f10k2013_sourcefinancialinc.htm

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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

For the fiscal year ended January 31, 2013

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

For the transition period from ___________ to ___________

Commission file number 033-26828

SOURCE FINANCIAL, INC.

(Exact name of registrant as specified in its charter)

DELAWARE		80-0142655
State or other jurisdiction of incorporation or organization		(I.R.S. Employer Identification No.)

1093 Broxton Avenue Suite 210 Los Angeles, CA		90024
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (310) 443-9246

Securities registered under Section 12(b) of the Act:

Title of each class:		Name of each exchange on which registered:
None		None

Securities registered under Section 12(g) of the Act:

None

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 x No o

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 x 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. x

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	o

Non-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

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter ended July 31, 2012: $$4,222,500

As of May 1, 2013, the registrant had 2,061,632 common shares issued and outstanding.

Documents Incorporated by Reference: None.

		PAGE
PART I
Item 1.	Business.	1
Item 1A.	Risk Factors.	11
Item 1B.	Unresolved Staff Comments
Item 2.	Properties.	11
Item 3.	Legal Proceedings.	11
Item 4.	Mine Safety Disclosures	11

Part II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.	12
Item 6.	Selected Financial Data.	13
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	14
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk.	18
Item 8.	Financial Statements and Supplementary Data.	18
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.	18
Item 9A.	Controls and Procedures.	18
Item 9B.	Other Information	20

Part III
Item 10.	Directors, Executive Officers and Corporate Governance.	20
Item 11.	Executive Compensation.	22
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.	23
Item 13.	Certain Relationships and Related Transactions, and Director Independence.	24
Item 14.	Principal Accounting Fees and Services.	25

Part IV
Item 15.	Exhibits, Financial Statement Schedules.	26

SIGNATURES		28

FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K (this “Report”) contains “forward-looking statements” within the meaning of the Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “expect,” “predict,” “project,” “forecast,” “potential,” “continue” negatives thereof or similar expressions. These forward-looking statements are found at various places throughout this Report and include information concerning possible or assumed future results of our operations; business strategies; future cash flows; financing plans; plans and objectives of management; any other statements regarding future operations, future cash needs, business plans and future financial results, and any other statements that are not historical facts.

From time to time, forward-looking statements also are included in our other periodic reports on Forms 10-Q and 8-K, in our press releases, in our presentations, on our website and in other materials released to the public. Any or all of the forward-looking statements included in this Report and in any other reports or public statements made by us are not guarantees of future performance and may turn out to be inaccurate. These forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Report. All subsequent written and oral forward-looking statements concerning other matters addressed in this Report and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Report.

Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.

USE OF CERTAIN DEFINED TERMS

In this Report, unless otherwise noted or as the context otherwise requires: “the Company,” “Source Financial,” “we,” “us,” and “our” refers to the combined company Source Financial, Inc. and its subsidiaries.

Unless otherwise stated, this Annual Report on Form 10-K does not reflect the Company’s 100:1 reverse stock split that became effective on March 21, 2013.

Source Financial, Inc. is a holding company, which owns two subsidiaries: WikiTechnologies, Inc. and Moneytech USA, Inc.

WikiTechnologies, Inc. is a technology company dedicated to making financial transactions simple, secure, social and affordable. WikiTechnologies is comprised of two platforms (i) WikiPay, a simple, low-cost alternative to existing mobile and online payment solutions; and (ii) WikiLoan, a low-cost peer-to-peer lending solution.

WikiPay, a money service business, competes worldwide in the $240 billion annual mobile payments business. WikiPay is a proprietary fee-based mobile Peer-to-Peer payment that allows mobile and online Peer-to-Peer, Business-to-Consumer, Consumer-to-Business and Business-to-Business payments through its website www.wikipay.com and mobile website m.wikipay.com. WikiPay empowers its users to perform real-time payments, scheduled payments, account inquiries for balance and transaction history, bill payment initiation, notifications and alerts, and transaction security verifications.

WikiPay was created in response to the emerging trends in mobile phone usage, text messaging, banking, electronic payment systems and direct marketing. The technological convergence of hardware, infrastructure and interface have contributed to making the mobile phone more versatile, powerful and ubiquitous, with larger market penetration than any other electronic device in history. Statista Inc, the leading statistics company on the Internet, maintains that the percentage of the U.S. population using mobile phones in 2012 was 76.8% and will grow to 77.5% in 2013.

WikiLoan competes worldwide in the $10 billion annual Peer-to-Peer lending business. WikiLoan is a proprietary fee-based Peer-to-Peer lending platform that allows people to use the tools on the website to borrow and lend money (from $500 to $25,000) among themselves at rates that make sense to all parties. WikiLoan through it's website, www.wikiloan.com, offers: loan documentation, promissory notes, repayment schedules, email reminders, online account access, and online repayment.

The Company provides identity and credit verification on borrowers and allows 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 tracking of loan payments, and other related functions are handled on an automated basis, which allows the Company to operate with low overhead costs, likely resulting in meaningful operating margins.

The initial revenue model consists of primarily fee-based products. Recently, the Company implemented its first lead generation product and will continue to develop additional revenue streams that include website advertising, credit card and auto loan origination, and other related lead generation opportunities.

The Company was incorporated in Delaware as Windsor Capital Corp. on June 24, 1988 by International Asset Management Group, Inc. (“IAMG”). 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.

On May 4, 2011, the Board of Directors authorized a 1 for 10 forward split.

On July 22, 2011, the Board of Directors authorized a 10 for 1 reverse split.

On February 10, 2012, we merged with WikiPay, LLC, a privately held Delaware corporation. In connection with the merger, 7,992,000 Series A Preferred shares, par value of $0.001, were issued to the former shareholders of WikiPay.

On March 6, 2012, the Board of Directors authorized the change of its name from WikiLoan, Inc. to The Wiki Group, Inc.

On November 2, 2012, the Company signed a non-binding Letter of Intent to acquire Moneytech, Ltd. (an Australian Corporation). This Letter of Intent is non-binding and is to be superseded by either a formal “A” Reorganization Plan and Agreement of Merger or “B” Reorganization Plan and Agreement for Share Exchange for the: (1) corporate restructuring of The Wiki Group, Inc. (“Wiki”) so that it becomes a holding company (with a new name reflecting the Moneytech expansion of the business) and the current business operations and assets and liabilities are in a wholly-owned subsidiary thereof (Wiki-sub”); (2) the acquisition by the holding company, either by share-for-share Stock Exchange with the shareholders of Moneytech Limited or by merger of Moneytech Limited into a wholly-owned subsidiary of Wiki (“Moneytech-sub”) and the transfer of control of Wiki to the majority shareholder of Moneytech-sub; and (3) the retention or disposition of Wiki-sub, based upon the performance of its management. ) The parties intended that the proposed transactions contemplated by this Letter of Intent be completed within approximately sixty days from the effective date of the Letter of Intent, However, as of the date hereof, the proposed transaction have not been completed.

Additionally, the Company entered into two agreements with a leading New York-based investment banking firm to assist in sourcing capital. Under the first agreement, the Company retained the investment-banking firm as its exclusive placement agent and financial advisor in connection with an offering of up to a $3 million PIPE and up to a $20 million debt placement. The second agreement anticipates a public offering of up to $10,000,000 on a firm commitment basis. These agreements are subject to the Company's successful merger with Moneytech Limited, an Australian commercial finance company. On January 14, 2013, the investment banking firm increased their secondary public offering commitment to up to $100 million with a first tranche of up to $20 million in equity.

On November 30, 2012, the Company signed an advisory agreement with Galileo Asset Management SA to advise on the merger with Moneytech Limited.

On December 5, 2012, the Company increased its authorized common shares to 500,000,000 with a par value of $0.001 per share. Additionally, the Company incorporated two wholly owned subsidiaries, WikiTechnologies, Inc., and Moneytech USA, Inc.

On March 21, 2013, the 100:1 reverse split of the Company's common shares went effective.

The Company developed “WikiPay” to compete worldwide in the $240 billion annual mobile payment industry. WikiPay is a proprietary fee-based Mobile Peer-to-Peer Payment and transfer platform that allows mobile and online Peer-to-Peer, Business-to-Consumer, Consumer-to-Business and Business-to-Business payments, payments scheduled payments, account inquiries for balance and transaction history, bill payment initiation, notifications and alerts, and transaction security verifications through its website www.wikipay.com and mobile website m.wikipay.com. According to the Gartner Group, the mobile payments industry is well positioned for growth with the number of mobile payment users worldwide expected to have reached 190 million in 2012.

In the banking industry, customers are looking for more convenience, and have become increasingly comfortable performing banking functions through the Internet and mobile devices. According to a recent Harris Interactive survey commissioned by Tealeaf, more than two-thirds of online adults in the U.S. regularly use online banking to conduct financial transactions, and nearly 60 percent have used mobile banking offerings. In addition, an increasing number of unbanked and under banked individuals are looking for less expensive and more convenient ways to perform bank-type functions.

Mobile payments have the potential to change the dynamics of the remittance industry, as mobile payments would eliminate the need for physical global agent networks and remove a barrier to entry. The World Bank estimates that remittance flows to developing countries reached $372 billion in 2011. The percentage of the population with mobile phones in the top 20 migration corridors around the world, the weighted average probability of both participants having a mobile phone in the top 20 migration corridors is 63%, with only a 25% probability of both sides having a bank account.

The use of mobile phones to facilitate money transfers was selected as the number one fastest growing wireless application by 2012. Traditional money transfer services, as well as the non-traditional methods such as cash and wire transfers, are inconvenient and expensive. We believe there is a growing need for an inexpensive money payment and transfer platform that can accommodate those who have become disenchanted with the banking and credit services industry.

Unlike bank accounts, mobile phones are a relatively new technology, and the number of global mobile subscribers is still growing at a double-digit rate. Thus, mobile phones have far greater reach than bank accounts and can very well become a viable money transfer method.

Broadly, WikiPay’s initial target market includes Internet users in the U.S. (245 million+ according to Internet World Stats). We intend to expand WikiPay into the international market, where mobile usage has significantly outpaced online usage. According to Royal Pingdom, there are over 2.4 billion Internet users and over 5 billion mobile phone users. Many developing countries have very few options for banking services and rely entirely on wireless devices and carrier for communication. A growing segment of the U.S. population does not have access to bank-type services and uses alternative services to facilitate transfers and payments.

The Company developed “WikiLoan” to compete worldwide in the $10 billion annual Peer-to-Peer Lending industry. WikiLoan is a proprietary fee-based Peer-to-Peer Lending Platform that allows people to use the tools on the website to borrow and lend money (from $500 to $25,000) among themselves at rates that make sense to all parties. WikiLoan through it's website, www.wikiloan.com, offers; loan documentation, promissory notes, repayment schedules, email reminders, online account access, and online repayment.

The initial revenue model consists of primarily fee-based products. The company recently implemented its first lead generation product and will continue to develop additional revenue streams that include website advertising, credit card and auto loan origination, and other related lead generation opportunities.

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.

WikiLoan is able to scale up in size without a commensurate increase in costs or labor.

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.

Lenders may 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 may also be based on social factors, 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.

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.

The Company charges borrowers a $24.95 “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 future, including but not limited to website advertising, credit card and auto loan origination and/or referral fees.

Our strategy is to market our fully developed technology platforms initially with partners in the U.S. and then with relationships abroad. Source Financial’s business primarily targets the underserved niche sectors of the newly banked, unbanked, under banked individuals residing in the US and abroad.

The Company recently launched an updated version of the WikiPay platform and has begun integration with a Point-of-Sale network in the U.S., which we intend to release in May 2013. The point of sale solution will allow WikiPay users to load and withdraw funds to and from their WikiPay accounts by showing a government identification, WikiPay account number and personal identification number (PIN). This program is an important part of our strategy to create a payment, load and withdrawal network for our users.

We continue to explore strategic partnership opportunities as part of our overall business strategy, including business combinations, and joint ventures. At any given time, we may be engaged in discussions or negotiations with respect to one or more of these types of transactions. Any of these transactions could be material to our financial condition and results of operations.

Our Competitive Strengths

Proprietary Solutions - Our cost-effective technologies are easy to use and agnostic of expensive providers. WikiPay works on any mobile phone, smartphone or internet-enabled device, and leverage existing infrastructure to reduce changes in customer behavior, while significantly reducing cost. WikiLoan is available online and provides secure and efficient transactions to under-served communities that cannot access traditional lending sources.

Secure, Robust Technology - Our proprietary online and mobile architecture is fully compliant with industry-leading security standards. Our technology comprises dynamic, reliable, and redundant layers of security in both hardware and software. Multi-level encryption and authentication ensure that customer information and transactions are safe and secure.

Strategic Partnerships - We have developed key relationships and formed dedicated strategic partners to enable fast and effective customer adoption. We continue to negotiate distribution and marketing partnerships.

Strong Domain Expertise - Our management team has decades of experience leading technology and telecommunications companies, ranging from high-tech start-ups to senior management roles at AT&T, IBM and Unisys.

Brand Name Recognition & Reputation - Success in the online payment, marketing and lending industries depend 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 customers seeking a solution to their financial needs will consider the company’s offering. 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. Source Financial 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, Source Financial has dedicated an extensive amount of time and effort building and thoroughly “stress testing” its unique, highly automated and easy-to-use platforms where users 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 continue to gain committed users/subscribers to its database. The Company believes its online platforms offer users a convenient and secure outlet for meeting their financial needs. Furthermore, the potential benefits to all parties from gaining access to banking services that may otherwise not be available from more conventional banking sources should serve to draw users to the Source Financial’s platforms.

Technical & Regulatory Requirements of an Online Financial Platform – The resources and necessary know-how to create successful online communities for the purpose of conducting financial transactions, 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 websites. 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 The Source Financial’s platforms are extremely sophisticated. The Company believes this level of complexity limits the ability of new players to easily enter the market.

Source Financial’s products and services are being marketed through strategic alliances with companies that have very large networks of user bases both in the United States and abroad. The Company also uses merchant aggregators, companies who service large numbers of merchants, who would benefit from low costs and better access to their customers to improve customer service, increase cross-selling opportunities, improve speed of collections and, as a result, increase customer retention.

The Company is also leveraging its anticipated vast user base to approach merchants with a large online presence. Forrester projects online retail sales in the U.S. to hit $231 billion.

In addition to forming strategic alliances, the Company will launch an aggressive online advertising campaign with a combination of banner ad placements on popular websites and top listings on the major search engines. The term “Wiki” scores extremely high in name recognition among Internet users, especially those in the very important 18-34 year old demographic. Wikipedia, which has no association with WikiPay or WikiLoan, has become a cultural, business and pop phenomenon and is one of the top sources for information on the Internet. According to ebizmba.com, Wikipedia is ranked 6th of all websites based on traffic, with an estimated 125 million unique monthly visitors. The marketing plan also includes press releases, television interviews, newspaper and magazine articles, and features in online banking and financial information websites.

The Western Union Company is a financial services and communications company based in the United States. Until it discontinued the service, Western Union was the best-known company in the business of exchanging telegrams. Western Union has a number of divisions, with products such as person-to-person money transfer, money orders, and commercial services. No mobile-to-mobile global money transfer option exists today. While there are a few corridors where mobile phones are used as part of the process, Western Union serves 16,000 send and receive corridors around the world, and mobile phones have not had any material impact on its business.

Reported revenues top $5 billion, annually. A key part of the Western Union business strategy is to offer consumers convenience and choice. Its current dominance in cash-to-cash transfers would provide Western Union (which has margins about twice as high as its closest competitor) with a source of profitability to fund and scale a mobile money transfer option over time, an advantage no potential entrant would possess. The Western Union mobile money transfer program will provide consumers with an additional option to send and receive funds how, where and when they want.

The Company has set a goal of generating more than $500 million in revenue through electronic channels by 2015 (which would equate to 9% of current revenue). Although mobile is still an immaterial source of revenue, it is likely that the biggest contributor over this time frame will be online money transfers, which generated $100 million in revenue in 2011.

We will compete effectively with Western Union’s core business, on-site and online money transfers, as well as its recently developed Internet-based mobile application. Our virtual fund transfers and payments are more accessible and cost effective for consumers, compared with Western Union’s high cost and more cumbersome model.

MoneyGram International, Inc. is a United States-based financial services company, headquartered in Minneapolis, Minnesota. It has additional facilities in Brooklyn Center, Minnesota, Lakewood, Colorado, and international offices in 190 countries. The company offers products and services through a network of agents and financial institution customers. The Travelers Express Company, Inc., which has been in operation since 1940, acquired MoneyGram Payment Systems, Inc. in June 1998 from American Express.

MoneyGram International provides money transfer services, money orders, and bill payment services to consumers. Another segment of MoneyGram International provides financial institutions with payment processing services, primarily of official check outsourcing services and money orders for sale to their customers. MoneyGram has 267,000 agent locations around the world to send or receive cash. The major global corporate competitor of MoneyGram is Western Union.

On August 3, 2009, MoneyGram International, Inc. signed an agreement with Affinity Global Services, a Dallas, TX provider of wireless payments technology, to allow for money to be transferred via mobile devices. “In developing economies, there are more people with mobile phones than traditional bank accounts.

As with Western Union, our online and mobile applications compete effectively with MoneyGram, being easy to use and cost effective for consumers, compared with MoneyGram’s high cost and more difficult-to-use Internet-based mobile applications.

PayPal, a wholly owned subsidiary of eBay, is an e-commerce business allowing payments and money transfers to be made through the Internet. PayPal serves as an electronic alternative to traditional paper methods such as checks and money orders and has been involved in many cases of litigation concerning fraud. Recently, PayPal launched PayPal Mobile, which allows money transfers via a cell phone.

A PayPal account can be funded with an electronic debit from a bank account or by a credit card. The recipient of a PayPal transfer can either request a check from PayPal, or establish their own PayPal deposit account or request a transfer to their bank account.

PayPal is an example of a payment intermediary service that facilitates worldwide e-commerce. PayPal performs payment processing for online vendors, auction sites, and other commercial users, for which it charges a fee. It sometimes also charges a transaction fee for receiving money (a percentage of the amount sent plus an additional fixed amount). The fees charged depend on the currency used, the payment option used, the country of the sender, the country of the recipient, the amount sent and the recipient’s account type.

In addition, eBay purchases made by credit card through PayPal may incur a foreign transaction fee if the seller is located in another country, as credit card issuers are automatically informed of the seller’s country of origin.

On March 17, 2010, PayPal entered into an agreement with China UnionPay (“CUP”), China’s bankcard association, to allow Chinese consumers to use PayPal to shop online.

Obopay enables consumers and businesses to purchase, pay, and transfer money through any mobile phone using OboPay’s mobile application, text message, mobile Web, or Obopay.com. Obopay purportedly works on any mobile phone and any carrier in the U.S.

OboPay’s prepaid MasterCard works with any merchant that accepts MasterCard debit cards. Obopay has partnerships with Citi, Fidelity Information Services, MasterCard MoneySend, Bancorp, Verizon Wireless, AT&T and RIM.

With Obopay users can instantly pay back a friend, split a dinner bill, get money from your parents, get quick cash, pay up or collect on a friendly wager, track purchases or check balances.

Obopay has moved into a competitive market: on-line social gaming. Although the option to purchase virtual goods in social gaming networks is pretty established, the average user is pretty young and credit cards are not always an option. Using a mobile bill to purchase credit for virtual purchases has become a very popular.

In contrast to other services, Obopay works through linking a credit or debit card to mobile numbers through a secure PIN. This application has the advantage of speed and convenience since all that is needed for payments is to enter a mobile number and PIN.

Obopay was named one of the “50 most innovative companies in the world,” by the editors of Technology Review who “looked for those that over the last year have demonstrated their superiority at inventing technology and using it both to grow as businesses and to transform how we live.” MIT stated, “We identified the companies that have the most promising technologies, whether they are giant corporations or fledgling startups with initial venture capital investments. Then we examined their business models, their strategies for deployment.

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, 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 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 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.

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.

Source Financial has worked extensively with leading law firms to position the Company to appropriately navigate and address regulatory channels and requirements. The Company believes its Terms and Conditions of Use set forth the duties and obligations of both the Company and individuals that use the platforms to engage in private transactions. Recently, WikiPay became a Money Services Business to properly address the current regulations of payments and money transfer.

Intellectual Property

Our intellectual property is a key to our success, which includes trademarks, copyrights, domain names, and trade secrets. We routinely protect our proprietary rights by entering into confidentiality and non-disclosure agreements with our employees, contractors and with parties with whom we conduct business in order to protect proprietary information.

We pursue the registration of our domain names, trademarks, and service marks in the U.S. and internationally.

We have registered our core brands as trademarks and domain names in the U.S. and other jurisdictions and actively secure trademarks and domain names that correspond with our brands in markets of interest.

We presently have 3 full-time employees, which include our two executive officers and our Vice President of Worldwide Sales. Additionally, we have 5 full-time and 4 part-time program developers that are based in India and the United States, respectively. These programmers provides a variety of services, including development, quality control and design.

Item 1A. Risk Factors.

Not applicable to smaller reporting companies.

Our principal executive office is located at 1093 Broxton Avenue, Suite 210, Los Angeles, CA 90024. We pay rent of $1,957 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. Mine Safety Disclosures.

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Our common stock is quoted on the OTCQB under the symbol “SRCF.” The OTCQB is a quotation service that displays real-time quotes, last-sale prices, and volume information in over-the-counter (“OTC”) equity securities. An OTCQB equity security generally is any equity that is not listed or traded on a national securities exchange.

Price Range of Common Stock

The following table shows, for the periods indicated, the high and low bid prices per share of our common stock as reported by the OTCQB quotation service. These bid prices represent prices quoted by broker-dealers on the OTCQB quotation service. Bid prices reflect the February 20, 2013 100:1 reverse stock split. The quotations reflect inter-dealer prices, without retail mark-up, markdown or commissions, and may not represent actual transactions.

	High		Low
Fiscal Year 2012
First quarter ended April 30, 2011	$	57.00	$	25.00
Second quarter ended July 31, 2011	$	50.00	$	21.00
Third quarter ended October 31, 2011	$	51.00	$	11.00
Fourth quarter ended January 31, 2012	$	27.00	$	9.00

Fiscal Year 2013
First quarter ended April 30, 2012	$	18.00	$	8.00
Second quarter ended July 31, 2012	$	11.90	$	2.50
Third quarter ended October, 31 2012	$	4.00	$	1.25
Fourth quarter ended January 31, 2013	$	0.46	$	6.00

Approximate Number of Equity Security Holders

As of April 25, 2013, there were approximately 307 stockholders of record. Because shares of our common stock are held by depositaries, brokers and other nominees, the number of beneficial holders of our shares is substantially larger than the number of stockholders of record.

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.

Securities Authorized for Issuance under Equity Compensation Plans

We do not have in effect any compensation plans under which our equity securities are authorized for issuance.

Recent Sales of Unregistered Securities

The below issuances of shares were offered and sold in reliance upon exemptions from registration pursuant to Section 4(2) of the Securities Act. These securities qualified for exemption under Section 4(2) of the Securities Act since the issuance securities by us did not involve a public offering. The offering was not a “public offering” as defined in Section 4(2) due to the insubstantial number of persons involved in the deal, size of the offering, manner of the offering and number of securities offered. We did not undertake an offering in which we sold a high number of securities to a high number of investors. In addition, these stockholders had the necessary investment intent as required by Section 4(2) since they agreed to and received share certificates bearing a legend stating that such securities are restricted pursuant to Rule 144 of the Securities Act. This restriction ensures that these securities would not be immediately redistributed into the market and therefore not be part of a “public offering.” Based on an analysis of the above factors, we have met the requirements to qualify for exemption under Section 4(2) of the Securities Act for this transaction.

On December 13, 2012, the Company issued its’ two officer’s 10 million (10,000,000) shares each in lieu of salary. The value of this transaction was $150,000.

On December 13, 2012, the Company issued 16 million shares (16,000,000) to a consultant pursuant to the terms of an agreement dated December 17, 2012. The value of this transaction was $120,000.

On December 21, 2012, the Company issued 10 million (10,000,000) shares to a consultant pursuant to the terms of an agreement dated December 20, 2012. The value of this transaction was $220,000.

On December 28, 2012 the Company issued 23,949,395 shares of common stock to resolve all outstanding convertible notes, which equaled $598,003 with principle and interest.

On January 11, 2013, the Company issued a total of 750,000 shares or 250,000 shares to each of three board members in exchange for 583,333 options. The value of this transaction was $29,250.

On October 31, 2012, a shareholder signed a Note Purchase Agreement, where he agreed to invest up to $600,000 in the Company, on an as needed basis. The conversion price for all notes in conjunction with this agreement, entitle him to convert these notes into the Company’s common stock at $0.0175 per share. Additionally, this agreement stipulates that he would not be able to convert the outstanding balance of these notes into more than 60,000,000 shares of common stock.

On October 31, 2012, the Company issued a shareholder a convertible note subject to the terms and conditions of the Note Purchase Agreement for $75,000.

On November 15, 2012, the shareholder agreed to cancel all non-convertible notes and issue a new convertible promissory note for $412,052 subject to the terms and conditions of the October 31, 2012, Note Purchase Agreement.

On January 2, 2013 the Company issued a shareholder a convertible note subject to the terms and conditions of the Note Purchase Agreement for $10,000.

On January 17, 2013 the Company issued a shareholder a convertible note subject to the terms and conditions of the Note Purchase Agreement for $1,000.

On January 30, 2013 the Company issued the shareholder a convertible note subject to the terms and conditions of the Note Purchase Agreement for $24,000.

Item 6. Selected Financial Data.

Not applicable because we are a smaller reporting company.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of the results of operations and financial condition for the fiscal years ended January 31, 2013 and 2012 and should be read in conjunction with our financial statements, and the notes to those financial statements that are included elsewhere in this Report.

Source Financial, Inc. is a holding company, which owns two subsidiaries; WikiTechnologies, Inc. and Moneytech USA, Inc.

WikiPay, a money service business, competes worldwide in the $240 billion annual mobile payments business. WikiPay is a proprietary fee-based Mobile Peer-to-Peer Payment that allows mobile and online Peer-to-Peer, Business-to-Consumer, Consumer-to-Business and Business-to-Business payments through its website www.wikipay.com and mobile website m.wikipay.com. WikiPay empowers its Users to perform real-time payments, scheduled payments, account inquiries for balance and transaction history, bill payment initiation, notifications and alerts, and transaction security verifications.

WikiPay was created in response to the emerging trends in mobile phone usage, text messaging, banking, electronic payment systems and direct marketing. The technological convergence of hardware, infrastructure and interface have contributed to making the mobile phone more versatile, powerful and ubiquitous, with more market penetration than any other electronic device in history. It is projected that by 2013 the U.S. will have a per capita mobile phone penetration of 100 percent.

WikiLoan competes worldwide in the $10 billion annual Peer-to-Peer Lending business. WikiLoan is a proprietary fee-based Peer-to-Peer Lending Platform that allows people to use the tools on the website to borrow and lend money (from $500 to $25,000) among themselves at rates that make sense to all parties. WikiLoan through it's website, www.wikiloan.com, offers; loan documentation, promissory notes, repayment schedules, email reminders, online account access, and online repayment.

The Company provides Identity and Credit Verification on borrowers and allows 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 tracking of loan payments, and other related functions are handled on an automated basis, which allows the Company to operate with low overhead costs, likely resulting in meaningful operating margins.

We had $4,413 in revenues during the year ended January 31, 2013 and $1,104 in revenues during the year ended January 31, 2012. Our expenses during that time incurred general and administrative expenses in the amount of $979,680 and $572,903, respectively. These expenses occurred developing our Web technology and establishing the necessary infrastructure to launch our services.

Our auditors have raised substantial doubt as to our ability to continue as a “Going Concern” as we have generated minimal revenue since 2005 and at January 31, 2013 and 2012, the Company had accumulated losses of $10,688,515 and $9,590,644, respectively. Our continued existence is dependent on our ability to generate sufficient cash flow from operations to support our daily operations, as well as, to provide sufficient resources to retire existing liabilities and obligations on a timely basis.

On October 31, 2012, a shareholder signed a Note Purchase Agreement, where he agreed to invest up to $600,000 in the company, on an as needed basis. The conversion price for all notes in conjunction with this agreement, entitle him to convert these notes into the Company’s common stock at $0.0175 per share. Additionally, this agreement stipulates that he would not be able to convert the outstanding balance of these notes into more than 60,000,000 shares of common stock.

On October 31, 2012, the Company issued a shareholder a convertible note subject to the terms and conditions of the Note Purchase Agreement for $75,000.

On January 2, 2013 the Company issued a shareholder a convertible note subject to the terms and conditions of the Note Purchase Agreement for $10,000.

On January 17, 2013 the Company issued a shareholder a convertible note subject to the terms and conditions of the Note Purchase Agreement for $1,000.

On January 30, 2013 the Company issued the shareholder a convertible note subject to the terms and conditions of the Note Purchase Agreement for $24,000.

At January 31, 2013 and 2012, the Company had accrued interest of $26,817 and $27,332, respectively, under these convertible note agreements.

●	Raise capital to fund operations;

●	Attract high-performing talent; and

●	Execute profitable contracts that grow our bottom-line.

●	Build our brand, loyalty, and revenue;

●	Seek partners that allow us to position our technology as an Enabler - we enable mobile phones to access financial services, helping improve the quality of life; and

●	Continuously innovate to deliver value to our customers.

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

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

Establishing a culture recognized for service excellence, attracting high performing team members and executing flawlessly will be the foundation of which we will grow our company.

We are committed to delivering excellent customer service and listening to our customers to determine how we continuously innovate and improve our products. Our goal is to WOW our customers so they become advocates of our services and refer their friends and family members. We see every interaction with a customer as an opportunity to differentiate ourselves from our competition. Delivering clear and simple messages will be the core of our communications plan.

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

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 $900,000 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 13 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

Comparison for the fiscal year ended January 31, 2013, as compared to January 31, 2012

We generated $4,413 in revenues during the year ended January 31, 2013 and $1,104 in revenues during the year ended January 31, 2012. The increase in revenues was primarily attributable to successful but limited acceptance of our platforms.

Our expenses during the year ended January 31, 2013 and 2012 incurred general and administrative expenses in the amount of $979,680 and $572,903, respectively. The higher expenses in fiscal year January 31, 2013 were mainly incurred in relation to developing our web technology and establishing the necessary infrastructure to launch our services.

We are currently operating at a loss and we have a net loss of $1,097,871 for the year ended January 31, 2013. Our auditor has expressed doubt as to whether we will be able to continue to operate as a “going concern” due to the fact that the company has not had significant revenue since 2005 and will need to raise capital to further its operations. We do not expect to be able to satisfy our cash requirements to continue to operate over the next twelve months unless we obtain additional funding or our revenues significantly improve. If the market does not begin to improve, we will need to raise additional funds to continue to operate as a “going concern.” There is no guarantee that we will be able to raise additional funds and if we are unsuccessful in raising the funds, we may be forced to close our business operations.

Liquidity and Capital Resources

As of January 31, 2013, we had cash of $13,018. However, due to the current instability of the credit market and our limited history with limited revenue, we may require additional funds to continue to operate. We will continue to operate on a reduced budget until such time as more capital is raised. We have no written agreement to legally insure that funding will be provided for our operations. Although we have no commitments for capital, other than verbal assurances, we may raise additional funds through:

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

-	private offerings of securities or debt, or other sources.

At this time, we have not identified any sources of additional financing. Upon developing a trading market for the common stock we intend to seek additional sources of financing through hedge funds and/or licensed broker-dealers, however, given our precarious financial condition and our lack of business, a trading market may not develop in the foreseeable future.

We have no written agreement to legally insure that funding will be provided for our operations. Although we have no commitments for capital, other than verbal assurances, we may attempt to raise additional funds through public offerings of equity, securities convertible into equity or debt, and private offerings of securities or debt, as our previous efforts raised $2,396,849. Given our history of raising money, there is no guarantee that we will be successful in obtaining funds through public or private offerings in order to fund our operations. Our investors should assume that any additional funding will cause substantial dilution to current stockholders. In addition, we may not be able to raise additional funds on favorable terms, if at all.

As to the following serious conditions:

1)	As of January 31, 2012, we had cash of $13,018;

2)	We received $301,849 from the sale of promissory notes in fiscal 2012;

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

To date, we have been able to secure $2,396,849 that we raised through several convertible promissory notes over the past four years. We may also rely on sources to borrow funds in the form of loans.

NAME	POSITION	AGE
Marco Garibaldi	Chairman of the Board, Chief Technology Officer	57
Edward DeFeudis	President, Chief Executive Officer, Chief Financial Officer and Director	40

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 Chairman, CTO	2013	$	85,000	(1)		0		0		0		0		0		0		$	85,000
Marco Garibaldi Chairman, CTO	2012	$	0			0		0		0		0		0		30,000	(2)	$	30,000

Edward DeFeudis	2013	$	85,000	(3)		0		0		0		0		0		0		$	85,000
President, CEO, CFO	2012	$	0			0		0		0		0		0		30,000	(4)	$	30,000

Denita Willough	2013	$	10,083	(6)		0		0	$	70,940		0		0		0			0
Former CEO(5)	2012		0			0		0		0		0		0		0			0

Name of Beneficial Owner and Address (1)	Amount and Nature of Beneficial Ownership of Common Stock			Percent of Common Stock (2)
5% Shareholders

Peter M Vita 145 Jefferson Avenue Suite 422 Miami Beach, FL 33139		160,000	(5)		7.8	%
Robert Pearson 1422 Burtonwood Drive Gastonia, NC 28054		169,164			8.2	%

Directors and Executive Officers
Edward C. DeFeudis		493,725	(3)		24	%
Marco Garibaldi		461,000	(4)		22.4	%

All directors and officers as a group (2 people)		954,725			46.3	%

Exhibit
Index	Description of Document	Incorporated by Reference To:
2.1	Agreement and Plan of Merger dated February 10, 2012.	Filed as an Exhibit on Current Report to Form 8-K with the SEC on February 14, 2012.

3.1	Articles of Incorporation.	Filed as an Exhibit on Form S-1 with the SEC on October 2, 2008

3.1(a)	Amendment to the Articles of Incorporation increasing the number of authorized shares.	Filed as an Exhibit on Current Report to Form 8-K with the SEC on May 19, 2011.

3.1(b)	Amendment to the Articles of Incorporation decreasing the number of authorized shares.	Filed as an Exhibit on Current Report to Form 8-K with the SEC on February 14, 2012.

3.1(c)	Amendment to the Articles of Incorporation changing the name of the Company.	Filed as an Exhibit on Current Report to Form 8-K with the SEC on March 16, 2012.

3.1(d)	Certificate of Designation of Series A Preferred Stock.	Filed as an Exhibit on Current Report to Form 8-K with the SEC on February 14, 2012.

3.2	Bylaws.	Filed as an Exhibit on Form S-1 with the SEC on October 2, 2008.

4.1	Form of 12% Convertible Promissory Note

10.1	Employment Agreement with Denita Willoughby.	Filed as an Exhibit on Current Report to Form 8-K with the SEC on March 8, 2011.

10.2		Note Purchase Agreement with Robert Pearson dated October 31, 2012.

10.3		Note Cancellation Agreement dated November 15, 2012

31.1		Certification of Principal Executive and Principal Financial Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification of Principal Executive and Principal Financial Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

●	been convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
●	had any bankruptcy petition filed by or against the business or property of the person, or of any partnership, corporation or business association of which he was a general partner or executive officer, either at the time of the bankruptcy filing or within two years prior to that time;

101.INS *	XBRL Instance Document

101.SCH *	XBRL Taxonomy Schema

101.CAL *	XBRL Taxonomy Calculation Linkbase

101.DEF *	XBRL Taxonomy Definition Linkbase

101.LAB *	XBRL Taxonomy Label Linkbase

101.PRE *	XBRL Taxonomy Presentation Linkbase

	SOURCE FINANCIAL, INC.

Date: May 1, 2013	By:	/s/ Edward C. DeFeudis
		Edward C. DeFeudis President, Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer and Director

Signature	Title	Date
/s/ Edward C. DeFeudis	President, Chief Executive Officer, Chief Financial Officer and Director (Principal Executive, Financial, and Accounting Officer)	May 1, 2013
Edward C. DeFeudis

/s/ Marco Garibaldi	Chairman of the Board	May 1, 2013
Marco Garibaldi

Source Financial, Inc.
Index to Financial Statements
January 31, 2013 and 2012

		Page
		Number

Report of Independent Registered Public Accounting Firm		F-1

Financial Statements:

	Balance Sheets as of January 31, 2013 and 2012	F-2

	Statements of Operations for the years ended January 31, 2013 and 2012	F-3

	Statement of Changes in Shareholders' Deficit for the years ended January 31, 2013 and 2012	F-4

	Statement of Cash Flows for the years ended January 31, 2013 and 2012	F-5

	Notes to Financial Statements	F-6

	January 31,			January 31,
Assets	2013			2012
Current assets:
Cash and cash equivalents	$	13,018		$	35,845
Total current assets		13,018			35,845

Fixed assets:
Computer equipment		19,843			-
		19,843			-
Less: accumulated depreciation		(9,085	)		-
Fixed assets, net		10,758			-

Other assets:
Deposits		1,957			-
Domain names		74,942			25,042
Software development costs		41,117			1,634
Deferred payment processing costs		62,500			92,500
Total other assets		180,516			119,176

	$	204,292		$	155,021

Liabilities and Shareholders' Deficit
Liabilities
Current liabilities:
Accounts payable	$	3,000		$	-
Accrued interest		26,817			27,332
Derivative liabilities		67,613			46,100
Convertible notes payables, net of discounts on debt
of $24,895 and $28,769		497,157			321,231
Total current liabilities		594,587			394,663

Total liabilities		594,587			394,663

Stockholders' equity (deficit)
Preferred stock, Series A, at $0.01 par value; 10,000,000 shares authorized;
none issued and outstanding at January 31, 2013 or 2012		-			-
Common stock; at $0.001 par value; 250,000,000 shares authorized;
207,664,055 shares issued and outstanding at January 31, 2013 and
53,080,493 shares issued and outstanding at January 31, 2012		207,663			53,080
Additional paid-in capital		10,100,395			9,307,760
Accumulated deficit		(10,688,515	)		(9,590,644	)
Treasury stock, 9,837,500 common shares, at cost		(9,838	)		(9,838	)
Total stockholders' deficit		(390,295	)		(239,642	)

Total liabilities and stockholders' deficit	$	204,292		$	155,021

	2013			2012

Revenues	$	4,413		$	1,104

Cost of sales		-			-

Gross profit		4,413			1,104

Selling, general and administrative expenses		979,680			572,903
Research and development costs		-			-
Operating expenses		979,680			572,903

Income (loss) from operations		(975,267	)		(571,799	)

Other income (expenses):
Gain (loss) from derivative liabilities		(17,823	)		155,374
Interest expense		(104,781	)		(138,546	)
Total other income (expenses)		(122,604	)		16,828

(Loss) before provision for income taxes		(1,097,871	)		(554,971	)

Provision for income taxes		-			-

Net (loss)	$	(1,097,871	)	$	(554,971	)

Earnings (Loss) Per Share:

Basic:
Earnings (loss) per common share	$	(0.01	)	$	(0.01	)
Weighted average common shares outstanding		115,211,600			53,022,051

Fully Diluted:
Earnings (loss) per common share	$	(0.00	)	$	(0.00	)
Weighted average common shares outstanding		117,693,082			53,022,051

													Additional
	Preferred Stock						Common Stock						Paid In			Treasury Stock					Accumulated
	Shares			Amount			Shares			Amount			Capital			Shares		Amount			Deficit			Total

Balance - February 1, 2011		-		$	-			57,434,569		$	57,435		$	6,860,256			9,837,500	$	(9,838	)	$	(9,035,673	)	$	(2,127,820	)

Shares returned to treasury		-			-			(139,561	)		(139	)		(46,971	)		-		-			-			(47,110	)

Shares issued for warrants		-			-			8,030,953			803			1,046,220			-		-			-			1,047,023

Shares issued for services		-			-			4,700,000			470			140,530			-		-			-			141,000

Shares issued for debt conversions		-			-			2,161,498			2,162			479,748			-		-			-			481,910

Beneficial conversion features related to convertible debt		-			-			-			-			820,326			-		-			-			820,326

Effect of 1 for 10 and subsequent 10 for 1 stock splits		-			-			(19,106,966	)		(7,651	)		7,651			-		-			-			-

Net income (loss)		-			-			-			-			-			-		-			(554,971	)		(554,971	)

Balance - January 31, 2012		-		$	-			53,080,493		$	53,080		$	9,307,760			9,837,500	$	(9,838	)	$	(9,590,644	)	$	(239,642	)

Preferred Stock issued for acquisition of WikiPay, Inc.		7,992,000			79,920			-			-			(377,389	)		-		-			-			(297,469	)

Conversion of Preferred Stock into shares of Common Stock		(7,992,000	)		(79,920	)		79,920,000			79,920			-			-		-			-			-

Shares issued for debt conversions		-			-			23,949,399			23,949			592,205			-		-			-			616,154

Shares issued for services		-			-			50,714,163			50,714			577,819			-		-			-			628,533

Net income (loss)		-			-			-			-			-			-		-			(1,097,871	)		(1,097,871	)

Balance - January 31, 2013		-		$	-			207,664,055		$	207,663		$	10,100,395			9,837,500	$	(9,838	)	$	(10,688,515	)	$	(390,295	)

	2013			2012

Cash Flows Provided From (Used By) Operating Activities
Net (loss)	$	(1,097,871	)	$	(554,971	)
Adjustments to reconcile net income (loss) to net cash provided from (used by) operating activities:
Depreciation and amortization		18,969			86,235
(Gain) loss on derivative liabilities		63,923			(155,374	)
Amortization of discount on convertible debt		26,018			162,354
Decrease in accounts receivable		-			196,485
Decrease in prepaid consulting fees		-			64,488
Increase (decrease) in accounts payable		3,000			(256,485	)
Increase (decrease) in accrued interest		(515	)		33,492
Net cash (used by) operating activities		(986,476	)		(423,776	)

Cash Flows (Used By) Investing Activities
Investment in software development		-			(4,900	)
Acquisition of WikiPay, Inc.		10,021			-
Payment of deposits		(1,957	)		-
Net cash (used by) investing activities		8,064			(4,900	)

Common stock issued for services, net of cancellations		628,533			93,890
Repayments of convertible notes payable		(21,849	)		(15,000	)
Proceeds from issuance of convertible notes payable		348,901			350,000
Net cash provided from financing activities		955,585			428,890

Net increase (decrease) in cash and cash equivalents		(22,827	)		214
Cash and cash equivalents, beginning of period		35,845			35,631
Cash and cash equivalents, end of year	$	13,018		$	35,845

Supplemental disclosure
Interest paid during the period	$	104,781		$	2,700

Non-cash transactions:
Issuance of common stock for debt conversions	$	520,000		$	435,000
Conversion of accrued interest into common stock	$	135,831		$	46,910
Common stock issued for SDI agreement	$	-		$	-
Preferred stock issued for acquisition of WiKiPay, Inc.	$	7,920,000		$	-

Net tangible assets acquired:
Cash	$	4
Fixed assets		14
	$	18
Identifiable intangible assets acquired
Domain names	$	50
Software development costs		37
Other assets		9
Total assets acquired	$	114

Less:
Liabilities assumed
Accrued interest	$	47
Notes payable related party		365
Total liabilities assumed	$	412

	January 31, 2012			January 31, 2011
Revenues	$	214		$	735
Gross profit (loss)	$	(14,786	)	$	-
Operating loss	$	(172,958	)	$	735
Net loss	$	(204,558	)	$	(144,073	)
Net loss per share	$	(0.004	)	$	(0.002	)

A Convertible Note Payable, dated October 31, 2012, due May 2, 2013, accruing at a rate of 12.0%, and is convertible into the Company’s common stock at $0.175 per share	$	75,000

A Convertible Note Payable, dated November 15, 2012, due May 17, 2013, accruing interest at a rate of 12.0%, and is convertible into the Company’s common stock at $0.0175 per share.	$	412,052

A Convertible Note Payable, dated January 2, 2013, due July 3, 2013, accruing interest at a rate of 12.0%, and is convertible into the Company’s common stock at $0.175 per share	$	10,000

A Convertible Note Payable, dated January 17, 2013, due July 19, 2013, accruing interest at a rate of 12.0%, and is convertible into the Company’s common stock at $0.175 per share	$	1,000

A Convertible Note Payable, dated January 30, 2013, due August 2, 2013, accruing interest at a rate of 12.0%, and is convertible into the Company’s common stock at $0.175 per share	$	24,000

Subtotal	$	522,052

Less: Discount on Convertible Debt		(24,895	)

Total	$	497,157