ITEM
1. FINANCIAL STATEMENTS
LZG
INTERNATIONAL, INC.
For
the Six Months Ended
November
30, 2020
(Unaudited)
LZG
International, Inc.
Condensed
Balance Sheets
(Unaudited)
|
|
November 30,
2020
|
|
May 31,
2020
|
ASSETS
|
|
|
|
|
|
|
|
|
CURRENT ASSETS
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
1,685
|
|
|
$
|
1,834
|
|
Total Current Assets
|
|
|
1,685
|
|
|
|
1,834
|
|
TOTAL ASSETS
|
|
$
|
1,685
|
|
|
$
|
1,834
|
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES
|
|
|
|
|
|
|
|
|
Accounts Payable – related party
|
|
$
|
9,100
|
|
|
$
|
6,100
|
|
Note Payable – related party
|
|
|
113,200
|
|
|
|
113,200
|
|
Notes Payable
|
|
|
64,100
|
|
|
|
59,100
|
|
Accrued Interest – related party
|
|
|
20,217
|
|
|
|
15,689
|
|
Accrued Interest
|
|
|
27,443
|
|
|
|
24,941
|
|
Total Current Liabilities
|
|
|
234,060
|
|
|
|
219,030
|
|
|
|
|
|
|
|
|
|
|
LONG-TERM LIABILITIES
|
|
|
|
|
|
|
|
|
Notes Payable – related party
|
|
|
23,500
|
|
|
|
23,500
|
|
Accrued Interest – related party
|
|
|
20,277
|
|
|
|
19,337
|
|
Total Long-term Liabilities
|
|
|
43,777
|
|
|
|
42,837
|
|
TOTAL LIABILITIES
|
|
$
|
277,837
|
|
|
$
|
261,867
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS' DEFICIT
|
|
|
|
|
|
|
|
|
Preferred Stock, $.001 par value, 20,000,000 shares authorized, none issued and outstanding
|
|
$
|
—
|
|
|
$
|
—
|
|
Common Stock, $.001 par value, 100,000,000 shares authorized, 250,556 shares issued and outstanding
|
|
|
251
|
|
|
|
251
|
|
Additional Paid-in Capital
|
|
|
3,063,134
|
|
|
|
3,063,134
|
|
Accumulated Deficit
|
|
|
(3,339,537
|
)
|
|
|
(3,323,418
|
)
|
Total Stockholders' Deficit
|
|
|
(276,152
|
)
|
|
|
(260,033
|
)
|
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT
|
|
$
|
1,685
|
|
|
$
|
1,834
|
|
The
accompanying notes are an integral part of these unaudited condensed financial statements.
LZG
International, Inc.
Condensed
Statements of Operations
(Unaudited)
|
|
THREE
MONTHS ENDED
NOV 30
2020
|
|
THREE MONTHS ENDED
NOV 30
2019
|
|
SIX MONTHS ENDED
NOV 30
2020
|
|
SIX MONTHS ENDED
NOV 30
2019
|
REVENUES
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative
|
|
|
2,825
|
|
|
|
2,725
|
|
|
|
8,150
|
|
|
|
7,550
|
|
TOTAL EXPENSES
|
|
|
2,825
|
|
|
|
2,725
|
|
|
|
8,150
|
|
|
|
7,550
|
|
Net Operating Loss Before Other Expense
|
|
|
(2,825
|
)
|
|
|
(2,725
|
)
|
|
|
(8,150
|
)
|
|
|
(7,550
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER EXPENSE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
(1,282
|
)
|
|
|
(1,182
|
)
|
|
|
(2,501
|
)
|
|
|
(2,364
|
)
|
Interest expense – related party
|
|
|
(2,734
|
)
|
|
|
(2,484
|
)
|
|
|
(5,468
|
)
|
|
|
(4,930
|
)
|
TOTAL OTHER EXPENSE
|
|
|
(4,016
|
)
|
|
|
(3,666
|
)
|
|
|
(7,969
|
)
|
|
|
(7,294
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOSS BEFORE INCOME TAXES
|
|
|
(6,841
|
)
|
|
|
(6,391
|
)
|
|
|
(16,119
|
)
|
|
|
(14,844
|
)
|
INCOME TAXES
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
NET LOSS
|
|
$
|
(6,841
|
)
|
|
$
|
(6,391
|
)
|
|
$
|
(16,119
|
)
|
|
$
|
(14,844
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss Per Share
|
|
$
|
(0.03
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
(0.06
|
)
|
|
$
|
0.06
|
)
|
Weighted Average Shares Outstanding
|
|
|
250,556
|
|
|
|
250,556
|
|
|
|
250,556
|
|
|
|
250,556
|
|
The
accompanying notes are an integral part of these unaudited condensed financial statements.
LZG
International, Inc.
Condensed
Statement of Stockholders’ Deficit
For
the three and six months ended November 30, 2019 and November 30, 2020
(Unaudited)
|
|
Common Stock
|
|
|
|
|
|
|
|
|
Shares
|
|
Amount
|
|
Additional Paid in Capital
|
|
Accumulated Deficit
|
|
Total
|
Balance – May 31, 2019
|
|
|
250,556
|
|
|
$
|
251
|
|
|
$
|
3,063,134
|
|
|
$
|
(3,295,647
|
)
|
|
$
|
(232,262
|
)
|
Net (loss) for the quarter ended August 31, 2019
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(8,453
|
)
|
|
|
(8,453
|
)
|
Balance – August 31, 2019
|
|
|
250,556
|
|
|
$
|
251
|
|
|
$
|
3,063,134
|
|
|
$
|
(3,304,100
|
)
|
|
$
|
(240,715
|
)
|
Net (loss) for the quarter ended November 30, 2019
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(6,391
|
)
|
|
|
(6,391
|
)
|
Balance – November 30, 2019
|
|
|
250,556
|
|
|
$
|
251
|
|
|
$
|
3,063,134
|
|
|
$
|
(3,310,491
|
)
|
|
$
|
(247,106
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance – May 31, 2020
|
|
|
250,556
|
|
|
$
|
251
|
|
|
$
|
3,063,134
|
|
|
$
|
(3,323,418
|
)
|
|
$
|
(260,033
|
)
|
Net (loss) for the quarter ended August 31, 2020
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(9,278
|
)
|
|
|
(9,278
|
)
|
Balance – August 31, 2020
|
|
|
250,556
|
|
|
$
|
251
|
|
|
$
|
3,063,134
|
|
|
$
|
(3,332,696
|
)
|
|
$
|
(269,311
|
)
|
Net (loss) for the quarter ended November 30, 2020
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(6,841
|
)
|
|
|
(6,841
|
)
|
Balance – November 30, 2020
|
|
|
250,556
|
|
|
$
|
251
|
|
|
$
|
3,063,134
|
|
|
$
|
(3,339,537
|
)
|
|
$
|
(276,152
|
)
|
The
accompanying notes are an integral part of these unaudited condensed financial statements.
LZG
International, Inc.
Condensed
Statements of Cash Flows
(Unaudited)
|
|
SIX MONTHS ENDED
NOV 30, 2020
|
|
SIX MONTHS ENDED
NOV 30, 2019
|
Cash Flows from Operating Activities
|
|
|
|
|
|
|
|
|
Net Loss
|
|
$
|
(16,119
|
)
|
|
$
|
(14,844
|
)
|
Adjustment to reconcile net (loss) to cash provided (used) by operating activities:
|
|
|
|
|
|
|
|
|
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable – related party
|
|
|
3,000
|
|
|
|
3,000
|
|
Accounts payable
|
|
|
—
|
|
|
|
1,225
|
|
Accrued interest
|
|
|
2,502
|
|
|
|
2,364
|
|
Accrued interest – related party
|
|
|
5,468
|
|
|
|
4,930
|
|
Net Cash Provided (Used) by Operating Activities
|
|
|
(5,149
|
)
|
|
|
(3,325
|
)
|
|
|
|
|
|
|
|
|
|
Cash Flows from Investing Activities
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Financing Activities:
|
|
|
|
|
|
|
|
|
Proceeds from advances and notes payable
|
|
|
5,000
|
|
|
|
3,100
|
|
Net Cash Provided by Financing Activities
|
|
|
5,000
|
|
|
|
3,100
|
|
|
|
|
|
|
|
|
|
|
Increase (Decrease) in Cash
|
|
|
(149
|
)
|
|
|
(225
|
)
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents, Beginning of Period
|
|
|
1,834
|
|
|
|
434
|
|
Cash and Cash Equivalents, End of Period
|
|
$
|
1,685
|
|
|
$
|
209
|
|
|
|
|
|
|
|
|
|
|
Supplemental Cash Flow Information:
|
|
|
|
|
|
|
|
|
Cash Paid For:
|
|
|
|
|
|
|
|
|
Interest
|
|
$
|
—
|
|
|
$
|
—
|
|
Income Taxes
|
|
$
|
—
|
|
|
$
|
—
|
|
The
accompanying notes are an integral part of these unaudited condensed financial statements.
LZG
International, Inc.
Notes
to the Condensed Financial Statements
November
30, 2020
(Unaudited)
NOTE
1 - BASIS OF FINANCIAL STATEMENT PRESENTATION
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, 2020 Annual Report on Form 10-K. Operating results for the six months ended
November 30, 2020 are not necessarily indicative of the results to be expected for year ending May 31, 2021.
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 negative cash flows from operations, and has no 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. 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 - RELATED PARTY TRANSACTIONS
The
financial statements include related party transactions, which as of November 30, 2020, and May 31, 2020, 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
$940 and $940 for the six months ended November 30, 2020 and 2019, respectively, resulting in accrued interest of $20,277 and
$19,337 at November 30, 2020 and May 31, 2020, respectively.
During
the six months ended November 30, 2020 and 2019, a stockholder paid for administrative and professional services totaling $3,000
and $3,000, respectively, resulting in amounts payable to the stockholder of $9,100 and $6,100 as of November 30, 2020, and May
31, 2020, 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, resulting in a promissory note payable balance of $113,200 at November 30,
2020 and May 31, 2020. Interest expense was $4,528 and $3,990 for the six months ended November 30, 2020 and 2019, respectively,
resulting in accrued interest of $20,217 and $15,689 at November 30, 2020 and May 31, 2020, respectively.
NOTE
4 – LOANS PAYABLE
During
the six months ended November 30, 2020 and 2019 the Company borrowed $5,000 and $3,100, respectively, from a third party, resulting
in loans payable of $64,100 and $59,100 at November 30, 2020 and May 31, 2020, respectively. The loan is due on demand, is not
collateralized, and bears interest at 8% per annum. Interest expense was $2,502 and $2,364 for the six months ended November 30,
2020 and 2019, respectively, resulting in accrued interest of $27,443 and $24,941 at November 30, 2020 and May 31, 2020, respectively.
NOTE
5 – 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,” “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
We
have not recorded revenues from operations since inception and lack revenues 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 company and acquire or enter into a merger with such company. At this time management is unsure what effect the COVID-19
pandemic will have on our search for companies to acquire or merge with.
The
type of business opportunity we acquire or with which we merge will affect our profitability. We may consider a business which
needs to raise additional funds through a public offering, including one that 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 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 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 Resources
At
November 30, 2020, we had cash of $1,685 and total liabilities of $277,837 compared to cash of $1,834 and total liabilities of
$261,867 at May 31, 2020. We have not established an ongoing source of revenue sufficient to cover our operating costs. During
the six-month period ended November 30, 2020 (“2021 six-month period”) we relied upon a stockholder for administrative
and professional services.
These
conditions raise substantial doubt about our ability to continue as a going concern. We 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.
During
the next 12 months we anticipate incurring costs related to the filing of Exchange Act reports, and possibly investigating, analyzing
and consummating an acquisition. 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 record revenues during the six-month periods ended November 30, 2020 and 2019. General and administrative expenses represented
consulting, administrative, professional services and out-of-pocket costs. General and administrative expenses were $8,150 for
2021 six-month period compared to $7,550 for the six-month period ended November 30, 2019 (“2020 six-month period”).
General and administrative expenses were $2,825 for the quarter ended November 30, 2020 (“2021 second quarter”) compared
to $2,725 for the quarter ended November 30, 2019 (“2020 second quarter”).
Total
other expense increased to $7,969 for the 2021 six-month period compared to $7,294 for the 2020 six-month period as a result of
accrued interest on loans. Total other expense increased to $4,016 for the 2021 second quarter compared to $3,666 for the 2020
second quarter.
Our
net loss increased to $16,119 the 2021 six-month period compared to $14,844 for the 2020 six-month period and increased to $6,841
for the 2021 second quarter compared to $6,391 for the 2020 second quarter. Management expects net losses to continue until we
acquire or merge with a business opportunity.
Commitments
and Obligations
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. The original promissory note had a due date of
June 30, 2014; however, Mr. Popp agreed to extend the due date of this note and interest to June 30, 2022. The total interest
due at November 30, 2020 was $20,277 compared to $19,337 at May 31, 2020.
During
the 2021 six-month period, a stockholder paid for administrative and professional services totaling $3,000 resulting in amounts
payable to the stockholder of $9,100 and $6,100 as of November 30, 2020 and May 31, 2020, respectively.
During
the 2021 six-month period, we borrowed $5,000 from a third party for operating expenses. At November 30, 2020 we owed this third
party $64,100 with accrued interest of $27,443. These loans are payable upon demand, are not collateralized and bear interest
at 8% per annum.
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.
Emerging
Growth Company
We
qualify as an emerging growth 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 JOBS Act we are permitted to, and intend to, rely on exemptions from certain disclosure 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.