Executive Overview

LZG International, Inc. was a "blank check" company until acquired by the current management team on October 23, 2021 ("AI Recap"). Incorporated in the State of Florida on May 22, 2000, as LazyGrocer.Com, Inc., the company offered an online grocery solution, limited its operations in November 2001 and changed its name to LZG International, Inc., on August 28, 2009.

As part of the AI Recap, we capitalized the company with software and related IT Assets, including the Outcomes™ engine and the connected AI Solutions, that use artificial intelligence ("AI") to help businesses automate and optimize enterprise decision cycles ("AI Solutions").

Since 2015, our Outcomes™ engine and platform have enabled scores of innovations across dozens of F500 business cases, billions of transactions, and hundreds of millions of behavioral profiles.

In 2019, for example, our AI solution for Bank of America outperformed by over 60% the combined effectiveness and efficiency of BOA's $100M state of the art system and 800 of its investigative experts to fight financial crimes.

In November 2021, we launched a foreign exchange ("FX") AI solution to tackle discriminatory pricing, especially with the start-up, small and mid-sized enterprises ("SMEs") in the $6.6 trillion-dollar daily FX market. The solution uses our Peer Intelligence technology to auto-match individual client's purchase cycles with their currency and supply chain risk to optimize FX and minimize constraints, across thousands of peers, in hundreds of sectors.

On February 23, 2022, we acquired the software assets of Intellagents, LLC, to accelerate our insurance focus.

On June 17, 2022, we acquired all of the capital stock of Prime Source, a Kazakhstani corporation ("Prime Source") and Prime Source's affiliates consisting of Prime Source Innovation, Prime Source - Analytical Systems, Digitalism, and InFin-IT Solution. We acquired Prime Source to expand our international operations and further focus our efforts in software development and IT consulting.

During the period covered by this report, the Company, through its wholly owned UK subsidiary, Fatbrain Acquisition Company Limited ("Fatbrain Acquisition") acquired all of the outstanding capital stock of SO Technology Ltd ("SO Tech"), a multiple award-winning digital agency in the UK, as described in the current report on Form 8-K filed on September 27, 2022, and all of the outstanding capital stock of Predictive Black Ltd ("PB Ltd"), an innovative financial forecasting SaaS in UK, as described in the current report on Form 8-K filed on November 17, 2022. SO Tech and PB Ltd will continue to be held by Fatbrain Acquisition, and are being integrated into the world-wide business of the Company.

We have streamlined our focus on delivering AI Solutions to the economic stars of tomorrow (SMEs), driving the majority of the global jobs and GDP growth. We are built on the five "P"-pillars comprising Purpose, Promise, Product, Predictability and People. Our distinctive competency works like WAZE to advance Peer Intelligence™ for SMEs, reflecting the dynamic wisdom of many across geo and industry sectors informed by relevant open-source and proprietary data signals. Our AI Solutions are supported by the Outcomes™ software platform and a 600-person team focused to help SMEs be more effective and efficient with top 5 problems ranked across 10M+ subscribers of Intuit's QuickBooks.






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So Tech Agreement

Stock Purchase Agreement ("SO Tech Stock Purchase Agreement"), dated as of September 22, 2022, with Dent Global Limited ("Dent"), and individuals Richard Burch, Stephen Gray, and Mark Purdy (together "SO Tech Sellers"), to acquire all outstanding shares of SO Technology Ltd, a United Kingdom limited company ("SO Tech") (see the SO Stock Purchase Agreement, filed as Exhibit 10.4 to this report). The parties closed this transaction on September 22, 2022 ("Closing Date").

SO Tech is a UK-based design and technology company creating web and mobile applications for mid-market enterprises, helping to accelerate growth and expand operation. The So Tech Sellers agreed to sell and assign all of their ownership interests and rights in SO Tech to FatBrain Acquisition, in exchange for a combination of stock and cash totaling two million seven hundred sixty-two thousand five hundred dollars ($2,762,500.00), subject to a payment schedule, with all payments due on or before the first anniversary of the closing.

Except for the Stock Purchase Agreement and the transactions contemplated thereby, neither the SO Tech Sellers, nor SO Tech, nor any of its officers or directors serving before the Stock Purchase Agreement had any material relationship with LZG or LZG's affiliates prior to this transaction.





Predictive Black Agreement

LZG International and its wholly owned subsidiary, FatBrain Acquisition, entered into a Share Purchase Agreement (the "PB Ltd Share Purchase Agreement"), dated as of November 14, 2022, with the shareholders of Predictive Black Ltd (together "PB Ltd Sellers"), to acquire all outstanding shares of Predictive Black Ltd, a United Kingdom limited company ("PB Ltd") (see the PB Ltd Share Purchase Agreement, filed as Exhibit 10.5 to this report). The parties closed this transaction on November 14, 2022 ("Closing Date").

PB Ltd is a data analytics company that uses machine learning and artificial intelligence to constantly improve and give increasingly refined predictive forecasts. The PB Ltd Sellers agreed to sell and assign all of their ownership interests and rights in PB Ltd to FatBrain Acquisition, in exchange for a combination of LZGI stock and cash, the payment of a portion of which will be deferred for several months.

Except for the Share Purchase Agreement and the transactions contemplated thereby, neither Sellers, nor PB Ltd, nor any of its officers or directors serving before the Share Purchase Agreement had any material relationship with LZG or LZG's affiliates prior to this transaction.

Material Changes in Financial Condition

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.

At November 30, 2022, we had cash of $531,464 and total liabilities of $39,164,867 compared to cash of $81,567 and total liabilities of $3,149,738 at May 31, 2022. We have not yet established ongoing sources of revenue sufficient to cover our operating costs at this time. During the six-month period ended November 30, 2022 ("2023 six-month period") we generated $9,372,426 of revenue but still relied upon advances from related parties to fund our operations. The current conditions continue to raise substantial doubt about our ability to continue as a going concern. We are currently devoting our efforts to obtaining capital from stockholders and/or third parties to cover expenses. We are also seeking to acquire additional companies with established revenue sources. Our ability to continue as a going concern is dependent upon our ability to produce and market the FatBrain technology.

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.






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Material Changes in Results of Operations

During the 2023 six-month period, we recorded revenues of $9,372,426 and net loss of ($7,434,592). For the six-month period ended 11/30/21, we recorded revenues of $43,447 and a net loss of $2,327,059.





Commitments or Obligations

On May 11, 2022, the Company assumed a promissory note from a related party in connection with an asset acquisition. The $3,000,000 note bears interest at 8% per annum and is payable on Demand, no later than January 5, 2023. There have been no payments of principle or interest for the loan as of November 30, 2022. Accrued interest at November 30, 2022 is $131,836.

On June 17, 2022 in connection with the Prime Source Acquisition, the Company issued two promissory notes of $6,000,000 to each of the former owners of Prime Source. Each loan bears interest of 8% and is payable on prescribed dates per a payment schedule. The final payment is due December, 31, 2023. As of November 30, 2022, the remaining balance due is $9,000,000 of which $3,000,000 is considered long term. Accrued interest on November 30, 2022 is $301,133.





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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