8-K: USBC, Inc. Pivots to Digital Assets, Appoints New Leadership

Know Labs, Inc. completes a strategic acquisition by Goldeneye 1995 LLC, changes its name to USBC, Inc., and shifts focus to a Bitcoin treasury strategy and digital asset development under new CEO Greg Kidd.

Summary

• Know Labs, Inc. completed a strategic acquisition by Goldeneye 1995 LLC, an affiliate of Greg Kidd, on August 6, 2025, following shareholder approval.
• The company's corporate legal name will change to USBC, Inc., and its ticker symbol will change from KNW to USBC, effective August 15, 2025.
• The new vision centers on the USBC token, a U.S.-dollar denominated token leveraging digital identity and blockchain technology, designed to be fully redeemable and earn high-yield rewards.
• Goldeneye 1995 LLC contributed 1,000 Bitcoin and $15 million in cash to acquire 357.8 million new common shares at a per share purchase price of $0.335, resulting in a change of control with the buyer acquiring approximately 81% of the outstanding common stock on a fully diluted basis.
• The Bitcoin will be used for a yield generation treasury strategy, and the cash will retire existing debt and redeem outstanding preferred equity.
• The company repaid a $2,354,625 promissory note to Lind Global Fund II LP in cash.
• Various Struve Loan Documents were repaid, including $75,000 in cash and an aggregate of 3,295,379 shares of common stock.
• Series C and Series D Preferred Stock were converted into an aggregate of 9,097,581 shares of common stock (7,569,299 shares for principal and 764,141 shares for accrued dividends).
• Series H Preferred Stock was redeemed for $654,276.15 in cash and 2,000,000 shares of common stock.
• An Asset Management Agreement was entered into with Hyrcanian Asset Management, LLC to manage the Bitcoin treasury strategy, with fees of 1% per annum of account value and 25% of net realized gains/mark-to-market changes, payable in Bitcoin.
• The company issued 3,909,549 shares of common stock to J.V.B Financial Group, LLC as a transaction fee.

Sentiment

Score: 7

Explanation: The filing indicates a significant strategic transformation with substantial new capital and experienced leadership, which are strong positives. However, the new business focus on digital assets introduces high volatility and regulatory risks, and the controlled company status may concern some investors. The overall sentiment is cautiously positive due to the potential for growth in a high-risk, high-reward sector.

Positives

• The company secured significant new capital through the private placement, including 1,000 Bitcoin and $15 million in cash.
• Existing debt was retired, and preferred equity was redeemed, strengthening the balance sheet.
• A clear new strategic direction towards digital assets and banking, with the development of the USBC token, offers potential for growth in an evolving market.
• New executive leadership, including CEO Greg Kidd, CFO Kitty Payne, and COO Kirk Chapman, brings extensive experience in finance, technology, and digital assets.
• The company will employ a yield generation treasury strategy with its Bitcoin holdings, aiming to create income streams.

Negatives

• The company's new business model, heavily reliant on Bitcoin and digital assets, exposes it to extreme market volatility and regulatory uncertainty.
• The CEO, Gregory Kidd, will receive an annual base salary of only $1, which is unusual for a public company CEO and could raise questions about long-term commitment or alternative compensation structures not fully detailed.
• The significant issuance of new shares (357.8 million in the private placement, plus shares for debt/preferred conversions) resulted in substantial dilution for existing shareholders, with the buyer acquiring 81% control.
• The company's status as a 'controlled company' under NYSE rules means it may elect not to comply with certain corporate governance requirements, potentially reducing protections for minority shareholders.

Risks

• Fluctuations in the market price of Bitcoin and associated unrealized gains or losses on digital assets could significantly impact financial results.
• Bitcoin does not inherently pay interest or dividends, and the ability to generate reliable income streams from Bitcoin holdings is uncertain.
• The concentration of assets in Bitcoin limits diversification and enhances the impact of price declines on financial condition.
• The Bitcoin treasury strategy, involving selling call options on Bitcoin, is untested over extended periods or different market conditions and could limit upside if Bitcoin prices increase significantly.
• Exposure to counterparty risks, particularly with custodians, where applicable insolvency law for digital assets is not fully developed, could result in loss of Bitcoin.
• The broader digital assets industry is subject to counterparty risks, including bankruptcies, closures, and regulatory enforcement actions, which could negatively impact Bitcoin adoption and price.
• Recent changes in accounting treatment (ASU 2023-08) require fair value measurement of Bitcoin holdings, increasing volatility in reported earnings.
• Bitcoin and other digital assets are subject to significant legal, commercial, regulatory, and technical uncertainty, including potential reclassification as a security, which could lead to classification as an investment company.
• The liquidity of Bitcoin may be reduced, and public perception damaged, if financial institutions limit banking services to Bitcoin-related businesses.
• Security breaches, cyberattacks, or loss/destruction of private keys could result in the loss of some or all Bitcoin holdings.
• Reliance on third-party advisors for the Bitcoin treasury strategy exposes the company to risks of non-performance, conflicts of interest, and potential misconduct.
• The emergence or growth of other digital assets, including stablecoins or central bank digital currencies (CBDCs), could negatively impact the price of Bitcoin.
• The availability of spot Bitcoin ETPs and other digital asset investment vehicles may adversely affect the market price of the company's common stock by offering alternative investment exposures.
• The company's Bitcoin treasury strategy may subject it to enhanced regulatory oversight, including potential money services or money transmitter licensing requirements.
• Substantial investments in technology and infrastructure for USBC development may be unsuccessful, adversely affecting business and financial condition.
• Dependence on various third-party partners, service providers, and vendors for USBC operations creates risks if these relationships are disrupted or if third parties fail to perform.

Future Outlook

The company is transitioning into a multi-disciplinary enterprise with a new vision centered on the USBC token, a U.S.-dollar denominated token leveraging digital identity and blockchain technology, designed to be fully redeemable and earn high-yield rewards. The company plans to employ a yield generation treasury strategy with its Bitcoin holdings and continue proprietary diagnostic research in non-invasive medical technology through a new Science Division.

Management Comments

• "The USBC token is an inclusive, compliant, and programmable digital dollar."
• "We believe this approach delivers a new standard for trust and utility in digital money, generating sustainable growth, and long-term value creation for our shareholders."

Industry Context

This announcement signifies a dramatic pivot from a non-invasive medical technology focus to a digital asset and banking enterprise. This strategic shift aligns with a broader trend of companies exploring cryptocurrency for treasury management and developing new digital financial products, particularly stablecoins or tokenized fiat. The move into Bitcoin treasury strategies, similar to MicroStrategy, positions the company within the evolving landscape of corporate crypto adoption, while the development of a 'programmable digital dollar' token places it in the competitive and rapidly developing fintech and blockchain space, potentially competing with other stablecoin issuers and future central bank digital currencies (CBDCs).

Comparison to Industry Standards

• The company's new status as a 'controlled company' (with Greg Kidd owning ~81% of common stock) deviates from standard NYSE corporate governance requirements, which typically mandate a majority of independent directors and independent committees. This structure provides less protection for minority shareholders compared to companies adhering to full NYSE governance standards.
• The adoption of a Bitcoin treasury strategy, including yield generation through options, is comparable to approaches taken by companies like MicroStrategy, which has aggressively accumulated Bitcoin as a primary treasury reserve asset. However, the company's additional focus on developing its own 'USBC token' and a broader 'multi-disciplinary enterprise' distinguishes its strategy from a pure Bitcoin holding company.
• The appointment of a CEO with a $1 annual base salary is an unconventional compensation structure, often seen in founder-led companies where the CEO's primary compensation is tied to equity performance, but it is not a standard industry practice for public company executives.

Management Changes

Corporate Governance

Related Party Transactions

• Goldeneye 1995 LLC, solely owned and managed by Robert Gregory Kidd (new CEO, President, and Chairman), acquired approximately 81% of the company's common stock through a private placement.
• J3E2A2Z LP, an entity affiliated with and controlled by Ronald P. Erickson (former CEO, now President of Science Division), had its Series H Preferred Stock redeemed in a combination of cash ($654,276.15) and common stock (2,000,000 shares).

Stakeholder Impact

• Shareholders: Experience significant dilution due to the large issuance of new shares, a change in control, and a dramatic shift in business strategy, introducing new risk and reward profiles. Minority shareholders may have reduced influence due to the 'controlled company' status.
• Employees: Key management roles have changed, with new executives appointed and the former CEO transitioning to a new division. This indicates a restructuring of the workforce to align with the new strategic focus.
• Customers: The shift to a digital asset and banking focus implies a new customer base for the USBC token and related services, moving away from the previous medical technology focus.
• Creditors: Existing debt has been retired using proceeds from the private placement, which is positive for creditors as it reduces financial leverage and improves the company's solvency.

Next Steps

• The company's corporate legal name will change to USBC, Inc., and its ticker symbol will change from KNW to USBC, effective August 15, 2025.
• The board of directors' composition will be further assessed to ensure alignment with the company's new strategic direction.
• The company will continue its proprietary diagnostic research in non-invasive medical technology through a new Science Division.
• The company will deploy a Bitcoin treasury strategy and invest in the further development of the USBC token.

Key Dates

Recommendation

The company is undergoing a radical transformation, injecting significant capital and bringing in new leadership with a clear vision for digital assets. This pivot offers substantial upside potential if the Bitcoin treasury strategy and USBC token development succeed in a rapidly growing market. However, the digital asset space is inherently volatile, subject to unpredictable regulatory changes, and carries significant operational risks. The substantial dilution and the 'controlled company' status also introduce new considerations for existing shareholders. Given the high-risk, high-reward nature of this strategic shift, a 'hold' recommendation is appropriate for investors to observe the execution of the new strategy and the company's ability to navigate the complex digital asset landscape before making further investment decisions.

Keywords

Bitcoin, Digital Assets, Blockchain, Fintech, Cryptocurrency, Change of Control, Corporate Governance, SEC Filing, Strategic Shift, USBC Token, Treasury Strategy, Investment Management