StockRunway are Ready to Take off with Wiki Group Inc (PINK:TWGI)

Have you ever woken up one morning and thought: “I want to lend some cash to a person I don’t know through a company I can’t completely trust with no guarantees of getting my money back.”. If you have, you probably think that Wiki Group Inc (PINK:TWGI) is a great company.

StockRunway’s email brought our attention to TWGI and to their peer-to-peer lending service called WikiLoan. What is it? Basically, if you need some cash, you register on their website, pay a $24.95 fee, and, supposedly there are hundreds of people waiting to lend you money with the advantage of choosing your own schedule for repayment and interest rates. On the other hand, if you have a lot of cash burning a hole in your pocket and you would like to help a person in need, you can also fill out the registration forms, again, pay some fees, and start hoping that the borrowers will return the money on time.

StockRunway are only too happy to explain what a great service that is and how it will grow in the future, utilizing some over-the-top comparisons with services like PayPal. The only problem is that we can’t see that there aren’t many things to suggest that the predicted growth will come true. Let us begin with the financial aspect. TWGI‘s last SEC report covers the quarter that ended on July 31 2012, and since we don’t have anything more recent to work with, we opened it and started reading. Things didn’t look good from the very start. As well as being outdated, the financials are not exactly confidence-inspiring:

• cash: $8 thousand
• total assets: $217 thousand
• revenue for the period that ended in July: $2,593
• net loss for the same period: $219 thousand
• net loss since inception: $9.8 million

Maybe they should register on WikiLoan and start borrowing money from those noble lenders. On a more serious note, there are some other problems with the financial report. Like the fact that the list of convertible notes they have issued over the past couple of years is longer than WikiLoan’s Terms of Agreement (yes, we read that one as well). In addition, they have recently nearly doubled the amount of authorized shares to 500,000,000 and they admit that this could cause some considerable dilution to current shareholders.

At this point we had pretty much made up our minds as to whether TWGI is a viable investment option, but, still we decided to check if we will be able to find some more information about WikiLoan. Sure enough, we did – it was called Swap-A-Debt back in 2009. Apparently TWGI are not too eager to talk about it (it’s not mentioned in any of the documents that we read through), but this is somewhat understandable since the website was live for a very short period of time and peer-to-peer lending experts were not too optimistic of its success.

Next we decided to see if we will be able to find some information about the people currently running the company, and we were successful once again – a user in the Investor Village forums uses some pretty strong words against TWGI‘s CEO Edward DeFeudis and blames him of performing pump-and-dump schemes. Of course, we can not in any way be sure if the allegations are true, but if we were to invest in TWGI, we would definitely keep it in mind.

If you have been following our articles closely, you would probably know that now is the time to say a few words about the today’s promoter. StockRunway have been around for a while now and if we are to follow the discourse of their name, their “picks” have experienced some pretty harsh landings in the past. Pengram Corporation (PINK:PNGM) for example has lost a total of 50% of its price since StockRunway’s promotion back in November 2012.