UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB




(Mark One)
    X     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934
                FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 2002
                                       OR
     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934
                        Commission File Number: 000-26017

                      GATEWAY INTERNATIONAL HOLDINGS, INC.
             (Exact Name of Registrant as Specified in its Charter)


           NEVADA                                   88-0375818
  (State or Other Jurisdiction of                 (I.R.S. Employer
   Incorporation or Organization)                Identification No.)

                    3840 EAST EAGLE DRIVE, ANAHEIM, CA 92807
                    (Address of principal executive offices)

                                  714-630-6253
                           (Issuer's telephone number)




Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Common Stock,
$0.001 par value

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Exchange  Act during the  preceding 12
months (or for such  shorter  period  that the issuer was  required to file such
reports),  and (2) has been subject to such filing  requirements for the past 90
days. Yes X      No
         ---       ---

 Title of each class of Common Stock           Outstanding at February 10, 2003
 Common Stock, $0.001 par value                            26,426,300


<PAGE>



                                   FORM 10-QSB

               GATEWAY INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARY

                                TABLE OF CONTENTS

<TABLE>
<S>        <C>                                                                   <C>


 PART I.
  Item 1.   Condensed Consolidated Balance Sheet at December 31, 2002 (Unaudited)..3
            Condensed Consolidated Statement of Operations for the three
              months ended December 31, 2002 (Unaudited) and 2001 (Unaudited)......4
            Condensed Consolidated Statement of Cash Flow for the three months
              ended December 31, 2002 (Unaudited) and 2001 (Unaudited).............5
            Notes to Condensed Consolidated Financial Statements...................6
  Item 2.   Management's Discussion and Analysis or Plan of Operations............12
  Item 3.   Controls and Procedures...............................................16
 PART II.
  Item 1.   Legal Proceedings.....................................................16
  Item 2.   Changes in Securities.................................................16
  Item 3.   Defaults upon Senior Securities.......................................16
  Item 4.   Submission of matters to a Vote of Security Holders...................16
  Item 5.   Other Information - Related party Transactions........................16
  Item 6.   Exhibits and Reports on Form 8-K......................................17
 Signatures.......................................................................18

</TABLE>



                                        2

<PAGE>


              GATEWAY INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEET

<TABLE>
<S>                                                               <C>


                                                                    December 31, 2002
                                                                        (Unaudited)
Assets
Current Assets :
  Cash                                                                 $   118,766
  Accounts receivable, net                                                 873,065
  Inventories                                                            1,223,570
                                                                       -----------
     Total current assets                                                2,215,401
Property and equipment, net                                                919,157
Other assets                                                               170,945
                                                                       -----------
Total Assets                                                           $ 3,305,503
                                                                       ===========
Liabilities and Stockholders' Deficit
Current Liabilities:
  Accounts payable and accrued liabilities                             $ 1,157,088
  Lines of Credit                                                          563,353
  Current portion of notes payable                                         643,348
  Obligation under capital lease                                           127,329
  Notes payable to related parties                                         599,700
                                                                       -----------
     Total current liabilities                                           3,090,818
Notes payable, less current portion                                        978,400
Obligations under capital lease, less current portion                      236,730
Deferred tax liabilities                                                   161,692
                                                                       -----------
Total Liabilities                                                        4,467,640
                                                                       -----------
Commitments and Contingencies

Stockholders' Deficit
  Preferred stock, $0.001 par value; 10,000,000 shares
     Authorized; no shares issued and outstanding                               --
  Common stock, $0.001 par value; 100,000,000 shares
     Authorized; 26,426,300 shares issued and outstanding                   26,426
  Additional paid in capital                                               506,889
  Stockholder note receivable                                              (76,461)
  Accumulated deficit                                                   (1,618,991)
                                                                       -----------
     Total stockholders' deficit                                        (1,162,137)
                                                                       -----------
Total Liabilities and Stockholders' Deficit                            $ 3,305,503
                                                                       ===========

</TABLE>

      See accompanying notes to condensed consolidated financial statements

                                        3

<PAGE>


              GATEWAY INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<S>                                                            <C>                 <C>




                                                                  Three Months ended December 31,
                                                                         2002            2001
                                                                         ----            ----
                                                                     (Unaudited)      (Unaudited)

Net sales                                                            $  1,984,179    $    756,992
Cost of sales                                                           1,452,907         719,355
                                                                     ------------    ------------
Gross profit                                                              531,272          37,637
                                                                     ------------    ------------
Operating expenses:
Payroll and related                                                       105,577         101,273
Selling, general and administrative                                       135,524         129,999
                                                                     ------------    ------------
Total operating expenses                                                  241,101         231,272
                                                                     ------------    ------------
Operating income (loss)                                                   290,171        (193,635)
                                                                     ------------    ------------
Other income (expense):
Interest expense                                                          (29,008)         (8,340)
Gain on disposal of fixed assets                                           22,250              --
Other                                                                      (1,591)             --
                                                                     ------------    ------------
Total other expense                                                        (8,349)         (8,340)
                                                                     ------------    ------------
Income (Loss) before provision for income taxes                           281,822        (201,975)
Provision for income taxes                                                    800              --
                                                                     ------------    ------------
Net income (loss)                                                    $    281,022    $   (201,975)
                                                                     ============    ============
Net income (loss) available to common
 shareholders per common share:
     Basic and diluted                                               $       0.01    $      (0.02)
                                                                     ============    ============
Weighted average common shares outstanding:
     Basic and diluted                                                 23,222,739      12,740,000
                                                                     ============    ============

</TABLE>



      See accompanying notes to condensed consolidated financial statements

                                        4

<PAGE>

              GATEWAY INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<S>                                                                                 <C>                <C>



                                                                                       Three Months ended December 31,
                                                                                             2002         2001
                                                                                             ----         ----
                                                                                          (Unaudited) (Unaudited)

Cash flows from operating activities:
    Net income (loss)                                                                     $ 281,022    $(201,975)
    Adjustments to reconcile net income (loss) to net cash
    provided by (used in) operating activities:
        Depreciation and amortization                                                        35,913       12,515
        Gain on disposal of property and equipment                                          (22,250)          --
        Changes in operating assets and liabilities:
             Accounts receivable                                                            (51,269)      39,491
             Inventories                                                                   (108,392)      44,741
             Other assets                                                                      (786)       4,000
             Accounts payable and accrued liabilities                                      (101,031)      62,166
                                                                                          ---------    ---------
     Net cash provided by (used in) operating activities                                     33,207      (39,062)
                                                                                          ---------    ---------
Cash flows from investing activities:
    Purchases of property and equipment                                                     (14,000)      (1,282)
    Cash received from Acquisitions                                                           4,927           --
    Repayments from shareholder notes receivable                                                997           --
                                                                                          ---------    ---------
    Net cash used by investing activities                                                    (8,076)      (1,282)
                                                                                          ---------    ---------

Cash flows from financing activities:
    Principal repayments on notes payable                                                   (94,795)     (60,666)
    Principal repayments on capital lease obligations                                       (32,987)      (1,310)
    Net borrowings on lines of credit                                                        56,000           --
    Principal repayments on notes payable to related parties                                     --       (3,000)
    Principal borrowings on notes payable to related parties                                140,000           --
    Restricted common stock issued for cash                                                      --        1,000
                                                                                          ---------    ---------
     Net cash provided by (used in) financing activities                                     68,218      (63,976)
                                                                                          ---------    ---------
Net increase (decrease) in cash                                                              93,349     (104,320)

Cash at beginning of period                                                                  25,417      106,150
                                                                                          ---------    ---------
Cash at end of period                                                                     $ 118,766    $   1,830
                                                                                          =========    =========
Supplemental disclosure of cash flow information Cash paid during the year for:
        Interest                                                                          $  26,107    $   5,184
        Income taxes                                                                      $     800    $      --


</TABLE>


      See accompanying notes to condensed consolidated financial statements

                                        5

<PAGE>


              GATEWAY INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES
              Notes to Condensed Consolidated Financial Statements
              For the three months ended December 31, 2002 and 2001


NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPALS

The management of Gateway International Holdings, Inc. and its subsidiaries (the
"Company" or "Gateway")  without  audit has prepared the condensed  consolidated
financial  statements  included  herein.  The accompanying  unaudited  condensed
financial  statements  consolidate  the  accounts  of the Company and its wholly
owned  subsidiaries  and  have  been  prepared  in  accordance  with  accounting
principles  generally  accepted  in the  United  States of America  for  interim
financial  information.   Certain  information  and  note  disclosures  normally
included  in  the  condensed   consolidated  financial  statements  prepared  in
accordance with accounting principles generally accepted in the United States of
America have been omitted. In the opinion of the management of the Company,  all
adjustments   considered  necessary  for  fair  presentation  of  the  condensed
consolidated  financial  statements  have  been  included  and  were of a normal
recurring  nature,  and  the  accompanying   condensed   consolidated  financial
statements  present  fairly the financial  position as of December 31, 2002, and
the results of operations  for the three months ended December 31, 2002 and 2001
and cash flows for the three months ended December 31, 2002 and 2001.

It is suggested that these condensed  consolidated  financial statements be read
in conjunction with the audited consolidated  financial statements and notes for
the year ended  September 30, 2002,  included in the Company's Form 10-KSB filed
with the  Securities  and Exchange  Commission on January 13, 2003.  The interim
results are not necessarily indicative of the results for a full year.

Nature of Business
------------------

Gateway International Holdings, Inc. (the "Company") was originally incorporated
on September 24, 1997 under the laws of Nevada. The Company and its subsidiaries
are  engaged  in  acquiring,   refurbishing  and  selling   pre-owned   Computer
Numerically  Controlled machine tools, and manufacturing of precision  component
parts in the fields of defense,  aerospace and medical tools. The Company trades
on the OTC Bulletin Board under the symbol "GWIH.OB".

Principles of Consolidation
---------------------------

The  consolidated   financial   statements   include  the  accounts  of  Gateway
International  Holdings,  Inc.,  and its wholly-owned  subsidiaries,  E.M.  Tool
Company,  Inc. dba Elite Machine Tool Company,  Inc. (see Note 2), Bechler Cams,
Inc. and Nelson  Engineering,  Inc. (see Note 3). All  significant  intercompany
accounts and transactions have been eliminated in consolidation.

Going Concern
-------------

The accompanying  consolidated  financial statements have been prepared assuming
the Company will continue as a going concern,  which  contemplates,  among other
things,  the realization of assets and satisfaction of liabilities in the normal
course of business.  The Company has negative  working  capital of $875,417,  an
accumulated  deficit  of  $1,618,991,  losses  from  operations  and the lack of
profitable  operational history.  These factors, among others, raise substantial
doubt about the Company's  ability to continue as a going  concern.  The Company
intends to fund operations through increased sales and debt and equity financing
arrangements  which management  believes may be insufficient to fund its capital
expenditures,  working capital and other cash  requirements  for the fiscal year
ending  September  30,  2003.  Therefore,  the  Company  may be required to seek
additional funds to finance its long-term operations.  The successful outcome of
future  activities  cannot be  determined at this time and there is no assurance
that if achieved, the Company will have sufficient funds to execute its intended
business plan or generate positive operating results.

The condensed  consolidated  financial statements do not include any adjustments
related to recoverability  and  classification of assets carrying amounts or the
amount and classification of liabilities that might result should the Company be
unable to continue as a going concern.

Risks and Uncertainties
-----------------------

The Company operates in a highly competitive industry that is subject to intense
competition.  The  Company's  operations  are subject to  significant  risks and
uncertainties  including financial,  operational,  technological and other risks
associated  with operating a business,  including the potential risk of business
failure.

                                        6

<PAGE>


              GATEWAY INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES
              Notes to Condensed Consolidated Financial Statements
              For the three months ended December 31, 2002 and 2001


Use of Estimates in the Preparation of Financial Statements
-----------------------------------------------------------

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 and the disclosure of contingent  assets and liabilities at the date
of the financial  statements,  and the reported amounts of revenues and expenses
during the reporting period. Significant estimates made by management are, among
others,  valuation allowance on deferred tax assets,  realization of inventories
and  collectibility  of accounts  receivable.  Actual  results could  materially
differ from those estimates.

Long-Lived Assets
-----------------

Statement  of Financial  Accounting  Standards  ("SFAS")  No. 144 ("SFAS  144"),
"Accounting for the Impairment of Disposed of Long-Lived  Assets," requires that
long-lived  assets  and  certain  identifiable  intangibles  held and used by an
entity be reviewed for impairment  whenever  events or changes in  circumstances
indicate  that the  carrying  amount  of an  asset  may not be  recoverable.  In
accordance  with the  provisions  of SFAS 144,  the  Company  regularly  reviews
long-lived  assets for impairment  whenever  events or changes in  circumstances
indicate that the carrying amount of the assets may not be recoverable. Based on
this  analysis,  the  Company's  management  believes  that no impairment of the
carrying value of its long-lived  assets existed at December 31, 2002. There can
be no assurance,  however, that market conditions will not change or demands for
the  Company's  services  or  products  will  continue  which  could  result  in
impairment of long-lived assets in the future.

Revenue Recognition
-------------------

The Company  records  sales when goods are shipped to the  customer.  Revenue is
recognized  when  all of the  following  criteria  have  been  meet:  persuasive
evidence for an arrangement exists;  delivery has occurred;  the fee is fixed or
determinable; and collectibility is reasonably assured.

In December 1999, the Securities and Exchange Commission issued Staff Accounting
Bulletin  101 ("SAB  101"),  "Revenue  Recognition,"  which  outlines  the basic
criteria  that  must be met to  recognize  revenue  and  provides  guidance  for
presentation  of revenue  and for  disclosure  related  to  revenue  recognition
policies  in  financial  statements  filed  with  the  Securities  and  Exchange
Commission.  Management  believes that the Company's revenue  recognition policy
conforms to SAB 101.

Basic and Diluted Earnings Per Common Share
-------------------------------------------

Under SFAS 128,  "Earnings  Per  Share",  basic  earnings  per  common  share is
computed  by  dividing   income   available  to  common   shareholders   by  the
weighted-average  number of common shares assumed to be  outstanding  during the
period of computation.  Diluted  earnings per share is computed similar to basic
earnings  per share  except that the  denominator  is  increased  to include the
number of  additional  common  share  that would  have been  outstanding  if the
potential common shares had been issued and if the additional common shares were
dilutive  (there were no additional  potential  common shares as of December 31,
2002 and 2001,  respectively).  Because the  Company had  incurred a net loss in
December 31, 2001,  basic and diluted loss per share are the same as  additional
potential common shares would be anti-dilutive.

Fair Value of Financial Instruments
-----------------------------------

SFAS 107,  "Disclosures  About Fair Value of  Financial  Instruments,"  requires
disclosure of fair value  information  about  financial  instruments  when it is
practicable to estimate that value.  The carrying  amount of the Company's cash,
accounts  receivables,  trade payables,  accrued liabilities,  obligations under
capital leases,  and notes payable  approximates their estimated fair values due
to the short-term maturities of those financial  instruments.  The fair value of
stockholder  note  receivable  and notes  payable  to  related  parties  are not
determinable as these transactions are with related parties.

Business Combinations
---------------------

SFAS 141, "Business  Combinations," which is effective for business combinations
initiated  after June 30,  2001,  eliminates  the pooling of interest  method of
accounting for business combinations and requires that all business combinations
occurring  after July 1, 2001 are  accounted  for under the  purchase  method of
accounting, (see Note 3).

                                        7

<PAGE>


              GATEWAY INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES
              Notes to Condensed Consolidated Financial Statements
              For the three months ended December 31, 2002 and 2001


Goodwill and Other Intangible Assets
------------------------------------

SFAS 142, "Goodwill and Other Intangible  Assets," which is effective for fiscal
years  beginning  after  December 15,  2001.  Early  adoption is  permitted  for
entities  with fiscal years  beginning  after March 15, 2001,  provided that the
first interim financial  statements have not been previously  issued.   SFAS 142
addresses how intangible  assets that are acquired  individually or with a group
of other assets should be accounted for in the financial  statements  upon their
acquisition  and after  they have been  initially  recognized  in the  financial
statements.  SFAS 142 requires  that  goodwill and  intangible  assets that have
indefinite  useful lives not be amortized but rather be tested at least annually
for impairment, and intangible assets that have finite useful lives be amortized
over their  useful  lives.  SFAS 142  provides  specific  guidance  for  testing
goodwill and  intangible  assets that will not be amortized for  impairment.  In
addition,  SFAS 142 expands the disclosure requirements about goodwill and other
intangible  assets  in the years  subsequent  to their  acquisition.  Impairment
losses for goodwill and indefinite-life  intangible assets that arise due to the
initial application of SFAS 142 are to be reported as resulting from a change in
accounting  principle.  However,  goodwill and intangible  assets acquired after
June 30, 2001 will be subject  immediately  to the  provisions  of SFAS 142. The
adoption of SFAS 142 did not have a material  effect on the Company's  financial
statements.

Significant Recent Accounting Pronouncements
--------------------------------------------

SFAS 143, "Accounting for Asset Retirement  Obligations,"  establishes standards
associated with the retirement of tangible  long-lived assets and the associated
asset  retirement  costs.  This statement is effective for financial  statements
issued for fiscal  years  beginning  after June 15,  2002.  The Company does not
expect SFAS 143 to have a material effect on its financial statements.

SFAS 144,  "Accounting  for the  Impairment or Disposal of  Long-Lived  Assets,"
addresses  financial  accounting  and reporting for the impairment of long-lived
assets and for  long-lived  assets to be disposed of. The provisions of SFAS 144
are effective for financial  statements  issued for fiscal years beginning after
December 15, 2001,  and interim  periods  within these fiscal years,  with early
adoption  encouraged.  Management has not determined the effect, if any, of SFAS
144 on the Company's future financial statements.

SFAS 146, "Accounting for Costs Associated with Exit or Disposal Activities," is
effective for such activities  initiated after December 31, 2002.  Activities of
this  type  include   restructuring  (such  as  relocation  of  a  business  and
fundamental  reorganizations of a business itself), which may give rise to costs
such as contract  cancellation  provisions,  employee  relocation,  and one-time
termination  costs.  SFAS 146 prohibits  liability  recognition  based solely on
management's intent, and requires that liabilities be measured at estimated fair
value.  Management  has not  determined  the effect,  if any, of SFAS 146 on the
Company's future financial statements.

In  December  2002,  the FASB  issued  SFAS  148,  "Accounting  for  Stock-Based
Compensation  -- Transition  and  Disclosure an amendment of FASB  Statement No.
123," which is effective  for fiscal years  beginning  after  December 15, 2002.
SFAS 148 provides  alternative  methods of transition for a voluntary  change to
the fair value based method of accounting for stock-based employee compensation.
In addition,  this Statement amends the disclosure requirements of Statement 123
to require prominent disclosures in both annual and interim financial statements
about the method of accounting for  stock-based  employee  compensation  and the
effect of the method used on reported results. Management has not determined the
effect, if any, of SFAS 148 on the Company's future financial statements.

NOTE 2 - PLAN OF REORGANIZATION

On December 11, 2001,  Gourmet Gifts,  Inc.  ("Gourmet")  entered into a Plan of
Reorganization  and Merger  ("Plan" or "Merger")  with E.M. Tool  Company,  Inc.
("EM") providing for a tax free share exchange under Section 368(a)(1)(B) of the
Internal   Revenue  Code  of  1986,  as  amended.   Immediately   prior  to  the
Reorganization,  Gourmet  had  3,384,000  shares  of  common  stock  issued  and
outstanding (net of 1,000,000 shares canceled pursuant to the merger).  Pursuant
to the Merger,  all of the 21,262  outstanding  shares of EM were  exchanged for
shares of  Gourmet  on a 1 for 637 basis,  or into  13,236,000  shares of common
stock (net of 300,000  shares  subsequently  cancelled).  Immediately  after the
merger, Gourmet had 16,320,000 shares of common stock issued and outstanding. In
addition,  in January  2002, pursuant  to the  merger,  EM paid  $160,000 to the
shareholders  of  Gourmet,   which  the  Company   expensed  under  general  and
administrative expenses in the year ended September 30, 2002.

                                        8

<PAGE>


              GATEWAY INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES
              Notes to Condensed Consolidated Financial Statements
              For the three months ended December 31, 2002 and 2001


Immediately  after the merger,  all then  existing  officers  and  directors  of
Gourmet  resigned and the  management  of EM were elected and  appointed to such
positions;  thereby,  effecting  a  change  of  control.  Although  EM  became a
wholly-owned  subsidiary  of Gateway  following  the  transaction,  because  the
transaction  resulted in a change of control,  the transaction was recorded as a
"reverse  merger"  whereby EM was  considered to be the  accounting  acquirer of
Gateway.  Simultaneously  with the merger,  Gourmet  changed its name to Gateway
International  Holdings,  Inc. The results of Gourmet  previously filed with the
SEC in prior years are not included herein. The related financial statements are
the results of  operations  of EM. Since  Gourmet's  continuing  operations  and
balance sheet are  insignificant  and due to the nature of a reverse  merger,  a
pro-forma  consolidated balance sheet,  consolidated  statement of stockholders'
equity and consolidated statement of operations are not presented here.

NOTE 3 - BUSINESS COMBINATIONS

In October 2002, the Company acquired Nelson Engineering  ("Nelson") pursuant to
an Agreement and Plan of Reorganization,  as amended (the "Agreement")  pursuant
to which Nelson became a wholly owned  subsidiary  of Gateway.  According to the
Agreement, the shareholders of Nelson received 6,175,300 restricted common stock
shares of Gateway  valued by a third party at  $302,575  in  exchange  for 1,935
common  shares of Nelson,  which  represents  all of the  outstanding  shares of
Nelson.  The transaction was accounted for in accordance with purchase method of
accounting as deemed appropriate under SFAS 141.

In November 2002, the Company acquired Bechler Cams, Inc.  ("Bechler")  pursuant
to an  Agreement  and  Plan of  Reorganization,  as  amended  (the  "Agreement")
pursuant to which Bechler became a wholly owned subsidiary of Gateway. According
to the Agreement,  the  shareholders of Bechler  received  3,530,000  restricted
common  stock  shares of Gateway  valued by a third party at $98,840 in exchange
for 100 common shares of Bechler, which represents all of the outstanding shares
of Bechler. The transaction was accounted for in accordance with purchase method
of accounting as deemed appropriate under SFAS 141.

The purchase was allocated to the businesses acquired based on the relative fair
values of the assets acquired and liabilities assumed,  which were independently
valued by a third party as follows:




                                             NELSON      BECHLER        TOTAL


Cash                                       $   2,357    $   2,570    $   4,927

Accounts receivable                          684,163      130,750      814,913

Inventory                                    798,284      114,609      912,893

Property and equipment                       798,413        2,476      800,889

Notes receivable from related parties        136,456          997      137,453

Other assets                                  99,652       61,066      160,718

Accounts payable and accrued liabilities    (652,376)     (55,428)    (707,804)

Line of credit                              (415,091)     (92,262)    (507,353)

Notes payable                               (711,561)          --     (711,561)

Obligations under capital lease             (276,030)     (65,938)    (341,968)

Deferred tax liabilities                    (161,692)          --     (161,692)
                                           ---------    ---------    ---------
Value of shares issued                     $ 302,575    $  98,840    $ 401,415
                                           =========    =========    =========

The results of operations of Nelson and Bechler are included in the accompanying
condensed  consolidated  financial statements from November 15, 2002 and October
23, 2002,  respectively.  The  following pro forma  summary  presents  condensed
consolidated results of operations as if Nelson and Bechler had been acquired as
of the beginning of the Company's 2003 fiscal year.

                                       Three months ended December 31,
                                           2002               2001
                                         ---------          ---------
   Net sales                           $ 2,622,099        $ 1,677,855
                                         =========          =========
   Net income (loss)                   $   310,505        $  (176,657)
                                         =========          =========
   Income (loss) per common share      $      0.01        $     (0.01)
                                         =========          =========


                                        9

<PAGE>


              GATEWAY INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES
              Notes to Condensed Consolidated Financial Statements
              For the three months ended December 31, 2002 and 2001


The above amounts are based upon certain  assumptions  and estimates,  which the
Company believes are reasonable. The pro forma financial position and results of
operations  do not purport to be indicative of the results which would have been
obtained had the business  combination  occurred October 1, 2002 or which may be
obtained in the future.

NOTE 4 - ACQUISITION DEBT

ACQUISITION DEBT CONSIST OF THE FOLLOWING AS OF DECEMBER 31, 2002 (See Note 3):
NELSON ENGINEERING, INC.
Line of  Credit - a  revolving  line of credit  agreement  (the  "Line")  with a
financial  institution.  The Line bears  interest  at the prime  rate  (4.75% at
December 31, 2002) plus 1% per annum. The Line is secured by  substantially  all
the assets of Nelson and guaranteed by a majority stockholder.  The terms of the
Line  provide for  borrowings  of up to  $500,000.  At December  31,  2002,  the
outstanding   borrowings   approximated  $469,000.  The  Line  requires  certain
financial and  non-financial covenants, which the Company is in compliance as of
December 31, 2002. The Line matures in February 2003.

Note  payable to a financial  institution;  payable in monthly  installments  of
approximately $5,700,  including interest at 7.6%, and secured by machinery. The
note matures in August 2006. At December 31, 2002,  the  outstanding  borrowings
approximated $219,000.

Notes payable to a financial  institution,  payable in monthly  installments  of
approximately  $9,700 with a balloon  payment of  approximately  $320,000 due in
February 2003, including interest at 7.3%, and secured by machinery. At December
31, 2002, the outstanding  borrowings  approximated  $326,000. The Company is in
the process of renegotiating this note payable.

Notes  payable to a  financial  institution;  payable  in  monthly  installments
ranging from approximately $700 to $3,900,  including interest ranging from 5.4%
to 7.4%, and secured by machinery.  The notes mature  through  December 2006. At
December 31, 2002, the outstanding borrowings approximated $116,000.

Assumption  of capital  leases;  payable in  monthly  installments  of $3,302 to
$5,146,  including  interest  ranging  from  6.4%  to  9.606%,  and  secured  by
machinery.  The leases mature through  September 2007. At December 31, 2002, the
outstanding balance on the capital leases approximated $264,000.

BECHLER CAMS, INC.
Line of  Credit - a  revolving  line of credit  agreement  (the  "Line")  with a
financial  institution.  The line bears  interest  at the prime  rate  (4.75% at
December 31, 2002) plus 2% per annum. The Line is secured by  substantially  all
the assets of Bechler and guaranteed by the stockholders.  The terms of the Line
provide for borrowings of up to $100,000.  At December 31, 2002, the outstanding
borrowings   approximated  $94,000.  The  Line  requires  certain  non-financial
covenants,  which the Company is in compliance with as of December 31, 2002. The
Line  matures in August 2003,  with  automatic  one-year  renewal  features,  as
defined.

Assumption of capital leases;  payable in monthly installments ranging from $809
to $3,597,  including  interest  ranging  from 9.75% to 15.22%,  and  secured by
machinery. The leases mature in June 2004. At December 31, 2002, the outstanding
balance on the leases approximated $96,000

NOTE 5 -- RELATED PARTY TRANSACTIONS

From time to time, the Company borrows funds from two  stockholders  for working
capital purposes,  which are non-interest bearing. During the three months ended
December 31, 2002, the  stockholders  loaned to the Company $140,000 in the form
of an interest bearing note payable accruing  interest ranging from 6% to 9% for
working  capital  requirements.  At December  31, 2002,  outstanding  borrowings
totaled $599,700.

                                       10

<PAGE>

              GATEWAY INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES
              Notes to Condensed Consolidated Financial Statements
              For the three months ended December 31, 2002 and 2001

NOTE 6 - STOCKHOLDERS' EQUITY

Common Stock
------------

In October 2002, the Company acquired Nelson Engineering  ("Nelson") pursuant to
an Agreement and Plan of Reorganization,  as amended (the "Agreement")  pursuant
to which Nelson became a wholly owned  subsidiary  of Gateway.  According to the
Agreement, the shareholders of Nelson received 6,175,300 restricted common stock
shares of Gateway  valued by a third party at  $302,575  in  exchange  for 1,935
common  shares of Nelson,  which  represents  all of the  outstanding  shares of
Nelson, (see Note 3).

In November 2002, the Company acquired Bechler Cams, Inc.  ("Bechler")  pursuant
to an  Agreement  and  Plan of  Reorganization,  as  amended  (the  "Agreement")
pursuant to which Bechler became a wholly owned subsidiary of Gateway. According
to the Agreement,  the  shareholders of Bechler  received  3,530,000  restricted
common  stock  shares of Gateway  valued by a third party at $98,840 in exchange
for 100 common shares of Bechler, which represents all of the outstanding shares
of Bechler, (see Note 3).

NOTE 7 -- BUSINESS SEGMENTS

Reportable  business segments for the three period ended December 31, 2002, (the
three-month  numbers for Nelson and Bechler are from the respective  acquisition
dates  through  December 31, 2002,  (see Note  3))(the  Company  operated in one
segment in 2001) are as follows:


                                                        3 Months ended
                                                       December 31, 2002
                                                       -----------------
Net sales from continuing operations:
    Elite Machine Tool Company                            $1,227,285
    Nelson Engineering, Inc.                                 518,981
    Bechler Cams, Inc.                                       237,913
                                                          ----------
                                                          $1,984,179
                                                          ==========
Operation profit from continuing operations:
    Elite Machine Tool Company                            $  128,715
    Nelson Engineering, Inc.                                 103,833
    Bechler Cams, Inc.                                        57,623
                                                          ----------
                                                          $  290,171
                                                          ==========
Depreciation and amortization - continuing operations:
    Elite Machine Tool Company                            $   14,515
    Nelson Engineering, Inc.                                  21,398
    Bechler Cams, Inc.                                            --
                                                          ----------
                                                          $   35,913
                                                          ==========
Identifiable assets - continuing operations:
    Elite Machine Tool Company                            $  489,979
    Nelson Engineering, Inc.                               2,424,715
    Bechler Cams, Inc.                                       390,809
                                                          ----------
                                                          $3,305,503
                                                          ==========
Capital expenditures/obligations under capital lease:
    Elite Machine Tool Company                            $       --
    Nelson Engineering, Inc.                                      --
    Bechler Cams, Inc.                                        64,000
                                                          ----------
                                                          $   64,000
                                                          ==========

                                       11

<PAGE>


              GATEWAY INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES
              Notes to Condensed Consolidated Financial Statements
              For the three months ended December 31, 2002 and 2001


NOTE 8 -- SUBSEQUENT EVENTS

Acquisitions
------------

In  December  2002,  the  Company   entered  into   discussions  to  purchase  a
manufacturing company.

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

Except for the historical information contained herein, the following discussion
contains  forward-looking  statements that involve risks and uncertainties.  The
Company's  actual results could  materially  differ from those  discussed  here.
Accordingly,  to the extent that this quarterly report contains  forward-looking
statements  regarding  the  financial  condition,  operating  results,  business
prospects  or any  other  aspect of the  Company,  please  be  advised  that the
Company's actual financial condition, operating results and business performance
may  differ  materially  from that  projected  or  estimated  by the  Company in
forward-looking  statements.  The  differences  may be caused  by a  variety  of
factors,  including  but not  limited to adverse  economic  conditions,  intense
competition,  including  intensification  of price  competition and entry of new
competitors  and  products,   adverse   federal,   state  and  local  government
regulation,   inadequate  capital,  unexpected  costs  and  operating  deficits,
increases  in general and  administrative  costs,  lower sales and revenue  than
forecast,  loss of customers,  customer  returns of products sold to them by the
Company, termination of contracts, loss of supplies,  technological obsolescence
of the Company's products, technical problems with the Company's products, price
increases,  for supplies and components,  inability to raise prices,  failure to
obtain new customers,  litigation and administrative  proceedings  involving the
Company,  the possible  acquisition of new  businesses  that result in operating
losses or that do not perform as anticipated, resulting in unanticipated losses,
the possible  fluctuation  and  volatility of the Company's  operating  results,
financial  condition and stock price,  inability of the Company to continue as a
going  concern,  losses  incurred in  litigation  and  settling  cases,  adverse
publicity and news  coverage,  inability to carry out marketing and sales plans,
loss or retirement of key executives,  changes in interest  rates,  inflationary
factors and other specific risks that may be alluded to in this quarterly report
or in other  reports  issued by the  Company.  In  addition,  the  business  and
operations  of the Company are subject to  substantial  risks that  increase the
uncertainty  inherent  in  the  forward-looking  statements.

General Overview
----------------

Gateway International  Holdings,  Inc. ("Gateway" or the "Company")  (previously
Gourmet Gifts, Inc.) is a public company whose common stock is quoted on the OTC
Bulletin  Board under the symbol  "GWIH.OB".  Prior to December  11,  2001,  the
Company was engaged in the business of catalogue  retail  gifts.  The  principal
product  entailed  packaging,  sale and  delivery of seasonal  gourmet  food and
beverage items. However, due to difficulty in raising additional working capital
to execute the business  plan, the Company ceased its operations and completed a
reverse merger (see below).

On December 11, 2001,  the Company  entered  into a plan of  Reorganization  and
Merger (the "Plan" or "Merger") with E.M. Tool Company, Inc. ("EM"). Immediately
prior to the merger, the Company had 100,000,000 shares authorized and 3,384,000
shares  issued  and  outstanding.  Pursuant  to the  merger,  all of the  21,262
outstanding  shares of EM were  exchanged  for  shares of  Gateway on a 1 to 637
basis or into 13,236,000 (net of 300,000 shares  subsequently  cancelled) shares
of common  stock of Gateway  for a total of  16,620,000  (net of 300,000  shares
subsequently   cancelled)   shares  of  common  stock  issued  and  outstanding.
Immediately after the merger, all officers and directors of Gateway resigned and
the  management  of EM were elected and appointed to such  positions;  therefore
effecting a change of control.  Although EM became a wholly owned  subsidiary of
Gateway following the transaction,  because the transaction resulted in a change
of control,  the transaction  was recorded as a "reverse  merger" whereby EM was
considered to be the accounting acquirer of Gateway.

The Company simultaneously  changed its name to Gateway International  Holdings,
Inc. The results of the Company  previously filed in past years are not included
herein.  The related  financial  statements are the results of operations for EM
and subsidiaries.

Following   the  merger,   the  Company  is  presently   engaged  in  acquiring,
refurbishing  and selling  pre-owned  Computer  Numerically  Controlled  ("CNC")
machine tools to manufacturing customers.

                                       12

<PAGE>


E.M. Tool Company,  Inc. dba Elite Machine Tool Company ("EM") was  incorporated
in  California  on March 30,  1998.  EM is  principally  engaged  in  acquiring,
refurbishing and selling pre-owned CNC machine tools to manufacturing  customers
across the United States of America.  The primary industry  segments in which EM
machines are utilized to make  component  parts are in  aerospace,  military and
medical fields.

Computer  Numerically  Controlled machines use commands from an onboard computer
to control the movement of cutting  tools and rotation  speeds of the part being
produced.  The computer control enables the operator to program  operations such
as part rotation, tooling selection and tooling movement for a specific part and
then store the program in memory for future use.  The machine is able to produce
parts while left unattended.  Because of this ability, as well as superior speed
of  operation,  a CNC  machine  is able to  produce  the same  amount of work as
several manually controlled machines,  as well as reduce the number of operators
required;  generating  higher  profits  with less  re-work and scrap.  Since the
introduction of CNC tooling  machines,  continual  advances in computer  control
technology  have  allowed  for  easier   programming   and  additional   machine
capabilities.

A vertical  turning machine  permits the production of larger,  heavier and more
oddly shaped parts on a machine that uses less floor space when  compared to the
traditional  horizontal  turning machine because the spindle and cam are aligned
on a vertical plane, with the spindle on the bottom.

In October 2002, Gateway acquired Nelson  Engineering,  Inc. ("Nelson") pursuant
to an Agreement  and Plan of  Reorganization  which Nelson became a wholly owned
subsidiary of Gateway.  Nelson is a first-tier manufacturer of precision machine
parts to customers  throughout the United States of America.  Nelson was founded
in 1987 and operates in Garden Grove,  California.  The Company is SAE,  AS9100,
ISO 9002 and ANSI/ASQC Q9002 compliant.  They are a Boeing-approved supplier and
have long-term contracts in aerospace and defense.  They do considerable work in
the electronics, medical and automotive sectors

In November 2002, Gateway acquired Bechler Cams, Inc. ("Bechler") pursuant to an
Agreement  and Plan of  Reorganization  which  Bechler  became  a  wholly  owned
subsidiary  of  Gateway.   Bechler  is  a  machine  shop   specializing  in  the
manufacturing  of precision  component parts to customers  throughout the United
States  of  America.  Bechler  was  founded  in 1957 and  operates  in  Anaheim,
California.  The Company  performs  production  contracting for companies in the
aerospace and defense  sectors and has contracts  for surgical  instruments  and
components in the medical sector.

The  Company's  revenues  consist of CNC  machine  sales,  sales of tooling  and
accessories  and service of CNC machines and related  equipment,  and production
contracting  for  aerospace  and defense,  electronics,  medical and  automotive
sectors.  Revenues are recognized in the period in which they are earned.  Costs
of sales  include  the  acquisition  cost of  inventory  for sale,  freight  and
transportation,  parts,  outside services,  service labor, sales commissions and
other direct sales costs.  General and  administrative  expenses consists of the
cost of  customer  acquisition  and  retention,  customer  service,  accounting,
billing, information systems and the personnel required to support the Company's
operation and growth.

Results of Operations
---------------------

Three months ended December 30, 2002 compared to three months ended December 31,
--------------------------------------------------------------------------------
2001
----

REVENUES - Revenues  increased  $1,227,187 from $756,992 during the three months
ended  December 31, 2001 to $1,984,179  for the three months ended  December 31,
2002. The increase was due primarily to increased revenues for Elite of $470,293
and the  acquisitions  of Nelson and  Bechler  with  revenues  of  $518,981  and
$237,913,  respectively.  Currently,  the economic demand for manufactured goods
have created an increased demand for machine tools and manufactured products.

COST OF SALES - Cost of sales  increased by $733,552  from  $719,355  during the
three months ended  December 31, 2001 to  $1,452,907  for the three months ended
December  31, 2002.  The increase was due  primarily to an increase in materials
and labor costs required for current demand of manufacturing  and machine tools.
Cost of sales increased  $182,453 for Elite,  $388,647 for Nelson,  and $162,452
for Bechler.  As a percentage of revenue,  condensed  consolidated cost of sales
were 95.0% and 73.2% resulting in a gross margin of 5.0% and 26.8% for the three
months  ended  December  31, 2001 and 2002,  respectively.  As a  percentage  of
revenue for the three months ended  December 31, 2002,  cost of sales were 73.5%
for Elite,  74.9% for Nelson, and 68.3% for Bechler resulting in gross margin of
26.5%,  25.1% and 31.7%,  respectively.  Gross margins increased due to increase
purchasing activities to meet the increased manufacturing demands. Following the
events of  September  11,  2001,  manufacturing  customers  cancelled  orders or
limited  their  acceptance  of  manufactured  products,  resulting  in decreased
purchases  of  capital  equipment  for  production.  Decreased  demand  severely
decreased the market  prices of machine  tools,  compelling  the Company to sell
equipment at a loss to maintain cash flow.

                                       13

<PAGE>


OPERATING  EXPENSES - Operating  expenses increased by $9,829 to $241,101 during
the three  months  ended  December  31, 2002  compared to $231,272 for the three
months ended  December 31, 2001.  Operating  expenses for the three months ended
December 31, 2002 decrease  $34,510 for Elite and increased for the acquisitions
of Nelson and Bechler of $26,501 and $17,838,  respectively.  Operating expenses
for the three  months  ended  December  31,  2001 were  comprised  primarily  of
$101,273 in salaries and related taxes, rent of $23,724,  12,515 of depreciation
expense, and $93,760 of other operating expenses,  including advertising,  auto,
office and  utilities  expenses.  Operating  expense for the three  months ended
December 31, 2002 were  comprised  primarily of $105,577 in salaries and related
taxes, rent of $29,040,  depreciation  expense of $35,913,  and $70,571 of other
operating expenses, including advertising, auto, office and utilities expense.

INTEREST EXPENSE - Net interest expense  increased by $20,668 to $29,008 for the
three  months ended  December 31, 2002  compared to $8,340 at December 31, 2001.
Interest  increase  because of the additional debt assumed with the acquisitions
of Nelson and Bechler.

The  Company  had a net  profit  of  $281,022,  or $0.01 per share for the three
months ended  December 31, 2002,  and a net loss of $201,975,  or $0.02 loss per
share for the three months ended December 31, 2001. Net income generated for the
three months ended December 31, 2002 by Elite was $102,840, Nelson was $100,507,
and Bechler was $77,675.  Current  requirements  for  manufacturing  demands and
machine tools have directly impacted Gateway.

ASSETS AND  LIABILITIES  - Assets  increased by  $2,993,546  from $311,957 as of
September  30, 2002 to  $3,305,503  as of December  31,  2002.  The increase was
related to an increase of inventory held for sale, accounts receivable, property
and equipment and other assets  directly  related to the  acquisitions of Nelson
and Bechler,  (see Note 3). Liabilities  increased by $2,311,109 from $2,156,531
as of September 30, 2002 to $4,467,640 as of December 31, 2002.  Elite increased
by  $75,182  related to the  increase  in notes  payable  to related  parties of
$100,000  and the  reduction  of debt  through  continuing  payments on its debt
obligations,  and  $2,235,927  increase  due to the  acquisitions  of Nelson and
Bechler (see Note 3).

STOCKHOLDERS'  DEFICIT   -Stockholders'   deficit  decreased  by  $682,437  from
$1,844,574 as of September  30, 2002 to $1,162,137 as of December 31, 2002.  The
decrease was  attributable to the issuance of common stock valued at $401,415 in
connection with the two acquisitions  accounted for using the purchase method of
accounting,  and the net income of $281,022 for the three months ending December
31, 2002.

Liquidity and Capital Resources
-------------------------------

GENERAL - Overall,  the Company had positive cash flows of $93,349 for the three
months ended  December 31, 2002  resulting  from $33,207 of cash provided by the
Company's operating activities,  $8,076 of cash used in the investing activities
offset  by  $68,218  of cash  provided  by  financing  activities.  The  Company
anticipates   funds  from  operations   should  be  sufficient  to  cover  daily
operations.

CASH FLOWS FROM OPERATING ACTIVITIES - Net cash provided by operating activities
of $33,207 for the three months ended  December 31, 2002 was  primarily due to a
net profit of $281,022,  depreciation  and  amortization  expense of $35,913 and
gain on disposal  of property  and  equipment  of $22,250;  offset by changes in
operating assets and liabilities of accounts receivable of $51,269, inventory of
$108,392,  other assets of $786 and accounts payable and accrued  liabilities of
$101,031.

CASH FLOWS FROM INVESTING  ACTIVITIES - Net cash used in investing activities of
$8,076  for the three  months  ended  December  31,  2002  funded  purchases  of
equipment for $14,000; offset with cash received from acquisitions of $4,927 and
the repayment of $997 against shareholder notes receivable.

CASH FLOWS FROM FINANCING ACTIVITIES - Net cash provided by financing activities
of $68,218 in the three months  ended  December  31, 2002 was  primarily  due to
borrowings on notes  payable to related  parties of $140,000 and lines of credit
of  $56,000;  offset by  principal  repayments  on notes  payable of $94,795 and
principal repayments on capital lease obligations of $32,987.

FINANCING - As previously  discussed,  the Company's  funds from  operations are
currently  sufficient  to fund daily  operations.  However,  the  Company may be
required to seek  additional  funds either  through debt or equity  financing to
stabilize and grow its business  operations.  Failure to raise  additional funds
may  have a  material  adverse  effect  on the  Company's  long-term  operations
viability.

EQUITY  FINANCING - The Company is actively  pursuing  all  potential  financing
options as it looks to secure additional funds to grow its business  operations.
Management  will review any financing  options at its  disposal,  and will judge
each  potential  source  of  funds on its  individual  merits.  There  can be no
assurance that the Company will be able to secure  additional funds from debt or
equity financing, or if they can, they will be on terms favorable to the Company
or existing stockholders.

                                       14

<PAGE>


Going Concern
-------------

The Company's  independent  certified  public  accountants  have stated in their
Auditor's  Report  included  in Form  10-KSB,  that  the  Company  has  incurred
operating  losses,  has  a  working  capital  deficit,  historical  losses  from
operations and a significant  stockholders'  deficit.  These  conditions,  among
others,  raise  substantial  doubt about the Company's  ability to continue as a
going concern.

The Company intends to fund operations  through increased sales, debt and equity
financing arrangements which management believes may be insufficient to fund its
capital expenditures, working capital and other cash requirements for the fiscal
year ending September 30, 2003.  Therefore,  the Company may be required to seek
additional funds to finance its long-term operations.  The successful outcome of
future  activities  cannot be  determined at this time and there is no assurance
that if achieved, the Company will have sufficient funds to execute its intended
business plan or generate positive operating results.

Inflation
---------

Management  believes  that  inflation  has  not  had a  material  effect  on the
Company's results of operations.

Critical Accounting Policies
----------------------------

In December  2001, the SEC requested  that all  registrants  list their three to
five most "critical  accounting  policies" in the MD&A. The SEC indicated that a
"critical  accounting policy" is one which is both important to the portrayal of
the Company's  financial  condition and results and requires  management's  most
difficult,  subjective  or complex  judgments,  often as a result of the need to
make  estimates  about the effect of matters that are inherently  uncertain.  We
believe that our following accounting policies fit this definition:

Business Combinations

SFAS 141, "Business  Combinations," which is effective for business combinations
initiated  after June 30,  2001,  eliminates  the pooling of interest  method of
accounting for business combinations and requires that all business combinations
occurring  after July 1, 2001 are  accounted  for under the  purchase  method of
accounting.

Revenue Recognition

Our net sales  consist of revenue from sales of products net of trade  discounts
and allowances. We generally obtain oral or written purchase authorizations from
our  customers  for a  specified  amount of  product  at a  specified  price and
consider delivery to have occurred at the time of shipment. We recognize revenue
when  evidence  of an  arrangement  exists,  contractual  obligations  have been
satisfied,  title and risk of loss have been  transferred  to the  customer  and
collection of the resulting receivable is reasonably assured.

Accounts Receivable

Our sales are generally made on an open account basis unless specific experience
or knowledge or the customer's  potential inability or unwillingness to meet the
payment terms dictate secured payments.  Our  international  sales are generally
made based on secure payments  including cash wire advance  payments and letters
of credit. Management's ability to manage the credit terms and take advantage of
the  leverage  of the  need  for  our  services  is  critical  to the  effective
application of credit terms and minimization of accounts receivable losses.

We maintain an allowance for doubtful  accounts  which is analyzed on a periodic
basis to insure that it is adequate to the best of  management's  knowledge.  We
believe that we have  demonstrated  the ability to make  reasonable and reliable
estimates of product  returns and of allowances  for doubtful  accounts based on
significant historical experience.

Inventories

Inventories,  which consist primarily of pre-owned machine tools, raw materials,
and related labor and  overhead,  are stated at the lower of cost or market with
cost  determined  on a specific  identification  basis.  The  Company  regularly
monitors  inventory  for  excess or  obsolete  items  and  makes  any  valuation
corrections when such adjustments are know.

Net  realizable  value  is  based  on  management's  forecast  for  sales of the
Company's  products  in the  ensuing  years.  The  industry in which the Company
operates is characterized by technological advancement and change. Should demand
for the Company's products prove to be significantly less than anticipated,  the
ultimate  realizable value of the Company's  inventories  could be substantially
less than the amount shown on the accompanying consolidated balance sheet.

                                       15


<PAGE>


ITEM 3 - CONTROLS AND PROCEDURES

The  Company's  Chief  Executive   Officer  and  Chief  Financial  Officer  (the
"Certifying Officer") is responsible for establishing and maintaining disclosure
controls and procedures for the Company.  Such officer has concluded (based upon
his  evaluation of these  controls and procedures as of a date within 90 days of
the filing of this report) that the Company's disclosure controls and procedures
are effective to ensure that information required to be disclosed by the Company
in this report is  accumulated  and  communicated  to the Company's  management,
including  its  principal  executive  officers as  appropriate,  to allow timely
decisions regarding required disclosure.

The Certifying Officer also has indicated that there were no significant changes
in the Company's  internal  controls or other  factors that could  significantly
affect such controls subsequent to the date of their evaluation,  and there were
no  corrective  actions  with regard to  significant  deficiencies  and material
weaknesses.

                                     PART II

ITEM 1. LEGAL PROCEEDINGS

The  Company  may be  involved  from time to time in various  claims,  lawsuits,
disputes with third parties,  actions involving allegations or discrimination or
breach of contract actions  incidental in the normal operations of the business.
The Company is currently not involved in any such  litigation  which  management
believes  could have a material  adverse  effect on its  financial  position  or
results of operations.

ITEM 2. CHANGES IN SECURITIES

In October 2002, the Company acquired Nelson Engineering  ("Nelson") pursuant to
an Agreement and Plan of Reorganization,  as amended (the "Agreement")  pursuant
to which Nelson became a wholly owned  subsidiary  of Gateway.  According to the
Agreement, the shareholders of Nelson received 6,175,300 restricted common stock
shares of Gateway  valued by a third party at  $302,575  in  exchange  for 1,935
common  shares of Nelson,  which  represents  all of the  outstanding  shares of
Nelson.  The transaction was accounted for in accordance with purchase method of
accounting as deemed appropriate under SFAS 141. The foregoing transactions were
exempt from the registration requirements of the Act under Section 4(2) thereof,
as the transactions were private transactions not involving a public offering.

In November 2002, the Company acquired Bechler Cams, Inc.  ("Bechler")  pursuant
to an  Agreement  and  Plan of  Reorganization,  as  amended  (the  "Agreement")
pursuant to which Bechler became a wholly owned subsidiary of Gateway. According
to the Agreement,  the  shareholders of Bechler  received  3,530,000  restricted
common  stock  shares of Gateway  valued by a third party at $98,840 in exchange
for 100 common shares of Bechler, which represents all of the outstanding shares
of Bechler. The transaction was accounted for in accordance with purchase method
of accounting as deemed  appropriate under SFAS 141. The foregoing  transactions
were exempt from the  registration  requirements  of the Act under  Section 4(2)
thereof,  as the transactions  were private  transactions not involving a public
offering.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None

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

No matters were submitted to a vote of the Company's security holders during the
first quarter of the fiscal year ended December 31, 2002.

ITEM 5. OTHER INFORMATION

Certain Relationships and Related Transactions
----------------------------------------------

From time to time,  the Company  borrows  funds from a  stockholder  for working
capital purposes,  which are non-interest bearing. During the three months ended
December 31, 2002, the  stockholders  loaned to the Company $140,000 in the form
of an interest bearing note payable accruing  interest ranging from 6.0% to 9.0%
for working capital requirements.  At December 31, 2002,  outstanding borrowings
totaled $599,700.

                                       16


<PAGE>

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

2        Agreement  and  Plan of  Reorganization  dated as of  the  11th day  of
         December,  2001,  by and  between  the  Registrant, E. M. Tool Company,
         Inc., a California  corporation ("E. M.") and the shareholders of E. M.
         (Incorporated  by reference to Exhibit 2 of the Current Report filed on
         Form 8-K dated  February  5, 2002,  as filed  with  the  Commission  on
         February 7, 2002).

2.1      Agreement  and  Plan  of  Reorganization  dated  March 31, 2002  by and
         between Gateway  International  Holdings,  Inc., GWIH Acquisition Corp.
         and Bechler  Cams,  Inc. (Incorporated   by  reference  to  Exhibit  10
         contained in  the  Registrant's  Quarterly  Report  on Form  10-QSB for
         the fiscal quarter ended March 31, 2002, as  filed with  the Commission
         on March 20,2002).

2.2      Agreement  and  Plan of  Reorganization  dated  April  26,  2002 by and
         between Gateway International  Holdings, Inc.,  GWIH Acquisition  Corp.
         and Nelson Engineering,  Inc. (Incorporated by reference to Exhibit 2.2
         of the Current  Report  filed on Form 8-K dated  October 23,  2002,  as
         filed with the Commission on November 7, 2002).

2.3      First  Amendment  to the  Agreement  and Plan of  Reorganization  dated
         October 4, 2002 by and between Gateway  International  Holdings,  Inc.,
         GWIH Acquisition Corp. and Nelson  Engineering,  Inc.  (Incorporated by
         reference to Exhibit 2.3 of the Current  Report filed on Form 8-K dated
         October 23, 2002, as filed with the Commission on November 7, 2002).

2.4      First  Amendment  to the  Agreement  and Plan of  Reorganization  dated
         October 4, 2002 by and between Gateway  International  Holdings,  Inc.,
         GWIH  Acquisition  Corp.  and  Bechler  Cams,  Inc.   (Incorporated  by
         reference to Exhibit 2.4 of the Current  Report filed on Form 8-K dated
         October 23, 2002, as filed with the Commission on November 7, 2002).

3.1      Articles of Incorporation of the Registrant (Incorporated  by reference
         to Exhibit 3.1 contained in the Registrant's  Registration Statement on
         Form 10-SB, as filed with the Commission on May 10, 1999).

3.2      Bylaws of  the  Registrant  (Incorporated  by reference to  Exhibit 3.2
         contained in the  Registrant's  Registration  Statement on Form  10-SB,
         as filed with the Commission on May 10, 1999).

4.0      Specimen Stock Certificate  (Incorporated by reference to  Exhibit  4.0
         contained in the Registrant's Amendment No. 1 to Registration Statement
         on Form 10-SB, as filed with the Commission on June 8, 1999).

10       Promissory  Note dated  August 10, 2000  (Incorporated  by reference to
         Exhibit 10  contained  in the  Registrant's  Form 10-KSB for the fiscal
         year ended  September 30, 2000, as filed with the Commission on January
         12, 2001).

10.1     Promissory Note dated December 11, 2000  (Incorporated  by reference to
         Exhibit 10  contained  in the  Registrant's  Form 10-QSB for the fiscal
         quarter  ended  December  31,  2000,  as filed with the  Commission  on
         February 14, 2001)

                                       17

<PAGE>


Signatures
----------

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

                                    GATEWAY INTERNATIONAL HOLDINGS, INC.


Date: February 19, 2003             By:  /s/ Lawrence Consalvi
                                         Lawrence Consalvi
                                         Chief Executive Officer,
                                         Chief Financial Officer
Date: February 19, 2003             By:  /s/ Joseph T.W. Gledhill
                                         Joseph T. Gledhill
                                         Chief Operations Officer

                                       18

<PAGE>


           CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED

            PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Gateway International  Holdings, Inc.
on Form 10-QSB for the three months ended  December 31, 2002,  as filed with the
Securities and Exchange  Commission on the date hereof,  I, Larry Consalvi,  the
Chief  Executive  Officer and Chief Financial  Officer of the Company,  certify,
pursuant to and for purposes of 18 U.S.C.  Section 1350, as adopted  pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002 that:

  1.I  have   reviewed  this   quarterly   report  on  Form  10-QSB  of  Gateway
    International Holdings, Inc.;

  2.Based on my  knowledge,  this  quarterly  report does not contain any untrue
    statement of a material fact or omit to state a material  fact  necessary to
    make the  statements  made, in light of the  circumstances  under which such
    statements  were made, not misleading  with respect to the period covered by
    this quarterly report;

  3.Based  on  my  knowledge,  the  financial  statements  and  other  financial
    information  included  in  this  quarterly  report,  fairly  present  in all
    material  respects the financial  condition,  results of operations and cash
    flows of the  registrant  as of,  and for,  the  periods  presented  in this
    quarterly report;

  4.The  registrant's  other  certifying  officers  and  I are  responsible  for
    establishing and maintaining  disclosure controls and procedures (as defined
    in Exchange Act rule 13a-14 and 15d-14) for the registrant and have:

  a.Designed  such  disclosure  control and  procedures  to ensure that material
    information   relating  to  the  registrant,   including  its   consolidated
    subsidiaries   is  made  known  to  us  by  others  within  those  entities,
    particularly  during  the  period in which  this  quarterly  report is being
    prepared;

  b.Evaluated the  effectiveness  of the  registrant's  disclosure  controls and
    procedures  as of a date  within 90 days  prior to the  filing  date of this
    quarterly report (the "Evaluation Date"); and

  c.Presented in this quarterly report our conclusions  about the  effectiveness
    of the disclosure  controls and procedures based on our evaluation as of the
    Evaluation Date;

  5.The registrant's  other certifying  officers and I have disclosed,  based on
    our most  recent  evaluation,  to the  registrant's  auditors  and the audit
    committee of the registrant's  board of directors (or persons performing the
    equivalent function):

  a.all significant deficiencies in the design or operation of internal controls
    which could adversely  affect the registrant's  ability to record,  process,
    summarize and report financial data and have identified for the registrant's
    auditors any material weakness in internal controls; and

  b.any fraud,  whether  or not  material,  that  involves  management  or other
    employees who have a significant role in the registrant's internal controls;
    and

  6.The  registrant's  other  certifying  officers and I have  indicated in this
    quarterly report whether or not there were  significant  changes in internal
    controls  or in other  factors  that  could  significantly  affect  internal
    controls subsequent to the date of our most recent evaluation, including any
    corrective  actions  with regard to  significant  deficiencies  and material
    weaknesses.


Dated: February 19, 2003

By:   /s/ Lawrence Consalvi
      Lawrence Consalvi
      Chief Executive Officer and
      Chief Financial Officer

                                       19

<PAGE>


Exhibit 99.1
           CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED
            PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


In connection with the quarterly report on Form 10-QSB of Gateway  International
Holdings, Inc. (the "Company") for the three months ending December 31, 2002, as
filed with the Securities Exchange Commission on the date hereof (the "Report"),
the  undersigned  Chief  Executive  Officer and Chief  Financial  Officer of the
Company  hereby  certifies,  pursuant  to 18 U.S.C.  Section  1350,  as  adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that:

  1.The Report fully complies with the requirements of Section 13(a) or 15(d) of
    the Securities Exchange Act of 1934; and

  2.The  information  contained in the Report fairly  presents,  in all material
    respects, the financial condition and results of operations of the Company.


Dated: February 19, 2003

/s/ Lawrence Consalvi
Lawrence Consalvi
Chief Executive Officer and
Chief Financial Officer

                                       20