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EX-31.1 - CERTIFICATION - SOURCE FINANCIAL, INC.f10q1012ex31i_wikigroup.htm


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________
 
FORM 10-Q
_______________
 
(Mark One) 
x   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended October 31, 2012

or
 
o   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
 For the transition period from ______to______.
 
Commission File Number: 033-26828

THE WIKI GROUP, INC.
 (Exact name of registrant as specified in its charter)
 
DELAWARE
 
58-1921737
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer Identification No.)
 
1093 Broxton Avenue Suite 210
Los Angeles, CA 90024
 (Address of principal executive offices) (Zip Code)
 _______________
 
(310) 443-9246
  (Registrant’s telephone number, including area code)
_______________
 
N/A
 (Former name, former address and former fiscal year, if changed since last report)
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the preceding 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 o
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yesx No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.  See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
 
Large Accelerated Filer o    Accelerated Filer o     Non-Accelerated Filer o (Do not check if a smaller reporting company)    Smaller Reporting Company x
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No x
 
Indicate the number of shares outstanding of each of the issuer’s classes of common stock: As of December 12, 2012, there were 136,964,656 shares of common stock issued and outstanding.
 
 
 

 
 
WIKILOAN INC.
 
FORM 10-Q
 
October 31, 2012
 
INDEX
 
PART I—FINANCIAL INFORMATION
 
Item 1.
Financial Statements
3
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
4
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
8
Item 4.
Control and Procedures
8
 
PART II—OTHER INFORMATION
 
Item 1.
Legal Proceedings
9
Item 1A
Risk Factors
9
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
9
Item 3.
Defaults Upon Senior Securities
9
Item 4.
Mine Safety Disclosures
9
Item 5.
Other Information
9
Item 6.
Exhibits
10
     
SIGNATURES 11
 
 
 

 
 
PART I. FINANCIAL INFORMATION

Item 1.     Financial Statements.
 
The Wiki Group, Inc.
(Formerly Known as WikiLoan, Inc.)
Index to Financial Statements
October31, 2012 and January 31, 2012
 
   
Page
   
Number
     
Financial Statements:
F-1
     
 
Balance Sheets as of October 31, 2012 and January 31, 2012
F-1
     
 
Statements of Operations for the three and nine months ended October 31, 2012 and
 
 
for the year ended January 31, 2012
F-2
     
 
Statement of Changes in Shareholders' Deficit
 
 
for the nine months ended October 31, 2012 and
 
 
for the year ended January 31, 2012
F-3
     
 
Statement of Cash Flows for the nine months ended
 
 
October 31, 2012 and for the year ended January 31, 2012
F-4
     
 
Notes to Financial Statements
F-5 to F-11
 
 
3

 
 
 
The Wiki Group, Inc.
(Formerly Known as WikiLoan, Inc.)
Balance Sheets
As of October 31, 2012 (UNAUDITED) and January 31, 2012
 
   
(UNAUDITED)
       
   
October 31,
   
January 31,
 
 
2012
   
2012
 
Assets  
Current assets:
           
Cash and cash equivalents
  $ 66,132     $ 35,845  
Total current assets
    66,132       35,845  
                 
Fixed assets:
               
Computer equipment
    19,843       -  
      19,843       -  
Less: accumulated depreciation
    (8,092 )     -  
Fixed assets, net
    11,751       -  
                 
Other assets:
               
Deposits
    1,957       -  
Domain names
    74,942       25,042  
Software development costs
    41,117       1,634  
Deferred payment processing costs
    70,000       92,500  
Total other assets
    188,016       119,176  
                 
    $ 265,899     $ 155,021  
                 
Liabilities and Shareholders' Deficit
   
Liabilities
               
Current liabilities:
               
Accounts payable
  $ 3,000     $ -  
Accrued interest
    148,698       27,332  
Derivative liabilities
    30,749       46,100  
Convertible notes payables, net of discounts on debt
               
of $39,677 and $28,769
    942,172       321,231  
Total current liabilities
    1,124,619       394,663  
                 
Total liabilities
    1,124,619       394,663  
                 
Stockholders' equity (deficit)
               
 Preferred stock, Series A, at $0.01 par value; 10,000,000 shares authorized;
         
none issued and oustanding at October 31, 2012
               
and none issued and outstanding at January 31, 2012
    -       -  
 Common stock; at $0.001 par value; 250,000,000 shares authorized;
               
  136,964,656 shares issued and outstanding at October 31, 2012 and
               
  53,080,493 shares issued and outstanding at January 31, 2012
    136,964       53,080  
Additional paid-in capital
    9,035,690       9,307,760  
Accumulated deficit
    (10,021,536 )     (9,590,644 )
Treasury stock, 9,837,500 common shares, at cost
    (9,838 )     (9,838 )
Total stockholders' deficit
    (858,720 )     (239,642 )
                 
Total liabilities and stockholders' deficit
  $ 265,899     $ 155,021  
 
The accompanying notes are an integral part of these financial statements.
 
 
F-1

 
 
The Wiki Group, Inc.
(Formerly Known as WikiLoan, Inc.)
Statements of Operations
For the three and nine months ended
 October 31, (UNAUDITED)
 
    For the Three Months Ended     For the Nine Months Ended  
    October 31,     October 31,  
   
2012
   
2011
   
2012
   
2011
 
                         
Revenues
  $ 1,801     $ 643     $ 4,394     $ 1,052  
                                 
Cost of sales
    -       -       -       -  
                                 
Gross profit
    1,801       643       4,394       1,052  
                                 
Selling, general and administrative expenses
    167,165       156,260       386,776       464,649  
Research and development costs
    -       -       -       -  
Operating expenses
    167,165       156,260       386,776       464,649  
                                 
Income (loss) from operations
    (165,364 )     (155,617 )     (382,382 )     (463,597 )
                                 
Other income (expenses):
                               
Gain from derivative liabilities
    49,495       (32,800 )     122,751       516,115  
Interest expense
    (95,828 )     (41,918 )     (171,261 )     (138,546 )
Total other income (expenses)
    (46,333 )     (74,718 )     (48,510 )     377,569  
                                 
(Loss) before provision for income taxes
    (211,697 )     (230,335 )     (430,892 )     (86,028 )
                                 
Provision for income taxes
    -       -       -       -  
                                 
Net (loss)
  $ (211,697 )   $ (230,335 )   $ (430,892 )   $ (86,028 )
                                 
                                 
Earnings (Loss) Per Share:
                               
                                 
Basic:
                               
Earnings (loss) per common share
  $ (0.00 )   $ (0.00 )   $ (0.00 )   $ (0.00 )
Weighted average common shares outstanding
    96,812,480       70,005,531       96,812,480       64,773,934  
                                 
Fully Diluted:
                               
Earnings (loss) per common share
  $ (0.00 )   $ (0.00 )   $ (0.00 )   $ (0.00 )
Weighted average common shares outstanding
    99,065,021       70,005,531       99,065,021       64,773,934  
 
The accompanying notes are an integral part of these financial statements.
 
 
F-2

 
 
The Wiki Group, Inc.
(Formerly Known as WikiLoan, Inc.)
Statement of Changes in Stockholders' Deficit
For the Period February 1, 2011 to October 31, 2012
 
                           
Additional
                         
   
Preferred Stock
   
Common Stock
   
Paid In
   
Treasury Stock
   
Accumulated
       
   
Shares
   
Amount
   
Shares
   
Amount
   
Capital
   
Shares
   
Amount
   
Deficit
   
Total
 
                                                       
Balance - February 1, 2011
    -     $ -       57,434,569     $ 57,435     $ 6,860,256       9,837,500     $ (9,838 )   $ (9,035,673 )   $ (2,127,820 )
                                                                         
Shares returned to treasury
    -       -       (139,561 )     (139 )     (46,971 )     -       -       -       (47,110 )
                                                                         
Shares issued for warrants
    -       -       8,030,953       803       1,046,220       -       -       -       1,047,023  
                                                                         
Shares issued for services
    -       -       4,700,000       470       140,530       -       -       -       141,000  
                                                                         
Shares issued for debt conversions
    -       -       2,161,498       2,162       479,748       -       -       -       481,910  
                                                                         
Beneficial conversion features related to convertible debt
    -       -       -       -       820,326       -       -       -       820,326  
                                                                         
Effect of 1 for 10 and subsequent 10 for 1 stock splits
    -       -       (19,106,966 )     (7,651 )     7,651       -       -       -       -  
                                                                         
Net income (loss)
    -       -       -       -       -       -       -       (554,971 )     (554,971 )
                                                                         
Balance - January 31, 2012
    -     $ -       53,080,493     $ 53,080     $ 9,307,760       9,837,500     $ (9,838 )   $ (9,590,644 )   $ (239,642 )
                                                                         
Preferred Stock issued for acquisition of WikiPay, Inc.
    7,992,000       79,920       -       -       (377,389 )     -       -       -       (297,469 )
                                                                         
Conversion of Preferred Stock into shares of Common Stock
    (7,992,000 )     (79,920 )     79,920,000       79,920       -       -       -       -       -  
                                                                         
Shares issued for services
    -       -       3,964,163       3,964       105,319       -       -       -       109,283  
                                                                         
Net income (loss)
    -       -       -       -       -       -       -       (430,892 )     (430,892 )
                                                                         
Balance - October 31, 2012
    -     $ -       136,964,656     $ 136,964     $ 9,035,690       9,837,500     $ (9,838 )   $ (10,021,536 )   $ (858,720 )
 
 
F-3

 
 
The Wiki Group, Inc.
(Formerly Known as WikiLoan, Inc.)
Statements of Cash Flows
For the nine months ended October 31, (UNAUDITED)
 
   
2012
   
2011
 
             
Cash Flows Provided From (Used By) Operating Activities
           
Net (loss)
  $ (430,892 )   $ (86,028 )
 Adjustments to reconcile net income (loss) to net cash
               
 provided from (used by) operating activities:
               
 Depreciation and amortization
    17,976       89,991  
 (Gain) on derivative liabilities
    (122,751 )     (516,115 )
 Amortization of discount on convertible debt
    87,093       102,354  
 Acquisition of WikiPay, Inc.
    10,021       -  
                 
 Decrease in accounts receivable
    -       196,485  
 Decrease in prepaid consulting fees
    -       52,764  
 Decrease in prepaid rent
    -       -  
 Increase (decrease) in accounts payable
    3,000       (256,485 )
 Increase in accrued interest
    91,665       33,492  
 Net cash (used by) operating activities
    (343,888 )     (383,542 )
                 
 Cash Flows (Used By) Investing Activities
               
 Investment in software development
    -       (4,900 )
 Payment of deposits
    (1,957 )     -  
 Net cash (used by) investing activities
    (1,957 )     (4,900 )
                 
 Common stock issued for services, net of cancellations
    109,283       141,000  
 Repayments of convertible notes payable
    -       (15,000 )
 Proceeds from issuance of convertible notes payable
    266,849       260,000  
 Net cash provided from financing activities
    376,132       386,000  
                 
 Net increase (decrease) in cash and cash equivalents
    30,287       (2,442 )
 Cash and cash equivalents, beginning of period
    35,845       35,631  
 Cash and cash equivalents, end of year
  $ 66,132     $ 33,189  
                 
Supplemental disclosure
               
Interest paid during the period
  $ 171,261     $ 2,700  
                 
Non-cash transactions:
               
Issuance of common stock for debt conversions
  $ -     $ 435,000  
Conversion of accrued interest into common stock
  $ -     $ 46,910  
Common stock issued for SDI agreement
  $ -     $ -  
  Preferred stock issued for acquisition of WiKiPay, Inc.
  $ 7,920,000     $ -  
 
The accompanying notes are an integral part of these financial statements.
 
 
F-4

 
 
The Wiki Group, Inc.
Notes to Condensed Financial Statements
October 31, 2012
 
1.
Basis of Presentation
 
The accompanying unaudited condensed financial statements of The Wiki Group, Inc., formerly known as WikiLoan, Inc., (referred to as the "Company") have been prepared in accordance with accounting principles generally accepted in the United States of America, pursuant to the rules and regulations of the Securities and Exchange Commission. These financial statements do not include all information and notes required by accounting principles generally accepted in the United States of America for complete financial statements. It is recommended that these interim unaudited condensed consolidated financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2012.
 
In the opinion of management, all adjustments (consisting only of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine month periods ended October 31, 2012 are not necessarily indicative of the results which may be expected for any other interim periods or for the year ending January 31, 2013.
 
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 these estimates.

2.
Going Concern Uncertainty

The Company has operated at a loss since 2005.  At October 31, 2012 and January 31, 2012, the Company had accumulated losses of $10,021,536 and $9,590,644, respectively.  These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amount of liabilities that might be necessary should the Company be unable to continue as a going concern.

The Company’s continued existence is dependent upon its ability to generate sufficient cash flows from operations to support its daily operations as well as provide sufficient resources to retire existing liabilities and obligations on a timely basis.

It is the intent of management and significant stockholders to provide sufficient working capital necessary to support and preserve the integrity of the corporate entity.  However, no formal commitments or arrangements to advance or loan funds to the Company or repay any such advances or loans exist.

3.
Acquisition of WikiPay, Inc.

On February 10, 2012, the Company signed a merger agreement with WikiPay, Inc. in which it acquired the company for approximately 7,992,000 shares of the Company’s Series A Preferred Stock. The fair value of the preferred shares was $8,791,200.

 
F-5

 
 
The Wiki Group, Inc.
Notes to Condensed Financial Statements
October 31, 2012
 
3.
Acquisition of WikiPay, Inc. (Cont.)
 
The Company allocated the total purchase price to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values as of the date of acquisition, using the purchase method of accounting. As the shareholders of WikiPay, Inc.  were also shareholders of the Company at the time of the merger, the Company determined the merger was a transfer of assets by shareholders to the Company and has recorded the assets received at historical cost in accordance with U.S, Generally Accepted Accounting Principles (GAAP).
 
The components of the purchase price allocation are as follows (in thousands):
 
Allocation:
     
Net tangible assets acquired:
     
Cash
  $ 4  
Fixed assets
    14  
    $ 18  
Identifiable intangible assets acquired
       
Domain names
  $ 50  
Software development costs
    37  
Other assets
    9  
Total assets acquired
  $ 114  
         
Less:
       
Liabilities assumed
       
Accrued interest
  $ 47  
Notes payable related party
    365  
Total liabilities assumed
  $ 412  
 
The following table represents the unaudited pro-forma combined results of operations of the Company as if WikiPay, Inc. had been acquired on February 1, 2010, with comparable results for the years ended January 31, 2012 and 2011

   
January 31, 2012
   
January 31, 2011
 
                 
Revenues
  $ 1,318     $ 635,919  
Gross profit (loss)
  $ (13,682 )   $ 10,250  
Operating loss
  $ (744,757 )   $ (2,562,155 )
Net loss
  $ (759,529 )   $ (3,294,132 )
Net loss per share
  $ (0.01 )   $ (0.06 )

 
F-6

 
 
The Wiki Group, Inc.
Notes to Condensed Financial Statements
October 31, 2012

4.
Convertible Notes Payable

Convertible notes payable consist of the following at October 31, 2012 and January 31, 2012:
 
   
October 31, 2012
   
January 31, 2012
 
A convertible note payable to an individual, dated March 16,  2011, with interest due at 12% per annum, due on or before,  September 16, 2011, convertible into shares of common stock  at a price equal to the 10 day average closing price multiplied  by 75% with a $0.125 floor and a $0.50 ceiling
  $ 260,000     $ 260,000  
                 
A convertible note payable to an individual, dated December 28,  2011, with interest due at 12% per annum, due on or before,  June 28, 2012, convertible into shares of common stock at a  price equal to the 10 day average closing price multiplied by  75% with a $0.125 floor and a $0.50 ceiling
  $ 20,000     $ 20,000  
                 
A convertible note payable to an individual, dated January 4, 2012, with interest due at 12% per annum, due on or before, July 4, 2012, convertible into shares of common stock at a price equal to the 10 day average closing price multiplied by 75% with a $0.125 floor and a $0.50 ceiling
  $ 20,000     $ 20,000  
                 
A convertible note payable to an individual, dated January 20, 2012, with interest due at 12% per annum, due on or before, July 20, 2012, convertible into shares of common stock at a  price equal to the 10 day average closing price multiplied by  75% with no floor and a $0.10 ceiling
  $ 50,000     $ 50,000  
                 
A promissory note, due on demand, dated March 23, 2010, with an interest rate of 12.0%
  $ 150,000       -  
                 
A promissory note, due on demand, dated October 26, 2010, with an interest rate of 12.0%.
  $ 75,000       -  
                 
A promissory note, due on demand, dated August 11, 2011, with an interest rate of 12.0%
  $ 20,000       -  
                 
A promissory note, due on demand, dated October 6, 2011, with an interest rate of 12.0%
  $ 120,000       -  
                 
A convertible note payable to an individual, dated March 7,  2012, with interest due at 12% per annum, due on or before, September 7, 2012, convertible into shares of common stock at a price equal to the 10 day average closing price multiplied by 75% with no floor and a $0.10 ceiling
  $ 50,000       -  
 
 
F-7

 
 
The Wiki Group, Inc.
Notes to Condensed Financial Statements
October 31, 2012
 
4.
Convertible Notes Payable (cont.)
 
   
October 31, 2012
   
January 30, 2012
 
A convertible note payable to an individual, dated March 23, 2012, with interest due at 12% per annum, due on or before, September 23, 2012, convertible into shares of common stock at a price equal to the 10 day average closing price multiplied by 75% with no floor and a $0.10 ceiling
  $ 12,000       -  
                 
A convertible note payable to an individual, dated May 10, 2012, with interest due at 12% per annum, due on or before, November 10, 2012, convertible into shares of common stock at a price equal to the 10 day average closing price multiplied by 75% with no floor and a $0.10 ceiling
  $ 35,000       -  
 
               
A convertible note payable to an individual, dated June 19, 2012, with interest due at 12% per annum, due on or before, December 20, 2012, convertible into shares of common stock at a price equal to the 10 day average closing price multiplied by 75% with no floor and a $0.10 ceiling
  $ 35,000       -  
                 
A convertible note payable to an individual, dated July 2, 2012, with interest due at 12% per annum, due on or before, January 3, 2013, convertible into shares of common stock at a price equal to the 10 day average closing price multiplied by 75% with no floor and a $0.10 ceiling
  $ 4,849       -  
                 
A non-interest bearing promissory note, due on demand, dated, October 4, 2012.
  $ 5,000       -  
                 
A convertible note payable to an individual, dated August 8,  2012, with interest due at 12% per annum, due on or before, February 8, 2013, convertible into shares of common stock at a price equal to the 10 day average closing price multiplied by 75% with no floor and a $0.10 ceiling
  $ 50,000       -  
                 
A bridge loan the terms of which were not been determined at October 31, 2012
  $ 75,000       -  
                 
Subtotal
  $ 981,849     $ 350,000  
Less: discount on convertible debt
    (39,677 )     (28,769 )
Total
  $ 942,142.     $ 321,231.  
 
 
F-8

 
 
The Wiki Group, Inc.
Notes to Condensed Financial Statements
October 31, 2012

4.
Convertible Notes Payable (cont.)

On August 8, 2012, the Company issued a short-term convertible promissory note for $50,000.  The note accrues interest at 12% per annum and is due on or before February 7, 2013.  The note is convertible into common shares of the Company at a conversion rate equal to 75% of the average closing price of the common stock ten trading days prior to the conversion notice, with a ceiling of $0.10 per share.

On October 4, 2012, the Company issued a short-term non-interest bearing promissory note for $5,000.

On October 31, 2012, the Company accepted a Bridge Loan in the amount of $75,000, the terms of which were not finalized prior to the October 31, 2012, Balance Sheet date.

At October 31, 2012 and January 31, 2012, the Company had accrued interest of $148,698 and $27,332, respectively, under these convertible note agreements.
 
5.
Rentals Under Operating Leases
 
The Company leases its offices on a month-to-month lease at $1,957 per month.  During the nine months ended, October 31, 2012 the Company incurred $11,742 in rent expense.

6.
Capital Stock Transactions

The Company has 10,000,000 shares of Class A, Preferred Stock authorized at a par value of $0.01 and there were no shares issued and outstanding at October 31, 2012 and none were issued at January 31, 2012.  These Class A, Preferred Shares are convertible into Common Stock at one share  for ten (10) shares of Common Stock.
 
On February 7, 2012, the Company engaged CB Capital Partners, Inc, as its financial advisor to the merger transaction with WikiPay, Inc.   The Company issued 200,000 shares of Common Stock for the services rendered.  The value of this transaction was $19,800.
 
On March 1, 2012, the Company hired its’ new CEO and Board Member and pursuant to the employment agreement she will be granted 12 million options on the Company‘s common stock at $0.10 in which two million have vested immediately and the remaining ten million will vest over the next 3 years.
 
On May 9, 2012, a shareholder converted 311,540 shares of the Company’s Class A, Preferred shares into 3,115,400 common shares.

On June 7, 2012, the Company issued 60,000 shares of its’ common stock for marketing consulting services.  The value of this transaction was $5,400.

On June 7, 2012, shareholders and officers representing 7,680,460 of Class A Preferred Stock converted these shares into 76,804,600 shares of the company’s common stock.
 
 
F-9

 
 
The Wiki Group, Inc.
Notes to Condensed Financial Statements
October 31, 2012

6.
Capital Stock Transactions (Cont.)
 
On August 14, 2012, the Company issued 500,000 shares of its common stock for legal services pursuant to the contract dated February 12, 2012.  The value of this transaction was $20,000.

On August 31, 2012, the Company issued 1,204,163 shares of its common stock to its officers in lieu of salary.  The value of this transaction was $24,083.
 
7.
Basic and Diluted Earnings (Loss) Per Common Share

Basic earnings (loss) per share for the nine months ended October 31, 2012 and 2011 were computed using 96,812,480 and 70,005,531 weighted average common shares outstanding, respectively.  The weighted average fully diluted shares outstanding including the common stock equivalents related to the potential dilution related to the options, warrants and convertible debt was 99,065,021 at October 31, 2012 and 70,005,531 at October 31, 2011. The Company did not include potentially dilutive shares issued or outstanding for the nine months ended October 31, 2012 as the effect of those shares would have resulted in an anti- dilutive effect.

8.
Subsequent Events
 
Management has evaluated subsequent events through the date, which the financial statements were available to be issued. These include:
 
On October 31, 2012 the Company accepted a $75,000 Bridge Loan, the terms of which were not finalized until after the Balance Sheet date.

On November 2, 2012, the Company signed a non-binding Letter of Intent to acquire Moneytech, Ltd. (an Australian Corporation).  This Letter of Intent is non-binding and is to be superseded by either a formal “A” Reorganization Plan and Agreement of Merger or “B” Reorganization Plan and Agreement for Share Exchange for the: (1) corporate restructuring of The Wiki Group, Inc. (“Wiki”) so that it becomes a holding company (with a new name reflecting the Moneytech expansion of the business) and the current business operations and assets and liabilities are in a wholly-owned subsidiary thereof (Wiki-sub”); (2) the acquisition by the holding company, either by share-for-share Stock Exchange with the shareholders of Moneytech Limited or by merger of Moneytech Limited into a wholly-owned subsidiary of Wiki (“Moneytech-sub”) and the transfer of control of Wiki to the majority shareholder of Moneytech-sub; and (3) the retention or disposition of Wiki-sub, based upon the performance of its management. )  The parties intend that the proposed transactions contemplated by this Letter of Intent shall be completed within approximately sixty days from the effective date of the Letter of Intent, which shall be the date on which the second of the parties to sign shall have signed.  However, an “outside” closing date of at least ninety (90) days from the effective date shall be set in the Plan and Agreement of Reorganization.
 
 
F-10

 
 
The Wiki Group, Inc.
Notes to Condensed Financial Statements
October 31, 2012
 
8.
Subsequent Events (cont.)
 
On December 5, 2012, the Company established two new wholly owned subsidiaries WikiTechnologies, Inc. and Moneytech USA, Inc.  The corporations were incorporated in the state of Delaware and are wholly- owned by the Company.
 
On December 5, 2012, the Board of Directors and Majority Shareholders voted to increase the Company’s authorized Common Stock, having a par value of $0.001, to 500,000,000 shares.
 
 
F-11

 
 
Item 2.     Management’s Discussion and Analysis of Financial Condition and Results of Operations.
 
The following discussion should be read in conjunction with the Unaudited Consolidated Financial Statements and Notes thereto appearing elsewhere in this Form 10-Q. The following discussion contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934 relating to future events or our future performance. Actual results may materially differ from those projected in the forward-looking statements as a result of certain risks and uncertainties set forth in this prospectus. Although management believes that the assumptions made and expectations reflected in the forward-looking statements are reasonable, there is no assurance that the underlying assumptions will, in fact, prove to be correct or that actual results will not be different from expectations expressed in this report.

Our Business
 
The Wiki Group, Inc. is an early-stage technology company dedicated to making financial transactions simple, secure, social and affordable. Wiki Group products include, (i) WikiPay, a simple, low-cost alternative to existing mobile and online payment solutions; (ii) WikiBlast, a customizable mobile marketing engine; and (iii) WikiLoan, a low-cost peer-to-peer lending solution.
 
We developed WikiPay to compete worldwide in the $240 billion annual mobile payments business. WikiPay allows users to send and receive money with any mobile device, over any carrier network. Our target market is primarily the un-banked and under-banked population worldwide that uses check cashing and money transfer alternatives. Our customers can use WikiPay to make real-time payments, schedule future payments, perform account inquiries for balance and transaction history, initiate bill payment notifications and alerts, and complete security verifications.  WikiPay is a proprietary, fee-based mobile peer-to-peer payment and marketing platform that allows mobile and online peer-to-peer payments, B2C, C2B and B2B payments, and mobile marketing services through our website www.wikipay.com and mobile website m.wikipay.com.
 
WikiPay was created to take advantage of the emerging and converging trends in mobile phone use, text messaging, banking, electronic payment systems and direct marketing.  Mobile phone adoption has been swift and widespread; the mobile phone is now widely recognized as the electronic device with the largest market penetration in history.  For example, it is projected that by 2013, the U.S. per capita mobile phone penetration will be 100 percent.
 
WikiBlast is a proprietary low-cost mobile marketing solution, fully integrated with the WikiPay payment platform, which allows merchants to convey product offers and messages to their customer base and generate sales.  WikiBlast provides customizable mobile marketing messages that can reach clients instantly. Personalized real-time two-way communications can generate superior response rates.  It is estimated that worldwide annual mobile marketing revenues are approximately $3 billion.
 
We developed WikiLoan to compete worldwide in the $10 billion annual peer-to-peer lending business.  WikiLoan is a proprietary fee-based peer-to-peer lending platform that allows users to borrow and lend money (from $500 to $25,000). WikiLoan, www.wikiloan.com, offers loan documentation, promissory notes, repayment schedules, email reminders, online account access, and online repayment functions.
 
We provide identity and credit verification of borrowers and allow lenders to select the types of borrowers they wish to consider for loans.  Credit, background and identity checks, loan application processing, loan payment tracking, and other related functions are fully automated, which allows us to operate with low overhead costs.
 
Our initial revenue model consists of primarily fee-based products. We recently implemented our first lead generation product and we anticipate developing additional revenue streams that may include website advertising, credit card and auto loan origination, and other related lead generation opportunities.
 
 
4

 
 
To date, we have been able to secure $2,287,000 that we raised through several convertible promissory notes over the past four years. We may also rely on sources to borrow funds in the form of loans.

Even if we do not raise additional capital, we believe that we will be able to continue operations for twelve months based on the funding currently provided and revenues that we anticipate generating in the near future. Our investors should assume that any additional funding may cause substantial dilution to current stockholders. In addition, we may not be able to raise additional funds on favorable terms, if at all.

Our auditors have raised substantial doubt as to our ability to continue as a “Going Concern” as we have generated minimal revenue since 2005 and at October 31, 2012 and January 31, 2012, the Company had accumulated losses of $10,021,536 and $9,590,644, respectively. Our continued existence is dependent on our ability to generate sufficient cash flow from operations to support our daily operations, as well as, to provide sufficient resources to retire existing liabilities and obligations on a timely basis.

Plan of Operation

The last three years have been dedicated to building and strengthening the technology platform that is now fully operational and robust. In order to move forward it is critical that we raise capital to fund our operations. Raising capital is our primary goal and we are focusing most of our attention to identify prospective investors and strategic partners.

As we look to grow our business, we will focus heavily on establishing strategic partners that provide us access to large customer bases that align with our target market. We will collaborate with these partners as we execute our marketing strategy and cross sell our products and services.

We are closely working with Telecomm (Mexican Government Agency) to gain access to the Mexican market. This partner welcomes our new and different revenue model, which has the potential to revolutionize the remittance market while positively impacting the local economy.

We are committed to delivering excellent customer service and listening to our customers to determine how we continuously innovate and improve our products. We see every interaction with a customer as an opportunity to differentiate ourselves from our competition. Delivering clear and simple messages will be the core of our communications plan.

Mobile commerce requires a change in customer behavior so it will be advantageous for us to make our offerings as attractive as possible.  Initial plans call for loyalty and reward programs that provide incentives for new users to immediately sign up and use our services. We have an ambitious road map that calls for new solutions that allow users to sign up faster while providing more convenient options to fund their accounts.   We intend to always deliver better, faster, and cheaper solutions that our customers value.

We do not expect to be able to satisfy our cash requirements to continue to operate over the next twelve months unless we obtain additional funding or our revenues significantly improve. If the market does not begin to improve, we will need to raise additional funds to continue to operate as a “going concern.” There is no guarantee that we will be able to raise additional funds and if we are unsuccessful in raising the funds, we may be forced to close our business operations.

If we obtain a large financing in the future, we would accelerate our business plan and hire additional staff, increase advertising and marketing, and expand operations, all of which will likely affect the performance of the company.
 
 
5

 
 
Results of Operations

For the three and nine months ended October 31, 2012 as compared to October 31, 2011
 
Revenues
 
We generated $1,801 and $4,394 in revenues during the three and nine months, respectively, ended October 31, 2012, and $643 and $1,052 during the three and nine months, respectively, ended October 31, 2011. 

Operating Expenses
 
Our operating expenses during the three months and nine months ended October 31, 2012 were $167,165 and $386,776, respectively, and were $156,260 and $ 464,649 in the three and nine months ended October 31, 2011.  The operating expenses are only comprised of general and administrative expenses.  The increase in operating expenses in the quarter ended October 31, 2012 versus the quarter ended October 31, 2011 were primarily because of increased expenses incurred in developing our Web technology and establishing the necessary infrastructure to launch our services.  

Net Loss
 
We are currently operating at a loss and we have a net loss of $211,697 and $430,892 for the three and nine months, respectively, ended October 31, 2012. Our auditor has expressed doubt as to whether we will be able to continue to operate as a “going concern” due to the fact that the company has not had significant revenue since 2005 and will need to raise capital to further its operations. We do not expect to be able to satisfy our cash requirements to continue to operate over the next twelve months unless we obtain additional funding or our revenues significantly improve. If the market does not begin to improve, we will need to raise additional funds to continue to operate as a “going concern.” There is no guarantee that we will be able to raise additional funds and if we are unsuccessful in raising the funds, we may be forced to close our business operations.

Liquidity and Capital Resources

As of October 31, 2012, we had cash of $66,132.  However, due to the current instability of the credit market and our limited history with limited revenue, we may require additional funds to continue to operate. We will continue to operate on a reduced budget until such time as more capital is raised.  We have no written agreement to legally insure that funding will be provided for our operations.  Although we have no commitments for capital, other than verbal assurances, we may raise additional funds through:

-  
public offerings of equity, securities convertible into equity or debt,

-  
private offerings of securities or debt, or other sources.
 
At this time, we have not identified any sources of additional financing.  While we have entered into a letter of intent with Moneytech Limited, as discussed in the “Subsequent Events” section below, there are no assurances that this deal will be consummated.  Upon developing a trading market for the common stock we intend to seek additional sources of financing through hedge funds and/or licensed broker-dealers, however, given our precarious financial condition and our lack of business, a trading market may not develop in the foreseeable future.

We have no written agreement to legally insure that funding will be provided for our operations. Although we have no commitments for capital, other than verbal assurances, we may attempt to raise additional funds through public offerings of equity, securities convertible into equity or debt, and private offerings of securities or debt, as our previous efforts raised $2,157,000.  Given our history of raising money, there is no guarantee that we will be successful in obtaining funds through public or private offerings in order to fund our operations. Our investors should assume that any additional funding will cause substantial dilution to current stockholders. In addition, we may not be able to raise additional funds on favorable terms, if at all.

As to the following serious conditions:

1)  
As of October 31, 2012, we had cash of $66,132;
 
2)  
We received $50,000 from the sale of a promissory note, $5,000 from a short term non-interest bearing note, and $75,000 from a bridge loan during the quarter ended October 31, 2012;
 
 
6

 
 
3)  
Our auditor has determined that based on our financial condition there is substantial doubt as to whether we can continue to operate as a going concern.

To date, we have been able to secure $2,287,000 that we raised through several convertible promissory notes over the past four years. We may also rely on sources to borrow funds in the form of loans.

Even if we do not raise additional capital, we believe that we will be able to continue operations for twelve months based on the funding currently provided and revenues that we anticipate generating in the near future. Our investors should assume that any additional funding may cause substantial dilution to current stockholders. In addition, we may not be able to raise additional funds on favorable terms, if at all.

Our auditors have raised substantial doubt as to our ability to continue as a “Going Concern” as we have generated minimal revenue since 2005 and at October 31, 2012 and January 31, 2012, the Company had accumulated losses of $10,021,536 and $9,590,644, respectively. Our continued existence is dependent on our ability to generate sufficient cash flow from operations to support our daily operations, as well as, to provide sufficient resources to retire existing liabilities and obligations on a timely basis.
 
Notes and Loan Agreements
 
On August 8, 2012, the Company issued a short-term convertible promissory note for $50,000.  The note accrues interest at 12% per annum and is due on or before February 7, 2013.  The note is convertible into common shares of the Company at a conversion rate equal to 75% of the average closing price of the common stock ten trading days prior to the conversion notice, with a ceiling of $0.10 per share.
 
On October 4, 2012, the Company issued a short-term note for $5,000.  The note is non-interest bearing and is due on demand.
 
On October 31, 2012, the Company accepted a Bridge Loan in the amount of $75,000, the terms of which were not finalized prior to the October 31, 2012, Balance Sheet date.
 
At October 31, 2012 and January 31, 2012, the Company had accrued interest of $148,698 and $27,332, respectively, under these convertible note agreements.

Off Balance Sheet Arrangements

We do not have any off-balance sheet arrangements, financings, or other relationships with unconsolidated entities or other persons, also known as “special purpose entities” (SPEs).

Critical Accounting Policies

The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

A summary of significant accounting policies is included in Note 1 to the audited financial statements for the year ended January 31, 2012. Management believes that the application of these policies on a consistent basis enables us to provide useful and reliable financial information about our Company's operating results and financial condition.
 
 
7

 
 
Recently Issued Accounting Pronouncements

We do not believe that any recently issued accounting pronouncements, if adopted, would have a material effect on the accompanying consolidated financial statements.

Subsequent Events

On October 31, 2012 the Company accepted a $75,000 Bridge Loan, the terms of which were not finalized until after the Balance Sheet date.
 
On November 2, 2012, the Company signed a non-binding Letter of Intent to acquire Moneytech Limited, an Australian corporation (“Moneytech”).  This Letter of Intent is to be superseded by either a formal “A” Reorganization Plan and Agreement of Merger or “B” Reorganization Plan and Agreement for Share Exchange for the: (1) corporate restructuring of  the Company so that it becomes a holding company (with a new name reflecting the Moneytech expansion of the business) and the current business operations and assets and liabilities are in a wholly-owned subsidiary thereof (“Wiki-sub”); (2) the acquisition by the holding company, either by share-for-share stock exchange with the shareholders of Moneytech or by merger of Moneytech into a wholly-owned subsidiary of Wiki (“Moneytech-sub”) and the transfer of control of the Company to the majority shareholder of Moneytech-sub; and (3) the retention or disposition of Wiki-sub, based upon the performance of its management.  The parties intend that the proposed transactions contemplated by this Letter of Intent shall be completed within approximately sixty days from the effective date of the Letter of Intent, which shall be the date on which the second of the parties to sign shall have signed.  However, an “outside” closing date of at least ninety (90) days from the effective date shall be set in the Plan and Agreement of Reorganization.
 
On December 5, 2012, the Board of Directors of the Company and shareholders holding a majority of the outstanding shares of Common Stock voted to increase the Company’s authorized Common Stock from 250,000,000 shares to 500,000,000 shares (the “Authorized Share Increase”).  On December 12, 2012, the Company filed a Certificate of Amendment to its Certificate of Amendment with the Secretary of State of the State of Delaware effecting the Authorized Share Increase.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk
 
The Company is subject to certain market risks, including changes in interest rates and currency exchange rates. The Company does not undertake any specific actions to limit those exposures.
 
Item 4.  Controls and Procedures

Disclosure of Controls and Procedures.

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports, filed under the Securities Exchange Act of 1934, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable and not absolute assurance of achieving the desired control objectives. In reaching a reasonable level of assurance, management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. In addition, the design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, a control may become inadequate because of changes in conditions or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
 
As required by the SEC Rule 13a-15(b), we carried out an evaluation under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on the foregoing, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level.
 
 
8

 
 
Changes in Internal Controls over Financial Reporting.

There have been no changes in our internal control over financial reporting that occurred during the fiscal quarter covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. 
 
PART II - OTHER INFORMATION
 
Item 1.      Legal Proceedings.
 
We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.
 
Item 1A.   Risk Factors.

Smaller reporting companies are not required to provide the information required by this item. 
 
Item 2.      Unregistered Sales of Equity Securities and Use of Proceeds.
 
On August 8, 2012, the Company issued a short-term convertible promissory note for $50,000.  The note accrues interest at 12% per annum and is due on or before February 7, 2013.  The note is convertible into common shares of the Company at a conversion rate equal to 75% of the average closing price of the common stock ten trading days prior to the conversion notice, with a ceiling of $0.10 per share.

On August 14, 2012, the Company issued 500,000 shares of its common stock for legal services pursuant to the contract dated February 12, 2012.  The value of this transaction was $20,000.

On August 31, 2012, the Company issued 1,204,163 shares of its common stock to its officers in lieu of salary.  The value of this transaction was $24,083.

The issuances of the shares and the note were exempt from registration, pursuant to Section 4(2) of the Securities Act of 1934, as amended (the “Securities Act”). The securities qualified for exemption under Section 4(2) of the Securities Act since the issuance of the security by us did not involve a public offering. None of the offerings were considered a “public offering” as defined in Section 4(2) due to the insubstantial number of persons involved in the deal, size of the offering, manner of the offering and number of securities offered. We did not undertake an offering in which we sold a high number of securities to a high number of investors. In addition, the shareholders had the necessary investment intent as required by Section 4(2). Based on an analysis of the above factors, we have met the requirements to qualify for exemption under Section 4(2) of the Securities Act for this transaction.   
 
Item 3.      Defaults Upon Senior Securities.
 
None.
 
Item 4.      Mine Safety Disclosures.

Not Applicable.
 
Item 5.      Other Information.
 
None.
 
 
9

 
 
Item 6.      Exhibits
 
(a)     Exhibits
 
31.1
Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of Sarbanes Oxley Act of 2002
32.1 *
Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes Oxley Act of 2002
101.INS **
XBRL Instance Document
101.SCH **
XBRL Taxonomy Schema
101.CAL **
XBRL Taxonomy Calculation Linkbase
101.DEF **
XBRL Taxonomy Definition Linkbase
101.LAB **
XBRL Taxonomy Label Linkbase
101.PRE **
XBRL Taxonomy Presentation Linkbase

* In accordance with SEC Release 33-8238, Exhibit 32.1 is being furnished and not filed.

** Furnished herewith. XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
 
 
10

 
 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
 
THE WIKI GROUP, INC.
     
Date: December 14, 2012
By:
/s/ Edward DeFeudis
   
Edward DeFeudis
   
President, Chief Executive Officer and Chief Financial Officer (Duly Authorized Officer, Principle Executive Officer, and Principal Financial Officer)
 
 
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