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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q
(Mark One)

x          QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF1934

For the quarterly period ended April 30, 2010

OR

o          TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
 
For the transition period from ______________to _______________.

Commission File Number 333-161795 
 
FOREX INTERNATIONAL TRADING CORP.
(Exact name of small business issuer as specified in its charter)
 
Nevada 
27-0603137
(State or other jurisdiction of incorporation or organization) 
(I.R.S. Employer Identification No.)
 
1618 N. Fairfax Avenue, Los Angeles, California 90046
(Address of principal executive offices)
 
323-822-1750
(Issuer’s telephone number)
Not Applicable
(Former name, former address and former fiscal year if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the 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 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
Smaller reporting company   x
Non-accelerated filer  o (Do not check if a smaller reporting company)  
   
                                                                                        
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes  x    No o

The number of shares of the Registrant’s Common Stock outstanding as of May 28, 2010 was 104,120,000.
 


 
1

 


 


 
 
 

FORM 10-Q
INDEX

 
Page
   
PART I: FINANCIAL INFORMATION
3
   
ITEM 1. FINANCIAL STATEMENTS
3
   
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
15
   
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
17
   
ITEM 4. CONTROLS AND PROCEDURES
18
   
ITEM 4T. CONTROLS AND PROCEDURES
18
   
PART II. OTHER INFORMATION
 
   
ITEM 1.  LEGAL PROCEEDINGS
19
   
ITEM 1A. RISK FACTORS
19
   
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
19
   
ITEM 3 DEFAULTS UPON SENIOR SECURITIES
20
   
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
20
   
ITEM 5.  OTHER INFORMATION
20
   
ITEM 6. EXHIBITS
20
   
SIGNATURES
21
 
 
 
 
 
2

 

 
 

 PART 1: FINANCIAL STATEMENTS
FOREX INTERNATIONAL TRADING CORP.
 
Introductory Note

Caution Concerning Forward-Looking Statements

This Report and our other communications and statements may contain “forward-looking statements” including statements about our beliefs, plans, objectives, goals, expectations, estimates, projections and intentions. These statements are subject to significant risks and uncertainties and are subject to change based on various factors, many of which are beyond our control. The words “may,” “could,” “should,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “intend,” “plan,” “target,” “goal,” and similar expressions are intended to identify forward-looking statements, including when used in the negative. All forward-looking statements, by their nature, are subject to risks and uncertainties. Our actual future results may differ materially from those set forth in our forward-looking statements. Forward-looking statements include, but are not limited to, statements about:

·
our expectations regarding our expenses and revenue, if any;
·
our anticipated cash needs and our estimates regarding our capital requirements and our needs for additional financing;
·
plans for future products, for enhancements of existing products and for development of new technologies;
·
our anticipated growth strategies;
·
existing and new customer relationships, if any;
·
our technology strengths;
·
our intellectual property, third-party intellectual property and claims related to infringement thereof;
·
anticipated trends and challenges in our business and the markets in which we operate; and
·
sources of new revenue, if any.

Although we believe that the expectations reflected in these forward-looking statements are reasonable, we can give no assurance that the expectations reflected in these forward-looking statements will prove to be correct. Although we believe that the expectations reflected in these forward-looking statements are reasonable and achievable, these statements involve risks and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements. Current shareholders and prospective investors are cautioned that any forward-looking statements are not guarantees of future performance. Such forward-looking statements by their nature involve substantial risks and uncertainties, certain of which are beyond our control, and actual results for future periods could differ materially from those discussed in this report, depending on a variety of important factors, among which are our ability to implement our business strategy, our ability to compete with major established companies, the acceptance of our products in our target markets, the outcome of litigation, our ability to attract and retain qualified personnel, our ability to obtain financing, our ability to continue as a going concern, and other risks described from time to time in our filings with the Securities and Exchange Commission.  Forward-looking statements contained in this report speak only as of the date of this report.  Future events and actual results could differ materially from the forward-looking statements. You should read this report completely and with the understanding that actual future results may be materially different from what management expects. We will not update forward-looking statements even though its situation may change in the future.


 
3

 
 
 
             
FOREX INTERNATIONAL TRADING CORP.
 
(A DEVELOPMENT STAGE COMPANY)
 
CONDENSED CONSOLIDATED BALANCE SHEET
 
APRIL 30, 2010
 
UN-AUDITED
 
(AUDITED RESTATED NOVEMBER 24, 2009)
 
             
             
ASSETS
             
             
   
April 30, 2010
   
July 31, 2009
 
   
UN-AUDITED
   
AUDITED
 
Current Assets
           
    Cash and cash equivalents (Note2)
  $ 82,082     $ 800  
    Tradable Securities
    64,666       -  
    Accounts Receivable
    -       5,000  
                 
    Total Current Assets     146,748       5,800  
                 
Fixed Asset
               
Leasehold improvements
    18,258       -  
                 
                 
TOTAL ASSETS
  $ 165,006     $ 5,800  
                 
                 
  LIABILITIES AND STOCKHOLDERS' EQUITY                
                 
Current Liabilities
               
    Accounts payable and Accrued Liabilities (Note 3)
  $ 79,563     $ 53,125  
                 
  Total Current Liabilities     79,563       53,125  
                 
Long term Liabilities
               
    Advances on Equity Offering (Note 4)
    180,000       -  
    Rasel - Affiliated Party - Notes & Accrued Interest (Note 6)
    127,153       -  
                 
    Total Long term Liabilities     307,153       -  
                 
Commitments and Contingencies (Note 9)
    -       -  
                 
TOTAL LIABILITIES
  $ 386,716     $ 53,125  
                 
Stockholders' Equity:
               
    Common Stock - $0.00001 par value - 400,000,000
               
    shares authorized, 84,120,000 issued and
               
    outstanding as of 4/30/10 (Note 7)
  $ 841     $ 800  
                 
    Additional Paid-In Capital
  $ 41,159       -  
                 
    Deficit
    (263,710 )     (48,125 )
                 
TOTAL STOCKHOLDERS EQUITY
  $ (221,710 )   $ (47,325 )
                 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
  $ 165,006     $ 5,800  
                 
 
The accompanying notes are an integral part of these financial statements.
 
 
 
4

 
 
 
                   
FOREX INTERNATIONAL TRADING CORP.
 
(A DEVELOPMENT STAGE COMPANY)
 
CONDENSED CONSOLIDATED UN-AUDITED STATEMENT OF INCOME AND EXPENSES
 
FOR THE NINE AND THREE MONTHS ENDED APRIL 30, 2010 AND SINCE INCEPTION ON JULY 22, 2009 TO APRIL 30, 2010
 
                   
                   
                   
   
Since Inception through
   
Three Months Ended
   
Nine Months Ended
 
   
April 30, 2010
   
April 30, 2010
   
April 30, 2010
 
   
UN-AUDITED
   
UN-AUDITED
   
UN-AUDITED
 
                   
Revenue
  $ 34,500     $ -     $ 29,500  
                         
Cost of Revenue
    -       -          
                         
Gross Profit
    34,500       -       29,500  
                         
Operating Expenses
                       
    Filing Fees
  $ 14,589     $ 8,659     $ 13,964  
    Proffessional & Legal Fees
    157,949       26,299       105,449  
    Salaries
    55,000        55,000       55,000  
    Software Licensing, website and Related Expenses
    58,004       57,917       58,004  
    Other expenses
    4,174       4,174       4,174  
Total Operating Expenses
  $ 289,716     $ 152,049     $ 236,591  
                         
Net Loss from Operations
    (255,216 )     (152,049 )     (207,091 )
                         
Financing Expenses
                       
    Interest Expenses and Bank fees
  $ (3,659 )      (2,529 )     (3,659 )
    Finance Charges - Tradable Securities
    (4,834 )     (4,834 )     (4,834 )
Total Financing Expenses
    (8,493 )     (7,363 )     (8,493 )
                         
Net Loss before Taxes
  $ (263,710 )   $ (159,412 )   $ (215,585 )
                         
Income Taxes
    -       -       -  
                         
Net Loss after Taxes
  $ (263,710 )   $ (159,412 )   $ (215,585 )
                         
Weighted average number of common shares
                 
outstanding - basic and fully diluted
    84,120,000       84,120,000       84,120,000  
                         
Net Loss per share - basic and fully diluted
  $ 0.0031349     $ 0.0018951     $ 0.0025628  
                         
 
The accompanying notes are an integral part of these financial statements.
 
 
 
 
5

 
 
 
 
                         
  FOREX INTERNATIONAL TRADING CORP.  
  (A DEVELOPMENT STAGE COMPANY)  
  CONDENSED CONSOLIDATED UN-AUDITED CHANGES IN STOCKHOLDERS' EQUITY  
  FOR THE NINE MONTHS ENDED APRIL 30, 2010 AND SINCE INCEPTION ON JULY 22, 2009 TO APRIL 30, 2010  
                         
  (AUDITED RESTATED NOVEMBER 24, 2009)
 
 
 
                         
   
Common
 
Additional
   
Retained
       
   
Stock
   
Paid In Capital
 
Deficit
   
Total
 
                         
                         
Balance at July 22, 2009
  $ -     $ -     $ -     $ -  
                                 
Stock Issued
    800       -       -       800  
                                 
Net Loss
    -       -       (48,125 )     (48,125 )
                                 
Balance at July 31, 2009 - Audited
  $ 800     $ -     $ (48,125 )   $ (47,325 )
                                 
Net Loss for the Period ended on April 30, 2010 - Un-Audited
            (215,585 )     (215,585 )
                                 
Restricted Shares Issuing
    41       41,159               41,200  
                                 
                                 
Balance at April 30, 2010 - Un-Audited
  $ 841     $ 41,159     $ (263,710 )   $ (221,710 )
                                 
 
 
The accompanying notes are an integral part of these financial statements.
 
 
 
 
6

 
 
 
 
                   
                   
FOREX INTERNATIONAL TRADING CORP.
       
(A DEVELOPMENT STAGE COMPANY)
       
CONDENSED CONSOLIDATED UN-AUDITED STATEMENT OF CASH FLOWS
       
FOR THE NINE AND THREE MONTHS ENDED APRIL 30, 2010 AND SINCE INCEPTION ON JULY 22, 2009 TO YEAR ENDED JULY 31, 2009
       
                   
                   
                   
                   
   
Since Inception through
   
Three Months Ended
   
Nine Months Ended
 
   
July 31, 2009
   
April 30, 2010
   
April 30, 2010
 
   
AUDITED
   
UN-AUDITED
   
UN-AUDITED
 
Cash Flows From Operating Activities
                 
    Net loss
  $ (48,125 )   $ (159,412 )   $ (215,585 )
                         
    Adjustments to reconcile net income (loss) to
                 
    net cash (used) provided by operating activities:
                 
                         
    Decrease (Increase) in Accounts Receivable
    (5,000 )     -       5,000  
    Increase (Decrease) in Accounts Payable and Accrued Expenses
    53,125       52,220       26,438  
                         
                         
    Net cash (used) by operating activities
    -       (107,193 )     (184,147 )
                         
Cash Flows from Investing Activities
                       
    Leasehold improvements
    -       (18,258 )     (18,258 )
                         
    Net cash invested in investing activities
    -       (18,258 )     (18,258 )
                         
Cash Flows From Financing Activities
                       
    Issuance of Common Stock
    800       41,200       41,200  
    Issuance of Notes to Affilated Party
    -       1,219       127,153  
    Advances on Eqwuity Offering
            180,000       180,000  
    Investment In Tradable Securities
            (64,666 )     (64,666 )
    Net cash from financing activities
    800       157,753       283,687  
                         
Net Increase in cash and cash equivalents
    800       32,302       81,282  
                         
Cash and cash equivalents, Beginning of Period
    -       49,780       800  
                         
Cash and cash equivalents, End of Period
  $ 800     $ 82,082     $ 82,082  
                         
                         
Non-cash transactions - Accrued interest on notes
  $ -     $ -     $ 2,153  
Non-cash transactions - Adjustment of tradable securities
  $ -     $ 4,834     $ 4,834  
Non-cash transactions - Issuing of Restricted Shares
  $ -     $ 41,200     $ 41,200  
 
  The accompanying notes are an integral part of these financial statements.
 
 
 
7

 
 
 
 
 

 
FOREX INTERNATIONAL TRADING CORP.
(A DEVELOPMENT STAGE COMPANY)
April 30, 2010
NOTES TO CONDENSED CONSOLIDATED UN-AUDITED
FINANCIAL STATEMENTS



NOTE 1
History and Organization of the Company
The Company was incorporated on July 22, 2009 (Date of Inception) as a development stage company under the laws of the State of Nevada as “Forex International Trading Corp.” and is licensed to engage in any lawful activity.


NOTE 2
Summary of Significant Accounting Policies

Basis of consolidation
The consolidated financial statements include the accounts of the Company, its majority-owned subsidiary and all variable interest entities for which the Company is the primary beneficiary. All intercompany balances and transactions have been eliminated upon consolidation. Control is determined based on ownership rights or, when applicable, whether the Company is considered the primary beneficiary of a variable interest entity

Marketable securities
The Company determines the appropriate classification of all marketable securities as held-to-maturity, available-for-sale or trading at the time of purchase, and re-evaluates such classification as of each balance sheet date. The Company assesses whether temporary or other-than-temporary gains or losses on its marketable securities have occurred due to increases or declines in fair value or other market conditions. The Company had marketable securities within continuing operations for the period ended April 30, 2010, which been presented in market value.

Cash and Cash Equivalents
The Company maintains a cash balance in a non-interest bearing account that currently does not exceed federally insured limits.   For purposes of financial statement presentation, the Company considers all highly liquid instruments with a maturity of three months or less to be cash.



 
8

 



 
Revenue Recognition
The Company uses the accrual basis of accounting for all transactions. The Company recognized revenue and gains when earned and related costs of sales and expenses when incurred.

Variable Interest Entities
The Company is required to consolidate variable interest entities (“VIE's”), where it is the entity’s primary beneficiary. VIE's are entities in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. The primary beneficiary is the party that has exposure to a majority of the expected losses and/or expected residual returns of the VIE.  For the period ending April 30, 2010, the balance sheets and results of operations of FOREX INTERNATIONAL TRADING CORP M.S. LTD, our wholly owned subsidiary is consolidated into these financial statements.

Loss per Share
Net loss per share is provided in accordance with ASC Codification Topic 260 Section S99-1 and Statement of Financial Accounting Standards No. 128 (SFAS #128) “Earnings Per Share”. Basic loss per share is computed by dividing losses available to common stockholders by the weighted average number of common shares outstanding during the period.  The Company had no dilutive common stock equivalents, such as stock options or warrants as of April 30, 2010 and as of July 31, 2009.

Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles 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 reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.

Foreign currency translation
The Company considers the United States Dollar (“US Dollar” or "$") to be the functional currency of the Company and its subsidiary. The reporting currency of the Company is the US Dollar and accordingly, all amounts included in the consolidated financial statements have been presented or translated into US Dollars. For non-US subsidiary that do not utilize the US Dollar as its functional currency, assets and liabilities are translated to US Dollars at period-end exchange rates, and income and expense items are translated at weighted-average rates of exchange prevailing during the period. Translation adjustments are recorded in “Accumulated other comprehensive income” within stockholders’ equity. Foreign currency transaction gains and losses are included in the consolidated results of operations for the periods presented.


 
9

 


 
Fair value of financial instruments
Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of April 30, 2010.   The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values.   These financial instruments include cash and accounts payable.  Fair values are assumed to approximate carrying values for cash and payables because they are short-term in nature and their carrying amounts approximated fair values or they are payable on demand.

Segment reporting
The Company follows Statement of ASC Codification Topic 220 and Statement of Financial Accounting Standards No. 130, “Disclosures About Segments of an Enterprise and Related Information”.  The Company operates as a single segment and will evaluate additional segment disclosure requirements as it expands its operations.

Dividends
The Company has not yet adopted any policy regarding payment of dividends.  No dividends have been paid or declared since inception.

Recent pronouncements
In May 2008, FAS No. 163, “Accounting for Financial Guarantee Insurance Contracts”, and SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles”, were issued. In March 2008, FAS No. 161, “Disclosures About Derivative Instruments and Hedging Activities-an amendment of FASB Statement No. 133 was issued.

The Financial Accounting Standards Board (FASB) issued Statement No. 168 – become effective on July 1, 2009 – The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles which makes the Accounting Standards Codification (ASC) the source of authoritative U.S. GAAP recognized by the FASB to be applied by nongovernmental entities for interim and annual periods ending after September 15, 2009. Rules and interpretive releases of the SEC under the authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. The adoption of ASC Topic 105 did not have a material impact on the Company’s financial position, cash flows or result of operations. Other recently issued or adopted accounting pronouncements are not expected to have, or did not have, a material effect on the Company’s operations or financial position.

Stock-Based Compensation
The Company accounts for stock-based awards to employees in accordance with Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” and related interpretations and has adopted the disclosure only alternative of ASC Codification Topic 220 and SFAS No. 123, “Accounting for Stock-Based Compensation”. Options granted to consultants, independent representatives and other non-employees are accounted for using the fair value method as prescribed by ASC Codification Topic 220 and SFAS No. 123.
 
 
 
 
10

 
 
 
 
Year End
The Company has elected to operate on a Fiscal Accounting Year and Fiscal Tax Year ending on July 31st.

Going Concern
The accompanying financial statements have been prepared assuming the Company will continue as a going concern.   The future of the Company is dependent upon its ability to generate revenues and upon future profitable operations from the development of its new business opportunities.   The financial statements do not include any adjustments relating to the recoverability and classification of liabilities that might be necessary in the event the Company cannot continue in existence.

NOTE 3
Accounts Payable
As of January 31, 2010 the Company owes $50,000 to Triple 8 Limited, in connection
with Software Licensing Agreement and the amount of $29,563 to other trades, including
$7,040 to the Company Chairman.

NOTE 4
Advances on Equity Offering
During the period, the Company made an offering to its common stocks. The offering closed on May 4, 2010.  The advances represent partial amounts that were received into the Company bank account.

NOTE 5
Income taxes
Deferred income tax assets and liabilities are computed annually for the differences between the financial statement and tax basis of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable on the periods in which the differences are expected to affect taxable income.  Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.  Income tax expense is the tax payable or refundable for the period plus or minus the change during the period in deferred tax assets and liabilities.

Since inception to April 30, 2010, there was no Income Tax Expense.

The provisions for income taxes differ from the amount computed by applying the statutory federal income tax rate to Income before provision for income taxes. The source and tax effects of the differences are as follows:
 
 
U.S. federal statutory rate    34.00 %    
Valuation reserve   34.00 %    
Total  0.00 %    
 

                                                   
 
11

 
 
 
                                                    
 
As of April 30, 2010, the Company has a net operating loss carry forward of approximately $263,710 for tax purposes, which will be available to offset future taxable income.  This carryforward will expire in various years through 2014.
 
 
The Company accounts for the income taxes under ASC Codification Topic 740 and SFAS No. 109, “Accounting for Income Taxes”, which requires the use of the liability method.   SFAS No. 109 provides that deferred tax assets and liabilities are recorded based on the differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes, referred to as temporary differences.   Deferred tax assets and liabilities at the end of each period are determined using the current enacted tax rates applied to taxable income in the periods in which the deferred tax assets and liabilities are expected to be settled or realized.

NOTE 6
Rasel - Affiliated Party - Notes & Accrued Interest
On October 6, 2009 the Company signed a Note Payable for $25,000 payable to RASEL, LTD (a Company Shareholder) due on October 6, 2010 at 4% annum.   The proceeds were used to pay for half of an existing Accounts Payable to Stephen Fleming for legal fees incurred at the Company’s inception.

On October 20, 2009 the Company signed a Note Payable for $50,000 payable to RASEL, LTD (a Company Shareholder) due on October 20, 2010 at 4% annum.   These proceeds were used to pay for startup costs, audit fees and future expenses.

On January 22, 2010 the Company signed a Note Payable for $50,000 payable to RASEL, LTD (a Company Shareholder) due on October 30, 2011 at 4% annum.   These proceeds will be used for working capital and future expenses.

On January 22, 2010 the Company signed an amendment to extend the maturity date of the Promissory Notes in the amount of $50,000 and $25,000 dated October 6, 2009 and October 20, 2009, respectively, to October 30, 2011.


NOTE 7
Stockholders’ Equity
The Company was authorized to issue 400,000,000 shares of its $0.00001 par value common stock and 20,000,000 shares of its $0.00001 par value preferred stock as of April 30, 2010.

On July 22, 2009 the Company issued 40,000,000 shares of its $0.00001 par value common stock to Meridad Inc. and 40,000,000 shares of its $0.00001 par value common stock to Rasel Ltd.   Shares were issued at par with no Additional Paid In Capital for a total of $800.


 
 
 
12

 
 
 
 
 
On March 26, 2010 the Company entered into agreement with Island Capital Management, LLC for the purpose of obtaining DTC Corporate Eligibility. The Company paid as a fee $2,000 in cash and 120,000 shares of restricted stock for the purpose of obtaining DTC  Eligibility, performing director, officer and control shareholder Background Reviews and Consultation Services with respect to transfer services, including obtaining CUSIP  number(s), documentation formatting and third-party professional consultation services.

On April 23, 2010, the Company entered into an Employment Agreement (the “Agreement”) with Darren Dunckel (“Executive”) whereby the Company will employ Executive as its Chief Executive Officer for a term of two years (the “Term”).  Executive does not have any family relationship with any director, executive officer or person nominated or chosen by the Company to become a director or executive officer In addition, Executive has been appointed as a member of the Board of Directors of the Company.  For his services during the Term as Chief Executive Officer, the Company will pay Executive a salary of $120,000 to be paid on a monthly basis at a rate of $10,000 per month.  Executive will also be granted a signing bonus consisting of 4,000,000 shares of common stock of the Company upon signing the Agreement.  Additionally, if the Company generates net income of at least $1,000,000 during any fiscal year during the Term, the Company will pay the Executive an annual bonus in the amount of $100,000.  Executive will also receive during the Term such medical, health and disability insurance as the Company provides to its executive officers, two weeks of vacation in each calendar year and eligibility to participate in such pension, profit-sharing, retirement and other benefits as are available to executive officers of the Company.


NOTE 8
Financial Statement RESTATEMENT
On 10/24/09, the Company restated previously issued audited financial statements to expense legal expenses that were initially booked and amortized as startup costs within paragraph 8 of SOP 98-5, were changed to expense in the month(s) incurred due to the fact that they represent expenses of the offering pursuant to SAB Topic 5A.  Regarding Statement of Cash Flows, these startup costs were re-classified in operating activities to conform with the decision to expense rather than to capitalize.

NOTE 9
Commitments and Contingencies
The Company S-1 registration statement that was filled with the Security and Exchange Commission on Sep 9, 2009 received Notice of Effectiveness on March 4, 2010. During April 2010 Moshe Schnapp, an executive officer and director for the Company, was the only party that solicited the investors.  A total of 42 investors were solicited, all of which invested in the Company.


 
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On March 22, 2010 the Company entered into agreement with Spartan Securities Group, Ltd for sponsoring the Company form 15C211. The broker dealer and or any of its affiliates were not compensated as part of said agreement.


On March 24, 2010 the Company incorporate fully owned subsidiary in the State of Israel
under the name: FOREX INTERNATIONAL TRADING CORP M.S. LTD – Company
number 514424985 (“Forex Sub”). To date Forex Sub did not commence any operations other than accept into its bank account proceeds from investors as the Company agent.

The Company has two websites. The corporate website address is www.forex-international-trading.com and the trading platform (under the affiliate licensing agreement): www.4xint.com. Both websites are currently under construction and modifications may apply.  T Company has blocked the ability of potential subscribers in the United States from engaging in any transactions.  This restriction will be lifted once Mr. Dunckel has obtained the required license

On April 19, 2010, the Company entered into a Software Licensing Agreement with Triple 8 Limited (“Triple 8”) which was dated April 12, 2010 whereby the Company will license Triple 8’s proprietary trading software (the “Software”) for the purpose of developing a Forex Trading Platform and introducing prospective clients (“End Users”).  Triple 8 will create a website for the Company, which will be funded by the Company at a cost of $50,000 (the “Setup Fee”).  Upon the Company and Triple 8 generating $100,000 in revenue under the agreement, the Company will be reimbursed 50% of the Setup Fee ($25,000).  The Company will receive 30% of the net profit generated from End Users, which will be increased to 50% in the event that the monthly volume generated by the Company is in excess of $250 million.

NOTE 10

Subsequent Events
Per Notice of Effectiveness received on March 4, 2010, the Company made on April and May 2010 an offering. The offering closed on May 4, 2010.  The Company sold 20,000,000 shares of common stock for $0.01 per share for an aggregate raise of $200,000.

 
 
14

 
 
 
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
 
This report includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance.  Forward-looking statements are often identified by words like: believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events.  You should not place undue certainty on these forward-looking statements, which apply only as of the date of this prospectus.  These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or our predictions.
 
We are a development stage company; have only recently started operations and have only generated limited revenues from our business operations.
 
We believe the technical aspects of our website, network infrastructure, and transaction processing systems will be sufficiently developed to use for our operations and we will have a sufficient inventory of products 120 days from the completion of our offering which was closed on May 4, 2010.   The money we raised in our offering will last 12 months, unless opportunities will present itself prior.  We intend to also acquire potential targets operating in the foreign exchange trading industry.  We are not presently in negotiations with any potential target and there is no guarantee that we will be able to identify any target and close such acquisition.  
 
We have two officers and directors and two other employees.  Our Chairman is responsible for our managerial and organizational structure which will include preparation of disclosure and accounting controls under the Sarbanes Oxley Act of 2002.  When theses controls are implemented, he will be responsible for the administration of the controls.  Should he not have sufficient experience, he may be incapable of creating and implementing the controls which may cause us to be subject to sanctions and fines by the Securities and Exchange Commission which ultimately could cause you to lose your investment.     
 
Result of Operations
 
Since inception (July 22, 2009) through April 30, 2010, we have only generated $34,500 in revenue and for the nine months ended April 30, 2010 we generated $29,500 in revenue. The revenue was derived from consulting services with respect to the foreign exchange industry provided to two parties.  We do not expect to generate any further revenue from these customers.  There were no costs associated with the revenue generated to date.  We incurred $298,210 in expenses and a net loss of $263,710 for the period from inception (July 22, 2009) through April 30, 2010 and we incurred $245,085 in expenses and a net loss of $215,585 for the nine months ended April 30, 2010. Our trading platform commenced generating revenues May 2010, which will be included in our next filling.
 
Plan of Operation
   
To date, we have been focused on forming our company and other administrative matters.  In addition, we have also begun our evaluation of outside web designs, software developers and other service providers.  To date, the Company has two websites. The corporate website address is www.forex-international-trading.com. The trading platform (under the affiliate licensing agreement) Internet address is www.4xint.com.  Both websites are currently under construction and modifications may apply.  The Company has blocked the ability of potential subscribers in the United States from engaging in any transactions.  This restriction will be lifted once Mr. Dunckel, our Chief Executive Officer, has obtained the required license 
Per the completion of our public offering, our specific goal is to:

·  
The Company business plan calls for the development of a currency trading platform and corresponding websites, followed by marketing of the Company’s products and services and the development of client relationships. The Company has engaged Darren Dunckel to be the Company CEO. Mr. Dunckel currently holds a Series 3 license to trade currencies and commodities as well as act as an introducing broker for Futures Commission Merchants (FCM).  Mr. Dunckel previously held Series 7, 63 and 65 securities licenses.  Mr. Dunckel’s membership with the National Futures Association was approved per the receipt of guarantor documentation from a FCM. Mr. Dunckel has over 15 years experience in the financial services industry with specific expertise marketing financial products to industry professionals.

 
·  
The first version of the Company Currency Trading Platform is expected to be completed October 1, 2010  Mr. Dunckel and Mr. Schnapp have identified  currency trading platform vendors for the purpose of customizing a platform to meet the Company’s criteria. It is the Company’s desire for the platform to provide their clients with not only simplified retail trading capabilities but also institutional multi account trading for CTA’s (Commodity Trading Advisors)and CPO’s (Commodity Pool Operators). The current market environment includes extensive training opportunities for inexperienced traders.  As traders become more astute, the ability to transition from a single account retail trading to institutional multi-account trading is a niche market within the vast currency trading space that the Company’s sees a significant void.

 
·  
As a mid-term-solution and in order to examine the system closely, the Company has signed an affiliate agreement with Triple 8 Limited, a Cyprus Company, to evaluate the platforms capabilities and flexibility to create a custom trading platform for the Company’s FUTURE clients.  While the Company is developing its own custom software platform, it began operating an affiliate program with Triple 8 Limited’s existing trading platform. The custom platform will be designed to help clients evaluate risk not only on a per trade basis, but also from a portfolio perspective.  The Company will then add additional features to their platform such as: (i) Easy deposit and withdrawal or funds transfers between existing banking/investment accounts; (ii) Total portfolio integration of client’s currency accounts with other investment accounts; and (iii) Detailed real time calculations of profits and losses, among others.

 
 
 
15

 
 

 
·  
The functionality of the website will provide traders with the typical demo account, live account, and compliance capabilities along with the specialized functionality for CTA’s and CPO’s. The website will act as not only the interface for the Client/Traders, but it will also provide CTA’s and CPO’s with their own client access capabilities. The launch of the website will follow the release of the first version of the software.

·  
Marketing (expected launch of marketing May/June, 2010) – The marketing of the platform will be performed primarily by Mr. Dunckel.  Mr. Dunckel has extensive experience in wholesaling financial products to investment advisors. The marketing strategy is to approach financial advisors, existing CTA’s, existing CPO’s, and retail currency traders involved in Forex trading training. The marketing will be focused on the unique features and delivery capabilities of the platform to attract currency traders. The Company will be seeking successful traders allowing them to maximize their expertise and the Company’s platform to manage money not only for themselves but for others as well. The Company will be utilizing multiple channels for delivering their message. The Company will be using multiple methods to reach out to the different channels including but not limited to phone, in person, email, mail and advertisements in publications utilized by the target market.


·  
Client Development (expected start of client development is June/July, 2010) – Client development will be performed by the Company’s support staff. The Company anticipates the hiring of this staff beginning in or around June/July 2010 and will be ongoing. The Company is developing an extensive training program for the support staff to enable the Company to provide the highest possible level of service. Please note that the Company timeline is subject to change, as the Company faces daily challenges similar to that of any other enterprise.
·
 
 
 Our websites are fully operational though subject to modification and adjustments, our network infrastructure and transaction processing systems are not in place yet as we operating via a white label agreement.  We believe that we will have to spend approximately $25,000 in order to ensure that our website is fully operational and our network infrastructure and transaction processing systems are in place.  Even though it is remote possibility, if we are unable to negotiate suitable terms with service providers to develop and maintain our websites and software and to attract customers to our website, we may have to suspend or cease operations.
 
On March 24, 2010 the Company incorporated a fully owned subsidiary in the State of Israel under the name FOREX INTERNATIONAL TRADING CORP M.S. LTD – Company number 514424985 (“Forex Sub”). To date Forex Sub has not commenced any operations other than accepting into its bank account proceeds from investors that invested in the Company’s offering.
 
On April 19, 2010, the Company entered into a Software Licensing Agreement with Triple 8 Limited (“Triple 8”) which was dated April 12, 2010 whereby the Company will license Triple 8’s proprietary trading software (the “Software”) for the purpose of developing a Forex Trading Platform and introducing prospective clients (“End Users”).  Triple 8 will create a website for the Company, which will be funded by the Company at a cost of $50,000 (the “Setup Fee”).  Upon the Company and Triple 8 generating $100,000 in revenue under the agreement, the Company will be reimbursed 50% of the Setup Fee ($25,000).  The Company will receive 30% of the net profit generated from End Users, which will be increased to 50% in the event that the monthly volume generated by the Company is in excess of $250 million.
 
 

 
16

 

 
Limited Operating History; Need for Additional Capital
 
There is no historical financial information about us upon which to base an evaluation of our performance. We are in development stage operations and have not generated any revenues from trading to the end of the quarter (we are generating revenues from Forex trading via our affiliated white label agreement during May 2010) . We cannot guarantee we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources and possible cost overruns.
 
To become profitable and competitive, we have to develop our websites (or modify the exiting), network infrastructure, and transaction processing systems; complete our trading platform and secure third parties to create the websites, services and software to be offered on our websites.  We are seeking equity or debts financing to provide for the capital required to implement our operations.  We have no assurance that future financing will be available to us on acceptable terms. If financing is not available on satisfactory terms, we may be unable to continue, develop or expand our operations. Equity financing could result in additional dilution to existing shareholders.
 
Liquidity and Capital Resources
 
Our future capital requirements and the adequacy of available funds will depend on numerous factors, including the successful commercialization of our products, competing technological and market developments, and the development of strategic alliances for the development and marketing of our products.  Our company intends to try to obtain additional funds through equity or debt financing, strategic alliances with corporate partners and others, or through other sources. On October 6, 2009, October 20, 2009 and January 29, 2010, Rasel Ltd., a shareholder of our company, loaned $25,000, $50,000 and $50,000, respectively, to our company.   The loans from Rasel Ltd. carry 4% annual interest and principal and interest mature for each of the notes on October 30, 2011.
 
We expect to use the proceeds to fund our short-term capital requirements including paying administrative expenses associated with maintaining our public company’s filings for the next 12 months. The offering closed on May 4, 2010.  The Company sold 20,000,000 shares of common stock for $0.01 per share for an aggregate raise of $200,000.  The certificates were delivered between March 26, 2010 and May 4, 2010. As of April 30, 2010, we had approximately $82,082 in cash on hand and additional $64,666 in tradable securities.   We expect to be able to remain in operation for a period of 12 months with cash on hand.  In the event our plans change or its assumptions change or prove to be inaccurate or the funds available prove to be insufficient to fund operations at the planned level (due to further unanticipated expenses, delays, and problems or otherwise), we could be required to obtain additional funds earlier than expected.  The Company does not have any committed sources of additional financing, and there can be no assurance that additional funding, if necessary, will be available on acceptable terms, if at all. If adequate funds are not available, we may be required to further delay, scale-back, or eliminate certain aspects of our operations or attempt to obtain funds through arrangements with collaborative partners or others that may require us to relinquish rights to certain of our technologies, product candidates, products, or potential markets. If adequate funds are not available, our business, financial condition, and results of operations will be materially and adversely affected.
  
Until required for operations, Forex's policy will be to invest its cash reserves in bank deposits.  Forex expects that its operating results will fluctuate significantly from quarter to quarter in the future and will depend on a number of factors, most of which are outside Forex's control.

 ITEM 3. QUA NTITATIVE AND QUALITIATIVE DISCLOSURES ABOUT MARKET RISK
 
As a smaller reporting company, as defined in Rule 12b-2 of the Exchange Act, we are not required to provide the information required by this Item. 


 
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 ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures
 
Based on an evaluation under the supervision and with the participation of the Company’s management, the Company’s principal executive officer and principal financial officer have concluded that the Company’s disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (“Exchange Act”) were effective as of April 30, 2010 to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms and (ii) accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
 
Changes in Internal Control Over Financial Reporting
 
There were no changes in the Company’s internal control over financial reporting during the quarter ended April 30, 2010, which were identified in connection with management’s evaluation required by paragraph (d) of Rules 13a-15 and 15d-15 under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
 
ITEM 4T. CONTROLS AND PROCEDURES

Not applicable.


 
 
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PART II: OTHER INFORMATION
 
 ITEM 1. 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, individually or in the aggregate, a material adverse affect on our business, financial condition or operating results.
 
None of our directors, officers or affiliate are involved in a proceeding adverse to our business or have a material interest adverse to our business.

 ITEM 1A. RISK FACTORS

As a smaller reporting company, as defined in Rule 12b-2 of the Exchange Act, we are not required to provide the information required by this Item.

 ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On July 24, 2009, Forex International Trading Corp. sold 40,000,000 restricted shares of common stock to Meridad Inc. for $400.00 cash, and 40,000,000 restricted shares of common stock to Rasel Ltd. for $400.00 cash.  Sean Schnapp and Tom Schnapp, sons of Mr. Moshe Schnapp, our chairman, are the sole shareholders of Meridad Inc. and Rasel Ltd., respectively.    Forex relied on Section 4(2) of the Securities Act as its exemption from registration when it issued the shares of common stock to Meridad Inc. and Rasel Ltd.  Both Meridad Inc. and Rasel Ltd. agreed to hold the shares for investment purposes only and to transfer such shares only in a registered offering or in reliance upon an exemption therefrom.

On March 26, 2010 the Company entered into agreement with Island Capital Management, LLC for the purpose of obtaining DTC Corporate Eligibility. The Company paid as a fee $2,000 in cash and 120,000 shares of restricted stock for the purpose of obtaining DTC  Eligibility, performing director, officer and control shareholder Background Reviews and Consultation Services with respect to transfer services, including obtaining CUSIP  number(s), documentation formatting and third-party professional consultation services.  The shares were issued under Section 4(2) of the Securities Act of 1933, as amended.
 
On April 23, 2010, the Company entered into an Employment Agreement (the “Agreement”) with Darren Dunckel (“Executive”) whereby the Company will employ Executive as its Chief Executive Officer for a term of two years (the “Term”).  Executive does not have any family relationship with any director, executive officer or person nominated or chosen by the Company to become a director or executive officer In addition, Executive has been appointed as a member of the Board of Directors of the Company.  For his services during the Term as Chief Executive Officer, the Company will pay Executive a salary of $120,000 to be paid on a monthly basis at a rate of $10,000 per month.  Executive will also be granted a signing bonus consisting of 4,000,000 shares of common stock of the Company upon signing the Agreement.  Additionally, if the Company generates net income of at least $1,000,000 during any fiscal year during the Term, the Company will pay the Executive an annual bonus in the amount of $100,000.  Executive will also receive during the Term such medical, health and disability insurance as the Company provides to its executive officers, two weeks of vacation in each calendar year and eligibility to participate in such pension, profit-sharing, retirement and other benefits as are available to executive officers of the Company.  The shares were issued under Section 4(2) of the Securities Act of 1933, as amended.
 
Our public offering under closed on May 4, 2010.  The Company sold 20,000,000 shares of common stock for $0.01 per share for an aggregate raise of $200,000. Moshe Schnapp, an executive officer and director for the Company, was the only party that solicited the investors, which had a previous relationship with Mr. Schnapp.  A total of 42 investors were solicited, all of which invested in the Company.  No other potential investors were solicited.
 
 
 
 
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ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None

 ITEM 4 – REMOVED AND RESERVED

Not applicable
 
 
ITEM 5. OTHER INFORMATION

None.

 ITEM 6. EXHIBITS

 Exhibit No.
 
Description
     
3.1
 
Certificate of Incorporation of Forex International Trading Corp. (1)
3.2
 
Bylaws of Forex International Trading Corp. (1)
4.1
 
Promissory Note issued to Rasel Ltd. Dated October 6, 2009 (2)
4.2
 
Promissory Note issued to Rasel Ltd. Dated October 20, 2009 (2)
4.3
 
Letter Agreement between Rasel Ltd. and Forex International Trading Corp. dated January 22, 2011(3)
4.4   Promissory Note issued to Rasel Ltd. Dated January 29, 2010 (3)
10.1   Employment Agreement dated April 23, 2010, by and between Forex International Trading Corp and Darren Dunckel(4)
10.2
 
Software Licensing Agreement dated April 12, 2010, by and between Forex International Trading Corp and Triple 8 Limited (5)
31.1 
 
Certification of the Chief Executive and Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1 
 
Certification of Chief Executive and Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 
(1) Incorporated by reference to the Form S-1 Registration Statement filed with the SEC on September 9, 2009.
(2) Incorporated by reference to the Form S-1 Registration Statement filed with the SEC on November 2, 2009.
(3) Incorporated by reference to the Form S-1 Registration Statement filed with the SEC on January 29, 2010.
(4) Incorporated by reference to the Form S-1 Registration Statement filed with the SEC on April 28, 2010.
(5) Incorporated by reference to the Form S-1 Registration Statement filed with the SEC on April 20, 2010.
 

 
 
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 SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
FOREX INTERNATIONAL TRADING CORP.
       
         
/s/Darren C Dunckel
 
CEO, President, CFO, Secretary, Treasurer and Director
June 2, 2010
Darren C. Dunckel
 
     
         

 
 
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