Blue Gem Enterprise, Inc.

Three months after its March 2011 comment letter, the SEC noted Blue Gem had never substantively responded, set a hard June 28, 2011 deadline, and warned it would otherwise proceed on its own and could publicly release all of the correspondence.

other

An SEC comment letter flagged that Blue Gem's 10-Q for the quarter ended Nov 30, 2010 was still unfiled two months past its Jan 14, 2011 due date, that its SIC code still read metal mining despite becoming a food/beverage distributor, that its 2010 forward stock split wasn't retroactively restated in the financial statements, and asked for more detail on the Share Exchange Agreement terms and on how it accounts for its produce/dairy distribution arrangement with American Fruit & Produce Corp.

other

Reported a consolidated net loss of $311,559 for the quarter ended August 31, 2010 (versus $6,759 a year earlier) and total assets of $1,122,425 (versus $261,106) - already folding in newly-acquired Title Beverage Distribution's results even though the Share Exchange Agreement, signed August 13, didn't formally close until September 14, two weeks after this quarter's own end date.

quarterly activities report

Blue Gem publicly corrected roughly eight months of its own press releases (December 2009-July 2010), acknowledging that deals it had announced as its own were actually done by Title Beverage Distribution, which only became Blue Gem's subsidiary when the Share Exchange Agreement closed on September 14, 2010 - before that date Title was still a separate, private company merely bound to Blue Gem by letter of intent.

other material event

A 10-K/A added detail on Title's supply arrangement with drink maker Electric Beverage Company (EBC), now formally amended to add Blue Gem as a party: $1,015,000 in product pre-payments (May-July 2010) plus roughly $800,000 in further advances, with $100,000 of Title's debt forgiven by Blue Gem in exchange for EBC easing minimum-purchase requirements and extending the distribution term.

annual report

The FY2010 10-K confirmed Title Beverage Distribution had become a wholly-owned subsidiary and that Blue Gem was letting its original Golden Prince mining claim lapse rather than pay the roughly $140 annual fee to keep it. Blue Gem's own net loss was $175,292 (accumulated deficit $230,474) while Title separately lost $475,017 in its first ~8 months, with Walgreens and Publix as its main retail customers; a $2.09 million raise from 11 accredited investors in April-July 2010 was already largely spent, leaving only about three months of cash.

annual report

Net loss ballooned to $252,768 for the quarter ended February 28, 2010 (from $7,463 a year earlier), driven by a sharp jump in administrative and general expenses coinciding with the pending Title Beverage Distribution deal announced two months earlier, taking the since-inception deficit to $318,168; the company still reported no assets.

quarterly activities report

Blue Gem signed a letter of intent to merge with Title Beverage Distribution, Inc., the athlete-endorsed Title Sports Drink's exclusive distributor to more than 1,500 South Florida stores - the accompanying press release was headlined "Blue Gem Enterprise Acquires Title Beverage Distribution," but the deal was only a non-binding LOI at this stage, not yet a completed acquisition.

material agreement

Reported as bought by Charter Consulting Corp., Belmont Partners' 82,236,850-share (76.68%) controlling stake actually sold for $235,000 on October 15, 2009; new CEO/Chairman Allan Sepe (a career cruise-line beverage buyer/manager) and CFO/Secretary Anthony Dervali took over from the departing Meuse, a 16.44737-for-1 forward stock split was approved, and the company pivoted its business plan to non-alcoholic Direct Store Beverage Distribution.

business combination

Belmont Partners, LLC - a firm specializing in acquiring control of dormant shell companies - bought 5,000,000 shares (76.63%) on July 29, 2009; its managing member Joseph Meuse became Director, President and Secretary while founders Dave Beatty and Susan Loyd resigned all positions, effectively ending the original mineral-exploration plan.

director officer appointment