UNITED STATES

SECURITY AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

(MARK ONE)

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

For the fiscal year ended June 30, ~~2019~~2020

[_] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________

Commission File Number: 000-21555

STEMGEN, INC.

(Exact name of registrant as specified in its charter)


Delaware		54-1812385
(State or other jurisdiction of Incorporation or organization)		(I.R.S. Employer Identification Number)

1 Performance Drive, Suite F Angleton, TX		77515
(Address of principal executive offices)		(Zip code)

Registrant’s telephone number, including area code: (832) 954-7569

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


Title of Each Class	Name of Each Exchange on which Registered
Common stock, $0.001 par value	OTC Markets QB

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes [_] No [X]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes [_] No [X]

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes [X] No [_]

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes [_] No [X]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	[_]	Accelerated filer	[_]
Non-accelerated filer	[X]	Smaller reporting company	[X]
		Emerging growth company	[_]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

[_]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)

Yes [_] No [X]

The Aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter, December 31, ~~2018~~2019 was $~~109~~5,~~879~~632,763.

There were 45,~~422~~429,188 shares of the Registrant’s common stock outstanding as of ~~November~~October 188, ~~2019~~2020.

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STEMGEN, INC.

TABLE OF CONTENTS

PART I	5
Item 1. Business	5
Item 1A. Risk Factors	5
Item 1B. Unresolved Staff Comments	5
Item 2. Properties	5
Item 3. Legal Proceedings	56
Item 4. Mine Safety Disclosures	56
PART II	6
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	6
Item 6. Selected Financial Data	7
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of operations	8
Item 7A. Quantitative and Qualitative Disclosures About Market Risk	12
Item 8. Financial Statements and Supplementary Data	1213
Reports of Independent Registered Public Accounting Firms	13
Report of Independent Registered Public Accounting Firm	14
Balance Sheets	1415
Statements of Operations	1516
Statement of Changes in Shareholders’ Equity (Deficit)	1617
Statements of Cash Flows	1718
Notes to the Financial Statements	1819
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	2425
Item 9A. Controls and Procedures	2425
Item 9B. Other Information	2526
PART III	2526
Item 10. Directors, Executive Officers and Corporate Governance	25
Item 11. Executive Compensation	2728
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	2829
Item 13. Certain Relationships and Related Transactions, and Director Independence	3031
Item 14. Principal Accounting Fees and Services	3031
PART IV	3132
Item 15. Exhibits, Financial Statement Schedules	3132

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

Certain statements in this report contain or may contain forward-looking statements. These statements, identified by words such as “plan”, “anticipate”, “believe”, “estimate”, “should”, “expect” and similar expressions include our expectations and objectives regarding our future financial position, operating results and business strategy. These statements are subject to known and unknown risks, uncertainties and other factors, which may cause actual results, performance, or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These forward-looking statements were based on various factors and were derived utilizing numerous assumptions and other factors that could cause our actual results to differ materially from those in the forward-looking statements. These factors include, but are not limited to, our ability to secure suitable financing to continue with our existing business or change our business and conclude a merger, acquisition or combination with a business prospect, economic, political and market conditions and fluctuations, government and industry regulation, interest rate risk, U.S. and global competition, and other factors. Most of these factors are difficult to predict accurately and are generally beyond our control. You should consider the areas of risk described in connection with any forward-looking statements that may be made herein. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. Readers should carefully review this report in its entirety, including but not limited to our financial statements and the notes thereto and the risks described in this Annual Report on Form 10-K for the fiscal year ended June 30, ~~2018~~2020. We advise you to carefully review the reports and documents we file from time to time with the Securities and Exchange Commission (the “SEC”), particularly our quarterly reports on Form 10-Q and our current reports on Form 8-K. Except for our ongoing obligations to disclose material information under the Federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events.

OTHER PERTINENT INFORMATION

When used in this report, the terms, “we,” the “Company,” “SGNI,” “our,” and “us” refers to StemGen, Inc., a Delaware corporation.

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PART I

ITEM 1. BUSINESS

Overview

We were incorporated under the laws of the State of Delaware, August 18, 1992. Prior to the Acquisition (as defined below), we were a “shell company” (as such term is defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended). As a result of the Acquisition, we have ceased to be a “shell company” and will continue as a publicly traded company under the name StemGen, Inc. The existing business operations of D3esports, Inc. will continue as our wholly subsidiary.

On January 29, 2019 (the “Closing Date”), we completed and closed the acquisition (the “Acquisition”) under an Agreement and Plan of Reorganization (the “Reorganization Agreement”), entered into by and among ~~by and among~~ (i) StemGen, Inc.(“StemGen”); (ii) D3esports, Inc., a Wyoming corporation (“D3esports”); and (iiiii) ~~and~~ the shareholders of D3esports (“Sellers”) pursuant to which D3esports became a wholly owned subsidiary of ours. Pursuant to the Reorganization Agreement, we acquired from the Sellers all of the issued and outstanding equity interests of D3esports in exchange for 39,631,587 shares of our common stock, par value $0.001 per share and 7,000,000 shares of Preferred Stock, par value $0.001 per share. As a result of the Acquisition, the Sellers, as the former shareholders of D3esports, became the controlling shareholders of the Company. The Acquisition was accounted for as a reverse merger notwithstanding it is legally a reverse acquisition. For accounting purposes, D3esports is the acquiring entity. Current and comparative consolidated financial statements include the accounts of D3esports since inception (May 1, 2018) and StemGen from the date of acquisition (January 29, 2019) (collectively, the “Company”).

~~D3esports~~On ~~was~~the ~~formed~~20th onday of May 1,2019 ~~2018~~we ~~and~~incorporated isStemGen ~~based~~Connect in ~~Angleton~~the State of Texas and issued 1,000,000 ~~TX.~~shares ~~D3esports~~(50%) ~~plans~~of tocommon ~~hold~~stock ~~monthly~~to ~~time~~The ~~trial~~Learning ~~format~~Partnership.com ~~competitions~~Trading ~~through~~Limited, an500,000 ~~eSports~~shares ~~platform~~(25%) ~~that~~of ~~allows~~common ~~professional~~stock ~~race~~to ~~car~~D3esports ~~drivers~~Corp. and ~~eSport~~500,000 ~~athletes~~shares (~~gamer enthusiasts~~25%) of common stock to ~~compete~~Dawson ~~for~~Racing, aInc. ~~real~~D3esports ~~experience~~Corp. inis a ~~race~~wholly ~~car~~owned ~~and~~subsidiary ~~points~~of ~~that~~StemGen, ~~can~~Dawson beRacing, ~~used~~Inc. tois ~~purchase~~an ~~products~~affiliate ~~and~~of ~~services~~Simon ~~through~~Dawson, ~~our~~the ~~partners~~president and CEO of StemGen.

The Learning Partnership.com Trading Limited is a UK based company engaged in educational leadership, teaching and learner engagement creating a social learning platform division for education, www.DendriteConnect.com. Dendrite Connect empowers students, teachers and parents around the globe to engage in enrichment and collaboration learning environment, programs, challenges, projects and careers. Dendrite Connect enables collaboration between its members through content sharing, chat forums and networks of users and career opportunities tailored to each member as they journey through education.

A joint venture agreement was entered into among the shareholders of StemGen Connect to integrate the technologies from the three companies, into a single virtual-to-real motorsports-based Science, Technology, Engineering and Mathematics (STEM) enrichment and collaboration learning environment to drive the launch of an esports competition for school networks and their students. The joint venture agreement was terminated effective June 1, 2020.

Employees and Employment Agreements

We have one employee. None of our employees has a written employment agreement. We are not subject to any collective bargaining agreements.

ITEM 1A. RISK FACTORS

This item is not applicable to smaller reporting companies.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

We maintain our corporate offices at 1 Performance Drive, Suite F, Angleton, Texas 77515. Our telephone number is (832) 954-7569.

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ITEM 3. LEGAL PROCEEDINGS

From time to time, we may be involved in litigation in the ordinary course of business. However, we are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. To our knowledge, there is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of our executive officers or any of our subsidiaries, threatened against or affecting our Company, our common stock, any of our subsidiaries or any of our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

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PART II

Market Information

Our common stock trades on the OTC Market Group, Inc.’s OTCQB tier (“OTCQB”) under the symbol SGNI. The following table sets forth, for the periods indicated, the prices of the common stock in the over-the-counter market, as reported and summarized by OTC Markets Group, Inc. These quotations represent inter-dealer quotations, without adjustment for retail markup, markdown, or commission and may not represent actual transactions. There is an absence of an established trading market for the Company’s common stock, as the market is limited, sporadic and highly volatile, which may affect the prices listed below.

	High		Low
Fiscal Year Ended June 30, 2019
Quarter ended June 30, 2019	$	2.00	$	0.76
Quarter ended March 31, 2019	$	2.00	$	0.75
Quarter ended December 31, 2018	$	0.75	$	0.75
Quarter ended September 30, 2018	$	1.10	$	0.75
Fiscal Year Ended June 30, 2018
Quarter ended June 30, 2018	$	2.00	$	1.10
Quarter ended March 31, 2018	$	2.00	$	1.50
Quarter ended December 31, 2017	$	2.25	$	1.00
Quarter ended September 30, 2017	$	1.00	$	0.68

Holders

As of the date of this filing, there were 134 holders of record of our common stock.

Dividends

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

Common Stock

We are authorized to issue 100,000,000 shares of common stock, with a par value of $0.001. The closing price of our common stock on June 30, ~~2019~~2020, as quoted by OTC Markets Group, Inc., was $10.0580. There were 45,~~422~~429,188 shares of common stock issued and outstanding as of October 258, ~~2019~~2020. All shares of common stock have one vote per share on all matters including election of directors, without provision for cumulative voting. The common stock is not redeemable and has no conversion or preemptive rights. The common stock currently outstanding is validly issued, fully paid and non-assessable. In the event of liquidation of the Company, the holders of common stock will share equally in any balance of the Company’s assets available for distribution to them after satisfaction of creditors and preferred shareholders, if any. The holders of the Company’s common are entitled to equal dividends and distributions per share with respect to the common stock when, as and if, declared by the Board of Directors from funds legally available.

Our Articles of Incorporation, our Bylaws, and the applicable statutes of the state of Delaware contain a more complete description of the rights and liabilities of holders of our securities.

During the year ended June 30, ~~2019~~2020, there was no modification of any instruments defining the rights of holders of the Company’s common stock and no limitation or qualification of the rights evidenced by the Company’s common stock as a result of the issuance of any other class of securities or the modification thereof.

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Non-cumulative voting

Holders of shares of our common stock do not have cumulative voting rights, which means that the holders of more than 50% of the outstanding shares, voting for the election of directors, can elect all of the directors to be elected, if they so choose, and, in that event, the holders of the remaining shares will not be able to elect any of our directors.

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Securities Authorized for Issuance under Equity Compensation Plans

The following table shows the number of shares of common stock that could be issued upon exercise of outstanding options and warrants, the weighted average exercise price of the outstanding options and warrants, and the remaining shares available for future issuance as of June 30, ~~2019~~2020.


Plan Category	Number of Securities to be issued upon exercise of outstanding options, warrants and rights	Weighted average exercise price of outstanding options, warrants and rights	Number of securities remaining available for future issuance
Equity compensation plans approved by security holders.	—	—	—

Equity compensation plans not approved by security holders.	—	—	—

Total	—	—	—

Preferred Stock

The Series A Convertible Preferred Stock has a par value of $0.001 and the number of shares constituting such class shall be unlimited. As of June 30, ~~2019~~2020, the Company has 6,000,000 shares of Series A Convertible Preferred Stock issued and outstanding. The Series A Convertible Preferred Stock has priority in liquidation and has a liquidation preference of $1 per share. The Series A Preferred Stock is convertible into shares of common stock at the option of the holder at a rate of three shares of common stock for each share of Series A Convertible Preferred Stock. The Series A Convertible Preferred ~~Stock~~Stockholders ~~holders~~ are not entitled to receive dividends and have no voting rights. The Series A Convertible Preferred Stock is redeemable by the Company at any time at $1 per share.

The Company has also authorized 1,000,000 shares of Series E Preferred Stock issued and outstanding. The Series E Preferred Stock has a par value of $0.000001 and ranks junior to all the Company’s common and other preferred stock. There are no dividends on the Series E Preferred Stock and there is no participation in liquidation, dissolution or winding-up distribution of the assets of the Company. The shares of outstanding Series E Preferred Stock shall have the right to vote based on the number of votes equal to twice the number of votes of all outstanding shares of capital stock.

The Company has authorized 1,000,000 shares of Series F Preferred Stock. The Series F Preferred Stock has a par value of $0.000001 per share and ranks junior to all of the Company’s common and other preferred stock. There are no dividends on the Series F Preferred Stock and there is no participation in liquidation, dissolution or winding-up distribution of the assets of the Company. The shares of outstanding Series F Preferred Stock shall have the right to vote based on the number of votes equal to twice the number of votes of all outstanding shares of capital stock such that the holders of the outstanding shares of Series F Preferred Stock shall always constitute sixty-six and two thirds of the voting rights of the Company. The voting rights of the Series F Preferred Stock are superior to the voting rights of the Series E Preferred Stock.

Recent Sales of Unregistered Securities

There have been no recent sales of unregistered securities.

ITEM 6. SELECTED FINANCIAL DATA

This item is not applicable to smaller reporting companies.

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

THIS FILING CONTAINS FORWARD-LOOKING STATEMENTS. THE WORDS “ANTICIPATED,” “BELIEVE,” “EXPECT,” “PLAN,” “INTEND,” “SEEK,” “ESTIMATE,” “PROJECT,” “WILL,” “COULD,” “MAY,” AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS. THESE STATEMENTS INCLUDE, AMONG OTHERS, INFORMATION REGARDING FUTURE OPERATIONS, FUTURE CAPITAL EXPENDITURES, AND FUTURE NET CASH FLOW. SUCH STATEMENTS REFLECT THE COMPANY’S CURRENT VIEWS WITH RESPECT TO FUTURE EVENTS AND FINANCIAL PERFORMANCE AND INVOLVE RISKS AND UNCERTAINTIES, INCLUDING, WITHOUT LIMITATION, GENERAL ECONOMIC AND BUSINESS CONDITIONS, CHANGES IN FOREIGN, POLITICAL, SOCIAL, AND ECONOMIC CONDITIONS, REGULATORY INITIATIVES AND COMPLIANCE WITH GOVERNMENTAL REGULATIONS, THE ABILITY TO ACHIEVE FURTHER MARKET PENETRATION AND ADDITIONAL CUSTOMERS, AND VARIOUS OTHER MATTERS, MANY OF WHICH ARE BEYOND THE COMPANY’S CONTROL. SHOULD ONE OR MORE OF THESE RISKS OR UNCERTAINTIES OCCUR, OR SHOULD UNDERLYING ASSUMPTIONS PROVE TO BE INCORRECT, ACTUAL RESULTS MAY VARY MATERIALLY AND ADVERSELY FROM THOSE ANTICIPATED, BELIEVED, ESTIMATED, OR OTHERWISE INDICATED. CONSEQUENTLY, ALL OF THE FORWARD-LOOKING STATEMENTS MADE IN THIS FILING ARE QUALIFIED BY THESE CAUTIONARY STATEMENTS AND THERE CAN BE NO ASSURANCE OF THE ACTUAL RESULTS OR DEVELOPMENTS.

The following discussion and analysis of our financial condition and plan of operations should be read in conjunction with our financial statements and related notes appearing elsewhere herein. This discussion and analysis contains forward-looking statements including information about possible or assumed results of our financial conditions, operations, plans, objectives, and performance that involve risk, uncertainties, and assumptions. The actual results may differ materially from those anticipated in such forward-looking statements. For example, when we indicate that we expect to increase our product sales and potentially establish additional license relationships, these are forward-looking statements. The words expect, anticipate, estimate or similar expressions are also used to indicate forward-looking statements.

Background of our Company

On January 29, 2019 (the “Closing Date”), we completed and closed the acquisition (the “Acquisition”) under an Agreement and Plan of Reorganization (the “Reorganization Agreement”), entered into by and among by and among (i) StemGen, Inc.(“StemGen”); (ii) D3esports, Inc., a Wyoming corporation (“D3esports”); (ii) and the shareholders of D3esports (“Sellers”) pursuant to which D3esports became a wholly owned subsidiary of ours. Pursuant to the Reorganization Agreement, we acquired from the Sellers all of the issued and outstanding equity interests of D3esports in exchange for 39,631,587 shares of our common stock, par value $0.001 per share and 6,000,000 shares of Preferred Stock, par value $0.001 per share. As a result of the Acquisition, the Sellers, as the former shareholders of D3esports, became the controlling shareholders of the Company. The Acquisition was accounted for as a reverse merger notwithstanding it is legally a reverse acquisition. For accounting purposes, D3esports is the acquiring entity. Current and comparative consolidated financial statements include the accounts of D3esports since inception (May 1, 2018) and StemGen from the date of acquisition (January 29, 2019) (collectively, the “Company”).

D3esports was formed on May 1, 2018 and is based in Angleton, TX. D3esports plans to hold monthly time trial format competitions through an eSports platform that allows professional race car drivers and eSport athletes (gamer enthusiasts) to compete for a real experience in a race car and points that can be used to purchase products and services through our partners.

On the 20^th day of May 2019 we incorporated StemGen Connect in the State of Texas and issued 1,000,000 shares (50%) of common stock to The Learning Partnership.com Limited, 500,000 shares (25%) of common stock to D3esports Corp. and 500,000 shares (25%) of common stock to Dawson Racing, Inc. D3esports Corp. is a wholly owned subsidiary of StemGen, Dawson Racing, Inc. is an affiliate of Simon Dawson, the president and CEO of StemGen.

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Plan of Operations

Overview. Our plan of operation is the business plan of D3esports, D3esports intends to gain year-round visibility by using a reputable eSport events company with knowledge in the traditional sports and Global education space to host ongoing virtual racing for corporate mentors and competitions with the top driver(s) at the end of the season earning the opportunity to compete against professional drivers and a chance to drive a real race car.

Our primary operation is to be the community offering and management of our online competitions in the motorsports arena but not confined to just one sport. We plan to expand to other sports in the future. The USP for D3esports is the Virtual to Real experience. We are negotiating agreements with third-party providers to manage our competition and Microsoft, currently the sole platform of competition to which we also plan to expand into other.

With growing partnerships from component providers in the gaming and eSport space we plan to build and sell professional simulators linking to a points/rewards platform.

Sales and Marketing. Our Marketing is through monthly press releases and social media on Facebook and Instagram coupled with our 24/7 time trial competition with online advertising for sponsors.

Research and Development. We do not currently develop electronic games. We are focused on forming agreements with the best games and virtual racing platforms in the world to optimize the experience but to familiarize the competitor. We are building the ultimate experience to our offering which is a connection to real drivers, engineers our partners technology by hosting eSports tournaments to connect the virtual to real and for the fastest to have the opportunity to passenger or drive a real race car on a real track. Through our partnership and internal research we are ~~moulding~~molding our competition to the gamer. (gamer focused). We are negotiating contracts for competition management with third-party providers and licensing agreements with Microsoft to run with Xbox and Forza 7 Motorsport to add to our intellectual properties. Additionally, we are in talks with app. developers for ease of competition registration and entry.

Intellectual Property. We are negotiating agreements with third-party providers to offer the best experience from green to checkered flag. There shall be more agreements with component supplies for our Professional simulator and race team in the future.

Competition. The business of eSports is highly competitive and rapidly growing. Our ability to compete depends upon many factors within and outside our control, including the timely development and introduction of the racing competition which is based a time-trial format to played 24/7 with the Forza 7 Motorsports, played on Xbox and PC.

As we expand and add more motorsports platforms (partnerships) and sports to D3esports we publish and market, and the related enhancements, functionality, performance, reliability, customer service and support and marketing efforts. Due to the relatively low barriers to entry in the eSports market, we expect additional competition from other emerging companies but we have structured a virtual to real offering which can be added to professional team, sim centre and other games companies, we are simply offering a path to pro and enhance the gamers experience to relate tot eh real world through virtual competition. Many of our existing and potential competitors are substantially larger than us and have significantly greater financial, technical and marketing resources that will compete for available users, developers & talent. With our partnerships, a large number of competitors are in house. As a result, they may be able to respond more quickly to new or emerging technologies and changes in customer requirements, or to devote greater resources to the publishing and promotion of their eSports competitions. There can be no assurance that we will be able to compete successfully against current or future competitors or that competitive pressure will not have a material adverse effect on our business, operating results and financial condition.. We have taken our time to see what competitors are producing and letting them launch before us, so they are committed to a path. As they are larger companies their ability to change direction is not as fast as us with a tighter, smaller group.

We believe we do not have adequate funds to fully execute the D3esports business plan for the next twelve months unless we obtain additional funding. However, should we not raise this capital, we will allocate our funding to first assure that all state, federal and SEC requirements are met.

As of June 30, ~~2019~~2020, we had cash on hand of $~~2,751~~236.

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We intend to pursue capital through public or private financing, as well as borrowing and other sources in order to finance our business activities. We cannot guarantee that additional funding will be available on favorable terms, if at all. If adequate funds are not available, then our ability to continue our operations may be significantly hindered.

Results of Operations

For the fiscal year ended June 30, ~~2019~~2020, the Company had a net loss of $~~425~~230,~~510~~772 and negative cash flow from operations of $~~105~~36,~~091~~525. As of June 30, ~~2019~~2020, the Company has negative working capital of $1,~~257~~461,~~249~~648.

We continue to rely on advances from shareholders to fund operating shortfalls and do not foresee a change in this situation in the immediate future. There can be no assurance that we will continue to have such advances available. We will not be able to continue operations without them. We are pursuing alternate sources of financing, but there is no assurance that additional capital will be available to the Company when needed or on acceptable terms.

Fiscal year ended June 30, ~~2019~~2020 compared to the ~~period~~year ~~from~~ended ~~inception (May 1, 2018) through~~ June 30, ~~2018~~2019

Revenue ~~and Cost of Revenue~~

For the year ended June 30, ~~2019~~2020, we recognized revenue of $2219,~~058~~350 ~~and~~compared ~~associated~~to ~~costs of revenue of~~ $822,~~510~~058 asfor athe ~~result~~comparable period of ~~commencing~~2019. ~~operations~~The ~~after~~Company ~~the~~is ~~reverse~~continuing ~~acquisition.~~to ~~There~~try ~~was~~to nobuild ~~revenue~~a orsteady ~~cost~~and ofpredicable revenue ~~in the comparable period of 2018~~stream.

Cost of Revenue

For the year ended June 30, 2020, we recognized costs of revenue of $8,572 compared to $8,510 for the comparable period of 2019.

General and Administrative Expenses

We recognized general and administrative expenses of $~~196~~58,~~734~~475 and $1196,~~995~~734 for the year ended June 30, ~~2019~~2020 and ~~the period from inception (May 1~~2019, ~~2018) through June 30, 2018,~~ respectively. The ~~increase~~decrease in general and administrative expense was primarily the result of ~~increased~~decreased consulting, legal and accounting expenses, asincluding afees ~~result~~paid ofto ~~commencing~~the ~~operations~~Mainline contract in 2019 which was cancelled in October 2019.

~~Amortization~~Depreciation

We recognized ~~amortization~~depreciation of $6019,~~000~~373 during the year ended June 30, ~~2019~~2020 related to ~~amortization~~placing our race cars in service. In 2019, we recognized $60,000 of depreciation of the website ~~development~~maintained ~~costs~~by Mainline due to cancellation of the contract in October 2019.

Interest Expense

We recognized interest expense $140,800 and $57,401 for the year ended June 30, ~~2019.~~2020 ~~The~~and ~~increase~~2019, inrespectively. ~~interest~~Interest expense ~~was~~represents the ~~result~~stated ofinterest ~~debt~~on ~~assumed~~the inoutstanding ~~the~~convertible ~~reverse~~notes ~~acquisition~~payable.

Change in Fair Value of Derivative Instruments

Change in fair value of derivative instruments was a loss of $22,902 and $124,923 for the year ended June 30, 2020 and 2019, respectively, as a result of the change in market value of derivatives acquired in the reverse acquisition.

Net Loss

We incurred a net loss of $~~425~~230,~~510~~772 for the year ended June 30, ~~2019~~2020 as compared to a net loss of $1425,~~995~~510 for the ~~period~~year ~~from~~ended ~~inception (May 1, 2018) through~~ June 30, ~~2018~~2019. ~~The increase in the net loss was primarily the result of the increase in general and administrative expense, interest expense and change in fair value of derivative instruments.~~

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Liquidity and Capital Resources

We anticipate needing approximately of $425,000 to fund our operations and to effectively execute our business plan over the next eighteen months. Currently available cash is not sufficient to allow us to commence full execution of our business plan. Our business expansion will require significant capital resources that may be funded through the issuance of common stock or of notes payable or other debt arrangements that may affect our debt structure. Despite our current financial status, we believe that we may be able to issue notes payable or debt instruments in order to start executing our business plan. However, there can be no assurance that we will be able to raise money in this fashion and have not entered into any agreements that would obligate a third party to provide us with capital.

We raised the cash amounts to be used in these activities from the sale of common stock and from advances. We currently have negative working capital of $1,~~257~~461,~~249~~648.

-As 10of -June 30, 2020, we had cash on hand of $236. We do not have an adequate amount of cash on hand to fund our future operations.

AsWe ofhave ~~June~~no ~~30,~~known ~~2019,~~demands weor ~~had~~commitments ~~cash~~and onare ~~hand~~not aware of ~~$2,751.~~any Weevents door ~~not~~uncertainties ~~have~~as anof ~~adequate~~June ~~amount~~30, of2020 ~~cash~~that onwill ~~hand~~result in or that are reasonably likely to ~~fund~~materially increase or decrease our ~~future~~current ~~operations~~liquidity.

We have no known demands or commitments and are not aware of any events or uncertainties as of June 30, 2019 that will result in or that are reasonably likely to materially increase or decrease our current liquidity.

Capital Resources

We had no material commitments for capital expenditures as of June 30, ~~2019~~2020. However, should we execute our business plan as anticipated, we would incur substantial capital expenditures and require financing in addition to what is required to fund our present operation.

Additional Financing

Additional financing is required to continue operations. Although actively searching for available capital, the Company does not have any current arrangements for additional outside sources of financing and cannot provide any assurance that such financing will be available.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Critical Accounting Policies and Estimates

We prepare our financial statements in conformity with GAAP, which requires management to make certain estimates and assumptions and apply judgments. We base our estimates and judgments on historical experience, current trends, and other factors that management believes to be important at the time the financial statements are prepared; actual results could differ from our estimates and such differences could be material. We have identified below the critical accounting policies, which are assumptions made by management about matters that are highly uncertain and that are of critical importance in the presentation of our financial position, results of operations and cash flows. Due to the need to make estimates about the effect of matters that are inherently uncertain, materially different amounts could be reported under different conditions or using different assumptions. On a regular basis, we review our critical accounting policies and how they are applied in the preparation our financial statements.

USE OF ESTIMATES - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

~~GOING CONCERN~~ - ~~The~~11 accompanying financial statements have been prepared assuming that the Company will continue as a going concern. For the year ended June 30, 2019, the Company had a net loss of $425,510 and we had negative cash flow from operations of $105,091. In view of these matters, the Company’s ability to continue as a going concern is dependent upon its ability to achieve a level of profitability or to obtain additional capital to finance its operations. The Company intends on financing its future activities and its working capital needs largely from the sale of public equity securities with some additional funding from other traditional financing sources, including term notes until such time that funds provided by operations are sufficient to fund working capital requirements. The financial statements of the Company do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.-

GOING CONCERN - The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. For the year ended June 30, 2020, the Company had a net loss of $230,772 and we had negative cash flow from operations of $36,525. In view of these matters, the Company’s ability to continue as a going concern is dependent upon its ability to achieve a level of profitability or to obtain additional capital to finance its operations. The Company intends on financing its future activities and its working capital needs largely from the sale of public equity securities with some additional funding from other traditional financing sources, including term notes until such time that funds provided by operations are sufficient to fund working capital requirements. The financial statements of the Company do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.

Derivative Instruments

Our debt or equity instruments may contain embedded derivative instruments, such as conversion options, which in certain circumstances may be required to be bifurcated from the associated host instrument and accounted for separately as a derivative instrument liability.

- 11 -

Our derivative instrument liabilities are re-valued at the end of each reporting period, with changes in the fair value of the derivative liability recorded as charges or credits to income, in the period in which the changes occur. For bifurcated conversion options that are accounted for as derivative instrument liabilities, we determine the fair value of these instruments using the Black-Scholes option pricing model. This model requires assumptions related to the remaining term of the instrument and risk-free rates of return, our current Common Stock price and expected dividend yield, and the expected volatility of our Common Stock price over the life of the option.

New Accounting Pronouncements

For a description of recent accounting standards, including the expected dates of adoption and estimated effects, if any, on our financial statements, see “Note 3: Significant Accounting Polices: Recently Issued Accounting Pronouncements” in Part II, Item 8 of this Form 10-K.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

This item is not applicable to smaller reporting companies.

- 12 -

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

StemGen, Inc.

Financial Statements

June 30, ~~2019~~2020

Contents

Report of Independent Registered Public Accounting Firm	1314
Consolidated Balance Sheets	1415
Consolidated Statements of Operations	1516
Consolidated Statement of Changes in Shareholders’ Equity (Deficit)	1617
Consolidated Statements of Cash Flows	1718
Notes to Consolidated Financial Statements	1819

- 1213 -

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and

Shareholders of StemGen, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of StemGen, Inc. (the Company) as of June 30, ~~2019~~2020 and ~~2018~~2019, and the related consolidated statements of operations, shareholders’ equity (deficit), and cash flows for the ~~year~~each ~~ended~~of ~~June 30, 2019 and for~~ the ~~period~~two ~~from~~years ~~May~~then 1ended, ~~2018 (inception) through June 30, 2018,~~ and the related notes (collectively referred to as the financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of June 30, ~~2019and~~2020and ~~2018~~2019, and the results of its operations and its cash flows for ~~the~~each ~~year~~of ~~ended June 30, 2019, and for~~ the ~~period~~two ~~from~~years ~~May~~ended ~~1, 2018 (inception) through~~ June 30, ~~2018~~2020, in conformity with accounting principles generally accepted in the United States of America.

Going Concern Matter

The accompanying consolidated 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 suffered recurring losses from operations and has a net capital deficiency that raises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

~~/s/LBB~~Going &Concern ~~Associates Ltd., LLP~~Matter

WeThe accompanying consolidated financial statements have ~~served~~been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has suffered recurring losses from operations and has a net capital deficiency that raises substantial doubt about its ability to continue as a going concern. Management’s ~~auditor~~plans ~~since~~in ~~2018~~regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/PWR CPA, LLP

We have served as the Company’s auditor since 2020.

Houston, Texas

~~November~~October 188, ~~2019~~2020

- 1314 -

STEMGEN, INC.

CONSOLIDATED BALANCE SHEETS

	June 30, 2019			June 30, 2018
	June 30, 2020			June 30, 2019
ASSETS
Current assets
Cash and cash equivalents	$	~~2,751~~236		$	202,~~025~~751
Total current assets		2,751			20,025
Accounts receivable-related party		10,000			—
Contract asset		18,800			—
Total current assets		29,036			2,751
Property and Equipment
Vehicles – race cars		387,450			387,450
Website design		~~60,000~~—			60,000
		447,450			447,450
		387,450			447,450
Less: Accumulated amortization		(6019,~~000~~373	)		—(60,000	)
Property and Equipment, net		~~387~~368,~~450~~077			~~447~~387,450
TOTAL ASSETS	$	~~390~~397,~~201~~113		$	~~467~~390,~~475~~201
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities
Accounts payable	$	~~180~~195,~~988~~460		$	20179,~~000~~488
Advances from shareholder		102,257			—
Deferred revenue		25,500			1,500
Accrued interest payable		288,629			—
Advances from shareholders		129,267			102,257
Convertible notes payable to shareholder		563,203			—
Accrued interest payable		429,429			288,629
Derivative liabilities		124,923			—
Convertible notes payable to shareholder		563,203			563,203
Total current liabilities		1,260,000			20,000
Derivative liabilities		147,825			124,923
Commitments
Total current liabilities		1,490,684			1,260,000
Stockholders’ Equity (Deficit)
Commitments and contingencies
Stockholders’ Deficit
Preferred Stock, 8,000,000 shares authorized:
Series A Preferred Stock, par value $.001, 6,000,000 shares and 1,000,000 shares issued and outstanding at June 30, 2019 and 2018, respectively, liquidation preference of $6,000,000 and $1,000,000 at June 30, 2019 and 2018, respectively		6,000			1,000
Series A Preferred Stock, par value $.001, 6,000,000 shares issued and outstanding at June 30, 2020 and 2019, liquidation preference of $6,000,000 at June 30, 2020 and 2019		6,000			6,000
Series E Preferred Stock; par value $0.000001; 1,000,000 shares issued and outstanding at June 30, 2019		1			—
Series E Preferred Stock; par value $0.000001; 1,000,000 shares issued and outstanding at June 30, 2020 and 2019		1			1
Series F Preferred Stock; par value $0.000001; 1,000,000 shares issued and outstanding at June 30, 2019		1			1
Series F Preferred Stock; par value $0.000001; 1,000,000 shares issued and outstanding at June 30, 2020 and 2019		1			1
Common Stock, par value $.001, 100,000,000 shares authorized, 45,422,188 shares and 4,706,508 shares issued and outstanding at June 30, 2019 and 2018, respectively		45,422			8,875
Common Stock, par value $.001, 100,000,000 shares authorized, 45,429,188 shares and 45,422,188 shares issued and outstanding at June 30, 2020 and 2019, respectively		45,429			45,422
Additional Paid-in Capital (Deficit)		(~~493~~486,~~718~~725	)		~~439~~(493,~~594~~718	)
Accumulated deficit		(~~427~~658,~~505~~277	)		(1427,~~995~~505	)
Total Stockholders’ Equity (Deficit)		(869,799	)		447,475
Total Stockholders’ Deficit		(1,093,571	)		(869,799	)
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)	$	390,201		$	467,475
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	397,113		$	390,201

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

- 1415 -

STEMGEN, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

	Year Ended June 30, 2019			Period from May 1, 2018 (inception) through June 30, 2018
	Year Ended June 30,
Revenue	$	22,058		$	—
	2020			2019
Revenue	$	19,350		$	22,058
Operating expense:
Cost of revenue		8,~~510~~572			—8,510
General and administrative expenses		~~196~~58,~~734~~475			1196,~~995~~734
Depreciation and amortization		6019,~~000~~373			—60,000
Total operating expense		~~265~~86,~~244~~420			1265,~~995~~244
Loss from operations		(~~243~~67,~~186~~070	)		(1243,~~995~~186	)
Interest expense		(57140,~~401~~800	)		—(57,401	)
Loss on fair value of derivative liability		(~~124~~22,~~923~~902	)		—(124,923	)
Net loss	$	(~~425~~230,~~510~~772	)	$	(1425,~~995~~510	)
Net loss per share – basic and diluted	$	(0.0201	)	$	(0.0002	)
Weighted average number of common shares outstanding – basic and diluted		2445,~~446~~428,~~775~~442			724,~~202~~446,~~729~~775

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

- 1516 -

STEMGEN, INC.

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT)

For the ~~Period~~Years ~~from~~Ended ~~May 1, 2018 (inception) through~~ June 30, 2020 and 2019

	Series A Preferred Stock					Series E Preferred Stock			Series F Preferred Stock			Common Stock			Additional paid-in			Accumulated
	Shares		Amount			Shares	Amount		Shares	Amount		Shares	Amount		Capital			Deficit			Total
Balance, May 1, 2018	—		$	—		—	$	—	1,000,000	$	1	5,166,663	$	5,167	$	(4,169)		$	—		$	999
Founder’s shares issued	—			—		—		—	—		—	996,463		997		—			—			997
Common stock and Preferred stock issued for cash	1,000,000			1,000		—		—	—		—	282,682		282		58,742			—			60,024
Common stock issued for race cars	—			—		—		—	—		—	2,429,326		2,429		385,021			—			387,450
Net loss	—			—		—		—	—		—	—		—		—			(1,995	)		(1,995	)
Balance, June 30, 2018	1,000,000		$	1,000		—	$	—	1,000,000	$	1	8,875,134	$	8,875	$	439,594		$	(1,995	)	$	447,475
Common stock issued for services	—			—		—		—	—		—	1,062,493		1,062		17,608			—			18,670
Common stock issued for:
Common stock issued for cash	—			—		—		—	—		—	21,600		22		21,578			—			21,600
- Services	—			—		—		—	—		—	1,062,493		1,062		17,608			—			18,670
- Cash	—			—		—		—	—		—	21,600		22		21,578			—			21,600
Acquisition of StemGen in reverse merger	6,000,000			6,000		1,000,000		1	—		—	35,462,961		35,463		(1,023,498	)		—			(982,034	)
Preferred stock canceled	(1,000,000	)		(1,000	)	—		—	—		—	—		—		1,000			—			—
Legal fees paid by shareholder	—			—		—		—	—		—	—		—		50,000			—			50,000
Net loss	—			—		—		—	—		—	—		—		—			(425,510	)		(425,510	)
Balance, June 30, 2019	6,000,000		$	6,000		1,000,000	$	1	1,000,000	$	1	45,422,188	$	45,422	$	(493,718	)	$	(427,505	)	$	(869,799	)
Common stock issued for cash	—			—		—		—	—		—	7,000		7		6,993			—			7,000
Net loss	—			—		—		—	—		—	—		—		—			(230,772	)		(230,772	)
Balance, June 30, 2020	6,000,000		$	6,000		1,000,000	$	1	1,000,000	$	1	45,429,188	$	45,429	$	(486,725	)	$	(658,277	)	$	(1,093,571	)

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

- 1617 -

STEMGEN, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Year Ended June 30, 2019			Period from May 1, 2018 (inception) through June 30, 2018
	Year Ended June 30,
	2020			2019
Cash flow from operating activities:
Net loss	$	(~~425~~230,~~510~~772	)	$	(1425,~~995~~510	)
Adjustments to reconcile net loss to net cash used in operating activities:
Founders shares issued for expenses		—			1,995
Depreciation and amortization		19,373			60,000
Depreciation and amortization		60,000			—
Common stock issued for services		—			18,670
Common stock issued for services		18,670			—
Preferred stock issued for services		—			1
Preferred stock issued for services		1			—
Legal fees paid by shareholder		—			50,000
Legal fees paid by shareholder		50,000			—
Amortization of discount on convertible notes payable		—			458
Amortization of discount on convertible notes payable		458			—
Loss on fair value of derivative liability		22,902			124,923
Loss on fair value of derivative liability		124,923			—
Changes in operating assets and liabilities:
Accounts payable and accrued liabilities		66,367			—
Accounts receivable		(10,000	)		—
Net cash used in operating activities		(105,091	)		—
Contract asset		(18,800)			—
Accounts payable and accrued liabilities		15,972			7,924
Deferred revenue		24,000			1,500
Accrued interest payable		140,800			56,943
Net cash used in operating activities		(36,525	)		(105,091	)
Cash flows from investing activities:
Website design		—			~~(40,000~~—	)
Net cash used in investing activities		—			~~(40,000~~—	)
Cash flows from financing activities:
Advances from shareholder		6627,~~217~~010			—66,217
Proceeds from issuance of common stock		217,~~600~~000			6021,~~025~~600
Net cash provided by financing activities		8734,~~817~~010			6087,~~025~~817
Net change in cash		(172,~~274~~515	)		20(17,~~025~~274	)
Cash and equivalents, beginning of period		202,~~025~~751			—20,025
Cash and equivalents, end of period	$	~~2,751~~236		$	202,~~025~~751
Schedule of non-cash investing and financing activities:
Contribution of race cars for common stock	$	—		$	387,450
Accounts payable for website design	$	—		$	20,000

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

- 1718 -

STEMGEN, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, ~~2019~~2020

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business – We were incorporated under the laws of the State of Delaware, August 18, 1992. Prior to the Acquisition (as defined below), we were a “shell company” (as such term is defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended). As a result of the Acquisition, we have ceased to be a “shell company” and will continue as a publicly traded company under the name StemGen, Inc. The existing business operations of D3esports, Inc. will continue as our wholly subsidiary.

On January 29, 2019 (the “Closing Date”), we completed and closed the acquisition (the “Acquisition”) under an Agreement and Plan of Reorganization (the “Reorganization Agreement”), entered into by and among by and among (i) StemGen, Inc.(“StemGen”); (ii) D3esports, Inc., a Wyoming corporation (“D3esports”); (ii) and the shareholders of D3esports (“Sellers”) pursuant to which D3esports became a wholly owned subsidiary of ours. Pursuant to the Reorganization Agreement, we acquired from the Sellers all of the issued and outstanding equity interests of D3esports in exchange for 39,631,587 shares of our common stock, par value $0.001 per share and 6,000,000 shares of Preferred Stock, par value $0.001 per share. As a result of the Acquisition, the Sellers, as the former shareholders of D3esports, became the controlling shareholders of the Company. The Acquisition was accounted for as a reverse merger notwithstanding it is legally a reverse acquisition. For accounting purposes, D3esports is the acquiring entity. Current and comparative consolidated financial statements include the accounts of D3esports since inception (May 1, 2018) and StemGen from the date of acquisition (January 29, 2019) (collectively, the “Company”).

A joint venture agreement was entered into among the shareholders of StemGen Connect to integrate the technologies from the three companies, into a single virtual-to-real motorsports-based Science, Technology, Engineering and Mathematics (STEM) enrichment and collaboration learning environment to drive the launch of an esports competition for school networks and their students. ~~There~~The ~~has been no activity in this~~ joint venture oragreement ~~StemGen~~was ~~Connect~~terminated aseffective of June 301, ~~2019~~2020.

Principles of Consolidation. The consolidated financial statements include the accounts of StemGen, and its subsidiaries, which are majority owned by StemGen, Inin accordance with ASC 810-10-05. All significant inter-company transactions and balances have been eliminated.

Use of Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Management believes that these estimates and assumptions provide a reasonable basis for the fair presentation of the financial statements.

Cash and Cash Equivalents – The Company considers all highly liquid debt instruments with an original maturity of three months or less at the date of purchase to be cash equivalents.

Property and Equipment – Property and equipment consists of vehicles and website design. The vehicles are three race cars which were contributed as capital at the inception of the Company and recorded at their estimated fair value. Depreciation on the race cars ~~will~~is berecognized ~~recorded~~ on a straight-line basis over seven years ~~once operations commence~~.

- 1819 -

Website design consists primarily of the cost of a contract with Mainline, an Esports provider, for the design of an esports website and platform for the Company. The Company ~~has~~ terminated its ~~association~~contract with Mainline and the website was taken down effective October 2019, therefore, the contract cost of $60,000 has been fully amortized during the year ended June 30, 2019.

Improvements or betterments of a permanent nature are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred. The cost of assets retired or otherwise disposed of and the related accumulated depreciation are eliminated from the accounts in the year of disposal. Gains or losses resulting from property disposals are credited or charged to operations in the year of disposal.

Revenue Recognition – In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, and issued subsequent amendments to the initial guidance in August 2015, March 2016, April 2016, May 2016, and December 2016 within ASU 2015-14, ASU 2016-08, ASU 2016-10, ASU 2016-12 and ASU 2016-20, respectively. The core principle of this new revenue recognition guidance is that a company will recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The new guidance defines a five-step process to achieve this core principle. The new guidance also requires more detailed disclosures to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The new guidance provides for two transition methods, a full retrospective approach and a modified retrospective approach.

On January 29, 2019, the Company adopted ASC Topic 606 using the modified retrospective method with no impact to the opening retained earnings and determined there were no changes required to its reported revenues as a result of the adoption. An analysis of contracts with customers under the new revenue recognition standard was consistent with the Company’s current revenue recognition model, whereby revenue is recognized primarily on the date products are delivered to the customer or services are provided. Payments for products or services which have been received prior to the Company fulfilling its performance obligations are deferred until those obligations are satisfied. Costs related to deferred revenue are included in ~~other~~contract assets until the revenue is recognized.

Income Taxes – The Company accounts for income taxes under FASB Codification Topic 740-10-25 (“ASC 740-10-25”). Under ASC 740-10-25, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740-10-25, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

Earnings (Loss) per Common Share – The Company computes basic and diluted earnings per common share amounts in accordance with ASC Topic 260, Earnings per Share. The basic earnings (loss) per common share are calculated by dividing the Company’s net income available to common shareholders by the weighted average number of common shares outstanding during the year. The diluted earnings (loss) per common share are calculated by dividing the Company’s net income (loss) available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted as of the first of the year for any potentially dilutive debt or equity. As of June 30, ~~2019~~2020, there were 3133,~~009~~107,~~330~~010 potentially dilutive shares related to convertible debt, accrued interest and Series A Preferred Stock.

Derivative Instruments – Our debt or equity instruments may contain embedded derivative instruments, such as conversion options, which in certain circumstances may be required to be bifurcated from the associated host instrument and accounted for separately as a derivative instrument liability.

Financial Instruments – The Company’s balance sheet includes certain financial instruments. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period between the origination of these instruments and their expected realization.

- 1920 -

FASB Accounting Standards Codification (ASC) 820 Fair Value Measurements and Disclosures (ASC 820) defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:


	Level 1 -	Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

	Level 2 -	Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

	Level 3 -	Inputs that are both significant to the fair value measurement and unobservable.

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of June 30, ~~2019~~2020 and ~~2018~~2019. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include, accounts payable, and accrued expenses. The fair value of the Company’s notes payable is estimated based on current rates that would be available for debt of similar terms that is not significantly different from its stated value.

Recently Issued Accounting Pronouncements – In February 2016, the FASB issued ASU 2016-02, Leases. This guidance requires an entity to recognize lease liabilities and a right-of-use asset for all leases on the balance sheet and to disclose key information about the entity’s leasing arrangements. ASU 2016-02 is effective for annual reporting periods beginning after December 15, 2020, with earlier adoption permitted. ASU 2016-02 must be adopted using a modified retrospective approach for all leases existing at, or entered into after the date of initial adoption, with an option to elect to use certain transition relief. The Company is evaluating the impact of this new standard on its financial position, results of operations, cash flows and related disclosures.

NOTE 2 – GOING CONCERN

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. For the year ended June 30, ~~2019~~2020, the Company had a net loss of $~~425~~230,~~510~~772. As of June 30, ~~2019~~2020, the Company had negative working capital of $1,~~257~~461,~~249~~648. Management does not anticipate having positive cash flow from operations in the near future.

These factors raise a substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the possible inability of the Company to continue as a going concern.

The Company does not have the resources at this time to repay its credit and debt obligations, make any payments in the form of dividends to its shareholders or fully implement its business plan. Without additional capital, the Company will not be able to remain in business.

Management has plans to address the Company’s financial situation as follows:

In the near term, management plans to continue to focus on increasing revenues and raising the funds necessary to fully implement the Company’s business plan. Management will continue to seek out debt financing to obtain the capital required to meet the Company’s financial obligations. There is no assurance, however, that lenders will continue to advance capital to the Company or that the new business operations will be profitable. The possibility of failure in obtaining additional funding and the potential inability to achieve profitability raise doubts about the Company’s ability to continue as a going concern.

- 2021 -

In the long term, management believes that the Company’s projects and initiatives will be successful and will provide cash flow to the Company, which will be used to finance the Company’s future growth. However, there can be no assurances that the Company’s planned activities will be successful, or that the Company will ultimately attain profitability. The Company’s long-term viability depends on its ability to obtain adequate sources of debt or equity funding to meet current commitments and fund the continuation of its business operations, and the ability of the Company to achieve adequate profitability and cash flows from operations to sustain its operations.

NOTE 3 – COMMITMENTS

From time to time, we may be involved in litigation in the ordinary course of business. ~~We are currently involved in litigation, however, we believe it will not have a material adverse effect on our financial condition or results of operations.~~ To our knowledge, there is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of our executive officers or any of our subsidiaries, threatened against or affecting our Company, our common stock, any of our subsidiaries or any of our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

NOTE 4 – EQUITY

During the year ended June 20, 2020, the Company issued 7,000 shares of common stock and received cash proceeds of $7,000.

On January 29, 2019, the holder of the Series A Convertible Preferred Stock returned 1,000,000 shares to the Company, and the Company canceled those shares.

There are 8,000,000 shares of preferred stock authorized. The board of directors has designated two series of preferred stock as described below.

On January 29, 2019, the Company issued 1,000,000 shares of Series F Preferred Stock to the Company’s CEO for services. The shares were valued at $1 based on the estimated market value of the shares.

During the year ended June 30, 2019, the Company issued 1,062,493 shares of common stock for legal and consulting services valued at $18,670.

During the year ended June 30, 2019, the Company issued 21,600 shares of common stock and received cash proceeds of $21,600.

- 2122 -

NOTE 5 – INCOME TAXES

The deferred tax asset as of June 30, ~~2019~~2020 and ~~2018~~2019 was approximately $~~460~~507,000 and $~~400~~460,000, respectively, offset by valuation allowances of the same amount resulting in a deferred tax asset of $0 at both June 30, ~~2019~~2020 and ~~2018~~2019. There is no income tax provision for the ~~year~~years ended June 30, ~~2019~~2020 and ~~for~~2019 ~~the period from inception (May 1, 2018) through June 30, 2018~~ due to the change in the valuation allowance. The difference between the effective rate and the statutory rate is the result of the change in the valuation allowance. At June 30, ~~2019~~2020 the Company had an unused net operating loss carry over approximating $2,~~180~~415,000, that is potentially available to offset future taxable income, which expires beginning 2028.

The Company has not filed its Federal tax returns for 2009-2019 and could be subject to penalty for its delinquency. Additionally, the availability of its net operating loss may be subject to adjustment or restriction due to the change in control of the Company during 2019.

NOTE 6 – CONVERTIBLE NOTES PAYABLE TO SHAREHOLDER

Convertible notes payable consisted of the following at June 30, 2020 and 2019:


Convertible note issued March 31, 2015, maturing March 31, 2017, bearing interest at 10% per year, until maturity, then 25%. Convertible into common stock at a rate of $0.05 per share.	$	36,340
Convertible note in the original principal amount of $85,465, issued June 30, 2015 and maturing June 30, 2017, bearing interest at 10% per year until maturity and 25% thereafter, and convertible into common stock at a rate of $0.05 per share.		85,465
Convertible note in the original principal amount of $277,208, issued September 30, 2015 and maturing September 30, 2018, bearing interest at 10% per year until maturity and 25% thereafter, and convertible into common stock at a rate of $0.05 per share		277,208
Convertible note in the original principal amount of $103,072, issued December 31, 2015 and maturing December 31, 2018, bearing simple interest at 10% per year until maturity and 25% thereafter, and convertible into common stock at a rate of $0.40 per share.		103,072
Convertible note in the original principal amount of $61,118, issued March 31, 2016 and maturing March 31, 2019, bearing simple interest at 10% per year until maturity and 25% thereafter, and convertible into common stock at a rate of a 60% discount to the volume weighted average price for the last five trading days prior to conversion.		61,118

Total convertible notes	$	563,203

All principal along with accrued interest is payable on the maturity date. The notes are convertible into common stock at the option of the holder. The holder of the notes cannot convert the notes into shares of common stock if that conversion would result in the holder owning more than 4.9% of the outstanding stock of the Company. The notes are unsecured and are in default. As of June 30, ~~2019~~2020, there was $~~288~~429,~~629~~429 of accrued interest related to these notes. For the ~~year~~years ended June 30, 2020 and 2019, the Company recorded interest expense of $140,800 and $57,401, respectively, related to these notes.

NOTE 7 – DERIVATIVE LIABILITY

The conversion feature of certain convertible notes payable was accounted for as a derivative liability. The derivative liability at June 30, ~~2019~~2020, was calculated using the Black Scholes method over the expected terms of the convertible notes, with a risk free rate of 2.40% and volatility of 200%.

Included in the accompanying consolidated statements of operations is a loss arising from the change in fair value of the derivatives of $22,902 and $124,923 for the ~~year~~years ended June 30, 2020 and 2019, respectively.

- 23 -

NOTE 8 – RELATED PARTY

The Company has been provided warehouse and office space by an entity owned by Simon Dawson for which $6,000 and $6,000 was paid during the ~~year~~years ended June 30, ~~2019. Subsequent~~2020 toand ~~June 30,~~ 2019, ~~the Company paid this entity $6,000 for warehouse and office space~~respectively.

The Company paid its chief executive officer, Simon Dawson, $6,000 and $10,000 during the ~~year~~years ended June 30, 2020 and 2019, respectively, for compensation. Subsequent to June 30, ~~2019~~2020, the Company paid Simon Dawson $117,~~500~~000.

-During 22the -year ended June 30, 2020, the Company recognized revenue of $4,000 from Dawson Racing, an entity owned by Simon and Ian Dawson, for sponsorship. As of June 30, 2020, the Company has deferred revenue of $16,000 related to sponsorship and accounts receivable of $10,000 from Dawson Racing. Dawson Racing remitted the payment of $10,000 to the Company in July 2020.

During the year ended June 30, 2019, the Company paid $10,000 to Dawson Racing, ~~an entity owned by Simon and Ian Dawson,~~ for sponsorship branding at Daytona Michelin Tire Test.

During 2018, in conjunction with the formation of D3esports, Simon and Ian Dawson were issued 998 and 997 shares, respectively, of common stock valued at $1 per share in exchange for services.

In conjunction with the reverse merger, the Company issued 1,000,000 shares of Series F Preferred Stock to the Simon Dawson in exchange for services. The shares were valued at $1 based on the estimated market value of the shares.

During the year ended June 30, 2019, a shareholder of the Company transferred 50,000 shares of common stock to an attorney to pay $50,000 in legal fees on behalf of the Company. The payment was recorded as an increase in additional paid-in capital.

As of June 30, 2020 and 2019, the Company has $129,267 and $102,257 in advances from ~~a shareholder~~shareholders. The advances bear no interest and have no repayment terms.

NOTE 9 – ~~REVERSE~~SUBSEQUENT ~~ACQUISITION~~EVENTS

OnSubsequent ~~the~~to ~~Closing~~June ~~Date~~30, ~~we completed and closed the Acquisition under the Reorganization Agreement~~2020, ~~entered into by and among by and among StemGen, D3esports and the Sellers pursuant to which D3esports became~~ a ~~wholly~~shareholder ~~owned~~advanced subsidiary of StemGen. Pursuant to the Reorganization Agreement, we acquired from the Sellers all of the issued and outstanding equity interests of D3esports in exchange for 39,631,587 shares of our common stock, par value $~~0.001 per share and 6~~48,~~000,000~~803 ~~shares~~to ~~of Preferred Stock, par value $0.001 per share. As a result of~~ the ~~Acquisition, the Sellers, as the former shareholders of D3esports, became the controlling shareholders of the~~ Company. The ~~Acquisition~~advances ~~was~~bear ~~accounted~~no ~~for~~interest ~~as a reverse merger notwithstanding it is legally a reverse acquisition. For accounting purposes, D3esports is the acquiring entity. Current~~ and ~~comparative~~have ~~consolidated~~no ~~financial~~repayment ~~statements include the accounts of D3esports since inception (May 1, 2018) and StemGen from the date of acquisition (January 29, 2019) (collectively, the “Company”)~~terms.

~~The~~- ~~unaudited~~24 ~~pro forma condensed statements of operations give effect to the Merger as if it had occurred on July 1, 2018 for the statement for the year ended June 30, 2019.~~-

The unaudited pro forma condensed financial statements are for illustrative purposes only and are not necessarily indicative of the financial results that would have occurred if the Merger had been consummated on the dates indicated, nor are they necessarily indicative of the financial position or results of operations in the future. The pro forma adjustments, as described in the accompanying notes, are based upon available information and certain assumptions that are believed to be reasonable as of June 30, 2019.

	Year Ended June 30, 2019
	StemGen As Reported			Pro Forma Adjustments			Pro Forma for Merger
LOSS FROM OPERATIONS	$	(243,186	)	$	(17,750	)	$	(260,936	)
Other expense:
Interest expense		(57,401	)		(59,946	)		(117,347	)
Loss on fair value of derivative liability		(124,923	)					(124,923	)
Net loss	$	(425,510	)	$	(77,696	)	$	(503,206	)
NET LOSS PER COMMON SHARE – Basic and diluted	$	(0.02	)				$	(0.01	)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING – Basic and diluted		24,446,775						45,141,599

NOTE 10 – SUBSEQUENT EVENT

The Company’s contract with Mainline was canceled subsequent to year end.

On August 2, 2019, the Company sold 7,000 shares of common stock for $7,000.

- 23 -

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Changes in Accounts

None.

Disagreements with Accountants

There were no disagreements with accountants on accounting and financial disclosures for the year ended June 30, ~~2019~~2020.

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)). Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered in this report, our disclosure controls and procedures were not effective to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the required time periods and is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Limitations on Systems of Controls

Our management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all error or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. To address the material weaknesses identified in our evaluation, we performed additional analysis and other post-closing procedures in an effort to ensure our financial statements included in this annual report have been prepared in accordance with generally accepted accounting principles. Accordingly, management believes that the financial statements included in this report fairly present in all material respects our financial condition, results of operations and cash flows for the periods presented.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, the company’s principal executive and principal financial officers and effected by the company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America and includes those policies and procedures that:


•	Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company;

•	Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and

•	Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

- 2425 -

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.

As of June 30, ~~2019~~2020, management assessed the effectiveness of our internal control over financial reporting based on the criteria for effective internal control over financial reporting established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO 2013”) and SEC guidance on conducting such assessments. Based on that evaluation, they concluded that, during the period covered by this report, such internal controls and procedures were not effective to detect the inappropriate application of US GAAP rules as more fully described below. This was due to deficiencies that existed in the design or operation of our internal controls over financial reporting that adversely affected our internal controls and that may be considered to be material weaknesses.

The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: lack of a functioning audit committee; lack of a majority of independent members and a lack of a majority of outside directors on our board of directors; inadequate segregation of duties consistent with control objectives; and, management is dominated by a single individual. The aforementioned material weaknesses were identified by our Chief Executive Officer in connection with the review of our financial statements as of June 30, ~~2019~~2020.

Management believes that the material weaknesses set forth above did not have an effect on our financial results. However, management believes that the lack of a functioning audit committee and the lack of a majority of outside directors on our board of directors results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods.

ITEM 9B. OTHER INFORMATION

None.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

~~Prior~~Our toexecutive ~~the~~officers ~~Acquisition, Mr. John David Walls served as director, president, secretary,~~ and ~~treasurer~~directors ~~of the Company. Upon the closing of the Acquisition, Mr. Simon Dawson became the sole director, president, treasurer and secretary of the Company.~~are:

Upon closing of the Acquisition, our executive officers and directors are:


NAME	AGE	POSITION(S)	DATE ELECTED OR APPOINTED
Simon Dawson	38	Director, President, Secretary, and Treasurer	January 29, 2019

NAME		AGE		POSITION(S)		DATE ELECTED OR APPOINTED
Simon Dawson		37		Director, President, Secretary, and Treasurer		January 29, 2019

Biographies

Simon Dawson joined his father on the Project Libra Race program, which developed the Radical Ford Eco Boost race engine and its first race car in 2012.

This led to his permanent move from North Carolina to Houston to develop a full Radical dealership and track day business, which he runs with his father today.

Over the last six years, Simon and his father have enjoyed great success with Radical Texas selling track day cars, track day experiences and along the way, testing and developing the cars and technologies that will bring them race championships well into the future.

- 25 -

The driving force behind Simon’s passion for motorsports is family, and the dream of making racing an obtainable pastime and sport for all families and inspire the future linking the real and virtual worlds with an investment into eSport for the ultimate experience.

- 26 -

Director Independence

We are not currently subject to listing requirements of any national securities exchange or inter-dealer quotation system which has requirements that a majority of the board of directors be “independent” and, as a result, we are not at this time required to have our Board of Directors comprised of a majority of “independent directors.” None of our directors are independent directors under the applicable standards of the SEC and the NASDAQ stock market.

Family Relationships

There are no family relationships among our directors, executive officers or persons nominated to become executive officers or directors.

Involvement in Certain Legal Proceedings

During the past ten (10) years, none of our directors, persons nominated to become directors, executive officers, promoters or control persons was involved in any of the legal proceedings listen in Item 401 (f) of Regulation S-K.

Arrangements

There are no arrangements or understandings between an executive officer, director or nominee and any other person pursuant to which he was or is to be selected as an executive officer or director.

Committees of the Board of Directors

Our sole director has not established any committees, including an Audit Committee, a Compensation Committee, or a Nominating Committee, any committee performing a similar function. The functions of those committees are being undertaken by our sole director. Because we do not have any independent directors, our sole director believes that the establishment of committees of the Board would not provide any benefits to our company and could be considered more form than substance.

We do not have a policy regarding the consideration of any director candidates that may be recommended by our stockholders, including the minimum qualifications for director candidates, nor has our sole director established a process for identifying and evaluating director nominees. We have not adopted a policy regarding the handling of any potential recommendation of director candidates by our stockholders, including the procedures to be followed. Our sole director has not considered or adopted any of these policies, as we have never received a recommendation from any stockholder for any candidate to serve on our Board of Directors. Given our relative size and lack of directors and officers insurance coverage, we do not anticipate that any of our stockholders will make such a recommendation in the near future.

While there have been no nominations of additional directors proposed, in the event such a proposal is made, all current members of our Board will participate in the consideration of director nominees.

Our sole director is not an “audit committee financial expert” within the meaning of Item 401(e) of Regulation S-K. In general, an “audit committee financial expert” is an individual member of the audit committee or Board of Directors who:


•	understands generally accepted accounting principles and financial statements,

•	is able to assess the general application of such principles in connection with accounting for estimates, accruals and reserves,

•	has experience preparing, auditing, analyzing or evaluating financial statements comparable to the breadth and complexity to our financial statements,

•	understands internal controls over financial reporting, and

•	understands audit committee functions

- 2627 -

Our Board of Directors is comprised of solely of Mr. Dawson who is involved in our day-to-day operations. We would prefer to have an audit committee financial expert on our board of directors. As with most small, early stage companies until such time our company further develops its business, achieves a stronger revenue base and has sufficient working capital to purchase directors and officers insurance, the Company does not have any immediate prospects to attract independent directors. When the Company is able to expand our Board of Directors to include one or more independent directors, the Company intends to establish an Audit Committee of our Board of Directors. It is our intention that one or more of these independent directors will also qualify as an audit committee financial expert. Our securities are not quoted on an exchange that has requirements that a majority of our Board members be independent and the Company is not currently otherwise subject to any law, rule or regulation requiring that all or any portion of our Board of Directors include “independent” directors, nor are we required to establish or maintain an Audit Committee or other committee of our Board of Directors.

WE DO NOT HAVE ANY INDEPENDENT DIRECTORS AND THE COMPANY HAS NOT VOLUNTARILY IMPLEMENTED VARIOUS CORPORATE GOVERNANCE MEASURES, IN THE ABSENCE OF WHICH, STOCKHOLDERS MAY HAVE MORE LIMITED PROTECTIONS AGAINST INTERESTED DIRECTOR TRANSACTIONS, CONFLICTS OF INTEREST, AND SIMILAR MATTERS.

ITEM 11. EXECUTIVE COMPENSATION

The table below summarizes all compensation awards to, earned by, or paid to our named executive officer for all service rendered in all capacities to us for the fiscal years ended June 30, ~~2019~~2020 and ~~2018~~2019.

SUMMARY COMPENSATION TABLE

Name and Principal Position	Fiscal Year	Salary ($)	Bonus ($)	Stock Awards ($)	Option Awards ($)	Non-Equity Incentive Plan Compensation ($)	Nonqualified Deferred Compensation ($)	All Other Compensation ($)	Total ($)
Simon Dawson CEO	2019 2018	10,000 —	— —	$1 —	— —	— —	— —	16,000 —	26,001 —
Simon Dawson, CEO	2020	6,000	—	—	—	—	—	—	6.000
	2019	10,000	—	$1	—	—	—	16,000	26,001
	2018	—	—	—	—	—	—	—	—

OUTSTANDING EQUITY AWARDS AT JUNE, 30, ~~2019~~2020

Option Awards

Stock Awards

Name

Number of Securities Underlying Unexercised Options (#) Exercisable

Number of Securities Underlying Unexercised Options (#) Unexercisable

Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)

Option Exercise Price ($)

Option Expiration Date

Number of Shares of Stock That Have Not Vested (#)

Market Value of Shares of Stock That Have Not Vested ($)

Equity Incentive Plan Awards: Number of Unearned Shares or Other Rights That Have Not Vested (#)

Equity Incentive Plan Awards: market or Payout Value of Unearned Shares or Other Rights That Have Not Vested ($)

Simon Dawson

—

- 28 -

Employment Agreements & Retirement Benefits

None of our executive officers is subject to employment agreements, but we may enter into such agreements with them in the future. We have no plans providing for the payment of any retirement benefits.

- 27 -

Director Compensation

Directors receive no compensation for serving on the Board. We have no non-employee directors.

Our Board of Directors is comprised of Simon Dawson. Mr. Dawson also serves as the CEO of the Company. None of our directors has or had a compensation arrangement with the Company for director services, nor have any of them been compensated for director services since the Company’s inception.

We reimburse our directors for all reasonable ordinary and necessary business related expenses, but we did not pay director’s fees or other cash compensation for services rendered as a director in the year ended June 30, ~~2019~~2020 to any of the individuals serving on our Board during that period. We have no standard arrangement pursuant to which our directors are compensated for their services in their capacity as directors. We may pay fees for services rendered as a director when and if additional directors are appointed to the Board of Directors.

Director Independence

We do not currently have any independent directors and we do not anticipate appointing additional directors in the foreseeable future. If we engage further directors and officers, however, we plan to develop a definition of independence.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

We do not currently have a stock option plan in favor of any director, officer, consultant, or employee of our company. No individual grants of stock options, whether or not in tandem with stock appreciation rights known as SARs or freestanding SARs have been made to our sole director and officer since our inception; accordingly, no stock options have been granted or exercised by our sole director and officer since we were founded.

Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. In accordance with SEC rules, shares of our common stock which may be acquired upon exercise of stock options or warrants which are currently exercisable or which become exercisable within 60 days of the date of the applicable table below are deemed beneficially owned by the holders of such options and warrants and are deemed outstanding for the purpose of computing the percentage of ownership of such person, but are not treated as outstanding for the purpose of computing the percentage of ownership of any other person. Subject to community property laws, where applicable, the persons or entities named in the tables below have sole voting and investment power with respect to all shares of our common stock indicated as beneficially owned by them.

The following table sets forth information with respect to the beneficial ownership of our common stock as of June 30, ~~2019~~2020, by (i) each stockholder known by us to be the beneficial owner of more than 5% of our common stock, voting preferred stock or convertible preferred stock, (ii) each of our directors and executive officers, and (iii) all of our directors and executive officers as a group. To the best of our knowledge, except as otherwise indicated, each of the persons named in the table has sole voting and investment power with respect to the shares of our stock beneficially owned by such person, except to the extent such power may be shared with a spouse. To our knowledge, none of the shares listed below are held under a voting trust or similar agreement, except as noted. Other than the Acquisition, to our knowledge, there is no arrangement, including any pledge by any person of securities of the Company or any of its parents, the operation of which may at a subsequent date result in a change in control of the Company.

- 2829 -


	Number of Shares of Capital Stock Beneficially Owned (1)		Percentage Ownership (3)
Name and Address of Beneficial Owner	Common Stock	Preferred Stock	Common Stock	Preferred Stock
Landor Investment Corp. (6) Calle 65 Esta, San Francisco, Local No. 35 Panama City, Panama	10,105,339	1,000,000(4)	22.25%	100%

Simon Dawson 1 Performance Drive, Suite F Angleton, TX 77515	5,166,663	1,000,000(8)	11.38%	100%

Ian Dawson 1 Performance Drive, Suite F Angleton, TX 77515	5,166,663	-0-	11.38%	-0-

Recycled Capital(6) 5712 Southwest Fwy. Houston, Texas 77057-7508	2,050,000	6,000,000(5)	4.99%	100%

John Pritzlaff 622 Cliffgate Lane Castle Rock Colorado 80108	7,500,000	-0-	16.52%	-0-

Hampton Bay Trading Corp.(7) 2500 Wilcrest Dr., Suite 300 Houston, Texas 77042	4,388,890	-0-	9.88%	-0-

All executive officers and directors as a group (one person)	5,166,663	1,000,000	11.38%	100%

__________

(1) Under Rule 13d-3 under the Exchange Act, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the number of shares is deemed to include the number of shares beneficially owned by such person (and only such person) by reason of these acquisition rights. As a result, the percentage of outstanding shares of any person as shown in this table does not necessarily reflect the person’s actual ownership or voting power with respect to the number of shares of common stock outstanding on January 29, 2019.

(2) In addition to common stock, Landor Investment Corp. owns 1,000,000 shares of series E preferred stock. The Series E preferred stock has a par value of $0.000001, does not vote because of the superior voting rights of the Series E Preferred Stock, ranks subordinate to the Company’s common stock and Series F Preferred Stock and is not entitled to participate in distributions of assets upon liquidation, dissolution, or winding up of the Company, whether voluntary or involuntary.

(3) Our calculation of the percentage of beneficial ownership is based on 45,422,188 shares of common stock, 6,000,000 shares of Series A Preferred Stock, 1,000,000 shares of Series E Preferred Stock and 1,000,000 shares of Series F Preferred Stock outstanding as of June 30, ~~2019~~2020.

(4) Represents Series E preferred stock

- 2930 -

(5) Represents Series A preferred stock, each convertible to 3 shares of common stock. The number of shares of the common stock held as of the date hereof is 4.99% of the total outstanding because. all the convertible preferred stock are subject to a conversion cap of 4.99% of the total outstanding. Therefore, the holder of the preferred stock does not have the “right” to hold more than the amount of the cap as expressed by the Commission’s amicus curiae brief in the case of Mark Levy v. Southbrook International Investments, Ltd. (2 ^nd Cir. Mar 31, 2001). In addition to these shares, Lead Enterprises, Inc. holds several convertible promissory notes which are convertible into a total of approximately 9,622,466 shares of common stock of the Company, all subject to the 4.99% limitation.

(6) Robert Wilson is the natural person who exercises the sole voting and or dispositive powers with respect to the shares of Recycled Capital Corp.

(7) Robert Sonfield is the natural person who exercises the sole voting and or dispositive powers with respect to the shares of Hampton Bay Trading Corp.

(8) Represents Series F preferred stock

None.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

~~LBB~~PWR ~~& Associates LTD.~~CPA, LLP ~~(LBB)~~was ~~served~~appointed as the independent ~~auditors~~auditor for the audits of fiscal years ended June 30, ~~2019~~2020 and ~~2018~~2019.

The following table ~~summarize~~summarizes the fees billed to the Company by its independent accountants, ~~LBB~~PWR, for the years ended June 30, ~~2019and~~2020 ~~2018~~and 2019:

	2019		2018
	2020		2019
Audit Fees	$	34,900	$	1634,900
Audit Related Fees (1)	$	—	$	—
Tax Fees (2)	$	—	$	—
All Other Fees (3)	$	—	$	—
Total Fees	$	34,900	$	1634,900

Notes to the Accountants Fees Table:


(1)	Consists of fees for assurance and related services by our principal accountants that are reasonably related to the performance of the audit or review of the Company’s financial statements and are not reported under “Audit Fees.”

(2)	Consists of fees for professional services rendered by our principal accountants for tax related services.

(3)	Consists of fees for products and services provided by our principal accountants, other than the services reported under “Audit Fees,” “Audit-Related Fees” and “Tax Fees” above.

As part of its responsibility for oversight of the independent registered public accountants, the Board has established a pre-approval policy for engaging audit and permitted non-audit services provided by our independent registered public accountants. In accordance with this policy, each type of audit, audit-related, tax and other permitted service to be provided by the independent auditors is specifically described and each such service, together with a fee level or budgeted amount for such service, is pre-approved by the Board. All of the services provided by ~~LBB~~PWR described above were approved by our Board.

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PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES


Exhibit	Description
3.1	Restated Certificate of Incorporation of StemGen, Inc. (1)
3.2	Bylaws of StemGen, Inc. (1)
10.1	Letter of Intent between the company and D3sports dated October 17, 2018 (2)
31.1	Rule 13a-14(a) Certification of Chief Executive Officer (3)
32.2	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of Chief Executive Officer and Chief Financial Officer (3)
101	XBRL Interactive Data (4)

______________


(1)	Incorporated by reference to our Form S-1 filed with the Securities and Exchange Commission on March 17, 2015.
(2)	Incorporated by reference to our Form 10-K filed with the Securities and Exchange Commission on November 2, 2018.
(3)	Filed or furnished herewith.
(4)	To be submitted by amendment.

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SIGNATURES

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

	StemGen, Inc.
Date: November 19, 2019	BY: /s/ Simon Dawson
Date: October 8, 2020	BY: /s/ Simon Dawson
	Simon Dawson
	CEO and Chairman of the Board

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Filing Compare · StemGen, Inc.