Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark
One)
X
QUARTERLY REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the
quarterly period ended: June 30,
2017
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
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4899
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46-1289228
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(State or other jurisdiction of organization)
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(Primary Standard Industrial Classification Code)
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(Tax Identification
Number)
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2690 Cobb Parkway
Suite A5-284
Smyrna, Georgia 30080
Tel: (800) 545-0010
(Address and telephone number of registrant's executive
office)
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2690 Cobb Parkway
Suite A5-284
Smyrna, Georgia 30080
Tel: (800) 545-0010
(Name, address and telephone number of agent for
service)
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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 ☒ 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 ☒
Indicate
by check mark whether the registrant is a large accelerated filer,
an accelerated filer, a non-accelerated filer, smaller reporting
company, or an emerging growth company. See the definitions of
“large accelerated filer,” “accelerated
filer”, “smaller reporting company” and "emerging
growth company" in Rule 12b-2 of the Exchange Act. (Check
one):
Large accelerated filer
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☐
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Accelerated filer
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☐
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Non-accelerated
filer
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☐
(Do not check if a smaller reporting company)
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Smaller reporting company
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☒
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Emerging
growth company
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☒
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If an
emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act.
☒
Indicate
by check mark whether the registrant is a shell company (as defined
in rule 12b-2 of the Exchange
Act). YES ☒ NO ☐
The
number of shares outstanding of each of the issuer’s classes
of common equity, as of August 14, 2017 was 247,240.
Table of Contents
Index
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Page No.
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PART I - FINANCIAL INFORMATION
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Item 1.
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Financial
Statements
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4
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SigmaBroadband Co.
Balance sheets at June 30, 2017 (unaudited) and December 31,
2016
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5
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SigmaBroadband
Co. Statements of Operations (unaudited) For the Three and Six
Months Ended June 30, 2017 and 2016
SigmaBroadband
Co. Statements of Cash Flows (unaudited) For the Six Months Ended
June 30, 2017 and 2016
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6
7
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SigmaBroadband Co.
Notes to Condensed Financial Statements (unaudited), June 30,
2017
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8
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Item 2.
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Management's
Discussion and Analysis of Financial Condition and Results of
Operations
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12
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Item 3.
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Quantitative and
Qualitative Disclosures About Market Risk
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15
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Item 4.
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Controls and
Procedures
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15
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PART II—OTHER INFORMATION
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Item 1.
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Legal
Proceedings
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16
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Item 2.
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Unregistered Sales
of Equity Securities and Use of Proceeds
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16
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Item 3.
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Default
Upon Senior Securities
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16
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Item
4.
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Submission
of Matters to a Vote of Security Shareholders
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16
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Item
5.
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Other
Information
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16
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Item 6.
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Exhibits
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16
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Signatures
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17
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2
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
3
PART I—FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The
financial statements of SigmaBroadband Co. ("SigmaBroadband Co." or
the "Company") as of June 30, 2017 and 2016 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.
4
SIGMABROADBAND
CO.
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BALANCE
SHEETS
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June
30, 2017 and December 31, 2016
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June
30,
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December
31,
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2017
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2016
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(Unaudited)
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ASSETS
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Current
assets
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Cash and
equivalents
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$354
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$167
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Total current
assets
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354
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167
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Total
assets
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$354
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$167
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LIABILITIES
AND STOCKHOLDERS' DEFICIT
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Current
liabilities
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Accrued
expenses
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$350,498
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$306,298
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Loan Payable -
stockholder
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53,014
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48,667
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Total current
liabilities
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403,512
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354,965
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Note
Payable
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10,000,000
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10,000,000
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Total
liabilities
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10,403,512
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10,354,965
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Commitments and
Contingencies
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-
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-
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Stockholders'
(deficit)
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Preferred
stock, no par value, 10,000,000 shares authorized, no shares issued
and
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outstanding
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-
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-
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Common stock,
$0.0001 par value; 500,000,000 shares authorized,
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247,240 and 247,240
shares issued and outstanding, respectively*
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25
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25
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Additional paid-in
capital
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70,925
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67,925
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Common stock to be
issued
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20,000
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20,000
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Accumulated
deficit
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(10,494,108)
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(10,442,748)
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(10,403,158)
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(10,354,798)
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Total
stockholders' deficit
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(10,403,158)
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(10,354,798)
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Total
liabilities and stockholders' deficit
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$354
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$167
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*Share amounts have been retroactively adjusted to reflect the
decreased number of shares resulting from a reverse stock
split
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The
accompanying notes are an integral part of these condensed
unaudited financial statements.
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5
SIGMABROADBAND
CO.
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Statements
of Operations
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FOR
THE THREE AND SIX MONTHS ENDED JUNE 30 2017 AND 2016
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(Unaudited)
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Three Months Ended
June 30,
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Six
Months Ended June 30,
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2017
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2016
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2017
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2016
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Expenses:
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Computer and
Internet
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30
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29
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119
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59
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Professional
fees
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5,037
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5,355
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5,894
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68,227
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Rent
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1,500
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1,500
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3,000
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3,000
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Storage
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828
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750
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1,632
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1,473
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Travel
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386
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197
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386
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197
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Other
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165
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664
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329
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769
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7,946
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8,495
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11,360
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73,725
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Net
loss before other income, expenses and income taxes
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(7,946)
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(8,495)
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(11,360)
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(73,725)
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Other
expenses
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Interest expense,
net
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(20,000)
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(20,000)
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(40,000)
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(40,000)
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Net
loss before income taxes
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$(27,946)
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$(28,495)
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$(51,360)
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$(113,725)
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Provision
for Income taxes
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-
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-
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-
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-
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Net
Loss
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(27,946)
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(28,495)
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(51,360)
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(113,725)
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Basic
and dilutive net loss
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per
share
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$(0.11)
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$(0.12)
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$(0.21)
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$(0.46)
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Weighted
average number of common
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shares
outstanding, basic and diluted
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247,240
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247,053
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247,240
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246,844
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*Share amounts have been retroactively adjusted to reflect the
decreased number of shares resulting from a reverse stock
split
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The
accompanying notes are an integral part of these condensed
unaudited financial statements.
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6
SIGMABROADBAND
CO.
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STATEMENTS
OF CASHFLOW
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FOR
THE SIX MONTHS ENDED JUNE 30, 2017 AND 2016
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(Unaudited)
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2017
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2016
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Cash
flows from operating activities:
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Net
Loss
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$(51,360)
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$(113,725)
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Adjustments
to reconcile net loss to
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net cash used
in operating activities:
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Common stock
issued for services
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-
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50,000
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Accounts
payable and accrued expenses
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44,200
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54,263
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Stockholder
contribution of rent expense
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3,000
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3,000
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Net cash used
in operating activities
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(4,160)
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(6,462)
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Cash
flows from financing activities:
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Stockholder's
loan
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4,347
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7,016
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Net cash
provided by financing activities
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4,347
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7,016
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Net
increase / decrease in cash
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187
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554
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Cash,
beginning of the period
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167
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275
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Cash,
end of the period
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$354
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$829
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Supplemental
cash flow disclosure:
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Interest
paid
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$-
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$-
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Income taxes
paid
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$-
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$-
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Supplemental
disclosure of non-cash transactions:
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Forgiven rent
convertible to additional paid in capital
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$3,000
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$3,000
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Common stock
to be issued for services
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$-
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$5,000
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The
accompanying notes are an integral part of these condensed
unaudited financial statements.
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7
Sigmabroadband Co.
Notes to Financial Statements
June 30, 2017
(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 is 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, 2016.
Equipment, net
Equipment is stated at cost. Major renewals and betterments are
capitalized while maintenance and repairs, which do not extend the
lives of the respective assets, are expensed when incurred.
Depreciation is computed over the estimated useful lives of the
assets using the straight line method of accounting.
The Company has estimated the useful life of the equipment to be 10
years.
The cost and accumulated depreciation for equipment sold, retired,
or otherwise disposed of are relieved from the accounts, and any
resulting gains or losses are reflected in income.
At June 30, 2017 and December 31, 2016, the assets have been fully
impaired.
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 June 30, 2017 and
December 31, 2016.
Income Taxes
The Company follows the asset and liability method of accounting
for future income taxes. Under this method, future income tax
assets and liabilities are recorded based on temporary differences
between the carrying amount of assets and liabilities and their
corresponding tax basis. In addition, the future benefits of income
tax assets including unused tax losses, are recognized, subject to
a valuation allowance to the extent that it is more likely than not
that such future benefits will ultimately be realized. Future
income tax assets and liabilities are measured using enacted tax
rates and laws expected to apply when the tax liabilities or assets
are to be either settled or realized. The Company’s effective
tax rate approximates the Federal statutory rates.
8
Sigmabroadband Co.
Notes to Financial Statements
June 30, 2017
(Unaudited)
Stock-Based Compensation
Stock-based compensation is accounted for at fair value in
accordance with ASC 718,”Compensation – Stock
Compensation”, when applicable. Under FASB Accounting
Standards Codification No. 718, companies are required to measure
the compensation costs of share-based compensation arrangements
based on the grant-date fair value and recognize the costs in the
financial statements over the period during which employees are
required to provide services. Share-based compensation arrangements
include stock options, restricted share plans, performance-based
awards, share appreciation rights and employee share purchase
plans. As such, compensation cost is measured on the date of grant
at their fair value. Such compensation amounts, if any, are
amortized over the respective vesting periods of the option grant.
The Company applies this statement prospectively.
Equity instruments (“instruments”) issued to other than
employees are recorded on the basis of the fair value of the
instruments, as required by FASB Accounting Standards Codification
No. 718. FASB Accounting Standards Codification No. 505, Equity
Based Payments to Non-Employees defines the measurement date and
recognition period for such instruments. In general, the
measurement date is when either a (a) performance commitment, as
defined, is reached or (b) the earlier of (i) the non-employee
performance is complete or (ii) the instruments are vested. The
measured value related to the instruments is recognized over a
period based on the facts and circumstances of each particular
grant as defined in the FASB Accounting Standards
Codification.
Cash and Cash Equivalents
The Company considers all highly liquid investments with original
maturities of three months or less to be cash equivalents. Cash and
cash equivalents are stated at cost, which approximates fair value.
The amount of cash equivalents as of June 30, 2017 and 2016 were
nil.
Reclassification of Prior Period Financial Statements
Certain items previously reported have been reclassified to conform
with the current year's presentation. The reclassification has no
effect on aggregate assets, liabilities, equity, or net income as
previous reported.
Recent Accounting Pronouncements
The
Company has reviewed all recently issued, but not yet effective,
accounting pronouncements and does not believe the future adoption
of any such pronouncements may be expected to cause a material
impact on our financial condition or the results of its
operations.
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.
Note 2 – EQUIPMENT, NET
The Company's furniture and equipment at June 30, 2017 and December
31, 2016 consisted of the following:
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June 30,
2017
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December
31, 2016
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Telecommunications
equipment
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10,000,000
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10,000,000
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Less:
accumulated depreciation
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2,000,000
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2,000,000
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Less:
impairment
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8,000,000
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8,000,000
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Total
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-
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-
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Note 3. LOAN PAYABLE - STOCKHOLDER
At June 30, 2017 and December 31, 2016, a stockholder and officer
of the Company was owed $35,658 and $34,342 by the Company for
funds he had advanced to pay for certain expenses. The loan bears
no interest and is payable on demand.
9
Sigmabroadband Co.
Notes to Financial Statements
June 30, 2017
(Unaudited)
At June 30, 2017 and December 31, 2016, a second stockholder and
officer of the Company was owed $17,356 and $14,105 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 June 30, 2017 and December 31,
2016, accrued interest on this note totaled $324,187 and
$284,187,
respectively.
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.
Note 5. STOCKHOLDERS' DEFICIT
The Company has authorized 500,000,000 shares of common stock with
a par value of $0.0001 per share. At June 30, 2017, 247,240
shares of common stock were issued and
outstanding.
The Company has authorized 10,000,000 shares of preferred stock
with no par value. No shares were issued or outstanding at June 30,
2017.
In first quarter of 2016, the Company issued 1,000 shares of common
stock for consulting services, the common shares issued were valued
at $13,000.
In second quarter of 2016, the Company issued 500 shares of common
stock to settle $5,000 of accounts payable.
All share issued and outstanding has been retroactively adjusted to
reflect the decreased number of shares resulting from the reverse
stock split.
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 six months ended June 30, 2017 and 2016
totaled $3,000 and $3,000, respectively, and was forgiven and
converted to additional paid-in capital.
Note 7. INCOME TAXES
|
June 30, 2017
|
December 31, 2016
|
Net operating loss carryforward
|
1,773,000
|
1,732,000
|
Valuation allowance
|
(1,773,000)
|
(1,732,000)
|
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:
10
Sigmabroadband Co.
Notes to Financial Statements
June 30, 2017
(Unaudited)
|
June 30,
2017
|
December
31, 2016
|
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
June 30, 2017 and December 31, 2016, the Company has a deferred
taxes asset of approximately $1,773,000 and $1,732,000,
respectively, to reduce future federal and state taxable income
through 2035.
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. GOING CONCERN
These
financial statements have been prepared on a going concern basis,
which assumes the Company will be able to realize its assets and
discharge its liabilities in the normal course of business for the
foreseeable future. The Company has yet to demonstrate sustainable
profitability and it does not currently have the funding to fully
implement its business plan. Future losses are anticipated in the
continued development of its business, raising substantial doubt
about the Company’s ability to continue as a going concern.
The ability to continue as a going concern is dependent upon
the Company generating profitable operations in the future and, or,
obtaining the necessary financing to meet its obligations and repay
its liabilities arising from normal business operations when they
come due. Management intends to finance operating costs over the
next twelve months with existing cash on hand, loans from directors
or stockholders or through debt or equity financings.
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
On
July 15, 2017, the Board of Directors of the Company and the
majority shareholders of the Company, approved a reverse stock
split of the outstanding shares of the Company’s Common
Stock, par value $0.0001 per share (the “Common
Stock”), at a ratio of 1-for-100 (the “Reverse Stock
Split”) effective on July 28, 2017. As a result of the
reverse stock split, every 100 of the Company’s old issued
common stock will be converted into one share of the
Company’s new issued common stock. All share information
presented in these financial statements and accompanying footnotes
has been retroactively adjusted to reflect the decreased number of
shares resulting from the reverse stock split. In addition, in the
third quarter of 2017, the Company received $125,000 from an
unrelated party as an unsecured loan.
11
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion is intended to assist you in understanding
our business and the results of our operations. It should be read
in conjunction with the Condensed Consolidated Financial Statements
and the related notes that appear elsewhere in this report as well
as our Report on Form 10K filed with the Securities and Exchange
Commission for the period ending December 31, 2016. 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.
For a discussion of the factors that could cause actual results to
differ materially from the forward-looking statements. 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 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, cloud-based services, IPtv, as well as advanced
video services such as on demand, high
definition (“HD”) television and digital video recorder
(“DVR”) service. The Company sets itself to grow
exponentially through strategic acquisitions of like kind
businesses in the technology sector. 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.
12
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. 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. The Company has had some discussions with potential
acquisition candidates, but has not entered into any agreements as
of the date of this report.
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.
13
Since
incorporation, the Company has financed its operations originally
through private capital and then, loans from stockholders and
executives of the Company. As of June 30, 2017 we had $354 cash on
hand. We had totaled operating expenses of $11,360 for
the six months ended June 30, 2017 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 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. The Company has had some discussions with
potential acquisition candidates, but has not entered into any
agreements as of the date of this report.
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 June 30, 2017 and
2016 in the amounts of $7,946 and $8,495 respectively. This
decrease of $549 in operating expenses was primarily the result of
increase in professional fees. We have incurred operational
expenses for the six months ended June 30, 2017 and 2016 in the
amounts of $11,360 and $73,725 respectively. This decrease of
$62,365 in operating expenses was primarily the result of one time
professional fees paid in 2016.
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 2017
and beyond will be a slow growth year for us. We will need to gain
strength and stability in the regional rural markets we intend to
expand our influence in markets throughout the U.S.
14
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 and six months ended June 30, 2017,
the company has a net loss of $27,946 and $51,360
respectively. The company has financed its activities from
its stockholder. As of June 2017 and December 2016 the Company had
$354 and $167 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 June 30, 2017 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 June
30, 2017, 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 June 30, 2017, 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
15
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.
The
Company’s management assessed the effectiveness of the
Company’s internal control over financial reporting as of
June 30, 2017. In making this assessment, the Company’s
management used the criteria set forth by the Committee of
Sponsoring Organizations of the Treadway Commission
(“COSO”) in Internal ControlIntegrated Framework
(COSO 2013 framework) and SEC guidance on conducting such
assessments. The COSO framework is based upon five integrated
components of control: control environment, risk assessment,
control activities, information and communications and ongoing
monitoring.
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 not effective as of June
30, 2017
Changes in Internal Control over Financial Reporting
No
change in the Company's internal control over financial reporting
occurred during the quarter ended June 30, 2017, 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 June 30, 2017.
ITEM 3. DEFAULT UPON SENIOR SECURITIES
There
have been no defaults in any material payments during the covered
period.
ITEM 4. MINE SAFETY DISCLOSURES
None.
ITEM 5. OTHER INFORMATION
For the period covered by this Form 10-Q, there was no information
required to be disclosed in a report on Form 8-K that was not
reported. There were no material changes to the procedures by which
security holders may recommend nominees to the Company’s
board of directors.
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
|
16
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.
August
17, 2017
By:
/s/ Jeffery A.
Brown
Jeffery
A. Brown
President,
Secretary, Principal Executive Officer,
and
Director
17
EXHIBITS
INDEX OF 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
|
18