Attached files
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-Q/A
(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, 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
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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 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
❒
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Accelerated Filer
❒
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Non-accelerated filer
❒
(Do not check if
asmaller reporting company)
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Smaller reporting company ☒
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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 22, 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 June 30, 2016, originally filed
with the Securities and Exchange Commission on August 31 2016, is
due to the Company mistakenly filing this form 10-Q by indicating
by check mark whether the registrant is a shell company (as defined
in rule 12b-2 of the Exchange Act). it indicated
YES ☒
and NO ☒.
We are filing this amendment to our Quarterly Report on Form 10-Q
to indicate the correct statement to by indicated by check mark
whether the registrant is a shell company (as defined in
rule 12b-2 of the Exchange
Act). NO ☒.
No other changes have been made to the original filed information
within this 10-Q.
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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Condensed Balance
sheets at June 30, 2016 (unaudited) and December 31,
2015
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4
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Condensed
Statements of Operations (unaudited) For the Six Months Ended June
30, 2016 and 2015
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5
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Condensed
Statements of Cash Flows (unaudited) For the Six Months Ended June
30, 2016 and 2015
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6
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Notes to Condensed
Financial Statements (unaudited), June 30, 2016
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7
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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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14
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Item 3.
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Quantitative and
Qualitative Disclosures About Market Risk
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16
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Item 4.
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Controls and
Procedures
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17
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PART
II—OTHER INFORMATION
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Item 1.
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Legal
Proceedings
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18
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Item 2.
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Unregistered Sales
of Equity Securities and Use of Proceeds
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18
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Item 3.
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Default Upon Senior
Securities
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18
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Item 4
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Submission of
Matters to a Vote of Security Shareholders
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18
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Item
5.
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Other
Information
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18
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Item 6.
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Exhibits
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18
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Signatures
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19
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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.
3
PART
I—FINANCIAL INFORMATION
ITEM
1. FINANCIAL STATEMENTS
The financial
statements of SigmaBroadband Co. ("SigmaBroadband Co." or the
"Company") as of June 30, 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
June
30, 2016 and December 31, 2015
ASSETS
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June
30,
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December
31,
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2016
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2015
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(Unaudited)
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Current
Assets:
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Cash
and equivalents
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$829
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$275
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Total
current assets
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829
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275
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Equipment,
net
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-
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-
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Total
Assets
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$829
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$275
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LIABILITIES
AND STOCKHOLDERS' EQUITY
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Liabilities
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Accounts
payable and accrued expenses
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$272,146
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$222,884
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Loans
payable - stockholders
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35,590
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28,574
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Total
current liabilities
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307,736
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251,458
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Note
payable
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10,000,000
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10,000,000
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Commitments
and Contingencies
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-
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-
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Stockholders'
Equity:
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Preferred
stock, no par value; 10,000,000 shares authorized, no
shares
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issued
and 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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24,724,000
and 24,574,000 shares issued and outstanding,
respectively
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2,472
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2,457
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Additional
paid in capital
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97,978
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39,993
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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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(10,427,358)
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(10,313,633)
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(10,306,908)
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(10,251,183)
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Total
Liability and Stockholders' Equity
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$828
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$275
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4
SigmaBroadband
Co.
Condensed
Statements of Operations
For
the Six Months Ended June 30, 2016 and 2015
(Unaudited)
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For
the Three Months Ended June 30,
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For
the Six Months Ended June 30,
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2016
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2015
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2016
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2015
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Expenses:
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Advertising
and promotion
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$-
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$70
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$-
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$70
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Computer
and internet
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29
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29
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59
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179
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Depreciation
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-
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250,000
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500,000
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Licenses
and fees
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-
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10,000
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-
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12,550
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Professional
fees
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5,355
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3,944
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68,227
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6,426
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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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750
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675
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1,473
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1,350
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Travel
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197
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-
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197
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1,023
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Other
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664
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281
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769
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855
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8,495
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266,499
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73,725
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525,453
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Net
loss before other income, expenses and income taxes
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(8,495)
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(266,499)
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(73,725)
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(525,453)
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Other
income and (expenses)
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Interest
expense
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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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(28,495)
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(286,499)
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(113,725)
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(565,453)
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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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$(28,495)
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$(286,499)
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$(113,725)
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$(565,453)
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Basic
and diluted loss per share
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$(0.00)
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$(0.01)
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$(0.00)
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$(0.02)
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Basic
and diluted weighted average number
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of
shares outstanding
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24,705,319
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24,596,000
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24,684,427
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24,585,918
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5
SigmaBroadband
Co.
Condensed
Statements of Cash Flows
For
the Six Months Ended June 30, 2016 and 2015
(Unaudited)
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2016
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2015
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Cash
flows from operating activities:
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Net
loss
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$(113,725)
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$(565,453)
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Adjustments
to reconcile net loss to net cash used
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by
operating activities:
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Common
stock issued for services
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50,000
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-
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Depreciation
expense
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-
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500,000
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Accounts
payable and accrued expenses
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54,263
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42,913
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Stockholder
Contribution
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3,000
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3,000
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Net
cash used by operating activities
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(6,462)
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(19,540)
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Cash
flows from financing activities:
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Stockholders'
loans
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7,016
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19,162
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Net
cash provided by financing activities
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7,016
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19,162
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Net
decrease in cash
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554
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(378)
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Cash
at beginning of period
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275
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2,161
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Cash
at end of period
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$829
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$1,783
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Supplemental
cash flow information:
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Cash
paid during the period for:
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Interest
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$-
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$-
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Income
taxes
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$-
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$-
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Non-cash
transactions:
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Common
Stock Issued To Settle Accounts Payable
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$5,000
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0
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Forgiven
rent converted to additional paid-in capital
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$3,000
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$3,000
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6
SIGMABROADBAND
CO.
Notes
to Condensed Financial Statements
June
30, 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 records 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.
7
SIGMABROADBAND
CO.
Notes
to Condensed Financial Statements
June
30, 2016
(Unaudited)
Note
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
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, 2016 or 2015.
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.
8
SIGMABROADBAND
CO.
Notes
to Condensed Financial Statements
June
30, 2016
(Unaudited)
Note
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
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 of Financial Instruments
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 June 30, 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.
9
SIGMABROADBAND
CO.
Notes
to Condensed Financial Statements
June
30, 2016
(Unaudited)
Recent Pronouncements (continued)
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 June 30, 2016 and December 31,
2015 consisted of the following:
Telecommunications
equipment
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$10,000,000
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$10,000,000
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Less:
accumulated depreciation
|
2,000,000
|
2,000,000
|
Less:
impairment
|
8,000,000
|
8,000,000
|
|
|
|
Total
|
$-
|
$-
|
10
SIGMABROADBAND
CO.
Notes
to Condensed Financial Statements
June
30, 2016
(Unaudited)
Note
3. LOANS PAYABLE - STOCKHOLDERS
At
June 30, 2016 and December 31, 2015, a stockholder and officer of
the Company was owed $22,825 and $17,538, respectively, by the
Company for funds he had advanced to pay for certain expenses. The
loan bears no interest and is payable on demand.
At
June 30, 2016 and December 31, 2015, another stockholder and
officer of the Company was owed $12,765 and $11,036, respectively,
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, 2016 and December 31, 2015,
accrued interest on this note totaled $244,187 and $204,187,
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. The Company has not issued any shares at June 30, 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 six months ended June
30, 2016, the Company issued 100,000 shares at $0.50 per share for
services provided to the company. At June 30, 2016, 24,724,000
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.
During
the three months ended March 31, 2016, the company issued 100,000
shares at .50 per share for consulting services. During the three
months ended June 30, 2016, the company issued 50,000 shares to
settle $5000 dollars of account payable.
11
SIGMABROADBAND
CO.
Notes
to Condensed Financial Statements
June
30, 2016
(Unaudited)
Note
5. STOCKHOLDERS' EQUITY (continued)
The
Company has authorized 10,000,000 shares of preferred stock with no
par value. No shares were issued or outstanding at June 30, 2016 or
December 31, 2015.
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, 2016 and 2015, totaled
$3,000 and $3,000, respectively, and was capitalized as additional
paid-in capital.
Note
7. INCOME TAXES
The
deferred tax asset consists of the following:
|
June
30, 2016
|
December
31, 2015
|
|
|
|
Net
operating loss carryforward
|
$1,721,000
|
$1,676,000
|
Valuation
allowance
|
(1,721,000)
|
(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:
|
June
30, 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
June 30, 2016, the Company has an estimated net operating loss
carryforward of approximately $4,302,000. 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 June 30, 2016.
12
SIGMABROADBAND
CO.
Notes
to Condensed Financial Statements
June
30, 2016
(Unaudited)
Note
7. INCOME TAXES (continued)
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
$4,302,000 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
Management
evaluated all events through the date of this filing and has
identified no events that would require disclosure in these
financial statements.
13
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 six months ended June 30 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.
14
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 June 30, 2016 we had $829 cash on
hand. We had totaled operating expenses of $73,725 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.
15
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, 2016 and 2015 in the amounts of
$73,725
and $525,453
respectively. These expenses were
attributed to continuing startup costs including general and
administrative expenses. The decrease in $500,000
depreciation and the increase
of $50,000
in consulting
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 years 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 six months ended
June 30, 2016, the company has a net loss $113,725. The company has
financed its activities from private funding and proceeds from the
issuance of its common stock. As of June 2016 and December 2015 the
Company had $829
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.
16
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, 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 June 30, 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 June 30, 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 June 30, 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.
17
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, 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 June 30,
2016.
During the three
months period ended June 30, 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.
EXHIBITS
INDEX
OF EXHIBITS
ITEM
6. Exhibits
Exhibit
No.
|
|
Description
|
|
|
|
|
Certification by
Chief Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
|
|
|
Certification by
Chief Executive Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
|
|
|
Certification by
Chief Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
|
|
|
Certification by
Chief Financial Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
|
18
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.
November 2,
2017
By:
/s/ Jeffery A.
Brown
Jeffery
A. Brown
President,
Chief Executive Officer and
Director
19