U.S. SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 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 MARCH 31, 1999

   [ ]           Transition report under Section 13 or 15(d) of the Exchange Act

                 For the transition period from _____ to _____.

                         Commission file number 0-13803


                            GATEWAY INDUSTRIES, INC.
       (Exact name of Small Business Issuer as Specified in Its Charter)


      DELAWARE                                                 33-0637631
(State or Other Jurisdiction of                              (IRS Employer
Incorporation or Organization)                               Identification No.)


                              150 East 52nd Street
                               New York, NY 10022
                    (Address of Principal Executive Offices)

                                  877-431-2942
                (Issuer's Telephone Number, Including Area Code)



     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 [ ]

Shares of Issuer's Common Stock Outstanding at March 31, 1999: 3,592,024

                 Transitional small business disclosure format:
                                 Yes [ ] No [X]



                            GATEWAY INDUSTRIES, INC.

                                     INDEX


Part I - Financial Information                                  Page Number

Item 1. Condensed Financial Statements (Unaudited):     

        Condensed  Balance Sheet
        March 31, 1999                                               3

        Condensed Statements 
        of  Operations - Three Months Ended 
        March 31, 1999 and 1998                                      4

        Condensed Statements
        of Cash Flows - Three Months Ended 
        March 31, 1999 and 1998                                      5

        Notes to Condensed Financial Statements                      6

Item 2. Management's Discussion and Analysis
                or Plan of Operations                                7


Part II - Other Information

Item 6. Exhibits and Reports on Form 8-K                             8

        Signatures                                                   9
<PAGE>
<TABLE>

                            GATEWAY INDUSTRIES, INC.

                            CONDENSED BALANCE SHEET
                                 March 31, 1999
                                  (Unaudited)

<CAPTION>


<S>                                                                     <C>   
ASSETS

Current assets:
   Cash and cash equivalents ........................................   $ 5,645,000
   Prepaid expenses and other current assets ........................        54,000
                                                                         ----------
     Total current assets ...........................................     5,699,000

Other assets:
   Security deposit .................................................        80,000
                                                                         ----------
Total assets ........................................................   $ 5,779,000
                                                                         ==========



LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
    Accounts payable and accrued expenses ...........................   $    38,000
                                                                         ----------
      Total current liabilities .....................................   $    38,000

Commitments

Shareholders' equity:
    Preferred stock, $.10 par value, 1,000,000 shares authorized,
        no shares issued or outstanding .............................          --
    Common stock, $.001 par value, 10,000,000 shares authorized,
        3,592,024 shares issued (including treasury shares) .........         4,000
    Capital in excess of par value ..................................     9,555,000
    Accumulated deficit .............................................    (3,772,000)
    Treasury stock, 11,513 shares ...................................       (46,000)
                                                                         ----------
       Total shareholders' equity ...................................     5,741,000
                                                                         ----------
Total liabilities & shareholders' equity ............................   $ 5,779,000
                                                                         ==========


See accompanying notes. 
</TABLE>



                            GATEWAY INDUSTRIES, INC.

                       CONDENSED STATEMENTS OF OPERATIONS
                                  (Unaudited)

                                                For the Three Months
                                                   Ended March 31,
                                                1999            1998

Revenues .................................   $      --      $      --
                                              ----------     ----------
Costs and expenses:

        General and administrative .......        66,000         50,000
                                              ----------     ----------
        Operating loss ...................       (66,000)       (50,000)

        Other income:

                Interest income ..........        68,000         79,000
                Gain on sale of investment          --            6,000
                                              ----------     ----------
                Total other income .......        68,000         85,000

Net income ...............................   $     2,000    $    35,000
                                              ==========     ==========
           
Net income per share - basic and diluted .   $      --      $       .01
                                              ==========     ==========
Weighted average number of shares ........     3,592,024      3,592,024
                                              ==========     ==========


See accompanying notes.


<TABLE>
                            GATEWAY INDUSTRIES, INC.

                       CONDENSED STATEMENTS OF CASH FLOWS
                                  (Unaudited)
<CAPTION>


                                                                                      For the Three Months
                                                                                         Ended March 31,
                                                                                       1999           1998
<S>                                                                                <C>            <C>  
Cash flows from operating activities:
        Net income .............................................................   $     2,000    $    35,000

        Adjustments to reconcile net income to net cash provided by/(used in)
                operating activities:

        Changes in assets and liabilities:

                Prepaid expenses and other assets ..............................       (26,000)      (124,000)
                Note receivable ................................................       566,000        (90,000)
                Accounts payable ...............................................       (37,000)       (50,000)
                                                                                    ----------     ----------
        Net cash provided by/(used in) operating activities ....................       505,000       (229,000)

Cash flows from investing activities:

                Purchase of equity investments .................................          --          (93,000)
                                                                                    ---------      ----------
        Net cash used by investing activities ..................................          --          (93,000)


        Net increase/(decrease) in cash ........................................       505,000       (322,000)
        Cash and cash equivalents at beginning of period .......................     5,140,000      5,433,000
                                                                                    ----------     ----------
        Cash and cash equivalents at end of period .............................   $ 5,645,000    $ 5,111,000
                                                                                    ==========     ==========

See accompanying notes.
</TABLE>


                            GATEWAY INDUSTRIES, INC.

                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                 March 31, 1999
                                  (Unaudited)

1.      GENERAL

     The  accompanying   unaudited  condensed  financial  statements  have  been
prepared in accordance with generally accepted accounting principles for interim
financial  information  and with the  instruction to Form 10-QSB and Item 310 of
Regulation  S-B.  Accordingly,  they do not include all of the  information  and
footnotes  required by generally  accepted  accounting  principles  for complete
financial statements.  In the opinion of management,  the accompanying unaudited
interim financial statements contain all adjustments  (consisting only of normal
recurring accruals) necessary to make such financial  statements not misleading.
Results  for the  three  months  ended  March  31,  1999,  are  not  necessarily
indicative  of the results that may be expected  either for any other quarter in
the year ending  December  31, 1999 or for the entire year ending  December  31,
1999. For further  information,  refer to the consolidated  financial statements
and footnotes thereto included in the Company's Annual Report on Form 10-KSB for
the year ended December 31, 1998.

2.      OPERATIONS

     The Company  currently  has no operating  business.  Management is pursuing
various strategic  alternatives  which include the possible use of the Company's
net assets to acquire, merge, consolidate or otherwise combine with an operating
business  or  businesses;   however,   there  is  no  assurance  that  any  such
alternatives will occur.

3.      LEASE COMMITMENTS

     The Company  entered into a three-year  operating lease for office space in
New York, NY which began April 1, 1998.  The Company has sublet a portion of its
office space to affiliated  companies.  Future minimum lease payments under this
lease are as follows:



                                        Deduct                Net
                                       Sublease             Rental
Year              Commitments           Rentals          Committments

1999               $ 97,000           $ 65,000            $ 32,000
2000                 97,000             65,000              32,000
2001                 24,000             16,000               8,000
                    -------            -------             -------
                   $218,000           $146,000            $ 72,000




4.      NET INCOME PER SHARE

     Net income per share was  calculated  using the weighted  average number of
common shares  outstanding.  The effect of all common stock  equivalents  is not
included in the per share  computation for the quarters ended March 31, 1999 and
1998, as such items are anti-dilutive in these quarters;  accordingly, basic and
diluted  income per share are the same for the quarters ended March 31, 1999 and
1998.


5.      COMPREHENSIVE INCOME

     For the three  months  ended March 31, 1998,  the  Company's  comprehensive
income was $46,000.  The comprehensive income differs from the net income in the
first quarter of 1998 due to the inclusion of the Company's  unrealized  gain on
equity securities in its comprehensive  income. For the three months ended March
31, 1999 there was no unrealized  gain or loss and  consequently  net income was
equal to comprehensive income.



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


     The Company currently has no operating business.  The Board of Directors is
pursuing various  strategic  alternatives  which include the possible use of the
Company's net assets to acquire, merge, consolidate or otherwise combine with an
operating business or businesses.

REVENUES AND EXPENSES 

     The Company  had no revenues  for the three  months  ended March 31,  1999.
Expenses for the quarter ended March 31, 1999 aggregated $66,000,  consisting of
general and administrative expense.  General and administrative expenses for the
three-month period ended March 31, 1998 totaled $50,000.

INTEREST INCOME, NET

     During the first  quarter of 1999,  the Company  recognized  $68,000 of net
interest income compared with $79,000 in the comparable period of 1998.

LIQUIDITY AND CAPITAL RESOURCES

     The Company's  cash and cash  equivalents  totaled  $5,645,000 at March 31,
1999 and $5,140,000 at December 31, 1998. Collection of the note receivable owed
by Only Multimedia Network, Inc. ("OMNI") during the first quarter accounted for
the  increase in cash.  Other  assets  consist of the  security  deposit for the
office space lease. At March 31, 1999, the Company's working capital balance was
$5,661,000.

     While the  Company  seeks an  acquisition  or other  business  combination,
management  believes its cash  position is  sufficient  to cover  administrative
expenses and current obligations for the foreseeable future.


PART II.        OTHER INFORMATION


ITEM 6.         Exhibits and Reports on Form 8-K

                (a)     Exhibits

                        (27) Financial Data Schedule

                (b)     Reports on Form 8-K

                        No reports on Form 8-K have been filed by the registrant
                        for the three  months ended March 31, 1999.



SIGNATURES





Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


                                GATEWAY INDUSTRIES, INC.





                                /s/ Jack Howard                                 
                                Jack Howard, Acting President 






Date:  May 13, 1999