Attached files
UNITED
STATES
SECURITIES AND EXCHANGE
COMMISSION
Washington,
D.C. 20549
FORM 10-Q/A
(Mark
One)
☒ QUARTERLY REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the quarterly
period ended:
September 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
|
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)
|
(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)
|
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
☐
|
|
Accelerated Filer
☐
|
|
Non-accelerated filer
☐
(Do not check if
asmaller reporting company)
|
|
Smaller reporting company ☒
|
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 November 17, 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 September 30, 2016, originally
filed with the Securities and Exchange Commission on November 18
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 September 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 September 30, 2016
and 2015
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5
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Condensed
Statements of Cash Flows (unaudited) For the Six Months
Ended September 30, 2016
and 2015
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6
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Notes to Condensed
Financial Statements (unaudited), September 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 September 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.
Condensed Balance Sheets
September
30, 2016 and December 31, 2015
Assets
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September
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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$264
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$275
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Total
current assets
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264
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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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$264
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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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$296,798
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222,884
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Loans
payable - stockholders
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37,014
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28,574
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Total
current liabilities
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333,812
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251,458
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Note
payable - long term
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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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Series
A Preferred stock, no par value; 10,000,000 shares
authorized,
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no
shares 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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99,478
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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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(10,455,498)
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(10,313,633)
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(10,333,548)
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(10,251,183)
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Total
liabilities and stockholders' equity
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$264
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$275
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4
SigmaBroadband Co.
Condensed Statements of Operations
For the Three and Nine Months Ended September 30, 2016 and
2015
(Unaudited)
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For
the Three Months Ended September 30,
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For
the Nine Months Ended September 30,
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2016
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2015
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2016
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2015
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Expenses:
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Advertising
and promotion
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$-
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$-
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$-
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$70
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Computer
and internet
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-
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30
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59
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209
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Depreciation
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-
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250,000
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-
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750,000
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Professional
fees
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5,609
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2,035
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73,836
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8,461
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Rent
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1,500
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1,500
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4,500
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4,500
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Storage
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804
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707
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2,277
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2,057
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Travel
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-
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-
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197
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1,023
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Permits
and fees
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10
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10
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10
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12,560
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Other
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217
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120
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986
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975
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8,140
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254,402
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81,865
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779,855
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Net
loss before other income, expenses and income taxes
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(8,140)
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(254,402)
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(81,865)
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(779,855)
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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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(60,000)
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(60,000)
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Net
loss before income taxes
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(28,140)
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(274,402)
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(141,865)
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(839,855)
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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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$(28,140)
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$(274,402)
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$(141,865)
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$(839,855)
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Basic
and diluted loss per share
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$(0.00)
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$(0.01)
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$(0.01)
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$(0.03)
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Basic
and diluted weighted average number
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of
shares outstanding
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24,724,000
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24,596,000
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24,703,562
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24,590,959
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5
SigmaBroadband Co.
Condensed Statements of Cash Flows
For the Nine Months Ended September 30, 2016 and
2015
(Unaudited)
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2016
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2015
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Cash
flows from operating activities:
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Net
(loss)
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$(141,865)
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$(839,855)
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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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750,000
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Accounts
payable and accrued expenses
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78,914
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64,799
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Stockholder
rent payable
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4,500
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4,500
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Net
cash (used in) operating activities
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(8,451)
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(20,556)
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Cash
flows from financing activities:
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Stockholders'
loans
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8,440
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19,162
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Net
cash provided by financing activities
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8,440
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19,162
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Net
(decrease) increase in cash
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(11)
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(1,394)
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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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$264
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$767
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Supplemental
cash flow information:
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Cash
paid during the period for:
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Interest
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$-
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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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Forgiven
rent converted to additional paid-in capital
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$4,500
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$4,500
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Common
stock issued for accounts payable
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$5,000
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$-
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6
SigmaBroadband
Co.
Notes
to Condensed Financial Statements
September
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 on an annual basis or 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
September
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 September 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
September
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 September 30, 2015. The
Company's financial instruments consist of cash. 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
September
30, 2016
(Unaudited)
Note 1. SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (continued)
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.
10
SigmaBroadband
Co.
Notes
to Condensed Financial Statements
September
30, 2016
(Unaudited)
NOTE 2 –
EQUIPMENT, NET
The Company's
furniture and equipment at September 30, 2016 and December 31, 2015
consisted of the following:
Telecommunications
equipment
|
$10,000,000
|
$10,000,000
|
Less: accumulated
depreciation
|
2,000,000
|
2,000,000
|
Less:
impairment
|
8,000,000
|
8,000,000
|
Total
|
$-
|
$-
|
Note 3. LOAN
PAYABLE – STOCKHOLDER
At September 30,
2016 and December 31, 2015, a stockholder and officer of the
Company was owed $23,493 and $17,358, 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 September 30,
2016 and December 31, 2015, a second stockholder and officer of the
Company was owed $13,301 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.
At September 30,
2016 and December 31, 2015, a third stockholder and officer of the
Company was owed $220 and $-0-, 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 September 30, 2016 and December 31, 2015,
accrued interest on this note totaled $264,187 and $204,187,
respectively.
11
SigmaBroadband
Co.
Notes
to Condensed Financial Statements
September
30, 2016
(Unaudited)
Note 4. NOTE
PAYABLE (continued)
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 September 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 nine months ended September 30, 2016, the Company issued
100,000 shares at $0.50 per share for services provided to the
company. At September 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.
Note 5.
STOCKHOLDERS' EQUITY (continued)
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 $5,000 dollars of
account payable. The Company has
authorized 10,000,000 shares of preferred stock with no par value.
No shares were issued or outstanding at September 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 nine months ended September 30, 2016 and 2015
totaled $4,500 and $4,500, respectively, and was capitalized as
additional paid-in capital.
Note 7. INCOME
TAXES
The
deferred tax asset consists of the following:
|
September
30,
|
December
31,
|
|
2016
|
2015
|
Net operating loss
carryforward
|
$1,737,252
|
$1,676,000
|
Valuation
allowance
|
(1,737,252)
|
(1,676,000)
|
Deferred tax asset,
net
|
$-
|
$-
|
12
SigmaBroadband
Co.
Notes
to Condensed Financial Statements
September
30, 2016
(Unaudited)
Note 7. INCOME
TAXES (continued)
The income tax
benefit differs from the amount computed by applying the statutory
federal and state income tax rates to the loss before income taxes.
The sources and tax effects of the differences are as
follows:
|
September
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 September 30,
2016, the Company has an estimated net operating loss carryforward
of approximately $1,737,000. 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 September 30,
2016.
The Company
currently has no federal or state tax examinations in progress, nor
has it had any federal or state examinations since its inception.
All of the Company's tax years are subject to federal and state tax
examinations. The Company is only subject to state taxes in
Georgia.
Note 8. BASIS OF
REPORTING
The Company's
financial statements are presented on a going concern basis, which
contemplates the realization of assets and satisfaction of
liabilities in the normal course of business.
The Company has
incurred losses from inception of approximately $10,460,000, 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.
Note 9. SUBSEQUENT
EVENT
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 September
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 September 30, 2016 we had
$264 cash on
hand. We had totaled operating expenses of $28,140 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
September 30, 2016 and 2015 in the amounts of $28,140 and $274,402
respectively. This decrease of $246,262 in operating
expenses was primarily the result of one-time depreciation expenses
in 2015. The other expenses were attributed to continuing
startup costs including general and administrative
expenses.
We have generated no significant revenues since inception; we
have incurred operational expenses for the nine months ended
September 30, 2016 and 2015 in the amounts of $141,865 and $839,855
respectively. This decrease of $697,990 in operating
expenses was primarily the result of one-time depreciation expenses
in 2015. The other expenses were attributed to continuing
startup costs including general and administrative
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 three months ended September 30, 2016, the
company has a net loss of $28,140
and for the nine months ended
September 30, 2016, the company has a net loss $141,865. The company has
financed its activities from private funding and proceeds from the
issuance of its common stock. As of September 2016 and December
2015 the Company had $264 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 September 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 September 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 September 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
September 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 September 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
September 30, 2016.
During the three
months period ended September 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
|
|
|
|
|
||
|
||
|
||
|
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