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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 OF 1934
   
 
For the quarterly period ended September 30, 2013
   
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commissions file number: 000-54530

FOREX INTERNATIONAL TRADING CORP.
(Exact name of registrant as specified in its charter)

Nevada
 
27-0603137
State or other jurisdiction of
 
I.R.S. Employer Identification Number
incorporation or organization
   
 
400 Continental Blvd. Suite 600 El Segundo CA 90245
 (Address of principal executive office)
 
Issuer's telephone number: 888-426-4780

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

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

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 
Accelerated filer      
 

Non accelerated filer   (Do not check if a smaller reporting company)  Smaller reporting company x

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

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date:

Common Stock, $0.00001 par value
44,966,086
(Class)
(Outstanding at November 14, 2013)
   


 
1

 

 
FOREX INTERNATIONAL TRADING CORP.

 
     
 
     
 
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2

 

PART I.
Financial Information
   
Item 1.
 
 
   
 

             
FOREX INTERNATIONAL TRADING CORP.
 
 
             
             
   
September 30, 2013
 
December 31, 2012
   
(UNAUDITED)
 
(AUDITED)
ASSETS
           
             
Current assets:
           
Cash and cash equivalents
  $ 5,725     $ 618  
Note and short-term receivables
    430,000       497,355  
Prepaid expenses
    -       10,845  
Total current assets
    435,725       508,818  
                 
Property and equipment, net
    5,497       8,417  
                 
Other assets
    -       -  
                 
 Total assets
  $ 441,222     $ 517,235  
                 
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
               
                 
Current liabilities:
               
Accounts payable and accrued expenses
  $ 100,461     $ 88,955  
Notes payable and accrued interest (net of debt discount of $25,000 and $100,000 as of
September 30, 2013 and December 31, 2012, respectively)
    772,015       622,607  
Total current liabilities
    872,476       711,562  
                 
Total liabilities
    872,476       711,562  
                 
Contingencies
               
                 
Stockholders' deficiency:
               
                 
Series B Preferred stock, $0.00001 par value, 20,000,000 shares authorized;
               
  45,000 shares issued as of September 30, 2013 and December 31, 2012, respectively
    -       -  
Series C Preferred stock, $0.00001 par value, 10,000 shares authorized;
         
  10,000 shares issued as of September 30, 2013 and December 31, 2012, respectively
    -       -  
Common stock - $0.00001 par value, 400,000,000 shares authorized; 38,888,586
               
  shares issued and outstanding as of September 30, 2013 and December 31, 2012, respectively
    389       389  
Treasury stock, at cost; 38,000 shares as of September 30, 2013 and December 31, 2012, respectively
    (11,059 )     (11,059 )
   Additional paid-in capital
    1,641,027       1,641,027  
   Accumulated deficit
    (2,061,611 )     (1,824,684 )
                 
Total stockholders' deficiency
    (431,254 )     (194,327 )
                 
       Total liabilities and stockholders' deficiency
  $ 441,222     $ 517,235  
                 
 
The accompanying notes are an integral part of these condensed consolidated unaudited financial statements.

 
3

 
 
FOREX INTERNATIONAL TRADING CORP.

 
                         
   
Three Months ended September 30,
   
Nine Months ended September 30,
 
   
2013
   
2012
   
2013
   
2012
 
         
 
         
 
 
                         
Revenues:
                       
Income from foreign currency operations
  $ -     $ -     $ -     $ 7,106  
   Income from consulting activities
    30,000       -       100,000       -  
Total revenues
    30,000       -       100,000       7,106  
                                 
General and administrative expenses
    66,639       49,733       336,275       287,703  
                                 
Loss from operations
    (36,639 )     (49,733 )     (236,275 )     (280,597 )
                                 
Other income (expenses):
                               
Interest income
    10,000       4,065       30,893       21,406  
Interest expense
    (13,373 )     (16,101 )     (31,545 )     (68,862 )
Recovery of allowance for credit losses
    -       -       -       100,000  
Loss on settlement of GV Global Note
    -       (111,340 )     -       (111,340 )
Total other income (expenses)
    (3,373 )     (123,376 )     (652 )     (58,796 )
                                 
Loss before income taxes
    (40,012 )     (173,109 )     (236,927 )     (339,393 )
                                 
Income tax expense
    -       -       -       -  
                                 
Net loss
  $ (40,012 )   $ (173,109 )   $ (236,927 )   $ (339,393 )
                                 
Net loss per share:
                               
Basic and diluted
  $ (0.00 )   $ (0.01 )   $ (0.01 )   $ (0.01 )
                                 
Weighted average number of
                               
common shares outstanding:
                               
Basic and diluted
    36,549,517       34,248,585       36,549,517       34,248,585  
                                 
 
 
 
 
The accompanying notes are an integral part of these condensed consolidated unaudited financial statements.
 
 
 
4

 
 
FOREX INTERNATIONAL TRADING CORP.
             
   
For the Nine Months Ended
 
   
September 30, 2013
   
September 30, 2012
 
   
 
       
Cash Flows From Operating Activities:
 
 
       
Net loss
  $ (236,927 )   $ (339,393 )
Adjustments to reconcile net loss to net cash
               
  provided by (used in) operating activities:
               
Recovery of allowance for credit loss
    -       (100,000 )
Depreciation of property and equipment
    2,920       4,146  
Amortization of intangible assets
    -       17,560  
Debt offereing costs
    2,500       -  
Amortization of debt discount
    75,000       -  
Loss on settlement of GV Global Note
    -       111,340  
Bad debt expense
    98,248       -  
Changes in assets and liabilities:
               
Accounts receivable and prepaid expenses
    10,845       (12,750 )
Accrued interest on notes receivable
    (30,893 )     (224 )
Accounts payable and accrued expenses
    11,506       (123,945 )
Accrued interest on notes payable
    31,544       49,664  
                 
Net cash used in operating activities
    (35,257 )     (393,602 )
                 
Cash flows from investing activities:
               
Investment in a joint venture
    -       (31,328 )
Issuance of a note receivable
    -       (15,000 )
Collections received on notes receivable
    -       803,926  
                 
Net cash provided by investing activities
    -       757,598  
                 
Cash flows from financing activities:
               
Repayment on a note payable
    -       (773,732 )
Additional borrowing under a note payable, net
    40,364       -  
 
    -       -  
                 
Net cash (used in) provided by financing activities
    40,364       (773,732 )
                 
Net decrease in cash and cash equivalents
    5,107       (409,736 )
                 
Cash and cash equivalents, beginning of year
    618       411,656  
                 
Cash and cash equivalents, end of year
  $ 5,725     $ 1,920  
                 
                 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
         
Cash paid during the quarter for:
               
Interest
  $ -     $ 52,855  
Income taxes
  $ -     $ -  
                 
NON-CASH ACTIVITIES:
               
Conversion of GV Global Payable to Series C Preferred Stock
  $ -     $ 111,000  
Conversion of accrued expenses to note payable
  $ -     $ 155,242  
                 
                 
 
The accompanying notes are an integral part of these condensed consolidated unaudited financial statements.
 
 
 
 
 
5


FOREX INTERNATIONAL TRADING CORP.
AS OF SEPTEMBER 30, 2013
(UNAUDITED)

1.      Organization and Nature of Business

Forex International Trading Corp. (the “Company”) was incorporated on July 22, 2009 under the laws of the State of Nevada and is headquartered in El Segundo, California.  On September 9, 2009 the Company filed Form S-1 Registration Statement to provide for the registration of securities under the Securities Act of 1933. The Company’s principal business activities have been to engage in foreign currency market trading for non-US resident professionals and retail clients over its web-based trading systems. While these trading operations have been closed, the Company continues to operate in the consulting segment of the foreign currency market, leveraging its contacts and knowledge, and its consulting expertise in the area of foreign exchange. In addition, the Company is analyzing investments in joint ventures and is selectively pursuing acquisitions.

2. Summary of Significant Accounting Policies

Presentation and Basis of Financial Statements
 
The accompanying unaudited condensed consolidated financial statements include the accounts of Forex International Trading Corp. and its wholly owned subsidiary, DirectJV Investments, Inc. (together “Forex” or the Company”) and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the rules and regulations of the Securities and Exchange Commission for interim financial information and reports pursuant to the requirements for reporting on Form 10-Q and Regulation S-X for scaled disclosures for smaller reporting companies.  Accordingly, they do not include all, or include a condensed version of, the information and footnotes required by U.S. GAAP for complete financial statements.  The Company believes, however, that the disclosures are adequate to make the information presented not misleading.

The Company’s unaudited condensed consolidated financial statements reflect all material adjustments (consisting of normal recurring adjustments), which are, in the opinion of management, necessary for the fair presentation of the consolidated financial position and the consolidated results of operations of the Company for the periods shown.  Results shown for the interim periods are not necessarily indicative of the results to be obtained for a full fiscal year or for any future period.  The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates, judgments and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements.  Actual results might differ from management’s estimates.  The consolidated balance sheet information as of December 31, 2012 was derived from the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K filed with Securities and Exchange Commission (“SEC”) for the fiscal year ended December 31, 2012, These interim unaudited condensed consolidated financial statements should be read in conjunction with the Company’s most recently audited financial statements and the notes thereto in such above referenced Annual Report on Form 10-K.  All intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates
 
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Significant estimates include the useful lives of tangible and intangible assets, depreciation and amortization, allowances for doubtful accounts and loan losses, valuation of common and preferred stock issuances, and the valuation allowance on deferred tax assets. Actual results could differ from those estimates.
 
Cash and Cash Equivalents
 
The Company considers all highly liquid financial instruments purchased with an original maturity of three months or less to be cash equivalents.
 
Notes and Short-Term Receivable
 
The notes and short-term receivable are carried at cost, which approximates fair value. The Company measures the impairment of loans based on its historical loan collection experience and existing economic conditions. Impairment is recognized when management believes it is probable that payments will not be received on some portion of the loan, which is determined on an individual loan basis. The Company evaluates loans for impairment on an annual basis or when there are indications that the loan may not be collected. When management determines that a loan is impaired it is placed on non-accrual status, and an allowance for loan losses is established to recognize the estimated amount of impairment.  Payments received on non-accrual loans are generally applied to the outstanding principal balance. Loans are removed from non-accrual status when management believes that the borrower will resume making the payments required by the loan agreement.
 

 
6

 
 
FOREX INTERNATIONAL TRADING CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2013
(UNAUDITED)
 
Property and Equipment
 
Property and equipment are stated at cost and the related depreciation is computed using the straight-line method over the estimated useful lives of the respective assets.  Expenditures for repairs and maintenance are charged to operations as incurred.  Renewals and betterments are capitalized.  Upon the sale or retirement of an asset, the related costs and accumulated depreciation are removed from the accounts and any gain or loss is recognized in the results of operations.
 
Leasehold improvements are amortized over the lesser of the estimated life of the asset or the lease term.
 
As required by U.S. GAAP for long-lived assets, the Company evaluates the fair value of its property and equipment on an annual basis or whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable.  Any impairment of value is recognized when the carrying amount of the asset exceeds its fair value.  There were no impairment losses for the nine months ended September 30, 2013 and 2012.
 
Fair value measurements
 
Financial instruments and certain non-financial assets and liabilities are measured at their fair value as determined based on the assets highest and best use.  GAAP has established a framework for measuring fair value that is based on a hierarchy that requires that the valuation technique used be based on the most objective inputs available for measuring a particular asset or liability.  There are three broad levels in the fair value hierarchy that describe the degree of objectivity of the inputs used to determine fair value.  The fair value hierarchy is set forth below:
 
 
Level 1 — inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
 
 
Level 2 — inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
 
 
Level 3 — inputs to the valuation methodology are unobservable and significant to the fair value measurement. They are based on best information available in the absence of level 1 and 2 inputs.
 
The carrying value of financial instruments, which include cash and cash equivalents, notes receivable, notes payable, and accrued expenses, approximate their fair values due to the short-term nature of these financial instruments.
 
Treasury Stock
 
Treasury stock is recorded at cost.  The re-issuance of treasury shares is accounted for on a first in, first-out basis and any difference between the cost of treasury shares and the re-issuance proceeds are charged or credited to additional paid-in capital. During 2011, the Company bought back 38,000 of its own shares.
 
Income Taxes
 
The Company accounts for income taxes using the liability method, which provides for an asset and liability approach to accounting for income taxes.  Under this method, deferred tax assets and liabilities are recorded for future tax effects of temporary differences between the financial reporting and tax basis of assets and liabilities, and measured using the current tax rates and laws that are expected to be in effect when the underlying assets or liabilities are anticipated to be recovered or settled.  Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount of tax benefits expected to be realized.
 
U.S. GAAP requires that, in applying the liability method, the financial statement effects of an uncertain tax position be recognized based on the outcome that is more likely than not to occur.  Under this criterion the most likely resolution of an uncertain tax position should be analyzed based on technical merits and on the outcome that would likely be sustained under examination.  The Company had no uncertain tax positions as of September 30, 2013, and is current in its tax filings.
 
The Company's federal income tax returns are no longer subject to examination by the IRS for the years prior to 2009, and the related state income tax returns are no longer subject to examination by state authorities for the years prior to 2009.
 
Revenue Recognition .
 
The Company recognizes consulting fees when services have been rendered.
 
 
 
7

 
 
FOREX INTERNATIONAL TRADING CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2013
(UNAUDITED)
 
Share-Based Compensation
 
The Company calculates stock-based compensation expense including compensation expense for all share-based payment awards made to employees and directors including employee stock options, stock appreciation rights and restricted stock awards based on their estimated grant date fair values.  The value of the portion of the award that is ultimately expected to vest is recognized as an expense on a straight-line basis over any required service period.  No such expenses were recognized for the nine months ended September 30, 2013 and 2012.  
 
Loss Per Share
 
Basic loss per share is computed by dividing net loss available to common stockholders by the weighted-average number of common shares outstanding for the period.  Diluted loss per share considers the potential dilution that could occur if securities or other contracts to issue common stock were exercised or could otherwise cause the issuance of common stock, such as options, convertible notes and convertible preferred stock, were exercised or converted into common stock or could otherwise cause the issuance of common stock that then shared in loss. Such potential additional common shares are included in the computation of diluted earnings per share.  Diluted loss per share has not been computed for the nine months ended September 30, 2013 and 2012 because any potential additional common shares would reduce the reported loss per share and therefore have an antidilutive effect.
 
 Reclassification

Certain amounts from prior periods have been reclassified to conform to the current period presentation. These reclassifications had no
impact on the Company's net loss or cash flows.

3.  Liquidity and Going Concern

The Company has generated revenues in the first nine months of 2013 and in the fiscal year 2012, has had recurring losses from operations since inception, and has a negative working capital and stockholder’s deficiency as of September 30, 2013.  As of September 30, 2013, the Company has an accumulated deficit of $2,061,611.  This raises substantial doubt about its ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company’s ability to raise additional capital and implement its business plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

4. Investment in Joint Venture – Vulcan Oil & Gas Inc.

On February 13, 2012, Direct JV Investments Inc. ("JV"), a wholly-owned subsidiary of the Company entered into a Joint Venture Agreement (the "JV Agreement") with Vulcan Oil & Gas Inc. ("Vulcan"), whereby the Company would from time to time provide financing to certain Vulcan alternative, green and solar energy projects (the "Projects") with the goal of sharing in any rebates awarded by the government on any of the Projects. Pursuant to the JV Agreement, JV provided Vulcan with $68,000 in cash (the Funding") and credit for inventory valued at $31,328 for a total investment value of $99,328 (the "Investment").
 
On January 7, 2013, effective December 31, 2012, the Company, JV and Vulcan entered into an agreement pursuant to which the JV Agreement was terminated.  The Company issued to Vulcan a 4% convertible promissory note in the principal amount of $500,000 (the "Forex Note") and Vulcan issued to the Company a 10% Secured and Collateralized Promissory Note in the principal amount of $400,000 (the "Vulcan Note" and collectively with the Forex Note, the "Notes") in consideration of the Forex Note.  The Investment of $99,328 was written off as of December 31, 2012.
 
The Forex Note maturity date is December 31, 2013, which can be extended by the Company for an additional one year at which point the 4% interest rate will increase to 10% per annum.  The Forex Note may be prepaid without penalty.  The Forex Note conversion price is the Variable Conversion Price, which is defined as 50% multiplied by the average of the lowest three trading prices of the Company's common stock on the OTCBB during the 10-day trading period ending on the latest complete day of trading on the OTCBB prior to the date of conversion.  The Variable Conversion Price cannot be less than $0.002.  At no time will Vulcan convert any amount of the Forex Note into common stock that would result in Vulcan owning more than 4.9% of the common stock outstanding of the Company.
 
The Vulcan Note has a 10% one-time interest charge on the principal sum.  The interest rate will be increased by an additional 4% per annum (e.g. 14% per annum) in the event the principal is not paid by the December 31, 2013 maturity date.  The collateral or security of the Vulcan Note is 50,000 watts of solar modules.  The Vulcan Note may be prepaid without penalty.
 
After closing the Notes and recording of the difference as a debt discount, there are no further balances due between the parties and the JV Agreement is null and void. The Company has received Vulcan's consent (subject to a fee to be negotiated upon the Company entering an agreement, with a minimum fee in the amount of the Funding) to begin negotiations with private groups to purchase certain knowledge and assets for the production of proprietary solar modules, directly or via third party. While management is of the opinion that these discussions may successfully produce agreements, there can be no guarantee of this.
 
 
8

 
 
FOREX INTERNATIONAL TRADING CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2013
(UNAUDITED)


5.           Notes and Short-term Receivables

At September 30, 2013 and December 31, 2012, notes and short-term receivables, including accrued interest, consisted of:
 
   
2013
    2012      
Note receivable - Vulcan
  $ 430,000     $ 400,000      a.
Short-term note receivable - Cordellia
    -       80,777      b.
Note receivable - Apel Design
    -       16,578      c.
Total notes and short-term receivables
  $ 430,000     $ 497,355      
 
a.  
On January 7, 2013, effective December 31, 2012, the Company, JV, and Vulcan entered into an agreement  pursuant to which the JV Agreement was terminated. As part of the termination agreement, Vulcan issued to the Company a 10% Secured and Collateralized Promissory Note in the principal amount of $400,000. The interest rate will increase by 4% per annum if not paid by the maturity date. The note has a maturity date of December 31, 2013. In the first nine months of 2013, $30,000 of interest income was accrued for this note.
 
b.  
As of June 30, 2013, the Company had overpaid a note payable to CDOO in the amount of $80,777. This amount is classified as a note and short-term receivable in the accompanying condensed consolidated unaudited financial statements. This note receivable was charged to bad debt expense at June 30, 2013.
 
c.  
The note receivable from Amit Apel Design, Inc. (“Apel Design”) original principal of $15,000, interest at a 12% annual rate, maturing on August 13, 2012. Subsequently, the parties agreed to extend the maturity of the note to December 31, 2012. The note is secured by Apel Design’s inventory. As of June 30, 2013, the amount owed the Company by Apel Design including accrued interest was $17,471. This note receivable was charged to bad debt expense at June 30, 2013.
 
 
 
 
6.      Property and Equipment, Net
 
Property and equipment consisted of the following as of September 30, 2013 and December 31, 2012:
 
 
Estimated
           
 
Useful
           
 
Lives
 
2013
   
2012
 
Computers and equipment
3 years
  $ 12,539     $ 12,539  
Furniture
7 years
    9,430       9,430  
        21,969       21,969  
Less accumulated depreciation
      16,472       13,552  
      $ 5,497     $ 8,417  

Depreciation expense was $2,920 for the nine months ended September 30, 2013.

7. Other Assets

As of September 30, 2013, all intangibles have been fully amortized.

 
9

 
 
FOREX INTERNATIONAL TRADING CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2013
(UNAUDITED)

8. Notes Payable

At September 30, 2013 and at December 31, 2012, notes payable and accrued interest consisted of:

   
2013
   
2012
     
Notes payable and accrued interest - Rasel
  $ 144,570     $ 140,778      a.
Note payable and accrued interest - Glendon
    94,377       81,829      b.
Note payable and accrued interest - Third Party Financier
    43,068              c.
Note payable and accrued interest - Vulcan (net of debt discount of $25,000 and $100,000 as of September 30, 2013 and December 31, 2012, respectively)
    490,000       400,000      d.
    $ 772,015     $ 622,607      
 
a) Rasel LTD - Convertible Notes Payable
 
On October 6, 2009 the Company signed a note payable for $25,000 to Rasel due on October 6, 2010, bearing interest at 4% per annum. The proceeds were used to pay for half of existing accounts payable 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 due on October 20, 2010, bearing interest at 4% per 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 due on October 30, 2011, bearing interest at 4% per annum.  These proceeds were used for working capital and expenditures. On January 22, 2010, the Company signed an amendment to extend the maturity date of the promissory notes in the amount of $25,000 and $50,000 dated October 6, 2009 and October 20, 2009, respectively, to October 30, 2011. On March 2, 2011, the Company and Rasel agreed to extend the maturity of all notes to December 31, 2012 in consideration of adding a conversion feature to the notes with either a 5% discount to the market price or a fixed price of $0.60.  The extension of maturity was effective as of December 30, 2010.
 
The balance of the notes as of September 30, 2013 and December 31, 2012 was $144,570 and $140,778, respectively, which includes accrued interest in the amounts of $19,570 and $15,778 at September 30, 2013 and December 31, 2012, respectively. The note is currently in default since the beginning of 2013; the Company will attempt to reach an amicable settlement with the counterparty.
 
b) Glendon Note Payable
 
On September 30, 2012, the Company converted a payable in the amount of $155,242 to a note payable. The note bears annual interest at 10%, and was to mature on December 31, 2012. The Company has negotiated an extension to the maturity date until December 31, 2013. The balance at September 30, 2013 and December 31, 2012, including accrued interest, is $94,377 and $81,829, respectively.
 
c) Issuance of note payable to third party

On July 24, 2013, the Company entered into a Securities Purchase Agreement with a third party financing source ("Financer"), for the sale of an 8% convertible note in the principal amount of $42,500 (the "July 2013 Note").  The financing closed on July 31, 2013.

The July 2013 Note bears interest at the rate of 8% per annum.  All interest and principal must be repaid on April 29, 2014.  The July 2013 Note is convertible into common stock, at Financer’s option, at the greater of a 42% discount to the average of the three lowest closing bid prices of the common stock during the 10 trading day period prior to conversion or $0.00009.  In the event the Company prepays the July 2013 Note in full, the Company is required to pay to Financer an amount in cash equal to all principal, interest and any other amounts owing multiplied by (i) 112% if prepaid during the period commencing on the closing date through 30 days thereafter, (ii) 121% if prepaid 31 days following the closing through 60 days following the closing and (iii) 126% if prepaid 61 days following the closing through 90 days following the closing and (iv) 131% if prepaid 91 days following the closing through 120 days following the closing and (v) 136% if prepaid 121 days following the closing through 150 days following the closing and (vi) 141% if prepaid 151 days following the closing through 180 days following the closing.  After the expiration of 180 days following the date of the Note, the Company has no right of prepayment.   

Financer has agreed to restrict its ability to convert the July 2013 Note and receive shares of common stock such that the number of shares of common stock held by them in the aggregate and their affiliates after such conversion or exercise does not exceed 9.99% of the then issued and outstanding shares of common stock.   The total net proceeds the Company received from this offering was $42,500, less attorneys fees.  As of the date of the July 2013 Note, the Company is obligated on the Note issued to Financer in connection with the offering. The July 2013 Note is a debt obligation arising other than in the ordinary course of business, which constitutes a direct financial obligation of the Company. 
 
 
 
10

 
 
FOREX INTERNATIONAL TRADING CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2013
(UNAUDITED)

 
The Company claims an exemption from the registration requirements of the Securities Act of 1933, as amended  (the "Act") for the private  placement  of these  securities  pursuant  to  Section  4(2) of the Act  and/or  Regulation  D promulgated  there under since,  among other  things,  the  transaction  did not involve a public  offering,  Financer is an accredited  investor, Financer had access to information about the Company  and their  investment,  Financer  took the  securities  for investment and not resale, and the Company took appropriate measures to restrict the transfer of the securities.

There are currently 54,800,000 common shares reserved for conversion by Financier. As of September 30, 2013, $568 has been accrued in interest on this note payable.

d) Note Payable to Vulcan

On January 7, 2013, effective December 31, 2012, the Company, JV and Vulcan entered an agreement  pursuant to which the JV Agreement was terminated, the Company issued to Vulcan a 4% convertible promissory note in the principal amount of $500,000 (the "Forex Note") and Vulcan issued to the Company a 10% Secured and Collateralized Promissory Note in the principal amount of $400,000. The Company recognized a debt discount in the amount of $100,000 for the difference in the face value of the note issued and the note received from the same party. The face value of the note payable is shown net of the debt discount. This debt discount will be amortized over the one-year life of the note. The note has a maturity date of December 31, 2013, and can be extended by the Company for an additional one year at which point the 4% interest rate will increase to 10% per annum. The Forex Note may be prepaid without penalty. The Forex Note conversion price is the Variable Conversion Price, which is defined as 50% multiplied by the average of the lowest three trading prices of the Company's common stock on the OTCBB during the 10-day trading period ending on the latest complete day of trading on the OTCBB prior to the date of conversion. The Variable Conversion Price cannot be less than $0.002. At no time will Vulcan convert any amount of the Forex Note into common stock that would result in Vulcan owning more than 4.99% of the common stock outstanding of the Company.

As of September 30, 2013, $75,000 of the debt discount has been amortized in the accompanying financial statements.

9.      Stockholders’ Equity

Authorized Shares
 
The Company has 400,000,000 authorized shares of its $0.00001 par value common stock and 20,000,000 shares of its $0.00001 par value Preferred Stock Series B as of September 30, 2013 and December 31, 2012, respectively. On September 26, 2012, the Company authorized 10,000 Preferred Stock Series C shares, par value $0.00001.
 
Common Shares:
 
Effective December 31, 2012, the Company issued common shares to former directors William Glass, Stewart Reich, and Liat Franco to settle their Director and Officer fees. To Messrs. Glass and Reich, the Company issued 2,042,740 restricted shares each valued at $20,427. To Mrs. Franco, formerly a Director and the CEO of the Company, the Company issued 554,521 restricted shares valued at $5,545.

On July 24, 2013, the Company entered into a Securities Purchase Agreement with Financer, for the sale of an 8% convertible note in the principal amount of $42,500 (the " July 2013 Note").  The financing closed on July 31, 2013.

The July 2013 Note bears interest at the rate of 8% per annum.  All interest and principal must be repaid on April 29, 2014.  The July 2013 Note is convertible into common stock, at Financer’s option, at a 42% discount to the average of the three lowest closing bid prices of the common stock during the 10 trading day period prior to conversion.  In the event the Company prepays the July 2013 Note in full, the Company is required to pay to Financer an amount in cash equal to all principal, interest and any other amounts owing multiplied by (i) 112% if prepaid during the period commencing on the closing date through 30 days thereafter, (ii) 121% if prepaid 31 days following the closing through 60 days following the closing and (iii) 126% if prepaid 61 days following the closing through 90 days following the closing and (iv) 131% if prepaid 91 days following the closing through 120 days following the closing and (v) 136% if prepaid 121 days following the closing through 150 days following the closing and (vi) 141% if prepaid 151 days following the closing through 180 days following the closing.  After the expiration of 180 days following the date of the July 2013 Note, the Company has no right of prepayment.   

Financer has agreed to restrict its ability to convert the July 2013 Note and receive shares of common stock such that the number of shares of common stock held by them in the aggregate and their affiliates after such conversion or exercise does not exceed 9.99% of the then issued and outstanding shares of common stock.   The total net proceeds the Company received from this Offering was $42,500, less attorneys fees.  As of the date of the July 2013 Note, the Company is obligated on the July 2013 Note issued to Financer in connection with the offering. The July 2013 Note is a debt obligation arising other than in the ordinary course of business, which constitutes a direct financial obligation of the Company. 

The Company claims an exemption from the registration requirements of the Securities Act of 1933, as amended  (the "Act") for the private  placement  of these  securities  pursuant  to  Section  4(2) of the Act  and/or  Regulation  D promulgated  there under since,  among other  things,  the  transaction  did not involve a public  offering,  Financer is an accredited  investor, Financer had access to information about the Company  and their  investment,  Financer  took the  securities  for investment and not resale, and the Company took appropriate measures to restrict the transfer of the securities.
 
 
11

 
 
FOREX INTERNATIONAL TRADING CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2013
(UNAUDITED)

 
There are currently 54,800,000 common shares reserved for conversion by Financier.
 
Treasury Stock
 
On April 25, 2011, the Company issued a press release announcing that its Board of Directors approved a share repurchase program.  Under the program, the Company is authorized to purchase up to 1,000,000 of its shares of common stock in open market transactions at the discretion of management.  All stock repurchases will be subject to the requirements of Rule 10b-18 under the Securities Exchange Act of 1934, as amended and other rules that govern such purchases.  As of September 30, 2013 and December 31, 2012, the Company had repurchased 38,000 of its common shares in the open market, which were returned to treasury.
 
    Total Number of    
Average
   
Shares Purchased
   
Shares Remaining
 
Month
 
Shares Purchased
   
Price Paid
   
Under Repurchase Plan
    Under Repurchase Plan  
                         
                         
                         
May 2011
    23,500     $ 0.4095       23,500       976,500  
August 2011
    9000     $ 0.1007       9,000       967,500  
November 2011
    5500     $ 0.0964       5,500       962,000  
Weightedaverage price paid per share     38,000     $ 0.2910       38,000          

Series B Preferred Shares
 
On November 1, 2011, the Company and certain creditors entered into a Settlement Agreement (the "Settlement Agreement") whereby without admitting any wrongdoing on either part, the parties settled all previous agreements and resolved any existing disputes.  Under the terms of the Settlement Agreement, the Company agreed to issue the creditors 45,000 shares of Series B Preferred Stock of the Company on a pro-rata basis.  Following the issuance and delivery of the shares of Series B Preferred Stock to said creditors, as well as surrendering the undelivered shares, the Settlement Agreement resulted in the settlement of all debts, liabilities and obligations between the parties.
 
The Series B Preferred Stock has a stated value of $100 per share and is convertible into the Company’s common stock at a conversion price of $0.30 per share representing 15,000,000 common shares. Furthermore, the Series B Preferred Stock votes on an as converted basis and carries standard anti-dilution rights. These rights were subsequently removed, except in cases of stock dividends or splits.

Series C Preferred Shares

On April 29, 2011, GV Global Communications, Inc. (“GV”) provided funding to the Company in the aggregate principal amount of $111,000 (the “Loan”).  On September 25, 2012, the Company and GV entered into a Conversion Agreement pursuant to which the Company agreed to convert the Loan into 10,000 shares of Series C Preferred Stock of the Company, which was approved by the Board of Directors.

Each share of Series C Preferred Stock is convertible, at the option of GV, into such number of shares of common stock of the Company as determined by dividing the Stated Value (as defined below) by the Conversion Price (as defined below).  The Conversion Price for each share is equal to a 50% discount to the average of the lowest three lowest closing bid prices of the Company’s common stock during the 10 day trading period prior to the conversion with a minimum conversion price of $0.002.  The stated value is $11.00 per share (the “Stated Value”).  The Series C Preferred Stock has no liquidation preference, does not pay dividends and the holder of Series C Preferred Stock shall be entitled to one vote for each share of common stock that the Series C Preferred Stock shall be convertible into.   GV has contractually agreed to restrict its ability to convert the Series C Preferred Stock and receive shares of the Company's common stock such that the number of shares of the Company's common stock held by it and its affiliates after such conversion does not exceed 4.9% of the then issued and outstanding shares of the Company's common stock.

The issuance of the Series C Preferred Stock was made in reliance upon exemptions from registration pursuant to Section 4(2) under the Securities Act of 1933 and Rule 506 promulgated under Regulation D thereunder.  GV is an accredited investor as defined in Rule 501 of Regulation D promulgated under the Securities Act of 1933.  
 
 
 
12

 
 
FOREX INTERNATIONAL TRADING CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2013
(UNAUDITED)
 
10. Related Parties

Related parties are natural persons or other entities that have the ability, directly or indirectly, to control another party or exercise significant influence over the party in making financial and operating decisions. Related parties include other parties that are subject to common control or that are subject to common significant influences.
 
Effective December 31, 2012 the Company issued common shares to former directors William Glass, Stewart Reich, and Liat Franco to settle their Director and Officer fees. To Messrs. Glass and Reich, the Company issued 2,042,740 restricted shares each valued at $20,427. To Mrs. Franco, formerly a Director and the CEO of the Company, the Company issued 554,521 restricted shares valued at $5,545. As of December 31, 2012, the payables for accrued directors and officer’s fees of $34,801 to Mr. Glass, Mr. Reich, and Liat Franco were settled with the issuance of common stock.

Effective January 2, 2012, Erik Klinger was appointed by the Company to serve as the Chief Financial Officer, on a part-time basis, and a Director of the Company.  Mr. Klinger earned fees of $49,166 in 2012 and $20,175 in the nine months ended September 30, 2013.
 
Robert Morris Price was appointed by the Company to serve as the President, Chief Executive Officer, and Treasurer as well as Chairman of the Company in April 2012. On May 20. 2013, Robert Price resigned as CEO of the Company to pursue other opportunities. This decision was not the result of any disagreement with the Company. Erik Klinger became the Chief Executive Officer effective the same day. Mr. Klinger also retains the title of Chief Financial Officer until a suitable replacement can be found.

David Price, the son of Robert Morris Price, earned consulting fees of $20,000 in 2012.

During the nine months ended September 30, 2013, the Company paid no rent for the use of headquarters in El Segundo, California, though it did pay minimal fees for office expenses.

10.       Contingencies

Legal Proceedings
 
From time to time, the Company may be involved in various litigation matters, which arise in the ordinary course of business.  There is currently no litigation that management believes will have a material impact on the financial position of the Company.
 
MDA Transaction
 
On September 2, 2013, effective September 1, 2013, the Company entered into an Evaluation License Agreement (the "MDA Agreement") with Micrologic Design Automation, Inc. ("MDA"), pursuant to which MDA will temporarily license to the Company, on a non-exclusive and royalty-free basis, certain technology and related materials for any purpose related to evaluating NanoDRC, NanoRV and NanoLVS technology. The MDA Agreement expires on November 1, 2013 and contains standard confidentiality terms. On November 6, 2013, the parties agreed to extend the MDA Agreement until December 31, 2013.  Upon expiration of the MDA Agreement, the Company must return the licensed technology to MDA. In the event the Company breaches the confidentiality provision in the MDA Agreement, the Company is required to issue 300 million shares of common stock and deliver the shares to MDA.
 
11.      Per Share Information

Loss per share
 
Basic loss per share of common stock is computed by dividing the net loss by the weighted-average number of shares of common stock outstanding.  Diluted loss per share of common stock (“Diluted EPS”) is computed by dividing the net loss by the weighted-average number of shares of common stock and dilutive common stock equivalents and convertible securities then outstanding.  At September 30, 2013 and September 30, 2012, there were 249,523,503 and 15,230,068 of potentially dilutive common stock equivalents outstanding, respectively. The potentially dilutive common stock equivalents at September 30, 2013 arise from (i) the issuance on December 7, 2011 of 45,000 Series B Preferred Shares which are convertible into 15 million shares, (ii) the issuance of the Rasel note which is convertible into 240,949 shares, (iii) the issuance of 10,000 Series C Preferred Shares having a stated value of $100 per share which are convertible into 40,000,000 common shares, given recent market prices, and notwithstanding a restriction against owning more than 4.99% of the Company’s stock, and (iv) the issuance of a $500,000 convertible note payable to Vulcan, which is convertible into 183,400,000 shares, given recent market prices, and notwithstanding a restriction against owning more than 4.99% of the Company’s stock, and (iv) the issuance of a note to a third party Financier, which based on a theoretical conversion at September 30, 2013 would have converted into 10,882,554 shares of common stock. The potentially dilutive common stock equivalents at September 30, 2012 arise from the issuance on December 7, 2011 of 45,000 Series B Preferred Shares convertible into 15 million shares and the issuance of the Rasel note convertible into 230,068 shares. The computation of Diluted EPS does not assume exercise or conversion of securities that would have an anti-dilutive effect on the net loss per common share.

12.      Subsequent Events

The Company has evaluated subsequent events from the balance sheet date through the date the accompanying unaudited condensed consolidated financial statements became available to be issued.

Effective October 21, 2013, GV notified the Company of its intention to convert 345 of Series C Preferred into 1,897,500 shares of common stock of the Company, representing a conversion price of $0.002 per share. The Company instructed its transfer agent to issue the required shares to GV. On November 5, 2013, 2013, GV notified the Company of the additional conversion of 380 of Series C Preferred into 2,090,000 shares of common stock of the Company. After accounting for the conversions, GV is holding 9,275 of Series C Preferred shares.  On November 12, 2013, 2013, GV notified the Company of the additional conversion of 380 of Series C Preferred into 2,090,000 shares of common stock of the Company. After accounting for the conversions, GV is holding 8,895 of Series C Preferred shares.
 
On November 6, 2013, the Company and Micrologic Design Automation, Inc. ("MDA") extended the expiration date of their agreement until December 31, 2013.

 
13

 

ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
 
 The following discussion and analysis summarizes the significant factors affecting our condensed consolidated results of operations, financial condition and liquidity position for the three months ended September 30, 2013. This discussion and analysis should be read in conjunction with our audited financial statements and notes thereto included in our Annual Report on Form 10-K for our year-ended December 31, 2012 and the condensed consolidated unaudited financial statements and related notes included elsewhere in this filing. The following discussion and analysis contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements.

Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward looking statements, including without limitation, statements related to our plans, strategies, objectives, expectations, intentions and adequacy of resources. Investors are cautioned that such forward-looking statements involve risks and uncertainties including without limitation the following: (i) our plans, strategies, objectives, expectations and intentions are subject to change at any time at our discretion; (ii) our plans and results of operations will be affected by our ability to manage growth; and (iii) other risks and uncertainties indicated from time to time in our filings with the Securities and Exchange Commission.

In some cases, you can identify forward-looking statements by terminology such as ‘‘may,’’ ‘‘will,’’ ‘‘should,’’ ‘‘could,’’ ‘‘expects,’’ ‘‘plans,’’ ‘‘intends,’’ ‘‘anticipates,’’ ‘‘believes,’’ ‘‘estimates,’’ ‘‘predicts,’’ ‘‘potential,’’ or ‘‘continue’’ or the negative of such terms or other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of such statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. We are under no duty to update any of the forward-looking statements after the date of this Report.

This section of the report should be read together with Notes of the Company unaudited consolidated financials. The unaudited consolidated statements of operations for the three-month and six-month periods ended September 30, 2013 and September 30, 2012 are compared in the sections below:

General Overview

Forex International Trading Corp. (the “Company”) was incorporated on July 22, 2009 under the laws of the State of Nevada and is headquartered in El Segundo, California.  The Company’s principal business activities have been to engage in foreign currency market trading for non-US resident professionals and retail clients over its web-based trading systems. While these trading operations have been closed, the Company continues to operate in the consulting segment of the foreign currency market, leveraging its contacts and knowledge, and earned revenue in the first nine months of 2013 by leveraging its consulting expertise in the area of foreign exchange. In addition, the Company is analyzing investments in joint ventures and is selectively pursuing acquisitions.

On September 2, 2013, effective September 1, 2013, the Company entered into an Evaluation License Agreement (the "MDA Agreement") with Micrologic Design Automation, Inc. ("MDA"), pursuant to which MDA will temporarily license to the Company, on a non-exclusive and royalty-free basis, certain technology and related materials for any purpose related to evaluating NanoDRC, NanoRV and NanoLVS technology. The MDA Agreement expires on November 1, 2013 and contains standard confidentiality terms. Upon expiration of the MDA Agreement, the Company must return the licensed technology to MDA. In the event the Company breaches the confidentiality provision in the MDA Agreement, the Company is required to issue 300 million shares of common stock and deliver the shares to MDA. On November 6, 2013, the parties agreed to extend the MDA Agreement until December 31, 2013.
 
 
14

 

 
Results of Operations:
Three months ended September 30, 2013 and 2012

A comparison of the consolidated statements of operations for the three months ended September 30, 2013 and 2012 is as follows:
 
Revenues:
The following table summarizes our revenues for the three months ended September 30, 2013 and 2012:
 
Three months ended September 30,
 
2013
   
2012
 
Total revenues
 
$
30,000
   
$
0
 
 
The Company was able to leverage its consulting expertise in the area of foreign exchange in the third quarter of 2013.
   
Operating expenses:
The following table summarizes our operating expenses for the three months ended September 30, 2013 and 2012:
 
Three months ended September 30,
 
2013
   
2012
 
Total operating expenses
 
$
66,639
   
$
49,733
 
 
The Company had roughly comparable operating expenses from the prior period.

Other income (expenses):
The following table summarizes our other income (expenses) for the three months ended September 30, 2013 and 2012:

Three months ended September 30,
 
2013
   
2012
 
Interest (expense) net of interest income
 
$
10,000
   
$
4,065
 
Interest expense
   
(13,373
)    
(16,101
Loss on settlement of GV Global note
   
-
     
(111,340
)
Net other income/expense      (3,373 )      (123,376 )
                                                                                                                                  
The Company has reduced its debt outstanding by paying off the Cordellia note during the fourth quarter of 2012. On September 25, 2012, the Company and GV entered into a separate conversion agreement pursuant to which the Company agreed to convert the loan into 10,000 shares of Series C Preferred Stock of the Company, which resulted in a loss on settlement of debt in the amount of $111,340 recognized in the fiscal year ended December 31, 2012.

The Company has a note receivable from Vulcan at 10% per annum with a face value of $400,000, and therefore accrued $10,000 of interest income during the third quarter. The Company has a note payable with a face value of $500,000 and a debt discount of $100,000 to Vulcan where $25,000 of the debt discount was amortized during the quarter. Year to date, the Company has amortized $75,000 of the debt discount. The Company calculated the interest at 4% per annum based on the average face value of the note during the quarter.

Nine months ended September 30, 2013 and 2012

A comparison of the consolidated statements of operations for the nine months ended September 30, 2013 and 2012 is as follows:
 
Revenues:
The following table summarizes our revenues for the nine months ended September 30, 2013 and 2012:
 
Nine months ended September 30,
 
2013
   
2012
 
Total revenues
 
$
100,000
   
$
7,106
 
 
Year to date in 2013, the Company was able to leverage its consulting expertise in the area of foreign exchange. In 2012, the Company derived some income for foreign exchange trading activities.
   
Operating expenses:
The following table summarizes our operating expenses for the nine months ended September 30, 2013 and 2012:
 
Nine months ended September 30,
 
2013
   
2012
 
Total operating expenses
 
$
336,275
   
$
287,703
 
 
The Company has downsized its operations, lowering the costs of professional fees and salaries in the current period compared to the same period in 2012. In the nine months ended September 30, 2013, however, the Company recorded a bad debt allowance of $98,248 to reflect the low probability of collecting the Apel and Cordellia receivables.
 
 
 
15

 

 
Other income (expenses):

The following table summarizes our other income (expenses) for the nine months ended September 30, 2013 and 2012:
 
Nine months ended September 30,
 
2013
   
2012
 
Interest income
 
$
30,893
   
$
21,406
 
Interest expense
   
(31,545
)    
(68,862
Recovery of credit losses
   
-
     
100,000
 
Gain/(loss) on settlement of notes
   
-
     
(111,340
Net other income / (expense)      (652 )      (58,796 )
                                                                                                                                                  
The Company has reduced its debt outstanding by paying off the Cordellia note during the fourth quarter of 2012. On September 25, 2012, the Company and GV entered into a separate conversion agreement pursuant to which the Company agreed to convert the loan into 10,000 shares of Series C Preferred Stock of the Company, which resulted in a loss on settlement of debt in the amount of $111,340 recognized in the fiscal year ended December 31, 2012.

The Company has a note receivable from Vulcan at 10% per annum with a face value of $400,000, and therefore accrued $30,000 of interest income during the first quarter. The Company has a note payable with a face value of $500,000 and a debt discount of $100,000 to Vulcan where $25,000 of the debt discount was amortized during the quarter. The Company calculated the interest at 4% per annum based on the average face value of the note during the quarter.

Liquidity and Capital Resources

Our cash and cash equivalents were $5,725 and $618 for the periods ended September 30, 2013 and December 31, 2012, respectively, a decrease of $5,107.

Cash used by operating activities for the nine months ended September 30, 2013 and 2012 was $(35,257), and $(393,602), respectively. The net loss in the first nine months of September 2012 was much larger, and the working capital position in the first nine months of 2013 improved over the prior period. Receivables are down in the current period, and accounts payable have decreased less than in the prior period. There were also more non-cash related items in the current period compared to the prior period. In the nine months ended September 30, 2013, the Company amortized $75,000 of the debt discount for the Vulcan note, and also recorded $98,248 in bad debt expense. In the nine months ended September 30, 2012, the Company recognized a net loss on settlement of the GV Global Note Payable in the amount of $111,340.

Cash provided by (used in) investing activities for the three months ended September 30, 2013 and 2012 was $0 and $757,598, respectively. During the nine months ended September 30, 2012, the Company issued a $15,000 note receivable and invested $31,328 in a joint venture, which was later terminated in the fiscal year ended December 31, 2012. In the first nine months of 2012, the Company collected $803,926 from a note receivable from Triple 8.  

Cash provided by (used in) financing activities for the three months ended September 30, 2013 and 2012 was $40,364 and $(773,732), respectively.  During the nine months ended September 30, 2013, the Company borrowed more under a new note from Financier that was issued during the third quarter of 2013. During the same nine month period of 2012, the Company paid $773,732 to Cordellia in accordance with the Triple 8 settlement.

On February 13, 2012, DirectJV entered into a Joint Venture Agreement (the "JV Agreement") with Vulcan Oil & Gas Inc. ("Vulcan"), whereby the Company would from time to time provide financing to certain Vulcan alternative, green and solar energy projects (the "Projects") with the goal of sharing in any rebates awarded by the government on any of the Projects. Pursuant to the JV Agreement, Direct JV provided Vulcan with $68,000 in cash (the Funding") and credit for inventory valued at $31,328 for a total investment value of $99,328 (the "Investment").
 
On January 7, 2013, effective December 31, 2012, the Company, DirectJV and Vulcan entered an agreement  pursuant to which the Direct JV Agreement was terminated, the Company issued to Vulcan a 4% convertible promissory note in the principal amount of $500,000 (the "Forex Note") and Vulcan issued to the Company a 10% Secured Promissory Note in the principal amount of $400,000 (the "Vulcan Note" and collectively with the Forex Note, the "Notes") in consideration of the Forex Note.
 
 
The Forex Note maturity date is December 31, 2013, which can be extended by the Company for an additional one year at which point the 4% interest rate will increase to 10% per annum. The Forex Note may be prepaid without penalty. The Forex Note conversion price is the Variable Conversion Price, which is defined as 50% multiplied by the average of the lowest three trading prices of the Company's common stock on the OTCBB during the 10 day trading period ending on the latest complete day of trading on the OTCBB prior to the date of conversion. The Variable Conversion Price cannot be less than $0.002. At no time will Vulcan convert any amount of the Forex Note into common stock that would result in Vulcan owning more than 4.9% of the common stock outstanding of the Company.
 
 
16

 
 
The Vulcan Note has a 10% one-time interest charge on the principal sum. The interest rate will be increased by an additional 4% per annum (e.g. 14% per annum) in the event the principal is not paid by the December 31, 2013 maturity date. The collateral or security of the Vulcan Note is 50,000 watts of solar modules. The Vulcan Note may be prepaid without penalty.
 
After closing the Notes and recording of the difference as a debt discount, there are no further balances between the parties and the JV Agreement is null and void. The Company has received Vulcan's consent (subject to a fee to be negotiated upon the Company entering an agreement, with a minimum fee in the amount of the Funding) to begin negotiations with private groups to purchase certain knowledge and assets for the production of proprietary solar modules, directly or via third party. While management is of the opinion that these discussions may successfully produce agreements, there can be no guarantee of this.
 
We plan to raise working capital that will allow us to conduct our business for the next twelve months. There is no guarantee regarding our ability to raise that capital. 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.    In order to implement our business plan and pay various administrative expenses on a minimal basis for the next 12 months, we expect that we will need approximately $25,000 per month, minimum.   We expect to be able to remain in operations for a period of 12 months with cash on hand and/or cash from collecting receivables and/or other debts.  The Company expects that its operating results will fluctuate significantly from quarter to quarter in the future and will depend on a number of factors including the state of the worldwide economy and financial markets, which are outside the Company's control.

Debt Financing Arrangements

a) Rasel LTD - Convertible Notes Payable
 
On October 6, 2009 the Company signed a note payable for $25,000 to Rasel due on October 6, 2010, bearing interest at 4% per annum. The proceeds were used to pay for half of existing accounts payable 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 due on October 20, 2010, bearing interest at 4% per 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 due on October 30, 2011, bearing interest at 4% per annum.  These proceeds were used for working capital and expenditures. On January 22, 2010, the Company signed an amendment to extend the maturity date of the promissory notes in the amount of $25,000 and $50,000 dated October 6, 2009 and October 20, 2009, respectively, to October 30, 2011. On March 2, 2011, the Company and Rasel agreed to extend the maturity of all notes to December 31, 2012 in consideration of adding a conversion feature to the notes with either a 5% discount to the market price or a fixed price of $0.60.  The extension of maturity was effective as of December 30, 2010.
 
The balance of the notes as of September 30, 2013 and December 31, 2012 was $144,570 and $140,778, respectively, which includes accrued interest in the amounts of $19,570 and $15,778 at September 30, 2013 and December 31, 2012, respectively. The note is currently in default since the beginning of 2013; the Company will attempt to reach an amicable settlement with the counterparty.
 
b) Glendon Note Payable
 
On September 30, 2012, the Company converted a payable in the amount of $155,242 to a note payable. The note bears annual interest at 10%, and was to mature on December 31, 2012. The Company has negotiated an extension to the maturity date until December 31, 2013. The balance at September 30, 2013 and December 31, 2012, including accrued interest, is $94,377 and $81,829, respectively. Consulting income in 2013 has been netted against this payable.
 
c) Note Payable to Vulcan

On January 7, 2013, effective December 31, 2012, the Company, JV and Vulcan entered an agreement pursuant to which the JV Agreement was terminated, the Company issued to Vulcan a 4% convertible promissory note in the principal amount of $500,000 (the "Forex Note") and Vulcan issued to the Company a 10% Secured and Collateralized Promissory Note in the principal amount of $400,000. The Company recognized a debt discount in the amount of $100,000 for the difference in the face value of the note issued and the note received from the same party. The face value of the note payable is shown net of the debt discount. This debt discount will be amortized over the one-year life of the note. The note has a maturity date of December 31, 2013, and can be extended by the Company for an additional one year at which point the 4% interest rate will increase to 10% per annum. The Forex Note may be prepaid without penalty. The Forex Note conversion price is the Variable Conversion Price, which is defined as 50% multiplied by the average of the lowest three trading prices of the Company's common stock on the OTCBB during the 10-day trading period ending on the latest complete day of trading on the OTCBB prior to the date of conversion. The Variable Conversion Price cannot be less than $0.002. At no time will Vulcan convert any amount of the Forex Note into common stock that would result in Vulcan owning more than 4.99% of the common stock outstanding of the Company.

As of September 30, 2013, $75,000 of the debt discount has been amortized in the accompanying financial statements.

d) Issuance of note payable to third party

On July 24, 2013, the Company entered into a Securities Purchase Agreement with a third party financing source ("Financer"), for the sale of an 8% convertible note in the principal amount of $42,500 (the "July 2013 Note").  The financing closed on July 31, 2013.

The July 2013 Note bears interest at the rate of 8% per annum.  All interest and principal must be repaid on April 29, 2014.  The July 2013 Note is convertible into common stock, at Financer’s option, at a 42% discount to the average of the three lowest closing bid prices of the common stock during the 10 trading day period prior to conversion.  In the event the Company prepays the July 2013  Note in full, the Company is required to pay to Financer an amount in cash equal to all principal, interest and any other amounts owing multiplied by (i) 112% if prepaid during the period commencing on the closing date through 30 days thereafter, (ii) 121% if prepaid 31 days following the closing through 60 days following the closing and (iii) 126% if prepaid 61 days following the closing through 90 days following the closing and (iv) 131% if prepaid 91 days following the closing through 120 days following the closing and (v) 136% if prepaid 121 days following the closing through 150 days following the closing and (vi) 141% if prepaid 151 days following the closing through 180 days following the closing.  After the expiration of 180 days following the date of the July 2013 Note, the Company has no right of prepayment.   

Financer has agreed to restrict its ability to convert the July 2013 Note and receive shares of common stock such that the number of shares of common stock held by them in the aggregate and their affiliates after such conversion or exercise does not exceed 9.99% of the then issued and outstanding shares of common stock.   The total net proceeds the Company received from this offering was $42,500, less attorneys fees.  As of the date of the July 2013 Note, the Company is obligated on the July 2013 Note issued to Financer in connection with the offering. The July 2013 Note is a debt obligation arising other than in the ordinary course of business, which constitutes a direct financial obligation of the Company. 

The Company claims an exemption from the registration requirements of the Securities Act of 1933, as amended  (the "Act") for the private  placement  of these  securities  pursuant  to  Section  4(2) of the Act  and/or  Regulation  D promulgated  there under since,  among other  things,  the  transaction  did not involve a public  offering,  Financer is an accredited  investor, Financer had access to information about the Company  and their  investment,  Financer  took the  securities  for investment and not resale, and the Company took appropriate measures to restrict the transfer of the securities.

There are currently 54,800,000 common shares reserved for conversion by Financier. As of September 30, 2013, $568 has been accrued in interest on this note payable.

Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company's financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

Critical Accounting Policies and Estimates

Our financial statements and related public financial information are based on the application of accounting principles generally accepted in the United States (“GAAP”). GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenues and expense amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use of estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements.
 
 
17

 

 
Use of Estimates
 
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Significant estimates include the useful lives of tangible and intangible assets, depreciation and amortization, allowances for doubtful accounts and loan losses, valuation of common and preferred stock issuances, and the valuation allowance on deferred tax assets. Actual results could differ from those estimates.
 
Cash and Cash Equivalents
 
The Company considers all highly liquid financial instruments purchased with an original maturity of three months or less to be cash equivalents.
 
Notes and Short-Term Receivable
 
The notes and short-term receivable are carried at cost, which approximates fair value. The Company measures the impairment of loans based on its historical loan collection experience and existing economic conditions. Impairment is recognized when management believes it is probable that payments will not be received on some portion of the loan, which is determined on an individual loan basis. The Company evaluates loans for impairment on an annual basis or when there are indications that the loan may not be collected. When management determines that a loan is impaired it is placed on non-accrual status, and an allowance for loan losses is established to recognize the estimated amount of impairment.  Payments received on non-accrual loans are generally applied to the outstanding principal balance. Loans are removed from non-accrual status when management believes that the borrower will resume making the payments required by the loan agreement.
 
Revenue Recognition
 
Income from foreign currency operations is earned by referring potential customers to foreign exchange trading companies.  Foreign exchange trading companies remit a percentage of their revenues to the Company in exchange for customer leads, which the Company recognizes when the exchange trading occurs.
 
The Company recognizes consulting fees when services have been rendered.
 
Share-Based Compensation
 
The Company calculates stock-based compensation expense including compensation expense for all share-based payment awards made to employees and directors including employee stock options, stock appreciation rights and restricted stock awards based on their estimated grant date fair values.  The value of the portion of the award that is ultimately expected to vest is recognized as an expense on a straight-line basis over any required service period.  No such expenses were recognized for the nine months ended September 30, 2013 and 2012.  
 
Loss Per Share
 
Basic loss per share is computed by dividing net loss available to common stockholders by the weighted-average number of common shares outstanding for the period.  Diluted loss per share considers the potential dilution that could occur if securities or other contracts to issue common stock were exercised or could otherwise cause the issuance of common stock, such as options, convertible notes and convertible preferred stock, were exercised or converted into common stock or could otherwise cause the issuance of common stock that then shared in loss. Such potential additional common shares are included in the computation of diluted earnings per share.  Diluted loss per share has not been computed for the nine months ended September 30, 2013 and 2012 because any potential additional common shares would reduce the reported loss per share and therefore have an antidilutive effect.
 
Dividends
The Company has not yet adopted any policy regarding payment of dividends.  No dividends have been paid or declared since the Date of Inception.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a Smaller Reporting Company, the Company is not required to include the disclosure under this Item.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As of the end of the year covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended.  Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were not effective as of the end of the applicable period to ensure that the information required to be disclosed by the Company in reports that it files or submits under the Exchange Act (i) is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, and (ii) is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures.

As a smaller reporting company, without a viable business and revenues, the Company does not have the resources to install a dedicated staff with deep expertise in all facets of SEC disclosure and GAAP compliance. As is the case with many smaller reporting companies, the Company will continue to consult with its external auditors and attorneys as it relates to new accounting principles and changes to SEC disclosure requirements. The Company has found that this approach worked well in the past and believes it to be the most cost effective solution available for the foreseeable future.  The Company will conduct a review of existing sign-off and review procedures as well as document control protocols for critical accounting spreadsheets. The Company will also increase management's review of key financial documents and records.

 
18

 
 
As a smaller reporting company, the Company does not have the resources to fund sufficient staff to ensure a complete segregation of responsibilities within the accounting function. However, Company management does review, and will increase the review of, financial statements on a monthly basis, and the Company's external auditor conducts reviews on a quarterly basis. These actions, in addition to the improvements identified above, will minimize any risk of a potential material misstatement occurring.

Changes in Internal Control over Financial Reporting

There were no changes in the Company’s internal controls over financial reporting during the first nine months of 2013 that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
 

 
From time to time, the Company may be involved in various litigation matters, which arise in the ordinary course of business.  There is currently no litigation that management believes will have a material impact on the financial position of the Company.
 

As a smaller reporting company, we are not required to provide the information required by this item.


Recent Issuances of Unregistered Securities

On July 24, 2013, the Company entered into a Securities Purchase Agreement with a third party financing source ("Financer"), for the sale of an 8% convertible note in the principal amount of $42,500 (the "July 2013 Note").  The financing closed on July 31, 2013.

The Note bears interest at the rate of 8% per annum.  All interest and principal must be repaid on April 29, 2014.  The July 2013 Note is convertible into common stock, at Financer’s option, at a 42% discount to the average of the three lowest closing bid prices of the common stock during the 10 trading day period prior to conversion.  In the event the Company prepays the July 2013 Note in full, the Company is required to pay to Financer an amount in cash equal to all principal, interest and any other amounts owing multiplied by (i) 112% if prepaid during the period commencing on the closing date through 30 days thereafter, (ii) 121% if prepaid 31 days following the closing through 60 days following the closing and (iii) 126% if prepaid 61 days following the closing through 90 days following the closing and (iv) 131% if prepaid 91 days following the closing through 120 days following the closing and (v) 136% if prepaid 121 days following the closing through 150 days following the closing and (vi) 141% if prepaid 151 days following the closing through 180 days following the closing.  After the expiration of 180 days following the date of the Note, the Company has no right of prepayment.   

Financer has agreed to restrict its ability to convert the July 2013 Note and receive shares of common stock such that the number of shares of common stock held by them in the aggregate and their affiliates after such conversion or exercise does not exceed 9.99% of the then issued and outstanding shares of common stock.   The total net proceeds the Company received from this offering was $42,500, less attorneys fees.  As of the date of the Note, the Company is obligated on the Note issued to Financer in connection with the offering. The July 2013 Note is a debt obligation arising other than in the ordinary course of business, which constitutes a direct financial obligation of the Company. 

The  Company  claims an  exemption  from the  registration  requirements  of the Securities  Act of 1933,  as amended  (the "Act") for the private  placement  of these  securities  pursuant  to  Section  4(2) of the Act  and/or  Regulation  D promulgated  there under since,  among other  things,  the  transaction  did not involve a public  offering,  Financer is an accredited  investor, Financer had access to information about the Company  and their  investment,  Financer  took the  securities  for investment and not resale, and the Company took appropriate measures to restrict the transfer of the securities.

There are currently 54,800,000 common shares reserved for conversion by Financier. As of September 30, 2013, $568 has been accrued in interest on this note payable.
 
Effective October 21, 2013, GV notified the Company of its intention to convert 345 of Series C Preferred into 1,897,500 shares of common stock of the Company, representing a conversion price of $0.002 per share. The Company instructed its transfer agent to issue the required shares to GV. On November 5, 2013, 2013, GV notified the Company of the additional conversion of 380 of Series C Preferred into 2,090,000 shares of common stock of the Company. After accounting for the conversions, GV is holding 9,275 of Series C Preferred shares. On November 12, 2013, 2013, GV notified the Company of the additional conversion of 380 of Series C Preferred into 2,090,000 shares of common stock of the Company. After accounting for the conversions, GV is holding 8,895 of Series C Preferred shares.
 
 
 
None.

 
Not Applicable.

 
Effective October 21, 2013, GV notified the Company of its intention to convert 345 of Series C Preferred into 1,897,500 shares of common stock of the Company, representing a conversion price of $0.002 per share. The Company instructed its transfer agent to issue the required shares to GV. On November 5, 2013, 2013, GV notified the Company of the additional conversion of 380 of Series C Preferred into 2,090,000 shares of common stock of the Company. After accounting for the conversions, GV is holding 9,275 of Series C Preferred shares. On November 12, 2013, 2013, GV notified the Company of the additional conversion of 380 of Series C Preferred into 2,090,000 shares of common stock of the Company. After accounting for the conversions, GV is holding 8,895 of Series C Preferred shares.
 


 
19

 


Exhibit No.
 
Description
3.1
 
Certificate of Incorporation of Forex International Trading Corp. (6)
3.2
 
Bylaws of Forex International Trading Corp. (6)
3.3   Certificate of Designation for Series A Preferred Stock (14)
3.4   Certificate of Designation for Series B Preferred Stock (21)
3.5   Certificate of Designation – Series C Preferred Stock (22)
3.6   Amendment to the Certificate of Designation for the Series B Preferred Stock (25)
3.7   Amendment to the Certificate of Designation for the Series C Preferred Stock (25)
4.1   Convertible Promissory Note issued by the Company to ATL dated July 8, 2010 (3)
4.2
 
Secured and Collateralized Promissory Note issued by ATL to the Company dated July 8, 2010 (3)
4.3
 
Collateral and Security Agreement by and between Forex International Trading Group and ATL dated July 7, 2010 (3)
4.4
 
Promissory Note issued to Rasel Ltd. Dated October 6, 2009 (7)
4.5
 
Promissory Note issued to Rasel Ltd. Dated October 20, 2009 (7)
4.6
 
Letter Agreement between Rasel Ltd. and Forex International Trading Corp. dated January 22, 2011 (8)
4.7
 
Letter Agreement by and between Forex International Trading Group and ATL dated November 8, 2010 (9)
4.8
 
6% Convertible Note issued to APH (11)
4.9
 
6% Convertible Debenture issued to HAM  dated April 5, 2011 (14)
4.10   Promissory Note dated November 30, 2011 issued to Cordellia d.o.o. in the amount of $1,000,000 (18)
4.11
 
$500,000 Convertible Promissory Note issued by Forex International Trading Corp. (23)
4.12   $400,000 Secured and Collateralized Promissory Note issued by Vulcan Oil & Gas Inc. (23)
4.13   Securities Purchase Agreement dated July 24, 2013 (26)
4.14   Convertible Promissory Note dated July 24, 2013 (26)
10.1   Software Licensing Agreement dated April 12, 2010, by and between Forex International Trading Corp and Triple (1)
10.2
 
Employment Agreement dated April 23, 2010, by and between Forex International Trading Corp and Darren Dunckel (2)
10.3
 
Letter Agreement by and between Forex International Trading Corp. and Anita Atias, dated July 29, 2010 (4)
10.4
 
Letter Agreement by and between Forex International Trading Corp. and Stewart Reich, dated July 29, 2010 (4)
10.5
 
Letter Agreement by and between Forex International Trading Corp. and Mr. William Glass, dated August 6, 2010 (5)
10.6
 
Share Exchange Agreement by and between Forex International Trading Corp. and APH (10)
10.7
 
Letter Agreement by and between Forex International Trading Corp., APH, Medirad Inc. and Rasel Ltd. (11)
10.8
 
Letter Amendment by and between Forex International Trading Corp. and William Glass, dated March 4, 2011 (13)
10.9
 
Letter Amendment by and between Forex International Trading Corp. and Stewart Reich, dated March 4, 2011 (13)
10.10
 
Employment Agreement by and between Forex International Trading Corp. and Liat Franco, dated March 7, 2011 (13)
10.11
 
Agreement between Forex International Trading Corp. and APH dated April 5, 2011 (14)
10.12
 
Conversion Agreement between MP and Forex International Trading Corp. dated April 5, 2011 (14)
10.13
 
Share Exchange Agreement between Forex International Trading Corp. and dated April 5, 2011 (14)
10.14
 
Agreement to Unwind and Mutual Release dated as of July 11, 2011 by and between Forex International Trading Corp., Forex NYC and Wheatley Investment Agreement by and between Forex International Trading Corp. and Centurion Private Equity, LLC dated June 27, 2011 (16)
10.15
 
Registration Rights Agreement with Centurion by and between Forex International Trading Corp. and Centurion Private Equity, LLC dated June 27, 2011 (16)
10.16
 
Settlement Agreement between AT Limited and Forex International Trading Corp.
10.17
 
Settlement Agreement by and between Forex International Trading Corp., A.T. Limited, Watford Holding Inc. and James Bay Holdings, Inc. dated November 1, 2011 (17)
10.18
 
Settlement and Foreclosure Agreement between Forex International Trading Corp., AP Holdings Limited, H.A.M Group Limited and Cordellia d.o.o.(18)
10.19
 
Annulment of Share Purchase Agreement dated December 5, 2011 between Triple 8 Limited, AP Holdings Limited, H.A.M Group Limited and 888 Markets (Jersey) Limited (18)
10.20
 
Promissory Note issued to Forex International Trading Corp. dated December 13, 2011 (19)
10.21
10.22
 
Stock Pledge Agreement executed by Fortune Market Media Inc. dated December 13, 2011 (19)
Conversion Agreement between the Company and GV Global Communications, Inc. (22)
10.23   Agreement by and between and Direct JV Investments Inc., Forex International Trading Corporation and Vulcan Oil & Gas Inc. dated January 7, 2013 (23)
10.24   Evaluation License Agreement dated September 2, 2013, by and between Forex International Trading Corp and Micrologic Design Automation, Inc. (27)
21.1
 
List of Subsidiaries (24)
 
 
     
(1)  
Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on April 20, 2010
(2)  
Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on April 28, 2010
(3)  
Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on July 13, 2010
(4)  
Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on August 3, 2010
(5)  
Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on August 9, 2010
(6)  
Incorporated by reference to the Form S-1 Registration Statement filed with the SEC on September 9, 2009.
(7)  
Incorporated by reference to the Form S-1 Registration Statement filed with the SEC on November 2, 2009.
(8)  
Incorporated by reference to the Form S-1 Registration Statement filed with the SEC on January 29, 2010.
(9)  
Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on December 22, 2010
(10)  
Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on November 17, 2010
(11)  
Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on January 3, 2011
(12)  
Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on February 2, 2011
(13)  
Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on March 9, 2011
(14)  
Incorporated by reference to the Form 10-K Annual Report filed with the Securities and Exchange Commission on April 6, 2011
(15)  
Incorporated by reference to the Form 10-Q Quarterly Report filed with the Securities and Exchange Commission on May 20, 2011
(16)  
Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on June 29, 2011
(17)  
Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on November 9, 2011
(18)  
Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on December 12, 2011
(19)  
Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on December 16, 2011
(20)  
Incorporated by referenced to the Form 10-K Annual Report filed with the Securities and Exchange Commission on April 13, 2012
(21)  
Incorporated by reference to the Form 10-Q Quarterly Report filed with the Securities and Exchange Commission on May 14, 2012
(22)  
Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on September 27, 2012.
(23)  
Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on January 9, 2013.
(24)  
Incorporated by reference to the Form 10-K Annual Report filed with the Securities and Exchange Commission on April 15, 2013.
(25)  
Incorporated by reference to the Form 10-Q Quarterly Report filed with the Securities and Exchange Commission on November 20, 2012.
(26)  
Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on August 1, 2013.
(27)  
Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on September 4, 2013.
 
 
 
20

 
 
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, there unto duly authorized.
 
 
 
 
 
FOREX INTERNATIONAL TRADING CORP.
(Registrant)
 
       
Date: November 14, 2013
By:
/s/ Erik Klinger
 
   
Erik Klinger
 
   
Chief Executive Officer, Chief Financial Officer and Director
 
In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

SIGNATURE
 
NAME
 
TITLE
 
DATE
             
             
/s/ Erik Klinger
 
Erik Klinger
 
Director, CEO and CFO
 
November 14, 2013





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