Item 1. Business
Background
SIGMABROADBAND CO. is a Georgia company that is in its development stage. The Company is engaged in the business of providing voice, data, and digital video services as a triple play bundled service to rural markets in the United States of America. During the period we are considered an emerging growth company, we will be exempt from the provisions of Section 404 (b) of the Sarbanes Oxley Act of 2002 and Section 14 (a) and (b) of the Securities Exchange Act of 1934, as amended. We have elected to use the extended transition period for complying with new or revised accounting standards under Section 102 (b) (1) while we are considered an emerging growth company. We would effectively retain emerging growth company status up to five years from the date of the first sale of common equity securities pursuant to an effective registration statement or until we attain $100 million in total annual gross revenues. (See “Risk Factors”)
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, the Company has made significant purchase of assets in order to enhance its business but has not sold any of its 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 or purpose.
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, there are no employees at the present time. We do anticipate hiring employees when the need arises.
SIGMABROADBAND CO. currently has intention to engage in a merger or acquisition with any unidentified company. We may pursue strategic acquisitions that complement our current business model within the telecommunications industry which may allow us to expand our activities and capabilities and advance our production.
SIGMABROADBAND CO.’s fiscal year end is December 31.
Industry Background
Our business plan is 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.
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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.
Our Mission
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.
Our Vision
To be a force in the technology industry that will transform the way of life in our communities.
Our Commitment to Customers
To provide optimum support and service using state-of-the-art technology and innovative customer care, building long- standing partnerships with our customers, ensuing mutually beneficial returns.
The Market
FCC Broadband Report Synopsis:
As per the U.S. Federal Government, Broadband is the great infrastructure challenge of the early 21st century. Like electricity a century ago, broadband is a foundation for economic growth, job creation, global competitiveness and a better way of life. It is enabling entire new industries and unlocking vast new possibilities for existing ones. It is changing how we educate children, deliver health care, manage energy, ensure public safety, engage government, and access, organize and disseminate knowledge.
But broadband in America is not all where it needs to be. According to the FCC Broadband Report Synopsis, approximately 100 million Americans do not have broadband at home. Broadband-enabled health information technology (IT) can improve care and lower costs by hundreds of billions of dollars in the coming decades, yet the United States is behind many advanced countries in the adoption of such technology. Broadband can provide teachers with tools that allow students to learn the same course material in half the time, but there is a dearth of easily accessible digital educational content required for such opportunities. A broadband-enabled Smart Grid could increase energy independence and efficiency, but much of the data required to capture these benefits are inaccessible to consumers, businesses and entrepreneurs. And nearly a decade after 9/11, our first responders still lack a nationwide public safety mobile broadband communications network, even though such a network could improve emergency response and homeland security.
SIGMABROADBAND CO. was created to take advantage of the market demand for communications and entertainment bundled services priced within the reach of all consumers. We are deploying voice, data, digital video and other broadband related services to Rural America. We are positioned to provide services to 45,000 homes in Arizona and another 3,000 homes in Missouri. We plan to extend the Missouri network to another 15,000 homes bringing the total in our franchised area to 18,000. Our intended $99 per month triple-play service standard package of voice, data and digital video will provide a compelling offer that will attract many new subscribers and be a competitive advantage going forward. None of our known competitors have such an offer and if they choose to follow, they will erode their existing revenue base.
Market Pricing Strategy
Our key market pricing strategy is to bundle our services to provide a more price competitive package to the customers. The "all inclusive and flat rate" billing we promote, allow customers to plan for and budget a fixed price for all their monthly telecommunication services. This billing strategy sets us apart from all of our existing competitors. We intend to provide optimum support and service using state-of-the-art technology and innovative customer care, building long-standing partnerships with our customers, ensuing mutually beneficial returns.
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Services and Product
Our technology allows us to provide Broadband triple-play services to any market nationwide. Our core business objective is to offer a bundling of services to include telephone service, Internet access, cellular and cable television nationwide; and also providing cloud-based and IPtv services. The Bundled Service or T3 (Triple Play) will be made available to the public at a prepaid fixed cost of $99 per/month with no taxes, no contract, no deposit and no credit needed to the low income families, retirees, unserved, underserved, underprivileged
and rural communities, in order to help bridge the technology usage gap in these areas. The potential customer base is extensive, as it literally consists of businesses, residential and rural customers- throughout the 95% of the U.S. covered by our network infrastructure.
Competition
Across the United States, Multiple Systems Operators (MSOs) compete with Direct Broadcast Satellite (DBS) providers and incumbent telecom companies. We believe that we compete with other providers in three product categories: Video, Voice, and Data.
We are poised to compete with any competitor that enters our market in terms of price, quality of service and no term contract. Since our operations are in rural areas, we may not have to compete with any regional and national carriers, except for local independent operators and DBS providers.
Market Strategy: Rural vs. Urban Markets
In rural markets, cable and DBS are often the only providers of video services. Recently, cable companies have been losing video share to DBS, primarily due to the fact that DBS has a greater number of high-definition channels and provides better customer service. We are trying to make up ground by pushing bundled services to customers (HSD and telephony). The current trend of RBOCs providing FTTN or FTTP will mostly affect competitive dynamics in urban markets not in rural markets, as the high amount of CAPEX being spent can only be justified in areas with high density.
We will be the only major triple play service provider in all of our rural markets where our cable/hubs infrastructure will be located at present time. The competitive dynamics between RBOCs and Cable MSOs in rural areas, where FTTN and FTTP are not available, favors cable. We will continue to have a competitive advantage in high speed data, voice and digital video. Traditional RBOC services generally do not include video, which will allow us a large bundling advantage. Wireless substitution is most likely to continue, though the rate of substitution will be less in rural areas, where users are more likely to keep wireline phones because of cellular signal issues. We believe that Cable MSOs like SIGMABROADBAND CO. operating primarily in rural markets will face more favorable competitive dynamics than those in urban markets.
Our Triple Play Price Strategy and Differences
We set ourselves apart from the competition not only by providing a superb customer care and quality of service but also offers our customers a flat rate service at $99/month including all applicable taxes and without any term contract ever for the exact same services that the competition may provide in areas we serve.
Operating Strategy
SIGMABROADBAND CO. offers a quality consumer experience, at a reasonable price for entertainment, communications and all broadband services. We intend to always value our customer’s needs and their requests, while balancing the requirement to meet our financial responsibility. Our focus will be greater than customer service; it will be on serving the customer and our strategic assets.
Our key to success is to bring the strength of our business development experiences, well trained personnel and cutting-edge technologies in every segment of our core businesses to increase profit margin and increase investors’ satisfaction, while we deliver value from diversity and promote sustainability for economic and social development.
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Regulation Challenges
There are multiple and intense regulatory battles over triple-play services as incumbent telephone companies and incumbent cable operators attempt to keep out new competitors - since both industries historically have been regulated monopolies, regulatory capture has long been as much a core competency for them as have been prices and terms of service. Cable providers want to compete with telephone companies for local voice service, but want to discourage telephone companies from competing with them for television service. Incumbent telephone companies want to deliver television service but want to block competition for voice service from cable operators. Both industries cloak their demands for favorable regulatory treatment in claims that their positions favor the public interests.
Business Challenges
The challenges in offering triple-play are mostly associated with determining the right business model, backend processes, customer care support and economic environment rather than technology. For example, using the right billing platform to address a variety of subscriber demographics or having the appropriate subscriber density to financially justify introduction of the service are a few factors that affect decisions to offer triple-play services.
In addition to the challenges mentioned above, there are a number of technical challenges with regards to the rollout of triple play services. Broadband voice, digital video and high speed data all have different characteristics and place different burdens on the network that provides access to these services. Voice services are greatly affected by jitter, whereas packet loss has a greater effect on digital video and data services. In order to use a shared network resource such as cable or DSL, we may use network equipment that employs quality-of-service mechanisms to adjust to the requirements of the different services.
SIGMABROADBAND CO. creates a bridge between local exchange carrier and cable service provider all into one network and from one provider, which in turns help reduce the customer’s cost, better quality of service and best customer service experience.
The other challenge for us is to provide superior service at a price value point that will attract customers away from existing telecom and cable operators in areas where we compete. We are confident that we will be very competitive with our multiple channels of basic video, a minimum 1.5d/2.0 Mbps Internet connection together with an unlimited local/domestic long distance package all for $99 per month and no other hidden cost to the customer in one network will attract many customers to our Company.
Our financial forecasts reflect a rigorous marketing approach that takes advantage of being the newest broadband triple-play provider in the market we serve. This will create a baseline for a significant marketing program should we reach the top of the interest curve.
Our Technology
We intend to operate Class 4/5 voice switching, routers, digital multiplexers among others and a cable network which allowing us to lower the cost of IP and TDM voice termination to our customers. To date, we have access from 23 head-end locations capable of serving well over 30 rural counties and communities. The current network without expansion spans 923 linear miles, covering more than 8,000 square miles, utilizing 732 miles of fiber optic cable or 4 million feet of fiber infrastructure.
Employees
SIGMABROADBAND CO. with the exception of its officers and directors has no other employees, however, works with several outside consultants who have substantial industry experience and who have dedicated time and effort on behalf of the Company.
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The Company may be required to hire an attorney on a consultancy basis to navigate permit and licensing requirements, but otherwise SIGMABROADBAND CO.’s Officers and Directors intend to do whatever work is necessary to bring the Company to the point of earning revenues from the sale of our services or further acquisitions. All operational functions such as customer service representatives, telemarketing, warehousing and fulfillment are planned to be outsourced. Human resource planning will be part of an ongoing process that will include constant evaluation of operations and revenue realization.
Board Committees
SIGMABROADBAND CO. has not yet implemented any board committees as of the date of this Prospectus.
Directors
SIGMABROADBAND CO. is authorized to have no more than seven directors. However, in no event may SIGMABROADBAND CO. have less than one director. Although the Company anticipates appointing additional directors, it has not identified any such additional persons.
Compensation of Directors
Because we are still in the development stage, our directors are not receiving any compensation other than reimbursement for expenses incurred during their duties.
Compensation Policy
Because we are still in the early stages of formation and development, our directors and officers are not currently receiving any compensation.
Stock Option
Because we are still in the early stages of formation and development, our directors and officers have not received any stock options or freestanding SARs.
Stock Option Plans
Our board of directors has not adopted any Stock Option Plans as of the date of this prospectus.
Bonuses
To date, shares have been granted to management for achievement of certain goals in the initial phase of establishing the Company’s operation and organization. Any bonuses granted in the future will relate to meeting certain performance criteria that are directly related to areas within the executive’s responsibilities with the Company. As the Company continues to grow, more defined bonus programs will be created to attract and retain our employees at all levels.
Employment Contracts; Termination of Employment and Change-in-Control Arrangements
We do not have employment agreements with any of our employees, however, we intend to enter into employment agreements with our key executives and other member of management as the business grows.
Item 1A.
Item 1A. Risks Factors
Not Applicable.
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Item 1B.
Item 1B. Unresolved Staff Comments
None.
Item 2.
Item 2. Properties
SIGMABROADBAND CO. corporate office is located at 2690 Cobb Parkway, Atlanta, GA 33080 and our telephone number is (800) 545-0010. The Company intends to lease office space when it achieves the financial capacity to support a commercial lease. Our management does not currently have policies regarding the acquisition or sale of real estate assets primarily for possible capital gain or primarily for income. We do not presently hold any investments or interests in real estate, investments in real estate mortgages or securities of or interests in persons primarily engaged in real estate activities.
Item 3.
Item 3. Legal Proceedings
The Company is not involved in any legal proceedings and is not aware of any pending or threatened claims that are not in the normal course of business. The Company expects that it may become 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.
Our officers and directors have not been convicted in any criminal proceedings nor has they been permanently or temporarily enjoined, barred, suspended or otherwise limited from involvement in any type of business, securities or banking activities. The Company’s officers and directors have not been convicted of violating any federal or state securities or commodities law.
There are no known pending legal or administrative proceedings against the Company.
Item 4.
Item 4. Submission of Matters to a Vote of Security Holders
There were no matters submitted to a vote of security holders during the fourth quarter of 2014.
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PART II
Item 5.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Market Information
As of the date of this document, the Company’s common stock is traded on the OTC Markets under the ticker symbol SGRB. Our current prospectus is a step toward creating a public market for our common stock, which may enhance the liquidity of our shares. However, there can be no assurance that a meaningful trading market will ever develop. The Company and its management make no representation about the present or future value of our common stock.
As of the date of this prospectus, there are no outstanding options or warrants to purchase, or other instruments convertible into, common equity of the Company and other than the stock registered under this Registration Statement, there is no stock that has been proposed to be publicly offered resulting in dilution to current shareholders.
As of the date of this document we have approximately 27,596,000 shares of the registrant’s Common Stock issued and outstanding and held by approximately 39 shareholders, five of which are deemed affiliates within the meaning of Rule 12b-2 under the Exchange Act.
The number of shares outstanding of each of the issuer’s classes of common equity, as of April 15, 2014 was 27,596,000.
Dividends
The Company does not anticipate paying any cash dividends on its Common Stock in the foreseeable future. The Company expects to retain, if any, its future earnings for expansion or development of the Company's business. The declaration, decision and payment of dividends, if any, in the future is within the discretion of the Board of Directors in light of conditions then existing and will depend upon the Company's earnings, capital requirements, financial condition and other relevant factors such as contractual obligations. There can be no assurance that dividends can or will ever be paid.
During the year ended December 31, 2014, 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.
Item 6.
Item 6. Selected Financial Data
The following financial data has been derived from and should be read in conjunction with (i) our audited financial statements for the year ended December 31, 2014 together with the notes to these financial statements; (ii) and the sections of this report entitled “Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, included elsewhere herein or filed with the SEC. Our historical results are not necessarily indicative of the results we may achieve in any future period.
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Balance Sheet Data
Statements of Operations Data
Item 7.
Item 7. 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 years ended December 31, 2014 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.
The statements in this report include forward-looking statements. These forward-looking statements are based on our management’s current expectations and beliefs and involve numerous risks and uncertainties that could cause actual results to differ materially from expectations. You should not rely upon these forward-looking statements as predictions of future events because we cannot assure you that the events or circumstances reflected in these statements will be achieved or will occur. You can identify a forward-looking statement by the use of the forward-terminology, including words such as “may”, “will”, “believes”, “anticipates”, “estimates”, “expects”, “continues”, “should”, “seeks”, “intends”, “plans”, and/or words of similar import, or the negative of these words and phrases or other variations of these words and phrases or comparable terminology.
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These forward-looking statements relate to, among other things: our sales, results of operations and anticipated cash flows; capital expenditures; depreciation and amortization expenses; sales, general and administrative expenses; our ability to maintain and develop relationship with our existing and potential future customers; and, our ability to maintain a level of investment that is required to remain competitive. Many factors could cause our actual results to differ materially from those projected in these forward-looking statements, including, but not limited to: variability of our revenues and financial performance; risks associated with technological changes; the acceptance of our products in the marketplace by existing and potential customers; disruption of operations or increases in expenses due to our involvement with litigation or caused by civil or political unrest or other catastrophic events; general economic conditions, government mandates and conditions in the advertising industry in particular; and, the continued employment of our key personnel and other risks associated with competition.
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.
This section must be read in conjunction with the Audited Financial Statements included in this prospectus.
General Overview
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.
We intend to engage in the business of providing voice, data, and digital video services as a triple play bundled service to rural markets in the United States of America.
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, there are no employees at the present time. We do anticipate hiring employees when the need arises.
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.
Results of Operations
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 through private placement capital. As of December 31, 2014 we had $2,161.00 cash on hand. We had total expenses of $1,159,197.00 which were related to general and administrative costs (See “Financial Statements”).
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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 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 not own any significant plant or equipment that it would seek to sell in the near future.
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.
Liquidity and Capital Resources
The following table sets forth our liquidity and capital resources as of December 31, 2014:
Cash Flows from Operating Activities
We have not generated positive cash flows from operating activities for the period ended December 31, 2014. Operating expenditures during the period covered by this report include general and administrative costs (See “Financial Statements).
Cash Flows from Investing Activities
We made no investments as of December 31, 2014.
Cash Flows from Financing Activities
We have financed our operations primarily from a capital contribution from a majority shareholder of the company. Such capital contribution was utilized to pay 2013 research and development expenditures.
Intangible Assets
There were no intangible assets during the period from inception through December 31, 2014.
Material Commitments
There were no material commitments for the period from inception through December 31, 2014.
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Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
Critical Accounting Policies
Our financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.
We regularly evaluate the accounting policies and estimates that we use to prepare our financial statements. In general, management's estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.
Cash and Cash Equivalents
We consider all highly liquid debt instruments with original maturities of three months or less to be cash equivalents. We have no cash equivalents.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
Intangible Assets
We evaluate the recoverability of identifiable intangible assets whenever events or changes in circumstances indicate that an intangible asset’s carrying amount may not be recoverable. There was no impairment loss for the period from inception through December 31, 2014.
Income Taxes
The Company accounts for income taxes as outlined in ASC 740 “Income Taxes”, which was previously Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes.” Under the asset and liability method of Statement 109, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled.
Fair Value of Financial Instruments
The Company considers that the carrying amount of financial instruments, including accounts payable, approximates fair value because of the short maturity of these instruments.
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Share Based Payments (included in ASC 718 “Compensation-Stock Compensation”)
In December 2004, the FASB issued SFAS No. 123(R), “Share-Based Payment,” which replaces SFAS No. 123 and supersedes APB Opinion No. 25. Under SFAS No. 123(R), companies are required to measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees or independent contractors are required to provide services. Share-based compensation arrangements include stock options and warrants, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. In March 2005, the SEC issued Staff Accounting Bulletin No. 107, or “SAB 107”. SAB 107 expresses views of the staff regarding the interaction between SFAS No. 123(R) and certain SEC rules and regulations and provides the staff's views regarding the valuation of share-based payment arrangements for public companies. SFAS No. 123(R) permits public companies to adopt its requirements using one of two methods. On April 14, 2005, the SEC adopted a new rule amending the compliance dates for SFAS 123(R). Companies may elect to apply this statement either prospectively, or on a modified version of retrospective application under which financial statements for prior periods are adjusted on a basis consistent with the pro forma disclosures required for those periods under SFAS 123.
The Company has fully adopted the provisions of SFAS No. 123(R) and related interpretations as provided by SAB 107. As such, compensation cost is measured on the date of grant as the fair value of the share-based payments. Such compensation amounts, if any, are amortized over the respective vesting periods of the share-based payments.
Recent Accounting Pronouncements
The Company has adopted all recently issued accounting pronouncements. The adoption of the accounting pronouncements, including those not yet effective, is not anticipated to have a material effect on the financial position or results of operations of the Company.
Critical Accounting Policies
We prepare our financial statements in conformity with GAAP, which requires management to make certain estimates and assumptions and apply judgments. We base our estimates and judgments on historical experience, current trends and other factors that management believes to be important at the time the financial statements are prepared and actual results could differ from our estimates and such differences could be material. We have identified below the critical accounting policies which are assumptions made by management about matters that are highly uncertain and that are of critical importance in the presentation of our financial position, results of operations and cash flows. Due to the need to make estimates about the effect of matters that are inherently uncertain, materially different amounts could be reported under different conditions or using different assumptions. On a regular basis, we review our critical accounting policies and how they are applied in the preparation our financial statements.
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 reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Item 7A.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
We are not subject to risks related to foreign currency exchange rate fluctuations.
Our functional currency is the United States dollar. We do not transact our business in other currencies. As a result, we are not subject to exposure from movements in foreign currency exchange rates. We do not use derivative financial instruments for speculative trading purposes.
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Item 8.
Item 8. Financial Statements and Supplementary Data
SigmaBroadband Co.
Audited Financial Statements
For The Years Ended December 31, 2014 and
Reports of Independent Registered Public Accounting Firm
Contents
Reports of Independent Registered Public Accounting Firms
Financial Statements:
Balance Sheets
Statements of Operations
Statements of Changes in Stockholders' Deficit
Statements of Cash Flows
Notes to Consolidated Financial Statements
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Stockholders and Board of Directors
SigmaBroadband Co.
We have audited the accompanying balance sheets of SigmaBroadband Co., (A Development Stage Company) as of December 31, 2014 and 2013, and the related statements of operations, stockholders' (deficit) and cash flows for the years then ended, and the period from inception (October 19, 2012) to December 31, 2014. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of SigmaBroadband Co., (A Development Stage Company) as of December 31, 2014, and results of its operations and its cash flows for the years then ended, and for the period from inception (October 19, 2012) to December 31, 2014, in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 6 to the financial statements, the Company has suffered a loss from operations and is in the development stage. These factors raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to this matter are also discussed in Note 8. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ David A. Aronson, CPA, P.A.
David A. Aronson, CPA. P.A.
North Miami Beach, Florida
March 31, 2015
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SigmaBroadband Co.
(A Development Stage Company)
Notes to Financial Statements
December 31, 2014 and 2013
Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
SigmaBroadband Co. ("Sigma" or the "Company") was incorporated in Georgia in October 2012. The Company has been in the development stage since inception and has not generated any revenue to date. The Company is a full service, facilities-based broadband service provider, local exchange and inter-exchange carrier serving residential and commercial customers with a special focus on rural areas.
Equipment, net
Equipment is stated at cost. Major renewals and betterments are capitalized while maintenance and repairs, which do not extend the lives of the respective assets, are expensed when incurred. Depreciation is computed over the estimated useful lives of the assets using the straight line method of accounting.
The Company has estimated the useful life of the equipment to be 10 years.
The cost and accumulated depreciation for equipment sold, retired, or otherwise disposed of are relieved from the accounts, and any resulting gains or losses are reflected in income.
Long-Lived Assets
The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss would be 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.
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 is recognized at the time the product is delivered or services are performed. Provision for sales returns are estimated based on the Company's historical return experience. Revenue is 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 December 31, 2014.
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SigmaBroadband Co.
(A Development Stage Company)
Notes to Financial Statements
December 31, 2014 and 2013
Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
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.
Recent Pronouncements
There are no recent accounting pronouncements that apply to the Company.
NOTE 2 - EQUIPMENT, NET
'The Company's furniture and equipment at December 31, 2014 consisted of the following:
Note 3. LOAN PAYABLE - STOCKHOLDER
During 2014 and 2013, a stockholder and officer of the Company advanced the Company $214 and $613, respectively, to pay for certain expenses. The loan bears no interest, is payable on demand and had a balance of $827 at December 31, 2014.
During 2014 and 2013, a stockholder and officer of the Company advance the Company $2,729 and $1,877, respectively, to pay for certain expenses.	The loan bears no interest, is payable on demand and had a balance of $2,729 at December 31, 2014.
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SigmaBroadband Co.
(A Development Stage Company)
Notes to Financial Statements
December 31, 2014 and 2013
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 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 5. STOCKHOLDERS' EQUITY
The Company has authorized 490,000,000 shares of common stock with a par value of $0.0001 per share. At December 31, 2013 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 December 31, 2013.
The Company issued 20,000,000 shares of common stock at par value, or $0.0001 to the founders of the Company. The shares were issued as follows:
In February 2013, the Company issued 64,000 shares of common stock at $0.25 per share.
In February 2013, the Company issued 4,000 shares of common stock at $0.25 per share.
In March 2013, the Company issued 1,400,000 shares of common stock at $0.00025 per share.
In March 2013, the Company issued 4,000 shares of common stock at $0.50 per share.
In March 2013, the Company issued 500,000 shares of common stock at $0.0002 per share.
In April 2013, the Company issued 2,000,000 shares of common stock at $0.00015 per share.
In April 2013, the Company issued 500,000 shares of common stock at $0.0002 per share.
In May 2013, the Company issued 100,000 shares of common stock at $0.001 per share.
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SigmaBroadband Co.
(A Development Stage Company)
Notes to Financial Statements
December 31, 2014 and 2013
Note 5. STOCKHOLDERS' EQUITY (continued)
In May 2013, the Company issued 4,000 shares of common stock at $0.50 per share.
In August 2014, the Company issued 20,000 shares of common stock at $1.00 per share.
In October 2014, the Company repurchased 2,000 shares of its common stock at $0.50 per share.
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 years ended December 31, 2014 and 2013 totaled $6,000 and $7,500, respectively, and was capitalized as additional paid-in capital.
Note 7. 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:
As of December 31, 2014, the Company has a net operating loss carryforward of approximately $1,192,000. 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 December 31, 2014. The principal difference between the operating loss for income tax purposes and reporting purposes is accrued officer's compensation.
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 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. For the period from October 19, 2012 (inception) to December 31, 2014, the Company incurred a net loss of approximately $1,192,000. In addition, the Company has no revenue generating operations.
The Company currently does not have sufficient cash to sustain itself for the next 12 months, and will require additional funding in order to execute its plan of operations and to continue as a going concern. To meet its cash needs, management expects to raise capital through a private placement offering. In the event that this funding does not materialize, certain stockholders have agreed, orally, to loan, on a non-interest bearing demand basis, sufficient funds to maintain the Company's operations for the next 12 months.
The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.
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SigmaBroadband Co.
(A Development Stage Company)
Notes to Financial Statements
December 31, 2014 and 2013
Note 9. SUBSEQUENT EVENTS
In accordance with ASC 855, management has evaluated the subsequent events through the date of issuance of the financial statements. Based upon this evaluation, there are no subsequent events that require disclosure.
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Item 9.
Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A.
Item 9A. Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that the information required to be disclosed in the reports that we file under the Securities Exchange Act of 1934 (the "Exchange Act") is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can only provide reasonable assurance of achieving the desired control objectives, and in reaching a reasonable level of assurance, management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
As required by SEC Rule 13a-15(b), we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of our fourth fiscal quarter covered by this report. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level.
There has been no change in our internal controls over financial reporting during our fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.
MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Our management of is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, the Company’s principal executive and financial officer 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 purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:
•Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;
•Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, 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 or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
The Company’s management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2014. In making this assessment, the Company’s management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework. The COSO framework is based upon five integrated components of control: control environment, risk assessment, control activities, information and communications and ongoing monitoring.
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Based on the assessment performed, management has concluded that the Company’s internal control over financial reporting, as of December 31, 2013, is effective and provides reasonable assurance regarding the reliability of its financial reporting and the preparation of its financial statements in accordance with generally accepted accounting principles. Further, management has not identified any material weaknesses in internal control over financial reporting as of December 31, 2014.
This annual report does not include an attestation report of the Company’s registered independent public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s independent registered public accounting firm pursuant to temporary rules of the SEC that permit the Company to provide only management’s report in this annual report.
Item 9B.
Item 9B. Other Information
There exists no information required to be disclosed by us in any report during the nine-month period ended December 31, 2014, but not reported.
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PART III
Item 10.
Item 10. Directors, Executive Officers and Corporate Governance
Our directors and executive officers and their ages as of December 31, 2014 are as follows:
Executive Officers and Directors
The term of office for each director is one year, or until the next annual meeting of the shareholders.
Biographical Information
Set forth below is a brief description of the background and business experience of our executive officers and directors.
Jeffery Brown is the President and serves as Chief Technology Officer (CTO) and Director of the Company. Mr. Brown has over 15 years of Communication Security and IT Support Management, and providing services across North America. Before joining the Company, he was the founder and CEO of Brown Consulting and Computers, LLC; CEO of Broadwave Communication and Security LLC. Mr. Brown’s expertise includes stewardship consultation, leadership development, organizational and visioning. Mr. Brown is well versed in Computer Forensics, Computer Design, Networking (LAN, WAN and Wireless) Diagnostics and Computer Repair, Services and Support to include but not limited to Laptop and Desktop Computer Consulting, Diagnostics, Computer Building and Repair. Mr. Brown provisioned networks for Orange Business Services a France Telecom subsidiary based company in Atlanta. Mr. Brown received all of his Certifications and Communication Training while serving in both Germany and the United States during his active duty career. He is currently working on his Masters in IT Communications. He is dedicated, dependable, takes initiative and gets the job done right. He is a Graduate of the U.S. Military Communication School in Augusta Georgia at Fort Gordon and has spent fifteen years in the United States Army.
Kelvin D. Smith serves as the Chief Executive Officer and Chief Operating Officer (COO) of the Company. Mr. Smith is a widely known and respected industry leader with thirty- eight years of experience in the telecommunications industry. Mr. Smith was founding member of C3 Broadband Integration, LLC a management consulting company that owned and operated cable systems in Missouri. Mr. Smith’s company engineered, designed, constructed and operated the first fiber-deep communications network in a major Southwest Market. He was Vice President of Engineering and Construction for Cable One, Inc. a subsidiary of the Washington Post Newspaper. He has worked for five of the top ten cable companies in the U.S. and has held senior level positions with companies such as Viacom Cable, Tele-Communications, Inc. (TCI), Continental Cablevision and Comcast Cable. Mr. Smith has been involved in the engineering and operations of cable systems with fiber optic platforms, digital multiplexed delivery of programming and content and bi-directional and Internet related services. He is well versed in day- to-day operations, as well as the financial requirements and framework necessary to operate a successful enterprise. Mr. Smith is a member of the Society of Telecommunications Engineers and has been published and quoted in numerous trade journals as well as participating in many industry conferences and seminars. Mr. Smith has been a Director on the Board of Arizona Federal Credit Union since 1997. He was elected and has served as Chairman of the Board since April 2009. Arizona Federal Credit Union has over $1.0 Billion in assets.
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Anthony Cusumano serves as Vice President and Director of the Company. Mr. Cusumano acts as a liaison between investors, customers and the Company, making sure that the lines of communication remain open and successful. Investor Relations and Customer Care are an integral part of SigmaBroadband’s investor and customer value proposition. Implemented feedback loops allow us to capture customer comments to improve service and ensure that quality and service exceed customer expectations. Mr. Cusumano strives to build trust and strong long term relationships with SigmaBroadband’s investors and customers. Prior to joining the Company, Mr. Cusumano spent many years with MetLife Bank, MetLife Financial Services, Mariner Financial Services, Garnet Ford and Penske Leasing. Mr. Cusumano held different positions as branch manager, sales manager, customer relations consultant and registered investment advisor. Mr. Cusumano is an AOPA Member and FAA/Private Pilot Certification. Mr. Cusumano holds many distinctions such as Chartered Life Underwriter; Life Underwriters Training Council Award; Instructor Award in Business Planning, Insurance and Annuity Marketing; MetLife Million Dollar Award; Met Life Southeastern Regional Conference Award; Ford Motor Division Regional Customer Satisfaction Index Award Sales Masters Achievement Awards for Pontiac, Buick, Oldsmobile, Cadillac and GMC Truck Motor Divisions. Mr. Cusumano has a Bachelor’s of Science degree in Business Marketing from West Chester University.
Timothy D. Valley serves as Chief Financial Officer (CFO) of the Company. Mr. Valley has over seventeen years of experience in finance and accounting. He has the experience and ability to provide trusted guidance and counsel to executive teams and Boards of Directors of the Company, coordinate multi-disciplined organizations, prepare and communicate strategic plans, build motivated teams and longstanding relationships, and operate with integrity and ethics. Prior to joining the Company, Mr. Valley served as CFO, consultant, finance director, assistant vice president- capital markets, and district controller for several companies in the manufacturing, cable business, and accounting firms. Mr. Valley has extensive experience in M&A from small to large businesses. Prior to joining the Company, he was CFO for Stars Design Group with offices in the U.S., Korea, Taiwan, India and Ethiopia. He served as a member of the executive leadership team for this fast growing multinational company. He provided financial tools, counsel and analysis (strategic and tactical) to the CEO, President, Operations team and Board of Directors; tools include customized financial statements, monthly reporting packages, financial modeling, budgets/projections (short-term, intermediate and long-term), interim forecasts, ad hoc analyses, strategy pro forma, sales analyses, production planning and predictive, activity-based cash forecast models. Develop financial and HR policies, manuals, procedures and controls; Primary contact for Company’s financing sources (current and prospective), auditors, tax experts, regulators, consultants and legal counsel; oversee HR, legal and accounting functions; mentor, develop, streamline and cross-train finance and accounting team. Mr. Valley was then CFO of Millennium Digital Media Systems, LLC (currently Broadstripe) and MDM iNet, LLC (dba U.S. Net). Millennium was the 30th largest cable system operator in the United States. MDM iNet was a sister company to Millennium Digital Media and a provider of Internet services to over 100,000 small and mid-sized business and select residential customers prior to disposition. Mr. Valley sourced, reviewed and negotiated debt, lease and equity financing proposals, amendments and waivers; including refinance of $200MM+ credit facility, restructuring management entity and ownership structure. He developed and maintained relationships with senior and mezzanine lenders, equity investors/venture capital firms, investment bankers, brokers and legal counsel; conducted and monitored the company’s $100MM+ interest rate hedging program (using various derivative instruments); prepared and delivered the company’s monthly and quarterly compliance packages; oversaw company’s cash management program including short-term investment portfolio and rolling liquidity forecasts; researched and prepared presentations to rating agencies and potential $150MM high-yield bond investors (including preparation of Millennium’s prospectus for 144A high-yield offering). Mr. Valley served as Assistant Vice President- Capital Markets of Citigroup, Inc. He managed the company’s U.S. mortgage pricing operations. Responsibilities included financial/return analysis, management of the pricing unit staff and daily pricing process, competitive analysis, model development/enhancement, streamlining processes, team building and motivation. Position required orchestration of several internal organizations in order to ensure return, volume and competitive objectives were met while recognizing and adhering to capacity constraints. Mr. Valley served as District Controller of Browning Ferris Industries, Inc. (BFI) - currently Republic Services, Inc., a Fortune 500 company in the waste services industry. His responsibilities included all financial aspects of the districts’ (landfill and hauling) operations and supervision of the accounting staff. Specific responsibilities included: budgeting, forecasting, analysis, internal controls, transaction approval (A/P, A/R, fixed assets, payroll, etc.), project cost tracking, compliance, preparation of financial statements and reporting results to senior management and corporate headquarters.
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Prior to leaving BFI, assisted in centralizing the accounting functions of 18 districts throughout five states into a single business center as well as the conversion from a mainframe accounting system to an SAP environment. These transitions required continuous dialogue and coaching with members of every department and corporate headquarters, standardization of several autonomous processes and workflow analyses. Mr. Valley was Senior Associate at Coopers & Lybrand, LLP (currently PricewaterhouseCoopers) Lead and/or participated in audits of a variety of industries including manufacturing, pharmaceutical, health care and service enterprises. Responsibilities included ongoing client relationship management, audit planning/ reengineering and research, staff supervision and evaluation, understanding/documenting/testing various systems/cycles and assessing risk areas, communication with management and shareholders regarding engagement issues, potential opportunities and recommendations for improvement. While at C&L also gained financial analysis and forecast modeling experience (developed and modified spreadsheet forecasting models) through preparation of feasibility studies for debt and equity placements through the firm’s consulting practice. Mr. Valley received a Bachelor of Science in Accountancy and a Master of Business Administration from Southern Illinois University.
Board Committees
We have not yet implemented any board committees as of the date of this prospectus.
Code of Ethics
We have adopted a code of ethics meeting the requirements of Section 406 of the Sarbanes-Oxley Act of 2002. We believe our code of ethics is reasonably designed to deter wrong doing and promote honest and ethical conduct; provide full, fair, accurate, timely and understandable disclosure in public reports; comply with applicable laws; ensure prompt internal reporting of violations; and provide accountability for adherence to the provisions of the code of ethics.
There are no acquisitions, business combinations, or mergers pending or which have occurred involving the Company. Presently, we have no plans, proposals, agreements, understandings or arrangements of any kind or nature whatsoever to acquire or merge with any specific business or company, and we have not identified any specific business or company for investigation and evaluation.
Our Board of Directors does not have audit, compensation or nominating committees, and no determination has been made as to whether our directors qualify as “audit committee financial experts”, as defined in Item 407 of Regulation S-K.
Involvement in Certain Legal Proceedings
None of our directors, executive officers or control persons has been involved in any of the events prescribed by Item 401(f) of Regulation S-K during the past ten years, including:
1.any petition under the Federal bankruptcy laws or any state insolvency law filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, or any partnership in which he or she was a general partner at or within two years before the time of such filing, or any corporation or business association of which he or she was an executive officer at or within two years before the time of such filing;
2.any conviction in a criminal proceeding or being named a subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);
3.being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him or her from, or otherwise limiting, the following activities:
i.acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity;
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ii.engaging in any type of business practice; or
iii.engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws;
4.being subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any type of business regulated by the Commodity Futures Trading Commission, securities, investment, insurance or banking activities, or to be associated with persons engaged in any such activity;
5.being found by a court of competent jurisdiction in a civil action or by the SEC to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated;
6.being found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated;
7.being subject to, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of:
i.any Federal or State securities or commodities law or regulation; or
ii.any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or
iii.any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or
8.being subject to, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.
Item 11.
Item 11. Executive Compensation
Executive Compensation
The table below sets forth all cash compensation paid or proposed to be paid by us to the chief executive officer and the most highly compensated executive officers, and key employees for services rendered in all capacities to the Company during fiscal year 2014.
Summary Compensation Table
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Employment Agreements
We have not entered into any employment agreements with our executive officers. Our decision to enter into an employment agreement, if any, will be made by our compensation committee.
Potential Payments Upon Termination or Change in Control
There were no potential payments or benefits payable to our named executive officers upon termination of employment or in connection with a change in control.
Grants of Plan-Based Awards in 2014
We have not granted any plan-based awards to our named executive officers since our inception.
Outstanding Equity Awards at Fiscal Year-End
We did not have any outstanding equity awards to our named executive officers, as of December 31, 2014, our fiscal year-end.
Option Exercises and Stock Vested in 2014
None.
Equity Incentive Plan
We expect to adopt an equity incentive plan. The purposes of the plan are to attract and retain qualified persons upon whom our sustained progress, growth and profitability depend, to motivate these persons to achieve long-term company goals and to more closely align these persons' interests with those of our other shareholders by providing them with a proprietary interest in our growth and performance. Our executive officers, employees, consultants and non-employee directors will be eligible to participate in the plan. We have not determined the amount of shares of our common stock to be reserved for issuance under the proposed equity incentive plan.
Potential Employment Agreement and Benefits
We do not anticipating entering into an employment agreement at this time our officers and directors.
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The following table provides the names and addresses of each person known to SIGMABROADBAND CO. who own more than 5% of the outstanding common stock as of the date of this prospectus, and by the officers and directors, individually and as a group. Except as otherwise indicated, all shares are owned directly.
The percent of class is based on 24,596,000 shares of common stock issued and outstanding as of the date of this prospectus.
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Item 13.
Item 13. Certain Relationships and Related Transactions, and Director Independence
Conflict of Interest
The current officers and directors of the Company currently devote all required time necessary to the Company. If a specific business opportunity becomes available, such person may face a conflict in selecting between our business interest and their other business interests. The policy of the Board is that any personal business or corporate opportunity incurred by an officer or director of the Company must be examined by the Board and turned down by the Board in a timely basis before an officer or director can engage or take advantage of a business opportunity which could result in a conflict of interest.
None of the following parties has, since the date of incorporation, had any material interest, direct or indirect, in any transaction with the Company or in any presently proposed transaction that has or will materially affect us:
•The Officers and Directors;
•Any person proposed as a nominee for election as a director;
•Any person who beneficially owns, directly or indirectly, shares carrying more than 5% of the voting rights attached to the outstanding shares of common stock;
•Any relative or spouse of any of the foregoing persons who have the same house as such person.
There are no promoters being used in relation with this report. No persons who may, in the future, be considered a promoter will receive or expect to receive any assets, services or other consideration from the Company. No assets will be or are expected to be acquired from any promoter on behalf of the Company.
Copies of our Annual Report on Form 10-K, without exhibits, can be obtained at www.sec.gov.
Item 14.
Item 14. Principal Accountant Fees and Services
The following table sets forth fees billed to us for principal accountant fees and services during the years ended December 31, 2014.
Audit Fees
The aggregate audit fees billed for the years ended December 31, 2014 and 2013 was $4,750.00 and $4,750, respectively. Audit services include the audits of the financial statements included in the Company's annual reports on Form 10-K and reviews of interim financial statements included in the Company's quarterly reports on Form 10-Q.
Audit-Related Fees
None.
Tax Fees
None.
All Other Fees
None.
Audit Committee Pre-Approval Process, Policies and Procedures
Our principal auditors have performed their audit procedures in accordance with pre-approved policies and procedures established by our Board of Directors. Our principal auditors have informed our Board of the scope and nature of each service provided. With respect to the provisions of services other than audit, review, or attest services, our principal accountants brought such services to the attention of our Board of Directors, or one or more members of our Board of Directors to whom authority to grant such approval had been delegated by the Board, prior to commencing such services.
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PART IV
Item 15.
Item 15. Exhibits
(a)Exhibits
The following exhibits are filed with this report on Form 10-K:
Exhibit No. Description
3.1 Articles of Incorporation, as currently in effect*
3.2 Bylaws as currently in effect*
4.1 Specimen common stock certificate*
31.1 302 Certifications - (filed herewith)
32.1 906 Certifications - (filed herewith)
31.2
32.2
302 Certifications - (filed herewith)
906 Certifications - (filed herewith)
*Previously filed with the SEC as exhibits on the registrant’s Form S-1 Registration Statement as declared effective December 13, 2013.
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on the 15th day of April, 2015.
SIGMABROADBAND CO.
April 20, 2015
By: /s/ Jeffery A. Brown
Jeffery A. Brown
President, Secretary, Principal Executive Officer
By: /s/ Timothy D. Valley
Timothy D. Valley
Chief Financial OFficer and
Principal Accounting Officer
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