Optionable's First Annual Shareholders Meeting
9:50 I arrive at 95 Croton Ave Ossining NY which is a plain looking office building. There are retailers such as a computer repair shop on the ground floor. Upon entering the building I see a memo from Optionable taped to the wall. The meeting has been moved to a restaurant just up the road. I had hoped to see their office space just to see if anyone works there. Oh well.
9: 55 I arrive at The Brasserie Swiss Restaurant & Bar at 118 Croton Ave Ossining NY
There’s a line up of “The Usual Suspects” seated at a table which is facing an audience of 5 people. One of them warns me not to eat all the food. I’m like – Dude – if you think I’m here to eat my way back to break-even you’re gonna need a bigger spread. I figure I’m dealing with Burchill, and it turns out I’m right. Later in the session Burchill makes a few more remarks that clearly show his propensity to pinch pennies. Given that OPBL was forced to hold this meeting by Mark Nordelicht (who is not in attendance) over a matter they have since resolved, I decide to give Burchill some slack about seeing this whole shareholder’s meeting as a waste of “his” money. There are a few remarks about CNN and CNBC being in the parking lot followed by laughter. There are no jokes about Kevin Cassidy or the SEC / CFTC lurking about.
10:00 Introductions
Optionable:
1) Charles McCormick – outside council to Ed O’Connor
http://www.mcoblaw.com/ourattorneys_charles.html (slick)
2) Ed O’Connor – Meeting Chairman (talks fast about complex items but comes across as energetic rather than shifty)
3) Thomas Burchill - President and Director (comes across as Ivy League Old Money)
4) Andrew Samaan – New to the team He didn’t speak other than to say his name – I didn’t get a read on him. http://columbiasportsgroup.com/Home.html
5) Marc-Andre Boisseau /- Chief Financial Officer/ (deep voiced curly haired guy in a wrinkled shirt)
Shareholders / Audience:
Shareholder 1
Shareholder 2
Manny Tzagarakis from the accounting firm Sherb and Company
http://www.sherbcpa.com/partners.html#manny_tzagarakis
Marni Rae Robin Lawyer from McCormick & O’Brien who handled the proxy
Shareholder 3
Peter (???) from Innisfree M&A Incorporated which handled the Proxy Solicitation
10:04 Up for nomination are: Marc-Andre Boisseau, Thomas Burchill, Edward O’Connor and Andrew Samaan. Each shareholder is polled to see if they have already voted. All shareholders reply in the affirmative.
10:05 Peter from Innisfree announces that all nominees have been approved by over 96% of the vote. (which means NYMEX didn’t vote against them) Nominees are congratulated. Nominees thank shareholders for their support.
10:06 Meeting is formally closed
Questions:
Status of OPBL’s 4 Patents –
Ed – Patent #1 allows for bilateral trading, but after Enron no one traded bilaterally. This invention was never put into OPEX. Ed is meeting with a patent attorney and the inventor to see if they should continue to pursue this pending patent. Don’t pin your hopes on this patent – however if the credit default market ever starts to unwind, this patent could be useful. O’Connor cautions that the government is moving even further away from bilateral trades.
Patent #2 is a depth of market montage. It shows a combination of structures – rather than just call spread or put spread – you can put 7 or 8 leg structures on it – with an assigned delta - There are other similar inventions out there, so OPBL may not own this in the future.
Patents #1 and #2 will be “up to bat” within the next 30 days. OPBL’s 2 other patents will not be up to bat for 6 to 9 months.
Ed is talking pretty openly in the spirit of full disclosure. Ed indicates that the inventor of Patent #2 might be willing to work with OPBL if they move forward with it. Ed does not mention the inventor by name – but Mark Nordelicht was the lead guy on all the patents (although not the only guy).
What is the Business Plan?
Burchill: take the assets that the company has a) the public shell b) cash c) technology platform and try to find the right path forward to deploy those assets to maximize shareholder value. What that involves is looking at a number of companies that might become merger or acquisition targets. It will take a few months to identify a target and then do due diligence to scope them out.
Is NYMEX out?
No, they are a shareholder. There have been no recent communications between OPBL and NYMEX.
Is the Insurance policy paying the legal bills?
Boisseau – that’s correct – but we can not promise that insurance policy will cover everything – there are just too many uncertainties.
Burchill – however there is currently still room left on the insurance policy
OPBL is authorized to repurchase shares. Will they?
Boisseau – That authorization was from a different time. Currently cash is king. (translation: there are no plans to repurchase shares)
There was an attempt to seize the assets of one of your bank accounts. Is that still a risk?
Burchill: Ironically there was an account at the same bank with much more money in it which we have withdrawn and relocated. A previous officer of the company (we can assume this means Kevin Cassidy) was a signatory on the account that the bank tried to seize and he has since been removed.
Does OPEX have any value?
Burchill: We believe so. Yes. I met yesterday with a software company that is also involved in a trading solution and we discussed working together. (Burchill later says that Charles Wilson was at this meeting) We have continued to invest in the OPEX platform and believe it is up to date.
Boisseau: please remember there is no guarantee. A platform needs good software, but it also needs liquidity.
O’Connor: it’s not necessarily the best platform that gets the most attention but the one with the most liquidity. In the beginning traders never have an interest in a new platform. But once we finally got them to look at OPEX and they saw stuff trading on it, they started to believe in it, and then we got the liquidity. So you need 2 things. The platform has to be viable and you have to have the distribution. So we’ve been talking to some people where we have one piece (the platform) and they have the other (the distribution) and we’re trying to put the 2 together.
Are you working with Charles Wilson on OFX Trading? http://www.ofxtrading.com/
Burchill: Charles Wilson is a technical consultant to the company who continues to work on the platform. He attended the meeting I was at yesterday.
Is Wilson launching OFX Trading in May of this year based on OPEX?
Burchill: He is helping us find viable partners, but he is not launching anything without our approval. One of the possible paths would be a joint venture with Wilson’s company Netserity. http://www.netserity.com/ but we are looking at other partners as well.
Given your (Burchill) history in media are you looking to turn Optionable into some totally different type of company – such as a media company?
Burchill : One of the options is set up something separate from the OPEX platform. It could be difficult given the company’s history (scandal) to go back to the same space. It may be better for us to separate from the OPEX platform and move into a different space.
If you separate from OPEX will you set up an entertainment company?
Burchill: no, we’ve looked at everything from a healthcare, software, building products and wireless technology. That’s why we hired a financial advisor to help us find the right company at the right stage of growth. The company we spoke with yesterday is very much in the trading area, but in a support capacity and that is where the compatibility lies. We are looking at it as very much a clean slate without any predetermined objectives.
The 8-K filed on Friday was a bit confusing and it seems to pertain to OPEX.
Boisseau – I can help clarify that. The company had entered into a transaction with a broker to create OPEX International and there was a request for confidential treatment. Nothing ever came of this so the recent 8-K just removed that request for confidentiality.
Who is the contact at Optionable? Should I just leave a message at the corporate number?
Burchill: yes, I will be checking it periodically. I will respond to questions.
Closing remark – Burchill: we will be working hard over the next year to maximize shareholder value. The good news is that a lot of companies need capital and we are blessed to have good capital. It will be our job to sort through where the opportunities lie
Thanks for coming out.
Post Q&A
Ed O’Connor was explaining some of the intricacies of OPEX’s matching engine with great enthusiasm to which a shareholder replied: “I can see you really are a trader at heart” to which Burchill replies: “That’s what he’s doing everyday“
O’Connor: I traded for 17 years and now I’m back doing it electronically.
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