- Quarterly Report (10-Q)

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

For the Quarterly Period Ended August 31, 2009

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

For the transition period from ______________ to ______________

Commission File No. 333-153441

BLUE GEM ENTERPRISE
(Exact name of small business issuer as specified in its charter)

Nevada 1000 20-8043372 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification No.)

245 King George Road
Suite # 105 Brantford, ON, Canada,
N3R 7N7
(Address of principal executive offices)

Telephone: [phone]
(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of "accelerated filer and large accelerated filer" in Rule 12b-2 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 12b-2 of the Act). Yes [X] No [ ]

The number of shares of Common Stock, $0.001 par value, of the registrant
outstanding at October 12, 2009 was 107,236,863

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TABLE OF CONTENTS

Page ---- PART I. Item 1. Financial Statements 4 Item 2. Management's Discussion and Analysis or Plan of Operations 8 Item 3. Quantitative and Qualitative Disclosures About Market Risks 9 Item 4. Controls and Procedures 10 PART II. Item 1. Legal Proceedings 10 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 10 Item 3. Defaults Upon Senior Securities 10 Item 4. Submission of Matter to Vote of Security Holders 10 Item 5. Other Information 10 Item 6. Exhibits 10 SIGNATURES 11

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STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Form 10-Q contains certain forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended Section 21E of the Securities Exchanged Act of 193, as amended, which are intended to be covered by the safe harbors created thereby. The statements contained in this report on Form 10-Q that are not purely historical are forward-looking statements within the meaning of applicable securities laws. Forward-looking statements include statements regarding our "expectations," "anticipation," "intentions," "beliefs," or "strategies" regarding the future. Forward looking statements also include statements regarding fluctuations in the price of gold or certain other commodities, (such as silver, copper, diesel fuel, and electricity); changes in national and local government legislation, taxation, controls, regulations and political or economic changes in the United States or other countries in which we may carry on business in the future; business opportunities that may be presented to or pursued by us; our ability to integrate acquisitions successfully; operating or technical difficulties in connection with exploration or mining activities; the speculative nature of gold exploration, including risks of diminishing quantities or grades of reserves; and contests over our title to properties. All forward-looking statements included in this report are based on information available to us as of the filing date of this report, and we assume no obligation to update any such forward-looking statements. Our actual results could differ materially from the forward-looking statements.

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PART I.

ITEM 1. FINANCIAL STATEMENTS.

BLUE GEM ENTERPRISE
(An Exploration Stage Company)

Balance Sheets

August 31, May 31, 2009 2009 -------- -------- Unaudited ASSETS CURRENT ASSETS Cash $ 1,059 $ 7,818 -------- -------- TOTAL ASSETS $ 1,059 $ 7,818 ======== ======== LIABILITIES & STOCKHOLDERS' EQUITY TOTAL LIABILITIES $ -- $ -- -------- -------- STOCKHOLDERS' EQUITY 75,000,000 shares Common Stock Authorized at $0.001/par value 6,520,000 shares issued and outstanding at August 31, 2009 and May 31, 2009, respectively 6,520 6,520 Additional Paid-in Capital 56,480 56,480 Deficit accumulated during the exploration stage (61,941) (55,182) -------- -------- TOTAL STOCKHOLDERS' EQUITY 1,059 7,818 -------- -------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,059 $ 7,818 ======== ========

The accompanying footnotes are an integral part of these financial statements.

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BLUE GEM ENTERPRISE
(An Exploration Stage Company)

Statements of Operations
(Unaudited)

Inception Three Months Three Months (November 28, 2006) Ending Ending Through August 31, August 31, August 31, 2009 2008 2009 ---------- ---------- ---------- REVENUES Revenues $ -- $ -- $ -- EXPENSES Mineral property costs -- -- 10,620 Administrative and general 6,759 5,226 51,626 ---------- ---------- ---------- Total operating expenses (6,759) (5,226) (62,246) Interest Income -- 25 305 ---------- ---------- ---------- NET (LOSS) $ (6,759) $ (5,201) $ 61,941 ========== ========== ========== Basic earnings per share (0.00) (0.00) ========== ========== Weighted average number of common shares outstanding 6,520,000 6,520,000 ========== ==========

The accompanying footnotes are an integral part of these financial statements.

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BLUE GEM ENTERPRISES
(An Exploration Stage Company)

Statements of Cash Flows
(Unaudited)

Inception Three Months Three Months (November 28, 2006) Ending Ending Through August 31, August 31, August 31, 2009 2008 2009 -------- -------- -------- CASH FLOW FROM OPERATING ACTIVITIES Net income (loss) $ (6,759) $ (5,201) $(61,941) Non-cash items: Write off of mineral property cost -- -- 10,000 Donated services -- 1,500 15,000 -------- -------- -------- Total cash provided by (used in) operating activities (6,759) (3,701) (36,941) -------- -------- -------- CASH FLOW FROM INVESTING ACTIVITIES Mineral property acquisition cost -- -- (10,000) -------- -------- -------- Net cash provided by investing activities -- -- (10,000) -------- -------- -------- CASH FLOW FROM FINANCING ACTIVITIES Proceeds from issuance of Common Stock -- -- 48,000 -------- -------- -------- Net cash provided by financing activities -- -- 48,000 -------- -------- -------- Net increase (decrease) in cash (6,759) (3,701) 1,059 Cash at beginning of period 7,818 38,240 -- -------- -------- -------- Cash at end of period $ 1,059 $ 34,539 $ 1,059 ======== ======== ======== Supplemental Cash Flow Information: Interest Paid $ -- $ -- $ -- ======== ======== ======== Taxes Paid $ -- $ -- $ -- ======== ======== ========

The accompanying footnotes are an integral part of these financial statements

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BLUE GEM ENTERPRISE
(An Exploration Stage Company)

Notes to Financial Statements
Unaudited

1. BASIS OF PRESENTATION

Blue Gem Enterprise (the "Company") was incorporated in the State of Nevada on November 28, 2006. The Company is in the business of mineral exploration.

The accompanying unaudited financial statements of Blue Gem Enterprise ("Blue Gem or the Company") have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission ("SEC"), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company's Form 10-K filed with the SEC. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for our interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements that would substantially duplicate the disclosure contained in the audited financial statements for fiscal 2009, as reported in the Form 10-K, have been omitted.

2. BOARD RESIGNATIONS AND APPOINTMENTS

On July 23, 2009 the two individuals acting as directors of the company resigned and a new sole director and president was appointed in their place. This motion was approved by a Meeting of the Board of Directors and a Written Consent in Lieu of a Special Meeting.

3. COMMON STOCK

On July 29, 2009 the Company entered into a material definitive agreement with Belmont Partners, LLC by which Belmont acquired five million (5,000,000) shares of the Company's common stock from certain shareholders. The transaction was approved by both a board resolution dated July 23, 2009 and a majority of the Company's shareholders in a shareholder resolution dated the same day. Following the transaction, Belmont Partners LLC controls approximately 76.69% of the Company's outstanding capital stock.

4. SUBSEQUENT EVENTS

On September 17, 2009, the Board of Directors approved an increase of the authorized capital stock of the Company to two hundred million (200,000,000).

On September 18, 2009 at a Meeting of the Board of Directors, the Company acted to ratify, approve and accept a forward stock split at a ratio of 16.44737 for 1.

The increase in authorized capital stock and forward stock split have not been retroactively applied.

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

The following discussion provides information that we believe is relevant to an assessment and understanding of the results of operations and financial condition of our company. It should be read in conjunction with the Financial Statements and accompanying Notes.

PLAN OF OPERATION

Our plan of operation for the following twelve months is to complete the first and second of the three phases of the exploration program on our claim. In addition to the $16,000 we anticipate spending for the first two phases of the exploration program as outlined below, we anticipate spending an additional $25,000 on general and administration expenses and complying with reporting obligations. Total expenditures over the next 12 months are therefore expected to be approximately $41,000. We will experience a shortage of funds prior to funding and we may utilize funds from our directors. However they have no formal commitment, arrangement or legal obligation to advance or loan funds to the company.

Phase 1 Data Evaluation: Magnetometer data for the claim area should be researched for anomalies potentially caused by mineralization. Priority areas for prospecting will be any such anomalies.

Phase 2 Geochemical sampling: All priority areas found will be prospected in detail and systematic soil sampling will be taken. Trenching may be employed to gather soil samples. Samples need to be analyzed at a specialized laboratory. Positive results will be the outline of mineralized bodies, through indicator element signatures.

Phase 3 Drilling: Positive areas will need to be drill tested. The amount of drilling will depend on the success of phase 1 and 2.

BUDGET

$ ------ Phase 1 6,000 Phase 2 10,000 Phase 3 70,000 ------ Total 86,000 ======

We plan to commence Phase 1 of the exploration program on the claim in the spring of 2010. We expect this phase to take 8 days to complete and an additional one to two months for the geologist to prepare his report.

The above program costs are management's estimates based upon the recommendations of the professional geologist's report and the actual project costs may exceed our estimates. To date, we have not commenced exploration.

Following Phase 1 of the exploration program, if it proves successful in identifying mineral deposits, we intend to proceed with Phase 2 of our exploration program. Subject to the results of Phase 1, we anticipate commencing with Phase 2 and 3 in summer 2010.

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We will require additional funding to commence our planned exploration program. We cannot provide any assurance that we will be able to raise sufficient funds to commence our planned exploration program.

We are still pursuing this plan but to date we have not been able to raise additional funds through either debt or equity offerings. Without this additional cash we have been unable to pursue our plan of operations and commence generating revenue. We believe that we may not be able to raise the necessary funds to continue to pursue our business operations. As a result of the foregoing, we may begin to explore our options regarding the development of a new business plan and direction.

RESULTS OF OPERATIONS

THREE-MONTH PERIODS ENDED AUGUST 31, 2009 AND 2008

We did not earn any revenues during the three-month period ended August 31, 2009 (three-month period ended August 31, 2008: $Nil).

We incurred operating expenses in the amount of $6,759 for the three-month period ended August 31, 2009 (three-month period ended August 31, 2008: $5,226).

LIQUIDITY AND CAPITAL RESOURCES

At August 31, 2009, we had a cash balance of $1,059. We do not have enough cash on hand to commence our exploration program. We will need to raise additional funds to commence our planned exploration program.

The additional funding will likely come from equity financing from the sale of our common stock or sale of part of our interest in our mineral claims. If we are successful in completing an equity financing, existing shareholders will experience dilution of their interest in our Company. We do not have any financing arranged and we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock to fund our exploration activities. In the absence of such financing, our business will likely fail.

There are no assurances that we will be able to achieve further sales of our common stock or any other form of additional financing. If we are unable to achieve the financing necessary to continue our plan of operations, then we will not be able to continue our exploration of the Claims and our business will fail.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

As a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act), we are not required to provide the information called for by this Item 3.

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ITEM 4. CONTROLS AND PROCEDURES

DISCLOSURE CONTROLS AND PROCEDURES

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on the evaluation and the identification of the material weaknesses in our internal control over financial reporting our Chief Executive Officer and our Chief Accounting Officer concluded that, as of August 31, 2009, our disclosure controls and procedures were effective.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There have been no changes during the period covered by this Quarterly Report on Form 10-Q in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

LIMITATIONS ON THE EFFECTIVENESS OF CONTROLS AND PROCEDURES

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our controls and procedures will prevent all potential error and fraud. 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.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

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

None.

ITEM 5. OTHER INFORMATION

SUBSEQUENT EVENTS

On September 17, 2009, the Board of Directors approved an increase of the authorized capital stock of the Company to two hundred million (200,000,000). On September 18, 2009 at a Meeting of the Board of Directors, the Company acted to ratify, approve and accept a forward stock split at a ratio of 16.44737 for 1.

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ITEM 6. EXHIBITS

(a) The following documents are filed as part of this Report:

(1) Financial statements filed as part of this Report:

Balance Sheets as of August 31, 2009 (Unaudited) and May 31, 2009

Statements of Operations for the three-month periods ended August 31, 2009 and 2008, and the period from November 28, 2006 (inception) to August 31, 2009 (Unaudited).

Statements of Cash Flows for the three-month periods ended August 31, 2009 and 2008, and the period from November 28, 2006 (inception) to August 31, 2009
(Unaudited)

Notes to Financial Statements (Unaudited)

(2) Exhibits filed as part of this Report:

Exhibit

Number Description ------ ----------- 31.1 Certification of Chief Executive Officer pursuant to Rule 13a-15e or 15d-15(e), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 31.2 Certification of Chief Financial Officer pursuant to Rule 13a-15e or 15d-15(e), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32.1 Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 32.2 Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(b) Reports filed on Form 8-K during the quarter ended August 31, 2009: On July 31, 2009 the Company filed a Form 8-K with the SEC regarding a change in control.

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.

Blue Gem Enterprise Date: October 12, 2009 (Registrant) /s/ Joseph Meuse ----------------------------------------- By: Joseph Meuse

Title: President and Chief Executive Officer Chief Financial Officer & Principal Accounting Officer

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