UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterlyperiodendedFebruary 28, 2022

For the quarterly period endedNovember 30, 2017

☐  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:000-53994

LZG INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)

Registrant’s telephone number, including area code:(801) 323-2395917-310-3978

2157 S. Lincoln Street, Suite 401, Salt Lake City, Utah 84106

(Former address)

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.

Yes ☒ ☑ No ☐

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

Yes ☒ ☑ No ☐ The registrant does not have a Web site.

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.

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

Act. ☐

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

Yes ☒  ☐ No ☐ ☑

The number of shares outstanding of the registrant’s common stock as of January 8, 2018April 14, 2022 was 250,556.10,250,556.

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

LZG INTERNATIONAL, INC.

For the Three and SixNine Months Ended

November 30, 2017February 28, 2022

(Unaudited)

LZG International, Inc.

Condensed Balance Sheets

(Unaudited)

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

LZG International, Inc.

Condensed Statements of Operations

(Unaudited)

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

LZG International, Inc.

Condensed Statements of Cash FlowsStockholders’ Equity (Deficit)

For the nine months ended February 28, 2022 and 2021

(Unaudited)

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

LZG International, Inc.

Condensed Statements of Cash Flows

(Unaudited) 

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

LZG International, Inc.

Notes to the Condensed Financial Statements

November 30, 2017February 28, 2022

(Unaudited)

NOTE 1 – BASIS OF FINANCIAL STATEMENT PRESENTATION AND ACCOUNTING POLICIES

The accompanying unaudited condensed financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted in accordance with such rules and regulations. The information furnished in the interim condensed financial statements includes normal recurring adjustments and reflects all adjustments, which, in the opinion of management, are necessary for a fair presentation of such financial statements. Although management believes the disclosures and information presented are adequate to make the information not misleading, it is suggested that these interim condensed financial statements be read in conjunction with the Company’s audited financial statements and notes thereto included in its May 31, 20172021 Annual Report on Form 10-K. As a result of acquiring the Fat Brain technology, the Company is launching business operations. Operating results for the sixnine months ended November 30, 2017February 28, 2022 are not necessarily indicative of the results to be expected for year ending May 31, 2018.2022.

Revenue Recognition– The Company's sources of revenue are from the sale of intellectual property licenses and technology, including services to configure, test and deploy FatBrain solutions on client servers, and providing training and support to a client’s staff. Revenues are reported net of returns.

In accordance with Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”), the Company recognizes revenue upon the transfer of promised technologies or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for promised technologies or services. The Company applies the following five-step revenue recognition model in accounting for its revenue arrangements:

The ASC 606 criteria the Company uses to recognize revenue comprise of the following:

1.  Contract with the customer – The Company acquired the contractual rights to the Angelina Agreement, dated May 10, 2021. This agreement comprises a subsisting, identifiable contract between Tempus Inc. (an unrelated entity) and the Company, reflecting that the parties have approved the agreement and are committed to fulfilling their obligations. Each party's rights are identifiable and the payment terms are quarterly subscriptions fees and transactions revenues.

2.  Performance obligations – The Company builds the software solution called Angelina FX which logs into a customer's general ledger, such as QuickBooks, and automatically determines the amount of savings a customer would enjoy if using the Angelina FX rate versus what they actually paid, as reflected in an FX Fair Value Report.

3.  Transaction price – The economic considerations are clearly spelled out in the Angelina Agreement

comprising estimated annual subscription revenue, plus a share of the transaction revenue earned from the application.

4.  Allocation of transaction price – The quarterly payment earned under the subscription obligation for using our service is $43,447.

5.  Revenue recognition – The revenue is recognized when the subscription obligation of providing, hosting and operating the software has been performed. The Company recognized revenue of $86,894 during the nine months ended February 28, 2022. Costs of revenue consist of amortization of the underlying software utilized in the Angelina Agreement. During the nine months ended February 28, 2022, the Company recognized software amortization of $16,416.

Basic and Diluted Loss Per Share– Basic loss per share is computed by dividing net loss by the weighted-average number of common shares outstanding during the period.  Diluted loss per share is computed by dividing net loss by the weighted-average number of common shares and dilutive potential common shares outstanding during the period. There are no potentially dilutive securities outstanding, so basic and diluted loss per share is the same.

Intangible Assets– The Company relies on guidance under ASC 350, Intangibles – Goodwill and Other, to account for intangible assets. Intangible assets are either amortized over their finite lives as determined by management or their contractual lives, or analyzed periodically for impairment if indefinite-lived. A periodic review is made of the assets for impairment.

Software Costs– The Company follows ASC 985-20, Costs of Computer Software to be Sold, Leased, or Marketed, whereby costs incurred during the period of planning and design, prior to the period determining technological feasibility, for all software developed to be sold to external users has been charged to operations in the period incurred as research and development costs.  Additionally, costs incurred after determination of readiness for market have been expensed as research and development. Purchased software that has reached technological feasibility and that has no alternative use, other than existing licenses or contracts for which it is being utilized, is capitalized at cost and amortized ratably over the term of the underlying contract.

NOTE 2 – GOING CONCERN

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has limited assets, has incurred losses since inception, has negativelimited cash flows from operations, and has noonly recently launched revenue-generating activities. Its activities have been limited for the past several years and it is dependent upon financing to continue operations. These factors raise substantial doubt about the ability of the Company to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. It is management’s plan to acquire or merge with other operating companies.further develop and market our technology.

In addition, the COVID-19 pandemic could have an impact on our ability to obtain financing to fund our operations.  The Company is unable to predict the ultimate impact at this time.

NOTE 3 – NOTES PAYABLERELATED PARTY TRANSACTIONS

The financial statements include related party transactions, which as of February 28, 2022 and May 31, 2021, included loans from an officer of the Company totaling $23,500. The loans had an original due date of June 30, 2014, but principal and interest maturities have been extended to June 30, 2022. The loans are not collateralized, and bear interest at 8% per annum. Interest expense was $1,410 for the nine months ended February 28, 2022, resulting in accrued interest of $22,627 and $21,217 at February 28, 2022 and May 31, 2021, respectively.

During the sixnine months ended November 30, 2017,February 28, 2022, a stockholder paid for administrative and professional services totaling $4,500, resulting in amounts payable to the stockholder of $10,500 and $6,000 as of February 28, 2022 and May 31, 2021, respectively. On May 31, 2018 the stockholder converted $92,500 of its accounts payable to a promissory note, which bears interest at 8% per annum and is due on demand. Due to subsequent additional advances, the promissory note totaled $119,200 at February 28, 2022 and May 31, 2021. Interest expense was $7,152 for the nine months ended February 28, 2022, resulting in accrued interest of $31,897 and $24,745 at February 28, 2022 and May 31, 2021, respectively.

NOTE 4 – NOTES PAYABLE

During the nine months ended February 28, 2022 and 2021, the Company borrowed $2,500$38,500 and $5,000, respectively, from a third party. This loan isparty, resulting in notes payable of $108,300 and $69,800 at February 28, 2022 and May 31, 2021, respectively. The notes are due on demand, are not collateralized, and bearsbear interest at 8% per annum. Interest expense was $4,941 for the ratenine months ended February 28, 2022, resulting in accrued interest of 8%$34,989 and $30,048 at February 28, 2022 and May 31, 2021, respectively.

NOTE 5 – SUBSCRIPTION AGREEMENTS

Beginning on October 26, 2021, the Company entered into private subscription agreements with investors under the Securities Act. The subscription agreement provided that the issuance of the common shares was conditioned upon the Company increasing the number of authorized shares of common stock to at least 250,000,000, pursuant to Florida law. Any proceeds received for a subscription would be delivered to the Company and would be held in escrow with the Company’s attorney, without interest, until closing, which is the later of the Company’s first trade or the increase in authorized shares becomes effective. Upon closing, the proceeds currently held in escrow will become the property of the Company. As of February 28, 2022, closing has not occurred, and the Company has agreed to sell an aggregate of 22,990,000 shares to nine investors totaling $10,450,000, held in escrow.

NOTE 6 – INTANGIBLE ASSET ACQUISITION

On October 23, 2021, the Company executed an “IT Asset Contribution Agreement” with FatBrain, LLC, an unrelated entity, for certain intellectual properties, including patents pending, proprietary technology, licenses, software, development plans and contractual rights. The intellectual property is comprised of an AI Technology with many commercial applications, the first being “Angelina FX”. As consideration, the Company issued 10,000,000 shares of common stock to FatBrain, LLC’s material non-controlling member, Peter B. Ritz. The mutually-agreed upon asset fair market value of $348,000 was allocated 100% to the Angelina FX software due to the assignment of contractual rights to the Company of a licensing agreement previously entered into on May 7, 2021 between FatBrain and a non-related party, Tempus, Inc. This transaction resulted in a change in control of the Company, whereby Mr. Ritz is the owner of 97.6% of the Company’s issued and outstanding common stock.

The estimated term of the licensing agreement is 60 months from the agreement’s inception on May 7, 2021. During the period of October 23, 2021 (the date of the IT Asset Contribution Agreement) through February 28, 2022, the Company recorded $16,416 of software amortization expense as cost of sales. The remaining carrying value of the software of $331,584 at February 28, 2022 is being amortized ratably over the remainder of the license term as follows:

On February 25, 2022, LZG International entered into the Intellagents, LLC Asset Purchase Agreement. LZG agreed to purchase Intellagents’ assets for three million dollars ($3,000,000), subject to adjustments and the assumption of certain liabilities. At the Closing Date, LZG will pay two hundred thousand dollars ($200,000) in cash and will issue 2,800,000 shares of common stock to Intellagents. The shares will be valued at two million eight hundred thousand dollars ($2,800,000), $1.00 per share. The amount of shares may be adjusted if the LZG common stock is trading under $1.00 on the Closing Date. Post-closing adjustments may be used based upon a working capital statement to be provided by LZG based upon the current assets, less current liabilities, determined as of the Closing Date.

NOTE 47 – SUBSEQUENT EVENTS

The Company has evaluated subsequent events from the balance sheet date through the date the financial statements were issued and has determined that there are no such events that would have a material impact on the financial statements.

In this report references to “LZG International,” “LZG,” “the Company,” “we,” “us,” and “our” refer to LZG International, Inc.

FORWARD LOOKING STATEMENTS

The U.S. Securities and Exchange Commission (“SEC”) encourages reporting companies to disclose forward-looking information so that investors can better understand future prospects and make informed investment decisions. This report contains these types of statements. Words such as “may,” “intend,” “expect,” “believe,” “anticipate,” “estimate,” “project,” or “continue” or comparable terminology used in connection with any discussion of future operating results or financial performance identify forward-looking statements. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this report. All forward-looking statements reflect our present expectation of future events and are subject to a number of important factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements.

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

Executive Overview

As a result of LZG International, Inc.’s acquisition of the FatBrain technology pursuant to the IT Asset Contribution Agreement (“IT Contribution Agreement”), dated October 23, 2021, we currently hold intellectual property assets, including patents pending, patents in preparation, proprietary technology, development plans, and contractual rights (“IT Assets”). On April 4, 2022, the Company changed its corporate address to 54 West 40^th Street, Suite 1123, New York, New York 10018.

The FatBrain IT Assets include software that uses artificial intelligence to help companies automate enterprise decision cycles to learn, explain and intervene for better outcomes across all business interactions. The software continuously learns from historical transactions, incumbent models and in-house expert teams to deliver a unified framework binding structured and unstructured data in text, numerical, network/graph and video formats. The FatBrain software leverages modern advances in machine learning and cloud economics to enable sustained operational advantages of (i) simplicity with smaller, denser models using vector embeddings, (ii) auditability with explainable, trusted quantification and de-biasing using blockchain, (iii) quality work with noisy, sparse, imbalances or missing date using generative autoencoders, and (iv) technology using transfer and active learning. The Company has initiated the commercialization of the technology and we have spoken to several potential clients.

Our strength is in the uniqueness of our technology offering. Our success will come from navigating the various challenges that drive technology globally. As we initially see marketing success in these various product offerings, we will continue to refine and adjust our business model and operations until we achieve the profit margins that this technology and our product offering deserves.

The Company will market our products directly and through distribution with value added resellers and strategic partners. Direct marketing efforts include internet and email campaigns, tele-sales and virtual and in person follow ups. We haveanticipate having ten sales people able to work from anywhere. Distribution efforts include relationships with global and regional systems integrators (“SIs”), value added resellers (“VARs”), independent software vendors (“ISVs”), vertical software application developers and combinations of the above.

In November of 2021, the Company announced the launch of the FatBrain product Angelina AI Solution for Foreign Exchange (“Angelina FX”), part of our coached business wellness service (“BWS”) to tackle discriminatory pricing in the $6.6 trillion-dollar daily foreign exchange market. Previously, FatBrain LLC had entered into a licensing agreement for our software with a non-related party, Tempus, Inc., a District of Columbia corporation owned by Monex S.A.B. (“Angelina Agreement”). After LZG acquired ownership of Angelina FX and the contractual rights to the licensing agreement, LZG and Tempus are using the FatBrain AI automation software to grow and improve Tempus’ foreign exchange and global payments solutions based upon the prior licensing agreement. As a result, LZG earned $86,894 in AI subscription revenue for the Angelina Agreement for the nine-month period ended February 28, 2022.

Our product development moving forward includes new enhancements for self-service and quick reporting, as well as, simplified integration of Angelina FX into any affiliated website. Our agreement with Tempus includes integrating the Foreign Exchange Fair Value Report into 80-plus daily calls per day work-flow for each member of the Tempus customer account team. The marketing efforts include tuning messaging and developing new content for Tempus’ thousands of existing and prospective clients, comprising importers, exporters, SME’s and multinationals.

Intellagents Agreement

LZG International entered into the Intellagents, LLC Asset Purchase Agreement (“Asset Purchase Agreement”), dated February 25, 2022. Subject to satisfaction or waiver of each party’s conditions and obligations as outlined in the Asset Purchase Agreement, the parties will close this transaction at a future date (“Closing Date”). Management is currently taking the necessary steps to close the Asset Purchase Agreement.

Intellagents, LLC is engaged in the business of creating, orchestrating and selling software as a service, and software as a business, within the larger insurance ecosystem services market. Intellagents agreed to sell and assign substantially all of its assets, properties and rights to LZG, except for certain excluded assets and liabilities.

LZG agreed to purchase Intellagents’ assets for three million dollars ($3,000,000), subject to adjustments and the assumption of certain liabilities. At the Closing Date, LZG will pay two hundred thousand dollars ($200,000) in cash and will issue 2,800,000 shares of common stock to Intellagents. The shares will be valued at two million eight hundred thousand dollars ($2,800,000), $1.00 per share. The amount of shares may be adjusted if the LZG common stock is trading under $1.00 on the Closing Date. Currently, the Company’s shares are not recordedtrading. Post-closing adjustments may be used based upon a working capital statement to be provided by LZG based upon the current assets, less current liabilities, determined as of the Closing Date. Within sixty (60) days after the Closing Date, LZG shall prepare and deliver to Intellagents a statement setting forth its calculation of the working capital.

The Asset Purchase Agreement provides that Intellagents will assign certain contracts and IP agreements to LZG, including Intellagents Division employment agreements with its officers Eric Hall, CEO; Mark Stender, President; and Michael Cocca, CTO.

Material Changes in Financial Condition

Since we are in the initial phases of marketing the FatBrain technology, we may not record significant revenues from operations since inception and may lack revenuesfunding to cover our operating costs. These conditions raise substantial doubt about our ability to continue as a going concern. We are currently devoting our efforts to obtain capital from management, significant stockholders and/or third parties to cover minimal expenses; however, there is no assurance that additional funding will be available. Our ability to continue as a going concern during the long term is dependent upon our ability to find a suitable companyproduce and acquire or enter into a merger with such company.

The type of business opportunity with which we acquire or merge will affect our profitability for long term. We may consider a business which has recently commenced operations, is a developing company in need of additional funds for expansion into new products or markets, is seeking to develop a new product or service, or is an established business which may be experiencing financial or operating difficulties and is in need of additional capital. Inmarket the alternative, a business combination may involve the acquisition of, or merger with, a company which does not need substantial additional capital, but which desires to establish a public trading market for its shares, while avoiding, among other things, the time delays, significant expense, and loss of voting control which may occur through a public offering.

Our management has not had any preliminary contact or discussions with any representative of any other entity regarding a business combination with us. Any target business that is selected may be a financially unstable company or an entity in its early stages of development or growth, including entities without established records of sales or earnings. In that event, we will be subject to numerous risks inherent in the business and operations of financially unstable and early stage or potential emerging growth companies. In addition, we may effect a business combination with an entity in an industry characterized by a high level of risk, and, although our management will endeavor to evaluate the risks inherent in a particular target business, there can be no assurance that we will properly ascertain or assess all significant risks.

Our management anticipates that we will likely be able to effect only one business combination, due primarily to our limited financing and the dilution of interest for present and prospective stockholders, which is likely to occur as a result of our management’s plan to offer a controlling interest to a target business in order to achieve a tax-free reorganization. This lack of diversification should be considered a substantial risk in investing in us, because it will not permit us to offset potential losses from one venture against gains from another.

We anticipate that the selection of a business combination will be complex and extremely risky. Because of general economic conditions, rapid technological advances being made in some industries and shortages of available capital, our management believes that there are numerous firms seeking even the limited additional capital which we will have and/or the perceived benefits of becoming a publicly traded corporation. Such perceived benefits of becoming a publicly traded corporation include, among other things, facilitating or improving the terms on which additional equity financing may be obtained, providing liquidity for the principals of and investors in a business, creating a means for providing incentive stock options or similar benefits to key employees, and offering greater flexibility in structuring acquisitions, joint ventures and the like through the issuance of stock. Potentially available business combinations may occur in many different industries and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex.

Liquidity and Capital ResourcesFatBrain technology.

At November 30, 2017,February 28, 2022, we had cash of $89$90,584 and total liabilities of $196,295$357,403 compared to cash of $1,013$4,735 and total liabilities of $186,749$294,610 at May 31, 2017. We2021. Despite the increase in cash, we have not established an ongoing sourcesources of revenue sufficient to cover our operating costs.costs at this time. During the six monthnine-month period ended November 30, 2017February 28, 2022 (“2022 nine-month period”) we borrowed $2,500 from a third party to fund our operations and relied upon a stockholder for administrativerevenues, advances and professional services totaling $3,100. During the year ended May 31, 2017 we borrowed $6,500 from a third partynotes payable to fundcover our operations and relied upon a stockholder, for administrative and professional services totaling $6,400.operating expenses.

These conditions raise substantial doubt aboutFinalizing long-term, constant revenue generating technology contracts with our abilityexisting and other customers remains our greatest challenge because our on-going business is dependent on the types of revenues and cash flows generated by such contracts. Cash flow and cash requirement risks are closely tied to continue as a going concern. Weand are currently devoting our efforts to obtaining capital from management, significant stockholders and/or third parties to cover minimal operations; however, there is no assurance that additional funding will be available. Our ability to continue as a going concern during the long term is dependent upon our ability to find a suitable business opportunity and acquire or enter into a merger with such a company.

The type of business opportunity that we acquire or merge with will affect our profitability for the long term. We may consider a business which has recently commenced operations, is a developing company in need of additional funds for expansion into new products or markets, is seeking to develop a new product or service, or is an established business which may be experiencing financial or operating difficulties and is in need of additional capital. In the alternative, a business combination may involve the acquisition of, or merger with, a company which does not need substantial additional capital, but which desires to establish a public trading market for its securities, while avoiding, among other things, the time delays,attract significant expense, and loss of voting control which may occur through a public offering.long-term technology contracts

During the next 12 months we anticipate incurring costs related to theproducing and marketing our FatBrain technology and filing of Exchange Act reports, and possibly investigating, analyzing and consummating an acquisition.reports. We believe we will be able to meet these costs through funds provided by management, significant stockholders and third parties.

Results of Operations

We did not recordparties until our revenues in 2017 or 2016. General and administrative expenses represented consulting, administrative, professional services and out of pocket costs. General and administrative expenses increased to $7,649 for the six month period ended November 30, 2017 (“2018 six month period”) compared to $7,599 for the six month period ended November 30, 2016 (“2017 six month period”). General and administrative expenses decreased to $2,625 for the three month period ended November 30, 2017 (“2018 second quarter”) compared to $2,925 for the three month period ended November 30, 2016 (“2017 second quarter”).

Total other expense increased to $2,821 for the 2018 six month period compared to $2,642 for the 2017 six month period and increased to $1,422 for the 2018 second quarter compared to $1,352 for the 2017 second quarter. The increase is a result of accrued interest on loans.increase.

Material Changes in Results of Operations

Net loss increasedDuring the 2022 nine-month period, we recorded revenues of $86,894 and relied on related party advances of $4,500 and notes payable of $38,500 to $10,470fund our operations. During the nine-months ended February 28, 2021 (“2021 nine-month period), we had no revenues and relied on advances or loans to fund our operations. We recorded net income of $6,640 for the 2018 six month2022 nine-month period compared to $10,241a net loss of $22,960 for the 2017 six month2021 nine-month period and decreasedended.

We recorded net income of $13,767 for our third quarter ended February 28, 2022 (“2022 third quarter”) compared to $4,047a net loss of $6,841 for the 2018 secondthird quarter compared to $4,277 for the 2017 second quarter. ended February 28, 2021 (“2021 third quarter”).

Management expects net lossesincome to continue untilas we acquireincrease revenues from the marketing of the FatBrain technology.

Commitments or merge withObligations

During the 2022 nine-month period, a business opportunity.stockholder paid for administrative and professional services totaling $4,500, resulting in amounts payable to the stockholder of $10,500 and $6,000 as of February 28, 2022 and May 31, 2021, respectively. On May 31, 2018 the stockholder converted $92,500 of its accounts payable to a promissory note, which bears interest at 8% per annum and is due on demand. Due to subsequent additional advances, the promissory note totaled $119,200 at February 28, 2022 and May 31, 2021. Interest expense was $7,152 for the nine months ended February 28, 2022, resulting in accrued interest of $31,897 and $24,745 at February 28, 2022 and May 31, 2021, respectively.

CommitmentsDuring the 2022 nine-month period the Company borrowed $38,500 from a third party, resulting in notes payable of $108,300 and Obligations$69,800 at February 28, 2022 and May 31, 2021, respectively. The notes are due on demand, are not collateralized, and bear interest at 8% per annum. Interest expense was $4,941 for the nine months ended February 28, 2022, resulting in accrued interest of $34,989 and $30,048 at February 28, 2022 and May 31, 2021, respectively.

We have relied upon loans and advances to fund our operational expenses. During the fiscal years ended May 31, 2009 and 2010, our Director and President, Greg L. Popp, loaned an aggregate of $23,500 to the Company. On April 20, 2010, these loans were combined into one promissory note which carries interest at 8%, and is not collateralized and matured incollateralized. The original promissory note had a due date of June 2012. In June 2016,30, 2014; however, Mr. Popp extendedagreed to extend the due date of the promissorythis note from June 30, 2016and interest to June 30, 2018. These loans2022. Interest expense was $1,410 for the nine months ended February 28, 2022, resulting in accrued interest of $940 for the six month period ended November 30, 2017.$22,627 and $21,217 at February 28, 2022 and May 31, 2021, respectively.

During the 2018 six month periodAt February 28, 2022, we borrowed $2,500 from a third party for operating expenses. At November 30, 2017 we owe the third party $47,600 and accrued interest on this loan of $13,833. These loans are payable upon demand, are not collateralized and bear interest at 8% per annum.owed venders $6,390.

During the 2018 six month period First Equity Holdings, Corp. (“First Equity”), a 20% stockholder, provided consulting, administrative and professional services and provided to, or paid on behalf of theEmerging Growth Company out-of-pocket costs. First Equity billed the Company $3,100 for its services and advances for the 2018 six month period. As of November 30, 2017 First Equity’s account payable totals $95,600.

Off-Balance Sheet Arrangements

We have not entered into 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 and would be considered material to investors.

Critical Accounting Policies

We qualify as an “emergingemerging growth company”company as that term is used in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). A company qualifies as an emerging growth company if it has total annual gross revenues of less than $1.07 billion during its most recently completed fiscal year and, as of December 8, 2011, had not sold common equity securities under a registration statement. Under the recently enacted JOBS Act. As a result,Act we are permitted to, and intend to, rely on exemptions from certain disclosure requirements. For so long as we are an emerging growth company, among other things, we will not be required to:requirements

In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.

We will remain an “emerging growth company” for up to five years, or until the earliest of (i) the last day of the first fiscal year in which our total annual gross revenues exceed $1 billion; (ii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, which would occur if the market value of our ordinary shares that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter or (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three-year period.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable to smaller reporting companies.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) or 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in our filings under the Exchange Act is recorded, processed, summarized and reported within the periods specified in the rules and forms of the SEC. This information is accumulated to allow our management to make timely decisions regarding required disclosure. Our President, who serves as our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures asAs of the end of the period covered by this quarterly report, we carried out an evaluation of the effectiveness of our disclosure controls and he determinedprocedures under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer. Our controls and procedures are designed to allow information required to be disclosed in our reports to be recorded, processed, summarized and reported within the specified periods, and accumulated and communicated to management to allow for timely decisions regarding required disclosure of material information. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives. Based upon the evaluation, our Chief Executive Officer concluded that our disclosure controls and procedures were ineffective duenot effective at that reasonable assurance level as of the end of the nine-month period ended February 28, 2022.

The material weaknesses relate to a control deficiency. During the period we did not have additional personnel to allow segregationlimited number of persons responsible for the recording and reporting of financial information, the lack of separation of financial reporting duties, to ensureand the completeness or accuracylimited size of our information. Duemanagement team in general. We are in the process of evaluating methods of improving our internal control over financial reporting, including the possible addition of financial reporting staff and the increased separation of financial reporting responsibility, and intend to the sizeimplement such steps as are necessary and operations of the Company we are unablepossible to remediate this deficiency until we acquire or merge with another company.correct these material weaknesses.

Changes to Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (asas defined in Rule 13a-15(f) under the Exchange Act).Act. Management conducted an evaluation of our internal control over financial reporting and determined that there were no changes made in our internal control over financial reporting during the quarter ended November 30, 2017February 28, 2022 that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

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

ITEM 1A.  RISK FACTORS

AN INVESTMENT IN THE COMPANY IS HIGHLY SPECULATIVE IN NATURE AND INVOLVES A HIGH DEGREE OF RISK.smaller reporting company is not required to provide the information required by this Item.

We have extremely limited assets and no source of revenue.

We have limited assets and have had no revenues since inception. We will not receive revenues until we complete an acquisition, reorganization or merger. We can provide no assurance that any selected or acquired business will produce any material revenues for the Company or our stockholders, or that any such business will operate on a profitable basis.ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

We will, in all likelihood, sustain operating expenses without corresponding revenues, at least until we complete a business combination with a private company. This may result in our incurring a net operating loss that will increase unless we consummate a business combination with a profitable business. We cannot assure you that we can identify a suitable business opportunity and consummate a business combination, or that any such business will be profitable at the time of its acquisition by the Company, or ever become profitable.None.

There is currently no trading market for our common stock, and liquidity of shares of our common stock is limited.ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Shares of our common stock are not registered under the securities laws of any state or other jurisdiction and are not quoted on any OTC market. Accordingly, there is no public trading market for the common stock. Further, no public trading market is expected to develop in the short term. Therefore, outstanding shares of our common stock cannot be offered, sold, pledged or otherwise transferred unless subsequently registered pursuant to, or exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”) and any other applicable federal or state securities laws or regulations. Stockholders may rely on the exemption from registration provided by Rule 144 of the Securities Act (“Rule 144”), subject to certain restrictions; namely, common stock may not be sold until one year after:

Compliance with the criteria for securing exemptions under federal securities laws and the securities laws of the various states is extremely complex, especially in respect of those exemptions affording flexibility and the elimination of trading restrictions for the securities received in exempt transactions and subsequently disposed of without registration under the Securities Act or state securities laws.None.

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

Part I Exhibits

Part II Exhibits

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.

LZG INTERNATIONAL, INC.