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, 2006.

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

                          COMMISSION FILE NO. 000-27879

                      MARSHALL HOLDINGS INTERNATIONAL, INC.
               (Exact name of issuer as specified in its charter)

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

           2555 EAST WASHBURN ROAD, NORTH LAS VEGAS, NEVADA     89081
               (Address of principal executive offices)       (Zip Code)

       Registrant's telephone number, including area code: (702) 317-2400

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 $0.001 PER SHARE
                                (Title of class)

     Check  whether  the  issuer  is  not  required  to file reports pursuant to
Sections  13  or  15(d)  of  the  Exchange  Act.  [ ]

     Check  whether the issuer (1) has filed all reports required to be filed by
Section  13  or  15(d)  of  the  Exchange Act during the past 12 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 [ ]

     Check  if  no  disclosure  of  delinquent filers in response to Item 405 of
Regulation  S-B  is contained in this form, and no disclosure will 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.  [ ]

     Indicate  by  check  mark  whether  the  registrant  is a shell company (as
defined  in  Rule  12b-2  of  the  Exchange  Act.  Yes [ ]  No [X]

     State  issuer's  revenues  for  its  most  recent  fiscal year: $3,757,181.

     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  April  5,  2007:  $34,325,717

     Indicate  the  number  of  shares  outstanding  of each of the registrant's
classes  of  common  stock  as  of  April  5,  2007:  2,145,357,320.

     Documents  incorporated  by  reference:  None.

     Transitional Small Business Disclosure Format (Check one): Yes [ ]  No [X]


<PAGE>
<TABLE>
<CAPTION>
                                TABLE OF CONTENTS

<S>       <C>                                                              <C>
ITEM 1.   DESCRIPTION OF BUSINESS . . . . . . . . . . . . . . . . . . . . . 1
ITEM 2.   DESCRIPTION OF PROPERTY . . . . . . . . . . . . . . . . . . . . .12
ITEM 3.   LEGAL PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . . . .12
ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS . . . . . . .16
ITEM 5.   MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS. . . . .16
ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION . . . .19
ITEM 7.   FINANCIAL STATEMENTS. . . . . . . . . . . . . . . . . . . . . . .33
ITEM 8.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
          FINANCIAL DISCLOSURE. . . . . . . . . . . . . . . . . . . . . . .33
ITEM 8A.  CONTROLS AND PROCEDURES . . . . . . . . . . . . . . . . . . . . .34
ITEM 8B.  OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . . . .34
ITEM 9.   DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
          COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT . . . . . . . .34
ITEM 10.  EXECUTIVE COMPENSATION. . . . . . . . . . . . . . . . . . . . . .36
ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
          AND RELATED STOCKHOLDER MATTERS . . . . . . . . . . . . . . . . .38
ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. . . . . . . . . .39
ITEM 13.  EXHIBITS. . . . . . . . . . . . . . . . . . . . . . . . . . . . .40
ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES. . . . . . . . . . . . . .41
</TABLE>


                                        i
<PAGE>
                                     PART I

ITEM 1.     DESCRIPTION OF BUSINESS.

COMPANY OVERVIEW

     As  used  herein  the  term  ("Marshall")  refers  to  Marshall  Holdings
International,  Inc., formerly Gateway Distributors, Ltd., a Nevada corporation,
its  subsidiaries  and  predecessors,  unless  the  context indicates otherwise.
Marshall  was  originally  incorporated  in the State of Nevada on May 26, 1993.
Marshall  markets  and distributes different nutritional and/or health products.
The  products,  which  the  Company  sells  are  intended to provide nutritional
supplementation  to the users; the products are not intended to diagnose, treat,
cure  or  prevent  any  disease.

     On  August  15,  2002,  Marshall  acquired all equity interest in Los Cabos
Freedom  Movement,  a  Wisconsin  LLC,  d/b/a  Grandma  Hammans  Specialty Foods
("Grandma  Hammans") for $217,500. The Company formed a wholly owned subsidiary,
Grandma  Hamman's Specialty Foods ("Grandma Hammans") on July 3, 2003 to run the
wholesale  operations  of  the  Company.

     Marshall  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  April  30,  2004,  Marshall  formed  a wholly owned subsidiary, Gateway
Venture  Holdings,  Inc.  ("GVH")  The  Las  Vegas  property and fixed assets of
Marshall  are  recorded  in  this  subsidiary.

     Also  on  April  30, 2004, Marshall formed a wholly owned subsidiary, Aspen
Cove  Resort  Incorporated  to run the operations of Aspen Cove Resort (formerly
Beaver  Dam  Lodge) located near Panguitch Utah. The lodge had been purchased on
April  15,  2004  and  was  owned  by  GVH.

     On May 30, 2004, an agreement was signed with Quality Distribution Services
of Nevada to create a new corporation, Quality Distribution Services of Arizona,
Inc  ("QDS").  QDS was incorporated in Nevada on June 7, 2004 and was 51 percent
owned  by  Marshall.  QDS  was  a  wholesale beverage distributor in the Phoenix
Arizona  area.  For  2005,  the  Company  has elected not to recognize QDS as an
equity  position,  but  as an investment. The corporation has since been revoked
and  not  in  business.

     On  November  30, 2004, Marshall formed a wholly owned subsidiary, Marshall
Corporate Administration, Inc ("MCA"), formerly Gateway Corporate Administration
which  is  engaged  in  marketing  and  management  services.

     In  December,  2004  Marshall  moved  the  corporate  office  and warehouse
location  to  3220  Pepper  Lane,  Las  Vegas,  Nevada  89120.

     On  December  21,  2004  Marshall  entered  an  Asset Purchase Agreement to
purchase  51  percent  of  Los  Cabos  Beverage  then  owned  by  Blaine
Wendtland("Wendtland").  The  51  percent interest in Los Cabos Beverage and its
assets  were  acquired  by  the  Company in exchange for Wendtland receiving all
rights to Grandma Hamman's GHF product and Wendtland assuming and paying off the
debt  of  $193,833  owing  to  Los  Cabos Freedom Movement LLC and Ed Wendtland.

     On  December  30,  2004, Marshall formed a 51 percent owned subsidiary, Los
Cabos Beverage Inc ("LCB") to handle the operations of the sale of private label
water.

     On  February  28,  2005,  Marshall  entered  into  an agreement with Blaine
Wendtland wherein he assumed all ownership and obligations of Los Cabos Beverage
and  the  Company  terminated  its  commitments and relationships with Los Cabos
Beverage  and  Blaine  Wendtland.


                                        1
<PAGE>
     On  June  2,  2005,  Marshall sold it's wholly owned subsidiary, Aspen Cove
Resort  Incorporated  ("ACR"), in combination with selling the building and real
estate  on  which  the  resort  is  located.

     On  September  30,  2005,  Marshall sold its building and real estate which
housed  its warehouse and corporate offices located 3220 Pepper Lane, Las Vegas,
Nevada  89120.

     On  March  13,  2006,  the  Company purchased a smaller commercial property
located  at  2555  East Washburn Rd, North Las Vegas, Nevada. The operations and
warehouse  is operating out of the new facilities. The Company's offices will be
in  temporary  accommodations  until the new building is ready for occupancy and
the  offices  have  been  built  out.

     On June 30, 2006, the Company purchased all of the operations and assets of
Marshall  Distributing  Company  in  Salt  Lake  City, UT. Marshall Distributing
distributes  over 150 different manufacturers lines of over 6,000 natural health
products.

     On August 31, 2006, Marshall formed a wholly owned subsidiary Mountain West
Holdings,  Inc.  to  facilitate  the  website  and  e-commerce  operations.

CURRENT BUSINESS PLAN

     Marshall  Holdings  International,  Inc.  is  a public trading company that
acquires  or creates companies that have potential to grow in revenue to provide
an opportunity in the field of Distribution of products or services that enhance
the  lives  of  individuals  through  modern  technology.

     The  Company's  current  purpose  is  to  seek,  investigate  and,  if such
investigation  warrants, acquire an interest in business opportunities presented
to  the  Company  by  persons or firms who or which desire to seek the perceived
advantages  of  a  corporation which is registered under the Securities Exchange
Act  of  1934,  as  amended.  The  Company  does  not restrict its search to any
specific  business;  industry  or geographical location and may participate in a
business  venture  of  virtually  any  kind  or  nature.

     The  Company  may  seek  a  business  opportunity  with entities which have
recently  commenced  operations, or which wish to utilize the public marketplace
in  order  to  raise  additional capital in order to expand into new products or
markets,  to  develop  a new product or service or for other corporate purposes.
The  Company  may  acquire  assets  and  establish  wholly owned subsidiaries in
various  businesses  or acquire existing businesses as subsidiaries. The company
will  continue to seek out potential merger candidates, acquisitions or business
opportunities  that  enable  expansion  of  market channels for distribution and
sales  of  product  to  benefit  and enhance the lives of individuals around the
world

     As  part of the Company's investigation of potential merger candidates, the
Company's  officers  and  directors will meet personally with management and key
personnel,  may  visit  and  inspect  material  facilities,  obtain  independent
analysis  or  verification  of certain information provided, check references of
management  and  key personnel and take other reasonable investigative measures,
to the extent of the Company's financial resources and management expertise. The
manner  in  which  the Company participates in an opportunity will depend on the
nature  of  the opportunity, the respective needs and desires of the Company and
other  parties,  the  management  of  the  opportunity,  the  Company's relative
negotiation  strength  and  that  of  the  other  management.

     The  Company  intends to concentrate on identifying preliminary prospective
business  opportunities  that  may be brought to the Company's attention through
present  associations  of  its  officers  and  directors, or by stockholders. In
analyzing  prospective  business  opportunities,  the Company will consider such
matters  as the available technical, financial and managerial resources; working
capital  and  other  financial  requirements;  history  of  operations,  if any;
prospects  for  the  future;  nature  of  present  and expected competition; the
quality  and  experience  of  management services which may be available and the
depth  of  that  management;  the potential for further research, development or
exploration;  specific  risk  factors  not now foreseeable but which then may be
anticipated  to  impact


                                        2
<PAGE>
the  Company's  proposed  activities; the potential for growth or expansion; the
potential  for  profit;  the  perceived  public  recognition  or  acceptance  of
products,  services  or trades; name identification; and other relevant factors.

     The  Company's  officers and directors will meet personally with management
and  key personnel of the business opportunity as part of the investigation. The
Company  will  not acquire or merge with any company for which audited financial
statements  cannot  be obtained within a reasonable period of time after closing
of  the  proposed  transaction,  as  required  by  the  Exchange  Act.

     The Company will not restrict its search to any specific kind of firms, but
may acquire a venture which is in its preliminary or development stage, which is
already  in  operation,  or  which  is in essentially any stage of its corporate
life.  It  is  impossible  to predict at this time the status of any business in
which  the  Company  may  become engaged, in that such business may need to seek
additional  capital,  may  desire to have its shares publicly traded or may seek
other  perceived  advantages  which  the  Company  may  offer.

REVERSE SPLITS

     During  the  twelve  months ended December 31, 2003, Marshall implemented a
reverse  stock  split  on  the  basis  of  one  post-split share for every 3,000
pre-split  shares.  During  the  twelve months ended December 31, 2004, Marshall
implemented three reverse stock splits as follows: one split on the basis of one
post-split  share  for every 900 pre-split shares, one split on the basis of one
post-split share for every 1,000 pre-split shares, and one split on the basis of
one  post-split share for every 1,000 pre-split shares. During the twelve months
ended December 31, 2005, Marshall implemented a reverse stock split on the basis
of one post-split share for every 500 pre-split shares. During the twelve months
ended December 31, 2006, Marshall implemented a reverse stock split on the basis
of  one  post-split  share  for  every  1,000  pre-split  shares.

     All  share  and  per  share  amounts  presented  in the Company's financial
statements  which  are  part  of  this  Annual  Report  on Form 10-KSB have been
restated  retroactively to reflect the reverse splits as if they had occurred on
the  first  day  of the first period presented, or January 1, 2005. However, all
share  and per share amounts have not been restated retroactively to reflect the
reverse  splits  in  the narrative portion of this Annual Report on Form 10-KSB.
Consequently,  the  retroactive  restatement  may  cause  some  apparent
inconsistencies  between  the  narrative  portion  of this Annual Report on Form
10-KSB  and  the  Company's  other  filings  with  the  Securities  and Exchange
Commission  on  one  hand,  and  the financial statements and accompanying notes
forming  part  of  this  Annual  Report  on  Form  10-KSB  on  the  other  hand.

KEY PERSONNEL

     Marshall's  future  financial  success  depends  to a large degree upon the
efforts of Messrs. Bailey and Ternes, our officers and directors. Messrs. Bailey
and  Ternes  have  played  major roles in developing and executing the Company's
business  strategy.  The loss of Messrs. Bailey and Ternes could have an adverse
effect  on  the  Company's business and chances for profitable operations. While
Marshall  intends  to  employ  additional  management and marketing personnel in
order  to  minimize the critical dependency upon any one person, there can be no
assurance  that  the  Company will be successful in attracting and retaining the
persons  needed.  If  Marshall  does not succeed in retaining and motivating the
current  employees  and  attracting  new  high  quality employees, the Company's
business  could  be  adversely affected. Marshall does not maintain key man life
insurance  on  the  lives  of  Messrs.  Bailey  and  Ternes.

     The  Company  has  employed  W.  Jamie  Plante  CPA  as the Company's chief
financial  officer.  Jamie  plays  a  key role in analyzing and reporting on the
company's  financial  matters.

BUSINESS

     Marshall  Holdings International contains three principal subsidiaries. The
first  is  The  Right  Solution Gateway. The Right Solution Gateway is a network
marketing  company  that  sells  whole  food  nutrition,  health  and  dietary
supplements  and  skin care products throughout North America, Russia, Japan and
Indonesia.  Marshall


                                        3
<PAGE>
believes  that  through  special  blends,  whole  foods,  such  as  grains  and
vegetables,  can  be  combined  to  help  produce  optimum  health.

     The  Right  Solution  Gateway's  products  are  marketed  through a network
marketing  system  within  the United States and wholesale personal import sales
outside  the  United  States.  Network  marketing enables Marshall's 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 The Right
Solution  Gateway  operates,  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  The  Right  Solution Gateway's products
themselves.  The  Right Solution Gateway's network marketing system appeals to a
broad  cross-section  of people, particularly those seeking to supplement family
income,  start  a  home-based business, or pursue employment opportunities other
than  conventional,  full-time  employment.

     The second Marshall Distributing is a natural products distribution company
that  has  been  in business since 1974 and has sold into over 3,500 health food
stores,  pharmacies  and medical offices around the country not to mention doing
complete  order  fulfillment  for  many  up  and coming on-line stores. Marshall
Distributing carries over 6,000 natural products and supplements comprising over
150  manufactures.  Our unique product mix consists of a wide variety of natural
products  ranging  from  popular  herbs  and health supplements to body care and
fitness.  Marshall  Distributing offers complete lines of teas, herbs, vitamins,
health  foods, minerals, homeopathic remedies, natural cosmetics, skin care, pet
care,  cold  &  wellness  products,  weight  management products, and much more.

     Marshall Distributing only carries top branded natural products and because
of  its  long  standing in the market as a natural product distributor can offer
many  popular  lines that are now unattainable from other sources. Just a few of
those  manufacturers  are  names  such  as  Nature's  Way,  Twin  Labs,  Dr.
Christopher's,  Celestial  Seasoning,  Natrol, Nature's Answer, Spectrum, Xlear,
American  Health,  Hyland's,  and  many  more.

     Over the years Marshall Distributing has established product mix that has a
proven  track  record.  It is continually searching for the best, most reputable
products on the market. Constantly tracking sales and watching the industry from
the  inside  it  can bring in only the most popular products with proven results
and  good  margins.

     Marshall  Distributing  sets  itself apart with a stellar reputation in the
natural  products  industry  going  back  over 30 years while looking forward by
creating  unique  channels  of wholesale and retail distribution for its already
popular  product  mix.

     Additionally,  Marshall  Distributing  has  reconfigured  its warehouse and
optimized  for  small  order  product movement. This optimization has positioned
Marshall  Distributing  as  a premier fulfillment house for natural products and
supplements.  Marshall  Distributing is already functioning as fulfillment house
for  over 100 web-sites looking to get away from product inventory and shipping.
These  web-sites  are  at  various stages of development and do take time to get
going  but  have  the  potential  to  create exponential sales opportunities for
Marshall  Distributing  product  mix. Through technological advances in Marshall
Distributing  systems  (API  Interface)  these  outside sites can also be linked
directly  to  it's  back  end  order  processing  and  inventory.

     The  third  principal  subsidiary  is Mountain West Holdings. Mountain West
Holdings  owns  an e-commerce platform that facilitates online sales of products
through web-sites. It contains Web Health Stores that provides the actual online
or  virtual  storefronts  for customers. This platform fully integrates with the
Marshall  Distributing  fulfillment  center.  Sales  of  Products,  through this
platform,  continue  to grow and adds additional benefits for the customer base.


                                        4
<PAGE>
     Marshall  has other subsidiaries with the intention of having a diversified
base  to  allow  revenue from additional sources which should enhance Marshall's
ability to benefit from other types of resources. These subsidiaries are Gateway
Venture  Holdings,  Inc,  and  Marshall  Corporate  Administration.

MARSHALL FINANCIAL RESULTS MAY BE AFFECTED BY FACTORS OUTSIDE OF MANAGEMENT'S
CONTROL

     Marshall's  future operating results may vary significantly from quarter to
quarter  due  to  a  variety  of factors, many of which are outside management's
control.  The  Company's  anticipated  expense  levels  are  based,  in part, on
estimates  of future revenues and may vary from the projections. The Company may
be  unable  to  adjust  spending rapidly enough to compensate for any unexpected
revenue  shortfall.  Accordingly,  any  significant  shortfall  in  revenues  in
relation to the Company's planned expenditures would materially adversely affect
business,  operating  results,  and  financial  condition.

     Management  cannot  predict  with  certainty  the  Company's  revenues  and
operating  results.  Further,  we  believe  that period-to-period comparisons of
operating  results  are  not  necessarily  a  meaningful  indication  of  future
performance.

CORPORATE OFFICES

     Marshall's executive office has relocated from 3220 Pepper Lane, Las Vegas,
Nevada  89120  to 2555 East Washburn Rd, North Las Vegas, Nevada 89081 as of the
date  of this filing. The telephone number to call for information remains (702)
317-2400.

CHANGES IN CAPITAL STRUCTURE

     Effective  September  3, 2004, Marshall implemented a 1-1,000 reverse split
of  the Company's authorized, issued and outstanding stock. Effective October 4,
2004,  Marshall  amended the Articles of Incorporation to increase the number of
authorized  preferred  shares  to  400,000,000  shares.

     Effective  on  June 28, 2004, Marshall implemented a 1-900 reverse split of
the  Company's  issued and outstanding common stock. Effective on June 28, 2004,
Marshall  also  filed  Articles  of  Amendment  to  Marshall's  Articles  of
Incorporation  increasing  the  Company's  authorized  common  shares  to
25,000,000,000  and  preferred  shares to 200,000,000 shares and authorizing the
board  of  directors.

     On  November  9,  2004,  Marshall  filed  a Certificate of Amendment to the
Company's Certificate of Designation increasing the number of shares of Series A
Preferred  Stock from 200,000 shares to 100,000,000 shares. The shares of Series
A  Preferred  Stock  rank  senior to shares of preferred and common shares. Each
share  of  the Series A Preferred Stock is entitled to 1,000 votes on any matter
submitted  to  the  holders of Marshall common stock. Each share of the Series A
Preferred  Stock  is  convertible into that number of common stock equal in fair
market  value  to  $1.

     Effective  December  20, 2004, Marshall implemented a one for 1,000 reverse
split  of  Company  issued  and  outstanding  common  stock.

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

     Effective March 28, 2005, Marshall implemented a 1-500 reverse split of the
Company's  issued  and  outstanding  common  stock.

     Effective December 4, 2006, Marshall implemented a 1-1,000 reverse split of
the  Company's  issued  and  outstanding  common  stock


                                        5
<PAGE>
EMPLOYEES

     Marshall  has twenty-two full-time employees and two part-time employees as
of April 5, 2007. Company distributors, who are independent contractors, are not
considered  to be employees. As Marshall grows, the Company will need to attract
an  unknown  number  of additional qualified employees. Although the Company has
experienced  no work stoppages and believes the relationships with employees are
good,  the Company could be unsuccessful in attracting and retaining the persons
needed.  None  of  the  employees  are  currently  represented by a labor union.
Marshall  expects  to  have a ready source of available labor to support growth.

     The  son  of  the  Chief  Operations  Officer  serves  as Vice President of
Operations  with  additional  responsibilities in Information Technology and the
daughter of the Chief Executive Officer worked as Accounting Assistant the first
half  of  2006  and  is  currently  working on special projects for the Company.

MARKETS AND MARKETING

     The  Right  Solution Gateway's products are distributed primarily through a
network  marketing system, consisting of a network of distributors. Distributors
are  generally  independent  contractors who purchase products directly from The
Right  Solution  Gateway  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.
The Right Solution Gateway believes that its network marketing system appeals to
a broad cross-section of people, 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 its distributors
work  on a part-time basis. The Right Solution Gateway believes that its network
marketing  system  is  ideally  suited to marketing its products because ongoing
personal  contact  between  consumers and distributors strengthens sales of such
products.

     Within  the  United States, distributors may earn profits by purchasing The
Right  Solution  Gateway's products at wholesale prices (which are discounted 40
percent  from  suggested retail prices) and selling The Right Solution Gateway's
products  to customers at suggested retail prices. All distributors, who sponsor
new  distributors  and  establish  their  own  downline  organizations  may earn
commissions  on  product  sales  on  their  downline.

     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 The Right Solution Gateway "tracks"
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 The Right
Solution  Gateway's  products  every  month.  All  distributors  are  allowed to
participate  in  The  Right  Solution  Gateway's  growth  by  sponsoring  new
distributors.

     The  Right Solution Gateway computes 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 percent of the new distributor's first
order.

     The  Right  Solution Gateway maintains a computerized system for processing
distributor  orders  and  calculating distributor commission and bonus payments,
which  enables  it  to  remit  such  payments to distributors monthly. The Right
Solution  Gateway  believes  that  prompt  remittance  of commission is vital to
maintaining  a  motivated  network  of  distributors  and that its distributors'
loyalty  to  The  Right  Solution  Gateway  has  been  enhanced


                                        6
<PAGE>
by  The  Right  Solution Gateway's history of consistently making commission and
bonus  payments  on  a  scheduled  basis.

     Internet. The Right Solution Gateway maintains a site on the World Wide Web
at  "www.rightsolution.com."  The Right Solution Gateway has enhanced the system
to  allow  on-line  ordering  and  volume  checks  by  the  distributors.

     Marketing.  Each distributor is responsible for sales of The Right Solution
Gateway's  product within his or her downline. The Right Solution Gateway relies
on  word  of  mouth and testimonials from previous or existing customers for its
primary  advertising.  The Right Solution Gateway has 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.  The  Right  Solution  Gateway has established a system for the
sponsoring  of  new  distributors.  The  Right  Solution  Gateway  prepares
communication  and  educational training materials for distributors to assist in
the  sponsoring  of new distributors. The Right Solution Gateway also engages in
weekly  conference  calls with distributors and sends newsletter email blasts to
its  distributors.  The Right Solution Gateway has an established advisory board
for  assistance  and  consultation  in  connection  with  sponsoring  matters.

     Marshall  Distributing  sells  its  products  through  health  food stores,
pharmacies, and medical offices around the country not to mention doing complete
order  fulfillment  for many up and coming on-line stores. Marshall Distributing
carries  over  6,000  natural  products  and  supplements  comprising  over  150
manufactures.  Our  unique  product  mix  consists  of a wide variety of natural
products  ranging  from  popular  herbs  and health supplements to body care and
fitness.  Marshall  Distributing offers complete lines of teas, herbs, vitamins,
health  foods, minerals, homeopathic remedies, natural cosmetics, skin care, pet
care,  cold  &  wellness  products,  weight  management products, and much more.

     Product  Distribution.  Marshall's  products are distributed to all markets
from  Marshall's  warehouse  located  in  Las Vegas, Nevada or the Distributions
Center  in  Salt  Lake  City,  Utah.

RISK FACTORS

NEED FOR ONGOING FINANCING.

     Marshall  will  need  additional  capital  to  continue operations and will
endeavor  to  raise  funds  through  the sale of equity shares and revenues from
operations.

     There  can  be  no  assurance  that the Company will generate revenues from
operations  or obtain sufficient capital on acceptable terms, if at all. Failure
to obtain such capital or generate such operating revenues would have an adverse
impact on Marshall's financial position and results of operations and ability to
continue  as  a  going concern. The Company's operating and capital requirements
during  the  next  fiscal  year  and  thereafter  will vary based on a number of
factors,  including the level of sales and marketing activities for services and
products. There can be no assurance that additional private or public financing,
including  debt  or  equity  financing,  will  be  available  as  needed, or, if
available,  on  terms  favorable  to  us. Any additional equity financing may be
dilutive  to stockholders and such additional equity securities may have rights,
preferences  or  privileges  that  are senior to those of existing common stock.

     Furthermore, debt financing, if available, will require payment of interest
and  may  involve  restrictive  covenants  that  could impose limitations on the
Company's  operating  flexibility.  Failure  to  successfully  obtain additional
future  funding  may jeopardize the ability to continue business and operations.

     When  Marshall  raises  additional  funds  by  issuing  equity  securities,
existing stockholders may experience a dilution in their ownership. In addition,
as  a  condition  to  giving  additional funds to Marshall, future investors may
demand,  and  may be granted, rights superior to those of existing stockholders.


                                        7
<PAGE>
BUSINESS CONCENTRATION.

     While  Marshall  considers relationships with customers to be satisfactory,
given the concentration of the Company's sales to a few key customers, continued
relationships  may  be  subject  to the policies and practices of the customers.
Marshall  continues  to  concentrate  efforts  on expanding the customer base in
order  to  reduce  the  reliance  on  current  customers.

INFLATION.

     In  management's  opinion,  inflation  has not had a material effect on the
Company's  financial  condition  or  results  of  operations.

TRENDS, RISKS AND UNCERTAINTIES.

     Management  has  sought  to  identify  what  is  believed  to  be  the most
significant  risks  to  the  Company's  business,  but management cannot predict
whether,  or  to  what  extent,  any  of  such risks may be realized nor can the
Company guarantee that all possible risks have been identified that might arise.
Investors  should  carefully  consider all of such risk factors before making an
investment  decision  with  respect  to  Marshall  common  stock.

CAUTIONARY FACTORS THAT MAY AFFECT FUTURE RESULTS.

     Marshall  provides  the  following  cautionary  discussion  of  risks,
uncertainties  and  possible  inaccurate  assumptions  relevant  to  the Company
business  and  products.  These  are factors that are thought could cause actual
results  to differ materially from expected results. Other factors besides those
listed  here  could  adversely  affect  the  Company.

POTENTIAL FLUCTUATIONS IN QUARTERLY OPERATING RESULTS.

     Marshall's  quarterly  operating results may fluctuate significantly in the
future  as  a  result  of  a  variety  of factors, most of which are outside the
Company's  control,  including  the  demand  for  services,  seasonal  trends in
purchasing,  the amount and timing of capital expenditures; price competition or
pricing  changes  in  the  industry;  technical difficulties or system downtime;
general  economic  conditions, and economic conditions specific to the industry.
Marshall's quarterly results may also be significantly impacted by the impact of
the  accounting  treatment  of  acquisitions,  financing  transactions  or other
matters.  Particularly  at  our  stage  of  development,  occurrences  such  as
accounting  treatment can have a material impact on the results for any quarter.
Due  to the foregoing factors, among others, it is likely that operating results
will  fall  below  expectations  or  those  of investors in some future quarter.

LACK OF INDEPENDENT DIRECTORS.

     The  Company  cannot  guarantee  that  the  board  of directors will have a
majority of independent directors in the future. In the absence of a majority of
independent  directors,  Marshall's executive officers, could establish policies
and  enter  into  transactions  without independent review and approval thereof.
This  could present the potential for a conflict of interest between the Company
and  stockholders  generally  and  the  controlling  officers,  stockholders  or
directors.

LIMITATION OF LIABILITY AND INDEMNIFICATION OF OFFICERS AND DIRECTORS.

     The  officers and directors of Marshall are required to exercise good faith
and high integrity in management affairs. The articles of incorporation provide,
however,  that  the  officers  and  directors  shall  have  no  liability to the
stockholders  for  losses sustained or liabilities incurred which arise from any
transaction in their respective managerial capacities unless they violated their
duty of loyalty, did not act in good faith, engaged in intentional misconduct or
knowingly  violated  the law, approved an improper dividend or stock repurchase,
or  derived  an  improper  benefit  from  the transaction. Marshall articles and
bylaws  also  provide for the indemnification by the Company of the officers and
directors  against  any  losses or liabilities they may incur as a result of the
manner  in


                                        8
<PAGE>
which  they  operate the business or conduct the internal affairs, provided that
in  connection with these activities they act in good faith and in a manner that
they  reasonably  believe  to  be  in,  or  not  opposed  to, the Company's best
interests, and their conduct does not constitute gross negligence, misconduct or
breach  of  fiduciary  obligations.

MANAGEMENT OF POTENTIAL GROWTH.

     Marshall  may experience rapid growth which will place a significant strain
on  the managerial, operational, and financial systems resources. To accommodate
the  Company's  current  size  and  manage  growth,  management must continue to
implement  and improve the Company's financial strength and operational systems,
and  expand,  train  and  manage  the  sales  and distribution base. There is no
guarantee  that  the Company will be able to effectively manage the expansion of
operations,  or  that  the  facilities,  systems, procedures or controls will be
adequate  to  support  the  expanded  operations.  The  Company's  inability  to
effectively  manage  future  growth  would  have  a  material  adverse  effect.

THE COMPANY PAYS NO DIVIDENDS.

     Marshall  has  never declared nor paid cash dividends on capital stock. The
Company  currently  intends  to  retain  any earnings for funding growth however
these  plans  may  change  depending  upon  capital  raising  requirements.

QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.

     Marshall  believes  that the Company does not have any material exposure to
interest  or  commodity  risks.  The  financial  results  are quantified in U.S.
dollars  and  a  majority  of  the  obligations and expenditures with respect to
operations  are incurred in U.S. dollars. Although Marshall does not believe the
Company  currently  has  any  materially  significant  market  risks relating to
operations  resulting  from  foreign  exchange rates, if the Company enters into
financing  or other business arrangements denominated in currency other than the
U.S.  dollars, variations in the exchange rate may give rise to foreign exchange
gains  or  losses  that  may  be  significant.

     Marshall  currently has no material long-term debt obligations. The Company
does  not  use financial instruments for trading purposes and are not a party to
any  leverage  derivatives.

RISKS RELATING TO THE BUSINESS

THE COMPANY IS NOT LIKELY TO SUCCEED UNLESS MANAGEMENT CAN OVERCOME THE MANY
OBSTACLES FACED.

     As  an  investor,  you  should  be  aware  of  the difficulties, delays and
expenses  Marshall  encounters,  many of which are beyond the Company's control,
including  unanticipated  market  trends,  employment  costs, and administrative
expenses. Management cannot assure investors that the proposed business plans as
described  in  this  report  will  materialize  or prove successful, or that the
Company  will  ever  be  able to finalize development of products or services or
operate  profitably.  If Marshall cannot operate profitably, you could lose your
entire  investment.  As a result of the nature of the Company business, Marshall
expects to sustain substantial operating expenses without generating significant
revenues.

COMPANY AUDITORS HAVE STATED THE COMPANY MAY NOT BE ABLE TO STAY IN BUSINESS.

     Marshall  auditors  have  issued  a going concern opinion, which means that
there is doubt that the Company can continue as an ongoing business for the next
12  months. Unless Marshall can raise additional capital, the Company may not be
able to achieve it's objectives and may have to suspend or cease operations. See
"Management's  Discussion  and  Analysis  of  Financial Condition and Results of
Operations."


                                        9
<PAGE>
COMPANY ACQUISITION STRATEGY INVOLVES A NUMBER OF RISKS.

     Marshall  intends to pursue growth through the opportunistic acquisition of
companies  or  assets  that  will  enable the Company to expand service lines to
provide  more  cost-effective  customer  solutions. Management routinely reviews
potential  acquisitions.  This  strategy  involves  certain  risks,  including
difficulties  in the integration of operations and systems, the diversion of the
Company's management's attention from other business concerns, and the potential
loss  of  key  employees  of  acquired  companies.  Marshall  may not be able to
successfully  acquire,  and/or  integrate  acquired  businesses into the Company
operations.

RISKS RELATING TO COMPANY STOCK

MARSHALL MAY NEED TO RAISE ADDITIONAL CAPITAL.  IF MARSHALL IS UNABLE TO RAISE
NECESSARY ADDITIONAL CAPITAL, THE BUSINESS MAY FAIL OR OPERATING RESULTS AND THE
STOCK PRICE MAY BE MATERIALLY ADVERSELY AFFECTED.

     Due  to  the  lack  of  revenue  and  expenses, the Company needs to secure
adequate  funding. If Marshall is unable to obtain adequate funding, the Company
may not be able to successfully develop and market its products and services and
the  business  will  most  likely  fail.  Marshall does not have commitments for
additional  financing.  To  secure additional financing, the Company may need to
borrow  money  or  sell  more securities, which may reduce the value of Marshall
outstanding  securities.  Under  these  circumstances, Marshall 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  Marshall  stockholders. If the Company borrows money, the
Company  will  have  to  pay interest and may also have to agree to restrictions
that  limit  operating  flexibility.  If  Marshall  is unable to obtain adequate
financing,  the Company 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.

MARSHALL 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  Marshall 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 2005 and 2006, Marshall
common  stock  was sold and purchased at prices that ranged from a high of $0.08
to  a  low of $0.0001 or lower 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 Marshall common stock may suffer greater
declines  due  to  its  price  volatility.

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

-     Variations  in  quarterly  operating  results;

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

-     Changes  in  market  valuations  of  similar  companies;

-     Announcement  by  Marshall  or  competitors  of  significant  contracts,
acquisitions,  strategic  partnerships,  joint  ventures or capital commitments;

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


                                       10
<PAGE>
-     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 Marshall
stock  price,  regardless  of  operating  performance.

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

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

     Marshall  directors,  within  the limitations and restrictions contained in
the  articles  of incorporation and without further action by 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.
Marshall  has  no  intention of issuing preferred stock at the present time. Any
issuance  of  preferred  stock  could  adversely affect the rights of holders of
common  stock.

     Should  Marshall  issue  additional shares of common stock, each investor's
ownership  interest  in  Marshall  Holdings  International,  Inc.  would  be
proportionally  reduced.  No  investor will have any preemptive right to acquire
additional  shares  of  common  stock,  or  any  other  Marshall  securities.

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

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

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

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


                                       11
<PAGE>
per  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, Marshall 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 Marshall common stock and cause a decline in the
market  value  of  the  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.

     Marshall  purchased  a building to house its offices and warehouse in March
2006  located  at  2555  E  Washburn  Road,  North  Las  Vegas,  Nevada  89081.

ITEM 3.     LEGAL PROCEEDINGS.

SUBURBAN CAPITAL CORPORATION V MARSHALL DISTRIBUTORS, LTD., CASE NO. 03-CV-7559

     On  August  13,  2003, Suburban Capital Corporation filed a civil action in
the  Circuit  Court of DuPage County, Illinois against Marshall Distributors and
two  of  its  officers, Richard Bailey and Florian Ternes. On December 15, 2003,
U.S. District Judge Charles R. Norgle, Sr., granted Marshall'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  judgment  regarding the validity of an
alleged  advisor  agreement  with  Gateway,  specific  performance  of


                                       12
<PAGE>
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.

     On  January  10,  2005,  Gateway  filed a counterclaim against Suburban for
breach  of  a Stock Purchase Agreement dated November 27, 2002. Gateway's claims
include  breach  of  contract  and,  in  the alternative, unjust enrichment. The
counterclaim seeks a judgment from the court which orders Suburban to assume the
debts  and  obligations  - currently valued at more than $306,667 - contained in
the  November 27, 2002 Stock Purchase Agreement and additional monetary damages.

     Company attorneys have been instructed to both vigorously defend the claims
made  against  Gateway  and  prosecute  claims  made  against  Suburban.

     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

     On  March  28,  2003,  the Securities and Exchange Commission filed a civil
action in the United States District Court for the Northern District of Illinois
against  Gateway  and  Richard  Bailey.

     The  action  was  styled  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  (Gottschall,  J.)  and  as  to Gateway and Richard Bailey:

     On  March  28,  2003, the Commission obtained a Temporary Restraining Order
(TRO)  from  the  United  States  District  Court  for  the Northern District of
Illinois,  temporarily  restraining Frank J. Custable, Jr., of Glendale Heights,
Illinois,  Suburban  Capital  Corp.,  Sara  Wetzel,  of  Glenview, Illinois, and
Francis  Scott  Widen of Buffalo Grove, Illinois, from violating the anti-fraud,
registration  and  reporting provisions of the federal securities laws. Custable
is  a  recidivist  who,  in  1994,  was  permanently enjoined from violating the
anti-fraud  provisions  of  the  federal  securities  laws  as  part  of a prior
Commission enforcement action. As part of the TRO, the Court also entered orders
freezing  the  assets  of  Custable,  Suburban  Capital,  Wetzel  and  Widen  to
repatriate  assets,  temporarily  prohibiting Custable and Suburban Capital from
participating  in  penny  stock  offerings  and  from trading in any securities,
requiring  all  defendants  to  give  an  accounting  and  prohibiting  document
destruction.

     The  Commission's  Complaint  alleged  that  Custable  has  orchestrated an
ongoing  scheme  to  violate registration, antifraud and reporting violations of
the  federal  securities laws. The scheme, as alleged in the Complaint, began in
at  least  November 2001, has involved at least seven different penny stocks and
has  generated  at  least  $4.3  million  in  ill-gotten gains. According to the
Complaint,  Custable  fraudulently concealed his ownership interest in the seven
penny  stocks  by  having  Suburban  Capital,  Wetzel,  Widen  and various other
individuals  engage  in  a  host  of  securities transactions on his behalf. The
Complaint  further  alleged  that  Custable,  Wetzel  and  Suburban Capital have
obtained  stock  through fraudulent Form S-8 registrations (normally intended to
allow  distribution  of  securities  to employees and consultants) and through a
scheme  to  counterfeit  nearly  half  of  the  outstanding  stock  in


                                       13
<PAGE>
Blagman  Media  International,  Inc., a company whose stock is quoted on the OTC
Electronic  Bulletin  Board.  The  Complaint alleged that Custable and the other
defendants  illegally  dumped  massive  quantities  of the improperly registered
shares  on  the  general  public.

     The  Commission's  Complaint also named as defendants four public companies
whose  stock  is  quoted  on  the  OTC Electronic Bulletin Board (Bulletin Board
Companies)  and  four  officers  of  the  Bulletin  Board  Companies.  The other
defendants  named in the Commission's Complaint are Thermo Elastic Technologies,
Inc.,  Wasatch Pharmaceutical, Inc., David Giles and Gary Heesch, who are two of
Wasatch's  officers,  Pacel  Corp.,  David  Calkins, who is an officer of Pacel,
Gateway  Distributors,  Ltd.,  and  Richard  Bailey,  an officer of Gateway. The
Complaint  also named Pine Services as a relief defendant. The Complaint alleged
that  Custable,  Suburban  Capital  and  Wetzel  violated  Section  17(a) of the
Securities  Act  of  1933  (Securities  Act) and Section 10(b) of the Securities
Exchange  Act  of  1934  (Exchange Act) and Rule 10b-5 thereunder. The Complaint
also  alleged that Custable violated Section 13(d) of the Exchange Act and Rules
13d-1  and  13d-2  thereunder by failing to report his ownership interest in the
penny  stocks  involved  in  his scheme. The Commission alleged in its Complaint
that Custable, Wetzel, Widen and Suburban Capital violated Section 5(a) and 5(c)
of the Securities Act. The Complaint also alleged that Wasatch, Heesch and Giles
violated  Sections  5(a), 5(c) and 17(a) of the Securities Act and Section 10(b)
of  the  Exchange Act and Rule 10b-5 thereunder, by engaging in several sham S-8
transactions  with  Custable  and  Suburban  Capital. The Complaint alleged that
ThermoElastic,  Gateway, Pacel, Bailey and Calkins violated Section 17(a) of the
Securities  Act  and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder
by  engaging  in fraudulent S-8 transactions with Custable and Suburban Capital.

     Apart from emergency relief, the Commission sought the entry of preliminary
and  permanent  injunctive  relief, disgorgement, civil penalties, a penny stock
bar  against  Custable,  Suburban Capital, Wetzel, Widen, Heesch, Giles, Calkins
and  Bailey  and an order barring Heesch, Giles, Calkins and Bailey from serving
as  an  officer  or  director  of  a  public  company.

     On  January 29, 2004, Judge Gottschall appointed a receiver, Mark Toljanic,
over  Suburban  Capital.  The  Receiver is vested with full and exclusive power,
duty and authority to administer and manage the business affairs, funds, assets,
and any other property of Suburban Capital. In addition, the Receiver is charged
with  identifying,  locating,  marshaling  and  safeguarding  all of the current
assets  of  Suburban  Capital as well as all assets in existence as of March 28,
2003  but  dissipated  thereafter.  The  Receiver  is  also to prepare discovery
responses  of  Suburban  Capital  and  take  whatever  actions  are necessary to
preserve  Suburban  Capital's  assets.

     On November 18, 2004, the Securities and Exchange Commission filed a Second
Amended  Complaint in the United States District Court for the Northern District
of  Illinois  against  Gateway and Richard Bailey. The Second Amended Complaint,
which  incorporates  all  of  the allegations in the March 28, 2003 civil action
referenced  above,  also  includes  new  allegations  as  to Gateway and Bailey.

     The  action  is  styled  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, ThermoElastic Technologies, Inc.,
Robert  Blagman,  Blagman Media International, Inc., and Brad Nordling, Case No.
03-C-2182  (Gottschall,  J.) and the additional allegations as to Richard Bailey
include  purported violations of Section 5(a) and (c) of the Securities Act. The
Securities and Exchange Commission seeks : entry of permanent injunctive relief,
disgorgement,  civil  penalties,  a  penny  stock bar against Custable, Suburban
Capital,  Wetzel,  Widen,  Heesch,  Giles  and  an  order barring Heesch, Giles,
Calkins  and  Bailey from serving as an officer or director of a public company.

     The  Commission  began  taking  numerous  depositions  in October 2004, and
Messrs.  Bailey  and Ternes were scheduled to be deposed in early May. Discovery
were  scheduled  to  close  on  June  21,  2005.

     The  attorneys  have  been  instructed to vigorously defend the claims made
against  Gateway  and  Bailey.

     Administrative  Subpoena by the Bureau of Consumer Protection of the Nevada
Attorney  general's  Office


                                       14
<PAGE>
     In  or  about December, 2003, the Company was served with an administrative
subpoena  issued  by  the  Bureau  of Consumer Protection of the Nevada Attorney
General's  Office. The subpoena sought documents in furtherance of that Bureau's
investigation  whether the Company violated federal or state consumer protection
regulations  and statutes in connection with the sale of "Y-motion", a topically
applied  yam  cream  product.

     At  about  the same time, the Company was served in Nevada with a virtually
identical  subpoena  issued by the Consumer Protection Division of the Office of
the  Attorney  General  of  Maryland  seeking the same documents. As a matter of
prudence, the Company has taken the position that the subpoena from the Maryland
Attorney General's office is void for lack of jurisdiction; nevertheless, in the
spirit  of  cooperation and candor, the Company has copied the Maryland Attorney
General's  office  with  its  responses  to  the  Nevada subpoena as a courtesy.

     The  representative  of  the Maryland Attorney General's office purports to
speak  for  a compact of attorneys general in 32-states and to have authority to
negotiate  issues  arising  from  the  sale  of  "Y-motion"  in  those  states.

     This  matter  involves  the questions whether sale of "Y-motion" is illegal
per  se  because it is considered a drug; whether the Company made health claims
in  connection  with its sale in violation of federal and state regulations; and
whether the Company had involvement with a questionable marketing scheme through
which  other  vendors  have  sold  similar  yam  cream  products.

     The  Company  has  sold "Y-motion" in many of the states represented by the
attorneys  general  compact.

     The Company has responded to the Nevada subpoena and to follow-up inquiries
by  producing  responsive  documents  in  its  possession,  with courtesy copies
provided  to  the  Maryland  Attorney  General's  office.  The  Company has also
retained  the services of a consultant who is well versed in the compliance with
relevant  state  and  federal  regulations  to  advise  the  Company.

     The Company is negotiating with the representative of the attorneys general
compact  to settle possible legal claims associated with its sale of "Y-motion."
The  Company's position is that it has and will comply with all application laws
and  regulations  in  its  operations,  and  will  take any necessary corrective
measures.

     A  settlement  was made with the Maryland Attorney General. On May 4, 2006,
Assurance  of Voluntary Compliance documents were signed. On June 14, 2006 final
judicial  approval  was  received on the signed documents. This includes a Civil
Penalty  of $100,000 and restitution to consumers of $25,000. If the amount paid
to  consumers  for  claims  is  less  than  $25,000,  the  Civil Penalty will be
increased  to the difference between $25,000 and the amount paid in restitution.
The  Civil  Penalty  is  payable  in  monthly  installments  of  $5,000  and the
restitution  is  to  be  paid  as  claims  are  presented.

ALLERGY RESEARCH GROUP/NUTRICOLOGY V GATEWAY DISTRIBUTORS, LTD., CASE NO.
A-487334

     Allergy  Research  Group/Nutricology v Gateway Distributors, Ltd., Case No.
A-487334,  District Court of Clark County, Nevada. This is an action against the
Company  on  an  unpaid  open account for goods and merchandise. The plaintiff's
Complaint  seeks  $168,070  from  the  Company.  The Company contests the amount
claimed  and  the  Company  has  made  a settlement with Allergy Research in the
amount  of  $50,000. Payment is to be made monthly in the amount of $5,000, with
an  initial payment of $10,000. The payments have been made and the debt is paid
in  full.

GLOBAL MEDIA CORP. GATEWAY DISTRIBUTORS, LTD. CASE NO., 06CV 13415

     There  has  been  a  breech of contract suit filed by Global Media Corp., a
company  located  in  New  York City, that alleges that a single meeting held on
January  28,  2004  resulted  in  a  series  of  agreements entered into by four
entities  for  licensing and marketing of hair removal product known as "Forever
Gone".  Among  those  agreement,  Plaintiff  alleges  that  defendant  Gateway
Distributors,  Ltd.  Agreed to pay $2,000,000 in Gateway stock for marketing and
materials  and  services.  Plaintiff  thus  claims  that  it assembled a team of
consultants,  provided  materials, work, labor and services to defendant Gateway
Distributors  and  that  Gateway  has  failed  to  issue  the  stock.


                                       15
<PAGE>
The  plaintiff  has  not  yet  identified the so-called agreements, consultants,
nominees  and  the  work  and  materials  allegedly delivered. The Plaintiff has
confirmed  that  the  so-called agreement with Gateway has never been reduced to
writing. Rather, council represented that its claim of an agreement with Gateway
is  based  upon  a  combination  of  verbal statements and miscellaneous  albeit
unidentified,  writings.

     Gateway  asserts  that  it  did  not  receive  the  consulting services and
materials  and  expects  the suit to be dismissed and is contemplating a counter
suit  against  Global  Media  Inc.

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 Gateway Common
Stock.  Gateway  stock originally traded under the symbol "GTWY.OB." On December
6,  2002,  the symbol changed from "GTWY.OB" to "GWYD.OB." On June 28, 2004, the
symbol  changed  from  "GWDL.OB"  to  "GWAD.OB." On September 3, 2004 the symbol
changed  from  "GWAD.OB"  to "GAWY.OB." On December 20, 2004, the symbol changed
from  "GAWY.OB"  to  "GAWD.OB."  As of March 28, 2005, the symbol was changed to
"GWDB.OB." On December 2006, the symbol changed from GWDB.OB to MHII.OB. 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 2005   HIGH    LOW
<S>                                     <C>     <C>
                    First Quarter         0.05  0.0001
                    Second Quarter       0.057  0.0001
                    Third Quarter        0.004  0.0001
                    Fourth Quarter       0.003  0.0002

                    CALENDAR YEAR 2006  High    Low
                    First Quarter       0.0007  0.0001
                    Second Quarter      0.0003  0.0001
                    Third Quarter       0.0002  0.0001
                    Fourth Quarter        0.08  0.0001
</TABLE>

     Marshall  currently  has  2,145,357,320 shares of common stock outstanding.
The  shares of common stock are held by approximately 74 stockholders of record.
The  number  of  record  holders  was  determined  from the records of Marshalls
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.


                                       16
<PAGE>
RECENT SALES OF UNREGISTERED SECURITIES

     During  the fiscal year ended December 31, 2006, Gateway sold 1,100,340,000
common  shares  in private transactions not involving a public offering.  All of
the  1,100,340,000  shares  bear  a  legend  restricting  their  disposition.

<TABLE>
<CAPTION>
        DATE     NAME                     LOCATION    # SHARES     CONSIDERATION
<S>              <C>                      <C>       <C>            <C>
     5/9/2006    Roger Pawson             USA       1,000,000,000     100,000.00
     12/13/2006  Troy R Ternes            USA              50,000       1,850.00
     12/13/2006  Penelope A Stowe         USA              50,000       1,850.00
     12/13/2006  Jamie Plante             USA              50,000       1,850.00
     12/13/2006  Ryan Nielsen             USA              50,000       1,850.00
     12/13/2006  Jessie Munoz             USA              10,000         370.00
     12/13/2006  Julie E Kofford          USA              10,000         370.00
     12/13/2006  Kristy M Wittman         USA              10,000         370.00
     12/13/2006  Marie A Woody            USA              10,000         370.00
     12/13/2006  Debra Call               USA              10,000         370.00
     12/13/2006  Stuart Call              USA              10,000         370.00
     12/13/2006  Joseph A Lasko           USA              10,000         370.00
     12/13/2006  Cody L Hanson            USA              10,000         370.00
     12/13/2006  Chelsea D Bailey         USA               5,000         185.00
     12/13/2006  Tonya Gerstenkorn        USA               5,000         185.00
     12/13/2006  Loralee Garcia           USA               5,000         185.00
     12/13/2006  Amy Stanton              USA               5,000         185.00
     12/13/2006  Argyle Ashlee            USA               5,000         185.00
     12/13/2006  Ranee Sanchez            USA               5,000         185.00
     12/13/2006  Joshua Dukes             USA               5,000         185.00
     12/13/2006  Ron Christopher Johnson  USA               5,000         185.00
     12/13/2006  Amy D Evans              USA               5,000         185.00
     12/13/2006  Trent R Morton           USA               5,000         185.00
     12/13/2006  Eric Allred              USA               5,000         185.00
     12/13/2006  Bradin S Hanson          USA               5,000         185.00
     12/14/2006  Roger Pawson             USA          99,900,000      39,038.97
     12/14/2006  Roger Pawson             USA             100,000          39.08

                 Total                              1,100,340,000     151,658.05
</TABLE>

     The  use  of  the  proceeds from the sale of our securities and issuance of
notes  were  for  general  working  capital  needs  and  the  repayment of debt.

     The  shares  were  issued  in  reliance upon an exemption from registration
pursuant  to  Section  4(2)  of  the  Securities Act or Rule 506 of Regulation D
promulgated under the Securities Act. All of the investors took their securities
for  investment  purposes  without  a  view  to  distribution  and had access to
information  concerning  us  and  our  business  prospects,  as  required by the
Securities  Act.  In  addition, there was no general solicitation or advertising
for  the  purchase  of  our  shares. Our securities were sold only to accredited
investors or sophisticated investors, as defined in the Securities Act with whom
we  had  a  direct  personal  preexisting  relationship,  and  after  a thorough
discussion.  Finally,  our  stock  transfer  agent  has  been  instructed not to
transfer  any  of  such  shares, unless such shares are registered for resale or
there  is  an  exemption  with  respect  to  their  transfer.

     All  purchasers  were  provided  with  access  to our filings with the SEC,
including  the  following:


                                       17
<PAGE>
-     Our  annual  report  to  stockholders for the most recent fiscal year, the
definitive  proxy statement filed in connection with that annual report, and, if
requested  by  the  purchaser  in writing, a copy of our most recent Form 10-KSB
under  the  Exchange  Act.

-     The  information  contained  in  an annual report on Form 10-KSB under the
Exchange  Act.

-     The information contained in any reports or documents required to be filed
by  us  under  Sections 13(a), 14(a), 14(c), and 15(d) of the Exchange Act since
the  distribution  or  filing  of  the  reports  specified  above.

-     A  brief  description  of  the  securities  being  offered, the use of the
proceeds from the offering, and any material changes in our affairs that are not
disclosed  in  the  documents  furnished.

STOCK OPTIONS

     During  the  fiscal  year  ended  December  31, 2006, Marshall issued stock
options  to  Gary Heath for 3,000,000,000 shares at an option price per share of
$0.0001  for  $300,000  in  cash.

     During  the  fiscal  year  ended  December  31, 2005, Marshall issued stock
options to Roger Pawson for 1,000,000,000 shares at an option price per share of
$0.0001  for  $100,000 in cash and to Donald Hansen for 690,000,000 shares at an
option  price  per  share  of  $0.0001  for  $69,000  in  cash.

SECTION 15(G) OF THE EXCHANGE ACT

     The  shares  of  Marshall  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 Marshall
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.

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


                                       18
<PAGE>
     The  following  table  provides information about purchases by Marshall and
affiliated  purchasers  during  the  quarter  ended  December 31, 2006 of equity
securities  that  are  registered  by  Marshall  pursuant  to  Section 12 of the
Securities  Exchange  Act  of  1934:

<TABLE>
<CAPTION>
               SMALL BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES

                    (a)              (b)             (c)               (d)
               --------------  ---------------  --------------  -----------------
                                                                     Maximum
                                                 Total number      number (or
                                                of shares (or      approximate
                                                    units)      dollar value) of
                                                 purchased as      shares (or
                                                   part of       units) that may
                Total number                       publicly          yet be
               of shares (or    Average price     announced         purchased
                   units)         paid per         plans or      under the plans
    Period       purchased     share (or unit)     programs        or programs
-------------  --------------  ---------------  --------------  -----------------
<S>            <C>             <C>              <C>             <C>
October 2006. .     -0-              -0-             -0-               -0-
November 2006 .     -0-              -0-             -0-               -0-
December 2006 .     -0-              -0-             -0-               -0-
               --------------  ---------------  --------------  -----------------
Total . . . . .     -0-              -0-             -0-               -0-
               ==============  ===============  ==============  =================
</TABLE>

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

FORWARD-LOOKING INFORMATION

     Much of the discussion in this Item is "forward looking." Actual operations
and  results  may  materially  differ  from present plans and projections due to
changes  in  economic  conditions,  new business opportunities, changed business
conditions,  and  other  developments. Other factors that could cause results to
differ  materially  are  described  in Marshalls filings with the Securities and
Exchange  Commission.

     There  are  several  factors  that  could cause actual results or events to
differ  materially  from  those anticipated, and include, but are not limited to
general  economic,  financial and business conditions, changes in and compliance
with  governmental  laws  and  regulations,  including various state and federal
environmental  regulations,  the  ability  to  obtain  additional financing from
outside  investors and/or bank and mezzanine lenders and the ability to generate
sufficient  revenues  to cover operating losses and position Marshall to achieve
positive  cash  flow.

     Readers  are  cautioned  not to place undue reliance on the forward-looking
statements  contained herein, which speak only as of the date hereof. Management
believes  the information contained in this Form 10-KSB to be accurate as of the
date  hereof.  Changes  may occur after that date. Marshall will not update that
information  except  as  required  by  law  in  the  normal course of its public
disclosure  practices.

MANAGEMENT'S PLAN OF OPERATION

STRATEGY

     Marshall  plans  to  continue capitalizing on its 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. The
Right  Solution  Gateway,  one  of  the  main  subsidiary  of  Marshall Holdings
International,  Inc.,  is  committed to expanding its 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


                                       19
<PAGE>
other  Company  products.  The  Right  Solution Gateway has made the decision to
concentrate on its top selling products that focus on three things: 1) cleansing
the  body  from  toxins;  2) feeding the body on a cellular level; and 3) 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 products will
continue  to  grow.

     Expansion  of product offerings through new marketing channels through it's
newly  acquired  subsidiary  Marshall  Distributing, Inc. Marshall Distributing,
Inc. has sold into over 3,000 health food stores, pharmacies, clinics and online
retail  web-site  stores.  Through  its  diverse  product offering, Marshall has
access  to  these  stores  and  can  expand  sales  through  these  channels.

     Mergers  and Acquisitions. Marshall's business plan includes growth through
mergers and acquisitions. Marshall intends 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  the  Company sales market.
Marshall  has  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. 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. Marshall's business plan for 2007 is to focus
on  growth  in  the  USA  and  places  emphasis  on international expansion on a
wholesale  basis.  Marshall  believes  there  are numerous additional markets in
which  its  products may prove successful. Marshall evaluates new markets based,
in  part,  on  Marshall's  ability to create a distributor base in the potential
markets  or  markets for the product wholesale. In determining when and where to
open  new  markets,  Marshall  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  Marshall intends to expand into new markets, there can be no assurance
that  Marshall  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
Marshall's  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. Marshall is 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. Marshall will continue to
seek  increased  sales  opportunities  through  its  network marketing system by
utilizing  extensive  training  and  motivational  programs.  The Right Solution
Gateway  will also hold regional meetings throughout the United States. Marshall
has  hired  Stuart Graves and other network marketing leaders in the industry to
run  the training of the company. The starting kits have training material along
with  product  which  will allow the new distributor to get started quicker. The
Company  continues  to  spend  a  significant  amount  of  money and time on the
internet  website.  Management feels that the support of the world wide web is a
core  competency  to  the  success  of  its  business,  unlike ten years ago. In
addition,  Marshall  will  continue to conduct conferences, seminars, and one on
one  training.

     Marshall has acquired the licensing rights to Jeunesse by Francois from the
Chelsea  Collection.  Jeunesse  by Francois is a seventy five year old skin care
formula  from Romania which was originally derived from the G-H-3 formula of Dr.
Anna  Aslan. Mr. Francois Vautour brought the formula to America and updated the
product  based upon newer technologies in skin care. An infomercial was produced
to  introduce  the  new  product  which  hasn't  received  the desired marketing
response.  The  product  is  being  offered  to  the distributors in the network
marketing  arena,  and plans for the future are to wholesale the product through
retail  chains  under  the  G-H-3 lines. We hope to expand the customer base and
increase sales. Two thirds of The Chelsea Collection is owned by the officers of
Marshall.  In the agreement the Company has with Chelsea Collection, the Company
will  have  the  opportunity to acquire the same Francois Vautour skin care line
from  Chelsea  Collection  for  virtually  the  same  price and terms as Chelsea
Collection  is  buying  it  from  Francois  Vautour.


                                       20
<PAGE>
     Marshall  extended  its agreement with PT. Mahakam Beta Farma in Indonesia.
They  are  purchasing  the  Body  Gard  product  and have it in their pharmacies
throughout  the  country.  PT.  Mahakam Beta Farma is working on approval by the
Indonesian  government  for  the  future  distribution  of  SuperFood.

PRODUCTS

     The  Right  Solution  Gateway markets and distributes different nutritional
and/or health and skin care products. The nutritional/health 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.

              THE RIGHT SOLUTION GATEWAY TOP SELLING PRODUCTS ARE:

-     Body  Gard  with  Lactoferrin

-     Femme

-     Fulvic  Factor

-     Lifetonic

-     LifeZymePlus

-     Master  Formula  Powder

-     Natural  Immunity

-     New  Life  Corrective  A,  B  and  C

-     Superfood  (Powder  and  Capsules)

-     Vibrant  9  Skin  Care/Jeunesse  by  Francois  Products

     Marshall  Distributing  carries over 6,000 natural products and supplements
comprising  over  150  manufactures.  Our  unique product mix consists of a wide
variety of natural products ranging from popular herbs and health supplements to
body  care  and  fitness.  Marshall  Distributing offers complete lines of teas,
herbs,  vitamins,  health  foods,  minerals,  homeopathic  remedies,  natural
cosmetics,  skin  care,  pet  care,  cold & wellness products, weight management
products,  and  much  more.

     Marshall Distributing only carries top branded natural products and because
of  its  long  standing in the market as a natural product distributor can offer
many  popular  lines that are now unattainable from other sources. Just a few of
those  manufacturers  are  names  such  as  Nature's  Way,  Twin  Labs,  Dr.
Christopher's,  Celestial  Seasoning,  Natrol, Nature's Answer, Spectrum, Xlear,
American  Health,  Hyland's,  and  many  more.

SERVICES

     Product  Return Policy for Retail Customers. Services Product Return Policy
for Retail Customers. The Right Solution Gateway has a 100% money-back guarantee
on  all  of  its 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 The Right Solution Gateway. Upon receipt of the
container  and  a  copy  of the customer's retail sales receipt with their name,
address  and  telephone  number, The Right Solution Gateway will promptly send a
replacement  to  the  Team Member. The Right Solution Gateway does not make cash
refunds. The Right Solution Gateway's product return policy for retail customers
has  been  approved  by  the  Direct


                                       21
<PAGE>
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.

     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 a refund if they are in the original packaging, factory sealed, and
in resalable condition. Shipping expenses are not eligible for refund. The Right
Solution  Gateway's  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.

DISTRIBUTION AND MARKETING

     The  Right  Solution Gateway's 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  network  marketing  companies.  The Right Solution Gateway calls
their distributors "Team Leaders". For this document they will be referred to as
distributors. The distributors purchase products from The Right Solution Gateway
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. The Right
Solution  Gateway  believes that its 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 its
distributors work on a part-time basis. The Right Solution Gateway believes that
its network marketing system is ideally suited to marketing its products because
ongoing personal contact between consumers and distributors strengthens sales of
such  products.

     Within  the  United States, distributors may earn profits by purchasing The
Right  Solution Gateway's products at wholesale prices (which are discounted 40%
from  suggested retail prices) and selling The Right Solution Gateway's 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 downline.

     To  become  a  distributor,  a  person  must  be  enrolled  by  an existing
distributor,  pay  an  annual  fee  (which  is  currently  $15.00  or first time
enrollees  may  join  over  the world wide web at no cost), and be placed into a
Tracking Center, which is a point from which The Right Solution Gateway "tracks"
the  sales  volume  of  the  distributor and the sales volume of a distributor's
downline  organization.  Each  distributor  can  have  three  legs  in  their
organization and commissions are based on volume requirements of these legs. The
strongest performing leg is the 1st leg, the second strongest is the 2nd 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 qualifying volume of
The  Right Solution Gateway's products every month. All distributors are allowed
to  participate  in  The  Right  Solution  Gateway's  growth  by  sponsoring new
distributors.

     Management  believes  that the more new enrollees use the internet, overall
costs  will  be  substantially  reduced.

     The  Right Solution Gateway computes the wholesale volumes purchased at the
close  of each business day during the month. Commissions are paid monthly based
on  the  qualifying  level.


                                       22
<PAGE>
     Additional  bonus  money  can be earned then paid weekly, 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 enrolled distributor. The amount of
the  Right  Start  Bonus  will  be  50%  of  the  new distributor's first order.

     The  Right  Solution Gateway maintains a computerized system for processing
distributor  orders  and  calculating distributor commission and bonus payments,
which  enables  it  to  remit  such payments to distributors. The Right Solution
Gateway  believes that prompt remittance of commission is vital to maintaining a
motivated  network  of  distributors  and  that its distributors' loyalty to The
Right Solution Gateway has been enhanced by The Right Solution Gateway's history
of  consistently  making  commission  and  bonus  payments on a scheduled basis.

     Internet. The Right Solution Gateway maintains a site on the World Wide Web
at  "www.rightsolution.com."  The Right Solution Gateway has enhanced the system
to  allow  new  distributor  signups,  on-line ordering and volume checks by the
distributors.

     Marketing.  Each distributor is responsible for sales of The Right Solution
Gateway's  product within his or her downline. The Right Solution Gateway relies
on  word  of  mouth  from  previous  or  existing  customers  for  its  primary
advertising.  The  Right  Solution  Gateway has developed sales materials, which
have  been  professionally  prepared  by  a  graphic  designer  and reviewed for
regulatory  compliance. These sales materials include product descriptions. Most
of  the  information  that  a distributor needs to do his or her business can be
found  on  the  website.

     Sponsoring.  The  Right  Solution  Gateway has established a system for the
enrolling of new distributors. The Right Solution Gateway prepares communication
and  educational  training materials for distributors to assist in the enrolling
of  new  distributors.  The  Right  Solution  Gateway  also  engages  in  weekly
conference  calls  with  distributors  and  sends newsletter email blasts to its
distributors.  The  Right Solution Gateway has an established advisory board for
assistance  and  consultation  in  connection  with  enrollment  matters.

     Marshall  Distributing  Sells  it's  products  through  health food stores,
pharmacies, and medical offices around the country not to mention doing complete
order  fulfillment  for many up and coming on-line stores. Marshall Distributing
carries  over  6,000  natural  products  and  supplements  comprising  over  150
manufactures.  Our  unique  product  mix  consists  of a wide variety of natural
products  ranging  from  popular  herbs  and health supplements to body care and
fitness.  Marshall  Distributing offers complete lines of teas, herbs, vitamins,
health  foods, minerals, homeopathic remedies, natural cosmetics, skin care, pet
care,  cold  &  wellness  products,  weight  management products, and much more.

     Product  Distribution.  Marshall's  products are distributed to all markets
from  Marshall's  warehouse  located  in  Las Vegas, Nevada or the Distributions
Center  in  Salt  Lake  City,  Utah.

COMPETITION

     The  Right  Solution  Gateway is 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 The Right Solution
Gateway's  competitors  are substantially larger and have available considerably
greater  financial resources than Marshall. The Right Solution Gateway's ability
to  remain  competitive  depends,  in  significant  part,  on The Right Solution
Gateway's  success in enrolling and retaining distributors through an attractive
compensation plan and other incentives. The Right Solution Gateway believes that
its  bonus  availability  program,  recognition  and  rewards program, and other
compensation  and  incentive  programs provide its distributors with significant
earning  potential.  However,  there can be no assurance that The Right Solution
Gateway's  programs  for  recruitment  and  retention  of  distributors  will be
successful.

     The  multilevel marketing plan "Every One Wins" is designed to expedite the
possibility  of earning monthly incomes while the distributor builds a business,
where  most  companies  take  months  for  their  distributors  to  realize


                                       23
<PAGE>
comparable  incomes.  The  average  person  in  this  industry  can  start  as a
distributor  for  The Right Solution Gateway and realize incomes rather quickly.

     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. The Right Solution Gateway expects to
continue  to face substantial competition in its 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  The  Right  Solution  Gateway's  existing and potential
competitors  have  greater  financial,  marketing,  distribution,  and  research
capabilities  than  Marshall.  The  performance  of  Marshall will depend on its
ability to develop and market new products that can gain customer acceptance and
loyalty,  as well as its ability to adapt its product offerings to meet changing
pricing  considerations  and  other  market  factors. The Right Solution Gateway
attempts  to  differentiate  itself from competitors by adhering to its "mission
statement"  which  reads  as  follows:

     "The  Right  Solution will distribute the finest life-enhancing products in
the  world.  Through  effective  leadership,  management  and  entrepreneurial
marketing,  together will provide an opportunity to all Team Members, customers,
employees and Stockholders to earn a fair profit on their investment of time and
or  money."

PRODUCT MANUFACTURING AND DEVELOPMENT

     Marshall  anticipates  continuing  to  expand  its 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,
Marshall's  executives,  staffs, consultants, and outside parties. In advance of
introducing  products  into  its markets, Marshall consults its Medical Advisory
Board,  comprised  of  Dr.  Steven  Kozmary,  M.D.,  Betty Kamen, Ph.D., and Dr.
Michael Hartman for advice. In addition, local counsel and other representatives
are  retained  by  Marshall  to  investigate product formulation matters as they
relate  to  regulatory  compliance  and  other  issues.

     The  Company  brought  on  a full time Compliance Officer in 2004 to assure
that  all  of  its  correspondence, marketing material, and the website meet all
regulations  and  compliance  requirements.

     All  of Marshall's products are provided by outside companies. Marshall has
agreements  in  place  with  all  of  its  current  manufactures  that  assure
availability  for  it  anticipated  growth.  Marshall's  ownership  of  product
formulations  and  trademarks  for  substantially  all of Marshall's nutritional
products  gives  Marshall  a  great  deal  of  protection  from  competition.

     Marshall's  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  its  own  ability and the ability of its
manufacturers  to  develop  new  products  and reformulate existing products for
introduction  into  Marshall's  markets.  Since 1998, Marshall has significantly
expanded  its  in-house product research and development and product formulation
staff,  which  now  consists  of  an  employee of Marshall, its Medical Advisory
Board, outside advisor, and manufacturers, who are increasingly involved in such
activities.

     Marshall owns the proprietary rights to substantially all of its health and
nutritional  supplements,  formulations  and  trademarks  for The Right Solution
subsidiary.  Marshall  has  formed  several  alliances with its manufacturers to
assure,  among  other  things,  that the products are organically grown and that
inventory  levels  will  remain  constant.


                                       24
<PAGE>
INSURANCE

     Although Marshall does not engage in the manufacture of any of the products
it  markets  and  sells,  Marshall could be exposed to product liability claims.
Marshall  has  not  had  any  such claims to date. Although Marshall maintains a
limited amount of liability insurance, each of Marshall's manufacturers provides
additional  insurance  of  at least two million dollars covering products, which
Marshall  sells.  There  can, however, be no assurance that Marshall will not be
subject  to  claims  in  the future or that available insurance coverage will be
adequate.  A  partially  or  completely  uninsured  claim  against  Marshall, if
successful  and of sufficient magnitude, would have a material adverse effect on
Marshall.

TRADEMARKS

     Marshall  has  received  federal  trademark  registration  for  THE  RIGHT
SOLUTION(R).  Marshall  intends  to  continue to seek trademark protection for a
number  of  the  products  and  brand  names under which Marshall's products are
marketed,  where applicable. There can be no assurance that such protection will
be  obtained.  Marshall  will  be  required  to rely upon common law concepts of
confidentiality and trade secret laws to protect its product formulations. There
can  be no assurance that the foregoing will protect the formulations or provide
adequate remedies for Marshall in the event of unauthorized use or disclosure of
such formulations, or that others will not be able to independently develop such
formulations.  Marshall's  product formulations are not protected by patents and
are  generally  not  patentable.  Marshall  intends  to  obtain  international
trademarks  as  Marshall  enters  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. Marshall considers its trademarks
and  trade  names  to  be  an  important  factor  in  its  business.

GOVERNMENT REGULATION

     Marshall  is  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  Marshall's  products,  (ii) product claims and advertising (including direct
claims  and  advertising  by  Marshall  as  well  as  claims  and advertising by
distributors,  for  which  Marshall  may  be held responsible), (iii) Marshall's
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 Marshall to collect the taxes and maintain
appropriate  records.

PRODUCTS

     The  formulation, manufacturing, packaging, storing, labeling, advertising,
distribution,  and  sale of Marshall's 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.
Marshall's  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
Marshall.  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.
Marshall  does  not  anticipate  that  the promulgation of any GMP's for dietary
supplements  would  have  a  material  impact  on  Marshall.

     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, Marshall believes, 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


                                       25
<PAGE>
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 Marshall are classified as dietary
supplements under the FFDCA. In addition, the adoption of new regulations in any
of Marshall's markets, or changes in the interpretation of existing regulations,
could  have  a  material  adverse effect on Marshall. 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. Marshall was required to
revise  a  substantial  number  of  its product labels by the effective date. In
addition,  Marshall  is  required  to  continue  its ongoing program of securing
substantiation  of  its  product  performance claims and of notifying the FDA of
certain  types  of  performance  claims  made  for  its  products.

     In  addition,  in certain markets, including the United States, claims made
with respect to dietary supplements or other products of Marshall 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 Marshall's
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 Marshall's
products  caused them to fall within the scope of OTC monographs, Marshall 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 Marshall
could  do  so  effectively,  or that any such changes would not adversely affect
sales  and  marketing  of an affected product. Marshall's substantiation program
involves  compiling  and  reviewing  the  scientific literature pertinent to the
ingredients  contained  in  Marshall's  products.

     As  a  marketer of food and dietary supplements and other products that are
ingested  by  consumers, Marshall is subject to the risk that one or more of the
ingredients in its 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. Marshall does not market
either  of  its products containing Ma Huang (Trim Easy Trim Easy Plus) with any
of  these  claims.  On  June  4,  1997, the FDA issued a 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.

     Marshall  has  discontinued  its  products  containing  Ma  Huang  with the
restrictions  on  this  ingredient.  While  Marshall  believes that its products
containing  Ma  Huang  could  be  reformulated  and  re-labeled, there can be no


                                       26
<PAGE>
assurance in that regard or that reformulation and/or re-labeling would not have
an  adverse  effect  on  sales  of  such  product.

     Marshall  has also discontinued its product containing Natural Progesterone
with  the  restrictions  on  this  ingredient.  While Marshall believes that its
product  containing  Natural  Progesterone 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 Marshall 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  there  under,  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
Marshall's  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  are  utilized  by Marshall. While Marshall has not been the target of FTC
enforcement  action  for  the  advertising  of  its  products,  there  can be no
assurance  that  the  FTC  will  not  question  Marshall's  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 Marshall, to increased
surveillance  to  ensure  compliance  with the principles set forth in the guide

     The  Right  Solution Gateway's principal suppliers are American Nutritional
Corporation,  Best  Formulations, Botanical Blessings, Nutranomics, Paragon Labs
and  Robinson  Pharma. Lead times for product delivery range from 4 to 10 weeks.

     Marshall  Distributing  owns  the  distribution  rights  to  distribute
approximately 150 different manufacturers lines of products including over 6,000
different  products.  The  manufacturers  include  Twin  Labs,  Natures Way, Dr.
Christophers,  Xlear,  Natrol,  Schiff, American Health, Derma-e, Hyland's, Hain
Celestial  Group,  Spectrum,  Natures  answer  and  many  more.

     Marshall  has the exclusive licensing agreement with The Chelsea Collection
for  Jeunesse  by  Francois  Products  as  well  as  G-H-3.

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

     In  markets outside the United States, including Japan, prior to commencing
operations  or  marketing  its  products,  Marshall  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
Marshall's products for the market or may be unavailable with respect to certain
products  or  product  ingredients. Marshall must also comply with local product
labeling  and  packaging  regulations  that  vary  from  country  to  country.

     Marshall  is  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  its  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


                                       27
<PAGE>
ingredients,  safety  or  usefulness.  Any or all such requirements could have a
material  adverse  effect  on  Marshall's  results  of  operations and financial
condition.

NETWORK MARKETING SYSTEM

     Marshall's  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, Marshall obtains regulatory approval of its network marketing system or,
where such approval is not required the favorable opinion of local counsel as to
regulatory  compliance.  However,  Marshall remains subject to the risk that, in
one  or  more  of  its markets, its marketing system could be found not to be in
compliance with applicable regulations. Failure by Marshall to comply with these
regulations  could  have  a  material adverse effect on Marshall in a particular
market  or  in  general.

     Marshall  is  also  subject  to the risk of private party challenges to the
legality of its 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.  Marshall  believes  that  its  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  Marshall's  marketing  system  and  that  described in the
Omnitrition  case.  Further,  it  is  an  ongoing part of Marshall's business to
monitor  and  respond to regulatory and legal developments, including those that
may  affect  its  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
Marshall's  network  marketing  system  could  have a material adverse effect on
Marshall.  Among  other  things,  such a determination could require Marshall to
make modifications to its 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 Marshall, could have a material adverse
effect  on  Marshall.

     The  Right  Solution Gateway has had correspondence with the State of South
Dakota  which  indicates  that the multilevel marketing program does not violate
any  portion  the  South Dakota Business Opportunity Act. The company is free to
offer  and  sell its business opportunity in South Dakota and is not required to
register  with  the  state.

COMPLIANCE PROCEDURES

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

     In  1996, Marshall 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 its
manuals, seminars and other training programs and materials, Marshall emphasizes
that  distributors  are prohibited from making therapeutic claims for Marshall's
products.

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


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<PAGE>
     In  order  to  comply  with regulations that apply to both Marshall and its
distributors,  Marshall  conducts  considerable  research  into  the  applicable
regulatory  framework prior to entering any new market to identify all necessary
licenses  and  approvals  and applicable limitations on Marshall's operations in
that  market.  Marshall devotes substantial resources to obtaining such licenses
and approvals and bringing its operations into compliance with such limitations.
Marshall  also  researches laws applicable to distributor operations and revises
or  alters  its distributor manuals and other training materials and programs to
provide  distributors  with  guidelines for operating a business, marketing, and
distributing  Marshall's products and similar matters, as required by applicable
regulations  in  each  market.  Marshall,  however,  is  unable  to  monitor its
supervisors  and  distributors  effectively  to  ensure  that  they refrain from
distributing  Marshall's  products in countries where Marshall has not commenced
operations,  and  Marshall  does  not  devote  significant  resources  to  such
monitoring.  In  the  event  that  Marshall discovers 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 Marshall believes that it and its
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  Marshall is subject may be influenced by public attention directed at
Marshall,  its  products  or  its  network  marketing  system, so that extensive
adverse  publicity  about Marshall, its products or its network marketing system
may  result  in  increased  regulatory  scrutiny.

     It  is  an ongoing part of Marshall's business to anticipate and respond to
such  new  and changing regulations and make corresponding changes in Marshall's
operations  to  the  extent  practicable.  However,  while  Marshall  devotes
considerable resources to maintaining its compliance with regulatory constraints
in  each  of its markets, there can be no assurance that Marshall would be found
to  be  in  full compliance with applicable regulations in all of its 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 Marshall's
operations  are not in full compliance. Such assertions or the effect of adverse
regulations  in  one market could negatively affect Marshall 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 Marshall in a particular
market  or  in  general.  Furthermore, depending upon the severity of regulatory
changes  in  a  particular  market and the changes in Marshall's operations that
would  be  necessitated  to  maintain  compliance,  such changes could result in
Marshall  experiencing  a  material  reduction  in  sales  in  such  market  or
determining  to  exit  such  market  altogether.  In  such event, Marshall 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 Marshall's business and
results  of  operations  either  in  the  short  or  long  term.

YEAR 2006 COSTS AND CHANGES IN FINANCIAL CONDITIONS

     Sales for the year ended December 31, 2006 Increased 2,987,000 to 3,757,000
from  sales  of  $770,000  for  the year ended December 31, 2005, an increase of
388%.  The  increase  in  sales was primarily due to the acquisition of Marshall
Distributing  wholesale  natural  products  distributor  and  the  activation of
Marshall  Corporate  Administration,  Inc,  formerly  Gateway  Corporate
Administration,  Inc

     Gross  profit  of  $2,712,000  for  the  year  ended December 31, 2006, was
$2,113,000,  or 352% higher than the gross profit of $599,000 for the year ended
December  31,  2005. As a percentage of sales, gross profit for 2006 as compared
to the same period in the prior year decreased approximately 6% from 78% to 72%.
The  decrease in gross profit as a percentage of sales primarily resulted from a
lower  margin  sales  from  Marshall  Distributing.

SALES, GENERAL AND ADMINISTRATIVE EXPENSES

     Selling,  general,  and  administrative expenses, as a percentage of sales,
were  66%  for  2006  as  compared to 172% for the same period in 2005. Selling,
general,  and  administrative  expenses  for the period ended December 31, 2006,
increased  $1,145,000  ,  187%, to $2,468,000 from $1,324,000 in the year ending
December  31,  2005.  The  increase  in  these  expenses resulted primarily from
increase  in  the  amount  of  outside  consulting  paid  with  stock  to


                                       29
<PAGE>
certain  consultants  hired  to  assist  Marshall  with  acquiring  additional
operations,  real  estate,  product  research  and  marketing  plans.

LOSSES

     Marshall had a net loss of $3,735,000 for the year ended December 31, 2006,
compared  to a net loss of $904,000 in 2005. Marshall had a loss from operations
of  $3,150,000 in 2006 compared to a loss from operations of $2,316,000 in 2005.
Marshall's  substantial  increase  in losses from operations and net losses were
attributable  to  a significant increase in payments to consultants both in cash
and  in  stock  for  services as reported in selling, general and administrative
expenses.

LIQUIDITY AND CAPITAL RESOURCES

     Marshall's  working capital needs and capital expenditure requirements have
increased  as  a  result  of  increased  cost  associated  with  hiring  outside
consultants.  Required  working capital and capital expenditure requirements are
expected  to  be  met  from  cash  flows  from  operations,  potential  future
acquisitions,  borrowings,  and  the  sale  of Marshall's equity securities. For
fiscal  year 2006, Marshall's working capital increased $99,000, or 224% deficit
decrease to a positive $388,000 at December 31, 2006 from a positive $289,000 at
December  31,  2005. This increase was primarily attributable to the acquisition
of  Marshall  Distributing  that  had a substantial amount in inventory. For our
purposes,  we  define working capital as Accounts Receivable plus Inventory less
Accounts  Payable.

     For  fiscal  year  2006, Marshall's operations used cash flow of $1,675,000
compared  to  net  cash  provided  of  $124,000 for the previous fiscal year, an
increase  in  cash  used  of  $1,799,000.

     Marshall  had  a  cash  flow  used by investing activities of $6,513,000 in
2006,  as  compared  to  a  positive  cash  flow  of  $2,414,000  in  2005.

     Marshalls stockholders equity (deficiency) decreased $776,000 to a positive
stockholders  equity  of  $387,000  in  2006  from  $1,163,000  in  2005.

     Cash,  cash  equivalents  and  marketable  securities  totaled  $61,000  at
December  31,  2006  compared  to  $93,000  at  December 31, 2005, a decrease of
$32,000.

     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. The Company continues 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 by the Company in order to
establish  and  maintain  its  reporting status with the Securities and Exchange
Commission.  In addition, the Company intends to pursue, as part of its business
strategy,  future  growth through acquisitions which may involve the expenditure
of  significant  funds.  Depending  upon  the  nature, size and timing of future
acquisitions,  the  Company  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 the Company,
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.

     Marshall  relied  heavily  on  the  issuance  of  its  common  stock to pay
consultants and other professionals pursuant to Form S-8 registration statements
during 2005 and 2006. The result of such issuances was reverse stock splits, one
in  the first quarter of 2005 for 500 to 1 and one in the fourth quarter of 2006
for  1000  to  1. In 2003 an Employee Stock Incentive Plan (ESIP) was set up and
through  stock  issues to the public, Marshall raised $237,000 in 2005 and $0 in
2006 in cash to provide the vehicle to finance activities. Based upon Marshall's
current  financial  situation  and  intention  of  procuring  and  marketing new
products,  it  is likely that Marshall may rely on the issuance of its shares to
pay  consultants  and  other  professionals  during  2007.


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<PAGE>
CRITICAL ACCOUNTING POLICIES

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

STOCK-BASED COMPENSATION

     In  December  2004,  the  FASB issued SFAS No. 123R - Share -Based Payment.
This  statement  applies  to all awards after the required effective date and to
awards  modified,  repurchased, or cancelled after that date. The effective date
for  public  entities that file as small business issuers is as of the beginning
of  the  first interim or annual reporting period that begins after December 15,
2005.

     This  statement  requires  that  the  cost  resulting  from all share-based
payment  transactions  be recognized in the financial statements. This statement
establishes  fair  value  as  the  measurement objective in accounting for share
based payment arrangements and requires all entities to apply a fair value based
measurement  method  in  accounting  for  share-based  payment transactions with
employees  except  for  equity  instruments  held  by  employee ownership plans.

     The  Company  has  appropriately  adopted  SFAS  No.123R  and  applies  the
principles  and  guidance therein by recognizing all share based compensation in
the  financial  statements  using  the  fair  market  value at the grant date to
determine  the  expense  associated  with  the  services  rendered.

RECENT ACCOUNTING PRONOUNCEMENTS

     The  Company adopted SFAS No. 142. Under the new rules, the Company 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. Based upon the information at the Company's
disposal,  Management  elected  not to adjust the value of goodwill after making
the  annual  review.  In  the  future  if there is a justification for making an
adjustment,  the  Company  will  do  so.

     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 the 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. The Company expects that the provisions of SFAS No. 143 will not have
a  material  impact  on  the  consolidated  results  of operations and financial
position.  We  adopted  SFAS  No.  143  effective  January  1,  2005.

     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


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<PAGE>
Company adopted SFAS No. 144 effective January 1, 2002. The adoption of SFAS No.
144  had  no  material  impact  on  the  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. The Company does not expect the adoption to have a material impact
to  the  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. The
Company  does not expect the adoption to have a material impact to the financial
position  or  results  of  operations.

     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 the financial position or results of operations as the
Company  has  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,


                                       32
<PAGE>
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  the  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 the results of
operations  or  financial  position.

OFF-BALANCE SHEET ARRANGEMENTS

     The Company does not have any off-balance sheet arrangements.

ITEM 7.     FINANCIAL STATEMENTS.

     The  financial  statements  and  related notes are included as part of this
report as indexed in the appendix on page F-1 through F-19.

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

     As  reported  in the Current Report on Form 8-K filed on March 28, 2007, on
February  27,  2007,  the  Company  terminated  Lawrence Scharfman, CPAPC as the
principal  accountant  engaged  to  audit  the  Company's  financial statements.
Scharfman  was  terminated,  effective  as  of  February  27,  2007.

     Lawrence  Scharfman,  CPAPC reports on the Company financial statements for
the  year  ended  December  31, 2005 and did not contain an adverse opinion or a
disclaimer  of  opinion,  and  were not qualified or modified as to uncertainty,
audit  scope,  or accounting principles, except that Lawrence Scharfman's report
for  the  year  ended  December  31,  2005  raised  substantial  doubt about the
Company's  ability  to continue as a going concern. Lawrence Scharfman CPAPC was
not  engaged  as  the  Company's  independent auditor for the fiscal years ended
December 31, 2004 or 2003. Madsen & Associates, CPA's Inc. served as the Company
independent  auditors  for  the  fiscal  year  ended December 31, 2004 and 2003.

     The  decision  to  change  accountants  was recommended and approved by the
Company's  Board  of  Directors.

     During  the  recent  fiscal  year and any subsequent interim period through
February  27,2007, there have not been any disagreements between us and Lawrence
Scharfman  CPAPC  on any matter of accounting principles or practices, financial
statement  disclosures,  or auditing scope or procedure, which disagreements, if
not  resolved to the satisfaction of Lawrence Scharfman CPAPC, would have caused
it  to  make  reference to the subject matter of the disagreements in connection
with  its  reports  on  the  financial  statements  for  such  periods.

     During  the  Company's  most  recent fiscal year and any subsequent interim
period  prior  to  the engagement of Madsen & Associates, neither Management nor
anyone  on  the  Company's behalf consulted with Madsen regarding either (i) the
application  of  accounting  principles  to  a  specified  transaction,  either
contemplated  or  proposed,  or  the


                                       33
<PAGE>
type of audit opinion that might be rendered on Madsen's financial statements or
(ii) any matter that was either the subject of a "disagreement" or a "reportable
event,"  as  those  terms are defined in Regulation S-K, Items 304(a)(1)(iv) and
304(a)(1)(v).

     We  provided  Lawrence  Scharfman  CPAPC  with  a  copy  of the disclosures
contained in the Company's Current Report on Form 8-K, filed with the Commission
on  March  28, 2007. Lawrence Scharfman CPAPC responses were filed as an exhibit
to  the  Company's  Form  8-K,  filed  with  the  Commission  on March 28, 2007.

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 Marshall in
the  reports  that  are  filed or submitted under the Exchange Act are 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 Marshall in the reports that
are filed under the Exchange Act are accumulated and communicated to management,
including  the  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, Marshall conducted an evaluation, under
the  supervision  and  with the participation of the chief executive officer and
chief  financial  officer, of the disclosure controls and procedures (as defined
in  Rules  13a-15(e)  of  the Exchange Act). Based on this evaluation, the chief
executive  officer  and  chief  financial  officer  concluded  that  Marshall's
disclosure  controls  and  procedures  are  effective to ensure that information
required  to  be  disclosed  by  Marshall in reports that are filed or submitted
under  the  Exchange Act are 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 Marshall internal controls, which are included within disclosure controls and
procedures,  during  the  most  recently  completed  fiscal  quarter  that  has
materially  affected,  or  is  reasonably  likely to materially affect, Marshall
internal  controls.  The  Chief  Financial  Officer  has changed from Richard A.
Bailey  to  Jamie  Plante. Mr. Plante accepted the position/title in addition to
his  responsibilities  with  Marshall  Distributing,  Inc.

ITEM 8B.     OTHER INFORMATION.

     None.

                                    PART III

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

The Company's directors and executive officer are:

<TABLE>
<CAPTION>
      NAME         AGE                     POSITION                      POSITION HELD SINCE
-----------------  ---  -----------------------------------------------  -------------------
<S>                <C>  <C>                                              <C>
Richard A. Bailey  50       President, Chief Executive Officer and              1993
                              Chairman of the Board of Directors
Florian R. Ternes  57   Director, Chief Operating Officer and Secretary         1995

W. Jamie Plante    38               Chief Financial Officer                     2006
</TABLE>


                                       34
<PAGE>
     Marshall executive officers are elected annually by the board of directors.
There  are  no  family relationships among the directors and executive officers.

     Richard  A. Bailey has served as the Chairman, Chief Executive Officer, and
President  since  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 the 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 Marshall. Mr. Bailey will serve as director until the
next  annual  shareholders  meeting.

     Florian R. Ternes has served as Chief Operating Officer and Secretary since
1998.  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 Marshall 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. After assisting in
completing  its  successful public offering, he resigned in January 1998 to join
Marshall  on  a  full-time  basis.

     W.  Jamie  Plante CPA has served as Chief Financial Officer since mid 2006.
He  began  his  career  in  public  accounting  graduated from the University of
Pacific  in 1993 Summa Cum Laude with a Bachelor degree in Finance. He was hired
out  of  school by Arthur Andersen LLP and worked there for the next four years.
Jamie  then  accepted a position with a client as controller for 9 companies. He
went  on  to be an independent CPA and performed contract services for that same
client  with  an  addition  of  several  other  clients  including  contract CFO
services.  Jamie  accepted the CFO position at Marshall Distributing LLC in July
of  2004  and  has been instrumental in planning and converting the facility for
optimization  and  strategic  positioning.  When Marshall Holdings International
acquired Marshall Distributing LLC Jamie was named CFO where he has concentrated
his  efforts  on  financial  management and public reporting, internal controls,
budgeting  and projections, inventory and asset management as well as technology
integration  and  management. Jamie's attention to detail and corporate controls
along  with  a unique vision for future expansion and development have proven an
invaluable  combination  for  Marshall  Holdings  International.

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, the directors and certain of the
officers,  and persons holding more than 10 percent of Marshall common stock are
required  to  file forms reporting their beneficial ownership of Marshall common
stock  and subsequent changes in that ownership with the Securities and Exchange
Commission.  Such persons are also required to furnish management with copies of
all  forms  so  filed.

     Based solely upon a review of copies of such forms filed on Forms 3, 4, and
5,  the  forms  were  filed  timely  for  the  year  ending  December  31, 2006.


                                       35
<PAGE>
CODE OF ETHICS

     The  Company  has  adopted  a  code of ethics that applies to the 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;

-    Full, fair,  accurate, timely, and understandable disclosure in reports and
     documents  that  Marshall  files  with, or submits to, the SEC and in other
     public  communications  made  by  Marshall;

-    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 Marshall's code of ethics that applies to the principal executive
officer,  principal  financial  officer,  principal  accounting  officer  or
controller,  or  persons performing similar functions was filed as an exhibit to
the Company's Annual report for the year ended December 31, 2003, filed with the
Commission  on April 14, 2004. Management posted a copy of the code of ethics on
the  Company's  website  at  http://www.rightsolution.com.

     The Company will provide to any person without charge, upon request, a copy
of  the  code  of  ethics.  Any  such  request should be directed to the Company
corporate  secretary  at  2555  E  Washburn  Rd,  North Las Vegas, Nevada 89081.

ITEM 10.     EXECUTIVE COMPENSATION.

SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                              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   2002   84,000    -0-         -0-         20,000          -0-          -0-          -0-
                    2003  101,500    -0-         -0-          3,163          -0-          -0-          -0-
                    2004  216,000    -0-         -0-         16,571          -0-          -0-          -0-
                    2005  240,000    -0-         -0-          5,000          -0-          -0-          -0-
                    2006  240,000    -0-         -0-           -0-           -0-          -0-          -0-

Florian R. Ternes   2002   73,500    -0-         -0-         20,000          -0-          -0-          -0-
                    2003   89,500    -0-         -0-          3,163          -0-          -0-          -0-
                    2004  186,000    -0-         -0-         20,817          -0-          -0-          -0-
                    2005  204,000    -0-         -0-          5,100          -0-          -0-          -0-
                    2006  204,000    -0-         -0-           -0-           -0-          -0-          -0-

   Jamie Plante     2006  100,000    -0-         -0-          5,000          -0-          -0-          -0-
</TABLE>


                                       36
<PAGE>
     The  following  table  provides  certain summary information concerning the
compensation earned by the named executive officers (determined as of the end of
the  last  fiscal  year)  for  services  rendered  in all capacities to Marshall
Holdings  International,  Inc.  and  subsidiaries:

     Marshall  pays  to  the  officers  and  directors their 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 profitability of
Marshall.

EMPLOYMENT AGREEMENTS

     Marshall  entered  into  an  employment  agreement  (the "Bailey Employment
Agreement")  with  Richard A. Bailey, the president and chief executive officer,
dated  May  1, 1999. The Bailey Employment Agreement provides termination of the
employment  at  the will of either Marshall 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 Marshall is unable to pay
the  annual salary, Marshall will issue to Mr. Bailey one share of the Company's
Common  Stock  for  each dollar owed at the end of the fiscal year. In the event
that  Mr.  Bailey's  employment  is terminated as a result of (a) his retirement
under  the  retirement program, (b) his disability resulting in absence from his
duties  to  Marshall 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 percent below the highest annual salary from
time to time in effect, Marshall is 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 Marshall each year for a period of
five  years. Effective April 10, 2004, Mr. Bailey agreed to a salary of $240,000
annually  with  the  remainder  of  the  agreement  remaining  in  force.

     Marshall  entered  into  an  employment  agreement  (the "Ternes Employment
Agreement")  with  Florian R. Ternes, the Secretary and Chief Operating Officer,
dated  May  1, 1999. The Ternes Employment Agreement provides termination of the
employment  at  the will of either Marshall 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 Marshall is unable to pay
the  annual salary, Marshall will issue to Mr. Ternes one share of the Company's
Common  Stock  for  each dollar owed at the end of the fiscal year. In the event
that  Mr.  Ternes'  employment  is  terminated as a result of (a) his retirement
under  the  retirement program, (b) his disability resulting in absence from his
duties  to Marshall 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 percent below the highest annual salary from
time to time in effect, Marshall is 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 Marshall each year for a period of
five  years. Effective April 10, 2004, Mr. Ternes agreed to a salary of $204,000
annually  with  the  remainder  of  the  agreement  remaining  in  force.

     Marshall  entered  into  an  employment  agreement  (the "Plante Employment
Agreement")  with  Jamie  Plante CPA, the Chief Financial Officer, dated July 1,
2006.  The Plante Employment Agreement provides termination of the employment at
the  will  of  either  Marshall  or  Mr. Plante. The Plante Employment Agreement
provides  for  a base salary of $100,000 annually commencing July 1, 2006, which
shall  be  reviewed  periodically.  In the event that Mr. Plante's employment is
terminated  as  a result of (a) his retirement under the retirement program, (b)
his  disability  resulting in absence from his duties to Marshall 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  percent  below  the highest annual salary from time to time in effect,
Marshall  is  obligated  to  pay  to  Mr. Plante, as severance and/or liquidated
damages,  an  amount equal to one and one-half times his highest annual earnings
during  his  employment  with  Marshall  each  year  for a period of five years.


                                       37
<PAGE>
CONFIDENTIALITY AGREEMENTS

     None.

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

EQUITY COMPENSATION PLAN INFORMATION

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 equity securities of the registrant 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           33,700,000,000                                                   2,047,450,000
Equity compensation plans not
approved by security holders                -0-                             N/A                              N/A
Total                                  33,700,000,000                        $                          2,047,450,000
</TABLE>

     Marshall currently has 25,000,000,000 shares of common stock authorized for
issuance.  The  number  of  shares  authorized  for  issuance  under  the Equity
Compensation  Plans is larger than the number of the Company's authorized common
shares,  because  the  number of shares registered under the Equity Compensation
Plans  is not affected by a change in the Company's capital structure, such as a
reverse  split.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The  following  table  sets  forth,  as  of  December 31, 2006, information
concerning  ownership  of  Marshall  securities  by:

-     Each  person  who  owns  beneficially  more  than  five  percent  of  the
      outstanding  shares  of  Marshall  common  stock;

-     Each person who owns beneficially outstanding shares of Marshall preferred
      stock;

-     Each  director;

-     Each  named  executive  officer;  and

-     All  directors  and  officers  as  a  group.


                                       38
<PAGE>
<TABLE>
<CAPTION>
                                                   COMMON SHARES           PREFERRED SHARES
                                            ------------------------  --------------------------
                                              BENEFICIALLY OWNED (2)    BENEFICIALLY OWNED (2)
                                            ------------------------  --------------------------
NAME OF BENEFICIAL OWNER (1)                   NUMBER       PERCENT       NUMBER       PERCENT
------------------------------------------  -------------  ---------  --------------  ----------
<S>                                         <C>            <C>        <C>             <C>

Richard A. Bailey . . . . . . . . . . . . .            24       0.00  15,486,000 (3)   46.97 (3)
Florian Ternes. . . . . . . . . . . . . . . 2,000,023,024     0.9443   9,486,000 (3)   63.03 (3)
                                            -------------  ---------  --------------  ----------
All directors and executive officers as a
group (two persons) . . . . . . . . . . . . 2,000,023,048     0.9443  32,972,000 (3)  100.00 (3)
                                            =============  =========  ==============  ==========
</TABLE>

---------------
* Less than one percent.
(1) Unless otherwise indicated, the address for each of these stockholders is
c/o Marshall Distributors, Ltd, 2555 East Washburn Road, North Las Vegas, Nevada
89081. Also, unless otherwise indicated, each person named in the table above
has the sole voting and investment power with respect to the shares of common
stock which he or she beneficially owns.
(2) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission. As of the date of this report, 2,145,357,320
shares of the Company's common stock were issued and outstanding, 32,972,125
shares of the Company's Series A preferred stock were issued and outstanding and
185,000,000 shares of the Company's Series B preferred stock were issued and
outstanding.
(3) Series A Preferred Stock.

     There  are  no arrangements, known to Marshall, including any pledge by any
person  of  Marshall securities, the operation of which may at a subsequent date
result  in  a  change  in  control  of  Marshall  Holdings  International,  Inc.

     There  are  no  arrangements  or  understandings  among members of both the
former  and the new control groups and their associates with respect to election
of  directors  or  other  matters.

ITEM 12.     CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

     December  10, 2002, the Marshall 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  Marshall's officers and directors, is the sole
shareholder,  officer  and  director of Neptune. Following the reverse splits of
Marshall  common  stock, the 7,000,000 shares of Marshall common stock have been
reduced  to  1  share  of  Marshall  common  stock.


                                       39
<PAGE>
ITEM 13.     EXHIBITS.

<TABLE>
<CAPTION>
EXHIBIT
-------
  NO.                                               IDENTIFICATION OF EXHIBIT
-------  --------------------------------------------------------------------------------------------------------------------
<S>      <C>

3.1**    Articles of Incorporation.
3.2**    Amended and Restated Articles of Incorporation.
3.3**    Articles of Amendment to the Articles of Incorporation, filed effective on June 28, 2004.
3.4**    Certificate of Change, filed effective on September 3, 2004.
3.5**    Articles of Amendment to the Articles of Incorporation, filed effective on October 4, 2004.
3.6**    Certificate of Amendment to the Certificate of Designation for the Series A Preferred Stock, filed effective on
         November 9, 2004.
3.7**    Certificate of Designation for the Series B Preferred Stock, filed effective on January 18, 2005.
3.8**    Amended By-laws.
10.01*   Donald Hansen Settlement Agreement effective February 2004.
10.02*   Donald Hansen Stock Option Agreement.
10.03*   Steve Owens Stock Option Agreement, dated February 01, 2006.
10.04*   Steve Hayden Consulting Agreement, dated March 01, 2006.
10.05*   Maryland Attorney General Assurance of Voluntary Compliance, dated May 04, 2006.
10.06*   Allan Gold Consulting Agreement, dated March 16, 2006.
10.07*   Employment Agreement Peter Hammer, dated May 08, 2006.
10.08*   Marshall Distributing Binding Letter, dated June 19, 2006.
10.09*   Marshall Distributors Assignment and Bill of Sale, dated June 30, 2006.
10.10*   Marshall Distributors Contract for Sale of Business Assets, dated June 30, 2006.
10.11*   Marshall Distributor Liability Undertaking Agreement, dated June 30, 2006.
10.12*   Marshall Distributors Operations & Assets Note, dated June 30, 2006.
10.13*   Marshall Distributors Security Agreement, dated June 30, 2006.
10.14*   Kozmary Consulting Agreement, dated August 10, 2006.
10.15*   Guarnera Consulting Agreement, dated August 14, 2006.
10.16*   American Bath Binding Letter of Intent, dated July 01, 2006.
10.17*   American Bath Agreement, dated September 01, 2006.
10.18*   Botanicals Confidentiality and Restricted Use Agreement, dated November 16, 2006.
10.19*   Janssen Consulting Agreement, dated February 08, 2007.
10.20*   Janssen Secured Promissory Note, dated February 09, 2007.
10.21*   Wanda Boone Consignment Agreement between Marshall Distributing and Wanda Boone, dated March 15, 2007.
10.22*   Wanda Boone Consignment Agreement between The Right Solution Gateway and Wanda Boone, dated March 15,
         2007.
10.23*   Gary Heath Stock Option Agreement, dated February 03, 2006.
10.24*   American Bath Intellectual Property Agreement, dated October 01, 2006.
10.25*   American Bath Inventory and Equipment Loan Agreement, dated October 01, 2006.
14**     Code of Ethics.
21*      Subsidiaries of the Registrant.
23.1*    Consent of Independent Certified Public Accountants.
23.2*    Consent of Independent Certified Public Accountants.
31.1*    Certification of Richard A. Bailey, Chief Executive Officer of Marshall Holdings International, Inc., 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 W. Jamie Plante, Chief Financial Officer of Marshall Holdings International, Inc., pursuant to 18
         U.S.C. Sec.1350, as adopted pursuant to Sec.302 of the Sarbanes-Oxley Act of 2002.
32.1*    Certification of Richard A. Bailey, Chief Executive Officer of Marshall Holdings International, Inc., 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 W. Jamie Plante, Chief Financial Officer of Marshall Holdings International, Inc., 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


                                       40
<PAGE>
ITEM 14.     PRINCIPAL ACCOUNTANT FEES AND SERVICES.

AUDIT FEES

     Marshall's  Audit  Committee  has selected  Madsen & Associates CPA's, Inc.
("Madsen")  as  its independent accountants for the current fiscal year. For the
fiscal  years  ended  December  31,  2005  Lawrence  Scharfman  CPAPC  served as
Marshall's  independent  accountant.  Madsen  & Associates CPA's, Inc. served as
Marshall's  independent  accountants  for  the years ended December 31, 2003 and
2004. The audit services provided by Madsen and Scharfman consist of examination
of  financial  statements,  services  relative  to  filings  with Securities and
Exchange  Commission,  and consultation in regard to various accounting matters.
The  following  table  presents  the  total fees paid for professional audit and
non-audit  services  rendered  by  the  independent  auditors  for  the audit of
Marshall  annual  financial statements for the years ended December 31, 2006 and
December 31, 2005 and fees billed for other services rendered by the independent
auditors  during  those  periods.

<TABLE>
<CAPTION>
                             Fiscal Year Ended   Fiscal Year Ended
                             December 31, 2006   December 31, 2005
                             ------------------  ------------------
<S>                          <C>                 <C>
     Audit Fees (1)          $           55,000  $          121,220
     Audit-Related Fees (2)                 N/A                 N/A
     Tax Fees (3)                           N/A                 N/A
     All Other Fees (4)                     N/A                 N/A
     Total                   $           55,000  $          121,220
</TABLE>

(1)  Audit services  consist  of  audit  work  performed  in  the preparation of
     financial  statements  for  the fiscal year and for the review of financial
     statements  included  in  Quarterly  Reports on Form 10-Q during the fiscal
     year,  as  well  as  work  that  generally only the independent auditor can
     reasonably  be  expected  to  provide,  including consents for registration
     statement  filings  and  responding  to  SEC  comment letters on annual and
     quarterly  filings.
(2)  Audit-related  services  consist of assurance and related services that are
     traditionally performed by the independent auditor, including due diligence
     related  to  mergers  and  acquisitions,  agreed upon procedures report and
     accounting  and  regulatory  consultations.
(3)  Tax services consist of all services performed by the independent auditor's
     tax  personnel,  except those services specifically related to the audit of
     the financial statements, and includes fees in the areas of tax compliance,
     tax  planning,  and  tax  advice.
(4)  Other services  consist  of  those  services  not  captured  in  the  other
     categories.

     Marshall's  Board  has  determined  that  the  services  provided  by  the
independent  auditors  and  the  fees  paid  to  them  for such services has not
compromised  the  independence  of  the  independent  auditors.

     Consistent  with SEC policies regarding auditor independence, the Board has
responsibility  for  appointing, setting compensation and overseeing the work of
the  independent  auditor.  In recognition of this responsibility, the Board has
established a policy to pre-approve all audit and permissible non-audit services
provided  by  the  independent  auditor.  Prior to engagement of the independent
auditor for the next year's audit, management will submit a detailed description
of  the  audit and permissible non-audit services expected to be rendered during
that  year  or  each of four categories of services described above to the Board
for  approval.  In  addition,  management will also provide to the Board for its
approval  a  fee  proposal  for  the  services  proposed  to  be rendered by the
independent  auditor.  Prior  to  the engagement of the independent auditor, the
Board  will  approve  both  the  description  of audit and permissible non-audit
services  proposed  to be rendered by the independent auditor and the budget for
all  such services. The fees are budgeted and the Board requires the independent
auditor  and  management  to  report  actual fees versus the budget periodically
throughout  the  year  by  category  of  service.

     During  the  year,  circumstances may arise when it may become necessary to
engage  the  independent auditor for additional services not contemplated in the
original  per-approval.  In  those  instances,  the  Board  requires  separate
pre-approval  before engaging the independent auditor. To ensure prompt handling
of  unexpected  matters,  the  Board


                                       41
<PAGE>
may delegate pre-approval authority to one or more of its members. The member to
whom  such  authority is delegated must report, for informational purposes only,
any  pre-approval decisions to the Board at its next scheduled meeting. The four
categories of services provided by the independent auditor are as defined in the
footnotes  to  the  fee  table  set  forth  above.

                                   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.


                                        MARSHALL HOLDINGS INTERNATIONAL, INC.

Date: April 16, 2007.

                                        By /s/ Richard A. Bailey
                                           -------------------------------------
                                           Richard A. Bailey,
                                           Chief Executive Officer


                                        By /s/ W. Jamie Plante
                                           -------------------------------------
                                           W. Jamie Plante,
                                           Chief Financial 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.

<TABLE>
<CAPTION>
      Signature                            Title                             Date
---------------------  -----------------------------------------------  --------------
<S>                    <C>                                              <C>

/s/ Richard A. Bailey      President, Chief Executive Officer and       April 16, 2007
---------------------      Chairman of the Board of Directors

/s/ Florian R. Ternes  Director, Chief Operating Officer and Secretary  April 16, 2007
---------------------

/s/ W. Jamie Plante              Chief Financial Officer                April 16, 2007
---------------------
</TABLE>


                                       42
<PAGE>
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                       FINANCIAL STATEMENTS AND SCHEDULES

             MARSHALL HOLDINGS INTERNATIONAL, INC. AND SUBSIDIARIES


                              FINANCIAL STATEMENTS


                                DECEMBER 31, 2006


             MARSHALL HOLDINGS INTERNATIONAL, INC. AND SUBSIDIARIES


                        CONSOLIDATED FINANCIAL STATEMENTS


                                December 31, 2006

<TABLE>
<CAPTION>
             MARSHALL HOLDINGS INTERNATIONAL, INC. AND SUBSIDIARIES

                                  - CONTENTS -

                                                           PAGE NUMBER
                                                           -----------
<S>                                                        <C>
Report of Independent Registered Public Accounting Firm        F-1


Financial Statements:

  Balance Sheet                                                F-3

  Statement of Operations                                      F-5

  Statement of Changes in Stockholders' Equity (Deficiency)    F-6

  Statement of Cash Flows                                      F-7

  Notes to Financial Statements                                F-8
</TABLE>


                                       43
<PAGE>
MADSEN & ASSOCIATES, CPA'S INC.                              684 EAST VINE ST #3
------------------------------
CERTIFIED PUBLIC ACCOUNTANTS AND BUSINESS CONSULTANTS           MURRAY, UT 84107
TELEPHONE 801-268-2632
FAX 801-262-3978

Board of Directors
Marshall Holdings International, Inc. & Audit Committee

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
-------------------------------------------------------

We have audited the accompanying consolidated balance sheets of Marshall
Holdings International, Inc.(formerly Gateway Distributors, Ltd.) And
Subsidiaries as of December 31, 2006, and the Related consolidated statements of
operations, stockholders' equity, and cash flows for the years then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audit in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
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 presentation. We believe that our audit
provided 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  Marshall Holdings
International, Inc.(formerly Gateway Distributors, Ltd.) and Subsidiaries as of
December 31, 2006 and the results of its consolidated operations and cash flows
for the years then ended in conformity with accounting principles generally
accepted in the United States of America.

The accompanying 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 will need additional working capital for its planned activity and to
service its debt. This raises substantial doubt about the Company's ability to
continue as a going concern. Management's 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.


MADSEN & ASSOCIATES CPA'S, INC.
APRIL 6, 2007


                                      F - 1
<PAGE>
LAWRENCE SCHARFMAN & CO., CPA PC
                                                     CERTIFIED PUBLIC ACCOUNTS
18 E SUNRISE HIGHWAY,#203                            9608 HONEY BELL CIRCLE
FREEPORT, NY 11520                                   BOYNTON BEACH FL,33437
TELEPHONE: (516) 771-5900                            TELEPHONE: (561) 733-0296
FACSIMILE: (516) 771-2598                            FACSIMILE: (561) 470-0613

Board of Directors & Audit Committee
Marshall Holdings International, Inc., and Subsidiaries
Las Vegas Nevada


            REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We have audited the accompanying consolidated balance sheets of Marshall
Holdings International, Inc. (formerly Gateway Distributors, Ltd.) And
Subsidiaries as of December 31,2005 and the Related consolidated statements of
operations, stockholders' equity, and cash flows for the year then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

We conducted our audit in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
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 presentation. We believe that our audit
provided 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 Marshall Holdings
International, Inc. (formerly Gateway Distributors, Ltd.) and Subsidiaries as of
December 31, 2005 and the results of its consolidated operations and cash flows
for the years then ended in conformity with accounting principles generally
accepted in the United States of America.

The accompanying 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 will need additional working capital for its planned activity and to
service its debt. This raises substantial doubt about the Company's ability to
continue as a going concern. Management's 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.

                                               LAWRENCE SCHARFMAN &
                                               CO., CPA PC
                                               APRIL 12, 2006


                                      F - 2
<PAGE>
<TABLE>
<CAPTION>
             MARSHALL HOLDINGS INTERNATIONAL, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                        (CONDENSED FINANCIAL STATEMENTS)


                                                      December 31,   December 31,
                                                          2006           2005
                                                     --------------  -------------
<S>                                                  <C>             <C>
                          ASSETS

CURRENT ASSETS:
  Cash and cash equivalents                          $      61,083         93,305
  Accounts Receivable (net allowance of 11,075)            193,071         23,756
  Inventories                                              991,337        373,276
  Note Receivable                                        1,709,122         90,000
  Prepaids                                                  12,962
                                                     --------------
      Total Current Assets                               2,967,575        580,337
                                                     --------------  -------------

PROPERTY & EQUIPMENT
  Property and Equipment, at cost                        3,627,972        410,979
  (Less) accumulated depreciation and amortization        (477,296)      (327,818)
                                                     --------------  -------------
      Total Property & Equipment                         3,150,676         83,161
                                                     --------------  -------------

OTHER ASSETS
  Customer Lists                                           500,000              -
  Distributor Rights                                     1,779,500              -
  Websites and e-commerce Programs                       1,750,000              -
  Other Assets                                           2,286,016      2,952,495
                                                     --------------  -------------
      Total Other Assets                                 6,315,516      2,952,495
                                                     --------------  -------------

Total Assets                                            12,433,767      3,615,933
                                                     ==============  =============

                        See Notes to Financial Statements

The accompanying notes are an integral part of the audited financial statements.
</TABLE>


                                      F - 3
<PAGE>
<TABLE>
<CAPTION>
              MARSHALL HOLDINGSINTERNATIONAL, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                        (CONDENSED FINANCIAL STATEMENTS)

                                                         December 31   December 31,
                                                            2006           2005
                                                        -------------  -------------
<S>                                                     <C>            <C>
LIABILITIES

CURRENT LIABILITIES:

Accounts payable:
  Trade Regular                                         $    784,977        201,308

Accrued expenses:
  Payroll and employee benefits                              402,105        167,103
  Payroll taxes                                              233,435        142,925
  Interest                                                   442,944        420,944
  Other                                                      213,503         48,257
Current maturities of long-term debt                       7,953,917      1,378,615
                                                        -------------  -------------
Total current liabilities                                 10,030,881      2,852,730
                                                        -------------  -------------

LONG-TERM DEBT                                             2,016,001              -
                                                        -------------  -------------

Total Liabilities                                         12,046,882      2,852,730
                                                        -------------  -------------

STOCKHOLDERS' EQUITY

Series A Preferred stock - $.001 par value;
  Authorized - 100,000,000 shares;
  Issued and outstanding at December 31 2006
    and 2005 32,972,125 and 14,972,125, respectively          32,972         14,972

Series B Preferred stock - $.001 par value;
  Authorized at December 31, 2006 and 2005
  1,000,000,000 and 100,000,000 respectively;
  Issued and outstanding at December 31, 2006 and
  2005 185,000,000 and 15,000,000, respectively              185,000         15,000

Common stock, - $.001 par value
  Authorized - 25,000,000,000 shares
  Issued and outstanding at December 31,2006 and 2005
  2,117,957,320 and 2,967,010,636 respectively             2,117,957      2,967,010

Additional paid-in capital                                21,162,117     17,542,204
Accumulated (deficit)                                    (23,111,161)   (19,775,923)
                                                        -------------  -------------

Net Stockholders' Equity                                     386,885        763,263
                                                        -------------  -------------

Total Liabilities & Stockholders' Equity                $ 12,433,767      3,615,993
                                                        =============  =============

                        See Notes to Financial Statements

The accompanying notes are an integral part of the audited financial statements.
</TABLE>


                                      F - 4
<PAGE>
<TABLE>
<CAPTION>
                         MARSHALL HOLDINGS INTERNATIONAL, INC.AND SUBSIDIARIES
                                CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (CONDENSED FINANCIAL STATEMENTS)

                                                                          Year Ended      Year Ended
                                                                         December 31,    December 31,
                                                                             2006            2005
                                                                        --------------  --------------
<S>                                                                     <C>             <C>
SALES                                                                   $   3,757,181   $     769,759

COST OF SALES                                                               1,044,400          70,580
                                                                        --------------  --------------

GROSS PROFIT                                                                2,712,781         599,179
                                                                        --------------  --------------

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES:
  Depreciation Expense                                                         82,035          47,132
  Professional Services Not Classified Elsewhere                            3,083,881         783,556
  Product Development                                                         228,527         761,118
  All Other Selling, General and Administrative                             2,468,156       1,323,551
                                                                        --------------  --------------

TOTAL SELLING, GENERAL AND ADMINISTRATIVE EXPENSES                          5,862,599       2,915,357
                                                                        --------------  --------------

INCOME (LOSS) FROM OPERATIONS                                              (3,149,818)     (2,316,178)
                                                                        --------------  --------------

OTHER INCOME (EXPENSE):
  Gain on Sale of Property                                                                  1,667,010
  Gain on Sale of Polar WearZ, Inc. (n.k.a. Chelsea Collection) Stock                          50,000
  (Loss) on Sale of Subsidiary - Los Cabos Beverage                                            (8,256)
  (Loss) change in reporting QDS of Arizona as an investment                                  (77,636)
  (Loss) on Sale of Valley Dr House                                                           (26,024)
  (Loss) on QDS Investment                                                   (200,000)              -
  Interest Expense                                                           (419,704)       (192,644)
  Other Income                                                                 34,285               -
                                                                        --------------  --------------
TOTAL OTHER INCOME (EXPENSE):                                                (585,419)      1,412,450
                                                                        --------------  --------------

NET INCOME (LOSS) BEFORE MINORITY INTEREST                                 (3,735,237)       (903,728)

MINORITY INTEREST                                                                   -
                                                                        --------------  --------------
NET INCOME (LOSS) BEFORE PROVISION FOR INCOME TAX                          (3,735,237)       (903,728)
PROVISION FOR INCOME TAX                                                            -               -
                                                                        --------------  --------------

NET INCOME (LOSS)                                                       $  (3,735,237)  $    (903,728)
                                                                        ==============  ==============

BASIC AND DILUTED EARNINGS (LOSS) PER SHARE                             $       (0.03)  $       (1.23)
                                                                        --------------  --------------

BASIC & DILUTED WEIGHTED AVERAGE SHARES OF
COMMON STOCK                                                              108,246,279         732,729
                                                                        ==============  ==============
<FN>

                                   See Notes to Financial Statements
</TABLE>


                                      F - 5
<PAGE>
<TABLE>
<CAPTION>
                               MARSHALL HOLDINGS INTERNATIONAL, INC. AND SUBSIDIARIES
                                   CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                            FOR THE PERIODS ENDED DECEMBER 31, 2006 AND DECEMBER 31, 2005


                                        Preferred Stock            Common Stock
                                        Par Value $0.001         Par Value $0.001
                                     ---------------------  ---------------------------    Paid in
                                                                                            Excess      Accumulated
                                       Shares      Amount       Shares        Amount        of Par       (Deficit)
                                     -----------  --------  --------------  -----------  ------------  -------------
<S>                                  <C>          <C>       <C>             <C>          <C>           <C>
Balance - December 31, 2004            4,972,125  $  4,972             99   $        0   $19,225,078   $(18,472,196)

Common Stock Issued:
  For Services - Restricted Stock                               1,975,100        1,975       710,926
  Cancelled Not Sold                                             (242,750)        (243)     (219,757)
  For Services - Unrestricted Stock                               853,400          853       477,374
  For Cash - Restricted                                           381,162          381       312,628
Preferred Stock Issued
  Preferred Stock B                   15,000,000    15,000
  Preferred Stock A                   10,000,000    10,000
Loss for the Period                                                                                        (903,728)
                                     -----------  --------  --------------  -----------  ------------  -------------
Balance for December 31, 2005         29,972,125    29,972      2,967,011        2,967    20,506,249    (19,375,924)

  Common Stock Issued:
  For Services - Restricted Stock                                 340,309          340        12,238
  For Services - Unrestricted Stock                            13,650,000       13,650     2,772,550
  For Cash - Restricted                                       101,000,000      101,000        38,080
Preferred Stock Issued
  Preferred Stock B                  170,000,000   170,000                                  (151,000)
  Preferred Stock A                   18,000,000    18,000  2,000,000,000    2,000,000    (2,016,000)
Loss for the Period                                                                                      (3,735,238)
                                     -----------  --------  --------------  -----------  ------------  -------------

Balance for December 31, 2006        217,972,125   217,972  2,117,957,320    2,117,957    21,162,117    (23,111,161)


                                      Net Equity
                                     (Deficiency)
                                     -------------
<S>                                  <C>
Balance - December 31, 2004          $    757,855

Common Stock Issued:
  For Services - Restricted Stock         712,901
  Cancelled Not Sold                     (220,000)
  For Services - Unrestricted Stock       478,227
  For Cash - Restricted                   313,007
Preferred Stock Issued
  Preferred Stock B                        15,000
  Preferred Stock A                        10,000
Loss for the Period                      (903,728)
                                     -------------
Balance for December 31, 2005           1,163,262

  Common Stock Issued:
  For Services - Restricted Stock          12,580
  For Services - Unrestricted Stock     2,786,200
  For Cash - Restricted                   139,080
Preferred Stock Issued
  Preferred Stock B                        19,000
  Preferred Stock A                         2,000
Loss for the Period                    (3,735,238)
                                     -------------

Balance for December 31, 2006             386,885
<FN>

                        See Notes to Financial Statements

The accompanying notes are an integral part of the audited financial statements.
</TABLE>


                                      F - 6
<PAGE>
<TABLE>
<CAPTION>
              MARSHALL HOLDINGS INTERNATIONAL, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                     CONDENSED INTERIM FINANCIAL STATEMENTS)


                                                     Year Ended      Year Ended
                                                    December 31,    December 31,
                                                        2006            2005
                                                   --------------  --------------
<S>                                                <C>             <C>
CASH FLOW FROM OPERATING ACTIVITIES:
Net Income                                         $  (3,735,237)  $    (903,728)
Adjustments to reconcile Net Income
to net cash provided by operating activities:

  Stock Issued for Services                            2,819,780         862,022
  Depreciation                                            82,035          47,132
  Changes in operating assets and liabilities:
  (Increase) in Accounts Receivable                     (169,314)       (178,122)
  (Increase) Decrease in Inventory                      (618,061)        120,923
  (Increase) Decrease in Other Current Assets         (1,632,084)        277,605
  Increase (Decrease in Accounts Payable                 583,669        (128,532)
Increase in Other Current Liabilities                    994,481          26,989
                                                   --------------  --------------
Net cash (used)provided by operating activities       (1,674,731)        124,289
                                                   --------------  --------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Net (Purchase)/Sale of Prop., Plant & Equipment     (3,149,552)      4,237,309
  (Increase) in Other Assets                          (3,363,021)     (1,823,428)
                                                   --------------  --------------
Net cash (used)provided by investing activities       (6,512,573)      2,413,881
                                                   --------------  --------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Increase (Decrease) in Long Term Debt                8,016,002      (2,820,033)
  Stock Sales for Cash; Net                              139,080         338,009
                                                   --------------  --------------
Net cash provided (used)by financing activities        8,155,082      (2,482,024)
                                                   --------------  --------------

Net cash Increase ((Decrease) for period                 (32,222)         56,146
Cash at beginning of period                               93,305          37,159
                                                   --------------  --------------

Cash at end of period                              $      61,083   $      93,305
                                                   ==============  ==============
<FN>

                        See Notes to Financial Statements

 The accompanying notes are an integral part of the audited financial statements.
</TABLE>


                                      F - 7
<PAGE>
                      MARSHALL HOLDINGS INTERNATIONAL, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           December 31, 2006 and 2005

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. It has subsequently changed its name to
Marshall Holdings International, Inc.("the Company").

The Company is a distributor of vitamins, nutritional supplements, whole health
foods and skin care products mainly in the United States of America and Canada,
with some sales in Russia and Indonesia. 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.

On April 30, 2004, Marshall formed a wholly owned subsidiary, Gateway Venture
Holdings, Inc. ("GVH"). The Las Vegas property and fixed assets of Marshall are
recorded in the financial statements of this subsidiary.

Also on April 30, 2004, Gateway formed a wholly owned subsidiary, Aspen Cove
Resort Incorporated ("ACR") to run the operations of Aspen Cove Resort (formerly
Beaver Dam Lodge) located in Panguitch Utah. The lodge had been purchased on
April 15, 2004 and is listed as real estate in the financial statements of GVH.
On May 30, 2004, an agreement was signed with Quality Distribution Services of
Nevada to create a new corporation, Quality Distribution Services of Arizona,
Inc ("QDS").  QDS was incorporated in Nevada on June 7, 2004 and was 51% owned
by Marshall. QDS was a wholesale beverage distributor in the Phoenix, Arizona
area.  The corporation has since been revoked and not in business and as such,
the remaining carrying value was written down and taken as a loss in the first
quarter of 2006.

On November 30, 2004, Gateway formed a wholly owned subsidiary, Gateway
Corporate Administration, Inc ("GCA"). On August 31, 2006 the name of the
corporation was changed to Marshall Corporate Administration. The company is
engaged in marketing and management services.

In December, 2004 Marshall moved its corporate office and warehouse location to
3220 Pepper Lane, Las Vegas, Nevada 89120.

On December 21, 2004 the Company entered an Asset Purchase Agreement for 51% of
Los Cabos Beverage, then owned by Blaine Wendtland ("Wendtland").  The 51%
interest in Loc Cabos Beverage and its assets were acquired by the Company in
exchange for Wendtland receiving all rights to Grandma Hamman's GHF product and


                                      F - 8
<PAGE>
Wendtland assuming and paying off the debts of $193,833 Grandma Hamman owed to
Los Cabos Freedom Movement LLC and to Ed Wendtland.

On December 30, 2004, Marshall formed a 51% owned subsidiary, Los Cabos Beverage
Inc ("Los Cabos") to handle the operations of the sale of private label water.

On February 28, 2005, the sales of Los Cabos did not meet expectations and the
Company entered into an agreement with Blaine Wendtland wherein he assumed all
ownership and obligations and the Company terminated its commitments and
relationships with Los Cabos and Blaine Wendtland.

On June 2, 2005, the Company sold its wholly owned subsidiary, Aspen Cove Resort
Incorporated ("ACR"), in combination with selling the building and real estate
on which the resort. The gain was reported as Gain on Sale of Property under
Other Income on the 2005 financials.

On September 30, 2005, the Company sold its property which housed the corporate
offices and warehouse located at 3220 Pepper Lane, Las Vegas, Nevada 89120. The
gain was reported as Gain on Sale of Property under Other Income on the 2005
financials.

In March, 2006 Gateway purchased warehouse property and moved its corporate
warehouse location to 2555 East Washburn Road, North Las Vegas, Nevada 89081.
The corporate offices are housed temporarily offsite, until the offices can be
built out in the building.

On June 30, 2006, The Company purchased all of the operations and assets of
Marshall Distributing Company in Salt Lake City, UT. Marshall Distributing
distributes over 150 different manufacturers lines and over 6000 natural health
products.

On August 31, 2006, Marshall formed a wholly owned subsidiary Mountain West
Holdings, Inc. to facilitate the website and e-commerce operations.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

(a)  - PRINCIPLES OF CONSOLIDATION
     -----------------------------

As of December 31, 2006, the Company has the following wholly owned
subsidiaries:
The Right Solution Gateway (multilevel marketing and retail sales)

     -    Marshall  Distributing,  Inc.  formerly  Grandma  Hammans  Specialty
          Foods,  (wholesale  distribution)
     -    Gateway  Venture  Holdings,  Inc.  (house  and manage the real estate,
          vehicles  and  equipment  of  the  Company)
     -    Marshall  Corporate  Administration  formerly  Gateway  Corporate
          Administration,  Inc.  (Marketing  and  Management)
     -    Mountain  West  Holdings,  Inc.  (website  and  e-commerce  sales)

The Company also owned a 51% interest in Quality Distribution Services of
Arizona, a wholesale distributor of non-alcoholic beverages and food. In 2004,
the Company reported the operations of QDS in the financial statement. Beginning
in 2005, the Company did not report the operations of this company in the
financial statements, but recognized it as an investment, not as an equity
position (See Note "Investment in Quality Distribution Services of Arizona"
("QDS")). During the first quarter 2006, the Company wrote off it's investment
in QDS as the corporate entity was revoked and out of business as of July 1,
2006.

The Company has completed the acquisition of the business assets and operations
of Marshall Distributing, LLC, a Utah limited liability company and a portion of
EMS Business Development, Inc., a California corporation. These assets have been
assigned to the previously inactive subsidiary Grandma Hammans Specialty Foods
and the subsidiary has appropriately changed it's name to Marshall Distributing,
Inc. ("Marshall Dist"). The asset purchase includes the operations and warehouse
facility.


                                      F - 9
<PAGE>
The Company created a new subsidiary corporation, Mountain West Holdings, Inc.
which includes some of the assets acquired from EMS Business Development, Inc. a
California corporation. The operation includes website and e-commerce channels
of distributions and retail sales.

The Company has utilized and appropriately changed the name of Gateway Corporate
Administration to Marshall Corporate Administration ("MCA"). MCA is a marketing
and management company that utilizes new technology and personnel to facilitate
market penetration directly to the end consumer and to provide management
services directly related to the facilitation of rapid growth.

The accompanying consolidated financial statements include the accounts of its
subsidiaries, except for QDS. All significant intercompany balances and
transactions have been eliminated.

(b) - 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.

(c) - ACCOUNTS RECEIVABLE
-------------------------

Management uses the allowance for bad debt method in accordance with the
generally accepted accounting principles to account for bad debts.

(d) - 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. There were no funds due at year end.

(e) - INVENTORIES
-----------------

Inventories, consisting primarily of nutritional, health, beauty products, and
beverages, are stated at cost computed by the first-in, first-out (FIFO) method
of accounting.

(f) - 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.

(g) - 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. Property and equipment are depreciated over the following
estimated useful lives:

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


                                     F - 10
<PAGE>
Depreciation expense for the years ended December 31, 2006 and 2005 was $82,035
and $47,132, respectively.

(h) - INTANGIBLE ASSETS
-----------------------

Through the Company's acquisition activities, intangible assets have been
recorded in the financial statements. The Company performs annual impairment
testing of its intangible assets under the provisions of statement of Financial
Accounting Standards No. 142, using the expected present value technique as
provided for by FASB Concepts Statement No. 7 "Using Cash Flow Information and
Present Value In Accounting Measurements".

(i) - OTHER ASSETS
------------------

The amount in other assets is condensed and includes distributor rights,
customer lists, website and e-commerce sites and programs, products pending
production, formulas, and other various assets.

(j) - 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.

(k) - 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. Term debt secured by various properties have interest
rates attached to them commensurate with the finance market at the time and
management believes approximate fair values in the short as well as the long
term. It is currently not practicable to estimate the fair value of the other
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, and 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.

(l) -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.

(m) - REVENUE RECOGNITION
-------------------------

Revenue is recognized in the period in which the products are shipped or
services are performed.

(n) - 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. The only common stock
equivalents relate to outstanding stock options (which have been measured to
have immaterial fair value at December 31, 2006 and 2005); however, since the
Company has net operating losses for the periods ending December 31, 2006 and
2005, the common stock equivalents would be anti-dilutive. Therefore, basic and
diluted EPS are the same.

(o) - ADVERTISING COSTS.
------------------------


                                     F - 11
<PAGE>
The Company conducts non-direct response advertising for which the costs are
expensed when incurred. Total advertising costs of $19,273 and $55,404 were
incurred for the years ended December 31, 2006 and 2005, respectively.

The Company has capitalized the advertising costs associated with the production
of an infomercial and will begin amortizing those costs in the period in which
the infomercial is first used. This is in accordance with the Statement of
Position 93-7 Reporting on Advertising Costs.

(p) - RECLASSIFICATIONS
-----------------------

Certain amounts in 2005 have been reclassified and represented to conform to the
current financial statement presentation.

(q) - USE OF ESTIMATES
----------------------

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States 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.

(r) - CONCENTRATION RISK
------------------------

The Company reports no significant concentrations.

(s) - 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.

NOTE 3 - MARSHALL DISTRIBUTING ACQUISITION OF OPERATIONS AND ASSETS

The Company completed the acquisition of the business assets of Marshall
Distributing, LLC, a Utah limited liability company and a portion of EMS
Business Development, Inc., a California corporation. These assets have been
assigned to the currently inactive subsidiary Grandma Hammans Specialty Foods
and the subsidiary has had an appropriate name change to Marshall Distributing,
Inc. The asset purchase includes the operations and warehouse facility. The date
in which all of the final terms and conditions were met was on or about August
6, 2006. The effective close date was June 30, 2006.

NOTE 4 - GRANDMA HAMMANS AND LOS CABOS BEVERAGE:

The Company purchased the assets of Grandma Hamman's Specialty Foods, LLC, from
Blaine Wendtland on August 15, 2002. On December 21, 2004 the assets and
liabilities of Grandma Hammans, other than some minor residual receivables and
payables, passed to Blaine Wendtland in exchange for a 51% interest in the sale
of private label water that Blaine Wendtland had developed. To date the
subsidiary, Grandma Hammans, remains inactive.

On December 30, 2004, the Company formed a corporation named Los Cabos Beverage,
Inc. ("Los Cabos") and acquired a 51% ownership with the remaining 49% going to
Blaine Wendtland. Los Cabos was formed to handle the operations of the sale of
private label water discussed in the prior paragraph. Operations were to begin
in 2005. The Company invested no initial money for this joint venture, but it
did provide a place of operation in its warehouse and limited funding for
payroll and selected other expenses.

During January and February of 2005 Los Cabos sales did not meet expectations.
Management determined that the operations would not be cost effective for the
Company. On February 28, 2005 the Company entered into an agreement with Blaine
Wendtland wherein he assumed all ownership and obligations and the Company
Terminated its commitments and relationships with Los Cabos and with Blaine
Wendtland. The Company incurred a loss from operations during 2005 of $8,256,
and the loss on sale of the business was immaterial to these financial
statements.


                                     F - 12
<PAGE>
NOTE 5 -RELATED PARTIES:

The Company entered into an agreement December 12, 2003 with The Chelsea
Collection Inc, a Nevada corporation ("Chelsea Collection") that was finalized
on March 15, 2004 and later clarified on a few points on May 4, 2004. Chelsea
Collection is majority owned by the officers of the Company and Francois
Vautour, an unrelated third party. Chelsea Collection, in an agreement dated
November 25, 2003, acquired among other things from Francois Vautour and others
all United States and Canada rights, trademarks, formulas and licenses of the
Jeunesse by Francois Vautour and the GH3 skin care line.

In the agreement the Company has with Chelsea Collection, the Company will have
the opportunity to acquire the same Francois Vautour skin care line from Chelsea
Collection for virtually the same price and terms as Chelsea Collection is
buying it from Francois Vautour. The terms of the agreement involves a purchase
price of $4,000,000, payments are computed based on 15% of the gross sales less
cost of goods sold with a minimum weekly payment of $10,000. Once the purchase
price is paid, then a royalty of up to 15% of the gross sales less cost of goods
sold steps into place and continues thereafter. The cost outlays have been
charged to the statement of operations as a selling, general and administrative
expense, which were $487,863 for all of 2005 and $163,971 for the period, ended
December 31, 2006.

No title or ownership passes to the Company or to Chelsea Collection until the
November 25, 2003 agreement between Chelsea Collection and Francois Vautour is
satisfied, the payment of which is described in the prior paragraph. The Company
has opted not to capitalize the purchase price. Therefore, all monies paid have
been expensed.

The Company is responsible for all product research and development for current
and future marketing as well as carrying inventory on all Marshall Holding's
products. An infomercial developed late in 2004 has been recorded as an asset
under "Prepaid Advertising" in the amount of $230,573. This remains unchanged
during 2005 and 2006.

During the third quarter 2005, the Company sold to the Chelsea Collection its
controlling block of preferred stock in PolarWearZ, Inc. (refer to note "Real
Estate Sales") for $250,000. Chelsea Collection changed the name of the
corporation to "The Chelsea Collection, Inc." As of June 30, 2006, the company
recognized a gain on sale of stock in the amount of $50,000.

The Company also sold an additional block of common stock in Polar Wear Z, Inc.
of 8,520,000 shares during the third quarter of 2005 to Chelsea Collection, Inc.
for $400,000. The company reported no gain or loss on the transaction. During
2005, the Chelsea Collection paid $311,700, leaving a balance owed of $88,300.

On September 29, 2006, The Chelsea Collection, Inc. changed its name to G-H-3
International Inc.

NOTE 6 - INVESTMENT IN QUALITY DISTRIBUTION SERVICES OF ARIZONA ("QDS"):

On May 30, 2004, an agreement was signed with Quality Distribution Services of
Nevada creating a wholesale beverage distribution center in the Phoenix, Arizona
area. For this joint venture, Quality Distribution Services of Arizona, Inc
("QDS") was incorporated in Nevada on June 7, 2004, of which 51% was owned by
Gateway.

The Company invested $282,700 during 2004 and another $50,000 through March 31,
2005 to assist in the development of the company. Due to lack of operations and
no identifiable future cash flows, for the period ended December 31, 2005, the
Company determined this investment was impaired to a carrying value of $200,000.

During 2006, management has determined it is in the best interest of the Company
not to continue funding this joint venture. Accordingly, the Company recorded an
impairment loss during the period ended December 31, 2006 for the remaining
investment balance of $200,000.


                                     F - 13
<PAGE>
NOTE 7- REAL ESTATE ACQUISITIONS AND SALES:

During the first quarter of 2005, the Company borrowed an additional $400,000
from a financial institution on a 6.5% equity line secured by the office and
warehouse property located at 3220 Pepper Lane, Las Vegas, Nevada. Proceeds were
used for remodeling the office and warehouse property. This loan was paid off
upon sale of the building on September 30, 2005.

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

In a single agreement on June 2, 2005, the Company sold Aspen Cove Resort
(property) and the subsidiary Aspen Cove Resort, Inc. (operations of Aspen Cove
Resort), hereafter referred to as "Aspen Cove," to Cal-Bay International
("Cal-Bay"). Aspen Cove sold for approximately $2,600,000. The purchase price
was paid with (1) 32,000,000 million shares of restricted Preferred Series B
stock of Cal-Bay, valued at $1,600,000, (2) the controlling block of stock
(restricted preferred stock) in PolarWearZ, Inc., an inactive no asset
corporation, valued at $200,000, (3) 8,520,000 free trading shares of common
stock in PolarWearZ, Inc. (approximately 15% of the common stock outstanding)
valued at $400,000, (4) mortgage debt assumption, and (5) cash paid to the
mortgage holder catching up the past due mortgage payments. Because there was no
distinction made between the sale of the Aspen Cove property and operations
(subsidiary), the transaction was recognized as one sale and netted into one
gain, effective June 2, 2005. The operations of Aspen Cove Resort are reflected
only thru June 2, 2005, the date the Company ceased owning the operations.

The valuation of Cal-Bay stock received from the sale of Aspen Cove and the
Valley Drive real estate, is for a guaranteed minimum sales price of $0.05 per
share upon conversion from preferred "B" non voting stock to voting common
stock. The preferred stock is non-dilutable and, as per the agreement, upon sale
as common stock it is guaranteed to sell for no less than $0.05 per share, or
additional shares will be issued to compensate for any shortage. The gain on
this sale of approximately $1,276,000 has been recognized in the 2005 Statement
of Operations as part of the "Gain on Sale of property."

During the second quarter of 2005, the Company sold a residential property in
Las Vegas for approximately $250,000 to Cal-Bay. Under the terms of the
agreement the purchase price was paid by (1) 2,800,000, shares of Cal-Bay
International non-dilutable Preferred "B" stock, guaranteed value at $0.05 per
share, for$140,000 (2) debt assumption of the underlying mortgage, and, (3) cash
paid to the mortgage holder catching up the past due mortgage payments. The loss
on this sale has been recognized in the 2005 Statement of Operations as "Loss on
Sale of Valley Dr House" in the amount of $26,024.

On September 30, 2005, the Company closed on the sale of its Las Vegas, Nevada
property located at 3220 Pepper Lane, which housed its warehouse and office
facilities for a gain that has been reported as part of the "Gain on Sale of
Property" on the statement of operations in 2005.

The Company purchased a smaller commercial property on March 13. 2006. The
warehouse/operations have been moved to this building. The offices are operating
out of a temporary location while the office portion of the building is
completed.

The Company acquired the existing offices and warehouse of Marshall Distributing
on July 1, 2006 in the purchase agreement.

NOTE 8 - EQUITY

(A) REVERSE STOCK SPLITS:

On March 28, 2005, the Company enacted a 500 for 1 reverse stock split. The
financial statements have reflected this reverse stock split retroactively to
the beginning of the reporting period of these financial statements.


                                     F - 14
<PAGE>
On December 4, 2006, the Company enacted a 1000 for 1 reverse stock split. The
financial statements have reflected this reverse stock split retroactively to
the beginning of the reporting period of these financial statements.

(B) EMPLOYEE STOCK INCENTIVE PLAN ("ESIP"):

Since 2003, the Company has filed with the Security and Exchange Commission
("SEC") several forms S-8 notifying of Employee Stock Incentive Plans ("ESIP")
and its increases in stock approved to issue under such plans. No additional
increases in stock have been submitted or approved to issue under such plans
since August 2004.

During 2004, the total number of shares approved to issue in these plans was
18,200,000,000 (18 billion, 200 million). Stock issued to employees through the
plan is not affected by reverse splits until after it has been sold. The
remaining unissued stock at any time remains unchanged despite what happens to
the stock once it is issued (i.e., stock reverse splits, dividends, etc.).  As
of December 31, 2006, there are no remaining shares approved to issue under the
ESIP plans.

During 2005, the Company issued 1,433,250,000 shares out of the ESIP plan before
stock splits. The net proceeds to the Company from employee stock sales during
2005 were approximately $228,000.

During January 1 through December 31, 2006 no stock was issued out of the ESIP
plan. There are currently no shares issued and unsold under the ESIP plan.

(C) NON-EMPLOYEE, DIRECTORS AND CONSULTANTS RETAINER STOCK PLANS ("RSP"):

The Company continually seeks to improve its financial position by seeking
investors in exchange for equity in the Company. The value assigned to the stock
for these transactions will vary based on the market value of the stock or
services performed at the time, whichever is more readily ascertainable.

Since 2003, the Company has filed with the Security and Exchange Commission
("SEC") several forms S-8 notifying of Non-Employee Directors and Consultants
Retainer Stock Plans ("RSP") and its increases in stock approved to issue under
such plans. On July 27, 2006 a Form S-8, Non-Employee Consultants Retainer Stock
Plan for the Year 2006, was submitted for 7,000,000,000 (7 billion) shares.

During 2004, the total number of shares approved to issue in these plans were
8,500,000,000 (8 billion 500 million). As of December 31, 2006, the total
remaining unissued shares under the RSP plans are 2,047,450,000. During 2005,
the Company issued 1,093,000,000 shares out of the RSP plan before stock splits.

During January 1 through December 31, 2006, the Company issued 11,102,550,000
shares out of the RSP plan.

(D) AUTHORIZATION OF SERIES "B" PREFERRED STOCK AND ISSUANCE OF RESTRICTED
PREFERRED "B" STOCK TO CONSULTANTS:

On January 18, 2005, the Company authorized 100,000,000 shares of Series B
Preferred Stock with a par value of 0.001 per share. Series B preferred stock is
convertible to common stock on a one for one basis and has no voting rights.

During 2005, the Company issued 15,000,000 restricted shares of Series B
preferred stock to consultants for services rendered with an assigned value of
$15,000.

On August 29, 2006, the Company authorized an increase of Series B Preferred
Stock with a par value of 0.001 per share to 1,000,000,000 shares.

During January 1 through December 31, 2006, the Company issued 170,000,000
shares of Series B preferred stock The value of these issuances was recorded at
$19,000.


                                     F - 15
<PAGE>
(E) RESTRICTED STOCK ISSUED TO OFFICERS (RELATED PARTY TRANSACTIONS):

During 2005, the Company issued to officers 23,000,000 shares of restricted
common stock, valued at approximately $10,000.

During January 1 through December 31, 2006, the Company issued 20,000,000
restricted preferred A stock to officers.

NOTE 9 - OTHER ASSETS:

Other Assets consist of costs incurred to develop an infomercial which is
completed and ready for release. Amortization of this prepaid advertising will
begin when the advertising campaigns begin, expected to be sometime in 2007 and
will be amortized over an estimated useful life yet to be determined.

Other assets also include costs incurred to develop a new product line. These
costs will not be recognized as inventory until a marketing plan has been
developed and implemented. Management is of the opinion that the estimated fair
value of product awaiting marketing exceeds the cost recognized on the Balance
Sheet.

NOTE 10 - PROFORMA STATEMENT OF OPERATIONS OF MARSHALL HOLDINGS INTERNATIONAL,
INC. AND SUBSIDIARIES INCLUDING MARSHALL DISTRIBUTING, INC.

On August 6, 2006, the Company acquired Marshall Distributing, LLC. Accordingly,
pro forma information is disclosed below to show the effects of the transaction
as if it had occurred on January 1, 2005 in accordance with Regulation S-X
Article 11Sec.210.11-01.


                                     F - 16
<PAGE>
<TABLE>
<CAPTION>
        MARSHALL HOLDINGS INTERNATIONAL, INC.AND SUBSIDIARIES AND MARSHALL DISTRIBUTING, INC.
                       PROFORMA UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (CONDENSED FINANCIAL STATEMENTS)


                                                                         12 Months       12 Months
                                                                           Ended           Ended
                                                                        December 31,    December 31,
                                                                            2006            2005
                                                                       --------------  --------------
<S>                                                                    <C>             <C>
SALES                                                                  $   5,115,692   $   3,337,910

COST OF SALES                                                              2,105,553       1,984,763
                                                                       --------------  --------------

GROSS PROFIT                                                               3,010,139       1,353,147
                                                                       --------------  --------------

SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES:
  Depreciation Expense                                                       104,859          83,791
  Professional Services Not Classified Elsewhere                           3,093,881         783,556
  Development of Jeunesse by Francois Product Line                           163,971         497,863
  Product Development                                                         64,556         263,255
  All Other Selling, General and Administrative                            3,209,939       2,541,110
                                                                       --------------  --------------

TOTAL SELLING, GENERAL AND ADMINISTRATIVE EXPENSES                         6,637,206       4,169,575
                                                                       --------------  --------------

OTHER INCOME (EXPENSE):
  Gain on Sale of Property held for short term investment                          0          37,139
  Gain on Sale of Property                                                         0       1,477,246
  Gain on Sale of Polar WearZ, Inc.                                                0          50,000
  (Loss) on Sale of Subsidiary - Los Cabos Beverage                                0          (8,256)
  (Loss) change in reporting QDS of Arizona as an investment                       0         (68,535)
  (Impairment)  reporting Subsidiary QDS of Arizona as an investment               0          (9,101)
  (Loss) on Investment in QDS                                               (200,000)              0
  (Loss) on Sale of Valley Dr House                                                0         (26,024)
  Interest Expense                                                          (326,496)       (242,461)
  Other Income                                                                34,285               0
                                                                       --------------  --------------

TOTAL OTHER INCOME (EXPENSE):                                               (492,211)      1,210,008
                                                                       --------------  --------------

NET INCOME (LOSS) BEFORE MINORITY INTEREST                                (4,119,278)     (1,606,420)

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

NET INCOME (LOSS) BEFORE PROVISION FOR INCOME TAX                         (4,119,278)     (1,606,420)

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

NET INCOME (LOSS)                                                      $  (4,119,278)  $  (1,606,420)
                                                                       ==============  ==============

BASIC AND DILUTED EARNINGS (LOSS) PER SHARE                            $       (0.00)  $       (0.00)
                                                                       --------------  --------------

BASIC & DILUTED WEIGHTED AVERAGE SHARES OF COMMON STOCK                  108,246,279       2,967,020
                                                                       ==============  ==============
</TABLE>


                                     F - 17
<PAGE>
NOTE 11 - GOING CONCERN:

There have been significant recurring losses and negative cash flows from
operations, which have resulted in a working capital deficiency. In the event
the Company is unable to raise additional 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 plans to raise the working capital it needs through equity financing
and other debt funding.

NOTE 12 - COMMITMENTS AND CONTINGENCIES:

In the normal course of business the Company experienced a change in position by
the Bureaus of Consumer Protection of Nevada and Maryland dealing with a now
discontinued product the Company previously sold to the public. A settlement was
made with the Maryland Attorney General on the investigation regarding a change
in position by the Bureaus of Consumer Protection of Nevada and Maryland dealing
with a now discontinued product the Company previously sold to the public. On
May 4, 2006, Assurance of Voluntary Compliance documents were signed. This
includes a Civil Penalty of $100,000 and restitution to consumers of $25,000. If
the amount paid to consumers for claims is less than $25,000, the Civil Penalty
will be increased to the difference between $25,000 and the amount paid in
restitution. The Civil Penalty is payable in monthly installments of $5,000 and
the restitution is to be paid as claims are presented.  The Company has accrued
a liability as of December 31, 2006 and 2005 in the amount of $125,000 for the
above contingency.

A creditor of the Company, Allergy Research group / Nutricology filed in the
District Court of Clark County, Nevada an action against the Company on an
unpaid open account for goods and merchandise, Case No. A-487334, in the amount
of $168,000. The Company contested the amount claimed and made payment toward
the uncontested amount while negotiations with the plaintiff continued. The
Company offered to pay, through counsel, the sum of $50,000 with a payment of
$10,000 upon acceptance of the offer and $5,000 per month until paid. The offer
was accepted and payments have been made and the debt is paid in full.  The
Company has recognized, in the financial statements, part of the "accounts
payable" in the liabilities of the balance sheet to cover these contingencies.

On January 11, 2001, the Company acquired approximately 76% of the outstanding
shares of common stock of TRSG Corporation ("TRSG"). The Company sold its
interests in TRSG as of December 31, 2002 for $15,000. At this time the Company
also acquired all of the assets and accrued certain liabilities of TRSG. The
creditors of TRSG continue to assert claims against the Company. Management is
unable to estimate the possible loss exposure, but believes the ultimate losses
would be minimal for the Company because the debts of TRSG paid by the Company
are debts of TRSG and not the Company.

The Securities and Exchange Commission has filed complaints against Suburban
Capital and the Company and its CEO. At this juncture, legal counsel is unable
to predict what the possible outcome of these matters will be.

As of September 18, 2006, Management finalized negotiations, initiated in 2003,
with the Internal Revenue Service ("IRS") to settle past taxes due. An agreement
was reached that the compromise previously submitted to the IRS was withdrawn on
July 24, 2006.  The offer deposit of $250,000 was to be credited as the initial
installment payment.  A second installment payment of $75,000 was to be paid
within 90 days of the agreement acceptance date, September 18, 2006.  Payments
of $50,000 per month will begin in the fourth month after the acceptance date
and will continue each month until the liability is paid in full, approximately
10 months.  The payments will be due by the 20th day of the month. The company
has accrued a contingent liability for the above in the amounts of $562,913 and
$587,336 for the years ended December 31, 2005 and 2006 respectively.

NOTE 13 - RESTATEMENT OF FINANCIAL STATEMENTS TO CORRECT AN ACCOUNTING ERROR


                                     F - 18
<PAGE>
The Company has restated its financial statements to correct an accounting error
in the recording of $1,282,886 as income from the reduction of liabilities
during the year ended December 31, 2004.  Management has made a determination
that the liabilities are not owed by the Company and that the write down of
these liabilities should have been reported in a period prior to the year ended
December 31, 2004.  In addition to the $1,282,886 in liabilities identified
above, the company originally had left an estimated $400,000 in liabilities on
the balance sheet at December 31, 2004.  Management has made a determination
that the Company should restate its financial statements to correct an
accounting error in the recording these $400,000 liabilities.  The Company does
not owe these amounts and the $400,000 has been included with the $1,282,886 as
an adjustment to a prior period.  Management has determined that following the
guidelines of SFAS 140 the Company has been legally discharged from all of these
obligations.

The effects of the restatement on the balance sheet are illustrated below:

<TABLE>
<CAPTION>
                          BALANCE SHEET-DECEMBER 31, 2005
                          -------------------------------

                         Restated                  Originally
                          Amount     Adjustment     Reported
                       ------------  -----------  ------------
<S>                    <C>           <C>          <C>
Accounts payable           200,808     (400,000)      600,808
Current liabilities      2,452,730     (400,000)    2,852,730
Accumulated (deficit)  (19,375,923)     400,000   (19,775,923)
Total liabilities &
Equity                   3,615,993                  3,615,993
</TABLE>

There was no change in total assets or weighted average shares of common stock
outstanding due to restatement correction.

NOTE 14 - SUBSEQUENT EVENTS:

The Company has entered into an agreement with the American Bath Factory to
source tools dies and various equipment needed for expansion and growth of its
business as well as additional marketing distribution services.

There has been a breech of contract suit filed by Global Media Corp., a company
located in New York City, that alleges that a single meeting held on January 28,
2004 resulted in a series of agreements entered into by four entities for
licensing and marketing of hair removal product known as "Forever Gone". Among
those agreements, Plaintiff alleges that defendant Gateway Distributors, Ltd.
agreed to pay $2,000,000 in Gateway stock for marketing and materials and
services. Plaintiff thus claims that it assembled a team of consultants,
provided materials, work, labor and services to defendant Gateway Distributors
and that Gateway has failed to issue the stock. The plaintiff has not yet
identified the so-called agreements, consultants, nominees and the work and
materials allegedly delivered. The Plaintiff has confirmed that the so-called
agreement with Gateway has never been reduced to writing. Rather, counsel
represented that its claim of an agreement with Gateway is based upon a
combination of verbal statements and miscellaneous albeit unidentified,
writings.

Gateway asserts that it did not receive the consulting services and materials
and expects the suit to be dismissed and is contemplating a counter suit against
Global Media Inc.


                                     F - 18