The Series B Preferred Stock has a stated value of $100 per share and is convertible into ourthe 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.
On January 18, 2011, Mrs. Liat Franco was appointed by the Company to serve as the Secretary of the Company. On March 4, 2011, the Company entered into an Employment Agreement with Liat Franco whereby the Company will employ Ms.employed Mrs. Franco as its Secretary for a term of one year (the “Term”). For her services during the Term as Secretary, the Company will issue Ms. Franco 15,000 shares of common stock of the Company, which will have a restrictive legend under the Securities Act of 1933, as amended. In the event that theThe Term of the Employment Agreement iswas extended, thenand the number of shares of common stock will bewas determined by dividing $6,000$4,159 by the market price on the first trading dayeffective date of the Term.issuance discounted by 25%. On November 15, 2011, LiatMrs. Franco was appointed by the Company to serve as the Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer and a director of the Company. The total compensation packageMrs. Franco resigned as CEO on April 23, 2012, and as a Director from the Company on May 23, 2012.
The above issued securities were offered and sold in transactions 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. As of the date hereof, other than 4,000,000 shares of common stock in conjunction with Mr. Dunckel April 2010 employment agreement, the Company has not issued the shares of common stock to its directors.
On April 25, 2011, the Company issued a press release announcing that its Board of Directors approved a share repurchase program as of April 25, 2011. 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 the date of this filing,December 31, 2013, the Company has repurchased 38,000 of its common shares in the open market, which will behad been returned to treasury.
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 accredited investors, raising $200,000,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
issued advances on equityrecording 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
$520,000the Funding) to begin negotiations with private groups to purchase certain knowledge and assets for
a private placement. The Company also received $28,345 from the
remainderproduction of proprietary solar modules, directly or via third party. While management is of the
private placement sharesopinion that
were issued in January 2011. these discussions may successfully produce agreements, there can be no guarantee of this.
Our futureWe plan to raise working capital requirements and the adequacy of available fundsthat will depend on numerous factors, including the successful commercialization ofallow us to conduct our products, competing technological and market developments, and the development of strategic alliancesbusiness for the development and marketing of our products. Our Company intends to obtain additional funds through equity or debt financing, strategic alliances with corporate partners and others, or through other sources.next twelve months. There is no guarantee regarding our ability to raise that these sources will be available at all or available on acceptable terms.
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 $50,000 per month, minimum. We expect to be able to remain in operation for a period of 8 months with cash on hand. We also expect to receive monthly collections from our settlement agreement with Triple 8 to support our operations in 2012. It is likely that the$100,000. The Company will have to raise additional capital in the next 8 months to continue operations. The required funds may not be available on acceptable terms, which would adversely affect the financial performance and continuing operation of the Company.
Until required for operations, Forex's policy will be to invest its cash reserves in bank deposits or deploy its cash in short term loans. Forex 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 Forex'sthe Company's control.
Debt Financing Arrangements
At December 31, 2013 and 2012, notes payable and accrued interest consisted of:
[Missing Graphic Reference]
a) Rasel LTD - Affiliated Party (During 2010)Convertible Notes Payable
On October 6, 2009 the Company signed a Note Payablenote payable for $25,000 payable to Rasel due on October 6, 2010, bearing interest at 4% per annum. The proceeds were used to pay for half of an existing Accounts Payableaccounts payable for legal fees incurred at the Company’s inception. On October 20, 2009, the Company signed a Note Payablenote 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 Payablenote payable for $50,000 payable to Rasel due on October 30, 2011, bearing interest at 4% per annum. These proceeds will bewere used for working capital and future expenses.expenditures. On January 22, 2010, the Company signed an amendment to extend the maturity date of the Promissory Notespromissory notes in the amount of $50,000$25,000 and $25,000$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 said notethe notes with either a 5% discount to the market price or a fixed price of $0.60. The extension of maturity was agreed to be effective as of December 30, 2010,2010.
The accrued balance of the notes including interest as of December 31, 20112013 and December 31, 2012 was $145,847 and $140,778, respectively, which includes accrued interest in the amounts of $20,847 and $15,778 at December 31, 2013 and 2012, respectively. The note is $135,548.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 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 December 31, 2013 and December 31, 2012, including accrued interest, is $97,552 and $81,829, respectively.
c) Issuance of note payable to third party
A.T. Limited, APH Note, H.A.M Note – Convertibles Note and Accrued Interest
APH Note and H.A.M Note:
As partial paymentsOn July 24, 2013, the Company entered into a Securities Purchase Agreement with a third party financing source ("Financer"), for the Triple 8 interest’s acquisitions (see disclosure in prior sectionssale of this filling) the Company issuedan 8% convertible Note to APH and HAM. A 6% Convertible Notenote in the principal amount of $1,200,000 due February 15, 2011$42,500 (the “APH Note”"July 2013 Note") and a 6% Convertible Debenture due June 30, 2011, of which $2,500 was for the amount of $600,000 (the “HAM Note”). As previously disclosed in the Company’s Quarterly Report for the quarters ended September 30, 2011 and June 30, 2011, the HAM Note and the APH Note were in default and the parties were negotiating a further extension of the maturity date of the HAM Note and the APH Note. The APH Note was assigned to a third party. On September 29, 2011, the Company received a formal notice of default from the holders of the HAM Note and the APH Note demanding payment of the notes and advising that they intend to take immediate legal action against the Company. In order to expedite the closing of the Annulment, the Company, APH, HAM and Cordellia d.o.o., a Croatian company ("CDOO"), third party which is not affiliatedfees associated with the Company entered into a Settlement and Foreclosure Agreement (the "Settlement Agreement"), whereby the Company provided CDOO, as the assignee of HAM and APH, with the ability to foreclosetransaction. The financing closed on all shares of Triple 8 held by the Company in consideration of the termination of the APH Note and the HAM Note, which were in default, and the issuance of a new promissory note in the name of CDOO in the principal amount of $1,000,000 (the "CDOO Note").July 31, 2013.
ATL Note:
OnThe July 8, 2010, the Company issued a Convertible Promissory Note to a third party - ATL in aggregate principal amounts of $500,000 (the “Forex Note”). In consideration for the Company issuing the ATL Note, ATL issued the Company a Secured and Collateralized Promissory Note in the principle amount of $400,000 (the “ATL Note”). The Forex2013 Note bears interest at 10%, matures two years from the daterate of issuance8% per annum. All interest and principal must be repaid on April 29, 2014. The July 2013 Note is convertible into our common stock, at ATL’sFinancer’s option, at the greater of a conversion price of $0.20 subject42% discount to adjustment. On the 21st trading day following each conversion, the number of shares of common stock issuable to ATL pursuant to the Forex Note shall be adjusted such that the aggregate number of shares of common stock issuable to ATL is equal to the amount converted divided by 75% of the average of the three lowest closing bid prices of the common stock during the 2010 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 deliverythe 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 uponsuch that the initial conversion. Concurrentnumber 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 conversionoffering. 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 Forex Note, ATL must make a payment to the Company reducing a pro rata amount owed to the Company under the ATL Note.Company.
On November 1, 2011,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 ATL Indebted Parties entered into a Settlement Agreement (the "Agreement") whereby without admitting any wrongdoing on either part,securities for investment and not resale, and the parties thereby settled all previous agreements and resolved any existing disputes. UnderCompany took appropriate measures to restrict the termstransfer of the Agreement,securities.
There are currently 30,293,248 common shares reserved for conversion by Financier. As of December 31, 2013, $1,425 has been accrued in interest on this note payable. On February 3 and March 17, 2014, Financier converted a total of $9,110 in convertible note principal into approximately 8,974,780 common shares.
d) Note Payable to Vulcan
On January 7, 2013, effective December 31, 2012, the Company, agreedJV and Vulcan entered an agreement pursuant to issuewhich the Indebted Parties 45,000 shares of Series B Preferred Stock ofJV Agreement was terminated, the Company onissued to Vulcan a pro-rata basis, and the Undelivered Shares were returned to the treasury of the Company. The Series B Preferred Stock has a stated value of $100 per share and is4% convertible into our 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.
Through various settlement agreements described herein, all convertible notes have been cancelled as of the date of this filing.
Cordellia d.o.o.:
As disclosed above, in order to expedite the closing of the Triple 8 Annulment, the Company, APH, HAM and Cordellia d.o.o., a Croatian company ("CDOO"), third party which is not affiliated with the Company entered into a Settlement and Foreclosure Agreement (the "Settlement Agreement"), whereby the Company provided CDOO, as the assignee of HAM and APH, with the ability to foreclose on all shares of Triple 8 held by the Company in consideration of the termination of the APH Note and the HAM Note, which were in default, and the issuance of a new promissory note in the name of CDOO in the principal amount of $1,000,000$500,000 (the "CDOO"Forex Note"). and Vulcan issued to the Company a 10% Secured and Collateralized Promissory Note in the principal amount of $400,000. The CDOO note bears interest at the rate of ten percent (10%) per annum and is due and payableCompany recognized a debt discount in full on November 30, 2012. In the event that Triple 8 fails to make the Triple Payments, then the amount payable under the CDOO Note shall be reduced by half of the amount of $100,000 for the missed payment. In addition, APHdifference in the face value of the note issued and HAM have also agreed to return tothe 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 cancellation allan 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 APH Stock and alllowest three trading prices of the HAM Stock and APH, HAM and CDOO have provided a full releaseCompany's common stock on the OTCBB during the 10-day trading period ending on the latest complete day of trading on the Company. As a result of the cancellation of the APH Stocks and the HAM Stocks, APH and HAM will no longer own securities in the Company.
Via various settlement agreements described herein, all convertible notes have been cancelled as ofOTCBB prior to the date of this filing.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.
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.
Critical Accounting Policies and Use of Estimates
Our Management’s Discussion and Analysis of Financial Condition and Results of Operations is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America.America (“U.S. GAAP”). The preparation of our consolidated financial statements in accordance with U.S. GAAP requires us to make certain estimates, judgments and assumptions that affect the reported amount of assets and liabilities as of the date of the financial statements, the reported amounts and classification of revenues and expenses during the periods presented, and the disclosure of contingent assets and liabilities. We evaluate our estimates and assumptions on an ongoing basis and material changes in these estimates or assumptions could occur in the future. Changes in estimates are recorded on the period in which they become known. We base our estimates on historical experience and various other assumptions that we believe to be reasonable under the circumstances and at that time, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from these estimates if past experience or other assumptions doedo not turn out to be substantially accurate.
We believe that the accounting policies described below are critical to understanding outour business, results of operations, and financial condition because they involve significant judgments and estimates used in the preparation of our consolidated financial statements. An accounting is deemed to be critical if it requires a judgment or accounting estimate to be made based on assumptions about matters that are highly uncertain, , and if different estimates that could have been used, or if changes in the accounting estimates that are reasonably likely to occur periodically, , could materially impact our consolidated financial statements. Other significant accounting policies, primarily those with lower levels of uncertainty than those discussed below, are also critical to understanding our consolidated financial statements. The notes to our consolidated financial statements contain additional information related to our accounting policies and should be read in conjunction with this discussion.
Presentation and Basis of Financial Statements
The accompanying audited 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”).
All intercompany balances and transactions have been eliminated in consolidation.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of AmericaU.S. GAAP requires management to make estimates and assumptions that affect the reported amountsamount 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 valuation of goodwill, the useful lives of tangible and intangible assets, depreciation and amortization, allowances for doubtful accountaccounts and creditloan losses, valuation of common and preferred stock issuances, and the valuation allowance on deferred tax assets. Although management believes these estimates and assumptions are adequate, actualActual results could differ from the estimates and assumptions used.those estimates.
Cash and Cash Equivalents
Going Concern
The accompanyingCompany considers all highly liquid financial statements have been prepared assuming the Company will continue as a going concern. The futureinstruments purchased with an original maturity of the Company is dependent upon its abilitythree months or less to raise funds, generate revenues and upon future profitable operations from the development of its new business opportunities. The financial statements do not include any adjustments relating to the recoverability and classification of liabilities that might be necessary in the event the Company cannot continue in existence.cash equivalents.
Notes and Short-Term Receivable
The notenotes 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 of the loan 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.
ImpairmentProperty 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 long livedthe 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 the Company evaluates the fair value of long-lived assetsits property and equipment on an annual basis or whenever events or changes in circumstances indicate that itsthe carrying amounts may not be recoverable. Accordingly, anyAny impairment of value is recognized when the carrying amount of a long-livedthe asset exceeds its fair value. NoThere were no impairment losses have been recognized atfor the fiscal year ended December 31, 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 2010.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 December 31, 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 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
Income from foreign currency operations is earned by referring potential customers to foreign exchange trading companies. The Company’s websites identify potential customers with a short-term foreign exchange trading need. 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 duringfor the fiscal year ended December 31, 20112013 and $40,000 was recognized during2012.
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 fiscal year ended December 31, 2010.2013 and 2012 because any potential additional common shares would reduce the reported loss per share and therefore have an antidilutive effect.
New Accounting Pronouncements
In July 2010, the FASB issued ASU 2010-20, “Receivables (Topic 310) – Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses.” The new disclosure guidance expands the existing requirements and will lead to greater transparency into a company’s exposure to credit losses from lending arrangements. The new disclosures of information as of the end of a reporting period became effective for both interim and annual reporting periods ending on or after December 15, 2010. Specific disclosures regarding activity that occurred before the issuance of the ASU, such as the allowance roll forward and modification disclosures, is required for periods beginning on or after December 15, 2010. The Company has included the required disclosures in its consolidated financial statements.
The Company has implemented all new accounting pronouncements that are in effect that are applicable. These pronouncements did not have any material impact on the consolidated financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
As a Smaller Reporting Company, the Company is not required to include the disclosure under this Item.
The information required by Item 8 appears at Page F-1, which appears after the signature page to this report.
On December 30, 2011April 25, 2013 (the “Dismissal Date”), the Company advised Eugene M. Egeberg, CPARosen, Seymour, Shapss, Martin & Company LLP (the “Former Auditor”) that heit was dismissed as the Company’s independent registered public accounting firm. The decision to dismiss the Former Auditor as the Company’s independent registered public accounting firm was approved by the Company’s Board of Directors on December 30, 2011. TheApril 25, 2013. Except for the provision of a “Going Concern” opinion, the reports of the Former Auditor on the Company’s consolidated financial statements for the years ended December 31, 20102012 and July 31, 20102011, and did not contain an adverse opinion or disclaimer of opinion, and such reports were not qualified or modified as to uncertainty, audit scope, or accounting principle.
During the years ended December 31, 20102012 and July 31, 2010,2011, and through the Dismissal Date, the Company has not had any disagreements with the Former Auditor on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to the Former Auditor’s satisfaction, would have caused them to make reference thereto in their reports on the Company’s consolidated financial statements for such years.
During the years ended December 31, 2010 and July 31, 2010, and through the Dismissal Date, there were no reportable events, as defined in Item 304(a)(1)(v) of Regulation S-K.
The Company has requested that Former Auditor furnish it with a letter addressed to the Securities and Exchange Commission stating whether it agrees with the above statements. A copy of this letter was filed as Exhibit 16.1 to the Form 8KA filed January 6, 2012.
New independent registered public accounting firm
On December 28, 2011April 17, 2013 (the “Engagement Date”), the Company engaged Rosen, Seymour, Shapss, Martin & Company LLPAlan R. Swift, CPA, P.A. (“New Auditor”) as its independent registered public accounting firm for the Company’s fiscal year ended December 31, 2011.2013. The decision to engage the New Auditor as the Company’s independent registered public accounting firm was approved by the Company’s Board of Directors.
During the two most recent fiscal years and through the Engagement Date, the Company has not consulted with the New Auditor regarding either:
1. | application of accounting principles to any specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company’s financial statements, and neither a written report was provided to the Company nor oral advice was provided that the New Auditor concluded was an important factor considered by the Company in reaching a decision as to the accounting, auditing or financial reporting issue; or |
2. | any matter that was either the subject of a disagreement (as defined in Regulation S-K, Item 304(a)(1)(iv) and the related instructions) or reportable event (as defined in Regulation S-K, Item 304 |
Evaluation of Disclosure Controls and Procedures
As of the end of the periodyear 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 havehas 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 workconsult 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 small business, 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.
Managements Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:
| | · | Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and disposition of our assets; |
| | · | Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and |
| | · | Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. |
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations and provide only reasonable assurance, not absolute assurance, with respect to financial statement preparation and presentation. The design of an internal control system reflects resource constraints and the benefits must be considered relative to the costs of implementing and maintaining the system.
Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2011.2013. This assessment was based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on our assessment, other than the control weakness mentioned above, we believe that as of December 31, 20112013 the Company’s internal control over financial reporting was not effective based on those criteria. There is a division of duties problem, caused by the fact that we are thinly staffed. The reason for this thin staffing level is that fact that we do not currently have a viable business with revenues and cash flow to support higher levels of staff.
This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management’s report in this annual report.
Changes in Internal Control over Financial Reporting
There were no changes in the Company’s internal controls over financial reporting during the fourth quarter of 2011fiscal year 2013 that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
ITEM 9A(T). CONTROLS AND PROCEDURES
Not applicable.
ITEM 9B. OTHER INFORMATION
Investment Agreements
On June 27, 2011, the Company entered into an investment agreement (the "Investment Agreement") with Centurion Private Equity, LLC ("Centurion") pursuant to which the Company may issue registered, tradable shares of its common stock, par value $0.00001 per share (the "Common Stock"), up to $10,000,000 over a 36-month period. Pursuant to that certain Registration Rights Agreement (the "Registration Rights Agreement"), the Company agreed to register the shares issuable under the Investment Agreement. Any use of this funding mechanism will be entirely at the Company's discretion.
Subject to an effective registration statement, the Company may submit a notice to Centurion from time to time, as and when the Company deems appropriate in accordance with the terms and conditions of the Investment Agreement. The maximum amount that the Company is entitled to put in any one notice is such number of shares of common stock as equals $250,000 subject to certain volume limitations. The put price of the securities to Centurion will equal the lesser of: (i) 98% of the average of the lowest three daily volume weighted average price, or "VWAPs," of our common stock during the fifteen trading day period beginning on the trading day immediately following the date Centurion receives our put notice (the "Market Price") or (ii) the Market Price minus $0.01. The Investment Agreement provides that the Company must deliver an advance put notice to Centurion at least five business days but no more than ten business days prior to any intended put date. The advance put notice must provide the number of shares included in the put and the put date. Pursuant to the terms of, and in consideration for Centurion entering into, the Investment Agreement, the Company issued 1,214,224 shares of Common Stock to Centurion as a commitment fee in connection with the Investment Agreement (the "Commitment Shares") and 86,730 shares of the Common Stock representing fees incurred by Centurion in connection with the Investment Agreement (the "Fee Shares"), in each case based upon a deemed valuation per share equal to 100% of the volume-weighted average price of the Company's Common Stock for the 5 trading days immediately preceding the date of the Investment Agreement.
The Company may terminate the facility at any time for any reason during an Extended Put Period (as defined in the Investment Agreement), provided that such termination shall have no effect on the parties' other rights and obligations under the Investment Agreement and the Registration Rights Agreement. The Investment Agreement contains customary representations and warranties of each of the Company and Centurion. There are circumstances under which we will not be entitled to put shares to Centurion in accordance with the terms and conditions of the Investment Agreement.
In addition, the Company executed a Registration Rights Agreement with Centurion whereby the Company agreed to register a number of shares of its Common Stock equal to the Commitment Shares, the Fee Shares, any shares of Common Stock to be issued in connection with a put and any shares resulting from a dividend, stock split, exchange, reclassification or similar distribution. The Company agreed to file a registration statement with the Securities and Exchange Statement to register such shares within 60 days and to have such registration be effective within 120-150 days and to keep such registration statement, or additional registration statements if necessary, remain effective until either all of the registered shares are sold or the shares may be sold in accordance with Rule 144 of the Securities Act of 1933, as amended.
In connection with the Investment Agreement, the Company issued the Commitment Shares and the Fee Shares to Centurion. These securities were issued in reliance on Section 4(2) of the Securities Act of 1933, as amended. The issuance did not involve any general solicitation or advertising by us. Centurion acknowledged the existence of transfer restrictions applicable to the securities sold by us. Certificates representing the securities sold contain a legend stating the restrictions on transfer to which such securities are subject. The commitment fee for the transaction has been capitalized under Other Assets.Not applicable.
Below are the names and certain information regarding our executive officers and directors:
| Name | | Age | | Position with the Company |
| | | | | |
Liat FrancoErik Klinger | | 36 | 44 | | Chief Executive Officer President, Treasurer, Secretary and Director |
Erik Klinger | | 42 | | Chief Financial Officer andSole Director |
| | | | | | |
Liat Franco - On January 18, 2011, Mrs. Liat Franco was appointed byMay 20. 2013, Robert Price resigned as CEO of the Company to serve aspursue other opportunities. This decision was not the Secretaryresult of any disagreement with the Company. Mrs. Franco graduated with a B.A. Magna Cum Laude from the University of California at Los Angeles and holds a J.D. from the UCLA School of Law in California where she specialized in corporate law, which she received in 2003. Prior to joining the Company, Mrs. Franco served as a Security Officer for foreign consulate in Beverly Hills, California, from 2003 until 2009. From 2009 to the present Mrs. Franco has served as a lecturer on contract law and evidence law at foreign college. On March 4, 2011, the Company entered into an Employment Agreement (the “Employment Agreement”) with Liat Franco whereby the Company will employ Ms. Franco as its Secretary for a term of one year (the “Term”). On November 15, 2011, Liat Franco was appointed by the Company to serve as the Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer and a director of the Company.
Erik Klinger - On December 20, 2011, effective January 2, 2012, Erik Klinger was appointed by the Company to serve as the Chief Financial Officer and a Director of the Company. Mr. Klinger’s principal objectives will be to assist in the deploymentOn May 20. 2013, Robert Price resigned as CEO of the Corporation’s assets, managementCompany to pursue other opportunities, and oversight ofErik Klinger became the Corporation’s financial statements and filings withChief Executive Officer effective the Securities and Exchange Commission and to perform due diligence on proposed acquisition targets, if any.same day. Mr. Klinger has extensive experience in Private Equity, Management Consulting, and Entrepreneurship. During his career, Mr. Klinger has worked with small companies to Fortune 500 companies. From May 2011 to present, Mr. Klinger has served as a partner at Ocelot Partners in Los Angeles, California, a company that provides due diligence services both on the buy side and on the sell side of transactions. From the years 2004 to 2011, Mr. Klinger was a Partner at Mindshift Partners, which focused on providing pre-audit preparation to public and private companies. As a Private Equity Associate at Orchard Capital from 1999 - 2001, he analyzed, structured, and helped to close leveraged buyouts of companies, and served on the Board of Directors of a large private airfreight carrier. Formerly, Mr. Klinger worked at Price Waterhouse (New York office) from 1994 - 1997, where his client work focused on process improvement and systems integration. Mr. Klinger earned a Masters of Business Administration from the Anderson School at UCLA in 1999 and earned a Bachelor’s Degree in Engineering Sciences modified with Economics from Dartmouth College in 1992.
Our directors are elected for a term of one year or until their successors are elected and qualified.
Family Relationships
There are no family relationships among our directors and executive officers. There is no arrangement or understanding between or among our executive officers and directors pursuant to which any director or officer was or is to be selected as a director or officer.
Involvement in Certain Legal Proceedings
To our knowledge, during the last ten years, none of our directors and executive officers has:
| | · | Had a bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time. |
| | · | Been convicted in a criminal proceeding or been subject to a pending criminal proceeding, excluding traffic violations and other minor offenses. |
| | · | Been subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities. |
| | · | Been found by a court of competent jurisdiction (in a civil action), the SEC, or the Commodities Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated. |
| | · | Been the subject to, or a party to, any sanction or order, not subsequently reverse, suspended or vacated, of any self-regulatory organization, any registered entity, or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member. |
CORPORATE GOVERNANCE
Committees
As we increase the number of Directors in the future, we intend to appoint an audit committee. Accordingly, we will designate a director as an "audit committee financial expert", as that term is defined in the rules of the Securities and Exchange Commission, at such time.
The Board of Directors does not have a standing nominating committee. Nominations for election to the Board of Directors may be made by the Board of Directors or by any shareholder entitled to vote for the election of directors in accordance with our bylaws and Nevada law.
Meetings may be held from time to time to consider matters for which approval of our Board of Directors is desirable or is required by law.
Agreements with Officers and Directors
On April 23, 2010,Effective December 31, 2012, the Company entered into the Dunckel Agreement with Darren Dunckel (“Dunckel”) wherebyissued common shares to former directors William Glass, Stewart Reich, and Liat Franco to settle their accrued Director and Officer’s fees. To Messrs. Glass and Reich, the Company will employ Dunckel as its Chief Executive Officer forissued 2,042,740 restricted shares each valued at $20,427. To Mrs. Franco, formerly a term of two years (the “Term”). For his services duringDirector and the Term as Chief Executive OfficerCEO of the Company, Dunckel received annual compensation of $120,000 or $10,000 per month. Dunckel was also granted a signing bonus consisting of 4,000,000 shares of common stock of the Company upon signing the Dunckel Agreement, of which he assigned or sold 1,000,000. Dunckel also received during the Term such medical, health and disability insurance as the Company provides to its executive officers, two weeks of vacation in each calendar year and eligibility to participate in such pension, profit-sharing, retirement and other benefits as are available to executive officers of the Company. On November 15, 2011, Darren Dunckel resigned as an executive officer and director of the Company.On July 29, 2010, Anita Atias and Stewart Reich were elected as members of the Board of Directors of the Company. On August 5, 2010, Mr. William Glass was elected as a member of the Board of Directors. Mr. Reich and Mr. Glass were each to initially receive on an annual basisissued 554,520 restricted shares valued at the commencement of each term shares of common stock of the Company registered on a Form S-8 Registration Statement equal to $6,000 divided by the Company’s market price discounted by 25%. On March 4, 2011, the Company amended the Director Agreements by and between the Company and William Glass and Stewart Reich whereby Mr. Glass and Mr. Reich will each receive shares of common stock of the Company equal to $12,000 divided by the Company’s market price discounted by 25% on an annual basis. The shares of common stock will be restricted as required under the Securities Act of 1933, as amended. On November 15, 2011, William Glass and Stewart Reich resigned as directors.
On January 18, 2011, Mrs. Liat Franco was appointed by the Company to serve as the Secretary of the Company. For her services during the Term as Secretary, the Company will issue Ms. Franco 15,000 shares of common stock of the Company, which will have a restrictive legend under the Securities Act of 1933, as amended. In the event that the Term of the Employment Agreement is extended, then the number of shares of common stock will be determined by dividing $6,000 by the market price on the first trading day of the Term. On November 15, 2011, Liat Franco was appointed by the Company to serve as the Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer and a director of the Company. The entire compensation of Mrs. Franco as the Company’s President (on top of her compensation as the Company’s Secretary) was set as $50,000 for the year ended December 31, 2011.$5,545.
Effective January 2, 2012, Erik Klinger was appointed by the Company to serve as the Chief Financial Officer and a Director of the Company. Mr. Klinger’s principal objectives will be to assist in the deployment of the Corporation’s assets, management and oversight of the Corporation’s financial statements and filings with the Securities and Exchange Commission and to perform due diligence on proposed acquisition targets, if any. Since his appointment in January, a company controlled byOn May 20, 2013, Mr. Klinger has received compensationalso assumed the title of $3,500 per month for part-time services..Chief Executive Officer, concurrent with Robert Price’s departure.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934, requires our directors, executive officers and persons who own more than 10% of our common stock to file with the SEC initial reports of ownership and reports of changes in ownership of common stock and other of our equity securities. During the fiscal year ended December 31, 2011,2012, our Chief Executive Officer and Chief Financial Officer did not file the required reports under Section 16.
Code of Ethics
We have adopted a Code of Ethics that applies to all officers, directors and employees. The Company will provide to any person without charge a copy of such code of ethics upon written request to the Company at its registered offices.
The following tables set forth all compensation paid inwith respect of our Chief Executive Officer and our most highly compensated three executive officers (collectively, the "Named Executive Officers") for the yearyears ended December 31, 20112013 and for the year ended December 31, 2010.2012.
Summary Compensation Table
| Name and | | | Salary | | | Bonus | | | Restricted Stock Awards | | | Option Awards | | | Non-Equity Incentive Plan Compensation | | | Nonqualified Deferred Compensation Earnings | | | All Other Compensation | | | Total | |
| Position | Year | | ($) | | | ($) | | | ($) | | | ($) | | | ($) | | | ( $) | | | ($) | | | ($) | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Moshe J. Schnapp CEO(1) | 2010 | | | 28,286 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 28,286 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Darren Dunckel CEO (2) | 2010 | | | 88,459 | | | | | | | | 40,000 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 128,459 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Darren Dunckel CEO (2) | 2011 | | | 107,500 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 107,500 | | | | 107,500 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Liat Franco | 2011 | | | 50,000 | | | | 0 | | | | 4,159 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 54,159 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Name and | | | Salary | | Bonus | | Restricted Stock Awards | | | Option Awards | | | Non-Equity Incentive Plan Compensation | | Nonqualified Deferred Compensation Earnings | | All Other Compensation | | Total |
| Position | Year | | ($) | | ($) | | ($) | | | ($) | | | ($) | | ( $) | | ($) | | ($) |
| | | | | | | | | | | | | | | | | | | | |
| | 2012 | | | 0 | | 0 | | | 0 | | | | 0 | | | | 0 | | 0 | | | 49,166 | | 49,166 |
Erik Klinger | 2013 | | | 0 | | 0 | | | 0 | | | | 0 | | | | 0 | | 0 | | | 49,200 | | 49.200 |
(1) | Resigned as an executive officer and director in 2010. |
(2) | Resigned as an executive officer and director in 2011 (during 2011 the Company disbursed Mr. Dunckel $37,014 for travel expenses which is not included in his $107,500 base compensation). |
The compensation discussed herein addresses all compensation awarded to, earned by, or paid to our named executive officer.
Per the Dunckel Agreement whereby the Company employed Darren Dunckel as its Chief Executive Officer until November 15, 2011 when he resigned, the Company paid $107,500 as compensation and additional $37,014 for travel costs for the year ended on December 31, 2011.
Per the Officer and Directors agreements, the Company accrued $34,800 as compensation for the year ended on December 31, 2011 since commencement.
Per the Franco Agreement whereby the Company employed Liat Franco as its Chief Executive Officer, the Company accrued $50,000 as salary and related compensation for the year ended on December 31, 2011.
Per the Klinger Agreement whereby the Company employed Erik Klinger as its Chief Financial Officer, the Company accrued $6,500 as salary and related compensation for the year ended on December 31, 2011.
There are no other stock option plans, retirement, pension, or profit sharing plans for the benefit of our sole officer and director other than as described herein.
Director Compensation
Pursuant to the respective board of directors' agreements between the Company and each director, Mr. Reich and Mr. Glass willhave each receivereceived 2,042,740 restricted shares of common stock of the Company equal to $12,000 divided by the Company’s market price discounted by 25% on an annual basis. The shares of common stock will be restricted as required under the Securities Act of 1933, as amended.$20,247.
For services during the Term as Secretary, the Company will issue Ms.has issued Mrs. Franco 15,000554,521 restricted shares of common stock of the Company which will have a restrictive legend under the Securities Act of 1933, as amended. In the event that the Term of the Employment Agreement is extended, then the number of shares of common stock will be determined by dividing $6,000 by the market price on the first trading day of the Term.valued at $5,545 at December 31, 2012. The entire compensation ofreceived by Mrs. Franco as the Company’s President (in addition to her compensation as the Company’s Secretary) was set as $50,000$55,545 for the year ended December 31, 2011.2012.
OnMr. Klinger’s total compensation was $98,366 over the two-year period from January 1, 2012 to December 29, 2010, Mrs. Atias resigned as a director of the Company due to a potential conflict of interest. Ms. Atias is currently the Operations Manager for Online Trading Academy, and the Company operates in a similar industry. Ms. Atias was not compensated by the Company for her services.
| Name | | Fees Earned or Paid in Cash ($) | | Stock Awards ($) | | Stock Options ($) | | Non-equity Incentive Plan Compensation ($) | | Non-Qualified Deferred Compensation Earnings ($) | | All Other Compensation ($) | | Total ($) | | | Fees Earned or Paid in Cash ($) | | Stock Awards ($) | | Stock Options ($) | | Non-equity Incentive Plan Compensation ($) | | Non-Qualified Deferred Compensation Earnings ($) | | All Other Compensation ($) | | Total ($) | |
| Darren Dunckel* | | 107,500 | | | | | 0 | | 0 | | 0 | | 0 | | 107,500 | | |
| William Glass | | 0 | | 15,321 | | 0 | | 0 | | 0 | | 0 | | 15,321 | | | 0 | | 20,247 | | 0 | | 0 | | 0 | | 0 | | 20,247 | |
| Stewart Reich | | 0 | | 15,321 | | 0 | | 0 | | 0 | | 0 | | 15,321 | | | 0 | | 20,247 | | 0 | | 0 | | 0 | | 0 | | 20,247 | |
| Liat Franco | | 50,000 | | 5,159 | | 0 | | 0 | | 0 | | 0 | | 54,159 | | | | | 5,545 | | 0 | | 0 | | | 0 | | 50,000 | | 55,545 | |
| Erik Klinger | | | | | 0 | | 0 | | 0 | | 0 | | 98,366 | | 98,366 | |
*) During 2011 the Company reimbursed Mr. Dunckel $37,014 for his traveling expenses on top of his $107,500 base salary.
Outstanding Equity Awards at Fiscal Year-End
Other than the above disclosure there are no outstanding equity awards outstanding at December 31, 2011.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table sets forth the beneficial ownership of our company'sCompany's common stock as of April 5, 2012,14, 2014, as to
| | · | each person known to beneficially own more than 5% of the Company's common stock |
| | |
| | · | all directors and officers as a group |
Unless otherwise indicated, each of the stockholders can be reached at our principal executive offices located at Moria 30 Ave., Haifa, Israel 34572.| Name of Beneficial Owner | | Common Stock Beneficially Owned (1) | | | Percentage of Common Stock (1) | |
| Micrologic Design Automation, Inc. | | | 200,000,000 | | | | 71.77 | % |
| | | | | | | | | |
| Erik Klinger (2) | | | 0 | | | | 0.00 | % |
| Name of Beneficial Owner | | Common Stock Beneficially Owned (1) | | | Percentage of Common Stock (1) | |
| Darren Dunckel (3) | | | 3,000,000 | | | | 8.76 | % |
| Stewart Reich (3) | | | 0 | | | | * | |
| William Glass (3) | | | 0 | | | | * | |
| Liat Franco (2) | | | 0 | | | | * | |
| Erik Klinger (2) | | | 0 | | | | * | |
| A. T. Limited (4) | | | 5,000,000 | | | | 10.15 | % |
| Watford Holding Inc. (4) | | | 5,000,000 | | | | 10.15 | % |
| James Bay Holding Inc. (4) | | | 5,000,000 | | | | 10.15 | % |
| Mladen Poropot | | | 2,833,333 | | | | 8.27 | % |
| | | | | | | | | |
| Total Officers and Directors (2 persons) | | | 3,000,000 | | | | 8.76 | % |
* less than 1%,
(1) Beneficial ownership is determined in accordance with the Rule 13d-3(d)(1) of the Exchange Act, as amended and generally includes voting or investment power with respect to securities. Pursuant to the rules and regulations of the Securities and Exchange Commission, shares of common stock that an individual or group has a right to acquire within 60 days pursuant to the exercise of options or warrants are deemed to be outstanding for the purposes of computing the percentage ownership of such individual or group, but are not deemed to be outstanding for the purposes of computing the percentage ownership of any other person shown in the table. The above is based on 34,248,585 278,663,366 shares of common stock outstanding as of April 5, 2012.14, 2014.
(2) Officer and/or director of the Company.
(3) Resigned as an No Director, executive officer, and/affiliate or director.
(4) Assumesany owner of record or beneficial owner of more than 5% of any class of voting securities of the full conversion of Series B Preferred Stock.Company is a party adverse to the Company or has a material interest adverse to the Company.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE. On or around December 31, 2012, the Company issued common shares to former directors William Glass, Stewart Reich, and Liat Franco to settle their Director fees. To Messrs. Glass and Reich, we issued 2,042,740 restricted shares each valued at $20,247. To Mrs. Franco, formerly a Director and the CEO of the Company, the Company issued 554,520 restricted shares valued at $5,545.
On April 23, 2010, the Company entered into the Dunckel Agreement to employ Dunckel as its Chief Executive Officer for a term of two years (the “Term”). For his services during the Term as Chief Executive Officer, the Company will pay Dunckel compensation of $120,000 to be paid on a monthly basis at a rate of $10,000 per month. Dunckel was also granted a signing bonus consisting of 4,000,000 shares of common stock of the Company upon signing the Dunckel Agreement. Dunckel will also receive during the Term such medical, health and disability insurance as the Company provides to its executive officers, two weeks of vacation in each calendar year and eligibility to participate in such pension, profit-sharing, retirement and other benefits as are available to executive officers of the Company. Mr. Dunckel resigned from his duties as an officer and director with the Company on November 15, 2011.
On July 29, 2010, Anita Atias and Stewart Reich were elected as members of the Board of Directors of the Company. On August 5, 2010, Mr. William Glass was elected as a member of the Board of Directors. Mr. Reich and Mr. Glass will each receive on an annual basis at the commencement of each term shares of common stock of the Company registered on a Form S-8 Registration Statement equal to $6,000 divided by the Company’s market price discounted by 25%. Mrs. Atias has since resigned from the Board due to a conflict of interest. On March 4, 2011, the Company amended the Director Agreements by and between the Company and William Glass and Stewart Reich whereby Mr. Glass and Mr. Reich will each receive shares of common stock of the Company equal to $12,000 divided by the Company’s market price discounted by 25% on an annual basis. The shares of common stock will be restricted as required under the Securities Act of 1933, as amended. Mr. Glass and Mr. Reich resigned as Directors of the Company on November 15, 2011.On January 18, 2011, Mrs. L. Franco2012, Robert Morris Price was appointed by the Company to serve as the SecretaryPresident, Chief Executive Officer, and Treasurer as well as Chairman of the Company. For her services duringMr. Price has been involved in the Termprivate practice of law for the last 50 years and was admitted to the District of Columbia Bar in 1963, to the U.S. Supreme Court in 1967, and to Maryland and U.S. Court of Appeals, Fourth Circuit in 1976. Mr. Price received an AB from the University of South Carolina in 1959 and his law degree from the George Washington University in 1962. Mr. Price does not have a Director agreement as Secretary, the Company will issue Ms. Franco 15,000 shares of common stockDecember 31, 2012.
On May 20. 2013, Robert Price resigned as CEO of the Company which will have a restrictive legend underto pursue other opportunities. This decision was not the Securities Actresult of 1933, as amended. Inany disagreement with the event that the Term of the Employment Agreement is extended, then the number of shares of common stock will be determined by dividing $6,000 by the market price on the first trading day of the Term. The entire compensation of Mrs. Franco as the Company’s President (on top of her compensation as the Company’s Secretary) was set as $50,000 for the year ended December 31, 2011.Company.
EffectiveOn December 20, 2011, effective January 2, 2012, Erik Klinger was appointed by the Company to serve as the Chief Financial Officer and a Director of the Company. Mr. Klinger’s principal objectives will be to assist in the deploymentOn May 20. 2013, Robert Price resigned as CEO of the Corporation’s assets, managementCompany to pursue other opportunities, and oversight ofErik Klinger became the Corporation’s financial statements and filings withChief Executive Officer effective the Securities and Exchange Commission and to perform due diligence on proposed acquisition targets, if any. Since his appointment in January, a company controlled bysame day. Mr. Klinger has received compensationextensive experience in Private Equity, Management Consulting, and Entrepreneurship. During his career, Mr. Klinger has worked with small companies to Fortune 500 companies. From May 2011 to present, Mr. Klinger has served as a partner at Ocelot Partners in Los Angeles, California, a company that provides due diligence services both on the buy side and on the sell side of $3,500 per month for part-time services.transactions. From the years 2004 to 2011, Mr. Klinger was a Partner at Mindshift Partners, which focused on providing pre-audit preparation to public and private companies. As a Private Equity Associate at Orchard Capital from 1999 - 2001, he analyzed, structured, and helped to close leveraged buyouts of companies, and served on the Board of Directors of a large private airfreight carrier. Formerly, Mr. Klinger worked at Price Waterhouse (New York office) from 1994 - 1997, where his client work focused on process improvement and systems integration. Mr. Klinger earned a Masters of Business Administration from the Anderson School at UCLA in 1999 and earned a Bachelor’s Degree in Engineering Sciences modified with Economics from Dartmouth College in 1992.
Rasel, LTD - Affiliated Party (During 2010)23
On October 6, 2009 the Company signed a Note Payable for $25,000 payable to RASEL, LTD (“Rasel”) (an affiliated entity) due on October 6, 2010 at 4% per annum. The proceeds were used to pay for half of an existing accounts payable to Stephen Fleming for legal fees incurred at the Company’s inception. On October 20, 2009 the Company signed a Note Payable for $50,000 payable to Rasel (a Company Shareholder) due on October 20, 2010 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 (a Company Shareholder) due on October 30, 2011 at 4% per annum. These proceeds will be used for working capital and future expenses. On January 22, 2010 the Company signed an amendment to extend the maturity date of the Promissory Notes in the amount of $50,000 and $25,000 dated October 6, 2009 and October 20, 2009, respectively, to October 30, 2011. 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 said note with either a 5% discount to the market price or a fixed price of $0.60. Said extension of maturity was agreed to be effective as of December 30, 2010, the accrued balance of the notes including interest as of December 31, 2011 is $135,548.
Procedures for Approval of Related Party Transactions
Our Board of Directors is charged with reviewing and approving all potential related party transactions. All such related party transactions must then be reported under applicable SEC rules. We have not adopted other procedures for review, or standards for approval, of such transactions, but instead review them on a case-by-case basis.
Director Independence
In 2011 Board of Directors has determined that Mrs. Franco and Mr. Klinger are each independent directors as of December 31, 2011 based on the definition of independence in the listing standards of the NASDAQ Corporate Governance Rules. Mr. Klinger was subsequent to the year end, appointed as the Chief Financial Officer of the Company as of January 2, 2012 and, as a result, Mr. Klinger is no longernot considered independent. In 2010, Board of Directors has determined that Mr. Reich and Mr. Glass are each independent directors as of December 31, 2010 based on the definitiondate of independence in the listing standards of the NASDAQ Corporate Governance Rules.this filing. The Board of Directors is currently evaluating committee charters with the goal of establishing a Compensation Committee, Governance and Nominating Committee and an Audit Committee.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
WeOn December 28, 2011 (the "Engagement Date"), the Company engaged Eugene M. Egeberg, CPARosen, Seymour, Shapss, Martin & Company LLP ("Rosen") as our auditorits independent registered public accounting firm for the Company's fiscal year ended December 31, 2010 (and 2009).
Audit Fees. The aggregate fees accrued for professional services rendered for the audit of our annual financial statements for the years ended December 31, 2010 and 2009 and for the reviews of the financial statements included in our Quarterly Reports on Form 10-Q during these fiscal years were $10,000 for 2010 and $2,500 for 2009. The audit fees incurred in 2010 are not comparable to other periods, because the Company a) restated their financials during the year due to the incorrect classification of certain startup-related expenses in 2009, among other items, and b) the Company changed their fiscal year in 2010 to end on December 31, 2010 from July 31, 2010.2011.
On December 30, 2011 (the "Dismissal Date"), weApril 25, 2013, the Company advised Rosen that it was dismissed Eugene M. Egeberg, CPA (the "Former Auditor") as the Company'sCompany’s independent registered public accounting firm. The decision to dismissExcept for the Former Auditor asprovision of a “Going Concern” opinion, the Company's independent registered public accounting firm was approved by the Company's Board of Directors on December 30, 2011. The reports of the Former Auditor on the Company'sCompany’s consolidated financial statements for the years ended December 31, 20102012 and July 31, 20102011 did not contain an adverse opinion or disclaimer of opinion, and such reports were not qualified or modified as to uncertainty, audit scope, or accounting principle. During 2011 and until Dismissal Date we incurred $9,000 in fees for professional services rendered for the reviews of the financial statements included in our Quarterly Reports on Form 10-Q.
On December 28, 2011April 17, 2013 (the "Engagement Date"“Engagement Date”), the Company engaged Rosen, Seymour, Shapss, Martin & Company LLP ("Alan R. Swift, CPA, P.A. (“New Auditor"Auditor”) as its independent registered public accounting firm for the Company'sCompany’s fiscal year ended December 31, 2011.2013. The decision to engage the New Auditor as the Company'sCompany’s independent registered public accounting firm was approved by the Company'sCompany’s Board of Directors.
The aggregate fees accruedAudit Fees
For the Company’s fiscal year ended December 31, 2013, we were billed approximately $9,620 by our current auditor for professional services rendered for the review of our financial statements.
For the Company’s fiscal year ended December 31, 2013, we were billed approximately $35,171 by our former auditor for professional services rendered for the audit of our annual financial statementsstatements.
For the Company’s fiscal year ended December 31, 2012, we paid $94,585 to our former auditor for professional services related to the audit of 2011 year-end and reviews of the quarterly filings. These fees were higher than anticipated, due to additional work related to the restatement of prior year’s financials. In fiscal 2013, we paid $35,171 to Rosen in connection with the audit of fiscal 2012.
Audit Related Fees
There were no fees for audit related services for the years ended December 31, 20112013 and for the reviews of the financial statements included in our Quarterly Reports on Form 10-Q during these fiscal years were $9,000 for 2011 for the Former Auditor. In fiscal 2012, in lieu of additional work required by the New Auditor that relate to restatement of prior year’s financials, the Company and the New Auditors agreed to modify their fees to $55,000 from $30,000.2012.
Tax Fees
We incurred $12,500$0 and $15,000 fees to an accountant for tax advice and tax compliance services during the fiscal years ended December 31, 2010.2013 and 2012, respectively.
All Other Fees
The Company did not incur any other fees related to services rendered by our current and/or former auditor for the years ended December 31, 2013 and 2012.
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
The Company’sEffective May 6, 2003, the Securities and Exchange Commission adopted rules that require that before our auditor is engaged by us to render any auditing or permitted non-audit related service, the engagement be:
● approved by our audit committee; or
● entered into pursuant to pre-approval policies and procedures established by the audit committee, provided the policies and procedures are detailed as to the particular service, the audit committee is informed of each service, and such policies and procedures do not include delegation of the audit committee's responsibilities to management.
We do not have an audit committee. Our entire board has considered whether the provision of non-auditdirectors pre-approves all services is compatible with maintaining the principal accountant’s independence.provided by our independent auditors.
| 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 4.10
| | 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) |
10.14.12
4.13 4.14 | | $400,000 Secured and Collateralized Promissory Note issued by Vulcan Oil & Gas Inc. (23) Securities Purchase Agreement dated July 24, 2013 entered with Asher Enterprise Inc. (26) 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) |
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.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) |
21.1
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 pursuant to Rule 13a-14(a) or Rule 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
31.2 | | Certification ofand 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 pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
32.2 | | Certification ofand Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
EX-101.INS | | XBRL INSTANCE DOCUMENT |
EX-101.SCH | | XBRL TAXONOMY EXTENSION SCHEMA DOCUMENT |
EX-101.CAL | | XBRL TAXONOMY EXTENSION CALCULATION LINKBASE |
EX-101.DEF | | XBRL TAXONOMY EXTENSION DEFINITION LINKBASE |
EX-101.LAB | | XBRL TAXONOMY EXTENSION LABELS LINKBASE |
EX-101.PRE | | XBRL TAXONOMY EXTENSION 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. |
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: April 13, 2012 | By: | /s/ Liat Franco | |
| | Liat Franco | |
| | Chief Executive Officer, President, | |
| | Secretary, Treasurer and Director | |
| | (Principal Executive | |
| | Officer) | |
| | | |
| 14, 2014 | By: | /s/ Erik Klinger | |
| | | Erik Klinger | |
| | | Chief FinancialExecutive Officer and Director | |
| | | | |
| | (Principaland Sole Director (Principal Executive, Financial and Accounting and | |
| | Financial 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.
| SIGNATURE | | NAME | | TITLE | | DATE |
| | | | | | | |
| | | | | | | |
/s/Liat Franco Erik Klinger | | Liat FrancoErik Klinger | | Director, CEO President, Treasurer and SecretarySole Director | | April 13,14, 2014 |
| | | | (Principal Executive, Financial and Accounting Officer) | | |
FOREX INTERNATIONAL TRADING CORP.
December 31, 2013 and 2012
TABLE OF CONTENTS
| | | |
| | | F-2 – F-3 | |
| | | | | | | |
/s/ Erik Klinger | | Erik Klinger | | Director and CFO | | April 13, 2012 |
| | CONSOLIDATED FINANCIAL STATEMENTS | | | | |
| | | | | |
| | | F-4 | |
| | | | | |
| | |
FOREX INTERNATIONALTRADING CORP.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2011 and 2010
TABLE OF CONTENTS
| |
REPORTS OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMS | F-2 – F-3 |
| |
CONSOLIDATED FINANCIAL STATEMENTSF-5 | |
| | |
Consolidated Balance Sheets as of December 31, 2011 and 2010 | F-4 |
| | |
Consolidated Statements of Operations for the Two Years Ended December 31, 2011 | F-5 |
| |
| | | F-6 | |
| | | | | |
| | | F-7 – F-8 | |
| | | | | |
| F-9 | | F-8 – F-20F-16 | |
| | | | |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders
Forex International Trading Corp. and Subsidiary
We have audited the accompanying consolidated balance sheet of Forex International Trading Corp. and SubsidiariesSubsidiary as of December 31, 2013, and the related consolidated statement of operations, changes in stockholders' equity, and cash flows for the year ended December 31, 2013. Forex International Trading Corp. and Subsidiary's management is responsible for these consolidated financial statements. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. Forex International Trading Corp. and Subsidiary is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over fmancial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Forex International Trading Corp. and Subsidiary's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Forex International Trading Corp. and Subsidiary as of December 31, 2013, and the results of its operations and its cash flows for the year ended December 31, 2013, in conformity with accounting principles generally accepted in the United States of America.
The accompanying consolidated financial statements have been prepared assuming that Forex International Trading Corp. and Subsidiary will continue as a going concern. As discussed in Note 3 to the consolidated financial statements, Forex International Trading Corp. and Subsidiary has suffered recurring losses, and has an accumulated deficit of $2,116,461 as of December 31, 2013. This raises substantial doubt about Forex International Trading Corp. and Subsidiary's ability to continue as a going concern. Management's plans concerning these matters are also described in Note 3. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ Alan R. Swift, CPA, P.A.
Certified Public Accountants and Consultants
Palm Beach Gardens, Florida
April 3, 2014
800 VILLAGE SQUARE CROSSING, SU1TE 118, PALM BEACH GARDENS, FL 3341 0
PHONE (561) 656-081 8 FAX (561 ) 658-0245 www.aswiftcpa.com