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"). (See Form 8-K, Amendment No. 2, filed on January 5, 2022.)

The FatBrain technology comprises services to configure, test, deploy and operate FatBrain solutions on client servers, with flexibility to work in the cloud, on client premise or in hybrid mode. It allows data integration with client systems to establish logical, trusted, programmatic connectivity and provides secure access protocols between the FatBrain technology and the client systems. In addition, the Company provides training and support to the client's staff starting with a two-week training session for the client's staff along with product support via phone, web and onsite.

The Company will market these 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. Distribution efforts include relationships with global and regional systems integrators, value added resellers, independent software vendors, vertical software application developers and combinations of the above.

On November 15, 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 $43,447 in AI subscription revenue for the Angelina Agreement for the quarter ended November 30, 2021. Management projects the annual AI subscription revenue from the Angelina Agreement to be approximately $174,000, plus an additional revenue share from the Angelina FX transactions.

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.

We are hiring additional employees to assist in the development of our new operations. We have hired a seasoned Wall Street executive, Dr. Wei Ouyang, to lead the Angelina FX business. Dr. Ouyang has operational, trading and sales tenures at Bank of America, Barclays and Deutsche Bank. Dr. Ouyang is working closely with product development and joint LZG and Monex sales and marketing teams to distribute the Angelina FX product.





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To support Dr. Ouyang's development goals, we have hired a pioneering AI researcher and scientist, Dr. Rajarshi Das. Dr. Das has tenures with IBM Research, Los Alamos National Labs and Santa Fe Institute. We have also hired Mr. Soubir Acharya, an experienced technology architect and innovator. Among other business and technical accomplishments, Mr. Acharya launched and commercialized a $250 million data protection business.

Since we are in the initial phases of marketing the FatBrain technology, we may not record significant revenues and may lack funding 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 produce and market the FatBrain technology.

At this time management is unsure what effect the COVID-19 pandemic may have on our operations.

Material Changes in Financial Condition

At November 30, 2021, we had cash of $44,842 and total liabilities of $332,636 compared to cash of $4,735 and total liabilities of $294,610 at May 31, 2021. Despite the increase in cash, we have not established ongoing sources of revenue sufficient to cover our operating costs at this time. Prior to the acquisition of the FatBrain technology, we relied upon a stockholder and third parties for advances and notes payable to cover our operating expenses. After the acquisition of the FatBrain technology in October 2021, we have relied on a loan of $25,000 from a third party to help fund operations.

Finalizing long-term, constant revenue generating technology contracts with our existing 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 and are dependent upon our ability to attract significant long-term technology contracts

During the next 12 months we anticipate incurring costs related to producing and marketing our FatBrain technology and filing of Exchange Act reports. We believe we will be able to meet these costs through funds provided by management, significant stockholders and third parties until our revenues increase.

Material Changes in Results of Operations

During the six-months ended November 30, 2021, we recorded revenues of $43,447, but also relied on advances or loans to fund our operations. During the six-months ended November 30, 2020, we did not record revenues and relied on advances or loans to fund our operations. We recorded a net loss of $6,127 for the six-month period ended November 30, 2021 ("2022 six-month period) compared to a net loss of $16,119 for the six-month period ended November 30, 2020 ("2021 six-month period).

We recorded net income of $7,849 for our second quarter ended November 30, 2021 ("2022 second quarter") compared to a net loss of $6,841 for the second quarter ended November 30, 2021 ("2021 second quarter").

Management expects net income to continue as we increase revenues from the marketing of the FatBrain technology.





Commitments or Obligations

During the 2022 and 2021 six-month periods, a stockholder paid for administrative and professional services totaling $3,000 and $3,000, respectively, resulting in amounts payable to the stockholder of $9,000 and $6,000 as of November 30, 2021 and May 31, 2021, respectively.

During the 2022 and 2021 six-month periods, we borrowed $25,000 and $5,000 from a third party for operating expenses. At November 30, 2021 and May 31, 2021, we owed this third party $94,800 and $69,800, respectively, with accrued interest of $33,016 and $30,048, respectively. These loans are payable upon demand, are not collateralized and bear interest at 8% per annum.

On May 31, 2021, a stockholder converted $6,000 of its accounts payable to a promissory note which bears interest at 8% per annum and is due on demand, resulting in a total balance owed of $119,200. Accrued interest on the note totaled $29,513 and $24,745 at November 30, 2021 and 2020, respectively

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, 2021 was $22,157 compared to $21,217 at May 31, 2021.

At November 30, 2021, we owed vendors $1,450.





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.

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