CONSOLIDATED GEMS, INC. - FORM 10-Q

Attached files

file	filename
EX-31.1 - EXHIBIT 31.1 - CONSOLIDATED GEMS, INC.	a50475845ex31_1.htm
EX-31.2 - EXHIBIT 31.2 - CONSOLIDATED GEMS, INC.	a50475845ex31_2.htm
EX-32.1 - EXHIBIT 32.1 - CONSOLIDATED GEMS, INC.	a50475845ex32_1.htm
EX-32.2 - EXHIBIT 32.2 - CONSOLIDATED GEMS, INC.	a50475845ex32_2.htm
EXCEL - IDEA: XBRL DOCUMENT - CONSOLIDATED GEMS, INC.	Financial_Report.xls

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10- Q

(Mark one)
x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the Quarterly Period Ended September 30, 2012

or
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from ________________ to ________________

Commission File Number: 000-53735

CONSOLIDATED GEMS, INC.

(Exact name of registrant as specified in its charter)

	Delaware	26-0267587
	(State or Other Jurisdiction	(I.R.S. Employer
	of Incorporation)	Identification No.)

	Level 8, 580 St Kilda Road
	Melbourne, Victoria, Australia	3004
	(Address of Principal Executive Offices)	(Zip Code)

	Registrant’s telephone number, including area code: 001 (613) 8532 2800

Electrum International, Inc.

(Former Name or Former Address, if changed since Last Report)

———————

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes ¨ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). x Yes ¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “accelerated filer,” “large accelerated filer” and “smaller reporting company” in Rule 12-b2 of the Exchange Act.

(Check one):

Large accelerated filer ¨

Accelerated filer ¨

Non-accelerated filer ¨

Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12-b2 of the Exchange Act). ¨ Yes x No

There were 175,315,350 shares of common stock outstanding on November 9, 2012

Table Of Contents

			PAGE NO

PART I.	FINANCIAL INFORMATION

Item 1	Financial Statements		2
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations		9
Item 3	Quantitative and Qualitative Disclosure about Market Risk		12
Item 4	Controls and Procedures		12

PART II	OTHER INFORMATION

Item 1	Legal Proceedings		13
Item 1A	Risk Factors		13
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds		13
Item 3	Defaults Upon Senior Securities		13
Item 4	Mining Safety Disclosures		13
Item 5	Other Information		13
Item 6	Exhibits		13


SIGNATURES			14

EXHIBIT INDEX			15

Exh. 31.1		Certification	16
Exh. 31.2		Certification	17
Exh. 32.1		Certification	18
Exh. 32.2		Certification	19

PART I – FINANCIAL INFORMATION

Item 1.

FINANCIAL STATEMENTS

Introduction to Interim Financial Statements.

The interim financial statements included herein have been prepared by Consolidated Gems, Inc. (“Consolidated Gems” or the “Company”), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (The “Commission”). Certain information and footnote disclosure normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. These interim financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011.

In the opinion of management, all adjustments, consisting of normal recurring adjustments necessary to present fairly the financial position of the Company as of September 30, 2012, the results of its operations for the three and nine month periods ended September 30, 2012 and 2011 and the changes in its cash flows for the nine month periods ended September 30, 2012 and 2011, have been included. The results of operations for the interim periods are not necessarily indicative of the results for the full year.

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

The functional and reporting currency of the Company is the United States Dollar and unless otherwise indicated, all financial information is presented in US$.

CONSOLIDATED GEMS, INC.

Balance Sheet

	September 30, 2012 (Unaudited)			December 31, 2011
	$			$

ASSETS

Current Assets:
Cash		3,089			940
Prepayments		14,902			11,355
Total Current Assets		17,991			12,295

Total Assets		17,991			12,295

LIABILITIES AND STOCKHOLDERS’ (DEFICIT)

Current Liabilities:
Accounts payable and accrued expenses		41,852			35,882
Total Current Liabilities		41,852			35,882

Non Current Liabilities:
Advances from affiliate		220,467			109,823
Total Non Current Liabilities		220,467			109,823

Total Liabilities		262,319			145,705

Stockholders’ (deficit):
Common stock: $.0001 par value 500,000,000 shares authorised, and 175,315,350 shares issued and outstanding		17,532			17,532
Additional paid-in capital		1,640,432			1,640,432
Accumulated (deficit) during development stage		(1,568,437	)		(1,568,437	)
Accumulated (deficit) subsequent to development stage		(333,855	)		(222,937	)
Total Stockholders’ (deficit)		(244,328	)		(133,410	)

Total Liabilities and Stockholders’ (deficit)		17,991			12,295

See notes to financial statements

CONSOLIDATED GEMS, INC.

Statements of Operations

(Unaudited)

	For the three months ended September 30						For the nine months ended September 30
	2012			2011			2012			2011

Revenues	$	-		$	-		$	-		$	-

Cost and expenses
Legal, accounting and professional		10,417			10,310			26,887			31,753
Administration expense		28,587			38,501			80,026			67,963
		39,004			48,811			106,913			99,716

(Loss) from operations		(39,004	)		(48,811	)		(106,913	)		(99,716	)
Foreign currency exchange gain/(loss)		(4,942	)		5,791			(4,005	)		(60,758	)
Other Income - Interest		-			-			-			4
(Loss) before income tax		(43,946	)		(43,020	)		(110,918	)		(160,470	)
Provision for income tax		-			-			-			-

Net (loss)		(43,946	)		(43,020	)		(110,918	)		(160,470	)

Basic net (loss) per Common Equivalent Shares		(0.00	)		(0.00	)		(0.00	)		(0.00	)

Weighted number of common equivalent shares (000’s)		175,315			175,315			175,315			173,657

See notes to financial statements

CONSOLIDATED GEMS, INC.

Statements of Stockholders’ (Deficit)

for the period ended September 30, 2012

(Unaudited)

	Shares		Common Stock Amount		Additional Paid-in Capital		Accumulated (Deficit) During Development Stage			Accumulated (Deficit) Subsequent to Development Stage			Total
			$		$		$			$			$

Balance, December 31, 2011		175,315,350		17,532		1,640,432		(1,568,437	)		(222,937	)		(133,410	)

Net (loss)		-		-		-		-			(110,918	)		(110,918	)

Balance, September 30, 2012		175,315,350		17,532		1,640,432		(1,568,437	)		(333,855	)		(244,328	)

See notes to financial statements

CONSOLIDATED GEMS, INC.

Statements of Cash Flows

(Unaudited)

	For the nine months ended September 30
	$	2012		$	2011

CASH FLOWS FROM OPERATING ACTIVITIES
Net (Loss)		(110,918	)		(160,470	)

Adjustments to reconcile net (loss) to net cash (used) in operating activities
Foreign currency exchange (gain)/loss		4,005			60,758
Net change in prepayments		(3,547	)		(15,249	)
Net change in accounts payable and accrued expenses		5,969			(21,369	)

Net Cash (used) in Operating Activities		(104,491	)		(136,330	)

CASH FLOWS FROM FINANCING ACTIVITIES

Advances from affiliate		106,767			139,091

Net Cash provided by Financing Activities		106,767			139,091

Effects of Exchange rate on cash		(127	)		(260	)

Net increase in Cash		2,149			2,501

Cash at Beginning of Period		940			1,410

Cash at End of Period		3,089			3,911

Supplemental Disclosures

NON CASH FINANCING ACTIVITY
Satisfaction of debt to affiliate through issuance of shares		-			1,509,210
Forgiveness of debt to affiliate		-			110,354

See notes to financial statements

CONSOLIDATED GEMS, INC.

Notes to Financial Statements

September 30, 2012

(1)	ORGANIZATION AND BUSINESS

Consolidated Gems, Inc. ("Consolidated Gems” or the “Company"), is a Delaware corporation originally incorporated in Florida as We Sell for U Corp. (“We Sell for U”). The principal stockholder of Consolidated Gems is Power Developments Pty Ltd., an Australian corporation (“Power”), an entity majority owned by the Company’s President, which owned 94.46% of Consolidated Gems as of September 30, 2012. The company recently changed its name from Electrum International, Inc. to Consolidated Gems, Inc. on September 24, 2012.

Commencing in fiscal 2009, Consolidated Gems decided to focus its business on energy opportunities. In March 2009, the Company announced the execution of an Agreement with Indian Farmers Fertilizer Cooperative (“IFFCO”) to explore the commercial viability of generating and/or distributing alternate energy or any other viable products to the rural Indian market. Consolidated Gems pursued this strategy until late 2010 when it decided that given the complexity of such opportunities and access to the necessary knowledge, personnel and finance required to pursue the opportunities, it would not continue with this strategy.

As a result of management’s decision to refocus its efforts from energy opportunities to explore opportunities in the resources industry, effective December 31, 2010 we are no longer reporting as a development stage company.

The Company has decided to expand its focus to include precious gems in order to generate value for shareholders and is currently assessing several gem opportunities.

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”), which contemplates continuation of Consolidated Gems as a going concern. The Company has not yet commenced revenue producing operations and has incurred net losses since inception and may continue to incur substantial and increasing losses for the next several years, all of which raises substantial doubt as to its ability to continue as a going concern. The financial statements do not contain any adjustments that could arise as a result of this uncertainty.

In addition, Consolidated Gems is reliant on loans and advances from corporations affiliated with the Company. Based on discussions with these affiliate companies the Company believes this source of funding will continue to be available. Other than the arrangements noted above, the Company has not confirmed any other arrangement for ongoing funding. As a result the Company may be required to raise funds by additional debt or equity offerings in order to meet its cash flow requirements during the forthcoming year.

(2)	RECENT ACCOUNTING PRONOUNCEMENTS

During 2011, the FASB issued ASU No. 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in US GAAP and International Accounting Reporting Standards (“IFRS”) and ASU 2011-05, Presentation of Comprehensive Income. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

(3)	AFFILIATE TRANSACTIONS

In January 2009, the Company entered into an agreement with AXIS Consultants Pty Ltd (“AXIS”) to provide geological, management and administration services to the Company. AXIS is affiliated through common management. The Company is one of ten affiliated companies under common management with AXIS. Each of the companies has some common Directors, officers and shareholders. In addition, each of the companies is substantially dependent upon AXIS for its senior management and administration staff. It has been the intention of the affiliated companies and respective Boards of Directors that each of such arrangements or transactions should accommodate the respective interest of the relevant affiliated companies in a manner which is fair to all parties and equitable to the shareholders of each. Currently, there are no material arrangements or planned transactions between the Company and any of the other affiliated companies other than AXIS.

The payable to affiliate at September 30, 2012 of $220,467 is due to AXIS. During the nine months ended September 30, 2012, AXIS provided services in accordance with the services agreement, incurred direct costs on behalf of the Company and advanced funds of $106,767. The Company intends to repay the advances from affiliate with funds raised either via additional debt or equity offerings, but as this may not occur within the next 12 months AXIS has agreed not to call the advance within the next twelve months and accordingly the Company has classified the amounts payable as non-current in the accompanying balance sheet.

(4)	INCOME TAXES

Consolidated Gems files its income tax returns on an accrual basis.

The Company files tax returns in the United States. Consolidated Gems has carry-forward losses of approximately $1,527,000 as of December 31, 2011 which expire in years 2028 through 2031. Due to the uncertainty of the availability and future utilization of those operating loss carry-forwards, management has provided a full valuation against the related deferred tax benefit.

The Company’s tax returns for all years since December 31, 2008 remain open to examination by the respective tax authorities. There are currently no tax examinations in progress.

(5)	FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company’s financial instruments consist of cash, prepayments, accounts payable and accrued expenses, and advances from affiliate. The carrying amounts of cash, prepayments, accounts payable and accrued expenses approximate their respective fair values because of the short term nature of those instruments. The fair value of the advances from affiliate is not determinable as it is due to an affiliate entity, no market exists for similar instruments and settlement date is uncertain.

(6)	SUBSEQUENT EVENTS

The Company has evaluated significant events subsequent to the balance sheet date through the date these financial statements were issued, and has determined that there were no subsequent events or transactions which would require recognition or disclosure in the financial statements.

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

General

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the Financial Statements and accompanying notes and the other financial information appearing elsewhere in this report. This report contains numerous forward-looking statements relating to our business. Such forward-looking statements are identified by the use of words such as believes, intends, expects, hopes, may, should, plan, projected, contemplates, anticipates or similar words. Actual operating schedules, results of operations, ore grades and mineral deposit estimates and other projections and estimates could differ materially from those projected in the forward-looking statements. The functional and reporting currency of the Company is the United States Dollar. These interim financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011.

Overview

Consolidated Gems, Inc. (“Consolidated Gems” or the “Company”), is a Delaware corporation originally incorporated in Florida as We Sell For U Corp. (“We Sell For U”). Consolidated Gems was originally established with the intention to develop and provide service offerings to facilitate auctions on eBay for individuals and companies who lack the eBay expertise and/or time to list/sell and ship items they wish to sell. In December 2008, Power Developments Pty Ltd, an Australian corporation ("Power") acquired approximately a 96% interest in Consolidated Gems from Edward T. Farmer and certain other stockholders. Mr. Farmer resigned as Sole Director and Officer of Consolidated Gems, Joseph Gutnick was appointed President, Chief Executive Officer and a Director and Peter Lee was appointed Chief Financial Officer and Secretary.

On August 12, 2009, the Company re-incorporated in the state of Delaware (the “Reincorporation”) through a merger involving We Sell for U Corp. and Consolidated Gems, a Delaware Corporation that was a wholly owned subsidiary of We Sell for U. The Reincorporation was effected by merging We Sell for U with Consolidated Gems, with Consolidated Gems being the surviving entity. For purposes of the Company’s reporting status with the Securities and Exchange Commission, Consolidated Gems is deemed a successor to We Sell for U.

The Company has decided to expand its focus to include precious gems in order to generate value for shareholders and is currently assessing several gem opportunities. On the September 24, 2012, the Company changed its name from Electrum International, Inc. to Consolidated Gems, Inc.

We have incurred net losses since our inception and may continue to incur substantial and increasing losses for the next several years. Since inception we have incurred accumulated losses of $1,902,292 which was funded primarily by the sale of equity securities and loans from affiliates.

Description of Current Business Plans and Activities

The following is a description of the Company’s recent, past and current business plans and activities.

In March 2009, the Company announced the execution of an Agreement with IFFCO to explore the commercial viability of generating and/or distributing alternate energy or any other viable products to the rural Indian market. Consolidated Gems pursued this strategy.

Until late 2010 when it was decided that given the complexity of such opportunities and access to the necessary knowledge, personnel and finance required to pursue the opportunities, it would not pursue this strategy.

As a result of management’s decision to refocus its efforts from energy opportunities to explore opportunities in the resources industry, effective December 31, 2010, the Company ceased reporting as a development stage company.

In May 2012, the Company decided to change its business plan to focus on gems.

In addition, Consolidated Gems is reliant on loans and advances from corporations affiliated with the Company. Based on discussions with these affiliate companies, the Company believes this source of funding will continue to be available. Other than the arrangements noted above, the Company has not confirmed any other arrangement for ongoing funding. As a result the Company may be required to raise funds by additional debt or equity offerings in order to meet its cash flow requirements during the forthcoming year.

RESULTS OF OPERATIONS

Three Months Ended September 30, 2012 vs. Three Months Ended September 30, 2011.

Costs and expenses decreased from $48,811 in the three months ended September 30, 2011 to $39,004 in the three months ended September 30, 2012.

The decrease in costs and expenses is a net result of:

a increase in legal, accounting and professional expense from $10,310 for the three months ended September 30, 2011 to $10,417 for the three months ended September 30, 2012. Included within legal, accounting and professional expense for the three months ended September 30, 2012 is $7,089 (2011: $7,274) for costs associated with the Company’s SEC compliance obligations and $3,328 (2011: $3,035) which relates to stock agent transfer fees.

an decrease in administrative expense from $38,501 in the three months ended September 30, 2011 to $28,587 in the three months ended September 30, 2012, primarily as a result of a decrease in direct costs charged to the Company by AXIS from $41,788 to $17,674 and no IT system maintenance charges incurred for the three months ended September 30, 2012 in comparison to $1,229 incurred for the three months ended September 30, 2011; offset by increases in; printing and stationary costs, expenditure for the conversion of financial statements to XBRL and travel expenditure..

As a result of the foregoing, the loss from operations decreased from $48,811 for the three months ended September 30, 2011 to a loss from operations of $39,004 for the three months ended September 30, 2012.

A foreign currency exchange gain of $5,791 for the three months ended September 30, 2011 compared to a foreign currency exchange loss of $4,942 for the three months ended September 30, 2012 was recorded as a result of the movement in the Australian dollar versus the US dollar, and the impact of the subsequent revaluation of amounts payable to affiliates.

The net loss was $43,946 for the three months ended September 30, 2012 compared to a net loss of $43,020 for the three months ended September 30, 2011.

Nine Months Ended September 30, 2012 vs. Nine Months Ended September 30, 2011.

Costs and expenses increased from $99,716 in the nine months ended September 30, 2011 to $106,913 in the nine months ended September 30, 2012.

The increase in costs and expenses is a net result of:

a decrease in legal, accounting and professional expense from $31,753 for the nine months ended September 30, 2011 to $26,887 for the nine months ended September 30, 2012. Included within legal, accounting and professional expense for the nine months ended September 30, 2012 is $16,693 (2011: $21,393) for costs associated with the Company’s SEC compliance obligations.

an increase in administrative expense from $67,963 in the nine months ended September 30, 2011 to $80,026 in the nine months ended September 30, 2012, primarily as a result of increased costs related to researching business opportunities including services provided by AXIS in accordance with the service agreement; increase in filing costs to the SEC from $16,459 to $21,924; an increase in travel expenditure incurred of $9,113 for the nine months ended September 30, 2012 compared to no such costs for the nine months ended September 30, 2011; and an increase in the cost of insurance from $2,250 to $5,099. These have been offset by various decreases in IT system maintenance charges from $4,354 to $1,569, outside storage costs and telecommunications expenditure.

As a result of the foregoing, the loss from operations increased from $99,716 for the nine months ended September 30, 2011 to a loss from operations of $106,913 for the nine months ended September 30, 2012.

A foreign currency exchange loss of $60,758 for the nine months ended September 30, 2011 compared to a foreign currency exchange loss of $4,005 for the nine months ended September 30, 2012 was recorded as a result of the movement in the Australian dollar versus the US dollar, and the impact of the subsequent revaluation of amounts payable to affiliates.

The net loss was $110,918 for the nine months ended September 30, 2012 compared to a net loss of $160,470 for the nine months ended September 30, 2011.

Liquidity and Capital Resources

For the nine months ended September 30, 2012, net cash used in operating activities was $104,491 consisting of the net loss of $110,918 offset by a non-cash charge for foreign currency exchange loss of $4,005, an increase in accounts payable and accrued expenses of $5,969 and a decrease in prepayments of $3,547. For the nine months ended September 30, 2012, net cash provided by financing activities was $106,767 consisting of an increase in payable to affiliate.

As of September 30, 2012, the Company had short-term obligations of $41,852 comprising accounts payable and accrued expenses and had long-term obligations of $220,467 comprising advances payable to an affiliate.

The Company has recently refocused its efforts from energy opportunities to looking for opportunities in the resources industry.

Our budget for general and administration and for professional expenses for fiscal 2012 is A$0.25 million. Once we have identified a specific exploration or mining project we will also need to prepare a budget for these activities. We are currently investigating capital raising opportunities which may be in the form of either equity or debt, to provide funding for working capital purposes. There can be no assurance that such a capital raising will be successful, or that even if an offer of financing is received by the Company, it is on terms acceptable to the Company.

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplates continuation of Consolidated Gems, Inc. as a going concern. However, Consolidated Gems, Inc. has limited assets, has not yet commenced revenue producing operations and has sustained recurring losses since inception.

Information Concerning Forward Looking Statements

This report and other reports, as well as other written and oral statements made or released by us, may contain forward looking statements. Forward looking statements are statements that describe, or that are based on, our current expectations, estimates, projections and beliefs. Forward looking statements are based on assumptions made by us, and on information currently available to us. Forward-looking statements describe our expectations today of what we believe is most likely to occur or may be reasonably achievable in the future, but such statements do not predict or assure any future occurrence and may turn out to be wrong. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. The words "believe," "anticipate," "intend," "expect," "estimate," "project", "predict", "hope", "should", "may", and "will", other words and expressions that have similar meanings, and variations of such words and expressions, among others, usually are intended to help identify forward-looking statements.

Forward-looking statements are subject to both known and unknown risks and uncertainties and can be affected by inaccurate assumptions we might make. Risks, uncertainties and inaccurate assumptions could cause actual results to differ materially from historical results or those currently anticipated. Consequently, no forward-looking statement can be guaranteed. The potential risks and uncertainties that could affect forward looking statements include, but are not limited to:

●	The risk factors set forth in Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011,

●	The risks and hazards inherent in the mineral exploration business (including environmental hazards, industrial accidents, weather or geologically related conditions),

●	The uncertainties inherent in our exploratory activities, including risks relating to permitting and regulatory delays,

●	Movements in foreign exchange rates,

●	Performance of information systems,

●	Ability of the Company to hire, train and retain qualified employees,

In addition, other risks, uncertainties, assumptions, and factors that could affect the Company's results and prospects are described in this Quarterly Report on Form 10-Q and in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011, including under the heading “Risk Factors” and elsewhere herein and therein and may further be described in the Company's prior and future filings with the Securities and Exchange Commission and other written and oral statements made or released by the Company.

We caution you not to place undue reliance on any forward-looking statements, which speak only as of the date of this document. The information contained in this report is current only as of its date, and we assume no obligation to update any forward-looking statements.

Item 3.

Quantitative and Qualitative Disclosures About Market Risk.

At September 30, 2012, the Company had no outstanding loan facilities.

The Company reports in US$ and holds cash in Australian dollars. At September 30, 2012, this amounted to A$2,977. A change in the exchange rate between the A$ and the US$ will have an effect on the amounts reported in the Company’s financial statements, and create a foreign exchange gain or loss. A movement of 1% in the A$ versus the US$ exchange rate will have a US$30 effect on the balance sheet and statement of operations.

Item 4.

Controls and Procedures.

(a)	Disclosure Controls and Procedures

Our principal executive officer and our principal financial officer evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 as amended) as of the end of the period covered by this report. Based on that evaluation, such principal executive officer and principal financial officer concluded that, the Company’s disclosure controls and procedures were effective as of the end of the period covered by this report at the reasonable level of assurance.

(b)	Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the third quarter of 2012 that materially affected, or are reasonably likely to materially affect, internal control over financial reporting.

(c)

Other

We believe that a controls system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. Therefore, a control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Our disclosure controls and procedures are designed to provide such reasonable assurance of achieving our desired control objectives, and our principal executive officer and principal financial officer have concluded, as of September 30, 2012, that our disclosure controls and procedures were effective in achieving that level of reasonable assurance.

PART II – OTHER INFORMATION

Item 1.

Legal Proceedings.

Not Applicable

Item 1A.

Risk Factors.

Not Applicable

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

Not Applicable

Item 3.

Defaults Upon Senior Securities.

Not Applicable

Item 4.

Mining Safety Disclosures.

Not Applicable

Item 5.

Other Information.

Not Applicable

Item 6.

Exhibits.

(a) Exhibit No. Description

31.1

Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Joseph Isaac Gutnick

31.2

Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Peter James Lee

32.1

Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley act of 2002 by Joseph Isaac Gutnick

32.2

Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley act of 2002 by Peter James Lee

101

The following materials from the Consolidated Gems, Inc. Quarterly Report on Form 10-Q for the nine months ended September 30, 2012 formatted in Extensible Business Reporting Language (XBRL): (i) the Statements of Operations, (ii) the Balance Sheets, (iii) the Statements of Cash Flows, (iv) Statement of Stockholders’ (Deficit) and (v) related notes.

#101.INS

XBRL Instance Document.

#101.SCH

XBRL Taxonomy Extension Schema Document.

#101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document.

#101.LAB

XBRL Taxonomy Extension Label Linkbase Document.

#101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document.

#101.DEF

XBRL Taxonomy Extension Definition Linkbase Document.

_________________

Filed herewith. In accordance with Rule 406T of Regulation S-T, these interactive data files are deemed “not filed” for purposes of section 18 of the Exchange Act, and otherwise are not subject to liability under that section.

FORM 10-Q

SIGNATURES

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

	Consolidated Gems, Inc

	By:	/s/ Joseph I Gutnick
		Joseph I. Gutnick
		Chairman of the Board, President and
		Chief Executive Officer
		(Principal Executive Officer)



	By:	/s/ Peter Lee
		Peter Lee
		Secretary and
		Chief Financial Officer
		(Principal Financial Officer)

Date: November 14, 2012

EXHIBIT INDEX

Exhibit No.		Description

31.1		Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Joseph Isaac Gutnick

31.2		Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Peter James Lee

32.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley act of 2002 by Joseph Isaac Gutnick

32.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley act of 2002 by Peter James Lee


101		The following materials from the Consolidated Gems, Inc. Quarterly Report on Form 10-Q for the nine months ended September 30, 2012 formatted in Extensible Business Reporting Language (XBRL): (i) the Statements of Operations, (ii) the Balance Sheets, (iii) the Statement of Stockholders’ (deficit), (iv) the Statements of Cash Flows and (v) related notes


		#101.INS XBRL Instance Document.
		#101.SCH XBRL Taxonomy Extension Schema Document.
		#101.CAL XBRL Taxonomy Extension Calculation Linkbase Document.
		#101.LAB XBRL Taxonomy Extension Label Linkbase Document.
		#101.PRE XBRL Taxonomy Extension Presentation Linkbase Document.
		#101.DEF XBRL Taxonomy Extension Definition Linkbase Document.
		_____________________
		# Filed herewith. In accordance with Rule 406T of Regulation S-T, these interactive data files are deemed “not filed” for purposes of section 18 of the Exchange Act, and otherwise are not subject to liability under that section.

Attached files

CONSOLIDATED GEMS, INC. Reports

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