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FORM 10-KSB

SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549

[ x ]	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended - December 31, 2000

OR

[ ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE 	 SECURITIES EXCHANGE ACT OF 1934
For the transition period from

Commission file number 000-30845

GEM INTERNATIONAL (USA), INC.



|Nevada                                                       | 87-0628796                       
|------------------------------------------------------------ | ---------------------------------
|State or other jurisdiction of incorporation or organization | (IRS Employer Identification No.)

1720 Hampton Drive 
Coquitlam, Britsh Columbia
Canada V3E 3C9(Address of principal executive offices, including zip code.)

(604) 941-0458(Registrant's telephone number, including area code)

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

Securities registered pursuant to Section 12(g) of the Act: Common Stock

Check whether the Issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 [ X ] NO [ ]

Check if no disclosure of delinquent filers pursuant to Item 405 of Regulation S-B is contained herein, and no disclosure will be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference
in Part III of this Form 10-KSB or any amendment to this Form 10-KSB. [ ]

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State Issuer's revenues for its most recent fiscal year. 
December 31, 2000 - $36,100.

The Registrant=s common stock does not trade at the present time accordingly there is not market or market price for the Registrant=s securities. There are
approximately 190,000 shares of common voting stock of the Registrant held by non-affiliates.

Issuers involved in Bankruptcy Proceedings during the past Five Years. Not Applicable.

State the number of shares outstanding of each of the Issuer's classes of common equity, as of the latest practicable date:
May 29, 2001 - 4,100,000 shares of Common Stock.

Documents Incorporated by Reference

1. 	Form 10-SB Registration Statement and all amendments thereto, which was filed with the Securities and Exchange Commission on June 21, 2000 and all exhibits thereto.

2. 	All reports filed with the Securities and Exchange Commission subsequent to June 21, 2000.

Transitional Small Business Issuer Format 
YES [ x ] NO [ ]



PART I

ITEM 1. BUSINESS.

History

Gem International (USA), Inc. (the "Company") was incorporated under the laws of the State of Nevada on December 21, 1998. Gem is a development stage company incorporated as a wholesale distributor of jewelry and gemstones. Gem intends to use
utilize an Internet website to sell its jewelry and gemstones. Gem is in the process of developing its website, however, as of the date hereof, the website has not been completed and is currently not operational. The discussion of the website contained in
this registration statement is forward looking in that it sets forth a plan of operation which has not been developed. Gem intends to sell stone-set, pearl and gold jewelry through the benefits of Internet retailing, thereby delivering consumers an
opportunity to buy quality jewelry at low prices on the Internet. Gem intends to offer a selection stone-set, pearl and gold jewelry. Gem intends to offer detailed product information, helpful shopping services and merchandising through an easy-to-use Web
pages. In addition, Gem intends to offer consumers the convenience and flexibility of shopping twenty-four hours a day, seven days a week.

For the year ended December 31, 2000, Gem generated revenue of $36,100. These revenues were derived mainly from the sale of gemstones and jewelry of at trade shows. The sale of the jewelry at trade shows was not related to Gem=s web strategy. The sale of jewelry was a strategy to raise capital in order to continue operations.

Gem is in the process of developing its online store. Its website address will be www.buyritejewels.com. As of the date hereof, Gem has not had adequate funds to complete the development of its website. Gem believes that it
will need $65,000 to complete the development of its website and estimates, subject to receipt of the $65,000, that the website will be completely operational in July 2001 .

During the last two years, Gem spent $10,844.35 ($-0- in 1998, $10,844 in 1999 and $-0- in 2000) on research and development activities. The activities were directly related to the development of its website. The costs related to the research and
development were not borne by customers, but were financed through the sale of equity securities.

Gem has retained NetNations Communications Inc. ("NetNations") as its outside technology provider to develop its website. NetNations will provide the following services and products for the website: disk space, bandwidth, 155 mbit backbone, pop
mailboxes, e-mail forwarding, e-mailing aliasing, auto responder, front page support, unlimited FTP access, java chat, hotmetal/miva scipt, shopping cart, secure transactions signio support, cypercash support, macromedia flash and true speech. The
foregoing allow Gem to make retail sales of its jewelry, promote its products in an attractive fashion, and communicate with its customers on-line.



Gem also believes that the lack of financial security on the Internet is hindering economic activity thereon. To ensure the security of transactions occurring over the Internet, U.S. federal regulations require that any computer software used within
the United States contain a 128-bit encoding encryption, while any computer software exported to a foreign country contain a 40-bit encoding encryption. There is uncertainty as to whether the 128-bit encoding encryption required by the U.S. is sufficient
security for transactions occurring over the Internet. Accordingly, there is a danger that any financial (credit card) transaction via the Internet will not be a secure transaction. Accordingly, risks such as the loss of data or loss of service on the
Internet from technical failure or criminal acts are now being considered in the system specifications and in the security precautions in the development of the website. There is no assurance that such security precautions will be successful.

Other than investigating potential technologies and recruiting personnel in support of Gem=s business purpose, Gem has had no material business operations since its inception in 1998. At present Gem has yet to
acquire or develop the necessary technology assets in support of its business purpose to become a Web-based retailer focused on the distribution of jewelry and gemstones.

The Internet is a world-wide medium of interconnected electronic and/or computer networks. Individuals and companies have recently recognized that the communication capabilities of the Internet provide a medium for not only the promotion and
communication of ideas and concepts, but also for the presentation and sale of information, goods and services.

Shopping at Gem=s On-line Store

Gem=s online store will be located at www.buyritejewels.com.

Convenient Shopping Experience.

Gem=s online store will provide customers with an easy-to-use Web site. The website will be available 24 hours a day, seven days a week and will be reached from the shopper's home or office. Gem=s online store will enable it to deliver a broad selection of products to customers in rural or other locations that do not have convenient access to physical stores. Gem also intends to make the shopping experience convenient by categorizing its
products into easy-to-shop departments. These include earrings, bracelets and necklaces, pearls, gold and other jewelry.

Customer Service.

Gem intends to provide a customer service department via email where consumers can resolve order and product questions. Furthermore, Gem will insure consumer satisfaction by offering a money back guaranty.



Online Retail Store

Gem intends to design its online retail store to be the primary place for consumers to purchase jewelry. Gem believes its Online Retail Store will be an easy-to-use online store.

Shopping at the Online Store

Gem believes that the sale of jewelry products over the Web can offer attractive benefits to consumers. These include enhanced selection, convenience, quality, ease-of-use, depth of content and information, and competitive pricing. Key features of
Gem=s Online Store include:

Browsing

Gem=s Online Store will offer consumers with a several subject areas and special features arranged in a simple, easy-to-use format intended to enhance product selection. By clicking on a category names,
the consumer will move directly to the home page of the desired category and can view promotions and featured products.

Selecting a Product and Checking Out.

To purchase products, consumers will simply click on the "add to cart" button to add products to their virtual shopping cart. Consumers will be able to add and subtract products from their shopping cart as they browse around Gem=s Online Store, prior to making a final purchase decision, just as in a physical store. To execute orders, consumers click on the "checkout" button and, depending upon whether the consumer has previously shopped at Gem=s Online Store are prompted to supply shipping details online. Gem will also offer consumers a variety of gift wrapping and shipping options during the checkout process. Prior to finalizing an order by clicking the "submit" button, consumers will
be shown their total charges along with the various options chosen at which point consumers still have the ability to change their order or cancel it entirely.

Paying.

To pay for orders, a consumer must use a credit card, which is authorized during the checkout process, but which is charged when the customer's items are shipped from Gem=s distribution facility. Gem=s Online Store will use a security technology that works with the most common Internet browsers and makes it virtually impossible for unauthorized parties to read information sent by its consumers.

Gem offers its customers a full refund for any reason if the customer returns the purchased item within thirty days from the date of sale in the same condition it was sold to the customer. After thirty days, Gem will not refund any money to a customer.



Gem believes that the sale of jewelry and gemstone products over the Web can offer attractive benefits to consumers. These include enhanced selection, convenience, ease-of-use, and competitive pricing.

The success of Gem may be affected by fluctuations of the price of the mining of the gemstones and raw materials for the manufacturing of the jewelry products, and government agencies. Such factors are beyond the control of Gem and may render
commercial distribution of mining of the gemstone and raw materials impossible. It is possible that no matter what the outcome is of any distribution, evaluation, acquisition, or development programs of Gem, factors beyond the control of Gem may operate
to render commercial distribution of jewelry and precious stones impossible.

Source of Jewelry

Gem currently buys its jewelry from Queensland Opal, NL in Queensland, New South Wales, Australia on consignment. Queensland Opal is owned and controlled by Michael A. Cox, Gem=s President.

Competition

The electronic commerce market is new, rapidly evolving and intensely competitive. The market for information resources is more mature but also intensely competitive. Gem expects competition to continue to intensify in the future. Competitors
include companies with substantial customer bases in the computer and other technical fields. There can be no assurance that Gem can maintain a competitive position against current or future competitors, particularly those with greater financial,
marketing, service, support, technical and other resources. The failure to maintain a competitive position within the market could have a material adverse effect on Gem's business, financial condition and results of operations. There can be no assurance
that Gem will be able to compete successfully against current and future competitors, and competitive pressures faced by Gem may have a material adverse effect on Gem's business, financial condition and results of operations. See "Risk Factors -
Competition."

Competition in the distribution, wholesaling, merchandising, evaluation, acquisition, and development of gemstone and jewelry product business is intense. Numerous persons and entities are engaged in distribution, wholesaling, merchandising,
development, evaluation, or acquisition, including companies or individuals possessing financial resources in excess of that available to Gem. Fluctuations in gold, silver, gemstone, labor prices and regulations set by various governmental agencies
increase the risk to Gem. In the event Gem marketing/sales program prove to be economically or commercially unfeasible, Gem may seek out other distribution, wholesaling businesses. There can be no assurance, because of competitive conditions, the
sufficient manufactures, gemstones, raw materials, equipment services and suppliers, will be available to Gem when needed or on term which would permit a profitable operation by Gem.



Netjewels.com and Bluenile.com offer the same services as Gem. Upon initiating its website operations, Gem will be competing with the foregoing, in addition to non-Internet jewelry operations. Gem intends to offer its jewelry at competitive prices and
services with the foregoing online jewelry operations. Gem=s initial inventory of jewelry will be manufactured in Australia and will be promoted as such, thereby differentiating it from the foregoing and many other retail jewelry stores. Because Gem will be initiating
its operations, it faces the obstacles of any start-up business seeking an entrance into a competitive retail business.

Marketing

Through newspaper, radio, magazine, brochure and email, advertising Gem will target purchasers of jewelry and gemstone products. Gem may utilize inbound links that connect directly to Gem=s website from
other sites. Potential customers can simply click on these links to become connected to Gem=s website from search engines and community and affinity sites.

Insurance

Gem maintains insurance in such amounts and covering such losses, contingencies and occurrences as Gem deems adequate to protect it and its property. The principal type of insurance includes a comprehensive liability policy covering legal
liability for bodily injury or death of persons, and for damage to property owned by, or under the control of Gem, as well as damage to the property of others.

Employees; Identification of Certain Significant Employees.

Gem is a development stage company and currently has no employees, exclusive of its of its Officers and Directors. See "Management." Gem intends to additional hire employees on an as needed basis. Gem is presently dependent upon the services of
two of its principal officers, namely David Rambaran and Michael Cox. In the event either such individuals should leave Gem, there is no assurance that Gem can obtain the services of a suitable replacement.

Offices

The offices of Gem, are located at 1720 Hampton Drive, Coquitlam, British Columbia, Canada V3E 3C9, and its telephone number is (604) 941-0458.

Government Regulation

Gem is not currently subject to direct federal, state or local regulation other than regulations applicable to businesses generally or directly applicable to electronic commerce. However, the Internet is increasingly popular. As a result, it is
possible that a number of laws and regulations may be adopted with respect to the Internet. These laws may cover issues such as user privacy, freedom of expression, pricing, content and quality of products and services, taxation, advertising, intellectual
property rights and information security. Furthermore, the growth of electronic commerce may prompt calls for more stringent consumer protection laws. Several states have proposed legislation to limit the uses of personal user information gathered online or require online
services to establish privacy policies. The Federal Trade Commission has also initiated action against at least one online service regarding the manner in which personal information is collected from users and provided to third parties. Gem will not
provide personal information regarding our users to third parties. However, the adoption of such consumer protection laws could create uncertainty in Web usage and reduce the demand for our products and services.

Gem is not certain how its business may be affected by the application of existing laws governing issues such as property ownership, copyrights, encryption and other intellectual property issues, taxation, libel, obscenity and export or import
matters. The vast majority of such laws were adopted prior to the advent of the Internet. As a result, they do not contemplate or address the unique issues of the Internet and related technologies. Changes in laws intended to address such issues could
create uncertainty in the Internet market place. Such uncertainty could reduce demand for services or increase the cost of doing business as a result of litigation costs or increased service delivery costs.

In addition, because Gem=s products are available over the Internet in multiple states and foreign countries, other jurisdictions may claim that Gem is required to qualify to do business in each such state or
foreign country. Gem is qualified to do business only in Nevada. Gem=s failure to qualify in a jurisdiction where it is required to do so could subject it to taxes and penalties. It could also hamper Gem=s ability to enforce contracts in
such jurisdictions. The application of laws or regulations from jurisdictions whose laws do not currently apply to Gem=s business could have a material adverse effect on its business, results of operations and financial condition.

RISK FACTORS

1.Gem has a limited history of earnings.Gem has a limited operating history and is subject to all of the risks inherent in a developing business enterprise including lack of cash flow and service acceptance. Gem has a limited history of
earnings, its web site is not operational and it has been in the planning stage since December 1998.

2.Gem is currently in the planning stage and has not initiated operations of its Internet store.At this time Gem is still at the business investigation and planning stage and has yet to acquire, license or develop the necessary
software and hardware technology to offer the products and services that it proposes to offer. Gem=s proposed plan of operations has not been completed as of the date hereof and there are no assurances that the plan will ever be implemented.

3. Gem has accumulated losses and anticipates operation losses in the foreseeable future.The Company has current accumulated losses of $106,264 and anticipates that the losses will continue in the foreseeable future.



4. Gem has not developed or obtained market acceptance of its services.Gem's success and growth will depend upon Gem's ability to market its services. Gem's success will also depend upon the profitable market's acceptance of, and Gem's
ability to deliver and support its services. As of the date hereof, Gem has not achieved either.

5.Gem is dependent upon a technology supplier.Gem currently relies upon NetNation Communications Inc as its outside technology supplier. While Gem believes that there are numerous outside technology suppliers that perform the same
services as NetNation Communications Inc., a loss of NetNation=s services could interfere with Gem=s operations in the short run.

6. Lack of liquidity and need for additional financing. Gem believes that it does not have the cash it needs for at least the next twelve months based upon its internally prepared budget. Gem believes that it has an immediate need of
$65,000 for its web site. As such, Gem=s auditors have expressed doubt that Gem can continue as a going concern. Gem may have to suspend or cease operations without an influx of additional cash. Further, Gem's cash requirements are not easily
predictable and there is a possibility that its budget estimates will prove to be inaccurate. If Gem is unable to generate a positive cash flow, it will be required to curtail operations substantially and seek additional capital. There is no assurance
that Gem will be able to obtain additional capital if required, or if capital is available, to obtain it on terms favorable to Gem. Gem may suffer from a lack of liquidity in the future which could impair its short-term marketing and sales efforts and
adversely affect its results of operations.

7. Matters over which Gem has no control may impact its success. Gem=s success may be affected by matters over which it does not control, such as fluctuations of the cost of mining gemstones and
the cost of raw materials for manufacturing jewelry products. If mining and raw material costs increase, Gem will have to increase its sales price in order to maintain its profit margin. It is not possible to quantify the fluctuation of mining and raw
material costs since they vary with each substance, however, the same have been fairly stable over the last three years.

8. We may be liable for customer losses from Internet credit card Fraud.We may be liable for customer losses from Internet credit card fraud. Customers who buy our merchandise on the Internet and use a credit card may have their credit
card information appropriated by third parties or third parties may already have obtained a lost or stolen credit card and use it to buy merchandise. As a result, we may have delivered merchandise, but will not be paid for the merchandise by the credit
card company that issued the card. Therefore, we will suffer the loss on the transaction.

9. Gem is in a competitive market.Gem will compete with at least two online Internet retail jewelers and all non-Internet retail jewelers, all of which, Gem believes, have greater financial, technical and marketing resources than Gem.
The retail distribution of jewelry is intensely competitive and Gem expects the competition to continue and intensify in the future.



10. Gem relies upon its directors and officers.Gem is wholly dependent, at the present, upon the personal efforts and abilities of its officers and directors, Michael A. Cox, President and a member of the Board of Directors, and David
D. Rambaran, Secretary and a member of the Board of Director, who exercise control over the day to day affairs of Gem. The loss of either Mr. Cox or Rambaran could significantly affect Gem=s operations.

11. Gem and Michael A. Cox have a conflict of interest. Gem and Michael A. Cox, Gem=s President have a conflict of interest. Mr. Cox is the owner of Queensland Opal, NL from whom Gem acquires its
inventory of jewelry. It is possible that Gem may be or will in the future, be paying Queensland more for its inventory than it would be paying an independent third party.

12. Gem may issue additional shares of common stock which would dilute existing shareholders. 195,810,000 shares of Common Stock or 97.90% of the 200,000,000 authorized shares of Common Stock of Gem are unissued. The Board of Directors
has the power to issue such shares, subject to shareholder approval, in some instances. Although Gem presently has no commitments, contracts or intentions to issue any additional shares to other persons, other than as described in this registration
statement, Gem may in the future attempt to issue shares to acquire products, equipment or properties, or for other corporate purposes. Any additional issuance by Gem, from its authorized but unissued shares, would have the effect of diluting the interest
of existing shareholders.

13. The Company=s common stock is defined as a "penny stock" and as a result, shareholders may not be able to resell their shares. Gem=s common stock is
defined as a "penny stock" under the Securities and Exchange Act of 1934, and its rules. Because the common stock is a penny stock, shareholders may be unable to resell the shares. This is because the Securities Exchange Act of 1934 and the penny stock
rules impose additional sales practice and disclosure requirements on broker-dealers who sell Gem=s common stock to persons other than certain accredited investors. As a result, fewer broker-dealers, if any, are willing to make a market in the Gem=s common stock which
makes resales of the shares more difficult if not impossible.

14.Gem will indemnify its officers and directors for securities liabilities.The laws of the state of Nevada provide that Gem could indemnify any director, officer, agent and/or employee as to those liabilities and on those terms and
conditions as are specified in the Corporation Act of the State of Nevada. Further, Gem may purchase and maintain insurance on behalf of any such persons whether or not the corporation would have the power to indemnify such person against the liability
insured against. The foregoing could result in substantial expenditures by Gem and prevent any recovery from such officers, directors, agents and employees for losses incurred by Gem as a result of their actions. Further, Gem has been advised that in the
opinion of the Securities and Exchange Commission, indemnification is against public policy as expressed in the Securities Act of 1933, as amended, and is, therefore, unenforceable.



15. Gem=s common stock does not contain provisions for cumulative voting, preemptive rights and control.There are no preemptive rights in connection with Gem's Common Stock. Shareholders may be
further diluted in their percentage ownership of Gem in the event additional shares are issued by Gem in the future. Cumulative voting in the election of Directors is not provided for. Accordingly, the holders of a majority of the shares of commons Stock,
present in person or by proxy, will be able to elect all of Gem's board of directors.

16. Gem does not intend to pay any dividends on its common stock. At the present time Gem does not anticipate paying dividends, cash or otherwise, on its common stock in the foreseeable future. Future dividends will depend on earnings,
if any, of Gem, its financial requirements and other factors. As such, shareholders should not anticipate receiving any return on their investment through dividends.

17. There are security risks connected with electronic commerce which could result in losses to Gem.A significant barrier to electronic commerce and communications is the secure transmission of confidential information over public
networks. Gem intends to rely on encryption and authentication technology licensed from third parties to provide the security and authentication necessary for secure transmission of confidential information, such as credit card information. Advances in
computer capabilities, new discoveries in the field of cryptography, or other events or developments may result in a compromise or breach of the algorithms used by us to protect customer transaction data. If any such compromise of our security were to
occur, it could seriously harm our reputation, business, financial condition and results of operations. A party who is able to circumvent our security measures could misappropriate proprietary information or cause interruptions in customers' operations.
Gem may be required to obtain and expend significant capital and other resources to protect against such security breaches or to alleviate problems caused by such breaches. Concerns over the security of the Internet and other online transactions and the
privacy of users may also inhibit the growth of the Internet and other online services generally, and the Web in particular, especially as a means of conducting commercial transactions. To the extent that activities of Gem or third-party contractors
involve the storage and transmission of proprietary information, such as credit card numbers, security breaches could damage our reputation and expose us to a risk of loss or litigation and possible liability. Gem's security measures may not prevent
security breaches and failure to prevent such security breaches may seriously harm Gem=s business, financial condition and results of operations.

18. There could be a decrease in the expansion of the Internet which could have an adverse affect upon Gem. The growth and development of the market for electronic commerce may prompt calls for more stringent consumer protection laws
that may impose additional burdens on those companies conducting business online. The adoption of any additional laws or regulations may decrease the expansion of the Internet. A decline in the growth of the Internet could decrease demand for Gem=s products and services and increase our cost of doing business, or otherwise seriously harm our business, financial condition and results of operations. Morever, the applicability to the Internet of existing
laws in various jurisdictions governing issues such as property ownership, sales tax, libel and personal privacy is uncertain and may take years to resolve. If Gem develops its products and services for use on the Internet in multiple states and foreign countries,
such jurisdictions may claim that we are required to qualify to do business as a foreign corporation in each such state and foreign country. The failure by Gem to qualify as a foreign corporation in a jurisdiction where it is required to do so could
subject us to taxes and penalties for the failure to qualify. It is possible that the governments of other states and foreign countries also might attempt to regulate the content of our online store or prosecute us for violations of their laws. Violations
of local laws may be alleged or charged by state or foreign governments. Further, we might unintentionally violate such laws and such laws may be modified and new laws may be enacted in the future. In addition, several telecommunications carriers are
seeking to have telecommunications over the Internet regulated by the Federal Communications Commission (the "FCC") in the same manner as other telecommunications services. The growing popularity and use of the Internet has burdened the existing
telecommunications infrastructure and many areas with high Internet use have begun to experience interruptions in phone service. As a result, local exchange carriers have petitioned the FCC to regulate Internet Service Providers ("ISPs") in a manner
similar to long distance telephone carriers and to impose access fees on the ISPs If any effort to increase regulation of ISPs is successful, the expense of communicating on the Internet could increase substantially, potentially slowing the growth in the
use of the Internet. Any such new legislation or regulation or application or interpretation of existing laws could seriously harm our business, financial condition and results of operations.

19.In order to be successful, Gem believes it must promote its brand name which could result in large expenses. Gem believes that establishing, maintaining and enhancing the GEM INTERNATIONAL brand is critical to attracting customers.
To do so, Gem expects to expand marketing initiatives and build a brand by providing a high-quality experience supported by a high level of customer service. To promote and maintain the GEM INTERNATIONAL brand, Gem expects to increase substantially
financial expenditures, including marketing initiatives. If it fails to promote and maintain our brand, or if it incurs excessive expenses in an attempt to do so, Gem's business, operating results and financial condition would be. seriously harmed.

20. If the development and growth of the Internet subsides, Gem=s proposed growth could be curtailed.Gem intends to expand and provide its products and services through the Internet. Future
operations could be substantially depend upon the acceptance and use of the Internet and other online services as an effective medium of commerce by target customers. Rapid growth in the use of and interest in the Internet, the Web and online services is
a recent phenomenon. As a result, acceptance and use of the Internet may not continue to develop at historical rates and a sufficiently broad base of consumers may not adopt, and continue to use, the Internet and other online services as a medium of
commerce. Demand and market acceptance for recently introduced services and products over the Internet are subject to a high level of uncertainty and there exist few proven services and products. In addition, the Internet may not be accepted as a viable
long-term commercial marketplace for a number of reasons, including potentially inadequate development of the necessary network infrastructure or delayed development of enabling technologies and performance improvements. To the extent that the Internet
continues to experience significant expansion in the number of users, frequency of use or bandwidth requirements, the infrastructure for the Internet may be unable to support the demands placed upon it. In addition, the Internet could lose its viability due to delays in the development or adoption of new standards and protocols required to handle increased levels of Internet activity, or due to increased governmental regulation. Changes in or
insufficient availability of telecommunications services to support the Internet also could result in slower response times and adversely affect usage of the Internet generally and Gem in particular.

21. To remain competitive, Gem believes it will have to spend substantial sums of money on Internet technology.To remain competitive, Gem must continue to enhance and improve the responsiveness, functionality and features of its
operations. The Internet and the electronic commerce industry are characterized by: Rapid technological change; changes in user and customer requirements and preferences; frequent new product and service introductions embodying new technologies; and the
emergence of new industry standards and practices. The evolving nature of the Internet could render our existing online store and proprietary technology and systems obsolete. Gem's success will depend, in part on its ability to: enhance its existing
services; develop new services and products that address the increasingly sophisticated and varied needs of the customer; and respond to technological advances and emerging industry standards and practices on a cost-effective and timely basis. The
development of a Web site and other proprietary technology entails significant technical and business risks. Gem may not successfully use new technologies effectively or adapt an online sites, proprietary technology and transaction-processing system to
customer requirements or emerging industry standards. If Gem is unable, for technical, legal, financial or other reasons, to adapt in a timely manner, in response to changing market conditions or customer requirements, our business, financial condition
and results of operations could be seriously harmed.

ITEM 2. DESCRIPTION OF PROPERTIES.

Gem does not own any real or personal property. Gem's only asset is cash.

Gem's headquarters are located 1720 Hampton Drive, Coquitlam, British Columbia Canada V3E 3C9 and its telephone number is (604) 941-0458. The Company use the property rent free.

ITEM 3. LEGAL PROCEEDINGS.

The Company is not the subject of any pending legal proceedings; and to the knowledge of management, no proceedings are presently contemplated against the Company by any federal, state or local governmental agency.

Further, to the knowledge of management, no director or executive officer is party to any action in which any has an interest adverse to the Company.



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

The Company has not submitted any matters to the Security Holders of the Company for a vote during the year ended December 31, 2000.

PART II

ITEM 5.	MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDERS MATTERS.

(a) Market Information.

No market exists for Gem's securities and there is no assurance that a regular trading market will develop, or if developed, that it will be sustained. A shareholder in all likelihood, therefore, will be unable to resell the securities referred to
herein should he or she desire to do so. Furthermore, it is unlikely that a lending institution will accept Gem's securities as pledged collateral for loans unless a regular trading market develops.

There are no plans, proposals, arrangements or understandings with any person with regard to the development of a trading market in any of Gem's securities. Gem plans to file or have filed the required forms with the National Association of Securities
Dealers, Inc. (the "NASD") requesting that Gem's common stock be listed on the Bulletin Board operated by the NASD when this registration statement is declared effective by the Securities and Exchange Commission (the "Commission") and Gem has satisfied
all comments made by the Commission.

There are no outstanding options or warrants, or other securities convertible into, common equity of Gem. Of the 4,190,000 shares of common stock outstanding as of February 20, 2001, 4,100,000 shares were issued to Gem's officers, directors, and
beneficial owners, of more than 10% of Gem's shares, and may only be resold in compliance with Rule 144 of the Securities Act of 1933.

There are no shares of common stock currently being proposed to be publicly offered (pursuant to an employee benefit plan or dividend reinvestment plan) the offering of which could have a material adverse effect upon the market price of Gem's common
stock.

(b) Holders.

As of February 20, 2001, Gem has 35 holders of record of its common stock.

Gem has not paid any dividends since it is inception and does not anticipate paying any dividends on its Common Stock in the foreseeable future.



(c) Dividends.

The Registrant has never paid a cash dividend on its Common Stock and has no present intention to declare or pay cash dividends on the Common Stock in the foreseeable future. The Registrant intends to retain any earnings which it may realize in the
foreseeable future to finance its operations. Future dividends, if any, will depend on earnings, financing requirements and other factors.

SEC Rule 15g

Gem's shares are covered by Section 15g of the Securities Act of 1933, as amended that imposes additional sales practice requirements on broker/dealers who sell such securities to persons other than established customers and accredited investors
(generally institutions with assets in excess of $5,000,000 or individuals with net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouses). For transactions covered by the Rule, the broker/dealer must
make a special suitability determination for the purchase and have received the purchaser's written agreement to the transaction prior to the sale. Consequently, the Rule may affect the ability of broker/dealers to sell Gem's securities and also may
affect the ability of purchasers to sell their shares in the secondary market.

Section 15g also imposes additional sales practice requirements on broker/dealers who sell penny securities. These rules require a one-page summary of certain essential items. The items include the risk of investing in penny stocks in both public
offerings and secondary marketing; terms important to in understanding of the function of the penny stock market, such as "bid" and "offer" quotes, a dealers "spread" and broker/dealer compensation; the broker/dealer compensation, the broker/dealers
duties to its customers, including the disclosures required by any other penny stock disclosure rules; the customers rights and remedies in causes of fraud in penny stock transactions; and, the NASD's toll free telephone number and the central number of
the North American Administrators Association, for information on the disciplinary history of broker/dealers and their associated persons.

ITEM 6.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULT OF OPERATIONS.

The statements included in this registration statement regarding future financial performance and results and the other statements that are not historical facts are forward-looking statements. The words "expect, " "project," "estimate, "
"predict," "anticipate," "believes," "intends" and similar expressions are intended to identify forward-looking statements. Such statements are based upon current expectations of Gem and involve a number of risks and uncertainties and should not be
considered as guarantees of future performance. Readers are cautioned not to place undue reliance on these forward looking statements.



Gem has inadequate cash to maintain operations during the next twelve months and must raise additional cash in order to complete its website. Gem believes that it has an immediate need of $65,000 to complete development of its web site. Gem believes
it may have to suspend or cease operations if it does not receive the $65,000 for its web site. In order to meet its cash requirements, Gem will have to raise additional capital through the sale of securities or loans. As of the date hereof, Gem has not
made sales of additional securities and there is no assurance that it will be able to raise additional capital through the sale of securities in the future. Further, Gem has not initiated any negotiations for loans to Gem and there is no assurance that it
will be able to raise additional capital in the future through loans. In the event that Gem is unable to raise additional capital by April 30, 2001, it may have to suspend or cease operations.

Gem does not intend to conduct any research or development of its services during the next twelve months other than the development of its web-site as described herein. See "Business."

Gem does not intend to purchase a plant or significant equipment.

Gem will hire employees on an as needed basis, however, Gem does not expect any significant changes in the number of employees.

Gem expects to earn additional revenues in the first quarter of 2001. There is no assurance, however, that Gem will earn said revenues as planned.

Results of Operations

Gem has had limited operations to date and its activities have consisted primarily of raising equity capital. Accordingly, Gem is considered to be a development stage enterprise as defined in SFAS 7. Operations to date have been funded by the sale
of common stock along with related party debt. Future operations during the development state will be funded by a combination of common stock sales and long term debt.

Gem will be primarily engaged in operating as a wholesale distributor of jewels and gemstones. The Company is planning to utilize the Internet for electronic commerce and is currently developing an Internet web-site for that purpose.

As of the date hereof, the web-site has been designed and the front page completed. The portion of the web-site which consists of images and descriptions is approximately 30% completed. The balance of the web-site which consists of payment technology,
maintenance, shipping and inventory control has yet to be completed. Gem needs $65,000 to complete its web site.

Gem had no revenue from its planned operations for the year ended December 31, 1999, and had a net loss for the year of $49,087. During the year ended December 31, 2000, Gem generated $36,100 in sales due mainly to trade show revenues. These revenues
were derived mainly from the sale of gemstones and jewelry of at trade shows. The sale of the jewelry at trade shows



was not related to Gem=s web strategy. The sale of jewelry was a strategy to raise capital in order to continue operations. During the quarter ended December 31, 2000, the Company had revenue of $-0- bringing
total revenue from sales for the year ending December 31, 2000 to $36,100, while the net loss amounted to $106,264 from inception to December 31, 2000.

Expenses for advertising promotions at trade shows amounted to $11,922 for the year ended December 31, 1999 compared withe $6,563 for the year ended December 31, 2000.

Gem anticipates minimal revenues from operations continuing until its web-site and infrastructure is fully developed. When Gem is fully operational, it expects the majority of revenues to come from wholesale customers.

Given the current accumulated net losses and the anticipated future losses, there can be no assurance that Gem will achieve profitability or that if profitability is achieved, it will be sustained. Gem believes that its success will depend in large
part on its ability to expand its operations into electronic commerce, encourage customer loyalty, and capitalize on the market for jewelry and precious stones. Accordingly, Gem intends to invest heavily in marketing and promotion, its direct sales and
systems and infrastructure development. There can be no assurance that such expenditures will result in increased revenues or customer growth.

Liquidity and Capital Resources

Gem had no working capital at December 31, 2000, Gem's ability to conduct operations depends upon Management's success in obtaining additional sources of financing primarily through the this and additional offerings, bank loans, joint ventures, or
other arrangements.

Since inception, Gem has sold 4,190,000 shares of its common stock in consideration of $109,310.00.

In December 1999, Gem loaned JCC International Investment Ltd $5,000 which is evidenced by a promissory note accruing interest at the rate of 2% above the prime rate. The current interest rate on the promissory note is 7%. JCC International
Investments Ltd. is owned and controlled by David Rambaran, Gem=s Secretary. Gem received payment in full on this note plus $266 in accrued interest in April 2000.

During the year ended December 31, 2000, Gem loaned JCC International Investment Ltd. a total of $68,724 which is evidenced in part by a promissory note accruing interest at the rate of 7%. On December 31, 2000 the balance owing was $42,989. Gem
intends to collect on this note by June 30, 2001.



Effects of Inflation

Inflation has not had a significant impact on Gem's operations to date.

Web-site

Revenues generated from the web-site for the years ended December 31, 2000 and 1999 totalled $-0-. This was because the web-site had yet to become operational and generate revenues.

There were no operating expenses relating to the web-site for the year ending December 31, 2000 and December 31, 1999. During the year ended December 31, 1999, a total of $10,884 was expenses in the planning stage of Gem=s web site in accordance with EITF 00-2A

ITEM 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The financial statements begin on the following page.







Board of Directors
Gem International (USA), Inc.
Vancouver, BC Canada

INDEPENDENT AUDITOR

We have audited the accompanying balance sheets of Gem International (USA), Inc., a development stage enterprise (a Nevada corporation) as of December 31, 2000 and 1999, and the related statements of operations, stockholders

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimated 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 Gem International (USA), Inc. as of December 31, 2000 and 1999, 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 that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has generated little revenue in the past years, and has suffered
recurring losses from operations resulting in an accumulated deficit of $90,964 at December 31, 2000. These conditions raise substantial doubt about the Company

/s/ Williams & Webster, P.S.
Williams & Webster, P.S.Certified Public AccountantsSpokane, Washington
April 12, 2001

F-1



GEM INTERNATIONAL (USA), INC.
(A Development Stage Company)
BALANCE SHEETS

|                                                     |                                                                                                                                       | December 31, 2000         |                 | December 31, 1999
|---------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------- | ------------------------- | --------------- | -----------------
|ASSETS                                               |                                                                                                                                       |                           |                 |                  
|                                                     | CURRENT ASSETS                                                                                                                        |                           |                 |                  
|                                                     | Cash and cash equivalents                                                                                                             | $                         | 1,353           | $                
|                                                     | Accounts receivable                                                                                                                   |                           | 360             |                  
|                                                     | Inventory                                                                                                                             |                           | 6,677           |                  
|                                                     | Note receivable, related party                                                                                                        |                           | 41,525          |                  
|                                                     | Accrued interest receivable                                                                                                           |                           | 1,464 
_______  |                  
|                                                     | Total Current Assets                                                                                                                  |                           | 51,379 
_______ |                  
|                                                     | PROPERTY, PLANT AND EQUIPMENT                                                                                                         |                           |                 |                  
|                                                     | Office equipment                                                                                                                      |                           | 17,954          |                  
|                                                     | Accumulated depreciation                                                                                                              |                           | (4,985)
_______ |                  
|                                                     | Total Property, Plant and Equipment                                                                                                   |                           | 12,969 
_______ |                  
|                                                     | OTHER ASSETS                                                                                                                          |                           |                 |                  
|                                                     | Deposits                                                                                                                              |                           | - 
_______      |                  
|                                                     | Total Other Assets                                                                                                                    |                           | - 
_______      |                  
|TOTAL ASSETS                                         | $                                                                                                                                     | 64,348 
=======           | $               | 17,494 
=======  
|LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)       |                                                                                                                                       |                           |                 |                  
|                                                     | CURRENT LIABILITIES                                                                                                                   |                           |                 |                  
|                                                     | Accounts payable                                                                                                                      | $                         | 18,810          | $                
|                                                     | Note payable, related party                                                                                                           |                           | 39,329 
_______ |                  
|                                                     |                                                                                                                                       | Total Current Liabilities |                 | 58,139 
_______  
|                                                     | COMMITMENTS AND CONTINGENCIES                                                                                                         |                           | - 
_______      |                  
|STOCKHOLDERS' EQUITY (DEFICIT)                       |                                                                                                                                       |                           |                 |                  
|                                                     | Common stock, $0.0001 par value; 5,000,000,000 shares authorized, 4,190,000 and 3,190,000 shares issued and outstanding, respectively |                           | 419             |                  
|Additional paid-in capital                           |                                                                                                                                       | 112,054                   |                 | 9,955            
|Deficit accumulated during development stage         |                                                                                                                                       | (106,264)
_______         |                 | (49,087)
_______ 
|                                                     | Total Stockholders' Equity (Deficit)                                                                                                  |                           | 6,209 
_______  |                  
|TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | $                                                                                                                                     | 64,348 
========          | $               | 17,494 
=======  



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

F-2



GEM INTERNATIONAL (USA), INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS

|                                                                       |                               | Year Ended
December 31, 2000 |                  | December 31, 1999  |                 | For the Period From Inception (December 21, 1998) to December 31, 2000
|---------------------------------------------------------------------- | ----------------------------- | ---------------------------- | ---------------- | ------------------ | --------------- | ----------------------------------------------------------------------
|REVENUES                                                               | $                             | 36,100                       | $                | -                  | $               | 36,100                                                                
|COST OF REVENUES                                                       |                               | 23,122 
_______              |                  | - 
_______         |                 | 23,122 
_______                                                       
|GROSS PROFIT                                                           |                               | 12,978 
_______              |                  | - 
_______         |                 | 12,978 
_______                                                       
|GENERAL AND ADMINISTRATIVE EXPENSES                                    |                               |                              |                  |                    |                 |                                                                       
|                                                                       | Advertising                   |                              | 6,563            |                    | 11,922          |                                                                       
|                                                                       | Depreciation                  |                              | 3,349            |                    | 1,636           |                                                                       
|                                                                       | Bad debt                      |                              | 15,300           |                    | -               |                                                                       
|                                                                       | Bank charges                  |                              | 248              |                    | 69              |                                                                       
|                                                                       | Excise and duty charges       |                              | -                |                    | 5,778           |                                                                       
|                                                                       | Freight                       |                              | 289              |                    | 771             |                                                                       
|                                                                       | Licenses and fees             |                              | 100              |                    | -               |                                                                       
|                                                                       | Management fees               |                              | 16,450           |                    | 6,000           |                                                                       
|                                                                       | Office expense                |                              | 5,125            |                    | 1,157           |                                                                       
|                                                                       | Professional expense          |                              | 27,207           |                    | 6,274           |                                                                       
|                                                                       | Rent and storage              |                              | 950              |                    | 800             |                                                                       
|                                                                       | Research and marketing        |                              | 3,624            |                    | -               |                                                                       
|                                                                       | Telephone and utilities       |                              | -                |                    | 2,089           |                                                                       
|                                                                       | Travel                        |                              | 1,292            |                    | 1,086           |                                                                       
|                                                                       | Web site expenses             |                              | - 
_______       |                    | 10,884 
_______ |                                                                       
|                                                                       | Total Expenses                |                              | 80,497 
_______  |                    | 48,466 
_______ |                                                                       
|LOSS FROM OPERATIONS                                                   |                               | (67,519)
_______             |                  | (48,466)
_______   |                 | (115,985)
_______                                                     
|OTHER INCOME (EXPENSES)                                                |                               |                              |                  |                    |                 |                                                                       
|                                                                       | Interest income               |                              | 2,541            |                    | 130             |                                                                       
|                                                                       | Other income                  |                              | 10,000           |                    | -               |                                                                       
|                                                                       | Interest expense              |                              | (2,199) 
_______ |                    | (751) 
_______  |                                                                       
|                                                                       | Total Other Income (Expenses) |                              | 10,342 
_______  |                    | (621) 
_______  |                                                                       
|LOSS BEFORE INCOME TAXES                                               |                               | (57,177)                     |                  | (49,087)           |                 | (106,264)                                                             
|INCOME TAXES                                                           |                               | - 
_______                   |                  | - 
_______         |                 | - 
_______                                                            
|NET LOSS                                                               | $                             | (57,177) 
=======            | $                | (49,087)
=======   | $               | (106,264)
=======                                                     
|BASIC AND DILUTED NET LOSS PER
COMMON SHARE                            | $                             | (0.01) 
=======              | $                | nil 
=======       | $               | (0.03)
=======                                                        
|WEIGHTED AVERAGE NUMBER OF BASIC AND
DILUTED COMMON SHARES OUTSTANDING |                               | 3,944,098 
=======           |                  | 1,866,877 
======= |                 | 3,351,260 
=======                                                    

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

F-3



GEM INTERNATIONAL (USA), INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY

|                                                                | Common Stock 
Number of Shares | Amount | Additional
Paid-in
Capital | Accumulated
Deficit During
Development
Stage | Total           
|--------------------------------------------------------------- | ------------------------------ | ------ | -------------------------- | -------------------------------------------- | ----------------
|Stock issued in April 1999 an average price of $0.003 per share | 3,190,000                      | $      | 319                        | $                                            | 8,991           
|Cash contributed for start up costs                             | -                              |        | -                          |                                              | 213             
|Imputed interest on loan from shareholder                       | -                              |        | -                          |                                              | 751             
|Net loss for the year ending December 31, 1999                  | - 
_______                     |        | - 
_______                 |                                              | - 
_______      
|Balances at December 31, 1999                                   | 3,190,000                      |        | 319                        |                                              | 9,955           
|Stock issued for cash at $0.10 per share                        | 1,000,000                      |        | 100                        |                                              | 99,900          
|Imputed interest on loan from shareholder                       | -                              |        | -                          |                                              | 2,199           
|Net loss for the year ended December 31, 2000                   | - 
_______                     |        | - 
_______                 |                                              | - 
_______      
|Balance at December 31, 2000                                    | 4,190,000 
=======             | $      | 419 
=======               | $                                            | 112,054 
=======

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

F-4



GEM INTERNATIONAL (USA), INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS

|                                                                            | Year Ended December 31, 2000              | Year Ended December 31, 1999 | For the Period From Inception (December 21, 1998) to December 31, 2000
|--------------------------------------------------------------------------- | ----------------------------------------- | ---------------------------- | ----------------------------------------------------------------------
|CASH FLOWS FROM OPERATING ACTIVITIES:                                       |                                           |                              |                                                                       
|                                                                            | Net loss                                  | $                            | (57,177)                                                              
|Adjustments to reconcile net loss to net cash used by operating activities: |                                           |                              |                                                                       
|                                                                            | Depreciation expense                      |                              | 3,349                                                                 
|Imputed interest                                                            |                                           | 2,199                        |                                                                       
|                                                                            | Change in assets and liabilities:         |                              |                                                                       
|Accounts receivable                                                         |                                           | (360)                        |                                                                       
|                                                                            | Accrued interest income                   |                              | (1,336)                                                               
|Inventory                                                                   |                                           | (6,677)                      |                                                                       
|Deposits                                                                    |                                           | 300                          |                                                                       
|Organizational costs                                                        |                                           | -                            |                                                                       
|Accounts payable                                                            |                                           | 1,832 
_______               |                                                                       
|Net cash used by operating activities                                       |                                           | (57,870) 
_______            |                                                                       
|CASH FLOWS FROM INVESTING ACTIVITIES:                                       |                                           |                              |                                                                       
|                                                                            | Purchase of computer and office equipment |                              | (5,093)                                                               
|Investment in short-term note receivable                                    |                                           | (68,724)                     |                                                                       
|Payments received from short-term note receivable                           |                                           | 32,199 
_______              |                                                                       
|                                                                            | Net cash used by investing activities     |                              | (41,618)
_______                                                      
|CASH FLOWS FROM FINANCING ACTIVITIES:                                       |                                           |                              |                                                                       
|                                                                            | Proceeds from sales of common stock       |                              | 100,000                                                               
|Proceeds from related party loan                                            |                                           | - 
_______                   |                                                                       
|                                                                            | Net cash provided by financing activities |                              | 100,000 
_______                                                      
|                                                                            | Net increase in cash and cash equivalents |                              | 512                                                                   
|Cash and cash equivalents beginning of period                               |                                           | 841 
_______                 |                                                                       
|Cash and cash equivalents at end of period                                  | $                                         | 1,353 
=======               | $                                                                     
|Supplemental cash flow disclosures:                                         |                                           |                              |                                                                       
|                                                                            | Income taxes paid                         | $                            | -                                                                     
|Interest paid                                                               | $                                         | -                            | $                                                                     
|Non-cash items:                                                             |                                           |                              |                                                                       
|                                                                            | Capital contribution for imputed interest | $                            | 2,199                                                                 

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

F-5



GEM INTERNATIONAL (USA), INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2000

NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

Gem International (USA), Inc. (hereinafter Athe Company@) was incorporated on December
21, 1998 under the laws of the State of Nevada for the purpose of wholesale distribution of jewelry and gemstones. The Company commenced activity in April 1999. The Company maintains offices in Coquitlam, British Columbia, Canada and Blaine, Washington.
The Company's fiscal year-end is December 31.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

This summary of significant accounting policies of Gem International (USA), Inc. is presented to assist in understanding the Company=s financial statements.
The financial statements and notes are representations of the Company=s management, which is responsible for their integrity and objectivity. These accounting policies conform to generally accepted accounting principles and have been consistently
applied in the preparation of the financial statements.

Development Stage Activities

The Company has been in the development stage since its formation in December 1998 and has not yet realized any significant revenues from its planned operations. It is primarily engaged in wholesale distribution of jewelry and
gemstones.

Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.

As shown in the accompanying financial statements, the Company incurred a net loss of $41,877 for the year ended December 31, 2000, has an accumulated deficit of $90,964, and had minimal sales. The future of the Company is dependent
upon its ability to obtain financing and upon future successful and profitable operations. Management has plans to seek additional capital through a public offering of its common stock. The financial statements do not include any adjustments relating to
the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue in existence.

Accounting Method

The Company=s financial statements are prepared using the accrual method of accounting.

Advertising Costs

Advertising costs are charged to operations when incurred.

F-6



GEM INTERNATIONAL (USA), INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2000

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Loss Per Share

Basic and diluted net loss per common share was computed by dividing the net loss by the weighted average number of shares outstanding during the period. The weighted average number of shares was calculated by taking the number of shares
outstanding and weighting them by the amount of time that they were outstanding. Diluted loss per share is the same as basic loss per share, as there were no common stock equivalents outstanding.

Inventories

The Company had $6,677 in inventory as of December 31, 2000. Inventory is purchased periodically for special orders and display purposes only and is stated at the lower of cost (using specific identification) or market.

The Company holds approximately $140,000 worth of inventory, valued at cost, on consignment from a related party, Queensland Opal N.L. (an Australian corporation). See Note 7. This inventory remains the property of Queensland Opal
N.L., which is responsible for maintaining insurance on the inventory, until the inventory is sold, returned, lost, stolen, damaged, or destroyed.

Revenue Recognition

The Company recognizes the net sale, gross proceeds less cost, at the point when title transfers from consignor to purchaser.

Revenues from special orders, not on consignment, are recognized when title transfers to purchaser.

Cash and Cash Equivalents

For purposes of its statement of cash flows, the Company considers money market accounts and all short-term debt securities purchased with a maturity of three months or less to be cash equivalents.

Compensated Absences

The Company has no employees. At such time as the Company hires personnel, its employees will be entitled to paid vacation, paid sick days and personal days off depending on job classification, length of service, and other factors.
The Company=s policy will be to recognize the cost of compensated absences when actually paid to employees.







F-7



GEM INTERNATIONAL (USA), INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2000

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Provision for Doubtful Accounts

Provision for losses on trade accounts receivable is made in amounts required to maintain an adequate allowance to cover anticipated bad debts. Accounts receivable are charged against the allowance when it is determined by the Company that payment
will not be received. During the year ended December 31, 2000, the Company expensed $15,300 as bad debt. Receivables are shown net of allowance for bad debts of $0 as of December 31, 2000.

Provision for Taxes

At December 31, 2000, the Company had an accumulated net operating loss of approximately $106,000. No provision for taxes or tax benefit has been reported in the financial statements, as there is not a measurable means of assessing future profits
or losses.

Use of Estimates

The process of preparing financial statements in conformity with generally accepted accounting principles requires the use of estimates and assumptions regarding certain types of assets, liabilities, revenues, and expenses. Such estimates
primarily relate to unsettled transactions and events as of the date of the financial statements. Accordingly, upon settlement, actual results may differ from estimated amounts.

Web Site Development

An outside consultant is planning and developing the Company=s web site to sell the Company=s products
in the future. The planning and development costs incurred in this project, in the amount of $10,884 for the period from inception (December 21, 1998) through December 31, 1999, were expensed as incurred in accordance with SOP 98-1.

Effective January 1, 2000, the Company adopted SOP 98-1 as amplified by EITF 99-2, AAccounting for Web Site Development Costs.@
In accordance with this early adoption, the Company will henceforth capitalize web site development costs. During the year ended December 31, 2000, the Company had not incurred any web site development costs.

Reclassifications

Certain amounts from prior periods have been reclassified to conform with the current period presentation. This reclassification has resulted in no changes to the Company=s
accumulated deficit or net losses presented.

F-8



GEM INTERNATIONAL (USA), INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2000

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Impaired Asset Policy

In March 1995, the Financial Accounting Standards Board issued a statement titled AAccounting for Impairment of Long-lived Assets.@In complying with this standard, the Company reviews its long-lived assets quarterly to determine if any events or changes in circumstances have transpired which indicate that the carrying value of its assets may not be
recoverable. The Company determines impairment by comparing the undiscounted future cash flows estimated to be generated by its assets to their respective carrying amounts. Asset values will be adjusted using the discounted future cash flows expected to
be received for the assets. The Company does not believe any adjustments are needed to the carrying value of its assets at December 31, 2000.

Fair Value of Financial Instruments

The carrying amounts for cash, accounts receivable, notes receivable, accounts payable, and notes payable approximate their fair value

Translation of Foreign Currency

The Company has adopted Financial Accounting Standard No. 52. Monetary assets and liabilities denominated in foreign currencies are translated into United States dollars at rates of exchange in effect at the balance sheet date. Non-monetary assets
and liabilities and items recorded in the income statement arising from transactions denominated in foreign currencies are translated at rates of exchange in effect at the date of the transaction. Gains or losses are included in income for the year. For
the year ended December 31, 2000, the Company had a $7 transaction gain, which was included in office expense given the immaterial amount.

Derivative Instruments

In June 1998, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards (ASFAS@) No. 133,AAccounting for Derivative Instruments and Hedging Activities.@This standard establishes
accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. It requires that an entity recognize all derivatives as either assets or liabilities in the
balance sheet and measure those instruments at fair value.

At December 31, 2000, the Company has not engaged in any transactions that would be considered derivative instruments or hedging activities.

NOTE 3 - CONCENTRATION OF CREDIT RISK FOR CASH HELD AT BANKS

The Company maintains cash balances at a bank in British Columbia, Canada. The Canadian dollar account is insured up to a maximum of $60,000 per account. However, the United States dollar account is not insured.

F-9



GEM INTERNATIONAL (USA), INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2000

NOTE 4 - PROPERTY PLANT AND EQUIPMENT

The cost of property, plant, and equipment is depreciated over the estimated useful lives of the related assets. Depreciation is computed using the declining balance method as follows and amounted to $3,349 for the year ended
December 31, 2000:



|Computer Equipment             | 30% declining balance
|------------------------------ | ---------------------
|Office Furniture and Equipment | 20% declining balance

For income tax purposes, the statutory depreciation methods are used.

NOTE 5 - COMMON STOCK

The Company is authorized to issue 5,000,000,000 shares of $0.0001 par value common stock. In April 1999, 3,190,000 shares of common stock were issued for cash at an average value of $0.003 per share.

During the year ending December 31, 2000, 1,000,000 shares of common stock were issued for $0.10 per share.

NOTE 6 - ADDITIONAL PAID-IN CAPITAL

During the year ended December 31, 1998, shareholders contributed $213 for start up costs. At September 30, 2000, the Company owed $39,329 to the president of the Company in the form of an uncollateralized note, which had no stated
interest rate. However, interest is imputed using the applicable federal rate, which was 5.59% at the date the note was initiated (October 1, 1999). This transaction resulted in additional paid-in capital of $2,199 for the year ended December 31, 2000.

NOTE 7 - RELATED PARTIES

The Company holds inventory on consignment from a stockholder, Queensland Opal N.L., an Australian corporation, (hereinafter

During the year ended December 31, 1999, the Company loaned funds in the amount of $5,000 to a company, which is controlled by the Company



GEM INTERNATIONAL (USA), INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2000

NOTE 7 - RELATED PARTIES (continued)

During the year ended December 31, 2000, the Company loaned additional funds in the amount of $68,724 to a company which is controlled by the Company

NOTE 8 - INTANGIBLE ASSETS

During 1998, Gem International (USA), Inc. incurred organization costs of $213. These organization costs were being amortized over sixty months beginning December 21, 1998. In accordance with SOP 98-5 (effective for fiscal years
beginning after December 15, 1998), the Company has written off all its organization costs in the year ending December 31, 1999.

NOTE 9 - OTHER INCOME

During the year ended December 31, 2000, the Company was awarded an advertising reimbursement. Due to the past disbursements being expensed in two different years, the reimbursement is being recognized as income.

NOTE 10 - COMMITMENTS AND CONTINGENCIES

Foreign Operations

The accompanying balance sheet includes $64,348 relating to the Company

NOTE 11 - YEAR 2000 ISSUES

Like other companies, Gem International (USA), Inc. could be adversely affected if the computer systems the Company, its suppliers or customers use do not properly process and calculate date-related information and data from the
period surrounding and including January 1, 2000. This is commonly known as the

F-11



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

There have been no disagreements on accounting and financial disclosures from the inception of the Company through the date of this Registration Statement.

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

Identification of Directors and Executive Officers.

The following table sets forth the names and nature of all positions and offices held by all directors and executive officers of the Company for the calendar year ending December 31, 2000, and to the date hereof, and the period or periods during
which each such director or executive officer served in his or her respective positions.

|Name           | Position Held                                   
|-------------- | ------------------------------------------------
|Michael A. Cox | President and a member of the Board of Directors
|David Rambaran | Secretary and a member of the Board of Director 

Each director serves for a term of one year and the directors are elected at the annual meeting of shareholders. Gem's officers are appointed by the Board of Directors and hold office at the discretion of the Board.

Michael A. Cox - President and member of the Board of Directors.

Since inception, Mr. Cox has been the President and a member of the Board of Directors. From September 1988 to December 1995, he was an Investment Analyst with ABS White & Co., Ltd., Sydney, Australia, and for a short period of time a
mining analyst with James Capel Ltd., of Sydney Australia. He has served or currently serves as a director and secretary for Australian Environmental Resources NL, Mildura, Australia, Opal Mining & Exploration NL, Sydney, Australia, and Queensland
Opals NL, Milton, Australia, and Corundum Pty Ltd., and is the sole director of Chaoxs Pty Ltd. He graduated from Sydney Technical College in 1987, with a certificate of accounting. He received a Diploma of Gemology from the Gemological Association of
Australia in 1984 and a Graduate Diploma of Diamond Technology in 1998. Gem currently has a verbal agreement for distribution of Queensland Opals NL's products.



David Rambaran - Secretary and a member of the Board of Directors

Since inception, Mr. Rambaran has been the secretary and a member of the Board of Directors of Gem. He has fifteen years experience in all aspects of the jewelry industry, including marketing, research, analysis, manufacturing and product
development, advertising, public relations, seeking new business opportunities, financial management, merchandising, and the facilitating of staff services. Mr. Rambaran is a native of London, England and studied Business Administration at the University
of London for three years before immigrating to Canada in 1982. From March 1980 to September 1982, he was employed in the military department for the Kuwait Embassy in London, England. From July 1996 to September 1997, Mr. Rambaran served as president of
Canadian Northern Lites. He is a member of the Canadian Jewelers Association and the AGTA Jewelers Association. Mr. Rambaran also is the President, Secretary, and founder of J.C.C. International, Inc.

Term of Office

The terms of office of the current directors continue until the annual meeting of stockholders, which the Bylaws provide shall be held on the third Friday of November of each year; officers are elected at the annual meeting of the board of
directors, which immediately follows the annual meeting of stockholders.

Involvement in Certain Legal Proceedings

During the past five years, no present or former director, executive officer or person nominated to become a director or an executive officer of the Company has been the subject matter of any legal proceedings, including bankruptcy, criminal
proceedings, or civil proceedings. Further, no legal proceedings are known to be contemplated by governmental authorities against any director, executive officer and person nominated to become a director.

Compliance with Section 16(a) of the Exchange Act.

The directors, executive officers and ten percent stockholders of the Company did not file any Forms 3, 4 or 5 as required by Section 16 of the Securities Exchange Act of 1934. Said directors, officers and ten percent stockholders intend to file
all delinquent reports in the near future.

ITEM 10. EXECUTIVE COMPENSATION.

The following table sets forth the aggregate compensation paid by the Company for services rendered during the period indicated:



SUMMARY COMPENSATION TABLE



| | Long-Term Compensation
| | ----------------------





| | Annual Compensation | Awards | Payouts
| | ------------------- | ------ | -------





|Names of executive officers and principal positions | Year Ended     | Salary
(US$) | Bonus (US$) | Other Annual
Compensation (US$) | Securities Under Options/ SARs Granted (#) | Restricted Shares of Restricted Shares Units(US$) | LTIP Payouts (US$) | Other Annual Compensation (US$)
|--------------------------------------------------- | -------------- | ------------ | ----------- | ------------------------------- | ------------------------------------------ | ------------------------------------------------- | ------------------ | -------------------------------
|Michael A. Cox 
President                           | 2000
1999
1998 | 0
0
0        | 0
0
0       | 0
0
0                           | 0
0
0                                      | 0
0
0                                             | 0
0
0              | 0
0
0                          
|David Rambaran 
Secretary                           | 2000
1999
1998 | 0
6,000
0    | 0
0
0       | 0
0
0                           | 0
0
0                                      | 0
0
0                                             | 0
0
0              | 0
0
0                          

The Company anticipates paying the following salaries in 2001, subject to the Company beginning profitable operations and generating sufficient revenues to pay the same:



|Michael A. CoxDavid Rambaran | President and DirectorSecretary and Director | $ -0-$ -0-
|---------------------------- | -------------------------------------------- | ----------

Option/SAR Grants.

Information concerning individual grants of stock options, whether or not in tandem with stock appreciation rights ("SARs"), and freestanding SARs made during fiscal 2000 and options granted to date in fiscal 2001 to each of the Named Executive
Officers is reflected in the table below.

Option/SAR Grants in Fiscal 2000.



| | Individual Grants | Potential Realizable Value at Assumed Annual Rates of Stock Price Appreciation for Option Term
| | ----------------- | ----------------------------------------------------------------------------------------------





|Name | Number of Securities Underlying Options/SARs Granted (#) | Percent of Total Options/SARs Granted to Employees in Fiscal Year | Exercise or Base Price | Expiration Date
|---- | -------------------------------------------------------- | ----------------------------------------------------------------- | ---------------------- | ---------------





|Michael A. CoxDavid Rambaran | 00 | 0%0% | $0.00$0.00 | 00
|---------------------------- | -- | ---- | ---------- | --



Long-Term Incentive Plan Awards.

Gem does not have any long-term incentive plans that provide compensation intended to serve as incentive for performance.

Compensation of Directors.

Directors do not receive any compensation for serving as members of the Board of Directors. The Board has not implemented a plan to award options to any Directors. There are no contractual arrangements with any member of the Board of Directors.

The Company has not paid any paid salaries to its officers for since the Company=s inception and does not plan to do so until such time as the Company beings operating profitably.

Compensation of Directors.

The Company=s Board of Directors unanimously resolved that members receive no compensation for their services, however, they are reimbursed for travel expenses incurred in serving on the Board of Directors.

ITEM 11.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

Security Ownership of Certain Beneficial Owners

The following table sets forth the share holdings of those persons who own more than five percent of the Company's Common Stock as of December 31, 2000:



|Name and address of owner                                         | Number of Shares | Position               | Percent of Class
|----------------------------------------------------------------- | ---------------- | ---------------------- | ----------------
|Michael A. Cox 
80 Edinburgh Road 	
Castlecrag NSW 2068
Australia | 500,000 [1]      | President and Director | 11.93%          
|David Rambaran 
1720 Hampton Drive
Coquitlam, B.C.
Canada V3E 3C9 | 2,500,000        | Secretary and Director | 59.66%          
|All officers and directors as a group (2 persons)                 | 3,000,000        |                        | 71.59%          
|Clariden Bank
12 East 49th Street
New York, New York 10017        | 1,000,000        |                        | 23.86%          



[1] 	Shares are held in the name of Queensland Opals NL, a corporation owned and controlled by Michael A. Cox, Gem's President. Queensland Opals NL is an Australian corporation in which Mr. Cox is the President and a member of the Board of Directors.

Changes in Control

To the knowledge of management, there are no present arrangements or pledges of securities of the Company which may result in a change in control of the Company.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

In January 1999, Gem issued 500,000 shares of common stock to Michael A. Cox, Gem=s President in consideration of $50.00. The foregoing shares were issued pursuant to Section 4(2) of the Securities Act of
1933 (the "Act").

In January 1999, Gem issued 2,500,000 shares of common stock to David Rambaran, Gem=s Secretary in consideration of $250.00. The foregoing shares were issued pursuant to Section 4(2) of the Act.

On October 28, 1999, Gem issued 1,000,000 shares of common stock to Clariden Bank, in consideration of $100,000. The foregoing shares were issued pursuant to Reg. 504 of the Act.

In December 1999, Gem loaned JCC International Investment Ltd $5,000 which is evidenced by a promissory note accruing interest at the rate of 2% above the prime rate. The current interest rate on the promissory note is 7%. JCC International
Investments Ltd. is owned and controlled by David Rambaran, Gem=s Secretary. This note was repaid in full, including accrued interest, in April 2000.

During the year ended December 31, 2000, Gem loaned JCC International Investment Ltd. a total of $68,724 which is evidenced in part by a promissory note accruing interest at the rate of 7%. On December 31, 2000, the balance owing was $42,989, which
includes interest receivable.

Gem purchases its inventory of jewelry and gems from Queensland Opal NA a corporation owned and controlled by Michael A. Cox, Gem=s President. Gem received a consignment of inventory from Queensland Opal N.L.
valued at $140,000.

Michael Cox owns 11.93% of Gem=s outstanding shares of common stock.

Dave Rambaran owns 59.66% of the Company=s outstanding shares of common stock.

Clariden Bank is incorporated in the State of New York. Clariden Bank owns 23.86% of Gem=s outstanding shares of common stock.



PART IV

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.

Reports on Form 8-K

No reports on Form 8-K have been filed during the last quarter of the period covered by this report.

Exhibits

The following documents are incorporated herein by reference from the Registrant's Form 10SB Registration Statement and all amendments thereto, which was filed with the Securities and Exchange Commission on June 21, 2000, and all exhibits thereto,
as filed with the Commission:



|Exhibit No.     | Description                                                                                      
|--------------- | -------------------------------------------------------------------------------------------------
|3.1
3.2
3.3
4.1 | Articles of Incorporation.
Bylaws.
Amended Articles of Incorporation.
Specimen Stock Certificate.



SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on this 29th day of
May, 2001.

GEM INTERNATIONAL USA, INC.

(Registrant)

BY: /s/ Michael Cox
Michael Cox, President, Chief Executive Officer and member of the Board of Directors

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following person on behalf of the Registrant and in the capacities and on this 29th day of May, 2001.



|SIGNATURES                        | TITLE                                                                    
|--------------------------------- | -------------------------------------------------------------------------
|/s/ Michael Cox 
Michael Cox      | President, Chief Executive Officer and a member of the Board of Directors
|/s/ David Rambaran
David Rambaran | Secretary and member of the Board of Directors