UNITED
STATES


SECURITIES
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 December 31, 2009





[ _]           Transition
Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934





For the
transition period from ________ to ________





Commission
file number: 000-27831




SUNGAME
      CORPORATION(Exact name of
      registrant as specified in its charter)Delaware
            
            20-8017623(State
      or other jurisdictionof
      incorporation or organization)
            
            (IRS Employee
      Identification No.)501
      Silverside Road, Suite 105, Wilmington, DE
            
            19809(Address of
      principal executive offices)
            
            (Zip
      Code)Registrant's
      telephone number, including area code: (310) 666-0051Securities
      Registered pursuant to Section 12(b) of the Exchange Act:Title of each
      class
            
            Name of each
      exchange on which registeredNone
            
            NoneSecurities
      Registered pursuant to Section 12(g) of the Exchange Act:Common Stock, $0.001
      Par Value(Title of
      class)




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





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b2 of the Exchange Act.




Large accelerated
      filer     [_]
            Accelerated
      filer     [_]Non-accelerated
      filer     [_]
            Smaller reporting
      company     [X](Do not check if a
      smaller reporting company)





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act)  Yes [X]  No [_]










State the
aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity was
last sold, or the average bid and asked price of such common equity, as of the
last business day of the registrant’s most recently completed second fiscal
quarter.


As of
March 31, 2009 the market value was $-0-. There are approximately 5,899,500
shares of our common voting stock held by non-affiliates.  This
valuation is based upon the bid price of our common stock as quoted on the OTCBB
on that date ($-0-).





APPLICABLE
ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY


PROCEEDINGS
DURING THE PRECEDING FIVE YEARS:





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





(APPLICABLE
ONLY TO CORPORATE REGISTRANTS)





Indicate
the number of shares outstanding of each of the registrant’s classes of common
stock, as of the latest practicable date.  The number of shares outstanding
of the registrant's common stock as of  March 25, 2010 is
10,000,000.





(DOCUMENTS
INCORPORATED BY REFERENCE)


None





2




SUNGAME
CORPORATION


FORM
10-K





TABLE OF
CONTENTS





PagePART
      I
              4Item
      1.  Business.
              4Item
      1A.  Risk Factors.
              13Item
      1B.  Unresolved Staff Comments.
              13Item
      2. Properties.
              13Item
      3.  Legal Proceedings.
              14Item
      4.  (Removed and Reserved).
              14PART
      II
              14Item
      5.  Market For Registrant’s Common Equity, Related Stockholder
      Matters And Issuer Purchases Of Equity Securities.
              14Item
      6. Selected Financial Data.
              16Item
      7. Management’s Discussion And Analysis Of Financial Condition And Results
      Of Operations.
              16Item
      7A. Quantitative And Qualitative Disclosures About Market
      Risk.
              23Item
      8. Financial Statements And Supplementary Data.
              23Item
      9. Changes In And Disagreements With Accountants On Accounting And
      Financial Disclosure.
              34Item
      9A. Controls And Procedures.
              34Item
      9B. Other Information
              35PART
      III
              35Item
      10. Directors, Executive Officers And Corporate
Governance.
              35Item
      11. Executive Compensation.
              37Item
      12. Security Ownership Of Certain Beneficial Owners And Management And
      Related Stockholder Matters.
              39Item
      13. Certain Relationships And Related Transactions, And Director
      Independence.
              40Item
      14. Principal Accounting Fees And Services.
              41PART
      IV
              42Item
      15. Exhibits, Financial Statement Schedules.
              42SIGNATURES
              43








3





PART
I





This annual report on Form 10-K
contains forward-looking statements that are based on current expectations,
estimates, forecasts and projections about the Company, us, our future
performance, our beliefs and our Management's assumptions. In addition, other
written or oral statements that constitute forward-looking statements may be
made by us or on our behalf. Words such as “expects,” “anticipates,” “targets,”
“goals,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,”
or  variations of such words and similar expressions are intended to
identify such forward-looking statements. These statements are not guarantees of
future performance and involve certain risks, uncertainties and assumptions that
are difficult to predict or assess. Therefore, actual outcomes and results may
differ materially from what is expressed or forecast in such forward-looking
statements. Except as required under the federal securities laws and the rules
and regulations of the SEC, we do not have any intention or obligation to update
publicly any forward-looking statements after the filing of this Form 10-K,
whether as a result of new information, future events, changes in assumptions or
otherwise.





Unless the context otherwise requires,
throughout this Annual Report on Form 10-K the words “Company,” “we,” “us” and
“our” refer to Sungame Corporation and its consolidated
subsidiaries.





Item
1.  Business.





History





SunGame Corporation (“We,” “Us,” “Our”)
was organized under the laws of the State of Delaware on November 14, 2006 as
SunGame International, Inc.  On November 17, 2006, we changed our name
to SunGame Corporation. We are a Delaware corporation organized for the purpose
of engaging in any lawful business with a current plan to engage in the internet
virtual world and Social Gaming space.





Overview





We are an early development stage
company in the process of establishing a three dimensional, virtual world
community called GameConnect.  Leveraging the increasing popularity of
online communities with this proprietary “virtual world”, we intend to
capitalize on the ever increasing popularity of gaming.  With an
initial focus on casual and tournament skill-based gaming, we will also offer
visitors a broad spectrum of social activities including group


chats,
music download, media sharing, content creation and other features designed to
build the community and generate repeat traffic to the Virtual
world.





As each generation of computers become
more powerful and affordable, and access to broadband internet increasingly
available within the home, the gaming industry has become one of the most
successful industries online.  The most popular online game, World of
Warcraft, a “Massively Multiplayer Online Role-Playing Game” or “MMORPG” enables
over 1 million players from around the world to play
simultaneously.  Released in November 2004, it is estimated that World
of Warcraft generated revenues in excess of $100 million in each of several
different markets in its first year alone and recently announced it had signed
its 10 millionth registered user. The potential for success in this sector has
resulted in a perpetual delivery of new games to the market, much to the delight
of the consumers, who seem to have a strong appetite for product.






4





The other component of the GameConnect
experience is the social networking aspect.  The original web-based
communities were formed to serve people with shared interests and activities,
enabling them to communicate through message boards and email
services.  Relevant content is created and posted by the
members.  Within relatively short order, social networking
revolutionized the way we communicate and share information on an everyday
basis.  Networks such as MySpace and Facebook now boast millions of
members, and the YouTube phenomenon


is
influencing the nature of presidential elections.





The next generation of the social
network is set in a virtual world, members can create avatars to represent
themselves and buy “real estate” which is then developed and customized to
reflect their own personality and lifestyle. The leader in this new social
network is SecondLife, which opened in June 2003.





However, while people around the world
participate in these communities every day, few social networks have been able
to establish a successful business model.  We intend to capitalize on
the social networking, gaming and virtual world trends, providing users with a
wide variety of skill games through GameConnect, a Virtual World online
community where the members can socialize, play games, share content and compete
in tournament with cash prices.  We will work to balance the more
popular “standard” games such as bowling and golf, with original content created
by independent game developers.  Like many of the traditional gaming
sites, ours has instituted an “outsourcing” strategy, allowing members of the
community to develop the content -- for gamers, by gamers.  The
developer friendly culture is expected to result in continual generation of
original and challenging games to keep residents within the world.





Initial
response to the "soft launch" of our world has been very positive and management
is now preparing to the official system launch , which is not incorporated as
part of this report. We have created a targeted launch campaign which will
provide for managed growth of the SunGame community, prizes and increased
viewership.





In October 2008, we secured a $250,000
investment from Singapore based Mindzeye Consulting Pte, Ltd (Mindzeye) and
India based Diamond Star Exports Pvt. Ltd. (Diamond Star).  As a
result such investment, we have deployed the core system of SunGame and new
servers in Singapore.  Customers have begun to participate in the
games available in the world and loading money into their
eWallets.  We have not recognized sales from the activities at this
time, but we have had users of the product.





Since January 2009, we have established
a development center in the Philippines.  We have also developed a
proprietary Virtual world center with BC2 and B2B provisioning.  These
developments have allowed us to deploy our B2C brand GameConnect and have
launched the www.gameconnect.com website.






5





We
currently have 5 games in the final stage of development:




1.
            Golf


2.
            Bowling


3.
            Basketball


4.
            Dogs
      with attitude


5.
            Dragon
      fighting game





We are currently working to build a
presence on the internet through such communities as MySpace.com, in order to
actively market GameConnect to end users.





Industry





Despite the popularity of game console
systems such as the Wii and Nintendo, the number one platform for games in 2007
was still personal computer.  This is largely attributed to online
gaming, and this trend is expected to continue as computer graphics and memory
increases and prices decline.





The “average” game player is no longer
the 25 year old male.  As consumer exposure to computers and the
internet increases, so does this player base. According to the Entertainment
Software Association's 2007 ESSENTIAL FACTS ABOUT THE COMPUTER AND VIDEO GAME
INDUSTRY, the average gamer is 33 years old and has been playing for 12 years.
The following facts from that report provide insight with regard to our target
audience.





o
            40%
      of all players are women, and women over 18 years of age are one of the
      industry's fastest growing demographics, today adult women a greater
      portion of the game-playing population 33% than boys age 17 or younger
      18%.


o
            26%
      of game players are over the age of 50, an increase from 9% in 1999. This
      figure is sure to rise in coming years with nursing homes and senior
      centers across the nation now incorporating video games  into
      their activities.


o
            51%
      of most frequent game players say they play games online at
      least  one hour per week, up from 31 percent in
      2002.


o
            The
      average adult woman plays games 7.4 hours per week and the average adult
      man plays 7.6 hours per week.


o
            45%
      of parents say they play computer and video games with their kids
      weekly.





Traditional online, virtual world games
require players to pay a monthly fee to take part in the virtual world. In order
to participate in these worlds, users must create an avatar - a character that
will represent them in the virtual world.  This endeavor, in and of
itself has spawned an industry; there are businesses devoted solely to the
creation of customized avatars and their accessories and eBay regularly auctions
“turnkey” avatars.  The maintenance of a virtual designee is an art
that many individuals take great pride in, with some participants logging
substantial amounts of time and money to create.





The general strategy of the virtual
communities is to create a virtual world around a game on a massive scale, so
that millions can use it at any time.  Games are initially free,
enabling the community to develop, then as the audience reaches critical mass,
retailer and advertising revenue will follow.  It seems that this
strategy is working quite effectively.






6





In May of 2007, IBM announced a new
virtual IBM Business Center offering a place for IBM sales people, clients and
partners to meet and conduct business together. The center has six divisions:
Reception; Sales Center; Technical Support Library; Innovation Center; Client
Briefing Center; and Conference Center, all accessible through Second
Life.  Staffed by real IBM sales representatives from around the
world, their avatars can chat with visitors in several languages and build
business relationships.





www.GameConnect.com





The GameConnect virtual world is based
on a proprietary, fully owned system designed specifically for our
company.  Our website is the portal to all of the GameConnect
activities.





Joining the GameConnect.com community
is fast and easy.  To establish a presence, users simply register at
the site, after which they will be invited to download theGameConnect
Application.  Once they have selected a user name, password and
avatar, they can immediately start interacting with other GameConnect
users.





For much of the rest of the function of
the website, we will work in close partnership with “best solution” providers to
integrate, host, localize and operate our technical system.  Our key
focus will be to modify and enhance these applications to enhance the
GameConnect experience for its members.





Consumer Applications





As a member of GameConnect, residents
utilize their avatar to access a multitude of activities. Navigation is
intuitive and the site is designed to attract member to the profit centers such
as tournaments and music download.





GameConnect's currency is the Sun Buck,
which can be earned by players as they spend time in the virtual world. While
many residents will elect this option, as the average age of gamers rises and
they assume the responsibilities of families and jobs, gamers have less time and
more money, many prefer spending “real” money to build a bank account, likening
it to renting a pay-per-view movie.  To that end, residents can also
purchase Sun Bucks at a rate of 100 for each $1.





Game Play





The primary focus of the GameConnect
community is gaming.  Visitors will be able to select from a broad
spectrum of chance and skill-based games.  They will be able to
challenge one or more other visitors to enter tournaments for cash
prizes.






7





Tournaments





Once logged into the world, users will,
in future versions, be able to search upcoming tournaments to determine which
they would like to participate in.  Each tournament will have an entry
cost, which will be deducted from the player's account or paid for before the
start with an accepted payment method, such as a credit card.





Games can last from two to five
minutes, and can include from two to hundreds of players at a single
event.  Once a winner has been established, the prize will be awarded
as a deposit directly into their accounts.  Prizes can be awarded in
cash or Sun Bucks, depending on the method of payment used to enter the
tournament.  For each tournament played we retain 20% of the "pot"
with 80% going to the winner.  Upon completion of each tournament, all
participants will be notified of the results via email.





Content Sharing





Long recognized as the Golden Rule of
the internet, “Content Is King.”  Visitors will surely be impressed by
“cool” applications and try the latest thing, but if the content is not
worthwhile and appealing, they will not stay.





Game Creation





GameConnect's community will highlight
gaming.  To that end, we have, and will continue to established
relationships with independent gamer developers around the
world.  Game developers will be able to register and be certified to
upload their games to the GameConnect portfolio.  Once there, our
incentive program offers registered programmers 10% of the revenue generated by
their games, in addition to technical support with regard to system
requirements, site code, etc.  Management is confident this structure
will attract a substantial number of developers to the virtual
world.





Music Downloading





Music is a highly popular online media
which will be offered to visitors in a number of ways on
GameConnect.  Music is streamed continuously over the site with a
feature that enables visitors to click on the details of a title and/or download
the song at any time.


The world features a music management
application similar to iTunes(R), which will allow users to program and play
music from their MP3 player and their GameConnect residence.  In
addition to this advertising sponsored music offering, users will be able to
download music for a fee.





Media Upload





Users will be able to upload and share
their own photos, music, documents and videos for display in their virtual
residence on GameConnect.






8





Networking





Chat





Community is the backbone of the
GameConnect virtual world. While many visitors will come to play games,
residents are also there to socialize with others.





Events





Once a resident has established their
avatar and “personal space” i.e., a home or apartment, they may invite other
residents, alone or in groups, to visit their GameConnect home, host an event,
or go visit other GameConnect features together.





Administrative





Profile Management





Subscribers will be able to create
their own content online, including the design of their room, changes to their
avatar and updating of their profile.





Rather than having each individual
create their own unique avatar, we provide users with a broad range of “fixed”
avatars with some variables to change - i.e., hair color, outfit
etc.  This structure provides us with some control with regard to the
server capacity and speed, in addition to reducing the general system
requirements for all users (i.e., not all residents will have the


capacity
on their system to interact with high resolution.





Sun Wallet





A critical factor to the generating
continuous revenue is the ease and security with which payments can be made. The
online game industry consists of an enormous variety of player demographics,
each with their own payment preferences.  Some use credit cards, while
others prefer bank account debiting, prepaid cards, or eWallets.





To this end, we have established
several alternatives for residents to access and make payments to their
accounts, through its relationship with PayPal, Moneybookers and Global Collect,
a leader in the industry.  With Global Collect, we are able to process
orders through credit cards, pre-paid cards, money orders andall other common
payment alternatives. We can also offer bank-based payments such as direct
debits and off-line bank transfer solutions.





With these payment providers, we are
able to generate online and electronic reporting of all payment types from a
single source.  We can create customized reports to manage and review
its accounts on a real-time basis. Sophisticated fraud screening services
protect us from enabling non-paying customers from playing.






9





Account Management





Once registered,  users can
manage their finances,  including adding SunBucks to their Wallet,
purchasing virtual goods, collecting tournament winnings,  upgrading
their membership,  paying  subscription fees or submitting
cash tournament entry fees.





Basic membership is available at no
charge to visitors; however users will also in next version have the option of a
VIP membership for a monthly fee.  As a VIP member, users will have
access to premier apartment, be granted a monthly Sun Bucks allowance, secure
priority reservations for high profile tournaments, early notification of
special events and new features.





Business Applications





The substantial opportunities in the
interactive market give corporations a significant economic incentive to develop
multi-media marketing campaigns.  This “Transmedia” approach is
particularly popular within the entertainment industry as it enables producers
to convey a story through a myriad of layers, encouraging fan participation and
interaction.





Conventional websites are no longer
adequate for success.  Television shows such as LOST and Heroes are
the definitive examples, offering their audience an “experience” including
ancillary materials, wikis, exploration games, back stories, cast bios, blogs,
fan discussions, spoiler rumors, and screenshots.





Sun Game will pursue this sector,
offering its development services to companies looking to utilize a multi-media
marketing strategy. Anticipated activities include the following.





Third Party/Private Label
Development





We will create turnkey virtual worlds
for companies seeking to establish a presence in this sector. Initially our
focus will be the entertainment sector.  Management believes this
market represents a significant opportunity as their focus on promotion is well
established, and a virtual presence provides a distinct marketing
advantage.  Longer term it is expected that a virtual component will
be commonplace within many market sectors, particularly those websites looking
to appeal to a younger or computer savvy audience.  We offer a natural
outsourcing alternative for those firms with the desire but without the
capabilities to develop or maintain such an operation.





Operational





Companies can build private, secure,
virtual “corporate headquarters” on GameConnect. Business residents will
essentially enter their own “world” as created for them by us.  The
activities and features of these worlds will be determined by the
host.






10





Access Administration





Our platform will enable each business
to remotely control the entry to their own virtual world.  Office
administrators can establish passwords and clearance levels to ensure that only
the proper employees gain access to confidential information.





Commercial





Product placement is common in all
forms of media, however brand marketing in the virtual world provides customers
with a significantly improved product interaction, and many companies and
organizations now incorporate virtual worlds in their advertising
budget.





E-Commerce





By creating an online store within
GameConnect, users will be able to “interact” with products.  For
example, IBM has built a virtual store for Sears, where users can mock up a
kitchen with Sears' appliances.





Gaming





As virtual worlds continue to gain in
popularity, corporations will continue to seek ways to participate in this
media.  SunGame will work with corporate clients to develop online
games for consumers. Games will be designed to generate brand and product
awareness.





Advertising





While the use of advertising within
“virtual worlds” is a comparatively new idea.  Management expects
advertisement placement within its GameConnect games will make a contribution to
revenue in the relatively near term.





Competition





There are a number of companies active
in the virtual world and gaming sectors that are already
established.  These companies include:





·
            SecondLife.com


·
            Zynga.com


·
            Pogo.com


·
            King.com


·
            Gameaccount.com





These established sites each have
targeted a very specific genre of internet users.  For example
SecondLife is developed more towards technical users and Zynga has launched
Social Networking games on Facebook.






11





There are 3 main market segments within
the virtual world industry:





1.
            Virtual
      world provisioning to end users


2.
            White
      label provisioning of virtual worlds to corporations using own proprietary
      software


3.
            Virtual
      world customization (branding) to corporations using own or 3rd party
      virtual world systems





We are in a position to be able to
offer a solution to all three markets segments.  We have already
launched the first Virtual World to end users and will ensure successful growth
of this business.  We have developed software and will begin the
marketing of White Label provisioning of Virtual Worlds.  Each
corporate customer that buys a White Label Virtual World System from us will
have the opportunity to customize and brand the virtual world using their own
resources or place that branding project in conjunction with us.  In
many cases, it will be more natural to place most or all of the
customization/branding project with the Company.





Expansion Strategy





We have developed a focused,
multi-pronged expansion strategy.  The following tactics will be used
to achieve our objectives.





Increase Membership Through Managed
Growth





We have implemented a controlled
approach to growth; seeking to increase membership at rates that will enable it
to support its membership and maintain appropriate server to customer
ratios.  Management estimates it can service approximately 5,000
registered users for each network server, which will correspond to 200
simultaneous usersin each network server.  Management also anticipates
the current software platform will support approximately 1 million registered
users.





We intend to promote the world through
several channels. As the vast majority of virtual world communities achieve
critical mass through word-of-mouth and grass roots “buzz”, we will promote
SunGames through other social communities.  We will also look to reach
potential residents through related blogs, gaming societies and
conferences.





Solicit Game Developers





The initial game selection at
GameConnect comprises three traditional skill-based games, including bowling,
golf and jewel catcher. In keeping with our strategy to outsource the
development of content, we expect the majority of its new gaming content will be
created by independent game developers.  As new and exciting offerings
will be critical to our success, the world's culture will seek to nurture the
creative abilities of the independent developer, providing an environment that
facilitates their efforts to develop a following.





We have created a package for game
developers who become certified to provide content. In addition to retaining
ownership of their intellectual property, developers will be entitled to 10% of
the revenues generated by their product.






12





Pursue The Business To Business
Market





Management anticipates the business to
business (“B2B”) sector represents a significant opportunity for
us.  It is estimated that 170 high profile companies, such as Coke,
Dell, Ben and Jerry's, and Sun Microsystems have set up virtual
worlds.  We anticipate the B2B sector will be attracted to our less
technical interface, along with our ability to deliver customized, turn-key
virtual worlds.





As an early entrant in the market, we
are looking to establish a presence within the corporate marketplace by
providing a comprehensive package for users. Beyond the creation of the virtual
world, we will be able to provide a variety of user activities, including
back-end provisioning, customer relations management, hardware and software
setup, registration pages, profile pages, etc.





Backlog of Orders





We currently have no orders for sales
at this time.





Government Contracts





We have no government
contracts.





Company Sponsored Research And
Development





We are not conducting any
research.





Number Of Persons Employed





As of December 31, 2009, we have 1
full-time employee, Guy M. Robert and 1 part-time administrative
employee.  Mr. Robert works up to 40 hours per week and other
Directors work on an as needed basis up to 40 hours per week.





Item
1A.  Risk Factors.





We are a
smaller reporting company as defined by Rule 12b-2 of the Securities Exchange
Act of 1934 and are not required to provide information under this
item.





Item
1B.  Unresolved Staff Comments.





We are a
smaller reporting company as defined by Rule 12b-2 of the Securities Exchange
Act of 1934 and are not required to provide information under this
item.





Item
2. Properties.





We do not own any property, real or
otherwise.  Our operations are principally located at 501 Silverside
Road, Suite 105, Wilmington, DE 19809.  We pay monthly rent or fees
for the use of this office and related facilities of $90.




13







Item
3.  Legal Proceedings.





We are not a party to any pending legal
proceedings nor are any of our property the subject of any pending legal
proceedings.





Item
4.  (Removed and Reserved).




PART
II





Item
5.  Market For Registrant’s Common Equity, Related Stockholder Matters
And Issuer Purchases Of Equity Securities.





Currently there is no public trading
market for our common stock, and we have not applied to have the common stock
quoted for trading in any venue.  In the immediate future, we intend
to apply to have the common stock quoted on the OTC Bulletin Board (the
“OTCBB”).





Quotations on the OTCBB reflect
inter-dealer prices, without retail mark-up, markdown or commission and may not
reflect actual transactions.  Our common stock will be subject to
certain rules adopted by the SEC that regulate broker-dealer practices in
connection with transactions in “penny stocks.”  Penny stocks
generally are securities with a price of less than $5.00, other than securities
registered on certain national exchanges or quoted on the Nasdaq system,
provided that the exchange or system provides current price and volume
information with respect to transaction in such securities. The additional sales
practice and disclosure requirements imposed upon broker-dealers are and may
discourage broker-dealers from effecting transactions in our shares which could
severely limit the market liquidity of the shares and impede the sale of shares
in the secondary market.





The penny stock rules require
broker-dealers, prior to a transaction in a penny stock not otherwise exempt
from the rules, to make a special suitability determination for the purchaser to
receive the purchaser's written consent to the transaction prior to sale, to
deliver standardized risk disclosure documents prepared by the SEC that provides
information about penny stocks and the nature and level of risks in the penny
stock market. The broker-dealer must also provide the customer with current bid
and offer quotations for the penny stock.  In addition, the penny
stock regulations require the broker-dealer to deliver, prior to any transaction
involving a penny stock, a disclosure schedule prepared by the SEC relating to
the penny stock market, unless the broker-dealer or the transaction is otherwise
exempt.  A broker-dealer is also required to disclose commissions
payable to the broker-dealer and the registered representative and current
quotations for the securities. Finally, a broker-dealer is required to send
monthly statements disclosing recent price information with respect to the penny
stock held in a customer's account and information with respect to the limited
market in penny stocks.




As of December 31, 2009, we have 38
shareholders of record of our common stock.





We have not paid any dividends to
shareholders.  There are no restrictions which would limit our ability
to pay dividends on common equity or that are likely to do so in the
future.  The Delaware Revised Statutes, however, do prohibit us from
declaring dividends where, after giving effect to the distribution of the
dividend; we would not be able to pay our debts as they become due in the usual
course of business; or our total assets would be less than the sum of the total
liabilities plus the amount that would be needed to satisfy the rights of
shareholders who have preferential rights superior to those receiving the
distribution.






14





Recent Sales of Unregistered
Securities.





We have
sold securities within the past three years without registering the securities
under the Securities Act of 1933 as shown in the following
table:





Name
            Equity
            Paid
      per Security
            Date
      of Purchase
            Accredited
      or SophisticatedAdversor,
      Inc.
            1500
      common shares
            $1500
      services  -formation of company
            2006
            AccreditedAdversor,
      Inc.
            4,125,500
      common shares
            $775,000
      debt relief
            2008
            AccreditedFriedland
      Capital
            902,000
      common shares
            $50,000
      corporate advisory finance services
            2008
            AccreditedRanulf
      Jose Goss
            1,375,000
      common shares
            $137,500
      development services
            2008
            AccreditedMindzeye
      Consulting Pte. Ltd
            500,000
      common shares
            $125,000
      cash
            2008
            AccreditedMindzeye
      Consulting Pte. Ltd
            500,000
      warrant
            $125,000
      cash
            2008
            AccreditedDiamon
      Star Exports Ltd.
            1,600,000
      common shares
            $400,000  in
      programming services
            2008
            AccreditedMindzeye
      Consulting Pte. Ltd
            500,000
      common shares
            $125,000
      cash
            2009
            AccreditedMindzeye
      Consulting Pte. Ltd
            100,000
      common shares
            $25,000
      in development services
            2009
            AccreditedDiamon
      Star Exports Ltd.
            900,000
      common shares
            Payment
      of services under agreement
            2009
            Accredited







15





Exemptions
From Registration For Unregistered Sales





All of the sales by Company of the
unregistered securities listed immediately above were made by the Company in
reliance upon Section 4(2) of the Act. All of the individuals and/or entities
listed above that purchased the unregistered securities were all known to the
Company and its management, through pre-existing business relationships, as long
standing business associates, friends, and employees. All purchasers were
provided access to all material information, which they requested, and all
information necessary to verify such information and were afforded access to
management of the Company in connection with their purchases. All purchasers of
the unregistered securities acquired such securities for investment and not with
a view toward distribution, acknowledging such intent to the Company. All
certificates or agreements representing such securities that were issued
contained restrictive legends, prohibiting further transfer of the certificates
or agreements representing such securities,  without such
securities  either being first registered or otherwise exempt from
registration in any further resale or disposition.








Item
6. Selected Financial Data.





We are a
smaller reporting company as defined by Rule 12b-2 of the Securities Exchange
Act of 1934 and are not required to provide information under this
item.





Item
7. Management’s Discussion And Analysis Of Financial Condition And Results Of
Operations.





THE
FOLLOWING DISCUSSION SHOULD BE READ IN CONJUNCTION WITH OUR AUDITED FINANCIAL
STATEMENTS AND NOTES THERETO INCLUDED HEREIN. FORWARD-LOOKING STATEMENTS ARE
STATEMENTS NOT BASED ON HISTORICAL INFORMATION AND WHICH RELATE TO FUTURE
OPERATIONS, STRATEGIES, FINANCIAL RESULTS OR OTHER DEVELOPMENTS. FORWARD LOOKING
STATEMENTS ARE NECESSARILY BASED UPON ESTIMATES AND ASSUMPTIONS THAT ARE
INHERENTLY SUBJECT TO SIGNIFICANT BUSINESS, ECONOMIC AND COMPETITIVE
UNCERTAINTIES AND CONTINGENCIES, MANY OF WHICH ARE BEYOND OUR CONTROL AND MANY
OF WHICH, WITH RESPECT TO FUTURE BUSINESS DECISIONS, ARE SUBJECT TO CHANGE.
THESE UNCERTAINTIES AND CONTINGENCIES CAN AFFECT ACTUAL RESULTS AND COULD CAUSE
ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED IN ANY FORWARD LOOKING
STATEMENTS MADE BY, OR ON OUR BEHALF. WE DISCLAIM ANY OBLIGATION TO UPDATE
FORWARD-LOOKING STATEMENTS.





Since January 1, 2009, we have focused
on making improvements to our network architecture.  We have enhanced
the overall appearance of the world; what was formerly SunIsland is now
GameConnect.com, and has a world view.  This updated version features
landmarks and buildings from around the world, such as the Great Wall of China,
the Pyramids, the Hollywood sign, etc.





In an effort to optimize and manage our
growth, we have segregated our operation into two divisions, consumer and
business to business.






16





The consumer division, now branded as
GameConnect.com (GameConnect), continues to focus on the continued development
and implementation of SunGame's Virtual World Systems for
individuals.  GameConnect is available to users in both the United
States and Canada.  The world focuses on targeting men and women, ages
18 to 28, the primary focus is on the development of a virtual community through
casual games and other social networking activities.





GameConnect now offers a number of free
applications, including, game play, chat, music download, and limited
customization of their virtual world.  Subscribers have access to a
growing number of features, currently including; significant customization of
their virtual world and avatar, including accessories, furniture, clothing,
etc.  Subscribers can download music, upload videos and pictures,
challenge friends to and compete in online game tournaments, earning
SunGameBucks for further use in the GameConnect community.  The system
now includes a cross platform solution where mobile users with Java and Internet
can log in to the Virtual World, see a list over the friends that are on line
and are able to chat with them.





In addition to working on the continued
development of the GameConnect virtual world, the Company continues to establish
its capabilities to offer virtual world development and support functions for
third parties.





RESULTS
OF OPERATIONS





FOR YEAR
ENDED DECEMBER 31, 2009 COMPARED TO


YEAR
ENDED DECEMBER 31, 2008





Revenues





For the year ended December 31, 2009 we
recognized revenue in the amount of $25,000 compared to the year ended December
31, 2008, in which we did not recognize any revenues from our operational
activities.  The $25,000 revenue for the year ended December 31, 2009
resulted from the one time sale of the rights to use one of our many 3D objects
contained in our Virtual World to a third party. This sale of the rights to use
3D objects was not exclusive and did not affect our ownership rights or our
rights to these 3D objects. In addition, this sale does not affect our business
plan or plan of operations.





Operating
Expenses





For the year ended December 31, 2009,
we incurred a total operational expense of $455,182 compared to $980,353 for the
year ended December 31, 2008.  The net decrease of $525,171 was the
result of the decrease of expenses attributable to stock based compensation and
consulting costs, on the one hand, and the increase of expenses attributable to
software development costs and start-up costs, on the other hand. The increase
in start-up costs are a result of our increased operational activities and our
efforts to file with the Securities and Exchange Commission the Registration
Statement on Form S-1.






17





Net
Income (Loss) From Operations





For the year ended December 31, 2009,
we incurred a net loss of $430,182 compared to a net loss of $980,353 for the
year ended December 31, 2008.  The decrease of $550,171 was a result
of the increase in revenue and decrease in operational expenses as discussed in
the preceding paragraphs. As of December 31, 2009, we have an accumulated
deficit of $2,302,478.





Net
Income (Loss) Applicable to Common Stock





For the year ended December 31, 2009,
we recognized a net loss per share of $0.05 compared to a net loss per share of
$0.46 for the year ended December 31, 2008. The reduction in net loss is
directly attributable to the increase in revenue and reduction in operating
expenses as discussed in the preceding paragraphs.





LIQUIDITY
AND CAPITAL RESOURCES





At December 31, 2009, we had cash on
hand of $2,011 and total assets of $3,132, consisting of cash of $2011 and net
fixed assets of $1,121.  At December 31, 2009, we had total current
liabilities of $334,701, consisting of $51,582 of accounts payable, $649 of
credit cards payable, $165,000 in contracts payable and $117,470 loan payable to
a stockholder.  At December 31, 2009, we had a working capital deficit
of $332,690.





During the year ended December 31,
2009, cash used in operating activities was $152,745 compared to $203,007 during
the year ended December 31, 2008.  During the year ended December 31,
2009, net losses of $430,182 were adjusted for a non-cash item consisting of
$202 in depreciation.  During the year ended December 31, 2008, net
losses of $980,353 were adjusted for non-cash items consisting of $46 in
depreciation, and $587,300 in compensatory stock issuances.





During the year ended December 31,
2009, we did not use or receive funds from investing
activities.  During the year ended December 31, 2008, we used $1,373
in our investing activities. The $1,373 was used to purchase office
equipment.





During the year ended December 31,
2009, we received $132,470 from our financing activities.  During the
year ended December 31, 2008, we received $223,740 from our financing
activities.





In March 2009, per the existing
Security Purchase Agreement, we received cash of $125,000 in exchange for
500,000 shares of restricted common stock. The shares were sold at a price of
$0.25 per share.





During the year ended December 31,
2008, our majority shareholder, Adversor, Inc. advanced additional funds of
$98,740 to support operations.  In 2008 Adversor contributed $107,109
to the Company's capital, leaving a yearend balance owed to Adversor of
$110,000. During the year ended December 31, 2009, Adversor advanced an
additional $7,470 to support operations. The balance owed to Adversor at
December 31, 2009 is $117,470.  The amounts owed are non-interest
bearing and due on demand.






18





In October 2008, we entered into a
Security Purchase Agreement (Security Purchase Agreement) with a third party, we
received cash of $125,000 in exchange for 500,000 shares of restricted common
stock and a warrant exercisable for 500,000 shares of our restricted common
stock. The warrant has an exercise price of $0.80 per share and a term of three
years. The shares were sold at a price of $0.25 per share with $0.24 per share
allocated to the common stock and $0.01 per share allocated to the
warrant.





In October 2008, we entered into a
Services Agreements with two parties. The Services Agreements provides for us to
receive services totaling up to $625,000 in connection with the development of
our system and gaming software to be paid for by the issuance of up to 2,500,000
shares of our common stock. During the year ended December 31, 2008, we issued
1,600,000 of these shares in exchange for services performed at that time
totaling $400,000. The shares were issued at a price of $0.25 per
share.





In October 2008, we
issued  4,123,500  shares of our
restricted  common stock to
our  majority  shareholder,  Adversor,  in  exchange  for
their  efforts  in the settlement  of $775,000
of  outstanding  accounts  payable  owed
to an unrelated third party vendor. The shares were issued at a price of $0.188
per share.





In September 2008, we issued 1,373,000
shares of our restricted common stock to our director, Mr. Goss as payment for
services totaling $137,5,00. The shares were issued at a price of $0.10 per
share.





In June 2008, we issued 902,000 shares
of our restricted common stock to Friedland, in exchange for services totaling
$50,000 provided under the Finance Advisory Services Agreement. The shares were
issued at a price of $0.055 per share.





We anticipate funding operations
through private investments and loans made by our current shareholders and
management, however, we have no commitments for such funding as of the date of
this report.  In addition, we anticipate generating revenue in the
near future, however, we have no current commitments or contracts that could
result in such revenue.  Management will have complete discretionary
control over the actual utilization of said funds and there can be no assurance
as to the manner or time in which said funds will be utilized.





We foresee that we will need a minimum
of $300,000 to fund our operations for the next 12 months as
follows:




System Development
      and Integration
            
            $
            150,000Professional
      Fees
            
            $
            50,000Sales, Marketing,
      Strategic Partnerships
            
            $
            50,000General &
      Administrative
            
            $
            25,000Working
      Capital
            
            $
            25,000Total
            
            $
            300,000






19





We will need substantial additional
capital to support our proposed future operations.  We have NO
revenues.  We have NO committed source for any funds as of the date
hereof.  No representation is made that any funds will be available
when needed.  In the event funds cannot be raised when needed, we may
not be able to carry out our business plan, may never achieve sales or royalty
income, and could fail in business as a result of these
uncertainties.





As a result of becoming a publicly
reporting company with the SEC we will incur costs in connection with complying
with the reporting requirements of the SEC.  Such costs will include
annual audits and those legal costs in connection with making filings with the
SEC.  We have accounted for such costs above in “Professional Fees”
and “General & administrative”.  We do not anticipate such costs
to be material after the effectiveness of this Registration
Statement.





Because of the limited financial
resources that we have, it is unlikely that we will be able to diversify our
operations.  Our probable inability to diversify our activities into
more than one area will subject us to economic fluctuations within the virtual
world industry and therefore increase the risks associated with our operations
due to lack of diversification.





We anticipate generating the vast
majority of our revenues from our advertisers. Advertisers can generally
terminate their contracts, at any time.  Advertisers could decide to
not do business with us if their investment in advertising with us does not
generate sales leads, and ultimately customers, or if we do not deliver their
advertisements in an appropriate and effective manner.  If we are
unable to remain competitive and provide value to advertisers, they may stop
placing ads with us, which would negatively harm future revenues and
business.  In addition, expenditures by advertisers tend to be
cyclical, reflecting overall economic conditions and budgeting and buying
patterns.  Any decreases in or delays in advertising spending due to
general economic conditions could delay or reduce our revenues or negatively
impact our ability to grow our revenues.





In the event we are unable to achieve
additional capital raising through future private or public offerings, we will
limit operations to fit within our capital availability. In such event, we will
probably seek loans for operating capital.  We have not achieved any
commitments for loans from any source.  In any event our business can
be operated with a skeleton staff and have limited advertising/marketing budget,
which could cause us to remain unprofitable and eventually fail.





Going Concern





The independent registered public
accounting firm's report on our financial statements as of December 31, 2009 and
2008 includes a “going concern” explanatory paragraph that describes substantial
doubt about our ability to continue as a going concern.





We are dependent on raising additional
equity and/or, debt to fund any negotiated settlements with our outstanding
creditors and meet our ongoing operating expenses. There is no assurance that we
will be able to raise the necessary equity and/or debt that we will need to be
able to negotiate acceptable settlements with our outstanding creditors or fund
our ongoing operating expenses. We cannot make any assurances that we will be
able to raise funds through such activities.






20




Capital Resources





We have only common stock as our
capital resource.





We have no material commitments for
capital expenditures within the next year, however if operations are commenced,
substantial capital will be needed to pay for participation, investigation,
exploration, acquisition and working capital.





Need For Additional
Financing





We do not have capital sufficient to
meet our cash needs. We have not generated revenue and have minimal resources to
conduct planned operations. We estimate that our monthly expenses to commence
planned operations within the next 12 months are approximately $24,000
(approximately $300,000 per year). Thus, using currently available capital
resources (the primary source of which is non-binding commitments and
expectations from management and current shareholders), we expect to be able to
conduct planned operations for a minimum period of 2-3 months. We are currently
relying solely on current shareholders and management to provide the necessary
funds to continue operations. We do not have any commitments for such funding
from shareholders or management.





At the present time, we have not made
any arrangements to raise additional cash. Management and current shareholders
are expected, but have not committed, to provide the necessary working capital
so as to permit us to conduct planned operations until such time as we have
begun to generate revenue and/or have become sufficiently
funded.  However, if we do not begin to generate revenue or cannot
raise additional needed funds, we will either have to suspend development
operations until we do raise the funds, or cease operations
entirely.





In addition, the United States and the
global business community is experiencing severe instability in the commercial
and investment banking systems which is likely to continue to have far-reaching
effects on the economic activity in the country for an indeterminable period.
The long-term impact on the United States economy and our operating activities
and ability to raise capital cannot be predicted at this time, but may be
substantial.





Critical Accounting
Policies





We have identified the policies below
as critical to its business operations and the understanding of our results from
operations. The impact and any associated risks related to these policies on our
business operations is discussed throughout Management's Discussion and Analysis
of Financial Conditions and Results of Operations where such policies affect our
reported and expected financial results. For a detailed discussion on the
application of these and other accounting policies, see Note 1 in the Notes to
the Consolidated Financial Statements beginning on page F-6 for the years ended
December 31, 2009 and 2008. Note that our preparation of this document requires
us to make estimates and assumptions that affect the reported amounts of assets
and liabilities, disclosure of contingent assets and liabilities at the date of
our financial statements, and the reported amounts of expenses during the
reporting periods. There can be no assurance that actual results will not differ
from those estimates.






21





Risks And Uncertainties





We operate in an emerging industry that
is subject to market acceptance and technological change. Our operations are
subject to significant risks and uncertainties, including financial,
operational, technological and other risks associated with operating an emerging
business, including the potential risk of business failure.





Software Costs





The costs for internal use software,
whether developed or obtained, are assessed to determine whether they should be
capitalized or expensed in accordance with American Institute of Certified
Public Accountants' Statement (“SOP”) 98-1, “Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use”. Capitalized software
costs are reflected as property and equipment on the balance sheet and are to be
depreciated when we begin recording revenue the deemed date that the software is
placed in service. As of the date of these financial statements the development
of the software necessary to achieve the business purposes of our Company is in
an undeterminable state causing us to deem the asset to be impaired. This
conclusion requires that the costs incurred to date be treated as expenses as
opposed to the capitalizing of the software.





Start-Up Costs





Start-up costs that would commonly be
capitalized as Other Assets to be amortized over a period of five years have
also been deemed to be impaired for the same reasons stated in the paragraph on
“Software Costs”. Based on these circumstances, management has elected to
expense these start-up costs as well.





“Long-lived assets” are reviewed for
impairment of value whenever events or changes in circumstances indicate that
the carrying value of the assets might not be recoverable or at least at the end
of each reporting period. Conditions that would necessitate an impairment
assessment include a significant decline in the observable market value of an
asset, a significant change in the extent or manner in which an asset is used,
or a significant adverse change that would indicate that the carrying value of
an asset is not recoverable. For Long-lived assets to be held and used,
management measures fair value based on quoted market prices or based on
discounted estimates of future cash flows.





Off-Balance Sheet
Arrangements




As of December 31, 2009, we did not
have any relationships with unconsolidated entities or financial partners, such
as entities often referred to as structured finance or special purpose entities,
that had been established for the purpose of facilitating off-balance sheet
arrangements or other contractually narrow or limited purposes. As such, we are
not materially exposed to any financing, liquidity, market or credit risk that
could arise if we were engaged in such relationships.




22








Item
7A. Quantitative And Qualitative Disclosures About Market Risk.





We are a smaller reporting company as
defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not
required to provide information under this item.





Item 8. Financial Statements And
Supplementary Data.








23





RONALD R.
CHADWICK, P.C.
 Certified
Public Accountant
 2851
South Parker Road, Suite 720
 Aurora,
Colorado  80014
 Telephone
(303)306-1967
 Fax
(303)306-1944
 
 
 REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 
 Board of
Directors
 Sungame
Corporation
 Wilmington,
Delaware
 
 I have
audited the accompanying balance sheets of Sungame Corporation (a development
stage company) as of December 31, 2009 and 2008, and the related statements of
operations, stockholders' equity and cash flows for the years then ended and for
the period from November 14, 2006 (inception of the development stage) through
December 31, 2009 . These financial statements are the responsibility of the
Company's management. My responsibility is to express an opinion on these
financial statements based on my audit.
 
 I
conducted my audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that I plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation.  I believe that my audit provides a
reasonable basis for my opinion.
 
 In my
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Sungame Corporation as of December
31, 2009 and 2008, and the  results of its operations and its cash
flows for the years then ended and for the period from November 14, 2006
(inception of the development stage) through December 31, 2009 in conformity
with accounting principles generally accepted in the United States of
America.
 
 The
accompanying  financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has suffered recurring losses from operations
and has a working capital deficit and stockholders' deficit. These conditions
raise 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.
 
  Aurora,
      Colorado
                /s/ Ronald R.
      Chadwick, P.C.March 11,
    2010
                RONALD R. CHADWICK,
      P.C.
  24
      December
      31,2009
              
              
              2008ASSETS:Current
      Assets:Cash
              
              $
              2,011
              
              
              $
              22,286-
              
              
              
              -Total
      Current Assets
              
              
              2,011
              
              
              
              22,286Fixed
      AssetsOffice
      Equipment
              
              
              1,373
              
              
              
              1,373Accumulated
      Depreciation
              
              
              (252
              )
              
              
              (46
              )Total
      Fixed Assets
              
              
              1,121
              
              
              
              1,327TOTAL
      ASSETS
              
              $
              3,132
              
              
              $
              23,613LIABILITIES
      AND STOCKHOLDERS' DEFICIENCY:Current
      Liabilities:Accounts
      Payable
              
              $
              51,582
              
              
              $
              -Credit
      Cards Payable
              
              
              649Contracts
      Payable
              
              
              165,000
              
              
              
              190,000Loans
      Payable - Stockholder
              
              
              117,470
              
              
              
              110,000Total
      Current Liabilities
              
              
              334,701
              
              
              
              300,000Stockholders'
      Deficiency:Common
      stock, par value, $0.001
              
              
              10,000
              
              
              
              8,500100,000,000
      authorized with:10,000,000
      issued and outstanding at December 31, 20098,500,000
      issued and outstanding at December 31, 2008Paid
      in Capital
              
              
              1,960,909
              
              
              
              1,587,409Preferred
      Stock, par value $0.0015,000,000
      authorized with none outstandingAccumulated
      deficit
              
              
              (2,302,478
              )
              
              
              (1,872,296
              )Total
      Stockholders' Deficiency
              
              
              (331,569
              )
              
              
              (276,387
              )TOTAL
      LIABILITIES AND STOCKHOLDERS' DEFICIENCY
              
              $
              3,132
              
              
              $
              23,613






The
accompanying notes are an integral part of these financial
statements




25









November
      13,Year
      ended
              
              
              2006,
      (Inception)December
      31,
              
              
              to
      December 31,2009
              
              
              2008
              
              
              2009Revenue:
              
              $
              25,000
              
              
              $
              -
              
              
              $
              25,000Total
      Income
              
              
              -
              
              
              
              -
              
              
              
              25,000Costs
      and Expenses:Software
      development
              
              
              371,235
              
              
              
              120,500
              
              
              
              1,356,284Stock
      based compensation
              
              
              -
              
              
              
              587,300
              
              
              
              587,300Depreciation
              
              
              206
              
              
              
              46
              
              
              
              252Consulting
      costs
              
              
              -
              
              
              
              257,500
              
              
              
              257,500Startup
      costs
              
              
              83,741
              
              
              
              15,007
              
              
              
              126,142Total
      Expenses
              
              
              455,182
              
              
              
              980,353
              
              
              
              2,327,478Net
      Loss From Operations
              
              
              (430,182
              )
              
              
              (980,353
              )
              
              
              (2,302,478
              )Other
      Income and (Expenses)-
              
              
              
              -
              
              
              
              -Net
      Loss
              
              $
              (430,182
              )
              
              $
              (980,353
              )
              
              $
              (2,302,478
              )Per
      Share InformationLoss
      per common share
              
              $
              (0.05
              )
              
              $
              (0.46
              )Weighted
      average numberof shares outstanding
              
              
              9,550,000
              
              
              
              2,126,125










26









November
      13,Year
      ended
              
              
              2006,
      (Inception)December
      31,
              
              
              to
      December 31,2009
              
              
              2008
              
              
              2009Cash
      Flows from Operating ActivitiesNet
      Income (Loss)
              
              $
              (430,182
              )
              
              $
              (980,353
              )
              
              $
              (2,302,478
              )Adjustments
      to reconcile net loss tonet cash used by operating
      activities:Depreciation
              
              
              206
              
              
              
              46
              
              
              
              252Increase/(decrease)
      in accrued expenses
              
              
              -
              
              
              
              190,000
              
              
              
              190,000Increase
      in accounts payable
              
              
              27,231
              
              
              
              -
              
              
              
              802,231Compensatory
      stock issuances
              
              
              250,000
              
              
              
              587,300
              
              
              
              837,300Net
      Cash Used by Operating Activities
              
              
              (152,745
              )
              
              
              (203,007
              )
              
              
              (472,695
              )Cash
      Flows from Investing Activities(Increase)
      in Fixed Assets
              
              
              -
              
              
              
              (1,373
              )
              
              
              -Net
      Cash Used for Investing Activities
              
              
              -
              
              
              
              (1,373
              )
              
              
              -Cash
      Flows from Financing ActivitiesSales
      of Common Stock and Warrants
              
              
              125,000
              
              
              
              125,000
              
              
              
              251,500Paid
      in capital
              
              
              -
              
              
              
              107,109
              
              
              
              107,109(Decrease)
      Increase in Loans Payable
              
              
              7,470
              
              
              
              (8,369
              )
              
              
              117,470Net
      Cash Provided by Financing Activities
              
              
              132,470
              
              
              
              223,740
              
              
              
              476,079Net
      Increase in Cash & Cash Equivalents
              
              
              (20,275
              )
              
              
              19,360
              
              
              
              3,384Beginning
      Cash & Cash Equivalents
              
              
              22,286
              
              
              
              2,926
              
              
              
              -Ending
      Cash & Cash Equivalents
              
              $
              2,011
              
              
              $
              22,286
              
              
              $
              3,384SUPPLEMENTAL
      DISCLOSURE OF CASH FLOW INFORMATIONCash
      paid for interest expense
              
              $
              -
              
              
              $
              -
              
              
              $
              -Cash
      paid for income taxes
              
              $
              -
              
              
              $
              -
              
              
              $
              -NON-CASH
      TRANSACTIONSStock
      issued for services
              
              $
              250,000
              
              
              $
              587,300
              
              
              $
              837,300Stock
      issued for debt relief
              
              
              -
              
              
              
              775,000
              
              
              
              863,369$
              250,000
              
              
              $
              1,362,300
              
              
              $
              1,700,669




The
accompanying notes are an integral part of these financial
statements




27









Common
              
              
              
              
              
              
              
              
              Preferred
              
              
              Common
              
              
              StockCommon
              
              
              Dollars
      at
              
              
              Paid
      in
              
              
              Preferred
              
              
              Dollars
              
              
              Stock
              
              
              Subscription
              
              
              Retained
              
              
              Stockholders'Shares
              
              
              $0.001
      Par
              
              
              Capital
              
              
              Shares
              
              
              $0.001
      Par
              
              
              Subscribed
              
              
              Receivable
              
              
              Earnings
              
              
              EquityBalances
      11/14/06
              
              
              -
              
              
              $
              -
              
              
              $
              -
              
              
              
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              -Shares
      to parent for services
              
              
              1,500
              
              
              
              1
              
              
              
              1,499
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              1,500Net
      loss for year
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (1,500
              )
              
              
              (1,500
              )Balances
      at December 31, 2006
              
              
              1,500
              
              
              $
              1
              
              
              $
              1,499
              
              
              
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              (1,500
              )
              
              $
              -Net
      loss for year
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (890,443
              )
              
              
              (890,443
              )Balances
      at December 31, 2007
              
              
              1,500
              
              
              $
              1
              
              
              $
              1,499
              
              
              
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              (891,943
              )
              
              $
              (890,443
              )Shares
      issued to parent for debtrelief
              
              
              4,123,500
              
              
              
              4,124
              
              
              
              770,876
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              775,000Shares
      issued for services
              
              
              3,875,000
              
              
              
              3,875
              
              
              
              583,425
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              587,300Shares
      issued for cash
              
              
              500,000
              
              
              
              500
              
              
              
              119,500
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              120,000Warrants
      issued for cash
              
              
              
              
              
              
              
              
              
              5,000
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              5,000Additional
      paid-in capital from parent
              
              
              
              
              
              
              107,109
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              107,109Net
      loss for year
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (980,353
              )
              
              
              (980,353
              )Balances
      at December 31, 2008
              
              
              8,500,000
              
              
              $
              8,500
              
              
              $
              1,587,409
              
              
              
              
              
              
              $
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              (1,872,296
              )
              
              $
              (276,387
              )Shares
      issued for cash
              
              
              500,000
              
              
              
              500
              
              
              
              124,500
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              125,000Shares
      issued for services
              
              
              1,000,000
              
              
              
              1,000
              
              
              
              249,000
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              250,000Net
      loss for year
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (430,182
              )
              
              
              (430,182
              )Balances
      at December 31, 2009
              
              
              10,000,000
              
              
              $
              10,000
              
              
              $
              1,960,909
              
              
              
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              (2,302,478
              )
              
              $
              (331,569
              )




The
accompanying notes are an integral part of these financial
statements





28










1.
            Business
      and Summary of Significant Accounting
Policies





Business





The
accompanying financial statements include the accounts of SunGame Corporation
(“the Company”), a Delaware corporation.  The Company is an early
development stage company that intends to become a leader in providing seamless
gambling and skill gaming in a virtual world. The Company believes that it can
exploit the market that is at the confluence of gaming and gambling, and that
this market is very significant. The Company will provide various types of Skill
Games in an online Virtual World where the users, regardless of location can
compete and place bets, using virtual money or real money and where the end
users can be individuals or corporations.





The main
activity will be to provide a network that attracts players who interact in a
seamless environment. The main goal will be to introduce competitive and unique
products in an already established market place. The Company will be a premier
marketer of money related activities that will have distinct comparative
advantages compared to both direct and indirect competitors.





The
Company was incorporated in Delaware on November 14, 2006. The Company’s fiscal
year end is December 31st.





Summary
of Significant Accounting Policies





Development Stage Company





The
Company is a development stage company as defined by Financial Accounting
Standards No. 7. The Company is devoting substantially all of its present
efforts to establish a new business. All losses accumulated since inceptions
have been considered as part of the Company’s development stage
activities.





Risks
and Uncertainties





The
Company operates in an emerging industry that is subject to market acceptance
and technological change. The Company’s operations are subject to significant
risks and uncertainties, including financial, operational, technological and
other risks associated with operating an emerging business, including the
potential risk of business failure.





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
certain estimates and assumptions that affect the reported amounts and timing of
revenue and expenses, the reported amounts and classification of assets and
liabilities, and disclosure of contingent assets and liabilities. These
estimates and assumptions are based on management’s future expectations for the
Company’s operations. The Company’s actual results could vary materially from
management’s estimates and assumptions.








29





Property
and Equipment





Property
and equipment, when acquired, will be stated at cost. Depreciation will be
computed using the straight-line method to allocate the cost of depreciable
assets over the estimated useful lives of the assets.





Software
Costs





The costs
for internal use software, whether developed or obtained, are assessed to
determine whether they should be capitalized or expensed in accordance with
American Institute of Certified Public Accountants’ Statement (“SOP”) 98-1,
“Accounting for the Costs of Computer Software Developed or Obtained for
Internal Use”. Capitalized software costs are reflected as property and
equipment on the balance sheet and are to be depreciated when the Company begins
recording revenue the deemed date that the software is placed in service. As of
the date of these financial statements the development of the software necessary
to achieve the business purposes of the Company is in an undeterminable state
causing the Company to deem the asset to be impaired. This conclusion requires
that the costs incurred to date be treated as expenses as opposed to the
capitalizing of the software.





Start-up
Costs





Start-up
costs that would commonly be capitalized as Other Assets to be amortized over a
period of five years have also been deemed to be impaired for the same reasons
stated in the paragraph on “Software Costs”. Based on these circumstances,
management has elected to expense these start-up costs as well.





“Long-lived
assets” are reviewed for impairment of value whenever events or changes in
circumstances indicate that the carrying value of the assets might not be
recoverable or at least at the end of each reporting period. Conditions that
would necessitate an impairment assessment include a significant decline in the
observable market value of an asset, a significant change in the extent or
manner in which an asset is used, or a significant adverse change that would
indicate that the carrying value of an asset is not recoverable. For Long-lived
assets to be held and used, management measures fair value based on quoted
market prices or based on discounted estimates of future cash
flows.





Concentration
of Credit Risk





The
Company’s financial instruments that are exposed to concentrations and credit
risk primarily consist of amounts due to related parties. The Company presently
uses one vendor for all of its software development.





Income
Taxes





Income
taxes are accounted for using the asset and liability method. 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 and operating
loss and tax credit carry-forwards. Deferred tax assets and liabilities are
measured using enacted tax rates expected to be applied to taxable income in the
years in which those temporary differences are expected to be recovered or
settled. 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. A
valuation allowance is provided for significant deferred tax assets when it is
more likely than not that such asset will not be recovered.






30







At
December 31, 2009 and 2008 the Company had net operating loss carryforwards of
approximately $1,400,000 and $980,000 which begin to expire in 2026. The
deferred tax asset of approximately $550,000 and $382,000 in 2009 and 2008
created by the net operating losses have been offset by a 100% valuation
allowance. The change in the valuation allowance in 2009 and 2008 was $168,000
and $382,000.




2.
              Going Concern
      Uncertainty and Managements’ Plans





In the
Company’s audited financial statements for the fiscal year ended December 31,
2009, the Report of the Independent Registered Public Accounting Firm includes
an explanatory paragraph that describes substantial doubt about the Company’s
ability to continue as a going concern.  The Company’s interim
financial statements for the year ended December 31, 2009 have been prepared on
a going concern basis, which contemplates the realization of assets and the
settlement of liabilities and commitments in the normal course of
business.  The Company reported a net loss of $430,182 for the year
ended December 31, 2009, and an accumulated deficit of $2,302,478 as of December
31, 2009.  At December 31, 2009, the Company’s total current
liabilities exceed total current assets by $331,569.





The
future success of the Company is likely dependent on its ability to attain
additional capital, or to find an acquisition to add value to its present
shareholders and ultimately, upon its ability to attain future profitable
operations.  There can be no assurance that the Company will be
successful in obtaining such financing, or that it will attain positive cash
flow from operations.  Management believes that actions presently
being taken to revise the Company’s operating and financial requirements provide
the opportunity for the Company to continue as a going concern.


3.
                Property
      and Equipment


The
Company has incurred software costs in the development of its virtual world in
the amount of $371,235 at December 31, 2009. Per the discussion under “Software
Costs” this amount has been expensed at this time.




4.
              Accounts
      Payable





At
December 31, 2007, accounts payable totaled $775,000 and was owed to one
creditor, Adversor, a majority shareholder of the Company. During the year ended
December 31, 2008, the creditor agreed to forgive the $775,000 in exchange for
4,123,500 shares of the Company’s restricted common stock (See Note
7).






31









5.
              Contracts
      Payable





During
the year ended December 31, 2008, the Company entered into a Corporate Finance
Advisory Services Agreement with Friedland Global Capital Markets, LLC
(Friedland) the Agreement provides that the Company would pay a total of
$190,000 for services as set forth in the Agreement.  These funds are
non-interest paying and due on demand. During the year ended December 31, 2009
the Company made payments in the amount of $25,000 against this
obligation.




6.
              Advance Payable,
      Related Party


During
the year ended December 31, 2007, the Company’s majority shareholder, Adversor,
Inc. (“Adversor”) advanced funds of $118,369 to the Company for operations.
During the year ended December 31, 2008 Adversor advanced an additional $98,740
to support operations.  In 2008 Adversor donated $107,109 to the
Company’s capital, leaving a year end balance owed to Adversor of
$110,000.  At December 31, 2009 the Company had working capital
advances due to Adversor $117,470. These funds are non-interest bearing and due
on demand. Also, included in the Company’s $51,582 in accounts payable at end
2009 were $26,600 owed to Adversor. In 2009 the Company recording consulting
fees to Adversor of $26,000.




7.
              Stockholders’
      Deficiency


Common Stock





In
October 2008, the Company entered into a Security Purchase Agreement (Security
Purchase Agreement) with a third party, the Company received cash of $125,000 in
exchange for 500,000 shares of restricted common stock and a warrant exercisable
for 500,000 shares of the Company’s restricted common stock.  The
warrant has an exercise price of $0.80 per share and a term of three
years.  The shares were sold at a price of $0.25 per share with $0.24
per share allocated to the common stock and $0.01 per share allocated to the
warrant.





In
October 2008, the Company entered into a Services Agreements with two
parties.  The Services Agreements provides for the Company to receive
services totaling up to $625,000 in connection with the development of its
website and gaming software to be paid for by the issuance of up to 2,500,000
shares of the Company’s common stock.  During the year ended December
31, 2008, the Company issued 1,600,000 of these shares in exchange for services
performed at that time totaling $400,000.  The shares were issued at a
price of $0.25 per share.





In
October 2008, the Company issued 4,123,500 shares of its restricted common stock
to its majority shareholder, Adversor, in exchange for their efforts in the
settlement of $775,000 of outstanding accounts payable owed to an unrelated
third party vendor.  The shares were issued at a price of $0.188 per
share.






32





In
September 2008, the Company issued 1,373,000 shares of its restricted common
stock to a director, Mr. Goss, of the Company as payment for services totaling
$1,373,000.  The shares were issued at a price of $0.10 per
share.





In June
2008, the Company issued 902,000 shares of its restricted common stock to
Friedland, in exchange for services totaling $50,000 provided under the Finance
Advisory Services Agreement.  The shares were issued at a price of
$0.055 per share.





In March
of 2009, pursuant the Securities Purchase Agreement the Company received further
cash of $125,000 in exchange for 500,000 shares of restricted common stock and a
warrant exercisable for 500,000 shares of the Company’s restricted common
stock.  The warrant has an exercise price of $0.80 per share and a
term of three years.  The shares were sold at a price of $0.25 per
share with $0.24 per share allocated to the common stock and $0.01 per share
allocated to the warrant. The Company also issued 100,000 shares of its
restricted common stock in exchange for consulting services valued at
$25,000.





In
October of 2009, the Company issued 900,000 shares of its restricted common
stock in exchange for consulting services valued at $225,000.





Warrants





At
December 31, 2009, the following warrants to purchase common stock were
outstanding:





Number
      of common
              shares covered by warrants
            
            
            Exercise Price
            
            Expiration Date500,000
            
            
            $
            0.80
            
            October
      2011500,000
            
            
            $
            0.80
            
            March
      20121,000,000





Other
Capital Transactions





During
the year ended December 31, 2008, the majority shareholder, Adversor, paid
$20,000 for services on our behalf.  In addition, during the year
ended December 31, 2008, Adversor forgave $87,109 in debt owed to
them.  The Company has treated such amounts as capital contributions
and as such has increased Additional Paid in Capital by $107,109.








33





Item
9. Changes In And Disagreements With Accountants On Accounting And Financial
Disclosure.





NONE





Item
9A. Controls And Procedures.





Evaluation
of Disclosure Controls and Procedures


Our
management, with the participation of our Chief Executive Officer and Chief
Financial Officer, has evaluated the effectiveness of the design and operation
of our disclosure controls and procedures (as defined in Rule 13a-15(e) under
the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of the
end of the period covered by this annual report on Form 10-K.  Based
on this evaluation, our Chief Executive Officer and Chief Financial Officer
concluded that these disclosure controls and procedures were effective as of
such date, at a reasonable level of assurance, in ensuring that the information
required to be disclosed by our company in the reports we file or submit under
the Exchange Act is: (i) accumulated and communicated to our management
(including the Chief Executive Officer and Chief Financial Officer) in a timely
manner, and (ii) recorded, processed, summarized and reported within the time
periods specified in the SEC’s rules and forms.





Internal
Control Over Financial Reporting





Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting, as such term is defined in Exchange Act Rules
13a-15(f).  Under the supervision and with the participation of our
management, including our Chief Executive Officer and Chief Financial Officer,
we conducted an evaluation of the effectiveness of our internal control over
financial reporting based on the criteria in Internal Control – Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission.  Based on our evaluation, management has concluded
that our internal control over financial reporting was effective as of December
31, 2009.  Because of its inherent limitations, internal control over
financial reporting may not prevent or detect misstatements.  Also,
projections of any evaluation of effectiveness to future periods are subject to
the risks that controls may become inadequate because of changes in conditions,
or that the degree of compliance with the policies or procedures may
deteriorate.  This annual report does not include an attestation
report of our registered public accounting firm regarding internal control over
financial reporting pursuant to temporary rules of the Securities and Exchange
Commission.




34




Changes
in Internal Control Over Financial Reporting




There was
no change in our internal control over financial reporting (as defined in Rule
13a-15(f) under the Securities Exchange Act of 1934, as amended) during our last
fiscal quarter that has materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting.





Item
9B. Other Information





None




PART
III





Item
10. Directors, Executive Officers And Corporate Governance.





The following individuals were serving
as our executive officers and directors on December 31, 2009:





Name
            Age
            PositionGuy
      M. Robert
            47
            President,
      CEO, DirectorMichael
      Segal
            67
            Secretary,
      Treasurer, DirectorRanulf
      Jose Goss
            32
            Director








Guy M. Robert.  Mr.
Robert has served as the President, Chief Executive Officer and a Director of
SunGame since inception. He also serves as President of Adversor, Inc., a
beneficial owner of SunGame Corporation, since incorporation. After a career in
IT consulting and Global Product Management for Ericsson 1989-1992 and Vodafone
from 1992-1995, Mr. Robert has focused his entrepreneurial spirit and management
capabilities within the international IT community. He established and was a
Director or CEO of companies such as XPonCard Thailand Ltd.1999-2004, MobylNet
SL, Spain, 2002-2005 and Communication Information Services 2000-2004 which was
acquired by a publicly listed group. Mr. Robert is a Market Economist, graduated
from the Stockholm Market Institute.





Michael Segal.  Mr.
Segal has been our director since June 8, 2007. Since
2001, he has been President of Segal Cirone Services Inc., a financial
consulting company that advises institutions, banks and high net worth
individuals.  He is an Officer, General Securities Principal and
Options Compliance Principal of B & B Securities, Inc., a member of the New
York Stock Exchange and Financial Industry Regulatory Authority (FINRA) since
January 2010.  Mr. Segal had served as President of Alexander Westcott
& Co., Inc., a Broker/Dealer registered with NASD and Secretary of the board
of directors of its parent company, the Financial Commerce Network
Inc.(FCNI.BB), a public company.  He is also individually registered
as a Commodity Trading Advisor with the Commodity Futures Trading Commission
(CFTC)  and a founding member of the Managed Funds Association. Mr.
Segal received a B.B.A. in marketing and economics from the University of Miami
in Florida.Mr. Segal
sits on the board of directors of China Agri Business Inc. (CHBU.BB) and China
Power Equipment Inc. (CPQQ.BB) publicly traded companies on the US OTC Bulletin
Board. Additionally Mr. Segal sits on the board of directors of a privately held
company Asia Carbon Industries Inc.






35





Ranulf Jose
Goss.Mr. Goss has been a Director of SunGame Corporation
since October 2008. As CEO of SunGame SEA, Mr. Goss manages online virtual world
and walkthrough development for SunGame US. Prior to joining the Company, he was
a Producer at Matahari Studios, a leading game development company in the
Philippines. As the senior project manager he oversaw supplier relationships,
academic relationships and technical research. From February to May 2006, Mr.
Goss was Chief Game Architect at E-commerce Percs, where he lead the PC game
development team, and was Project Manager for Online MMORPG being Co-developed
with a Korean Online Game. In August 2005, he founded SlyceSoft Games
Development, the premier 3-D Digital game producer company in the Philippines.
Directly managed the artistic and technical team that planned, designed, and
developed the Away-Agila, the upcoming first and only 3-D Filipino
folklore-based adventure game in the Philippines. The game was released in
prototype in May 2005 and is expected to be published in late 2009. From 1999 to
July 2005, Mr. Goss held several positions with TrendMicro, Inc. His senior
position was Global Database Administrator where he managed the day-to-day
operations of multiple, multi-tier, distributed, large-scale SQL server
databases to service the real-time technical support needs of customers in the
United States, Europe, and Philippines. Prior to that he was the Quality
Assurance Engineer, where he was responsible for leading the QA project team
that was involved in the planning and executing testing efforts of specific
software upgrades for multiple, multi-tier, distributed, large-scale SQL server
databases environment. His first position with the company was as a Systems
Engineer, providing customer support for the installation and use of Trend Micro
products. Wrote advanced T-SQL ueries, complex joins, indexes, Data
Transformation Services (DTS), triggers, stored procedures, data extraction,
transformation, and validation of SQL queries.  Mr. Goss is currently
Chairperson, Manila Chapter, International Game Developers Association. He
attended La Salle University where he obtained a B.S. in Computer
Studies.





All executive officers are elected by
the Board and hold office until the next Annual Meeting of stockholders and
until their successors are elected and qualify.





Compliance
With Section 16(a) Of The Exchange Act





Section
16(a) of the Securities Exchange Act of 1934, as amended, requires the
registrant's officers and directors, and persons who own more than 10% of a
registered class of the registrant's equity securities, to file reports of
ownership and changes in ownership of equity securities of the Registrant with
the Securities and Exchange Commission. Officers, directors and greater-than 10%
shareholders are required by the Securities and Exchange Commission regulation
to furnish the registrant with copies of all Section 16(a) forms that they
file.






36





Item
11. Executive Compensation.





Compensation.





The following table sets forth
compensation awarded to, earned by or paid to our Chief Executive Officer and
the four other most highly compensated executive officers for the years ended
December 31, 2009 and 2008 (collectively, the “Named Executive
Officers”).





SUMMARY
      COMPENSATION TABLEName
      and
              principal
      position
            Year
            Salary
            Bonus
            Stock
      Awards
            Option
      Awards
            Non-Equity
      Incentive Plan Compensation
            Nonqualified
      Deferred Compensation Earnings
            All
      Other Compensation
            TotalGuy
      Robert, CEO(1)
            2009
            0
            0
            0
            0
            0
            0
            0
            02008
            0
            0
            0
            0
            0
            0
            0
            0Michael
      Segal, sec/treas.
            2009
            0
            0
            0
            0
            0
            0
            0
            02008
            0
            0
            0
            0
            0
            0
            0
            0





(1)  Mr.
Robert does not receive a salary for his services from SunGame.  Mr.
Robert is an employed as an executive officer of the Company by Adversor, Inc.,
a majority shareholder of the Company. Mr. Robert owns 49% of Adversor, Inc. and
receives 49% of any dividends paid by Adversor as compensation for his services.
Mr. Robert does not have an employment agreement with Adversor. Mr. Robert's
dividend payments by Adversor are shown as other compensation in the above
table.








OUTSTANDING
      EQUITY AWARDS AT DECEMBER 31, 2009OPTION
      AWARDS
            STOCK
      AWARDSName
            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
              ($)
            Option
      Expiration Date
            Number
      of Shares or Units of Stock That Have Not Vested
              (#)
            Market
      Value of Shares or Units of Stock That Have Not Vested
              ($)
            Equity
      Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights
      That Have Not Vested
              (#)
            Equity
      Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or
      Other Rights That Have Not Vested
              (#)Guy
      Robert
            0
            0
            0
            0
            0
            0
            0
            0
            0Michael
      Segal
            0
            0
            0
            0
            0
            0
            0
            0
            0






37





Employment
Contracts





We do not
have an employment contract with any executive officer.





We have
made no Long Term Compensation payouts.





Director
Compensation





DIRECTOR
      COMPENSATIONName
            Fees
              Earned
      or
              Paid
      in
              Cash
            Stock
              Awards
            Option
              Awards
            Non-Equity
              Incentive
              Plan
              Compensation
            Change
      in
              Pension
              Value
      and
              Nonqualified
              Deferred
              Compensation
              Earnings
            All
              Other
              Compensation
            TotalGuy
      Robert(1)
            0
            0
            0
            0
            0
            0
            0Michael
      Segal
            0
            0
            0
            0
            0
            0
            0





(1)  Mr.
Robert does not receive a salary for his services from SunGame.  Mr.
Robert is an employed as an executive officer of the Company by Adversor, Inc.,
a majority shareholder of the Company.  Adversor, Inc. compensates Mr.
Robert for his services. Mr. Robert is an owner of Adversor, Inc.





Our directors do not receive
compensation for their attendance at meetings of the board of
directors.





All of our officers and/or directors
will continue to be active in other companies. All officers and directors have
retained the right to conduct their own independent business
interests.





It is possible that situations may
arise in the future where the personal interests of the officers and directors
may conflict with our interests. Such conflicts could include determining what
portion of their working time will be spent on our business and what portion on
other business interest. To the best ability and in the best judgment of our
officers and directors, any conflicts of interest between us and the personal
interests of our officers and directors will be resolved in a fair manner which
will protect our interests. Any transactions between us and entities affiliated
with our officers and directors will be on terms which are fair and equitable to
us. Our Board of Directors intends to continually review all corporate
opportunities to further attempt to safeguard against conflicts of interest
between their business interests and our interests.






38





We have no intention of merging with or
acquiring an affiliate, associated person or business opportunity from any
affiliate or any client of any such person.





Item
12. Security Ownership Of Certain Beneficial Owners And Management And Related
Stockholder Matters.





The following table and the notes
thereto set forth information, as of March 1, 2010 (except as otherwise set
forth herein), concerning beneficial ownership (as defined in Rule 13d-3 under
the Securities Exchange Act of 1934) of common stock by: (i) each director of
the Company, (ii) each executive officer (iii) all executive officers and
directors as a group, and (iv) each holder of 5% or more of the Company’s
outstanding shares of common stock.








Name
      and Address of Beneficial Owner(1)
            
            Number
      of Shares of
              common
      stock
              Beneficially
      Owned(2)
            
            
            Percentage
      of
              common
      stock
              Outstanding(3)Guy
      M. Robert(4)
            
            
            4,100,000
            
            
            
            41.00
            %Adversor,
      Inc.(4)
            
            
            4,000,000
            
            
            
            40.00
            %Michael
      Segal
            
            
            100,500
            
            
            1
            %Ranulf
      Jose Goss
            
            
            1,373,000
            
            
            
            13.73
            %Sudhir
      Shah
            
            
            1,000,000
            
            
            
            10.00
            %Diamond
      Star Exports Ltd.(5)
            
            
            2,500,000
            
            
            
            25.00
            %Mindzeye
      Consulting Pte. Ltd.
            
            
            100,000
            
            
            
            1.00
            %Jeffrey
      Friedland(6)
            
            
            535,000
            
            
            
            5.35
            %Officers
      and Directors as a group (3 people)
            
            
            5,473,500
            
            
            
            54.47
            %





(1)  Unless
      otherwise stated above, the address of beneficial owner is c/o SunGame
      Corporation, 501 Silverside Road, Suite 105, Wilmington, DE
      19809.


(2)  Beneficial
      ownership of each person is shown as calculated in accordance with Rule
      13d-3 of the Securities Exchange Act of 1934, which includes all
      securities that the person, directly, or indirectly through an contract,
      arrangement, understanding, relationship or otherwise has or shares voting
      power which includes the power to vote or direct the voting of a security,
      or investment power, which includes the power to dispose, or direct the
      disposition of such security.


(3)  Based
      on 10,000,000 shares of common stock outstanding as of March 1,
      2010.


(4)Mr.
      Robert owns his shares indirectly through Adversor, Inc., as president
      thereof.


(5)
      Mr. Shah holds the voting and dispositive powers for Diamond Star Exports,
      Ltd.


(6)
      Mr. Freidland holds the voting power and dispositive powers over 535,000
      shares of our common stock through the following entities; Philadelphia
      New York Investors, Global Investment Advisers, LLC, China America
      Holdings, Strategic Technology Advisors, LLC, VAC Edwards, LLC, Wall
      Street Global Research, LLC, and Western Technology
      Investors,  LLC.






39





Item
13. Certain Relationships And Related Transactions, And Director
Independence.





Other than the stock transactions
discussed below, we have not entered into any transaction nor are there any
proposed transactions in which any of our founders, directors, executive
officers, shareholders or any members of the immediate family of any of the
foregoing had or is to have a direct or indirect material interest.





Mr. Robert, our Chief Executive Officer
and a director, is the founder and organizer of SunGame.  Mr. Robert
does not receive a salary for his services from SunGame.  Mr. Robert
is employed as an executive officer of the Company by Adversor, Inc., a majority
shareholder of the Company.  Adversor, Inc. compensates Mr. Robert for
his services. Mr. Robert is an owner of Adversor, Inc.  Because of his
present management positions with, his organizational efforts on behalf of and
his percentage share ownership in our company, Mr. Robert may be deemed to be a
“promoter,” as that term is defined in Rule 405 of the Securities Act of
1933.





In October 2008, Diamond Star Export,
Ltd. and Adversor, Inc., greater than 10% shareholders of our Company, entered
into Lock Up Agreements with us whereby they agreed to that, until the earlier
of: (1) 90 days after the shareholder's stock has been registered under an
effective Registration Statement with the SEC, (2) the second anniversary of the
date of the agreement or  (3) 90 days after Change in Control (as
defined in the Securities Exchange Act of 1934), that they will not make or
cause any sale more than 5% of shares outstanding per quarter, irrespective of
whether their shares are subsequently registered. In exchange each received
$100.





In October 2008, Mr. Ranulf Goss, our
director, entered into a Lock-Up Agreement with us whereby they agreed to that,
until the earlier of: (1) 90 days after the shareholder's stock has been
registered under an effective Registration Statement with the SEC, (2) the
second anniversary of the date of the agreement or (3) 90 days after Change in
Control (as defined in the Securities Exchange Act of 1934), that they will not
make or cause any sale more than 5% of shares outstanding per quarter,
irrespective of whether their shares are subsequently registered. In exchange he
received $100.





In March 2009, per the Security
Purchase Agreement with Mindzeye Consulting Pte, Ltd., we received cash of
$125,000 in exchange for 500,000 shares of restricted common stock. The shares
were sold at a price of $0.25 per share.





During the year ended December 31,
2008, our majority shareholder, Adversor, paid $20,000 for services on our
behalf. In addition, during the year ended December 31, 2008, Adversor forgave
$87,109 in debt owed to them. We have treated such amounts as capital
contributions and as such have increased Additional Paid in Capital by
$107,109.





In October 2008, we issued 4,123,500
shares of our restricted common stock to our majority shareholder, Adversor, in
exchange for their efforts in the settlement of $775,000 of outstanding accounts
payable owed to an unrelated third party vendor. The shares were issued at a
price of $0.188 per share.






40





In September 2008, we issued 1,373,000
shares of our restricted  common stock to our director, Mr. Goss, as
payment for services totaling $1,373,000.  The shares were issued at a
price of $0.10 per share.





During the year ended December 31,
2008, we entered into a Corporate Finance Advisory Services Agreement with
Friedland Global Capital Markets, LLC ("Friedland"). The Agreement provides that
we will pay a remaining total of $65,000 for services as set forth in the
Agreement and $140,000 upon the commencement of the trading of our stock. These
funds payable are non-interest bearing and due on demand. At September 30, 2009,
we owe Friedland a total of $65,000.





In June 2008, we issued 902,000 shares
of our restricted common stock to Friedland, in exchange for services totaling
$50,000 provided under the Finance Advisory Services Agreement. The shares were
issued at a price of $0.055 per share.





During the year ended December 31,
2008, Adversor advanced $107,109 to support operations. Adversor forgave the
total $107,109 and the Company has treated it as capital contribution and an
increase the Additional Paid In Capital.





During the year ended December 31,
2007, our majority shareholder, Adversor, Inc. (Adversor) advanced funds of
$118,369 to us for operations. During the year ended December 31, 2008, we
repaid $8,369 of the outstanding amount. At December 31, 2008, Adversor is owed
$110,000. These funds are non-interest bearing and due on demand. During the
nine months ended September 30, 2009, Adversor advanced funds of $7,470 to us
for operations. At September 30, 2009, Adversor is owed $117,470.





Item
14. Principal Accounting Fees And Services.





Audit Fees





We were billed $9,500 for the fiscal year ended December 31, 2009
and $9,500 for
the fiscal year ended December 3, 2008 for professional services rendered by the
principal accountant for the audit of our annual financial statements, the
review of our quarterly financial statements, and other services performed in
connection with our statutory and regulatory filings.





Audit Related Fees





There were $0 in audit related fees for the fiscal year ended
December 31, 2009 and $0 in audit related
fees for the fiscal year ended December 31, 2008. Audit related fees include
fees for assurance and related services rendered by the principal accountant
related to the audit or review of our financial statements, not included in the
foregoing paragraph.





Tax Fees





Tax fees were $0 for the fiscal year ended December 31, 2009 and
$0 for the
fiscal year ended December 31, 2008.






41





All Other Fees





There
were no other professional services rendered by our principal accountant during
the last two fiscal years that were not included in the above
paragraphs.





Preapproval Policy





Our Board of Directors’ current policy
is to pre-approve all audit and non-audit services that are to be performed and
fees to be charged by our independent auditor to assure that the provision of
these services does not impair the independence of the auditor.  Our
board pre-approved all audit and non-audit services rendered by our principal
accountant in 2009 and 2008.





PART
IV





Item
15. Exhibits, Financial Statement Schedules.





(a) Financial Statements and Schedules.
The following financial statements and schedules for the Company as of December
31, 2009 are filed as part of this report.





(1)   Financial
statements of the Company and its subsidiaries.





(2)   Financial
Statement Schedules:





All
schedules are omitted because they are not applicable or the required
information is shown in the financial statements or notes thereto.





(A) EXHIBITS.





The
following Exhibits are incorporated herein by reference or are filed with this
report as indicated below.




Exhibit
      No.
            Description
      of Exhibits3.01
            Certificate of
      Incorporation(1)3.01(a)
            Certificate of
      Amendment of Certificate of Incorporation(2)3.02
            By-laws(1)3.02(a)
            Certificate of
      Amendment of Bylaws(3)21.1
            Subsidiaries(2)31.2
            Certification
      pursuant to Sarbanes-Oxley Section 30232.1
            Certification
      pursuant to 18 U.S.C. Section 1350





(1)
Incorporated by reference to our Registration Statement on Form S-1 filed with
the SEC on May 1, 2009.


(2)
Incorporated by reference to our Registration Statement on Form S-1/A filed with
the SEC on August 7, 2009.


(3)
Incorporated by reference to our Registration Statement on Form S-1/A filed with
the SEC on January 19, 2010.






42





SIGNATURES





In accordance with Section 13 or 15(d)
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.








Sungame
Corporation:





By:
              /s/ Guy M.
      RobertName:
              Guy
      M. RobertTitle:
              Principal
      Executive Officer, President and Chief Executive Officer, Chief Financial
      Officer and Principal Accounting OfficerDate:
              March
      30 , 2010In
      accordance with the Exchange Act, this report has been signed below by the
      following persons on behalf of the registrant and in the capacities and on
      the dates indicated:By:
              /s/ Guy M.
      RobertName:
              Guy M.
      RobertTitle:
              Principal
      Executive Officer, President and Chief Executive Officer, Chief Financial
      Officer and Principal Accounting OfficerDate:
              March
      30, 2010By:
              /s/ Michael
      SegalName:
              Michael
      SegalTitle:
              DirectorDate:
              March
      30 , 2010




43