USBC, Inc. Annual Report - How They Did This Year

I’m putting together a guide to help you understand how USBC, Inc. (formerly Know Labs) performed. The company has completely transformed. Think of this as a brand-new startup rather than the company it was a year ago.

1. What does this company do now?

USBC has moved away from health sensors to focus on "tokenized deposits." Think of this as a digital version of a bank account that lives on a blockchain. Unlike cryptocurrencies, these are actual U.S. dollar deposits held at regulated banks. They want to make moving money as fast as sending an email, while keeping the safety of a traditional bank. They make money through transaction fees, software licensing, and interest earned on the deposits they hold.

2. The Strategy

In August 2025, new leadership took over with $125 million in fresh cash. They are building a platform that connects traditional banking with blockchain technology.

• How it works: They use a private blockchain to follow laws like "Know Your Customer" and anti-money laundering rules. This allows for instant transfers, bypassing the 1–3 day wait times of traditional bank transfers.
• The Partners: They work with Uphold and Vast Bank. Uphold provides the network, and Vast Bank holds the FDIC-insured deposits.
• The Tech: They run on the Solana blockchain, which handles 65,000 transactions per second. A custom "rules engine" ensures every transaction follows federal banking laws.

3. Financial Health and Spending

The company is in "build mode." They reported a loss of $42.8 million for the year ending December 31, 2025.

• Spending: They will pay an affiliate, Vast Holdings, up to $10.5 million through 2026 for technical work and security audits.
• Debt: In March 2026, they took a $25 million loan at a 9% interest rate. They used their Bitcoin—worth about $38 million—as collateral.
• The Reality: They aren't profitable. They burn about $3.5 million per month and rely on loans and selling stock to fund development. They expect costs to rise by 25–30% as they move from testing to scaling up to 500,000 users.

4. Key Risks for Investors

• It’s a "Show Me" Story: They only have 12,000 beta users. There is no guarantee regulators will approve their licenses or that the public will use their platform.
• Bitcoin Volatility: They use Bitcoin as a reserve and loan collateral. If the price of Bitcoin drops by 20%, the lender could demand more cash or immediate repayment, which would hurt the company’s bank account.
• Dilution: The company can sell more shares to raise money. This creates more shares, which reduces your ownership percentage and the value of your current holdings.
• Competition: They face giants like JPMorgan and Citigroup. These competitors have more money and established banking systems, making it hard for USBC to compete.

5. The Bottom Line

USBC is a high-risk, speculative bet. They are trying to bridge old-school banking and blockchain. If they succeed, they could change how money moves globally. If they fail, or if they run out of cash before becoming profitable, investors could lose significant value.

Before you decide: Ask yourself if you are comfortable with a company that is currently burning cash to build a product that hasn't yet reached mass adoption. Only invest what you are prepared to lose.