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EX-32.1 - OPTION PLACEMENT, INC.v193794_ex32-1.htm
EX-31.1 - OPTION PLACEMENT, INC.v193794_ex31-1.htm
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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, 2010

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 000-53638

OPTION PLACEMENT, INC.  
(Exact name of registrant as specified in its charter)

Nevada
26-2415625
(State or other jurisdiction of
(I.R.S. Employer
incorporation or organization)
Identification No.)
 
2328 B Hartford Rd  Austin, TX 78703
(Address of principal executive offices)

(512) 750-5844
Issuer’s telephone number

2629 River Dr.  Columbia, SC 29201
 (Former name, former address and former
fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes   o No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every
Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
o Yes  x No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer   o
Accelerated filer     o
Non-accelerated filer     o  (Do not check if a smaller reporting company)
Smaller reporting company     x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). x Yes o No
 
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. o  Yes  o  No
 
 
APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date:  At August 23, 2010 there were 1,125,000 shares of common stock outstanding.
 


PART I — FINANCIAL INFORMATION

Item 1. Financial Statements.
 
   
Financial Statements for the Three-Month Period Ended June 30, 2010
 
   
 
Balance Sheet as of June 30, 2010 (unaudited) and December 31, 2009 (audited)
F–1
     
 
Statement of Operations for the three months ended June 30, 2010 and 2009 (unaudited)
F–2
     
 
Statement of Operations for the six months ended June 30, 2010 and 2009 (unaudited)
F-3
     
 
Statement of Stockholders’ Deficit for the period ended June 30, 2010 (unaudited)
F-4
     
 
Statement of Cash Flows for the three months ended June 30, 2010  and cumulative since inception (March 5, 2008)(unaudited)
F–5
     
 
Notes to the Financial Statements
F–6

 
2

 
 
Balance Sheets
 
(A Development Stage Company)
 
             
   
As of
 
   
June 30,
   
December 31,
 
   
2010 (unaudited)
   
2009 (audited)
 
ASSETS
           
CURRENT ASSETS
           
Cash
  $ 281     $ 35  
TOTAL CURRENT ASSETS
    281       35  
TOTAL ASSETS
    281       35  
                 
LIABILITIES AND STOCKHOLDERS' DEFICIT
               
LIABILITIES
               
CURRENT LIABILITIES
               
Note Payable to a Related Party
  $ 14,150     $ 9,150  
Accrued Expenses and Payables
    4,577       -  
Accrued Interest – Related Party
    1,467       1,002  
TOTAL CURRENT LIABILITIES
    20,194       10,152  
TOTAL LIABILITIES
    20,194       10,152  
                 
STOCKHOLDERS' DEFICIT
               
Preferred stock ($0.0001 par value; 10,000,000 shares authorized;
               
none issued and outstanding)
    -       -  
Common stock ($0.0001 par value; 100,000,000 shares authorized;
               
1,000,000 shares issued and outstanding)
    100       100  
Deficit accumulated during the development stage
    (20,013 )     (10,217 )
TOTAL STOCKHOLDERS' DEFICIT
    (19,913 )     (10,117 )
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT
  $ 281     $ 35  



The accompanying notes are an integral part of these financial statements.
 
F-1


Option Placement, Inc.
Statements of Operations (unaudited)
(A Development Stage Company)
             
             
             
   
For the three months ended
 
   
June 30,
   
June 30,
 
   
2010
   
2009
 
REVENUES:
           
Income
  $ -     $ -  
Total Revenue
    -       -  
                 
EXPENSES:
               
Selling, General and Administrative
    4,331       636  
Professional Fees
    5,000       -  
Total Expenses
    9,331       636  
                 
Loss from operations
    (9,331 )     (636 )
                 
OTHER INCOME/(EXPENSE):
               
Interest Expense
    (283 )     (197 )
                 
                 
NET LOSS
  $ (9,614 )   $ (833 )
Basic and fully diluted net loss per common share:
  $ (0.01 )   $ (0.00 )
                 
Weighted average common shares outstanding
    1,000,000       1,000,000  



The accompanying notes are an integral part of these financial statements.
 
F-2


Option Placement, Inc.
 
Statements of Operations (unaudited)
 
(A Development Stage Company)
 
                   
                   
               
Cumulative
 
   
For the six months ended
   
Total Since
 
   
June 30,
   
June 30,
   
Inception
 
   
2010
   
2009
   
March 5, 2008
 
REVENUES:
                 
Income
  $ -     $ -     $ -  
Total Revenue
    -       -       -  
                         
EXPENSES:
                       
Selling, General and Administrative
    4,331       636       5,846  
Professional Fees
    5,000       -       12,700  
Total Expenses
    9,331       636       18,546  
                         
Loss from operations
    (9,331 )     (636 )     (18,546 )
                         
OTHER INCOME/(EXPENSE):
                       
Interest Expense
    (465 )     (396 )     (1,467 )
                         
                         
NET LOSS
  $ (9,796 )   $ (1,032 )   $ (20,013 )
Basic and fully diluted net loss per common share:
  $ (0.01 )   $ (0.00 )   $ (0.02 )
                         
Weighted average common shares outstanding
    1,000,000       1,000,000       1,000,000  



The accompanying notes are an integral part of these financial statements.
 
F-3


 
Statement of Stockholders' Deficit (unaudited)
 
(A Development Stage Company)
 
                                     
                                     
                                     
                     
Additional
       
   
Common Stock
   
Preferred stock
   
Paid-in
   
Deficit
 
   
Shares
   
Amount
   
Shares
   
Amount
   
Capital
   
Accumulated
 
                                     
Balances, March 5, 2008 (Inception)
    -     $ -       -     $ -     $ -     $ -  
                                                 
Net income/(loss)
    -       -       -       -       -       (7,040 )
                                                 
                                                 
Issuance of founders’ shares
    1,000,000       100       -       -       -       -  
                                                 
Balances, December 31, 2008
    1,000,000     $ 100       -     $ -     $ -     $ (7,040 )
                                                 
Net income/(loss)
    -       -       -       -       -       (3,177 )
                                                 
Balances, December 31, 2009
    1,000,000     $ 100       -     $ -     $ -     $ (10,217 )
                                                 
Net income/(loss)
    -       -       -       -       -       (9,796 )
                                                 
Balances, June 30, 2010
    1,000,000     $ 100       -     $ -     $ -     $ (20,013 )



The accompanying notes are an integral part of these financial statements.
 
F-4


 
Statement of Cash Flows (unaudited)
 
(A Development Stage Company)
 
                   
                   
   
For the six months
   
Cumulative Total
 
   
Ended June 30,
   
Since Inception
 
   
2010
   
2009
   
March 5, 2008
 
CASH FLOWS FROM OPERATING ACTIVITIES:
                 
Net loss
  $ (9,796 )   $ (1,032 )   $ (20,013 )
Adjustments to reconcile net loss to net cash provided by (used in)
                       
operating activities:
                       
Changes in Assets and Liabilities:
                       
Increase/(decrease) in Accrued Interest – Related Party
    465       395       1,467  
Increase/(decrease) in Accounts Payable
    4,577       -       4,577  
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
    (4,754 )     (637 )     (13,969 )
                         
CASH FLOWS FROM FINANCING ACTIVITIES:
                       
Issuance of Stock
    -       -       100  
Proceeds from a Note Payable to Related Party
    5,000       700       17,550  
Repayment of Note Payable to a Related Party
    -       -       (3,400 )
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
    5,000       700       14,250  
                         
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    246       63       281  
                         
CASH AND CASH EQUIVALENTS,
                       
BEGINNING BALANCE
    35       134       -  
                         
ENDING BALANCE
  $ 281     $ 197     $ 281  
                         
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
                       
CASH PAID DURING THE PERIOD FOR:
                       
Interest
  $ -     $ -     $ -  
Taxes
  $ -     $ -     $ -  



The accompanying notes are an integral part of these financial statements.
 
F-5

OPTION PLACEMENT ONE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
AS OF JUNE 30, 2010

 
NOTE A—BUSINESS ACTIVITY

Option Placement, Inc. (the “Company”) was organized under the laws of the State of Nevada on March 5, 2008 as a corporation.  The Company’s objective is to acquire or merge with a target business or company in a business combination.

NOTE B—GOING CONCERN

The accompanying financial statements have been prepared on a going concern basis, which assumes the Company will realize its assets and discharge its liabilities in the normal course of business.  As reflected in the accompanying financial statements, the Company has a deficit accumulated during the development stage of $20,013 used cash from operations of $13,969 since its inception, and has a negative working capital of $19,913 at June 30, 2010. 

 The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due.  The Company’s ability to continue as a going concern is also dependent on its ability to find a suitable target company and enter into a possible reverse merger with such company.  Management’s plan includes obtaining additional funds by equity financing through a reverse merger transaction and/or related party advances; however there is no assurance of additional funding being available.  These circumstances raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might arise as a result of this uncertainty.

NOTE C—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation- The financial statements included herein were prepared under the accrual basis of accounting.

Cash and Cash Equivalents- For purposes of the Statement of Cash Flows, the Company considers liquid investments with an original maturity of three months or less to be cash equivalents.

Management’s Use of Estimates- The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The financial statements above reflect all of the costs of doing business.
 
Presentation of Interim Information
 
The financial information at June 30, 2010 is unaudited, but includes all adjustments (consisting only of normal recurring adjustments) that the Company considers necessary for a fair presentation of the financial information set forth herein, in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information, and with the instructions to Form 10-Q. Accordingly, such information does not include all of the information and footnotes required by U.S. GAAP for annual financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s annual Report on Form 10-K for the year ended December 31, 2009.
  
The results for the six and three months ended June 30, 2010 may not be indicative of results for the year ending December 31, 2010 or any future periods.
 
F-6

 OPTION PLACEMENT ONE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
AS OF JUNE 30, 2010

 
NOTE C—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—CONT’D

Revenue Recognition- The Company applies paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition.  The Company recognizes revenue when it is realized or realizable and earned less estimated future doubtful accounts.  The Company considers revenue realized or realizable and earned when all of the following criteria are met:

 
(i)
persuasive evidence of an arrangement exists,

(ii)
the services have been rendered and all required milestones achieved,

(iii)
the sales price is fixed or determinable, and

(iv)
collectability is reasonably assured.

Comprehensive Income (Loss) - The Company reports Comprehensive income and its components following guidance set forth by section 220-10 of the FASB Accounting Standards Codification which establishes standards for the reporting and display of comprehensive income and its components in the financial statements. There were no items of comprehensive income (loss) applicable to the Company during the period covered in the financial statements.

Net Income per Common Share- Net loss per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification.  Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period.  Diluted net loss per share is computed by dividing net loss by the weighted average number of shares of common stock and potentially outstanding shares of common stock during each period.  There were no potentially dilutive shares outstanding as of June 30, 2010.

Deferred Taxes- The Company accounts for income taxes under Section 740-10-30 of the FASB Accounting Standards Codification.  Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.  Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of operations in the period that includes the enactment date.

Fair Value of Financial Instruments- The carrying amounts reported in the balance sheet for cash, accounts receivable and payable approximate fair value based on the short-term maturity of these instruments.

Accounts Receivable- Accounts deemed uncollectible are written off in the year they become uncollectible. As of June 30, 2010, the balance in Accounts Receivable was $0.

Impairment of Long-Lived Assets- The Company evaluates the recoverability of its fixed assets and other assets in accordance with section 360-10-15 of the FASB Accounting Standards Codification for disclosures about Impairment or Disposal of Long-Lived Assets.  Disclosure requires recognition of impairment of long-lived assets in the event the net book value of such assets exceeds its expected cash flows. If so, it is considered to be impaired and is written down to fair value, which is determined based on either discounted future cash flows or appraised values. The Company adopted the statement on inception. No impairments of these types of assets were recognized during the period ended June 30, 2010.
 
F-7

 OPTION PLACEMENT ONE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
AS OF JUNE 30, 2010

 
NOTE C—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—CONT’D

Stock-Based Compensation- The Company accounts for stock-based compensation using the fair value method following the guidance set forth in section 718-10 of the FASB Accounting Standards Codification for disclosure about Stock-Based Compensation. This section requires a public entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award- the requisite service period (usually the vesting period). No compensation cost is recognized for equity instruments for which employees do not render the requisite service.

Fair Value for Financial Assets and Financial Liabilities- The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments.  Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S. GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels.  The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs.  The three levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:

Level 1
Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
   
Level 2
Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
   
Level 3
Pricing inputs that are generally observable inputs and not corroborated by market data.

The carrying amounts of the Company’s financial assets and liabilities, such as cash and accrued expenses, approximate their fair values because of the short maturity of these instruments. The Company’s note payable approximates the fair value of such instrument based upon management’s best estimate of interest rates that would be available to the Company for similar financial arrangement at June 30, 2010.

The Company does not have any assets or liabilities measured at fair value on a recurring or a non-recurring basis, consequently, the Company did not have any fair value adjustments for assets and liabilities measured at fair value at June 30, 2010, nor gains or losses are reported in the statement of operations that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date for the interim period ended June 30, 2010.
 
F-8

 OPTION PLACEMENT ONE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
AS OF JUNE 30, 2010

 
NOTE C—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—CONT’D

Recent Accounting Pronouncements
In March 2010, the FASB issued Accounting Standard Update No. 2010-11 “Derivatives and Hedging” (Topic 815). ASU No. 2010-11 update provides amendments to subtopic 815-15, Derivatives and hedging. The amendments clarify about the scope exception in paragraph 815-10-15-11 and section 815-15-25 as applicable to the embedded credit derivatives. The ASU is effective on the first day of the first fiscal quarter beginning after June 15, 2010. Therefore, for a calendar-year-end entity, the ASU becomes effective on July 1, 2010. Early application is permitted at the beginning of the first fiscal quarter beginning after March 5, 2010

In April 2010, the FASB issued Accounting Standard Update No. 2010-12. “Income Taxes” (Topic 740). ASU No.2010-12 amends FASB Accounting Standard Codification subtopic 740-10 Income Taxes to include paragraph 740-10-S99-4. On March 30, 2010 The President signed the Health Care & Education Affordable Care Act reconciliation bill that amends its previous Act signed on March 23, 2010. FASB Codification topic 740, Income Taxes, requires the measurement of current and deferred tax liabilities and assets to be based on provisions of enacted tax law. The effects of future changes in tax laws are not anticipated.” Therefore, the different enactment dates of the Act and reconciliation measure may affect registrants with a period-end that falls between March 23, 2010 (enactment date of the Act), and March 30, 2010 (enactment date of the reconciliation measure). However, the announcement states that the SEC would not object if such registrants were to account for the enactment of both the Act and the reconciliation measure in a period ending on or after March 23, 2010, but notes that the SEC staff “does not believe that it would be appropriate for registrants to analogize to this view in any other fact patterns.”

In April 2010, the FASB issued Accounting Standard Update No. 2010-13 “Stock Compensation” (Topic 718). ASU No.2010-13 provides amendments to Topic 718 to clarify that an employee share-based payment award with an exercise price denominated in the currency of a market in which a substantial portion of the entity's equity securities trades should not be considered to contain a condition that is not a market, performance, or service condition. Therefore, an entity would not classify such an award as a liability if it otherwise qualifies as equity. The amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2010. The amendments in this Update should be applied by recording a cumulative-effect adjustment to the opening balance of retained earnings. The cumulative-effect adjustment should be calculated for all awards outstanding as of the beginning of the fiscal year in which the amendments are initially applied, as if the amendments had been applied consistently since the inception of the award. The cumulative-effect adjustment should be presented separately. Earlier application is permitted.

In April 2010, the FASB issued Accounting Standards Update No.2010-14, “Accounting for Extractive Activities – Oil & Gas” (Topic 932). ASU No. 2010-14 amends FASB accounting Standard paragraph 932-10-S99-1 due to SEC release no. 33-8995 [FR 78], Modernization of Oil and Gas Reporting and provides update as to amendments to SEC Regulation S-X, Rule 4-10.

In April 2010, the FASB issued Accounting Standard Update No. 2010-15. “Financial Services-Insurance” (Topic 944) ASU No.2010-15 gives direction on how investments through separate accounts affect an insurer’s consolidation analysis of those investments. Under the ASU: an insurance entity should not consider any separate account interests held for the benefit of policy holders in an investment to be the insurer's interests and should not combine those interests with its general account interest in the same investment when assessing the investment for consolidation, unless the separate account interests are held for the benefit of a related party policy holder as defined in the Variable Interest Entities Subsections of Subtopic 810-10 and those Subsections require the consideration of related parties. The amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2010. Early adoption is permitted. The amendments in this Update should be applied retrospectively to all prior periods upon the date of adoption.
 
F-9

 OPTION PLACEMENT ONE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
AS OF JUNE 30, 2010

 
NOTE C—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—CONT’D

Recent Accounting Pronouncements (cont’d)

In April 2010, the FASB issued Accounting Standard Update No. 2010-16. “Entertainment-Casinos” (Topic 924). ASU No.2010-16 addresses diversity in practice regarding whether an entity accrues liabilities for a base jackpot before it is won because they could avoid the payment. The amendments in this update clarify that an entity should not accrue jackpot liabilities (or portions thereof) before a jackpot is won if the entity can avoid paying that jackpot. Jackpots should be accrued and charged to revenue when an entity has the obligation to pay the jackpot. This guidance applies to both base and progressive jackpots. The ASU amendments are effective for fiscal years, and the interim periods within those fiscal years, beginning on or after December 15, 2010.
In April 2010, the FASB issued Accounting Standard Update No. 2010-17. “Revenue Recognition-Milestone Method” (Topic 605) ASU No.2010-17 provides guidance on defining a milestone and determining when it may be appropriate to apply the milestone method of revenue recognition for research or development transactions. An entity often recognizes these milestone payments as revenue in their entirety upon achieving a specific result from the research or development efforts. A vendor can recognize consideration that is contingent upon achievement of a milestone in its entirety as revenue in the period in which the milestone is achieved only if the milestone meets all criteria to be considered substantive. Determining whether a milestone is substantive is a matter of judgment made at the inception of the arrangement. The ASU is effective for fiscal years and interim periods within those fiscal years beginning on or after June 15, 2010. Early application is permitted. Entities can apply this guidance prospectively to milestones achieved after adoption. However, retrospective application to all prior periods is also permitted.

In April 2010, the FASB issued Accounting Standard Update No. 2010-18. “Receivables” (Topic 310). ASU No.2010-18 provides guidance on accounting for acquired loans that have evidence of credit deterioration upon acquisition. Paragraph 310-30-15-6 allows acquired assets with common risk characteristics to be accounted for in the aggregated as a pool. Upon establishment of the pool, the pool becomes the unit of accounting. When loans are accounted for as a pool, the purchase discount is not allocated to individual loans; thus all of the loans in the pool accrete at a single pool rate (based on cash flow projections for the pool). Under subtopic 310-30, the impairment analysis also is performed on the pool as a whole as opposed to each individual loan. Paragraphs 310-40-15-4 through 15-12 establish the criteria for evaluating whether a loan modification should be classified as a troubled debt restructuring. Specifically paragraph 310-40-15-5 states that “a restructuring of a debt constitutes a troubled debt restructuring for purposes of this subtopic if the creditor for economic or legal reasons related to the debtor’s financial difficulties grants a concession to the debtor that it would not otherwise consider.” The ASU is effective for modification of loans accounted for within pools under subtopic 310-30 occurring in the first interim or annual period ending on or after July 15, 2010. The amendments are to be applied prospectively. Early application is permitted.
 
In May 2010, the FASB issued Accounting Standard Update No. 2010-19 “Foreign Currency”. (“ASU No. 2010-19”). ASU 2010-19, codifies the SEC staff announcement made at the March 18, 2010, EITF meeting. The ASU “provides the SEC staff’s views on certain foreign currency issues related to investments in Venezuela.” These issues relate to Venezuela’s highly inflationary status. The ASU became effective on March 18, 2010.

Other ASUs not effective until after June 30, 2010, are not expected to have a significant effect on the Company’s consolidated financial position or results of operations.
 
F-10

 OPTION PLACEMENT ONE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
AS OF JUNE 30, 2010

 
NOTE D-SUPPLEMENTAL CASH FLOW INFORMATION
 
Supplemental disclosures of cash flow information for the period ended June 30, 2010 and 2009 is summarized as follows:

Cash paid during the period ended June 30, 2010 and 2009 for interest and income taxes:

   
2010
   
2009
 
Inception
to date
 
Interest
  $ -     $ -  
-
 
Taxes
  $ -     $ -   $
-
 

NOTE E-SEGMENT REPORTING

The Company follows the guidance set forth by section 280-10 of the FASB Accounting Standards Codification for reporting and disclosure on operating segments of the Company. It also requires segment disclosures about products and services, geographic areas, and major customers. The Company determined that it did not have any separately reportable operating segments as of June 30, 2010.

NOTE F-CAPITAL STOCK

The Company is authorized to issue 100,000,000 common shares at $0.0001 par value per share.

During the period from inception (March 5, 2008) through June 30, 2010, the company has the following common shares outstanding:

Name
 
Number of shares
 
Jonathan Patton
    1,000,000  

The Company is authorized to issue 10,000,000 preferred shares at $0.0001 per share.  As of June 30, 2010, the company has not issued any preferred shares.

NOTE G-DEVELOPMENT STAGE COMPANY

The Company is in the development stage as of June 30, 2010 and to date has had no significant operations. Recovery of the Company assets is dependent on future events, the outcome of which is indeterminable. In addition, successful completion of the Company’s development program and its transition, ultimately, to attaining profitable operations is dependent upon obtaining adequate financing to fulfill its development activities and achieving a level of sales adequate to support the Company’s cost structure.

NOTE H—SHAREHOLDER LOAN/RELATED PARTY

The Company has signed a series of promissory notes with a related party.  The total amount of loan outstanding is $14,150 and it is payable upon demand, the annual interest rate on this note is 8%.  Accrued interest, but not paid as of June 30, 2010 is $1,467.

NOTE I—SUBSEQUENT EVENT

On August 19, 2010, the Company issued 125,000 shares to Jonathan Patton at a value equal to the par value share, or $12.50.  This transaction has been approved by the Company’s sole member of the board of directors.
 
F-11

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

Overview.

Option Placement, Inc. (“we”, “us” or the “Company”) was organized in the State of Nevada on March 5, 2008.  We are a developmental stage company and have not generated any revenues to date.  We were organized to serve as a vehicle for a business combination through a capital stock exchange, merger, reverse acquisition, asset acquisition or other similar business combination (a “Business Combination”) with an operating or development stage business (the “Target Business”) which desires to utilize our status as a reporting company under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).   We are currently in the process of evaluating and identifying targets for a Business Combination.  We are not presently engaged in, and will not engage in, any substantive commercial business operations unless and until we consummate a Business Combination.

Our management has broad discretion with respect to identifying and selecting a prospective Target Business.  We have not established any specific attributes or criteria (financial or otherwise) for prospective Target Businesses.  Our sole officer and director has never served as an officer or director of a development stage public company with the business purpose of acquiring a Target Business.  Accordingly, he may not successfully identify a Target Business or conclude a Business Combination.   To the extent we affect a Business Combination with a financially unstable company or an entity in its early stage of development or growth, including entities without established records of sales or earnings, we may be affected by numerous risks inherent in the business and operations of financially unstable and early stage or potential emerging growth companies.  If we consummate a Business Combination with a foreign entity, we will be subject to all of the risks attendant to foreign operations.  Although our management will endeavor to evaluate the risks inherent in a particular Target Business, we cannot assure you that we will properly ascertain or assess all significant risk factors.

We expect that in connection with any Business Combination, we will issue a significant number of shares of our common stock (equal to at least 80% of the total number of shares outstanding after giving effect to the transaction and likely a significantly higher percentage) in order to ensure that the Business Combination qualifies as a “tax free” transaction under federal tax laws.  The issuance of additional shares of our capital stock will:
 
·  
significantly reduce the equity interest of our stockholders; and

·  
cause a change in and likely result in the resignation or removal of our present officers and directors.

Our management anticipates that our Company likely will affect only one Business Combination, due primarily to our financial resources and the dilution of interest for present and prospective stockholders, which is likely to occur as a result of our management's plan to offer a controlling interest to a Target Business in order to achieve a tax-free reorganization.  This lack of diversification should be considered a substantial risk in investing in us because it will not permit us to offset potential losses from one venture against potential gains from another.

Liquidity and Capital Resources.

At June 30, 2010, we had a de minimus amount of cash on hand.  We do not expect that the funds available will be sufficient to cover our operating costs and expenses over the next twelve months which we anticipate will comprise costs and expenses in connection with the preparation and filing of reports under the Exchange Act, the evaluation and investigation of Target Business and, possibly, for a Business Combination.

We have not generated any revenue and, to date, we have funded our operations through loans from our stockholder, who is our sole officer and director, and, as of June 30, 2010, we had borrowed the aggregate of $14,150 from him.  Management expects to fund additional costs and expenses which may be incurred in connection with due diligence activities and a Business Combination through loans or further investment in the Company, as and when necessary.

We cannot provide investors with any assurance that we will have sufficient capital resources to identify a suitable Target Business, to conduct effective due diligence as to any Target Business or to consummate a Business Combination.  As a result of our negative working capital, our losses since inception and our failure to generate revenues from operations, our financial statements include a note in which our auditor has expressed doubt about our ability to continue as a "going concern."
 
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Results of Operations.

Since our inception, we have neither engaged in any substantive operations nor generated any revenue.  We reported a net loss for the three month period ended June 30, 2010 of $7,937 and $8,120, respetively, and a net loss since inception of $18,337.  The Company has a deficit accumulated during the development stage of used cash from operations of $13,969 since its inception, and has a negative working capital of $18,737 at June 30, 2010.

We do not expect to engage in any substantive activities unless and until such time as we enter into a Business Combination with a Target Business, if ever.  We cannot provide investors with any assessment as to the nature of a Target Business’s operations or speculate as to the status of its products or operations, whether at the time of the Business Combination it will be generating revenues or its future prospects.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Not applicable.

Item 4(T). Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

As of June 30, 2010, the Company’s management carried out an evaluation, under the supervision and with the participation of the Company’s Chief Executive Officer, who is the Company's principal executive officer and principal financial officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rules 13a-15 and 15d-15 under the Exchange Act), pursuant to Exchange Act Rule 13a-15.  Based on management’s evaluation and in light of the weaknesses disclosed in "Part II - Item 7. Management’s Discussion and Analysis of Financial Statements and Results of Operations" in our Annual Report on Form 10-K for the year ended Decemb31, 2009, our Chief Executive Officer has concluded that as of June 30, 2010, our disclosure controls and procedures were not effective.

 Changes in Internal Controls

There have been no changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15 and 15d-15 under the Exchange Act) during the three months ended June 30, 2010 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. 

PART II — OTHER INFORMATION

Item 1. Legal Proceedings.

The Company is not a party to any legal proceeding or litigation.

Item 1A. Risk Factors.

Smaller reporting companies are not required to provide the information required by this item.

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

(a) During the three months ended June 30, 2010, the Company did not issue any securities.

(b) Not applicable.
 
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(c) During the three months ended June 30, 2010, neither the issuer nor any "affiliated purchaser," as defined in Rule 10b-18(a)(13), purchased any shares or other units of any class of the issuer's equity securities.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. (Removed and Reserved)

Item 5. Other Information.

(a) On August 9, 2010, the Company issued 125,000 shares of common stock to our sole stockholder, who also serves as our sole director and officer, for a price equal to the par value per share, or $12.50, pursuant to the exemption from the registration requirements of the Securities Act of 1933, as amended, afforded by Section 4(2) thereof.

(b) The Company has not adopted any procedures by which security holders may recommend nominees to the registrant's board of directors.

Item 6. Exhibits. 

Exhibit
Description
   
31.1
Certification of the Company’s Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2010.
   
32.1*
Certification of the Company’s Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002.
 
*  Pursuant to Commission Release No. 33-8238, this certification will be treated as “accompanying” this Quarterly Report on Form 10-Q and not “filed” as part of such report for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of Section 18 of the Exchange Act and this certification will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act except to the extent that the registrant specifically incorporates it by reference.
 
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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused the Report to be signed on its behalf by the undersigned thereunto duly authorized.


  OPTION PLACEMENT, INC.
     
 Dated: August 23, 2010
By:
/s/ Jonathan Patton                                                      
 
Name:
Jonathan Patton
 
Title:
President, Principal Executive Officer
and Principal Financial Officer
 
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