UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





FORM 10-K





(Mark One)





x            ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934





For the fiscal year ended January 31, 2011





or





o             TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934





For the transition period from ___________ to ___________





Commission File No. 000-51879





WIKILOAN INC.


(Exact name of registrant as specified in its charter)





DELAWARE

58-1921737(State or other jurisdiction of

incorporation or organization)

(IRS 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)





Securities registered under Section 12(b) of the Exchange Act:Title of each class registered:
Name of each exchange on which registered:None
NoneSecurities registered under Section 12(g) of the Exchange Act:Common Stock, par value $0.001

(Title of class)





Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.        Yes o    No x





Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes o     No x





Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities 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). Yes o   No o





Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.   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 the 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
oNon-accelerated filer

(Do not check if a smaller reporting company)
o

Smaller reporting company
x





Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o   No x





The aggregate market value of the registrant’s voting common stock held by non-affiliates as of May 5, 2010 based upon the closing price of $0.34 was $10,386,231.





As of May 5, 2011, the registrant had 49,758,567 shares issued and outstanding.





Documents Incorporated by Reference: None.










TABLE OF CONTENTS





PAGEPART IITEM 1.

Business.

1ITEM 1A.

Risk Factors.

8ITEM 2.

Properties.

8ITEM 3.

Legal Proceedings.

8ITEM 4.

(Removed and Reserved).

8PART IIITEM 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

8ITEM 6.

Selected Financial Data.

9ITEM 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

9ITEM 7A.

Quantitative and Qualitative Disclosures About Market Risk.

12ITEM 8.

Financial Statements and Supplementary Data.

12ITEM 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

12ITEM 9A.

Controls and Procedures.

13PART IIIITEM 10.

Directors, Executive Officers and Corporate Governance.

13ITEM 11.

Executive Compensation.

15ITEM 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

15ITEM 13.

Certain Relationships and Related Transactions, and Director Independence.

16ITEM 14.

Principal Accounting Fees and Services.

16PART IVITEM 15.

Exhibits, Financial Statement Schedules.

17SIGNATURES

19











PART I





ITEM 1.      BUSINESS.





Our History





We were incorporated in Delaware under the name Windsor Capital Corp. on June 24, 1988 by International Asset Management Group, Inc. (“IAMG”), the promoter and parent of our company. Our initial business plan was to provide a vehicle to raise capital and seek business opportunities. On January 17, 1989, we issued 64,817 shares of our common stock and 64,817 warrants to IAMG for $125,000. The warrants were exercisable at $192.85 per share for a period of three years.





In February 1989, we completed an initial public offering for 6,482 units at a purchase price of $38.57 per unit, which included 6,482 shares of common stock and 6,482 Class A common stock purchase warrants.





On May 9, 1995, we changed our name to Innovative Health Systems, Inc. On July 13, 1995, we changed our name to Windsor Capital Corp.





We entered into an Agreement and Plan of Merger dated December 18, 1997 with IAMG, and Woodfield Enterprises, Inc., a Florida corporation (“Woodfield”), in which we issued 86,854 shares of our common stock, par value $0.001 per share to the former shareholders of Woodfield, in a private transaction pursuant to Section 4(2) of the Securities Act of 1933, as amended. After the transaction, Woodfield was acquired into our company. Also, pursuant to the terms of the agreement, IAMG cancelled 62,224 shares of common stock and 64,817 warrants.





On January 30, 1998, pursuant to an Agreement and Plan of Merger dated January 29, 1998, we acquired all of the business and assets of Boynton Tobacconists, Inc., a privately-held Florida corporation ("Boynton"), and assumed all of Boynton's liabilities. Pursuant to the merger, 22,950 shares of our common stock, par value $0.001 per share, were issued to the former shareholder of Boynton, Mr. Joel A. Wolk, in a private transaction pursuant to Section 4(2) of the Securities Act of 1933, as amended. Additional shares of our common stock, up to a maximum of 2,288, were issued to Mr. Wolk based on a final valuation of certain assets and liabilities of Boynton as of January 30, 1998.





On March 7, 2001, we completed our 1-for-3.85704 reverse stock split of our common stock.





On March 7, 2001, WCC Acquisition Corp. (“WCC”), our wholly-owned subsidiary, acquired Energy Control Technology, Inc., a privately-held Delaware corporation (“ECT”) pursuant to an Agreement and Plan of merger dated as of December 15, 2000. In connection with the merger, 466,630 shares of our common stock, par value $.001 per share, were issued to the former shareholders of ECT in a private transaction pursuant to Section 4(2) of the Securities Act of 1933, as amended. Upon the merger of ECT into WCC, WCC changed its name to Energy Control Systems, Inc. ("ECS"), and we changed our name to Energy Control Technology, Inc. Our business was changed to development and marketing of proprietary motor control software focused initially on the agricultural irrigation market.





On September 26, 2005, we changed our name to 5fifty5.com, Inc.





On August 8, 2005, we entered into an Agreement for the Purchase of Preferred Stock with Edward C. DeFeudis. Pursuant to the agreement, we would issue to Mr. DeFeudis 3,750,000 shares of preferred stock in exchange for $37,500. Rather than issuing the 3,750,000 shares of our preferred stock, we issued to Mr. DeFeudis 1,875,000 shares of common stock pursuant to a letter of issuance of common stock dated January 25, 2008.





On January 31, 2008, we changed our name to Swap-A-Debt, Inc. On February 26, 2008, we completed our 1-for-20 reverse stock split.





On February 26, 2008, we acquired all the right, title and interest in and to www.swapadebt.com, a person-to-person lending website from Spider Investments, LLC, a Florida limited liability company, pursuant to a purchase agreement (the “Purchase Agreement”). As consideration, we issued to Spider Investment of 22,200,000 shares of our common stock, and we also issued an additional 15,000,000 shares of our common stock to Situation X, LLC, a Delaware limited liability company, in connection with services rendered and to be rendered by Marco Garibaldi with respect to the business of our company. As a result of the transaction, Edward C. DeFeudis held 24,675,000 shares of our common stock, as a beneficial owner of Spider Investment and Lion Equity Corp., which represent 49.84% of all our issued and outstanding common stock. Marco Garibaldi held 15,000,000 shares of our common stock, which represent 30.30% of all our issued and outstanding common stock.  Based upon same, we became an Internet person-to-person lending service. The website is in construction and is 95% complete (for further details please refer to page 1 “Our Corporate Information” section).





On May 15, 2009, the Board of Directors authorized the change of its name from Swap-A-Debt, Inc. to WikiLoan Inc.




1




All information set forth herein gives effect to a 1-for-3.85704 reverse stock split on March 7, 2001 and a 1-for-20 reverse stock split of our common stock on February 26, 2008.





Business Overview





WikiLoan.com is a Peer-to-Peer Lending site for borrowers who want to borrow $25,000 or less and for lenders who can make educated decisions on credit scores, intended use etc., to receive a higher rate of interest than available at traditional financial institutions. This peer-to-peer lending process is all facilitated with a state-of-the-art Internet website and highly efficient back office systems to completely automate a process that has become ever more cumbersome at brick and mortar banks.





Peer-to-peer banking systems eliminate the overhead and inefficiencies of traditional banks and creates a “virtuous cycle” of lenders getting better returns and borrowers getting not only better interest rates but also the loan itself. It is the only time that individuals directly control their own funds, as opposed to the traditional banking/lending models which pool all funds together and completely remove individuals from decision making.





WikiLoan is the epitome of a virtual company that can scale up in size without a commensurate increase in costs or labor.





Background on Peer-to-Peer Lending





Peer-to-peer lending, also known as person-to-person lending or social lending is defined as the undertaking of financial transactions, primarily comprised of lending and borrowing, that are executed directly between individuals or “peers” without the intermediation or participation of a traditional financial institution.  For many individual borrowers, some of who possess little or no collateral or have unfavorable credit scores, peer-to-peer lending offers an excellent, if not one of the only, opportunities to access needed capital.  Person-to-person lending involves individual borrowers seeking loans from ordinary people looking to invest their money via lending it other individuals.





The lenders usually decide whether to lend money to a particular borrower and at what rate, based on the borrower's credit score, existing debt level and other traits.  Unlike with a traditional bank or credit card loan, however, the decision is sometimes based on social factors as well, such as how compelling the lender believes the borrower's reason is for a loan or whether he/she happens to share hobbies or common interests with the lender as stated in their respective online profiles.





Typical loan amounts in this developing industry range from $8,000 to $20,000 and, under some peer-to-peer lending models, multiple lenders may end up funding a loan with each offering to lend, say $25 to $200, to a particular borrower.





Clearly, the biggest enabling technology for person-to-person lending has been the Internet, where it appears in two primary variations, namely, an “online marketplace” model and a “family and friends” model.





In the marketplace model, person-to-person lending is facilitated by a host organization or company responsible for managing a website that enables lenders to locate borrowers and vice-versa via the Internet. Typically, this model connects borrowers with lenders through an auction-like process in which the lender willing to provide the lowest interest rate “wins” the opportunity to fund the borrower’s loan. Additionally, while the marketplace process may include other intermediaries who package and resell the personal loans of borrowers, such loans are ultimately sold to other individuals or “peers.”





The "family and friend" model, on the other hand, forgoes the auction-like process entirely and concentrates rather establishing loan agreements between borrowers and lenders who already know each other including relatives, friends and business colleagues interested in formalizing a personal loan. Fundamentally, whereas the primary benefit of the marketplace model is the "match making" aspect, the family and friend model emphasizes online collaboration, loan formalization and servicing.





Peer-to-peer lending companies profit from the fees they charge borrowers and lenders to make and service the loan, and not from a particular loan's interest rate. These companies also provide services such as checking a borrowers' credit rating and contracting with third parties to collect on defaulted loans. Additionally, both lender and borrower typically benefit from better interest rates than would otherwise be available to either party through alternative channels, as peer-to-peer online lending does not involve many of the costly back office expenses of a normal bank such as branches, staff and regulatory costs. These costs make the margins for traditional lending much thinner thereby necessitating higher interest rate charges as well as a focus on larger loan business only.





WikiLoan Revenue Model





Borrowers pay a $49 “Borrower Application Fee”.  Lenders pay an annual “Lender Administration Fee” of $9 per loan of which they are a Lender.  Users of the website will also pay a $0.99 “EFT/ACH Transfer Fee” for all ACH transactions.  While these fees constitute the initial revenue model, we believe it is highly likely that the company will develop additional revenue streams in the very near future with website advertising, credit card and auto loan origination and/or referral fees likely showing the most realistic near-term potentials.





2




WikiLoan’s Customer Base





WikiLoan’s business targets the underserved niche sector of small loan lending in the financial community by specializing in loans that range from $25,000 and below.





Historically, procuring a loan in the $500 to $25,000 category has often proven substantially difficult for many borrowers, as most banks and financial institutions simply to not cater to personal loan levels this low.  In fact, most traditional lending institutions and professional financial brokers draw the “cut off” point at a minimum level, below which it is simply not economically profitable for these organizations to service given the time and resources required to execute these loan transactions.  Additionally, many customers of the small loan market may have poor or non-existent credit scores and/or borrowing profiles that simply are not compelling enough for traditional lenders to take interest.  For this reason, many small-loan seekers often face few alternatives such as turning to friends and family or other more costly sources, such as payday advances or credit card cash advances, to meet their financing needs, or else they simply do without.





As a side note, while the WikiLoan program is open to all would-be borrowers, as there are no minimum criteria, the company’s believes an individual’s credit rating and other important personal borrowing characteristics are likely to play a key role for lenders in selecting a particular borrower’s loan profile.





WikiLoan’s customer base is concentrated in borrowers seeking access to loan levels between $500 and $25,000, with the average loan likely to be between $5,000 to 7,500.  Likewise, WikiLoan’s lender profile is likely to encompass individual lenders of all sorts seeking returns on their investment in the approximate average range of 10.0% to 16.0%.





Benefits to the Parties Involved





Benefits to Borrowers





WikiLoan created its peer-to-peer lending community to specifically address the needs of small loan borrowers with few alternatives in the current financial market place.  Several key advantages to borrowers participating in the company’s online lending program include the following:





• Access to needed funds in the small loan range of $500 to $25,000





• The ability to pay a comparatively favorable interest rate, typically ranging from an average of 10% to 16+%, relative to the higher rates often charged by alternative sources such as 25+% for cash advances, credit card changes and payday advances, among others





• The ability to independently source funding from a anonymous third party lender, rather than face the potentially awkward experience of having to approach family and friends for money





• The convenience of an online “banking-like” experience, whereby the borrower can apply for a loan online and monitor the results of their application and “lender hits” anytime, anywhere online.





Benefits to Lenders





Likewise, the company believes its lending program offers several advantages and incentives for lenders to participate in its peer-to-peer community, as highlighted below.





• Compared to the estimated return typically earned on cash deposits, which can range from 2.0% and below, WikiLoan offers lenders the chance to participate in an investment opportunity with average returns as high as 10% to 16+% on loans made





• As part of the features of the company’s online lending program, lenders are able to diversify their investments in a portfolio of loans by electing to disperse their funds amongst one or several different borrowers.  Additionally, a single lender may choose to provide just a fraction of a borrower’s requested amount, with the remainder coming from other participating lenders in the online community.  By choosing to practice lending diversification, lenders should better be able to insulate their returns from the default of any one/few borrowers while still earnings superior returns





• Users experience the convenience of an online “investing” experience, whereby the lender can create his/her own portfolio of borrower loans.




3




Minimizing Default Risk





One of the risks to all lenders in providing money for loans is that of borrower default, and WikiLoan is no exception.  Recognizing this fact, the company’s system seeks to minimize this risk by enabling lenders to diversify their invested loan amounts among different borrowers, or even elect to provide fraction lending to a single borrower by supplying only a portion of the requested loan amount.  Additionally, the ability of lenders to personally choose their particular borrower based on credit rating and other important metrics is intended to provide lenders with both choice and control over where to invest their money.





Nonetheless, in the event of borrower default, the company has an established means of handling this potential, unfortunate occurrence.  Specifically, approximately thirty days following a missed payment, the company’s automated system will send out a notification email to borrowers reminding them of their contractual obligations under the terms of the loan and advising of the potential for reference to a professional collection agency.  If the borrower is still unresponsive, the company will then refer the loan to an accredited collection agency that will seek recovery from the borrower, subtract out their respective fee, and return the remaining amount to the original lender.





Overall, the company estimates the current default rate for the online small loan sector to be in the range of 1-20% depending on the quality of the borrower.  The Company believes that it is prudent to only lend to high quality borrowers on this type of system, even though industry experts have advised that defaults are lower for peer-to-peer loans than for other consumer loans.  While the Company believes it is still too early to confirm this statistic in the peer-to-peer lending model deployed by the company, and also as the overall small loan movement continues to grow online, the Company nonetheless believes this claim has merit given the community structure and potential honor system and reputation factor that could be at work in this social lending environment.





Industry Keys to Success in Barriers to Entry





Brand Name Recognition & Reputation - Success in the online lending industry depends in part on customer brand recognition and a company’s reputation for delivering a favorable user experience. Strong brand name awareness among consumers ensures the likelihood that the company’s offering will be considered by customers seeking a solution to their funding needs and, in the case of online lending, that potential borrowers and lenders will visit a provider’s website. Additionally, delivering a favorable user experience, including ease of use, timely delivery of results and the effective performance of website interactions (i.e.: zero to few technical “glitches”) is essential for building and maintaining a large customer base of satisfied users. WikiLoan is currently evaluating several strategic marketing options to promote the company’s brand name recognition in the market place, including several “high-profile” alternatives it believes to be unique among the industry.





Ease of Use – In the “do-it-yourself” era of Internet commerce, it is also important for online providers to ensure users have access to a convenient, almost “self-explanatory” interaction with the company’s website while conducting business. Complicated website layouts or the need to seek user instructions from the company via email inquiries or phone calls can limit or even eliminate a potential user’s interest in the company and its offerings, as some users may even quit the website prior to completing the transaction. For this reason, WikiLoan has dedicated an extensive amount of time and effort to building and thoroughly “stress testing” its unique, highly automated and easy-to-use platform where borrowers and lenders can come together online to transact business.





Critical User Mass – As part of the very definition of establishing a successful online business community, an online service provider must build-up and continues to gain committed users/subscribers to its database.  In this way, as the critical mass of users in the online community grows, the number of individual interactions also increases, thereby greatly improving and facilitating the chances for a successful match to be made in the execution of any one particular transaction. The Company believes its online lending platform offers users a convenient and secure outlet for meeting their funding and investing needs. Furthermore, the potential financial benefits to both parties from gaining access to interest rate levels that may otherwise not be available from more conventional banking sources should serve to draw users to the WikiLoan platform.





Technical & Regulatory Requirements of an Online Financial Platform – The resources and necessary know-how to create a successful online community for the purpose of conducting financial transactions, including the borrowing and lending of funds, are extensive.  In addition to technical programming skills, the builder must have a thorough understanding of the complex laws and requirements of United States, on a state-by-state basis, that regulate the online banking industry and dictate its permissible transactions.  Effectively, all code must be written to comply with virtually hundreds of laws at every stage and consideration of the transaction process, including the requirements of the Securities and Exchange Commission, the Department of Homeland Security and federal and state laws, among others. Failure to identify and comply with all of these laws as part of peer-to-peer provider’s business plan can delay, halt or even close down an operator’s efforts.





The company has invested many thousands of man-hours, and the expertise in the programming industry via 16 high level programmers to complete its fully automated Internet website. These efforts were undertaken to ensure all code comprising its platform is logically written to comply with the laws of United States. Furthermore, while the company believes its website provides an easy-to-use platform for users, the actual technical framework behind WikiLoan’s site is extremely sophisticated. The company believes this level of complexity limits the ability of new players to easily enter the market.





4




Alternative Financing Sources and the Micro-Lending Sector





Unfortunately for many would-be borrowers, accessing a loan in the micro-funding category of $25,000 and under can be difficult due to limited options and resources.  While there is significant demand in the market place from individual borrowers seeking a personal loan to consolidate debts, cover expenses or finance a big purchase, many large and well-known financial institutions simply do not cater to this borrowing level given its economic infeasibility relative to their resource pool and the insignificance to their bottom line.  Additionally, many customers of the small loan market may have poor or challenged credit profiles that preclude them from having access to borrowing at traditional lending institutions.  For these reasons, borrowers seeking loans less than the approximate $25,000 level often have to turn less palatable sources of funding or simply do without.





Friends & Family - One alternative for borrowers seeking a micro-loan is to turn to friends and family and request the funding of these familiar associates.  While loans from friends and family can offer some substantial benefits, such as lower rates, more flexible terms and a significantly simpler “approval process” than traditional bank loans, it seems that most people prefer to keep personal and professional business separate or private, especially when it comes to money.  Entering into a loan agreement with friends and family can bring a great deal risk to an otherwise highly valued and important interpersonal relationship.  For borrowers who fail to pay money back, they could wind up forever destroying once-great friendships or creating devastating family feuds.  For this reason, the company believes many potential borrowers would prefer the ability to independently source funding from an anonymous third party lender, rather than face the potentially awkward experience of having to approach family and friends for money.





Payday Advances - Payday advances, also called paycheck advances or payday loans, represent another funding source alternative for would-be borrowers.  While payday advances can offer a quick source of cash, there are many inherent drawbacks.  Payday advances are small, short-term loan s intended to cover a borrower's expenses until his or her next payday.  Typically, these loans range between $100 and $500 with payment due in full at the borrower's next paycheck, which is often in two weeks time.  These loans are highly controversial and, in some states, even illegal, given the exorbitant fees and associated rates of interest charged, often up to 400% or higher APR.  Thus, on a two-week loan, fees are extensive and average $15 for each $100 lent.  Overall, typical users of payday loan services tend to be repeat borrowers who are unable to repay their loans on the due date and instead repeatedly renew their loans, paying fees each time.





Furthermore, borrowers must have both a paycheck coming their way as well as maintain a personal checking account given that, as a prerequisite, payday lenders require the borrower to provide recent bank statements as well as bring in one or more recent pay stubs in order to prove that they have a steady source of income.  Regarding the mechanics of the transaction, borrowers seeking a payday loan may write a post-dated personal check for the borrowed amount plus fees for up to 14 days. The payday lender typically agrees to hold the check until the borrower's next payday, at which time the borrower has the option to redeem the check by paying back the full amount in cash, or renewing the loan for another two weeks.  For any checks that bounce, in addition to the principal cost of the loan, the borrower could also incur a bounced check fee from their bank, and the loan itself may also incur additional fees and/or an increased interest rate as a result of the failure to pay.





Cash Advances from Credit Cards - A cash advance from a credit card refers to an amount of cash provided to the credit card holder against a prearranged line of credit on their actual credit card, such as Visa, MasterCard or American Express.  Cash advances are charged against the holder’s credit card and typically carry even higher rates of interest than standard credit card purchases.  Specifically, fees often charged on these loans by the credit card company reflect a higher-than-normal rate of interest and are set as a fixed number of percentage points above the prime rate.  For example, the average interest rate assessed on middle class users for credit card charges is in the 25% range, while cash advances on their credit cards are typically at least 5% higher, thereby reaching 30% and above.  Furthermore, there is seldom any type of grace period in which no interest is charged.  These two factors make cash advances more expensive and less flexible than many other types of debt financing.





In conjunction with cash advances on credit cards, another perhaps obvious source of funding for would-be borrowers with access credit cards would be to simply make more extensive use of their lines of credit under these programs.  However, this too represents a less than optimal source of funding given its “living on debt” effect and the very high rates of associated interest as discussed above.





Home Equity Loans - Finally, for would-be borrowers fortunate enough to be homeowners, a home equity loan represents another source of potential funding.  Under the terms of a home equity loan, the borrower uses the equity in his/her home as collateral against the loan, thereby creating a lien against their house and reducing their actual home equity value.  The typical use for funds from a home equity loan often differs from that of loans sourced through a peer-to-peer lending community.  For example, borrowers seeking a home equity loan typically use the funds to help finance major home repairs, medical bills or college education.





Finally, gaining access to a home equity loan also has its drawbacks. It is clearly limited to the population of home owners, and is an involved and time consuming process that carries with it a potentially significant fees including appraisal fees, originator fees, title fees, survey or conveyor and valuation costs, stamp duties, arrangement fees, closing fees, early pay-off and other costs.





Other Sources of Funding - In addition to the above mentioned alternative financing sources, other options available to most would-be loan borrowers include the following sources of funding:  Pawnbrokers, credit union loans with lower interest rates and more stringent terms, credit payment plans, paycheck cash advances from employers, bank overdraft protection plans and emergency community assistance plans.




5




Other Industry Players





The Online Banking Report predicts that within five years, the total market for peer-to-peer lending in the United State could surpass 1,000,000 loans annually.  In addition to WikiLoan, other companies in the peer-to-peer online lending space include Prosper.com and Virgin Money, among others.  A discussion of some of these players is given below.





Commercial For-Profit Sector





Lending Club – Launched in May 2007, Lending Club is a person-to-person lending website that pairs borrowers and lenders through a matching system based on a search algorithm, a borrower’s credit rating and social networking.  Lending Club was founded on the philosophy that borrowers will be less likely to default on loans made by other members of their own communities.  Thus, Lending Club leverages existing geographic and online communities and other existing relationships to help minimize default risk by effectively pairing lenders and borrowers using the company’s proprietary algorithm known as LendingMatch.  Additionally, the company can find relationships between anonymous borrowers and lenders based on certain factors such as geographic location, educational and professional background and/or associations within a given social network.





As part of the process, borrowers create personal loan listings by supplying details about themselves and the funds being requested, such as their intended use.  The company then obtains a credit report on the borrower in order to assign a score to the loan and a corresponding appropriate credit grade and interest rate, for which factors taken into consideration by Lending Club include the borrower’s credit score, credit history, the amount of the loan being requested and the borrower’s debt-to-income ratio.  Additionally, lenders wishing to participate in the company’s program must enter in their personal information including level of risk tolerance.  Next, they are permitted to either search for loans on their own or use the LendingMatch algorithm to generate a recommended portfolio that takes their risk level and connections with borrowers into consideration in order to form a match.  Lenders must provide a minimum of $500 in loan money to take advantage of the LendingMatch algorithm offering.  The company is headquartered in Sunnyvale, CA.  California.





LendingTree - LendingTree, LLC is an online, web-based company and lending exchange that provides a marketplace for connecting individual borrowers with a network of professional lenders from lending institutions that compete for their business.  Specifically, LendingTree operates a lead-generation business where lending institutions compete and bid for a borrower’s finance business including for mortgages and refinance loans, home equity loans and lines of credit, auto loans, personal loans, student loans, online high yield savings accounts, and credit cards.  The company was launched in 1998 and is headquartered in Charlotte, NC.





Prosper.com - Prosper Marketplace, Inc. is a San Francisco, CA based company that operates Prosper.com, an online auction website founded in 2006 where individuals can request money as borrowers and buy loans as lenders.  As part of this process, borrowers set the maximum interest rate they wish to pay and lenders then bid on specific loans by committing to lend a portion of the principal and setting the minimum interest rate they wish to receive on a particular loan.  Prosper.com serves to manage this reverse Dutch auction process by assembling bids with the lowest interest rates in order to fund the loan. The company also verifies selected borrowers' identity and personal data before funding loans and manages loan repayment.  Prosper.com rates prospective borrowers for creditworthiness by assigning a “credit grade” generated by its own internal rating system and based on the borrower's Experian Scorex PLUS credit score.





Prospect generates revenue by collecting a one-time fee on funded loans from borrowers of 1.0% to 3.0% depending on the borrower's credit grade as well as assessing a 1.0% annual loan servicing fee.  Prosper.com requires that all transactions be in U.S. dollars and mandates that lenders and borrowers must be U.S. residents.





Virgin Money - Virgin Money is a United Kingdom based financial services company owned by the Virgin Group and founded by Sir Richard Branson in March 1995.  Virgin Money currently provides a number of products, most of which are offered in conjunction with other financial service providers.  As of 2008 it offers the Virgin Credit Card  (issued by MBNA), a prepaid debit card (issued by Clydesdale Bank), loans  (Provided by Co-operative Bank and Freedom Finance), mortgages  (provided by The One Account) and insurance for a variety of purposes.





Virgin Money U.S., Virgin Money’s operations in the United States, facilitates peer-to-peer loans with a focus on borrowers and lenders who already have an existing relationship, such as friends or family.  Specifically, the company serves as a manager of personal loans between relatives and friends by providing the documents and support needed to execute and consummate the transaction.  Customers can draft a loan online at the company’s website, choosing their own interest rate and terms amongst the associated parties involved so as to fit their individual situation and mutual requirements. Virgin Money then works with clients to manage the process by ensuring the loan agreement meets the needs of all parties involved and by providing official loan related documentation to each party, respectively. The company also manages the servicing of the loan throughout its lifetime. This site manages more than $200 million in loans between friends and family.




6




Zopa - Zopa is a United Kingdom based company providing an online money exchange to bring individual borrowers and lenders together in a peer-to-peer lending environment with the company acting as a middle-man or facilitator. Worldwide, Zopa operates within the United Kingdom, the United States and Italy. Additionally, the company is currently developing a service for the Japanese market. Each geographical area operates under a slightly different model given the rules and regulations of individual countries. The company is based in London and was launched in 2005.





Zopa began its offering in the United States in December 2007 in partnership with six different Credit Unions.  The company’s U.S. model is significantly different from that elsewhere due to U.S. regulatory restrictions.  In the United States, borrowers can obtain a loan via Zopa from one of the Credit Unions by posting a profile on Zopa’s website that lists certain details about themselves and their funding needs.  Individual investors to the company’s platform are able to buy a Zopa Certificate of Deposit  (“CD”), which is a guaranteed and insured investment that pays a higher rate than comparable investment alternatives.  In return, however, each investor who purchases a Zopa CD is also required to help at least one borrower by offering them a “slice” of the return on their CD, thereby reducing the amount of interest a borrower must ultimately pay on his/her loan.  The investor gets to set the rate and amount on his Zopa CD and, in doing so, raise or lower the amount of help he/she wants the borrower to receive.  The investor’s help thus becomes a monthly benefit to the borrower by reducing their monthly loan payment.





Not for Profit - Micro-Loan Industry Players





In addition to the commercial for-profit sector of peer-to-peer lending, many organizations and websites have deployed the person-to-person lending model to generate funding for philanthropic or altruistic purposes.  Specifically, microfinance targets rural and urban consumers with limited access to financial services by offering low-interest loans for their financial needs and entrepreneurial endeavors.  Microfinance has been defined as “parts altruism and capitalism” as a lending option that creates opportunity for borrowers and lenders alike.  In fact, microloans are often directed at borrowers and entrepreneurs outside of the United States, where the nascent international microloan market is potentially $300 billion worldwide.  Loans in this market are typically in the hundreds of dollars.  Some companies in the microfinance industry are listed below.





GlobeFunder - GlobeFunder has a focus on delivering international microloans to the developing world’s entrepreneurs and working poor. GlobeFunder’s mission is to lower borrowing costs for “every person on the planet” by driving capital through an efficient, online marketplace. As part of its business plan, the company’s lending model, called Direct-to-ConsumerTM ("D2CTM"), offers borrowers and lenders better rates and returns and provides borrowers with unsecured personal and business loans. Currently, the company’s Direct-to-ConsumerTM lending service is available only to institutional lenders. GlobeFunder is currently working to bring this service to individual lenders as well in the near future.





Under the company’s new D2CTM model of lending, GlobeFunderTM offers banking institutions low-cost customer acquisition costs in addition to cross-selling opportunities, while increasing transaction fee revenue and decreasing credit risk.  For credit-worthy borrowers, the company’s new D2CTM model of lending provides transparent, immediate access to cash loans through competitive market rates from institutional lenders.  Borrows must qualify with a minimum credit score determined by the company as based on market conditions and loan performance experience.  Loans are not resold to third parties.  The company’s revenue stream is generated by loan closing fees paid by borrowers and loan servicing fees paid by lenders.  The company believes its D2CTMbusiness model results is a more efficient, profitable lending option for banking institutions and retail businesses, in addition to lower rates for borrowers and higher returns for lenders.





Kiva - Kiva is described as the world's first person-to-person micro-lending website that empowers individuals to lend directly to entrepreneurs in impoverished communities throughout developing world.  The company maintains the socially conscious mission of connecting people through lending for the sake of alleviating poverty, as Kiva’s base of borrowers constitute the working poor from around the globe.  Lenders from around the world are able to browse these entrepreneurs' profiles on the company’s website, which the company’s microfinance institution partners upload to the Kiva site, and choose someone to whom they wish lend.  The company highlights the fact that when a loan is made, lenders are choosing to help “a real person make great strides towards economic independence and improve life for themselves, their family and their community.”  Throughout the course of the loan, which typically lasts six to 12 months, lenders can receive email journal updates and track repayments.  Lenders are then encouraged to re-lend to someone else in need when they get their loan money back.





MicroPlace, Inc. (a wholly-owned subsidiary of eBay) - MicroPlace’s mission is to help alleviate global poverty by enabling individual people to make investments in the world’s working poor through socially responsible lending.  Specifically, MicroPlace was started in 2006 when its founder realized that the microfinance industry required approximately $250 billion in order to get capital and funding to all the world's working poor who need it, given that access to financial services is critical to poverty alleviation.  Although repayment rates average higher than 97%, fewer than 10 million of the 100 million people receiving microfinance are able to obtain loans from traditional banks. For this reason, MicroPlace targets this unbanked population in an effort to bring them mainstream financial services.




7


MicroPlace provides everyday investors with the ability to make interest-earning investments in the global microfinance industry.  Examples of such micro-loans include lending a native of a third world country the funds to purchase livestock or agricultural seed necessary to start a self-sustaining business.  Prior to MicroPlace, ordinary investors did not really invest in microfinance loans unless they had significant capital and could work with a microfinance security issuer directly, or were willing to invest for no financial return at all.





Pre-launch, San Francisco based MicroPlace was bought by eBay in April 2007.  eBay purchased MicroPlace given the technology giant’s interest in the power of ordinary individuals to “level the uneven global playing field” and bring the power, transparency and efficiency of the world financial markets to the microfinance industry by giving ordinary investors access to these loans.  Powered by eBay’s expertise in connecting people and creating marketplaces, as well as PayPal’s expertise in processing payments, MicroPlace offers a way for individual lenders to invest in such a way that gives them a financial return and, in keeping with the company’s philosophy, makes a positive impact on the world.





Fairness Opinion





A fairness opinion was written by Dr. Kenneth Lehrer of Lehrer Financial and Economic Advisory Services as of November 2, 2009 and issued in April of 2010.  The opinion was written to examine a wide variety of economic and financial data in reference to the WikiLoan transaction of October 29, 2009, namely the company selling seventeen domain names and a trademark application unrelated to the company’s peer-to-peer lending business.





Employees and Management Team





The company’s business model is highly scalable.  Given the high degree of automation in the WikiLoan website and lending system, from identity verification to funding transaction transfers, the technical and personnel requirements for the company are relatively modest, as the capital resources required to serve one customer are essentially the same as those required to serve an entire community of borrowers and lenders.  Thus, the company is able to “scale-up” in user size without the need for a commensurate increase in costs and labor.  For this reason, WikiLoan currently retains a low employee profile.  The Company is estimating that it will have approximately 6 to 10 employees over the next few quarters.





ITEM 1A.   RISK FACTORS.





Not applicable to smaller reporting companies.





ITEM 2.      PROPERTIES.





Our principal executive office is located at 1093 Broxton Avenue, Suite 210, Los Angeles, CA 90024. We pay rent of $1,900 per month to occupy this location.





ITEM 3.      LEGAL PROCEEDINGS.





From time to time, we may become involved in various lawsuits and legal proceedings, which arise, in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results.





ITEM 4.     (REMOVED AND RESERVED).








PART II





ITEM 5.    MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.





Market Information





Our common stock is quoted on the Pink Sheets under the symbol “WKLI.”





Holders





As of May 5, 2011, there were approximately 1550 shareholders of our common stock.




8




Divid ends





Since inception we have not paid any dividends on our common stock. We currently do not anticipate paying any cash dividends in the foreseeable future on our common stock, when issued pursuant to this offering. Although we intend to retain our earnings, if any, to finance the exploration and growth of our business, our Board of Directors will have the discretion to declare and pay dividends in the future.





Payment of dividends in the future will depend upon our earnings, capital requirements, and other factors, which our Board of Directors may deem relevant.





Penny Stock Considerations





Broker-dealer practices in connection with transactions in “penny stocks” are regulated by certain penny stock rules adopted by the Securities and Exchange Commission. Penny stocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system). Penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer’s account. The broker-dealer must also make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These requirements may have the effect of reducing the level of trading activity, if any, in the secondary market for a security that becomes subject to the penny stock rules.





ITEM 6.     SELECTED FIANANCIAL DATA.





Not applicable because we are a smaller reporting company.





ITEM 7.     MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS.





The following discussion should be read in conjunction with the Consolidated Financial Statements and Notes thereto appearing elsewhere in this Form 10-K. The following discussion contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 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





WikiLoan provides online tools for person-to-person borrowing and lending on its website located at www.wikiloan.com.  People can use the tools on the website to borrow and lend money ($500 to $25,000) among themselves at rates that make sense to all parties.  WikiLoan provides management tools that allow Borrowers and Lenders to manage the process by; providing loan documentation, promissory notes, repayment schedules, email reminders, online account access, and online repayment.





Peer-to-peer lending is one of the fastest growing sectors of the financial services industry.  While the market for such lending is currently relatively small, and with only approximately $650 million borrowed and lent during all of 2007, the market is already experiencing significant growth and is projected to boom over the coming years reaching nearly $5 billion in loans by 2013.





While the popularity and the ubiquity of the Internet are certainly major factors driving the peer-to-peer lending market forward, there are also very clearly major macro and micro economic factors propelling this business forward.  As a result of an overheated housing sector, and other economic factors, financial institutions have significantly tightened credit standards making it difficult for many consumers to acquire non-collateralized personal loans.  Such loans that are available have become considerably more expensive over the past year.  These financial market conditions have created an opportunity for individual lenders to step in and fill the small loan lending gap, fueling the current hyper-growth we are currently experiencing in the peer-to-peer lending market.





Peer-to-peer lending offers significant benefits to both borrowers and lenders.  Through peer-to-peer lending borrowers are able to access funds at rates that typically range from 10% to 16%, which compare very favorably to credit card advances, which are often over 25% annually or short-term consumer loans, which are often made at over 100% interest per year.  Peer to peer lenders also realize significant potential benefits.  Compared to the estimated return typically earned on cash deposits, which can range from 2% and below, peer-to-peer lending offers lenders a chance to participate in investment opportunities with much higher returns.  Peer-to-peer lending also offers socially positive benefits to lenders that many find attractive.




9




Via our website, we provide identity verification and credit checks on borrowers and allow lenders to select the types of borrowers they wish to consider for loans. The process of credit, background and identity checks, processing of the loan applications, the connection of borrowers and lenders, the tracking of loan payments, and other related functions are handled on a completely automated basis allowing us to incur extremely low overhead costs, likely resulting in meaningful operating margins.





Borrowers pay a $49 “Borrower Application Fee”.  Lenders pay an annual “Lender Administration Fee” of $9 per loan of which they are a Lender.  Users of the website will also pay a $0.99 “EFT/ACH Transfer Fee” for all ACH transactions.  While these fees constitute the initial revenue model, we believe it is highly likely that the company will develop additional revenue streams in the very near future with website advertising, credit card and auto loan origination and/or referral fees likely showing the most realistic near-term potentials.





We had limited operations during 2010 and 2009. Our expenses during that time incurred general and administrative expenses in the amount of $2,423,822 and $345,610, respectively. These expenses occurred developing our Web technology and establishing the necessary infrastructure to launch its services.





Our auditors have raised substantial doubt as to our ability to continue as a “Going Concern” as we have generated limited gross profit since 2005 and have accumulated losses of $9,035,673 at January 31, 2011. Our continued existence is dependent on our ability to generate sufficient cash flow from operations to support its daily operations, as well as, to provide sufficient resources to retire existing liabilities and obligations on a timely basis.





On March 1, 2010, the Company received a conversion notice on the August 29, 2008 convertible note agreement to convert the outstanding principal and accrued interest aggregating $142,960 into 1,250,000 common shares.





On March 5, 2010, the Company issued a short-term convertible promissory note for 10,000.  The note accrues interest at 12% per annum and is due on or before September 5, 2010.  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.   On March 12, 2010, the Company received a conversion notice on this convertible note agreement to convert the outstanding principal into 40,404 common shares.





In June 2010, the Company received written notice from the September 16, 2009 convertible note holder to extend the note agreement for an additional three months.  The due date is September 16, 2010, and no other terms or conditions were changed.





On March 23, 2010, the Company issued a short-term convertible promissory note for $150,000.  The note accrues interest at 12% per annum and is due on or before September 23, 2010.  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.





On April 9, 2010, the Company received conversion notices on the May 12, 2009 and July 28, 2009 convertible note agreements to convert the outstanding principal and accrued interest aggregating $109,116 into 839,354 common shares.





On May 27, 2010, the Company issued a short-term convertible promissory note for $75,000.  The note accrues interest at 12% per annum and is due on or before November 27, 2010.  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.





On October 26, 2010, the Company issued a short-term convertible promissory note for $150,000.  The note accrues interest at 12% per annum and is due on or before April 26, 2011.  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.





On November 27, 2010, the Company received a conversion notice on the May 12, 2009 convertible note agreement to convert the outstanding principal and accrued interest aggregating $79,500 into 331,250 common shares.





On March 16, 2011, the Company repaid the $15,000 convertible note payable plus accrued interest of $2,700.


On March 16, 2011, the Company received a conversion notice on the March 23, 2010, September 28, 2010, October 26, 2010 and January 21, 2010 convertible note agreements aggregating $435,000 to convert the outstanding principal and accrued interest into 2,161,498 common shares.





On March 16, 2011, the Company issued a short-term convertible promissory note for $260,000.  The note accrues interest at 12% per annum and is due on or before September 16, 2011.  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.




10




PLAN OF OPERATION





During the next twelve months, we expect to take the following steps in connection with the further development of our business and the implementation of our plan of operations:





1)
We plan to keep our peer-to-peer lending platform compliant in all 50 states and obtain licenses where required;





2)
We will establish a marketing relationship with a Search Engine Optimization company to give us maximum Web exposure;





3)
We will also continue to establish and maintain our relationships with realtors, accountants, attorneys, etc they can help to send us business; and





4)
We will continue to pursue a major funding through a hedge fund or broker dealer to enable us to accelerate our business plan.





Over the next 12 months, we anticipate our expenses could range from $300,000 to $3,600,000, depending upon financing and the acceleration of our business plan.





If we do not obtain additional funding, we will continue to operate on a reduced budget until such time as more capital is raised. Under this reduced budget, our expenses may be $300,000 for the next 12 months. We believe that we could operate with our current cash on hand while satisfying any shortfall in cash flow with income that will be generated after the launch of our website.





If we obtain a large financing in the future, we would accelerate our business plan and hire up to 9 more staff members, increase our office space and operations, and increase our advertising and marketing budget, all of which would directly affect the performance of the company.





RESULTS OF OPERATIONS





As of the year ended January 31, 2011, we had cash on hand of $35,631 and our total assets were $497,115 while our total liabilities consisted of accounts payable of $256,485, accrued interest of $40,750, derivative liabilities on convertible debts and outstanding warrants of $1,914,672 and short-term convertible notes payable aggregating $413,028.  With the continued losses and a resulting accumulated deficit of $9,035,673, we have negative shareholder’s equity in the amount of $2,127,820.





As of the year ended January 31, 2010, we had cash on hand of $28,460 and our total assets were $100,863 while our total liabilities consisted of an Outstanding Line of Credit in the amount of $100,000, accrued interest of $49,928 and short-term convertible notes payable aggregating $352,000.  With the continued losses and a resulting accumulated deficit of $5,885,614, we have negative shareholder’s equity in the amount of $495,468.





We are currently operating at a loss and we had net losses of $3,150,059 and $596,639 for the years ended January 31, 2011 and 2010, respectively. 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 had minimal revenues or gross profits 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.





Over the next twelve months, we do not plan to purchase or sell any product or significant equipment. We do not own any products or equipment and we do not rely on any equipment or expensive product to operate in the Person-to-Person Lending Market. Therefore, it is not anticipated that we would have any significant cost associated with a new product or service.





LIQUIDITY AND CAPITAL RESOURCES





As of January 31, 2011 and 2010, we had cash of $35,631 and $28,460, respectively.  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 with Mr. DeFeudis to legally insure that he will provide the funding for our operations.  Although we have no commitments for capital, other than verbal assurances from Mr. DeFeudis, 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.





11




At this time, Mr. DeFeudis has not identified any sources of additional financing. Upon developing a trading market for the common stock he intends 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 with Mr. DeFeudis to legally insure that he will provide the funding for our operations. Although we have no commitments for capital, other than verbal assurances from Mr. DeFeudis, 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 $1,745,000. 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.





To date, we have been able to secure $1,745,000 that we raised through several convertible promissory notes over the pas t 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.





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 3 to the audited financial statements for the year ended January 31, 2011. 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.





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.





ITEM 7A.   QUANTITIATIVE AND QUALITATIVE DISCLOUSURES ABOUT MARKET RISK.





Not applicable because we are a smaller reporting company.





ITEM 8.      FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.





The financial statements start from F-1.





ITEM 9.      CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.





None.




12




ITEM 9A.   CONTROLS AND PROCEDURES.





Evaluation of Disclosure Controls and Procedures





Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (Exchange Act), as of January 31, 2011. Based on this evaluation, our principal executive officer and principal financial officers have concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules.





Management’s Report on Internal Control Over Financial Reporting





The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting for the Company.  Our internal control system was designed to, in general, provide reasonable assurance to the Company’s management and board regarding the preparation and fair presentation of published financial statements, but because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.





Our management assessed the effectiveness of the Company’s internal control over financial reporting as of January 31, 2011.  The framework used by management in making that assessment was the criteria set forth in the document entitled “ Internal Control – Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on that assessment, our management has determined that as of January 31, 2011, the Company’s internal control over financial reporting was effective for the purposes for which it is intended.





This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management's report in this annual report.





Changes in Internal Control over Financial Reporting





No change in our system of internal control over financial reporting occurred during the fourth quarter of the fiscal year ended January 31, 2011 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.








PART III





ITEM 10.  DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.





As of the filing date, we have two Directors and Officers as follows:





NAME
POSITION
AGEMarco Garibaldi
Chief Executive Officer
56Edward C. DeFeudis
President, Chief Financial Officer, Principal Accounting Officer, and Chairman of the Board of Directors
38





The business background descriptions of the officers and directors:





Marco Garibaldi – Founder and Chief Executive Officer





As the founder and CEO of WikiLoan Inc., Mr. Garibaldi has extensive experience as an entrepreneur and manager overseeing the development and growth of innovative emerging companies.  He is also a computer programmer by trade with over 30 years of extensive experience in a variety of sectors including computer programming, the Internet, entertainment and the business advisory industry.  He began his career at Burroughs and Sperry, which, in 1986, became Unisys Corp. and later founded a think-tank corporation called InterComm, Inc.





While at InterComm, Inc., Mr. Garibaldi was responsible for introducing a host of essential on-line applications widely used today and familiar to most Internet users.  Specifically, his contributions are credited with the development of the online shopping cart, the online bookstore and the auction server, each of which represents a fundamental component of the current Internet commerce environment.  Currently, while seeing the underserved need in the microfinance lending industry, Mr. Garibaldi has dedicated his extensive technical skills and creative ingenuity to establishing WikiLoan, an online peer-to-peer lending community designed to bring lenders and borrowers together to pursue new opportunities in this largely untapped market space of micro-lending.





13




Edward C. DeFeudis – President and Chairman of the Board





Mr. DeFeudis is the President and Chairman of the Board of our company since August 2005 and he is mainly responsible for all start-up activities from business plan through execution. He is the Manager of Spider Investments, LLC, as well as the President of Lion Equity Holding Corp., which provides investment banking consulting business services, since 1999.  From March 2004 to February 2006, he served as President and Chief Executive Officer of Ringo, Inc. Mr. DeFeudis also served as Financial Advisor for several financial institutions such as Paragon Capital, Merrill Lynch, Oppenheimer Securities, and Euro-Atlantic Securities from 1996 to 1999. Mr. DeFeudis graduated from University of New Hampshire in 1995 with a BA degree in Political Science.





There are no agreements or understandings for the officer or director to resign at the request of another person and the above-named officer and director is not acting on behalf of nor will act at the direction of any other person.





The director and executive officer have not been involved in: (a) bankruptcy; (b) criminal proceeding; or (c) any other legal proceeding.





Term of Office





Our directors are appointed for a one-year term to hold office until the next annual general meeting of our shareholders or until removed from office in accordance with our bylaws. Our officers are appointed by our board of directors and hold office until removed by the board.





All officers and directors listed above will remain in office until the next annual meeting of our stockholders, and until their successors have been duly elected and qualified. There are no agreements with respect to the election of Directors. We have not compensated our Directors for service on our Board of Directors, any committee thereof, or reimbursed for expenses incurred for attendance at meetings of our Board of Directors and/or any committee of our Board of Directors. Officers are appointed annually by our Board of Directors and each Executive Officer serves at the discretion of our Board of Directors. We do not have any standing committees. Our Board of Directors may in the future determine to pay Directors’ fees and reimburse Directors for expenses related to their activities.





None of our Officers and/or Directors have filed any bankruptcy petition, been convicted of or been the subject of any criminal proceedings or the subject of any order, judgment or decree involving the violation of any state or federal securities laws within the past five (5) years.





Audit Committee





We do not have a standing audit committee of the Board of Directors. Management has determined not to establish an audit committee at present because of our limited resources and limited operating activities do not warrant the formation of an audit committee or the expense of doing so. We do not have a financial expert serving on the Board of Directors or employed as an officer based on management’s belief that the cost of obtaining the services of a person who meets the criteria for a financial expert under Item 407(d) of Regulation S-K is beyond its limited financial resources and the financial skills of such an expert are simply not required or necessary for us to maintain effective internal controls and procedures for financial reporting in light of the limited scope and simplicity of accounting issues raised in its financial statements at this stage of its development.





Involvement in Certain Legal Proceedings





To our knowledge, during the past ten (10) years, none of our directors, executive officers, promoters, control persons, or nominees has been:





§
the subject of any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;





§
convicted in a criminal proceeding or is subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);





§
subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or





§
found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law.





Code of Ethics





We currently do not have a code of ethics that applies to our officers, employees and directors, including our Chief Executive Officer, Chief Financial Officer and senior executives.





14




ITEM 11.   EXECUTIVE COMPENSATION.





The following summary compensation table sets forth all compensation awarded to, earned by, or paid to the named executive officers paid by us during the fiscal years ended January 31, 2011 and 2010 in all capacities for the accounts of our executives, including the Chief Executive Officer (CEO) and Chief Financial Officer (CFO):





Summary Compensation Table





Name and Principal Position

Year

Salary

($)


Bonus

($)


Stock

Awards

($)


Option Awards

($)


Non-Equity Incentive Plan Compensation ($)


Non-Qualified Deferred Compensation Earnings

($)


All Other Compensation

($)


Totals

($)Marco Garibaldi

CEO

2011

$
0



0



0



0



0



0



58,500
(1)

$
58,5002010

$
0



0



1,625
(2)


0



0



0



87,375


$
89,000Edward C. DeFeudis,

2011

$
0



0



0



0



0



0



62,000
(3)

$
62,000President,

CFO

2010

$
0



0



1,625
(4)


0



0



0



102,375


$
104,000





(1) Including $56,500 paid to Mr. Garibaldi through Godfather Entertainment, Inc. and $2,000 paid through Situation X, LLC.





(2)  Godfather Entertainment, Inc. was granted 162,500 shares of our common stock in connection with the services rendered by Marco Garibaldi with respect to our business. Mr. Garibaldi is the beneficial owner of Godfather Entertainment, Inc. Mr. Garibaldi was also granted $87,375 as consulting fee for his services to Godfather Entertainment, Inc.





(3) Including $10,000 paid to Mr. DeFeudis directly and $52,000 paid through Lion Equity Holding Corp.





(4) Lion Equity Holding Corp. was granted 162,500 shares of our common stock in connection with the services rendered by Edward C. DeFeudis with respect to our business. Mr. DeFeudis is the beneficial owner of Lion Equity Holding Corp. Mr. DeFeudis was also granted $102,375 as consulting fee for his services to Lion Equity Holding Corp.





ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.





The following table sets forth each person known by us to be the beneficial owner of five percent or more of the Company's Common Stock, all directors individually and all directors and officers of the Company as a group. Except as noted, each person has sole voting and investment power with respect to the shares shown.





Amount and Nature

of Beneficial OwnershipName and Address of Beneficial Owners (1) (2)

# of Shares

% of Class (5)Edward C. DeFeudis

1093 Broxton Avenue, Suite 210

Los Angeles, CA 90024 (3)


14,519,000



29.18
%Marco Garibaldi

9200 Sunset Blvd #625

Los Angeles, CA 90069 (4)


4,691,827



9.43
%All named executive officers and our sole director as a group

(two (2) persons)

19,210,827



38.61
%




(1)
Pursuant to Rule 13d-3 under the Exchange Act, a person has beneficial ownership of any securities as to which such person, directly or indirectly, through any contract, arrangement, undertaking, relationship or otherwise has or shares voting power and/or investment power or as to which such person has the right to acquire such voting and/or investment power within 60 days.  15
  (2)
Unless otherwise stated, each beneficial owner has sole power to vote and dispose of the shares.(3)
The number of shares beneficially owned by Mr. DeFeudis includes 1,494,000 shares of common stock issued on January 2008 and 13,025,000 shares owned through Spider Investment, LLC with an address at 951 S.W. 4th Avenue, Boca Raton, FL 33432.  On February 26, 2008, we acquired all the right, title and interest in www.swapadebt.com, a person-to-person lending website, in exchange for the issuance of 22,200,000 shares of our common stock to Spider Investments, LLC, pursuant to a Purchase Agreement.  On January 31, 2011, Spider Investment, LLC returned 9,175,000 common shares to the treasury of the company. Mr. DeFeudis has control and dispositive power over the shares owned by Spider Investment, LLC and is the beneficial owner of Spider Investment, LLC.(4)
Marco Garibaldi owned 4,691,827 shares of our common stock through Situation X, LLC. Pursuant to a Purchase Agreement, in connection with the services rendered and to be rendered by Marco Garibaldi with respect to our business, we issued 15,000,000 shares of our common stock to Situation X, LLC, a Delaware limited liability company.  Marco Garibaldi has control and dispositive power over the shares owned by Situation X, LLC and he is the beneficial owner of Situation X, LLC.(5)
Applicable percentage of ownership is based on 49,758,567 shares of common stock outstanding as of May 5, 2011.





ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.





We currently use the offices of management at no cost to us.





ITEM 14.    PRINCIPAL ACCOUNTING FEES AND SERVICES.





(1) Audit Fees





Audit Fees





For the Company’s fiscal year ended January 31, 2011 and 2010, we were billed approximately $11,500 and $9,700, respectively, for professional services rendered for the audit and review of our financial statements.





Audit Related Fees





There were no fees for audit related services for the years ended January 31, 2011 and 2010.





Tax Fees





For the Company’s fiscal years ended January 31, 2011 and 2010, we were not billed for professional services rendered for tax compliance, tax advice, and tax planning.





All Other Fees





The Company did not incur any other fees related to services rendered by our principal accountant for the fiscal year ended January 31, 2011.





Pursuant to the requirements of Section 13 or 15(d) 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 Company did not incur any other fees related to services rendered by our principal accountant for the fiscal years ended January 31, 2011 and 2010.





Effective May 6, 2003, the Securities and Exchange Commission adopted rules that require that before our auditor is engaged by us to render any auditing or permitted non-audit related service, the engagement be:





-  approved by our audit committee; or





- entered into pursuant to pre-approval policies and procedures established by the audit committee, provided the policies and procedures are detailed as to the particular  service,  the  audit committee is informed of each service, and such policies and procedures do not include delegation of the audit committee's responsibilities to management.





16




We do not have an audit committee.  Our entire board of directors pre-approves all services provided by our independent auditors. The pre-approval process has just been implemented in response to the new rules. Therefore, our board of directors does  not have  records of  what percentage of the above fees were pre-approved.  However, all of the above services and fees were reviewed and approved by the entire board of directors either before or after the respective services were rendered.





Pursuant to the requirements of Section 13 or 15(d) 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.





PART IV





ITEM 15.   EXHIBITS, FINANCIAL STATEMENT SCHEDULES.





(a) List the following documents filed as a part of the report:





1. Financial Statements





2. Financial Statement Schedules: None.





3. Exhibits





Exhibit



FiledIndex

Description of Document

Herewith

Incorporated by Reference To:2.1

Purchase Agreement between Swap-A-Debt, Inc. and Spider Investments, LLC, dated February 26, 2008.



Exhibit 2.1 to the Registrant’s Registration Statement Form S-1 filed on October 2, 2008.2.2

Agreement and Plan of Merger by and among Windsor Capital Corp., WCC Acquisition Corp., and Energy Control Technology, Inc., dated March 7, 2001.



Exhibit 2.1 to the Registrant’s Current Report Form 8-K filed on March 22, 2001.2.3

Agreement and Plan of Merger by and among Windsor Capital Corp., Woodfield Enterprises, Inc. and Internetional Asset Management Group, Inc., dated December 18, 1997.



Exhibit 2.1 to the Registrant’s Current Report Form 8-K filed on February 13, 1998.2.4

Agreement and Plan of Merger between Windsor Capital Corp. and Boynton Tobacconists, Inc., dated March 7, 2001.



Exhibit 2.1 to the Registrant’s Current Report Form 8-K filed on January 14, 1998.3.1

Articles of Incorporation of the Registrant as filed with the Secretary of State of Delaware.



Exhibit 3.1 to the Registrant’s Registration Statement Form S-1 filed on October 2, 20083.2

Bylaws of the Registrant.



Exhibit 3.2 to the Registrant’s Registration Statement Form S-1 filed on October 2, 2008.4.1

12% Convertible Promissory Note between Swap-A-Debt, Inc. and Robert S. Pearson, dated August 29, 2008.



Exhibit 4.1 to the Registrant’s Registration Statement Form S-1 filed on October 2, 2008.4.2

9% Convertible Promissory Note between Swap-A-Debt, Inc. and Sarah Catherine Huempfner, dated January 18, 2008.



Exhibit 4.2 to the Registrant’s Registration Statement Form S-1 filed on October 2, 2008.4.3

9% Convertible Promissory Note between Swap-A-Debt, Inc. and Jane Elizabeth Pearson, dated January 18, 2008.



Exhibit 4.3 to the Registrant’s Registration Statement Form S-1 filed on October 2, 200810.1

Assignment of Convertible Note between Robert Alick and Joe Meuse, dated September 2, 2004.



Exhibit 10.1 to the Registrant’s Registration Statement Form S-1 filed on October 2, 2008  17
  10.2

Assignment of Convertible Note between Joe Meuse and Erin Reusch, dated August 15, 2005.



Exhibit 10.2 to the Registrant’s Registration Statement Form S-1 filed on October 2, 200810.3

Assignment of Convertible Note between Erin Reusch and Robert S. Pearson, dated January 15, 2008.



Exhibit 10.3 to the Registrant’s Registration Statement Form S-1 filed on October 2, 2008.





10.4

Letter of Issuance of Common Stock between Swap-A-Debt, Inc. and Edward C. DeFeudis, dated January 25, 2008.



Exhibit 10.4 to the Registrant’s Registration Statement Form S-1 filed on October 2, 2008.10.5

Agreement for the Purchase of Preferred Stock between 5fifth5.com, Inc. and Edward C. DeFeudis, dated August 8, 2005.



Exhibit 10.5 to the Registrant’s Registration Statement Form S-1 filed on October 2, 2008.10.6

Sudjam Production Specifications Agreement



Exhibit 10.6 to the Registrant’s Registration Statement Form S-1/A filed on February 12, 2009.31.1

Rule 13a-14(a)/ 15d-14(a) Certification of Chief Executive Officer

ü31.2

Rule 13a-14(a)/ 15d-14(a) Certification of Chief Financial Officer

ü32.1

Section 1350 Certification of Chief Executive Officer

ü32.2

Section 1350 Certification of Chief Financial Officer

ü





18





SIGNATURES





In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.





WIKILOAN, INC.Date: May 10, 2011
By:
/s/ Edward C. DeFeudisEdward C. DeFeudis

President, Chief Financial Officer,

Principal Accounting Officer

and Chairman of the Board





Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.





Signature

Title

Date/s/ Edward C. DeFeudis

President, Chief Financial Officer, Principal Accounting Officer and Chairman of the Board

May 10, 2011Edward C. DeFeudis/s/ Marco Garibaldi

Chief Executive Officer

May 10, 2011Marco Garibaldi







20


WikiLoan, Inc.Index to Financial StatementsJanuary 31, 2011 and 2010PageNumberReport of Independent Registered Public Accounting Firm
F-1Financial Statements:Balance Sheets as of January 31, 2011 and 2010
F-2Statements of Operations for the years ended
F-3January 31, 2011 and 2010Statement of Changes in Shareholders' Deficitfor the years ended January 31, 2011 and 2010
F-4Statement of Cash Flows for the years ended
F-5January 31, 2011 and 2010Notes to Financial Statements
F-6
   
  REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 
 
 To the Board of Directors
 WikiLoan, Inc.
 Delray Beach, FL
 
 We have audited the accompanying balance sheets of WikiLoan, Inc. as of January 31, 2011 and 2010 and the related statements of operations, changes in stockholders’ deficit, and cash flows for the years then ended.  These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
 
 We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
 
 In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of WikiLoan, Inc. as of January 31, 2011 and 2010, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.
 
 The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has no revenue, significant assets or cash flows that raise substantial doubt about the Company’s ability to continue as a going concern.  Management’s plans regarding these matters are described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
 
 /s/ PS STEPHENSON & CO., PC
 
 
 Wharton, Texas
 May 2, 2011
  F-1
  WikiLoan, Inc.Balance SheetsJanuary 31, 2011 and 2010Assets

2011


2010Current assetsCash and cash equivalents

$
35,631


$
28,460Accounts receivable


196,485



-Prepaid consulting fees


64,488



-Total current assets


296,604



28,460Property and equipmentOffice equipment


5,297



5,297Computer equipment


3,010



3,010Total property and equipment


8,307



8,307Accumulated depreciation


(8,307
)


(8,307
)Property and equipment, net


-



-Other assetsDomain names


25,042



25,042Software development costs


1,969



47,361Deferred payment processing costs


122,500



-SDI distribution agreement


51,000



-Total assets

$
497,115


$
100,863Liabilities and Shareholders' DeficitLiabilitiesLine of credit

$
-


$
100,000Accounts payable


256,485



-Accrued interest


40,750



49,928Derivative liabilities


1,914,672



203,826Convertible notes payables, net of discounts on debtof $36,972 and $109,423


413,028



242,577Total liabilities


2,624,935



596,331Stockholders' equity (deficit)Preferred stock - par value $0.01; 10,000,000 shares authorized;none issued and outstanding


-



-Common stock; par value $0.001; 70,000,000 shares authorized;57,434,569 and 51,575,000 shares issued and outstanding, respectively


57,435



51,575Additional paid-in capital


6,860,256



5,338,571Accumulated deficit


(9,035,673
)


(5,885,614
)Treasury stock, 9,837,500 common shares at cost


(9,838
)


-Total stockholders' deficit


(2,127,820
)


(495,468
)Total liabilities and stockholders' equity

$
497,115


$
100,863
  
  F-2
  WikiLoan, Inc.Statements of OperationsFor the Years Ended January 31, 2011 and 20102011


2010Revenues

$
635,184


$
1,801Cost of sales


625,669



-Gross profit


9,515



1,801Operating expensesSelling, general and administrative expenses


2,423,822



345,610Research and development costs


18,775



23,800Total operating expenses


2,442,597



369,410Income (loss) from operations


(2,433,082
)


(367,609
)Other income (expense)Gain (loss) from derivative liabilities


(429,886
)


(32,593
)Gain on sale of domain names


-



33,667Interest expense


(287,091
)


(230,104
)Total other income (expense)


(716,977
)


(229,030
)Income (loss) before provision for income taxes


(3,150,059
)


(596,639
)Provision for income taxes


-



-Net income (loss)

$
(3,150,059
)

$
(596,639
)Basic and fully diluted earnings (loss) per common share:Earnings (loss) per common share

$
(0.06
)

$
(0.01
)Basic and fully diluted weighted average common shares outstanding


55,122,301



50,164,583
  
  F-3
  WikiLoan, Inc.Statement of Changes in Stockholders' DeficitFor the Years Ended January 31, 2011 and 2010AdditionalPreferred Stock


Common Stock


Paid In


AccumulatedShares


Amount


Shares


Amount


Capital


Deficit


TotalBalance at January 31, 2009


-


$
-



49,500,000



49,500



5,049,396



(5,288,975
)

$
(190,079
)Shares issued for accrued liabilities










325,000



325



2,925







3,250Shares issued for services










-



-



-







-Shares issued for debt conversions










1,750,000



1,750



138,250







140,000Beneficial conversion featuresrelated to convertible debt


















148,000







148,000Net income (loss)


-



-



-



-



-



(596,639
)


(596,639
)Balance at January 31, 2010


-



-



51,575,000



51,575



5,338,571



(5,885,614
)


(495,468
)Shares returned to treasury










-



-



9,838







9,838Shares issued for services










3,398,561



3,399



1,017,712







1,021,111Shares issued for debt conversions










2,461,008



2,461



351,946







354,407Beneficial conversion featuresrelated to convertible debt


















142,189







142,189Net income (loss)


-



-



-



-



-



(3,150,059
)


(3,150,059
)Balance at January 31, 2011


-


$
-



57,434,569


$
57,435


$
6,860,256


$
(9,035,673
)

$
(2,117,982
)
  
  F-4
  WikiLoan, Inc.Statements of Cash FlowsFor the Years Ended January 31, 2011 and 20102011


2010Cash Flows Provided From (Used By) Operating ActivitiesNet income (loss)

$
(3,150,059
)

$
(596,639
)Adjustments to reconcile net income (loss) to net cashprovided from (used by) operating activities:Depreciation and amortization


178,892



46,651(Gain) loss on derivative liabilities


429,886



32,593Amortization of discount on convertible debts


166,487



188,399Gain on sale of domain names


-



(33,667
)Increase in accounts receivable


(196,485
)


-Increase in prepaid consulting fees


1,135,266



-Increase in accounts payable


256,485



-Increase in related party payables


-



35,250Increase (decrease) in accrued interest


45,398



37,188Net cash provided from (used by) operating activities


(1,134,130
)


(290,225
)Cash Flows Provided From (Used By) Investing ActivitiesPurchase of Domain Names


-



(3,375
)Net cash provided from (used by) investing activities


-



(3,375
)Cash Flows Provided From (Used By) Financing ActivitiesRepayment of line of credit


(100,000
)


-Common stock issued for services


856,301



-Proceeds from issuance of convertible notes payable


385,000



250,000Net cash provided from (used by) financing activities


1,141,301



250,000Net increase (decrease) in cash and cash equivalents


7,171



(43,600
)Cash and cash equivalents, beginning of year


28,460



72,060Cash and cash equivalents, end of year

$
35,631


$
28,460Supplemental disclosureInterest paid during the period

$
3,643


$
4,517Non-cash transactions:Issuance of common stock for debt conversions

$
287,000


$
-Conversion of accrued interest into common stock

$
54,576


$
-Common stock issued for SDI agreement

$
157,000


$
-Sale of domain names and trademark applicationExtinguishment of related party payables

$
-


$
(32,000
)Extinguishment of convertible note payable


-



(8,000
)Cost of domain names


-



6,333Gain on sale of domain names and trademark application

$
-


$
(33,667
)Issuance of common stock for related party payables

$
-


$
(3,250
)
  
 F-5
 WikiLoan, Inc.
 Notes to Financial Statements
 January 31, 2011
 1. Organization, Description of Business, and Basis of Accounting
  WikiLoan, Inc., formerly known as Swap-A-Debt, Inc., (the “Company”) was originally incorporated on June 24, 1988 under the laws of the State of Delaware as Windsor Capital Corp.  Between March 2001 and January 2008, the Company amended and restated its Articles of Incorporation and changed its corporate name to Energy Control Technology, Inc., 5Fifty5.com, inc., Swap-A-Debt, Inc., and finally, WikiLoan, Inc.  WikiLoan is a Social Network with a focus on finance.  At WikiLoan.com, family and friends can borrow and lend money among themselves at rates suitable to their respective needs. The Company's website provides repayment schedules and documentation for loans, along with proprietary administrative tools, which enable users to securely pull credit reports and automate the loan repayment process.
  The Company follows the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America and has a fiscal year-end of January 31.
 
 2.        Going Concern Uncertainty
 
 The Company has operated at a loss since 2005.  At January 31, 2011 and 2010, the Company had accumulated losses of $9,035,673 and $5,885,614, 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.        Summary of Significant Accounting Policies
 
 Cash and Cash Equivalents
 For Statement of Cash Flows purposes, the Company considers all cash on hand and in banks, certificates of deposit and other highly-liquid investments with maturities of three months or less, when purchased, to be cash and cash equivalents.
 
 Income Taxes
 The Company uses the asset and liability method of accounting for income taxes. At January 31, 2011 and 2010, respectively, the deferred tax asset and deferred tax liability accounts, as recorded when material to the financial statements, are entirely the result of temporary differences.  Temporary differences represent differences in the recognition of assets and liabilities for tax and financial reporting purposes, primarily accumulated depreciation and amortization.
 
 As of January 31, 2011 and 2010, the deferred tax asset related to the Company's net operating loss carryforward is fully reserved.  Due to the provisions of Internal Revenue Code Section 338, the Company may have no net operating loss carryforwards available to offset financial statement or tax return taxable income in future periods as a result of a change in control involving 50 percentage points or more of the issued and outstanding securities of the Company.
  F-6
 WikiLoan, Inc.
 Notes to Financial Statements
 January 31, 2011
 Effective January 1, 2009, the Company adopted guidance regarding accounting for uncertainty in income taxes. This guidance clarifies the accounting for income taxes by prescribing the minimum recognition threshold an income tax position is required to meet before being recognized in the financial statements and applies to all federal or state income tax positions. Each income tax position is assessed using a two step process. A determination is first made as to whether it is more likely than not that the income tax position will be sustained, based upon technical merits, upon examination by the taxing authorities. If the income tax position is expected to meet the more likely than not criteria, the benefit recorded in the financial statements equals the largest amount that is greater than 50% likely to be realized upon its ultimate settlement.As of January 31, 2011 and 2010 there were no amounts that had been accrued in respect to uncertain tax positions.
 
 None of the Company’s federal or state income tax returns is currently under examination by the Internal Revenue Service (“IRS”) or state authorities.  However, fiscal years 2007 and later remain subject to examination by the IRS and respective states.
 
 Property and Equipment
 Property and equipment are stated at cost. Depreciation has been calculated over the estimated useful lives of the assets ranging from 3 to 5 years.  The cost of maintenance and repairs is expensed as incurred. Depreciation and amortization expense for the years ended January 31, 2011 and 2010 was $0 and $1,259, respectively.
 
 Earnings (Loss) per Share
 Basic earnings (loss) per share is computed by dividing the net income (loss) available to common shareholders by the weighted-average number of common shares outstanding during the respective  period presented in our accompanying financial statements.
 
 Fully diluted earnings (loss) per share is computed similar to basic income (loss) per share except that the denominator is increased to include the number of common stock equivalents (primarily outstanding options and warrants).
 
 Common stock equivalents represent the dilutive effect of the assumed exercise of outstanding stock options and warrants, using the treasury stock method, at either the beginning of the respective period presented or the date of issuance, whichever is later, and only if the common stock equivalents are considered dilutive based upon the Company's net income (loss) position at the calculation date.
 
 Research & Development
 The Company’s policy is to expense any research and development costs as they are incurred. The Company incurred research and development costs of $18,775 and $23,800 during the years ended January 31, 2011 and 2010, respectively.
 
 Internally Developed Software Costs
 
 The Company develops software that is utilized to meet the Company’s internal needs and applies Statement of Position 98-1, Accounting for the Costs of Computer Software Developed or Obtained for Internal Use, and Statement of Financial Accounting Standards No. 86, Accounting for the Costs of Computer Software to Be Sold, Leased, or Otherwise Marketed, in determining the costs to be capitalized as internally developed software costs and the expected useful life of the software assets.
 
 F-7
 WikiLoan, Inc.
 Notes to Financial Statements
 January 31, 2011
 
  At January 31, 2011 and 2010, the Company had unamortized software costs of $1,969 and $47,361.  Developed software costs are being amortized over 5 years using the straight-line method. Amortization expense during the years ended January 31, 2011 and 2010 was $45,392 and $45,392, respectively.
 
 Concentrations of Risk
 
 Cash and Cash Equivalents
 The Company maintains cash balances at financial institutions insured up to $250,000 by the Federal Deposit Insurance Corporation. Balances exceeded these insured amounts during the year.
 
 Stock Based Compensation
 The Company recognizes stock-based compensation in accordance with the fair value recognition provisions of SFAS No. 123(R), “Share-Based Payment.” SFAS No. 123(R) generally requires share-based payments to employees, including grants of employee stock options and other equity awards, to be recognized in the statement of operations based on their fair values. Thus, the Company records compensation expense for all share-based awards granted, based on the grant date fair value estimated in accordance with the provisions of SFAS 123(R). The Company adopted SFAS 123(R) using the modified prospective method, which requires that compensation expense for the portion of awards for which the requisite service has not yet been rendered and that are outstanding as of the adoption date be recorded over the remaining service period. Prior to the adoption of SFAS No. 123(R), the Company had no share-based compensation arrangements. Accordingly, no prior periods have been restated, the impact of SFAS 123(R) is not presented, and no pro forma amounts are presented had the Company recognized stock-based compensation in accordance with SFAS No. 123(R).
 
 Stock-based compensation expense recognized during the period is based on the value of the stock-based payment awards that is ultimately expected to vest. SFAS 123(R) requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.
 
 Use of Estimates
 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 those estimates.
 
 5.        Sale of Domain Names and Trademark Applications
 
 On October 29, 2009, the Company completed the sale of 17 domain names and a trademark application unrelated to the Company’s peer-to-peer lending business for debt reductions of $40,000, of which $32,000 was owed to two entities owned by the Company’s officers for consulting services and $8,000 in convertible notes payable reductions (Note 8).  The Company’s recorded cost in the domain names and trademark applications was $6,333.
 
 F-8
 WikiLoan, Inc.
 Notes to Financial Statements
 January 31, 2011
   6.        Line of Credit
 
 On June 13, 2006, the Company was approved for a line of credit agreement with a bank for $100,000. The line of credit bears interest at Prime, as defined in the agreement, with interest payments due monthly. The line of credit is personally guaranteed by the Company’s President. The line of credit was repaid in full during 2010.
 
 7. Convertible Notes Payable
 
 Convertible notes payable consist of the following at January 31, 2011 and 2010:
 
 Jan. 31, 2011


Jan. 31, 2010Convertible note payable to an individual dated August 29, 2008,interest at 12%, due on or before August 29, 2010, convertibleinto shares of common stock at a conversion price equal tothe 10 day average closing  price multiplied by 0.80

$
-


$
102,000Convertible note payable to an individual dated March 23, 2010,interest at 12%, due on or before Sept. 23, 2010, convertibleinto shares of common stock at a conversion price equal tothe 10 day average closing  price multiplied by 0.75


150,000



-Convertible note payable to an individual dated May 12, 2009,interest at 12%, due on or before May 12, 2010, convertibleinto shares of common stock at a conversion price equal tothe 10 day average closing  price multiplied by 0.80


-



50,000Convertible note payable to an individual dated July, 28, 2009,interest at 12%, due on or before July 28, 2010, convertibleinto shares of common stock at a conversion price equal tothe 10 day average closing  price multiplied by 0.80


-



50,000Convertible note payable to an individual dated Sept. 16, 2009,interest at 12%, due on or before Jan. 16, 2011, convertibleinto shares of common stock at a conversion price equal tothe 10 day average closing  price multiplied by 0.75


15,000



15,000Convertible note payable to an individual dated Sept. 28, 2009interest at 12%, due on or before Sept. 28, 2010, convertibleinto shares of common stock at a conversion price equal tothe 10 day average closing  price multiplied by 0.80


85,000



85,000Convertible note payable to an individual dated October 26, 2010interest at 12%, due on or before April 26, 2011, convertibleinto shares of common stock at a conversion price equal tothe 10 day average closing  price multiplied by 0.75


150,000



-Convertible note payable to an individual dated Jan. 21, 2010,Interest at 12%, due on or before July 21, 2010, convertibleInto shares of common stock at a conversion price equal toThe 10 day average closing  price multiplied by 0.75


50,000



50,000Less discount on convertible debt


(36,972
)


(109,423
)Total

$
413,028


$
242,577
  F-9
 WikiLoan, Inc.
 Notes to Financial Statements
 January 31, 2011
   As each of the convertible note agreements above contain options to convert the outstanding balance into shares of the Company’s common stock, we evaluated these agreement pursuant to ASC 815-15 and due to there being no minimum or fixed conversion price resulting in an indeterminate number of shares to be issued in the future, the Company determined an embedded derivative existed and ASC 815-15 applied.
 
 The Company has elected to value the derivative instruments separately at the fair value on the issuance date using the Black-Scholes valuation model and bifurcate the instrument. The derivative instruments were subsequently remeasured at January 31, 2011. The Company estimated the fair value of the derivative using the Black-Scholes valuation method with assumptions including: (1) term of 1year or less; (2) a computed volatility rate from 166% to 242 % (3) a discount rate of .17 to .44% and (4) zero dividends. The discount is being amortized over the life of the note using the effective interest method.
 
 At January 31, 2011, derivative liabilities and respective gains or losses on derivatives consisted of the following:
  Gain (loss)Derivative


on DerivativeLiability


at 1/31/11August 29, 2008 note

$
-


$
(33,712
)October 26, 2010 note


113,683



(39,738
)Sept. 16, 2009 note


11,368



(3,713
)Sept. 28, 2009 note


64,420



(21,044
)January 21, 2009 note


37,894



(12,378
)March 23, 2010 note


113,683



(44,356
)May 27, 2010 note


-



28,754Warrants


1,573,624



(303,699
)$
1,914,672


$
(429,886
)
 At January 31, 2011, unamortized discount and respective amortization to interest expense consisted of the following:
 Fiscal 2011Unamortized


AmortizationDiscount


of DiscountAugust 29, 2008 note

$
-


$
-October 26, 2010 note


36,792



36,973Sept. 16, 2009 note


-



6,854Sept. 28, 2009 note


-



38,840January 21, 2009 note


-



25,516March 23, 2010 note


-



58,304May 12, 2010 note


-



-$
36,792


$
166,487
   On March 1, 2010, the Company received a conversion notice on the August 29, 2008 convertible note agreement to convert the outstanding principal and accrued interest aggregating $142,960 into 1,250,000 common shares.
  F-10
 WikiLoan, Inc.
 Notes to Financial Statements
 January 31, 2011
 On March 5, 2010, the Company issued a short-term convertible promissory note for 10,000.  The note accrues interest at 12% per annum and is due on or before September 5, 2010.  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.   On March 12, 2010, the Company received a conversion notice on this convertible note agreement to convert the outstanding principal into 40,404 common shares.
 
 In June 2010, the Company received written notice from the September 16, 2009 convertible note holder to extend the note agreement for an additional three months.  The due date is September 16, 2010, and no other terms or conditions were changed.
 
 On March 23, 2010, the Company issued a short-term convertible promissory note for $150,000.  The note accrues interest at 12% per annum and is due on or before September 23, 2010.  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.
 
 On April 9, 2010, the Company received conversion notices on the May 12, 2009 and July 28, 2009 convertible note agreements to convert the outstanding principal and accrued interest aggregating $109,116 into 839,354 common shares.
 
 On May 27, 2010, the Company issued a short-term convertible promissory note for $75,000.  The note accrues interest at 12% per annum and is due on or before November 27, 2010.  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.
 
 On October 26, 2010, the Company issued a short-term convertible promissory note for $150,000.  The note accrues interest at 12% per annum and is due on or before April 26, 2011.  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.
 
 On November 27, 2010, the Company received a conversion notice on the May 12, 2009 convertible note agreement to convert the outstanding principal and accrued interest aggregating $79,500 into 331,250 common shares.
 
 At January 31, 2011 and 2010, the Company had accrued interest of $40,750 and $49,928, respectively, under these convertible note agreements.
 
 8. Key Operating Officers
 
 At January 31, 2011, the Company had two officers.  This puts the Company at a high degree of risk if they were no longer able to function in that capacity.
 
 9. Common Stock Transactions
 
 On February 10, 2010, the Company issued 500,000 common shares to SDI upon execution of the agreement and issuance of a press release. The Company valued the shares issued at $110,000, based on the closing price of the Company’s common stock on February 10, 2010.
  F-11
 WikiLoan, Inc.
 Notes to Financial Statements
 January 31, 2011
 On March 1, 2010, the Company received a conversion notice on the August 29, 2008 convertible note agreement to convert the outstanding principal and accrued interest aggregating $142,960 into 1,250,000 common shares.
 
 On March 2, 2010, the Company issued an aggregate of 600,000 common shares to two payment processors for five year payment processing fee agreements.  The Company valued the shares issued at $150,000, based on the average closing price of the Company’s common stock immediately prior to the agreements, and will expense this amount over the life of the agreements.  For the quarter ended April 30, 2010, the Company expensed $5,000 under these agreements.
 
 On March 12, 2010, the Company received a conversion notice on the March 5, 2010 convertible note agreement to convert the outstanding principal of $10,000 into 40,404 common shares.
 
 On April 9, 2010, the Company received conversion notices on the May 12, 2009 and July 28, 2009 convertible note agreements to convert the outstanding principal and accrued interest aggregating $109,116 into 839,354 common shares.
 
 On August 2, 2010, and in conjunction with a six month Advisory Agreement, the Company issued 2 warrants to purchase an aggregate of 6,000,000 common shares (3,000,000 shares per warrant) of the Company.  The warrants contain an exercise price of $0.001 per share, a cashless exercise provision, and a term of five years.  The second warrant is not issuable by the Company until satisfaction of certain events by the advisor. The value of the options was computed using the Black Scholes pricing model using the following input values and assumption: (1) Stock price: the closing price on the day previous to the grant date; (2) warrant exercise price of $0.001; (3) volatility of 242%; (4) discount rate of 0.17%; (5) term of 5 years and (6) a zero dividend rate.  The value of the first warrant was $1,199,754, and is being amortized over the life of the agreement.  The amount of expense recognized during the quarter ended October 31, 2010 in connection with these warrants was $629,877 and is included in general and administrative expenses.
 
 On October 13, 2010, the Company issued 2,000,000 common shares to a consulting firm for services rendered. The company valued the services at $648,000 based on the closing stock price at the date of issuance.
 
 On October 13, 2010, the Company issued 20,000 common shares for services rendered. The Company valued the services at $5,000.
 
 On October 13, 2010, the Company issued 100,000 common shares to SDI upon execution of an agreement to provide distribution services to the Company.  The Company valued the shares issued at $47,000, based on the closing price of the Company’s common stock at the date of issuance.
 
 On November 27, 2010, the Company received a conversion notice on the May 12, 2009 convertible note agreement to convert the outstanding principal and accrued interest aggregating $79,500 into 331,250 common shares.
 
 On November 29, 201, the Company issued 40,000 common shares for services rendered. The Company valued the services at $14,000, based on the closing price of the Company’s common stock at the date of issuance.
  F-12
 WikiLoan, Inc.
 Notes to Financial Statements
 January 31, 2011
 On December 2, 2010, the Company issued 138,561 common shares to SDI as provided by the agreement to provide distribution services to the Company.  The Company valued the shares issued at $47,111, based on the closing price of the Company’s common stock at the date of issuance.
 
 On January 19, 2011, and in conjunction with a one year Advisory Agreement, the Company issued a warrant to purchase an aggregate of 150,000 common shares of the Company.  The warrant contains an exercise price of $0.001 per share, a cashless exercise provision, and a term of five years.The value of the option was computed using the Black Scholes pricing model using the following input values and assumption: (1) Stock price: the closing price on the day previous to the grant date; (2) warrant exercise price of $0.001; (3) volatility of 185%; (4) discount rate of 0.17%; (5) term of 5 years and (6) a zero dividend rate.  The value of the warrant at issuance was $70,351, and is being amortized over the life of the agreement.  The amount of expense recognized during the year ended January 31, 2011 in connection with this warrant was $5,863 and is included in general and administrative expenses.
 
 On January 31, 2011, Lion Equity Holding Corp., an entity owned by the Company’s president, returned 662,500 common shares to treasury.
 
 On January 31, 2011, Spider Investments, LLC, an entity owned by the Company’s president, returned 9,175,000 common shares to treasury.
  10. Basic and Diluted Earnings (Loss) Per Common Share
 
 Basic and diluted earnings (loss) per share for the years ended January 31, 2011 and 2010 were computed using 55,122,301 and 50,164,583 weighted average common shares outstanding, respectively.  The Company did not include potentially dilutive shares issued or outstanding as the effect of those shares would have resulted in an ant dilutive effect.
  11. SDI Agreement
 
 On February 10, 2010, the Company entered into Development and Distribution Agreement (“the Agreement”) with SDI Distributors NJ, Inc. (“SDI”) for the development and distribution of a phone card/cash equivalent card branded in a “Wiki” financial name.  SDI may purchase up to five million phone card/cash equivalent cards from the Company and distribute the cards through SDI’s distribution chain.  The Company has agreed to issue up to 5,500,000 common shares of the Company as consideration for the Agreement, with 500,000 common shares due upon execution of this agreement and issuance of a press release.  Subsequent issuance of common shares of the Company will be delivered on a quarterly basis upon performance.
 
 Effective February 10, 2010, the Company issued 500,000 common shares to SDI upon execution of the agreement and issuance of a press release. The Company valued the shares issued at $110,000, based on the closing price of the Company’s common stock on February 10, 2010.
 
 This agreement was subsequently terminated and a new distribution agreement was entered into on October 13, 2010.
  F-13
 
 WikiLoan, Inc.
 Notes to Financial Statements
 January 31, 2011
  On October 13, 2010, the Company issued 100,000 common shares to SDI upon execution of a distribution agreement to provide distribution services to the Company.  The Company valued the shares issued at $47,000, based on the closing price of the Company’s common stock at the date of issuance.
 
 On December 2, 2010, the Company issued 138,561 common shares to SDI as provided by the agreement to provide distribution services to the Company.  The Company valued the shares issued at $47,111, based on the closing price of the Company’s common stock at the date of issuance.
 
 12. Advisory Agreement
 
 On January 19, 2011, and in conjunction with a one year Advisory Agreement, the Company issued a warrant to purchase an aggregate of 150,000 common shares of the Company.  The warrant contains an exercise price of $0.001 per share, a cashless exercise provision, and a term of five years.The value of the option was computed using the Black Scholes pricing model using the following input values and assumption: (1) Stock price: the closing price on the day previous to the grant date; (2) warrant exercise price of $0.001; (3) volatility of 185%; (4) discount rate of 0.17%; (5) term of 5 years and (6) a zero dividend rate.  The value of the warrant at issuance was $70,351, and is being amortized over the life of the agreement.  The amount of expense recognized during the year ended January 31, 2011 in connection with this warrant was $5,863 and is included in general and administrative expenses.
  13. Contingencies
 
 The Company is subject to litigation, primarily as a result of customer claims, in the ordinary conduct of its operations.  As of January 31, 2011, the Company had no knowledge of any legal proceedings, which, by themselves, or in the aggregate, would not be covered by insurance or could be expected to have a material adverse effect on the Company.
 
 14. Subsequent Events
  Management has evaluated subsequent events through May 2, 2011, the date which the financial statements were available to be issued.
  On March 16, 2011, the Company repaid the $15,000 convertible note payable plus accrued interest of $2,700.
  On March 16, 2011, the Company received a conversion notice on the March 23, 2010, September 28, 2010, October 26, 2010 and January 21, 2010 convertible note agreements aggregating $435,000 to convert the outstanding principal and accrued interest into 2,161,498 common shares.
 
 On March 16, 2011, the Company issued a short-term convertible promissory note for $260,000.  The note accrues interest at 12% per annum and is due on or before September 16, 2011.  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.