LZG INTERNATIONAL, INC. Item 2.01 Completion of Acquisition or Disposition of Assets
Form 10 Information
For purposes of this Current Report on Form 8-K, the Company is providing
certain information that it would be required to disclose if it were a
registrant filing a general form for registration of securities on Form 10 under
the Exchange Act. As a result of the acquisition of the IT Assets of FatBrain
(as described more fully in Item 1.01, above),
2
Description of Business
The Company will market the FatBrain technology directly to customers and/or through reselling strategic partners. We have initiated the commercialization of the technology and we have spoken to several potential clients.
FatBrain's AI and machine learning (ML) software is differentiated across three key areas of automation:
1. Data integration enabling formation and exploitation of a unified asset unique
to each enterprise featuring learned business drivers and exploitable signals,
binding siloed text, spreadsheets, PDF's, databases, emails, alternative
econometric, health and regional data into a unified metric space of entities,
events, relationships, consequences and decisions.
2. Model consolidation across scores of uncoordinated models, boosting incumbent
system performance with improved effectiveness and efficiency, featuring
continuous unit level scoring to distinguish good, bad or worse outcomes with
back testing, featuring receiver operating characteristics ("ROC") and area
under the curve ("AUC") performance benchmarking (collectively, "ROC-AUC
curve") for dynamic improvement outpacing static thresholds or legacy rules.
3. Coached decision-making featuring "FatBrain Optimal" outcomes war-gamed to
attain personalized "WAZE-like" awareness tuned to peer-attained goals,
powered by recommendations with quantified, anticipated trade-offs and
automated active and transfer learning, including human expertise in the loop.
The FatBrain technology comprises services to configure, test and deploy FatBrain solutions on client servers, with flexibility to work in the cloud, on client premise or in hybrid mode. It allows data integration with client systems to establish logical, trusted, programmatic connectivity and provides secure access protocols between the FatBrain technology and the client systems. The Company provides training and support to the client's staff starting with a two-week training session for the client's staff along with product support via phone, web and onsite.
On
Principal Products and Services
The FatBrain technology offers software solutions packaged within the modern AI architecture. The solutions comprise FatBrain technology applications, Core PaaS (Platform as a Service), and public cloud (e.g., AWS, Azure, IBM, Google) or on premise private (Vmware, Nvidia) orchestration using microservices portability. Our Core PaaS includes capability to dynamically integrate with customer applications. The FatBrain software framework features data engineering, encoding, anonymizing, disambiguation and de-biasing modules, working with all data formats, including text, web, PDF, transaction, time series, interconnection, econometric, video and behavior data. The framework uses representational learning, continuous scoring, and pre-trained models featuring reinforcement learning to identify optimal policies for simulated outcomes in multi-level, multi-agent settings. The competitive advantage of our framework delivers continuously improved effectiveness and efficiency controls via a higher ROC-AUC curve, with explainability and auditability at a lower cost, and in a fraction of the time compared with traditional analytics offerings.
3 Major Suppliers
The Company will use commodity public cloud infrastructure and microservices platforms ("IaaS") without material dependency on any one cloud provider, such as AWS, Azure, Google Cloud, IBM Cloud, or other cloud providers, and a variety of open-source software ("OSS").
Marketing
The Company will market its products directly and through distribution with value-added resellers and strategic partners. Direct marketing efforts include internet and email campaigns, tele-sales and virtual and in person follow ups. We anticipate having ten sales people able to work from anywhere. Distribution efforts include relationships with global and regional systems integrators ("SIs"), value added resellers ("VARs"), independent software vendors ("ISVs"), vertical software application developers and combinations of the above.
Product Development
FatBrain research and development expenditures have roughly averaged
Patents, Brands and Trademarks
The Company will continue to use the FatBrain brand and logo as well as the Outcomes™ engine brand to represent the quality and source of its products and services and, reflecting the ownership and usage as trademarks of the terms "FatBrain," its fanciful "FBAI" puzzle logo and the term "Outcomes." We use themed product names as brands for our apps, solutions and services in the "Service Name (solution area) - market comparable" format (e.g., Service Name = 'Aisling'; solution area = 'global private placement bond ratings'; market comparable = 'S&P Global, Moody's, Fitch et al., for private placement products"), as follows:
a. Aisling (global private placement bond ratings) - market is S&P Global,
Moody's, Fitch et al., for the private placement products.
b. Andromeda (social media signal ratings) - market is Sprout Social, et al.
c. Angelina (foreign exchange FX intelligence) - holds 50% of the equity in
Angelina GL and related distributions under a Master Services Agreement, dated
May 7, 2021 , between FatBrain LLC and Tempus, Inc , a wholly-owned business of
Monex SAB de CV .
d. Alice (document intelligence) - market is UPath, et al.
e. Bella (business wellness) - market is over 400 SaaS data repositories, e.g.,
QBO, Shopify, Salesforce.
f. Cagney (dynamic risk IQ) - market is compliance Oracle, Nice Actimize,
Feezdai, Refinitiv, et al.
g. Celeste (thin-file behavior IQ) - market is anyone without traditional credit
scores.
h. Clair (climate wellness) - market is anyone interested in ESG integrated
outcomes scoring.
i. Covid Risk Live (digital health) - market is consumer facing C-19 dynamic risk
rating by specified zip code.
j. Debbie (PEM forecasting) - market is HIS Markit, et al.
k. Ginger (yield optimization) - market is anyone interested in commodities input
driven yield growth, based on peer-attained and contributory data dynamics.
4
a. Gaby (customer intent) - market is Contact Center as a service software and
services, e.g., NICE et al.
b. Goldie (trading surveillance) - market is dark pool trading by e.g., Goldman
Sachs, JP Morgan, Citi, Morgan Stanley, et al.
c. Inga (insurance underwriting) - market is iPipeline, GuideWire, and similar
InsureTech customers.
d. Jade (crypto risk IQ) - market is risk management for
e. Ness (AML, fraud) - market is all regulated financial institutions.
f. Fiona (trading forecast) - market is day trader and family office trading
operations.
g. Flora (trading dynamics) - market is day trader and family office trading
operations.
h.
operations.
i. Frida (risk concentration) - market is day trader and family office trading
operations.
j. Rosie (data engineering) - market is anyone with data silos.
k. Ruby (MTF engine maintenance) - market is internet-of-things ("IOT") and
physical equipment (e.g., compressor, air conditioner) scheduled maintenance
to mean-time-to-failure ("MTF") transformation.
l. Shahrazad (unrest risk ratings) - market is governments and institutions
needing early warning systems to detect social unrest in physical world as
reflected in viral communications signals.
m. Stella (Chinese bond ratings) -- market is S&P Global, Moody's, Fitch et al.
for the Chinese bond ratings products, including State Owned Enterprises and
hidden default tail risk.
Major Competitors
Risk Factors
An investment in the Company's common stock involves a high degree of risk. In determining whether to purchase the Company's common stock, an investor should carefully consider all of the material risks described below, together with the other information contained in this report. An investor should only purchase the Company's securities if he or she can afford to suffer the loss of his or her entire investment.
5
Risks Related to Our Business
We have a limited operating history and a history of operating losses, and we may not be able to achieve or sustain profitability.
Our limited operating history may make it difficult to evaluate our current business and our prospects. We have encountered, and will continue to encounter, risks and difficulties frequently experienced by growing companies in rapidly developing and changing industries, including challenges in forecasting accuracy, determining appropriate investments of our limited resources, gaining market acceptance of our FatBrain technology, managing a complex regulatory landscape and developing new product candidates.
We may not be able to fully implement or execute our business strategy or realize, in whole or in part within our expected time frames, the anticipated benefits of our growth strategies. You should consider our business and prospects in light of the risks and difficulties we face as an early-stage company focused on developing and marketing our Fatbrain technology products.
In addition, we may be unable to continue as a going concern. We incurred a net
loss of approximately
Our success is dependent on the FatBrain technology.
We intend to initially devote all of our time, effort and resources on the commercialization of our FatBrain technology. If we are unsuccessful in such efforts, we will have spent all or a substantial portion of our available funds on an unsuccessful product. Moreover, other factors that could adversely affect ultimate success of our FatBrain technology includes pricing, demand, market acceptance, regulatory compliance and approval.
Our failure to effectively manage growth could impair our business.
We intend to increase our personnel and other costs as we develop our FatBrain technology marketing plan. Such changes may put a strain on our administrative and operational resources, and our funding requirements. Our ability to effectively manage growth will require us to successfully create and expand operational and management systems and hire, attract, train, manage, and retain qualified personnel. There can be no assurance that we will be able to do so, particularly if we are unable to obtain sufficient financing. If we are unable to appropriately manage growth, our business, prospects, financial condition, and results of operations could be materially and adversely affected.
We operate in a very competitive industry and will compete against competitors who have greater resources than us.
FatBrain's AI and machine learning (ML) software is in an intensely competitive market, subject to rapid change and highly sensitive to the introduction of new products. We believe the FatBrain technology will compete directly with a number of well-established AI products. We believe our primary competitors will be Palantir Technologies Inc. (PLTR), who services government institutions, and C3ai. Inc (C3AI), who serves Fortune 500 companies. Both are publicly traded companies. . . .
Item 9.01 Financial Statements and Exhibits
(a) Financial Statements of
In accordance with Item 9.01(a),
(b) Pro Forma Financial Information.
None.
(c) Shell Company Transactions.
Reference is made to Items 9.01(a) and 9.01(b) and the exhibits referred to therein which are incorporated herein by reference.
(d) Exhibits.
The following exhibits are either filed as a part hereof or are incorporated by reference. Exhibit numbers correspond to the numbering system in Item 601 of Regulation S-K.
No. Description 3.1 Articles of Incorporation of LazyGrocer.Com, Inc., datedMay 17, 2000 (Incorporated by reference to exhibit 3.1 to Form 10, filedMay 26, 2010 ) 3.1.2 Amendment to Articles of Incorporation of LazyGrocer.Com, Inc., datedAugust 28, 2009 (Incorporated by reference to exhibit 3.1.2 to Form 10, filedMay 26, 2010 ) 3.2 Bylaws ofLZG International, Inc. , effectiveJanuary 28, 2010 (Incorporated by reference to exhibit 3.2 to Form 10, filedMay 26, 2010 ) 4.6 Description of Securities (Incorporated by reference to exhibit 4.6 to Form 10-K, filedAugust 29, 2019 ) 10.1 IT Asset Contribution Agreement, datedOctober 23, 2021 (Incorporated by reference to exhibit 10.1 to Form 8-K, filedOctober 28, 2021 ) 10.2 Subscription Agreement Form (Incorporated by reference to exhibit 10.1 to Form 8-K, filedNovember 26, 2021 ) 23.1 Consent ofPinnacle Accountancy Group of Utah 99.1LZG International's unaudited financial statements for the quarter endedAugust 31, 2021 99.2LZG International's audited financial statements for the years endedMay 31, 2021 and 2020 17
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