ITEM
1. FINANCIAL STATEMENTS
LZG
INTERNATIONAL, INC.
For
the Nine Months Ended
February
28, 2021
(Unaudited)
LZG
International, Inc.
Condensed
Balance Sheets
(Unaudited)
|
|
February 28,
2021
|
|
May 31,
2020
|
ASSETS
|
|
|
|
|
|
|
|
|
CURRENT ASSETS
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
360
|
|
|
$
|
1,834
|
|
Total Current Assets
|
|
|
360
|
|
|
|
1,834
|
|
TOTAL ASSETS
|
|
$
|
360
|
|
|
$
|
1,834
|
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES
|
|
|
|
|
|
|
|
|
Accounts Payable – related party
|
|
$
|
10,600
|
|
|
$
|
6,100
|
|
Note Payable – related party
|
|
|
113,200
|
|
|
|
113,200
|
|
Notes Payable
|
|
|
64,100
|
|
|
|
59,100
|
|
Accrued Interest – related party
|
|
|
22,481
|
|
|
|
15,689
|
|
Accrued Interest
|
|
|
28,725
|
|
|
|
24,941
|
|
Total Current Liabilities
|
|
|
239,106
|
|
|
|
219,030
|
|
|
|
|
|
|
|
|
|
|
LONG-TERM LIABILITIES
|
|
|
|
|
|
|
|
|
Notes Payable – related party
|
|
|
23,500
|
|
|
|
23,500
|
|
Accrued Interest – related party
|
|
|
20,747
|
|
|
|
19,337
|
|
Total Long-term Liabilities
|
|
|
44,247
|
|
|
|
42,837
|
|
TOTAL LIABILITIES
|
|
$
|
283,353
|
|
|
$
|
261,867
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS' DEFICIT
|
|
|
|
|
|
|
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|
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
|
|
|
(3,346,378
|
)
|
|
|
(3,323,418
|
)
|
Total Stockholders' Deficit
|
|
|
(282,993
|
)
|
|
|
(260,033
|
)
|
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT
|
|
$
|
360
|
|
|
$
|
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
FEB 28
2021
|
|
THREE MONTHS ENDED
FEB 29
2020
|
|
NINE MONTHS ENDED
FEB 28
2021
|
|
NINE MONTHS ENDED
FEB 29
2020
|
REVENUES
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
General and administrative
|
|
|
2,825
|
|
|
|
2,725
|
|
|
|
10,975
|
|
|
|
10,275
|
|
TOTAL EXPENSES
|
|
|
2,825
|
|
|
|
2,725
|
|
|
|
10,975
|
|
|
|
10,275
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Operating Loss Before Other Expense
|
|
|
(2,825
|
)
|
|
|
(2,725
|
)
|
|
|
(10,975
|
)
|
|
|
(10,275
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER EXPENSE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
(1,282
|
)
|
|
|
(1,182
|
)
|
|
|
(3,783
|
)
|
|
|
(3,546
|
)
|
Interest expense – related party
|
|
|
(2,734
|
)
|
|
|
(2,508
|
)
|
|
|
(8,202
|
)
|
|
|
(7,438
|
)
|
TOTAL OTHER EXPENSE
|
|
|
(4,016
|
)
|
|
|
(3,690
|
)
|
|
|
(11,985
|
)
|
|
|
(10,984
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOSS BEFORE INCOME TAXES
|
|
|
(6,841
|
)
|
|
|
(6,415
|
)
|
|
|
(22,960
|
)
|
|
|
(21,259
|
)
|
INCOME TAXES
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
NET LOSS
|
|
$
|
(6,841
|
)
|
|
$
|
(6,415
|
)
|
|
$
|
(22,960
|
)
|
|
$
|
(21,259
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss Per Share
|
|
$
|
(0.03
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
(0.09
|
)
|
|
$
|
(0.08
|
)
|
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 nine months ended February 28, 2021 and February 29, 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
|
)
|
Net (loss) for the quarter ended February 29, 2020
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(6,415
|
)
|
|
|
(6,415
|
)
|
Balance – February 29, 2020
|
|
|
250,556
|
|
|
$
|
251
|
|
|
$
|
3,063,134
|
|
|
$
|
(3,316,906
|
)
|
|
$
|
(253,521
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
)
|
Net (loss) for the quarter ended February 28, 2021
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(6,841
|
)
|
|
|
(6,841
|
)
|
Balance – February 28, 2021
|
|
|
250,556
|
|
|
$
|
251
|
|
|
$
|
3,063,134
|
|
|
$
|
(3,346,378
|
)
|
|
$
|
(282,993
|
)
|
The
accompanying notes are an integral part of these unaudited condensed financial statements.
LZG
International, Inc.
Condensed
Statements of Cash Flows
(Unaudited)
|
|
NINE MONTHS ENDED
FEB 28, 2021
|
|
NINE MONTHS ENDED
FEB 29, 2020
|
Cash Flows from Operating Activities
|
|
|
|
|
|
|
|
|
Net Loss
|
|
$
|
(22,960
|
)
|
|
$
|
(21,259
|
)
|
Adjustment to reconcile net (loss) to cash used by operating
activities:
|
|
|
|
|
|
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable – related party
|
|
|
4,500
|
|
|
|
4,500
|
|
Accounts payable
|
|
|
—
|
|
|
|
2,450
|
|
Accrued interest
|
|
|
3,784
|
|
|
|
3,546
|
|
Accrued interest – related party
|
|
|
8,202
|
|
|
|
7,438
|
|
Net Cash Used by Operating Activities
|
|
|
(6,474
|
)
|
|
|
(3,325
|
)
|
|
|
|
|
|
|
|
|
|
Cash Flows from Investing Activities
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Financing Activities:
|
|
|
|
|
|
|
|
|
Proceeds from advances and notes payable – related party
|
|
|
—
|
|
|
|
3,100
|
|
Proceeds from notes payable
|
|
|
5,000
|
|
|
|
—
|
|
Net Cash Provided by Financing Activities
|
|
|
5,000
|
|
|
|
3,100
|
|
|
|
|
|
|
|
|
|
|
Decrease in Cash
|
|
|
(1,474
|
)
|
|
|
(225
|
)
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents, Beginning of Period
|
|
|
1,834
|
|
|
|
434
|
|
Cash and Cash Equivalents, End of Period
|
|
$
|
360
|
|
|
$
|
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
February
28, 2021
(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 nine-months ended
February 28, 2021 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 February 28, 2021 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
$1,410 and $1,410 for the nine months ended February 28, 2021 and February 29, 2020, respectively, resulting in accrued interest
of $20,747 and $19,337 at February 28, 2021 and May 31, 2020 respectively.
During
the nine months ended February 28, 2021 and 2020, a stockholder paid for administrative and professional services totaling $4,500
and $4,500, respectively, resulting in amounts payable to the stockholder of $10,600 and $6,100 as of February 28, 2021 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. Due to subsequent additional advances, the promissory note payable balance
was $113,200 at February 28, 2021 and May 31, 2020. Interest expense was $6,792 and $6,028 for the nine months ended February
28, 2021 and 2020, respectively, resulting in accrued interest of $22,481 and $15,689 at February 28, 2021 and May 31, 2020, respectively.
NOTE
4 – LOAN PAYABLE
During
the nine months ended February 28, 2021 and 2020 the Company borrowed $5,000 and $0, respectively, from a third party, resulting
in loans payable of $64,100 and $59,100 at February 28, 2021 and May 31, 2020, respectively. The loan is due on demand, is not
collateralized, and bears interest at 8% per annum. Interest expense was $3,783 and $3,546 for the nine months ended February
28, 2021 and 2020, respectively, resulting in accrued interest of $28,725 and $24,941 at February 28, 2021 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.
Since we have minimal operations, the pandemic has not caused any significant changes to our operations.
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.
Material
Changes in Financial Condition
At
February 28, 2021, we had cash of $360 and total liabilities of $283,353 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 nine-month
period ended February 28, 2021 (“2021 nine-month period”) we relied upon a stockholder and third parties for advances
and notes payable to cover our operating expenses.
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.
Material
Changes in Results of Operations
We
had no revenues during 2021 and 2020 and continue to rely on advances or loans to fund our operations. Our net loss increased
to $22,960 for the 2021 nine-month period compared to $21,259 for the nine-month period ended February 29, 2020. Management expects
net losses to continue until we acquire or merge with a business opportunity.
Commitments
or Obligations
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 February 28, 2021 was $20,747 compared to $19,337 at May 31, 2020.
During
the 2021 nine-month period, a stockholder paid for administrative and professional services totaling $4,500 resulting in amounts
payable to the stockholder of $10,600 and $6,100 as of February 28, 2021 and May 31, 2020, respectively.
During
the 2021 nine-month period, we borrowed $5,000 from a third party for operating expenses. At February 28, 2021 we owed this third
party $64,100 with accrued interest of $28,725. These loans are payable upon demand, are not collateralized and bear interest
at 8% per annum.
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.