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Worthy Bonds, better alternative to Peer to Peer Lending?
Old 04-27-2019, 01:45 PM   #1
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Worthy Bonds, better alternative to Peer to Peer Lending?

I was wondering if anyone had heard anything good or bad regarding worthy bonds. They say you can earn 5% interest and they lend money to small businesses. Their website is worthybonds.com

Just looking for some thoughts.

Thanks
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Old 04-27-2019, 02:05 PM   #2
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Start by reading the SEC 1-K report. Strange stuff.

https://www.sec.gov/Archives/edgar/d...wpc_partii.htm

Quote:
We are a wholly owned subsidiary of WFI which was organized in February 2016 by Sally Outlaw, our President and CEO. Ms. Outlaw is a leading crowd funding strategist and a Registered Investment Advisor.

WFI was organized to create a “Worthy Community” which we are initially targeting to the millennials who are surpassing the baby boomers as the nation’s largest living generation. Management believes that this demographic in large part has a basic distrust of old guard financial institutions, is burdened by student loans and other debt, change employment frequently and is unable to save money and/or fund a retirement program. At the same time there are two rapidly growing trends – peer financing and robo investing.

WFI has developed a mobile app, the Worthy App, for members of its potentially targeted community, which management believes is approximately 74,000,000 millennials, who spend more than $600 billion per year. The Worthy App seeks to monetize debit card, checking account linked credit card purchases and other checking account transactions by rounding up the purchase to the next whole dollar amount, which the member can thereafter use to purchase the Worthy Bonds being offered by us in our Regulation A+ offering.

Procedurally, Worthy members download the “App” and simply link their debit card or credit card to the App. Every time the member shops or completes any checking account transaction, the App automatically rounds up their purchase to the next dollar, tracks the spare change and then permits the member to use it to invest in the Worthy Bonds. The member’s bank accounts are monitored and the money is transferred via ACH once the round up amounts reach $10.00.

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Old 04-27-2019, 02:34 PM   #3
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I'm not keen on investing in any organization headed by an Outlaw.
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Old 04-27-2019, 02:37 PM   #4
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What problem are you trying to solve? If you are just wanting some risk there are easier ways. If you are looking for something to play with, then this is probably fine. Or Bitcoin.
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Old 04-27-2019, 02:37 PM   #5
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Originally Posted by pb4uski View Post
I'm not keen on investing in any organization headed by an Outlaw.
Same here, especially one that crowdfunds!

Also, this bond thing almost sounds like a Ponzi scheme.
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Old 04-27-2019, 02:46 PM   #6
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You can earn 4.5% to 6% investing in bond/preferred stock/high dividend ETFs. No need to try something new with exceptional risk.
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Old 04-27-2019, 03:22 PM   #7
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Originally Posted by petestan View Post
I was wondering if anyone had heard anything good or bad regarding worthy bonds. They say you can earn 5% interest and they lend money to small businesses. Their website is worthybonds.com

Just looking for some thoughts.

Thanks
Sure, they use your money to lend to small businesses who pay 10% or more and give you 5%. Guess where the other 5% goes?

In a low interest rate environment, people are quick to chase yield and totally ignore risk. The folks running this operation are well aware of this and will market it to take advantage of folks who think 5% is wonderful.

I have some harsher words about this outfit, but will not go any further.

https://www.sec.gov/Archives/edgar/d...wpc_partii.htm
Quote:
There is substantial doubt about our ability to continue as a going concern.

We began reporting revenues in 2018. In 2018 we generated net losses and had cash used in operations of approximately $143,000 and $45,000, respectively. At December 31, 2018 we had a working capital deficit, shareholder’s deficit and accumulated deficit of $1,203,680, $3,680 and $193,220, respectively. These conditions raise substantial doubt about our ability to continue as a going concern for a period of 12 months from the issuance date of this report. Our consolidated financial statements have been prepared assuming that we will continue as a going concern. No assurances can be given that we will achieve success in selling any material amount of our Worthy Bonds, or that our operations will provide sufficient revenues to cover our operating expenses.

We have only begun to make loans with the proceeds from the sale of the Worthy Bonds.

We made our first loan in September 2018 and as of March 25, 2019, we have five outstanding loans. While we have identified several additional opportunities for investment in the proceeds, our lending history is limited. Interest on the proceeds from our Regulation A+ offering will not cover interest payments accruing on the bonds or our operating expenses. Accordingly, until such time as we are able to generate significant income from the investment of the proceeds we will be required to utilize cash on hand to make the interest payments which will reduce the amount of proceeds available for loans by us.

Holders of Worthy Bonds are exposed to our credit risk.

Worthy Bonds are our full and unconditional obligations. If we are unable to make payments required by the terms of the notes bondholders will have an unsecured claim against us. Worthy Bonds are therefore subject to non-payment by us in the event of our bankruptcy or insolvency. In an insolvency proceeding, there can be no assurances that bondholders will recover any remaining funds. Moreover, bondholder claims may be subordinate to that of any senior creditors and any secured creditors to the extent of the value of their security.
You still want to give your money to these folks? Be my guest.
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Old 04-27-2019, 03:30 PM   #8
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Old 04-27-2019, 05:40 PM   #9
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Tanstaafl
Seems like a free lunch for Worthy if they can make a business out of loaning at 10% (or more) while only paying their investors 5%.
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Old 04-27-2019, 05:55 PM   #10
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+1 with njhowie. They also have a going concern opinion from their auditors (page 14)... and the auditors are a tiny firm... not one of the Big 4 or even the other upper tier firms like Grant Thorton, BDO, McGladrey, etc. Big red flashing light to me.
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Old 04-27-2019, 06:14 PM   #11
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Old 04-27-2019, 07:45 PM   #12
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5% , unsecured ?

i don't even lend at that ( and that is what bonds are ) to major corporate entities that i can assess closely , so absolutely NOT to such a 'middle-man play '

sorry nothing attractive here , for me

sounds like a 'cult of personality ' play to me
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