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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-KSB

[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended September 30, 2006

[   ] TRANSITION REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to ___________

Commission file number: **333 - 131531**

EZ ENGLISH ONLINE
INC.(Name of small business issuer in its charter)

|Delaware                                         | N/A                                 
|------------------------------------------------ | ------------------------------------
|(State or other jurisdiction of incorporation or |                                     
|organization)                                    | (I.R.S. Employer Identification No.)
|                                                 |                                     
|605  595 Hornby Street,                         |                                     
|Vancouver                                        |                                     
|British Columbia                                 | V6C 1A4                             
|(Address of principal executive offices)         | (Zip Code)                          

Issuer's telephone number 604  809 3535

Securities registered under Section 12(b) of the Exchange
Act:None.

Securities registered under Section 12(g) of the Exchange Act:
None.

Common Stock(Title of class)

Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past 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 [X]  No [   ]

Check if there is no disclosure of delinquent filers in response
to Item 405 of Regulation S-B contained in this form, and no disclosure will
be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB [X] .

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Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act)   [   ]
Yes  [X] No

The issuer's revenues for the year ended September 30, 2006 are
0.

Aggregate market value of the voting stock of the registrant
held by non-affiliates of the registrant at November 29, 2006 (computed by
reference to the price of the most recent sales from the Issuer:
$84,954

(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS)

Check whether the Registrant has filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the Exchange Act after
the distribution of securities under a plan confirmed by a court.
N/A

(APPLICABLE ONLY TO CORPORATE REGISTRANTS)

The registrant has 5,061,925 common shares, $0.0001 par value,
outstanding as of November 29, 2006.

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Table of Contents

|PART I     |                                                                                                                       | 1 
|---------- | --------------------------------------------------------------------------------------------------------------------- | --
|Item 1.    | Description of Business                                                                                               | 1 
|           | Corporate History                                                                                                     | 1 
|           | Business Development                                                                                                  | 1 
|           | Products and Services and Distribution Methods                                                                        | 2 
|           | New Products and Services                                                                                             | 3 
|           | Competition                                                                                                           | 3 
|           | Intellectual Property                                                                                                 | 3 
|           | Legislation and Government Regulation                                                                                 | 3 
|           | Environmental Law Compliance                                                                                          | 6 
|           | Employees                                                                                                             | 6 
|           | Reports to Securities Holders                                                                                         | 6 
|Item 2.    | Description of Property.                                                                                              | 6 
|Item 3.    | Legal Proceedings.                                                                                                    | 6 
|Item 4.    | Submissions of Matters to
      a Vote of Security Holders                                                            | 6 
|PART II    |                                                                                                                       | 6 
|Item 5.    | Market for Common Equity
      and Related Stockholder Matters.                                                       | 6 
|Item 6.    | Management's Discussions and Analysis or
      Plan of Operation.                                                     | 7 
|           | Plan of Operation                                                                                                     | 7 
|           | Results of Operations for the Year ended
      September 30, 2006, Compared to the Year ended September 30, 2005      | 8 
|           | Liquidity and Capital Resources                                                                                       | 9 
|           | Limited operating history; need for additional
      capital                                                          | 10
|           | Audit Committee                                                                                                       | 11
|           | Certain Relationships and Related Party
      Transactions                                                            | 11
|           | Known Material Trends and Uncertainties                                                                               | 11
|           | Critical Accounting Policies                                                                                          | 11
|Item 7.    | Financial Statements.                                                                                                 | 12
|           | Report of Independent Registered Public
      Accounting Firm                                                         | 12
|Item 8.    | Changes In and Disagreements
      with Accountants on Accounting and Financial Disclosure                            | 13
|Item 8A.   | Controls and Procedures                                                                                               | 13
|PART III   |                                                                                                                       | 14
|Item 9.    | Directors, Executive Officers, Promoters
      and Control Persons; Compliance With Section 16(a) of the Exchange Act | 14
|Item 10.   | Executive Compensation.                                                                                               | 16
|Item 11.   | Security Ownership of Certain Beneficial
      Owners and Management and Related Stockholder Matters.                 | 17
|Item 12.   | Certain Relationships and Related Transactions                                                                        | 18
|Item 13.   | Exhibits                                                                                                              | 18
|Item 14.   | Principal Accountant Fees
      and Services.                                                                         | 18
|SIGNATURES | 19                                                                                                                   

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PART I

FORWARD-LOOKING STATEMENTS

This annual report contains forward-looking statements. These
statements relate to future events or our future financial performance. In some
cases, you can identify forward-looking statements by terminology such as "may",
"will", "should", "expects", "plans", "anticipates", "believes", "estimates",
"predicts", "potential" or "continue" or the negative of these terms or other
comparable terminology. These statements are only predictions and involve known
and unknown risks, uncertainties and other factors, including the risks in the
section entitled "Risk Factors that may cause our or our industry's actual
results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements.

Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity, performance or achievements. Except as required by
applicable law, including the securities laws of the United States, we do not
intend to update any of the forward-looking statements to conform these
statements to actual results.

As used in this annual report, the terms "we", "us", "our", and
"EZ English" mean EZ English Online Inc., unless otherwise indicated.

All dollar amounts refer to US dollars unless otherwise
indicated.

Item 1.      Description of
Business

Corporate History

We were incorporated on March 2, 2005 under the laws of the
State of Delaware. Our principal offices are located at 605  595 Hornby Street,
Vancouver, British Columbia, V6C 1A4, and our telephone number is (604) 809
3535.

EZ English is a start-up stage corporation with limited operations
  and no revenues from our business operations. For the year ended September 30,
  2006, we had no revenues, a net loss of $59,553 and had an accumulated deficit
  of $90,809 as of September 30, 2006. Our website is www.ezenglishonline.com.

On July 3, 2006, our common stock was approved for quotation on
the OTC Bulletin Board and the Pink Sheets under the trading symbol EZEO.

Business Development

Prior to our inception on March 4, 2005, our President Andrea
Molnar had been active in interviewing people who had taken a teaching English
as a second language (TESL) course and students to determine the strengths and
weaknesses of various courses. She talked to Canadians while she was in Canada
and also consulted with residents of other countries while she was abroad. After
our inception, our President continued to interview people who might be
interested in taking a TESL course, including immigrants to Canada from Europe.
We used this information to assist us in designing course material that would
combine the solid foundation of

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traditional TESL course material with the convenience and
flexibility of the internet for students. We designed the course so that it
would be suitable for different levels of students (that wanted to teach English
as a foreign language), including beginners. By June 2005 we had completed the
initial design of our course material.

In March 2005, we reserved the domain name
www.ezenglishonline.com and entered into an agreement with Netnation
Communications Inc. to host our website. In April 2005, we retained Crack
Marketing.com to develop our website and by December 2005 the construction of
our website and our course material was complete. On March 28, 2006, we
appointed Kris Kooner, an experienced web-marketer and the owner of Crack
Marketing.com, as Vice President Marketing for us. We pay him $500.00 per month
for marketing services. In May and June 2006, Mr. Kooner devised and implemented
a plan to increase traffic to our website. As a result of his plan, hits to our
website, www.ezenglishonline.com, increased during May and June. The number of
hits fluctuates each month, but in recent months the amount of internet traffic
has slowed down. To increase traffic to our website, in September 2006 we
published an article about TESOL and our website and distributed it to a network
of Ezing publishers. We also added RSS Feeds for English language news to the
bottom of our website in September 2006 which improves our search engine
position.

In June 2006, our President went to Hungary in order to
research the market for English teachers in Budapest and the rest of Hungary.
She learned that there is a high demand for English teachers in Hungary and
hopes that we will be able to train suitable persons to teach English there.
Subsequent to this, in summer 2006 we reserved the domain name
www.TESLbudapest.com. We decided to use this site to post job openings in
Hungary and other parts of Europe. We will not charge a fee to post job
openings. The site will have a link to www.ezenglishonline.com and we hope that
this will increase the number of students who will take our course.

In July 2006, we hired Amped Consulting to design and build the
www.TESLbudapest.com website for a fee of $4,000. This website is not yet
completed but we expect it to be running within one month.

Since inception, we have sold: 
  •  ****4,000,000 shares of common stock to our President for $400; and 
  • ****1,061,925 shares to approximately 40 investors at a price of $0.08
  per share pursuant
  to a registered offering on Form SB-2, for gross proceeds of $84,954.

Products and Services and Distribution Methods

Our core product and service is a complete online TESOL
certification course. The success of our business is dependent at this stage on
the successful marketing of our websites and this is why, on March 28, 2006, we
appointed Kris Kooner as Vice President Marketing. We plan to market our
www.ezenglishonline.com website through a combination of search engine
optimization, reciprocal marketing relationships, email distributions and
possibly mail distributions. We are also contemplating marketing this website in
North America through traditional sources such as magazines, newspaper
advertising, telephone directories and flyers/mailers. We intend to target North
Americans who want to make money while traveling abroad. We may use inbound
links that connect directly to our website from other sites. Potential customers
would be able to click on these links to become connected to our website from
search engines or other websites.

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We are also focusing on developing our new website www.TESLbudapest.com and intend to seek the expertise
of, and hiring of, outside management and directors in this regard. We plan to
continue to engage people as outside contractors and consultants for
bookkeeping, legal, accounting, website development and audit functions. Also,
we expect to hire one person to provide customer service in 2008. Before 2008,
our President will handle customer service herself. As our course is fully
automated, including grading, we do not anticipate our customer service needs
will be significant for the next few years.

We are constantly examining new ways to achieve sales and
revenue in both the Vancouver and Hungary markets and may also hire an
additional marketing consultant in Europe, to provide marketing services in
additional overseas markets.

Marketing is an ongoing matter which will continue during the
life of our operations.

New Products and Services

We have no publicly announced new products or services, nor do
we expect to have any in the next 3  6 months, as we are concentrating our
efforts on developing the existing products and services. If we are unable to
see any sales in this or the next quarter, we will consider significantly
changing our business plan.

Competition

There is a lot of competition in our industry, because there is
nothing stopping anyone offering a teaching program like ours. Furthermore, our
current business plan provides for an online platform only. We do not intend to
hold any seminars at all, whereas, some of our competitors do offer seminars. A
few of our main competitors are as follows: http://www.oxfordseminars.com; http://www.teflcorp.com (this offers an online
certification courses ranging in price from $150.00 USD to $ 295.00 USD);
http://www.teflintl.com/ (this offers an
online certification courses ranging in price for $ 375.00 USD, including job
placement help and tutoring); http://www.tesol-academy.com/ (this offers a course for
$79.99 requiring independent purchase of texts).

Internet industries are constantly undergoing substantial
changes, which have resulted in increased consolidation. Many companies in these
industries have been going out of business or are being acquired by competitors.
As a result we may be competing with larger competitors that have substantially
greater resources than we do, both in terms of expertise and funding. Some of
our competitors may be able to offer goods and services at a lower price than we
can. We expect this consolidation and strategic partnering to continue.

Intellectual Property

We own the copyright in the websites www.ezenglishonline.com and www.TESLbudapest.com. We also own the copyright in our
logo EZ English Online.

Legislation and Government Regulation

Laws and regulations directly applicable to Internet
communications, commerce and advertising are becoming more prevalent. In
addition to recent laws enacted by the United States Congress regulating
children's privacy, copyrights and taxation, we are subject to rules and
regulations around the world which affect the business of the Internet. Also,
because we carry on business

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in Canada, we are subject to laws regarding employment, taxes
and other regulatory issues for its Canadian operations.

The laws and regulations that govern our business change
rapidly. The following are some of the evolving areas of law that are relevant
to our business:

Privacy Law.The state of
privacy law is unsettled, and rapidly changing. Current and proposed federal,
state and foreign privacy regulations and other laws restricting the collection,
use and disclosure of personal information could limit our ability to use the
information in our databases to generate revenues. In late 1998, COPPA was
enacted, mandating that measures be taken to safeguard minors under the age of
13. The FTC promulgated regulations implementing COPPA on October 21, 1999,
which became effective on April 21, 2000. The principal COPPA requirement is
that individually identifiable information about minors under the age of 13 not
be collected, used or displayed without first obtaining informed parental
consent that is verifiable in light of present technology. The FTC final
regulations create a sliding scale of permissible methods for obtaining such
consent. Consent for internal use of the individually identifiable information
of children under the age of 13 can be obtained through e-mail plus an
additional safeguard, such as confirming consent with a delayed e-mail,
telephone call, or letter. Obtaining verifiable consent from a childs parent to
share that childs information with a third party or enable the child to
publicly distribute the information by, for example, allowing unrestricted
access to a chat room or message board is significantly more burdensome. While
the temporary sliding scale implementation was due to expire on April 21, 2002,
on October 31, 2001, the FTC extended the implementation period through April
21, 2005.

The FTC has required that parental consent for such higher risk
activities be verified by more secure methods than e-mail, such as a credit card
in connection with a transaction, print-and-sign forms, toll-free numbers
staffed by trained operators, or digital signatures. Complying with the new
requirements is costly and will likely dissuade some of our customers. While we
will attempt to be fully compliant with the FTC requirements, our efforts may
not be entirely successful. In addition, at times we rely upon outside vendors
to maintain data-collection software, and there can be no assurance that they
will at all times comply with our instructions to comply with COPPA. If our
methods of complying with COPPA are inadequate, we may face litigation with the
FTC or individuals, which would adversely affect our business.

The European Union recently enacted its own privacy regulations
that may result in limits on the collection and use of certain user information.
The laws governing the Internet, however, remain largely unsettled, even in
areas where there has been some legislative action. It may take years to
determine whether and how existing laws such as those governing intellectual
property, privacy, libel and commerce may prompt calls for more stringent
consumer protection laws, both in the United States and abroad, that may impose
additional burdens on companies conducting business on the Internet.
Furthermore, the Federal Trade Commission has recently investigated the
disclosure of personal identifying information obtained from individuals by
Internet companies. Evolving areas of law that are relevant to our business
include privacy law, regulation on what websites contain, and sales and use tax.
Because of this rapidly evolving and uncertain regulatory environment, we cannot
predict how these laws and regulations might affect our business. In addition,
these uncertainties make it difficult to ensure compliance with the laws and
regulations governing the Internet. These laws and regulations could harm us by
subjecting us to liability or forcing us to change how we do business.

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Moreover, we will post a privacy policy pertaining to all users
and visitors to our web site. By doing so, we will subject ourselves to the
jurisdiction of the FTC. Should any of our business practices be found to differ
from our privacy policy, we could be subject to sanctions and penalties from the
FTC. It is also possible that users or visitors could try to recover damages in
a civil action as well.

Laws Governing Sending of
Unsolicited Commercial E-mail.We typically intend to provide our customers
and other visitors to our Web sites with an opportunity to opt-in, or agree to
receive e-mailings from us. In 2003, the federal government implemented the
Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003
(CAN-SPAM) designed to limit unsolicited commercial e-mail commonly referred to
as spam. In addition, California and a number of other states regulate the
sending of e-mails for commercial purposes to third parties where there is no
preexisting business relationship. Further, several states give Internet service
providers (ISPs) a private right of action against those who send large
e-mailings across their servers in contravention of the ISPs posted policy.
There is no guarantee that we will always be fully compliant in all of our
communications at all times. Our failure to comply with applicable laws
regarding these types of e-mails could result in significant fines, actual or
statutory damages, and injunctive actions.

Conformance to E-Commerce
Statutory Requirements for Formation of Contracts.We conduct e-commerce on
our web site. The applicable law on online formation of contracts has been
unsettled and is evolving. On June 30, 2000, the federal government enacted the
E-Sign statute, which in limited cases permits online formation of contracts.
Similarly, on January 1, 2000, California adopted a standard version of the
Uniform Electronic Transactions Act (UETA), which also permits electronic
signatures and record-keeping for certain types of contracts. We attempt to
comply with these laws, but there is no guarantee that we will be successful.
Judicial interpretation of their application could result in customer contracts
being set aside or modified. In that case, our e-commerce revenue could be
materially adversely affected.

Sales Tax.The tax
treatment of goods sold over the Internet is currently unsettled. A number of
proposals have been made at the state and local level that would impose
additional taxes on the sale of goods through the Internet. Such proposals, if
adopted, could substantially impair the growth of electronic commerce and could
adversely affect our opportunity to derive financial benefit from electronic
commerce. While the Internet Tax Freedom Act (ITFA) has placed a moratorium on
new state and local taxes on Internet commerce, the tax moratorium expired on
November 1, 2003 and has not been re-enacted. At least some state legislatures
that will convene during early 2004 have indicated that they will move to expand
their sales taxes to cover Internet commerce, if the ITFA is not reinstated.
Imposing state sales taxes on Internet-based commerce would adversely affect our
business.

Intellectual Property.Copyrighted material that we develop, as well as our service marks and
domain names, and other proprietary rights are important to our business
prospects. We seek to protect our common-law trademarks through federal
registration, but these actions may be inadequate. In addition, we principally
rely upon trademark, copyright, trade secret and contract law to protect our
proprietary rights. We generally enter into confidentiality agreements,
work-made-for-hire contracts and intellectual property licenses with our
employees, consultants and corporate partners, respectively, as part of our
efforts to control access to and distribution of our technologies, content and
other proprietary information.

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Environmental Law Compliance

To the extent which environmental compliance may be necessary,
we do not anticipate any significant compliance expense.

Employees

As at November 29, 2006 we had no full time employees.

Reports to Securities Holders.

We are required to file annual reports on Form 10-KSB and
quarterly reports on Form 10-QSB with the SEC on a regular basis, and will be
required to timely disclose certain material events (e.g., changes in corporate
control; acquisitions or dispositions of a significant amount of assets other
than in the ordinary course of business; and bankruptcy) in a current report on
Form 8-K.

You may read and copy any materials we file with the SEC at
their Public Reference Room Office, 100 F Street, NE, Room 1580, Washington,
D.C. 20549-0102. You may obtain information on the operation of the Public
Reference Room by calling the SEC at 1-800-SEC-0330. Additionally, the SEC
maintains an Internet site (http://www.sec.gov) that contains reports, proxy and
information statements and other information regarding issuers that file
electronically with the SEC.

Item 2.      Description of
Property.

On April 1, 2006, we began to sublet shared office space at
Suite 605 - 595 Hornby Street, Vancouver, British Columbia for $150 per month.
The rent is on a month-to-month basis and includes internet and fax reception
but not telephone service.

Item 3.      Legal Proceedings.

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

Item 4.      Submissions of Matters
to a Vote of Security Holders.

We had no submissions of matters to a vote of security holders
during the last quarter of our fiscal year.

PART II

Item 5.      Market for Common
Equity and Related Stockholder Matters.

Our common stock is quoted on the OTC Bulletin Board under the
symbol "EZEO", but as of November 29, 2006 there had not yet been a trade of our
common stock.

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Island Stock Transfer, Inc., 100 Second Avenue South, Suite
300N, St. Petersburg, FL 33701, Tel: 727-289-0010 is the transfer agent for our
shares of common stock.

As of November 29, 2006, we had 5,061,925 shares of common
stock outstanding and 41 stockholders of record.

Dividend Policy

We have not declared or paid any cash dividends since
inception. Although there are no restrictions that limit our ability to pay
dividends on our shares of common stock, we intend to retain future earnings for
use in our operations and the expansion of our business.

Recent Sales of Unregistered Securities

There has been no sale of unregistered shares in this fiscal
year. We filed a Registration Statement on Form SB-2 which became effective on
February 28, 2006 and all of our sales of securities for the year ended
September 30, 2006 were pursuant to the Registration Statement.

No approval has been given for any compensation plan or
individual compensation arrangement under which equity securities of the Company
are authorized for issuance to employees or non-employees in exchange for
consideration in the form of goods or services.

Item 6.      Management's
Discussions and Analysis or Plan of Operation.

The following discussion should be read in conjunction with our
financial statements, including the notes thereto, appearing elsewhere in this
report. The discussions of results, causes and trends should not be construed to
imply any conclusion that these results or trends will necessarily continue into
the future.

Plan of Operation

We are a development stage company and our efforts have been
principally devoted to developing a website through which we offer a complete
online TESOL certification course.

We anticipate that our business will incur significant
operating losses in the next two years. At this time, we believe that our
success depends on our ability to advertise and market ourselves effectively,
both in North America and overseas, and offer a competitive service and product.

The number of hits to our websites has been adequate, but we
have not yet achieved any sales. We will need to invest significantly more
capital in our website and also hire further personnel with expertise in the
marketing industry in order to become profitable. If the outlook for us does not
improve over the next quarter, we will have to change our business plan. We may
have to consider a merger or acquisition of another business or may seek a
business opportunity with entities which have recently commenced operations, or
which wish to utilize the public marketplace in order to raise additional
capital in order to expand into new products or markets, to develop a new
product or service, or for other corporate purposes. Alternatively, we may
acquire assets and establish wholly-owned subsidiaries in various businesses or
acquire existing businesses as subsidiaries. For this reason, the discussion of
the proposed business is purposefully general and is not meant to be
restrictive.

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If operations and cash flow improve through our increased
marketing efforts, management believes that we can continue to operate under our
existing business plan. However, no assurance can be given that management's
actions will result in profitable operations or the resolution of our liquidity
problems.

Results of Operations for the Year ended September 30, 2006,
Compared to the Year ended September 30, 2005

We have accumulated a net loss of $90,809 since March 2, 2005
(date of inception) to September 30, 2006. As of September 30, 2006 we had a
working capital surplus of $7,295. These financial conditions give rise to
substantial doubt about our ability to continue as a going concern.

For the year ended September 30, 2006, we incurred a net loss
  of $59,553, compared to $31,256 from March 2, 2005 (date of inception) to September
  30, 2005. For the year ended September 30, 2006, our net loss per share was
  $0.01, which was the same for the period from March 2, 2005 (date of inception)
  to September 30, 2005.

Lack of Revenues

Since March 2, 2005 (date of inception) to September 30, 2006,
we have not yet generated any revenues. At this time, our ability to generate
any significant revenues continues to be uncertain. The auditor's report dated
November 14, 2006 contains an additional explanatory paragraph which identifies
issues that raise substantial doubt about our ability to continue as a going
concern. Our financial statements do not include any adjustment that might
result from the outcome of this uncertainty.

Expenses

Our total expenses were $59,553 for the year ended September
30, 2006, including $23,164 in professional fees, $6,000 in management fees, and
$30,389 in general and administrative fees. Our total expenses from March 2,
2005 (date of inception) to September 30, 2005 were $31,256, including $19,868
in professional fees, $3,500 in management fees, and $7,888 in general and
administrative fees. Since March 2, 2005 (date of inception) to September 30,
2006, our total expenses were $90,809.

Our general and administrative expenses consist of website
development, marketing and promotion, travel, meals and entertainment, rent,
office maintenance, communication expenses (cellular, internet, fax, telephone),
office supplies, and courier and postage costs. Our general and administrative
expenses had an increase of $22,501 to $30,389 for the year ended September 30,
2006 from $7,888 from March 2, 2005 (date of inception) to September 30, 2005.
Since March 2, 2005 (date of inception) to September 30, 2006, our general and
administrative fees were $38,277. Our President donated the office to us for
free until April 1, 2006. Of $2,400 in the rent expenses for the year ended
September 30, 2006, $1,500 was donated by our President at a value of $250 per
month and $900 was paid by us at a value of $150 per month. The rent of $1,750
was donated and recorded from March 2, 2005 (date of inception) to September 30,
2005.

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Our professional fees consisted primarily of legal, accounting
and auditing fees. Our professional fees had an increase of $3,296 to $23,164
for the year ended September 30, 2006 from $19,868 from March 2, 2005 (date of
inception) to September 30, 2005. Since March 2, 2005 (date of inception) to
September 30, 2006, our professional fees were $43,032.

Our management fees of $6,000 for the year ended September 30,
2006 were recorded for services donated by our President, compared to $3,500
donated from March 2, 2005 (date of inception) to September 30, 2005. Our
President donated 10  15 hours per month to us and her management services were
recorded at a value of $500 per month. From March 30, 2005 (date of inception)
to August 31, 2006, our management expenses were recorded as $9,500.

Liquidity and Capital Resources

We do not expect to generate any revenues over the next six
months. As of September 30, 2006, our total current assets were $12,849,
compared to $2,188 as at September 30, 2005. Our total current liabilities were
$5,554, compared to $27,794 as at September 30, 2005. We expect to incur
substantial losses over the next two years.

As of September 30, 2006, we had a working capital surplus of
$7,295, compared to a working capital deficit of $25,606 as at September 30,
2005. Our accumulated deficit was $90,809 as at September 30, 2006. Our net loss
of $90,809 from March 2, 2005 (inception) to September 30, 2006 was mostly
funded by our equity financing. Since March 2, 2005 (inception) to September 30,
2006, we raised $85,354 in equity financing. The increase in cash for the year
ended September 30, 2006 was $8,661, compared to $2,188 as at September 30,
2006. The increase was mainly due to our equity financing activities, which were
partially offset by cash used for operations.

We used net cash of $67,293 in operations for the year ended
September 30, 2006, compared to $2,360 from March 2, 2005 (date of inception) to
September 30, 2005. During the year ended September 30, 2006 our monthly cash
requirement was approximately $5,608. At the year end as at September 30, 2006,
we had cash of $10,849, which we anticipate will cover our costs for
approximately 2 months according to our current monthly burn rate. We plan to
raise capital through private placements, join ventures, loans or possibly a
direct offering to carry out our business plan. However, there is no assurance
that we can receive enough capital to meet our cash requirements. If we fail to
raise sufficient capital, we may cease our operations.

We have been focusing our efforts on marketing our websites and
the decision whether or not to employ further expertise in this area could
affect our operating results over the next several fiscal periods. We intend to
continue to make financial investments in marketing and website development.

If our management decides to carry on with our original
business plan, we estimate that our expenses over the next 12 months (beginning
December 1, 2006) will be approximately $118,000 as follows:

$1,000
    Continued development of our
      website www.ezenglishonline.com$50,000
    Auditor and legal fees$6,000
    Directors fees$40,000
    General and administration
      expenses$15,000
    Marketing fees


9

---

$6,000
    Management fees$118,000
    Total


These estimates will change significantly if we cease our
current operations or if we acquire other businesses. As of September 30, 2006,
we had cash of $10,849. The balance of our cash requirements for the next 12
months (beginning in early 2007) was approximately $107,000. We intend to raise
this amount from private placements and possibly a registered public offering
(either self-underwritten or through a broker-dealer) within the next few
months. At this time we do not have any commitments from any broker-dealer to
provide us with financing.

If we are unsuccessful in raising enough money through private
placements or a direct offering, we may review other financing possibilities
such as bank loans. If we cannot raise at least $107,000, we will not be able to
carry out our full business plan and we may not be able to become profitable and
we may have to cease operations.

We anticipate that we will generate revenues within the next
twelve months from sales of our online English courses. If we are successful in
generating such revenues, we plan to apply them towards our general and
administrative expenses. There are no assurances that we will receive any
revenues or that such revenues will be sufficient to cover our expenses. Our
inability to receive sufficient revenues could prevent us from implementing our
business plan.

If we expand in the future, we will incur additional costs for
personnel. In order for us to attract and retain quality personnel, our
management anticipates it will need to offer competitive salaries, issue common
stock to consultants and employees, and grant EZ English stock options to future
employees. We anticipate that we will need approximately $72,000 per year or
approximately $6,000 per month beginning in early 2008 to pay salaries to
employees or consultants working in the area of marketing and sales.

Limited operating history; need for additional
capital

There is limited historical financial information about us upon
which to base an evaluation of our performance. We are a development stage
company and have generated no revenues. We cannot guarantee we will be
successful in our business operations. Our business is subject to risks inherent
in the establishment of a new business enterprise, including limited capital
resources and possible cost overruns due to price and cost increases in services
and products.

To become profitable and competitive, we have to build our
brand. We are seeking equity financing to provide for the capital required to
fully carry out our business plan and develop and market our website.

We have no assurance that future financing will be available to
us on acceptable terms. Obtaining additional financing will be subject to a
number of factors including market conditions, investor acceptance of our
business plan and investor sentiment. These factors may make the timing, amount,
terms and conditions of additional financing unattractive or unavailable to us.
If financing is not available on satisfactory terms, we may be unable to
continue, develop or expand our operations. If we are unable to raise additional
financing, we will have to significantly reduce our spending, delay or cancel
planned activities or substantially change our current corporate structure. In
such an event, we intend to implement expense reduction plans in a timely
manner. However, these actions would have material adverse effects on our
business, revenues, operating results, and prospects, resulting in a possible
failure of our business. If we

10

---

raise funds through equity or convertible securities, our
existing stockholders may experience dilution and our stock price may
decline.

We have incurred operating losses from our inception, and we
are dependent upon our management's ability to develop profitable operations and
our ability to raise money through equity or debt financing. These factors raise
substantial doubt about our ability to continue as a going concern.

Audit Committee

The functions of the audit committee are currently carried out
by our Board of Directors. Our Board of Directors has determined that we do not
have an audit committee financial expert on our Board of Directors carrying out
the duties of the audit committee. Our Board of Directors has determined that
the cost of hiring a financial expert to act as a member of our Board of
Directors and to be a member of the audit committee or otherwise perform audit
committee functions outweighs the benefits of having a financial expert on the
audit committee.

Certain Relationships and Related Party Transactions

We have not entered into any transactions with our officers,
directors, persons nominated for these positions, beneficial owners of 5% or
more of our common stock, or family members of these persons wherein the amount
involved in the transaction or a series of similar transactions exceeded
$60,000.

Known Material Trends and Uncertainties

As of November 29, 2006, we had no off balance sheet
transactions that have or are reasonably likely to have a current or future
effect on our financial condition, changes in our financial condition, revenues
or expenses, results of operations, liquidity, capital expenditures or capital
resources.

In view of the uncertainties concerning our continued existence
as a going concern, our management plans to mitigate the effect of such
conditions, management intends to take the following steps in the event that we
are not able to raise sufficient funds to meet the needs of our business plans:

- generate revenues by the sale of our online English classes;
- continue equity financing by private placements or a direct offering;
- negotiate with our management and consultants to pay parts of salaries and
  fees with stock and stock options instead of cash.

We believe that the above discussion contains a number of
forward-looking statements. Our actual results and our actual plan of operations
may differ materially from what is stated above. Factors which may cause our
actual results or our actual plan of operations to vary include, among other
things, decisions of the board of directors not to pursue a specific course of
action based on its re-assessment of the facts or new facts, or general economic
conditions.

Critical Accounting Policies

11

---

Our financial statements are impacted by the accounting
policies used and the estimates and assumptions made by management during their
preparation. A complete summary of these policies is included in note 2 of the
notes to our financial statements. We have identified below the accounting
policy that is of particular importance in the presentation of our financial
position, results of operations and cash flows and which require the application
of significant judgment by management.

Revenue Recognition

We recognize revenue in accordance with Securities and Exchange
Commission Staff Accounting Bulletin No. 104 Revenue Recognition in Financial
Statements. Revenue will consist of online sales of English language lessons to
customers over the Internet, linkage fees to others websites and advertising
revenues. Revenue from these sources is recognized only when the price is fixed
or determinable, persuasive evidence of an arrangement exists, and the lessons
are downloaded by customers with payment received by us.

Item 7.      Financial Statements.

Our financial statements are stated in United States Dollars
(US$) and are prepared in accordance with United States Generally Accepted
Accounting Principles.

Our financial statements are included herein as pages F-1 to
F-9.

EZ English Online Inc. (A Development Stage Company)
September 30, 2006

|Index                                                         |    
|------------------------------------------------------------- | ---
|                                                              |    
|Report
      of Independent Registered Public Accounting Firm | F-1
|                                                              |    
|Balance
      Sheets                                          | F-2
|                                                              |    
|Statements
      of Operations                                | F-3
|                                                              |    
|Statements
      of Cash Flows                                | F-4
|                                                              |    
|Statements
      of Stockholders Equity (Deficit)            | F-5
|                                                              |    
|Notes
      to the Financial Statements                       | F-6

12

---



Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of EZ English
Online Inc. (A Development Stage Company)

We have audited the accompanying balance sheets of EZ English
Online Inc. (A Development Stage Company) as of September 30, 2006 and 2005 and
the related statements of operations, cash flows and stockholders equity
(deficit) for the year ended September 30, 2006, the period from March 2, 2005
(Date of Inception) to September 30, 2005 and accumulated from March 2, 2005 to
September 30, 2006. These financial statements are the responsibility of the
Companys management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audits to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position of EZ English
Online Inc. (A Development Stage Company) as of September 30, 2006 and 2005, and
the results of its operations and its cash flows for the year ended September
30, 2006, the period from March 2, 2005 (Date of Inception) to September 30,
2005 and accumulated from March 2, 2005 to September 30, 2006 in conformity with
accounting principles generally accepted in the United States.

The accompanying financial statements have been prepared
assuming the Company will continue as a going concern. As discussed in Note 1 to
the financial statements, the Company has not generated any revenue and has
accumulated losses from operations since inception. These factors raise
substantial doubt about the Companys ability to continue as a going concern.
Managements plans in regard to these matters are also discussed in Note 1. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.



/S/ Manning Elliott LLP

CHARTERED ACCOUNTANTS

Vancouver, Canada

November 14, 2006

F-1

---

EZ English Online Inc.(A Development Stage Company)
Balance Sheets (Expressed in U.S. dollars)

|                                                                      |  | September 30, |   |  | September 30, |  
|--------------------------------------------------------------------- |  | ------------- | - |  | ------------- | -
|                                                                      |  | 2006          |   |  | 2005          |  
|                                                                      |  | $             |   |  | $             |  
|ASSETS                                                                |  |               |   |  |               |  
|Current Assets                                                        |  |               |   |  |               |  
|Cash                                                                  |  | 10,849        |   |  | 2,188         |  
|Prepaid expenses                                                      |  | 2,000         |   |  |              |  
|Total Assets                                                          |  | 12,849        |   |  | 2,188         |  
|                                                                      |  |               |   |  |               |  
|LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)                        |  |               |   |  |               |  
|Current Liabilities                                                   |  |               |   |  |               |  
|Accounts payable                                                      |  | 4,120         |   |  | 10,118        |  
|Accrued liabilities                                                   |  | 762           |   |  | 8,406         |  
|Due
      to related parties (Note 3(a) and (b))                      |  | 672           |   |  | 9,270         |  
|Total Liabilities                                                     |  | 5,554         |   |  | 27,794        |  
|Going Concern (Note 1)                                                |  |               |   |  |               |  
|Stockholders Equity (Deficit)                                        |  |               |   |  |               |  
|Common Stock, 100,000,000 shares authorized, $0.0001 par
      value; |  |               |   |  |               |  
|5,061,925 and 4,000,000 shares
      issued and outstanding,          |  |               |   |  |               |  
|respectively                                                          |  | 506           |   |  | 400           |  
|Additional Paid-in Capital                                            |  | 84,848        |   |  |              |  
|Donated Capital (Note 3(c))                                           |  | 12,750        |   |  | 5,250         |  
|Deficit Accumulated During the Development Stage                      |  | (90,809       | ) |  | (31,256       | )
|Total
      Stockholders Equity (Deficit)                            |  | 7,295         |   |  | (25,606       | )
|Total Liabilities and Stockholders Equity (Deficit)                  |  | 12,849        |   |  | 2,188         |  

(The accompanying notes are an integral part of these financial
statements)

F2

---

EZ English Online Inc. (A Development Stage Company)
Statements of Operations (Expressed in U.S. dollars)

|                                       |  | Accumulated From    |   |  |               |   |  | For the Period from |  
|-------------------------------------- |  | ------------------- | - |  | ------------- | - |  | ------------------- | -
|                                       |  | March 2, 2005       |   |  | For the       |   |  | March 2, 2005       |  
|                                       |  | (Date of Inception) |   |  | Year Ended    |   |  | (Date of Inception) |  
|                                       |  | to September 30,    |   |  | September 30, |   |  | to September 30,    |  
|                                       |  | 2006                |   |  | 2006          |   |  | 2005                |  
|                                       |  | $                   |   |  | $             |   |  | $                   |  
|                                       |  |                     |   |  |               |   |  |                     |  
|Revenue                                |  |                    |   |  |              |   |  |                    |  
|                                       |  |                     |   |  |               |   |  |                     |  
|                                       |  |                     |   |  |               |   |  |                     |  
|Expenses                               |  |                     |   |  |               |   |  |                     |  
|                                       |  |                     |   |  |               |   |  |                     |  
|Management fees (Note 3(c))            |  | 9,500               |   |  | 6,000         |   |  | 3,500               |  
|Office and
      general (Note 3(d))   |  | 32,127              |   |  | 25,989        |   |  | 6,138               |  
|Professional fees                      |  | 43,032              |   |  | 23,164        |   |  | 19,868              |  
|Rent (Note 3(c))                       |  | 4,150               |   |  | 2,400         |   |  | 1,750               |  
|Website development costs              |  | 2,000               |   |  | 2,000         |   |  |                    |  
|                                       |  |                     |   |  |               |   |  |                     |  
|Total Expenses                         |  | 90,809              |   |  | 59,553        |   |  | 31,256              |  
|                                       |  |                     |   |  |               |   |  |                     |  
|Net
      Loss for the Period          |  | (90,809             | ) |  | (59,553       | ) |  | (31,256             | )
|                                       |  |                     |   |  |               |   |  |                     |  
|                                       |  |                     |   |  |               |   |  |                     |  
|Net Loss Per Share  Basic and Diluted |  |                     |   |  | (0.01         | ) |  | (0.01               | )
|                                       |  |                     |   |  |               |   |  |                     |  
|                                       |  |                     |   |  |               |   |  |                     |  
|Weighted Average Shares Outstanding    |  |                     |   |  | 4,509,000     |   |  | 4,000,000           |  

(The accompanying notes are an integral part of these financial
statements)

F3

---

EZ English Online Inc. (A Development Stage Company)
Statements of Cash Flows (Expressed in U.S. dollars)

|                                                           |  | Accumulated from    |   |  |               |   |  | For the Period from |  
|---------------------------------------------------------- |  | ------------------- | - |  | ------------- | - |  | ------------------- | -
|                                                           |  | March 2, 2005       |   |  | For the       |   |  | March 2, 2005       |  
|                                                           |  | (Date of Inception) |   |  | Year Ended    |   |  | (Date of Inception) |  
|                                                           |  | to September 30,    |   |  | September 30, |   |  | to September 30,    |  
|                                                           |  | 2006                |   |  | 2006          |   |  | 2005                |  
|                                                           |  | $                   |   |  | $             |   |  | $                   |  
|Operating Activities                                       |  |                     |   |  |               |   |  |                     |  
|                                                           |  |                     |   |  |               |   |  |                     |  
|Net loss                                                   |  | (90,809             | ) |  | (59,553       | ) |  | (31,256             | )
|                                                           |  |                     |   |  |               |   |  |                     |  
|Adjustment to
      reconcile net loss to net cash used in |  |                     |   |  |               |   |  |                     |  
|operating activities:                                      |  |                     |   |  |               |   |  |                     |  
|                                                           |  |                     |   |  |               |   |  |                     |  
|Donated services
      and rent                            |  | 12,750              |   |  | 7,500         |   |  | 5,250               |  
|                                                           |  |                     |   |  |               |   |  |                     |  
|Changes in operating assets and
      liabilities:         |  |                     |   |  |               |   |  |                     |  
|Prepaid expenses                                           |  | (2,000              | ) |  | (2,000        | ) |  |                    |  
|Accounts payable                                           |  | 4,120               |   |  | (5,998        | ) |  | 10,118              |  
|Accrued liabilities                                        |  | 762                 |   |  | (7,644        | ) |  | 8,406               |  
|Due to related party                                       |  | 5,524               |   |  | 402           |   |  | 5,122               |  
|                                                           |  |                     |   |  |               |   |  |                     |  
|Net
      Cash Flows Used in Operating Activities          |  | (69,653             | ) |  | (67,293       | ) |  | (2,360              | )
|                                                           |  |                     |   |  |               |   |  |                     |  
|Financing Activities                                       |  |                     |   |  |               |   |  |                     |  
|                                                           |  |                     |   |  |               |   |  |                     |  
|Advances from related party                                |  | 24,448              |   |  | 20,300        |   |  | 4,148               |  
|Repayments to
      related party                          |  | (29,300             | ) |  | (29,300       | ) |  |                    |  
|Proceeds from issuance of common stock                     |  | 85,354              |   |  | 84,954        |   |  | 400                 |  
|                                                           |  |                     |   |  |               |   |  |                     |  
|Net
      Cash Flows Provided by Financing Activities      |  | 80,502              |   |  | 75,954        |   |  | 4,548               |  
|                                                           |  |                     |   |  |               |   |  |                     |  
|Increase in Cash                                           |  | 10,849              |   |  | 8,661         |   |  | 2,188               |  
|                                                           |  |                     |   |  |               |   |  |                     |  
|Cash
       Beginning of Period                           |  |                    |   |  | 2,188         |   |  |                    |  
|                                                           |  |                     |   |  |               |   |  |                     |  
|Cash
       End of Period                                 |  | 10,849              |   |  | 10,849        |   |  | 2,188               |  
|                                                           |  |                     |   |  |               |   |  |                     |  
|Supplemental Disclosures                                   |  |                     |   |  |               |   |  |                     |  
|                                                           |  |                     |   |  |               |   |  |                     |  
|Interest paid                                              |  |                     |   |  |              |   |  |                    |  
|Income taxes paid                                          |  |                     |   |  |              |   |  |                    |  

(The accompanying notes are an integral part of these financial
statements)

F4

---

EZ English Online Inc. (A Development Stage Company)
Statement of Stockholders Equity (Deficit) From March 2, 2005 (Date of
Inception) to September 30, 2006 (Expressed in U.S. dollars)

DeficitAccumulatedAdditional
    
    
    
    
    
    During theCommon Stock
    
    
    Paid-in
    
    
    Donated
    
    
    DevelopmentAmount
    
    
    Capital
    
    
    Capital
    
    
    Stage
    
    
    Total#
    
    
    $
    
    
    $
    
    
    $
    
    
    $
    
    
    $Balance  March 2, 2005 (Date
      of Inception)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Common stock issued for cash at $0.0001per share
    
    4,000,000
    
    
    400
    
    
    
    
    
    
    
    
    
    
    
    400Donated services and rent
    
    
    
    
    
    
    
    
    
    
    5,250
    
    
    
    
    
    5,250Net loss for the period
    
    
    
    
    
    
    
    
    
    
    
    
    
    (31,256
    )
    
    (31,256
    )Balance  September 30, 2005
    
    4,000,000
    
    
    400
    
    
    
    
    
    5,250
    
    
    (31,256
    )
    
    (25,606
    )Common stock issued for cash
      at $0.08 pershare
    
    1,061,925
    
    
    106
    
    
    84,848
    
    
    
    
    
    
    
    
    84,954Donated services and rent
    
    
    
    
    
    
    
    
    
    
    7,500
    
    
    
    
    
    7,500Net
      loss for the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    (59,553
    )
    
    (59,553
    )Balance  September 30, 2006
    
    5,061,925
    
    
    506
    
    
    84,848
    
    
    12,750
    
    
    (90,809
    )
    
    7,295


(The accompanying notes are an integral part of these financial
statements)

F5

---

EZ English Online Inc. (A Development Stage Company)
Notes to the Financial Statements (Expressed in U.S. dollars)

|1. | Nature of Operations and Continuance of
  Business
|-- | --------------------------------------------------

|   | EZ English Online Corp. (the Company) was incorporated
      in the State of Delaware on March 2, 2005. The Company is based in
      Vancouver, British Columbia, Canada and its principal business is offering
      a teacher training course to teach English as a second language that is
      available over the Internet.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | The Company is in the development stage with management
      devoting most of its activities to developing a market for its products
      and services. These financial statements have been prepared on a going
      concern basis, which implies the Company will continue to realize its
      assets and discharge its liabilities in the normal course of business. The
      Company has not generated any revenue and has never paid any dividends.
      The Company is unlikely to pay dividends or generate significant earnings
      in the immediate or foreseeable future. The continuation of the Company as
      a going concern and the ability of the Company to emerge from the
      development stage are dependent upon the continued financial support from
      its shareholders, the ability of the Company to obtain necessary equity
      financing to continue operations and to generate sustainable significant
      revenue. There is no guarantee that the Company will be able to raise any
      equity financing or generate profitable operations. As at September 30,
      2006, the Company has working capital of $7,295 and has accumulated losses
      of $90,809 since inception. These factors raise substantial doubt
      regarding the Companys ability to continue as a going concern. These
      financial statements do not include any adjustments to the recoverability
      and classification of recorded asset amounts and classification of
      liabilities that might be necessary should the Company be unable to
      continue as a going concern.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | The Company filed an SB-2 Registration Statement (SB-2)
      with the United States Securities and Exchange Commission to offer a
      minimum of 1,000,000 shares of common stock and a maximum of 2,000,000
      shares of common stock at $0.08 per share to raise minimum cash proceeds
      of $80,000 and maximum cash proceeds of $160,000. The SB-2 was declared
      effective on February 28, 2006. On April 28, 2006, the Company issued
      1,061,925 shares of common stock at $0.08 per share for proceeds of
      $84,954 pursuant to the SB-2.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|2. | Summary of Significant Accounting
  Principles                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

| | a) | Basis of Presentation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    | These financials statements and related notes are
      presented in accordance with accounting principles generally accepted in
      the United States, and are expressed in US dollars. The Company has not
      produced any revenue from its principal business and is a development
      stage company as defined by Statement of Financial Accounting Standard
      (SFAS) No. 7, Accounting and Reporting by Development Stage
      Enterprises. The Companys fiscal year end is September 30.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | b) | Use of Estimates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    | The preparation of financial statements in conformity
      with U.S. generally accepted accounting principles requires management to
      make estimates and assumptions that affect the reported amounts of assets
      and liabilities and disclosure of contingent assets and liabilities at the
      date of the financial statements and the reported amounts of revenues and
      expenses during the reporting period. Actual results could differ from
      those estimates.                     
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | c) | Cash and Cash Equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    | The Company considers all highly liquid instruments with
      a maturity of three months or less at the time of issuance to be cash
      equivalents.                                                                                                                                                                                                                                                                                                                                                        
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | d) | Comprehensive Loss                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    | SFAS No. 130, Reporting Comprehensive Income,
      establishes standards for the reporting and display of comprehensive loss
      and its components in the financial statements. As at September 30, 2006
      and 2005, the Company has no items that represent a comprehensive loss
      and, therefore, has not included a schedule of comprehensive loss in the
      financial statements.                                                                                                         
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | e) | Financial Instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    | The fair values of financial instruments which include
      cash, accounts payable, accrued liabilities, and due to related party were
      estimated to approximate their carrying values due to the immediate or
      relatively short maturity of these instruments.                                                                                                                                                                                                                                     

F-6

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EZ English Online Inc. (A Development Stage Company)
Notes to the Financial Statements (Expressed in U.S. dollars)

|2. | Summary of Significant Accounting Principles
      (continued)
|-- | --------------------------------------------------------------

| | f) | Basic and Diluted Net Income (Loss) Per Share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    | The Company computes net income (loss) per share in
      accordance with SFAS No. 128, "Earnings per Share". SFAS No. 128 requires
      presentation of both basic and diluted earnings per share (EPS) on the
      face of the income statement. Basic EPS is computed by dividing net income
      (loss) available to common shareholders (numerator) by the weighted
      average number of shares outstanding (denominator) during the period.
      Diluted EPS gives effect to all dilutive potential common shares
      outstanding during the period using the treasury stock method and
      convertible preferred stock using the if-converted method. In computing
      diluted EPS, the average stock price for the period is used in determining
      the number of shares assumed to be purchased from the exercise of stock
      options or warrants. Diluted EPS excludes all dilutive potential shares if
      their effect is anti-dilutive.                                                                                                                                                                                                                                                                                                                    
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | g) | Foreign Currency Translation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    | The Companys functional and reporting currency is the
      United States dollar. Monetary assets and liabilities denominated in
      foreign currencies are translated using the exchange rate prevailing at
      the balance sheet date. Gains and losses arising on translation or
      settlement of foreign currency denominated transactions or balances are
      included in the determination of income. Foreign currency transactions are
      primarily undertaken in Canadian dollars. The Company has not, to the date
      of these financials statements, entered into derivative instruments to
      offset the impact of foreign currency fluctuations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | h) | Revenue Recognition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    | The Company recognizes revenue in accordance with
      Securities and Exchange Commission Staff Accounting Bulletin No. 104
      Revenue Recognition in Financial Statements. Revenue will consist of
      online sales of English language lessons to customers over the Internet,
      linkage fees to others websites and advertising revenues. Revenue from
      these sources is recognized only when the price is fixed or determinable,
      persuasive evidence of an arrangement exists, and the lessons are
      downloaded by customers with payment received by the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | i) | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    | Potential benefits of income tax losses are not
      recognized in the accounts until realization is more likely than not. The
      Company has adopted SFAS No. 109 Accounting for Income Taxes as of its
      inception. Pursuant to SFAS No. 109 the Company is required to compute tax
      asset benefits for net operating losses carried forward. The potential
      benefits of net operating losses have not been recognized in these
      financial statements because the Company cannot be assured it is more
      likely than not it will utilize the net operating losses carried forward
      in future years.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | j) | Recent Accounting Pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    | In September 2006, the Financial Accounting Standards
      Board (FASB) issued SFAS No. 158, Employers Accounting for Defined
      Benefit Pension and Other Postretirement Plans  an amendment of FASB
      Statements No. 87, 88, 106, and 132(R). This statement requires employers
      to recognize the overfunded or underfunded status of a defined benefit
      postretirement plan (other than a multiemployer plan) as an asset or
      liability in its statement of financial position and to recognize changes
      in that funded status in the year in which the changes occur through
      comprehensive income of a business entity or changes in unrestricted net
      assets of a not-for-profit organization. This statement also requires an
      employer to measure the funded status of a plan as of the date of its
      year-end statement of financial position, with limited exceptions. The
      provisions of SFAS No. 158 are effective for employers with publicly
      traded equity securities as of the end of the fiscal year ending after
      December 15, 2006. The adoption of this statement is not expected to have
      a material effect on the Company's future reported financial position or
      results of operations.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    | In September 2006, the FASB issued SFAS No. 157, Fair
      Value Measurements. The objective of SFAS No. 157 is to increase
      consistency and comparability in fair value measurements and to expand
      disclosures about fair value measurements. SFAS No. 157 defines fair
      value, establishes a framework for measuring fair value in generally
      accepted accounting principles, and expands disclosures about fair value
      measurements. SFAS No. 157 applies under other accounting pronouncements
      that require or permit fair value measurements and does not require any
      new fair value measurements. The provisions of SFAS No. 157 are effective
      for fair value measurements made in fiscal years beginning after November
      15, 2007. The adoption of this statement is not expected to have a
      material effect on the Company's future reported financial position or
      results of operations.                                                                                                                                                                                                                                                                                                                             

F-7

---

EZ English Online Inc. (A Development Stage Company)
Notes to the Financial Statements (Expressed in U.S. dollars)

|j) | Recent Accounting Pronouncements (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | In June 2006, the FASB issued FASB Interpretation No. 48,
      Accounting for Uncertainty in Income Taxes, an interpretation of FASB
      Statements No. 109 (FIN 48). FIN 48 clarifies the accounting for
      uncertainty in income taxes by prescribing a two-step method of first
      evaluating whether a tax position has met a more likely than not
      recognition threshold and second, measuring that tax position to determine
      the amount of benefit to be recognized in the financial statements. FIN 48
      provides guidance on the presentation of such positions within a
      classified statement of financial position as well as on derecognition,
      interest and penalties, accounting in interim periods, disclosure, and
      transition. FIN 48 is effective for fiscal years beginning after December
      15, 2006. The adoption of this statement is not expected to have a
      material effect on the Company's future reported financial position or
      results of operations.                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | In March 2006, the FASB issued SFAS No. 156, "Accounting
      for Servicing of Financial Assets, an amendment of FASB Statement No. 140,
      Accounting for Transfers and Servicing of Financial Assets and
      Extinguishments of Liabilities". This statement requires all separately
      recognized servicing assets and servicing liabilities be initially
      measured at fair value, if practicable, and permits for subsequent
      measurement using either fair value measurement with changes in fair value
      reflected in earnings or the amortization and impairment requirements of
      Statement No. 140. The subsequent measurement of separately recognized
      servicing assets and servicing liabilities at fair value eliminates the
      necessity for entities that manage the risks inherent in servicing assets
      and servicing liabilities with derivatives to qualify for hedge accounting
      treatment and eliminates the characterization of declines in fair value as
      impairments or direct write-downs. SFAS No. 156 is effective for an
      entity's first fiscal year beginning after September 15, 2006. The
      adoption of this statement is not expected to have a material effect on
      the Company's future reported financial position or results of
      operations.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | In February 2006, the FASB issued SFAS No. 155,
      "Accounting for Certain Hybrid Financial Instruments-an amendment of FASB
      Statements No. 133 and 140", to simplify and make more consistent the
      accounting for certain financial instruments. SFAS No. 155 amends SFAS No.
      133, "Accounting for Derivative Instruments and Hedging Activities", to
      permit fair value re-measurement for any hybrid financial instrument with
      an embedded derivative that otherwise would require bifurcation, provided
      that the whole instrument is accounted for on a fair value basis. SFAS No.
      155 amends SFAS No. 140, "Accounting for the Impairment or Disposal of
      Long-Lived Assets", to allow a qualifying special-purpose entity to hold a
      derivative financial instrument that pertains to a beneficial interest
      other than another derivative financial instrument. SFAS No. 155 applies
      to all financial instruments acquired or issued after the beginning of an
      entity's first fiscal year that begins after September 15, 2006, with
      earlier application allowed. The adoption of this statement is not
      expected to have a material effect on the Company's future reported
      financial position or results of operations.                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | In May 2005, the FASB issued SFAS No. 154, Accounting
      Changes and Error Corrections  A Replacement of APB Opinion No. 20 and
      SFAS No. 3. SFAS 154 changes the requirements for the accounting for and
      reporting of a change in accounting principle and applies to all voluntary
      changes in accounting principle. It also applies to changes required by an
      accounting pronouncement in the unusual instance that the pronouncement
      does not include specific transition provisions. SFAS 154 requires
      retrospective application to prior periods financial statements of
      changes in accounting principle, unless it is impracticable to determine
      either the period-specific effects or the cumulative effect of the change.
      The provisions of SFAS No. 154 are effective for accounting changes and
      correction of errors made in fiscal years beginning after December 15,
      2005. The adoption of this standard is not expected to have a material
      effect on the Companys future reported financial position or results of
      operations                                                                                                                                                                                                                    

F-8

---

EZ English Online Inc. (A Development Stage Company)
Notes to the Financial Statements (Expressed in U.S. dollars)

|3. | Related Party Transactions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4. | Common Stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|5. | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | Potential benefits of income tax losses are not
      recognized in the accounts until realization is more likely than not. The
      Company has net operating losses of $78,000, which commence expiring in
      2025. Pursuant to SFAS No. 109, the Company is required to compute tax
      asset benefits for net operating losses carried forward. The potential
      benefit of net operating losses has not been recognized in these financial
      statements because the Company cannot be assured it is more likely than
      not it will utilize the net operating losses carried forward in future
      years. For the year ended September 2006, the valuation allowance
      established against the deferred tax asset increased by $18,200.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | The components of the net deferred tax asset as at
      September 30, 2006 and 2005 and the statutory tax rate, the effective tax
      rate and the elected amount of the valuation allowance are scheduled
      below:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

2006
    2005$
    $Cumulative Net Operating Loss
    78,000
    26,000Statutory Tax Rate
    35%
    35%Effective Tax Rate
    
    Deferred Tax Asset
    27,300
    9,100Valuation Allowance
    (27,300)
    (9,100)Net
      Deferred Tax Asset
    
    


F-9

---

Item 8.      Changes In and
Disagreements with Accountants on Accounting and Financial Disclosure.

Not applicable.

Item 8A.   Controls and Procedures.

As required by Rule 13a-15 under the Exchange Act, we carried
out an evaluation of the effectiveness of the design and operation of our
disclosure controls and procedures as of September 30, 2006 being the date of
our fiscal year end covered by this Annual Report. This evaluation was carried
out under the supervision and with the participation of our Chief Executive
Officer / Chief Financial Officer, Andrea Molnar, during the year, and upon that
evaluation, our Chief Executive Officer / Chief Financial Officer concluded that
our disclosure controls and procedures are effective in timely alerting
management to material information relating to us required to be included in our
periodic SEC filings.

Disclosure controls and procedures are controls and other
procedures that are designed to ensure that information required to be disclosed
in our reports filed or submitted under the Exchange Act is recorded, processed,
summarized and reported, within the time periods specified in the Securities and
Exchange Commission's rules and forms.

During our fiscal year ended September 30, 2006, there were no
changes in our internal control over financial reporting that have materially
affected, or are reasonably likely to affect, our internal control over
financial reporting.

The term "internal control over financial reporting" is defined
as a process designed by, or under the supervision of, the registrant's
principal executive and principal financial officers, or persons performing
similar functions, and effected by the registrant's board of directors,
management and other personnel, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting
principles and includes those policies and procedures that:

| | (1) | Pertain to the maintenance of records that in reasonable
      detail accurately and fairly reflect the transactions and dispositions of
      the assets of the registrant;                                                                                                                                                                                                   
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                
| | (2) | Provide reasonable assurance that transactions are
      recorded as necessary to permit preparation of financial statements in
      accordance with generally accepted accounting principles, and that
      receipts and expenditures of the registrant are being made only in
      accordance with authorizations of management and directors of the
      registrant; and
| |     |                                                                                                                                                                                                                                                                                                                                                                                
| | (3) | Provide reasonable assurance regarding prevention or
      timely detection of unauthorized acquisition, use or disposition of the
      registrant's assets that could have a material effect on the financial
      statements.                                                                                                                                              

Item 8B.   Other Information

The common stock of EZ English became eligible for trading on
the NASDAQ-operated OTC Bulletin Board (OTCBB) when the market opened on
Monday, July 3, 2006. Our shares will trade under the ticker symbol EZEO.OB.
The OTCBB is a regulated quotation service that displays real-time quotes,
last-sale prices and volume information for over-the-counter equity

13

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securities. OTCBB securities are traded by a community of
market makers that enter quotes and trade through a sophisticated computer
network. Information on the OTCBB can be found at www.otcbb.com.

PART III

Item 9.      Directors, Executive
Officers, Promoters and Control Persons; Compliance With Section 16(a) of the
Exchange Act.

Directors and Executive Officers

All directors of our company hold office until the next annual
meeting of the shareholders or until their successors have been elected and
qualified. The officers of our company are appointed by our board of directors
and hold office until their death, resignation or removal from office.

As at November 29, 2006 our directors and executive officers,
their ages, positions held, and duration of such, are as follows:

Name
    Position Held with our
      Company
    Age
    Date First Elected or
      AppointedAndrea Molnar
    President, Chief Executive
      Officer, Chief Financial Officer, Chief Accounting Officer,
      Secretary, Treasurer, and Director
    39
    March 2, 2005Kris Kooner
    Vice President
      Marketing, Director
    32
    March 28, 2006 (VP), October 4, 2006
      (Director)


Business Experience

The following is a brief account of the education and business
experience during at least the past five years of each director, executive
officer and key employee, indicating the principal occupation during that
period, and the name and principal business of the organization in which such
occupation and employment were carried out.

Andrea Molnar, President, Chief Executive Officer, Chief
Financial Officer, Chief Accounting Officer, Secretary, Treasurer, and
Director.

Andrea Molnar has been the President, Chief Executive Officer
and Chief Financial Officer of EZ English since our inception in March 2005.
Andrea Molnar began teaching over a decade ago after obtaining her teaching
certificate from University in Hungary. From January 2000 to January 2004, Ms.
Molnar was self employed, providing bookkeeping and accounting services to small
businesses. Since January 2004 to the present, she has been working as a home
realtor with Royal LePage. Ms. Molnar has an Elementary School Teachers Diploma
from the Teachers College of Zsambek, Hungary and a Kindergarten Teaching
Diploma from Fotgyermekvaros, Hungary. She was issued a TEFL (Teach English as a
Foreign Language)

14

---

and TESL (Teach English as a Second Language) certificate by
Vancouver English School Centre in November 2002.

Kris Kooner, Vice President Marketing, Director

For the past five years, Mr. Kooner has been the sole owner and
  operator of CrackMarketing.com, a business which provides internet marketing
  and web based consulting services to a variety of clients. Mr. Kooner has developed
  several web businesses including Homehammer.com, which he recently sold. He
  is currently enrolled in the Executive Master's of Business Administration program
  at Athabasca University. Mr. Kooner also has an Internet Marketing degree from
  the University of British Columbia.

Significant Employees

Other than the executive officers described above, EZ English
does not expect any other individuals to make a significant contribution to our
business.

Family Relationships

There are no family relationships among our officers,
directors, or persons nominated for such positions.

Legal Proceedings

No officer, director, or persons nominated for these positions,
and no promoter or significant employee of our corporation has been involved in
legal proceedings that would be material to an evaluation of our management.

Audit Committee

The functions of the Audit Committee are currently carried out
by our Board of Directors. We do not have an audit committee financial expert
serving on the Board of Directors or an audit committee. We do not believe that
the addition of such an expert would add anything meaningful to our company at
this time. It is also unlikely we would be able to attract an independent
financial expert to serve on our Board of Directors at this stage of our
development. In order to entice such a director to join our Board of Directors
we would probably need to acquire directors' errors and omission liability
insurance and provide some form of meaningful compensation to such a director;
two things we are unable to afford at this time.

Director Nominees

We do not have a nominating committee. The Board of Directors,
sitting as a Board, selects those individuals to stand for election as members
of our Board. Since the Board of Directors does not include a majority of
independent directors, the decision of the Board as to director nominees is made
by persons who have an interest in the outcome of the determination. The Board
will consider candidates for directors proposed by security holders, although no
formal procedures for submitting candidates have been adopted. Until otherwise
determined, not less than 90 days prior to the next annual Board of Directors'
meeting at which the slate of Board nominees is adopted, the Board accepts
written submissions that include the name, address and telephone number of the
proposed nominee, along with a brief statement of the candidate's

15

---

qualifications to serve as a director and a statement of why
the shareholder submitting the name of the proposed nominee believes that the
nomination would be in the best interests of shareholders. If the proposed
nominee is not the security holder submitting the name of the candidate, a
letter from the candidate agreeing to the submission of his or her name for
consideration should be provided at the time of submission. The letter should be
accompanied by a résumé supporting the nominee's qualifications to serve on the
Board of Directors, as well as a list of references.

The Board identifies director nominees through a combination of
referrals, including by management, existing Board members and security holders,
where warranted. Once a candidate has been identified, the Board reviews the
individual's experience and background and may discuss the proposed nominee with
the source of the recommendation. If the Board believes it to be appropriate,
Board members may meet with the proposed nominee before making a final
determination whether to include the proposed nominee as a member of
management's slate of director nominees submitted to shareholders for election
to the Board.

Among the factors that the Board considers when evaluating
proposed nominees are their knowledge of and experience with and knowledge of
and experience in business matters, finance, capital markets and mergers and
acquisitions. The Board may request additional information from the candidate
prior to reaching a determination. The Board is under no obligation to formally
respond to all recommendations, although as a matter of practice, it will
endeavor to do so.

Code of Ethics

We have not yet adopted a code of ethics that applies to EZ
Englishs principal executive officer, principal financial officer, principal
accounting officer or controller, or persons performing similar functions
because it has not yet finalized the content of such a code. Companies whose
equity securities are listed for trading on the OTCBB are not currently required
to do so.

Item 10.     Executive Compensation.

None of our officers or directors received annual compensation
in excess of $100,000 during the last three complete fiscal years.

Employment/Consulting Agreements

We have one marketing agreement with Kris Kooner whereby we
have agreed to pay Mr. Kooner $500 per month for marketing services to us.

Stock Options/SAR Grants

EZ English made no grants of stock options or stock
appreciation rights during the fiscal year ended September 30, 2006.

Long-Term Incentive Plans

There are no arrangements or plans in which we provide pension,
retirement or similar benefits for directors or executive officers. We do not
have any material bonus or profit sharing plans

16

---

pursuant to which cash or non-cash compensation is or may be
paid to our directors or executive officers.

We have no plans or arrangements in respect of remuneration
received or that may be received by our executive officers to compensate such
officers in the event of termination of employment (as a result of resignation,
retirement, change of control) or a change of responsibilities following a
change of control.

Directors Compensation

We reimburse our directors for expenses incurred in connection
with attending board meetings but did not pay director's fees or other cash
compensation for services rendered as a director in the year ended September 30,
2006.

We have no standard arrangement pursuant to which our directors
are compensated for their services in their capacity as directors. The board of
directors may award special remuneration to any director undertaking any special
services on behalf of our company other than services ordinarily required of a
director. No director received and/or accrued any compensation for his services
as a director, including committee participation and/or special assignments.

Item 11.     Security Ownership of
Certain Beneficial Owners and Management and Related Stockholder Matters.

The following table sets forth, as of November 29, 2006,
certain information with respect to the beneficial ownership of our common stock
by each stockholder known by us to be the beneficial owner of more than 5% of
our common stock, as well as by each of our current directors and executive
officers. Each person has sole voting and investment power with respect to the
shares of common stock, except as otherwise indicated. Beneficial ownership
consists of a direct interest in the shares of common stock, except as otherwise
indicated.

Name and Address of Beneficial
      Owner
    Amount and Nature of Beneficial
      Ownership (1)
    Percentage of Class (2)Andrea Molnar (3)
    4,000,000
    79%Kris Kooner (4)
    625
    Less than 1%Directors and Executive Officers as a
      Group
    4,000,000
    79%


(1)Except as otherwise indicated, we believe that
the beneficial owners of the common stock listed above, based on information
furnished by such owners, have sole investment and voting power with respect to
such shares, subject to community property laws where applicable. Beneficial
ownership is determined in accordance with the rules of the SEC and generally
includes voting or investment power with respect to securities. Shares of common
stock subject to options or warrants currently exercisable, or exercisable
within 60 days, are deemed outstanding for purposes of computing the percentage
ownership of the person holding such option or warrants, but are not deemed
outstanding for purposes of computing the percentage ownership of any other
person.

(2)Based on 5,061,925 shares of common stock issued
  and outstanding as of November 29, 2006.

17

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(3) Andrea Molnar is a Director and the President,
  Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer,
  Secretary, Treasurer, of EZ English.

(4)Kris Kooner is a Director and Vice President of
Marketing of EZ English. Mr. Kooner owns 625 shares through AJ Capital Corp., a
company over which he has voting and investment control.

Item 12.     Certain
Relationships and Related Transactions.

We have not entered into any transactions with our officers,
directors, persons nominated for these positions, beneficial owners of 5% or
more of our common stock, or family members of these persons wherein the amount
involved in the transaction or a series of similar transactions exceeded
$60,000.

Item 13.     Exhibits

|3.1  | Articles of Incorporation (incorporated
        by reference as Exhibit Number 3.1 of our Form SB- 2 filed February 3,
        2006).                                                                
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                      
|3.2  | Bylaws (incorporated by reference as
        Exhibit Number 3.2 of our Form SB-2 filed February 3, 2006).                                                                                            
|     |                                                                                                                                                                                                      
|10.1 | PayPal User Agreement (incorporated
        by reference as Exhibit Number 10.1 of our Form SB-2 filed February 3,
        2006).                                                                    
|     |                                                                                                                                                                                                      
|31.1 | Certification
        of Chief Executive Officer and Chief Financial Officer pursuant to Section
        302 of the Sarbanes-Oxley Act of 2002                                                       
|     |                                                                                                                                                                                                      
|32.1 | Certification
        of Chief Executive Officer and Chief Financial Officer pursuant to 18
        U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
        Act of 2002

Item 14.     Principal Accountant Fees
and Services.

The aggregate fees billed for the two most recently completed
fiscal years ended September 30 for professional services rendered by the
principal accountant for the audit of our company's annual financial statements
and review of the financial statements included our Annual Report on Form 10-KSB
and services that are normally provided by the accountant in connection with
statutory and regulatory filings or engagements for these fiscal periods were as
follows:

|                   |   | Year Ended | 
|------------------ | - | ---------- | 
|                   |   | September  | 
|                   |   | 30, 2006   | 
|Audit Fees         | $ | 8,400      | 
|Audit Related Fees |   | 0          | 
|Tax Fees           |   | 0          | 
|All Other Fees     |   | 0          | 
|Total              | $ | 8,400      | 

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SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

EZ ENGLISH ONLINE INC.a Delaware corporation

/s/ Andrea
MolnarAndrea
Molnar, Director and the President, Chief Executive Officer, Chief Financial
Officer, Chief Accounting Officer, Secretary, Treasurer,

Date: December 6, 2006

In accordance with the Exchange Act, this report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.

Signatures

/s/ Andrea
MolnarAndrea
Molnar, Director and the President, Chief Executive Officer, Chief Financial
Officer, Chief Accounting Officer, Secretary, Treasurer,

Date: December 6, 2006

/s/ Kris KoonerKris
Kooner, Director

Date: December 6, 2006

19

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