UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

———————

FORM 10-K

☒	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
	ACT OF 1934
	For the fiscal year ended: December 31, 2015
	Or
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
	ACT OF 1934
	For the transition period from: _____________ to _____________

———————

x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
	ACT OF 1934
For the fiscal year ended: December 31, 2016
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 Number 000-53735

CONSOLIDATED GEMS, INC.

(Exact name of Registrant as specified in its charter)

———————

Delaware		27-0267587
(State or Other Jurisdiction		(I.R.S. Employer
of Incorporation or Organization)		Identification No.)

Level 1A, 42 Moray Street Southbank, Victoria, 3004, Australia

(Address of principal executive offices) (Zip Code)

001 (613) 8532 2838

(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report)

———————

Securities registered pursuant to Section 12(b) of the Act: None




Securities registered pursuant to Section 12(g) of the Act: None

Title of each class
Common Stock, par value US$.0001 per share

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ Yes ☒ No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ☐ Yes ☒ No

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
	☐	Yes	☒	No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
	☐	Yes	☒	No

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. ☐ 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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ☐ Yes ☒ No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.


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.
		☐	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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
		☒	Yes	☐	No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.
				☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

Large accelerated filer	☐	Accelerated filer		☐
Non-accelerated filer	☐	Smaller reporting company		☒
Emerging growth company	☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).		☐	Yes	☒	No

Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☒ Emerging growth company ☐ ☐

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 the last business day of the registrant’s most recently completed second fiscal quarter.

(a)The aggregate market value based on the average bid and asked price on the over-the-counter market of the registrant’s common stock (“Common Stock”) held by non-affiliates of the Company was US$1,905,500 as at June 30, 2016. There were 199,873,683 outstanding shares of Common Stock as of December 12, 2017

APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.
	☐	Yes	☐	No

DOCUMENTS INCORPORATED BY REFERENCE

Not Applicable

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ☐ Yes ☒ No

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 the last business day of the registrant’s most recently completed second fiscal quarter. (a) The aggregate market value based on the average bid and asked price on the over-the-counter market of the registrant’s common stock (“Common Stock”) held by non-affiliates of the Company was US$582,900 as at June 30, 2015. There were 199,873,683 outstanding shares of Common Stock as of September 18, 2017 APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. ☐ Yes ☐ No DOCUMENTS INCORPORATED BY REFERENCE Not Applicable

_____________________

INDEX

PART I
Item 1.	Business	2
Item 1A.	Risk Factors	3
Item 1B.	Unresolved Staff Comments	7
Item 2.	Properties	7
Item 3.	Legal Proceedings	7
Item 4.	Mine Safety Disclosures	7
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	8
Item 6.	Selected Financial Data	9
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operation	10
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	1614
Item 8.	Financial Statements and Supplementary Data	1614
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	1614
Item 9A.	Controls and Procedures	1614
Item 9B.	Other Information	1715
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	1816
Item 11.	Executive Compensation	2018
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	2119
Item 13.	Certain Relationships and Related Transactions, and Director Independence	2119
Item 14.	Principal Accounting Fees and Services	2321
PART IV
Item 15.	Exhibits, Financial Statement Schedules	2422
SIGNATURES

PART I

Information Regarding 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 risks of exploration stage projects,

§	political risks of exploration in foreign countries,

§	risks associated with environmental and other regulatory matters,

§	the volatility of commodity prices,

§	movements in foreign exchange rates,

§ increased competition, governmental regulation,

§ governmental regulation,

§	performance of information systems,

§	ability of the Company to hire, train and retain qualified employees, and

§	our ability to enter into key project and supply agreements and the performance of contract counterparties.

In addition, other risks, uncertainties, assumptions, and factors that could affect the Company's results and prospects are described in this report, including under the heading “Risk Factors” and elsewhere 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.

Foreign Currency Translation

Prior to April 1, 2013, the Company’s functional currency was the US dollar. However, as a result of Australian based activities in the June 2013 quarter relating to potential gem projects, the Company’s revenue and expenses are primarily denominated in Australian dollars (A$). ASC 830 Foreign Currency Translation, states that the functional currency of an entity is the currency of the primary economic environment in which the entity operates. Accordingly the Company determined that from April 1, 2013 the functional and reporting currency of the Company is the Australian dollar. Assets, liabilities and equity were translated at the rate of exchange at April 1, 2013. Revenue and expenses were translated at rates at date of transaction. Translation gains and losses were not material.

Restatement of comparative numbers was made for the change in functional and reporting currency.

UNLESS OTHERWISE INDICATED, ALL FINANCIAL INFORMATION PRESENTED IS IN AUSTRALIAN DOLLARS.

Item 1 Business

Description of Business

Introduction

Consolidated Gems, Inc. ("Consolidated Gems” or the “Company", “we,” “our” or “us”), formerly Electrum International, Inc. is a Delaware corporation that was originally incorporated in Florida as We Sell for U Corp. (“We Sell for U”) on November 12, 2007. 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 9482.4685% of Consolidated Gems as of December 31, ~~2015~~2016.

In December 2008, Power acquired a 96% interest in Consolidated Gems from Edward T. Farmer and certain other stockholders. Mr. Farmer resigned as Sole Director and Officer of Electrum, Joseph Gutnick was appointed President, Chief Executive Officer and a Director and Peter Lee was appointed Chief Financial Officer and Secretary. Commencing in fiscal 2009, the Company decided to focus its business on energy opportunities.

On January 29, 2009, the Company’s Board of Directors declared a 6-for-1 stock split in the form of a stock dividend that was payable in February 2009 to stockholders of record as of February 14, 2009. The Company has accounted for this bonus issue as a stock split and accordingly, all share and per share data has been retroactively restated. An aggregate of 72,000,000 shares of common stock were issued in connection with this dividend.

On March 31, 2009, the Company’s Board of Directors declared a 2-for-1 stock split in the form of a stock dividend that was payable in August 2009 to stockholders of record as of August 12, 2009. The Company has accounted for this bonus issue as a stock split and accordingly, all share and per share data has been retroactively restated. An aggregate of 86,400,000 shares of common stock were issued in connection with this dividend.

Effective on August 12, 2009, the Company completed the reincorporation from a Florida corporation to a Delaware corporation through a merger with and into its wholly-owned subsidiary, Consolidated Gems. Each issued and outstanding share of common stock, par value US$0.0001 per share, of We Sell For U Corp., a Florida-incorporated company, was automatically converted into one issued and outstanding share of common stock, par value US$0.0001 per share, of Consolidated Gems, a Delaware-incorporated company. The number of authorized shares of capital stock was increased to five hundred twenty million (520,000,000) shares, of which five hundred million (500,000,000) shares shall be Common Stock and twenty million (20,000,000) shares shall be Preferred Stock, each with a par value of US$0.0001 per share. 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.

On June 30, 2011, the Company issued 2,515,350 shares of common stock at an issue price of US$0.60, being the closing price on the date of issue, to AXIS Consultants Pty Ltd (“AXIS”) in satisfaction of a loan balance of US$1,509,210.

The Company issued 19,033,333 and 5,525,000 shares of common stock on April 13, 2016, and May 20, 2016, raising A$765,652 and A$221,000, respectively.

Description of Current Business Plans and Activities

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

On March 8, 2016, the Company announced it had entered into a Term Sheet with Noam Levavi and Eran Galil (the “Vendors”) for the acquisition of all of the issued shares of Byondata (“Byondata”), a company incorporated under the laws of Israel. The Company had a 90 day period to conduct due diligence and negotiate a formal share sale agreement. Headquartered in Herzliya, Israel, Byondata has developed unique platform as a service to create content-rich, immersive Virtual Reality (VR) experiences. Following initial due diligence and by mutual agreement, the proposed acquisition was terminated.

In January 2017, the Company announced it was looking for gold opportunities in Myanmar.

Employees

We use temporary employees in our activities. The services of our President, Chief Executive Officer and Director, Mordechai Gutnick, and Chief Financial Officer and Secretary, Peter Lee, as well as clerical employees are provided to us on a part-time as needed basis pursuant to a Service Agreement (the “Service Agreement”) between us and AXIS Consultants Pty Limited (“AXIS”) effective from January 1, 2009. AXIS also provides us with office facilities, equipment, administration and clerical services in Melbourne Australia pursuant to the Service Agreement. The Service Agreement may be terminated by written notice by either party.

Other than this, we rely primarily upon consultants to accomplish our activities. We are not subject to a union labour contract or collective bargaining agreement.

SEC Reports

We file annual, quarterly, current and other reports and information with the SEC. These filings can be viewed and downloaded from the Internet at the SEC’s website at www.sec.gov. In addition, these SEC filings are available at no cost as soon as reasonably practicable after the filing thereof on our website at electrumint.com these reports are also available to be read and copied at the SEC’s public reference room located at Judiciary Plaza, 100 F Street, N.E., Washington, D.C. 20549. The public may obtain information on the operations of the public reference room by calling the SEC at 1-800-SEC-0330.

Item 1A Risk Factors

You should carefully consider each of the following risk factors and all of the other information provided in this Annual Report before purchasing our common stock. An investment in our common stock involves a high degree of risk, and should be considered only by persons who can afford the loss of their entire investment. The risks and uncertainties described below are not the only ones we face. There may be additional risks and uncertainties that are not known to us or that we do not consider to be material at this time. If the events described in these risks occur, our business, financial condition and results of operations would likely suffer. Additionally, this Annual Report contains forward-looking statements that involve risks and uncertainties. Our actual results may differ significantly from the results discussed in the forward-looking statements. This section discusses the risk factors that might cause those differences.

Risks of Our Business

We Lack an Operating History And Have Losses Which We Expect To Continue Into the Future.

To date we have no source of revenue and have not identified any mineral exploration properties. We have no operating history as an exploration and mining company upon which an evaluation of our future success or failure can be made. Our ability to achieve and maintain profitability and positive cash flow is dependent upon:

~~- our ability to identify suitable exploration and mining opportunities~~3

-	our ability to identify suitable exploration and mining opportunities.

-	our ability to raise sufficient capital to turn such opportunities into economically viable business units

There can be no assurance that we will be able to identify profitable business opportunities in the exploration and mining industry or, if we do, that we will be able to obtain sufficient financing to develop such opportunities.

Our Proposed Areas of Operations may be located in locations that are subject to Changes in political conditions and regulations in those regions.

Our proposed areas of operations may be located in locations that are subject to changes in political conditions and regulations. In the past some countries in regions such as Asia have been subject to political and social instability, changes and uncertainties which may cause changes to existing government regulations affecting resource exploration and mining activities. Civil or political unrest could disrupt our operations at any time. Our planned resource exploration and activities may be adversely affected in varying degrees by changing governmental regulations relating to the mining industry or shifts in political conditions that increase the costs related to our activities or maintaining our future properties. Finally, some countries’ status as developing regions may make it more difficult for us to obtain required financing for our planned exploration activities.

We May Engage in Acquisitions, Strategic Investments, Strategic Partnerships or Alliances or Other Ventures that may or may not be Successful.

We may acquire or make strategic investments in businesses, technologies, services or products, or enter into strategic partnerships or alliances with third parties in order to enhance our business. It is possible that we may not be able to identify suitable ~~acquisitions~~acquisition targets and candidates for strategic investments or partnerships, or if we do identify such targets or candidates, we may not be able to complete those transactions on terms commercially acceptable to us, or at all. The inability to identify suitable acquisition targets or investments or the inability to complete such transactions may affect our competitiveness and our growth prospects.

We may make strategic investments in early-stage exploration and mining start-up companies in order to gain experience in or exploit niche technologies. However, our investments may not be successful. The lack of profitability of any of our investments could have a material adverse effect on our operating results.

World Economic Conditions Could Adversely Affect Our Results of Operations and Financial Condition

The effects of world economic conditions are difficult to accurately predict. As a result of this crisis, conditions in the credit markets ~~may~~have become uncertain and risk averse. These adverse conditions may make it harder for the Company to raise additional funds to finance the development of its business. Continued adverse economic conditions could adversely affect our liquidity, results of operations and financial condition.

The Report Of Our Independent Registered Public Accounting Firm Contains An Explanatory Paragraph Questioning Our Ability To Continue As A Going Concern.

The report of our independent registered public accounting firm on our financial statements as of December 31, ~~2015~~2016 and ~~2014~~2015, and for the years ended December 31, ~~2015~~2016 and ~~2014~~2015, includes an emphasis of matter paragraph questioning our ability to continue as a going concern. This paragraph indicates that we have not yet commenced revenue producing operations, have incurred net losses from inception, and have an accumulated (deficit) of A$23,~~835~~152,~~947~~650 which conditions raise substantial doubt about our ability to continue as a going concern. Our financial statements do not include any adjustments that might result from the outcome of this uncertainty.

~~We Are A Small Operation And Do Not Have Significant Capital~~4

~~Because~~We weAre ~~will~~A ~~have~~Small ~~limited~~Operation ~~working~~And ~~capital,~~Do weNot ~~must~~Have ~~limit~~Significant ~~our activities~~Capital. If we are unable to raise the capital required to undertake adequate activities, including identifying suitable exploration and mining opportunities, we may miss opportunities to establish or acquire suitable economically viable business units. If we do not find suitable economically viable business units, we may be forced to cease operations and you may lose your entire investment.

Because we have negative working capital, we must limit our activities. If we are unable to raise the capital required to undertake adequate activities, including identifying suitable exploration and mining opportunities, we may miss opportunities to establish or acquire suitable economically viable business units. If we do not find suitable economically viable business units, we may be forced to cease operations and you may lose your entire investment.

Approximately 83% Of Our Common Stock Is Controlled By Our President Who Has The Ability To Appoint Our Board Of Directors And Determine Other Matters Submitted To Stockholders

Mr. Mordechai Gutnick, our Executive Chairman and President, beneficially owned 165.6 million shares of our common stock, which represented approximately 82.85% of our shares outstanding as of ~~September~~October 1814, 2017. As a result, Mr. Gutnick has and is expected to continue to have the ability to appoint our Board of Directors and to determine the outcome of all other issues submitted to our stockholders. The interests of Mr. Gutnick may not always coincide with our interests or the interests of other stockholders, and subject to his fiduciary duties as a director, he may act in a manner that advances his best interests and not necessarily those of other stockholders. One consequence to this substantial influence or control is that it may not be possible for investors to remove management of the Company. It could also deter unsolicited takeover, including transactions in which stockholders might otherwise receive a premium for their shares over then current market prices.

We are substantially dependent upon AXIS To Carry Out Our Activities

We are substantially dependent upon AXIS for our senior management, financial and accounting, corporate legal and other corporate headquarters functions. For example, each of our officers is employed by AXIS and, as such, is required by AXIS to devote substantial amounts of time to the business and affairs of the other shareholders of AXIS.

Pursuant to a services agreement, AXIS provides us with office facilities, and some administrative personnel and services, management staff and services. No fixed fee is set in the agreement and we are required to reimburse AXIS for any direct costs incurred by AXIS for us. In addition, we pay a proportion of AXIS indirect costs based on a measure of our utilization of the facilities and activities of AXIS plus a service fee of not more than 15% of the direct and indirect costs. AXIS has not charged a service fee for this fiscal year or in the prior year. This service agreement may be terminated by us or AXIS on 60 days’ notice. See Item 13 “Certain Relationships and Related ~~Party~~ Transactions ~~and Director Independence~~.” AXIS billed Consolidated Gems, Inc, as per the services agreement and incurred direct costs on our behalf, for ~~2015~~2016 a total of A$2189,~~833~~182 (~~2014~~2015: A$5321,~~072~~977). ~~Since December 31, 2015, the Company has repaid A$786,600 to AXIS.~~

We are one of seven affiliated companies. 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 certain mining and exploration staff. A number of arrangements and transactions have been entered into from time to time between such companies. Currently, there are no material arrangements or planned transactions between the Company and any of the other affiliated companies other than AXIS. However, it is possible we may enter into such transactions in the future which could present conflicts of interest. In addition, there may be conflicts among the Company and the other companies that AXIS provides services to with respect to access to executive and administrative personnel and other resources.

Historically, AXIS has allocated corporate opportunities to each of the companies engaged in the exploration and mining industry after considering the location of each of the companies’ operations and the type of commodity for which each company explores within its geographic region. At present, there are no conflicts among the Company and the other companies with respect to the principal geographic areas in which they operate and/or the principal commodities that they are searching for.

The Company has received advances from AXIS in connection with the ongoing business relationship between the two parties, which have been disclosed in the Company’s SEC reports, but which are not specifically provided for in the AXIS Services Agreement. Historically, the shortfall in our cash receipts has been covered by cash advances from AXIS. The purpose of such advances is to assist us in meeting our ongoing cash flow requirements. See Item 13 “Certain Relationships and Related Transactions, and Director Independence.”

Future Sales of Common Stock Could Depress The Price Of Our Common Stock

Future sales of substantial amounts of common stock pursuant to Rule 144 under the Securities Act of 1933 or otherwise by certain stockholders could have a material adverse impact on the market price for the common stock at the time. As of September 1828, ~~2017there~~2017 there were 168,115,350 outstanding shares of common stock which are deemed “restricted securities” as defined by Rule 144 under the Securities Act or control securities. Under certain circumstances, these shares may be sold without registration pursuant to the provisions of Rule 144 following the expiration of one year after the Company ceases to be a shell company. In general, under rule 144, a person (or persons whose shares are aggregated) who has satisfied a six-month holding period and who is not an affiliate of the Company may sell restricted securities without limitation as long as the Company is current in its SEC reports. A person who is an affiliate of the Company may sell within any three-month period a number of restricted securities and/or control securities which does not exceed the greater of one (1%) percent of the shares outstanding or the average weekly trading volume during the four calendar weeks preceding the notice of sale required by Rule 144. In addition, Rule 144 permits, under certain circumstances, the sale of restricted securities by a non-affiliate without any limitations after a one-year holding period. Any sales of shares by stockholders pursuant to Rule 144 may have a depressive effect on the price of our Common stock.

Our Common Stock Is Traded Over the Counter, Which May Deprive Stockholders Of The Full Value Of Their Shares

Our common stock is quoted via the Over The Counter Bulletin Board (OTCBB). As such, our common stock may have fewer market makers, lower trading volumes and larger spreads between bid and asked prices than securities listed on an exchange such as the New York Stock Exchange or the NASDAQ Stock Market. These factors may result in higher price volatility and less market liquidity for the common stock.

A Low Market Price May Severely Limit The Potential Market For Our Common Stock

Our common stock is currently trading at a price substantially below US$5.00 per share, subjecting trading in the stock to certain SEC rules requiring additional disclosures by broker-dealers. These rules generally apply to any equity security that has a market price of less than US$5.00 per share, subject to certain exceptions (a “penny stock”). Such rules require the delivery, prior to any penny stock transaction, of a disclosure schedule explaining the penny stock market and the risks associated therewith and impose various sales practice requirements on broker-dealers who sell penny stocks to persons other than established customers and institutional or wealthy investors. For these types of transactions, the broker-dealer must make a special suitability determination for the purchaser and have received the purchaser’s written consent to the transaction prior to the sale. The broker-dealer also must disclose the commissions payable to the broker-dealer, current bid and offer quotations for the penny stock and, if the broker-dealer is the sole market maker, the broker-dealer must disclose this fact and the broker-dealer’s presumed control over the market. Such information must be provided to the customer orally or in writing before or with the written confirmation of trade sent to the customer. Monthly statements must be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stock. The additional burdens imposed upon broker-dealers by such requirements could discourage broker-dealers from effecting transactions in our common stock.

Item 1B Unresolved Staff Comments

Not applicable.

Item 2 Properties

The Company occupies certain executive and office facilities in Melbourne, Victoria, Australia which are provided to it pursuant to the Service Agreement with AXIS. See “Item 1- Business- Employees” and “Item 13 - Certain Relationships and Related Transactions ~~and Director Independence~~”. The Company believes that its administrative space is adequate for its current needs.

Item 3 Legal Proceedings

There are no pending legal proceedings to which the Company is a party, or to which any of its property is the subject, which the Company considers material.

Item 4

Mine Safety Disclosures

Not applicable.

PART II

Item 5 Market for ~~Registrant’s~~ Common Equity, and Related Stockholder Matters ~~and Issuer Purchases of Equity Securities~~

Market Information

Our common stock is traded in the over-the-counter market and quoted on the OTC-Bulletin Board under the symbol “CGEM”, which became effective on October 1, 2012.

The following table sets out the high and low bid information for the common stock as reported by the OTC Bulletin Board for each period/quarter indicated in US$:

Calendar Period	High Bid(1)	~~High~~Low Bid(1)		~~Low Bid(1)~~
2014
2015
First Quarter	0.02	0.02	~~0.03~~		~~0.03~~
Second Quarter	0.06	0.02	~~0.05~~		~~0.02~~
Third Quarter	0.06	0.02	~~0.05~~		~~0.05~~
Fourth Quarter	0.06	0.02	~~0.05~~		~~0.02~~
2015
2016
First Quarter	0.03	0.03	~~0.02~~		~~0.02~~
Second Quarter	0.03	0.03	~~0.06~~		~~0.02~~
Third Quarter	0.04	0.03	~~0.06~~		~~0.02~~
Fourth Quarter	0.03	0.03	~~0.06~~		~~0.02~~
2016
First Quarter			0.03		0.03
Second Quarter			0.03		0.03
Third Quarter			0.04		0.03
Fourth Quarter			0.03		0.03

⁽¹⁾	The quotations set out herein reflect inter-dealer prices without retail mark-up, mark-down or commission and may not necessarily reflect actual transactions.

As of December 31, ~~2015,~~2016 ~~there were 175,315,350 shares of common stock issued~~ and ~~outstanding.~~October ~~As at September 18~~14, 2017, there were 199,873,683 shares of common stock issued and outstanding.

Dividends

To date we have not paid any cash dividends on our common stock and we do not expect to declare or pay any cash dividends on our common stock in the foreseeable future. Payment of any dividends will depend upon our future earnings, if any, our financial condition, and other factors deemed relevant by the Board of Directors.

On January 29, 2009 the Company’s Board of Directors declared a 6-for-1 stock split in the form of a stock dividend that was payable in February 2009 to stockholders of record as of February 14, 2009. An aggregate of 72,000,000 shares of common stock were issued in connection with this dividend.

Shareholders

As of December 31, ~~2015~~2016, the Company had 1243 shareholders of record. Within the holders of record of the Company's Common Stock are depositories such as Cede & Co., a nominee for The Depository Trust Company (or DTC), that hold shares of stock for brokerage firms which, in turn, hold shares of stock for one or more beneficial owners. Accordingly, the Company believes there are many more beneficial owners of its Common Stock whose shares are held in "street name", not in the name of the individual shareholder

Transfer Agent

Our United States Transfer Agent and Registrar is Continental Stock Transfer & Trust Company.

Item 6

Selected Financial Data

Our selected financial data presented below for the years ended December 31, ~~2015~~2016 and December 31, ~~2014~~2015 and the balance sheet data at December 31, ~~2015~~2016 and ~~2014~~2015 have been derived from audited financial statements, which have been audited by PKF O’Connor Davies, LLP ~~(PKF O’Connor Davies)~~. The selected financial data should be read in conjunction with our financial statements for the years ended December 31, ~~2015~~2016 and ~~2014~~2015, and Notes thereto, which are included elsewhere in this Annual Report.

Statement of Operations Data

Statement of Operations Data
	2016	2015
	A$	A$
Revenues	-	-


Costs and expenses	314,343	95,438

(Loss) from operations	(314,343)	(95,438)

Foreign currency exchange (loss)	(2,360)	(14,072)


(Loss) before income tax	(316,703)	(109,510)

Provision for income tax	-	-

Net (loss)	(316,703)	(109,510)

	A$	A$
Net (loss) per share per common equivalent share	(0.00)	(0.00)

Weighted average number of common equivalent shares outstanding (000’s)	192,451	175,315

Balance Sheet Data
	A$	A$
Total assets	3,435	118
Total liabilities	(578,285)	(1,244,917)

Stockholders’ (deficit)	(574,850)	(1,244,799)

	2015	2014
	A$	A$
Revenues	-	-
Costs and expenses	95,438	128,794
(Loss) from operations	(95,438)	(128,794)
Foreign currency exchange (loss)	(14,072)	(1,743)
Other income – interest	-	-
(Loss) before income tax	(109,510)	(130,537)
Provision for income tax	-	-
Net (loss)	(109,510)	(130,537)
	A$	A$
Net (loss) per share per common equivalent share	(0.00)	(0.00)
Weighted average number of common equivalent shares outstanding (000’s)	175,315	175,315
Balance Sheet Data
	A$	A$
Total assets	118	16,342
Total liabilities	(1,244,917)	(1,151,631)
Stockholders’ (deficit)	(1,244,799)	(1,135,289)

Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operation

General

The following discussion and analysis of our financial condition and plan of operation 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 Australian Dollar.

Foreign Currency Translation

The majority of our administrative operations are in Australia and, as a result, our accounts are reported in Australian dollars. Foreign income and expenses are translated into Australian dollars at the average exchange rate prevailing during the period. Assets and liabilities of the foreign operations are translated into Australian dollars at the period-end exchange rate. The following table shows the period-end rates of exchange of the Australian and US dollar compared with the US dollar during the periods indicated.

Year ended

Year ended December 31
2016	A$1.00	=	US$0.7202
2015	A$1.00	=	US$0.7299

The exchange rate between the A$ and US$ has moved by 11% between December 31, 2015 and 2016. Accordingly, a direct comparison of costs between fiscal 2015 and 2016 may not necessarily be a true comparison.

2014 A$1.00 = US$0.8157

2015 A$1.00 = US$0.7299

The exchange rate between the A$ and US$ has moved by 11% between December 31, 2014 and 2015. Accordingly, a direct comparison of costs between fiscal 2014 and 2015 may not necessarily be a true comparison.

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 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.

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 (deficit) of A$3,152,650 which was funded primarily by advances from affiliates and by the sale of equity securities.

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 deficit of A$2,835,947 which was funded primarily by advances from affiliates and by the sale of equity securities.

In order to take advantage of management’s substantial experience in the location and development of mineral exploration properties, the Company plans to look for opportunities in the resources industry.

As a result of management’s decision to refocus its efforts from energy opportunities to explore opportunities in the resources industry, effective March 31, 2013, the Company ceased reporting as a development stage company. Since April 1, 2013, the Company ~~had~~has been evaluating potential gem related projects and ~~had~~has been granted an exploration tenement in New South Wales, Australia. Accordingly, from April 1, 2013 the Company ~~had~~has been classified as an exploration stage company. In March 2015, following a review of the results of exploration on the gem tenement, the Company decided to relinquish the exploration licence.

On July 24, 2017, the Company entered into a Term Sheet with Lior Barash, Erez Glazer, Lior Wayn, and Lior Dolfin, (collectively, the ‘’Sellers”) for the acquisition of all of the issued shares of the Cyber Security technology business “Attofensive”, a company incorporated under the laws of Israel. The Company has a 120 day period to conduct due diligence and negotiate a formal share sale agreement.

The purchase price is up to USD$20,000,000 which is to be satisfied as follows:

a) The sum of USD$25,000 payable to the Sellers for due diligence expenses, 30 business days from the execution of the Term Sheet;

b) A further USD$25,000 each month after the date in a) above for due diligence expenses, for 3 months, payable to the Sellers for working capital purposes;

c) An issue of fully paid ordinary shares of common stock of the Company to the value of USD$5,000,000 (less any payments made to The Sellers under (a) and (b) above) to the Sellers at an issue price of USD$0.10 per share of common stock (Consideration Shares);

d) The issue to the Sellers of shares of common stock to the equivalent to USD$5,000,000 at the issue price of USD$0.20, subject to the Sellers achieving sales revenue of USD$100,000 within twelve months after the first anniversary of Completion;

e) The issue to the Sellers of shares of common stock to the equivalent to USD$5,000,000 at the issue price of USD$0.20, subject to the Sellers achieving sales revenue of USD$1,000,000 within twelve months after the first anniversary of Completion; and

f) The issue to the Sellers of shares of common stock to the equivalent to USD$5,000,000 at the issue price of USD$0.20, subject to the Sellers achieving sales revenue of USD$2,500,000 within twelve months after the first anniversary of Completion.

If the Transaction is terminated or is in the reasonable opinion of the Company unable to proceed at any point, the Vendors and the Sellers have agreed to convert any monies paid to the Sellers under (a) and (b) above into convertible securities in the Sellers.

As part of the agreement and as a condition to completion, the Company will raise USD$5,000,000.

Pending completion, the Sellers are required to carry on business in the ordinary course.

Prior to completion the Sellers is discharge all encumbrances, mortgages, liens bank loans and other security holdings other than no more than $200,000 from past working capital.

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 has some common management and is incorporated in Australia. AXIS is paid by each company it manages for the costs incurred by it in carrying out the administration function for each such company. Pursuant to the Service Agreement, AXIS performs such functions as payroll, maintaining employee records required by law and by usual accounting procedures, providing insurance, legal, human resources, company secretarial, land management, certain exploration and mining support, financial, accounting advice and services. AXIS procures items of equipment necessary in the conduct of the business of the Company. AXIS also provides for the Company various services, including but not limited to the making available of office supplies, office facilities and any other services as may be required from time to time by the Company as and when requested by the Company. We are required to reimburse AXIS for any direct costs incurred by AXIS for the Company. In addition, we are required to pay a proportion of AXIS’s overhead cost based on AXIS’s management estimate of our utilization of the facilities and activities of AXIS plus a service fee of not more than 15% of the direct and overhead costs. Amounts invoiced by AXIS are required to be paid by us. Under the agreement, we are not permitted to obtain from sources other than AXIS, and we are not permitted to perform or provide ourselves, the services contemplated by the Service Agreement, unless we first request AXIS to provide the service and AXIS fails to provide the service within one month. As our arrangements with AXIS have evolved, the arrangements have changed, which have verbally been agreed to by AXIS, as a result of the requirements of certain suppliers to be able to deal directly with us. In these cases, AXIS does not charge us a management or service fee in respect to these arrangements with suppliers who deal with us directly. The types of services that are provided directly to us include audit and tax services, legal services, stock transfer services and Delaware franchise tax.

Results of Operations

As set out in Management’s Discussion and Analysis of Financial Condition and Results of Operation – Overview, the Company is managed by AXIS. Certain costs and expenses are incurred by the Company and certain costs and expenses are incurred by AXIS on behalf of the Company and billed to the Company by AXIS. The total amount of expenses (refunded)/billed to the Company and incurred on its behalf by AXIS in fiscal ~~2015~~2016 was A$2189,~~833~~182 (~~2014~~2015: A$53(21,~~072~~977)). The discussion in the ~~next~~following paragraphs relates to costs and expenses of the Company, incurred by both the Company; and by AXIS that are billed to the Company.

~~Year ended December 31, 2015 versus Year ended December 31, 2014~~11

~~Total~~Year ~~costs and expenses have decreased from A$128,794 for the year~~ ended December 31, ~~2014~~2016 toversus ~~A$95,438~~Year ~~for the year~~ ended December 31, 2015~~. The decrease was a net result of:~~

i)Total Ancosts ~~increase in legal, accounting~~ and ~~professional~~expenses ~~costs~~have increased from A$6095,~~365~~438 for the year ended December 31, ~~2014~~2015 to A$76314,~~748~~343 for the year ended December 31, ~~2015~~2016. ~~Included~~The ~~within~~increase ~~legal,~~was ~~accounting~~a ~~and~~net ~~professional~~result ~~costs for the year ended December 31, 2015 is A$10,032 for stock transfer agent fees for management~~ of ~~the share register (2014~~: A$8,943), A$338 for legal expenses (2014: A$784), A$nil for professional consultant fees (2014: A$516), and A$66,377 (2014: A$50,122) for audit and tax fees and professional services in relation to financial statements in the quarterly reports on Form 10-Q and annual reports on Form 10-K and taxation matters.

12i) An increase in legal, accounting and professional costs from A$76,748 for the year ended December 31, 2015 to A$103,905 for the year ended December 31, 2016. Included within legal, accounting and professional costs for the year ended December 31, 2016 is A$10,557 for stock transfer agent fees for management of the share register (2015: A$10,032), A$4,832 for legal expenses (2015: A$338), A$38,600 for potential tax penalty for late lodgement of income tax returns (2015: A$nil), and A$49,916 (2015: A$66,377) for audit and tax fees and professional services in relation to financial statements in the quarterly reports on Form 10-Q and annual reports on Form 10-K and taxation matters.

ii) AAn ~~decrease~~increase in administration expenses from A$5718,~~796~~690 for the year ended December 31, ~~2014~~2015 to A$1893,~~690~~492 for the year ended December 31, ~~2015~~2016. Included with administrative expenses for the year ended December 31, ~~2015~~2016 is ana ~~amount~~charge of A$433,~~351~~321 from AXIS for salaries incurred on behalf of the Company which relate to amounts paid to the President and Chief Executive Officer, Secretary and Chief Financial Officer and other staff of AXIS who provide services to the Company ~~offset~~(2015: ~~by credit of~~ A$21,271 ~~from AXIS for charges relating to 2014, (2014: A$30,121 billed to us~~credit); A$~~285~~505 for information systems costs (~~2014~~2015: A$~~(67~~285)); A$87,~~058~~116 for lodgement of company filings with the SEC (~~2014~~2015: A$198,~~577~~058); insurance costs of A$~~13,804~~nil (~~2014~~2015: A$613,~~388~~804); storage costs of A$~~530~~1,589 (~~2014~~2015: A$~~928~~530); bank charges of A$~~777~~707 (~~2014~~2015: A$~~833~~777); consultants fees of A$1118,~~000~~190 (~~2014~~2015: A$~~nil~~11,000); franchise tax of A$1,871 (~~2014~~2015: A$1,871), A$10,866 for travel and accommodation (2015: A$nil); A$17,500 for public relations (2015: A$nil);and administration fees of A$31,~~636~~826 (~~2014~~2015: A$163,636). The ~~decrease~~increase is primarily as a result of a ~~decrease~~increase in the cost of services provided by AXIS in accordance with the service agreement. The total administrative expenses include an AXIS ~~billings of~~ credit for $(443,~~251)~~651 for ~~2015~~2016 (~~2014~~2015: $53,071).

iii) AAn ~~decrease~~increase in ~~exploration~~acquisition ~~expenditure~~related expense from A$~~10,633~~nil for the year ended December 31, ~~2014~~2015 to A$~~nil~~116,946 for the year ended December 31, ~~2015~~2016. As noted earlier, asin March 2016 the Company ~~relinquished~~entered ~~its~~into ~~mining~~a ~~interests~~term sheet with Noam Levavi and Eran Galil (the “Vendors”) for the acquisition of all of the issued shares of Byondata (“Byondata”), a company incorporated under the laws of Israel. The Company had a 90 day period to conduct due diligence and negotiate a formal share sale agreement. Included within the acquisition related costs are the initial payments made to Byondata for working capital purposes (which were non-refundable), costs of travel and consultant’s time in ~~early~~undertaking ~~fiscal~~the ~~2015~~due diligence. Following initial due diligence and by mutual agreement, the proposed acquisition was terminated.

Accordingly, the loss from operations ~~decreased~~increased from A$~~128~~95,~~794~~438 for the year ended December 31, ~~2014~~2015 to A$95314,~~438~~343 for the year ended December 31, ~~2015~~2016.

Foreign currency exchange loss ~~increased~~decreased from A$114,~~743~~072 for the year ended December 31, ~~2014~~2015 to A$142,~~072~~360 for the year ended December 31, ~~2015~~2016 as a result of the movement in the US dollar versus the Australian dollar.

The net loss for the year ended December 31, ~~2014~~2015 was A$~~130~~109,~~537~~510 compared to a net loss for the year ended December 31, ~~2015~~2016 of A$~~109~~316,~~510~~703.

Liquidity and Capital Resources

For fiscal ~~2015~~2016, net cash used in operating activities was A$24228,~~030~~911 (~~2014~~2015: A$9124,~~716~~030) primarily consisting of the net loss of A$~~109~~316,~~510~~703 (~~2014~~2015: A$~~130~~109,~~537~~510), offset by a non-cash charge for foreign currency exchange loss of A$142,~~072~~360 (~~2014~~2015: A$114,~~743~~072), a decrease in prepayments of A$~~2,660~~nil (~~2014~~2015: A$2,~~392~~660), an ~~decrease~~increase in receivables and deposits of A$113,~~510~~344 (~~2014~~2015: decrease A$3(11,~~912~~510)) and an increase in accounts payable and accrued expenses of A$5788,~~238~~776 (~~2014~~2015: A$3057,~~774~~238). Financing activities in ~~2015~~2016 consisted of a net repayment of an advance of A$21757,~~976~~768 (~~2014~~2015: A$9321,~~361~~976 advance) from AXIS. ~~All~~and ofproceeds ~~the~~from ~~Company’s~~an ~~operations~~issuance ~~since~~of ~~inception~~shares ~~have been funded by AXIS and sale~~ of ~~equity~~A$986,652 ~~securities~~(2015: A$nil).

As of December 31, 2015, the Company has short term obligations of A$156,742 comprising accounts payable and accrued expenses, and had long term obligations of A$1,088,175 comprising advances payable to an affiliate.12

~~During~~As ~~the~~of ~~year ended~~ December 31, ~~2015~~2016, ~~AXIS~~the ~~provided~~Company ~~services~~has inshort ~~accordance~~term ~~with~~obligations ~~the~~of ~~Services Agreement~~A$247,878 ~~incurred~~comprising ~~direct~~accounts ~~costs~~payable and ~~provided~~accrued ~~funding on behalf of the Company of A$21~~expenses,~~833~~ ~~(2014: A$53,072),~~ and ~~advanced~~had ~~the~~long ~~Company~~term ~~A$143~~obligations ~~(2014:~~of A$40330,~~290).~~408 Atcomprising ~~December~~advances ~~31,~~payable ~~2015, the amount owed~~ to ~~AXIS~~an ~~was A$1,088,175 (2014: A$1,066,199)~~affiliate.

13During the year ended December 31, 2016, AXIS provided services in accordance with the Services Agreement and incurred direct costs on behalf of the Company of A$89,182 (2015: A$(21,977)), and advanced the Company A$123,900 (2015: A$443), and the Company repaid A$970,850 (2015: A$4,300). At December 31, 2016, the amount owed to AXIS was A$330,408 (2015: A$1,088,175).

In ~~early~~fiscal 2016, the Company ~~commenced~~conducted a private placement and received subscriptions for 24,558,333 shares of common stock at a price of A$0.04 for A$986,652.

OnThe ~~July~~Company ~~24,~~has ~~2017,~~funded ~~the~~operations since inception through advances from affiliated entities. The Company’s ~~entered~~ability ~~into~~to acontinue ~~Term~~operations ~~Sheet~~through ~~with~~2017 ~~Lior~~is ~~Barash,~~dependent ~~Erez~~upon ~~Glazer~~future funding from affiliated entities, ~~Lior~~capital ~~Wayn~~raisings, ~~and~~or ~~Lior~~its ~~Dolfin,~~ability ~~(collectively,~~to ~~the~~commence ~~‘’Sellers”) for~~revenue ~~the~~producing ~~acquisition~~operations ofand ~~all~~positive cash flows, of ~~the~~which ~~issued~~there ~~shares~~can ofbe ~~the~~no ~~Cyber~~assurance. ~~Security~~AXIS ~~technology~~has ~~business~~advised ~~“Attofensive”,~~it adoes ~~company~~not ~~incorporated~~currently ~~under~~intend ~~the~~to ~~laws~~require repayment of ~~Israel.~~these ~~The~~advances ~~Company~~prior ~~has~~to aDecember ~~120~~31, ~~day~~2017, ~~period~~accordingly the Company has decided to ~~conduct~~classify ~~due~~the ~~diligence~~amounts ~~and~~payable ~~negotiate~~as anon-current ~~formal~~in ~~share~~the ~~sale~~accompanying ~~agreement~~balance sheets.

The ~~purchase~~Company ~~price~~continues isto upsearch tofor ~~USD$20~~additional sources of capital,~~000~~ as and when needed; however,~~000~~ ~~which~~there can be no assurance funding will be successfully obtained. Even if it is toobtained, there is no assurance that it will not be ~~satisfied~~secured ason ~~follows:~~terms that are highly dilutive to existing shareholders.

g) The sum of USD$25,000 payable to the Sellers for due diligence expenses, 30 business days from the execution of the Term Sheet;

h) A further USD$25,000 each month after the date in a) above for due diligence expenses, for 3 months, payable to the Sellers for working capital purposes;

i) An issue of fully paid ordinary shares of common stock of the Company to the value of USD$5,000,000 (less any payments made to The Sellers under (a) and (b) above) to the Sellers at an issue price of USD$0.10 per share of common stock (Consideration Shares);

j) The issue to the Sellers of shares of common stock to the equivalent to USD$5,000,000 at the issue price of USD$0.20, subject to the Sellers achieving sales revenue of USD$100,000 within twelve months after the first anniversary of Completion;

k) The issue to the Sellers of shares of common stock to the equivalent to USD$5,000,000 at the issue price of USD$0.20, subject to the Sellers achieving sales revenue of USD$1,000,000 within twelve months after the first anniversary of Completion; and

l) The issue to the Sellers of shares of common stock to the equivalent to USD$5,000,000 at the issue price of USD$0.20, subject to the Sellers achieving sales revenue of USD$2,500,000 within twelve months after the first anniversary of Completion.

As part of the agreement and as a condition to completion, the Company will raise USD$5,000,000.

Pending completion, the Sellers are required to carry on business in the ordinary course.

Prior to completion the Sellers is discharge all encumbrances, mortgages, liens bank loans and other security holdings other than no more than $200,000 from past working capital.

The Company has funded operations since inception through advances from affiliated entities. The Company’s ability to continue operations through 2018 is dependent upon future funding from affiliated entities, capital raisings, or its ability to commence revenue producing operations and positive cash flows, of which there can be no assurance. AXIS has advised it does not currently intend to require repayment of these advances prior to December 31, 2016, accordingly the Company has decided to classify the amounts payable as non-current in the accompanying balance sheets.

The Company continues to search for additional sources of capital, as and when needed; however, there can be no assurance funding will; be successfully obtained. Even if it is obtained, there is no assurance that it will not be secured on terms that are highly dilutive to existing shareholders.

The Company had decided to expand its focus to include precious gems in order to generate value for shareholders and was assessing several gem opportunities. In March 2015, following a review of the results of exploration on the gem tenement, the Company decided to relinquish the exploration licence.

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 as a going concern. However, Consolidated Gems has limited assets, has not yet commenced revenue producing operations and has sustained recurring losses since inception.

Our budget for general and administration and for professional expenses for fiscal ~~2016~~2017 is A$0.255 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.

Impact of Australian Tax Law

On December 28, 2008 the management and control of Consolidated Gems was effectively transferred to Australia making the Company an Australian resident corporation under Australian law. Australian resident corporations are subject to Australian income tax on their non-exempt worldwide assessable income (which includes capital gains), less allowable deductions, at the rate of 30%. Foreign tax credits are allowed where tax has been paid on foreign source income, provided the tax credit does not exceed 30% of the foreign source income.

Under the U.S./Australia tax treaty, a U.S. resident corporation such as us is subject to Australian income tax on net profits attributable to the carrying on of a business in Australia through a “permanent establishment” in Australia. A “permanent establishment” is a fixed place of business through which the business of an enterprise is carried on. The treaty limits the Australian tax on interest and royalties paid by an Australian business to a U.S. resident to 10% of the gross interest or royalty income unless it relates to a permanent establishment. Although we consider that the Company does not have a permanent establishment in Australia, it may be deemed to have such an establishment due to the location of its administrative offices in Melbourne. In addition we may receive interest or dividends from time to time.

Impact of Australian Governmental, Economic, Monetary or Fiscal Policies

Although Australian taxpayers are subject to substantial regulation, we believe that our operations are not materially impacted by such regulations nor is it subject to any broader regulations or governmental policies than most Australian taxpayers.

Impact of Recent Accounting Pronouncements

For a discussion of the impact of recent accounting pronouncements on the Company’s financial statements, see Note 4 to the Company’s Financial Statements which are included elsewhere in this Annual Report.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

At December 31, ~~2015~~2016, the Company had no outstanding borrowings under Loan Facilities.

Item 8. Financial Statements

See F Pages

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None

Item 9A Controls and Procedures

(a) Evaluation of 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)	Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d – 15(f) under the Securities Exchange Act of 1934, as amended. Under the supervision of management and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO 2013 Framework). Based on our evaluation of internal control over financial reporting, our management concluded that our internal control over financial reporting was effective as of December 31, ~~2015~~2016.

(c)	Attestation report of the Registered Public Accounting Firm

This Annual Report on Form 10-K does not include an attestation report of the Company’s independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s independent registered public accounting firm pursuant to an exemption for smaller reporting companies under Section 989G of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

16(d) Change in Internal Control over Financial Reporting

(d) Change in Internal Control over Financial Reporting.

There were no changes in the Company’s internal control over financial reporting identified in connection with the evaluation of such internal control that occurred during the Company’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect the Company’s internal control over financial reporting.

(e) 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 December 31, ~~2015~~2016, that our disclosure controls and procedures were effective in achieving that level of reasonable assurance.

Item 9B Other Information

None.

1715

PART III

Item 10. Directors, and Executive Officers and Corporate Governance

The following table sets forth our director and officer, their ages and all offices and positions with our company. Officers and other employees serve at the will of the Board of Directors.

Name	Age	Position(s) Held
Mordechai Gutnick	39	President and Chief Executive Officer
Peter Lee	5960	Secretary, Chief Financial Officer and Principal Accounting Officer

Director Qualifications

The following paragraphs provide information as of the date of this report about our sole director as well as about each executive officer. The information presented includes information such director has given us about his age, all positions he holds, his principal occupation and business experience for the past five years, and the names of other publicly-held companies of which he currently serves as a director or has served as a director during the past five years which we believe demonstrates our sole director’s qualifications to serve on our Board of Directors.

Mordechai Gutnick

Mr. Gutnick is a businessman who invests in public listed companies. He was appointed President and as a Director on September 30, 2015. Mr. Gutnick is a Director of Merlin Diamonds Limited, ~~Top~~and ~~End Minerals Limited,~~ Golden River Resources Corporation and was formerly a director of Legend International Holdings Inc., Top End Minerals Limited and Quantum Resources Limited.

Peter Lee

Mr. Lee has been Chief Financial Officer and Principal Accounting Officer since December 2008. Mr. Lee is a Member of the Institute of Chartered Accountants in Australia, a Fellow of the Governance Institute in Australia, a Member of the Australian Institute of Company Directors and holds a Bachelor of Business (Accounting) from Royal Melbourne Institute of Technology. He has over 30 years commercial experience and is currently CFO and Secretary of Aurum, Inc. (since 2009), Director, CFO and Secretary of Golden River Resources Corporation (for more than 10 years), which are US corporations listed on the OTC market in the USA; CFO and Secretary of Northern Capital Resources Corporation and Great Central Resources Corporation, US Corporations; and CFO and Secretary of Merlin Diamonds Limited, ~~and Director, CFO and Secretary of Top End Minerals Limited, both~~ listed on the Australian Securities Exchange. He was a Director of Acadian Mining Corporation, which was listed on the Toronto Stock Exchange until October 2013 and Quantum Resources Limited which was listed on the ASX until May 2015, Director, CFO and Secretary of Top End Minerals Limited which was listed on the Toronto Stock Exchange until October 2013 and Quantum Resources Limited which was listed on the ASX from 2012 to June 2017 and CFO and Secretary of Legend International Holdings Inc. which was previously listed on OTCBB.

Mr. Joseph Gutnick resigned as a director on September 30, 2015.

Involvement on Certain Material Legal Proceedings During the Last Ten Years

No director, officer, significant employee or consultant has been convicted in a criminal proceeding, exclusive of traffic violations. No director, officer, significant employee or consultant has been permanently or temporarily enjoined, barred, suspended or otherwise limited from involvement in any type of business, securities or banking activities. No director, officer or significant employee has been convicted of violating a federal or state securities or commodities law.

1816

Mr. Lee was formerly Company Secretary of Centaur Mining & Exploration Ltd., an Australian corporation, which commenced an insolvency proceeding in Australia in March 2001 and Legend International Holdings Inc. which commenced insolvency proceedings in May 2016.

Board, Audit Committee and Remuneration Committee Meetings

Our Board of Directors consists of one director. During fiscal ~~2015~~2016, our Board of Directors met once.

Directors are elected for an annual term and generally hold office until the next Directors have been duly elected and qualified. Directors may receive compensation for their services as determined by the Board of Directors. A vacancy on the Board may be filled by the remaining Directors even though less than a quorum remains. A Director appointed to fill a vacancy remains a Director until his successor is elected by the Stockholders at the next annual meeting of Shareholder or until a special meeting is called to elect Directors.

We do not have a nominating committee. Historically our entire Board has selected nominees for election as directors. The Board believes this process has worked well thus far particularly since it has been the Board's practice to require unanimity of Board members with respect to the selection of director nominees. In determining whether to elect a director or to nominate any person for election by our stockholders, the Board assesses the appropriate size of the Board of Directors, consistent with our bylaws, and whether any vacancies on the Board are expected due to retirement or otherwise. If vacancies are anticipated, or otherwise arise, the Board will consider various potential candidates to fill each vacancy. Candidates may come to the attention of the Board through a variety of sources, including from current members of the Board, stockholders, or other persons. The Board of Directors has not yet had the occasion to, but will, consider properly submitted proposed nominations by stockholders who are not directors, officers, or employees of Consolidated Gems on the same basis as candidates proposed by any other person. We do not have a policy with respect to the use of diversity as a criteria for Board membership and do not consider diversity in the selection of our Directors.

Audit Committee

At December 31, ~~2015~~2016, the Company had not formed an audit committee or adopted an audit committee charter. In lieu of an audit committee, the Company's Board of Directors assumes the responsibilities that would normally be those of an audit committee. Given the limited scope of the Company’s operations to date, the Board of Directors does not at present have a director that would qualify as an audit committee financial expert under the applicable federal securities law regulations.

Remuneration Committee

At December 31, ~~2015~~2016, the Company had not formed a remuneration committee or adopted a remuneration committee charter. In lieu of a remuneration committee, the Company's ~~Board~~board of ~~Directors~~directors assumes the responsibilities that would normally be those of an remuneration committee.

Code of Ethics

We have adopted a Code of Conduct and Ethics and it applies to all Directors, Officers and employees. A copy of the Code of Conduct and Ethics is posted on our website at www.electrumint.com and we will provide a copy to any person without charge. If you require a copy, you can download it from our website or alternatively, contact us by facsimile or email and we will send you a copy.

1917

Stockholder Communications with the Board

Stockholders who wish to communicate with the Board of Directors should send their communications to the Chairman of the Board at the address listed below. The Chairman of the Board is responsible for forwarding communications to the appropriate Board members.

Mr. Mordechai Gutnick

Consolidated Gems, Inc.

Level 1A, 42 Moray Street

Southbank, Victoria 3006 Australia

Section 16(a) Beneficial Ownership Reporting Compliance

Pursuant to Section 16(a) of the Securities Exchange Act of 1934, our Directors, executive officers and beneficial owners of more than 10% of the outstanding Common Stock are required to file reports with the Securities and Exchange Commission concerning their ownership of and transactions in our Common Stock and are also required to provide to us copies of such reports. Based solely on such reports and related information furnished to us, we believe that in fiscal ~~2015~~2016, all such filing requirements were complied with in a timely manner by all Directors and executive officers and 10% stockholders.

Item 11. Executive Compensation.

The following table sets forth the annual salary, bonuses and all other compensation awards and pay outs on account of our Chief Executive Officer for services rendered to us during the fiscal years ended December 31, ~~2015~~2016 and ~~2014~~2015. No other executive officer received more than US$100,000 per annum during this period.

Summary Compensation Table

Name and Principal Position	Year	Salary	Bonus	Stock Awards	Option Awards	Non-Equity Incentive Plan Compensation	Change in Pension Value and Nonqualified Deferred Compensation Earnings	All Other Compensation	Total
Mordechai Gutnick, Chairman of the Board, President and CEO (1)	2016 2015	- -	- -	- -	- -	- -	- -	- -	- -
Joseph Gutnick, Chairman of the Board, President and CEO (2)	2015 ~~2014~~	- ~~US$617~~	- -	- -	- -	- -	- -	- -	- ~~US$617~~

(1) Appointed September 28, 2017 30, 2015

(2)	Resigned September 30, 2015

We have a policy that we will not enter into any transaction with an officer, Director or affiliate of the Company or any member of their families unless the terms of the transaction are no less favourable to us than the terms available from non-affiliated third parties or are otherwise deemed to be fair to the Company at the time authorised.

2018

Outstanding Equity Awards at Fiscal Year-End

The Company does not currently have any equity or stock option plans.

Principal Officers Contracts

The principal officers do not have any employment contracts.

Compensation of Directors

The Company’s directors who are also executive officers of the Company did not receive any separate compensation during fiscal ~~2015~~2016 for serving as directors of the Company.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The following table sets forth certain information regarding the beneficial ownership of our common stock by each person or entity known by us to be the beneficial owner of more than 5% of the outstanding shares of common stock, each of our directors and named executive officers, and all of our directors and executive officers as a group as of ~~September~~December 1812, 2017.

Title of Class	Name and Address of Beneficial Owner*	Amount and nature of Beneficial Owner	Percentage of class ⁽¹⁾
Shares of common stock Shares of common stock	Mordechai Gutnick Peter J. Lee	165,600,000⁽²⁾ -	82.85 -
	All officers and Directors as a group	165,600,000	82.85

*	Unless otherwise indicated, the address of each person is c/o Consolidated Gems, Inc., Level 1A, 42 Moray Street, Southbank, Victoria, 3006 Australia

Notes:

(1) Based on 199,873,683 shares outstanding as of ~~September~~December 1812, 2017.

(2) Includes 165,600,000 shares owned by Power Developments Pty Ltd, of which Mr. Mordechai Gutnick is a Director and ~~the~~ sole stockholder.

Item 13. Certain Relationships and Related Transactions~~, and Director Independence~~

In January 2009, the Company entered into an agreement with AXIS Consultants Pty Ltd to provide geological, management and administration services to the Company. AXIS has some common management and is incorporated in Australia. Mr. Peter Lee is Chief Financial Officer and Company Secretary of AXIS and owes a fiduciary duty to both parties. AXIS’ principal business is to provide geological, management and administration services to companies. We are one of seven affiliated companies that AXIS provides services to, namely, Merlin Diamonds Ltd, Top End Minerals Ltd, Northern Capital Resources Corp, Golden River Resources Corp, Great Central Resources Corp., Aurum Inc, and Consolidated Gems Inc.

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 certain mining and exploration staff. A number of arrangements and transactions have been entered into from time to time between such companies. 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.

2119

AXIS is paid by each company it manages for the costs incurred by it in carrying out the administration function for each such company. Pursuant to the Service Agreement, AXIS performs such functions as payroll, maintaining employee records required by law and by usual accounting procedures, providing insurance, legal, human resources, company secretarial, land management, certain exploration and mining support including provision of exploration managers and geologists, financial, accounting advice and services. AXIS also provides for the Company various services, including but not limited to the making available of office supplies, office facilities and any other services as may be required from time to time by the Company as and when requested by the Company.

We are required to reimburse AXIS for any direct costs incurred by AXIS for the Company. In addition, we are required to pay a proportion of AXIS’s overhead cost based on AXIS’s management estimate of our utilization of the facilities and activities of AXIS plus a service fee of not more than 15% of the direct and overhead costs. Amounts invoiced by AXIS are required to be paid by us. We are also not permitted to obtain from sources other than AXIS, and we are not permitted to perform or provide ourselves, the services contemplated by the Service Agreement, unless we first ~~request~~requests AXIS to provide the service and AXIS fails to provide the service within one month.

The Service Agreement may be terminated by AXIS or us upon 60 days prior notice. If the Service Agreement is terminated by AXIS, we would be required to independently provide, or to seek an alternative source of providing, the services currently provided by AXIS. There can be no assurance that we could independently provide or find a third party to provide these services on a cost-effective basis or that any transition from receiving services under the Service Agreement will not have a material adverse effect on us. Our inability to provide such services or to find a third party to provide such services may have a material adverse effect on our operations.

The arrangement with AXIS has changed since it was originally entered into as the relationship has evolved as a result of the requirements of certain suppliers to be able to deal directly with us. In these cases, AXIS does not charge us a management or service fee in respect to these arrangements with suppliers who deal with us directly. The types of services that are provided directly to us include audit and tax services, legal services, stock transfer services, and Delaware franchise tax.

In accordance with the Service Agreement, AXIS provides the Company with the services of our Chief Executive Officer, Chief Financial Officer and clerical employees, as well as office facilities, equipment, administrative and clerical services. We pay AXIS for the actual costs of such facilities. AXIS has not charged a service fee for this fiscal year.

During the year ended December 31, ~~2015~~2016, AXIS provided services in accordance with the Services Agreement, and incurred direct costs ~~and provided funding~~ on behalf of the Company of A$2189,~~833~~182 (~~2014~~2015: A$53(21,~~072~~977)), and advanced the Company A$~~143~~123,900 (~~2014~~2015: A$40443),~~290~~ and the Company repaid A$970,850 (2015: A$4,300). At December 31, ~~2015~~2016, the amount owed to AXIS was A$1330,~~088,175~~408 (~~2014~~2015: A$1,~~066~~088,~~199~~175).

The Company has received advances from AXIS in connection with the ongoing business relationship between the two parties, which have been disclosed in the Company’s SEC reports, but which are not specifically provided for in the AXIS Services Agreement. Historically, the shortfall in our cash receipts has been covered by cash advances from AXIS. The purpose of such advances is to assist us in meeting our ongoing cash flow requirements. ~~Since December 31, 2015, the Company has repaid A$786,000 to AXIS.~~

Transactions with Management.

We have a written policy that we will not enter into any transaction with an Officer, Director or Affiliate of us or any member of their families unless the transaction is approved by a majority of our disinterested non-employee Directors and the disinterested majority determines that the terms of the transaction are no less favourable to us than the terms available from non-affiliated third parties or are otherwise deemed to be fair to us at the time authorised.

Item 14. Principal Accounting Fees and Services

The following table shows the fees incurred for fiscal ~~2015~~2016 and ~~2014~~2015.

	2015	2014
	2016	2015
	A$	A$
Audit fees	4837,~~215~~000	4048,~~928~~215
Audit related fees	-	-
Tax fees	126,~~542~~500	912,~~194~~542
Total	6043,~~757~~500	5060,~~122~~757

Audit fees were for the audit of our annual financial statements, review of financial statements included in our 10-Q quarterly reports, and services that are normally provided by independent auditors in connection with our other filings with the SEC. This category also includes advice on accounting matters that arose during, or as a result of, the audit or review of our interim financial statements.

Tax fees relate to the preparation of the Company’s income tax returns and other tax compliance filings.

2321

PART IV

Item 15. Exhibits, Financial Statement Schedules

(a)	Financial Statements and Notes thereto.

The Financial Statements and Notes thereto listed on the Index at page 2628 of this Annual Report on Form 10-K are filed as a part of this Annual Report.

(b)

Exhibits

The Exhibits to this Annual Report on Form 10-K are listed in the Exhibit Index at page 2628 of this Annual Report.

2422

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has caused this Annual Report to be signed on its behalf by the undersigned, thereunto duly authorised.

	CONSOLIDATED GEMS, INC.

	(Registrant)

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

Dated: December ~~September 24~~19, 2017.

2523

FORM 10-K Signature Page

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

Signature		Title	~~Title~~Date	~~Date~~
1.	/s/ Mordechai IZ Gutnick	Chairman, President and Chief	~~Chairman, President and Chief~~
	Mordechai Gutnick	Executive Officer	~~Executive~~December ~~Officer~~19, 2017
		(Principal Executive Officer)	~~(Principal Executive Officer)~~	~~September 24, 2017~~
2.	/s/ Peter J Lee	Secretary and	~~Secretary and~~
	Peter Lee	Chief Financial Officer	~~Chief~~December ~~Financial~~19, ~~Officer~~2017
		(Principal Financial Officer)	~~(Principal Financial Officer)~~	~~September 24, 2017~~

2624

EXHIBIT INDEX

Incorporated by Reference to:		Exhibit No	Exhibit
(1)	Exhibit 99.1 Annex B	3.1	Certificate of Incorporation of Consolidated Gems, Inc.
(1)	Exhibit 99.1 Annex C	3.2	Bylaws of Consolidated Gems, Inc.
(1)	Exhibit 99.1 Annex A	3.3	Agreement and Plan of Merger between We Sell For U Corp and Consolidated Gems Inc.
(2)	Exhibit 99.1 Annex A	3.4	Amendment to Certificate of Incorporation
(2)	Exhibit 4.1	4.1	Specimen Stock Certificate of Consolidated Gems, Inc.
(3)	Exhibit 99.1 Annex A	10.1	Service Agreement dated January 30, 2009, by and between the Registrant and AXIS Consultants Pty Ltd
(3)	Exhibit 99.1 Annex A	10.2	Agreement with IFFCO
(4)	Exhibit 99.1	16.1	Letter from former independent accountant
		21.1	Subsidiaries of the Registrant
	*	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 Mordechai Zev 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 pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by Mordechai Zev Gutnick.
	*	32.2	Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by Peter James Lee

*Filed herewith

(1)	Incorporated by reference to the Company’s Form 8-K filed on July 16, 2009.

(2)	Incorporated by reference to the Company’s Form 10-K filed on March 30, 2011.

(3)	Incorporated by reference to the Company’s Form 10-K filed on March 26, 2010.

(4)	Incorporated by reference to the Company’s Form 8-K filed on January 29, 2009.

2725

Financial Statements as of December 31, ~~2015~~2016 and ~~2014~~2015 and for the years ended December 31, ~~2015~~2016 and ~~2014~~2015.

Consolidated Gems, Inc.

Audited Financial Statements for the Company for the years ended December 31, ~~2015~~2016 and ~~2014~~2015.

2826

CONSOLIDATED GEMS, INC.

~~Consolidated~~ Financial Statements

December 31, ~~2015~~2016 and ~~2014~~2015

(with Report of Independent Registered Public Accounting Firm)

CONTENTS

	Page
Report of Independent Registered Public Accounting Firm	F-3
Consolidated Balance Sheets	F-4
Balance Sheets	F-4
Consolidated Statements of Operations	F-5
Statements of Operations	F-5
Consolidated Statements of Stockholders’ Equity (Deficit)	F-6
Statements of Stockholders’ Equity (Deficit)	F-6
Consolidated Statements of Cash Flows	F-7
Statements of Cash Flows	F-7
Notes to Financial Statements	F-8 to F-1513

F-2

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of

Consolidated Gems, Inc.

We have audited the accompanying balance sheets of Consolidated Gems, Inc. as of December 31, ~~2015~~2016 and ~~2014~~2015, and the related statements of operations, stockholders’ equity (deficit) 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 audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company'’s internal control ~~over~~ ~~financial reporting. The Company is not required to have, nor were we engaged to perform, an audit of its internal control~~ over financial reporting. Our ~~audit~~audits ~~included~~include consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Consolidated Gems, Inc. at December 31, ~~2015~~2016 and ~~2014~~2015 and the results of its operations and its 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 the Company will continue as a going concern. As described in Note 3, at December 31, ~~2015~~2016 the Company has negative working capital, has not yet commenced revenue producing operations, has incurred net losses from inception, and has an accumulated (deficit) of a A$23,~~835~~152,~~947~~650. These 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 outcome of this uncertainty. Management’s plans in regard to these matters are also discussed in note 3.

/s/ PKF O’Connor Davies, LLP

New York, NY

~~September~~December 2319, 2017

F-3

CONSOLIDATED GEMS, INC.

Balance Sheets

December 31, ~~2015~~2016 and ~~2014~~2015

	A$ 2015		A$ 2014
	A$ 2016		A$ 2015
ASSETS
Current Assets:
Cash	~~118~~91		~~2,172~~118
Receivables	-3,344		~~1,510~~-
Prepayments	-		2,660
Total Current Assets	3,435		118
Total Current Assets	118		6,342
Total Assets	3,435		118
Non-Current Assets:
Deposits	-		10,000
Total Non-Current Assets	-		10,000
Total Assets	118		16,342
LIABILITIES AND STOCKHOLDERS’ (DEFICIT)
Current Liabilities:
Accounts payable and accrued expenses	~~156~~247,~~742~~877		85156,~~432~~742
Total Current Liabilities	~~156~~247,~~742~~877		85156,~~432~~742
Non-Current Liabilities:
Advances from affiliate (Note 5)	1330,~~088,175~~408		1,~~066~~088,~~199~~175
Total Non-Current Liabilities	1330,~~088,175~~408		1,~~066~~088,~~199~~175
Total Liabilities	1578,~~244,917~~285		1,~~151~~244,~~631~~917
Stockholders’ (Deficit):
Preferred stock: US$.0001 par value, 20,000,000 shares authorised, none issued and outstanding.	-		-
Common stock: US$.0001 par value 500,000,000 shares authorised, and 175,315,350 issued and outstanding	16,825		16,825
Common stock: US$.0001 par value 500,000,000 shares authorised, and 199,873,683 and 175,315,350 issued and outstanding at December 31, 2016 and 2015	20,077		16,825
Additional paid-in-capital	12,~~574~~557,~~323~~723		1,574,323
Accumulated (deficit)	(23,~~835~~152,~~947~~650	)	(2,~~726~~835,~~437~~947	)
Total Stockholders’ (Deficit)	(1,244,799	)	(1,135,289	)
Total Stockholders’ (deficit)	(574,850	)	(1,244,799	)
Total Liabilities and Stockholders’ (Deficit)	~~118~~3,435		~~16,342~~118
See notes to financial statements

F-4

CONSOLIDATED GEMS, INC.

Statements of Operations

	Year Ended December 31,	Year Ended December 31,
		Year Ended December 31, 2016			Year Ended December 31, 2015
	2015	2014
		A$			A$
	A$	A$
Revenues			-			-
Revenues	-	-
Costs and expenses
Costs and expenses
Legal, accounting and professional			103,905			76,748
Legal, accounting and professional	76,748	60,365
Administration expenses			93,492			18,690
Administration expenses	18,690	57,796
Acquisition related expenses			116,946			-
Exploration expenses	-	10,633
			314,343			95,438
	95,438	128,794
(Loss) from operations			(314,343	)		(95,438	)
(Loss) from operations	(95,438)	(128,794)
Foreign currency exchange (loss)			(2,360	)		(14,072	)
Foreign currency exchange (loss)	(14,072)	(1,743)
(Loss) before income tax			(316,703	)		(109,510	)
Interest - other	-	-
Provision for income tax			-			-
(Loss) before income tax	(109,510)	(130,537)
Net (Loss)			(316,703	)		(109,510	)
Provision for income tax	-	-
Basic net (loss) per common equivalent shares			(0.00	)		(0.00	)
Net (Loss)	(109,510)	(130,537)
Weighted number of common equivalent shares (000’s)			192,451			175,315
Basic net (loss) per common equivalent shares	(0.00)	(0.00)
See notes to financial statements
Weighted number of common equivalent shares (000’s)	175,315	175,315
See notes to financial statements

F-5

CONSOLIDATED GEMS, INC.

Statement of Stockholders’ Equity (Deficit)

	~~Shares~~	~~Common Stock Amount~~Shares	~~Additional Paid-in Capital~~	~~Accumulated (Deficit)~~	~~Total~~	Common Stock Amount		Additional Paid-in Capital		Accumulated (Deficit)			Total
		A$	A$	A$	A$	A$		A$		A$			A$
Balance December 31, 2013	175,315,350	16,825	1,574,323	(2,595,900)	(1,004,752)
Balance December 31, 2014			175,315,350				16,825		1,574,323		(2,726,437	)		(1,135,289
Net (loss)	-	-	-	~~(130,537)~~	~~(130,537)~~		-		-		(109,510	)		(109,510	)
Balance December 31, 2014	175,315,350	16,825	1,574,323	(2,726,437)	(1,135,289)
Balance December 31, 2015			175,315,350				16,825		1,574,323		(2,835,947	)		(1,244,799	)
Balance December 31, 2014	175,315,350	16,825	1,574,323	(2,726,437)	(1,135,289)
Issuance of shares – April 13 2017			19,033,333				2,482		763,170		-			765,652
Net (loss)	-	-	-	(109,510)	(109,510)
Issuance of shares – May 20 2017			5,525,000				770		220,230		-			221,000
Balance December 31, 2015	175,315,350	16,825	1,574,323	(2,835,947)	(1,244,799)
Net (loss)			-				-		-		(316,703	)		(316,703	)
See notes to financial statements
Balance December 31, 2016			199,873,683				20,077		2,557,723		(3,152,650	)		(574,850	)
See notes to financial statements

F-6

CONSOLIDATED GEMS, INC.

Statements of Cash Flows

	Year Ended December 31, 2015	Year Ended December 31, 2014
		Year Ended December 31, 2016 A$			Year Ended December 31, 2015 A$
	A$	A$
CASH FLOWS FROM OPERATING ACTIVITIES
CASH FLOWS FROM OPERATING ACTIVITIES
Net (Loss)			(316,703	)		(109,510	)
Net (Loss)	(109,510)	(130,537)
Adjustments to reconcile net (loss) to net cash (used)
Adjustments to reconcile net (loss) to net cash (used)
in operating activities
in operating activities
Foreign currency exchange loss			2,360			14,072
Foreign currency exchange loss	14,072	1,743
Net change receivables			(3,344	)		11,510
Net change receivables and deposits	11,510	3,912
Net change in prepayments			-			2,660
Net change in prepayments	2,660	2,392
Net change in accounts payable and accrued expenses			88,776			57,238
Net change in accounts payable and accrued expenses	57,238	30,774
Net Cash (used) in Operating Activities			(228,911	)		(24,030	)
Net Cash (used) in Operating Activities	(24,030)	(91,716)
CASH FLOWS FROM FINANCING ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock			986,652			-
Advances from affiliate	21,976	93,361
Advances from (repayment to) affiliate			(757,768	)		21,976
Net Cash provided by Financing Activities	~~21,976~~	~~93,361~~	228,884			21,976
Effects of exchange rate on cash	-	~~(1,743)~~	-			-
Net (decrease) in Cash	~~(2,054)~~	~~(98)~~	(27	)		(2,054	)
Cash at Beginning of Year	~~2,172~~	~~2,270~~	118			2,172
Cash at End of Year	~~118~~	~~2,172~~	91			118
See notes to financial statements

F-7

CONSOLIDATED GEMS, INC.

Notes to Financial Statements

December 31, ~~2015~~2016 and ~~2014~~2015

(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. 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 9482.4685% of Consolidated Gems as of December 31, ~~2015~~2016.

The purchase price is up to USD$20,000,000 which is to be satisfied as follows:

m) The sum of USD$25,000 payable to the Sellers for due diligence expenses, 30 business days from the execution of the Term Sheet;

n) A further USD$25,000 each month after the date in a) above for due diligence expenses, for 3 months, payable to the Sellers for working capital purposes;

o) An issue of fully paid ordinary shares of common stock of the Company to the value of USD$5,000,000 (less any payments made to The Sellers under (a) and (b) above) to the Sellers at an issue price of USD$0.10 per share of common stock (Consideration Shares);

p) The issue to the Sellers of shares of common stock to the equivalent to USD$5,000,000 at the issue price of USD$0.20, subject to the Sellers achieving sales revenue of USD$100,000 within twelve months after the first anniversary of Completion;

q) The issue to the Sellers of shares of common stock to the equivalent to USD$5,000,000 at the issue price of USD$0.20, subject to the Sellers achieving sales revenue of USD$1,000,000 within twelve months after the first anniversary of Completion; and

F-8

r) The issue to the Sellers of shares of common stock to the equivalent to USD$5,000,000 at the issue price of USD$0.20, subject to the Sellers achieving sales revenue of USD$2,500,000 within twelve months after the first anniversary of Completion.

As part of the agreement and as a condition to completion, the Company will raise USD$5,000,000.

Pending completion, the Sellers are required to carry on business in the ordinary course.

Prior to completion the Sellers is discharge all encumbrances, mortgages, liens bank loans and other security holdings other than no more than $200,000 from past working capital.

(2)	ACCOUNTING POLICIES

The following is a summary of the significant accounting policies followed in connection with the preparation of the financial statements.

(a)	Basis of presentation and use of estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (US GAAP) 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 revenue and expenses during the reporting period. Actual results could differ from those estimates.

The functional and reporting currency is the Australian dollar.

Foreign Currency Translation

Effective April 1, 2013, the Company’s functional and reporting currency is the Australian dollar. Revenue and expenses incurred in a currency other than Australian dollars are translated at the date incurred or invoiced. Assets and liabilities are re-valued at the period end exchange rate where appropriate. Gains or losses from foreign currency transactions are included in the results of operations.

F-8

Prior to April 1, 2013, the Company’s functional currency was the US dollar. However, as a result of Australian based activities in the second quarter of 2013 relating to potential gem projects, the Company’s revenue and expenses are now primarily denominated in Australian dollars (A$). ASC 830 Foreign Currency Translation, states that the functional currency of an entity is the currency of the primary economic environment in which the entity operates. Accordingly the Company determined that from April 1, 2013 the functional currency of the Company is the Australian dollar. Assets, liabilities and equity were translated at the rate of exchange at April 1, 2013. Revenue and expenses were translated at rates at date of transaction. Translation gains and losses, if material, are included as part of accumulated other comprehensive income. The resulting translation at April 1, 2013 was not material.

F-9

(b)	Cash Equivalents

The Company considers all highly liquid investments with a maturity of three months or less at the time of purchase to be cash equivalents. For the periods presented there were no cash equivalents.

(c)	Federal Income Tax

ASC Topic 740 prescribes how a company should recognise, measure, present and disclose in its financial statements uncertain tax positions that the Company has taken or expects to take on a tax return. Additionally for tax positions to qualify for deferred tax benefit recognition under ASC 740, the position must have at least “more than likely not” chance of being sustained upon challenge by the respective taxing authorities, and whether or not it meets that criteria is a matter of significant judgement. The Company believes that it does not have any uncertain tax positions that would require the recording or disclosure of a potential tax liability.

The Company follows the asset and liability approach which requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of assets and liabilities. For the periods presented, there was no taxable income. There are no deferred income taxes resulting from temporary differences in reporting certain income and expense items for income tax and financial accounting purposes. The Company, at this time, is not aware of any net operating losses which are expected to be realized.

(d)	Australian Tax Law

The Company is not an Australian resident corporation under Australian law. If the Company became an Australian resident corporation, it would be subject to Australian income tax on its non-exempt worldwide assessable income (which includes capital gains), less allowable deductions, at the rate of 30%. Foreign tax credits are allowed where tax has been paid on foreign source income provided the tax credit does not exceed 30% of the foreign source income.

F-9

F-10

(e)	Goods and Services Tax (“GST”)

Revenues, expenses and assets generated in Australia are subject to Australian GST which requires the supplier to add a 10% GST to predominately all expenses and the cost of assets and for the Company to include a 10% GST to the selling price of a product. Revenues, expenses and assets are recognized net of the amount of GST except where the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST is ~~recognised~~recognized as part of the cost of acquisition of the assets or as part of the expense item as applicable, and receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the balance sheet. Cash flows are included in the cash flow statement on a gross basis and the GST component of cash flows arising from investing and financing activities which is recoverable from, or payable to, the taxation authority are classified as operating cash flows. Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority

(f)	Loss per share

The Company calculates loss per share in accordance with FASB ASC Topic 260, “Earnings per Share”.

Basic (loss) per share is computed based on the weighted average number of common shares outstanding during the period. Dilutive loss per share has not been presented as there are no common stock equivalents.

(g)	Fair value of Financial Instruments

The Company’s financial instruments consist of cash, receivables, accounts payable and accrued expenses, and advances from affiliate. The carrying amounts of cash, receivables, 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 affiliated entity, no market exists for similar instruments and settlement date is uncertain.

(h)	Comparative Figures

Where necessary, comparative figures have been reclassified to be consistent with current year presentation with no effect on operations.

(3)	GOING CONCERN

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. The Company has not yet commenced revenue producing operations and had an accumulated deficit of A$23,~~835~~152,~~947~~650 as of December 31, ~~2015. In early~~ 2016~~, the Company commenced a private placement and received subscriptions for 24,558,333 shares of common stock at a price of A$0~~.04 ~~for A$986,652.~~ These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The Company will require additional funding for operations and this additional funding may be raised through debt or equity offerings. The Company has a debt due to AXIS Consultants Pty Ltd (AXIS). AXIS provides management services to the Company and the cost of these services increases the amount of the debt. In addition, the Company has historically relied on loans and advances from corporations affiliated with the President of Consolidated Gems. 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~~arrangements for ongoing funding. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

F-1110

(4)	RECENT ACCOUNTING PRONOUNCEMENTS

In November 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (ASU) 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes, which requires all deferred income tax assets and liabilities to be classified as noncurrent on the balance sheet. The new standard is effective for interim and annual reporting periods beginning after December 15, 2016 with early adoption permitted. Additionally, this guidance may be applied either prospectively or retrospectively to all periods presented. The Company does not expect this standard to have a material impact on its financial statements.

In August 2014, the FASB issued Accounting Standards Update ("ASU") No. 2014-15 ("ASU 2014-15"), Presentation of Financial Statements-Going Concern (Subtopic 205-40), Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern. The objective of the amendments in this Update is to provide guidance on determining when and how to disclose going-concern uncertainties in the financial statements. The new standard requires management to perform interim and annual assessments of an entity's ability to continue as a going concern within one year of the date the financial statements are issued. An entity must provide certain disclosures if "conditions or events raise substantial doubt about the entity's ability to continue as a going concern." The ASU applies to all entities and is effective for annual periods ending after December 15, 2016, and interim periods thereafter, with early adoption permitted. The Company is evaluating the impact of ASU 2014-15 on its financial condition, results of operations and cash flows.

Other Recently Issued, but not Yet Effective Accounting Pronouncements

Management does not believe that any recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying financial statements.

(5)	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, (the “Service Agreement”). AXIS has some common management and is incorporated in Australia. Mr. Peter Lee is Chief Financial Officer and Company Secretary of AXIS and owes a fiduciary duty to both parties. AXIS’s principal business is to provide geological, management and administration services to companies. We are one of seven companies that AXIS provides services to, namely, Merlin Diamonds Limited, Top End Minerals Limited, Northern Capital Resources Corp, Golden River Resources Corporation, Great Central Resources Corp, Aurum Inc., and Consolidated Gems, Inc.

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 certain mining and exploration staff. A number of arrangements and transactions have been entered into from time to time between such companies. It has been the intention of the companies and respective Boards of Directors that each of such arrangements or transactions should accommodate the respective interest of the relevant 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 companies other than AXIS.

F-12

AXIS is paid by each company for the costs incurred by it in carrying out the administration function for each such company. Pursuant to the Service Agreement, AXIS performs such functions as payroll, maintaining employee records required by law and usual accounting procedures, providing insurance, human resources, company secretarial, land management, certain exploration and mining support including provision of exploration managers and geologists, financial, accounting advice and services. AXIS also provides for the Company various services, including but not limited to the making available of office supplies, office facilities and any other services as may be required from time to time by the Company as and when requested by the Company.

The Company is required to reimburse AXIS for any direct costs incurred by AXIS for the Company. In addition, we are required to pay a proportion of AXIS’s overhead cost based on AXIS’s management estimate of our utilisation of the facilities and activities of AXIS plus a service fee of not more than 15% of the direct and overhead costs. Amounts invoiced by AXIS are required to be paid by us. We are also not permitted to obtain from sources other than AXIS, and we are not permitted to perform or provide ourselves, the services contemplated by the Service Agreement, unless we first request AXIS to provide the service and AXIS fails to provide the service within one month.F-11

We are required to reimburse AXIS for any direct costs incurred by AXIS for the Company. In addition, we are required to pay a proportion of AXIS’s overhead cost based on AXIS’s management estimate of our utilisation of the facilities and activities of AXIS plus a service fee of not more than 15% of the direct and overhead costs. Amounts invoiced by AXIS are required to be paid by us. We are also not permitted to obtain from sources other than AXIS, and we are not permitted to perform or provide ourselves, the services contemplated by the Service Agreement, unless we first request AXIS to provide the service and AXIS fails to provide the service within one month.

The Service Agreement may be terminated by AXIS or ourselves upon 60 days prior notice. If the Service Agreement is terminated by AXIS, we would be required to independently provide, or to seek an alternative source of providing, the services currently provided by AXIS. There can be no assurance that we could independently provide or find a third party to provide these services on a cost-effective basis or that any transition from receiving services under the Service Agreement will not have a material adverse effect on us. Our inability to provide such services or to find a third party to provide such services may have a material adverse effect on our operations.

(6)	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 US$1,703,000 as of December 31, ~~2015~~2016 which expire in years 2028 through 2034. 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 tax benefit.

The Company’s tax returns for all years since December 31, 2011 remain open to examination by the respective tax authorities. There are currently no tax examinations in progress.

(7)	SUBSEQUENT EVENTS

The Company has evaluated events and transactions after the balance sheet date and, through the date the financial statements were issued and believes that all relevant disclosures have been included herein and there are no other which requires recognition or disclosure in the accompanying financial statements.

InOn ~~early~~July ~~2016~~24, 2017, the Company ~~commenced~~entered into a ~~private~~Term ~~placement~~Sheet ~~and~~with ~~received~~Lior ~~subscriptions~~Barash, ~~for~~Erez 24Glazer,~~558~~ Lior Wayn,~~333~~ ~~shares~~and Lior Dolfin, (collectively, the ‘’Entrepreneurs”) for the acquisition of ~~common~~all ~~stock~~of atthe aissued ~~price~~shares of ~~A$0.04~~the ~~for~~Cyber ~~A$986~~Security technology business “Attofensive”,~~652~~ a company incorporated under the laws of Israel.

F-12

On November 17, 2017, the parties agreed to amend the Term Sheet and a summary of the terms are as follows:

·	Commencing December 1, 2017, the Entrepreneurs shall commence development of a product based on AttoFensive Technology.

·	The Entrepreneurs shall supply the Company with their personal services in the following roles:

i.	Barash – Chief Technology Officer

ii.	Dolphin – Chief Product Officer

iii.	Glazer – Chief Operating Officer

iv.	Wayn – Chief Executive Officer

Until the earlier of the July 17, 2018, and closing of a fund raising, the Company shall pay the Entrepreneurs only from funds raised specifically for this purpose a monthly amount of US$30,000. In addition, the Company shall cover operating expenses incurred by the Entrepreneurs (tax, accounting, legal, D&O insurance, travelling expenses, etc.), in an amount of up to US$50,000 on the production of invoices and/or receipts for such expenditure.

·	Upon the completion of private placements amounting to USD$400,000 for the AttoFensive Technology:

i.	Erez Glazer will be appointed to the Board of directors of the Company.

ii.	the Company shall grant to the Entrepreneurs (or their designees) options to acquire 10,000,000 shares of Common Stock in the Company at an exercise price of US$0.001 per share of Common Stock.

·	Upon the completion of placements amounting to USD$750,000 for the AttoFensive Technology:

i.	One more of the Entrepreneurs will be appointed to the Board of directors of the Company.

ii.	the Company shall grant to the Entrepreneurs (or their designees), options to acquire 10,000,000 shares of Common Stock in the Company at an exercise price of US$0.001 per share of Common Stock.

·	Upon the completion of placements amounting to USD$2,000,000 for the AttoFensive Technology:

i.	One more of the Entrepreneurs will be appointed to the Board of directors of the Company.

ii.	the Company shall grant to the Entrepreneurs (or their designees), options to acquire 30,000,000 shares of Common Stock in the Company at an exercise price of US$0.001 per share of Common Stock.

·	Once the Company's gross revenues per year exceed an aggregate amount of US$100,000, the Company shall issue the Entrepreneurs (or their designees), options to acquire 25,000,000 shares of Common Stock in the Company at an exercise price of US$0.001 per share of Common Stock.

·	Once the Company's gross revenues per year exceed an aggregate amount of US$1,000,000, the Company shall issue the Entrepreneurs (or their designees), options to acquire 25,000,000 shares of Common Stock in the Company at an exercise price of US$0.001 per share of Common Stock.

·	Once the Company's gross revenues per year exceed an aggregate amount of US$2,500,000, the Company shall issue the Entrepreneurs (or their designees), options to acquire 25,000,000 shares of Common Stock in the Company at an exercise price of US$0.001 per share of Common Stock.

the Company shall raise US$2,000,000. In the event that the Fund Raising does not close by July 17, 2018, the Entrepreneurs will be released from their obligations to provide services to the Company and the AttoFensive Technology shall, at the Entrepreneurs' sole discretion and for no consideration, revert to the Entrepreneurs. All Fund Raising proceeds will be distributed as per the board of directors.

·	The Entrepreneurs shall transfer the AttoFensive Technology to the Company (or its nominee) within 14 days of the signing of November 17, 2017.

F-13

In January 2017, the Company announced it was looking for gold opportunities in Myanmar.

The purchase price is up to USD$20,000,000 which is to be satisfied as follows:

a) The sum of USD$25,000 payable to the Sellers for due diligence expenses, 30 business days from the execution of the Term Sheet;

b) A further USD$25,000 each month after the date in a) above for due diligence expenses, for 3 months, payable to the Sellers for working capital purposes;

If the Transaction is terminated or is in the reasonable opinion of the Company unable to proceed at any point, the Company and the Sellers have agreed to convert any monies paid to the Sellers under (a) and (b) above into convertible securities in Attofensive.

F-14

As part of the agreement and as a condition to completion, the Company will raise USD$5,000,000.

Pending completion, the Sellers are required to carry on business in the ordinary course.

Prior to completion the Sellers are to discharge all encumbrances, mortgages, liens, bank loans and other security holdings except the business may have liabilities of no more than $200,000 from past activities.

F-15

Filing Compare · CONSOLIDATED GEMS, INC.