UNITED STATES SECURITY AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549  FORM 10-Q  [X]  QUARTERLY REPORT PURSUANT TO SECTION
13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934  For the quarterly period ended December 31, 2021  or  [_]  TRANSITION REPORT UNDER SECTION
13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934  For the transition period from _________ to _________  Commission File Number: 000-21555  StemGen, Inc. (Exact name of registrant as specified in its charter)  Delaware
    
    54-1812385(State or other jurisdiction of Incorporation or organization)
    
    (I.R.S. Employer Identification Number)1 Performance Drive, Suite F
    Angleton, TX
    
    77515(Address of principal executive offices)
    
    (Zip code)  Registrant’s telephone number, including area
code: (832) 954-7569  Securities registered pursuant to Section 12(b) of the Act: None  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. [X] Yes    [_] No  Indicate by check mark whether the registrant has
submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of
this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). [X] Yes
   [_] No  Indicate by check mark whether the registrant is a
large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See
the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and
“emerging growth company” in Rule 12b-2 of the Exchange Act.  Large accelerated filer
    [_]
    Accelerated filer
    [_]Non-accelerated filer
    [X]
    Smaller reporting company
    [X]Emerging growth company
    [_]  If an emerging growth company, indicate by check mark
if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards
provided pursuant to Section 13(a) of the Exchange Act. [_]  Indicate by check mark whether the registrant is a
shell company (as defined in Rule 12b-2 of the Exchange Act). [_] Yes    [X] No  Indicate the number of shares outstanding of each
of the issuer’s classes of common stock, as of the latest practicable date. As of January 22, 2022, there were 45,670,063 shares
of common stock issued and outstanding.    TABLE OF CONTENTS



PagePart I — Financial InformationItem 1.
    Financial Statements.
    4Consolidated Balance Sheets (Unaudited)
    4Consolidated Statements of Operations (Unaudited)
    5Consolidated Statements of Stockholders’ Equity (Deficit) (Unaudited)
    6Consolidated Statements of Cash Flows (Unaudited)
    7Notes to the Unaudited Consolidated Financial Statements
    8-11Item 2.
    Management’s Discussion and Analysis of Financial Condition and Results of Operations.
    12-14Item 3.
    Quantitative and Qualitative Disclosures about Market Risk.
    14Item 4.
    Controls and Procedures.
    14Part II — Other InformationItem 1.
    Legal Proceedings.
    15Item 1A.
    Risk Factors.
    15Item 2.
    Unregistered Sales of Equity Securities and Use of Proceeds.
    15Item 3.
    Defaults upon Senior Securities.
    15Item 4.
    Mine Safety Disclosures.
    15Item 5.
    Other Information.
    15Item 6.
    Exhibits.
    15


- 2 -


CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION



Certain statements in this report contain or may contain
forward-looking statements. These statements, identified by words such as “plan”, “anticipate”, “believe”,
“estimate”, “should”, “expect” and similar expressions include our expectations and objectives regarding
our future financial position, operating results and business strategy. These statements are subject to known and unknown risks, uncertainties
and other factors, which may cause actual results, performance, or achievements to be materially different from any future results, performance
or achievements expressed or implied by such forward - looking statements. These forward-looking statements were based on various factors
and were derived utilizing numerous assumptions and other factors that could cause our actual results to differ materially from those
in the forward-looking statements. These factors include, but are not limited to, our ability to secure suitable financing to continue
with our existing business or change our business and conclude a merger, acquisition or combination with a business prospect, economic,
political and market conditions and fluctuations, government and industry regulation, interest rate risk, U.S. and global competition,
and other factors. Most of these factors are difficult to predict accurately and are generally beyond our control. You should consider
the areas of risk described in connection with any forward-looking statements that may be made herein. Readers are cautioned not to place
undue reliance on these forward-looking statements, which speak only as of the date of this report. Readers should carefully review this
report in its entirety, including but not limited to our financial statements and the notes thereto and the risks described in our Annual
Report on Form 10-K for the fiscal year ended June 30, 2021. We advise you to carefully review the reports and documents we file from
time to time with the Securities and Exchange Commission (the “SEC”), particularly our quarterly reports on Form 10-Q and
our current reports on Form 8-K. Except for our ongoing obligations to disclose material information under the Federal securities laws,
we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence
of unanticipated events.



OTHER PERTINENT INFORMATION



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




- 3 -


PART I — FINANCIAL INFORMATION



ITEM 1. FINANCIAL STATEMENTS



STEMGEN, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)



December 31,
2021
    
    June 30,
2021ASSETSCurrent assetsCash and cash equivalents
    
    $
    15
    
    $
    1,343Total current assets
    
    
    15
    
    
    1,343Property and EquipmentVehicles – race cars
    
    
    362,650
    
    
    527,650Less accumulated depreciation and amortization
    
    
    (99,328
    )
    
    (127,350
    )263,322
    
    
    400,300TOTAL ASSETS
    
    $
    263,337
    
    $
    401,643LIABILITIES AND STOCKHOLDERS’ DEFICITCurrent liabilitiesAccounts payable
    
    $
    173,411
    
    $
    168,911Accounts payable – related party
    
    
    —
    
    
    12,000Deferred revenue
    
    
    1,500
    
    
    1,500Advances from shareholders
    
    
    252,820
    
    
    249,070Accrued interest payable
    
    
    640,629
    
    
    570,229Convertible notes payable to shareholder
    
    
    563,203
    
    
    563,203Derivative liability
    
    
    182,204
    
    
    170,744Total current liabilities
    
    
    1,813,767
    
    
    1,735,657Commitments and contingenciesStockholders’ DeficitPreferred Stock; 8,000,000 shares authorized:Series A Convertible Preferred Stock, par value $0.001; 6,000,000 shares issued and outstanding at December 31, 2021 and June 30, 2021; liquidation preference of $6,000,000
    
    
    6,000
    
    
    6,000Series E Preferred Stock; par value $0.000001; 1,000,000 shares issued and outstanding at December 31, 2021 and June 30, 2021
    
    
    1
    
    
    1Series F Preferred Stock; par value $0.000001; 1,000,000 shares issued and outstanding at December 31, 2021 and June 30, 2021
    
    
    1
    
    
    1Common Stock; par value $0.001; 100,000,000 shares authorized, 45,670,063 shares issued and outstanding at December 31, 2021 and June 30, 2021
    
    
    45,671
    
    
    45,670Additional paid-in capital (deficit)
    
    
    (293,267
    )
    
    (294,266
    )Accumulated deficit
    
    
    (1,308,836
    )
    
    (1,091,420
    )Total stockholders’ deficit
    
    
    (1,550,430
    )
    
    (1,334,014
    )TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT
    
    $
    263,337
    
    $
    401,643

The accompanying notes are an integral part of these
financial statements




- 4 -


STEMGEN, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

For the Three Months and Six Months Ended December
31, 2021 and 2020

(Unaudited)



Six Months Ended
December 31,
    
    Three Months Ended
December 31,2021
    
    2020
    
    2021
    
    2020Revenue
    $
    20,000
    
    $
    39,000
    
    $
    20,000
    
    $
    15,000Operating expense:Cost of revenue
    
    12,879
    
    
    30,326
    
    
    12,841
    
    
    5,651Depreciation
    
    36,978
    
    
    32,682
    
    
    18,845
    
    
    18,845General and administrative expenses
    
    105,699
    
    
    70,146
    
    
    28,773
    
    
    38,914Loss from operations
    
    (94,154
    )
    
    (94,154
    )
    
    (60,459
    )
    
    (48,410
    )Interest expense
    
    (70,400
    )
    
    (70,400
    )
    
    (35,200
    )
    
    (35,200
    )Loss on sale of property and equipment
    
    —
    
    
    (25,500
    )
    
    —
    
    
    (25,500
    )Loss on fair value of derivative liability
    
    (11,460
    )
    
    (11,460
    )
    
    (5,730
    )
    
    (5,730
    )Net loss
    $
    (217,416
    )
    $
    (201,514
    )
    $
    (81,389
    )
    $
    (114,840
    )Net loss per share – basic and diluted
    $
    (0.00
    )
    $
    (0.00
    )
    $
    (0.00
    )
    $
    (0.00
    )Weighted average number of common shares outstanding – basic and diluted
    
    45,670,411
    
    
    45,670,053
    
    
    45,670,411
    
    
    45,670,053

The accompanying notes are an integral part of these
financial statements




- 5 -


STEMGEN, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(DEFICIT) For the Six Months Ended December 31, 2021 and 2021 (Unaudited)  Series A
Preferred Stock
    
    Series E
Preferred Stock
    
    Series F
Preferred Stock
    
    Common Stock
    
    Additional
paid-in
    
    AccumulatedShares
    
    Amount
    
    Shares
    
    Amount
    
    Shares
    
    Amount
    
    Shares
    
    Amount
    
    Capital
    
    Deficit
    
    TotalBalance,
June 30, 2021
    6,000,000
    
    $
    6,000
    
    1,000,000
    
    $
    1
    
    1,000,000
    
    $
    1
    
    45,670,063
    
    $
    45,670
    
    $
    (294,266
    )
    $
    (1,091,420
    )
    $
    (1,334,014
    )Common stock issued for vehicles
    —
    
    
    —
    
    —
    
    
    —
    
    —
    
    
    —
    
    —
    
    
    —
    
    
    —
    
    
    —
    
    
    —Net loss
    —
    
    
    —
    
    —
    
    
    —
    
    —
    
    
    —
    
    —
    
    
    —
    
    
    —
    
    
    (136,027
    )
    
    (136,027
    )Balance,
September 30, 2021
    6,000,000
    
    $
    6,000
    
    1,000,000
    
    $
    1
    
    1,000,000
    
    $
    1
    
    45,670,063
    
    $
    45,670
    
    $
    (294,266
    )
    $
    (1,227,447
    )
    $
    (1,470,041
    )Sale of stock
    —
    
    
    —
    
    —
    
    
    —
    
    —
    
    
    —
    
    1,000
    
    
    1
    
    
    999
    
    
    —
    
    
    1,000Net loss
    —
    
    
    —
    
    —
    
    
    —
    
    —
    
    
    —
    
    —
    
    
    —
    
    
    —
    
    
    (81,389
    )
    
    (81,389
    )Balance,
December 31, 2021
    6,000,000
    
    $
    6,000
    
    1,000,000
    
    $
    1
    
    1,000,000
    
    $
    1
    
    45,671,063
    
    $
    45,671
    
    $
    (293,267
    )
    $
    (1,308,836
    )
    $
    (1,550,430
    )   Series A
Preferred Stock
    
    Series E
Preferred Stock
    
    Series F
Preferred Stock
    
    Common Stock
    
    Additional
paid-in
    
    AccumulatedShares
    
    Amount
    
    Shares
    
    Amount
    
    Shares
    
    Amount
    
    Shares
    
    Amount
    
    Capital
    
    Deficit
    
    TotalBalance,
June 30, 2020
    6,000,000
    
    $
    6,000
    
    1,000,000
    
    $
    1
    
    1,000,000
    
    $
    1
    
    45,429,188
    
    $
    45,429
    
    $
    (486,725
    )
    $
    (658,277
    )
    $
    (1,093,571
    )Common stock issued for vehicles
    —
    
    
    —
    
    —
    
    
    —
    
    —
    
    
    —
    
    240,875
    
    
    241
    
    
    192,459
    
    
    —
    
    
    192,700Net loss
    —
    
    
    —
    
    —
    
    
    —
    
    —
    
    
    —
    
    —
    
    
    —
    
    
    —
    
    
    (86,674
    )
    
    (86,674
    )Balance,
September 30, 2020
    6,000,000
    
    $
    6,000
    
    1,000,000
    
    $
    1
    
    1,000,000
    
    $
    1
    
    45,670,063
    
    $
    45,670
    
    $
    (294,466
    )
    $
    (744,951
    )
    $
    (987,545
    )Net loss
    —
    
    
    —
    
    —
    
    
    —
    
    —
    
    
    —
    
    —
    
    
    —
    
    
    —
    
    
    (114,840
    )
    
    (114,840
    )Balance,
December 31, 2020
    6,000,000
    
    $
    6,000
    
    1,000,000
    
    $
    1
    
    1,000,000
    
    $
    1
    
    45,670,063
    
    $
    45,670
    
    $
    (294,466
    )
    $
    (859,791
    )
    $
    (1,102,385
    )  The accompanying notes are an integral part of these
financial statements  - 6 -


STEMGEN, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS For the Six Months Ended December 31, 2021 and 2020 (Unaudited)  Six Months Ended
December 31,2021
    
    2020Cash flow from operating activities:Net loss
    
    $
    (217,416
    )
    $
    (201,514
    )Adjustments to reconcile net loss to net cash used in operating activities:Depreciation
    
    
    36,978
    
    
    32,682Change in fair value of derivative liability
    
    
    11,460
    
    
    11,460Loss on sale of property and equipment
    
    
    —
    
    
    25,500Change in accrued interest payable
    
    
    70,400
    
    
    70,400Change in contract assets
    
    
    —
    
    
    18,800Change in deferred revenue
    
    
    —
    
    
    (24,000
    )Change in accounts payable and accrued liabilities
    
    
    (7,500
    )
    
    (26,549
    )Net cash used in operating activities
    
    
    (106,078
    )
    
    (93,221
    )Cash flows from investing activities:Proceeds from sale of car
    
    
    100,000
    
    
    22,500Net cash provided by financing activities
    
    
    100,000
    
    
    22,500Cash flows from financing activities:Issuance of Common Stock
    
    
    1,000
    
    
    —Proceeds from advances from shareholder
    
    
    3,750
    
    
    74,803Net cash provided by financing activities
    
    
    4,750
    
    
    74,803Net change in cash
    
    
    (1,328
    )
    
    4,082Cash and equivalents, beginning of period
    
    
    1,343
    
    
    236Cash and equivalents, end of period
    
    $
    15
    
    $
    4,318Non-cash investing and financing activities:Common stock issued for vehicles
    
    $
    —
    
    $
    192,700  The accompanying notes are an integral part of these
financial statements  - 7 -   STEMGEN, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2021

(Unaudited)



NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES



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



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



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



Principles of Consolidation –The
consolidated financial statements include the accounts of StemGen, and its wholly owned subsidiaries. All significant inter-company transactions
and balances have been eliminated.



Interim Financial Statements –The
accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted
in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Regulation
S-X. Accordingly, the consolidated financial statements do not include all of the information and footnotes required by GAAP for complete
financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included and
such adjustments are of a normal recurring nature. These unaudited consolidated financial statements should be read in conjunction with
the consolidated financial statements for the fiscal year ended June 30, 2021 and notes thereto and other pertinent information contained
in our Form 10-K filed with the Securities and Exchange Commission (the “SEC”).



The results of operations for the six months ended
December 31, 2021 are not necessarily indicative of the results to be expected for the full fiscal year ending June 30, 2022.



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



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



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




- 8 -


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



Earnings (Loss) per Common Share –The
Company computes basic and diluted earnings per common share amounts in accordance with ASC Topic 260, Earnings per Share.
The basic earnings (loss) per common share are calculated by dividing the Company’s net income available to common shareholders
by the weighted average number of common shares outstanding during the year. The diluted earnings (loss) per common share are calculated
by dividing the Company’s net income (loss) available to common shareholders by the diluted weighted average number of shares outstanding
during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted as of the first
of the year for any potentially dilutive debt or equity. There are no dilutive shares outstanding for any periods reported.



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



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



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



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



Level 1 -
    Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.Level 2 -
    Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.Level 3 -
    Inputs that are both significant to the fair value measurement and unobservable.

Fair value estimates discussed herein are based upon
certain market assumptions and pertinent information available to management as of December 31, 2021 and June 30, 2021. The respective
carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these
instruments. These financial instruments include accounts payable, and accrued expenses. The fair value of the Company’s notes payable
is estimated based on current rates that would be available for debt of similar terms that is not significantly different from its stated
value.




- 9 -


COVID-19 –Since March 31, 2020
and through the date of this report, the entire global economy has been substantially impacted by the COVID-19 pandemic which began in
China and has spread to the United States and most other parts of the world. The impacts on the Company’s business from the COVID-19
pandemic include the following factors:



•
    A negative impact due to the contraction in the sources of capital required to support our continued business strategic efforts.•
    A negative impact due to rising bottleneck in the supply chain of goods and services needed to pursue our business strategic effort.•
    A negative impact on our human capital resources needed in our business.

NOTE 2 – GOING CONCERN



The accompanying unaudited consolidated financial
statements have been prepared assuming that the Company will continue as a going concern. For the six months ended December 31, 2021,
the Company had a net loss of $217,416. As of December 31, 2021, the Company had negative working capital of $1,813,752. Management does
not anticipate having positive cash flow from operations in the near future.



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



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



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



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



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



NOTE 3 – PROPERTY AND EQUIPMENT



During the Six months ended December 31, 2021, the
Company sold a vehicle for $100,000 cash. There was no gain or loss resulting from the vehicle sale. $50,000 of the sales proceeds were
used to pay Dawson Racing, a related party, for marketing and brand awareness.



NOTE 4 – COMMITMENTS



From time to time, we may be involved in litigation
in the ordinary course of business. To our knowledge, there is no action, suit, proceeding, inquiry or investigation before or by any
court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of our executive officers or
any of our subsidiaries, threatened against or affecting our Company, our common stock, any of our subsidiaries or any of our subsidiaries’
officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.




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NOTE 5 – EQUITY



During the six months ended December 31, 2021, the
Company issued 240,875 shares of common stock for the purchase of two race cars. The stock was valued at $192,700 based on the market
value of the stock on the date of the transaction.



During the six months ended December 31, 2021, the
Company sold 1,000 shares of common stock for $1,000 cash.



NOTE 6 – CONVERTIBLE NOTES PAYABLE



Convertible notes payable consisted of the following
at December 31, 2021:



Convertible note issued March 31, 2015, maturing March 31, 2017, bearing interest at 10% per year, until maturity, then 25%. Convertible into common stock at a rate of $0.05 per share.
    
    $
    36,340Convertible note in the original principal amount of $85,465, issued June 30, 2015 and maturing June 30, 2017, bearing interest at 10% per year until maturity and 25% thereafter, and convertible into common stock at a rate of $0.05 per share.
    
    
    85,465Convertible note in the original principal amount of $277,208, issued December 31, 2015 and maturing December 31, 2018, bearing interest at 10% per year until maturity and 25% thereafter, and convertible into common stock at a rate of $0.05 per share
    
    
    277,208Convertible note in the original principal amount of $103,072, issued December 31, 2015 and maturing December 31, 2018, bearing simple interest at 10% per year until maturity and 25% thereafter, and convertible into common stock at a rate of $0.40 per share.
    
    
    103,072Convertible note in the original principal amount of $61,118, issued March 31, 2016 and maturing March 31, 2019, bearing simple interest at 10% per year until maturity and 25% thereafter, and convertible into common stock at a rate of a 60% discount to the volume weighted average price for the last five trading days prior to conversion.
    
    
    61,118Total convertible notes
    
    $
    563,203

Principal along with accrued interest are payable
on the maturity date. The notes are convertible into common stock at the option of the holder. The holder of the notes cannot convert
the notes into shares of common stock if that conversion would result in the holder owning more than 4.9% of the outstanding stock of
the Company. The notes are unsecured and are in default.



NOTE 7 – DERIVATIVE LIABILITY



The conversion feature of certain convertible notes
payable was accounted for as a derivative liability. The derivative liability at December 31, 2021, was calculated using the Black Scholes
method over the expected terms of the convertible notes, with a risk-free rate of .06% and volatility of 200%.



During the six months ended December 31, 2021, the
Company recognized a loss of $11,460 for the change in fair value of derivative.



NOTE 8 – RELATED PARTY



The Company has been provided warehouse, office space
and other organizational expenses by its chief executive officer, Simon Dawson, for which $23,260 and $2,000 was paid during the Six-month
periods ended December 31, 2021 and 2020, respectively. As of June 30, 2021, the Company had a payable of $12,000 to Dawson Racing related
to these expenses. During the Six-month period ended December 31, 2021, $50,000 was paid to Dawson Racing, a related party, for marketing
and brand awareness.



During the Six months ended December 31, 2021, the
Company received an advance of $3,750 from a shareholder. The advance bears no interest and has no repayment terms. As of December 31,
2021 and June 30, 2021, the Company has $252,820 and $249,070, respectively, in advances from a shareholder. The advances bear no interest
and have no repayment terms.




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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OVERVIEW



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



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



Critical Accounting Policies



We prepare our consolidated financial statements in
conformity with GAAP, which requires management to make certain estimates and apply judgments. We base our estimates and judgments on
historical experience, current trends, and other factors that management believes to be important at the time the consolidated financial
statements are prepared. On a regular basis, we review our accounting policies and how they are applied and disclosed in our consolidated
financial statements.



While we believe that the historical experience, current
trends and other factors considered support the preparation of our consolidated financial statements in conformity with GAAP, actual results
could differ from our estimates and such differences could be material.



For a full description of our critical accounting
policies, please refer to Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”
in our Annual Report for the year ended June 30, 2021 on Form 10-K.



Results of Operations



Six months ended December 31, 2021 and 2020



Revenue



We recognized $20,000 in revenue for the six months
ended December 31, 2021 compared to revenue of $39,000 for the six months ended December 31, 2020.



Cost of Revenue



We incurred cost of revenue of $12,879 for the six
months ended December 31, 2021 and $30,326 for the six months ended December 31, 2020.



Depreciation



We incurred depreciation expense of $36,978 and $32,682for
the six months ended December 31, 2021 and 2020, respectively. The increase in depreciation was related to the acquisition of the race
cars in the prior year.



General and Administrative Expenses



We recognized general and administrative expenses
in the amount of $76,964 for the Six months ended December 31, 2021 compared to $31,232 for the comparable period of 2020, related to
higher professional and marketing expenses.




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Interest Expense



We incurred interest expense of $70,400 and $70,400
for the six months ended December 31, 2021 and 2020, respectively, related to statutory interest on convertible notes payable.



Loss on fair value of derivative



We recognized a loss on fair value of derivative of
$11,460 for the six months ended December 31, 2021 compared to a loss of $11,460 during the comparable period of 2020 based on the valuation
of the derivatives.



Net Loss



We incurred a net loss $217,416 for the six months
ended December 31, 2021 compared to a loss of $201,514 for the comparable period of 2020 related to the items discussed above.



Three months ended December 31, 2021 and 2020



Revenue



We recognized revenue of $20,000 for the three months
ended December 31, 2021 compared to revenue of $15,000 during the comparable period of 2020. We expect our revenue to be intermittent
in the near term.



Cost of Revenue



We incurred cost of revenue of $12,841 for the three
months ended December 31, 2021 related to the revenue generated in the period.



Depreciation



We incurred depreciation expense of $18,845 for the
three months ended December 31, 2021 and 2020.



General and Administrative Expenses



We recognized general and administrative expenses
in the amount of $28,773 for the three months ended December 31, 2021 compared to $38,914 for the comparable period of 2020, related to
higher equipment, professional and marketing expenses.



Interest Expense



We incurred interest expense of $35,200 for both the
three months ended December 31, 2021 and 2020, primarily related to statutory interest on convertible notes payable.



Loss on sale of property and equipment



We recognized a loss on sale of property and equipment
of $25,500 for the three months ended December 31, 2020 related to the sale of one race car.



Loss on fair value of derivative



We recognized a loss on fair value of derivative of
$5,730 for the three months ended December 31, 2021 compared to a loss of $5,730 during the comparable period of 2020 based on the valuation
of the derivatives.



Net Loss



We incurred a net loss $81,389 for the three months
ended December 31, 2021 compared to a loss of $114,840 for the comparable period of 2020 related to the items discussed above.




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Liquidity and Capital Resources



At December 31, 2021, we had cash on hand of $15 and
negative working capital of $1,813,752. We do not expect to achieve positive cash flow from operating activities in the near future. We
will require additional cash in order to implement our business plan. There is no guarantee that we will be able to obtain funds when
we need them or that funds will be available on terms that are acceptable to the Company.



Additional Financing



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



Off Balance Sheet Arrangements



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



Item 3. Quantitative and Qualitative Disclosures
about Market Risk



Not applicable to a smaller reporting company.



Item 4. Controls and Procedures Management’s
Report on Internal Control over Financial Reporting



We carried out an evaluation, under the supervision
and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness
of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15€ and 15d-15(e)) as of December 31, 2021. Based
upon that evaluation, our principal executive officer and principal financial officer concluded that, as of December 31, 2021, our disclosure
controls and procedures were not effective to ensure that information required to be disclosed in reports filed by us under the Securities
Exchange Act of 1934 is recorded, processed, summarized and reported within the required time periods and is accumulated and communicated
to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions
regarding required disclosure.



1.
    As of December 31, 2021, we did not maintain effective controls over the control environment. Specifically, we have not developed and effectively communicated to our employees our accounting policies and procedures. This has resulted in inconsistent practices. Further, the Board of Directors does not currently have any independent members and no director qualifies as an audit committee financial expert as defined in Item 407(d)(5)(ii) of Regulation S-K. Since these entity level programs have a pervasive effect across the organization, management has determined that these circumstances constitute a material weakness.2.
    As of December 31, 2021, we did not maintain effective controls over financial statement disclosure. Specifically, controls were not designed and in place to ensure that all disclosures required were originally addressed in our financial statements. Accordingly, management has determined that this control deficiency constitutes a material weakness.

Our management, including our principal executive
officer and principal financial officer, who are the same person, does not expect that our disclosure controls and procedures or our internal
controls will prevent all error or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not
absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that
there are resource constraints and the benefits of controls must be considered relative to their costs. Due to the inherent limitations
in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any,
have been detected.



Change in Internal Controls Over Financial Reporting



There was no change in our internal controls over
financial reporting that occurred during the period covered by this report, which has materially affected, or is reasonably likely to
materially affect, our internal controls over financial reporting.



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PART II — OTHER INFORMATION



ITEM 1. LEGAL PROCEEDINGS



We know of no material, active or pending legal proceedings
against us, nor are we involved as a plaintiff in any material proceedings or pending litigation. There are no proceedings in which any
of our directors, officers or affiliates, or any registered beneficial shareholder are an adverse party or has a material interest adverse
to us.



ITEM 1A. RISK FACTORS



Not applicable to a smaller reporting company.



ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES
AND USE OF PROCEEDS



None.



ITEM 3. DEFAULTS UPON SENIOR SECURITIES



The Company has not defaulted upon senior securities.



ITEM 4. MINE SAFETY DISCLOSURES



Not applicable to the Company.



ITEM 5. OTHER INFORMATION



None.



ITEM 6. EXHIBITS



3.1
    Restated Certificate of Incorporation of StemGen, Inc. (1)3.2
    Bylaws of StemGen, Inc. (1)31.1
    Rule 13(a)-14(a)/15(d)-14(a) Certification of principal executive officer and principal financial and accounting officer (2)32.1
    Section 1350 Certification of principal executive officer and principal financial accounting officer (2)101
    XBRL Interactive Data files (3),(4)__________

(1)
    Incorporated by reference to the Company’s Form S-1 filed on March 17, 2015.(2)
    Filed or furnished herewith.(3)
    To be submitted by amendment.(4)
    In accordance with Regulation S-T, the Interactive Data Files in Exhibit 101 to the Quarterly Report on Form 10-Q shall be deemed “furnished” and not “filed.”


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SIGNATURES



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



StemGen, Inc.Date: February 22, 2022
    By:
    /s/ Simon DawsonSimon DawsonCEO and Chairman of the Board

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