UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549 |
FORM 10-Q |
x | Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. |
For the quarterly period ended June 30, 2009. |
or |
o | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. |
For the transition period from ___________ to ___________ |
Commission File Number: 000-51837 |
OPTIONABLE, INC. (Exact Name of Registrant as Specified in Its Charter) |
Delaware | 52-2219407 | |
(State or Other Jurisdiction of Incorporation or | (IRS Employer Identification No.) | |
Organization) | ||
1230 Avenue of the Americas, Seventh Floor, New York, NY | 10020 | |
(Address of Principal Executive Offices) | (Zip Code) |
(914) 773-1100 |
(Registrant’s Telephone Number Including Area Code) |
Indicate by check mark whether the registrant (1) has filed all reports required by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer o | Accelerated Filer o | |
Non-accelerated Filer o | Smaller reporting company x |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes x No o
The number of outstanding shares of the registrant’s Common Stock as of August 14, 2009 is 48,328,328.
1
INDEX |
PART I: FINANCIAL INFORMATION | |||
ITEM 1: | FINANCIAL STATEMENTS (Unaudited) | 3 | |
Consolidated Balance Sheets | 3 | ||
Consolidated Statements of Operations | 4 | ||
Consolidated Statements of Cash Flows | 5 | ||
Notes to the Consolidated Financial Statements | 6 | ||
ITEM 2: | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | 22 | |
ITEM 3 : | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | 25 | |
ITEM 4: | CONTROLS AND PROCEDURES | 25 | |
PART II: OTHER INFORMATION | |||
ITEM 1 | LEGAL PROCEEDINGS | 26 | |
ITEM 1A : | RISK FACTORS | 27 | |
ITEM 2 | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS | 27 | |
ITEM 3 | DEFAULTS UPON SENIOR SECURITIES | 27 | |
ITEM 4 | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS | 27 | |
ITEM 5 | OTHER INFORMATION | 27 | |
ITEM 6: | EXHIBITS | 27 | |
SIGNATURES | 28 |
2
OPTIONABLE, INC. | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
June 30, 2009 | December 31, 2008 | |||||||
ASSETS | (Unaudited) | (1) | ||||||
Current Assets: | ||||||||
Cash and cash equivalents | $ | 4,237,091 | $ | 8,974,282 | ||||
Recoverable Income Taxes | 908,988 | 958,294 | ||||||
Notes Receivable, net of allowance for doubtful accounts of $75,000 at June 30, 2009 | - | - | ||||||
Prepaid Expenses | 1,185,740 | 1,269,827 | ||||||
Total current assets | 6,331,819 | 11,202,403 | ||||||
Total assets | $ | 6,331,819 | $ | 11,202,403 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current Liabilities: | ||||||||
Accounts payable and accrued expenses | $ | 534,493 | $ | 420,590 | ||||
Due to stockholder | - | 97,907 | ||||||
Income Tax Payable | 261,804 | 83,555 | ||||||
Total current liabilities | 796,297 | 602,052 | ||||||
Due to stockholder, net of unamortized discount of $2,618,270 at December 31, 2008 | - | 2,426,240 | ||||||
Due to director, net of unamortized discount of $330,064 and $355,126 | ||||||||
at June 30, 2009 and December 31, 2008, respectively | 178,633 | 153,571 | ||||||
Total liabilities | 974,930 | 3,181,863 | ||||||
Stockholders' Equity: | ||||||||
Preferred Stock; $.0001 par value, 5,000,000 shares authorized, none issued | ||||||||
and outstanding | - | - | ||||||
Common stock; $.0001 par value, 100,000,000 shares authorized, | ||||||||
52,428,203 issued and 48,328,328 and 52,423,403 outstanding at June 30, 2009 | 5,242 | 5,242 | ||||||
and December 31, 2008, respectively | ||||||||
Additional paid-in capital | 162,779,028 | 162,766,096 | ||||||
Treasury stock at cost, 4,099,875 and 4,800 shares at June 30, 2009 | ||||||||
and December 31, 2008, respectively | (47,552 | ) | (2,506 | ) | ||||
Accumulated deficit | (157,379,829 | ) | (154,748,292 | ) | ||||
Total stockholders’ equity | 5,356,889 | 8,020,540 | ||||||
Total liabilities and stockholders’ equity | $ | 6,331,819 | $ | 11,202,403 | ||||
(1) Derived from audited financial statements |
See Notes to Unaudited Financial Statements.
3
OPTIONABLE, INC. | ||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
For the three-month period ended | For the six-month period ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
Operating expenses: | ||||||||||||||||
Selling, general and administrative | $ | 1,212,833 | $ | 582,849 | $ | 2,275,648 | $ | 1,604,584 | ||||||||
Research and development | - | 215,400 | - | 460,445 | ||||||||||||
Total operating expenses | 1,212,833 | 798,249 | 2,275,648 | 2,065,029 | ||||||||||||
Operating loss | (1,212,833 | ) | (798,249 | ) | (2,275,648 | ) | (2,065,029 | ) | ||||||||
Other income (expense): | ||||||||||||||||
Interest income | 7,006 | 68,095 | 34,691 | 156,688 | ||||||||||||
Interest expense to related parties | (12,718 | ) | (94,500 | ) | (128,776 | ) | (186,219 | ) | ||||||||
Total other expenses | (5,712 | ) | (26,405 | ) | (94,085 | ) | (29,531 | ) | ||||||||
Loss before income tax | (1,218,545 | ) | (824,654 | ) | (2,369,733 | ) | (2,094,560 | ) | ||||||||
Income tax benefit ( expense) | 216,818 | 313,643 | (261,804 | ) | 809,414 | |||||||||||
Net loss | $ | (1,001,727 | ) | $ | (511,011 | ) | $ | (2,631,537 | ) | $ | (1,285,146 | ) | ||||
Basic earnings per common share | $ | (0.02 | ) | $ | (0.01 | ) | $ | (0.05 | ) | $ | (0.02 | ) | ||||
Diluted earnings per common share | $ | (0.02 | ) | $ | (0.01 | ) | $ | (0.05 | ) | $ | (0.02 | ) | ||||
Basic and diluted weighted average common | ||||||||||||||||
shares outstanding | 48,328,328 | 52,023,047 | 49,617,937 | 52,023,047 |
See Notes to Unaudited Financial Statements. |
4
OPTIONABLE, INC. | ||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
For the six-month periods ended | ||||||||
June 30, | ||||||||
2009 | 2008 | |||||||
(Unaudited) | (Unaudited) | |||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (2,631,537 | ) | $ | (1,285,146 | ) | ||
Adjustments to reconcile net loss to net cash used in | ||||||||
operating activities: | ||||||||
Depreciation | - | 48,177 | ||||||
Amortization of debt discount | 128,776 | 186,219 | ||||||
Provision for doubtful accounts | 75,000 | (625 | ) | |||||
Fair value of warrants and options | 12,932 | 11,370 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | - | 625 | ||||||
Due to shareholder | (97,907 | ) | - | |||||
Other current assets | 84,087 | (12,267 | ) | |||||
Accounts payable and accrued expenses | 113,903 | (90,722 | ) | |||||
Income tax payable | 178,249 | - | ||||||
Recoverable income taxes | 49,306 | 840,586 | ||||||
Net cash used in operating activities | (2,087,191 | ) | (301,783 | ) | ||||
Cash flows used in investing activities: | ||||||||
Purchases of notes receivable | (75,000 | ) | - | |||||
Net cash used in investing activity | (75,000 | ) | - | |||||
Cash flows from financing activities: | ||||||||
Repurchase of shares of common stock | (45,046 | ) | - | |||||
Principal repayment of due to stockholder | (2,529,954 | ) | - | |||||
Net cash used in financing activities | (2,575,000 | ) | - | |||||
Net decrease in cash | (4,737,191 | ) | (301,783 | ) | ||||
Cash, beginning of period | 8,974,282 | 9,919,727 | ||||||
Cash, end of period | $ | 4,237,091 | $ | 9,617,944 | ||||
Supplemental disclosures of cash flow information: | ||||||||
Cash paid for taxes | $ | - | $ | - | ||||
Cash paid for interest | $ | - | $ | - |
See Notes to Unaudited Financial Statements. |
5
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1-Organization, Description of Business and Going Concern
The Company has not generated any revenues since the third quarter of 2007 as a result of the suspension of the business relationship by its largest customer and the succession of events since then. In addition, the matters discussed in Note 7 and Item 1 of Part II of this Report "Legal Proceedings" have had a significant adverse impact on its business and future results of operations and financial condition. The Company’s management continues to seek out possible business transactions and new business relationships.
The Company is considering merging with businesses outside of the financial service industry. The Company is also considering whether or not to satisfy existing obligations with current creditors and distribute its remaining assets to its stockholders.
The Company has suspended the development of its OPEX trading platform technology. However, the Company intends to maintain it and is exploring its sale or license.
6
OPTIONABLE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Going Concern
The Company believes it has sufficient funds to meet its obligations, based on its internal projections, for at least the next twelve months. However, the Company cannot guarantee that it will do so. If there are unforeseen expenses or financial obligations which occur during that period, such as those that could result from matters discussed in Note 7, the Company may not be able to meet such obligations. Additionally, if the Company enters into a transaction with another company, this could hamper the Company's ability to continue as a going concern and the Company may have to resort to financing, through either debt or equity placements, for the funding of either such acquisitions or unforeseen expenses or financial obligations. There can be no assurance that any such financing would be available on acceptable terms, or at all, especially in light of the pending litigations against the Company and certain of its former and current directors and officers and the current economic conditions.
Principles of consolidation
The accompanying consolidated financial statements include the results of operations of Opex International, Inc. and Hydra Commodity Services, Inc. for the three and six-month periods ended June 30, 2009 and 2008. All material intercompany accounts and transactions between the Company and its subsidiaries have been eliminated in consolidation.
Basis of Presentation
The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information. Accordingly, they do not include all of the information and the footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments, consisting only of normal recurring accruals, considered necessary for a fair presentation have been included. Operating results for the three and six-month periods ended June 30, 2009 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2009.
7
OPTIONABLE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 2- Summary of Significant Accounting Policies
Cash and Cash Equivalents
The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents.
Concentration of Credit Risks
The Company is subject to concentrations of credit risk primarily from cash and cash equivalents.
The Company's cash and cash equivalents accounts are held at financial institutions and are insured by the Federal Deposit Insurance Corporation ("FDIC") up to $100,000 between January 2007 and October 2008 and $250,000 for interest-bearing accounts and an unlimited amount for noninterest-bearing accounts after October 2008. During the three and six-month periods ended June 30, 2009 and 2008, the Company has reached bank balances exceeding the FDIC insurance limit. While the Company periodically evaluates the credit quality of the financial institutions in which it holds deposits, it cannot reasonably alleviate the risk associated with the sudden failure of such financial institutions. The Company’s cash and cash equivalents held at financial institutions exceeding the FDIC insurance limit amounted to $ 1.9 million and $7.3 million at June 30, 2009 and December 31, 2008, respectively.
Fair Value of Financial Instruments
Effective January 1, 2008, the Company adopted SFAS No. 157, “Fair Value Measurements” (“SFAS 157”), for assets and liabilities measured at fair value on a recurring basis. SFAS 157 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements, establishes a framework for measuring fair value and expands disclosure about such fair value measurements. The adoption of SFAS 157 did not have an impact on the Company’s financial position or operating results, but did expand certain disclosures.
8
OPTIONABLE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 2- Summary of Significant Accounting Policies-continued
SFAS 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, SFAS 157 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:
Level 1: | Observable inputs such as quoted market prices in active markets for identical assets or liabilities | |
Level 2: | Observable market-based inputs or unobservable inputs that are corroborated by market data | |
Level 3: | Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions. |
The Company did not have any Level 2 or Level 3 assets or liabilities as of June 30, 2009 and December 31, 2008, with the exception of its due to shareholder and due to director. The carrying amount of the due to director at June 30, 2009 and December 31, 2008 and due to shareholder at December 31, 2008, approximate their respective fair value based on the Company’s incremental borrowing rate.
Cash and cash equivalents include money market securities that are considered to be highly liquid and easily tradable as of June 30, 2009 and December 31, 2008, respectively. These securities are valued using inputs observable in active markets for identical securities and are therefore classified as Level 1 within our fair value hierarchy.
In addition, SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities,” was effective for January 1, 2008. SFAS 159 expands opportunities to use fair value measurements in financial reporting and permits entities to choose to measure many financial instruments and certain other items at fair value. The Company did not elect the fair value options for any of its qualifying financial instruments.
9
OPTIONABLE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 2- Summary of Significant Accounting Policies-continued
Income Taxes
Income taxes are accounted for in accordance with SFAS No. 109, "Accounting for Income Taxes". SFAS No. 109 requires the recognition of deferred tax assets and liabilities to reflect the future tax consequences of events that have been recognized in the Company's financial statements or tax returns. Measurement of the deferred items is based on enacted tax laws. In the event the future consequences of differences between financial reporting bases and tax bases of the Company's assets and liabilities result in a deferred tax asset, SFAS No. 109 requires an evaluation of the probability of being able to realize the future benefits indicated by such assets. A valuation allowance related to a deferred tax asset is recorded when it is more likely than not that some or all deferred tax assets will not be realized. Penalties and interest on underpayment of taxes are reflected in the Company’s effective tax rate.
Use of Estimates
The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates made by management include, but are not limited to, the realization of receivables and share-based payments. Actual results will differ from these estimates.
Basic and Diluted Earnings per Share
Basic earnings per share are calculated by dividing income available to stockholders by the weighted-average number of common shares outstanding during each period. Diluted earnings per share are computed using the weighted average number of common shares and dilutive common share equivalents outstanding during the period. Dilutive common share equivalents consist of shares issuable upon the exercise of stock options and warrants (calculated using the modified-treasury stock method). The outstanding options amounted to 1,233,000 and 983,000 at June 30, 2009 and December 31, 2008, respectively. The outstanding warrants amounted to 100,000 at June 30, 2009 and December 31, 2008. The options and warrants outstanding at June 30, 2009 and 2008, respectively, have been excluded from the computation of diluted earnings per share due to their antidilutive effect.
10
OPTIONABLE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 2- Summary of Significant Accounting Policies-continued
Share-Based Payments
In December 2004, the Financial Accounting Standards Board ("FASB") issued SFAS No. 123(R), "Share-Based Payment," which replaces SFAS No. 123 and supersedes APB Opinion No. 25. Under SFAS No. 123(R), companies are required to measure the costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share-based compensation arrangements include stock options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. In March 2005, the SEC issued SAB 107. SAB 107 expresses views of the staff regarding the interaction between SFAS No. 123(R) and certain SEC rules and regulations and provides the staff's views regarding the valuation of share-based payment arrangements for public companies. SFAS No. 123(R) permits public companies to adopt its requirements using one of two methods. On April 14, 2005, the SEC adopted a new rule amending the compliance dates for SFAS 123(R). Companies may elect to apply this statement either prospectively, or on a modified version of retrospective application under which financial statements for prior periods are adjusted on a basis consistent with the pro forma disclosures required for those periods under SFAS 123. Effective January 1, 2006, the Company has fully adopted the provisions of SFAS No. 123(R) and related interpretations as provided by SAB 107 prospectively. As such, compensation cost is measured on the date of grant as its fair value. Such compensation amounts, if any, are amortized over the respective vesting periods of the option grant. The Company applies this statement prospectively.
Recent Accounting Pronouncements
In May 2009, the FASB issued SFAS No. 165, “Subsequent Events”. The new standard is intended to establish general standards of accounting for and disclosure of events that occur after the balance sheet date, but before the issuance of financial statements. Specifically, the standard sets forth: 1) the period after the balance sheet date during which management should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, 2) the circumstances that an entity should recognize events or transactions that occur after the balance sheet date, and 3) the disclosures that an entity should make about events or transactions that occur after the balance sheet date.
11
OPTIONABLE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 2- Summary of Significant Accounting Policies-continued
In June 2009, the FASB issued SFAS No. 168, “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles- a replacement of FASB Statement No. 162”. The new standard sets forth that the FASB Accounting Standards Codification (Codification) will become the source of authoritative U.S. generally accepted accounting principles (GAAP) recognized by the FASB to be applied to nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (SEC) under authority of federal securities laws are also source for authoritative GAAP for SEC registrants. When the statement is effective, the Codification will supersede all then-existing non-SEC accounting and reporting standards. All other nongrandfathered non-SEC accounting literature not included in the Codification will become nonauthoritative.
Note 3- Prepaid expenses
Prepaid expenses primarily consists of retainers paid to certain law firms which represent the Company and certain former and current directors and officers in connection with legal proceedings which are described in Note 7- Litigation and contingencies.
12
OPTIONABLE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 4- Notes receivable
The Company purchased four notes receivable aggregating $75,000 from its former chief technical officer and an affiliate. The notes can be either redeemed in cash or in kind for services performed, at the Company’s option. The notes can be redeemed in cash within six-month of issuance or within a year from issuance if redeemed in-kind.
The Company has not received payment on of the first note and believes that it is unlikely that it will collect on the remaining notes and has provided for an allowance for doubtful accounts on all the notes at June 30, 2009.
Note 5-Due to Related Parties
The terms and amounts of due to related parties at June 30, 2009 and December 31, 2008 are as follows:
Due to Stockholder and former Chairman of the Board, non-interest bearing, unsecured, payable by March 12, 2014, if the Company obtains additional equity or debt financing of at least $1,000,000 following the private placement which closed in September 2004 ("Capital Raise"), the Company will repay its former Chairman of the Board up to 39.33% of the Capital Raise, up to $2,810,877, with the remaining balance and accrued interest of 4.68% from the date of the Capital Raise due on March 12, 2014:
June 30, | December 31, | |||||||
2009 | 2008 | |||||||
$ | - | $ | 5,044,510 | |||||
Discount, using initial implied rate of 12% | - | (2,618,270 | ) | |||||
$ | - | $ | 2,426,240 |
13
OPTIONABLE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 5-Due to Related Parties-continued
Due to Director and former President, non-interest bearing, unsecured, payable by March 12, 2014, if the Company obtains additional equity or debt financing of at least $1,000,000 following a Capital Raise, the Company will repay its Director up to 5.3% of the Capital Raise, up to $381,250, with the remaining balance and accrued interest of 4.68% from the date of the Capital Raise due on March 12, 2014:
June 30, | December 31, | |||||||
2009 | 2008 | |||||||
$ | 508,697 | $ | 508,697 | |||||
Discount, using initial implied rate of 12% | (330,064 | ) | (355,126 | ) | ||||
$ | 178,633 | $ | 153,571 |
During April 2005, the Company modified the terms of its due to related parties. The modified terms provide that, in the event of a Capital Raise, among other things, the annual interest rate accrued after such event is reduced from 12% to 4.68%. Additionally, the modified terms provide that the Company may make principal repayments towards the due to a stockholder and former Chairman of the Board and the due to Director amounting to approximately 25% of its cash flows from operating cash flows less capital expenditures. During April 2006, the Company modified the terms of its due to related parties to allow the Company to make principal repayments at its discretion.
The amortization of the discount on the due to related parties amounted to approximately $129,000 and $118,000 during the six-month period ended June 30, 2009 and 2008, respectively.
During the six-month period ended June 30, 2009, the Company satisfied its obligations under the due to Stockholder and former Chairman of the Board by paying him $2,575,000, including the repurchase of 4,095,075 shares of the Company’s common stock, valued at approximately $45,000 based on the closing price of the Company’s stock on the date of repurchase.
14
OPTIONABLE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 5-Due to Related Parties-continued
At December 31, 2008, the Company owed approximately $98,000 to a Stockholder for certain legal fees incurred and paid by such Stockholder for matters discussed in Note 7 of the financial statements. As of June 30, 2009, the Company satisfied its obligation to the Stockholder.
Note 6- Stockholders' Equity
Stock Compensation Plan
During November 2004, the Company adopted the 2004 Stock Option Plan ("2004 Plan"). The 2004 Plan allows for the grant of both incentive stock options and nonstatutory stock options. The 2004 Plan may be administered, interpreted and constructed by the Board of Directors or a compensation committee. The maximum number of shares of common stock which may be issued pursuant to options granted under the 2004 Plan may not exceed 7,500,000 shares. The options outstanding vest over periods of up to twenty-four months.
The amortization of share-based payment was recorded in selling, general, and administrative expenses during such periods.
The Company granted 500,000 options during the six-month period ended June 30, 2009.
The fair value of the options granted during the six-month period ended June 30, 2009 is based on the Black Scholes Model using the following assumptions:
Exercise price : | $0.016-0.025 |
Market price at date of grant : | $0.016-0.025 |
Volatility : | 104.5% |
Expected dividend rate: | 0% |
Expected terms: | 3.3 years |
Risk-free interest rate: | 1.22-1.44% |
15
OPTIONABLE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 6- Stockholders' Equity-continued
The following activity occurred under our plan:
Six-month periods ended June 30, | ||||||||
2009 | 2008 | |||||||
Weighted-average grant-date fair value of options granted | $0.015 | N/A | ||||||
Fair value of options recognized as expense: | $12,932 | $11,370 |
The total compensation cost related to nonvested options not yet recognized amounted to approximately $10,000 at June 30, 2009 and the Company expects that it will be recognized over the following weighted-average period of 8 months.
If any options granted under the 2004 Plan expire or terminate without having been exercised or cease to be exercisable, such options will be available again under the 2004 Plan. All employees of the Company and its subsidiaries, if any, are eligible to receive incentive stock options and nonstatutory stock options. Non-employee directors and outside consultants who provided bona-fide services not in connection with the offer or sale of securities in a capital raising transaction are eligible to receive nonstatutory stock options. Incentive stock options may not be granted below the fair market value of the Company's common stock at the time of grant or, if to an individual who beneficially owns more than 10% of the total combined voting power of all stock classes of the Company or a subsidiary, the option price may not be less than 110% of the fair value of the common stock at the time of grant. The expiration date of an incentive stock option may not be longer than ten years from the date of grant. Option holders, or their representatives, may exercise their vested options up to three months after their employment termination or one year after their death or permanent and total disability. The 2004 Plan provides for adjustments upon changes in capitalization.
The Company's policy is to issue shares pursuant to the exercise of stock options from its available authorized but unissued shares of common stock. It does not issue shares pursuant to the exercise of stock options from its treasury shares.
16
OPTIONABLE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 7- Litigation and Contingencies
Regulatory Matters
On November 18, 2008, a complaint was filed in the United States District Court for the Southern District of New York by the Commodity Futures Trading Commission (the “CFTC”) against the Company, current and former employees of the Company, including its former Chief Executive Officer and its former President and a Director, Edward O’Connor, David Lee, a former Bank of Montreal (“BMO”) trader (“Lee”), and Robert Moore, a former executive managing director of BMO’s Commodity Derivatives Group.
The complaint alleges, among other things, that Lee, through the assistance of Moore, and employees of the Company, engaged in a scheme to mis-mark Lee’s natural gas options positions between at least May 2003 to May 2007, and mis-value other natural gas option positions from October 2006 until May 2007. The complaint further alleges that based upon the scheme, in April 2007, BMO announced anticipated losses of approximately C$350 million and C$450 million.
The CFTC alleges, among other things, violations of, Section 4c(b) of the Commodity Exchange Act, as amended (the “Act”) and Commission Regulations 33.10(a),(b) and (c). The CFTC seeks an order of permanent injunction restraining and enjoining, among others, the Company from directly or indirectly violating Section 6c(b) of the Act and Commission Regulations 33.10(a), (b) and (c). The CFTC further seeks an order directing, among others, the Company to pay civil monetary penalties in an amount not to exceed $120,000 or triple the monetary gain for each violation of the Act during the time period between October 23, 2000 and October 22, 2004 and $130,000 or triple the monetary gain for each violation of the Act on or after October 23, 2004.
On March 20, 2009, the Company and certain other of the defendants filed motions to dismiss the CFTC complaint. On April 3, 2009, the CFTC filed briefs in opposition to the motions to dismiss. On April 15, 2009, the Company and certain other of the defendants filed reply briefs.
17
OPTIONABLE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 7- Litigation and Contingencies-continued
The Company also understands that on November 18, 2008, a complaint was filed in the United States District Court for the Southern District of New York by the Securities and Exchange Commission (“SEC”) against Lee, Scott Connor, the Company’s former President and a Director, Edward O’Connor and its former Chief Executive Officer. The Company was not named in the SEC complaint. Like the action brought by the CFTC, the complaint is based upon allegations that the defendants engaged in a scheme to overvalue Lee’s commodity derivates trading portfolio at BMO.
The SEC alleges causes of action against the Company’s former President and a Director, Edward O’Connor, for violations of Sections 10(b), 13(a), 13(b)(2), 13(b)(5), Rules 13b2-2 and 13a-14 of the Securities and Exchange Act of 1934 (the “Exchange Act”), and Section 17(a) the Securities Act of 1933 (the “Securities Act”). The complaint seeks a permanent injunction against, among others, Mr. O’Connor and an order to pay civil penalties and disgorgement. The complaint also seeks an order prohibiting, among others, Mr. O’Connor from acting as an officer or director of a public company.
CMEG NYMEX Inc. v. Optionable, Inc. et. al
On April 10, 2009, CMEG NYMEX Inc. filed suit against the Company, several past and present officers and directors, and other defendants in the United States District Court for the Southern District of New York (09-3677). The complaint alleges that defendants committed securities and common law fraud, and breach warranties, in connection with an April 2007 transaction in which the officers and directors sold $28.9 million of their Optionable stock to NYMEX, and the Company issued warrants to NYMEX for the purchase of additional stock. The plaintiff seeks rescission and restitution and/or damages.
The Company filed a motion to dismiss in June 2009.
18
OPTIONABLE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 7- Litigation and Contingencies-continued
Claim from the Company’s former Chief Executive Officer
On October 15, 2007, and as subsequently reiterated, the Company received a letter from the Company's former Chief Executive Officer in which he states, among other things, that the Company is in breach of certain obligations pursuant to an Amended and Restated Employment Agreement, dated April 10, 2007, and the Company should:
1) continue to pay him his base salary, amounting to $25,000 per month for fiscal 2007, $325,000 for fiscal 2008, and $350,000 for fiscal 2009;
2) continue to pay him a cash consideration equal to 5% of the Company's revenues and a stock consideration equal to 2% of the Company's revenues. The aggregate value of the unpaid consideration based on the Company's revenues amounted to approximately $289,000 at September 30, 2007;
3) Continue to provide to him health, welfare, and pension plan benefits as well as the payment of an annual premium for his life insurance through October 2009.
19
OPTIONABLE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 7- Litigation and Contingencies-continued
While the Company intends to vigorously defend these matters, there exists the possibility of adverse outcomes that the Company cannot determine. These matters are subject to inherent uncertainties and management's view of these matters may change in the future.
Note 8-Income Taxes
The components of the benefit (provision) for income taxes are as follows:
June 30, 2009 | June 30, 2008 | |||||||
Current and deferred: | ||||||||
Federal | $ | (261,804 | ) | $ | 809,414 | |||
Total benefit (provision) for income taxes | $ | (261,804 | ) | $ | 809,414 |
A reconciliation of the Company’s effective tax rate to the statutory federal rate is as follows:
Six-month period ended June 30, | ||||||||
2009 | 2008 | |||||||
Federal statutory taxes | (35.0 | %) | (35.0 | )% | ||||
State income taxes, net of federal tax benefit | (5.7 | ) | (5.7 | ) | ||||
Utilization of state net operating loss | 5.7 | - | ||||||
Permanent differences (taxable gain on extinguishment of due to Stockholder in 2009) | 46.0 | 1.7 | ||||||
11.0 | % | (38.6 | ) % |
20
OPTIONABLE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 8-Income Taxes-continued
The recoverable income tax amounting to approximately $900,000 is recoverable from applications for carryback refund from the Company’s 2006 federal tax returns.
The Company has net operating losses of approximately $1.2 million for both federal and state tax purposes.
ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
Optionable, Inc. (“the “Company”) was formed in Delaware in February 2000. Between April 2001 and July 2007, a substantial portion of our revenues were generated from providing energy derivative brokerage services to brokerage firms, financial institutions, energy traders, and hedge funds worldwide. A substantial portion of all energy derivatives we brokered in the past were natural gas derivatives.
We launched our electronic trading system, OPEX, in 2006 and we enhanced its features and functionalities during 2007 and 2008. Users of OPEX can execute on the platform mostly energy-related derivative trades. A significant portion of the contracts executed on OPEX were those offered by NYMEX, a US exchange. However, we believe that OPEX features and functionalities can be ported to other derivatives as well, such as credit default swaps, interest-related derivatives, metals and other commodities. Additionally, we believe that OPEX, with appropriate enhancements, may be able to execute transactions offered by other exchanges as well. Effective November 4, 2008, the Company has suspended the development of OPEX. However, we intend to maintain OPEX and explore its possible sale or licensing.
A significant portion of our revenues through the third quarter of 2007 was derived from our business relationship with BMO Financial Group ("BMO"). We have not generated any revenues since the third quarter of 2007 as a result of the suspension of the business relationship with us by BMO together with the combined succession of events since then. In addition, the matters discussed in Item 1 of Part II of this Report "Legal Proceedings" have had a significant adverse impact on our business, including current and, likely, future results of operations and financial condition. Our management continues to seek out possible business transactions and new business relationships.
The Company is considering merging with businesses outside of the financial service industry. The Company is also considering whether or not to satisfy existing obligations with current creditors and distribute its remaining assets to its stockholders.
GOING CONCERN
The Company believes it has sufficient funds to meet its obligations, based on its internal projections, for at least the next twelve months. However, the Company cannot guarantee that it will do so. If there are unforeseen expenses or financial obligations which occur during that period such as those related to matters disclosed in Part II, Item 1- Legal Proceedings, the Company may not be able to meet such obligations. Additionally, if the Company acquires another company , this could hamper the Company's ability to continue as a going concern, and the Company would have to resort to financing, through either debt or equity placements, for the funding of either such acquisitions or unforeseen expenses or financial obligations. There can be no assurance that any such financing would be available on acceptable terms, or at all, especially in light of the pending litigation against the Company and recent economic conditions.
Three and Six-Month Periods Ended June 30, 2009 and 2008
Results of Operations |
(Unaudited) |
Increase/ | Increase/ | Increase/ | Increase/ | |||||||||||||||||||||||||||||
For the three-month | (Decrease) | (Decrease) | For the six-month | (Decrease) | (Decrease) | |||||||||||||||||||||||||||
period ended June 30, | in $ 2009 | in % 2009 | periods ended June 30, | in $ 2009 | in % 2009 | |||||||||||||||||||||||||||
2009 | 2008 | vs 2008 | vs 2008 | 2009 | 2008 | vs 2008 | vs 2008 | |||||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||||||
Selling, general and administrative | 1,212,833 | 582,849 | 629,984 | 108.1 | % | 2,275,648 | 1,604,584 | 671,064 | 41.8 | % | ||||||||||||||||||||||
Research and development | - | 215,400 | (215,400 | ) | -100.0 | % | - | 460,445 | (460,445 | ) | -100.0 | % | ||||||||||||||||||||
Total operating expenses | 1,212,833 | 798,249 | 414,584 | 51.9 | % | 2,275,648 | 2,065,029 | 210,619 | 10.2 | % | ||||||||||||||||||||||
Operating loss | (1,212,833 | ) | (798,249 | ) | (414,584 | ) | 51.9 | % | (2,275,648 | ) | (2,065,029 | ) | 210,619 | 10.2 | % | |||||||||||||||||
Other income (expense): | ||||||||||||||||||||||||||||||||
Interest income | 7,006 | 68,095 | (61,089 | ) | -89.7 | % | 34,691 | 156,688 | (121,997 | ) | -77.9 | % | ||||||||||||||||||||
Interest expense-related parties | (12,718 | ) | (94,500 | ) | (81,782 | ) | -86.5 | % | (128,776 | ) | (186,219 | ) | (57,443 | ) | -30.8 | % | ||||||||||||||||
(5,712 | ) | (26,405 | ) | (20,693 | ) | 78.4 | % | (94,085 | ) | (29,531 | ) | 64,554 | 218.6 | % | ||||||||||||||||||
Net loss before income tax | (1,218,545 | ) | (824,654 | ) | (393,891 | ) | 47.8 | % | (2,369,733 | ) | (2,094,560 | ) | (275,173 | ) | 13.1 | % | ||||||||||||||||
Income tax benefit ( expense) | 216,818 | 313,643 | 96,825 | 30.9 | % | (261,804 | ) | 809,414 | (1,071,218 | ) | NM | |||||||||||||||||||||
Net loss | $ | (1,001,727 | ) | $ | (511,011 | ) | $ | (490,716 | ) | 96.0 | % | $ | (2,631,537 | ) | $ | (1,285,146 | ) | $ | (1,346,391 | ) | 104.8 | % | ||||||||||
NM: Not meaningful |
22
Selling, general, and administrative expenses
Selling, general, and administrative expenses consists primarily of legal fees, incurred in connection with the Company’s attention to matters described in Part II, Item 1- Legal Proceedings or to handle certain matters which occur during the course of our operations, and compensation of personnel supporting our operations.
· | Higher legal fees incurred in connection with an increased number of litigations handled during 2009 as well as legal fees incurred in connection with our annual meeting of stockholders in March 2009 and the satisfaction of our obligations to Mark Nordlicht, a stockholder and our former Chairman of the Board, which occurred in February 2009. |
As a result of the matters discussed above and in Item 1 of Part II of this Report, we believe that our legal fees for 2009 will continue to constitute a large share of our selling, general, and administrative expenses.
Research and development
Research and development expenses consist primarily of compensation of personnel and consultants associated with the development and testing of our automated electronic trading system. The decrease in research and development expenses during the three-month and six-month periods ended June 30, 2009 when compared to the prior year periods is primarily due to the following:
· | We suspended our OPEX development efforts in November 2008. |
Interest income consists primarily of interest earned on interest-bearing cash and cash equivalents. The decrease in interest income during the three-month and six-month periods ended June 30, 2009 when compared to the prior year period is primarily due to a decrease in interest rate we earned as well as a lower weighted average interest-bearing cash balance.
Interest expense to related parties
Interest expense to related parties consists of interest charges associated with amounts due to related parties, including Mark Nordlicht, our former Chairman of the Board and Edward O’Connor, our former President and current Director. The increase in interest expense to related parties during the three-month and six-month periods ended June 30, 2009 is primarily due to a loss on extinguishment of debt to Mark Nordlicht of approximately $35,000 which was recognized as interest expense during February 2009. No such loss occurred during the comparable prior year period.
Income tax
Income tax benefit/expense consists of federal and state current and deferred income tax or benefit based on our net income. The increase in income tax provision during the three and six- month periods ended June 30, 2009 when compared to the income tax benefits expense we incurred during the comparable prior year periods is primarily due to a tax gain of $2.5 million we incurred on the satisfaction of the due to Mark Nordlicht, offset by taxable losses resulting from our expenses.
23
LIQUIDITY AND CAPITAL RESOURCES
Our cash balance as of June 30, 2009 amounts to approximately $4.2 million.
During the six-month period ended June 30, 2009, we used cash from operating activities of approximately $2.1 million, primarily resulting from:
· | net loss of approximately $2.6 million, adjusted for the amortization of debt discount of approximately $129,000 and an increase in allowance for bad debt of $75,000; and |
· | a increase in income tax payable of approximately $178,000 resulting from the taxable gain of $2.5 million resulting from the satisfaction of our obligations to Mark Nordlicht, a stockholder and our former Chairman of the Board, offset by the current pre-tax loss. |
During the six-month period ended June 30, 2009, we used cash in investing activities, resulting from purchases of four notes receivable aggregating $75,000;
During the six-month period ended June 30, 2009, we satisfied our obligations of approximately $5.0 million to Mark Nordlicht, and repurchased 4,095,075 shares of our common stock hold for a consideration aggregating $2,575,000.
During the six-month period ended June 30, 2009, we used cash in our operating activities of approximately $302,000, primarily resulting from:
· | net loss of approximately $1.3 million, adjusted for the amortization of debt discount of approximately $186,000; and |
· | a decrease in recoverable income taxes resulting from the reimbursement during the six-month period ended June 30, 2008 of the 2007 federal estimated tax payments /income tax payable of $1.6 million resulting from the payment of estimated income taxes, offset by benefits resulting from the pre-tax loss. |
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
A summary of significant accounting policies is included in Note 2 of unaudited financial statements included in this Quarterly Report. Management believes that the application of these policies on a consistent basis enables us to provide useful and reliable financial information about our operating results and financial condition. Our financial statements and accompanying notes are prepared in accordance with U.S. GAAP. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management's application of accounting policies. Critical accounting policies for us include the following:
Share-based payment
We account for share-based payments in accordance with SFAS No. 123(R), Share-Based Payment. Under the fair value recognition provisions of this statement, share-based compensation cost is measured at the grant date based on the value of the award and is recognized as expense over the vesting period. Determining the fair value of share-based awards at the grant date requires judgment, including estimating expected volatility. In addition, judgment is also required in estimating the amount of share-based awards that are expected to be forfeited. If actual results differ significantly from these estimates, stock-based compensation expense and our results of operations could be materially impacted.
24
Contingencies
The outcomes of legal proceedings and claims brought against us are subject to significant uncertainty. SFAS No. 5, Accounting for Contingencies, requires that an estimated loss from a loss contingency such as a legal proceeding or claim should be accrued by a charge to income if it is probable that an asset has been impaired or a liability has been incurred and the amount of the loss can be reasonably estimated. Disclosure of a contingency is required if there is at least a reasonable possibility that a loss has been incurred.
In determining whether a loss should be accrued we evaluate, among other factors, the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the amount of loss. Changes in these factors could materially impact our financial position or our results of operations.
Recent Accounting Pronouncements
In May 2009, the FASB issued SFAS No. 165, “Subsequent Events”. The new standard is intended to establish general standards of accounting for and disclosure of events that occur after the balance sheet date, but before the issuance of financial statements. Specifically, the standard sets forth: 1) the period after the balance sheet date during which management should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, 2) the circumstances that an entity should recognize events or transactions that occur after the balance sheet date, and 3) the disclosures that an entity should make about events or transactions that occur after the balance sheet date.
In June 2009, the FASB issued SFAS No. 168, “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles- a replacement of FASB Statement No. 162”. The new standard sets forth that the FASB Accounting Standards Codification (Codification) will become the source of authoritative U.S. generally accepted accounting principles (GAAP) recognized by the FASB to be applied to nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (SEC) under authority of federal securities laws are also source for authoritative GAAP for SEC registrants. When the statement is effective, the Codification will supersede all then-existing non-SEC accounting and reporting standards. All other nongrandfathered non-SEC accounting literature not included in the Codification will become nonauthoritative.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
n/a |
ITEM 4. CONTROLS AND PROCEDURES
As of June 30, 2009, our Chief Executive Officer and President and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15(b) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based upon that evaluation, our Chief Executive Officer and President and our Chief Financial Officer concluded that, as of June 30, 2009, our disclosure controls and procedures were effective in ensuring that material information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, including ensuring that such material information is accumulated and communicated to our Chief Executive Officer and President and our Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
25
Changes in Internal Control Over Financial Reporting
During the quarter ended June 30, 2009, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART 2 OTHER INFORMATION
Shareholder Class Action Lawsuit
On May 11, 2007, two class action lawsuits were filed against the Company and certain past and present officers and directors in the United States District Court for the Southern District of New York and were consolidated under In re Optionable Securities Litigation.
The suit sought unspecified damages arising from alleged violations of the federal securities laws, including the Securities Exchange Act of 1934, 15 U.S.C. ss. 78a et seq., (the “Exchange Act”), and Rule 10b-5 under the Exchange Act, 17 C.F.R. ss. 240.10b-5. The complaint alleged, among other things, that during the period January 22, 2007 to May 14, 2007, the defendants made materially false and misleading statements concerning the Company’s relationship with its customer Bank of Montreal (“BMO”), and concealed a “scheme” to assist a former trader at BMO in concealing trading losses from his employer. As a result, according to the plaintiffs, the Company’s stock sold at “inflated” prices.
On September 15, 2008, the Court granted the defendants’ motions to dismiss the complaint. The plaintiffs subsequently filed a motion to take discovery they claimed would permit them to file an amended complaint. On October 20, 2008, the Court denied the plaintiffs’ motion, and a final judgment of dismissal was entered on October 23, 2008.
On January 13, 2009, the plaintiffs filed a motion pursuant to Rule 60(b) for relief from the October 23, 2008 judgment and seeking to file an amended complaint on the basis of newly discovered evidence. On February 12, 2009, the defendants filed an opposition to the motion. The plaintiffs filed a reply on March 3, 2009. The plaintiffs’ motion was dismissed in June 2009.
Commodity Futures Trading Commission v. Cassidy et al.
On November 18, 2008, the U.S. Commodity Futures Trading Commission (“CFTC”) filed a Complaint in the United States District Court for the Southern District of New York against the Company, two past and present officers and directors, and two Bank of Montreal employees.. The complaint seeks injunctive relief restraining defendants from future violations of CFTC regulations, disgorgement, and civil monetary penalties under the Commodity Exchange Act.
The complaint alleges that that the defendants violated Section 4c(b) of the CEA, 7 U.S.C. § 6c(b), and Rule 33.10 thereunder, 17 C.F.R. § 33.10. On March 20, 2009, the Company and certain other of the defendants filed motions to dismiss the CFTC complaint. On April 3, 2009, the CFTC filed briefs in opposition to the motions to dismiss. On April 15, 2009, the Company and certain other of the defendants filed reply briefs.
CMEG NYMEX Inc. v. Optionable, Inc. et. al
On April 10, 2009, CMEG NYMEX Inc. filed suit against the Company, the Company’s former Chief Executive Officer, former Chairman of the Board, and former President and current board member, and other defendants in the United States District Court for the Southern District of New York. The complaint alleges that defendants committed securities and common law fraud, and breach warranties, in connection with an April 2007 transaction in which the officers and directors sold $28.9 million of their Optionable stock to NYMEX, and the Company issued warrants to NYMEX for the purchase of additional stock. The plaintiff seeks rescission and restitution and/or damages.
The Company and the other defendants have responded to the complaint in June 2009.
26
ITEM 1A. RISK FACTORS
N/A
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
The Company’s by-laws were amended after the Board adopted in April 2009 certain procedures for stockholders to propose nominees to the Board. The amended and restated by-laws were filed as an exhibit to Form 8-K in April 2009.
31.1 | Certification of Principal Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934* | |
31.2 | Certification of Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934* | |
32.1 | Certification of Principal Executive Officer pursuant to Rule 13a-14(b)/15d-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350* | |
32.2 | Certification of Principal Financial Officer pursuant to Rule 13a-14(b)/15d-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350* |
* Filed herewith
27
Pursuant to the requirements 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.
August 14, 2009
Optionable, Inc. | |||
By: | /s/ Thomas Burchill | ||
Thomas Burchill Chief Executive Officer and President (Principal Executive Officer) | |||
By: | /s/ Marc Andre-Boisseau | ||
Marc Andre-Boisseau Chief Financial Officer (Principal Financial Officer) |
28