UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended: March 31,
2015
OR
[ ] TRANSITION REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to
_____________
Commission File Number: 333-191426
SIGMABROADBAND CO.
(Exact name of registrant as specified in its charter)
GEORGIA |
4899 |
46-1289228 |
(State or other jurisdiction
of organization) |
(Primary Standard
Industrial Classification Code) |
(Tax
Identification
Number) |
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2690 Cobb Parkway
Suite A5
Atlanta, Georgia 33080
Tel: (800) 545-0010
(Address and telephone number of
registrant's executive office) |
2690 Cobb Parkway
Suite A5
Atlanta, Georgia 33080
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 [X] No [ ]
Indicate by check mark whether the registrant
has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted
and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files). Yes [ ] No [X]
Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of
"large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2
of the Exchange Act.
Large Accelerated Filer [ ] |
|
Accelerated Filer [ ] |
|
Non-accelerated filer [ ]
(Do not check if a
smaller reporting company) |
|
Smaller reporting company [X] |
Indicate by check mark whether the registrant is a shell company (as defined in
rule 12b-2 of the Exchange Act). YES [ ] NO [X]
The number of shares outstanding of each of
the issuer’s classes of common equity, as of March 31, 2015 was 27,596,000.
Table of Contents
SigmaBroadband Co.
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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Balance
Sheets (unaudited) at March 31, 2015 and December 31, 2014 |
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Statements
of Operations (unaudited) For the Three Months Ended March 31, 2015 and 2014, and for the Period From October 19, 2012
(Inception) to March 31, 2015 |
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Statement of Stockholders Equity for
the Period from October 19, 2012 (Inception) to March 31, 2015
Statements of Cash Flows (unaudited)
For the Three Months Ended March 31, 2015 and 2014, and for the Period From October 19, 2012 (Inception) to March 31,
2015 |
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Notes to Financial Statements |
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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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Item 3. |
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Quantitative and Qualitative
Disclosures About Market Risk |
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Item 4. |
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Controls and Procedures |
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PART II—OTHER INFORMATION |
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Item 1. |
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Legal Proceedings |
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Item 2. |
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Unregistered Sales of Equity
Securities and Use of Proceeds |
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Item 3. |
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Default Upon Senior Securities |
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Item 4. |
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Submission of Matters to a Vote of Security Shareholders |
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Item 5. |
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Other Information |
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Item 6. |
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Exhibits |
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Signatures |
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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.
PART I—FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The financial statements of SigmaBroadband Co. ("SigmaBroadband Co." or the
"Company") as of March 31, 2015 and 2014 and for the Period from October 19, 2012 (Inception) and for the three months
ended March 31, 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. |
(A Development Stage Company) |
Balance Sheets |
March 31, 2015 and December 31, 2014 |
(Unaudited) |
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| |
|
ASSETS | |
March 31, 2015 | |
December 31, 2014 |
Current Assets: | |
| | | |
| | |
Cash and equivalents | |
$ | 532 | | |
$ | 2,161 | |
Total current assets | |
| 532 | | |
| 2,161 | |
| |
| | | |
| | |
Equipment, net | |
| 8,750,000 | | |
| 9,000,000 | |
| |
| | | |
| | |
| |
$ | 8,750,532 | | |
$ | 9,002,161 | |
| |
| | | |
| | |
LIABILITIES AND STOCKHOLDERS' EQUITY | |
| | | |
| | |
Liabilities | |
| | | |
| | |
Accounts payable and accrued expenses | |
$ | 10,396 | | |
$ | 9,958 | |
Accrued interest | |
| 144,187 | | |
| 124,187 | |
Loans payable - stockholders | |
| 8,943 | | |
| 3,556 | |
Note payable - current portion | |
| — | | |
| — | |
Total current liabilities | |
| 163,526 | | |
| 137,701 | |
| |
| | | |
| | |
Note payable - net of current portion | |
| 10,000,000 | | |
| 10,000,000 | |
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| | |
Commitments | |
| | | |
| | |
| |
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Stockholders' Equity: | |
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| | |
Preferred stock, no par value; 10,000,000 shares authorized, no shares
issued and outstanding | |
| — | | |
| — | |
Common stock, $0.0001 par value; 490,000,000 shares authorized, 24,596,000
issued and outstanding, respectively | |
| 2,460 | | |
| 2,460 | |
Additional paid in capital | |
| 56,490 | | |
| 54,990 | |
Treasury stock | |
| (1,000 | ) | |
| (1,000 | ) |
Deficit accumulated during development stage | |
| (1,470,944 | ) | |
| (1,191,990 | ) |
| |
| (1,412,994 | ) | |
| (1,135,540 | ) |
| |
| | | |
| | |
| |
$ | 8,750,532 | | |
$ | 9,002,161 | |
SigmaBroadband Co. |
(A Development Stage Company) |
Statements of Operations |
For the Three Months Ended March 31, 2015 and 2014 |
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| |
| 2015 | | |
| 2014 | |
Revenue (net) | |
$ | — | | |
$ | — | |
Cost of goods sold | |
| — | | |
| — | |
Gross profit | |
| — | | |
| — | |
| |
| | | |
| | |
Expenses: | |
| | | |
| | |
Computer and internet | |
| 150 | | |
| 30 | |
Depreciation | |
| 250,000 | | |
| 250,000 | |
Professional fees | |
| 2,482 | | |
| 2,608 | |
Rent | |
| 1,500 | | |
| 1,639 | |
Storage | |
| 675 | | |
| 639 | |
Travel | |
| 1,023 | | |
| — | |
Other | |
| 3,124 | | |
| 204 | |
| |
| 258,954 | | |
| 255,120 | |
Net loss before other income, expenses and income taxes | |
| (258,954 | ) | |
| (255,120 | ) |
| |
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| | |
Other income and (expenses) | |
| | | |
| | |
Interest expense | |
| (20,000 | ) | |
| (30,000 | ) |
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| | |
Net loss before income taxes | |
| (278,954 | ) | |
| (285,120 | ) |
| |
| | | |
| | |
Provision for income taxes | |
| — | | |
| — | |
| |
| | | |
| | |
Net loss | |
$ | (278,954 | ) | |
$ | (285,120 | ) |
| |
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| | |
Basic and diluted loss per share | |
$ | (0.01 | ) | |
$ | (0.01 | ) |
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Basic and diluted weighted average number of
shares outstanding | |
| 24,596,000 | | |
| 24,576,000 | |
SigmaBroadband Co. |
(A Development Stage Company) |
Statement of Stockholders' Equity |
March 31, 2015 |
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Accumulated | |
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Additional | |
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Deficit During | |
Total |
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Common Stock | |
Preferred Class A | |
Paid in | |
Treasury Stock | |
Development | |
Stockholders’ |
| |
Shares | |
Amount | |
Shares | |
Amount | |
Capital | |
Shares | |
Amount | |
Stage | |
Equity |
Balance - January 1, 2014 | |
| 24,576,000 | | |
$ | 2,458 | | |
| — | | |
$ | — | | |
$ | 28,992 | | |
| — | | |
$ | — | | |
$ | (32,793 | ) | |
$ | (1,343 | ) |
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Contribution to additional paid in capital | |
| — | | |
| — | | |
| | | |
| | | |
| 1,500 | | |
| — | | |
| — | | |
| — | | |
| 1,500 | |
Contribution to additional paid in capital | |
| — | | |
| — | | |
| | | |
| | | |
| 1,500 | | |
| — | | |
| — | | |
| — | | |
| 1,500 | |
Issuance of common shares for cash at $1.00 per share | |
| 20,000 | | |
| 2 | | |
| | | |
| | | |
| 19,998 | | |
| — | | |
| — | | |
| — | | |
| 20,000 | |
Contribution to additional paid in capital | |
| — | | |
| — | | |
| | | |
| | | |
| 1,500 | | |
| — | | |
| — | | |
| | | |
| 1,500 | |
Purchase of treasury stock at cost | |
| — | | |
| — | | |
| | | |
| | | |
| — | | |
| 2,000 | | |
| (1,000 | ) | |
| — | | |
| (1,000 | ) |
Contribution to additional paid in capital | |
| — | | |
| — | | |
| | | |
| | | |
| 1,500 | | |
| — | | |
| — | | |
| — | | |
| 1,500 | |
Net loss | |
| — | | |
| — | | |
| | | |
| | | |
| — | | |
| — | | |
| — | | |
| (1,159,197 | ) | |
| (1,159,197 | ) |
Balance - December 31, 2014 | |
| 24,596,000 | | |
| 2,460 | | |
| — | | |
| — | | |
| 54,990 | | |
| 2,000 | | |
| (1,000 | ) | |
| (1,191,990 | ) | |
| (1,135,540 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Contribution to additional paid in capital | |
| — | | |
| — | | |
| — | | |
| — | | |
| 1,500 | | |
| — | | |
| — | | |
| — | | |
| 1,500 | |
Net loss | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| (278,954 | ) | |
| (278,954 | ) |
Balance - March 31, 2015 | |
| 24,596,000 | | |
$ | 2,460 | | |
| — | | |
$ | — | | |
$ | 56,490 | | |
| 2,000 | | |
$ | (1,000 | ) | |
$ | (1,470,944 | ) | |
$ | (1,412,994 | ) |
SigmaBroadband Co. |
(A Development Stage Company) |
Statements of Cash Flows |
For the Three Months Ended March 31, 2015 and 2014 |
| |
| |
|
| |
2015 | |
2014 |
Cash flows from operating activities: | |
| | | |
| | |
Net loss | |
$ | (278,954 | ) | |
$ | (285,120 | ) |
Adjustments to reconcile net loss to net cash used by operating
activities: | |
| | | |
| | |
Depreciation expense | |
| 250,000 | | |
| 250,000 | |
Accounts payable and accrued expenses | |
| 20,438 | | |
| 31,949 | |
Capitalized rent expense | |
| 1,500 | | |
| 1,500 | |
Net cash used by operating activities | |
| (7,016 | ) | |
| (1,671 | ) |
| |
| | | |
| | |
Cash flows from financing activities: | |
| | | |
| | |
Stockholder's loan | |
| 5,387 | | |
| 639 | |
Net cash provided by financing activities | |
| 5,387 | | |
| 639 | |
| |
| | | |
| | |
Net increase in cash | |
| (1,629 | ) | |
| (1,032 | ) |
Cash at beginning of period | |
| 2,161 | | |
| 8,904 | |
Cash at end of period | |
$ | 532 | | |
$ | 7,872 | |
| |
| | | |
| | |
Supplemental cash flow information: | |
| | | |
| | |
Cash paid during the period for: | |
| | | |
| | |
Interest | |
$ | — | | |
$ | — | |
Income taxes | |
$ | — | | |
$ | — | |
| |
| | | |
| | |
Non-cash transactions: | |
| | | |
| | |
During the periods ended March 31, 2015 and 2014, the Company capitalized rent expense of $1,500, $1,500, respectively. | |
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, 2014.
Revenue Recognition
In general, the Company
will record revenue when persuasive evidence of an arrangement exists, services have been rendered or product delivery has occurred,
the sales price to the customer is fixed or determinable, and collectability is reasonably assured. The following policies reflect
specific criteria for the various revenues streams of the Company:
Revenue will be recognized
at the time the product is delivered or services are performed. Provision for sales returns will be estimated based on the Company's
historical return experience. Revenue will be presented net of returns.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally
accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported
in the financial statements and accompanying notes. Actual results could differ from those estimates.
Segment Information
The Company follows Accounting
Standards Codification ("ASC") 280, "Segment Reporting". The Company currently operates in a single segment
and will evaluate additional segment disclosure requirements as it expands its operations.
Net Loss Per Common
Share
Basic net (loss) income
per common share is calculated using the weighted average common shares outstanding during each reporting period. Diluted net
(loss) income per common share adjusts the weighted average common shares for the potential dilution that could occur if common
stock equivalents (convertible debt and preferred stock, warrants, stock options and restricted stock shares and units) were exercised
or converted into common stock. There were no common stock equivalents at March 31, 2015.
Income Taxes
Deferred income taxes
are recognized for the tax consequences related to temporary differences between the carrying amount of assets and liabilities
for financial reporting purposes and the amounts used for tax purposes at each year end, based on enacted tax laws and statutory
tax rates applicable to the periods in which the differences are expected to affect taxable income. A valuation allowance is recognized
when, based on the weight of all available evidence, it is considered more likely than not that all, or some portion, of the deferred
tax assets will not be realized. Income tax expense is the sum of current income tax plus the change in deferred tax assets and
liabilities.
ASC 740, Income Taxes,
requires a company to first determine whether it is more likely than not (which is defined as a likelihood of more than fifty
percent) that a tax position will be sustained based on its technical merits as of the reporting date, assuming that taxing authorities
will examine the position and have full knowledge of all relevant information. A tax position that meets this more likely than
not threshold is then measured and recognized at the largest amount of benefit that is greater than fifty percent likely to be
realized upon effective settlement with a taxing authority.
Stock-Based Compensation
The Company accounts for equity instruments issued to employees in accordance with ASC
718, Compensation - Stock Compensation. ASC 718 requires all share-based compensation payments to be recognized in the financial
statements based on the fair value using an option pricing model. ASC 718 requires forfeitures to be estimated at the time of
grant and revised in subsequent periods if actual forfeitures differ from initial estimates.
Equity instruments granted
to non-employees are accounted for in accordance with ASC 505, Equity. The final measurement date for the fair value of equity
instruments with performance criteria is the date that each performance commitment for such equity instrument is satisfied or
there is a significant disincentive for non-performance.
Cash and Cash Equivalents
The Company considers all highly liquid investments
with an original maturity of three months or less to be cash equivalents.
Fair Value 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 March 31, 2015. 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
There are no recent accounting pronouncements that
apply to the Company.
Note 2. LOANS PAYABLE - STOCKHOLDERS
At March 31, 2015 a
stockholder and officer of the Company was owed $4,438 by the Company for funds he had advanced to pay for certain expenses. The
loan bears no interest and is payable on demand.
At March 31, 2015 a stockholder
and officer of the Company was owed $4,505 by the Company for funds he had advanced to pay for certain expenses. The loan bears
no interest and is payable on demand.
Note 3. 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 January 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.
The Company has the
option to pay the remaining $9,000,000 balance in the Company's common stock at par value 12 months after the signing of the agreement
or to pay it in equal monthly installments over a 60 month term with interest at 12% per annum.
Note 4. STOCKHOLDERS' EQUITY
The Company has authorized 490,000,000 shares of common stock with a par value of
$0.0001 per share. At March 31, 2015, 24,576,000 shares of common stock were issued and outstanding.
The Company has authorized 10,000,000 shares
of preferred stock with no par value. No shares were issued or outstanding at March 31, 2014.
Note 5. COMMITMENTS AND CONTINGENCIES
The Company currently leases its offices
on a month to month basis from the Company's President and stockholder for $500 per month.
Rent expense for the three months ended March 31, 2015 and 2014, totaled $1,500 and
$1,500, respectively, and was capitalized as additional paid-in capital.
Note 6. INCOME TAXES
The provision for income taxes differs from the amount computed by applying the statutory
federal income tax rate to income before provision for income taxes. The sources and tax effects of the differences are as follows:
Income tax provision at the federal statutory rate | |
| 34 | % |
Effect of operating losses | |
| (34 | )% |
| |
| 0 | % |
As of March 31, 2015,
the Company has a net operating loss carryforward of approximately $1,471,000. This loss will be available to offset future taxable
income. If not used, this carryforward will begin to expire in 2033. The deferred tax asset relating to the operating loss carryforward
has been fully reserved at March 31, 2015.
Note 7. 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 experienced
a loss from operations during its development stage as a result of its investment necessary to achieve its operating plan, which
is long-range in nature. Since October 19, 2012 (inception) to March 31, 2015, the Company incurred a net loss of approximately
$1,471,000. In addition, the Company has no significant assets or revenue generating operations.
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 nine months ended March 31, 2015 and 2014, and for the period from October
19, 2012 (Inception) to March 31, 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 several million dollars in technology assets and is to be engaged in the business of providing voice,
data, and digital video as a triple play bundled service to rural markets in the United States of America. We plan to offer our
customers traditional cable video programming, Internet services, telephone services and IPtv, as well as advanced video services
such as on demand, high definition (“HD”) television and digital video recorder (“DVR”) service.
We plan to provide national and international long distance service. Our business plan include goals for increasing customers
and revenue. To reach our goals, we will actively invest in our network and operations in order to improve the quality and value
of the products and packages that we offer.
SIGMABROADBAND CO. has never declared bankruptcy,
it has never been in receivership, and it has never been involved in any legal action or proceedings. Since becoming incorporated,
has not made any significant purchase or sale of assets, nor has it been involved in any mergers, acquisitions or consolidations.
SIGMABROADBAND CO. is not a blank check registrant as that term is defined in Rule 419(a)(2) of Regulation C of the Securities
Act of 1933, since it has a specific business plan, purpose and substantial assets.
Since our inception, we have been engaged
in business planning activities, including researching the industry, identifying target markets for our services and developing
our SIGMABROADBAND CO. models and financial forecasts, performing due diligence regarding potential geographic locations and acquisitions
most suitable for establishing our offices and identifying future sources of capital.
Currently, SIGMABROADBAND CO. has officers
and directors who have assumed responsibility for all planning, development and operational duties, and will continue to do so
throughout the beginning stages of the Company. Other than the Officers/Directors and other management team, there are no employees
at the present time. We do anticipate hiring regular employees when the need arises.
SIGMABROADBAND CO. currently has no intention
to engage in a merger or acquisition with any unidentified company. However, we may pursue strategic acquisitions that complement
our current business model within the technology industry which may allow us to expand our activities, capabilities, advance our
production and revenue.
SIGMABROADBAND CO.’s
fiscal year end is December 31.
Industry Background
Approximately 100 million Americans do not
have broadband at home today and most of them are living in rural communities across America. We intend to be a leading provider
of cost-effective and reliable technology services for home, small to medium sized businesses in the areas we serve and to create
value to our shareholders.
We intend to deliver innovative communications,
information and entertainment. Our voice, data and video products and services offer over intelligent wireless, wireline, cable,
fiber, broadband and global IP networks that meet customers' growing demand for speed, mobility, security and control. As a committed
corporate citizen, we use our advanced communications services to address important issues confronting our society today, especially
in rural America. We plan to follow a strategy of being first to our regional markets with technology and services first introduced
in metropolitan areas by national service providers.
We intend to be a full service, facilities-based
cable operator, local exchange and inter-exchange carrier serving both residential and commercial customers by providing voice,
data and digital video services. We intend to employ the newest technology available in the marketplace today, which provides
quality of service (QoS), reliability, security, redundancy and continuity of service always. In the future, we will be recognized
as a leader in the data network, IP telephony and cloud-based services. Our potential customers are located in some of the country’s
largest cities to families living in rural communities. We intend to establish a dominant national presence in the triple-play
broadband, cable and telecom industry in America.
Plan of Operation
We are a development stage company, incorporated
on October 19, 2012 and have not started operations or generated or realized any revenues from our business operations. However,
we have substantial technology assets ready to deploy in the rural markets where we plan to provide our services.
Our auditors have issued a going concern opinion. This means that our auditors
believe there is substantial doubt that we can continue as an on-going business for the next twelve (12) months. Our
auditors’ opinion is based on the uncertainty of our ability to establish profitable operations. The opinion results
from the fact that we have not generated any revenues. Accordingly, we must raise cash from sources other than operations.
Our only other source for cash at this time is investments by others in our Company.
Our Officers and Directors are responsible
for our managerial and organizational structure which will include preparation of disclosure and accounting controls under the
Sarbanes Oxley Act of 2002. When these controls are implemented, they will be responsible for the administration of the controls.
Should they not have sufficient experience, they may be incapable of creating and implementing the controls which may cause us
to be subject to sanctions and fines by the Securities and Exchange Commission which ultimately could cause you to lose your investment.
Since incorporation, the Company has financed
its operations originally through private capital and then, loans from stockholders and executives of the Company. As of March
31, 2015 we had $532 cash on hand. We had total expenses of $278,954 which were related to general and
administrative costs (See “Financial Statements”).
To date, the Company has not fully implemented
its planned principal operations or strategic business plan. SIGMABROADBAND CO. is attempting to secure sufficient monetary assets
to increase operations. SIGMABROADBAND CO. cannot assure any investor that it will be able to enter into sufficient business operations
adequate enough to insure continued operations.
Our intended plan of operations is to offer
voice, data, and video services and implement the necessary sales and marketing support to begin generating revenue. If SIGMABROADBAND
CO. does not produce sufficient cash flow to support its operations over the next 12 months, the Company will need to raise additional
capital by issuing capital stock in exchange for cash in order to continue as a going concern. There are no formal or informal
agreements to attain such financing. SIGMABROADBAND CO. cannot assure any investor that, if needed, sufficient financing can be
obtained or, if obtained, that it will be on reasonable terms. Without realization of additional capital, it would be unlikely
for operations to continue and any investment made by an investor would be lost in its entirety.
SIGMABROADBAND CO. currently does own significant
plant or equipment that it can seek to sell in the near future in order to sustain its operations if not able to raise necessary
capital for its business.
Our management anticipates hiring employees
over the next twelve (12) months as needed. Currently, the Company believes the services provided by its officers and directors
appear sufficient at this time.
The Company has not paid for expenses on behalf
of any directors. Additionally SIGMABROADBAND CO. believes that this policy shall not materially change within the next
twelve months.
The Company has no plans to seek a business
combination with another entity in the foreseeable future.
Impact of Inflation
We believe that the rate of inflation has had negligible effect on us. We
believe we can absorb most, if not all, increased non-controlled operating costs by operating our Company in the most efficient
manner possible.
Results of Operations
We have generated no significant revenues
since inception; we have incurred operational expenses for the three months ended March 31, 2015 and 2014, and for the period
from October 19, 2012 (Inception) in the amounts of $278,954 and $285,120 respectively. These 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 2015 and beyond will be a significant growth year(s) for us. As we gain strength and stability in the
regional rural markets we intend to expand our influence in markets throughout the U.S.
Liquidity and Capital Resources
The financial statements have been prepared
assuming the company will continue as a going concern as per its business plan. For the three months ended March 31, 2015, the
company has a net loss $278,954. The company has financed its activities from private funding and proceeds from the issuance
of its common stock.
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.
ITEM 3: QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK
Market risk represents the risk of changes
in value of a financial instrument, derivative or non-derivative, caused by fluctuations in interest rates, foreign exchange rates
and equity prices. Changes in these factors could cause fluctuations in results of our operations and cash flows. In the ordinary
course of business, we are not exposed to interest rate and foreign currency exchange rate risks.
ITEM 4. CONTROLS AND PROCEDURES
Based upon the required evaluation of our
disclosure controls and procedures, our President and Chief Executive Officer and Chief Financial Officer concluded that as of
March 31, 2015 our disclosure controls and procedures were adequate and effective to ensure that information was gathered, analyzed
and disclosed on a timely basis.
There has been no change in our internal control over financial reporting (as defined
in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during our fiscal quarter ended March 31, 2015, that
has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Evaluation of disclosure controls and procedures
Under the supervision and with the participation
of our management, including our Chief Executive Officer and our Chief Financial Officer, we carried out an evaluation of the
effectiveness of the design and operation of our disclosure controls and procedures as defined in Rules 13a-15 (e) and 15d-15(e)
under the Exchange Act. Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that,
at March 31, 2015, such disclosure controls and procedures were not effective, based on our delinquent filings. Disclosure controls
and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our
reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified
in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed
to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and
communicated to management, including our Chief Executive Officer and Chief Financial Officer, or persons performing similar functions,
as appropriate, to allow timely decisions regarding required disclosure.
Management's Report on Internal Control
over Financial Reporting
The Company's management is responsible for
establishing and maintaining adequate internal control over financial reporting, as defined in Rule 13a-15(f) promulgated under
the Exchange Act of 1934 as a process designed by or under the supervision of the company’s principal executive and principal
financial officers and effected by the company’s board of directors, management and other personnel, to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting
purposes in accordance with generally accepted accounting principles in the United States of America and included those policy
and procedures that:
• | | Pertain to the maintenance of records that in reasonable detail accurately and fairly
reflect the transaction and dispositions of the assets of the company. |
• | | Provide reasonable assurance that transactions are recorded as necessary to permit
preparation of finical statements in accordance with accounting principles generally accepted in the United States of America
and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors
of the company; and |
• | | Provide reasonable assurance regarding prevention for timely detection of unauthorized
acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements |
A control system, no matter how well conceived or operated, can provide only
reasonable, not absolute assurance that the objectives of the control system are met under all potential conditions,
regardless of how remote, and may not prevent or detect all errors and all fraud. Because of the inherent limitations in all
control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if
any, within the Company have been prevented or detected. Our internal control over financial reporting is designed to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles in the United States of America.
As of March 31, 2015 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 effective to detect the appropriate application
of US GAAP rules.
Our disclosure controls and procedures are
designed to provide reasonable, not absolute, assurance that the objectives of our disclosure control system are met. Because
of inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues,
if any, within a company have been detected. Based on their evaluation as of the end of the period covered by this report, management
concluded that our disclosure controls and procedures were sufficiently effective to provide reasonable assurance that the objectives
of our disclosure control system were met.
Changes in Internal Control over Financial
Reporting
No change in the Company's internal control over financial reporting occurred during
the quarter ended March 31, 2015, that materially affected, or is reasonably likely to materially affect, the Company's internal
control over financial reporting.
PART II—OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is not involved in any legal proceedings
and is not aware of any pending or threatened claims.
The Company expects and may be subject to
legal proceedings and claims from time to time in the ordinary course of its business, including, but not limited to, claims of
alleged infringement of the trademarks and other intellectual property rights of third parties by the Company and its licensees.
Such claims, even if not meritorious, could result in the expenditure of significant financial and managerial resources.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
There have been no sales of unregistered securities
during the quarter ended March 31, 2015.
During the three month period ended March
31, 2015, 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
The Company does not have any other material information to report
with respect to the three month period ended March 31, 2015.
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:
|
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SIGMABROADBAND CO. |
May 15, 2015 |
|
|
|
By: |
/s/ Jeffery A. Brown |
|
|
Jeffery A. Brown |
|
|
President, Secretary, Principal Executive Officer, and Director |
|
|
|
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By: |
/s/ Timothy D. Valley |
|
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Timothy D. Valley |
|
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Chief Financial Officer and Principal Accounting Officer |
EXHIBITS
INDEX OF EXHIBITS
ITEM 6. Exhibits
Exhibit 31.1
CERTIFICATION PURSUANT TO SECTION 302 OF
THE SARBANES OXLEY ACT OF
2002 AND RULE 13A-14 OF THE EXCHANGE ACT
OF 1934
CERTIFICATION
I, Jeffery A. Brown, certify that:
1. | | I have reviewed this Quarterly Report on Form 10-Q of SigmaBroadband Co.; |
2. | | Based on my knowledge, this report does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this report; |
3. | | Based on my knowledge, the financial statements, and other financial information included
in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant
as of, and for, the periods presented in this report; |
4. | | The registrant’s other certifying officer and I are responsible for establishing
and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control
over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have: |
(a) | | Designed such disclosure controls and procedures, or caused such disclosure controls
and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including
its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this
report is being prepared; |
(b) | | Designed such internal control over financial reporting, or caused such internal control
over financial reporting to be designed under our supervision, 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; |
(c) | | Evaluated the effectiveness of the registrant's disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and |
(d) | | Disclosed in this report any change in the registrant‘s internal control over
financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter
in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s
internal control over financial reporting; and |
5. | | The registrant's other certifying officer and I have disclosed, based on our most
recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of
the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | | All significant deficiencies and material weaknesses in the design or operation of
internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information; and |
(b) | | Any fraud, whether or not material, that involves management or other employees who
have a significant role in the registrant’s internal control over financial reporting. |
SIGMABROADBAND CO.
May 15, 2015
By: /s/ Jeffery A. Brown
Jeffery A. Brown
President, Secretary, Principal Executive Officer, and Director
Exhibit 31.2
CERTIFICATION PURSUANT TO SECTION 302 OF
THE SARBANES OXLEY ACT OF
2002 AND RULE 13A-14 OF THE EXCHANGE ACT
OF 1934
CERTIFICATION
I, Timothy D. Valley, certify that:
1. | | I have reviewed this Quarterly Report on Form 10-Q of SigmaBroadband Co.; |
2. | | Based on my knowledge, this report does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this report; |
3. | | Based on my knowledge, the financial statements, and other financial information included
in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant
as of, and for, the periods presented in this report; |
4. | | The registrant’s other certifying officer and I are responsible for establishing
and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control
over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have: |
(a) | | Designed such disclosure controls and procedures, or caused such disclosure controls
and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including
its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this
report is being prepared; |
(b) | | Designed such internal control over financial reporting, or caused such internal control
over financial reporting to be designed under our supervision, 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; |
(c) | | Evaluated the effectiveness of the registrant's disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and |
(d) | | Disclosed in this report any change in the registrant‘s internal control over
financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter
in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s
internal control over financial reporting; and |
5. | | The registrant's other certifying officer and I have disclosed, based on our most
recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of
the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | | All significant deficiencies and material weaknesses in the design or operation of
internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information; and |
(b) | | Any fraud, whether or not material, that involves management or other employees who
have a significant role in the registrant’s internal control over financial reporting. |
SIGMABROADBAND CO.
May 15, 2015
By: /s/ Timothy D. Valley
Timothy D. Valley
Chief Financial Officer and Principal Accounting Officer
Exhibit 32.1
CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER
PURSUANT TO 18 U.S. C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF
2002
In connection with the Quarterly Report of
SigmaBroadband Co., (the "Company") on Form 10-Q for the period ended March 31, 2015 as filed with the Securities and
Exchange Commission on the date hereof (the "Report"), I, Jeffery A. Brown, President and Principal Executive Officer
of the Company, certify, pursuant to 18 U.S. C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of
2002, that, to my knowledge:
(1) | | The Report fully complies with the requirements of Section 13 (a) or 15 (d) of the
Securities Exchange Act of 1934; and |
(2) | | The information contained in the Report fairly presents, in all material respects,
the financial condition and results of operations of the Company. |
SIGMABROADBAND CO.
May 15, 2015
By: /s/ Jeffery A. Brown
Jeffery A. Brown
President, Secretary, Principal Executive Officer, and Director
Exhibit 32.2
CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER
PURSUANT TO 18 U.S. C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF
2002
In connection with the Quarterly Report of
SigmaBroadband Co., (the "Company") on Form 10-Q for the period ended March 31, 2015 as filed with the Securities and
Exchange Commission on the date hereof (the "Report"), I, Timothy D. Valley, President and Principal Executive Officer
of the Company, certify, pursuant to 18 U.S. C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of
2002, that, to my knowledge:
(1) | | The Report fully complies with the requirements of Section 13 (a) or 15 (d) of the
Securities Exchange Act of 1934; and |
(2) | | The information contained in the Report fairly presents, in all material respects,
the financial condition and results of operations of the Company. |
SIGMABROADBAND CO.
May 15, 2015
By: /s/ Timothy D. Valley
Timothy D. Valley
Chief Financial Officer and Principal Accounting Officer
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