UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q/A

(Amendment No. 1)

 

(Mark One)

 

[ X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended: March 31, 2016

 

OR

 

[ ] 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: 333-191426

 

SIGMABROADBAND CO.

(Exact name of registrant as specified in its charter)

 

GEORGIA 4899   46-1289228
(State or other jurisdiction of organization) (Primary Standard Industrial Classification Code)

(Tax Identification

Number)

     

2690 Cobb Parkway

Suite A5-284

Smyrna, Georgia 30080

Tel: (800) 545-0010

(Address and telephone number of registrant's executive office)

2690 Cobb Parkway

Suite A5-284

Smyrna, Georgia 30080

Tel: (800) 545-0010

(Name, address and telephone number of agent for service)

       

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 requirement for the past 90 days. Yes [X]    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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [ ]    No [X]

 

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

 

Large Accelerated Filer [ ]   Accelerated Filer [ ]   Non-accelerated filer [ ]
(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). YES [X]    NO [ ]

 

The number of shares outstanding of each of the issuer’s classes of common equity, as of July 15, 2016 was 24,724,000.

 

 
 

 

EXPLANATORY NOTE

 

The sole purpose of this amendment to our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2016, originally filed with the Securities and Exchange Commission on July 15, 2016, is due to the Company mistakenly filing this form 10-Q prior to the completion of the review of our unaudited interim financial information by our registered independent accountants.  As a result, our previous filing was considered deficient and not in compliance with rules of the Securities Exchange Act of 1934.  We are filing this amendment to our Quarterly Report on Form 10-Q as a result of the final completion of the review of our interim financial information by our outside independent accounting firm.  No other changes have been made to the original filed information within this 10-Q. 

 

This Amendment is presented as of the filing date of the Original Filing. Other than as set forth above, this Amendment does not modify or update disclosures in the Original Filing and does not reflect events that may have occurred after that date.

 

 

 
 

Table of Contents

SigmaBroadband Co.  

Index

             
        Page No.  

 

PART I - FINANCIAL INFORMATION

 

 

Item 1.

 

 

Financial Statements

       
   

 

Condensed Balance sheets at March 31, 2016 (unaudited) and December 31, 2015

    2  
   

 

Condensed Statements of Operations (unaudited) For the Three Months Ended March 31, 2016 and 2015

 

    3  
    Condensed Statements of Cash Flows (unaudited) For the Three Months Ended March 31, 2016 and 2015     4  
   

 

Notes to Condensed Financial Statements (unaudited), March 31, 2016

    5-9  

 

Item 2.

 

 

Management's Discussion and Analysis of Financial Condition and Results of Operations

    10  

 

Item 3.

 

 

Quantitative and Qualitative Disclosures About Market Risk

    13  

 

Item 4.

 

 

Controls and Procedures

    13  

 

 

 

 

PART II—OTHER INFORMATION

 

 

Item 1.

 

 

Legal Proceedings

    15  

 

Item 2.

 

 

Unregistered Sales of Equity Securities and Use of Proceeds

    15  

 

Item 3.

 

 

Default Upon Senior Securities

    15  

 

Item 4.

 

 

Submission of Matters to a Vote of Security Shareholders

    15  

 

Item 5.

 

 

Other Information

    15  

 

Item 6.

 

 

Exhibits

    17  

 

Signatures

    16  

 

 

 

 
 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This quarterly report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, that involve substantial risks and uncertainties. In addition, we, or our executive officers on our behalf, may from time to time make forward-looking statements in reports and other documents we file with the Securities and Exchange Commission, or SEC, or in connection with oral statements made to the press, potential investors or others. All statements, other than statements of historical facts, including statements regarding our strategy, future operations, future financial position, future revenues, projected costs, prospects, plans and objectives of management are forward-looking statements. The words "expect," "estimate," "anticipate," "predict," "believe," "think," "plan," "will," "should," "intend," "seek," "potential" and similar expressions and variations are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.

 

Forward-looking statements in this report are subject to a number of known and unknown risks and uncertainties that could cause our actual results, performance or achievements to differ materially from those described in the forward-looking statements, in this report as well as in the other documents we file with the SEC from time to time, and such risks and uncertainties are specifically incorporated herein by reference.

 

Forward-looking statements speak only as of the date the statements are made. Except as required under the federal securities laws and rules and regulations of the SEC, we undertake no obligation to update or revise forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information. We caution you not to unduly rely on the forward-looking statements when evaluating the information presented in this report.

 

 
 

 

 

 

 

 

 

 

Intentionally Leave Blank

 

 

 

 

 

 

 

 

 

 

 
 

PART I—FINANCIAL INFORMATION

 

ITEM 1.    FINANCIAL STATEMENTS

 

The financial statements of SigmaBroadband Co. ("SigmaBroadband Co." or the "Company") as of March 31, 2016 and 2015 included herein have been prepared by the Company, without audit, pursuant to U.S. generally accepted accounting principles and the rules and regulations of the SEC. In addition, certain information and note disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. These financial statements reflect, in the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the results for the interim periods. The results of operations for such interim periods are not necessarily indicative of the results for the full year.

 

SigmaBroadband Co.
Balance Sheets
March 31, 2016 and December 31, 2015
         
         
         
         
ASSETS                
       March 31,        December 31,  
      2016       2015  
      (Unaudited)          
Current Assets:                
Cash and equivalents   $ 270     $ 275  
Total current assets     270       275  
                 
Equipment, net     —         —    
                 
Total assets   $ 270     $ 275  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY                
                 
Liabilities                
Accounts payable and accrued expenses   $ 250,399     $ 222,884  
Loans payable - stockholders     29,784       28,574  
Note payable - current portion     —         —    
  Total current liabilities     280,183       251,458  
                 
Note payable - net of current portion     10,000,000       10,000,000  
                 
Commitments and Contingencies     —         —    
                 
Stockholders' Equity:                
Preferred stock, no par value; 10,000,000 shares authorized, no shares                
issued and outstanding     —         —    
Common stock, $0.0001 par value; 500,000,000 shares authorized,                
24,674,000 and 24,574,000 shares issued and outstanding, respectively     2,467       2,457  
Additional paid in capital     91,483       39,993  
Common stock to-be-issued     25,000       20,000  
Accumulated deficit     (10,398,863 )     (10,313,633 )
      (10,279,913 )     (10,251,183 )
                 
Total Liabilities and Stockholders' Equity   $ 270     $ 27 5  

 

 

 

SigmaBroadband Co.
Condensed Statements of Operations
For the Three Months Ended March 31, 2016 and 2015
(Unaudited)
         
                 
                 
                 
      2016       2015    
                 
Expenses:                
Computer and internet   $ 30     $ 150  
Depreciation     —         250,000  
Professional fees     62,872       2,482  
Rent     1,500       1,500  
Storage     723       675  
Travel     —         1,023  
Other     105       3,124  
      65,230       258,954  
                 
Net loss before other income, expenses and income taxes     (65,230 )     (258,954 )
                 
Other income and (expenses)                
Interest expense     (20,000 )     (20,000 )
                 
Net loss before income taxes     (85,230 )     (278,954 )
                 
Provision for income taxes     —         —    
                 
Net loss   $ (85,230 )   $ (278,954 )
                 
Basic and diluted loss per share   $ (0.00 )   $ (0.01 )
                 
Basic and diluted weighted average number                
 of shares outstanding     24,595,501       24,596,000  

 

 

 

 

SigmaBroadband Co.
Statements of Cash Flows
For the Three Months Ended March 31, 2016 and 2015
 
         
                 
                 
                 
                 
      2016       2016    
                 
Cash flows from operating activities:                
Net loss   $ (85,230 )   $ (278,954 )
Adjustments to reconcile net loss to net cash used                
by operating activities:                
Common stock issued for services     50,000       —    
Depreciation expense     —         250,000  
Stockholder contribution     1,500       1,500  
Accounts payable and accrued expenses     32,515       20,438  
Net cash used by operating activities     (1,215 )     (7,016 )
                 
Cash flows from financing activities:                
Stockholder's loan     1,210       5,387  
Net cash provided by financing activities     1,210       5,387  
                 
Net decrease in cash     (5 )     (1,629 )
Cash at beginning of period     275       2,161  
Cash at end of period   $ 270     $ 532  
                 
Supplemental cash flow information:                
Cash paid during the period for:                
Interest   $ —       $ —    
Income taxes   $ —       $ —    
                 
Non-cash transactions:                
Forgiven rent convertible to additional paid-in capital   $ 1,500     $ 1,500  
Common stock to-be-issued for services   $ 5,000     $ —    

 

 

 

SigmaBroadband Co.

Notes to Condensed Financial Statements

March 31, 2016

(Unaudited)

 

Note 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Organization

SigmaBroadband Co. ("Sigma" or the "Company") was incorporated in Georgia in October 2012.  The Company has been in the development stage since inception and has not generated any revenue to date.  The Company will be a full service, facilities-based broadband service provider, local exchange and inter-exchange carrier serving residential and commercial customers with a special focus on rural areas.

 

Basis of Presentation

The accompanying unaudited financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information.  Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted pursuant to such principles and regulations of the Securities and Exchange Commission for Form 10-Q.  All adjustments, consisting of normal recurring adjustments, have been made which, in the opinion of management, are necessary for a fair presentation of the results of interim periods.  The results of operations for such interim periods are not necessarily indicative of the results that may be expected for a full year because of, among other things, seasonality factors in the retail business.  The unaudited financial statements contained herein should be read in conjunction with the audited financial statements and notes thereto  for the fiscal year ended December 31, 2015.

Long-Lived Assets

The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.  An impairment loss is recognized when estimated future cash flows expected to result from the use of the asset and its eventual disposition are less than its carrying amount.  Based on this analysis an impairment loss of $8,000,000 was recognized at December 31, 2015.

 

Revenue Recognition

In general, the Company will record revenue when persuasive evidence of an arrangement exists, services have been rendered or product delivery has occurred, the sales price to the customer is fixed or determinable, and collectability is reasonably assured. The following policies reflect specific criteria for the various revenues streams of the Company:

 

Revenue will be recognized at the time the product is delivered or services are performed.  Provision for sales returns will be estimated based on the Company's historical return experience.  Revenue will be presented net of returns.

 

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 amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

 

Segment Information

The Company follows Accounting Standards Codification ("ASC") 280, "Segment Reporting".  The Company currently operates in a single segment and will evaluate additional segment disclosure requirements as it expands its operations.

 

Net Loss Per Common Share

Basic net (loss) income per common share is calculated using the weighted average common shares outstanding during each reporting period.  Diluted net (loss) income per common share adjusts the weighted average common shares for the potential dilution that could occur if common stock equivalents (convertible debt and preferred stock, warrants, stock options and restricted stock shares and units) were exercised or converted into common stock.  There were no common stock equivalents at March 31, 2015 or 2016.

 

 

SigmaBroadband Co.

Notes to Condensed Financial Statements

March 31, 2016

(Unaudited)

 

Income Taxes

Deferred income taxes are recognized for the tax consequences related to temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for tax purposes at each year end, based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income.  A valuation allowance is recognized when, based on the weight of all available evidence, it is considered more likely than not that all, or some portion, of the deferred tax assets will not be realized.  Income tax expense is the sum of current income tax plus the change in deferred tax assets and liabilities.

 

ASC 740, Income Taxes, requires a company to first determine whether it is more likely than not (which is defined as a likelihood of more than fifty percent) that a tax position will be sustained based on its technical merits as of the reporting date, assuming that taxing authorities will examine the position and have full knowledge of all relevant information.  A tax position that meets this more likely than not threshold is then measured and recognized at the largest amount of benefit that is greater than fifty percent likely to be realized upon effective settlement with a taxing authority.

 

Stock-Based Compensation

The Company accounts for equity instruments issued to employees in accordance with ASC 718, Compensation - Stock Compensation.  ASC 718 requires all share-based compensation payments to be recognized in the financial statements based on the fair value using an option pricing model.  ASC 718 requires forfeitures to be estimated at the time of grant and revised in subsequent periods if actual forfeitures differ from initial estimates.

Equity instruments granted to non-employees are accounted for in accordance with ASC 505, Equity.  The final measurement date for the fair value of equity instruments with performance criteria is the date that each performance commitment for such equity instrument is satisfied or there is a significant disincentive for non-performance.

 

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.

 

Fair Value

Pursuant to ASC No. 820. "Fair Value Measurement and Disclosures," the Company is required to estimate the fair value of all financial instruments included on its balance sheet as of March 31, 2016. The Company's financial instruments consist of cash, accounts payable and accrued expenses, loans payable - stockholders, and note payable . The Company considers the carrying value of such amounts in the financial statements to approximate their fair value due to the short-term nature of these financial instruments.

 

Reclassifications

Certain prior year amounts have been reclassified to conform with the current year presentation.

 

Recent Pronouncements

In May 2014, FASB and IASB issued a new joint revenue recognition standard that supersedes nearly all GAAP guidance on revenue recognition.  The core principle of the standard is that revenue recognition should depict the transfer of goods and services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services.  The new standard is effective for the Company for the fiscal year beginning January 1, 2017, and the effects of the standard on the Company’s financial statements are not known at this time.

 

 

SigmaBroadband Co.

Notes to Condensed Financial Statements

March 31, 2016

(Unaudited)

 

In March 2016, the FASB issued ASU 2016-03.  The amendments in this Update make the guidance in Updates 2014-02, 2014-03, 2014-07, and 2014-18 effective immediately by removing their effective dates. The amendments also include transition provisions that provide that private companies are able to forgo a preferability assessment the first time they elect the accounting alternatives within the scope of this Update.  The Company is in the process of evaluating the impact of the adoption of this ASU.

 

In March 2016, the FASB issued ASU 2016-09, Stock Compensation, which is intended to simplify several aspects of the accounting for share-based payment award transactions.  The guidance will be effective for the fiscal year beginning after December 15, 2016, including interim periods within that year.  The Company is in the process of evaluating the impact of the adoption of this ASU.

 

In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customer, the principle of which is that a company should recognize revenue to record the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled for the transfer of those goods or services by applying the following steps:

 

1. Identify the contract(s) with a customer.

2. Identify the performance obligations in the contract(s).

3. Determine the transaction price.

4. Allocate the transaction price to the performance obligations in the contract.

5. Recognize revenue when, or as, the company satisfies a performance obligation

 

The guidance will be effective for the fiscal year beginning after December 15, 2016, including interim periods within that year.  The Company is in the process of evaluating the impact of the adoption of this ASU.

 

NOTE 2 –  EQUIPMENT, NET

The Company's furniture and equipment at March 31, 2016 and December 31, 2015 consisted of the following:

 

Telecommunications equipment    $ 10,000,000    $ 10,000,000
Less: accumulated depreciation         2,000,000         2,000,000
Less: impairment             8,000,000         8,000,000
               
Total          $                    -    $                    -

 

Note 3.  LOANS PAYABLE - STOCKHOLDERS

At  March 31, 2016 and December 31, 2015, a stockholder and officer of the Company was owed $18,025 and $4,438 by the Company for funds he had advanced to pay for certain expenses.  The loan bears no interest and is payable on demand.

 

At  March 31, 2016 and December 31, 2015, a stockholder and officer of the Company was owed $11,759 and $4,505 by the Company for funds he had advanced to pay for certain expenses.  The loan bears no interest and is payable on demand.

 

Note 4.  NOTE PAYABLE

In December 2013, the Company signed an agreement to purchase certain telecommunications equipment for $10 million.  The agreement called for the Company to sign an installment agreement for $1,000,0000.  The installment agreement, as amended in November 2015, calls for this balance to be amortized over a six year term with interest accruing at 8% per annum.  Additionally, under the terms of this modification, payments will begin 48 months after the signing of the original agreement (December 2013) at which time all interest accrued until that time will be due and payable.  Interest only payments will begin in month 49 and will continue through month 72 at which time a balloon payment of the principal and any unpaid interest will be due.  At March 31, 2016 and December 31, 2015, accrued interest on this note totaled $224,187 and $204,187, respectively.

 

SigmaBroadband Co.

Notes to Condensed Financial Statements

March 31, 2016

(Unaudited)

 

The amendment stipulates that the remaining $9,000,000 owed by the Company will be paid by the issuance of 10,000,000 shares of the Company's preferred stock within 36 months from the date of the amendment.  The Company has not issued any shares at March 31, 2016, under the terms of this amendment.

 

Note 5.  STOCKHOLDERS' EQUITY

The Company has authorized 500,000,000 shares of common stock with a par value of $0.0001 per share.  During the three months ended March 31, 2016, the Company issued 100,000 shares at $0.50 per share for services provided to the company.  At March 31, 2016, 24,674,000 shares of common stock were issued and outstanding.

 

In August 2014, the Company received $20,000 in payment for 20,000 shares of common stock at $1.00 per share that are to be issued at a future date.

 

In March 2016, the Company authorized the issuance of 50,000 shares of common stock at $0.10 per share, or $5,000, for services provided to the Company.  The shares were issued in May 2016. (Note 9)

 

The Company has authorized 10,000,000 shares of preferred stock with no par value.  No shares were issued or outstanding at March 31, 2016.

 

Note 6.  COMMITMENTS AND CONTINGENCIES

The Company currently leases its offices on a month to month basis from the Company's President and stockholder for $500 per month.

 

Rent expense for the three months ended March 31, 2016 and 2015, totaled $1,500 and $1,500, respectively, and was capitalized as additional paid-in capital.

 

Note 7.  INCOME TAXES

The deferred tax asset consists of the following:

 

          March 31, 2016   December 31, 2015
           
Net operating loss carryforward    $   1,710,000    $   1,676,000
Valuation allowance          (1,710,000)        (1,676,000)
Deferred tax asset, net      $                  -       $                  -   


 

The income tax benefit differs from the amount computed by applying the statutory federal and state income tax rates to the loss before income before income taxes.  The sources and tax effects of the differences are as follows:

 

          March 31, 2016   December 31, 2015  
             
Statutory federal income tax rate                       34 %                     34 %
State income taxes, net of federal taxes                       6 %                       6 %
Valuation allowance                       (40) %                   (40) %
Effective income tax rate      0  %  0  %


As of March 31, 2016, the Company has a net operating loss carryforward of approximately $10,366,000.  This loss will be available to offset future taxable income.  If not used, this carryforward will begin to expire in 2033. The deferred tax asset relating to the operating loss carryforward has been fully reserved at March 31, 2016.

 

 

SigmaBroadband Co.

Notes to Condensed Financial Statements

March 31, 2016

(Unaudited)

 

The Company currently has no federal or state tax examinations in progress, nor has it had any federal or state examinations since its inception.  All of the Company's tax years are subject to federal and state tax examinations.  The Company is only subject to state taxes in Georgia.

 

Note 8.  BASIS OF REPORTING

The Company's financial statements are presented on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.

 

The Company has incurred losses from inception of approximately $10,366,000, which among other factors, raises substantial doubt about the Company's ability to continue as a going concern.  The ability of the Company to continue as a going concern is dependent upon management's plans to raise additional capital from the sales of stock and receiving additional loans from related parties.

 

The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.

 

Note 9.  SUBSEQUENT EVENTS

In May 2016, the Company issued the 50,000 shares of common stock that were authorized in March 2016 for services provided to the Company. (Note 5)

     

 

ITEM 2:    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

The following discussion should be read in conjunction with (i) our financial statements for the three months ended March 2016 and 2015 together with the notes to these financial statements; and (ii) the section entitled “Business” that appears elsewhere in this report.  The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this report. You should not place undue certainty on these forward-looking statements, which apply only as of the date of this report.  Our financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.

 

THIS FILING CONTAINS FORWARD-LOOKING STATEMENTS. THE WORDS "ANTICIPATED," "BELIEVE," "EXPECT," "PLAN," "INTEND," "SEEK," "ESTIMATE," "PROJECT," "WILL," "COULD," "MAY," AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS. THESE STATEMENTS INCLUDE, AMONG OTHERS, INFORMATION REGARDING FUTURE OPERATIONS, FUTURE CAPITAL EXPENDITURES, AND FUTURE NET CASH FLOW. SUCH STATEMENTS REFLECT THE COMPANY'S CURRENT VIEWS WITH RESPECT TO FUTURE EVENTS AND FINANCIAL PERFORMANCE AND INVOLVE RISKS AND UNCERTAINTIES, INCLUDING, WITHOUT LIMITATION, GENERAL ECONOMIC AND BUSINESS CONDITIONS, CHANGES IN FOREIGN, POLITICAL, SOCIAL, AND ECONOMIC CONDITIONS, REGULATORY INITIATIVES AND COMPLIANCE WITH GOVERNMENTAL REGULATIONS, THE ABILITY TO ACHIEVE FURTHER MARKET PENETRATION AND ADDITIONAL CUSTOMERS, AND VARIOUS OTHER MATTERS, MANY OF WHICH ARE BEYOND THE COMPANY'S CONTROL. SHOULD ONE OR MORE OF THESE RISKS OR UNCERTAINTIES OCCUR, OR SHOULD UNDERLYING ASSUMPTIONS PROVE TO BE INCORRECT, ACTUAL RESULTS MAY VARY MATERIALLY AND ADVERSELY FROM THOSE ANTICIPATED, BELIEVED, ESTIMATED, OR OTHERWISE INDICATED. CONSEQUENTLY, ALL OF THE FORWARD-LOOKING STATEMENTS MADE IN THIS FILING ARE QUALIFIED BY THESE CAUTIONARY STATEMENTS AND THERE CAN BE NO ASSURANCE OF THE ACTUAL RESULTS OR DEVELOPMENTS.

 

The following discussion and analysis should be read in conjunction with "Selected Financial Data" and our financial statements and related notes thereto included elsewhere in this registration statement. Portions of this document that are not statements of historical or current fact are forward-looking statements that involve risk and uncertainties, such as statements of our plans, objectives, expectations and intentions. The cautionary statements made in this registration statement should be read as applying to all related forward-looking statements wherever they appear in this registration statement. Our actual results could differ materially from those anticipated in the forward-looking statements. Factors that could cause our actual results to differ materially from those anticipated include those discussed in "Risk Factors," "Business" and "Forward-Looking Statements."

 

For a discussion of the factors that could cause actual results to differ materially from the forward-looking statements see the “Liquidity and Capital Resources” section under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this item of this report and the other risks and uncertainties that are set forth elsewhere in this report or detailed in our other Securities and Exchange Commission reports and filings. We believe it is important to communicate our expectations. However, our management disclaims any obligation to update any forward-looking statements whether as a result of new information, future events or otherwise.

 

General Overview

 

SIGMABROADBAND CO. is a registered Georgia company. The Company has certain technology assets which had been fully impaired as of December 31, 2015. The Company is to be engaged in the business of providing voice, data, and digital video as a triple play bundled service to rural markets in the United States of America. We plan to offer our customers traditional cable video programming, Internet services, telephone services and IPtv, as well as advanced video services such as on demand, high definition (“HD”) television and digital video recorder (“DVR”) service. We plan to provide national and international long distance service. Our business plan include goals for increasing customers and revenue. To reach our goals, we will actively invest in our network and operations in order to improve the quality and value of the products and packages that we offer.

 

 

SIGMABROADBAND CO. has never declared bankruptcy, it has never been in receivership, and it has never been involved in any legal action or proceedings. Since becoming incorporated, has not made any significant purchase or sale of assets, nor has it been involved in any mergers, acquisitions or consolidations. SIGMABROADBAND CO. is not a blank check registrant as that term is defined in Rule 419(a)(2) of Regulation C of the Securities Act of 1933, since it has a specific business plan, purpose and substantial assets.

 

Since our inception, we have been engaged in business planning activities, including researching the industry, identifying target markets for our services and developing our SIGMABROADBAND CO. models and financial forecasts, performing due diligence regarding potential geographic locations and acquisitions most suitable for establishing our offices and identifying future sources of capital.

 

Currently, SIGMABROADBAND CO. has officers and directors who have assumed responsibility for all planning, development and operational duties, and will continue to do so throughout the beginning stages of the Company. Other than the Officers/Directors and other management team, there are no employees at the present time. We do anticipate hiring regular employees when the need arises.

 

SIGMABROADBAND CO. currently has no intention to engage in a merger or acquisition with any unidentified company. However, we may pursue strategic acquisitions that complement our current business model within the technology industry which may allow us to expand our activities, capabilities, advance our production and revenue.

 

SIGMABROADBAND CO.’s fiscal year end is December 31.

 

Industry Background

 

Approximately 100 million Americans do not have broadband at home today and most of them are living in rural communities across America. We intend to be a leading provider of cost-effective and reliable technology services for home, small to medium sized businesses in the areas we serve and to create value to our shareholders.

 

We intend to deliver innovative communications, information and entertainment. Our voice, data and video products and services offer over intelligent wireless, wireline, cable, fiber, broadband and global IP networks that meet customers' growing demand for speed, mobility, security and control. As a committed corporate citizen, we use our advanced communications services to address important issues confronting our society today, especially in rural America. We plan to follow a strategy of being first to our regional markets with technology and services first introduced in metropolitan areas by national service providers.

 

We intend to be a full service, facilities-based cable operator, local exchange and inter-exchange carrier serving both residential and commercial customers by providing voice, data and digital video services. We intend to employ the newest technology available in the marketplace today, which provides quality of service (QoS), reliability, security, redundancy and continuity of service always. In the future, we will be recognized as a leader in the data network, IP telephony and cloud-based services. Our potential customers are located in some of the country’s largest cities to families living in rural communities. We intend to establish a dominant national presence in the triple-play broadband, cable and telecom industry in America.

 

 

Plan of Operation

 

We are a development stage company, incorporated on October 19, 2012 and have not started operations or generated or realized any revenues from our business operations. However, we have substantial technology assets ready to deploy in the rural markets where we plan to provide our services.

 

Our auditors have issued a going concern opinion. This means that our auditors believe there is substantial doubt that we can continue as an on-going business for the next twelve (12) months. Our auditors’ opinion is based on the uncertainty of our ability to establish profitable operations. The opinion results from the fact that we have not generated any revenues. Accordingly, we must raise cash from sources other than operations. Our only other source for cash at this time is investments by others in our Company.

 

Our Officers and Directors are responsible for our managerial and organizational structure which will include preparation of disclosure and accounting controls under the Sarbanes Oxley Act of 2002. When these controls are implemented, they will be responsible for the administration of the controls. Should they not have sufficient experience, they may be incapable of creating and implementing the controls which may cause us to be subject to sanctions and fines by the Securities and Exchange Commission which ultimately could cause you to lose your investment.

 

Since incorporation, the Company has financed its operations originally through private capital and then, loans from stockholders and executives of the Company. As of March 31, 2016 we had $270 cash on hand.  We had total expenses of $85,230 which were related to general and administrative costs (See “Financial Statements”).

 

To date, the Company has not fully implemented its planned principal operations or strategic business plan. SIGMABROADBAND CO. is attempting to secure sufficient monetary assets to increase operations. SIGMABROADBAND CO. cannot assure any investor that it will be able to enter into sufficient business operations adequate enough to insure continued operations.  

 

Our intended plan of operations is to offer voice, data, and video services and implement the necessary sales and marketing support to begin generating revenue. If SIGMABROADBAND CO. does not produce sufficient cash flow to support its operations over the next 12 months, the Company will need to raise additional capital by issuing capital stock in exchange for cash in order to continue as a going concern. There are no formal or informal agreements to attain such financing. SIGMABROADBAND CO. cannot assure any investor that, if needed, sufficient financing can be obtained or, if obtained, that it will be on reasonable terms. Without realization of additional capital, it would be unlikely for operations to continue and any investment made by an investor would be lost in its entirety.

 

SIGMABROADBAND CO. currently does own significant plant or equipment that it can seek to sell in the near future in order to sustain its operations if not able to raise necessary capital for its business.  

 

Our management anticipates hiring employees over the next twelve (12) months as needed. Currently, the Company believes the services provided by its officers and directors appear sufficient at this time.

 

The Company has not paid for expenses on behalf of any directors.  Additionally SIGMABROADBAND CO. believes that this policy shall not materially change within the next twelve months.

 

The Company has no plans to seek a business combination with another entity in the foreseeable future.

 

Impact of Inflation

 

We believe that the rate of inflation has had negligible effect on us. We believe we can absorb most, if not all, increased non-controlled operating costs by operating our Company in the most efficient manner possible.

 

 

Results of Operations

 

We have generated no significant revenues since inception; we have incurred operational expenses for the three months ended March 31, 2016 and 2015 in the amounts of $85,230 and $285,120 respectively. These expenses were attributed to continuing startup costs including general and administrative expenses. The decrease in $250,000 depreciation and the increase of $50,000 in expenses offset the operational expenses.

 

General Trends and Outlook

 

We believe that our immediate outlook is extremely favorable, as we believe the competition is very limited in our market niche for broadband voice, data and video in the rural markets and only a limited number of companies competing with us in the marketplace. However, there is no assurance that such national competitor will not arrive in the future. We do not anticipate any major changes in the triple-play telecommunications industry. We believe that 2016 and beyond will be a significant growth year(s) for us. As we gain strength and stability in the regional rural markets we intend to expand our influence in markets throughout the U.S.

 

Liquidity and Capital Resources

 

The financial statements have been prepared assuming the company will continue as a going concern as per its business plan. For the three months ended March 31, 2016, the company has a net loss $85,230 . The company has financed its activities from private funding and proceeds from the issuance of its common stock. As of March 2016 and December 2015 the Company had $270 and $275 in cash on hand respectively.

 

The company intends to finance its future business and development activities and its working capital needs largely from the sale of equity securities until such time that funds generated from operations are sufficient to fund working capital requirements.

 

Off Balance Sheet Arrangements

 

There are no Off Balance Sheet Arrangements.

 

ITEM 3:    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Market risk represents the risk of changes in value of a financial instrument, derivative or non-derivative, caused by fluctuations in interest rates, foreign exchange rates and equity prices. Changes in these factors could cause fluctuations in results of our operations and cash flows. In the ordinary course of business, we are not exposed to interest rate and foreign currency exchange rate risks.

  

ITEM 4.    CONTROLS AND PROCEDURES

 

Based upon the required evaluation of our disclosure controls and procedures, our President and Chief Executive Officer and Chief Financial Officer concluded that as of March 31, 2016 our disclosure controls and procedures were inadequate and not effective to ensure that information was gathered, analyzed and disclosed on a timely basis.

 

There has been no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during our fiscal quarter ended March 31, 2016, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

 

Evaluation of disclosure controls and procedures

 

Under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rules 13a-15 (e) and 15d-15(e) under the Exchange Act. Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that, at March 31, 2016, such disclosure controls and procedures were not effective, based on our delinquent filings. Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.

 

Management's Report on Internal Control over Financial Reporting

 

The Company's management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule 13a-15(f) promulgated under the Exchange Act of 1934 as a process designed by or under the supervision of the company’s principal executive and principal financial officers and effected by the company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with generally accepted accounting principles in the United States of America and included those policy and procedures that:

 

· Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transaction and dispositions of the assets of the company.
· Provide reasonable assurance that transactions are recorded as necessary to permit preparation of finical statements in accordance with accounting principles generally accepted in the United States of America and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and
· Provide reasonable assurance regarding prevention for timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements

A control system, no matter how well conceived or operated, can provide only reasonable, not absolute assurance that the objectives of the control system are met under all potential conditions, regardless of how remote, and may not prevent or detect all errors and all fraud. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been prevented or detected. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States of America.

 

As of March 31, 2016 management assessed the effectiveness of our internal controls over financial reporting based on the criteria for effective internal control over financial reporting established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organization of the Treadway Commission (“COSO”) and SEC guidance on conducting such assessments. Based on that evaluation, they concluded that, during the period covered by this report, such internal controls and procedures were not effective to detect the appropriate application of US GAAP rules.

 

Our disclosure controls and procedures are designed to provide reasonable, not absolute, assurance that the objectives of our disclosure control system are met. Because of inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within a company have been detected. Based on their evaluation as of the end of the period covered by this report, management concluded that our disclosure controls and procedures were sufficiently effective to provide reasonable assurance that the objectives of our disclosure control system were met.

 

 

Changes in Internal Control over Financial Reporting

 

No change in the Company's internal control over financial reporting occurred during the quarter ended March 31, 2016, that materially affected, or is 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 involved in any legal proceedings and is not aware of any pending or threatened claims.

 

The Company expects and may be subject to legal proceedings and claims from time to time in the ordinary course of its business, including, but not limited to, claims of alleged infringement of the trademarks and other intellectual property rights of third parties by the Company and its licensees. Such claims, even if not meritorious, could result in the expenditure of significant financial and managerial resources.

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

There have been no sales of unregistered securities during the quarter ended March 31, 2016.

 

During the three months period ended March 31, 2016, there was no modification of any instruments defining the rights of holders of the Company's common stock and no limitation or qualification of the rights evidenced by the Company's common stock as a result of the issuance of any other class of securities or the modification thereof.

 

During the period covered by this filing, the Company did not sell any securities that were not registered under the Securities Act.

 

ITEM 3. DEFAULT UPON SENIOR SECURITIES

 

There have been no defaults in any material payments during the covered period.

 

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY SHAREHOLDERS

 

There have been no matters submitted to a vote of the Company’s shareholders.

 

ITEM 5. OTHER INFORMATION

 

None.

 

 

  SIGNATURES

 

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned, thereto duly authorized:

 

 

SIGMABROADBAND   CO .
July 15, 2016  
By: /s/ Jeffery A. Brown
  Jeffery A,. Brown
  President, Secretary,
  Principal Executive
  Officer, and Director
   
By: /s/ Timothy D. Valley
  Timothy D. Valley
  Chief Financial Officer and
  Principal Accounting Officer

 

 

 

 

EXHIBITS

 

INDEX OF EXHIBITS

 

 

ITEM 6. Exhibits

 

Exhibit No.   Description
     
31.1   Certification by Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1   Certification by Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
31.2   Certification by Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.2   Certification by Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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