three months ended March 31, 2005 was $46,000
as  compared  to  the  same  period  in  2004  of  $63,000.


                                        3
<PAGE>
     Net  loss  from  continuing operations for the three months ended March 31,
2005  decreased  to a loss of $599,000 from a loss of $3,508,000 compared to the
same  period  2004,  a  decrease  of  $2,909,000.

LIQUIDITY AND CAPITAL RESOURCES

     As of March 31, 2005, we had a deficiency in working capital of $2,466,000.

     Cash  outs,  net  first  quarter operations came to approximately $351,000,
down  $4,128,000  from  this  period  last  year  of  $4,479,000.

     Cash  used  in  investing  activities  totaled  $295,000,  used  for office
building  improvements  and  investment  in  QDS  of  Arizona.

     During  the first quarter 2005, we received loan proceeds to remodel office
building and paid on other loans for a net increase in term debt of $443,000. We
also  received  $204,000  in  proceeds  from  stock  sales  to  employees.

CRITICAL ACCOUNTING POLICIES

     The preparation of our consolidated financial statements in conformity with
accounting  principles  generally  accepted  in the United States requires us to
make  estimates  and  judgments  that  affect  our reported assets, liabilities,
revenues, and expenses, and the disclosure of contingent assets and liabilities.
We  base  our  estimates  and  judgments on historical experience and on various
other  assumptions  we  believe to be reasonable under the circumstances. Future
events,  however,  may  differ  markedly  from  our  current  expectations  and
assumptions.  While  there  are  a  number  of  significant  accounting policies
affecting  our  consolidated  financial  statements,  we  believe  the following
critical  accounting  policy  involve 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.

     We  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

     In  November  2004,  the Financial Accounting Standards Board (FASB) issued
SFAS 151, Inventory Costs- an amendment of ARB No. 43, Chapter 4. This Statement
amends  the  guidance  in ARB No. 43, Chapter 4, "Inventory Pricing," to clarify
the  accounting for abnormal amounts of idle facility expense, freight, handling
costs,  and  wasted  material  (spoilage).  Paragraph  5  of  ARB 43, Chapter 4,
previously  stated  that  "under some circumstances, items such as idle facility
expense,  excessive  spoilage,  double  freight,  and rehandling costs may be so
abnormal  as  to  require  treatment  as current period charges." This Statement
requires  that those items be recognized as current-period charges regardless of
whether  they  meet  the criterion of "so abnormal." In addition, this Statement
requires  that  allocation  of  fixed  production  overheads  to  the  costs  of
conversion  be  based  on the normal capacity of the production facilities. This
Statement  is  effective  for  inventory  costs  incurred  during  fiscal  years
beginning  after June 15, 2005. Management does not believe the adoption of this
Statement  will  have  any  immediate  material  impact  on  the  Company.

     In  December 2004, the FASB issued SFAS No.152, "Accounting for Real Estate
Time-Sharing  Transactions-an amendment of FASB Statements No. 66 and 67" ("SFAS
152)  The  amendments  made  by  Statement  152  This


                                        4
<PAGE>
Statement amends FASB Statement No.  66, Accounting for Sales of Real Estate, to
reference  the  financial  accounting  and  reporting  guidance  for real estate
time-sharing  transactions that is  provided  in  AICPA  Statement  of  Position
(SOP)  04-2,  Accounting  for  Real  Estate  Time-Sharing  Transactions.  This
Statement  also  amends FASB Statement No. 67,  Accounting for Costs and Initial
Rental  Operations  of Real Estate Projects, to  state that the guidance for (a)
incidental  operations  and  (b) costs incurred to  sell  real  estate  projects
does  not  apply  to  real  estate  time-sharing  transactions.  The  accounting
for  those  operations  and costs is subject to the guidance  in  SOP 04-2. This
Statement is effective for financial statements for fiscal years beginning after
June  15,  2005. with earlier application encouraged.  We do not anticipate that
the implementation of this standard will have a material impact on its financial
position,  results  of  operations  or  cash  flows.

     On  December  16,  2004,  the Financial Accounting Standards Board ("FASB")
published  Statement  of  Financial Accounting Standards No. 123 (Revised 2004),
Share-Based  Payment  ("SFAS  123R").  SFAS 123R requires that compensation cost
related  to  share-based  payment  transactions  be  recognized in the financial
statements.  Share-based  payment  transactions  within  the  scope of SFAS 123R
include  stock  options, restricted stock plans, performance-based awards, stock
appreciation  rights,  and employee share purchase plans. The provisions of SFAS
123R  are  effective  as  of the first interim period that begins after June 15,
2005.  Accordingly, the Company will implement the revised standard in the third
quarter of fiscal year 2005. Currently, the Company accounts for its share-based
payment  transactions under the provisions of APB 25, which does not necessarily
require  the  recognition  of  compensation  cost  in  the financial statements.
Management  is  assessing  the  implications of this revised standard, which may
materially  impact  the  Company's results of operations in the third quarter of
fiscal  year  2005  and  thereafter.

     On  December  16,  2004,  FASB  issued  Statement  of  Financial Accounting
Standards  No. 153, Exchanges of Nonmonetary Assets, an amendment of APB Opinion
No.  29,  Accounting  for Nonmonetary Transactions (" SFAS 153"). This statement
amends  APB  Opinion  29 to eliminate the exception for nonmonetary exchanges of
similar productive assets and replaces it with a general exception for exchanges
of  nonmonetary assets that do not have commercial substance. Under SFAS 153, if
a nonmonetary exchange of similar productive assets meets a commercial-substance
criterion  and fair value is determinable, the transaction must be accounted for
at  fair  value  resulting  in  recognition  of  any  gain  or loss. SFAS 153 is
effective  for  nonmonetary transactions in fiscal periods that begin after June
15,  2005.  We  do  not anticipate that the implementation of this standard will
have  a material impact on its financial position, results of operations or cash
flows.

OFF-BALANCE SHEET ARRANGEMENTS

We do 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 us in the
reports  that  we  file or submit under the Exchange Act is 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 us in the reports that we file under the
Exchange  Act  is  accumulated and communicated to our management, including our
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, we conducted an evaluation, under the
supervision  and with the participation of our chief executive officer and chief
financial  officer,  of  our  disclosure  controls and procedures (as defined in
Rules  13a-15(e)  of  the  Exchange  Act).  Based  on this evaluation, our chief
executive  officer  and  chief  financial  officer concluded that our disclosure
controls  and procedures are effective to ensure that information required to be
disclosed  by  us  in  reports  that we file or submit under the Exchange Act is
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  our  internal  controls,  which  are included within disclosure controls and
procedures,  during  our  most  recently  completed  fiscal  quarter  that  has
materially  affected, or is reasonably likely to materially affect, our internal
controls.


                                        5
<PAGE>
                           PART II - OTHER INFORMATION

ITEM  1.  LEGAL PROCEEDINGS.

     Reference  is  made  to  Item 3 of our Annual Report on Form 10-KSB for the
fiscal  year  ended  December  31,  2004, filed with the Commission on April 15,
2005.

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.

     Effective  March  28,  2005,  our  majority  stockholders  voted  to  grant
discretionary  authority  to our board of directors to implement a reverse split
of  our common stock on the basis of one post-consolidation share for up to each
500  pre-consolidation shares to occur at some time within 12 months of the date
of our information statement on Schedule 14C, with the exact time of the reverse
split  to  be  determined  by  our  board  of  directors.

     We  had  consenting  stockholders,  Mr.  Richard  A.  Bailey,  our founder,
president,  and  a  director, who held 12,000,001 shares of our common stock and
486,000  shares  of  our  Series  A  preferred stock, and Florian R. Ternes, our
director  and  secretary,  who  owned  12,005,002 shares of our common stock and
4,486,000  shares  of  our  Series  A  preferred  stock.

     Each  share  of  our  common  stock  is entitled to one vote on all matters
brought  before  the  stockholders.  Pursuant  to  our  amended  certificate  of
designation  establishing  Series A preferred stock, each share of our currently
issued  and  outstanding  Series  A  preferred  stock may be converted into that
number  of shares of our common stock which will equal one dollar in fair market
value.  On  all  matters submitted to a vote of the holders of the common stock,
including,  without limitation, the election of directors, a holder of shares of
the  Series A preferred stock is entitled to the number of votes on such matters
equal  to  the  number  of  shares  of the Series A preferred stock held by such
holder  multiplied  by  1,000.  Pursuant  to  our  certificate  of  designation
establishing  Series  B  preferred stock, each share of our currently issued and
outstanding  Series  B  preferred  stock  may be converted into one share of our
common  stock.  The shares of our Series B preferred stock have no voting rights
on any matter submitted to our stockholders. Therefore, Mr. Bailey had the power
to  vote  498,000,001 shares of our common stock and Mr. Ternes had the power to
vote  4,498,005,002  shares  of  our  common stock. Together, Messrs. Bailey and
Ternes  had  the  power  to vote 4,996,005,003 shares of the common stock, which
number  exceeded the majority of the issued and outstanding shares of our common
stock  on  the  record  date.

     Messrs.  Bailey  and  Ternes  voted  for  the  grant  of  the discretionary
authority  to  our  directors to implement a reverse stock split. Messrs. Bailey
and  Ternes had the power to approve the grant of the discretionary authority to
our  directors to implement a reverse stock split without the concurrence of any
of  our  other  stockholders.

ITEM  5.  OTHER INFORMATION.

None.


                                        6
<PAGE>
ITEM  6.     EXHIBITS.

<TABLE>
<CAPTION>
EXHIBIT
  NO.                                        IDENTIFICATION OF EXHIBIT
-------  --------------------------------------------------------------------------------------------------
<S>      <C>
3.1**    Articles of Incorporation.
3.2**    Amended and Restated Articles of Incorporation.
3.3*     Articles of Amendment to the Articles of Incorporation, filed effective on June 28, 2004.
3.4**    Certificate of Change, filed effective on September 3, 2004
3.5**    Articles of Amendment to the Articles of Incorporation, filed effective on October 4, 2004.
3.6**    Certificate of Amendment to the Certificate of Designation for the Series A Preferred Stock, filed
         effective on November 9, 2004.
3.7**    Certificate of Change, filed effective on December 20, 2004.
3.8*     Certificate of Designation for the Series B Preferred Stock, filed effective on January 18, 2005.
3.9**    Amended By-laws.
10.1**   Financial Advisor Agreement between Sabita Dhingra and Registrant, dated January 12, 2004
10.2**   Financial Advisor Agreement between Venna Kila and Registrant, dated January 12, 2004
10.3**   Financial Advisor Agreement between Patricia M. Spreitzer and Registrant, dated January 12, 2004
10.4**   Financial Advisor Agreement between Avi Sivan and Registrant, dated January 12, 2004
10.5**   Financial Advisor Agreement between Prem Ramchandani and Registrant, dated January 12, 2004
10.6**   Financial Advisor Agreement between Avraham Ovadia and Registrant, dated January 12, 2004
10.7**   Financial Advisor Agreement between Shai Bar-Lavi and Registrant, dated January 12, 2004
10.8**   Financial Advisor Agreement between Glen Bartolini and Registrant, dated January 12, 2004
10.9**   Financial Advisor Agreement between Athony Cassetta and Registrant, dated January 12, 2004
10.10**  Settlement Agreement between William Goins, Jr. and Registrant, dated December 2002
10.11**  Agreement between Suburban Capital Corporation and Registrant, dated January 14, 2003
10.12**  Proposed Consulting and Marketing Agreement between Sprout Investments and Registrant
10.13**  Consultant and Marketing Right Agreement between Mark Neuhaus and Registrant
10.14**  Asset Purchase Agreement between The Right Solution Gateway and Registrant, dated August 11, 2003
10.15**  Endorsement Agreement between Bruce Jenner and The Right Solution, dated November 1, 2003
10.16**  Master Distributorship Indonesia between Master Distributor Mahakam Beta Forma and The Right
         Solution, dated September 23, 2003
10.17**  Promissory Note of  Registrant to Los Cabos Freedom Movement, L.L.C., Lender, dated July 3, 2003
10.18**  Agreement between Tropical Beverage and Registrant, dated September 9, 2003
10.19**  Employment agreement between Blaine Wendtland and Registrant, dated July 7, 2003
10.20**  Promissory Note of Grandma Hamman's to Ed Wendtland, Lender, dated July 3, 2003
10.21**  Consulting Agreement between Jack M. Zufelt and The Right Solutions Gateway, dated July 17, 2003
10.22**  Consulting Agreement between Jack M. Zufelt and The Right Solutions Gateway, dated August 12, 2003
10.23**  Endorsement Agreement between Bruce Jenner and The Right Solution, dated November 1, 2003
10.24**  Consulting Agreement between Jack M. Zufelt and The Right Solutions Gateway, dated December 12,
         2003
10.25**  Consulting Agreement between Jack M. Zufelt and The Right Solutions Gateway, dated December 9,
         2003.
10.26**  Consulting Agreement dated October 27, 2004 by and between the Company and Anthony Munafo.

10.27**  Property Settlement Agreement dated September 29, 2004, by and among Gateway Venture Holdings, a
         Nevada Corporation and SAS Global, Inc., a Nevada Corporation.
10.28**  Consulting Agreement dated August 13, 2004 between the Company and WWD Trading International.
10.29**  Consulting Agreement between the Company and Tarun Mendiratta.
10.30**  Settlement Agreement between the Company, Herbally Yours, and Blaine Wendtland.
10.31**  Consulting Agreement between Jack M. Zufelt and The Right Solution Gateway, dated April 25, 2004.
10.32**  Purchase Agreement between The Chelsea Collection and Gateway Distributors, LTD., dated March 15,
         2004.
10.33**  Consulting Agreement between P2R and The Right Solution Gateway, dated April 15, 2004.
10.34**  Consulting Agreement between Douglas E. Ashman and Gateway Distributors, LTD.


                                        7
<PAGE>
10.35**  Final Asset Purchase Agreement between Los Cabos Beverage and Grandma Hammans, dated December
         20, 2004.
10.36**  Consulting Agreement between Edward Rus and Gateway Distributors, LTD.
10.37**  Consulting Agreement between Grazyna Wnuk and Gateway Distributors, LTD.
10.38**  Non-Disclosure Agreement International Vitamin Co., L.L.C.
10.39**  Agreement between Quality Distribution Services, Inc. and Gateway Distributors, LTD, dated May 20,
         2004.
10.40**  Consulting Agreement between Steven Frye and Gateway Distributors, LTD.
10.41**  Confidentiality Agreement by and between Bill Woo and Gateway Venture Holdings, Inc., dated August
         2, 2004.
10.42**  Consulting Agreement between Jack M. Zufelt and The Right Solutions Gateway, LTD., dated January
         10, 2005.
10.43**  Media Services Agreement between Chief Media, L.L.C. and The Right Solution, dated March 10, 2004.
10.44*   Asset Purchase Agreement between Los Cabos Beverage and Blaine Wendtland, dated February 28, 2005.
10.45*   Licensing/Purchase Agreement between The Chelsea Collection and Gateway Distributors, LTD, dated
         January 27, 2005.
10.46*   Consulting Agreement between Gateway Distributors, LTD and Stephanie M. Burruss, dated April 21, 2005.
10.47*   Consulting Agreement between Gateway Distributors, LTD and Andrew E. Mercer, dated April 21, 2005.
10.48*   Consulting Agreement between Gateway Distributors, LTD and Roger Pawson, dated April 21, 2005.
31.1*    Certification of Richard A. Bailey, Chief Financial Officer and 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.
32.1*    Certification of Richard A. Bailey, Chief Financial Officer and 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.
</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 May 16, 2005.
                                    By /s/ Richard A. Bailey
                                       ------------------------------------
                                       Richard A. Bailey, President and Director


                                        8
<PAGE>