SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

              ____________________________________________________

                                   FORM 10-KSB

(Mark One)

[X]  ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2003

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ______ TO ________

                          COMMISSION FILE NO. 000-27879

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


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

3035 EAST PATRICK LANE, SUITE 14, LAS VEGAS, NEVADA                   89120
     (Address of principal executive offices)                       (Zip Code)

       Registrant's telephone number, including area code:  (702) 938-9316

Securities registered under Section 12(b) of the Exchange Act:  NONE

Securities registered under Section 12(g) of the Exchange Act: COMMON STOCK, PAR
                                                               VALUE $0.0001 PER
                                                                     SHARE
                                                               (Title of class)


                               (Previous Address)

     Indicate  by  check  mark  whether the registrant (1) has filed all reports
required  to  be  filed by Section 13 or 15(d) of the Securities Exchange Act of
1934  during  the  preceding  twelve  months  (or  such  shorter period that the
registrant  was required to file such reports), and (2) has been subject to such
filing  requirements  for  the  past  90  days.  Yes [X] No [ ]

     Indicate  by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best  of  registrant's  knowledge, in definitive proxy or information statements
incorporated  by  reference  in Part III of this Form 10-KSB or any amendment to
this  Form  10-KSB. [X]

     State  issuer's  revenues  for  its most recent fiscal year: $ ___________.

     State the aggregate market value of the voting and non-voting common equity
held  by  non-affiliates  computed by reference to the price at which the common
equity  was last sold, or the average bid and asked price of such common equity,
as  of  March  15,  2004:  $___________

     Indicate  the  number  of  shares  outstanding  of each of the registrant's
classes  of  common  stock  as  of  March  29,  2004:  ________.

     Documents incorporated by reference:  None.


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                                     PART I

ITEM 1.     BUSINESS.

     Business  Development.

     As used herein the term ("Gateway") refers to Gateway Distributors, Ltd., a
Nevada corporation, its subsidiaries and predecessors, unless the context
indicates otherwise. We were originally incorporated in the State of Nevada on
May 26, 1993. In March 1995, we purchased all of the assets of The Right
Solution, Inc., a California corporation, which had filed for protection from
its creditors under Chapter 7 of the United States Bankruptcy Code. The
acquisition of those assets was effected as part of our long term strategic
plans.

     On July 1, 2000, we acquired the assets and operations of Dynamic Products,
Inc. ("Dynamic Products") in exchange for 1 (post reverse split) share of our
Common Stock. Dynamic Products was a multi-level marketing company focusing on
cleaning products. The transaction was accounted for under the purchase method
of accounting, therefore, the assets were recorded based on their fair values at
the date of acquisition. We recorded $128,600 of cost in excess of net assets
acquired, which is being amortized over 20 years.

     On October 12, 2000, we entered into an Acquisition Agreement ("Agreement")
with TRSG Corporation (TRSG) fka Professional Wrestling Alliance Corporation, a
Delaware Corporation wherein the Company agreed to sell the bulk of its assets
and its operating business, in exchange for shares of PWA stock equaling
approximately 85% of the issued and outstanding shares of PWA.

     On January 10, 2001 we closed on the acquisition pursuant to the Agreement
dated October 12, 2000. Pursuant to the Agreement, we acquired from TRSG
13,448,660 shares of TRSG's Common Stock. As a result of this transaction, we
acquired approximately 78% of the outstanding shares of TRSG.

     TRSG acquired all of our business and existing networking distribution
operations. Nearly all of our operations were conducted through TRSG its
majority owned subsidiary under the DBA "The Right Solution" which was formerly
operated by the Company.

     We sold our controlling shareholder interest of TRSG on December 31, 2002.
We recognized the sale as a gain of the disposition of a subsidiary. We recorded
the purchase at the carrying value on the books of TRSG.

     On December 31, 2002, we purchased substantially all the assets and
selected liabilities of TRSG , in a related party transaction, without a
shareholder vote or notice of given to our shareholders or the shareholders of
TRSG, and without the approval of TRSG's creditors. We have recognized the
carrying value on the books of TRSG as its carrying value of the assets it
received in this asset purchase from TRSG. The transaction involved us assuming
more liabilities than the assets acquired. Management is of the opinion that
this asset purchase received no goodwill benefit to us. Therefore, we have
expensed as a loss on the asset acquisition of TRSG with no implied fair value
assigned to goodwill. We may be liable to certain creditors and shareholders as
a result of effecting this transaction without the prior consent of certain
creditors and without giving notice to certain minority shareholders.

     As a result of acquiring substantially all the assets of TRSG at December
31, 2002, our operations remain essentially the same as in 2001 except we now
directly sell nutritional, health, and dietary supplements and products
throughout North America and Japan through our new subsidiary, The Right
Solution Gateway, directly, rather than through our former subsidiary TRSG.

     We formed a wholly owned subsidiary, The Right Solution Gateway, on January
7, 2003 to house the assets of TRSG Corporation and to run the retail operations
of the Company.

     On August 15, 2002, we acquired all assets in Los Cabos Freedom Movement, a
Wisconsin LLC, dba Grandma Hammans Specialty Foods ("Grandma Hammans") for
$217,50. We formed a wholly owned subsidiary, Grandma Hamman's Specialty Foods
("Grandma Hammans") on July 3, 2003 to run the wholesale operations of the
Company.


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     Our principal executive office is located at 3035 East Patrick Lane, Suite
14, Las Vegas, Nevada 89120 and our telephone number is (702) 938-9316.

     Business of the Issuer.

     We are a network marketing company that sells whole food nutrition, and
health and dietary supplements throughout North America and Japan. We believe
that through special blends, whole foods, such as grains and vegetables, can be
combined to help produce optimum health.

     Our products are marketed through a network marketing system within the
United States and wholesale personal import sales outside the United States.
Network marketing enables our independent distributors in the United States to
earn profits by selling Company products to retail consumers. Distributors may
also develop their own distributor downline organizations by sponsoring others
to do business in any market where we operate, entitling the sponsors to receive
overrides or commissions (cash incentives, including royalties and bonuses) on
product sales within their downline organizations.

     Management believes that its network marketing system is ideally suited to
its products, which emphasize a healthy lifestyle, because sales of such
products are strengthened by ongoing personal contact between retail consumers
and distributors, most of whom use our products themselves. Our network
marketing system appeals to a broad cross-section of people throughout the
world, particularly those seeking to supplement family income, start a
home-based business, or pursue employment opportunities other than conventional,
full-time employment.

     Growth Strategy

     Our plans to continue capitalizing on our strong operating platform and
intends to pursue a growth strategy comprised of the following four principal
elements:

     Expansion of Product Offerings and Development of New Product Lines. We are
committed to expanding our product line by developing and offering new products
and introducing existing products into markets where they are not currently
offered. The timely introduction of new, high quality products creates sales
opportunities for distributors, and also serves to generate enthusiasm among
distributors and provide them with additional promotional opportunities to sell
other Company products. During the past year we discontinued slow selling
duplicated products and have made the decision to concentrate on our top selling
products that focus on three things: 1) cleansing the body from toxins; 2)
feeding the body on a cellular level; and living ones dreams. With more than 70%
of the food that is consumed in the world being genetically altered, management
believes that the market for its whole food products will continue to grow.

     Mergers and Acquisitions. Our business plan includes growth through mergers
and acquisitions. In June of 2003 we moved Grandma Hammans operations to Las
Vegas, Nevada.  This gives us the opportunity to bring some of our manufacturing
needs in house and should reduce product costs.

     With the asset purchase of TRSG and Grandma Hammans, we expanded the
distributor base, increasing monthly sales volumes, and gave us a broad base of
new products and existing inventory. Throughout each of these transitions, the
majority of distributors and customers were retained.

     We intend to continue to look for opportunities to merge or purchase
smaller companies that have active distributors and sales volumes, or purchase
new products to diversify our sales market. We have two strategies for growth:
1) the continuation of the existing strategy to target companies that are in
trouble financially, lacking product inventories, but which have active
distributors and sales. Potential companies must be compatible to our marketing
system and must merge into our compensation plan; 2) Purchase the rights to
existing products that have either a recognized brand name or have been
successfully marketed in the past with continued need in the marketplace,
requiring only market exposure to generate new sales.

     Expansion Into New Markets. Our business plan for 2004 is to focus on
growth in the USA and place less emphasis on international expansion (with the
exception of existing clients being given the opportunity to distribute


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all products including new acquisitions) until such time we are profitable on a
consistent basis, and have the funding available for international operations.
We believe there are numerous additional markets in which our network marketing
system and products may prove successful. We evaluate new markets based, in
part, on our ability to create a distributor base in the potential markets. In
determining when and where to open new markets, we will continue to seek to
minimize the impact on distributor focus in existing markets and to ensure that
adequate distributor support services and other Company systems are in place to
support the growth. Although we intend to expand into new markets, there can be
no assurance that we can open markets on a timely basis or that such new markets
will prove to be profitable. Significant regulatory and legal barriers must be
overcome before marketing can begin in any new market. In addition, expansion of
our operations into new markets requires substantial working capital and capital
expenditures associated with both the regulatory compliance and operations
phases of the process. The lead-time and costs associated with opening
anticipated new markets may significantly exceed those of entering new markets
in the past due to greater regulatory barriers, the necessity of adapting to
entirely new regulatory systems, and problems related to entering new markets
with different cultural bases and political systems from those encountered in
the past. We are informed that the lead-time necessary to open a new market is
generally up to one year, but may be more.

     Enhancement of Sales and Motivational Training. We will continue to seek
increased sales opportunities through our network marketing system by utilizing
extensive training and motivational programs. We will also hold regional
meetings throughout the United States. We have hired Jack Zufelt to run the
training of the company.  Our new starting kits have training material along
with product which will allow the new distributor to get started quicker.  In
addition, Jack Zufelt will conduct conferences, seminars, and one-on-one
training as required by the Company.

     We have acquired Jeunesse by Francois which is a seventy-five year old skin
care formula from Romania. In January 2004, an informercial was produced to
introduce the new product. Product is projected to be complete and in the
warehouse by the end of May 2004 at which time it will be offered in the network
marketing and retail business of the company. This allows us to expand our
customer base and increase our sales.

     We extended our agreement with PT. Mahakam Beta Farma in Indonesia.  They
are purchasing our Body Gard product and have it in their pharmacies throughout
the country.

     Products  and  Services

     We market and distribute different nutritional and/or health products. The
products, which The Right Solution Gateway sells, are intended to provide
nutritional supplementation to the users; the products are not intended to
diagnose, treat, cure or prevent any disease.

     TOP SELLING PRODUCTS ARE:

     Body Gard with Lactoferrin - a unique formulation of Colostrum, Echinacea
and Lactoferrin. Lactoferrin is a naturally occurring protein derived from
colostrum. Lactoferrin is involved in iron metabolism, an important mechanism
used by animals and plants to moderate growth and control infections.
Lactoferrin has been shown to be effective at supporting lymphocytes, the white
blood cells directly involved in the destruction of bacteria, viruses and other
infectious agents. Body Gard is also fortified with pure colostrum, containing a
broad spectrum of immune factors presumed to provide natural protection against
illness. The herb Echinacea, one of the most exciting therapeutic herbs
available, is believed to boost the immune system. This combination of
ingredients may build a stronger defense against infection by signaling more
sophisticated components of the immune system to become active. (30 tablets)

     Detox Tea -

     Femme - Transitions happen at the blink of an eye. With specially
formulated herbal products such as Femme, natural transitions are now made
easier. Approximately 50% of all women are affected by symptoms of PMS or other
menstrual problems. Fertility and menopausal complaints are also common in
today's society. Femme addresses many of the discomforts associated with stress
and hormonal imbalance with its all-natural combination of


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high-quality, concentrated herbs. Femme is a concentrated hormonal balancer that
combines three of the most widely used herbs in the world for relief from
menstrual, menopausal and fertility complaints. This powerful, soothing tonic
helps to balance hormonal and cyclical patterns without the harsh side affects
of prescription drugs. (2 oz. Bottle)

     Fulvic Factor - Fulvic Factor is made from the raw material shilajit
harvested from vertical cliff sides high in the Himalayan mountain range. The
Himalayan mountains were formed from the collision of the sub Asian and Indian
continents about 30-50 million years ago. During the collision, dense
vegetation, literally entire rain forests, were trapped under millions of tons
of pressure, which slowly changed this lush vegetation into a rich bioactive
material, which is perhaps, the rarest nutrient rich substance found on earth.
Ancient in origin and pure beyond measure, shilajit has never been exposed to
harmful fertilizer, pesticide, herbicide or pollution. For centuries it has been
known as the "Destroyer of Weakness", Builder of Strength - a natural
rejuvenator.

     Lifetonic - is a delightful tasting herbal tonic formulated with 30
all-natural, unpasteurized herbs used by natural healers for centuries to help
energize, balance and rebuild the entire body and nervous system. Low in sodium
and rich in active enzymes, potassium and many other vitamins and minerals,
Lifetonic is the ideal nutritional aide to any weight loss program. All it takes
is a one-ounce serving (1-tablespoon) per day. (16 oz)

     LifeZymePlus -

     Master Formula - is scientifically formulated with whole, minimally
processed, organically grown amaranth, brown rice, spirulina, flaxseed, and
millet. These whole foods are nutritionally balanced together, without protein
isolates, making Master Formula one of the most nutritionally dense, mass
produced whole food products in the world! Special herbs and natural supplements
have been added to feed select glands and organs that are constantly under
attack by today's polluted environment. Each 21- gram serving provides 72
calories. The fat is from flax, and there is no hydroginization. There is zero
cholesterol. Each serving contains 3 grams of fiber. There are no added
preservatives, starches, sugars, colors, or protein isolates! Master Formula
powder is available in bulk or encapsulated form. (Canister 1 lb. 5 oz. Capsules
180)

     Master Formula Cleansing Bar - Also helpful for reducing detoxification
symptoms to the skin, Master Formula Cleansing Bar features a soothing and
stimulating blend of ingredients that promote healing. It includes Master
Formula in vegetable glycerin soap enhanced with safflower, amaranth and
peppermint oils. (4.75 oz bar)

     Natural Immunity - Strengthen your immune system naturally with the most
potent source of Echinacea available. Echinacea is one of the world's most
highly respected herbs, recognized for its ability to protect against infection
by neutralizing hyaluronidase, the tissue-dissolving enzyme produced by many
germs. Natural Immunity is highly concentrated, using only wildcrafted,
organically grown herbs to stimulate and strengthen your immune system, support
tissues from assault by invading microorganisms, increase T-Cell production and
fight infection. Turn to Natural Immunity as an immune booster when you are sick
or for maintenance to protect against future illnesses. You may never catch
another cold! (2 oz. Bottle)

     New Life Corrective "A" - This stimulating formula provides quick relief
from constipation, while cleansing and healing the entire gastrointestinal
system. Formula A strengthens the colon and stimulates peristalsis, the muscular
movement that moves fecal matter through the intestines. Includes a unique blend
of Curacao and Cape Aloe - two forms of aloe regarded for their ability to
strengthen and normalize peristalsis while supporting healthy bowel elimination.
New Life Corrective "A" also contains the healing herbs Senna and Cascara
Sagrada, both rich in anthroquinones and proven to help normalize bowel
function. (90 capsules)

     New Life Detoxifier "B"
     New Life Formula B - aids in the removal of old waste and fecal matter
caused by diverticulosis. Formula B contains flaxseeds, (rich in Omega-3 and
Omega-6 fattyacids), Bentonite clay, (removes up to 40 times its weight in fecal
matter), and fruit pectin (removes dangerous materials such as mercury, cadmium,
lead and other heavy metals.) Formula B also provides activated Charcoal
(absorbs fats, toxins and other harmful agents in the bowel), and herbs that
gently lubricate and promote normal bowel function. (1/2 lb. canister)


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     New Life Maintenance "C" - used on a daily basis, helps to naturally
restore and maintain regularity. Formula C is rich in fibers and gums designed
to assure soft, easy bowel movements for healthy elimination, It also provides
maintenance doses of Paratol, a proprietary mineral complex that helps control
parasite and Candida infestations. (1 lb. Canister)

     Penta Concentrate - In China, Penta Tea, known as Jaogulan or JGL, has been
consumed as a vegetable and a tea for many centuries. No other single herb has
been researched so thoroughly in China as Penta. According to recent studies,
Penta lowers cholesterol levels and may also have beneficial effects on vascular
walls. Penta lowers blood pressure, protects the heart muscle from ischemia,
strengthens the immunological functions of the body, and reduces blood clotting.
This `food enhanced' herb is safe for long-term, continuous use.

     Rose Tea - The kidneys filter blood and remove toxins and metabolic
byproducts from the body. Every minute of the day, one-fourth of your blood
supply is filtered through the kidneys, totaling over 3,400 quarts being
filtered every twenty-four hours! Although small enough to fit in the palm of
your hand, your kidneys are composed of two million microscopic filters called
nephrons, whose job is to absorb, needed nutrients and eliminate toxins from the
body. Rose Tea supports the natural filtering power of the kidneys. This natural
blend of 10 healing herbs, including Dandelion, Violet Leaves, Honeysuckle and
Marigold, can also help relieve body aches associated with detoxification
symptoms.

     SuperFood - is literally an organic garden at your fingertips -- a rich
combination of whole foods harvested from some of the most pristine organic
farms in the world. SuperFood formula blends 12 of the most nutritious fruits
and vegetables on the planet into a nutritional rainbow to form the foundation
of your health and weight-loss program. SuperFood provides the vitamins and
minerals your body has been starving for. Wholesome for all ages, after just one
serving of SuperFood your body will immediately begin to feel more alive and
energetic as it replenishes the stores of nutrients that a steady diet of
processed foods depletes. Each serving provides protein, vegetable fiber,
vitamins, minerals, folic acid, amino acids and more. This is a 100% organically
grown ultra low fat formula. (382.7 gram Canister)

     Trim Easy Plus - will help you safely lose weight without making any major
change in your current lifestyle. Trim Easy Plus uses `natural botanicals' and
`natural activators' to promote healthy weight-loss in an effective, yet safe
manner. The primary effect of these products is to accelerate the rate at which
your body metabolizes fat in a process is known as "thermogenesis". In this way,
Trim Easy Plus not only decreases your appetite, but also allows your body to
burn fat at an accelerated rate. (225 capsules)

     Ymotion - Supplemental progesterone has been shown to confer a host of
benefits, including balancing hormone levels, boosting immune function,
restoring libido, increasing bone density and reducing the risk for developing
osteoporosis for both men and women. Ymotion provides progesterone in
combination with Wild Yam Extract and select natural herbs. These all-natural
ingredients have the potential to help relieve symptoms of PMS and menopause,
including irritability, hot flashes, water retention, fatigue and mood swings.
These ingredients have also been shown to help protect against the development
of breast cancer, fibrocysts and endometriosis, while supporting thyroid hormone
actions, normalizing blood sugar levels and helping the body utilize stored fat
for energy production. Ymotion contains no artificial coloring or fragrances.
The faint aroma and delicate peach coloring are due to the concentration of wild
yam extract. The ingredients act synergistically to achieve metabolic balance
and are recognized as excellent skin moisturizers. (2 fl. oz.)

Services

     Product Return Policy for Retail Customers. Services Product Return Policy
for Retail Customers. We have a 100% money-back guarantee on all of our products
for retail customers. It is the responsibility of each Team Member to refund the
purchase price to any unsatisfied customer. The customer's request must be made
within 30 days of the date of the product purchase to be valid. If the product
was used, the empty or partially filled container must be returned to Gateway.
Upon receipt of the container and a copy of the customer's retail sales receipt
with their name, address and telephone number, we will promptly send a
replacement to the Team Member. We do not make cash refunds. Our product return
policy for retail customers has been approved by the Direct Selling Association
(the "DSA"), a national industry trade organization of network marketing
companies whose objective is to provide aid, support and guidance to the network
marketing industry.


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     Product Return Policy for Team Members. A Team Member who is dissatisfied
with a product may request a refund or credit within 30 days of the date of the
product's purchase. Full, partially full, and empty bottles are eligible for
refund. However, only one partially filled or empty container per individual
product will be honored. Unused products purchased during this same period are
eligible for refund if they are in the original packaging, factory sealed, and
in resalable condition. Shipping expenses are not eligible for refund. Our
product return policy for Team Members has been approved by the DSA.

     Product Market. The nutritional supplement industry is growing and
management believes it is due primarily to heightened public awareness of the
positive effects of vitamins and other nutritional supplements. Many individuals
are now using nutritional supplements as a means of preventive health care.
Retail sales of nutritional supplements increased from approximately $3.5
billion in 1991 to approximately $4.2 billion in 1993, as reported by The
Overview of Nutritional Supplement Market prepared by the Council for
Responsible Nutrition. Furthermore, industry trade sources estimated that
worldwide sales of nutritional supplements were $4.7 billion in 1994 and $5.3
billion in 1995, respectively.

MARKETS  AND  MARKETING

     Our products are distributed primarily through a network marketing system,
consisting of an extensive network of distributors. Distributors are generally
independent contractors who purchase products directly from us for personal use
or for resale to consumers within the United States. Distributors may elect to
work on a full-time or part-time basis. We believe that our network marketing
system appeals to a broad cross-section of people worldwide, particularly those
seeking to supplement family income, start a home-based business or pursue
employment opportunities other than conventional, full-time employment and that
a majority of our distributors work on a part-time basis.  We believe that our
network marketing system is ideally suited to marketing our products because
ongoing personal contact between consumers and distributors strengthens sales of
such products.

     Within the United States, distributors may earn profits by purchasing our
products at wholesale prices (which are discounted 40% from suggested retail
prices) and selling our products to customers at suggested retail prices.  All
distributors, both inside and outside the United States, who sponsor new
distributors and establish their own downline organizations may earn commissions
on product sales on their entire downline. There is no limit on the number of
downline levels from which a distributor can generate commissions.

     To become a distributor, a person must be sponsored by an existing
distributor, pay an annual fee (which is currently $15.00), and be placed into a
Tracking Center, which is a point from which we "track" the sales volume of the
distributor and the sales volume of a distributor's downline organization. Each
distributor has three legs in their organization and commissions are based on
volume requirements for these three legs. The strongest performing leg is the
first leg, the second strongest is the second leg and all other legs make up the
third leg. In order to receive any commissions or bonuses a distributor must
make an initial purchase of $100 in personal purchase volume. To maintain
qualification for any commissions or bonuses, a distributor must purchase a
minimum of $100 to $150 depending on total volume of our products every month.
All distributors are allowed to participate in our growth by sponsoring new
distributors.

     We compute the wholesale volumes purchased at the close of each business
day during the month. Commissions are paid monthly based on the qualifying
level.  Additional bonus money can be earned through the Right Start Program. A
distributor may sign up for an "Autoship Program" which helps protect
distributors from losing qualification by automatically shipping them a
qualifying order monthly. In addition, when a distributor signs up for the
Autoship Program, the distributor becomes qualified to receive a bonus (the
"Right Start Bonus") for each new personally sponsored distributor. The amount
of the Right Start Bonus will be 50% of the new distributor's first order.

     We maintain a computerized system for processing distributor orders and
calculating distributor commission and bonus payments, which enables it to remit
such payments to distributors monthly. We believe that prompt remittance of
commission is vital to maintaining a motivated network of distributors and that
our distributors' loyalty to us has been enhanced by our history of consistently
making commission and bonus payments on a scheduled basis.


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     Internet.  We maintain a site on the World Wide Web at
www.rightsolution.com. We have enhanced the system to allow on-line ordering and
---------------------
volume checks by the distributors.

     Marketing. Each distributor is responsible for sales of our product within
his or her downline. We rely on word of mouth and testimonials from previous or
existing customers for our primary advertising. We have developed sales
materials, which have been professionally prepared by a graphic designer and
reviewed for DSA and regulatory compliance. These sales materials include
product descriptions.

     Sponsoring. We have established a system for the sponsoring of new
distributors. We prepare communication and educational training materials for
distributors to assist in the sponsoring of new distributors. We also engage in
weekly conference calls with distributors and send a newsletter, fax blast, and
email blasts to our distributors. We have an established advisory board for
assistance and consultation in connection with sponsoring matters.

     Product Distribution.  Our products are distributed to all markets from our
warehouse located in Las Vegas, Nevada.

COMPETITION

     We are subject to significant competition for the recruitment of
distributors from other network marketing organizations, including those that
market nutritional, health and dietary supplements, as well as those, which
market other types of products. Some of our competitors are substantially larger
and have available considerably greater financial resources. Our ability to
remain competitive depends, in significant part, on our success in sponsoring
and retaining distributors through an attractive compensation plan and other
incentives. We believe that our bonus availability program, recognition and
rewards program, and other compensation and incentive programs provide our
distributors with significant earning potential. However, there can be no
assurance that our programs for recruitment and retention of distributors will
be successful.

     The market for nutritional, health, and dietary supplements is
characterized by extensive competition, frequent new product introductions,
short product life cycles, rapid price declines, and eroding profit margins, and
changing customer preferences. This market segment includes numerous
manufacturers, distributors, marketers, retailers, and physicians that actively
compete for the business of consumers, both in the United States and Canada. The
market is highly sensitive to the introduction of new products that may rapidly
capture a significant share of the market. We expect to continue to face
substantial competition in our efforts to successfully capture a significant
share of the market. There are a number of companies that currently offer
competing products, and it can be expected that other companies will introduce
additional competing products in the future. In addition, there are a variety of
channels of distribution for nutritional supplements other than through network
marketing and distribution systems, including direct response marketing,
specialty retail health and nutrition stores, drug stores, and supermarkets.
Many of our existing and potential competitors have greater financial,
marketing, distribution, and research capabilities. Our performance will depend
on our ability to develop and market new products that can gain customer
acceptance and loyalty, as well as our ability to adapt our product offerings to
meet changing pricing considerations and other market factors. Our attempts to
differentiate ourselves from competitors by adhering to our "mission statement"
which reads as follows:

     We will distribute the finest life-enhancing products in the world. Through
effective leadership, management and entrepreneurial marketing, we will provide
an opportunity to our Team Members, customers and employees to earn a fair
profit on their investment of time and money."

PRODUCT  MANUFACTURING  AND  DEVELOPMENT

     We anticipate continuing to expand our product line through the development
of new products. New product ideas are derived from a number of sources,
including trade publications, scientific and health journals, our executives,
staffs, consultants, and outside parties. In advance of introducing products
into our markets, we consult our Medical Advisory Board, comprised of Dr.
Herbert Pardell, M.D., D.O., Betty Kamen, Ph.D., Dr. Michael


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Hartman and Jack Akers, M.D., Ph.D. for advice. In addition, local counsel and
other representatives are retained by us to investigate product formulation
matters as they relate to regulatory compliance and other issues.

     All of our products are provided by outside companies. We have agreements
in place with all of our current manufactures that assure availability for it
anticipated growth. Our ownership of product formulations and trademarks for
substantially all of our nutritional products gives us a great deal of
protection from competition.

     Our ability to enter new markets and sustain satisfactory levels of sales
in each market has been in the past and is likely to continue to be dependent in
significant part upon our own ability and the ability of our manufacturers to
develop new products and reformulate existing products for introduction into our
markets. Since 1998, we have significantly expanded our in-house product
research and development and product formulation staff, which now consists of
several of our employees, our Medical Advisory Board, and our manufacturers, who
are increasingly involved in such activities.

     We own the proprietary rights to substantially all of our health and
nutritional supplements' formulations and trademarks. We have formed several
alliances with our manufacturers to assure, among other things, that products
are organically grown and that inventory levels will remain constant.

INSURANCE

     Although we do not engage in the manufacture of any of the products we
market and sell, we could be exposed to product liability claims. We have not
had any such claims to date. Although we maintain a limited amount of liability
insurance, each of our manufacturers provides additional insurance of at least
two million dollars covering products, which we sell. There can, however, be no
assurance that we will not be subject to claims in the future or that available
insurance coverage will be adequate. A partially or completely uninsured claim
against us, if successful and of sufficient magnitude, would have a material
adverse effect on us.

TRADEMARKS

     We have received federal trademark registration for THE RIGHT SOLUTION(R).
We intend to continue to seek trademark protection for a number of the products
and brand names under which our products are marketed, where applicable. There
can be no assurance that such protection will be obtained. We will be required
to rely upon common law concepts of confidentiality and trade secret laws to
protect our product formulations. There can be no assurance that the foregoing
will protect the formulations or provide adequate remedies for us in the event
of unauthorized use or disclosure of such formulations, or that others will not
be able to independently develop such formulations. Our product formulations are
not protected by patents and are generally not patentable. We intend to obtain
international trademarks, particularly Japanese trademarks, as we enter foreign
markets. Trademark registrations are either issued or pending in the United
States Patent and Trademark Office and in comparable agencies in many other
countries. We consider our trademarks and trade names to be an important factor
in our business.

GOVERNMENT  REGULATION

     We are subject to and affected by extensive laws, governmental regulations,
administrative determinations, court decisions, and similar constraints (as
applicable, at the federal, state and local levels) including, among other
things, regulations pertaining to (I) the formulation, manufacturing, packaging,
labeling, distribution, importation, sale and storage of our products, (ii)
product claims and advertising (including direct claims and advertising by us as
well as claims and advertising by distributors, for which we may be held
responsible), (iii) our network marketing system, (iv) transfer pricing and
similar regulations that affect the personal import laws, and (v) taxation of
distributors, which in some instances may impose an obligation on us to collect
the taxes and maintain appropriate records.

PRODUCTS


                                        8
<PAGE>
     The formulation, manufacturing, packaging, storing, labeling, advertising,
distribution, and sale of our products are subject to regulation by one or more
governmental agencies, including the Food and Drug Administration ("FDA"), the
Federal Trade Commission ("FTC"), the Consumer Product Safety Commission
("CPSC"), the United States Department of Agriculture ("USDA"), the
Environmental Protection Agency ("EPA") and the United States Postal Service.
Our activities are also regulated by various agencies of the states and
localities. The FDA, in particular, regulates the formulation, manufacture, and
labeling of foods and dietary supplements, such as those distributed by Gateway.
FDA regulations require manufacturers and distributors of certain products to
meet relevant good manufacturing practice ("GMP") regulations for the
preparation, packing and storage of these products. GMP's for dietary
supplements have yet to be promulgated, but are expected to be proposed. We do
not anticipate that the promulgation of any GMP's for dietary supplements would
have a material impact on Gateway.

     The 1994 Dietary Supplement Health and Education Act ("DSHEA") revised the
provisions of the Federal Food, Drug and Cosmetic Act ("FFDCA") concerning the
composition and labeling of dietary supplements and, we believe, is generally
favorable to the dietary supplement industry. The legislation creates a new
statutory class of "dietary supplements." This new class includes vitamins,
minerals, herbs, amino acids, and other dietary substances for human use to
supplement the diet, and the legislation grandfathers, with certain limitations,
dietary ingredients that were on the market before October 15, 1994. A dietary
supplement which contains a new dietary ingredient (i.e., one not on the market
before October 15, 1994) will require evidence of a history of use or other
evidence of safety establishing that it is reasonably expected to be safe.
Manufacturers of dietary supplements that make certain types of statements on
dietary supplements, including certain product performance claims, must have
substantiation that such statements are truthful and not misleading.

     The majority of the products marketed by us are classified as dietary
supplements under the FFDCA. In addition, the adoption of new regulations in any
of our markets, or changes in the interpretation of existing regulations, could
have a material adverse effect on us. In September 1997, the FDA issued
regulations governing the labeling and marketing of dietary supplement products.
The regulations cover the following: (1) the identification of dietary
supplements and their nutrition and ingredient labeling; (2) the terminology to
be used for nutrient content claims, health content claims, and statements of
nutritional support; (3) labeling requirements for dietary supplements for which
"high potency" and "antioxidant" claims are made; (4) notification procedures
for statements on dietary supplements; and (5) pre-market notification
requirements for new dietary ingredients in dietary supplements. The
notification procedures became effective in November 1997, while the new
labeling requirements became effective in March 1999. We were required to revise
a substantial number of our product labels by the effective date. In addition,
we are required to continue our ongoing program of securing substantiation of
our product performance claims and of notifying the FDA of certain types of
performance claims made for our products.

     In addition, in certain markets, including the United States, claims made
with respect to dietary supplements or other products of ours may change the
regulatory status of the products. In the U.S., for example, it is possible that
the FDA could take the position that claims made for certain of our products
place those products within the scope of an FDA "over-the-counter" ("OTC") drug
monograph. OTC monographs prescribe permissible ingredients and appropriate
labeling language, and require the marketer or supplier of the products to
register and file annual drug listing information with the FDA. In the event
that the FDA asserted that product claims for some of our products caused them
to fall within the scope of OTC monographs, we would be required either to
comply with the applicable monographs or change the claims made in connection
with the products. There can be no assurance that we could do so effectively, or
that any such changes would not adversely affect sales and marketing of an
affected product. Our substantiation program involves compiling and reviewing
the scientific literature pertinent to the ingredients contained in our
products.

     As a marketer of food and dietary supplements and other products that are
ingested by consumers, we are subject to the risk that one or more of the
ingredients in our products may become the subject of adverse regulatory action.
For example, on April 10, 1996, the FDA issued a statement warning consumers not
to purchase or ingest dietary supplements containing ephedrine (found in the
ingredient Ma Huang) that are claimed to produce such effects as euphoria,
heightened awareness, increased sexual sensations, or increased energy, because
these products pose significant adverse health risks, including dizziness,
headache, gastrointestinal distress, irregular heartbeat, heart palpitations,
heart attack, strokes, seizures, psychosis, and death. We do not market either
of our products containing Ma Huang (Trim Easy Trim Easy Plus) with any of these
claims. On June 4, 1997, the FDA issued a


                                        9
<PAGE>
proposed regulation for dietary supplements containing ephedrine alkaloids. The
proposed regulation would prohibit dietary supplements containing eight
milligrams or more of ephedrine alkaloids per serving, and would not permit such
products to contain any other stimulant, diuretic, or laxative ingredients. In
addition, labeling of supplements would be prohibited from suggesting or
recommending conditions of use that would result in an intake of eight
milligrams or more of ephedrine alkaloids within a six-hour period, or a total
daily intake of 24 milligrams or more. The FDA proposal would also require a
warning not to take the product for more than seven days, and would prohibit the
supplements from being represented, either expressly or implicitly, as being
suitable for long-term uses, such as for weight loss or body building.
Similarly, claims for increased energy, increased mental concentration, or
enhanced well- being that encourage the consumer to take more of the product to
achieve more of the purported effect would be required to be accompanied by a
warning stating that taking more than the recommended serving may cause a heart
attack, stroke, seizure, or death.

     We have discontinued restocking inventory on our products containing Ma
Huang with the recent restrictions on this ingredient. While we believe that our
products containing Ma Huang could be reformulated and re-labeled, there can be
no assurance in that regard or that reformulation and/or re-labeling would not
have an adverse effect on sales of such product.

     Some of the products marketed by us are considered conventional foods and
are currently labeled as such. Both this category of products and dietary
supplements are subject to the Nutrition Labeling and Education Act ("NLEA"),
and regulations promulgated thereunder, which regulates health claims,
ingredient labeling, and nutrient content claims characterizing the level of a
nutrient in the product.

     The FTC, which exercises jurisdiction over the advertising of all our
products, has in the past several years; instituted enforcement actions against
several dietary supplement companies for false and misleading advertising of
certain products. These enforcement actions have resulted in consent decrees and
monetary payments by the companies involved. In addition, the FTC has increased
its scrutiny of the use of testimonials, such as those which we utilize. While
we have not been the target of FTC enforcement action for the advertising of our
products, there can be no assurance that the FTC will not question our
advertising or other operations in the future. In November of 1998, the FTC
issued a guide for the dietary supplement industry, describing how the FTC
applies the law, which it administers to dietary supplements advertisements. It
is unclear whether the FTC will subject such advertisements, including those of
Gateway, to increased surveillance to ensure compliance with the principles set
forth in the guide

     Through our manuals, seminars, and other training materials and programs,
we attempt to educate our distributors as to the scope of permissible and
impermissible activities in each market. We also investigates allegations of
distributor misconduct. However, our distributors are independent contractors,
and we are not able to directly monitor all distributor activities. As a
consequence, there can be no assurance that our distributors will comply with
applicable regulations. Misconduct by distributors could have a material adverse
effect on us in a particular market or in general.

     In markets outside the United States, including Japan, prior to commencing
operations or marketing our products, we may be required to obtain approvals,
licenses, or certifications from a country's ministry of health or comparable
agency. Approvals or licensing may be conditioned on reformulation of our
products for the market or may be unavailable with respect to certain products
or product ingredients. We must also comply with local product labeling and
packaging regulations that vary from country to country. To date, we have
retained legal counsel in Japan to provide opinions as to our compliance with
applicable laws and regulations.

     We are unable to predict the nature of any future laws, regulations,
interpretations, or applications, nor can it predict what effect additional
governmental regulations  or administrative orders, when and if promulgated,
would have on our business in the future. They could, however, require the
reformulation of certain products not able to be reformulated, imposition of
additional record keeping requirements, expanded documentation of the properties
of certain products, expanded or different labeling and additional scientific
substantiation regarding product ingredients, safety or usefulness. Any or all
such requirements could have a material adverse effect on our results of
operations and financial condition.

NETWORK  MARKETING  SYSTEM


                                       10
<PAGE>
     Our network marketing system is subject to a number of federal and state
regulations administered by the FTC and various state agencies. Regulations
applicable to network marketing organizations are generally directed at ensuring
that product sales are ultimately made to consumers and that advancement within
such organizations be based on sales of the organizations' products rather than
investments in the organizations or other non-retail sales related criteria. For
instance, in certain markets there are limits on the extent to which
distributors may earn commissions on sales generated by distributors that were
not directly sponsored by the distributor. Where required by law, we obtain
regulatory approval of our network marketing system or, where such approval is
not required the favorable opinion of local counsel as to regulatory compliance.
However, we remain subject to the risk that, in one or more of our markets, our
marketing system could be found not to be in compliance with applicable
regulations. Our failure to comply with these regulations could have a material
adverse effect on us in a particular market or in general.

     We are also subject to the risk of private party challenges to the legality
of our network marketing system. For example, in Webster v. Omnitrition
International, Inc., 79 F.3d 776 (9th Cir. 1996), the "multi-level marketing"
program of Omnitrition International, Inc. ("Omnitrition") was challenged in a
class action by certain Omnitrition distributors who alleged that Omnitrition
was operating an illegal "pyramid scheme" in violation of federal and state
laws. We believe that our network marketing system satisfies the standards set
forth in the Omnitrition case and other applicable statutes and case law
defining a legal marketing system, in part based upon significant differences
between our marketing system and that described in the Omnitrition case.
Further, it is an ongoing part of our business to monitor and respond to
regulatory and legal developments, including those that may affect our network
marketing system. However, the regulatory requirements concerning
network-marketing systems do not include "bright line" rules and are inherently
fact-based. An adverse judicial determination with respect to our network
marketing system could have a material adverse effect on us. Among other things,
such a determination could require us to make modifications to our network
marketing system, result in negative publicity or have a negative impact on
distributor morale. In addition, adverse rulings by courts in any proceedings
challenging the legality of multi-level marketing systems, even in those not
involving us, could have a material adverse effect on us.

COMPLIANCE  PROCEDURES

     As indicated above, our organization, our products and our network
marketing system are subject, both directly and indirectly through distributors'
conduct, to numerous federal, state, and local laws and regulations in all our
markets. In order to assist us in achieving and maintaining compliance with
these numerous laws and regulations, We have hired a local Las Vegas firm to
handle all compliance issues. This firm has expertise in rules and regulations
governing our industry.

     In 1996, we began to institute formal regulatory compliance measures by
developing a system to identify specific complaints against distributors and to
remedy any violations by distributors through appropriate sanctions, including
warnings, suspensions and, when necessary, terminations. In our manuals,
seminars and other training programs and materials, we emphasize that
distributors are prohibited from making therapeutic claims for our products.

     Our general policy regarding acceptance of distributor applications from
individuals who do not reside in one of our markets is to refuse to accept such
individual's distributor application.

     In order to comply with regulations that apply to both us and our
distributors, we conduct considerable research into the applicable regulatory
framework prior to entering any new market to identify all necessary licenses
and approvals and applicable limitations on our operations in that market. We
devote substantial resources to obtaining such licenses and approvals and
bringing our operations into compliance with such limitations. We also research
laws applicable to distributor operations and revise or alter our distributor
manuals and other training materials and programs to provide distributors with
guidelines for operating a business, marketing, and distributing our products
and similar matters, as required by applicable regulations in each market. We
are, however, unable to monitor our supervisors and distributors effectively to
ensure that they refrain from distributing our products in countries where we
have not commenced operations, and we do not devote significant resources to
such monitoring.


                                       11
<PAGE>
In the event that we discover distributor misconduct, it imposes disciplinary
measures against the distributor ranging from probation to expulsion.

     In addition, regulations in existing and new markets are often ambiguous
and subject to considerable interpretive and enforcement discretion by the
responsible regulators. Moreover, even when we believe that we and our
distributors are initially in compliance with all applicable regulations, new
regulations are regularly being added and the interpretation of existing
regulations is subject to change. Further, the content and impact of regulations
to which we are subject may be influenced by public attention directed at us,
our products or our network marketing system, so that extensive adverse
publicity about us, our products or our network marketing system may result in
increased regulatory scrutiny.

     It is an ongoing part of our business to anticipate and respond to such new
and changing regulations and make corresponding changes in our operations to the
extent practicable. However, while we devote considerable resources to
maintaining our compliance with regulatory constraints in each of our markets,
there can be no assurance that we would be found to be in full compliance with
applicable regulations in all of our markets at any given time or that the
regulatory authorities in one or more markets will not assert, either
retroactively or prospectively or both, that our operations are not in full
compliance. Such assertions or the effect of adverse regulations in one market
could negatively affect us in other markets as well by causing increased
regulatory scrutiny in those other markets or as a result of the negative
publicity generated in those other markets. Such assertions could have a
material adverse effect on us in a particular market or in general. Furthermore,
depending upon the severity of regulatory changes in a particular market and the
changes in our operations that would be necessitated to maintain compliance,
such changes could result in our experiencing a material reduction in sales in
such market or determining to exit such market altogether. In such event, we
would attempt to devote the resources previously devoted to such market to a new
market or markets or other existing markets, but there can be no assurance that
such transition would not have an adverse effect on our business and results of
operations either in the short or long term.

EMPLOYEES

     As of March 19, 2004, we employed fourteen full-time employees.  These
numbers do not include our distributors, who are independent contractors rather
than employees.  We consider our employee relationships to be satisfactory.
None of our employees is a member of any labor union, and we have never
experienced any business interruption as a result of any labor disputes.

FORWARD-LOOKING  STATEMENTS

     Statements in this Form 10-KSB Annual Report may be "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995.  Forward-looking statements include, but are not limited to, statements
that express our intentions, beliefs, expectations, strategies, predictions or
any other statements relating to our future activities or other future events or
conditions.  These statements are based on current expectations, estimates and
projections about our business based, in part, on assumptions made by our
management.  These statements are not guarantees of future performance and
involve risks, uncertainties and assumptions that are difficult to predict.
Therefore, actual outcomes and results may, and probably will, differ materially
from what is expressed or forecasted in the forward-looking statements due to
numerous factors, including those described above and those risks discussed from
time to time in this Form 10-KSB Annual Report, including the risks described
under "Risk Factors" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and in other documents which we file with
the Securities and Exchange Commission.

     In addition, such statements could be affected by risks and uncertainties
related to our financial condition, factors that affect the internet and
software industries, market and customer acceptance, competition, future
government regulations and requirements and pricing, as well as general industry
and market conditions and growth rates, and general economic conditions.  Any
forward-looking statements speak only as of the date on which they are made, and
we do not undertake any obligation to update any forward-looking statement to
reflect events or circumstances after the date of this Form 10-KSB Annual
Report.

RISK FACTORS


                                       12
<PAGE>
     You should carefully consider the following risks before making an
investment in our Company. In addition, you should keep in mind that the risks
described below are not the only risks that we face. The risks described below
are all the risks that we currently believe are material to our business.
However, additional risks not presently know to us, or risks that we currently
believe are not material, may also impair our business operations. You should
also refer to the other information set forth in this Annual Report on Form
10-KSB, including the discussions set forth in "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and "Business," as
well as our financial statements and the related notes.

     Our business, financial condition, or results of operations could be
adversely affected by any of the following risks. If we are adversely affected
by such risks, then the trading of our common stock could decline, and you could
lose all or part of your investment.

     Our auditor's report on our financial statements includes an explanatory
paragraph with respect to substantial doubt existing about our ability to
continue as a going concern.

     As of December 31, 2003, we had incurred a loss from operations and had an
accumulated deficit. As a result, our financial statements include a note
stating that these conditions raise substantial doubt about our ability to
continue as a going concern, but the financial statements do not include any
adjustments that might result from this uncertainty.

     We are subject to compliance with securities law, which expose us to
potential liabilities, including potential rescission rights.

     We have periodically offered and sold our common stock to investors
pursuant to certain exemptions from the registration requirements of the
Securities Act of 1933, as well as those of various state securities laws. The
basis for relying on such exemptions is factual; that is, the applicability of
such exemptions depends upon our conduct and that of those persons contacting
prospective investors and making the offering. We have not received a legal
opinion to the effect that any of our prior offerings were exempt from
registration under any federal or state law. Instead, we have relied upon the
operative facts as the basis for such exemptions, including information provided
by investors themselves.

     If any prior offering did not qualify for such exemption, an investor would
have the right to rescind its purchase of the securities if it so desired. It is
possible that if an investor should seek rescission, such investor would
succeed. A similar situation prevails under state law in those states where the
securities may be offered without registration in reliance on the partial
preemption from the registration or qualification provisions of such state
statutes under the National Securities Markets Improvement Act of 1996. If
investors were successful in seeking rescission, we would face severe financial
demands that could adversely affect our business and operations. Additionally,
if we did not in fact qualify for the exemptions upon which we have relied, we
may become subject to significant fines and penalties imposed by the SEC and
state securities agencies.

RISKS RELATING TO OUR BUSINESS

NO ESTABLISHED, STABLE MARKET FOR OUR COMMON STOCK

     Management beneficially owns approximately 47.1% of our common stock and
100% of our preferred stock and their interests could conflict with other
stockholders. Our current directors and executive officers beneficially own
approximately 53% of our outstanding stock. As a result, the directors and
executive officers collectively may be able to substantially influence all
matters requiring stockholder approval, including the election of directors and
approval of significant corporate transactions. Such concentration of ownership
may also have the effect of delaying or preventing a change in control.

     There is no established, stable market for our common stock.


                                       13
<PAGE>
     Our common stock is quoted on the Over-the-Counter Electronic Bulletin
Board ("OTCBB") and traded sporadically. A large number of shares of outstanding
common stock are restricted and are not freely-tradeable. An established public
trading market for our common stock may never develop or, if developed, it may
not be able to be sustained. The OTCBB is an unorganized, inter-dealer,
over-the- counter market that provides significantly less liquidity than other
markets. Purchasers of our common stock may therefore have difficulty selling
their shares should they desire to do so.

VOLATILITY OF STOCK PRICE

     The trading price of our Common Stock has in the past and may in the future
be subject to significant fluctuations. In addition, the stock market in general
has experienced extreme price and volume fluctuations that have affected the
market price for many companies in industries similar to or related to ours and
which have been unrelated to the operating performance of these companies. These
market fluctuations may adversely affect the market price of our Common Stock.

     Penny stock regulations may impair our shareholders' ability to sell their
stock.

     Our shares of common stock may be deemed "penny stock." Penny stocks
generally are equity securities with a price of less than $5.00 per share, other
than securities registered on certain national securities exchanges. Penny
stocks are subject to rules and regulations that impose additional sales
practice requirements on broker-dealers who sell the securities to persons other
than established customers and accredited investors, and these additional
requirements may restrict the ability of broker- dealers to sell a penny stock.

     Any acquisitions that we undertake could be difficult to integrate, disrupt
our business, dilute shareholder value and significantly harm our operating
results.

     We expect to review opportunities to buy other business or technologies
that would complement our current business, expand the breadth of our markets,
or that may otherwise offer growth opportunities. If we make any future
acquisitions, we could issue stock that would dilute existing stockholders'
percentage ownership, incur substantial debt or assume contingent liabilities.
Potential acquisitions also involve numerous risks, including: problems
assimilating the purchased operations, technologies or products; unanticipated
costs associated with the acquisition; diversion of management's attention from
our core business; adverse effects on existing business relationships with
suppliers and customers; risks associated with entering markets in which we have
no or limited prior experience; and potential loss of the purchased
organization's or our own key employees.

     We cannot assure that we would be successful in overcoming problems
encountered in connection with such acquisitions and our inability to do so
could significantly harm our business.

FUTURE CAPITAL REQUIREMENTS; UNCERTAINTY OF FUTURE FUNDING.

     Our plan of operation calls for additional capital to facilitate growth and
support our long-term development and marketing programs.  It is likely that we
will have to seek additional financing through future public or private sales of
our securities, including equity securities.  We may also seek funding for the
development and marketing of our products through strategic partnerships and
other arrangements with investment partners.  There can be no assurance,
however, that such collaborative arrangements or additional funds will be
available when needed, or on terms acceptable to us, if at all.  Any such
additional financing may result in significant dilution to existing
stockholders.  If adequate funds are not available we may be required to curtail
one or more of our future programs.

SUBSTANTIAL DOUBT THAT WE CAN CONTINUE AS A GOING CONCERN.

     We expect to incur significant capital expenses in pursuing our plans to
increase sales volume, expanding our product lines and obtaining additional
financing through stock offerings, or licensing agreements or other feasible
financing alternatives.  In order for us to continue our operations, we will
require additional funds over the next 12 months.  While we can generate funds
necessary to maintain our operations, without additional funds there


                                       14
<PAGE>
will be a reduction in the number of new projects that we could take on, which
may have an effect on our ability to maintain our operations.  Additional
financing may not be available on terms favorable to us, or at all. If
additional funds are not available, we may not be able to execute our business
plan or take advantage of business opportunities.  Our ability to obtain such
additional financing and to achieve our operating goals is uncertain.  In the
event that we do not obtain additional capital or are not able to increase cash
flow through the increase of sales, there is a substantial doubt of our being
able to continue as a going concern.

     Additionally, it should be noted that our independent auditors have
included a going concern opinion and related discussion in the notes to our
financial statements.  The auditors have included the going concern provision
because we have incurred significant and recurring losses and have a large
working capital deficit that the auditors believe raises substantial doubt about
our ability to continue as a going concern.  Until such time we receive
additional debt or equity financing, there is a risk that our auditors will
continue to include a going concern provision in the notes to our financial
statements.

PROPRIETARY RIGHTS.

     We rely on contractual rights, trade secrets, trademarks, and copyrights to
establish and protect our proprietary rights in our products and our components.

     We intend to closely monitor competing product introductions for any
infringement of our proprietary rights.  We believe that, as the demand for
products such as those developed by us increase, infringement of intellectual
property rights may also increase.  If certain industry competitors infringe on
our proprietary rights, they may have substantially greater financial,
technical, and legal resources than we, which could adversely affect our ability
to defend our rights.  In addition, we could incur substantial costs in
defending our rights.

     We anticipate that based on the size and sophistication of our competitors
and the history of the industry's rapid technological advances, several
competitors may be working to develop our patented technology.  We intend to
closely monitor any infringement of our proprietary rights.  Competitors may
have patented applications in progress in the United States that, if issued,
could relate to our products.  If such patents were to issue, there can be no
assurance that the patent holders or licensees will not assert infringement
claims against us or that such claims will not be successful.  We could incur
substantial costs in defending ourselves and our customers against any such
claims, regardless of the merits.  Parties making such claims may be able to
obtain injunctive or other equitable relief that could effectively block our
ability to sell our products, and each claim could result in an award of
substantial damages.  In the event of a successful claim of infringement, we and
our customers may be required to obtain one or more licenses from third parties.
There can be no assurance that we or our customers could obtain the necessary
licenses from third parties or at a reasonable or acceptable cost.  Patent
litigation could be very expensive, and there is no assurance that it would not
have an adverse effect on our business, financial condition and results of
operations.

DEPENDENCE ON KEY EMPLOYEES.

     Our business is dependent upon our senior executive officers, principally,
Richard A. Bailey, our president and chief executive officer, who is responsible
for our operations, including marketing and business development.  Although we
do not have an employment agreement with Mr. Bailey, he has indicated a desire
to continue his employment with us for the long term.  Our business may be
adversely affected if Mr. Bailey left our employ.  In the event of future growth
in administration, marketing, manufacturing and customer support functions, we
may have to increase the depth and experience of our management team by adding
new members.  Our success will depend to a large degree upon the active
participation of our key officers and employees.  Loss of services of any of the
current officers and directors, especially Mr. Bailey, could have a significant
adverse effect on our operations and prospects.  There can be no assurance that
we will be able to employ qualified persons on acceptable terms to replace
officers who become unavailable.

NEED FOR ADDITIONAL SPECIALIZED PERSONNEL.


                                       15
<PAGE>
     Although our management is committed to the business and continued
development and growth of the business, the addition of specialized key
personnel and sales persons to assist us in our expansion of our national
operations will be necessary.  There can be no assurance that we will be able to
locate and hire such specialized personnel on acceptable terms.

WE MAY FACE SIGNIFICANT COMPETITION.

     There are numerous corporations, firms and individuals that are engaged in
the type of business activities that we are presently engaged in.  Many of those
entities are more experienced and possess substantially greater financial,
technical and personnel resources than us.  While we hope to be competitive with
other similar companies, there can be no assurance that such will be the case.

DEPENDENCE ON ABILITY TO MARKET PRODUCTS AND SERVICES.

     Due to our limited resources, the sales and marketing of our products has
been limited to date.  Our success is dependent upon our ability to market and
sell our products and services with such limited resources.

RISKS RELATING TO OUR STOCK

WE MAY NEED TO RAISE ADDITIONAL CAPITAL.  IF WE ARE UNABLE TO RAISE NECESSARY
ADDITIONAL CAPITAL, OUR BUSINESS MAY FAIL OR OUR OPERATING RESULTS AND OUR STOCK
PRICE MAY BE MATERIALLY ADVERSELY AFFECTED.

     Because we are a newly operational company, we need to secure adequate
funding.  If we are unable to obtain adequate funding, we may not be able to
successfully develop and market our products and services and our business will
most likely fail.  We do not have commitments for additional financing.  To
secure additional financing, we may need to borrow money or sell more
securities, which may reduce the value of our outstanding securities.  We may be
unable to secure additional financing on favorable terms or at all.

     Selling additional stock, either privately or publicly, would dilute the
equity interests of our stockholders.  If we borrow more money, we will have to
pay interest and may also have to agree to restrictions that limit our operating
flexibility.  If we are unable to obtain adequate financing, we may have to
curtail business operations which would have a material negative effect on
operating results and most likely result in a lower stock price.

OUR COMMON STOCK HAS EXPERIENCED IN THE PAST, AND IS EXPECTED TO EXPERIENCE IN
THE FUTURE, SIGNIFICANT PRICE AND VOLUME VOLATILITY, WHICH SUBSTANTIALLY
INCREASES THE RISK THAT YOU MAY NOT BE ABLE TO SELL YOUR SHARES AT OR ABOVE THE
PRICE THAT YOU PAY FOR THE SHARES.

     Because of the limited trading market for our common stock, and because of
the possible price volatility, you may not be able to sell your shares of common
stock when you desire to do so.  During 2002 and 2003, and through the date of
this Annual Report, our common stock was sold and purchased at prices that
ranged from a high of $.20 to a low of $.0001 per share.  The inability to sell
your shares in a rapidly declining market may substantially increase your risk
of loss because of such illiquidity because the price for our common stock may
suffer greater declines due to its price volatility.

     The price of our common stock that will prevail in the market may be higher
or lower than the price you pay.  Certain factors, some of which are beyond our
control, that may cause our share price to fluctuate significantly include, but
are not limited to, the following:

-    Variations in our quarterly operating results;

-    Our ability to complete the research and development of our technologies;

-    The development of a market in general for our products and services;

-    Changes in market valuations of similar companies;


                                       16
<PAGE>
-    Announcement by us or our competitors of significant contracts,
     acquisitions, strategic partnerships, joint ventures or capital
     commitments;

-    Loss of a major customer or failure to complete significant transactions;

-    Additions or departures of key personnel; and

-    Fluctuations in stock market price and volume.

     Additionally, in recent years the stock market in general, and the OTC
Bulletin Board and technology stocks in particular, have experienced extreme
price and volume fluctuations.  In some cases, these fluctuations are unrelated
or disproportionate to the operating performance of the underlying company.
These market and industry factors may materially and adversely affect our stock
price, regardless of our operating performance.

     Over the past few months, there have been periods of significant increases
in trading volume of our common stock during which the price of our stock has
both increased and decreased.  The historical trading of our common stock is not
necessarily an indicator of how it will trade in the future and our trading
price as of the date of this Annual Report does not necessarily portend what the
trading price of our common stock might be in the future.

     In the past, class action litigation has often been brought against
companies following periods of volatility in the market price of the common
stock of those companies.  If we become involved in this type of litigation in
the future, it could result in substantial costs and diversion of management
attention and resources, which could have a further negative effect on your
investment in our stock.

OUR DIRECTORS HAVE THE RIGHT TO AUTHORIZE THE ISSUANCE OF PREFERRED STOCK AND
ADDITIONAL SHARES OF OUR COMMON STOCK.

     Our directors, within the limitations and restrictions contained in our
articles of incorporation and without further action by our stockholders, have
the authority to issue shares of preferred stock from time to time in one or
more series and to fix the number of shares and the relative rights, conversion
rights, voting rights, and terms of redemption, liquidation preferences and any
other preferences, special rights and qualifications of any such series.  We
have no intention of issuing preferred stock at the present time.  Any issuance
of preferred stock could adversely affect the rights of holders of our common
stock.

     Should we issue additional shares of our common stock at a later time, each
investor's ownership interest in our stock would be proportionally reduced.  No
investor will have any preemptive right to acquire additional shares of our
common stock, or any of our other securities.

IF WE FAIL TO REMAIN CURRENT ON OUR REPORTING REQUIREMENTS, WE COULD BE REMOVED
FROM THE OTC BULLETIN BOARD WHICH WOULD LIMIT THE ABILITY OF BROKER-DEALERS TO
SELL OUR SECURITIES AND THE ABILITY OF STOCKHOLDERS TO SELL THEIR SECURITIES IN
THE SECONDARY MARKET.

     Companies trading on the OTC Bulletin Board, such as we, must be reporting
issuers under Section 12 of the Securities Exchange Act of 1934, as amended, and
must be current in their reports under Section 13, in order to maintain price
quotation privileges on the OTC Bulletin Board.  If we fail to remain current on
our reporting requirements, we could be removed from the OTC Bulletin Board.  As
a result, the market liquidity for our securities could be severely adversely
affected by limiting the ability of broker-dealers to sell our securities and
the ability of stockholders to sell their securities in the secondary market.

OUR COMMON STOCK IS SUBJECT TO THE "PENNY STOCK" RULES OF THE SEC AND THE
TRADING MARKET IN OUR SECURITIES IS LIMITED, WHICH MAKES TRANSACTIONS IN OUR
STOCK CUMBERSOME AND MAY REDUCE THE VALUE OF AN INVESTMENT IN OUR STOCK.

     The Securities and Exchange Commission has adopted Rule 15g-9 which
establishes the definition of a "penny stock," for the purposes relevant to us,
as any equity security that has a market price of less than $5.00 per


                                       17
<PAGE>
share or with an exercise price of less than $5.00 per share, subject to certain
exceptions.  Inasmuch as that the current bid and ask price of common stock is
less than $5.00 per share, our shares are classified as "penny stock" under the
rules of the SEC.  For any transaction involving a penny stock, unless exempt,
the rules require:

-    That a broker or dealer approve a person's account for transactions in
     penny stocks; and

-    The broker or dealer receives from the investor a written agreement to the
     transaction, setting forth the identity and quantity of the penny stock to
     be purchased.

     In order to approve a person's account for transactions in penny stocks,
the broker or dealer must:

-    Obtain financial information and investment experience objectives of the
     person; and

-    Make a reasonable determination that the transactions in penny stocks are
     suitable for that person and the person has sufficient knowledge and
     experience in financial matters to be capable of evaluating the risks of
     transactions in penny stocks.

     The broker or dealer must also deliver, prior to any transaction in a penny
stock, a disclosure schedule prescribed by the Commission relating to the penny
stock market, which, in highlight form:

-    Sets forth the basis on which the broker or dealer made the suitability
     determination; and

-    That the broker or dealer received a signed, written agreement from the
     investor prior to the transaction.

     Generally, brokers may be less willing to execute transactions in
securities subject to the "penny stock" rules.  This may make it more difficult
for investors to dispose of our common stock and cause a decline in the market
value of our stock.

     Disclosure also has to be made about the risks of investing in penny stocks
in both public offerings and in secondary trading and about the commissions
payable to both the broker-dealer and the registered representative, current
quotations for the securities and the rights and `remedies available to an
investor in cases of fraud in penny stock transactions.  Finally, monthly
statements have to be sent disclosing recent price information for the penny
stock held in the account and information on the limited market in penny stocks.

ITEM 2.   DESCRIPTION OF PROPERTY.

     We lease approximately 9,500 square feet of office space, housing the
executive offices, information systems department, human resources department,
accounting department, order entry department, and customer service department,
and approximately 3,700 square feet of warehouse space, also housing the
warehouse department, in Las Vegas, Nevada. The monthly base rent is $7,403. We
anticipate a need for additional space in the near future and are seeking to
purchase an existing building and are reviewing several options.

ITEM 3.   LEGAL PROCEEDINGS.

     On August 13, 2003, Suburban Capital Corporation filed a civil action in
the Circuit Court of DuPage County, Illinois against Gateway Distributors and
two of its officers, Richard Bailey and Florian Ternes. On December 15, 2003,
U.S. District Judge Charles R. Norgle, Sr., granted Gateway's Notice of Removal
and removed the case to the United States District Court for the Northern
District of Illinois.

     The action is styled Suburban Capital Corporation v Gateway Distributors,
Ltd., Rick Bailey and Flo Ternes, and Neptune Communications, Case No.
03-CV-7559 (Norgle, J.) and as to Gateway, Richard Bailey and Florian Ternes:

     Suburban Capital's complaint alleges breach of contract and fraud claims.
Suburban Capital seeks a declaratory judgement regarding the validity of an
alleged advisor agreement with us, specific performance of that


                                       18
<PAGE>
agreement and injunctive relief, including temporary restraining order as well
as preliminary and permanent injunctions. The complaint seeks $550,000 together
with its costs of enforcement including reasonable attorney's fees as well as
punitive damages in the amount of $500,000.

     On November 17, 2003, we filed an answer and affirmative defenses which
asserted that the Plaintiff's claims are barred by the principles of undue
influence, duress, in pari delicto, estoppel, and illegality.

     On January 24, 2004, Judge Gottschall granted the Securities and Exchange
Commission's motion for an order appointing a receiver over Suburban Capital
Corporation in Securities and Exchange Commission v. Frank J. Custable, Jr.,
Sara Wetzel, Suburban Capital Corp., Francis Scott Widen, Wasatch
Pharmaceutical, Inc., David Giles, Gary Heesch, Pacel Corp., David Calkins,
Gateway Distributors, Ltd., Richard Bailey and ThermoElastic Technologies, Inc,
Case No. 03-C-2182. The court-appointed Receiver, Mark Toljanic, controls this
claim.

     On March 12, 2004 the Parties agreed to a Scheduling Order and commenced
discovery.

     The Parties are scheduled to appear before Judge Norgle on April 13, 2004
for a status hearing.

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

     None.

                                     PART II

ITEM 5.   MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

     Prior to August of 2001, there was no public market for our Common Stock.
Since August of 2001, our common stock has been quoted on the Electronic
Bulletin Board under the symbol "GWYD."  As of April 16, 2003, the symbol was
changed to "GWDL".  Trading in the common stock in the over-the-counter market
has been limited and sporadic and the quotations set forth below are not
necessarily indicative of actual market conditions.  Further, these prices
reflect inter-dealer prices, without retail mark-up, mark-down or commission,
and may not necessarily reflect actual transactions.

<TABLE>
<CAPTION>
          CALENDAR YEAR 2002     HIGH BID   LOW BID
<S>                             <C>         <C>
          First Quarter            .03        .03
          Second Quarter           .02        .02
          Third Quarter            .006       .004
          Fourth Quarter           .015(1)    .012

          CALENDAR YEAR 2003    HIGH BID    LOW BID
          First Quarter           .0001(2)    .0001
          Second Quarter          .20         .01
          Third Quarter           .035        .0029
          Fourth Quarter          .0334       .0011

          CALENDAR YEAR 2004    HIGH BID    LOW BID
          First Quarter            $           $
</TABLE>

     (1)       Our board of directors authorized a reverse split of our Common
               Stock on December 4, 2002. The reverse split was carried out on a
               1 for 25, 000 basis. The above high and low quotes have not
               factored in the 25,000 to 1 reverse split prior to December 31,
               2002.

     (2)       Our board of directors authorized a reverse split of our Common
               Stock on April1 6, 2003. The reverse split was carried out on a 1
               for 3,000 basis. The above high and low quotes have not factored
               in the 3,000 for 1 reverse split.


                                       19
<PAGE>
     Such quotations reflect inter-dealer prices, without retail mark-up,
mark-down or commission.  Such quotes are not necessarily representative of
actual transactions or of the value of our securities, and are in all likelihood
not based upon any recognized criteria of securities valuation as used in the
investment banking community.

STOCKHOLDERS

     Our shares of common stock are held by approximately 1,034 stockholders of
record.  The number of record holders was determined from the records of our
transfer agent and does not include beneficial owners of common stock whose
shares are held in the names of various security brokers, dealers, and
registered clearing agencies.

DIVIDENDS

     No cash dividends were paid during the fiscal years ending December 31,
2003 and 2002. We have never paid a cash dividend on our common stock. The
payment of dividends may be made at the discretion of our Board of Directors and
will depend upon, among other things, our operations, our capital requirements,
and our overall financial condition. We do not anticipate paying any dividends
in the foreseeable future.

DESCRIPTION OF SECURITIES

     As of March 25, 2004, there were 7,191,252,084 shares of common stock
issued and outstanding. Of those shares at least 3,564,272,435 shares are
restricted securities within the meaning of Rule 144(a)(3) promulgated under the
Securities Act of 1933, as amended, because such shares were issued and sold by
us in private transactions not involving a public offering. These 3,564,272,435
restricted securities are held by affiliates and may only be sold pursuant to a
registration statement or pursuant to Rule 144.

     In general, under Rule 144, as currently in effect, subject to the
satisfaction of certain other conditions, a person, including an affiliate of
Gateway (in general, a person who has a control relationship with Gateway) who
has owned restricted securities of common stock beneficially for at least one
year is entitled to sell, within any three-month period, that number of shares
of a class of securities that does not exceed the greater of (I) one percent
(1%) of the shares of that class then outstanding or, if the common stock is
quoted on NASDAQ, (ii) the average weekly trading volume of that class during
the four calendar weeks preceding such sale. A person who has not been an
affiliate of Gateway for at least the three months immediately preceding the
sale and has beneficially owned shares of common stock for at least two (2)
years is entitled to sell such shares under Rule 144 without regard to any of
the limitations described above.

     No prediction can be made as to the effect, if any, that future sales of
shares of common stock or the availability of common stock for future sale will
have on the market price of the common stock prevailing from time-to-time. Sales
of substantial amounts of common stock on the public market could adversely
affect the prevailing market price of the common stock.

REVERSE SPLITS

     On December 4, 2002, we effected a 1 for 25,000 reverse-split of our common
stock, such that every current shareholder of our common stock will hold 1 share
for every 25,000 shares they held prior to the reverse split. All fractional
shares were rounded up to the nearest whole share.

     On April 16, 2003, we effected a 1 for 3,000 reverse-split of our common
stock, such that every current shareholder of our common stock will hold 1 share
for every 3,000 shares they held prior to the reverse split. All fractional
shares were rounded up to the nearest whole share.

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

     See Item 11 of this Annual Report


                                       20
<PAGE>
RECENT SALES OF UNREGISTERED SECURITIES

     On December 16, 2003, our Board of Directors authorized the issuance of a
total of 400,000 shares (200,000 shares each) of preferred stock (value at one
preferred share to 1,000 common shares) to Rick Bailey and Flo Ternes for
services. We issued the shares pursuant to section 4(2) of the Securities Act of
1933 in an isolated private transaction which did not involve a public offering.
We made this transfer based on the following factors: (1) The issuance was an
isolated private transaction which did not involve a public offering; (2) there
was a limited number of offerees who were issued stock; (3) the offerees have
not resold the stock but have continued to hold it since the date of issue; (4)
there were no subsequent or contemporaneous public offerings of the stock; (5)
the stock was not broken down into smaller denominations; and (6) the
negotiations for the sale of the stock took place directly between us and the
offerees.

SECTION 15(g) OF THE EXCHANGE ACT

     The shares of our common stock are covered by Section 15(g) of the Exchange
Act, and Rules 15g-1 through 15g-6 promulgated thereunder, which impose
additional sales practice requirements on broker-dealers who sell our securities
to persons other than established customers and accredited investors.

     Rule 15g-2 declares unlawful any broker-dealer transactions in "penny
stocks" unless the broker-dealer has first provided to the customer a
standardized disclosure document.

     Rule 15g-3 provides that it is unlawful for a broker-dealer to engage in a
"penny stock" transaction unless the broker-dealer first discloses and
subsequently confirms to the customer the current quotation prices or similar
market information concerning the penny stock in question.

     Rule 15g-4 prohibits broker-dealers from completing "penny stock"
transactions for a customer unless the broker-dealer first discloses to the
customer the amount of compensation or other remuneration received as a result
of the penny stock transaction.

     Rule 15g-5 requires that a broker-dealer executing a "penny stock"
transaction, other than one exempt under Rule 15g-1, disclose to its customer,
at the time of or prior to the transaction, information about the sales person's
compensation.

     Our common stock may be subject to the foregoing rules.  The application of
the "penny stock" rules may affect our stockholders' ability to sell their
shares because some broker-dealers may not be willing to make a market in our
common stock because of the burdens imposed upon them by the "penny stock"
rules.

ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

     Statements included in this Management' Discussion and Analysis or Plan of
Operation, and in future filings by us with the Securities and Exchange
Commission, in our press releases and in oral statements made with the approval
of an authorized executive officer which are not historical or current facts are
"forward-looking statements" made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995 and are subject to certain
risks and uncertainties that could cause actual results to differ materially
from historical earnings and those presently anticipated or projected.  We wish
to caution readers not to place undue reliance on any such forward-looking
statements, which speak only as of the date made.  The following important
factors, among others, in some cases have affected and in the future could
affect our actual results and could cause our actual financial performance to
differ materially from that expressed in any forward-looking statement: (i) the
extremely competitive conditions that currently exist in the market for "blank
check" companies similar to us, and (ii) lack of resources to maintain our good
standing status and requisite filings with the Securities and Exchange
Commission.  The foregoing list should not be construed as exhaustive and we
disclaim any obligation subsequently to revise any forward-looking statements to
reflect events or circumstances after the date of such statements or to reflect
the occurrence of anticipated or unanticipated events.

CRITICAL ACCOUNTING POLICIES


                                       21
<PAGE>
     The preparation of our consolidated financial statements in conformity with
accounting principles generally accepted in the United States requires us to
make estimates and judgments that affect our reported assets, liabilities,
revenues, and expenses, and the disclosure of contingent assets and liabilities.
We base our estimates and judgments on historical experience and on various
other assumptions we believe to be reasonable under the circumstances.  Future
events, however, may differ markedly from our current expectations and
assumptions.  While there are a number of significant accounting policies
affecting our consolidated financial statements, we believe the following
critical accounting policy involve the most complex, difficult and subjective
estimates and judgments.

STOCK-BASED COMPENSATION

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

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

YEAR 2003 COSTS AND CHANGES IN FINANCIAL CONDITIONS

     Sales for the year ended December 31, 2003 decreased $30,894 to $1,123,373,
from sales of $1,154,267 for the year ended December 31, 2002. The decrease in
sales was a result of Grandma Hammans weak sales during 2003.

     Gross profit of $830,194 for the year ended December 31, 2003, was $77,250,
or 9% lower than the gross profit of $907,444 for the year ended December 31,
2002. As a percentage of sales, gross profit for 2003 as compared to the same
period in the prior year decreased approximately 5% from 79% to 74%. The
decrease in gross profit as a percentage of sales primarily resulted from an
increase in costs of goods sold. The increase in costs of goods sold reflects
higher prices paid for certain goods.

     Selling, general, and administrative expenses, as a percentage of sales,
were 211% for 2003 as compared to 346% for the same period in 2002. Selling,
general, and administrative expenses for the period ended December 31, 2003,
decreased $1,628,998 , 41%, to $2,367,288 from $3,996,286 in the year ending
December 31, 2002. The decrease in these expenses resulted primarily from
management cutting back on outside consulting paid with stock to certain
consultants hired to assist us with acquiring additional operations.

LOSSES

     We had a net loss of $1,723,463 for the year ended December 31, 2003,
compared to a net loss of $2,783,378 in 2002. We had a loss from operations of
$1,537,094 in 2003 compared to a loss from operations of $3,088,842 in 2002. Our
substantial decrease in losses from operations and net losses were attributable
to a significant decrease in payments to consultants both in cash and in stock
for services as reported in selling, general and administrative expenses.

RESULTS OF OPERATIONS

     We sold our operations to TRSG on January 11, 2001. Consequently, nearly
all of our operations were conducted through TRSG until December 31, 2002 at
which time we sold our controlling shareholder interest in


                                       22
<PAGE>
TRSG in exchange for all the assets of TRSG, $15,000 cash payment and the
unilateral assumption of certain debts of TRSG.

     We also acquired in an asset purchase, all of the assets of Los Cabos
Freedom Movement dba Grandma Hammans Specialty Foods LLC on August 15, 2002.
Grandma Hamman's Specialty Foods was incorporated in Nevada on June 4, 2003 to
handle all of the assets and operations coming from this asset purchase.

     The  Right  Solution Gateway was incorporated January 7, 2003 to handle the
operation of running our retail sales that had previously been conducted through
TRSG.

     The  following  financial  discussion  includes the activities of these two
subsidiaries  on  a  consolidated  basis.

LIQUIDITY AND CAPITAL RESOURCES

     Our working capital needs and capital expenditure requirements have
increased as a result of lower sales and increased cost associated with hiring
outside consultants.  Required working capital and capital expenditure
requirements are expected to be met from cash flow from operations, potential
future acquisitions, borrowings, and the sale of our equity securities.  For
fiscal year 2003, our working capital (deficit) decreased by $1,671,530 (28%) to
($4,284,225) at December 31, 2003 from ($5,955,755) at December 31, 2002.  This
decrease was primarily attributable to a reduction in Notes Payable reduced via
stock value greater than estimated in 2002, an Employee Stock Incentive Program
and sale of equity securities and negotiations of reduction in debt by vendors
and noteholders.

     For fiscal year 2003, our operations used cash flow of $1,095,089 compared
to net cash used of $179,501 for the previous fiscal year, and increase in cash
used of $915,588.

     We had a negative cash flow from investing activities of $138,597 in 2003,
as compared to a negative cash flow of $152,530 in 2002.

     Non-Employee Directors and Consultants Retainer Stock Plan for the Year
2003 provided $1,396,661 in cash flow from financing activities in 2003,
compared to $322,614 provided from financing activities in 2002, an increase of
$1,074,047.

     Our Stockholders deficit decreased $1,638,566 to $3,594,495 in 2003 from
$5,233,061 in 2002.

     Cash, cash equivalents and marketable securities totaled $163,190 at
December 31, 2003 compared to $215 at December 31, 2002, an increase of
$162,975.

     Management anticipates that its expansion strategy will require significant
expenditures for the investment in the Chelsea Collection, as well as increased
general and administrative expenses primarily due to the hiring of additional
personnel and advertising expenses related to operations. These expenditures are
expected to be funded by revenues from operations.  We continue selling equity
securities to fund expansion activities.  Selling, general and administrative
expenses are also expected to increase in future periods due to the increased
legal and accounting expenses incurred in order to establish and maintain our
reporting status with the Securities and Exchange Commission.  In addition, we
intend to pursue, as part of our business strategy, future growth through
acquisitions which may involve the expenditure of significant funds.  Depending
upon the nature, size and timing of future acquisitions, we may be required to
obtain additional debt or equity financing in connection with such future
acquisitions.  There can be no assurance, however, that additional financing
will be available to us, when and if needed, on acceptable terms or at all.
Management believes that future cash flow from operations and equity sales will
be sufficient to fund these expenditures.

     We relied heavily on the issuance of our common stock to pay consultants
and other professionals pursuant to Form S-8 registration statements during 2002
and early 2003. The result of such issuances was massive dilution and a
precipitous decline in the price of our common stock resulting in two reverse
stock splits, one in the last half of 2002 for 25,000 to 1 and the other in the
first half of 2003 for 3,000 to 1. In 2003 an Employee Stock Incentive


                                       23
<PAGE>
Plan (ESIP) was set up and through stock issues to the public, we raised
$1,888,507 in cash to provide the vehicle to finance the activities for 2003.
Based upon our current financial situation and intention of procuring and
marketing new products, it is likely that we may rely heavily on the issuance of
our shares to pay consultants and other professionals and to raise cash during
2004.

PROMISSORY NOTE PAID OFF IN STOCK & STOCK FOR SERVICES WITH SUBURBAN CAPITAL

     On January 30, 2003, we entered into an agreement with Suburban Capital
wherein the $235,000 debt plus an accrued interest of about $38,780, or a total
of $273,780 we owed was settled and paid off with 5,021 shares of common stock.
As discussed elsewhere, there is presently a lawsuit initiated by Suburban
Capital challenging the stock issues and payments Suburban Capital received.

RECENT ACCOUNTING PRONOUNCEMENTS

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

     Any goodwill impairment loss recognized as a result of the transitional
goodwill impairment test will be recorded as a cumulative effect of a change in
accounting principle no later than the end of fiscal year 2002. The adoption of
SFAS No. 142 had no material impact on our consolidated financial statements
SFAS No. 143 establishes accounting standards for the recognition and
measurement of an asset retirement obligation and its associated asset
retirement cost. It also provides accounting guidance for legal obligations
associated with the retirement of tangible long-lived assets. SFAS No. 143 is
effective in fiscal years beginning after June 15, 2002, with early adoption
permitted. We expect that the provisions of SFAS No. 143 will not have a
material impact on our consolidated results of operations and financial position
upon adoption. We plan to adopt SFAS No. 143 effective January 1, 2003.

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

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

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


                                       24
<PAGE>
     In October 2002, the FASB issued Statement No. 147, "Acquisitions of
Certain Financial Institutions-an amendment of FASB Statements No. 72 and 144
and FASB Interpretation No. 9," which removes acquisitions of financial
institutions from the scope of both Statement 72 and Interpretation 9 and
requires that those transactions be accounted for in accordance with Statements
No. 141, Business Combinations, and No. 142, Goodwill and Other Intangible
Assets.  In addition, this Statement amends SFAS No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets, to include in its scope long-term
customer-relationship intangible assets of financial institutions such as
depositor- and borrower-relationship intangible assets and credit cardholder
intangible assets.  The requirements relating to acquisitions of financial
institutions are effective for acquisitions for which the date of acquisition is
on or after October 1, 2002.  The provisions related to accounting for the
impairment or disposal of certain long-term customer-relationship intangible
assets are effective on October 1, 2002.  The adoption of this statement did not
have a material impact to our financial position or results of operations as we
have not engaged in either of these activities.

     In December 2002, the FASB issued Statement No. 148, "Accounting for
Stock-Based Compensation-Transition and Disclosure," which amends FASB Statement
No. 123, Accounting for Stock-Based Compensation, to provide alternative methods
of transition for a voluntary change to the fair value based method of
accounting for stock-based employee compensation.  In addition, this statement
amends the disclosure requirements of Statement 123 to require prominent
disclosures in both annual and interim financial statements about the method of
accounting for stock-based employee compensation and the effect of the method
used on reported results.  The transition guidance and annual disclosure
provisions of Statement 148 are effective for fiscal years ending after December
15, 2002, with earlier application permitted in certain circumstances.  The
interim disclosure provisions are effective for financial reports containing
financial statements for interim periods beginning after December 15, 2002.  The
adoption of this statement did not have a material impact on our financial
position or results of operations as we have not elected to change to the fair
value based method of accounting for stock-based employee compensation.

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

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

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

OFF-BALANCE SHEET ARRANGEMENTS

     We do not have any off-balance sheet arrangements.


                                       25
<PAGE>
GOING CONCERN

     Our auditors have expressed an opinion as to our ability to continue as a
going concern. Our ability to continue as a going concern is subject to our
ability to obtain a profit and/or obtaining the necessary funding from outside
sources. Management's plan to address our ability to continue as a going
concern, includes: (1) obtaining funding from the sale of our securities; (2)
increasing sales, and (3) obtaining loans and grants from various financial
institutions where possible. Although management believes that it will be able
to obtain the necessary funding to allow us to remain a going concern through
the methods discussed above, there can be no assurances that such methods will
prove successful.


ITEM 7.   FINANCIAL STATEMENTS.

     The financial statements and related notes are included as part of this
Annual Report as indexed in the appendix on page F-1 through F-22.

ITEM 8.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
          FINANCIAL DISCLOSURE.

     As reported in our report on Form 8-K filed on February 18, 2004 and on
February 18, 2004, we terminated Sellers & Andersen, LLC ("S&A") as our
principal accountants engaged to audit our financial statements, effective as of
February 18, 2004. S&A was terminated because they were not members of the
Public Company Accounting Oversight Board (PCAOB). Madsen & Associates CPA'S
Inc., who are members of the PCAOB, were appointed in their place. The audit
reports of S&A for the previous fiscal years, covering fiscal years 2002 and
2001, and subsequent interim periods ("the reporting periods") had not contained
any adverse opinion or disclaimer of opinion, nor were they qualified or
modified as to uncertainty audit scope, or accounting principles other than
expressing a going concern. In connection with the reporting periods, we have
had no disagreements with S&A on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedures,
which disagreements, if not resolved to their satisfaction, would have caused
S&A to make reference to connection with their opinion to the subject matter of
the disagreement. Additionally, during the reporting period there were no
reportable events, as defined in Item 304(a)(I)(iv) of Regulation S-B.

     On February 18, 2004 we retained Madsen & Associates CPA's Inc of Murray,
Utah, ("Madsen"), to be our principal accountant, engaged to audit our financial
statements.  This action was taken to replace the firm of S&A.  Our Board of
Directors approved the engagement of Madsen as the principal accountants.  Prior
to engaging Madsen, we did not consult with Madsen regarding the application of
accounting principles to a specified transaction, either completed or proposed,
or the type of audit opinion that might be rendered on our financial statements,
or any other financial presentation, whatsoever.

ITEM 8A.  CONTROLS AND PROCEDURES.

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

     Evaluation of disclosure and controls and procedures.  As of the end of the
period covered by this Annual Report, we conducted an evaluation, under the
supervision and with the participation of our chief executive officer and chief
financial officer, of our disclosure controls and procedures (as defined in
Rules 13a-15(e) of the Exchange Act).  Based on this evaluation, our chief
executive officer and chief financial officer concluded that our disclosure
controls and procedures are effective to ensure that information required to be
disclosed by us in reports that we file


                                       26
<PAGE>
or submit under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in Securities and Exchange Commission rules
and forms.

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

                                    PART III

ITEM 9.   DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
          COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.

     The following table furnishes the information concerning our directors and
officers.

<TABLE>
<CAPTION>
       NAME        AGE                    POSITION                    POSITION HELD
-----------------  ---  --------------------------------------------  -------------
                                                                          SINCE
                                                                      -------------
<S>                <C>  <C>                                           <C>
Richard A. Bailey   48  Chairman of the Board of Directors, Chief          1993
                             Executive Officer and President
Florian R. Ternes   55  Director, Chief Operating Officer, Secretary       1995
</TABLE>

     The members of our board of directors are subject to change from time to
time by the vote of the stockholders at special or annual meetings to elect
directors.  The number of the directors may be fixed from time to time by
resolution duly passed by our board.  Each director is elected for a period of
one year at the annual meeting of our stockholders, and will hold office for the
term for which elected and until his successor is elected and qualified or until
his earlier death, resignation or removal.  Vacancies and newly created
directorships resulting from any increase in the number of authorized directors
may generally be filled by a majority of the directors then remaining in office.
The directors elect officers annually.  There are no family relationships among
the directors and officers of Gateway.

     We may employ additional management personnel, as our board of directors
deems necessary.  Richard Bailey has not identified or reached an agreement or
understanding with any other individuals to serve in management positions, but
does not anticipate any problem in employing qualified staff.

     A description of the business experience during the past several years for
each of the directors and executive officers is set forth below.

     Richard A. Bailey, 48, has served as our Chairman, Chief Executive Officer,
and President since our inception in May 1993. In 1981, Mr. Bailey purchased a
small, local mobile wash company in North Las Vegas, Nevada. He expanded
operations to include aviation services, growing our company from two employees
in 1981 to in excess of three hundred by 1988. He served as president of the
business as it grew to $7,000,000 a year in revenue, operating in twenty-seven
cities throughout the United States.  In 1990, Mr. Bailey became involved in the
network marketing/direct selling business.  In 1997, Mr. Bailey elected to sell
the aviation company to International Total Services in order to devote one
hundred percent of his time to Gateway.  Mr. Bailey will serve as director until
the next annual shareholders meetings

     Florian R. Ternes, 55, has served as our Chief Operating Officer and
Secretary since 1995. He became a director in 1999. He began his career in the
airline industry and became City Vice President of Continental Airlines, Denver,
Colorado hub in 1989, where he managed approximately 7,500 employees with a
budget of $250 million. His airline career involved running several large hubs
for various airlines which included the Northwest International Gateway in Los
Angeles, the Detroit Hub for Republic Airlines, the Denver Hub for Continental
Airlines. In 1995, he left the airline industry to join Richard A. Bailey in
other business opportunities. As one of those ventures, he became president of a
nutritional company generating revenues in excess of $13,000,000 a year.


                                       27
<PAGE>
After assisting in completing its successful public offering, he resigned in
January 1998 to join Gateway on a full-time basis.

INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS

     Richard Bailey has been named as a defendant in a civil injunctive action
filed on March 28, 2003, by the Securities and Exchange Commission in the United
States District Court in the Northern District of Illinois, Civil Action No.
03-C-2182.  The action alleges that the named defendants were involved in a
scheme to violate the registration, anti-fraud and reporting violations of the
federal securities laws.  The complaint seeks injunctive relief as to Mr. Bailey
that could prevent him from serving as an officer or a director for the Company
in the future, or other relief that could impact Mr. Bailey's ability to serve
the Company.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

     Under Section 16(a) of the Exchange Act, our directors and certain of our
officers, and persons holding more than 10 percent of our common stock are
required to file forms reporting their beneficial ownership of our common stock
and subsequent changes in that ownership with the Securities and Exchange
Commission.  Such persons are also required to furnish us with copies of all
forms so filed.

     Based solely upon a review of copies of such forms filed on Forms 3, 4, and
5, and amendments thereto furnished to us, we are aware of two persons who
during the year ended December 31, 2003, were directors, officers, or beneficial
owners of more than ten percent of our Common Stock, and who failed to file, on
a timely basis, reports required by Section 16(a) of the Securities Exchange Act
of 1934 during such transitional year as follows:

     Richard A. Bailey - Mr. Bailey was an officer and director during all of
the year 2003.  Mr. Bailey further failed to timely file a Form 5 for the year
ended December 31, 2003.

     Florian R. Ternes - Mr. Ternes was an officer and director during all of
the year 2003.  Mr. Ternes further failed to timely file a Form 5 for the year
ended December 31, 2003.

COMMITTEES OF THE BOARD OF DIRECTORS

     Compensation Committee.  Our board of directors has created a compensation
committee.  However, no members of the committee have been appointed and the
committee has not been formally organized.  The compensation committee will make
recommendations to the board of directors concerning salaries and compensation
for our executive officers and employees.  We have adopted a charter for the
compensation committee.

     Audit Committee.  Our board of directors has created an audit committee
which is directly responsible for the appointment, compensation, and oversight
of the work of any registered public accounting firm employed by us (including
resolution of disagreements between our management and the auditor regarding
financial disclosure) for the purpose of preparing or issuing an audit report or
related work.  The audit committee will also review and evaluate our internal
control functions.  However, no members of the committee have been appointed and
the committee has not been formally organized.  We have adopted a charter for
the audit committee.

CODE OF ETHICS

     We have adopted a code of ethics that applies to our principal executive
officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions.  The code of ethics is
designed to deter wrongdoing and to promote:

-    Honest and ethical conduct, including the ethical handling of actual or
     apparent conflicts of interest between personal and professional
     relationships;


                                       28
<PAGE>
-    Full, fair, accurate, timely, and understandable disclosure in reports and
     documents that we file with, or submits to, the SEC and in other public
     communications made by us;

-    Compliance with applicable governmental laws, rules and regulations;

-    The prompt internal reporting of violations of the code to an appropriate
     person or persons identified in the code; and

-    Accountability for adherence to the code.

     A copy of our code of ethics that applies to our principal executive
officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions is attached to this Annual
Report as an exhibit.  We have filed with the SEC a copy of the code of ethics
attached hereto.  We have posted a copy of the code of ethics on our website at
www.entech.com.

     We will provide to any person without charge, upon request, a copy of our
code of ethics.  Any such request should be directed to our corporate secretary
at 3035 East Patrick Lane, Suite Las Vegas, Nevada  89120, telephone number
(702) 938 -9316.

ITEM 10.  EXECUTIVE COMPENSATION

     Except as noted in the table below, no compensation in excess of $100,000
was awarded to, earned by, or paid to any of our executive officers during 2003
and 2002.  The following table and the accompanying notes provide a summary of
compensation paid during the past two fiscal years concerning cash and noncash
compensation  paid or accrued by our president.

<TABLE>
<CAPTION>
                                               SUMMARY COMPENSATION TABLE

                                         ANNUAL COMPENSATION                LONG TERM COMPENSATION
                                   -------------------------------  ------------------------------------
                                                                             AWARDS             PAYOUTS
                                                                    --------------------------  --------
                                                                     RESTRICTED    SECURITIES
                                                      OTHER ANNUAL     STOCK       UNDERLYING      LTIP      ALL OTHER
NAME AND PRINCIPAL                  SALARY    BONUS   COMPENSATION    AWARD(S)    OPTIONS/SARS   PAYOUTS   COMPENSATION
POSITION                    YEAR      ($)      ($)         ($)          ($)           (#)          ($)          ($)
--------------------------  -----  --------  ------  -------------  -----------  -------------  --------  -------------
<S>                         <C>    <C>       <C>     <C>            <C>          <C>            <C>       <C>
Richard A. Bailey,           2003   101,500       -              -       35,501              -         -              -
President, Chief Executive  20023    84,000       -              -       20,000              -         -              -
Officer and Chairman of
the Board of Directors
--------------------------  -----  --------  ------  -------------  -----------  -------------  --------  -------------
Florian R. Ternes,           2003    89,500       -              -       35,501              -         -              -
Secretary and COO            2002    73,500       -              -       20,000              -         -              -
</TABLE>

     As of the date hereof, we have not granted stock options or stock
appreciation rights to any of our executive officers or directors. Salaries owed
Richard R. Bailey and Florian R. Ternes have not been paid and have been
deferred for payment in year 2002 or later in the form of stock and / or cash
based on our financial position. Both parties agreed to delay the payment.

COMPENSATION OF DIRECTORS

     We pay traveling expenses, hotel, food, car allowance and $300 for each
board meeting.  Stock options and dividends will be a consideration in the
future, based on our profitability.

EMPLOYMENT CONTRACTS


                                       29
<PAGE>
     We entered into an employment agreement (the "Bailey Employment Agreement")
with Richard A. Bailey, our president and chief executive officer, dated May 1,
1999. The Bailey Employment Agreement provides termination of the employment at
the will of either us or Mr. Bailey. The Bailey Employment Agreement provides
for a base salary of $100,000 annually commencing May 1, 1999, which shall be
reviewed periodically. Such review did in 2003 result in an increase and the car
allowance included in the May 1, 1999 agreement was implemented during 2003 for
Mr. Bailey. In the event we are unable to pay the annual salary, we will issue
to Mr. Bailey one share of our Common Stock for each dollar owed at the end of
our fiscal year. In the event that Mr. Bailey's employment is terminated as a
result of (a) his retirement under our retirement program, (b) his disability
resulting in absence from his duties to us on a full-time basis for over one
year, c) his death, (d) a material reduction in his responsibilities or title,
or (e) a reduction of his cash compensation by more than 10% below the highest
annual salary from time to time in effect, we are obligated to pay to Mr.
Bailey, as severance and/or liquidated damages, an amount equal to one and
one-half times his highest annual earnings during his employment with us each
year for a period of five years. Effective September 1, 2003, Mr. Bailey agreed
to a salary of $144,000 annually with the remainder of the agreement remaining
in force.

     We entered into an employment agreement (the "Ternes Employment Agreement")
with Florian R. Ternes, our Secretary and Chief Operating Officer, dated May 1,
1999. The Ternes Employment Agreement provides termination of the employment at
the will of either us or Mr. Ternes. The Ternes Employment Agreement provides
for a base salary of $85,000 annually commencing May 1, 1999, which shall be
reviewed periodically. Such review did in 2003 result in an increase and the car
allowance included in the May 1, 1999 agreement was implemented during 2003 for
Mr. Ternes. In the event we are unable to pay the annual salary, we will issue
to Mr. Ternes one share of our Common Stock for each dollar owed at the end of
our fiscal year. In the event that Mr. Ternes' employment is terminated as a
result of (a) his retirement under our retirement program, (b) his disability
resulting in absence from his duties to us on a full-time basis for over one
year, (c) his death, (d) a material reduction in his responsibilities or title,
or (e) a reduction of his cash compensation by more than 10% below the highest
annual salary from time to time in effect, we are obligated to pay to Mr.
Ternes, as severance and/or liquidated damages, an amount equal to one and
one-half times his highest annual earnings during his employment with us each
year for a period of five yearsEffective September 1, 2003, Mr. Ternes agreed
to a salary of $132,000 annually with the remainder of the agreement remaining
in force.

OPTIONS GRANTED TO EMPLOYEES IN FISCAL 2003

     None.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
          RELATED STOCKHOLDER MATTERS.

     The following table sets forth certain information regarding the beneficial
ownership of our Common Stock, $.001 par value (the "Common Stock") as of March
29, 2004, (1) by each person who is known by us to be the beneficial owner of
more than 5% of our Common Stock; (ii) by each of our directors and officers;
and (iii) by all of our directors and officers as a group:

<TABLE>
<CAPTION>
                                  NAME AND ADDRESS OF      NATURE OF OWNERSHIP    AMOUNT OF    PERCENT OF CLASS
TITLE OF CLASS                     BENEFICIAL OWNER                               OWNERSHIP
----------------------------  ---------------------------  -------------------  -------------  -----------------
<S>                           <C>                          <C>                  <C>            <C>
Common Stock ($0.001 par      Richard A. Bailey
value)                        3035 East Patrick Lane
                              Suite 14                     Direct               1,778,345,006             23.51%
                              Las Vegas, Nevada
                              89120
Common Stock ($0.001 par      Florian R. Ternes
value)                        3035 East Patrick Lane
                              Suite 14                     Direct               1,778,341,672             23.51%
                              Las Vegas, Nevada
                              89120
Common Stock ($0.001 par      All officers and directors   Direct               3,556,686,678             47.10%
value)                        as a group (2 individuals)
Preferred Stock ($0.001 par   Richard A. Bailey            Direct                     498,000             49.99%
value)                        3035 East Patrick Lane
                              Suite 14


                                       30
<PAGE>
                              Las Vegas, Nevada
                              89120
Preferred Stock ($0.001 par   Florian R. Ternes            Direct                     498,000             49.99%
value)                        3035 East Patrick Lane
                              Suite 14
                              Las Vegas, Nevada
                              89120
Preferred Stock ($0.001 par   All officers and directors   Direct                     996,000               100%
value)                        as a group (2 individuals)
</TABLE>


SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

     The following table provides information as of the end of the most recently
completed fiscal year with respect to compensation plans (including individual
compensation arrangements) under which our equity securities are authorized for
issuance, aggregated as follows:

-    All compensation plans previously approved by security holders; and

-    All compensation plans not previously approved by security holders.

<TABLE>
<CAPTION>
                                                                                               NUMBER OF SECURITIES REMAINING
                                 NUMBER OF SECURITIES TO BE                                     AVAILABLE FOR FUTURE ISSUANCE
                                  ISSUED UPON EXERCISE OF        WEIGHTED-AVERAGE EXERCISE        UNDER EQUITY COMPENSATION
                               OUTSTANDING OPTIONS, WARRANTS   PRICE OF OUTSTANDING OPTIONS,     PLANS (EXCLUDING SECURITIES
                                         AND RIGHTS                 WARRANTS AND RIGHTS           REFLECTED IN COLUMN (a))
PLAN CATEGORY                               (a)                             (b)                              (c)
-----------------------------  ------------------------------  ------------------------------  -------------------------------
<S>                            <C>                             <C>                             <C>
Equity compensation plans
approved by security holders                -0-                             -0-                              -0-
Equity compensation plans not
approved by security holders                -0-                             -0-                              -0-

Total
</TABLE>

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.


     On December 31, 2002 we purchased all assets of TRSG without shareholder or
notice and unilaterally assumed the debts of certain creditors. We then sold our
controlling shareholder interest for $15,000 to an unrelated party. We are doing
business as "The Right Solution ". On December 10, 2002, our Board of Directors
authorized the issuance of 7,000,000 shares of restricted common stock to
Neptune Communications, Inc. in conjunction with a non-dilution agreement with
Neptune dated December 10, 2002. Florian Ternes, one of our officers and
directors, is the sole shareholder, officer and director of Neptune.

ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K.

     (a)  Exhibits required to be attached by Item 601 of Regulation S-B are
listed in the Index to Exhibits beginning on page 31 of this Form 10-KSB, which
is incorporated herein by reference.

<TABLE>
<CAPTION>
EXHIBIT
-------
  NO.                                         IDENTIFICATION OF EXHIBITS
-------  ---------------------------------------------------------------------------------------------------------
<S>      <C>
3.1 *    Articles of Incorporation of the Registrant
3.1.1*   Amended and Restated Articles of Incorporation of the Registrant, incorporated by reference from Form
         10-SB/A filed December 15, 1999
3.2 *    By-laws of the Registrant
3.2.1*   By-laws of the Registrant, as amended and incorporated by reference from Form 10-SB/A filed December
         15, 1999


                                       31
<PAGE>
4.1*     Common Stock Certificate Specimen, incorporated by reference from Form 10-SB/A filed December 15,
         1999
10.1**   Financial Advisor Agreement between Sabita Dhingra and Registrant, dated January 12, 2004
10.2**   Financial Advisor Agreement between Venna Kila and Registrant, dated January 12, 2004
10.3**   Financial Advisor Agreement between Patricia M. Spreitzer and Registrant, dated January 12, 2004
10.4**   Financial Advisor Agreement between Avi Sivan and Registrant, dated January 12, 2004
10.5**   Financial Advisor Agreement between Prem Ramchandani and Registrant, dated January 12, 2004
10.6**   Financial Advisor Agreement between Avraham Ovadia and Registrant, dated January 12, 2004
10.7**   Financial Advisor Agreement between Shai Bar-Lavi and Registrant, dated January 12, 2004
10.8**   Financial Advisor Agreement between Glen Bartolini and Registrant, dated January 12, 2004
10.9**   Financial Advisor Agreement between Athony Cassetta and Registrant, dated January 12, 2004
10.10**  Settlement Agreement between William Goins, Jr. and Registrant, dated December 2002
10.11**  Agreement between Suburban Capital Corporation and Registrant, dated January 14, 2003
10.12**  Proposed Consulting and Marketing Agreement between Sprout Investments and Registrant
10.13**  Consultant and Marketing Right Agreement between Mark Neuhaus and Registrant
10.14**  Asset Purchase Agreement between The Right Solution Gateway and Registrant, dated August 11, 2003
10.15**  Endorsement Agreement between Bruce Jenner and The Right Solution, dated November 1, 2003
10.16**  Master Distributorship Indonesia between Master Distributor Mahakam Beta Forma and The Right
         Solution, dated September 23, 2003
10.17**  Promissory Note of  Registrant to Los Cabos Freedom Movement, L.L.C., Lender, dated July 3, 2003
10.18**  Agreement between Tropical Beverage and Registrant, dated September 9, 2003
10.19**  Employment agreement between Blaine Wendtland and Registrant, dated July 7, 2003
10.20**  Promissory Note of Grandma Hamman's to Ed Wendtland, Lender, dated July 3, 2003
10.21**  Consulting Agreement between Jack M. Zufelt and The Right Solutions Gateway, dated July 17, 2003
10.22**  Consulting Agreement between Jack M. Zufelt and The Right Solutions Gateway, dated August 12, 2003
10.23**  Endorsement Agreement between Bruce Jenner and The Right Solution, dated November 1, 2003
10.24**  Consulting Agreement between Jack M. Zufelt and The Right Solutions Gateway, dated December 12,
         2003
10.25**  Consulting Agreement between Jack M. Zufelt and The Right Solutions Gateway, dated December 9,
         2003
14 **    Code of Ethics
31.1 **  Certification of Richard A. Bailey, President and Chief Executive Officer of Gateway Distributors, Ltd.,
         pursuant to 18 U.S.C. Sec.1350, as adopted pursuant to Sec.302 of the Sarbanes-Oxley Act of 2002.
31.2 **  Certification of Richard A. Bailey, Chief Financial Officer of Gateway Distributors, Ltd., pursuant to 18
         U.S.C. Sec.1350, as adopted pursuant to Sec.302 of the Sarbanes-Oxley Act of 2002.
32.1 **  Certification of Richard A. Bailey, President and Chief Executive Officer of Gateway Distributors, Ltd.,
         pursuant to 18 U.S.C. Sec.1350, as adopted pursuant to Sec.906 of the Sarbanes-Oxley Act of 2002.
32.2 **  Certification of Richard A. Bailey, Chief Financial Officer of Gateway Distributors, Ltd., pursuant to 18
         U.S.C. Sec.1350, as adopted pursuant to Sec.906 of the Sarbanes-Oxley Act of 2002.
</TABLE>
__________________
*    Previously filed.
**   Filed herewith.

     (b)  Reports on Form 8-K.

          (1)On August 9, 2002, we filed a Form 8-K setting forth that we had
          filed with the State of Nevada our amended Articles of Incorporation
          to increase the authorized shares of $0.001 par value common stock
          from 1,000,000,000 to 25,000,000,000.

          (2) On February 18, 2004 we filed a Form 8-K/A disclosing a change in
          the certifying Accountant. Sellers & Andersen, LLC was terminated
          because they were not registered with the Public Companies Accounting
          Oversight Board (PCAOB). Madsen & Associates, CPA's, Inc were
          appointed in their place.

          (3) On December 30, 2002, we filed a Form 8-K disclosing recent
          issuances of common stock.


                                       32
<PAGE>
ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES.

AUDIT AND AUDIT RELATED FEES

     The aggregate audit and audit related fees billed or yet to be billed by
Sellers & Andersen for professional services rendered for the audit of our
annual financial statements for fiscal year 2003 were $16,500.

     The aggregate audit and audit related fees billed or yet to be billed by
Madsen & Associates for professional services rendered for the audit of our
annual financial statements for fiscal year 2003 were $18,000.

     The aggregate audit and audit related fees billed by Sellers & Andersen for
professional services rendered for the audit of our annual financial statements
for the fiscal year 2002 were $26,000.

ALL OTHER FEES

     There were no other fees billed by Madsen & Associates or Sellers &
Andersen for professional services rendered, other than as stated under the
captions Audit and Audit-Related Fees.

ITEM 15.  CONTROLS AND PROCEDURES.

     Our president acts both as our chief executive officer and chief financial
officer ("Certifying Officer") and is responsible for establishing and
maintaining our disclosure controls and procedures. The Certifying Officer has
concluded (based on his evaluation of these controls and procedures as of a date
within 90 days of the filing of this report) that the design and operation of
our disclosure controls and procedures (as defined in Rule 13a-14(c) under the
Securities Exchange Act of 1934) are effective. No significant changes were made
in our internal controls or in other factors that could significantly affect
those controls subsequent to the date of the evaluation, including any
corrective actions with regard to slight deficiencies and material weaknesses.
Due to the Certifying Officer's dual role as chief executive officer and chief
financial officer, we have no segregation of duties related to internal
controls.


                                   SIGNATURES

     In accordance with Section 13 or 15(d) of the Securities Exchange Act of
1934, as amended, the registrant has duly caused this Annual Report to be signed
on its behalf by the undersigned, thereunto duly authorized.

                                   GATEWAY DISTRIBUTORS, LTD.


Date: April 13, 2004
                                   By /s/
                                     -------------------------------------
                                      Richard A. Bailey
                                      President, Chief Executive Officer

     Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this Annual Report has been signed by the following persons on behalf
of the registrant and in the capacities and on the dates indicated.


                                       33
<PAGE>
     SIGNATURE                       TITLE                     DATE
--------------------  ----------------------------------  -------------

/s/Richard A. Bailey  President, Chief Executive Officer  April 13, 2004
--------------------            and Director

/s/Florian R. Ternes  Secretary, Chief Operating Officer  April 13, 2004
--------------------            and Director



                                       34
<PAGE>
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549


                       FINANCIAL STATEMENTS AND SCHEDULES

                           DECEMBER 31, 2003 AND 2002



                         FORMING A PART OF ANNUAL REPORT

                 PURSUANT TO THE SECURITIES EXCHANGE ACT OF 1934


                                   ___________


<PAGE>
<TABLE>
<CAPTION>
                                               ___________
                                      INDEX TO FINANCIAL STATEMENTS

                                                                                            Page No.
<S>                                                                                         <C>
Report of Independent Certified Public Accountants                                          F-3 to F-4

Balance Sheet at December 31, 2003                                                          F-5 to F-6

Statement of Losses for the years ended of December 31, 2003 and 2002 and the period from   F-7
___________ (date of inception) through December 31, 2003

Statement of Deficiency in Stockholders' Equity for the years ended December 31, 2003 and   F-8
2002 and the period from ___________ (date of inception) through December 31, 2003

Statement of Cash Flows for the years ended December 31, 2003 and 2002 and the period from  F-9 to F-10
___________ (date of inception) through December 31, 2003

Notes to Financial Statements                                                               F-11 to F-23
</TABLE>


<PAGE>

MADSEN & ASSOCIATES CPA'S. INC.                              684 East Vine St #3
-------------------------------                               Murray, Utah 84107
CERTIFIED PUBLIC ACCOUNTANTS AND BUSINESS CONSULTANTS         Phone 801-268-2632
                                                                Fax 801-262-3978



Gateway  Distributors,  Ltd.
Las  Vegas,  Nevada


               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS



We  have  audited  the  accompanying  consolidated  balance  sheet  of  Gateway
Distributors,  Ltd.  and  Subsidiaries for the year ended  December 31, 2003 and
the  related  consolidated  statements  of  operations,  stockholders' equity
(deficiency),  and  cash  flows  for  the  year  then ended.  These consolidated
financial  statements  are  the  responsibility of the Companys Management.  Our
responsibility  is  to express an opinion on these financial statements based on
our  audit.

We  conducted our audit in accordance with auditing standards generally accepted
in  the  United  States  of  America.  Those  standards require that we plan and
perform  the audit to obtain reasonable assurance about whether the consolidated
financial  statements  are  free  of  material  misstatement.  An audit includes
examining  on  a  test basis, evidence supporting the amounts and disclosures in
the  financial  statements.  An  audit  also  includes  assessing the accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating  the  overall  financial statement presentation.  We believe that our
audit  provides  a  reasonable  basis  for  our  opinion.

In  our opinion, the consolidated financial statements referred to above present
fairly,  in  all  material  respects,  the  financial  position  of  Gateway
Distributors,  Ltd.  and Subsidiaries as of December 31, 2003 and the results of
its  operations  and  its  cash flows for the year then ended in conformity with
accounting  principles  generally  accepted  in  the  United  States of America.

The  accompanying  consolidated financial statements have been prepared assuming
that  the  Company  will  continue  as  a  going  concern.  As  disclosed in the
consolidated  financial  statements  and  notes  to  the  consolidated financial
statements, the Company has suffered significant losses.  These conditions raise
substantial  doubt  about  the Company's ability to continue as a going concern.
Managements  plans  regarding  these  matters  are described in the notes to the
consolidated financial statements.  The consolidated financial statements do not
include  any adjustments that might result from the outcome of this uncertainty.

                            /s/ Madsen & Associates CPA's,  Inc.

March  19,  2004
Murray,  Utah


                                      F-3
<PAGE>

SELLERS & ANDERSEN,LLC                                  684 East Vine Street # 3
---------------------                                         Murray, Utah 84107
CERTIFIED PUBLIC ACCOUNTANTS AND BUSINESS CONSULTANTS         Phone 801-268-2632
                                                                Fax 801-262-3978


Gateway  Distributors,  Ltd.
Las  Vegas,  Nevada


               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS



We  have  audited  the  consolidated  statements  of  operations,  changes  in
Stockholders' equity  (deficiency), and cash flows of Gateway Distributors, Ltd.
and  Subsidiaries  for  the  year  ended  December 31, 2002.  These consolidated
financial  statements  are  the  responsibility of the Companys Management.  Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements  based  on  our  audit.

We  conducted our audit in accordance with auditing standards generally accepted
in  the  United  States  of  America.  Those  standards require that we plan and
perform  the audit to obtain reasonable assurance about whether the consolidated
financial  statements  are  free  of  material  misstatement.  An audit includes
examining  on  a  test basis, evidence supporting the amounts and disclosures in
the  financial  statements.  An  audit  also  includes  assessing the accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating  the  overall  financial statement presentation.  We believe that our
audits  provides  a  reasonable  basis  for  our  opinion.

In  our opinion, the consolidated financial statements referred to above present
fairly,  in  all  material respects, the results of operations and cash flows of
Gateway Distributors, Ltd. and Subsidiaries for the year ended December 31, 2002
in conformity with accounting principles generally accepted in the United States
of  America.

The  accompanying  consolidated financial statements have been prepared assuming
that  the  Company  will  continue  as  a  going  concern.  As  disclosed in the
consolidated  financial  statements  and  notes  to  the  consolidated financial
statements, the Company has suffered significant losses.  These conditions raise
substantial  doubt  about the  Company's ability to continue as a going concern.
Managements  plans  regarding  these  matters  are described in the notes to the
consolidated financial statements.  The consolidated financial statements do not
include  any adjustments that might result from the outcome of this uncertainty.

                            /s/ Sellers & Andersen, LLC

March  19,  2004
Murray,  Utah


                                      F-4
<PAGE>
<TABLE>
<CAPTION>
                           GATEWAY DISTRIBUTORS, LTD.
                          (A DEVELOPMENT STAGE COMPANY)
                                  BALANCE SHEET
                                DECEMBER 31, 2003

                     ASSETS
                                                   DECEMBER 31,
                                                       2003
<S>                                               <C>
CURRENT ASSETS:
   Cash and cash equivalents                      $     163,190
   Accounts Receivable                                    4,805
   Receivable from Stock Sales                          184,546
   Inventories                                          201,225
                                                  --------------
Total Current Assets                                    553,766
                                                  --------------


PROPERTY & EQUIPMENT, at cost                           129,702
(Less) accumulated depreciation and amortization        (94,936)
                                                  --------------
Total Fixed Assets                                       34,766
                                                  --------------


OTHER ASSETS
Formulas and Trademark                                  666,496
Other Assets                                             49,362
                                                  --------------
Total Other Assets                                      715,858

                                                  --------------
Total Assets                                      $   1,304,390
                                                  ==============
</TABLE>


                (See accompanying notes to financial statements)


                                      F-5
<PAGE>
<TABLE>
<CAPTION>
                           GATEWAY DISTRIBUTORS, LTD.
                          (A DEVELOPMENT STAGE COMPANY)
                                  BALANCE SHEET
                                DECEMBER 31, 2003

                           LIABILITIES
                                                                 DECEMBER 31,
                                                                     2003
CURRENT LIABILITIES:
<S>                                                             <C>
Current maturities of long-term debt                            $   1,720,002
Accounts payable:
  Trade                                                               554,469
  Commissions                                                         714,971
Accrued expenses:
  Payroll and employee benefits                                       170,030
  Payroll taxes                                                       411,655
  Interest                                                          1,239,625
  Other                                                                27,239
                                                                --------------
Total current liabilities                                           4,837,991
                                                                --------------

LONG-TERM DEBT                                                        206,525

Total Liabilities                                                   5,044,516
                                                                --------------

ASSETS & LIABILITIES AND
 STOCKHOLDERS' EQUITY (DEFICIENCY):
Preferred stock - $.001 par value
  Authorized - 1,000,000 shares
  726,125 shares issued and outstanding                                   726
Common stock, - $.001 par value
  Authorized - 25,000,000,000 shares
  Issued and outstanding - 619,193,554 as of December 31,2003         619,194

  Additional paid-in capital                                        7,118,071
  Accumulated (deficit)                                           (11,478,117)
                                                                --------------

Total Equity (Deficiency)                                          (3,740,126)

Total Liabilities & Equity (Deficiency)                         $   1,304,390
                                                                ==============
</TABLE>


                                      F-6
<PAGE>
<TABLE>
<CAPTION>
                             GATEWAY DISTRIBUTORS, LTD.
                            (A DEVELOPMENT STAGE COMPANY)
                                 STATEMENT OF LOSSES

                       CONSOLIDATED STATEMENTS OF OPERATIONS

                                                        Year Ended      Year Ended
                                                       December 31,    December 31,
                                                           2003            2002
<S>                                                   <C>             <C>
SALES                                                 $   1,123,373   $   1,154,267

COST OF SALES                                               293,179         246,823

GROSS PROFIT                                                830,194         907,444

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES              2,367,288       3,996,286
                                                      --------------  --------------

(LOSS) FROM OPERATIONS                                   (1,537,094)     (3,088,842)
                                                      --------------  --------------

OTHER INCOME (EXPENSE):
  Interest Expense                                         (186,369)       (287,228)
  Loss on Disposal of Prop, Equip & Leasehold Imp                 0         (36,926)
  Gain on Disposal of TRSG Subsidiary                             0       1,001,031
  Impairment of Goodwill                                          0        (728,953)
                                                      --------------  --------------

NET (LOSS) BEFORE MINORITY INTEREST                      (1,723,463)     (3,140,918)

MINORITY INTEREST                                                 0         357,540

NET INCOME (LOSS) BEFORE PROVISION FOR INCOME TAX        (1,723,463)     (2,783,378)

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

NET INCOME (LOSS)                                     $  (1,723,463)  $  (2,783,378)
                                                      ==============  ==============

BASIC AND DILUTED EARNINGS (LOSS) PER SHARE                  ($0.01)        ($32.36)
                                                      ==============  ==============

BASIC & DILUTED WEIGHTED AVERAGE SHARES OF
COMMON STOCK (000 OMITTED)                                  619,194              86
                                                      ==============  ==============
</TABLE>


                (See accompanying notes to financial statements)


                                      F-7
<PAGE>
<TABLE>
<CAPTION>
                                                 GATEWAY DISTRIBUTORS, LTD.
                                               (A DEVELOPMENT STAGE COMPANY)
                                      STATEMENT OF DEFICIENCY IN STOCKHOLDER'S EQUITY
                        FOR THE PERIOD DECEMBER 31, 2001 (DATE OF INCEPTION) THROUGH DECEMBER 31, 2003

                                                 GATEWAY DISTRIBUTORS, LTD.
                            CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
                                                         (AUDITED)

                      CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIENCY)

                                              *    Common Stock      Paid      Paid In Excess    Accumulated
                                                    # of Shares     Amount         of Par         (Deficit)    (Deficiency)
                                                                   Par .001
<S>                                          <C>   <C>            <C>         <C>               <C>            <C>
BALANCE - December 31, 2001                  $  0         4,532   $       4   $     1,795,470    ($6,971,276)  ($5,175,802)
                                             ====  =============  ==========  ================  =============  ============

Shares issued for:
Towards Acquisition of Grandma Hammans          0           333           1                99              0           100
Debt Elimination                                0         4,833           5            76,995              0        77,000
Services                                        0       869,711         869         2,648,150                    2,649,019
Pledging Stock for Debt                         1             0           0                (1)                           0

Net (Loss)                                                    0           0                 0     (2,783,378)   (2,783,378)

BALANCE - December 31, 2002                  $  1       879,409   $     879   $     4,520,713    ($9,754,654)  ($5,233,061)
                                             ====  =============  ==========  ================  =============  ============

Adjustment - Rounding Partial Shares            0         1,385           2                (2)             0             0
Stock for Services - Preferred Stock          725             0           0            71,875              0        72,600
Stock for Services - Restricted Stock           0    56,000,000      56,000           (50,400)             0         5,600
Stock for Services - Unrestricted Stock         0     9,697,065       9,697           464,191              0       473,888
Cash - Common                                   0   552,554,600     552,555         1,335,952              0     1,888,507
Debt - Accounts Payable                         0        56,407          57             1,965              0         2,022
Debt - Note Payable - Suburban                  0         5,021           5           273,776              0       273,781
Renegotiation of Acquisition Grandma                                                                                     0
   Hammans acquired 2002                        0          (333)         (1)                1              0             0
Note Payable - Suburban paid off via stock
   Sold in 2002 at a value greater in 2003
   Than was estimated in 2002                   0             0           0           500,000              0       500,000

Net (Loss)                                                                                        (1,723,463)   (1,723,463)

BALANCE - December 31, 2003                  $726   619,193,554   $ 619,194   $     7,263,702   ($11,478,117)  ($3,594,495)
                                             ====  =============  ==========  ================  =============  ============
<FN>

* Preferred Stock, 125 shares issued at par ($.001par value) @ December 31, 2002.
During 2003 an additional 726,000 restricted shares of preferred stock were issued at $.001 per share
</TABLE>


                (See accompanying notes to financial statements)


                                      F-8
<PAGE>
<TABLE>
<CAPTION>
                                GATEWAY DISTRIBUTORS, LTD.
                              (A DEVELOPMENT STAGE COMPANY)
                                 STATEMENTS OF CASH FLOWS


                                GATEWAY DISTRIBUTORS, LTD
                          CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                                     YEAR ENDED
                                                            DECEMBER 31,    DECEMBER 31,
                                                                2003            2002
<S>                                                        <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss)                                                 $  (1,723,463)  $  (2,783,378)
Adjustments to reconcile net (loss)
to net cash from (to) operating activities:
   Depreciation & Amortization Prop & Equip                       25,667          38,868
   Amortization Goodwill                                               0          67,169
   Stock issued for Services                                     552,088       2,649,019
   Stock Issued for Debt                                         275,803          77,000
   Minority Interest                                                   0        (357,540)
   Loss on Disposal of Fixed Assets                                    0          36,926
   Gain on Sale of Subsidiary & Related Debt Settlement                0      (1,001,031)
   Impairment of Goodwill                                              0         728,953
   Changes in operating assets and liabilities
      which increase (decrease) cash flow:
   Accounts Receivable                                            (1,234)         38,765
   Inventory                                                     (73,648)        (75,478)
   Prepaid Expenses and Other Current Assets                           0             939
   Accounts Payable and Commissions                             (237,977)         77,450
   Accrued Expenses                                               87,675         322,837
                                                           --------------  --------------
Net cash provided (used) from operating activities            (1,095,089)       (179,501)
                                                           ==============  ==============

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital (Outlays)/Disposals                                       (6,174)        (42,530)
Renegotiation of Purchase of Grandma Hammans                    (137,182)        (85,000)
Other Assets                                                       4,759         (25,000)
                                                           --------------  --------------
Net cash provided (used) from investing activities              (138,597)       (152,530)
                                                           ==============  ==============

CASH FLOWS FROM FINANCING ACTIVITIES:
Net Proceeds from Term Debt after Principal Payments                   0         322,614
Principle Payment on Debts (over) net proceeds Term Debt        (307,300)              0
Stock Sales for Cash; Net                                      1,703,961               0
                                                           --------------  --------------
Net cash provided (used) from financing activities             1,396,661         322,614
                                                           ==============  ==============

NET INCREASE (DECREASE) IN CASH EQUIVALENTS                      162,975          (9,417)

CASH AND CASH EQUIVALENTS - Beginning of Period                      215           9,632

                                                           --------------  --------------
CASH AND CASH EQUIVALENTS - End of Period                  $     163,190   $         215
                                                           ==============  ==============
</TABLE>


                (See accompanying notes to financial statements)


                                      F-9
<PAGE>
<TABLE>
<CAPTION>
                           GATEWAY DISTRIBUTORS, LTD.
                          (A DEVELOPMENT STAGE COMPANY)
                      STATEMENTS OF CASH FLOWS (CONTINUED)

                            GATEWAY DISTRIBUTORS, LTD
                 CONSOLIDATED STATEMENTS OF CASH FLOWS CONTINUED

                                                      YEAR ENDED
                                              DECEMBER 31,   DECEMBER 31,
                                                  2003           2002
<S>                                           <C>            <C>
SUPPLEMENTAL DISCLOSURE

CASH PAID FOR:
  Interest                                    $      29,437  $      35,000
  Taxes                                                   0              0


NON CASH INVESTING AND FINANCING ACTIVITIES

STOCK ISSUED FOR:
  Services                                    $     552,088  $   2,649,019
  Debt Elimination                                  275,803         77,000
  Asset Acquisition                                       0            100


CONTRIBUTION TO CAPITAL WITH NO STOCK ISSUED

Note Payable - Suburban
Paid off via stock value greater in 2003
than estimated in 2002 - no additional
stock issued in 2003                          $     500,000  $           0
</TABLE>


                                      F-10
<PAGE>
                           GATEWAY DISTRIBUTORS, LTD.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                  FOR THE YEAR ENDED DECEMBER 31, 2003 AND 2002

NOTE 1 -  ORGANIZATION,  HISTORY  AND  BUSINESS  ACTIVITY:

          The  Company  incorporated  on  May 26th, 1993 as a Nevada corporation
          under  the  name  of  Gateway  Distributors,  Ltd.  ("the  Company").

          The  Company  is a distributor of vitamin, nutritional supplements and
          whole  health foods mainly in the United States of America and Canada.
          Many  of  the  formulas  used  in  the  products the Company sells and
          distributes  are  made  from  its  own  formulas.

          On  August 15th, 2002, the Company purchased all of the operations and
          assets  including  formulas and trademark of Grandma Hammans Specialty
          Foods LLC. On June 4, 2003, the Company incorporated in Nevada Grandma
          Hammans  Specialty  Foods  ("GH") and moved the operations, assets and
          liabilities  related  to  this  purchase  into  GH.

          On  December 31, 2002, the Company sold its ownership interest in TRSG
          Corporation  ("TRSG")  previously a majority owned subsidiary. TRSG is
          recognized  in these consolidated financial statements to the point of
          sale,  which  is  December  31,  2002.

          On December 31, 2002, the Company bought all of the assets and assumed
          a  significant  portion  of  the  debts  of  TRSG. This transaction is
          reported on the purchase method of accounting using the carrying value
          on  the  books  of TRSG as the cost basis on the books of the Company.

          On  January 7, 2003, the Company organized the Right Solution Gateway,
          a  wholly  owned  subsidiary  ("TRS  Gateway").  All operations of the
          Company  that  were  previously handled via TRSG were transferred into
          TRS  Gateway.

NOTE 2 -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES:

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

          The  accompanying  consolidated  financial  statements  include  the
          accounts  of  the  Company  and its wholly owned subsidiaries, Grandma
          Hammans  since  August 15, 2002; the date of acquisition and The Right
          Solution  Gateway  incorporated  January  7,  2003.  Intercompany
          transactions  and  balances  have  been  eliminated  in consolidation.

          CASH AND CASH EQUIVALENTS
          -------------------------

          For  purposes of the statement of cash flows, cash equivalents include
          cash  in  banks  and  all  highly  liquid  investments  with  original
          maturities  of  three  months  or  less.

          INVENTORIES
          -----------


                                      F-11
<PAGE>
          Inventories,  consisting  primarily of nutritional, health, beauty and
          cleaning  products  are  stated  at  cost  determined by the first-in,
          first-out  (FIFO)  method.

          PROPERTY  AND  EQUIPMENT
          ------------------------

          Property  and  equipment  are  stated  at cost. Major replacements and
          refurbishings  are  capitalized  while  replacements,  maintenance and
          repairs  which  do  not  improve  or extend the life of the respective
          assets  are  expensed.

          EARNINGS  (LOSS)  PER  SHARE
          ----------------------------

          Basic and diluted earnings (loss) per share are computed on a weighted
          average  of  shares  issued  and  outstanding  through  the  year.  No
          recognition  of  stock  options  and warrants and other dilutive stock
          interests are recognized in the computation as there are net operating
          losses  and  it  would  be  antidilutive.

          INCOME  TAXES
          -------------

          The  Company  has  adopted  the  provisions of statements of Financial
          Accounting  Standards  No.  109,  "Accounting for Income Taxes," which
          incorporates the use of the asset and liability approach of accounting
          for  income  taxes.  The  asset  and  liability  approach requires the
          recognition  of  deferred  tax assets and liabilities for the expected
          future  consequences  of  temporary  differences between the financial
          reporting  basis  and  the income tax basis of assets and liabilities.

          DEPRECIATION  AND  AMORTIZATION
          -------------------------------

          The Company provides for depreciation of property, plant and equipment
          principally  by use of declining balance and straight-line methods for
          financial reporting purposes. Plant and equipment are depreciated over
          the  following  estimated  useful  lives:

          Leasehold  improvements                    39 years
          Furniture  and  fixtures                5 - 7 years
          Machinery  and  equipment               3 - 5 years
          Transportation  equipment               5 - 7 years

          Depreciation  expense  for  the years ended December 31, 2003 and 2002
          was  $25,667  and  $38,868,  respectively.

          RECEIVABLE ESIP STOCK PLAN
          --------------------------

          Stock  sales  through the Employee Stock Incentive Plan (ESIP) sold at
          year  end  are  reported  as  a receivable rather than negative equity
          provided  they are received within 60 days after year end. Funds to be
          received  from  the  ESIP Plan were reported as "Receivable ESIP Stock
          Plan"  as  a  current  asset  in the amount of $184,546. These are for
          stock  issued  by  December  31, 2003, the sale proceeds of which were
          received  by  the  Company  during  January  2004.


                                      F-12
<PAGE>
          ACCOUNTS  RECEIVABLE
          --------------------

          Management  has elected to record bad debts using the direct write-off
          method.  Generally  accepted  accounting  principles  require that the
          allowance  method be used to reflect bad debts. However, the effect of
          the  use  of  the  direct write-off method is not materially different
          from  the  results  that  would  have  been obtained had the allowance
          method  been  followed.


          INTANGIBLE  ASSETS
          ------------------

          The Financial Accounting Standards Board has issued FASB 142 "Goodwill
                                                                       ---------
          and  Other  Intangible  Assets"  effective  for fiscal years beginning
          -------------------------------
          after  December  15, 2001. According to this FASB, goodwill should not
          be  amortized.  Instead  it should be reviewed for impairment at least
          annually  and charged to earnings only when its recorded value exceeds
          its  implied  fair  value.

          When  the  Company  purchased the assets of Grandma Hamman's Specialty
          Foods, LLC on August 15, 2002, formulas and trademarks were recognized
          at  $48,314.  On  July  3,  2003,  the  Company  signed  an  agreement
          renegotiating  the  value  of  the  asset  purchase  and the method of
          payment.  The net result is formulas and trademarks now cost $185,496,
          or  $137,182 increase over December 31, 2002. Management has evaluated
          formulas  and trademark for impairment and has determined that implied
          value  exceeds  recorded value as of December 31, 2003 and 2002 and no
          adjustment  is  required.

          The  Company  purchased  the  assets  and selected liabilities of TRSG
          Corporation  ("TRSG")  on December 31, 2002. TRSG was a majority owned
          subsidiary  of  the  Company  up  to  December  31st, when it sold its
          interest  in  TRSG.  Therefore the Company has recognized the carrying
          value  on  the  books  of  TRSG as its carrying value of the assets it
          received  in  this  asset purchase from TRSG. The transaction involved
          the  Company  assuming  more  liabilities  than  the  assets acquired.
          Management  is  of  the  opinion  that this asset purchase received no
          goodwill  benefit  to the Company. Therefore, the Company has expensed
          as  a loss on the asset acquisition of TRSG with no implied fair value
          assigned  to  goodwill.

          The  Company  acquired in the purchase of assets from TRSG on December
          31,  2002,  formulas  valued  at  $475,000.  The Company also acquired
          formulas  through  the  acquisition of its subsidiary Grandma Hammans.
          The  Company  evaluated  these formulas and has determined the implied
          fair  value  exceeds  its  recorded  value as of December 31, 2003 and
          2002.  Therefore,  there  is  no  adjustment  to  intangible assets as
          implied value is equal to or exceeds recorded value as of December 31,
          2003  and  2002.

          COMPREHENSIVE  INCOME
          ---------------------

          The  Company  has adopted SFAS No. 130 Reporting Comprehensive Income.
          The  Company  has  no  reportable  differences  between net income and
          comprehensive  income,  therefore  a statement of comprehensive income
          has  not  been  presented.

          NET  (LOSS)  PER  SHARE  OF  COMMON  STOCK
          ------------------------------------------


                                      F-13
<PAGE>
          The  basic  and  diluted  net  income  (loss)  per common share in the
          accompanying  statements  of  operations are based upon the net income
          (loss)  divided  by  the weighted average number of shares outstanding
          during  the  periods presented. Diluted net (loss) per common share is
          the  same  as basic net (loss) per share because including any pending
          shares  to  issued  would  be  anti-dilutive.

          FAIR  VALUES  OF  FINANCIAL  INSTRUMENTS
          ----------------------------------------

          The  carrying  amounts  of  the  Company's  cash, accounts receivable,
          accounts  payable  and accrued expenses approximate fair value because
          of  the  short  maturity  of  these  items.

          It  is  currently  not  practicable  to estimate the fair value of the
          long-term  debt  obligations  because  these  note  agreements contain
          unique  terms,  conditions,  covenants  and  restrictions  which  were
          negotiated  at  arm's  length  with the Company's lenders, there is no
          readily  determinable  similar instrument on which to base an estimate
          of fair value. Accordingly, no computation or adjustment to fair value
          has  been  determined.

          ADVERTISING  COSTS.
          -------------------

          The  Company  conducts  nondirect  response  advertising for which the
          costs  are expensed when incurred. Total advertising costs of $163,529
          and  $8,325  were  incurred  for the years ended December 31, 2003 and
          2002,  respectively.

          REVENUE RECOGNITION
          -------------------

          Revenue is recognized in the period in which the products are shipped.

          RECLASSIFICATIONS
          -----------------

          Certain  amounts  in  2002  have  been reclassified and represented to
          conform  to  the  current  financial  statement  presentation.

          USE OF ESTIMATES
          ----------------

          The  preparation  of financial statements in conformity with generally
          accepted  accounting  principles requires management to make estimates
          and  assumptions  that  affect  the  reported  amounts  of  assets and
          liabilities and 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. Actual results may differ
          from  those  estimates.

          CONCENTRATIONS
          --------------

          The  Company  reports  no  significant  concentrations.

          OTHER RECENT ACCOUNTING PRONOUNCEMENTS
          --------------------------------------

          The  Company  does  not  expect  that  the  adoption  of  other recent
          accounting pronouncements to have any material impact on its financial
          statements.


                                      F-14
<PAGE>
NOTE 3 -  ACQUISITION  AND SUBSEQUENT SALE OF MAJORITY OWNED SUBSIDIARY - TRSG
          CORPORATION:

          The  Company  acquired  a majority equity interest in TRSG Corporation
          ("TRSG") on January 11, 2001. On the consolidated financial statements
          this  acquisition  reported  goodwill  as the amount of liabilities in
          excess  of all other assets. At December 31, 2002 management evaluated
          goodwill  and  determined  the  implied  value  of  goodwill  is  $0.
          Therefore,  an  impairment of goodwill of $728,953 was established and
          expensed  against  the  consolidated  statement  of  operations  as of
          December  31,  2002.

          The  Company  purchased the assets and selected liabilities of TRSG on
          December 31, 2002. TRSG was a majority owned subsidiary of the Company
          up  to December 31, 2002, when it sold its equity interest in TRSG for
          a  gain  of  $1,001,031  as  reported on the consolidated statement of
          operations.

NOTE 4 -  ASSET  PURCHASE  OF  GRANDMA  HAMMANS:

          On August 15, 2002, the Company purchased all the assets, tangible and
          intangible,  and  operations  of  Los  Cabos  Freedom Movement, d.b.a.
          Grandma  Hammans  Specialty  Foods, a Wisconsin LLC ("Los Cabos"). The
          Company  organized  a Nevada Corporation on June 4, 2003 named Grandma
          Hammans  Specialty  Foods  ("GH")  and  moved  all  of  the assets and
          operations  coming from the asset purchase from Los Cabos into GH. The
          asset  purchase  was reported on the purchase method of accounting and
          has  been  consolidated  with  the  Company.

          When  the  Company  purchased the assets of Grandma Hamman's Specialty
          Foods,  LLC on August 15, 2002, formulas and trademark were recognized
          at  $48,314.  On  June  2,  2003,  the  Company  signed  an  agreement
          renegotiating  the  value  of  the  asset  purchase  and the method of
          payment.  The net result is formulas and trademarks now cost $185,496,
          or  a  $137,182  increase  over  2002.

          Also  as  a  condition  of  the  renegotiation, the owner of Los Cabos
          relinquished  his  claim to 1,000,000 shares of stock as referenced in
          the  original  purchase  agreement.  The  stock  had not been actually
          issued  even  though  it  had  been  reported in the December 31, 2002
          financial  statements  as if it had. The unissued shares and the value
          of  it was in question and had been compromised by the passage of time
          and  with  two  reverse  stock splits. The Company accepted payment of
          reasonable  legal  costs  of  a  lawsuit between Los Cabos and a third
          party  as  part  of  the  renegotiation.

NOTE 5 -  TERM  DEBT:

          Term  debt  consisted  of  the  following  at  December  31,2003:

<TABLE>
<CAPTION>
<S>                                                   <C>
          Convertible notes payable                   $1,500,414

          Notes payable - related parties, interest
          ranging from 6.5% - 10%, currently due,
          unsecured.                                     115,174


                                      F-15
<PAGE>
          Notes payable - Grandma Hammans, interest
          in monthly installments ranging from
          925 - $1,673, plus interest at 8% - 24%,
          due at various dates, unsecured.               206,525

          Notes payable - stockholders, payable
          in monthly installments ranging from
          25 - $1,278, plus interest at 7% - 14%,
          due at various dates, unsecured.                46,760
                                                       1,926,527
          Less current portion                         1,720,002
                                                      ----------

          Long - term debt                            $  206,525
                                                      ==========
</TABLE>



     Convertible  notes  payable are to individuals and bear interest at 12% per
annum.  Principal  and  accrued  interest  is due twelve months from the date of
issuance.  These  notes  are convertible at the option of the holder into shares
of the Company's common stock, at an initial conversion price of $.80 per share.
Approximately  $980,000  of accrued interest relating to these notes at December
31,  2003, is also convertible into the Company's common stock.  At December 31,
2003  the approximate total of common shares available through conversion of the
aforementioned  debt  is  445,000,000.

          The notes may be called for conversion when the average of the bid and
          asked  prices  of  the  common  stock  exceeds $1.00 per share for ten
          consecutive  days.  Although the notes issued will be freely tradeable
          under  federal securities laws, there is currently only a small public
          market  for  the  notes. As of December 31, 2003 the convertible notes
          issued during the year ended December 31, 2003 and prior have not been
          converted  to  common  stock  as  the  initial public offering has not
          transpired.

          Maturities of long-term debt are as follows:

          Year ending December 31:
          2004                                   $1,720,002
          2005                                       27,476
          2006                                       20,076
          2007                                       20,076
          2008                                       20,076
          2009 and thereafter                       118,821
                                               ------------
                                               $  1,926,527
                                               ============

NOTE 6 -  INCOME  TAXES:

          No provision was made for income taxes in 2003 and 2002 as a result of
          the  net  loss  for each year and a net operating loss carryforward. A
          valuation  reserve  on  the  deferred  tax  assets  of  approximately
          $1,900,000  offsets  deferred  tax  benefit  of  equal  amount  as  no


                                      F-16
<PAGE>
          assurance  can  be  given it can be used. As of December 31, 2003, the
          Company  has  available  net  operating  loss  carryforwards  of
          approximately  $13,000,000.  Expiration  dates  on these carryforwards
          begin  in  2010  and  end  in  2023.

NOTE 7 -  EQUITY:

          REVERSE  STOCK  SPLITS
          ----------------------

          On  December 4, 2002, the Company effected a 25,000 to 1 reverse stock
          split.  The  financial  statements  have  reflected this reverse stock
          split  retroactive  to  inception.

          On  April  16,  2003,  the Company effected a 3,000 to 1 reverse stock
          split.  The  financial  statements  have  reflected this reverse stock
          split  retroactive  to  inception.

          STOCK  ISSUED  FOR  SERVICES  PROVIDED
          --------------------------------------

          The  Company  continually  seeks  to improve its financial position by
          seeking  investors  in  exchange  for equity in the Company. The value
          assigned  to  the  stock for these transactions will vary based on the
          market  value  of  stock  at  the  time.

          The  Company filed with the Securities and Exchange Commission ("SEC")
          on  April  11,  2003,  a  Form  S-8  notifying  of  an "Employee Stock
          Incentive  Plan  for  the Year 2003" and a "Non-Employee Directors and
          Consultants  Retainer  Stock  Plan  for  the Year 2003." The number of
          shares  registered  are  1,000,000,000  shares  for  the employees and
          1,000,000,000  shares  for non-employees for a total of 2,000,000,000,
          all  at  a  proposed offering price per share of $0.0001 and the first
          stock  was  issued  from  the  Non-Employee  Directors and Consultants
          Retainer  Stock  Plan  portion  of  the  plan  on  May  16,  2003.

          Some  services  were  being  provided  and paid for by stock issuances
          during  2003  and  2002.  The Company issued free trading common stock
          based  on  market value at the time of issuance. During 2003 and 2002,
          9,697,065 and 869,711 shares were issued for a total value of $473,888
          and $2,649,019 respectively. Of these 2003 shares, 9,250,000 were from
          the Non-Employee Directors and Consultants Retainer Stock Plan for the
          Year  2003  with  a  value  of  $45,010  which  is  a  portion  of the
          unrestricted  stock  for services as shown on the statement of changes
          in  stockholders  equity.

          STOCK  ISSUED  FOR  DEBT  -  ACCOUNTS  PAYABLE
          ----------------------------------------------

          From  time to time a creditor has agreed to exchange debt for stock in
          the  agreed amount. During 2003, 56,407 shares were issued for a total
          value  of  accounts payable debt relief of $2,022 while in 2002, 4,833
          shares  were  issued for a total value of accounts payable debt relief
          of  $77,000.

          CONSULTING SERVICES SECURED BY STOCK IN 2002 AND PAID OFF IN 2003
          -----------------------------------------------------------------

          On  November  27,  2002,  the  Company  entered into an agreement with
          Suburban  Capital  Corporation ("Suburban") and its assigns. The terms
          of  the agreement call for Suburban to perform consulting services for
          the  Company,  the  value  of which is not to exceed $1,500,000. It is
          computed  based on the stock issued to Suburban and what sale proceeds


                                      F-17
<PAGE>
          Suburban  receives.  Once Suburban has received $1,500,000 in proceeds
          from  stock  sales,  or  on  or about April 15, 2003, which ever comes
          first,  then  the  Company has no further obligation to issue Suburban
          additional  stock.

          On  January  14,  2003,  this  agreement  was  modified.  Among  the
          modifications  is  a change in the amount owed to Suburban. The amount
          was  changed  to  $550,000. However, Suburban has not made an adequate
          and  proper  accounting to the Company as to the proceeds Suburban has
          received  nor  the stock Suburban still had on hand as of December 31,
          2002. It is management's best estimate that the maximum amount owed to
          Suburban at December 31, 2002, is $500,000 out of the $550,000 and the
          Company  reported  such  as  of  December  31,  2002.

          In  2003,  Management has received third party information identifying
          Suburban  has received all or most all of the $550,000. Management has
          taken  the  position  that  all  of  the $550,000 has been received by
          Suburban  and  that  no  further  obligation of stock issuances is due
          Suburban.  The  remaining $500,000 of debt due Suburban as of December
          31,  2003  has  been  recognized  as  paid  off  in stock sold for and
          proceeds received by Suburban greater than was estimated in 2002. This
          difference  is  recognized  in  2003  in the consolidated statement of
          stockholders  equity.

          The  same  agreement  also  paid off $273,781 in notes payable owed to
          Suburban  in  exchange for 5,021 shares of common stock and Suburban's
          release of stock it held as security. However, the stock Suburban held
          as  security  has  not  been  released by Suburban and returned to the
          Company and to the officer who pledged his own stock in the Company as
          security  on  the  loan.

          NOTES  CONVERTIBLE  INTO  STOCK
          -------------------------------

          There  are  $1,500,414 of convertible notes payable as of December 31,
          2003.

          Convertible  notes payable are to individuals and bear interest at 12%
          per  annum.  Principal  and accrued interest is due twelve months from
          the date of issuance. These notes are convertible at the option of the
          holder  into  shares  of  the  Company's  common  stock, at an initial
          conversion  price of $.80 per share. Approximately $980,000 of accrued
          interest  relating  to  these  notes  at  December  31,  2003, is also
          convertible into the Company's common stock. At December 31, 2003, the
          approximate total of common shares available through conversion of the
          aforementioned  debt  is  619,090  freely  tradeable  stock.

          The notes may be called for conversion when the average of the bid and
          asked  prices  of  the  common  stock  exceeds $1.00 per share for ten
          consecutive  days

          STOCK  OPTIONS
          --------------

          Before  2002  there  were granted options for 645,000 shares of common
          stock  at  an  exercise  price  of  $1.00 per share that had also been
          affected  by  the  25,000 to 1 reverse stock split of December 4, 2004
          and  the 3,000 for 1 reverse stock split on April 16, 2003. Because of
          the  stock  splits  management  is of the opinion the stock options in
          place  are of no measurable value and are anticipating terminating the
          existing stock option plan. Therefore, in computing earnings per share
          all  stock  options  have  been  ignored.


                                      F-18
<PAGE>
          STOCK  ISSUED  FOR  ASSET  PURCHASE
          -----------------------------------

          In  2002, the Company acquired the assets of Grandma Hammans Specialty
          Foods,  LLC.  Payment  included 333 shares of Company stock (1,000,000
          shares  before  the  25,000  for  1 reverse stock split on December 4,
          2002).  In  2003  the  agreement  to  acquire  Grandma  Hammans  was
          renegotiated  and  no  stock  will be involved in the acquisition. The
          financial  statements  recognize the issue of the stock as of December
          31,  2002  and  the  return  of  the  stock  as  of December 31, 2003.

          EMPLOYEE  STOCK  INCENTIVE  PLAN  ("ESIP")
          ------------------------------------------

          The  Company filed with the Securities and Exchange Commission ("SEC")
          on  April  11,  2003,  a  Form  S-8  notifying  of  an "Employee Stock
          Incentive  Plan  for  the Year 2003" and a "Non-Employee Directors and
          Consultants  Retainer  Stock  Plan  for  the Year 2003." The number of
          shares  registered  are  1,000,000,000  shares  for  the employees and
          1,000,000,000  shares  for non-employees for a total of 2,000,000,000,
          all  at  a  proposed offering price per share of $0.0001 and the first
          stock  was  issued  April  17,  2003.

          By  December  31,  2003,  552,554,600 unrestricted shares of stock had
          been  issued  under this plan. Out of the shares issued under the ESIP
          Plan,  all shares have been sold to the public for net proceeds to the
          company  of  $1,888,507.

          STOCK  ISSUED  FOR  SERVICES  PROVIDED
          --------------------------------------

          During  April  through July 2003, the Company issued 56,000,000 shares
          of  restricted  common  stock  to  officers.  Restricted  stock is not
          marketable.  Consequently,  no  value  can  be  determined  for  this
          restricted  stock  issued. However a nominal amount of $5,600 has been
          assigned  as  the  value  for  this  non-marketable  stock  issued.

          During  2002  the  Company  issued 125 shares of preferred stock to an
          officer  for  pledging his stock in the Company as collateral for debt
          the  Company  owed  for  an  assigned  value  of  $1.

          During 2003, the Company issued 726,000 shares of restricted preferred
          stock  to  officers. Restricted stock is not marketable. Consequently,
          no value can be determined for this restricted stock issued. However a
          nominal  amount  of  $72,600  has  been assigned as the value for this
          non-marketable  stock  issued.

NOTE 8 -  RELATED  PARTY  TRANSACTIONS  NOT  DISCLOSED  ELSEWHERE:

          From  time to time, Officers and directors will advance to the Company
          or  receive  advances from the Company. Amounts due to related parties
          are  included  in accounts payable at December 31, 2003 and 2002 of $0
          and $7,037, respectively and in notes payable of $115,174 and $186,379
          for  December  31,  2003  and 2002 respectively (Refer to Note on Term
          Debt).  Amounts  due  from  related  parties  included  in  accounts
          receivable  at December 31, 2003 and 2002 were $0 and $0 respectively.

          The  daughter  of  the  Chief  Executive  Officer  works  as Marketing
          Representative  and  the son of the Chief Operations Officer serves as
          Vice  President  of  Operations  with  additional  responsibilities in
          Information  Technology.


                                      F-19
<PAGE>
NOTE 9 -  LITIGATION, COMMITMENTS AND CONTINGENCIES:

          LITIGATION:
          -----------

          On  August 13, 2003, Suburban Capital Corporation filed a civil action
          in  the  Circuit  Court  of  DuPage  County,  Illinois against Gateway
          Distributors  and  two  of  its  officers,  Richard Bailey and Florian
          Ternes.  On  December 15, 2003, U.S. District Judge Charles R. Norgle,
          Sr.,  granted  Gateway's Notice of Removal and removed the case to the
          United  States  District  Court for the Northern District of Illinois.

          The  action  is  styled  Suburban  Capital  Corporation  v  Gateway
                                   ------------------------------------------
          Distributors,  Ltd.,  Rick  Bailey  and  Flo  Ternes,  and  Neptune
          -------------------------------------------------------------------
          Communications,  Case  No.  03-CV-7559 (Norgle, J.) and as to Gateway,
          --------------
          Richard  Bailey  and  Florian  Ternes:

          Suburban  Capital's  complaint  alleges  breach  of contract and fraud
          claims.  Suburban  Capital seeks a declaratory judgement regarding the
          validity  of  an  alleged  advisor  agreement  with  Gateway, specific
          performance  of  that  agreement  and  injunctive  relief,  including
          temporary  restraining  order  as  well  as  preliminary and permanent
          injunctions.  The  complaint seeks $550,000 together with its costs of
          enforcement  including  reasonable attorney's fees as well as punitive
          damages  in  the  amount  of  $500,000.

          On November 17, 2003, Gateway filed an answer and affirmative defenses
          which  asserted  that  the  Plaintiff's  claims  are  barred  by  the
          principles  of undue influence, duress, in pari delicto, estoppel, and
          illegality.

          On  January  24,  2004,  Judge  Gottschall  granted the Securities and
          Exchange  Commission's  motion for an order appointing a receiver over
          Suburban  Capital Corporation in Securities and Exchange Commission v.
          ----------------------------------------------------------------------
          Frank  J.  Custable, Jr., Sara Wetzel, Suburban Capital Corp., Francis
          ----------------------------------------------------------------------
          Scott  Widen,  Wasatch Pharmaceutical, Inc., David Giles, Gary Heesch,
          ----------------------------------------------------------------------
          Pacel Corp., David Calkins, Gateway Distributors, Ltd., Richard Bailey
          ----------------------------------------------------------------------
          and  ThermoElastic  Technologies,  Inc,  Case  No.  03-C-2182.  The
          ---------------------------------------
          court-appointed  Receiver,  Mark  Toljanic,  controls  this  claim.

          On  March  12,  2004  the  Parties  agreed  to  a Scheduling Order and
          commenced  discovery.

          The  Parties  are scheduled to appear before Judge Norgle on April 13,
          2004  for  a  status  hearing.

          There  are  other  legal  proceedings  going  on as part of the normal
          course  of  business.

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

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

          Although  the  Company  desired to acquire the rights and ownership of
          the  line,  it was greater than the Company felt was prudent for it to
          do.  So,  to  put  a  stop  loss  feature  in  the


                                      F-20
<PAGE>
          agreement  the  two  key officers of the Company, Rick Bailey, CEO and
          Flo Ternes, COO, formed The Chelsea Collection, LLC ("LLC"), an entity
          to  provide the spring board for the Company to acquire the rights and
          to  minimize  the  Company's  risk.  This  was agreeable with Francois
          Vautour  and  LLC.

          The  initial  $75,000  investment paid in 2003 was expensed as startup
          costs  and is recognized under selling, general and administrative. An
          additional  $156,000 has been invested in 2004 to March 19, 2003 for a
          total to date of $231,000 to date. Monthly outgoes to the project will
          continue  at  around  $50,000  per  month  at  the  present  rate  of
          expenditures.  Management  anticipates  the  initial marketing program
          will  launch  by  June  and  the stop loss decision will be at a later
          date.  The  Company  is  seeking due diligence before the agreement is
          finalized.

          On  July  17,  2003  the  Company  entered into a consulting agreement
          whereby  the  consultant  provides  training,  selling and multi-level
          marketing  solutions in the amount of $104,000 through March 2004. The
          Company  has  paid  this  commitment  in  full  as  of March 19, 2004.

          On  August  12, 2003 a consulting agreement was signed committing to a
          ten-year  contract  to  provide training for the company distributors.
          Compensation will be based on the ability of the consultant to sign up
          new  distributors.  Management  believes it will be a self-funding and
          revenue  generating  program.

          CONTINGINCIES:
          --------------

          The  Company  has  no  errors or omissions insurance for Directors and
          Officers.  The  Company  is  currently  looking  into  this.

     On  December  31,  2002,  the  Company  acquired  all  assets  and selected
liabilities of TRSG Corporation ("TRSG"). Under the terms of the agreement, TRSG
chooses  which  creditors  it  continues to owe and all others are passed to the
Company.  This  agreement has not been agreed upon by the creditors of TRSG. The
agreement  appears  to  pass  all  liabilities  to  the  Company,  disclosed and
undisclosed.  Because  the  Company  cannot control or decide which creditors it
will  ultimately pay, management acknowledges a possible contingency it will owe
more  than  the  agreement contains and that is also recognized in the financial
statements.  However,  management has concluded not to recognize any amount of a
contingency  for  the  asset  purchase  of  TRSG.

          (a)  In  July  of  2001,  the  Company's subsidiary, TRSG acquired the
          business  of A and A Medical ("A&A"), located in Salt Lake City, Utah.
          In  February  2002,  TRSG  sold  the  business  to an unrelated party.

          The  transactions  dealing  with the activity of A&A for 2002 have not
          been  audited and was determined not to be auditable because it is out
          of  business and records are unattainable. The net amount received and
          dispersed  has been reported in the statement of operations as part of
          selling,  general  and  administrative  expense.

NOTE 10 - OPERATING  LEASES:

          The Company leases its office and certain office equipment items under
          operating  leases which expire at various dates through December 2007.
          The  following  is  a  schedule,  by  years,  of future minimum rental
          payments  required  under  these  operating  leases as of December 31,
          2002.


                                      F-21
<PAGE>
          Year  ending  December  31:
          2004                                   $  63,048
          2005                                       3,824
          2006                                       3,824
          2007                                       3,824
               2008  and  forward                        -
                                                ----------
          Total minimum payments                $   74,520
                                                ==========

     The  Company  leases  a building under an operating lease through August 1,
2004.  The  monthly  amount  at  December  31,  2003  is  $7,403.

          Total  rent expense charged to operations for the years ended December
          31,  2003  and  2002,  was  $96,172  and  $143,594  respectively.

NOTE 11 - CONSIDERATIONS AFFECTING THE COMPANY'S ABILITY TO CONTINUE AS A GOING
          CONCERN:

     In  the  event the Company is unable to raise sufficient operating capital,
     the  aforementioned  conditions raise substantial doubt about the Company's
     ability  to  continue  as  a going concern. The financial statements do not
     include  any  adjustments  that  might  result  from the occurrence of such
     conditions  and  have been prepared assuming that the Company will continue
     as  a  going  concern.  The  Company  has implemented a plan to raise funds
     through  an  Employee  Stock  Incentive  Plan  ("ESIP").

     There  have  been significant recurring losses and negative cash flows from
     operations for the past three years, which has resulted in a severe working
     capital  deficiency. This deficiency has contributed to inventory shortages
     and decreased sales, limited the ability of the Company to meet its current
     obligations  and  caused  the  Company  to  default  on  debt  repayments.

     During  2003,  and  presently  2004  as well, the Company continues raising
     funds  through  stock  sales.  During  2003  stock sales provided operating
     capital  to  the  company  of:

     Cash  received  in  2003                                     $1,703,961
     Receivable  from  stock  sales  via  ESIP  Stock  Plan          184,546
                                                                  ----------

     Total  for  2003                                             $1,888,507
                                                                  ==========

     In  January  2004  the  Company received the $184,546 from stock sales.(See
     Subsequent  Events.)

NOTE 12 - SUBSEQUENT  EVENTS:

     During  2004,  management  continues negotiations with the Internal Revenue
     Service  ("IRS") to settle back payroll taxes due. Management anticipates a
     settlement  by  the  end  of  2004.

     The  Company  filed  with the Securities and Exchange Commission ("SEC") on
     January 23, 2004, a Form S-8 notifying of an "Employee Stock Incentive Plan
     for  the Year 2004". The number of shares registered are 900,000,000 shares
     ("ESIP").


                                      F-22
<PAGE>
     The  Company  filed  with the Securities and Exchange Commission ("SEC") on
     February  27,  2004  a  Form S-8 notifying of a "Non-Employee Directors and
     Consultants  Retainer  Stock  Plan for the Year 2004." The number of shares
     registered  are  1,500,000,000.  The  Company  has  contracted with several
     consultants  who  will  be  paid  out  of  this  Plan  during  2004.

     The  Company  filed  with the Securities and Exchange Commission ("SEC") on
     March  17,  2004, a Form S-8 notifying of an "Employee Stock Incentive Plan
     for the Year 2004 No. 2". The number of shares registered are 2,000,000,000
     shares.

     The  Company  is a defendant in a suit filed March 22, 2004 in the District
     Court of Clark County, Nevada, Case No. A-482523 filed by Perrin, Fordree &
     Company,  P.C.  Perrin  Fordree  is seeking $75,000 for accounting services
     which  the  plaintiff  rendered  primarily  for  TRSG Corporation, a former
     subsidiary  of  the  Company.  The  Company  presently  is  negotiating  a
     settlement,  as  part  of  the  obligation  is  the  Company's.


                                      F-23
<PAGE>