GBT Technologies Inc. - Quarter Report: 2014 March (Form 10-Q)

/s/ Erik Klinger

Erik Klinger

CEO and Sole Director

May 19, 2014

(Principal Executive, Financial and Accounting Officer)

form10q.htm

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 March 31, 2014

o	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	329,183,063 Common Shares
(Class)	(Outstanding at May 15, 2014)

Table of Contents

FOREX INTERNATIONAL TRADING CORP.

TABLE OF CONTENTS

PART I.	Financial Information

Item 1.	Condensed Consolidated Financial Statements (Unaudited)

	Condensed Consolidated Balance Sheets as of March 31, 2014 (unaudited) and December 31, 2013 (audited)	3
	Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2014 and March 31, 2013 (unaudited)	4
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2014 and March 31, 2013 (unaudited)	5
	Notes to Condensed Consolidated Financial Statements (unaudited)	6

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	15

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	19

Item 4.	Controls and Procedures	19

PART II.	Other Information	19

Signatures		23

Table of Contents

PART I.	Financial Information

Item 1.	Financial Statements

FOREX INTERNATIONAL TRADING CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS


	March 31, 2014			December 31, 2013
	(UNAUDITED)			(AUDITED)
ASSETS

Current assets:
Cash and cash equivalents	$	-		$	-
Note and short-term receivables		450,000			440,000
Total current assets		450,000			440,000

Property and equipment, net		4,572			5,034

Other assets		600,000			600,000

Total assets	$	1,054,572		$	1,045,034

LIABILITIES AND STOCKHOLDERS' DEFICIENCY

Current liabilities:
Accounts payable and accrued expenses	$	164,943		$	123,797
Bank overdraft		107			17
Notes payable and accrued interest		776,202			807,324
Total current liabilities		941,252			931,138

Total liabilities		941,252			931,138

Contingencies

Stockholders' deficiency:

Series B Preferred stock, $0.00001 par value, 20,000,000 shares authorized;
45,000 shares issued as of March 31, 2014 and December 31, 2013, respectively		-			-
Series C Preferred stock, $0.00001 par value, 10,000 shares authorized;
6,670 and 8,470 shares issued as of March 31, 2014 and December 31, 2013, respectively		-			-
Common stock - $0.00001 par value, 600,000,000 shares authorized; 266,178,366 and 247,303,586
shares issued and outstanding as of March 31, 2014 and December 31, 2013, respectively		2,662			2,473
Treasury stock, at cost; 38,000 shares as of March 31, 2014 and December 31, 2013, respectively		(11,059	)		(11,059	)
Additional paid-in capital		2,247,864			2,238,943
Accumulated deficit		(2,126,147	)		(2,116,461	)

Total stockholders' deficiency		113,320			113,896

Total liabilities and stockholders' deficiency	$	1,054,572		$	1,045,034

The accompanying notes are an integral part of these condensed consolidated unaudited financial statements.

Table of Contents

FOREX INTERNATIONAL TRADING CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)


	Three Months ended March 31,
	2014			2013


Revenues:
Income from foreign currency operations	$	-		$	-
Income from consulting activities		30,000			30,000
Total revenues		30,000			-

General and administrative expenses		41,698			93,203

Loss from operations		(11,698	)		(63,203	)

Other income (expenses):
Interest income		10,000			10,000
Interest expense		(7,988	)		(8,850	)
Total other income (expenses)		2,012			1,150

Loss before income taxes		(9,686	)		(62,053	)

Income tax expense		-			-

Net loss	$	(9,686	)	$	(62,053	)

Net loss per share:
Basic and diluted	$	(0.00	)	$	(0.00	)

Weighted average number of
common shares outstanding:
Basic and diluted		95,255,747			35,405,407

The accompanying notes are an integral part of these condensed consolidated unaudited financial statements.

Table of Contents

FOREX INTERNATIONAL TRADING CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)


	For the Three Months Ended
	March 31, 2014			March 31, 2013

Cash Flows From Operating Activities:
Net loss	$	(9,686	)	$	(62,053	)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation of property and equipment		462			1,382
Amortization of debt discount		-			25,000
Changes in assets and liabilities:
Accrued interest on notes receivable		(10,000	)		(10,000	)
Accounts payable and accrued expenses		41,146			(4,155	)
Accrued interest on notes payable		7,988			8,850

Net cash used in operating activities		29,910			(40,976	)

Cash flows from investing activities:


Net cash provided by investing activities		-			-

Cash flows from financing activities:
Repayment on a note payable		(30,000	)		(30,000	)
Cash inflow from "changes in bank overdraft"		90			-
Additional borrowing under a note payable, net		-			40,380
		-			-

Net cash (used in) provided by financing activities		(29,910	)		40,380

Net decrease in cash and cash equivalents		-			(596	)

Cash and cash equivalents, beginning of year		-			618

Cash and cash equivalents, end of year	$	-		$	22


SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the quarter for:
Interest	$	-		$	-
Income taxes	$	-		$	-

NON-CASH ACTIVITIES:
Shares issued in conversion of convertible debt and accrued interest	$	9,110		$	-

The accompanying notes are an integral part of these condensed consolidated unaudited financial statements.

Table of Contents

FOREX INTERNATIONAL TRADING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2014

(UNAUDITED)

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.

Effective April 4, 2014, the Company filed with the State of Nevada a Certificate of Amendment to Articles of Incorporation changing the Company’s number of authorized shares to 600,000,000.

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, 2013 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, 2013, 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.

Table of Contents

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 three months ended March 31, 2014and 2013.

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 under FASB Codification Topic 740-10-25 (“ASC 740-10-25”) Income Taxes. Under ASC 740-10-25, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740-10-25, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. 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 March 31, 2014.

The Company's federal income tax returns are no longer subject to examination by the IRS for the years prior to 2010, and the related state income tax returns are no longer subject to examination by state authorities for the years prior to 2010.

Revenue Recognition

The Company recognized revenue on arrangements in accordance with FASB Codification Topic 605, “Revenue Recognition” (“ASC Topic 605”). Under ASC Topic 605, revenue is recognized only when the price is fixed and determinable, persuasive evidence of an arrangement exists, the service is performed and collectability of the resulting receivable is reasonably assured. We had revenue of $30,000 and $30,000 for the quarters ended March 31, 2014 and 2013, respectively.

Table of Contents

During the quarter ended March 31, 2014, 100% of the Company’s revenue was related to consulting services provided to one company in the foreign exchange business.

Share-Based Compensation

In December 2004, the FASB issued FASB Accounting Standards Codification No. 718, Compensation – Stock Compensation. Under FASB Accounting Standards Codification No. 718, companies are required to measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share-based compensation arrangements include stock options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. As such, compensation cost is measured on the date of grant at their fair value. Such compensation amounts, if any, are amortized over the respective vesting periods of the option grant. The Company applies this statement prospectively. No such expenses were recognized for the fiscal quarter ended March 31, 2014.

Earnings (Loss) Per Share

In accordance with accounting guidance now codified as FASB ASC Topic 260, “Earnings per Share,” Basic earnings per share (“EPS”) is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted EPS gives effect to all dilutive potential of shares of common stock outstanding during the period including stock options or warrants, using the treasury stock method (by using the average stock price for the period to determine the number of shares assumed to be purchased from the exercise of stock options or warrants), and convertible debt or convertible preferred stock, using the if-converted method. Diluted EPS excludes all dilutive potential of shares of common stock if their effect is anti-dilutive. Because of the Company’s net losses, the effects of stock options, convertible notes, and convertible preferred stock would be anti-dilutive and accordingly, is excluded from the computation of earnings per share. Diluted loss per share has not been computed for the fiscal quarters ended March 31, 2014 and 2013 because any potential additional common shares would reduce the reported loss per share and therefore have an antidilutive effect.

3. Liquidity and Going Concern

The Company generated revenues in the fiscal quarter ended March 31, 2014, but has had recurring losses from operations since inception, and has a negative working capital as of March 31, 2014. As of March 31, 2014, the Company has an accumulated deficit of $2,126,147. 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. Investments, Acquisitions, and Divestiture

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 is currently in default, and 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.

Table of Contents

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.

5. Notes and Short-term Receivables

At March 31, 2014 and December 31, 2013, notes and short-term receivables, including accrued interest, consisted of:

	2014		2013
Note receivable - Vulcan	$	450,000	$	440,000

Total notes and short-term receivables	$	450,000	$	440,000

6. Property and Equipment, Net

Property and equipment consisted of the following as of March 31, 2014 and December 31, 2013:

	Estimated
	Useful
	Lives	2014		2013
Computers and equipment	3 years	$	12,539	$	12,539
Furniture	7 years		9,431		9,431
			21,970		21,970
Less accumulated depreciation			17,398		16,936
		$	4,572	$	5,034

Depreciation expense was $462 and $3,383 for the quarter ended March 31, 2014, and the fiscal year ended December 31, 2013, respectively.

7. Other Assets

Licensure agreement

On January 2, 2014, and effective December 31, 2013, the Company and Micrologic Design Automation, Inc. ("MDA") signed a letter agreement whereby MDA provided for a perpetual, royalty free, exclusive license of the Licensed Technology, as defined in the Evaluation License Agreement dated September 1, 2013. In connection with this agreement, the Company agreed to issue 200,000,000 shares of common stock having a value of $600,000 based upon recent market value ($0.003/shares). (See Note 10 and 12)

Table of Contents

8. Notes Payable

At March 31, 2014 and December 31, 2013, notes payable and accrued interest consisted of:

	March 31, 2014		December 31, 20113
Notes payable and accrued interest - Rasel	$	147,097	$	145,847	a.
Note payable and accrued interest - Glendon		69,015		97,552	b.
Note payable and accrued interest - Third Party Financier		35,090		43,925	c.
Note payable and accrued interest - Vulcan (net of debt discount of $0
and $100,000 as of December 31, 2013 and December 31, 2012, respectively)		525,000		520,000	d.

	$	776,202	$	807,324

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 March 31, 2014 and December 31, 2013, was $147,097 and $145,847, respectively, which includes accrued interest in the amounts of $22,097 and $20,847 at March 31, 2014 and December 31, 2013, respectively. The note is currently in default since the beginning of 2013; and the Company will attempt to reach an amicable settlement with the counterparty.

b) Glendon Note Payable

On December 31, 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 note is currently in default; the Company will attempt to reach an amicable settlement with the counterparty.

The balance at March 31, 2014 and December 31, 2013, including accrued interest, is $69,015 and $97,552, respectively. The note was reduced for revenue received during the quarter from a customer for which Glendon was handling invoicing and collections.

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"), of which $2,500 was for legal fees associated with the transaction. 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.

Table of Contents

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.

As of March 31, 2014, the convertible note balance and accrued interest is $35,090. As of December 31, 2013, the convertible note balance and accrued interest is $43,925. During the first quarter, Financier converted $9,110 of its note into 8,974,780 shares of common stock at an average conversion price of $0.001015 per share.

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 December 31, 2013, the entire debt discount has been amortized in the accompanying financial statements, and $20,000 of interest expense was accrued during the year ended December 31, 2013. Another $5,000 of interest expense was accrued during the first quarter. The balance of the Note at March 31, 2014 and December 31, 2013, including accrued interest, is $525,000 and $520,000, respectively.

10. Stockholders’ Equity

Authorized Shares

Effective April 4, 2014, the Company filed with the State of Nevada a Certificate of Amendment to Articles of Incorporation changing the Company’s number of authorized shares to 600,000,000.

The Company has 600,000,000 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 December 31, 2013 and 2012, respectively. On September 26, 2012, the Company authorized 10,000 Preferred Stock Series C shares, par value $0.00001.

Common Shares:

On September 2, 2013, effective September 1, 2013, Forex International Trading Corp. (the “Company”) entered into an Evaluation License Agreement (the "ELA") with Micrologic Design Automation, Inc. ("MDA"), pursuant to which MDA temporarily licensed 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 “Technology”). On January 2, 2014, and effective December 31, 2013, the Company and MDA signed a letter agreement whereby MDA provided for a perpetual, royalty free, exclusive license of the Licensed Technology, as defined in the Evaluation License Agreement dated September 1, 2013, in exchange for 200 million shares of common stock (the “Shares”) of the Company. MDA is not permitted to sell, assign, hypothecate or transfer the Shares in any way prior to the Company generating at minimum $50,000 in revenue through the use of the Technology (the “Revenue Target”). A stop transfer legend shall be affixed to the certificate representing the Shares. If the Revenue Target is achieved, then such stop transfer legend shall be removed. The shares of common stock were issued under Section 4(2) of the Securities Act of 1933, as amended. (See Note 7 and 12)

During the first quarter, Financier converted $9,110 of its note into 8,974,780 shares of common stock at an average conversion price of $0.001015 per share.

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 December 31, 2013 and December 31, 2012, the Company had repurchased 38,000 of its common shares in the open market, which were returned to treasury.

Table of Contents


	Total Number of		Average		Shares Purchased		Shares Remaining
	Shares Purchased		Price Paid		Under Repurchase Plan		Under Repurchase Plan
Month

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

Weighted-average 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.

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. On November 11, 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. On November 26, 2013, 2013, GV notified the Company of the additional conversion of 425 of Series C Preferred into 2,337,500 shares of common stock of the Company. On January 2, GV notified the Company of the additional conversion of 1,800 of its Series C Preferred into 9,900,000 shares of common stock of the Company. After these conversions, GV holds 6,670 Series C Preferred shares as of March 31, 2014.

Table of Contents

The following table shows how the conversions were accounted for within the Series C and Common Stock Additional Paid in Capital accounts:

	Series C									Series C
	Convertible Preferred									Convertible Preferred
	Stock					Common Stock				Stock			Common Stock
										Additional Paid			Additional Paid
	Shares			Amount		Shares		Amount		In Capital			In Capital
Balances at December 31, 2012		10,000		$	-		38,888,586	$	389	$	222,340		$	1,418,687


Conversion of Series C Preferred Stock to Common Stock		(1,530	)				8,415,000		84		(34,018	)		33,934
Common Stock issued in exchange for Licensure Agreement							200,000,000		2,000		-			598,000

Balances at December 31, 2013		8,470		$	-		247,303,586	$	2,473	$	188,322		$	2,050,621

Conversion of Series C Preferred Stock to Common Stock		(1,800	)				9,900,000		99		(40,021	)		39,922
Conversion of note payable to common stock							8,974,780		90					9,020

Balances at March 31, 2014		6,670		$	-		266,178,366		2,662	$	148,301		$	2,099,563

This presentation shows the impact on the Additional Paid-in Capital account for the Series C Preferred and Common Stock, whereas the financial statements present the Additional Paid-in Capital as one combined account.

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.

11. 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 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 $12,000 and 49,200, in the fiscal quarter ended March 31, 2014 and the fiscal year ended December 31, 2013, respectively.

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.

During the quarter ended March 31, 2014, the Company paid no rent for the use of headquarters in El Segundo, California, though it did pay minimal fees for office expenses.

12. 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.

Table of Contents

13. 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 March 31, 2014 and 2013, there were 224,806,432 and 116,901,296 of potentially dilutive common stock equivalents outstanding, respectively. The potentially dilutive common stock equivalents at March 31, 2014 arise from (i) the issuance on December 7, 2011 of 45,000 Series B Preferred Shares which are convertible into 15,000,000 common shares, (ii) the issuance of the Rasel note which is convertible into 104,225,555 shares, (iii) the issuance of 10,000 Series C Preferred Shares having a stated value of $100 per share, of which 6,670 shares remain unconverted, which remaining unconverted shares are convertible into 29,348,000 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 netted against the note receivable from Vulcan, which is convertible into 51,269,863 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 March 31, 2014 would have converted into 24,863,014 shares of common stock. The potentially dilutive common stock equivalents at March 31, 2013 arise from (i) the issuance on December 7, 2011 of 45,000 Series B Preferred Shares which are convertible into 15,000,000 common shares, (ii) the issuance of the Rasel note which is convertible into 234,629 shares, (iii) the issuance of 10,000 Series C Preferred Shares having a stated value of $100 per share which are convertible into 18,333,333 common shares, had they been converted at or around March 31, 2013, 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 would have been convertible into 83,333,333 shares, given market prices at or around March 31, 2013, and notwithstanding a restriction against owning more than 4.99% of the Company’s stock. 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

In preparing these financial statements, the Company has evaluated events and transactions for potential recognition of disclosure as follows:

On or around April 2, 2014, GV notified the Company of its conversion of 2,270 shares of Series C Preferred Shares into 12,485,000 shares of Common Stock of the Company. On or around April 21, 2014, GV notified the Company of its conversion of 1,200 shares of Series C Preferred Shares into 13,200,000 shares of Common Stock of the Company. On or around May 6, 2014, GV notified the Company of its conversion of 1,300 shares of Series C Preferred Shares into 14,300,000 shares of Common Stock of the Company. After these conversions, GV still holds 1,900 Series C Preferred Shares.

On or around April 14, Financier notified the Company of its intention to convert $12,390 of its note to 6,883,333 common shares. On or around April 17, Financier notified the Company of its intention to convert $11,000 of its note to 5,500,000 common shares. On or around April 23, Financier notified the Company of its intention to convert $11,700 of its note to 10,636,364 common shares. After these conversions, the note balance due Financier is zero.

Effective April 4, 2014, the Company filed with the State of Nevada a Certificate of Amendment to Articles of Incorporation changing the Company’s number of authorized shares to 600,000,000.

On May 13, 2014, the Company signed an agreement with a third-party financier (“Counterparty”) where Counterparty agreed to purchase the Rasel note for consideration of its face value plus accrued interest ($147,625) in two roughly equal installments. The resultant note carries interest at 8%, and is convertible to freely-trading stock with no holding period. The conversion price will be at a 42% discount to the lowest closing price bid during the prior 10-day trading sessions.

Table of Contents

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 March 31, 2014. This discussion and analysis should be read in conjunction with our audited financial statements and notes thereto included in our Quarterly Report on Form 10-Q for our quarter-ended March 31, 2013 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 ended March 31, 2014 and 2013 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.

Results of Operations:

Three months ended March 31, 2014 and 2013

A comparison of the consolidated statements of operations for the three months ended March 31, 2014 and 2013 is as follows:

Revenues:

The following table summarizes our revenues for the three months ended March 31, 2014 and 2013:

Three months ended March 31,		2014				2013
Total revenues		$	30,000			$	30,000

The Company was able to leverage its consulting expertise in the area of foreign exchange in the first quarter of 2014. This revenue was generated by one customer.

Operating expenses:

The following table summarizes our operating expenses for the three months ended March 31, 2014 and 2013:

Three months ended March 31,		2014				2013
Total operating expenses		$	41,698			$	93,203

The Company downsized its operations during the first quarter of 2014, resulting in a significant reduction in operating expenses. The Company also switched auditors, resulting in a significant savings due to the need to restate prior quarters.

Other income (expenses):

The following table summarizes our other income (expenses) for the three months ended March 31, 2014 and 2013:

Three months ended March 31,	2014			2013
Interest income	$	10,000		$	10,000
Interest expense		(7,988	)		(8,850	)
Net other income/expense		2,012			1,150

Table of Contents

The Company has reduced its debt outstanding by netting $30,000 of revenue for the first quarter against the Glendon note, which in turn reduced interest expense.

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 first quarter. The Company has a note payable with a face value of $500,000, and a debt discount that has been fully amortized. Although interest expense on the note payable increased over the same quarter last year, the reduction in the Glendon note reduced interest expense overall compared to the same period in fiscal 2013.

Liquidity and Capital Resources

Our cash and cash equivalents were $0 and $618 for the periods ended March 31, 2014 and March 31, 2013, respectively, a decrease of $618.

Cash provided by (used by) operating activities for the three months ended March 31, 2014 and 2013 was $29,910, and $(40,976), respectively. The company swung to a profit in the first quarter of fiscal 2014, and the working capital position also improved in the current quarter. In the prior period, the Company amortized a non-cash debt discount of $25,000; in the current period, that debt discount has been fully amortized.

Cash used by investing activities for the three months ended March 31, 2014 and 2013 was $0 and $0, respectively.

Cash provided by (used by) financing activities for the three months ended March 31, 2014 and 2013 was $(29,910) and $(40,380), respectively. During the three months ended March 31, 2014, the Company reduced its note payable to Glendon by the amount of revenue earned during the quarter. During the same three month period of 2013, the Company borrowed more under a note payable.

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.

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.

Table of Contents

Debt Financing Arrangements

a) Rasel LTD - Convertible Notes Payable

b) Glendon Note Payable

c) Issuance of note payable to third party

d) Note Payable to Vulcan

Table of Contents

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.

Use of 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

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.

Table of Contents

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 three months ended March 31, 2014 and 2013.

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 three months ended March 31, 2014 and 2013 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.

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 three months of 2014 that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Table of Contents

Item 1A. Risk Factors.

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

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Recent Issuances of Unregistered Securities

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not Applicable.

Item 5. Other Information

Table of Contents

The following table shows how the conversions were accounted for within the Series C and Common Stock Additional Paid in Capital accounts:

	Series C									Series C
	Convertible Preferred									Convertible Preferred
	Stock					Common Stock				Stock			Common Stock
										Additional Paid			Additional Paid
	Shares			Amount		Shares		Amount		In Capital			In Capital
Balances at December 31, 2012		10,000		$	-		38,888,586	$	389	$	222,340		$	1,418,687


Conversion of Series C Preferred Stock to Common Stock		(1,530	)				8,415,000		84		(34,018	)		33,934
Common Stock issued in exchange for Licensure Agreement							200,000,000		2,000		-			598,000

Balances at December 31, 2013		8,470		$	-		247,303,586	$	2,473	$	188,322		$	2,050,621

Conversion of Series C Preferred Stock to Common Stock		(1,800	)				9,900,000		99		(40,021	)		39,922
Conversion of note payable to common stock							8,974,780		90					9,020

Balances at March 31, 2014		6,670		$	-		266,178,366		2,662	$	148,301		$	2,099,563

ITEM 6. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

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 entered with Asher Enterprise Inc. (26)
4.14		Convertible Promissory Note issued to Asher Enterprises Inc. (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)

Table of Contents

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		Intentionally Left Blank
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		Stock Pledge Agreement executed by Fortune Market Media Inc. dated December 13, 2011 (19)
10.22		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)
10.25		Letter Agreement dated January 2, 2014, by and between Forex International Trading Corp and Micrologic Design Automation, Inc. (28)
21.1		List of Subsidiaries (24)
31.1		Certification of Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1		Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.SCH		Document, XBRL Taxonomy Extension
101.CAL		Calculation Linkbase, XBRL Taxonomy Extension Definition
101.DEF		Linkbase, XBRL Taxonomy Extension Labels
101.LAB		Linkbase, XBRL Taxonomy Extension
101.PRE		Presentation Linkbase

(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.

(28)	Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on January 3, 2014.

Table of Contents

SIGNATURES

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: May 19, 2014	By:	/s/ Erik Klinger
		Erik Klinger
		Chief Executive Officer
		and Sole Director (Principal Executive, Financial and Accounting Officer)

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.