StationDigital Corp. (fka SDIG)

[Arthur]

SDIG 10-Q has been filed:
http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=10748427

Results of Operations
Comparison of Three Months Ended March 31, 2015 and 2014
Revenue

We generate advertising revenue primarily from audio, display and video advertising sold on a cost-per-thousand impressions, or CPM, basis. Advertisers generally pay us based on the number of delivered impressions. We have arrangements with advertising agencies under which these agencies sell advertising inventory on our service directly to advertisers; we report revenue net of amounts due to agencies. For the three months ended March 31, 2015 and 2014, advertising revenue accounted for 85% and 100%, of our total revenue, respectively. We expect that advertising will comprise a substantial majority of revenue for the foreseeable future.

For the three months ended March 31, 2015 and the three months ended March 31, 2014, the Company generated revenue of $704 and $16,507, respectively. The decrease in revenue was due to a reduction in sales and marketing efforts as the Company did not release version 2 of its platform until March 20, 2015.

Net Loss

The Company incurred a net loss of $2,158,713 for the three months ended March 31, 2015, compared with a net loss of $1,421,028 for the three months ended March 31, 2014. This increase in the net loss from the three months ended March 31, 2014 to the three months ended March 31, 2015 was primarily due to increased general and administrative expenses and increased other expenses.

Liquidity and Capital Resources

As of March 31, 2015 and December 31, 2014, we had $39,538 and $8,325, respectively, of cash and cash equivalents. Our current cash holdings will not satisfy our liquidity requirements and we will require additional financing to pursue our planned business activities.

In order to continue operations and engage in the development of our company, we will be dependent on raising capital, debt or equity, from outside sources. Such capital may not be available on terms acceptable to us if at all. If credit financing became available, because the Company is a development stage company with minimal revenue to date, it would likely have to pay additional costs associated with high risk loans and be subject to an above market interest rate. We may also incur substantial costs in pursuing such capital financing, including legal fees, accounting fees, securities law compliance fees and other costs. We may also be required to recognize non-cash expenses in connection with certain securities we may issue, such as convertible notes and warrants, which may adversely impact our financial condition. There is no assurance that we will be able to obtain sufficient funds on terms acceptable to us or at all. If the Company cannot obtain the necessary financing, the Company would be required to limit our activities or cease business operations. As a result, investors in the Company common stock would lose all of their investment.

The continuation of the Company as a going concern is dependent upon the continued financial support from its lenders, the ability of the Company to obtain necessary financing to continue operations and the attainment of profitable operations. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. The Company’s financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Item 1. Legal Proceedings.
On September 8, 2014, Andrew Gladney filed a complaint against the Company and a co-defendant, CloudWebStore, Inc. in the 21st Judicial Circuit Court of the County of St. Louis, State of Missouri, alleging that the Company and CloudWebStore failed to compensate him for services rendered pursuant to a consulting agreement and related correspondence. Mr. Gladney is seeking damages in excess of $25,000 and 5 million shares of common stock. The Company intends to vigorously defend its interests.

On April 15, 2015, Performance Revenue, LT filed a Notice of Filing of Foreign Country Money Judgment against the Company in the 21st Judicial Circuit Court of the County of St. Louis, State of Missouri, in connection with a Foreign Country Money Judgment entered by the Magistrate Court of Tel-Aviv-Yaffo in the State of Israel in favor of Performance Revenue, LT for indebtedness in the amount of approximately NIS 653,868 (approximately US $168,910). The Company has accrued a $169,309 liability related to this indebtedness.

On May 8, 2015, Millennial Media Inc. filed a complaint against the Company in the 21st Judicial Circuit Court of the County of St. Louis, State of Missouri, alleging indebtedness related to goods, wares merchandise and services sold by Millennial Media, Inc. to the Company and seeks damages in the amount of $394,858. The Company has accrued a $394,858 liability related to this indebtedness.

On May 18, 2015, Yahoo! Inc. filed a complaint against the Company in 22nd Judicial Circuit Court of City of St. Louis County, Missouri alleging indebtedness in relation to a services contract and seeks damages in the amount of $30,000, together with annual interest at the rate of 9% beginning on June 1, 2014 and related court costs. The Company has accrued a $39,339 liability related to this indebtedness.