SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   FORM 10-QSB


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

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


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


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





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





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


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


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

                                    Yes XX           No
                                        --             ----


         The number of outstanding  shares of the issuer's common stock,  $0.001
par value (the only class of voting stock), as of June 30, 2000 was 10,796,500.




<PAGE>




                                TABLE OF CONTENTS

                                     PART I

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

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


                                     PART II


ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS.............................4

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K......................................5

SIGNATURES.....................................................................5
INDEX TO EXHIBITS..............................................................6







                 [THIS SPACE HAS BEEN INTENTIONALLY LEFT BLANK]


<PAGE>



ITEM 1.           FINANCIAL STATEMENTS

As used  herein,  the term  "Company"  refers to Gateway  Distributors,  Ltd., a
Nevada  corporation,  and its  subsidiaries  and  predecessors  unless otherwise
indicated.  Consolidated,  unaudited,  condensed  interim  financial  statements
including a balance  sheet for the Company as of the quarter ended June 30, 2000
and  statements  of  operations,  and  statements  of cash flows for the interim
period up to the date of such  balance  sheet and the  comparable  period of the
preceding year are attached hereto as Pages F-1 through F-8 and are incorporated
herein by this reference.



















                      [THIS SPACE LEFT BLANK INTENTIONALLY]








                                       1

<PAGE>

<TABLE>


                                            GATEWAY DISTRIBUTORS, LTD.
                                                   BALANCE SHEET

<CAPTION>


                                                      ASSETS




                                                                                       JUNE 30,             DECEMBER 31,
                                                                                         2000                   1999
                                                                                 --------------------- ----------------------
                                                                                     (UNAUDITED)
<S>                                                                        <C>                            <C>

     CURRENT ASSETS
            Cash                                                              $                  2,880     $           17,593
            Accounts Receivable                                                                 58,552                 53,644
            Inventories                                                                        392,118                360,441
            Prepaid expenses                                                                    30,452                 31,085
                                                                                 --------------------- ----------------------
                 Total Current Assets                                                          484,002                462,763

     PROPERTY AND EQUIPMENT, AT COST:
            Furniture and fixtures                                                              83,239                 83,239
            Computer equipment                                                                 206,713                206,713
            Leasehold improvements                                                              29,228                 29,228
            Office equipment                                                                   106,208                106,208
                                                                                 --------------------- ----------------------
                                                                                               425,388                425,388
            Less accumulated depreciation and
                  amortization                                                               (318,875)              (298,419)
                                                                                 --------------------- ----------------------
                                                                                               106,513                126,969

     OTHER ASSETS:
            Goodwill, net of accumulated amortization
                 of $46,796 and $20,351, respectively                                          867,438                893,883
            Other                                                                                9,347                  9,347
                                                                                 --------------------- ----------------------
                                                                                               876,785                903,230
                                                                                 --------------------- ----------------------
                                                                              $              1,467,300      $       1,492,962
                                                                                 ===================== ======================
</TABLE>















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



                                      F-1
<PAGE>


<TABLE>

                                              GATEWAY DISTRIBUTORS, LTD.
                                              BALANCE SHEET (continued)




                                         LIABILITIES AND SHAREHOLDERS' EQUITY

<CAPTION>

                                                                                     JUNE 30,              DECEMBER 31,
                                                                                       2000                    1999
                                                                                -------------------   ----------------------
                                                                                    (UNAUDITED)
<S>                                                                        <C>                          <C>
CURRENT LIABILITIES
       Checks drawn in excess of available bank
       balances                                                              $              204,115      $              170,394
       Current portion of long-term debt                                                  1,306,020                   1,270,754
       Accounts payable:
            Trade                                                                         1,433,994                     862,796
            Commissions                                                                     342,892                     201,842
       Accrued liabilities:
            Payroll and vacation pay                                                        133,706                      89,045
            Interest                                                                        360,025                     256,977
            Payroll taxes                                                                   381,893                     265,378
            Other                                                                            28,299                      48,161
                                                                                -------------------      ----------------------
                  Total Current Liabilities                                               4,190,944                   3,165,347

LONG-TERM DEBT                                                                              533,356                     549,160

LONG-TERM ACCOUNTS PAYABLE                                                                        -                     324,530
                                                                                -------------------      ----------------------
                  Total Liabilities                                                       4,724,300                   4,039,037

SHAREHOLDERS' EQUITY/ (DEFICIT)
       Preferred stock - $.001 par value
        Authorized 1,000,000 shares
        No shares issued and outstanding                                                          -                           -
       Common stock - $.001 par value
       Authorized 20,000,000 shares
       Issued and outstanding  -
           10,796,500 and 6,817,000 shares
           at June 30, 2000 and
           December 31, 1999, respectively                                                   10,797                       6,817
       Additional paid-in capital                                                         1,503,535                   1,423,615
       Accumulated deficit                                                              (4,771,332)                 (3,976,507)
                                                                                -------------------      ----------------------
                Total Stockholders' deficit                                             (3,257,000)                 (2,546,075)
                                                                                -------------------      ----------------------

                                                                             $            1,467,300   $               1,492,962
                                                                                -------------------      ----------------------

</TABLE>


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


                                      F-2
<PAGE>


<TABLE>

                                              GATEWAY DISTRIBUTORS, LTD.
                                               STATEMENTS OF OPERATIONS
                                                     (UNAUDITED)

<CAPTION>


                                                           THREE MONTHS ENDED                             SIX MONTHS ENDED
                                                                 JUNE 30                                        JUNE 30
                                                        2000                   1999                  2000               1999
                                                 -------------------        -------              -----------           ---------
<S>                                            <C>                     <C>                   <C>                 <C>
SALES                                                    1,328,566                728,726           2,859,518            1,544,719
COST OF SALES                                              231,874                121,655             506,296              260,557
                                               -------------------     ------------------     ---------------     ----------------
GROSS PROFIT                                             1,096,692                607,071           2,353,222            1,284,162

SELLING, GENERAL AND                                     1,377,065                876,297           3,029,960            1,850,783
ADMINISTRATIVE EXPENSES
                                               -------------------     ------------------     ---------------     ----------------
LOSS FROM OPERATIONS                                     (280,373)              (269,226)           (676,738)            (566,621)
OTHER INCOME (Expense):
     Interest Expense                                     (72,484)               (42,863)           (134,768)             (85,726)
     Miscellaneous income                                    5,277                 12,114              16,681               25,038
                                               -------------------     ------------------     ---------------     ----------------
                                                          (67,207)               (30,749)           (118,087)             (60,688)
                                               -------------------     ------------------     ---------------     ----------------
NET LOSS                                                 (347,580)              (299,975)           (794,825)            (627,309)
                                               ===================     ==================     ===============     ================
BASIC LOSS PER SHARE                                        (0.04)                 (0.05)              (0.11)               (0.11)
AVERAGE NUMBER OF
SHARES
                                               ===================     ==================     ===============     ================
</TABLE>















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

                                      F-3
<PAGE>


<TABLE>

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

                                                                                      SIX MONTHS ENDED
                                                                                        JUNE 30,
                                                                             2000                            1999
                                                                       ------------------                 ----------

<S>                                                                <C>                         <C>
CASH FLOWS FROM OPERATING ACTIVITIES
     Net loss                                                       $               (794,825)   $                  (627,309)
     Adjustments to reconcile net loss
          to net cash to operating activities -
               Depreciation and amortization                                           46,901                         36,710
     Changes in operating assets and liabilities
               which increase (decrease) cash flow::
                    Accounts receivable                                               (4,908)                      (199,239)
                    Inventories                                                      (31,677)                      (116,616)
                    Prepaid expenses                                                      633                         37,429
                    Accounts payable                                                  425,339                        133,585
                    Accrued expenses                                                  244,362                         97,342
                                                                       ----------------------        -----------------------
                         Total adjustments                                            680,650                       (10,789)
                                                                       ----------------------        -----------------------
                          Net cash to operating activities                          (114,175)                      (638,098)

     CASH FLOWS FROM INVESTING ACTIVITIES:
                 Purchase of property and equipment                                         -                       (19,055)

     CASH FLOWS FROM FINANCING ACTIVITIES:
                 Proceeds from issuance of stock                                       80,000                        185,001
                 Proceeds from issuance of debt                                        73,660                        507,400
                 Principle payments on debt                                          (54,198)                       (42,908)
                                                                       ----------------------        -----------------------
                       Net cash from financing activities                              99,462                        649,493
                                                                       ----------------------        -----------------------
     NET DECREASE IN CASH EQUIVALENTS                                                (14,713)                        (7,660)
     CASH AND CASH EQUIVALENTS - beginning of                                          17,593                         19,711
    period
                                                                       ----------------------  ----  -----------------------
     CASH AND CASH EQUIVALENTS - end of period                      $                   2,880   $                     12,051
                                                                       ======================        =======================
</TABLE>

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



                                      F-4
<PAGE>


<TABLE>

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

<CAPTION>


                                               SUPPLEMENTAL DISCLOSURE


                                                                                             SIX MONTHS ENDED
                                                                                                 JUNE 30,
                                                                                           2000              1999
                                                                                        ----------        ----------
<S>                                                                                  <C>               <C>

CASH PAID DURING YEAR FOR INTEREST                                                      $ 31,720          $         -
                                                                                        ========          =============



                                     NON CASH INVESTING AND FINANCING ACTIVITIES


STOCK ISSUED FOR ACQUISITIONS                                                           $        -        $    127,407
                                                                                        =============     ===========

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

</TABLE>






















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


                                      F-5
<PAGE>



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


NOTE 1 -      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

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

                  The  notes  to  the  financial  statements  are  presented  as
                  permitted by Form 10-Q and do not contain certain  information
                  included in the Company's annual financial statements

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

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

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

NOTE 2 -          INVENTORIES:

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

                  Product                                              $351,788
                  Promotional and literature                             40,330
                                                                      ----------
                                                                       $392,118


                                      F-5
<PAGE>



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

NOTE 3 -     LONG-TERM DEBT:

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

     Convertible notes payable                                        $1,151,500

     Note payable-stockholders,  interest  ranging from 6.5% - I
     0%, no re-payment terms stated,
     unsecured.                                                       $  447,793

     Note payable-stockholders,  payable in monthly  installments
     ranging from $25 - $1,278, plus . interest at 7% - 14%, due at
     various dates through
     2003, unsecured.                                                    178,691

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

     Capital leases,  payable in monthly  installments ranging from
     $130 - $180, including interest at 15.6% to 26.6%, maturing at
     various dates through
     2003, secured by equipment.                                           3,343
                                                                      ----------
                                                                       1,839,376
     Less current portion                                              1,306,020
                                                                      ----------
     Long-term debt                                                  $   533,356

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



                                      F-7
<PAGE>



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

NOTE 3 -          LONG-TERM DEBT - CONTINUED:

                  Maturities of long-term debt are as follows:

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

NOTE 4 -           EARNINGS PER SHARE:

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

<TABLE>
<CAPTION>
                                                                                                 PER SHARE
                                                              INCOME            SHARES              AMOUNT
<S>                                                 <C>                        <C>            <C>

                  June 30, 2000 - loss from
                  continuing operations                      $ (794,825)        7,380,930        $        (.11)
                                                     ===================        =========        ==============

                  June 30, 1999 - loss from
                  continuing operations                      $ (627,309)        5,496,865         $       (.11)
                                                     ===================        =========        ==============
</TABLE>

                  For the  period  ended  June 30,  2000 and  1999,  options  on
                  2,393,158 and 1,700,158 shares of common stock,  respectively,
                  were not  included in  computing  diluted  EPS  because  their
                  effects were antidilutive.

NOTE 5 - SUBSEQUENT EVENTS:

                  On  July  1,  2000,  the  Company   acquired  the  assets  and
                  operations of Dynamic Products,  Inc. ("Dynamic  Products") in
                  exchange for 160,750 shares of Gateway common stock.  Dynamic
                  Products  is  a  multi-level  marketing  company  focusing  on
                  cleaning products. The transaction was accounted for under the
                  purchase  method of  accounting,  therefore,  the assets  were
                  recorded   based  on  their   fair   values  at  the  date  of
                  acquisition.  The Company recorded  $128,600 of cost in excess
                  of net  assets  acquired,  which are being  amortized  over 20
                  years.

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

                                      F-8
<PAGE>



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

General

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

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

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

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

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

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

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



                                       2
<PAGE>



Results of Operations

Sales for the three and six month periods ended June 30, 2000,  were  $1,328,566
and $2,859,518  respectively as compared to $728,726 and $1,544,719 for the same
periods in 1999,  an increase  of  $599,840  and  $1,314,799  respectively.  The
increase  in sales is  attributed  to  acquisitions  of new  product  lines  and
expansion into the Japanese market.

Costs of sales  for the three and six month  periods  ended  June 30,  2000 were
$231,874 and 506,296  respectively  as compared to $121,655 and $260,557 for the
same periods in 1999, an increase of $110,219 and $245,739 respectively.

Selling, general and administrative expenses for the three and six month periods
ended June 30, 2000, were $1,377,065 and $3,029,960  respectively as compared to
$876,297 and $1,850,783 for the same periods in 1999. The primary reason for the
increase was an increase in costs of goods sold, an increase in marketing  costs
associated  with  expansion  into  the  Japanese  market,  and  an  increase  in
administrative costs associated with business acquisitions by the Company.

Operating  loss for the three and six month  periods  ended June 30, 2000,  were
$280,373 and $676,738  respectively as compared to $269,226 and $566,621 for the
same periods in 1999.  The Company's  operating  loss  increased for the quarter
ended June 30, 2000, as a result of  significant  increases in cost of sales and
selling and general and administrative expenses.

Liquidity and Capital Resources

The Company  had a net working  capital  deficit of  $3,706,942  for the quarter
ended June 30, 2000, as compared to a $2,702,584  deficit at the end of June 30,
1999.

Cash used by  operations  was  $114,175  for the  quarter  ended June 30,  2000,
compared with $638,098 for the quarter ended June 30, 1999.

Cash flow from  investing  activities  for the  quarter  ended June 30, 2000 was
$0.00,  as compared  with a negative  cash flow of $19,055 for the quarter ended
June 30, 1999.

Cash flows  generated  from financing  activities  were $ 99,462 for the quarter
ended June 30, 2000 as compared to $649,493 for the quarter ended June 30, 1999.

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

Impact of Inflation

The Company  believes that  inflation has had a negligible  effect on operations


                                       3
<PAGE>


over the past two years.  The Company  believes that it can offset  inflationary
increases  in the cost of  materials  and  labor  through  increased  sales  and
improved operating efficiency.

Capital Expenditures

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

Income Tax Expense (Benefit)

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

Going Concern

The  Company's  ability to continue as a going  concern is an issue  raised as a
result of an accumulated deficit of $4,771,332 as of June 30, 2000 compared to a
deficit of $3,976,507 at December 31, 1999. The Company's ability to continue as
a going  concern is subject to the ability of the Company to obtain a profit and
/or  obtaining  the  necessary  funding  from  outside  sources.  Management  is
committed to taking the  necessary  steps to ensure the Company  remains a going
concern.  Management's  plan to address the  Company's  ability to continue as a
going concern,  includes:  (1) obtaining additional funding from the sale of the
Company's securities;  (2) increasing sales; (3) obtaining loans and grants from
various financial institutions where possible. Although management believes that
it will be able to obtain the necessary funding to allow the Company to remain a
going concern through the methods  discussed  above,  there can be no assurances
that such methods will prove successful.

PART II

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

Recent Sales of Unregistered Securities

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

In June,  2000, the Company issued  3,300,000  shares of common stock to Richard
Bailey and  300,000  shares of common  stock to Florian  Ternes for  services as


                                       4
<PAGE>



Officers  and  Directors  of the  Company.  All of the  shares  were  issued for
services  pursuant to section 4(2) of the  Securities Act of 1933 in an isolated
private transaction by the Company which did not involve a public offering.  The
Company made this offering based on the following factors:  (1) The issuance was
an isolated  private  transaction  by the Company which did not involve a public
offering;  (2) there were only two offerees who were issued stock for  services;
(3) the  offerees  did not resell the stock but  continued  to hold it since the
date of issue; (4) there were no subsequent or contemporaneous  public offerings
of the stock; (5) the stock was not broken down into smaller denominations;  and
(6) the  negotiations  for the sale of the stock took place directly between the
offerees and the Company.


ITEM 6.EXHIBITS AND REPORTS ON FORM 8-K

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

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


                                   SIGNATURES

         In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized, this 22nd day of February 2001.




Gateway Distributors, Ltd.


By:    /s/ Rick Bailey
      ------------------------------------------

Its:   President, Chief Executive Officer and
Director


                                       5
<PAGE>


                                            INDEX TO EXHIBITS


Exhibit     Page        Description

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

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

3.2          *           Bylaws of the Company, as amended.

4.1          *           Specimen Common Stock Certificate

4.2          *           Specimen 12% Convertible Note

27           __          Financial Data Schedule

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