Document_And_Entity_Informatio
Document And Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Nov. 07, 2013 | |
Document and Entity Information [Abstract] | ' | ' |
Entity Registrant Name | 'Optionable Inc | ' |
Document Type | '10-Q | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Common Stock, Shares Outstanding | ' | 83,833,128 |
Amendment Flag | 'false | ' |
Entity Central Index Key | '0001303433 | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Voluntary Filers | 'No | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Well-known Seasoned Issuer | 'No | ' |
Document Period End Date | 30-Sep-13 | ' |
Document Fiscal Year Focus | '2013 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Balance_Sheets_Current_Year_Un
Balance Sheets (Current Year Unaudited) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
ASSETS | ' | ' |
Cash and cash equivalents | $462,123 | $247,684 |
Prepaid expenses | ' | 14,589 |
Total current assets | 462,123 | 262,273 |
Total assets | 462,123 | 262,273 |
LIABILITIES AND STOCKHOLDERS' EQUITY | ' | ' |
Accounts payable and accrued expenses | 237,365 | 176,853 |
237,365 | 176,853 | |
Due to director, net of unamortized discount of $27,411 and $68,638 at September 30, 2013 and December 31, 2012, respectively | 481,286 | 440,059 |
Total liabilities | 718,651 | 616,912 |
Stockholders' Equity: | ' | ' |
Preferred Stock; $.0001 par value, 5,000,000 shares authorized, none issued and outstanding at September 30, 2013 and December 31, 2012 | ' | 0 |
Common stock; $.0001 par value, 100,000,000 shares authorized, 87,928,203 shares issued and 83,833,128 shares outstanding at September 30, 2013 and December 31, 2012 | 8,792 | 5,242 |
Additional paid-in capital | 163,532,304 | 162,819,884 |
Treasury stock at cost, 4,095,075 shares at September 30, 2013 and December 31, 2012 | -47,552 | -47,552 |
Accumulated deficit | -163,750,072 | -163,132,213 |
Total stockholders’ equity | -256,528 | -354,639 |
Total liabilities and stockholders’ equity | $462,123 | $262,273 |
Balance_Sheets_Current_Year_Un1
Balance Sheets (Current Year Unaudited) (Parentheticals) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Due to director, unamortized discount (in Dollars) | $27,411 | $68,638 |
Preferred Stock; par value (in Dollars per share) | $0.00 | $0.00 |
Preferred Stock; shares authorized (in Shares) | 5,000,000 | 5,000,000 |
Preferred Stock; issued (in Shares) | 0 | 0 |
Preferred Stock; outstanding (in Shares) | 0 | 0 |
Common stock; par value (in Dollars per share) | $0.00 | $0.00 |
Common stock; shares authorized (in Shares) | 100,000,000 | 100,000,000 |
Common stock; shares issued (in Shares) | 87,928,203 | 83,833,128 |
Common stock; shares outstanding (in Shares) | 87,928,203 | 83,833,128 |
Treasury stock at cost, shares (in Shares) | 4,095,075 | 4,095,075 |
Statements_Of_Operations_Unaud
Statements Of Operations (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Operating expenses: | ' | ' | ' | ' |
Selling, general and administrative | $171,723 | $67,811 | $577,102 | $823,586 |
Total operating expenses | 171,723 | 67,811 | 577,102 | 823,586 |
Operating loss | -171,723 | -67,811 | -577,102 | -823,586 |
Interest income | 278 | 566 | 470 | 1,796 |
Interest expense to related parties | -14,155 | -12,192 | -41,227 | -36,588 |
-13,877 | -11,626 | -40,757 | -34,792 | |
Loss before income tax benefit | -185,600 | -79,437 | -617,859 | -858,378 |
Income tax benefit | 0 | 0 | 0 | 0 |
Net loss | ($185,600) | ($79,437) | ($617,859) | ($858,378) |
Basic loss per common share (in Dollars per share) | $0 | ($0.01) | ($0.01) | ($0.02) |
Diluted loss per common share (in Dollars per share) | $0 | ($0.01) | ($0.01) | ($0.02) |
Basic weighted average common shares outstanding (in Shares) | 83,833,128 | 48,333,128 | 83,833,128 | 48,333,128 |
Diluted weighted average common shares outstanding (in Shares) | 83,833,128 | 48,333,128 | 83,833,128 | 48,333,128 |
Statements_of_Cash_Flows_Unaud
Statements of Cash Flows (Unaudited) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Net loss | ($617,859) | ($858,378) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ' | ' |
Amortization of debt discount | 41,227 | 0 |
Write Down of Debt Discount | 0 | 36,587 |
Share-based compensation expense | 5,970 | 11,400 |
Changes in operating assets and liabilities: | ' | ' |
Prepaid and other assets | 14,589 | 0 |
Accounts payable and accrued expenses | 60,512 | -48,121 |
Net cash (used in) provided by operating activities | -495,561 | -858,512 |
Net cash used in investing activities | 0 | 0 |
Net cash used in financing activities | 710,000 | 0 |
Net increase (decrease) in cash | 214,439 | -858,512 |
Cash, beginning of period | 247,684 | 1,290,282 |
Cash, end of period | 462,123 | 431,770 |
Supplemental disclosures of cash flow information: | ' | ' |
Cash paid for income taxes | 0 | 0 |
Cash paid for interest | $0 | $0 |
Note_1_Organization_Descriptio
Note 1 - Organization, Description of Business and Going Concern | 9 Months Ended |
Sep. 30, 2013 | |
Disclosure Text Block [Abstract] | ' |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | ' |
Note 1- Organization, Description of Business and Going Concern | |
Optionable, Inc. (the “Company”) was formed in Delaware in February 2000. Between April 2001 and July 2007, a substantial portion of the Company’s revenues were generated from providing energy derivative brokerage services to brokerage firms, financial institutions, energy traders, and hedge funds worldwide. | |
The Company has not generated any revenues since the third quarter of 2007 as a result of the termination of the business relationship by its largest customer and the succession of events since then. The litigation matters listed below and discussed in Note 6 have had a significant adverse impact on its business and future results of operations and financial condition. | |
The Company’s management is seeking out possible business transactions and new relationships in areas unrelated to brokerage services. | |
The Company is a defendant to several legal proceedings, one from its largest shareholder, Chicago Mercantile Exchange/ New York Mercantile Exchange (“NYMEX”), and a second one from its former largest customer, Bank of Montreal (“BMO”). Also named in such lawsuits, among others, are: one of the Company’s current board members and former president, as well as the Company’s former chief executive officer and former chairman. Additionally, the Company’s former chief executive officer and former president are defendants in a claim made by the Securities and Exchange Commission. | |
Going Concern | |
The Company is unable to determine whether it will have sufficient funds to meet its obligations for at least the next twelve months. The combination of its anticipated legal costs to defend against current legal proceedings, the potential amounts the Company would have to pay if there are negative outcomes in one or more of such legal proceedings, the Company’s obligations under its indemnification obligations and additional legal expenses incurred by the Company could exceed the Company’s resources. The legal proceedings also negatively impact the Company’s ability to enter into strategic transactions with other companies. The Company’s future depends on its ability to satisfactorily resolve the aforementioned legal issues and there is no assurance it will be able to do so. If the Company fails for any reason, it would not be able to continue as a going concern and could potentially be forced to seek relief through a filing under the US Bankruptcy Code. The Company's September 30, 2013 unaudited financial statements do not include any adjustments that might result from the outcome of this uncertainty. | |
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 nine month periods ended September 30, 2013 is not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2013. The accompanying consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012, which was filed on April 10,2013. |
Note_2_Summary_of_Significant_
Note 2 - Summary of Significant Accounting Policies | 9 Months Ended | ||
Sep. 30, 2013 | |||
Accounting Policies [Abstract] | ' | ||
Significant Accounting Policies [Text Block] | ' | ||
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. The Federal Deposit Insurance Corporation (“FDIC”) insured up to $100,000 between January 2007 and October 2008. After October 2008, it insured up to $250,000 for interest-bearing accounts and an unlimited amount for noninterest-bearing accounts after October 2008. During 2013 and 2012, the Company had 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. | |||
Fair Value of Financial Instruments | |||
Effective January 1, 2008, the Company adopted Financial Accounting Statement Board (“FASB”) Accounting Standard Codification (“ASC”) 820, “Fair Value Measurements and Disclosures”, for assets and liabilities measured at fair value on a recurring basis. ASC 820 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. | |||
ASC 820 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, ASC 820 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 September 30, 2013 and December 31, 2012, with the exception of its due to director. The Company deems that the carrying value of the due to director approximates the fair value as of September 30, 2013 and December 31, 2012. | |||
Cash and cash equivalents include money market securities that are considered to be highly liquid and easily tradable as of September 30, 2013 and December 31, 2012, 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, ASC 825-10-25, “Fair Value Option,” was effective January 1, 2008. ASC 825-10-25 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. | |||
Income Taxes | |||
Income taxes are accounted for in accordance with “Accounting for Income Taxes”, which 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, ASC 740 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 2,883,000 and 2,883,000 shares at September 30, 2013 and 2012, respectively. The outstanding warrants amounted to 0 at September 30, 2013 and 2012. The options and warrants outstanding at September 30, 2013 and 2012, respectively, have been excluded from the computation of diluted earnings per share due to their antidilutive effect. | |||
Stock Compensation | |||
Under ASC 718- Compensation-Stock Compensation, 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 ASC 718 and certain SEC rules and regulations and provides the staff’s views regarding the valuation of share-based payment arrangements for public companies. 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. | |||
Contingencies | |||
The outcomes of legal proceedings and claims brought against the Company are subject to significant uncertainty. FASB ASC 450-20-25-2 “Contingencies- Loss Contingencies-Recognition”, 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 the Company evaluates, among other factors, the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the amount of loss. While the Company believes that it will continue to incur losses from such legal proceedings, it is unable to make a reasonable estimate of the amount of loss. | |||
Recent Accounting Pronouncements | |||
A variety of accounting standards have been issued or proposed by FASB that do not require adoption until a future date. The Company does not expect the adoption of any of these standards to have a material impact once adopted. |
Note_3_Prepaid_expenses
Note 3 - Prepaid expenses | 9 Months Ended |
Sep. 30, 2013 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ' |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Table Text Block] | ' |
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 in connection with legal proceedings which are described in Note 6-Litigation and Contingencies. |
Note_4_Due_to_Related_Parties_
Note 4 - Due to Related Parties and Related Party Transaction | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Related Party Transactions [Abstract] | ' | ||||||||
Related Party Transactions Disclosure [Text Block] | ' | ||||||||
Note 4-Due to Related Parties and Related Party Transaction | |||||||||
The terms and amounts of due to related parties at September 30, 2013 and December 31, 2012, respectively, are as follows: | |||||||||
One of the Company’s former board members and former president is entitled to a payment of $508,697 (the “Principal Amount”), plus interest, if applicable, upon the following terms. In the event that the Company secures financing of at least $1,000,000 (the “Capital Raise”), this person will be entitled to a payment equal to the lesser of (i) 12.5% of the Capital Raise, (ii) $381,250, and (iii) any unpaid Principal Amount. In the event that upon a Capital Raise, the entire Principal Amount has not been repaid, this person shall be issued a promissory note (the “Capital Raise Note”) in the principal amount of any then unpaid Principal Amount remaining after the payments described in the preceding sentence. The Capital Raise Note shall be due and payable on April 1, 2014 and shall bear interest at a rate of 4.68% annually. In the event that no Capital Raise shall have occurred prior to April 1, 2014, then the unpaid Principal Amount shall be due and payable as of such date. This liability is recorded on the Company’s balance sheets as follows: | |||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
$ | 508,697 | $ | 508,697 | ||||||
Discount, using initial implied rate of 12% | (27,411 | ) | (68,638 | ) | |||||
$ | 481,286 | $ | 440,059 | ||||||
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 $41,227 and $24,025 during the nine-month periods ending September 30, 2013 and 2012, respectively. | |||||||||
On April 10, 2013, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with Mark Nordlicht, a current stockholder of the Company (the “Subscriber”), pursuant to which the Company sold to the Subscriber an aggregate of 35,500,000 shares of the Company’s common stock, par value $.001 (the “Securities”), at a purchase price of $0.02 per share (the “Purchase Price”), for a total offering amount, before Offering related expenses, of $710,000 (the “Offering”). The Offering closed immediately following the execution and delivery of the Purchase Agreement by the Company and the Subscriber. After giving effect to the Offering, there are 83,833,128 shares of Common Stock outstanding and options to purchase an aggregate of 2,983,000 shares of Common Stock outstanding. | |||||||||
Effective upon the closing of the Offering, Brad O’Sullivan, Matthew Katzeff, Ed O’Connor and Andrew Samaan resigned as directors of the Company, the number of directors constituting the Company’s full Board of Directors was reduced to two and Dov Rauchwerger and Neil Osrof were elected to fill the vacancies created by such resignations. Mr. Rauchwerger was also elected as the Chief Executive Officer and Chief Financial Officer of the Company. Subsequently, Matthew Katzeff was reappointed Chief Financial Officer. |
Note_5_Stockholders_Equity
Note 5 - Stockholders' Equity | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Stockholders' Equity Note [Abstract] | ' | ||||||||
Stockholders' Equity Note Disclosure [Text Block] | ' | ||||||||
Note 5- Stockholders’ Equity | |||||||||
Stock Compensation Plan | |||||||||
During November 2004, the Company adopted the 2004 Stock Option Plan (“2004 Plan”), and amended it in March 2011. 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. The 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. | |||||||||
During the three- and nine-month periods ended September 30, 2013 and 2012, respectively, the Company recorded share-based payment expenses amounting to approximately $1,557 and $5,970 in 2013, and $3,786 and $11,400 in 2012, respectively, in connection with all options outstanding at the respective measurement dates. The amortization of share-based payment was recorded in selling, general and administrative during such periods. | |||||||||
The Company granted 500,000 options in March 2011, as follows: 100,000 options were granted to each of former CEO Brad O’Sullivan, CFO Matthew Katzeff, former Director Andrew Samaan, Director and former President Edward O’Connor and former Controller Michael Templeton. The Company granted 100,000 options to former Director Andrew Samaan in August 2011. | |||||||||
The Company granted 600,000 options in May 2012, as follows: 200,000 options were granted to each of former CEO Brad O'Sullivan and CFO Matthew Katzeff and 100,000 options were granted to each of former Director Andrew Samaan and former Director and former President Edward O’Connor. There were no options granted during the three and nine month periods ended September 30, 2013. | |||||||||
The following activity occurred under our plan: | |||||||||
Nine-month periods ended | |||||||||
September 30, | |||||||||
2013 | 2012 | ||||||||
Weighted-average grant-date fair value of options granted | $ | 0.022 | $ | 0.022 | |||||
Fair value of options granted | $ | 11.001 | $ | 11.001 | |||||
The total compensation cost related to nonvested options not yet recognized amounted to approximately $3,231 and $12,400 at September 30, 2013 and 2012, respectively, and the Company expects that it will be recognized over the following weighted-average period of 12 months. | |||||||||
If any options granted under the 2004 Plan, as amended, 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 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 and nonstatutory 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 incentive stock options up to three months after their employment termination or one year after their death or permanent and total disability. With respect to the current directors and officers of the Company, their nonstatutory stock options do not expire until the second year anniversary of their resignation from the Company for Good Reason or termination without Cause (as these terms are defined in the Plan), or upon the occurrence of certain other events. The 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. |
Note_6_Litigation_and_Continge
Note 6 - Litigation and Contingencies | 9 Months Ended |
Sep. 30, 2013 | |
Disclosure Text Block Supplement [Abstract] | ' |
Legal Matters and Contingencies [Text Block] | ' |
Note 6- Litigation and Contingencies | |
CMEG NYMEX Inc. v. Optionable, Inc. et. al. Civ. No. 09-03677 (S.D.N.Y.) | |
CMEG NYMEX Inc. (“NYMEX”) filed the operative complaint in this litigation on April 10, 2009. The complaint alleges, among other things, that Optionable, certain of its former officers and directors, and other defendants defrauded NYMEX in connection with NYMEX’s purchase of $28.9 million of shares of Optionable common stock pursuant to a Stock and Warrant Purchase Agreement (“SWPA”). NYMEX seeks damages in excess of $28.5 million based on the following causes of action against Optionable: violations of Section 10(b) of the Securities Exchange Act; breach of contract and warranty; aiding and abetting common law fraud; and negligent misrepresentation. The Company has denied the allegations in the Complaint. On September 6, 2011, the Company filed counterclaims against NYMEX alleging, among other things, that NYMEX breached its obligations under the SWPA. The counterclaims seek unspecified damages based on the following causes of action: breach of contract; breach of the covenant of good faith and fair dealing; and refusal to pay amounts due and owed of over $740,000. NYMEX filed a motion for partial summary judgment in support of its claims, and the Company also filed a motion for summary judgment in support of its claims. | |
On August 24, 2012, the United States District Court for the Southern District of New York (the “Court”) issued a Memorandum Decision and Order (the “NYMEX Order”) concerning motions for summary judgment regarding certain of the parties’ claims and counterclaims. In the NYMEX Order, the Court: (i) denied NYMEX’s motion for summary judgment on its breach of warranty claim; (ii) denied NYMEX’s motion to dismiss Optionable’s counterclaim for breach of the SWPA; (iii) granted NYMEX’s motion to dismiss Optionable’s counterclaims for breach of the covenant of good faith and fair dealing, and refusal to pay amounts due and owed; and (iv) granted NYMEX’s motion to dismiss defendant Mark Nordlicht’s breach of contract counterclaim. The Company is unable to predict the outcome of this litigation. | |
Bank of Montreal v. Optionable, Inc. et al. Civ. No. 09-07557 (S.D.N.Y.) | |
Bank of Montreal (“BMO”) filed the operative complaint in this litigation on August 28, 2009. The complaint alleges, among other things, that Optionable, certain of its former officers and directors, and other defendants conspired to defraud BMO in connection with large monetary losses experienced by BMO as a result of natural gas option trades made by one of its former employees. BMO seeks unspecified damages based on the following causes of action: fraud; negligent misrepresentation; aiding and abetting fraud; aiding and abetting breach of fiduciary duty; and breach of contract. The Company has denied the allegations in the Complaint. On September 6, 2011, the Company filed counterclaims against BMO alleging, among other things, that BMO launched an unlawful campaign to blame the Company for the losses BMO incurred due to its own fault. | |
On August 24, 2012, the Court issued a Memorandum Decision and Order granting BMO’s motion to dismiss all of Optionable’s counterclaims. The Company is unable to predict the outcome of this litigation. | |
Claims from former employee | |
On December 9, 2009, Scott Connor, a co-defendant in the BMO Matter, filed cross-claims against the Company. Mr. Connor claimed rights to indemnity and contribution from the Company for any liability he may have to Bank of Montreal. The Company is unable to predict the outcome of this litigation. | |
SEC Matter | |
On November 18, 2008, the Securities and Exchange Commission filed a complaint against the Company’s former Chief Executive Officer, Kevin Cassidy, its former President (and current Director), Edward O’Connor, and its former employee Scott Connor in the United States District Court for the Southern District of New York. The complaint claims that Cassidy and Mr. O’Connor are liable for violations of Rules 10b-5, 12b-20, 13a-1, 13a-14, 13a-16, 13b2-1, and 13b2-2 and Section 10(b), Section 13(a), Section 13(b)(2) and Section 13(b)(5) of the Exchange Act and Section 17(a) of the Securities Act. The complaint demands, among other things, that Mr. Cassidy and Mr. O’Connor disgorge their alleged ill-gotten gains, be permanently enjoined from certain activities, pay civil penalties, be prohibited from being an officer or director of any issuer that has registered securities or an issuer that is required to file reports pursuant to Section 15(d) of the Exchange Act. | |
While the Company intends both to defend itself vigorously against these claims and cross-claims and to prosecute its own counterclaims, 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. | |
Indemnification Obligations | |
As a result of their involvement in the matters described in this Note 6, the Company may have indemnification obligations to certain of its past directors and officers. The amounts, if any, and timing of such indemnification obligations with respect to such individuals is indeterminable. Therefore, the Company’s financial statements reflect as expenses only those indemnification obligations it has been able to quantify and determined to be payable during the relevant accounting period. |
Note_7_Subsequent_Events
Note 7 - Subsequent Events | 9 Months Ended |
Sep. 30, 2013 | |
Subsequent Events [Abstract] | ' |
Subsequent Events [Text Block] | ' |
Note 7 – Subsequent Events | |
None. | |
In accordance with ASC 855, “Subsequent Events” the Company evaluated subsequent events after the balance sheet date for disclosure or recognition purposes. |
Accounting_Policies_by_Policy_
Accounting Policies, by Policy (Policies) | 9 Months Ended | ||
Sep. 30, 2013 | |||
Accounting Policies [Abstract] | ' | ||
Cash and Cash Equivalents, Policy [Policy Text Block] | ' | ||
Cash and Cash Equivalents | |||
The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. | |||
Concentration Risk, Credit Risk, Policy [Policy Text Block] | ' | ||
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. The Federal Deposit Insurance Corporation (“FDIC”) insured up to $100,000 between January 2007 and October 2008. After October 2008, it insured up to $250,000 for interest-bearing accounts and an unlimited amount for noninterest-bearing accounts after October 2008. During 2013 and 2012, the Company had 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. | |||
Fair Value of Financial Instruments, Policy [Policy Text Block] | ' | ||
Fair Value of Financial Instruments | |||
Effective January 1, 2008, the Company adopted Financial Accounting Statement Board (“FASB”) Accounting Standard Codification (“ASC”) 820, “Fair Value Measurements and Disclosures”, for assets and liabilities measured at fair value on a recurring basis. ASC 820 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. | |||
ASC 820 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, ASC 820 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 September 30, 2013 and December 31, 2012, with the exception of its due to director. The Company deems that the carrying value of the due to director approximates the fair value as of September 30, 2013 and December 31, 2012. | |||
Cash and cash equivalents include money market securities that are considered to be highly liquid and easily tradable as of September 30, 2013 and December 31, 2012, 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, ASC 825-10-25, “Fair Value Option,” was effective January 1, 2008. ASC 825-10-25 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. | |||
Income Tax, Policy [Policy Text Block] | ' | ||
Income Taxes | |||
Income taxes are accounted for in accordance with “Accounting for Income Taxes”, which 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, ASC 740 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, Policy [Policy Text Block] | ' | ||
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. | |||
Earnings Per Share, Policy [Policy Text Block] | ' | ||
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 2,883,000 and 2,883,000 shares at September 30, 2013 and 2012, respectively. The outstanding warrants amounted to 0 at September 30, 2013 and 2012. The options and warrants outstanding at September 30, 2013 and 2012, respectively, have been excluded from the computation of diluted earnings per share due to their antidilutive effect. | |||
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | ' | ||
Stock Compensation | |||
Under ASC 718- Compensation-Stock Compensation, 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 ASC 718 and certain SEC rules and regulations and provides the staff’s views regarding the valuation of share-based payment arrangements for public companies. 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. | |||
Commitments and Contingencies, Policy [Policy Text Block] | ' | ||
Contingencies | |||
The outcomes of legal proceedings and claims brought against the Company are subject to significant uncertainty. FASB ASC 450-20-25-2 “Contingencies- Loss Contingencies-Recognition”, 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 the Company evaluates, among other factors, the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the amount of loss. While the Company believes that it will continue to incur losses from such legal proceedings, it is unable to make a reasonable estimate of the amount of loss. | |||
New Accounting Pronouncements, Policy [Policy Text Block] | ' | ||
Recent Accounting Pronouncements | |||
A variety of accounting standards have been issued or proposed by FASB that do not require adoption until a future date. The Company does not expect the adoption of any of these standards to have a material impact once adopted. |
Note_4_Due_to_Related_Parties_1
Note 4 - Due to Related Parties and Related Party Transaction (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Related Party Transactions [Abstract] | ' | ||||||||
Schedule of Debt [Table Text Block] | ' | ||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
$ | 508,697 | $ | 508,697 | ||||||
Discount, using initial implied rate of 12% | (27,411 | ) | (68,638 | ) | |||||
$ | 481,286 | $ | 440,059 |
Note_5_Stockholders_Equity_Tab
Note 5 - Stockholders' Equity (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Stockholders' Equity Note [Abstract] | ' | ||||||||
Schedule of Share-based Compensation, Activity [Table Text Block] | ' | ||||||||
Nine-month periods ended | |||||||||
September 30, | |||||||||
2013 | 2012 | ||||||||
Weighted-average grant-date fair value of options granted | $ | 0.022 | $ | 0.022 | |||||
Fair value of options granted | $ | 11.001 | $ | 11.001 |
Note_2_Summary_of_Significant_1
Note 2 - Summary of Significant Accounting Policies (Details) (USD $) | Sep. 30, 2013 | Sep. 30, 2012 | Oct. 31, 2008 |
Accounting Policies [Abstract] | ' | ' | ' |
Cash, FDIC Insured Amount (in Dollars) | $250,000 | ' | $100,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number (in Shares) | 2,883,000 | 2,883,000 | ' |
Warrants and Rights Outstanding (in Dollars) | $0 | $0 | ' |
Note_4_Due_to_Related_Parties_2
Note 4 - Due to Related Parties and Related Party Transaction (Details) (USD $) | 1 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | |||||
Apr. 30, 2005 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Apr. 11, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | |
Purchase Agreement [Member] | Maximum [Member] | Minimum [Member] | Approximation [Member] | Approximation [Member] | |||||
Note 4 - Due to Related Parties and Related Party Transaction (Details) [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Related Party Transaction, Amounts of Transaction | ' | $508,697 | ' | ' | ' | ' | ' | ' | ' |
Related Party Transaction, Terms and Manner of Settlement | ' | '$1,000,000 | ' | ' | ' | '12.5% | '$381,250 | ' | ' |
Related Party Transaction, Rate | 12.00% | 4.68% | ' | ' | ' | ' | ' | ' | ' |
Percentage of Cash Flow Available to Repay Related Party Debt | ' | 25.00% | ' | ' | ' | ' | ' | ' | ' |
Amortization of Debt Discount (Premium) | ' | 41,227 | 0 | ' | ' | ' | ' | 41,227 | 24,025 |
Sale of Stock, Number of Shares Issued in Transaction (in Shares) | ' | ' | ' | ' | 35,500,000 | ' | ' | ' | ' |
Sale of Stock, Price Per Share (in Dollars per share) | ' | ' | ' | ' | $0.02 | ' | ' | ' | ' |
Sale of Stock, Consideration Received on Transaction | ' | ' | ' | ' | $710,000 | ' | ' | ' | ' |
Common Stock, Shares, Outstanding (in Shares) | ' | 87,928,203 | ' | 83,833,128 | 83,833,128 | ' | ' | ' | ' |
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in Shares) | ' | ' | ' | ' | 2,983,000 | ' | ' | ' | ' |
Note_4_Due_to_Related_Parties_3
Note 4 - Due to Related Parties and Related Party Transaction (Details) - Related Party Debt (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Note 4 - Due to Related Parties and Related Party Transaction (Details) - Related Party Debt [Line Items] | ' | ' |
Discount, using initial implied rate of 12% | ($27,411) | ($68,638) |
481,286 | 440,059 | |
Board Member and Former President [Member] | ' | ' |
Note 4 - Due to Related Parties and Related Party Transaction (Details) - Related Party Debt [Line Items] | ' | ' |
508,697 | 508,697 | |
Discount, using initial implied rate of 12% | -27,411 | -68,638 |
$481,286 | $440,059 |
Note_4_Due_to_Related_Parties_4
Note 4 - Due to Related Parties and Related Party Transaction (Details) - Related Party Debt (Parentheticals) (Board Member and Former President [Member]) | Sep. 30, 2013 | Dec. 31, 2012 |
Board Member and Former President [Member] | ' | ' |
Note 4 - Due to Related Parties and Related Party Transaction (Details) - Related Party Debt (Parentheticals) [Line Items] | ' | ' |
Initial Implied Rate | 12.00% | 12.00% |
Note_5_Stockholders_Equity_Det
Note 5 - Stockholders' Equity (Details) (USD $) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 1 Months Ended | |||||||
31-May-12 | Mar. 31, 2011 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Nov. 30, 2004 | 31-May-12 | Mar. 31, 2011 | Aug. 31, 2011 | 31-May-12 | |
Chief Executive Officer [Member] | Chief Executive Officer [Member] | Director [Member] | Chief Financial Officer [Member] | ||||||||
Note 5 - Stockholders' Equity (Details) [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | ' | ' | ' | ' | ' | ' | 7,500,000 | ' | ' | ' | ' |
Allocated Share-based Compensation Expense (in Dollars) | ' | ' | $1,557 | $3,786 | $5,970 | $11,400 | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 600,000 | 500,000 | 0 | ' | 0 | ' | ' | 200,000 | 100,000 | 100,000 | 100,000 |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized (in Dollars) | ' | ' | $3,231 | $12,400 | $3,231 | $12,400 | ' | ' | ' | ' | ' |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | ' | ' | ' | ' | '12 months | ' | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Maximum Employee Subscription Rate | ' | ' | 10.00% | ' | 10.00% | ' | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Discount from Market Price, Offering Date | ' | ' | ' | ' | 110.00% | ' | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Terms of Award | ' | ' | ' | ' | 'ten | ' | ' | ' | ' | ' | ' |
Note_5_Stockholders_Equity_Det1
Note 5 - Stockholders' Equity (Details) - Stock Option Activity (USD $) | 6 Months Ended | |
Jun. 30, 2013 | Jun. 30, 2012 | |
Stock Option Activity [Abstract] | ' | ' |
Weighted-average grant-date fair value of options granted | $0.02 | $0.02 |
Fair value of options granted (in Dollars) | $11.00 | $11.00 |
Note_6_Litigation_and_Continge1
Note 6 - Litigation and Contingencies (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 06, 2011 | Apr. 10, 2009 | Apr. 10, 2009 |
Punitive [Member] | CMEG NYMEX Inc [Member] | ||||
Note 6 - Litigation and Contingencies (Details) [Line Items] | ' | ' | ' | ' | ' |
Common Stock, Value, Issued | $8,792 | $5,242 | ' | ' | $28,900,000 |
Loss Contingency, Damages Sought, Value | ' | ' | ' | 28,500,000 | ' |
Gain Contingency, Unrecorded Amount | ' | ' | $740,000 | ' | ' |