Item 2.01 Completion of Acquisition or Disposition
of Assets
As previously reported, on October 23, 2021, LZG International entered
into an IT Asset Contribution Agreement (“IT Contribution Agreement”) with FatBrain, LLC, a Delaware limited liability company
(“FatBrain”), to effect the acquisition of FatBrain's intellectual property assets, including patents, patents pending,
patents in preparation, proprietary technology, development plans, and contractual rights (“IT Assets”). Pursuant to the terms
of the IT Contribution Agreement, LZG International issued 10,000,000 shares of common stock, valued at $0.001, to FatBrain as consideration
for the FatBrain asset contribution to LZG International. As a result of this transaction, LZG International acquired assets and has operations
related to the FatBrain technology.
Business Operations
The FatBrain IT Assets include software that uses artificial intelligence
(“AI”) to help companies automate enterprise decision cycles to learn, explain and intervene for better outcomes across all
business interactions. The software continuously learns from historical transactions, incumbent models and in-house expert teams to deliver
a unified framework binding structured and unstructured data in text, numerical, network/graph and video formats. The technology leverages
modern advances in machine learning and cloud economics to enable sustained operational advantages of: (i) simplicity with smaller, denser
models using vector embeddings, (ii) auditability with explainable, trusted quantification and de-biasing using blockchain, (iii) quality
work with noisy, sparse, imbalances or missing date using generative autoencoders, and (iv) technology using transfer and active learning.
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:
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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.
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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.
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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.
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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 November 15, 2021, the Company announced the launch of LZG International's
FatBrain product “Angelina,” a foreign exchange (“FX”) service, as part of its coached
business wellness services (“BWS”) to tackle discriminatory pricing in the $6.6 trillion-dollar daily foreign exchange market.
Angelina FX realizes a multi-year strategic effort co-developed with global leaders to manage FX risk and provide international payment
solutions. Nearly nine thousand businesses were invited through traditional and nontraditional marketing efforts to take advantage of
the inaugural service offering.
Principal Products and Services
The FatBrain technology offers software solutions packaged within the Modern
AI Architecture. The solutions comprise FatBrain AI 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.
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 $1.25
million per year each of the last three years. The Company anticipates doubling the expenditures to support projected growth.
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:
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a.
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Aisling (global private placement bond ratings) – market is S&P Global, Moody's, Fitch
et al., for the private placement products.
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b.
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Andromeda (social media signal ratings) – market is Sprout Social, et al.
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c.
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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.
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Alice (document intelligence) – market is UPath, et al.
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e.
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Bella (business wellness) – market is over 400 SaaS data repositories, e.g., QBO, Shopify, Salesforce.
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Cagney (dynamic risk IQ) – market is compliance Oracle, Nice Actimize, Feezdai, Refinitiv, et
al.
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Celeste (thin-file behavior IQ) – market is anyone without traditional credit scores.
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Clair (climate wellness) – market is anyone interested in ESG integrated outcomes scoring.
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Covid Risk Live (digital health) – market is consumer facing C-19 dynamic risk rating by specified
zip code.
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Debbie (PEM forecasting) – market is HIS Markit, et al.
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k.
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Ginger (yield optimization) – market is anyone interested in commodities input driven yield growth,
based on peer-attained and contributory data dynamics.
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Gaby (customer intent) – market is Contact Center as a service software and services, e.g., NICE
et al.
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Goldie (trading surveillance) – market is dark pool trading by e.g., Goldman Sachs, JP Morgan,
Citi, Morgan Stanley, et al.
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Inga (insurance underwriting) – market is iPipeline, GuideWire, and similar InsureTech customers.
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Jade (crypto risk IQ) – market is risk management for Coinbase, BlockFi et al.
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p.
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Ness (AML, fraud) – market is all regulated financial institutions.
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Fiona (trading forecast) – market is day trader and family office trading operations.
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Flora (trading dynamics) – market is day trader and family office trading operations.
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Frankie (trading scenarios) – market is day trader and family office trading operations.
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Frida (risk concentration) – market is day trader and family office trading operations.
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Rosie (data engineering) – market is anyone with data silos.
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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.
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w.
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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.
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x.
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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.
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Major Competitors
FatBrain's efforts are focused on advancing machine intelligence
and learning (“AI/ML”) for improved enterprise decision-making. The competition to address this market span scores of siloed
special purpose SaaS applications (e.g., Salesforce for CRM, Shopify for ecommerce, HubSpot for marketing, QuickBooks for financial reporting,
etc.), which is difficult and expensive to integrate into a unified framework. Similarly, there are service providers using human capital
at industrial scale to achieve greater productivity e.g., Consero for finance as a service (FaaS), in a specific market but still siloed.
There are many OSS tools for variety of automation tasks such as for natural language processing and statistical machine learning (e.g.,
DataRobot, Databricks, H20), all requiring expensive, scarce do-it-yourself (“DIY”) and data scientist resources. Consulting
firms like McKinsey, Bain, Deloitte have been able to engage on specific AI/ML projects but lack platform and operational scalability,
featuring eight-figure custom time and materials (“T&M”) project risk with ad hoc approaches. To date the most successful
AI/ML decision making services have only been available to large government institutions (served by Palantir: PLTR) and Fortune 500 companies
(served by C3AI: AI). In contrast, FatBrain's unprecedented speed and subscription delivery model enables enterprises of up to 500
people to take advantage of its easy to use and simple to deploy solution eco-system turbo-charged by AI/ML.