UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended: December 31, 2017

¨	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: 000-55346

CÜR MEDIA, INC.

(Exact name of registrant as specified in its charter)

Delaware		99-0375741
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

136 New London Turnpike Glastonbury, Connecticut		06033
(Address of principal executive offices)		(Zip Code)

(860) 633-5565

(Registrant's telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Common Stock, par value $0.0001 per share

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes ¨ No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ¨ No x

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) 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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer a smaller reporting company or an emerging growth company. See the definitions of the "large accelerated filer," "accelerated filer," "non-accelerated filer," "smaller reporting company" and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	¨	Accelerated Filer	¨
Non-Accelerated Filer	¨	Smaller Reporting Company	x
(Do not check if a smaller reporting company)		Emerging Growth Company	x

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

As of June 30, 2017, there were 2,526,663 shares of the registrant's common stock, par value $0.0001 per share (“Common Stock”), issued and outstanding. Of these, approximately 1,731,000 shares were held by non-affiliates of the registrant. The market value of securities held by non-affiliates on June 30, 2017 was approximately $2,527,260, based on the closing sale price of $1.46 per share for the registrant's Common Stock as quoted on the OTC Markets OTC PINK marketplace.

As of April 30, 2018, there were 2,526,663 shares of the registrant’s Common Stock outstanding, 20,174 of which had not yet been issued.

DOCUMENTS INCORPORATED BY REFERENCE

Not Applicable.

EXPLANATORY NOTE

As previously reported in a Current Report on Form 8-K we filed with the Securities and Exchange Commission ("SEC") on February 16, 2016, on February 9, 2016 we filed a certificate of amendment ("Certificate of Amendment") to our Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware, pursuant to which, effective as of February 16, 2016, we effected a reverse stock split of our common stock, $0.0001 par value per share ("Common Stock") at a rate of 1-for-13 (the "Reverse Stock Split").

Upon effectiveness of the Reverse Stock Split, every thirteen (13) outstanding shares of our Common Stock ("Old Common Stock") were, without any further action by us, or any holder thereof, combined into and automatically became one (1) share of our Common Stock ("New Common Stock"). Any fractional shares were rounded up to one whole common share. All shares of Common Stock eliminated as a result of the Reverse Stock Split have been cancelled such that they have been returned to our authorized and unissued capital stock, and our capital has been reduced by an amount equal to the par value of the Old Common Stock so retired.

Prior to the filing of the Certificate of Amendment, we had an authorized capital of 310,000,000 shares of capital stock consisting of 300,000,000 shares of Common Stock and 10,000,000 shares of preferred stock, $0.0001 par value per share ("Preferred Stock"). Prior to the filing of the Certificate of Amendment, we had (a) 31,720,247 shares of Common Stock issued and outstanding and (b) 268,279,753 authorized and unissued shares of Common Stock. As a result of the filing of the Certificate of Amendment, and effectiveness of the Reverse Stock Split, the 31,720,247 shares of Common Stock issued and outstanding became 2,440,336 shares of Common Stock, $0.0001 par value per share, and the 268,279,753 authorized and unissued shares of Common Stock became 297,559,664 shares of Common Stock, $0.0001 par value per share. The Reverse Stock Split did not change our current authorized number of shares of Common Stock. Of the 10,000,000 shares of our Preferred Stock authorized, none of the shares of Preferred Stock are issued and outstanding. The Reverse Stock Split had no effect on authorized Preferred Stock.

Except for de minimus adjustments that resulted from the treatment of fractional shares, the Reverse Stock Split did not have any dilutive effect on our stockholders since each stockholder holds the same percentage of our Common Stock outstanding immediately following the Reverse Stock Split as such stockholder held immediately prior to the Reverse Stock Split.

As a result of the Reverse Stock Split, the number of shares of our Common Stock that may be purchased upon exercise of outstanding warrants, options, or other securities convertible into, or exercisable or exchangeable for, shares of our Common Stock, and the exercise or conversion prices for these securities, have also be ratably adjusted in accordance with their terms.

All share and per share numbers in this report relating to our Common Stock prior to the Reverse Stock Split have been adjusted to give effect to the Reverse Stock Split, unless otherwise stated.

TABLE OF CONTENTS

FORWARD-LOOKING STATEMENTS		4

PART I

ITEM 1.	BUSINESS	5
ITEM 1A.	RISK FACTORS	17
ITEM 1B.	UNRESOLVED STAFF COMMENTS	48
ITEM 2.	PROPERTIES	48
ITEM 3.	LEGAL PROCEEDINGS	48
ITEM 4.	MINE SAFETY DISCLOSURES	48

PART II

ITEM 5.	MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	49
ITEM 6.	SELECTED FINANCIAL DATA	53
ITEM 7.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	53
ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	72
ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	72
ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	72
ITEM 9A.	CONTROLS AND PROCEDURES	72
ITEM 9B.	OTHER INFORMATION	74

PART III

ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE	75
ITEM 11.	EXECUTIVE COMPENSATION	81
ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	85
ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	87
ITEM 14.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	90

PART IV

ITEM 15.	EXHIBITS, FINANCIAL STATEMENT SCHEDULES	91

SIGNATURES		94

Table of Contents

FORWARD-LOOKING STATEMENTS

Except for historical information, this report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Such forward-looking statements include, among others, those statements including the words "believes", "anticipates", "expects", "intends", "estimates", "plans" and words of similar import. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

Forward-looking statements are based on our current expectations and assumptions regarding our business, potential target businesses, the economy and other future conditions. Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Our actual results may differ materially from those contemplated by the forward-looking statements. We caution you therefore that you should not rely on any of these forward-looking statements as statements of historical fact or as guarantees or assurances of future performance. Important factors that could cause actual results to differ materially from those in the forward-looking statements include changes in local, regional, national or global political, economic, business, competitive, market (supply and demand) and regulatory conditions and the following:

	·	Our ability to raise capital when needed and on acceptable terms and conditions;

	·	Our ability to attract and retain management with experience in digital media including digital music streaming, and similar emerging technologies;

	·	Our ability to negotiate, finalize and maintain economically feasible agreements with the major and independent music labels, publishers and performance rights organizations;

	·	Our expectations regarding market acceptance of our products in general, and our ability to penetrate the digital music streaming market in particular;

	·	The scope, validity and enforceability of our and third party intellectual property rights;

	·	Our ability to comply with governmental regulation;

	·	The intensity of competition; and

	·	Changes in the political and regulatory environment and in business and fiscal conditions in the United States and overseas.

These risks and others described under the section "Risk Factors" below are not exhaustive.

Given these uncertainties, readers of this Annual Report on Form 10-K ("Annual Report") are cautioned not to place undue reliance on such forward-looking statements. We disclaim any obligation to update any such factors or to publicly announce the result of any revisions to any of the forward-looking statements contained herein to reflect future events or developments.

All references in this Annual Report to the "Company", "CÜR Media", "we", "us", or "our", are to CÜR Media, Inc., a Delaware corporation, and its consolidated subsidiary, CÜR Media, LLC, a Connecticut limited liability company.

Table of Contents

PART I

ITEM 1. BUSINESS

History

We were incorporated in the State of Delaware as Duane Street Corp. on November 17, 2011. Our original business, prior to the Contribution (as defined below), was discontinued.

On January 28, 2014, we consummated a contribution transaction (the "Contribution") with CÜR Media, LLC (formerly Raditaz, LLC), a limited liability company organized in the State of Connecticut on February 15, 2008, pursuant to a Contribution Agreement by and among the Company, CÜR Media, LLC, and the holders of a majority of CÜR Media, LLC's limited liability company membership interests (the "Contribution Agreement"). In connection with the Contribution, and in accordance with the terms and conditions of the Contribution Agreement, all outstanding securities of CÜR Media, LLC were exchanged for securities of the Company.

As a result of the Contribution, CÜR Media, LLC became our wholly owned subsidiary, and we adopted the business of CÜR Media, LLC, which was to develop and commercialize a streaming music application for listening on mobile devices and the web (the “Music Streaming Business”), as our sole line of business.

On January 31, 2014, we changed our name to CÜR Media, Inc., a name that more accurately represents our new business focus. In connection with the name change, we changed our OTC trading symbol to "CURM."

In addition, on January 31, 2014, we increased our number of authorized shares to 310,000,000 shares, consisting of (i) 300,000,000 shares of common stock par value $0.0001 per share (“Common Stock”), and (ii) 10,000,000 shares of preferred stock, par value $0.0001 per share (“Preferred Stock”).

Further, on January 31, 2014, our board of directors (“Board of Directors) authorized a 1.26953123-for-1 forward split of our Common Stock, in the form of a dividend, pursuant to which each holder of our Common Stock as of the record date received 1.19260815 additional shares of Common Stock for each one share owned.

In early 2016, the Company entered into agreements ("Music Label Agreements") with three music labels ("Music Labels"), pursuant to which the Company was provided limited, non-exclusive licenses to digitally distribute certain sound recordings and related materials owned or controlled by the Music Labels in connection with the Company’s CÜR-branded Internet music service, CÜR Music (“CÜR Music”), the music streaming product we are developing, within the United States and its territories, commonwealths, and possessions. However, we defaulted on the Music Label Agreements as a result of our failure to pay advances due to the Music Labels pursuant to such agreements, and two of the Music Label Agreements were subsequently terminated.

On February 16, 2016, we effected a 1-for-13 Reverse Stock Split of our outstanding shares of Common Stock. Share and per share numbers in this report relating to our Common Stock have been retrospectively adjusted to give effect to this Reverse Stock Split, unless otherwise stated.

As of August 2016, we terminated all of our employees and ceased significant operations, other than capital raising activities intended to continue our Music Streaming Business. These capital-raising activities were led by our Founder and then-sole director, Thomas Brophy.

Table of Contents

On July 19, 2017, we received a “Wells Notice” from the staff (the “Staff”) of the Securities and Exchange Commission (the “SEC”). The Wells Notice provides notification to the Company that the Staff has made a preliminary determination to recommend that the SEC institute administrative proceedings against the Company pursuant to Sections 12(j) and 12(k) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), based solely upon our failure to comply with our reporting obligations under Section 13(a) of the Exchange Act. Sections 12(j) grants the SEC the right, after notice and opportunity for a hearing, to revoke the registration of a security. Section 12(k) grants the SEC the right to suspend trading in a security.

In accordance with SEC rules, on August 25, 2017, we made a written submission to the SEC in response to the Wells Notice, in which, among other things, we conveyed the Company’s present intention to file the delinquent reports and become current with our SEC filing requirements and, as such, set forth the reasons why the proposed enforcement action should not be filed. While no assurances can be made, we believe that, as a result of making these filings, the SEC will have no further reason to institute the proposed administrative proceedings, or, if instituted, to continue such proceedings. However, there can be no assurance that the SEC will not bring an enforcement action against the Company, which could result in a trading suspension of our Common Stock and the de-registration of the Company’s securities under the Exchange Act. With this filing, we have filed all delinquent reports and are up to date with our SEC filing requirements.

On September 11, 2017, we entered into a term sheet (the “Term Sheet”) with CUR Holdings, Inc., a Delaware corporation (“Holdings”) pursuant to which the Company and Holdings agreed to consummate either a Merger (as defined below) or an Asset Transfer (as defined below), under certain circumstances. Pursuant to the Term Sheet, in the event the Company receives notification from the SEC that it will not institute the proposed administrative proceedings, or, if instituted, will discontinue such proceedings (“SEC Clearance”), Holdings will, subject to any required shareholder approval, merge with and into the Company, with the Company continuing as the surviving entity (the “Merger”); provided, however, that the boards of directors of the Company and Holdings may mutually agree to proceed with the Merger prior to receipt of SEC Clearance. If, however, the SEC commences the proposed administrative proceedings against the Company, and such proceedings result in the revocation of the registration of our Common Stock under the Exchange Act (“SEC Revocation”), the Company and Holdings will, subject to any required shareholder approval, enter into an asset purchase and sale transaction, pursuant to which Holdings will acquire all of the intellectual property and other assets and liabilities constituting our Music Streaming Business (the “Asset Transfer” and, together with the Merger, a “Combination Transaction”); provided, however, that the board of directors of the Company and Holdings may mutually agree to proceed with the Asset Transfer any time commencing on the ninety-first (91st) day after the effective date of the Term Sheet, as disclosed below.

In anticipation of the Combination Transaction (defined above), on November 16, 2017, Holdings consummated an initial closing (the “Initial Closing”) of its private placement offering (the “Preferred Stock Unit Offering”), to certain “accredited investors” (each, a “Unit Purchaser” and, collectively, the “Unit Purchasers”), intended to be exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to Section 4(a)(2) and/or Rule 506 of Regulation D and/or Regulation S promulgated thereunder, of a minimum of $6,000,000 (the “Minimum Amount”) of units of securities of Holdings (each, a “Preferred Stock Unit” and, collectively, the “Preferred Stock Units”), at a purchase price of $5.15 per Preferred Stock Unit, with each Preferred Stock Unit consisting of (a) one (1) share of Series A convertible preferred stock of Holdings (each, a “Unit Share” and collectively, the “Unit Shares”), and (b) a 5-year warrant (each, a “Unit Warrant” and collectively, the “Unit Warrants”) to purchase 6.5087 shares of common stock of Holdings, at an exercise price of $1.00 per each full share.

In connection with the Initial Closing of the Preferred Stock Unit Offering, Holdings issued 1,195,033 Preferred Stock Units to the Unit Purchasers, consisting of 1,195,033 Unit Shares and 7,778,119 Unit Warrants, in consideration for gross proceeds of $6,154,362 from the Preferred Stock Unit Offering.

In connection with the Initial Closing of the Preferred Stock Unit Offering, a U.S. broker-dealer registered with FINRA, engaged on a non-exclusive basis as placement agent for the Preferred Stock Unit Offering (the “Placement Agent”), received a cash commission of $115,436, and warrants (“Placement Agent Warrants”) to purchase (a) 22,415 shares of Series A Preferred Stock of Holdings, with a term of five (5) years and an exercise price of $5.15 per share, and (b) 145,893 shares of common stock of Holdings, with a term of five (5) years and an exercise price of $1.00 per share.

Table of Contents

Simultaneously with the closing of the Preferred Stock Unit Offering, Holdings consummated a private placement offering (the “$2.5 Million Note Offering” and, together with the Preferred Stock Unit Offering, the “Holdings Offerings”), to one “accredited investor” (the “New Note Purchaser”), intended to be exempt from registration under the Securities Act, pursuant to Section 4(a)(2) and/or Rule 506 of Regulation D promulgated thereunder, of (a) a 12% senior secured promissory note of Holdings, in the principal amount of $2,500,000 (the “New Note”), with a term of twelve (12) months, at a purchase price of 100% of the face value amount of the New Note, and (b) 10-year warrants (the “New Note Warrants”) to purchase 1,000,000 shares of common stock of Holdings, at an exercise price per share of $0.0001.

In connection with the closing of the $2.5 Million Note Offering, the Placement Agent received a cash commission of $250,000, and warrants (“Second Placement Agent Warrants”) to purchase 383,800 shares of common stock of Holdings, with a term of five (5) years and an exercise price of $0.0001 per share.

The net proceeds from the Holdings Offerings, in the aggregate amount of $6,932,288 (after deducting fees and expenses related to the Holdings Offerings in the aggregate amount of $722,074 (including placement agent fees, legal fees and expenses and fees payable to the escrow agent)) are to be used to pay the required Label Advances (as defined below) to the Music Labels sufficient to allow Holdings and/or the Company to proceed with soliciting subscriptions for CÜR Music, and to extend a line of credit to the Company (the “Post-Closing Line of Credit Note”), for up to the full amount of the aggregate net proceeds from the Holdings Offerings (1) to enable the Company to pay outstanding accounts payable, employee deferred compensation, and monthly payments due by the Company under the New Note, and (2) for working capital and general corporate purposes. Management feels it can enter into structured settlements with vendors and streaming services. While there is a process for requesting and approving drawdowns, it is not formally documented, approval is on a case by case basis and the terms and associated interest on the Post-Closing Line of Credit Note is to be determined, and will be reflected in the definitive documentation for the transaction.

In addition, simultaneously with the Initial Closing of the Preferred Stock Unit Offering, the holders (the “Secured Noteholders”) of all of the Company’s existing 12% senior secured convertible promissory notes, in the aggregate principal amount of $2,515,000, with accrued and unpaid interest in the aggregate of $561,203 (each, a “Secured Note” and, collectively, the “Secured Notes”), assigned, conveyed, transferred to Holdings all of the Secured Noteholders’ right, title, interest and obligations in, to and under the Secured Notes, and all claims, suits, causes of action and any other rights thereunder, in exchange for units (each, a “Secured Note Conversion Unit” and, collectively, the “Secured Note Conversion Units”) of securities of Holdings, at an exchange rate of $2.00 of principal and interest due under the Secured Notes per unit, in an transaction intended to be exempt from registration under the Securities Act, pursuant to Section 4(a)(2) and/or Rule 506 of Regulation D promulgated thereunder (the “Secured Note Assignment Transaction”). Each Secured Note Conversion Unit consisted of (a) one (1) share of common stock of Holdings (each, a “Secured Note Conversion Share” and, collectively, the “Secured Note Conversion Shares”), and (b) a 5-year warrant (each, a “Secured Note Conversion Warrant” and, collectively, the “Secured Note Conversion Warrants”) to purchase one (1) share of common stock of Holdings for every share of common stock of Holdings received upon exchange, at an exercise price per share equal to $1.00. Upon completion of the transaction, CÜR Media is now required to pay Holdings.

The Secured Note Assignment Transaction did not alter the obligation of the Company under the original Secured Notes.

In connection with the Secured Note Assignment Transaction, (a) Holdings issued 1,538,102 Secured Note Conversion Units, consisting of 1,538,102 Secured Note Conversion Shares, and 1,538,102 Secured Note Conversion Warrants, and (b) Holdings became the sole payee under the Secured Notes.

In connection with the Secured Note Assignment Transaction, the Placement Agent, received warrants (“Third Placement Agent Warrants”) to purchase (a) 86,377 shares of common stock of Holdings, with a term of five (5) years and an exercise price of $2.00 per share, and (b) 86,377 shares of common stock of Holdings, with a term of five (5) years and an exercise price of $1.00 per share.

Table of Contents

The Company joined one of the New Music Label Agreements, while the other New Music Label Agreements provide Holdings with the right to sublicense its rights under such agreement to the Company. The New Music Label Agreements enable the Company to digitally distribute sound recordings and related materials owned or controlled by the Music Labels in connection with our Internet music service, CÜR Music. The New Music Label Agreements released the Company of prior obligations under the original Music Label Agreements. At the current time, the Company does not have a contract with Holdings which requires payment for sublicenses and access to the sound recordings and related materials.

Immediately following the Initial Closing of the Preferred Stock Unit Offering, Holdings issued one (1) share of its Series B voting preferred stock (“Series B Preferred Stock”) to William F. Duker, the President and Treasurer of Holdings, and a member of the board of directors of Holdings. Pursuant to the Certificate of Designation of Series B Voting Preferred stock of Holdings (the “Series B Certificate of Designation”), Mr. Duker, the holder of the Series B Preferred Stock, has the right (a) to elect the number of directors on the board of directors of Holdings constituting the majority, and (b) to approve any merger (including the Merger), asset sale (including the Asset Transfer), or other fundamental transaction to be effected by Holdings.

As mentioned above, if the Company receives SEC Clearance (or, at the discretion of the board of directors of the Company and Holdings, as described above), the Company and Holdings will consummate the Merger. The Company and Holdings anticipate that the Merger, if consummated, will qualify as a tax-free reorganization under the U.S. Internal Revenue Code. The Company and Holdings also anticipate that, if the Merger is consummated:

	·	the stockholders of Holdings will receive, in exchange for all of their issued and outstanding shares of capital stock of Holdings (including all issued and outstanding shares of preferred stock of Holdings), shares of the Company’s capital stock (including shares of Preferred Stock of the Company), at an exchange rate of 1-for-1, with appropriate adjustments and, otherwise, on their original terms and conditions;

	·	outstanding warrants to purchase shares of common stock of Holdings will be exchanged for warrants to purchase shares of the Company’s Common Stock, at the same ratio at which shares of outstanding capital stock of Holdings are exchanged for shares of the Company’s capital stock, with appropriate adjustments and, otherwise, on their original terms and conditions;

	·	the principal and any accrued and unpaid interest due under the Company’s existing 12% unsecured convertible promissory notes (the “Unsecured Notes”) will convert into units of the Company’s securities, at a conversion price of $2.00 of principal and interest due under said note per unit, each consisting of (a) one (1) share of the Company’s Common Stock, and (b) a 5-year warrant to purchase one (1) share of the Company’s Common Stock for every share of the Company’s Common Stock received upon conversion, at an exercise price equal to $1.00 per share;

	·	the Standard Holdings Note will be assigned and transferred to the Company, and the Company will become the payee under such note;

Table of Contents

	·	the Line of Credit Note, the Secured Notes, and the Post-Closing Line of Credit Note will be forgiven and canceled by Holdings;

	·	the Company will assume the obligations under the $2,500,000 New Note; and

	·	the Company will assume the New Music Label Agreements with the Music Labels, if possible.

As mentioned above, if there is an SEC Revocation of the Company’s Common Stock under the Exchange Act (or, at the discretion of the boards of directors of the Company and Holdings, as described above), the Company and Holdings will consummate the Asset Transfer. The Company and Holdings anticipate that, if the Asset Transfer is consummated:

	·	the Company’s stockholders will receive, in exchange for all of the assets and liabilities constituting the Company’s Music Streaming Business, shares of capital stock of Holdings, at a rate of 1-for-1 of equivalent classes of preferred and common stock, with appropriate adjustments and, otherwise, on their original terms and conditions;

	·	outstanding warrants and stock options to purchase shares of the Company’s Common Stock will be exchanged for warrants and stock options to purchase shares of common stock of Holdings, at the same ratio at which shares of the Company’s outstanding capital stock are exchanged for shares of capital stock of Holdings, with appropriate adjustments and, otherwise, on their original terms and conditions;

	·	if necessary, the board of directors of Holdings will adopt an Equity Incentive Plan (the “Holdings EIP”) with such number of shares available under the Holdings EIP that equals 15% of the fully diluted capitalization of Holdings after giving effect to the Asset Transfer, covering outstanding stock options to purchase shares of the Company’s Common Stock, and for the future issuance, at the discretion of the board of directors of Holdings, of incentive awards to officers, key employees, consultants and directors;

	·	the principal and any accrued and unpaid interest due under the Company’s existing Unsecured Notes will convert into units of securities of Holdings, at a conversion price of $2.00 per unit, each unit consisting of (a) one (1) share of common stock of Holdings, and (b) a 5-year warrant to purchase one (1) share of common stock of Holdings for every share of common stock of Holdings received upon conversion, at an exercise price equal to $1.00 per share;

	·	the Standard Holdings Note will remain payable to Holdings;

	·	the Line of Credit Note, the Secured Notes, and the Post-Closing Line of Credit Note will be forgiven and canceled by Holdings as partial consideration for the transfer to Holdings of the assets and liabilities constituting the Company’s Music Streaming Business;

	·	Holdings will remain responsible for the obligations under the $2,500,000 New Note; and

	·	any sublicenses under the relevant New Music Label Agreements with the Music Labels will terminate.

Simultaneously with the closing of the Holdings Offerings, shareholders representing at least fifty-one percent (51%) of the voting capital stock of each of the Company and Holdings, and of the Unit Purchasers in the Preferred Stock Unit Offering and Secured Noteholders in the Secured Note Assignment transaction, entered into voting agreements, pursuant to which they agreed to vote in favor of the Combination Transaction, as applicable.

The Company and Holdings have two common members on their boards of directors. However, they are two separate and distinct entities with two completely different sets of officers running their day-to-day affairs, separate corporate offices where their books and records are separately kept, and very different shareholder bases. Further, while Holdings has agreed to extend a line of credit to the Company for up to the full amount of the aggregate net proceeds from the Holdings Offerings, drawdowns against the line of credit must be requested by the Company and approved by Holdings. Requests may be approved or rejected by Holdings on a case-by-case basis.

Table of Contents

Following the closing of the Holdings Offerings, we appointed Thomas Brophy as President and Chief Executive Officer, John Egazarian as Head of Product, Chief Operating Officer, Michael Betts as Chief Technology Officer, and Kelly Sardo as Chief Financial Officer and Treasurer, and have hired five other full-time employees. We have restarted our business operations and expect to launch CÜR Music in the second or third quarter of 2018.

Our Business

CÜR Music, our CÜR-branded Internet music service, to be comprised of three progressively priced and increasingly functional tiers, will provide a paid subscription internet radio service offering listeners streaming music on the web and mobile devices. CÜR Music began as Raditaz, a free internet radio product, which was launched in 2012, and had iPhone and Android applications in addition to a website at www.raditaz.com. We took the Raditaz iPhone and Android applications, and our website, offline to focus our resources on the development of CÜR Music. As of the date of this Annual Report, we had devoted substantially all of our efforts to product development, raising capital and building our technology infrastructure. We expect to launch CÜR Music in the second or third quarter of 2018.

Our Service

CÜR Music is intended to be a new social streaming music experience that combines the listening experience of free internet radio products with an on-demand listening experience for listening on mobile devices and the web. CÜR Music will target consumers who are seeking a more comprehensive music streaming service than current free, ad-supported music streaming products. Upon launching, two subscription levels will be offered for a monthly cost to the consumer of starting at $1.99 for the first subscription level and $4.99 for the second subscription level. A full on-demand product is being developed and will be available post launch.

As designed, the CÜR Music product includes a hybrid model that includes many features that free, ad-supported internet radio products provide, without interruptive advertising, and with a limited on-demand offering. The limited on-demand offering is a CÜR8, eight songs chosen by the user for them to use on an on-demand basis. In addition, CÜR Music includes functionality that enables consumers to curate their playlists with photos and short personal videos and to share music with their friends. The product includes social features that allow users to follow and be followed by other users, view activity and listen to other users' limited on-demand CÜR8s.

Our primary business is CÜR Music, a music service that will give listeners access to millions of songs that can be listened to using CÜR Music's algorithmic internet radio stations, CÜR Music's genre and theme-based stations, and through CÜR Music's on-demand listening features. In addition to the ability to stream music, subscribers will be able to personalize their playlists, buy music downloads, share songs with friends and add photos and short personal videos to songs in their playlists and to songs in the sharing process.

Our business plan also includes a second revenue stream of personalized advertising, which we do not intend to interrupt a music stream, but targets a user's listening habits. We believe the advertising will be in the form of display ads, email and/or text messages. We intend to integrate personalized advertising into certain aspects of the CÜR Music product when we achieve a reasonable level of scale.

Our business plan further includes a third revenue stream from the sale of music, concert tickets and merchandise through our music streaming service, tailored to each listeners taste based on prior listening trends. We plan to begin to sell concert tickets and merchandise at a later date after the launch of CÜR Music.

In addition, our business plan includes distributing CÜR Music's music streaming service through Apple's iTunes App Store to iOS devices, Google's Google Play Store to Android devices and the internet among other distribution channels and platforms. At launch, we plan to have an iPhone application, an iPad application, an Android application and a website.

Table of Contents

We plan to source our music from MusicNet, Inc. d/b/a Media Net Digital, Inc. We will use Amazon web services, and services from other technology providers, to support certain of the technological needs of the business.

In early 2016, the Company had entered into Music Label Agreements with certain Music Labels, pursuant to which the Company was provided limited, non-exclusive licenses to digitally distribute certain sound recordings and related materials owned or controlled by the Music Labels in connection with CÜR Music, within the United States and its territories, commonwealths, and possessions.

The Company was not able to make the initial payments required under the agreements when due on January 31, 2016. As a result, our Music Label Agreements with Sony Music Entertainment (“SME”) and UMG Recordings, Inc. (“UMG”) were terminated as a result of our failure to pay SME and UMG the advances due pursuant to such agreements, respectively. The Company also defaulted on its Music Label Agreement with Warner Music, Inc. (“WMG”) as a result of its failure to pay WMG the advance due pursuant to such agreement. WMG did not initiate termination of their agreement.

Prior to the Initial Closing of the Preferred Stock Unit Offering, and as a condition thereto, Holdings renegotiated the content licensing agreements (“New Music Label Agreements”). Upon consummation of the Initial Closing of the Preferred Stock Unit Offering, Holdings paid the Label Advances to the Music Labels pursuant to the New Music Label Agreements. We joined one of the New Music Label Agreements with one of the Music Labels, while the other New Music Label Agreements provide Holdings with the right to sublicense its rights under such agreement to the Company. The New Music Label Agreements enable Holdings and/or the Company to digitally distribute sound recordings and related materials owned or controlled by the Music Labels in connection with our Internet music service, CÜR Music. The Company and Holdings are required to pay certain minimum content fees over the term of the Content Agreements with Content Providers as follows: $15.1 million in the first year of the agreements, $24.5 million in the second year of the agreements, and $18.4 million in the third year of the agreements. The New Music Label Agreements released the Company of prior obligations under the original Music Label Agreements. At the current time, the Company does not have a contract with Holdings which requires payment for sublicenses and access to the sound recordings and related materials.

Now that the New Music Label Agreements are in place, we plan to have a team of software engineers, led by our management, working on enhancing the technology platform, as well as the iOS and Android applications and the CÜR Music website. We are currently fine-tuning the user interface and user experience of CÜR Music's iPhone, iPad and Android applications, our website, and our backend systems, and will continue to do so through launch. We plan to submit CÜR Music's iOS app and CÜR Music's Android app for approval by the iTunes App Store and the Google Play Store, respectively. We plan on developing the marketing timeline for marketing the launch of CÜR Music, which will include paid media, public relations, social media, event sponsorships and marketing through influencers. Success of those strategies will determine the amount of marketing spending allocated to each of these marketing strategies.

Not including non-cash expenses, we have spent approximately $22.9 million on research and development, sales and marketing and general and administrative costs to complete the development of the CÜR Music, in the time period since the Contribution in January 2014 and through the date of this filing. Of the total $22.9 million, approximately $16.3 million is related to research and development and approximately $6.6 million is related to general and administrative costs. In addition to the aforementioned costs, we expect to pay approximately $3 million dollars as prepayments in connection with the agreements that we have with the major music labels, independent labels and publishers.

Source and Content

On July 1, 2014 the Company entered into a data license and service agreement (the “Data License and Services Agreement”) with Rovi Data Solutions, Inc. and Veveo, Inc. (collectively, “Rovi”), acquiring the limited, non-exclusive, non- transferable right to use, display, communicate, reproduce and transmit data owned or controlled by Rovi. On September 8 and September 18, 2014, a first amendment and second amendment to the Data License and Service Agreement, respectively, were executed which expanded the original license to include custom development of search and voice capabilities. The Data License and Service Agreement remained in effect through and including March 14, 2017. The Company has the option to extend the term of this agreement for additional one-year periods. During the term of the Data License Agreement and as consideration for the grant of rights and license of Rovi’s data, the Company agreed to pay Rovi a monthly minimum charge during the development period, which is the period where data will be used for internal, non-public, non-commercial uses. The Company agreed to pay a minimum per month during the first initial term, subsequent to launch date until March 14, 2016. For each subsequent term, consideration paid was dependent on the number of subscribers to CUR Music. As of September 27, 2016, the Company’s Data License and Services Agreement with Rovi terminated as a result of the Company’s failure to pay Rovi past due balances for the services provided under the Agreement. As of December 31, 2017, the Company has not made any payments to Rovi however has accrued for balances due. The Company has not received a notice of default from Rovi.

Table of Contents

With the Holdings Offerings complete, Holdings contracted with Gracenote, Inc. (“Gracenote”) for the services previously provided by Rovi to the Company.

We also entered into an agreement (the "MediaNet Service Agreement") with MusicNet, Inc. d/b/a MediaNet Digital, Inc. ("MediaNet") on November 10, 2014, from which we were to source our music. Pursuant to the agreement, MediaNet was to provide the Company a catalog of sound recordings and metadata that would enable and provide for the delivery of sound recordings to end users of the Company's CÜR Music application. The MediaNet Service Agreement was to remain in effect for a period of three years following the effective date of November 7, 2014. The MediaNet Service Agreement was to automatically renew for successive one-year terms unless terminated by MediaNet or the Company. Pursuant to the MediaNet Service Agreement, the Company was to pay a set-up fee to MediaNet prior to launch. In addition, the Company agreed to pay MediaNet a monthly technology licensing fee during the initial term, a monthly usage fee, and will pay for any additional professional services and technical assistance or customization. The Company is in default under the MediaNet Service Agreement with MediaNet as a result of the Company’s failure to pay MediaNet past due balances for the services they provided under the MediaNet Service Agreement. The unpaid monthly fees have been accrued by the Company. To date, the Company has not received a notice of default from MediaNet. The Company intends to cure the default and/or enter into a new contract with MediaNet now that it is adequately funded.

We entered into an agreement (“Master Subscription Agreement”) with Zuora, Inc. ("Zuora") on July 31, 2014. Pursuant to the Master Subscription Agreement with Zuora, we planned to use Zuora's technology platform to administer the subscription process related to credit card billing and collection. In accordance with the Master Subscription Agreement, Zuora was to provide the Company a non-exclusive, non-transferable worldwide limited license to use Zuora's online integrated subscription management, billing, and data analysis services. The initial order form covered the implementation and development period ending October 31, 2014. In addition, the Company agreed to an initial 36-month service term, subsequent to implementation through October 31, 2017. On October 12, 2016, the Company received a notice of default from Zuora, confirming that the Company was in default under its Master Subscription Agreement with Zuora as a result of its failure to pay Zuora past due balances for the services they provided under the Master Subscription Agreement. On July 31, 2017, the Company and Zuora signed a new order form (“New Order Form”) under the Master Subscription Agreement, providing for the full settlement and release of the parties from all obligations under the old order form, dated July 31, 2014, in consideration for entering into the New Order Form. Upon execution of the New Order Form, the Company paid Zuora $125,000 and accrued $25,000 as of December 31, 2017 for the first year of the three-year agreement for Zuora to provide subscription services to the Company.

We plan to use Amazon web services, and services from other technology providers, to support certain of the technological needs of the business.

Content Licensing

General

As previously reported, the Company had entered into agreements (“Music Label Agreements”) with certain music labels (“Music Labels”), pursuant to which the Company has been provided limited, non-exclusive licenses to digitally distribute certain sound recordings and related materials owned or controlled by the Music Labels in connection with the Company’s CÜR-branded Internet music service, CÜR Music, to be composed of three progressively priced and increasingly functional tiers, within the United States and its territories, commonwealths, and possessions. The Company had also entered into agreements (“Publishing Agreements”) with certain music publishing companies (“Music Publishers”) either directly or through a third party, pursuant to which the Company had been provided the non-exclusive right and license to use certain musical works owned, controlled and/or administered by the Music Publishers in connection with CÜR Music, within the United States and its territories, commonwealths, and possessions. The Music Label Agreements and Publishing Agreements may be collectively referred to herein as the “Content Agreements,” and the Music Labels and Music Publishers may be collectively referred to herein as the “Content Providers.”

Table of Contents

The Company was not able to make initial payments when due under the Music Label Agreements. As a result, our Music Label Agreements with SME and UMG were terminated as a result of our failure to pay SME and UMG the advances due pursuant to such agreements, respectively. The Company also defaulted on its Music Label Agreement with WMG as a result of its failure to pay WMG the advance due pursuant to such agreement. WMG did not initiate termination of their agreement.

Prior to the Initial Closing of the Preferred Stock Unit Offering, and as a condition thereto, Holdings entered directly into the New Music Label Agreements with the Music Labels. Upon consummation of the Initial Closing of the Preferred Stock Unit Offering, Holdings paid the Label Advances to the Music Labels in the aggregate amount of $2,500,000. The Company joined one of the New Music Label Agreements, while the other New Music Label Agreements provide CÜR Holdings with the right to sublicense its rights under such agreement to the Company. The New Music Label Agreements enable Holdings and/or the Company to digitally distribute sound recordings and related materials owned or controlled by the Music Labels in connection with our Internet music service, CÜR Music. The New Music Agreements released the Company of prior obligations under the original Music Label Agreements. At the current time, the Company does not have a contract with Holdings which requires payment for sublicenses and access to the sound recordings and related materials.

The Company had previously entered into agreements ("Publishing Agreements") with certain music publishing companies ("Music Publishers"), pursuant to which the Company was provided the non-exclusive right and license to use certain musical works owned, controlled and/or administered by the Music Publishers (the "Publisher Materials") in connection with CÜR Music, within the United States and its territories, commonwealths, and possessions. The Company is currently in default of the Publishing Agreements and intends to enter into new agreements prior to the launch of CÜR Music.

We intend to enter into content licensing agreements with certain independent labels prior to the launch of CÜR Music. We plan to negotiate and execute other independent label content licensing agreements subsequent to the launch of CÜR Music. We also intend to enter into content licensing agreements with music publishers and performance rights organizations. When we enter into these content license agreements with these labels, publishers and performance rights organizations, our platform is expected to provide end users access to millions of sound recordings.

The Company and Holdings are required to pay certain minimum content fees over the term of the Content Agreements with Content Providers as follows: $15.1 million in the first year of the agreements, $24.5 million in the second year of the agreements, and $18.4 million in the third year of the agreements. Upon consummation of the Initial Closing of the Preferred Stock Unit Offering, Holdings paid the Label Advances to the Music Labels in the aggregate amount of $2,500,000. We expect to bring CÜR Music to market in the second or third quarter of 2018 and begin to generate subscription revenue. However, we need to raise a substantial amount of capital to fully implement our business plan, market CÜR Music, for additional content license costs, and for general working capital.

Marketing

We plan to bring a transformative music service to market by focusing intently on Millennials and creating a brand that is more personal and accessible than any other music service in the marketplace. Our marketing plan includes paid media, distribution arrangements, social media and event marketing.

Table of Contents

Competition for Listeners

We will face competition from larger and more established media service providers. We must compete for the time and attention of listeners with more established companies offering similar services. We will compete on the basis of a number of factors, including quality of experience, relevance, acceptance and diversity of content, ease of use, price, accessibility, perceptions of ad load, brand awareness and reputation. We also will compete for listeners on the basis of our presence and visibility as compared with other providers that deliver content through the internet, mobile devices and consumer products. Many of our current and potential future competitors enjoy substantial competitive advantages, such as greater name recognition, longer operating histories and larger marketing budgets, as well as substantially greater financial, technical and other resources. For additional details on risks related to competition for listeners, please refer to the section entitled "Risk Factors" below.

Our competitors include:

	·	Other Radio Providers. We expect to compete for listeners with broadcast radio providers, including terrestrial radio providers such as iHeart Radio (formerly Clear Channel) and CBS and satellite radio providers such as Sirius XM among others. Many broadcast radio companies own large numbers of radio stations or other media properties. Many terrestrial radio stations have begun broadcasting digital signals, which provide high quality audio transmission. In addition, unlike participants in the emerging internet radio market, terrestrial and satellite radio providers, as aggregate entities of their subsidiary providers, generally enjoy larger established audiences and longer operating histories. Broadcast and satellite radio companies enjoy a significant cost advantage because we believe they pay a much lower percentage of revenue for transmissions of sound recordings.

	·	Internet Radio Providers. We also will compete directly with emerging non-interactive online radio providers such as Pandora, Spotify, Apple’s Apple Music, iHeart Radio, Slacker Personal Radio and CBS's Last.fm. We could face additional competition if known incumbents in the digital media space choose to enter the internet radio market.

	·	Other Audio Entertainment Providers. We will face competition from providers of interactive on-demand audio content and pre-recorded entertainment, such as Spotify, Apple's Apple Music and iTunes Music Store, Napster, Google Play, Tidal and Amazon, among others that allow listeners to select the audio content that they stream or purchase. This interactive on-demand content is accessible in automobiles and homes, using portable players, mobile phones and other wireless devices. The audio entertainment marketplace continues to rapidly evolve, providing our listeners with a growing number of alternatives and new media platforms.

	·	Other Forms of Media. We will compete for the time and attention of our listeners with providers of other forms of in-home and mobile entertainment. To the extent existing or potential listeners choose to watch cable television, stream video from on-demand services such as Netflix, Hulu, VEVO or YouTube, or play interactive video games on their home-entertainment system, computer or mobile phone, rather than listen to the CÜR Music service, these content services pose a competitive threat.

We believe our competitive advantages will include:

	·	Our product will not contain interruptive advertising. This feature will be attractive for all music listeners that do not want their music constantly interrupted with audio "ads."

	·	Our product enables users to share songs and integrate their music with photos and personal video.

	·	Our product is a hybrid music streaming service that offers internet radio style listening capability with an on-demand component that includes an 8-song musical selfie - the CÜR8.

	·	Our product features a unique, user interface and experience with our "buttonless player".

Table of Contents

Competition for Advertisers

We intend to generate a portion of our revenue from advertising on our website and mobile applications. We will be in competition for potential advertisers with other content providers for a share of our advertising customers' overall marketing budgets. We anticipate having to compete on the basis of a number of factors, including perceived return on investment, effectiveness and relevance of our advertising products, pricing structure and ability to deliver large volumes or precise types of ads to targeted demographics. We believe that our ability to deliver targeted and relevant ads across a wide range of platforms allows us to compete favorably on the basis of these factors and justify a long-term profitable pricing structure. However, the market for online and mobile advertising solutions is intensely competitive and rapidly changing, and with the introduction of new technologies and market entrants, we expect competition to intensify in the future. For additional details on risks related to competition, please refer to the section entitled "Risk Factors" below.

Terrestrial broadcast and to a lesser extent satellite radio are significant sources of competition for advertising dollars. These radio providers deliver ads across platforms that are more familiar to traditional advertisers than the internet might be. Advertisers may be reluctant to migrate advertising dollars to our internet-based platform. Additionally, we expect to compete for advertising dollars with other traditional media companies in television and print, such as ABC, CBS, FOX and NBC, cable television channel providers, national newspapers such as The New York Times and the Wall Street Journal and some regional newspapers. These traditional outlets present us with a number of competitive challenges in attracting advertisers, including large established audiences, longer operating histories, greater brand recognition and a growing presence on the internet.

Government Regulation

As a company that intends to conduct business on the internet, we will be subject to a number of foreign and domestic laws and regulations relating to consumer protection, information security, data protection and privacy, among other things. Many of these laws and regulations are still evolving and could be interpreted in ways that could harm our business. In the area of information security and data protection, the laws in several states require companies to implement specific information security controls to protect certain types of information. Likewise, all but a few states have laws in place requiring companies to notify users if there is a security breach that compromises certain categories of their information. Any failure on our part to comply with these laws may subject us to significant liabilities.

We are also subject to federal and state laws regarding privacy of listener data. Once we launch the CÜR Music product, we will adopt a privacy policy, which will describe our practices concerning the use, transmission and disclosure of listener information and will be posted on our website. Any failure to comply with our posted privacy policy or privacy-related laws and regulations could result in proceedings against us by governmental authorities or others, which could harm our business. Further, any failure by us to adequately protect the privacy or security of our listeners' information could result in a loss of confidence in our service among existing and potential listeners, and ultimately, in a loss of listeners and advertising customers, which could adversely affect our business.

Intellectual Property

Our success depends upon our ability to protect our technologies and intellectual property. To accomplish this, we rely on a combination of intellectual property rights, including trade secrets, trademarks, contractual restrictions, technological measures and other methods. We entered into confidentiality and proprietary rights agreements with our employees, consultants and business partners, and we control access to and distribution of our proprietary information.

We have registered the internet domain name www.curmusic.com for our website, as well as various other domain names. We have registered trademarks for "Raditaz," "Tunevision" and "CÜR."

Table of Contents

Research and Development

Prior to launch, we are devoting substantially all of our financial and business focus to enhance the product, raise capital, negotiate content licensing arrangements and build our technology infrastructure.

Research and development expenses were approximately $6.6 million since inception through the year ended December 31, 2017, comprised primarily of employee wages and professional services associated with the CÜR Music application development of the user interface, user experience, back-end technology on all platforms, iOS, Android and Web. Research and Development also include the costs of content while in development and Beta.

Employees

On August 16, 2016, we had laid off all of our employees and ceased significant operations, other than capital raising activities intended to continue our Music Streaming Business. We hired an Investor Relations Analyst on January 8, 2017, but terminated his employment as of August 17, 2017. We recently appointed Thomas Brophy as President and Chief Executive Officer, John Egazarian as Head of Product, Chief Operating Officer, Michael Betts as Chief Technology Officer, and Kelly Sardo as Chief Financial Officer, Secretary and Treasurer, and have hired nine other full-time employees. As a result, as of the date hereof, we have thirteen full-time regular employees. None of our employees were or are covered by collective bargaining agreements. Generally, we considered our relations with our employees to be good. However, the Company has not yet paid its employees for work rendered during the first three quarters of 2016. Other than the 2016 accrued payroll, no other periods have been unpaid and accrued. It is the Company's intention to pay the accrued payroll as soon as practicable. Certain of the Company’s former employees have filed claims against the Company for payment of unpaid wages totaling $50,000 which remain outstanding. In addition, the Company has agreed to settlements on employee claims totaling $237,343 which also remain outstanding. The Company expects to pay these claims and settlements as soon as practicable.

Reports to Security Holders

We file annual, quarterly and current reports and other information with the SEC. You may read and copy any reports, statement or other information that we file with the SEC at the SEC's public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at (202) 551-8090 for further information on the public reference room. These SEC filings are also available to the public from commercial document retrieval services and at the Internet site maintained by the SEC at http://www.sec.gov.

Table of Contents

ITEM 1A. RISK FACTORS

THIS ANNUAL REPORT CONTAINS CERTAIN STATEMENTS RELATING TO FUTURE EVENTS OR THE FUTURE FINANCIAL PERFORMANCE OF OUR COMPANY. YOU ARE CAUTIONED THAT SUCH STATEMENTS ARE ONLY PREDICTIONS AND INVOLVE RISKS AND UNCERTAINTIES, AND THAT ACTUAL EVENTS OR RESULTS MAY DIFFER MATERIALLY. IN EVALUATING SUCH STATEMENTS, YOU SHOULD SPECIFICALLY CONSIDER THE VARIOUS FACTORS IDENTIFIED IN THIS ANNUAL REPORT, INCLUDING THE MATTERS SET FORTH BELOW, WHICH COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE INDICATED BY SUCH FORWARD-LOOKING STATEMENTS.

AN INVESTMENT IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS BEFORE DECIDING TO INVEST IN OUR COMPANY. IF ANY OF THE FOLLOWING RISKS ACTUALLY OCCUR, OUR BUSINESS, FINANCIAL CONDITION, RESULTS OF OPERATIONS AND PROSPECTS FOR GROWTH WOULD LIKELY SUFFER.

General Risks

We have a limited operating history upon which investors can evaluate our future prospects. We may never attain profitability.

We have been developing CÜR Music and have not yet begun any commercial operations. Historically, we were a shell company with a limited operating history in an unrelated business and no assets other than cash. Upon consummation of the Contribution with CÜR Media, LLC, we redirected our business focus towards the development and commercialization of a music streaming subscription service. Although CÜR Media, LLC was incorporated in 2008, it did not launch its Raditaz DMCA-compliant internet radio product until 2012. Subsequently, the Raditaz iPhone and Android applications and website were taken offline to focus resources on the development of CÜR Music, which we planned to launch once adequate funding was in place. Therefore, both the Company and CÜR Media, LLC have limited operating histories upon which an evaluation of our business plan or performance and prospects can be made. Our proposed operations are therefore subject to all of the risks inherent in light of the expenses, difficulties, complications and delays frequently encountered in connection with the formation of any new business, the development of a product, as well as those risks that are specific to our proposed business in particular. The risks include, but are not limited to, the possibility that we will not be able to develop functional and scalable products and services, or that although functional and scalable, our products and services will not be accepted in the market. To successfully introduce and market our products at a profit, we must establish brand name recognition and competitive advantages for our products. There are no assurances that the Company can successfully address these challenges. If it is unsuccessful, the Company and its business, financial condition and operating results will be materially and adversely affected.

Given our limited operating history, management has little basis on which to forecast future demand for our products. The current and future expense levels of the Company following the Contribution are based largely on estimates of planned operations and future revenues rather than experience. It is difficult to accurately forecast future revenues because the business of the Company is new, and its market has not been developed. We do not expect meaningful revenues until late 2018 or early 2019. If the forecasts for the Company prove incorrect, the business, operating results and financial condition of the Company will be materially and adversely affected.

Table of Contents

We have a history of losses and we may not achieve or sustain profitability in the future.

We have incurred losses in each fiscal year since our incorporation in 2011, and CÜR Media, LLC has incurred losses in each fiscal year since its formation in 2008. We anticipate that our operating expenses will increase in the foreseeable future as we continue to invest to grow our business, acquire customers and develop our platform and new functionality. These efforts may prove more expensive than we currently anticipate, and we may not succeed in generating sufficient revenues to offset these higher expenses. If we are unable to do so, the Company and its business, financial condition and operating results could be materially and adversely affected.

We may not be able to secure additional financing.

On November 16, 2017, Holdings consummated the Holdings Offerings. The net proceeds from the Holdings Offerings, in the aggregate amount of $6,932,288 (after deducting fees and expenses related to the Holdings Offerings in the aggregate amount of $722,074 (including placement agent fees, legal fees and expenses and fees payable to the escrow agent)) are to be extended in a line of credit to the Company (the “Post-Closing Line of Credit Note”), for up to the full amount of the aggregate net proceeds from the Holdings Offerings.

If we are unable to finalize terms for the Post-Closing Line of Credit Note with Holdings, or are otherwise unable to raise additional financing, we will not have sufficient funds to complete the development of CÜR Music, make payments as they come due to music labels and publishers and to begin to execute our marketing plan. We may need to raise additional funds in order to fully implement our business plan, support our growth, develop new or enhanced services and products, respond to competitive pressures, acquire or invest in complementary or competitive businesses or technologies, or take advantage of unanticipated opportunities. We cannot be sure that this additional financing, will be available on acceptable terms or at all. Furthermore, any debt financing, if available, may involve restrictive covenants, which may limit our operating flexibility with respect to business matters. If additional funds are raised through the issuance of equity securities, the percentage ownership of our existing shareholders will be reduced, our shareholders may experience additional dilution in net book value, and such equity securities may have rights, preferences, or privileges senior to those of our existing shareholders. If adequate funds are not available on acceptable terms, or at all, we may be unable to develop or enhance our products and services, take advantage of future opportunities, repay debt obligations as they become due, or respond to competitive pressures, any of which would have a material adverse effect on our business, prospects, financial condition, and results of operations. However, if adequate funds are not available to us when we need them, and we are unable to commercialize our products giving us access to additional cash resources, we will be required to curtail or cease our operations.

Our independent registered public accounting firm has expressed doubt about our ability to continue as a going concern.

Our historical financial statements have been prepared under the assumption that we will continue as a going concern. Our independent registered public accounting firm has issued a report on the Company's financial statements at December 31, 2017 and 2016, appearing elsewhere herein, that included an explanatory paragraph referring to our recurring net losses and accumulated deficit, and expressing substantial doubt in our ability to continue as a going concern. Our ability to continue as a going concern is dependent upon our ability to obtain additional equity financing or other capital, attain further operating efficiencies, reduce expenditures, and, ultimately, to generate revenue. Our financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Our products may not be accepted in the market.

We cannot be certain that CÜR Music, or other products or services we may develop or market, will achieve or maintain market acceptance. Market acceptance of our products depends on many factors, including our ability to license the necessary content from the music labels, performance rights organizations and publishers, to convince key opinion leaders to provide recommendations regarding our products, convince distributors and customers that our technology is an attractive alternative to other technologies, supply and service sufficient quantities of products directly or through marketing alliances, and price products competitively in light of the current macroeconomic environment. If our products are not accepted in market, the Company and its business, financial condition and operating results could be materially and adversely affected.

Business Risks

Online and mobile music services are an emerging market, which makes it difficult to evaluate our current business and future prospects.

The market for streaming music on the internet and on mobile devices has undergone rapid and dramatic changes in its relatively short history and is subject to significant challenges. As a result, the future revenue and income potential of our business is uncertain. You should consider our business and prospects in light of the risks and difficulties we encounter in this new and rapidly evolving market, which risks and difficulties include, among others:

Table of Contents

	·	Our relatively new, evolving and unproven business model.

	·	Our ability to build our listener base and our paid subscriber base.

	·	Our ability to effectively convert users from free trial to our paid subscription service.

	·	Our ability to negotiate, finalize and maintain economically feasible agreements with the major and independent music labels, publishers and performance rights organizations.

	·	Our ability to attract advertisers and prove to advertisers that our advertising platform is effective enough to justify a pricing structure that is profitable to us.

	·	Our ability to develop and maintain relationships with makers of mobile devices, consumer electronics products and automobiles.

	·	Our ability to develop and maintain relationships with Apple's iTunes Store (App Store), Google's Google Play Store, and other distribution platforms.

	·	Our operation under an evolving music industry licensing structure that may change or cease to exist, which in turn may result in significant increase in operating expenses.

Failure to successfully address these risks and difficulties, and other challenges associated with operating in a new and emerging market, could significantly harm our business, financial condition, results of operations, liquidity and prospects.

The Company has been dormant since mid-2016 and is planning to re-start operations.

We were forced to lay off our employees in August of 2016 due to our inability to raise the necessary funds to launch the CÜR Music. Since then our only significant activities were related to capital raising activities intended to continue our Music Streaming Business. These capital-raising activities were led by our Founder and then-sole director, Thomas Brophy. Now that the Holdings Offerings have been consummated, we intend to re-hire as many former employees as possible and to re-integrate with various vendors including Amazon Web Services, Zuora, MediaNet, among others. If we are unable to hire the necessary employees and/or are unable to integrate with certain of our vendors, our ability to complete the development of CÜR Music, launch CÜR Music and operate the business will be adversely impacted.

The Company plans to transition from Rovi to Gracenote.

We were previously integrated with Rovi to utilize their platform for generating music playlists and other information for CÜR Music users. We are transitioning to Gracenote for these services. If we are unable to fully integrate with Gracenote, our ability to complete the development of CÜR Music, launch CÜR Music and operate our business will be adversely impacted.

The Company has significant liabilities to certain vendors.

As the Company was encountering financial difficulties in 2016, we accumulated large accounts payable balances to various vendors. If we are unable to reach settlements on our accounts payable, vendors may file lawsuits against the Company. The costs to defend these lawsuits could be significant, and we may have to pay accounts payable balances including penalties and interest, which would adversely affect our business.

Table of Contents

We have incurred significant operating losses in the past, and we may not be able to generate sufficient revenue to be profitable, or to generate positive cash flow on a sustained basis. In addition, our revenue growth rate may decline.

Since our inception in January 2014, we have incurred significant operating losses and as of December 31, 2017, had an accumulated deficit of $(23.4) million. For the years ended December 31, 2017 and 2016, our operating losses were $(2.3) million and $(6.4) million, respectively. We cannot assure you that we will generate sufficient revenue from the sale of our subscription service and our other revenue sources to offset the cost of our content and royalty expenses. If we cannot successfully earn revenue at a rate that exceeds the operational costs, including royalty expenses, associated with our service, we will not be able to achieve or sustain profitability or generate positive cash flow on a sustained basis.

We also expect our costs to increase in future periods, which could negatively affect our future operating results and ability to achieve profitability. We expect to continue to expend substantial financial and other resources on:

securing top quality audio and video content from leading music labels, distributors, aggregators, as well as the publishing right to the underlying musical compositions;

creating new forms of original content;

our technology infrastructure, including website architecture, development tools, scalability, availability, performance, security, and disaster recovery measures;

research and development, including investments in our research and development team and the development of new features;

sales and marketing;

international expansion in an effort to increase our member base, engagement, and sales; and

general administration, including legal and accounting expenses, related to being a public company.

These investments may not result in increased revenue or growth in our business. If we fail to continue to grow our revenue and overall business, our business, operating results, and financial condition would be harmed.

We are a party to many license agreements which are complex and impose numerous obligations upon us which may make it difficult to operate our business, and a breach of such agreements could adversely affect our business, operating results, and financial condition.

Many of our license agreements are complex and impose numerous obligations on us, including obligations to, among other things:

meet certain user and conversion targets in order to secure certain licenses and royalty rates;

calculate and make payments based on complex royalty structures, which requires tracking usage of content on our Service that may have inaccurate or incomplete metadata necessary for such calculation;

provide periodic reports on the exploitation of the content in specified formats;

represent that we will obtain all necessary publishing licenses and consents and pay all associated fees, royalties, and other amounts due for the licensing of musical compositions;

comply with certain marketing and advertising restrictions; and

comply with certain security and technical specifications.

Many of our license agreements grant the licensor the right to audit our compliance with the terms and conditions of such agreements. Some of our license agreements also include so-called “most favored nations” provisions which require that certain terms (including potentially the material terms) of such agreements are no less favorable than those provided to any similarly situated licensor. If triggered, these most favored nations provisions could cause our payments or other obligations under those agreements to escalate substantially. Additionally, some of our license agreements require consent to undertake certain business initiatives and without such consent, our ability to undertake new business initiatives may be limited. This could hurt our competitive position.

Table of Contents

If we materially breach any of these obligations or any other obligations set forth in any of our license agreements, or if we use content in ways that are found to exceed the scope of such agreements, we could be subject to monetary penalties and our rights under such license agreements could be terminated, either of which could have a material adverse effect on our business, operating results, and financial condition. We have entered into settlement agreements requiring us to make substantial payments in the past, and may do so in the future, as a result of claims that we are in breach of certain provisions in, or have exceeded the scope of, our license agreements.

The Company received a Wells Notice from the SEC related to its delinquent financial statements.

On July 19, 2017, we received a “Wells Notice” from the Staff of the SEC. The Wells Notice provides notification to the Company that the Staff has made a preliminary determination to recommend that the SEC institute administrative proceedings against the Company pursuant to Sections 12(j) and 12(k) of the Exchange Act, based solely upon the Company’s failure to comply with its reporting obligations under Section 13(a) of the Exchange Act. Sections 12(j) grants the SEC the right, after notice and opportunity for a hearing, to revoke the registration of a security. Section 12(k) grants the SEC the right to suspend trading in a security.

At the time we received the Wells Notice, the Company had not filed its quarterly reports on Form 10-Q with the SEC for the quarters ended June 30, 2016, September 30, 2016, March 31, 2017 and June 30, 2017. The Company also had not filed its Annual Report on Form 10-K for the year ended December 31, 2016. As of this filing, the Company has filed all delinquent reports for fiscal years ended December 31, 2016 and 2017.

In accordance with SEC rules, on August 25, 2017, the Company made a written submission to the SEC in response to the Wells Notice, in which, among other things, it conveyed the Company’s present intention to file the delinquent reports and become current with its SEC filing requirements and, as such, set forth the reasons why the proposed enforcement action should not be filed. While no assurances can be made, the Company believes that, as a result of making these filings, the SEC will have no further reason to institute the proposed administrative proceedings, or, if instituted, to continue such proceedings. However, there can be no assurance that the SEC will not bring an enforcement action against the Company, which could result in a trading suspension of the Company’s Common Stock and the de-registration of the Company’s securities under the Exchange Act. Administrative proceedings, if instituted, will be held before an administrative law judge. If the SEC decides to institute the proposed administrative proceedings, our business and investors’ perception of our business will be adversely affected.

Our failure to manage growth, diversification and changes to our business could harm our business.

We currently have no revenue, but may encounter significant growth upon the anticipated launch of our product, CÜR Music. The failure to successfully manage and monetize any growth, and to successfully diversify our business in the future, could harm the success and longevity of our company.

Investing in our securities is considered a high-risk investment.

An investment in an early stage company such as ours involves a degree of risk. There can be no assurance that our online streaming music monthly subscription platform will be successful or profitable. If our streaming service id not successful, your entire investment may be lost.

We depend on key personnel to operate our business, and if we are unable to attract, retain, and integrate qualified personnel, our ability to develop and successfully grow our business could be harmed.

We believe that our future success is highly dependent on the continued services of our key officers, employees, and member of our Board of Directors, as well as our ability to attract and retain highly skilled and experienced technical personnel. During 2016, we were unable to raise the capital necessary to enable us to continue to operate our business and were forced to cease significant operations, other than capital raising activities meant to continue our Music Streaming Business. On August 16, 2016, we terminated Kelly Sardo as our Chief Financial Officer and Treasurer. In addition, on August 16, 2016, we terminated William Campbell as our Chief Strategy Officer, John Egazarian as our Chief Operating Officer, and Michael Betts as our Chief Technology Officer. We believe our future success is highly dependent on our ability to re-hire these key officers and employees and, at this time, we have already rehired John Egazarian, Michael Betts and Kelly Sardo. If we are not able to reach agreement to employ certain other key officers and employees, our operations could be adversely affected.

Table of Contents

In addition, the departure of Thomas Brophy, our President and Chief Executive Officer, or any major change in our Board of Directors or management, such as the departure of our Directors, William West Duker or Edward Swyer could adversely affect our operations.

Expansion of our operations into new fields may subject us to additional business, legal, financial and competitive risks.

After the launch of CÜR Music, we may decide to provide non-musical content such as talk, comedy, news, weather, or other areas where we may have less experience or where we could be subject to additional business, legal, financial, and competitive risks. We have not identified a timeframe in which we may expand into new areas of content. Expanding into these additional areas could potentially have a negative effect on our overall business.

Users of the Raditaz application and/or website may not transition to CÜR Music.

We have taken our beta product, Raditaz, offline in order to develop CÜR Music. We intend to attempt to transition former beta users of Raditaz to CÜR Music through a targeted communication strategy. However, there are no assurances that users of Raditaz will transition to CÜR Music. If Raditaz's beta users do not transition to CÜR Music, CÜR Music's capital needs, results of operations, viability and growth prospects may be adversely affected.

Much of the success of our business plan relies on the accuracy of our business and customer research.

We engaged an outside research firm to conduct a research study regarding, among other things, the demand for CÜR Music's proposed product and features set. Our product was built and negotiations with the labels were conducted with the results of this research in mind. If the results of the research study prove to be inaccurate, our capital needs, results of operations, viability and growth prospects will be adversely affected.

If our efforts to attract prospective users and to retain existing users are not successful, our growth prospects and revenue will be adversely affected.

We plan to provide new users of CÜR Music with a free trial upon registration. Our ability to grow our business and generate revenue depends on obtaining, retaining and expanding our total user base. If we are not able to convert users of our free trial to become paying subscribers, our growth prospects and ability to generate revenues will be negatively impacted. Our ability to attract new users, retain existing users, and convert free trial users to subscribers depends in large part on our ability to continue to offer leading technologies and products, compelling content, superior functionality, and an engaging User experience. Some of our competitors, including Apple, Amazon, and Google, have developed, and are continuing to develop, devices for which their music streaming service is preloaded, which puts us at a significant competitive disadvantage. As consumer tastes and preferences change on the internet and with mobile devices and other internet-connected products, we will need to enhance and improve our existing service, introduce new services and features, and maintain our competitive position with additional technological advances and an adaptable platform. If we fail to keep pace with technological advances or fail to offer compelling product offerings and state-of-the-art delivery platforms to meet consumer demands, our ability to grow or sustain the reach of our service, attract and retain users, and increase our subscribers may be adversely affected.

In order to increase our free trial and paid subscribers we will need to address a number of challenges, including:

providing users with a consistently high-quality and user-friendly experience;

continuing to curate a catalog of content that consumers want to engage with on our service;

continuing to innovate and keep pace with changes in technology and our competitors; and

maintaining and building our relationships with the makers of consumer products such as mobile devices.

Table of Contents

We may not be able to successfully overcome each challenge, which could have a material adverse effect on our business, operating results, and financial condition.

The success of our products relies heavily on the use of search technologies and marketing campaigns to drive users to our websites and mobile applications.

We intend to utilize search technologies and services, to engage in marketing campaigns and referral relationships, to use social platforms, to use a marketing agency, and to use influencers, among other means, to drive user traffic to our websites and mobile applications. If we are unable to utilize search technologies and other services that generate significant traffic to our websites and mobile applications, or we are unable to enter into or continue distribution relationships that drive significant traffic to our websites and/or mobile applications, our business could be harmed, causing our revenues to decline.

Our current marketing budget may not be sufficient to obtain budgeted subscriber levels. We may have to spend more than our marketing plan calls for to obtain new subscribers.

We anticipate incurring significant expenses to obtain and maintain subscribers to CÜR Music. We will utilize a number of different channels and partnerships, including but not limited to social media partners, to do so and we may be required to expend greater resources on advertising, marketing and other brand-building efforts to preserve and enhance consumer awareness of our brand, which would adversely affect our operating results and may not be effective.

We may not be able to retain, find and/or hire employees with the necessary skills to maintain and enhance the necessary software applications that are necessary to operating and growing the business.

Premier technology software developers, designers and other technology personnel are in high demand in our industry. There may be competitors or other technology companies that have more capital to allocate for such personnel, making our search for such job positions more difficult and expensive, thus increasing our business expenses. As of August 16, 2016, we had laid off all of our employees and ceased significant operations other than capital raising activities meant to continue our Music Streaming Business. If we are unable to attract and retain certain of our former employees, or hire other qualified candidates, we may have difficulty completing the development of CÜR Music. If we are unable to complete the development of CÜR Music, we may not be able to commercially launch, which would have an adverse effect on our business.

If we cannot maintain our corporate culture as we grow, we could lose the innovation, teamwork and focus that contribute crucially to our business.

We believe that a critical component of our success is the corporate culture that we have prior to ceasing significant operations, which we believe fostered innovation, encouraged teamwork, cultivated creativity and promoted focus on execution. We invested substantial time, energy and resources in building a highly collaborative team that worked together effectively in a non-hierarchical environment designed to promote openness, honesty, mutual respect and pursuit of common goals. We may find it difficult to replicate that corporate culture, and, if we are able to replicate our previous corporate culture, we may find it difficult to maintain these valuable aspects of our corporate culture. Any failure to rebuild and preserve our culture could negatively impact our future success, including our ability to attract and retain employees, encourage innovation and teamwork and effectively focus on and pursue our corporate objectives.

There are no assurances that our development team can build all of CÜR Music's planned product features.

While our application has been built and tested, since it has been offline since mid-2016, we now must re-integrate our software code and re-integrate with our vendors. Our software applications may not work as it did previously. We have designed and built CÜR Music to include features that may be considered ambitious and untested, such as a library of several million songs, on-demand playlists, unlimited song skip and repeat functionality, social features, lyric synchronization, photo and video integration and storage and more. The technology is extremely complex and there are no assurances that the product features will continue to function as built. If we are not able to prevent and or fix issues with the application, our capital needs, results of operations, viability and growth prospects will be adversely affected.

Table of Contents

Our Service and software are highly technical and may contain undetected software bugs or vulnerabilities, which could manifest in ways that could seriously harm our reputation and our business.

Our Service and software are highly technical and complex. Our service, CÜR Music, or any other products we may introduce in the future, may contain undetected software bugs, hardware errors, and other vulnerabilities. These bugs and errors can manifest in any number of ways in our products, including through diminished performance, security vulnerabilities, malfunctions, or even permanently disabled products. We have a practice of rapidly updating our products and some errors in our products may be discovered only after a product has been used by users, and may, in some cases, be detected only under certain circumstances or after extended use. Any errors, bugs, or other vulnerabilities discovered in our code or backend after release could damage our reputation, drive away users, allow third parties to manipulate or exploit our software, lower revenue, and expose us to claims for damages, any of which could seriously harm our business.

We also could face claims for product liability, tort, or breach of warranty. Defending a lawsuit, regardless of its merit, is costly and may divert management’s attention and seriously harm our reputation and our business. In addition, if our liability insurance coverage proves inadequate or future coverage is unavailable on acceptable terms or at all, our business could be seriously harmed.

If we fail to accurately predict and play music that our listeners enjoy, we may fail to retain existing and attract new subscribers, both online and offline.

Our personalized playlist generating system is being developed through a partnership with a digital entertainment service provider, Gracenote, and is being designed to enable us to predict listener music preferences and select music content tailored to our listeners' music tastes. While this third-party provider has invested significant resources in refining these technologies, we cannot assure you that such investments will continue in the future or yield an attractive return or that such refinements will be effective. The effectiveness of personalized playlist generating system depends in part on our ability to gather and effectively analyze large amounts of listener data and listener feedback, and we have no assurance that we will be successful in enticing listeners to provide feedback sufficient for our database to effectively predict and select new and existing songs. In addition, our ability to offer listeners songs that they have not previously heard and impart a sense of discovery depends on our ability to acquire and appropriately categorize additional songs that will appeal to our listeners' diverse and changing tastes. Our ability to predict and select music content that our listeners enjoy is critical to the perceived value of our service among listeners and failure to make accurate predictions would adversely affect our ability to attract and retain listeners, convert free listeners to paid subscribers, increase listener hours and sell advertising.

Various regulations as well as self-regulation related to privacy and data security concerns pose the threat of lawsuits and other liability, require us to expend significant resources, and may harm our business, operating results, and financial condition.

We intend to collect and utilize personal and other information from and about our users as they interact with our service. Various laws and regulations govern the collection, use, retention, sharing, and security of the data we receive from and about our users. Privacy groups and government bodies have increasingly scrutinized the ways in which companies link personal identities and data associated with particular users or devices with data collected through the internet, and we expect such scrutiny to continue to increase. Alleged violations of laws and regulations relating to privacy and data security, and any relevant claims, may expose us to potential liability and may require us to expend significant resources in responding to and defending such allegations and claims. Claims or allegations that we have violated laws and regulations relating to privacy and data security could in the future result in negative publicity and a loss of confidence in us by our users and our partners. Such claims or allegations also may subject us to fines, including by data protection authorities and credit card companies, and could result in the loss of our ability to accept credit and debit card payments.

Existing privacy-related laws and regulations in the United States and other countries are evolving and are subject to potentially differing interpretations, and various U.S. federal and state or other international legislative and regulatory bodies may expand or enact laws regarding privacy and data security-related matters. In recent years, U.S. lawmakers and regulators have expressed concern over electronic marketing and the use of third-party cookies, web beacons, and similar technology for online behavioral advertising.

Table of Contents

We may find it necessary or desirable to join self-regulatory bodies or other privacy-related organizations that require compliance with their rules pertaining to privacy and data security. We also may be bound by contractual obligations that limit our ability to collect, use, disclose, share, and leverage user data and to derive economic value from it. New laws, amendments to, or reinterpretations of existing laws, rules of self-regulatory bodies, industry standards, and contractual obligations, as well as changes in our users’ expectations and demands regarding privacy and data security, may limit our ability to collect, use, and disclose, and to leverage and derive economic value from user data. Restrictions on our ability to collect, access and harness user data, or to use or disclose User data or any profiles that we develop using such data, may require us to expend significant resources to adapt to these changes, and would in turn limit our ability to stream personalized music content to our users and offer targeted advertising opportunities to our users.

In addition, any failure or perceived failure by us to comply with privacy or security laws, policies, legal obligations, industry standards, or any security incident that results in the unauthorized release or transfer of personal data may result in governmental enforcement actions and investigations, including fines and penalties, enforcement orders requiring us to cease processing or operate in a certain way, litigation and/or adverse publicity, including by consumer advocacy groups, and could cause our customers to lose trust in us, which could have an adverse effect on our reputation and business. Such failures could have a material adverse effect on our financial condition and operations. If the third parties we work with (for example, cloud-based vendors) violate applicable laws or contractual obligations or suffer a security breach, such violations also may put us in breach of our obligations under privacy laws and regulations and/or could in turn have a material adverse effect on our business.

We may incur expenses to comply with privacy and security standards and protocols imposed by law, regulation, self-regulatory bodies, industry standards, and contractual obligations. Increased regulation of data capture, analysis, and utilization and distribution practices, including self-regulation and industry standards, could increase our cost of operation, limit our ability to grow our operations, or otherwise adversely affect our business, operating results, and financial condition.

Changes in regulations or user concerns regarding privacy and protection of user data, or any failure or appearance of failure to comply with such laws, could diminish the value of our Service and cause us to lose users and revenue.

The regulatory framework for privacy issues worldwide is currently in flux and is likely to remain so for the foreseeable future. Practices regarding the collection, use, storage, transmission, and security of personal information by companies operating over the internet have recently come under increased public scrutiny. The U.S. government, including the Federal Trade Commission and the Department of Commerce, may continue to review the need for greater regulation over the collection of information concerning consumer behavior on the internet, including regulation aimed at restricting certain targeted advertising practices. Various government and consumer agencies also have called for new regulation and changes in industry practices. Our business, including our ability to operate and expand internationally, could be adversely affected if legislation or regulations are adopted, interpreted, or implemented in a manner that is inconsistent with our current business practices and that require changes to these practices, the design of our website, services, features, or our privacy policy. In particular, the success of our business has been, and we expect will continue to be, driven by our ability to responsibly use the personal data that our users share with us. Therefore, our business could be harmed by any significant change to applicable laws, regulations, or industry practices regarding the use of our users’ personal data, for example regarding the manner in which disclosures are made and how the express or implied consent of users for the use of personal data is obtained. Such changes may require us to modify our services and features, possibly in a material manner, and may limit our ability to develop new services and features that make use of the data that our users voluntarily share with us. In addition, some of our developers or other partners, such as those that help us measure the effectiveness of marketing and/or ads, may receive or store information provided by us or by our users through mobile or web applications integrated with our service. We may provide limited information to such third parties based on the scope of services provided to us. However, if these third parties or developers fail to adopt or adhere to adequate data security practices, or in the event of a breach of their networks, our data or our Users’ data may be improperly accessed, used, or disclosed.

Table of Contents

We are subject to a number of risks related to credit card and debit card payments that we plan to accept, and we may not be able to enter into economically favorable credit and debit card processing arrangements.

Our subscription business, which we project will make up more than 80-90% of our total revenue, will be completely dependent on our ability and third-party processors' abilities to process monthly subscription payments through credit and debit card processing methods. Any disruption in this service could adversely affect our business.

For credit and debit card payments, we will be required to pay interchange and other fees, which may increase over time. An increase in those fees would require us to either increase the prices we charge for our products, or suffer an increase in our operating expenses, either of which could adversely affect our business, financial condition and results of operations.

If we, or any of our processing vendors, have problems with our billing software or our third party's billing software, or the billing software malfunctions, it could have an adverse effect on our subscriber satisfaction and could cause one or more of the major credit card companies to disallow our continued use of their payment products. In addition, if our billing software or our third party's billing software fails to work properly and, as a result, we do not automatically charge our subscribers' credit cards on a timely basis or at all, our business, financial condition and results of operations could be adversely affected.

We will also be subject to payment card association operating rules, certification requirements, and rules governing electronic funds transfers, which could change or be reinterpreted to make it more difficult for us to comply. We will need to assess whether we are fully compliant with the Payment Card Industry, or PCI, Data Security Standard, or PCI DSS, a security standard with which companies that collect, store, or transmit certain data regarding credit and debit cards, credit and debit card holders, and credit and debit card transactions are required to comply. Our failure to comply fully with PCI DSS may violate payment card association operating rules, federal and state laws and regulations, and the terms of our contracts with payment processors and merchant banks. Such failure to comply fully also may subject us to fines, penalties, damages, and civil liability, and may result in the loss of our ability to accept credit and debit card payments. Further, there is no guarantee that, even if PCI DSS compliance is achieved, we will maintain PCI DSS compliance or that such compliance will prevent illegal or improper use of our payment systems or the theft, loss, or misuse of data pertaining to credit and debit cards, credit and debit card holders and credit and debit card transactions.

If we fail to adequately control fraudulent credit card transactions, we may face civil liability, diminished public perception of our security measures and significantly higher credit card-related costs, each of which could adversely affect our business, financial condition and results of operations.

If we are unable to maintain our chargeback rate or refund rates at acceptable levels, credit card and debit card companies may increase our transaction fees or terminate their relationships with us. Any increases in our credit card and debit card fees could adversely affect our results of operations, particularly if we elect not to raise our rates for our service to offset the increase. The termination of our ability to process payments on any major credit or debit card would significantly impair our ability to operate our business.

We may experience a reduction or increase in the prices of our products, which would have a negative impact on our business and on our margins.

We anticipate charging a monthly fee for our base platform. We anticipate our base platform to represent as much as 85% of subscription revenues. Our business model is unproven, and if we have to adjust our subscription prices lower, the lower revenue could adversely affect our business. Conversely, if we have to adjust our subscription prices higher, it would be more difficult to attract and retain our subscribers, and the impact would likely cause a negative trend in our subscriber retention numbers, and could adversely affect our business.

Table of Contents

Minimum guarantees required under certain of our license agreements for sound recordings and underlying musical compositions may limit our operating flexibility and may adversely affect our business, operating results, and financial condition.

Certain of our license agreements for sound recordings and musical compositions (both for mechanical rights and public performance rights) contain minimum guarantees and/or require that we make minimum guarantee payments. Such minimum guarantees related to our content acquisition costs are not always tied to our number of users, active users, paid subscribers, or the number of sound recordings and musical compositions used on our service. Accordingly, our ability to achieve and sustain profitability and operating leverage on our service in part depends on our ability to increase our revenue through increased sales of subscription services on terms that maintain an adequate gross margin. The duration of our license agreements that contain minimum guarantees is typically between one and three years, but our subscribers may cancel their subscriptions at any time. If our forecasts of subscriber acquisition do not meet our expectations or the number of our subscribers, our margins may be materially and adversely affected. To the extent our service revenue growth does not meet our expectations, our business, operating results, and financial condition also could be adversely affected as a result of such minimum guarantees. In addition, the fixed cost nature of these minimum guarantees may limit our flexibility in planning for, or reacting to, changes in our business and the market segments in which we operate.

We rely on estimates of the market share of licensable content controlled by each content provider, as well as our own user growth and forecasted advertising revenue, to forecast whether such minimum guarantees could be recouped against our actual content acquisition costs incurred over the duration of the license agreement. To the extent that these revenue and/or market share estimates underperform relative to our expectations, leading to content acquisition costs that do not exceed such minimum guarantees, our margins may be materially and adversely affected.

Difficulties in obtaining accurate and comprehensive information necessary to identify the compositions embodied in sound recordings on our service and the ownership thereof may impact our ability to perform our obligations under our licenses, affect the size of our catalog, impact our ability to control content acquisition costs, and lead to potential copyright infringement claims.

Comprehensive and accurate ownership information for the musical compositions embodied in sound recordings is often unavailable to us or difficult or, in some cases, impossible for us to obtain, sometimes because it is withheld by the owners or administrators of such rights. We currently rely on the assistance of third parties to determine this information. If the information provided to us or obtained by such third parties does not comprehensively or accurately identify the ownership of musical compositions, or if we are unable to determine which musical compositions correspond to specific sound recordings, it may be difficult or impossible to identify the appropriate rights holders to whom to pay royalties. This may make it difficult to comply with the obligations of any agreements with those rights holders.

In the United States, we also rely on the assistance of third parties to issue notices of intent (“NOIs”) to obtain a compulsory license under Section 115 of the Copyright Act to those copyright owners with whom we do not have a direct license agreement or, in the case of unknown copyright owners, to the United States Copyright Office. The lack of comprehensive and accurate ownership information or the inability to determine which musical compositions correspond to specific sound recordings can cause difficulties in issuing NOIs to the correct parties (including the United States Copyright Office) or serving NOIs in a timely manner and can otherwise cause difficulties in obtaining licenses. This could lead to a reduction of sound recordings available to be streamed on our Service, adversely impacting our ability to retain and expand our User base, and could make it difficult to ensure that we are fully licensed.

These challenges, and others concerning the licensing of musical compositions embodied in sound recordings on our service, may subject us to significant liability for copyright infringement, breach of contract, or other claims.

Our product is vulnerable to service disruptions and software problems.

Our users will be entirely dependent on our mobile phone application and website working properly for their enjoyment. Any disruption in these services could cause us to lose subscribers and harm our business.

Table of Contents

Changes to our products, services, technologies, licenses or business practices or strategies may drive away customers.

Any change to our business model and/or CÜR Music product may cause a loss of subscribers and the inability to attract subscribers, which may adversely affect our business. Examples of such changes include, but are not limited to, a change or drop of certain CÜR Music features, increase or decrease in subscription rates, a decrease in the quality of music streamed, a shift to a smaller library of music, inability to keep pace with competitors, and maintaining relationships with makers of consumer products such as mobile phones, tablets, and automobiles.

As new demands strain our infrastructure, scalability issues may emerge, impeding performance.

The power to expand our music platform to support growing user communities, launch new services, integrate more data, and handle greater workloads is fundamental to business growth. Data management architectures have their scaling limits. If business requirements exceed those limits, the data management system may not scale to provide critical new services, may not respond quickly to growing users and complex functionality, may degrade with new applications and may not be able to meet service level commitments, resulting in a material adverse effect on our business.

If web, smartphones, tablets and connected TV devices, their operating systems or content distribution channels, including those controlled by our competitors, develop in ways that prevent our solutions from being delivered to their users, our ability to grow our business will be impaired.

Our business model depends upon the continued compatibility of our solutions with most internet-connected devices across online, mobile, tablet and connected TV distribution channels, as well as the major operating systems that run on them. The design of these devices and operating systems are controlled by third parties with whom we do not have any formal relationships. These third parties frequently introduce new devices, and from time to time, they may introduce new operating systems or modify existing ones. In some cases, the parties that control the development of internet-connected devices and operating systems include companies that we regard as our competitors, including some of our most significant competitors. For example, Google controls the Android operating system and also controls a significant number of mobile devices. Apple, Inc. controls iOS devices including mobile, tablet and computer devices. If our solutions were unable to work on these devices or operating systems, either because of technological constraints or because a maker of these devices or developer of these operating systems wished to impair our ability to provide our solutions on them, our ability to grow our business would be impaired.

If we experience lengthened sales cycles, our business operations may be adversely affected.

Our business will be dependent on revenue from subscription, advertising and song sales, and potentially merchandise and ticket sales. Our subscription transactions, song sales and other revenues will involve credit card processing. Any delays or lengthened sales cycles, delays in collect fees due from credit card companies and/or credit card transaction cancellations, may adversely affect our business.

Degradation in our stature and reputation in the market could harm our business.

Our CÜR brand name is very important to us. Any degradation in our stature and reputation in the market may adversely affect our business.

Our failure to drive advertising revenue could harm our business.

While we anticipate revenue from advertisements to be a non-core revenue generator and eventually make up approximately 5-10% of total revenue, advertising revenue will still be an important factor in determining our financial success. Advertising within the application is not planned for launch but is anticipated after launch once we achieve a reasonable number subscribers. Our ability to attract and retain advertisers, and ultimately to generate advertising revenue, depends on a number of factors, including, but not limited to, the number of users and subscribers and the number of listener hours on CÜR Music, keeping pace with changes in technology and the competition, and competing effectively for advertising dollars from other online marketing and media companies. Our failure to drive advertising revenue could adversely affect our business.

Table of Contents

We may be unable to retain key advertisers, attract new advertisers or replace departing advertisers with advertisers that can provide comparable revenue to us.

Our success requires us to develop, maintain and expand our relationships with brand advertisers, including the ad agencies that represent them, and to develop new relationships with other brand advertisers and ad agencies. Advertising agreements generally do not include long-term obligations requiring them to purchase from us and are cancelable upon short notice and without penalty in accordance with standard terms and conditions for the purchase of internet advertising published by the Interactive Advertising Bureau. As a result, we have limited visibility as to our future advertising revenue streams from our advertisers.

Our advertisers' usage may decline or fluctuate as a result of a number of factors, including, but not limited to:

	·	the performance of their display and audio ad campaigns and their perception of the efficacy and efficiency of their advertising spending through CÜR Music;

	·	changes in the economic prospects of advertisers or the economy generally, which could alter current or prospective advertisers' spending priorities;

	·	our ability to deliver display, audio ad campaigns in full, i.e., our ability to serve each requested impression;

	·	their satisfaction with our solutions and our client support;

	·	the ability of our optimization algorithms underlying our solutions to deliver better rates of return ad spending dollars than competing solutions;

	·	seasonal patterns in advertisers' spending, which tend to be discretionary;

	·	the pricing of our or competing solutions; and

	·	reduction in spending levels or changes in brand advertisers' strategies regarding advertising spending.

If a major advertiser decides to materially reduce its advertising spend, it could do so on short or no notice. We cannot assure that our advertisers will continue to use CÜR Music, or that we will be able to replace in a timely or effective manner departing advertisers with new advertisers from whom we generate comparable revenue. If any of these factors occur, our business would be adversely affected.

Unavailability of, or fluctuations in, third-party measurements of our audience may adversely affect our ability to grow advertising revenue.

Selling ads requires that we demonstrate to advertisers that our service has substantial reach, and we may rely on third parties to quantify the reach of our service. These third-party ratings may not reflect our true listening audience and the third parties may change their methodologies, either of which could adversely impact our business. Third-party independent rating agencies have not yet developed rating systems that comprehensively and accurately measure the reach of our service. We expect that in the future these rating agencies will begin to publish increasingly reliable information about the reach of our service. However, until then, in order to demonstrate to potential advertisers the reach of our service, we must supplement third-party ratings data with our internal research, which is perceived as less reliable than third- party numbers. If our mobile audience becomes rated, it is not clear whether the measurement technology of the third-party rating agencies will initially integrate with ours or whether their methodology will accurately reflect the value of our service. If such third-party ratings are inaccurate or we receive low ratings, our ability to convince advertisers of the benefits of our service would be adversely affected.

Table of Contents

We will have significant competition from other services that stream music to users of the internet and mobile devices.

The streaming music industry is heavily saturated with competitors, many of which offer ad-supported free music listening. We do not plan for CÜR Music to have a free, ad-supported product, like many of our competitors. If we decide to integrate a free, ad-supported product into CÜR Music, our capital needs, results of operations, viability and growth prospects may be adversely affected.

Our users will access CÜR Music through mobile devices, tablets, the internet, automobiles and other platforms.

Our subscribers will access our music streaming product through various media platforms. If the cost of accessing streaming music, including CÜR Music, through cellular networks proves to be too expensive for potential subscribers or subscribers of CÜR Music, our capital needs, results of operations, viability and growth prospects may be adversely affected.

Many of our subscribers may purchase our service through on-line third-party stores.

Google and Apple assess a fee equal to 30% of purchases made within applications on their platforms (Android and iOS). If we are unable to have a significant percentage of our subscribers subscribe to CÜR Music through a web browser outside of these platforms, our business, financial condition and/or results of operations will be adversely affected. If we are unable to reach agreement with music labels on acceptable terms, where users subscribe through the Android and iOS platforms, our business, financial condition and/or results of operations will be adversely affected. Further, if Apple, Google, Amazon or other companies change the structure of their online stores, we may not be able to get customers to download our applications, which would adversely affect our business.

Many of our potential subscribers may be young and may not have access to credit cards or have the ability to pay for CÜR Music.

If we are unable to provide adequate payment options for younger potential subscribers, our business, financial condition and/or results of operations will be adversely affected.

If we fail to detect click fraud or other invalid clicks on ads, we could lose the confidence of our advertisers, which would cause our business to suffer.

Our business will rely on delivering positive results to our advertising customers. We will be exposed to the risk of fraudulent and other invalid clicks or conversions that advertisers may perceive as undesirable. A major source of invalid clicks could result from click fraud where a listener intentionally clicks on ads for reasons other than to access the underlying content of the ads. If fraudulent or other malicious activity is perpetrated by others and we are unable to detect and prevent it, or if we choose to manage traffic quality in a way that advertisers find unsatisfactory, the affected advertisers may experience or perceive a reduced return on their investment in our advertising products, which could lead to dissatisfaction with our advertising programs, refusals to pay, refund demands or withdrawal of future business. This could damage our brand and lead to a loss of advertisers and revenue.

We are at risk of attempts at unauthorized access to our service, and failure to effectively prevent and remediate such attempts could have an adverse impact on our business, operating results, and financial condition. Unauthorized access to our service may cause us to misstate key performance indicators, which once discovered, corrected, and disclosed, could undermine investor confidence in the integrity of our key performance indicators and could cause our stock price to drop significantly.

We may be impacted by attempts by third parties to manipulate and exploit our software for the purpose of gaining unauthorized access to our service. If we have fail to successfully detect and address such issues or if in the future we fail to successfully detect and address such issues, it may have artificial effects on our key performance indicators, such as Content Hours, Content Hours per MAU, and MAUs, which underlie, among other things, our contractual obligations with rights holders and advertisers, as well as harm our relationship with rights holders. This may impact our results of operations and could expose us to claims for damages including, but not limited to, from rights holders, any of which could seriously harm our business. It should be noted that since unauthorized access to our service happen through exploitation of software vulnerabilities, once a new method of doing so is developed by third parties, the level of unauthorized access (and attendant negative financial impact described above, if at all) may increase over time as third parties share the method until we find a way to prevent the unauthorized access, assuming we are able to do so at all. Moreover, once we detect and correct such unauthorized access and any key performance indicators it affects, investor confidence in the integrity of our key performance indicators could be undermined. These could have a material adverse impact on our business, operating results, and financial condition.

Table of Contents

Failure to protect our intellectual property could substantially harm our business, operating results, and financial condition.

The success of our business depends on our ability to protect and enforce our patents, trade secrets, trademarks, copyrights, and all of our other intellectual property rights, including our intellectual property rights underlying our service. We attempt to protect our intellectual property under patent, trade secret, trademark, and copyright law through a combination of employee, third-party assignment and nondisclosure agreements, other contractual restrictions, technological measures, and other methods. These afford only limited protection and we are still early in the process of securing our intellectual property rights. Despite our efforts to protect our intellectual property rights and trade secrets, unauthorized parties may attempt to copy aspects of our song recommendation technology, or other technology, or obtain and use our trade secrets and other confidential information. Moreover, policing our intellectual property rights is difficult and time consuming. We cannot assure you that we would have adequate resources to protect and police our intellectual property rights, and we cannot assure you that the steps we take to do so will always be effective.

We have filed, and may in the future file, patent applications on certain of our innovations. It is possible, however, that these innovations may not be patentable. In addition, given the cost, effort, risks, and downside of obtaining patent protection, including the requirement to ultimately disclose the invention to the public, we may choose not to seek patent protection for some innovations. Furthermore, our patent applications may not issue as granted patents, the scope of the protection gained may be insufficient or an issued patent may be deemed invalid or unenforceable. We also cannot guarantee that any of our present or future patents or other intellectual property rights will not lapse or be invalidated, circumvented, challenged, or abandoned. Neither can we guarantee that our intellectual property rights will provide competitive advantages to us. Our ability to assert our intellectual property rights against potential competitors or to settle current or future disputes could be limited by our relationships with third parties, and any of our pending or future patent applications may not have the scope of coverage originally sought. We cannot guarantee that our intellectual property rights will be enforced in jurisdictions where competition may be intense or where legal protection may be weak. We could lose both the ability to assert our intellectual property rights against, or to license our technology to, others and the ability to collect royalties or other payments.

We have registered trademarks for "Raditaz," "Tunevision" and "CÜR." We currently own the www.curmusic.com internet domain name and various other related domain names. Internet regulatory bodies generally regulate domain names. If we lose the ability to use a domain name in a particular country, we would be forced either to incur significant additional expenses to market our service within that country or, in extreme cases, to elect not to offer our service in that country. Either result could harm our business, operating results, and financial condition. The regulation of domain names in the United States and in foreign countries is subject to change. Regulatory bodies could establish additional top-level domains, appoint additional domain name registrars, or modify the requirements for holding domain names. As a result, we may not be able to acquire or maintain the domain names that utilize our brand names in the United States or other countries in which we may conduct business in the future.

Litigation or proceedings before governmental authorities and administrative bodies may be necessary in the future to enforce our intellectual property rights, to protect our patent rights, trademarks, trade secrets, and domain names and to determine the validity and scope of the proprietary rights of others. Our efforts to enforce or protect our proprietary rights may be ineffective and could result in substantial costs and diversion of resources and management time, each of which could substantially harm our operating results. Additionally, changes in law may be implemented, or changes in interpretation of such laws may occur, that may affect our ability to protect and enforce our patents and other intellectual property.

Table of Contents

Some of our services and technologies may use "open source" software, which may restrict how we use or distribute our service or require that we release the source code of certain services subject to those licenses.

Some of our services and technologies may incorporate software licensed under so-called "open source" licenses, including, but not limited to, the GNU General Public License and the GNU Lesser General Public License. Such open source licenses typically require that source code subject to the license be made available to the public and that any modifications or derivative works to open source software continue to be licensed under open source licenses. Few courts have interpreted open source licenses, and the manner in which these licenses may be interpreted and enforced is therefore subject to some uncertainty. We rely on multiple software programmers to design our proprietary technologies, and we do not exercise complete control over the development efforts of our programmers and we cannot be certain that our programmers have not incorporated open source software into our proprietary products and technologies or that they will not do so in the future. In the event that portions of our proprietary technology are determined to be subject to an open source license, we could be required to publicly release the affected portions of our source code, re- engineer all or a portion of our technologies, or otherwise be limited in the licensing of our technologies, each of which could reduce or eliminate the value of our services and technologies and materially and adversely affect our business, results of operations and prospects.

We are required to indemnify management and its affiliates for their good faith actions. Indemnification may cause any liability they incur to be paid by us.

We are required to indemnify management and its affiliates for any liabilities they incur in connection with business if incurred in good faith, in a manner reasonably believed to be in our best interests, and with the care that an ordinarily prudent person in a like position would use under similar circumstances. Management is not liable to the company for any act or omission it may make in good faith and that it believes is in the company's best interest, except for acts of gross negligence or willful misconduct. Under certain circumstances, management will be entitled to indemnification from the company for losses it or any affiliate, employee, officer, director, or owner incurs in defending actions arising out of their position as or with management. These indemnification requirements could have a material adverse effect on our operations.

We may not be successful in distributing our products on the Internet or on mobile devices, or using a paid marketing strategy on the Internet, on mobile devices, on tablets, or offline.

More individuals are utilizing non-Personal Computer ("PC") devices to access the Internet, and versions of our services developed or optimized for these devices may not gain widespread adoption by users, manufacturers or distributors of such devices, or may not work on these devices, based on the broad range of unique technical requirements that may be established for each device by their manufacturers and distributors globally. If this occurs, it could materially and adversely affect our business, results of operations and prospects.

We may not be able to acquire the number of users projected in our financial model.

We may not be able to acquire the number of internet users and/or mobile phone users that is projected in our financial model or achieve the projected market penetration rates. If we are unable to do so, it would materially and adversely affect our business, results of operations and prospects.

We may not be able to launch our music streaming service on iPhone, Android and the web and associated tablets.

If we are not able to launch CÜR Music on iPhone, Android and/or the web and/or on associated tablets, our business, financial condition and/or results of operations will be adversely affected.

Government regulation of the internet is evolving, and unfavorable developments could have an adverse effect on our operating results.

Any changes in laws or regulations or new laws and regulations relating to our services could adversely affect our business, results of operations and our business prospects. If the government were to place limitations on the amount and type of content that can be streamed over networks, the internet and to mobile and other applications, our business, results of operations and our business prospects could be adversely affected.

Table of Contents

We face competition from entities in our industry with substantially more capital, greater name recognition, more employees, greater resources, and longer operating histories than we do.

Significant competition from traditional offline music distribution competitors, from larger media companies like Apple, Google, Spotify, Amazon, Tidal and others, and from other online digital music services, as well as online theft or "piracy", could have a negative impact on our business.

We face many risks associated with our long-term plan to expand our operations outside of the United States, including difficulties obtaining rights to stream music on favorable terms, which could harm our business, operating results and financial condition.

Expanding our operations into international markets is an element of our long-term strategy. However, offering our service outside of the United States involves numerous risks and challenges.

Operating internationally requires significant management attention and financial resources. We cannot be certain that the investment and additional resources required in establishing and expanding our international operations will produce desired levels of revenue or profitability. If we invest substantial time and resources to establish and expand our international operations and are unable to do so successfully and in a timely manner, our business and operating results will suffer.

We have no international operations and any future international expansion may expose us to several risks, such as difficulty adapting our solutions for international markets. As we have limited experience in marketing, selling and supporting our solutions abroad, and any future international expansion of our business will involve a variety of risks, including:

	·	localization of our solutions, including translation into foreign languages and adaptation for local practices;

	·	unexpected changes in regulatory requirements, taxes, trade laws, tariffs, export quotas, custom duties or other trade restrictions;

	·	differing labor regulations where labor laws may be more advantageous to employees as compared to the United States;

	·	more stringent regulations relating to data security and the unauthorized use of, or access to, commercial and personal information, particularly in the European Union;

	·	reluctance to allow personally identifiable data related to non- U.S. citizens to be stored in databases within the United States, due to concerns over the U.S. government's right to access information in these databases or other concerns;

	·	changes in a specific country's or region's political or economic conditions;

	·	challenges inherent in efficiently managing an increased number of employees over large geographic distances, including the need to implement appropriate systems, policies, benefits and compliance programs;

	·	risks resulting from changes in currency exchange rates;

	·	limitations on our ability to reinvest earnings from operations in one country to fund the capital needs of our operations in other countries;

	·	different or lesser intellectual property protection; and

	·	exposure to liabilities under anti-corruption and anti-money laundering laws, including the U.S. Foreign Corrupt Practices Act and similar laws and regulations in other jurisdictions.

If we are unable to expand our business outside the United States as planned, our growth prospects and our ability to generate revenue will be negatively impacted.

Table of Contents

Third Party Risks

We will rely on third parties to provide software and related services necessary for the operation of our business.

We are incorporating and including third-party software into and with our applications and service offerings and expect to continue to do so. The operation of our applications and service offerings could be impaired if errors occur in the third-party software that we use. It may be more difficult for us to correct any defects in third-party software because the development and maintenance of the software is not within our control. Accordingly, our business could be adversely affected in the event of any errors in this software. There can be no assurance that any third-party licensors will continue to make their software available to us on acceptable terms, to invest the appropriate levels of resources in their software to maintain and enhance its capabilities, or to remain in business. In addition, we have not requested and have not performed, or had performed, a freedom to operate or right to use investigation to determine whether the platform we intend to use to provide our music streaming service infringes any third-party patents. Any impairment in our relationship with these third-party licensors could have a material adverse effect on our business, results of operations, cash flow and financial condition.

Loss of partners and potential partners who provide content that we distribute to our customers could have a negative impact on our business.

Our technology and CÜR Music product will be dependent upon content and technology companies such as MediaNet, Amazon, Google, Apple, Microsoft, Gracenote, UMG, SME and WMG, and others, for the provision of digital music song library, creation of customized playlists and the hosting of our services. A loss of these content providers or a technical issue with these providers could materially disrupt our business and have a significant adverse effect on our business.

We will depend upon third party licenses for musical works and content and the ability to obtain these licenses, and/or change to or loss of these licenses could increase our operating costs or adversely affect our ability to retain and expand our listener base, and therefore could adversely affect our business.

We license all of CÜR Music's musical works, sound recordings and related content from major and independent music labels as well as publishers and performing rights organizations ("PROs"). We secure content from these owners and approvals from some of these owners with respect to CÜR Music's features that would grant our customers enhanced access to their licensed materials, such as on-demand play, song skipping, and offline listening, among others. The Company and Holdings have entered into the New Music Label Agreements. We intend to enter into content licensing agreements with certain independent labels and content aggregators, prior to the launch of CÜR Music. We also plan to negotiate and execute other independent label and content licensing agreements subsequent to the launch of CÜR Music. When we enter into these content licensing agreements with these labels, publishers and PROs, we expect that our platform will provide end users with access to millions of sound recordings.

To secure the rights to stream musical works embodied in sound recordings over the Internet to mobile devices, the web and other platforms, we will obtain licenses from publishers and performing rights organizations, for the benefit of copyright owners and pay royalties to copyright owners or their agents. Those who own copyrights in musical works are vigilant in protecting their rights and seek royalties that are very high in relation to the revenue that can be generated from the public performance of such works. There is no guarantee that the licenses available to us now will continue to be available in the future or that such licenses will be available at the royalty rates associated with the current licenses. If we are unable to secure and maintain rights to stream musical works or if we cannot do so on terms that are acceptable to us, our ability to stream music content to our listeners, and consequently our ability to attract and retain advertisers, will be adversely impacted.

In order to stream musical works embodied in sound recordings over the internet to mobile devices, the web and other platforms, we must obtain public performance licenses and pay license fees to performing rights organizations such as Broadcast Music, Inc., or BMI, SESAC, Inc., or SESAC, and the American Society of Composers, Authors and Publishers, or ASCAP, among others. These organizations represent the rights of songwriters and music publishers, and negotiate with copyright users such as us, collect royalties and distribute those royalties to the copyright owners they represent, namely songwriters and music publishers. Performing rights organizations have the right to audit our playlists and royalty payments, and any such audit could result in disputes over whether we have paid the proper royalties. If such a dispute were to occur, we could be required to pay additional royalties and the amounts involved could be material.

Table of Contents

We also may be subject to claims including infringement claims by music publishers and songwriters, among others, based on our usage of certain musical works and for non-payment of royalties for such musical works. If such claims are made, we could be required to pay additional damages and/or additional royalties, and the amounts involved could be material.

If the three major music labels (UMG, SME and/or WMG) and/or independent music labels, content aggregators, publishers or PROs rescind permission for us to utilize the services of our back-end content delivery and infrastructure services partner, MediaNet and/or our music intelligence partner, Gracenote, or choose not to license streaming music services such as CÜR or other sources, our revenue numbers could be negatively impacted, and our business could be materially adversely impacted.

We may not be able to negotiate economically viable agreements with independent music publishers and Performing Rights Organizations.

We must license musical work rights from an array of music publishers and performing rights organizations. We are in the process of negotiating our agreements with the major, significant and other independent music publishers, and we expect to have secured these agreements rights prior to the launch of CÜR Music. If music publishers withdraw all or a portion of their musical works from performing rights organizations for public performances by means of digital transmissions, then we may be forced to enter into direct licensing agreements with these publishers at rates which may not be economically viable, or we may be unable to reach agreement with these publishers at all, which could adversely affect our business, our ability to launch CÜR Music, to attract and retain listeners, financial condition and results of operations. We intend to enter into licensing agreements on economically viable terms with performing rights organizations, and if we are unable to secure licenses on economically viable terms, this could adversely affect our ability to operate CÜR Music and our business.

We must license and pay for the content our product delivers to its users and the content owners must grant us permission for use.

Holdings and the Company have entered into the New Music Label Agreements for sound recordings and related content with the major Music Labels. These major Music Labels have agreed to license their content to us, and have also approved CÜR Music's features and functionality that will grant our customers enhanced access to their licensed sound recordings, such as on-demand play, song skipping, and offline listening, among others. We intend to enter into content licensing agreements with certain independent labels and content aggregators prior to the launch of CÜR Music. We plan to negotiate and execute other independent label content licensing agreements subsequent to the launch of CÜR Music. We also intend to enter into content licensing agreements with music publishers and PROs. We had previously finalized our agreement with SESAC, and had sent consent decree license requests to ASCAP and BMI. Through a combination of voluntary agreements, compulsory licenses and consent decree license requests, we expect our platform will provide end users access to approximately 5-10 million sound recordings. If we are unable to secure and maintain rights to stream and cache musical works, sound recordings and related content, or cannot secure and maintain these rights on terms that are acceptable to us, our business, or ability to attract and retain listeners, financial condition and results of operations could be adversely affected.

We have no control over the providers of our content, and our business may be adversely affected if our access to music is limited or delayed. The concentration of control of content by our major providers means that even one entity, or a small number of entities working together, may unilaterally affect our access to music and other content.

We rely on music rights holders, over whom we have no control, for the content we make available on our service. We cannot guarantee that these parties will always choose to license to us.

Table of Contents

The music industry has a high level of concentration, which means that one or a small number of entities may, on their own, take actions that adversely affect our business.

Our business may be adversely affected if our access to music is limited or delayed because of deterioration in our relationships with one or more of these rights holders or if they choose not to license to us for any other reason. Rights holders also may attempt to take advantage of their market power to seek onerous financial terms from us, which could have a material adverse effect on our financial condition and results of operations.

Even if we are able to secure rights to sound recordings from record labels and other copyright owners, artists and/or artist groups may object and may exert public or private pressure on third parties to discontinue licensing rights to us, hold back content from us, or increase royalty rates. As a result, our ability to continue to license rights to sound recordings is subject to convincing a broad range of stakeholders of the value and quality of our Service.

To the extent that we are unable to license a large amount of content or the content of certain popular artists, our business, operating results, and financial condition could be materially harmed.

Our revenue from song sales will depend on third party stores and services.

A portion of our revenue model is dependent on the sale of songs through Amazon, Apple's iTunes store, Google and/or MediaNet. If these parties or similar parties were to change their pricing structure by effectively lowering or increasing their prices, our business could be impacted negatively. In addition, if these parties were to not allow us access to sell their products or the ability to access their products in an efficient manner, our business could be negatively impacted.

We plan to rely on third parties to administer our subscriptions and credit card transactions, and we may take such management in-house in the future.

We plan to rely on a third-party company, Zuora, to manage our subscriber list and customer payments. If we decide to manage subscriptions and payments transactions in-house, we will assume the regulatory and financial risk for such user information and financial transactions. If we are unable to effectively manage our subscriber list and customer payments, we may incur adverse regulatory and financial risk for such user information and financial transactions. This could have a materially adverse effect on our business.

We will generate our created playlists and stations using data from a third party.

We plan to enter into an agreement with Gracenote to utilize their platform for generating music playlists and other information for CÜR Music users. If such third party were to decide to not let us use their data, we may not be able to enable users to create playlist and/or stations. This would have a negative impact on our business.

We relied on, and anticipate continuing to rely on, MediaNet for our music catalog.

We relied on, and anticipate continuing to rely on, MediaNet for access to our music catalog. While there are other companies that provide such services, if we had to change to another provider, we may encounter significant disruption to our service. The size of the catalog is dependent on the successful negotiation of music licenses with the major and independent music labels, publishers and performance rights organizations. If our relationship with MediaNet does not continue for any reason, it could have a negative impact on our business.

We rely on third-party providers for our principal Internet connections and technologies, databases, and network services critical to our properties and services.

We rely extensively on Amazon, Inc., and other third parties, for various hosting services, and other companies for various other Internet, database, and network services. Any errors, failures or disruption in the services provided by these third parties could significantly harm our business, results of operations and our business prospects.

Table of Contents

The inability to distribute our application through Apple's iTunes App Store and/or Google's Google Play Store could harm our business.

We expect to be accepted by and expect to distribute our application through Apple's iTunes App Store and/or Google's Google Play Store upon launch of CÜR Music. These distribution channels may determine that our application should be cancelled at any time with little or no prior notice or penalty. Some of these App Stores, including Apple, are now, or may in the future become, competitors of ours, and could stop allowing or supporting access to our service through their products for competitive reasons. The loss of these acceptances once obtained, or the inability to obtain these acceptances, could limit the reach of our service and its attractiveness to advertisers, which, in turn, could adversely affect our business, financial condition and results of operations.

If we are unable to continue to make our technology compatible with the technologies of third-party distribution partners who make our service available to our listeners through mobile devices, consumer electronic products and automobiles, we may not remain competitive and our business may fail to grow or decline.

In order to deliver music everywhere our listeners want to hear it, we need our service to be compatible with mobile, consumer electronic, automobile and website technologies. Our service will be accessible in part through CÜR-developed or third-party developed applications that hardware manufacturers embed in, and distribute through, their devices. Connected devices and their underlying technology are constantly evolving. As internet connectivity of automobiles, mobile devices, and other consumer electronic products expands and as new internet-connected products are introduced, we must constantly adapt our technology. It is difficult to keep pace with the continual release of new devices and technological advances in digital media delivery and predict the problems we may encounter in developing versions of our applications for these new devices and delivery channels, and it may become increasingly challenging to do so in the future. In particular, the technology used for streaming the CÜR Music service in automobiles remains at an early stage and may not result in a seamless customer experience. If automobile and consumer electronics makers fail to make products that are compatible with our technology or we fail to adapt our technology to evolving requirements, our business and financial results could be harmed.

Furthermore, consumer tastes and preferences can change in rapid and unpredictable ways and consumer acceptance of these products depends on the marketing, technical and other efforts of third-party manufacturers, which is beyond our control. If consumers fail to accept the products of the companies with whom we partner or if we fail to establish relationships with makers of leading consumer products, our business could be adversely affected.

Interruptions or delays in our services or from third-party vendors could adversely affect our brand and disrupt our business.

We will rely on systems housed in our own facilities and upon third-party vendors, including bandwidth providers and data center facilities located in locations throughout the United States and potentially the world, to enable listeners to receive our content in a dependable, timely, and efficient manner. We expect to experience periodic service interruptions and delays involving our own systems and those of our third-party vendors. We do not currently maintain a live fail-over capability that would allow us to switch our streaming operations from one facility to another in the event of a service outage. Both our own facilities and those of our third-party vendors are and will be vulnerable to damage or interruption from earthquakes, floods, fires, power loss, telecommunications failures and similar events. They also are and will be subject to break-ins, sabotage, intentional acts of vandalism, failure of physical, administrative, and technical security measures, terrorist acts, natural disasters, human error, the financial insolvency of our third-party vendors and other unanticipated problems or events. The occurrence of any of these events could result in interruptions in our service and to unauthorized access to, or alteration of, the content and data contained on our systems and that these third-party vendors store and deliver on our behalf.

Defects or errors in our service could harm our reputation, result in significant costs to us, and impair our advertisers' ability to deliver effective advertising campaigns.

The technology underlying our service, including our proprietary technology and technology provided by third-parties, may contain material defects or errors that can adversely affect our ability to operate our business and cause significant harm to our reputation. This risk is compounded by the complexity of the technology underlying our service and the large amounts of data we utilize. Errors, defects, disruptions in service or other performance problems in our service could result in the incomplete or inaccurate delivery of an ad campaign, including serving an ad campaign in an incomplete or inaccurate manner, in an incorrect geographical location or in an environment that is detrimental to the advertiser's brand health. Any such failure, malfunction, or disruption in service could result in damage to our reputation, our advertising clients withholding payment to us or the advertisers making claims or initiating litigation against us, and our giving credits to our advertiser clients toward future advertising spend. As a result, defects or errors in our service could harm our reputation, result in significant costs to us, and impair our advertisers' ability to deliver effective advertising campaigns.

Table of Contents

System failures could significantly disrupt our operations and cause us to lose advertisers, or publishers, subscribers and/or users.

Our success will depend on the continuing and uninterrupted performance of our solutions, which we will utilize to enable our users to stream music, edit playlists, create playlists, receive payments, place ads, monitor the performance of advertising campaigns, manage our advertising inventory, among other things. Our revenue will depend on our ability to collect subscription fees and deliver ads. Sustained or repeated system failures that interrupt our ability to provide our service, could significantly reduce the attractiveness of our solutions and reduce our revenue. Our systems will be vulnerable to damage from a variety of sources, including telecommunications failures, power outages, malicious human acts and natural disasters. In addition, any steps we take to increase the reliability and redundancy of our systems may be expensive and may not be successful in preventing system failures. Any such system failures could significantly disrupt our operations and cause us to lose users, subscribers and advertisers.

We will exercise no control over our third-party vendors, which will make us vulnerable to any errors, interruptions, or delays in their operations. Any disruption in the services provided by these vendors could have significant adverse impacts on our business reputation, customer relations and operating results. Upon expiration or termination of any of our agreements with third-party vendors, we may not be able to replace the services provided to us in a timely manner or on terms and conditions, including service levels and cost, that are favorable to us, and a transition from one vendor to another vendor could subject us to operational delays and inefficiencies until the transition is complete.

Our success will depend on our subscribers continued access to the Internet and wireless devices and the continued reliability and maintenance of the internet and cellular infrastructure.

Because our service is being designed primarily to work over the Internet and cellular networks, our revenue growth will depend on our listeners' low cost, high-speed access to the Internet, as well as the continued maintenance and development of the internet infrastructure, including the wireless internet infrastructure and the cellular network infrastructure. The delivery of our service will depend on third-party Internet service providers and wireless telecommunication companies expanding high-speed Internet access and wireless networks, maintaining reliable networks with the necessary speed, data capacity and security, and developing complementary products and services for providing reliable and timely wired and wireless internet access and services. The success of our business depends generally on the continued accessibility, maintenance and improvement of the Internet and, in particular, on access to the internet through wireless infrastructure, to permit high-quality streaming of music content and provide a convenient and reliable platform for customer interaction. All of these factors are outside of our control.

To the extent that the Internet and the wireless Internet infrastructure continue to experience an increasing number of listeners, frequency of use and expanding bandwidth requirements, the Internet and wireless networks may become congested and unable to support the demands placed on them, and their performance and reliability may decline. In addition, the wireless communications companies that provide our listeners with access to the Internet through wireless networks may raise their rates or impose data usage limits, which could cause our listeners to decrease their usage of our service or our listenership to decline. Any future Internet or wireless network outages, interruptions, bandwidth constraints, rate increases or data usage limits could adversely affect our ability to provide service to our listeners and advertising customers.

If our security systems are breached, we may face civil liability and public perception of our security measures could be diminished, either of which would negatively affect our ability to attract listeners and advertisers.

Techniques used to gain unauthorized access are constantly evolving, and we may be unable to anticipate or prevent unauthorized access to data pertaining to our listeners, including credit card and debit card information and other personally identifiable information. If an actual or perceived breach of security occurs of our systems or a vendor's systems, we may face civil liability and public perception of our security measures could be diminished, either of which would negatively affect our ability to attract listeners, which in turn would harm our efforts to attract and retain advertisers. We also would be required to expend significant resources to mitigate the breach of security and to address related matters.

Table of Contents

We cannot control the actions of third parties who may have access to the listener data we collect. The integration of the CÜR Music service with applications provided by third parties represents a significant growth opportunity for us, but we may not be able to control such third parties' use of listeners' data, ensure their compliance with the terms of our privacy policies, or prevent unauthorized access to, or use or disclosure of, listener information, any of which could hinder or prevent our efforts with respect to growth opportunity.

Any failure, or perceived failure, by us to maintain the security of data relating to our listeners and employees, to comply with our posted privacy policy, laws and regulations, rules of self-regulatory organizations, industry standards, and contractual provisions to which we may be bound, could result in the loss of confidence in us, or result in actions against us by governmental entities or others, all of which could result in litigation and financial losses, and could potentially cause us to lose listeners, advertisers, revenue, and employees.

Risks Related to Our Corporate Structure and Ownership of Our Securities

Our operating results may fluctuate, which makes our results difficult to predict.

Our revenue and operating results could vary significantly from quarter to quarter and year to year because of a variety of factors, many of which are outside our control. As a result, comparing our operating results on a period-to-period basis may not be meaningful. In addition to other risk factors discussed herein, factors that may contribute to the variability of our quarterly and annual results include:

our ability to retain a user base, increase subscribers, and increase users’ time spent streaming content on our service;

our ability to more effectively monetize mobile users of our service, particularly as the number of our users on mobile and other connected devices grow;

our ability to effectively manage our growth;

our ability to attract and retain existing advertisers and prove that our advertising products are effective enough to justify a pricing structure that is profitable for us;

the effects of increased competition in our business;

our ability to keep pace with changes in technology and our competitors;

lack of accurate and timely reports and invoices from our rights holders and partners;

interruptions in service, whether or not we are responsible for such interruptions, and any related impact on our reputation;

our ability to pursue and appropriately time our entry into new geographic or content markets and, if pursued, our management of this expansion;

costs associated with defending any litigation, including intellectual property infringement litigation;

the impact of general economic conditions on our revenue and expenses; and

changes in regulations affecting our business.

Seasonal variations in user and marketing behavior also may cause fluctuations in our financial results. We expect to experience some effects of seasonal trends in user behavior due to increased internet usage and sales of streaming service subscriptions and devices during holiday periods.

Table of Contents

We may be unable to raise enough capital to implement our business plan.

We have been largely dependent on capital raised through equity and debt financings to implement our business plan and support our operations. We raised aggregate gross proceeds of approximately $9,680,000 in our 2014 PPO (before deducting placement agent fees and expenses of approximately $1,529,000). Pursuant to the Offer to Amend and Exercise Warrants, we raised an aggregate of approximately $3,233,500 (before deducting placement agent fees and expenses of approximately $417,000). In addition, we sold Unsecured Notes in the aggregate principal amount of $2,113,500 (before deducting fees and expenses of approximately $45,000) in a private offering in 2015 (the “2015 Note Offering”), and Secured Notes in the aggregate principal amount of $2,515,000 (before deducting placement agent fees and expenses of approximately $282,454) in a private offering in 2016 (the “2016 Note Offering”). Gross proceeds from the Holdings Offerings, in the aggregate amount of $6,932,288 (before deducting fees and expenses related to the Holdings Offerings in the aggregate amount of $722,074 (including placement agent fees, legal fees and expenses and fees payable to the escrow agent)) are to be extended in a line of credit to the Company which will be reflected by the Post-Closing Line of Credit Note, for up to the full amount of the aggregate net proceeds from the Holdings Offerings. We cannot assure you that we will be able to raise the working capital as needed on terms acceptable to us, if at all. If we are unable to raise capital as needed, we may be required to reduce the scope of our business development activities, which could harm our business plans, financial condition and operating results, or cease our operations entirely, in which case, you may lose all of your investment.

We may require additional capital to support business growth and objectives, and this capital might not be available on acceptable terms, if at all.

We intend to continue to make investments to support our business growth and may require additional funds to respond to business challenges, including the need to develop new features or enhance our existing service, expand into additional markets around the world, improve our infrastructure, or acquire complementary businesses and technologies. Accordingly, we may need to engage, and have engaged, in equity and debt financings to secure additional funds. If we raise additional funds through future issuances of equity or convertible debt securities, our existing shareholders could suffer additional significant dilution, and any new equity securities we issue could have rights, preferences, and privileges superior to those of holders of our ordinary shares. Any debt financing we secure in the future, including pursuant to the unwind described above, also could contain restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and pursue business opportunities, including potential acquisitions. We may not be able to obtain additional financing on terms favorable to us, if at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to support our business growth, acquire or retain Users, and to respond to business challenges could be significantly impaired, and our business may be harmed.

You may experience dilution of your ownership interests because of the future issuance of additional shares of our Common Stock or Preferred Stock or other securities that are convertible into or exercisable for our Common Stock or Preferred Stock.

Any future issuance of our equity or equity-backed securities may dilute then-current stockholders' ownership percentages and could also result in a decrease in the fair market value of our equity securities, because our assets would be owned by a larger pool of outstanding equity. As described above, we may need to raise additional capital through public or private offerings of our Common Stock or Preferred Stock or other securities that are convertible into or exercisable for our Common Stock or Preferred Stock. We may also issue such securities in connection with hiring or retaining employees and consultants (including stock options issued under our equity incentive plans, as payment to providers of goods and services, in connection with future acquisitions or for other business purposes. Our Board of Directors may at any time authorize the issuance of additional Common Stock or Preferred Stock without stockholder approval, subject only to the total number of authorized Common Stock and Preferred Stock set forth in our Amended and Restated Articles of Incorporation, as amended. The terms of equity securities issued by us in future transactions may be more favorable to new investors, and may include dividend and/or liquidation preferences, superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect. In addition, the future issuance of any such additional shares of Common Stock or Preferred Stock or other securities may create downward pressure on the trading price of our Common Stock. There can be no assurance that any such future issuances will not be at a price (or exercise prices) below the price at which shares of the Common Stock are then traded.

Table of Contents

The ability of our Board of Directors to issue additional stock may prevent or make more difficult certain transactions, including a sale or merger of the Company.

We currently have authorized 310,000,000 shares of capital stock, consisting of (i) 300,000,000 shares of Common Stock, and (ii) 10,000,000 shares of Preferred Stock. As a result, our Board of Directors is authorized to issue up to 10,000,000 shares of Preferred Stock with powers, rights and preferences designated by it. Shares of voting or convertible Preferred Stock could be issued, or rights to purchase such shares could be issued, to create voting impediments or to frustrate persons seeking to effect a takeover or otherwise gain control of the Company. The ability of the Board of Directors to issue such additional shares of Preferred Stock, with rights and preferences it deems advisable, could discourage an attempt by a party to acquire control of the Company by tender offer or other means. Such issuances could therefore deprive stockholders of benefits that could result from such an attempt, such as the realization of a premium over the market price for their shares in a tender offer or the temporary increase in market price that such an attempt could cause. Moreover, the issuance of such additional shares of Preferred Stock to persons friendly to the Board of Directors could make it more difficult to remove incumbent managers and directors from office even if such change were to be favorable to stockholders generally.

We have a concentration of stock ownership and control, which may have the effect of delaying, preventing, or deterring certain corporate actions and may lead to a sudden change in our stock price.

Our Common Stock ownership is highly concentrated. Thomas Brophy, our President and Chief Executive Officer, beneficially owns 696,513 shares, or approximately 25.4% of our total outstanding Common Stock. His interests may differ significantly from your interests. As a result of the concentrated ownership of our stock, a relatively small number of stockholders, acting together, will be able to control all matters requiring stockholder approval, including the election of directors and approval of mergers and other significant corporate transactions. In addition, because our stock is so thinly traded, the sale by any of our large stockholders of a significant portion of that stockholder's holdings could cause a sharp decline in the market price of our Common Stock.

Restrictions on the use of Rule 144 by Shell Companies or Former Shell Companies could affect your ability to resale our shares.

Historically, the SEC has taken the position that Rule 144 under the Securities Act, as amended, is not available for the resale of securities initially issued by companies that are, or previously were, blank check companies like us, to their promoters or affiliates despite technical compliance with the requirements of Rule 144. The SEC has codified and expanded this position in its amendments effective on February 15, 2008 and apply to securities acquired both before and after that date by prohibiting the use of Rule 144 for resale of securities issued by shell companies (other than business transaction related shell companies) or issuers that have been at any time previously a shell company. The SEC has provided an important exception to this prohibition, however, if the following conditions are met:

	·	the issuer of the securities that was formerly a shell company has ceased to be a shell company;

	·	the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act;

	·	the issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials), other than Form 8-K reports; and

	·	at least one year has elapsed from the time that the issuer filed current Form 10 type information with the SEC reflecting its status as an entity that is not a shell company.

As such, due to the fact that we were a shell company until the effective time of the Contribution, holders of "restricted securities" within the meaning of Rule 144 will be subject to the conditions set forth herein. Therefore, sales under Rule 144 are prohibited for at least one year from the date this report is filed.

Table of Contents

There currently is a limited trading market for our Common Stock. Failure to maintain a trading market could negatively affect the value of our Common Stock and make it difficult or impossible for you to sell your shares.

As of September 29, 2016, the Company’s Common Stock was downgraded from the OTC Markets OTCQB marketplace ("OTCQB") to the OTC Pink marketplace. Our Common Stock is quoted on the OTC Pink Marketplace under the symbol "CURM." The OTC Pink Marketplace is a thinly traded market and lacks the liquidity of certain other public markets with which some investors may have more experience. We may not ever be able to satisfy the listing requirements for our Common Stock to be listed on a national securities exchange, which is often a more widely-traded and liquid market. Some, but not all, of the factors that may delay or prevent the listing of our Common Stock on a more widely-traded and liquid market, include the following:

	·	our stockholders' equity may be insufficient;

	·	the market value of our outstanding securities may be too low;

	·	our net income from operations may be too low;

	·	our Common Stock may not be sufficiently widely held;

	·	we may not be able to secure market makers for our Common Stock; and

	·	we may fail to meet the rules and requirements mandated by the several exchanges and markets to have our Common Stock listed.

Should we fail to satisfy the initial listing standards of the national exchanges, or our Common Stock is otherwise rejected for listing and remains listed on the OTC Pink Marketplace, or suspended from the OTC Pink Marketplace, the trading price of our Common Stock could suffer and the trading market for our Common Stock may be less liquid and our Common Stock price may be subject to increased volatility.

Our Common Stock is subject to the "penny stock" rules of the SEC and the trading market in the securities is limited, which makes transactions in the stock cumbersome and may reduce the value of an investment in the stock.

The SEC has adopted Rule 15g-9 which establishes the definition of a "penny stock," for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require:

	·	that a broker or dealer approve a person's account for transactions in penny stocks; and

	·	the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.

In order to approve a person's account for transactions in penny stocks, the broker or dealer must:

	·	obtain financial information and investment experience objectives of the person; and

	·	make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.

The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which, in highlight form sets forth:

	·	the basis on which the broker or dealer made the suitability determination; and

	·	that the broker or dealer received a signed, written agreement from the investor prior to the transaction.

Table of Contents

Generally, brokers may be less willing to execute transactions in securities subject to the "penny stock" rules. This may make it more difficult for investors to dispose of Common Stock and cause a decline in the market value of stock.

Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks. If we remain subject to the penny stock rules for any significant period, it could have an adverse effect on the market, if any, for our securities. If our securities are subject to the penny stock rules, investors will find it more difficult to dispose of our securities.

Our stock may be traded infrequently and in low volumes, so you may be unable to sell your shares at or near the quoted bid prices if you need to sell your shares.

Until our Common Stock is listed on a national securities exchange such as the NYSE MKT and NASDAQ, we expect our Common Stock to remain eligible for quotation on the OTC Pink Marketplace or the OTCQB, or on another over-the-counter quotation system. In those venues, however, the shares of our Common Stock may trade infrequently and in low volumes, meaning that the number of persons interested in purchasing our Common Stock at or near bid prices at any given time may be relatively small or non-existent. An investor may find it difficult to obtain accurate quotations as to the market value of our Common Stock or to sell his or her shares at, or near, bid prices or at all. In addition, if we fail to meet the criteria set forth in SEC regulations, various requirements would be imposed by law on broker-dealers who sell our securities to persons other than established customers and accredited investors. Consequently, such regulations may deter broker-dealers from recommending or selling our Common Stock, which may further affect the liquidity of our Common Stock. This would also make it more difficult for us to raise capital.

If securities analysts do not initiate coverage or continue to cover our Common Stock or publish unfavorable research or reports about our business, this may have a negative impact on the market price of our Common Stock.

The trading market for our Common Stock will depend on the research and reports that securities analysts publish about our business and the Company. It is often more difficult to obtain analyst coverage for companies whose securities are traded on the OTC Pink Marketplace to the OTCQB. We do not have any control over securities analysts. There is no guarantee that securities analysts will cover our Common Stock. If securities analysts do not cover our Common Stock, the lack of research coverage may adversely affect its market price. If we are covered by securities analysts, and our stock is the subject of an unfavorable report, our stock price and trading volume would likely decline. If one or more of these analysts ceases to cover the Company or fails to publish regular reports on the Company, we could lose visibility in the financial markets, which could cause our stock price or trading volume to decline.

We do not anticipate paying dividends on our Common Stock, and investors may lose the entire amount of their investment.

To date, cash dividends have not been declared or paid on our Common Stock, and we do not anticipate such a declaration or payment for the foreseeable future. We expect to use future earnings, if any, to fund business growth. Therefore, stockholders will not receive any funds absent a sale of their shares of Common Stock, subject to the limitation outlined herein. If we do not pay dividends, our Common Stock may be less valuable because a return on your investment will only occur if our stock price appreciates. We cannot assure stockholders of a positive return on their investment when they sell their shares, nor can we assure that stockholders will not lose the entire amount of their investment.

Table of Contents

The price of our Common Stock may become volatile, which could lead to losses by investors and costly securities litigation.

The trading price of our Common Stock is likely to be highly volatile and could fluctuate in response to factors such as:

	·	actual or anticipated variations in our operating results;

	·	announcements of developments by us or our competitors;

	·	announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital commitments;

	·	adoption of new accounting standards affecting our industry;

	·	additions or departures of key personnel;

	·	sales of our Common Stock or other securities in the open market;

	·	changes in our industry;

	·	regulatory and economic developments, including our ability to obtain working capital financing;

	·	our ability to execute our business plan; and

	·	other events or factors, many of which are beyond our control.

The stock market is subject to significant price and volume fluctuations. In the past, following periods of volatility in the market price of a company's securities, securities class action litigation has often been initiated against the public company. Litigation initiated against us, whether or not successful, could result in substantial costs and diversion of our management's attention and resources, which could harm our business and financial condition.

Being a public company is expensive and administratively burdensome.

As a public reporting company, we are subject to the information and reporting requirements of the Securities Act of 1933, as amended (the "Securities Act"), the Securities Exchange Act of 1934, as amended (the "Exchange Act") and other federal securities laws, rules and regulations related thereto, including compliance with the Sarbanes-Oxley Act of 2002 ("Sarbanes-Oxley Act"). Complying with these laws and regulations requires the time and attention of our Board of Directors and management, and increases our expenses. Among other things, we are required to:

	·	maintain and evaluate a system of internal controls over financial reporting in compliance with the requirements of Section 404 of the Sarbanes-Oxley Act and the related rules and regulations of the SEC and the Public Company Accounting Oversight Board ("PCAOB");

	·	maintain policies relating to disclosure controls and procedures;

	·	prepare and distribute periodic reports in compliance with our obligations under federal securities laws;

	·	institute a more comprehensive compliance function, including with respect to corporate governance; and

	·	involve, to a greater degree, our outside legal counsel and accountants in the above activities.

Table of Contents

The costs of preparing and filing annual and quarterly reports, proxy statements, when required, and other information with the SEC and furnishing audited reports to stockholders is expensive and much greater than that of a privately-held company, and compliance with these rules and regulations may require us to hire additional financial reporting, internal controls and other finance personnel, and will involve a material increase in regulatory, legal and accounting expenses and the attention of management. There can be no assurance that we will be able to comply with the applicable regulations in a timely manner, if at all. In addition, being a public company makes it more expensive for us to obtain director and officer liability insurance. In the future, we may be required to accept reduced coverage or incur substantially higher costs to obtain this coverage. These factors could also make it more difficult for us to attract and retain qualified executives and members of our Board of Directors, particularly directors willing to serve on an audit committee that we expect to establish.

The requirements of being a public company may strain our resources, divert management’s attention, and affect our ability to attract and retain qualified board of director members.

As a public company, we will be subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the listing requirements of the OTCQB, on which we will trade, and other applicable securities rules and regulations. Compliance with these rules and regulations increase our legal and financial compliance costs, make some activities difficult, time-consuming, or costly, and impact demand on our systems and resources. The Exchange Act requires, among other things, that we file annual and current reports with respect to our business and operating results. The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. In order to maintain and, if required, improve our disclosure controls and procedures and internal control over financial reporting to meet this standard, significant resources and management oversight may be required. As a result, management’s attention may be diverted from other business concerns, which could harm our business and operating results.

In addition, changing laws, regulations, and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs and making some activities more time consuming. These laws, regulations, and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We intend to invest resources to comply with evolving laws, regulations, and standards, and this investment may result in increased general and administrative expenses and a diversion of management’s time and attention from revenue-generating activities to compliance activities. If our efforts to comply with new laws, regulations, and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to practice, regulatory authorities may initiate legal proceedings against us and our business may be harmed.

Being a public company combined with these the rules and regulations make it more expensive for us to obtain director and officer liability insurance. These factors also make it more difficult for us to attract and retain qualified senior management and members of our Board of Directors, particularly to serve on our audit committee and compensation committee.

We are obligated to develop and maintain proper and effective internal control over financial reporting. We may not complete our assessment of our internal control over financial reporting in a timely manner, or these internal controls may be determined to be ineffective, which may adversely affect investor confidence in our company and, as a result, the value of our ordinary shares.

We are required, pursuant to Section 404 of the Sarbanes-Oxley Act, to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting. This assessment needs to include disclosure of any material weaknesses identified by our management in our internal control over financial reporting, as well as a statement that our auditors have issued an attestation report on our management’s assessment of our internal controls.

If we are unable to assert that our internal control over financial reporting are effective, or if our auditors are unable to express an opinion on the effectiveness of our internal controls, we could lose investor confidence in the accuracy and completeness of our financial reports, which would cause the price of our shares to decline.

Table of Contents

We have identified material weaknesses in our disclosure controls and procedures. We will need to allocate significant resources to address these material weaknesses and make our disclosure controls and procedures effective.

We have adopted disclosure controls and procedures that are designed to ensure that information required to be disclosed by us in the reports that we submit under the Exchange Act are recorded, processed, summarized and reported, within the time periods specified in the SEC's rules. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act are accumulated and communicated to management, including principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. As of December 31, 2017, management concluded that our disclosure controls and procedures were not effective in light of the material weaknesses found in our internal controls over financial reporting as set forth in the “Part II, Item 9A. Controls and Procedures” of this Annual Report.

We are taking steps to address existing material weaknesses in our disclosure control and procedures. These efforts require significant time and resources. If we are unable to improve our internal financial reporting controls and procedures, our reported financial information may be inaccurate, and we will encounter difficulties in the audit or review of our financial statements by our independent auditors, which in turn may have material adverse effects on our ability to prepare financial statements in accordance with generally accepted accounting principles in the United States and to comply with SEC reporting obligations.

Failure to achieve and maintain effective internal controls in accordance with Section 404 of the Sarbanes Oxley Act of 2002 could prevent us from producing reliable financial reports or identifying fraud. In addition, current and potential stockholders could lose confidence in our financial reporting, which could have an adverse effect on our stock price.

We are subject to Section 404 of the Sarbanes-Oxley Act of 2002. Effective internal controls are necessary for us to provide reliable financial reports and effectively prevent fraud, and a lack of effective controls could preclude us from accomplishing these critical functions. We are required to document and test our internal control procedures in order to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, in connection with PCAOB Auditing Standard No. 5, which requires annual management assessments of the effectiveness of our internal controls over financial reporting. Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2017 and concluded that our internal controls and procedures were not effective due to (a) lack of a functioning Audit Committee, Compensation Committee or Nominating and Corporate Governance Committee, and a lack of independent directors on our Board of Directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (b) inadequate segregation of duties consistent with control objectives, including lack of personnel resources and technical accounting expertise within the accounting function; and (c) ineffective controls over period end financial disclosure and reporting processes.. In an effort to remediate the identified material weaknesses and other deficiencies and enhance our internal controls we plan to create a position to segregate duties consistent with control objectives and will increase our personnel resources and technical accounting expertise within the accounting function as funds are available.

We are an emerging growth company and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our Common Stock less attractive to investors.

We are an emerging growth company under the JOBS Act. For as long as we continue to be an emerging growth company, we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies including, but not limited to, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, exemptions from the requirements of holding a nonbinding advisory stockholder vote on executive compensation and any golden parachute payments not previously approved, exemption from the requirement of auditor attestation in the assessment of our internal control over financial reporting and exemption from any requirement that may be adopted by the PCAOB. If we do, the information that we provide stockholders may be different than what is available with respect to other public companies. We cannot predict if investors will find our Common Stock less attractive because we will rely on these exemptions. If some investors find our Common Stock less attractive as a result, there may be a less active trading market for our Common Stock and our stock price may be more volatile.

Table of Contents

Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards until such time as those standards apply to private companies. We have irrevocably elected to take advantage of this extended transition period. Since we will not be required to comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for other public companies, our financial statements may not be comparable to the financial statements of companies that comply with the effective dates of those accounting standards

We will remain an emerging growth company until the earliest of (1) the end of the fiscal year in which the market value of our Common Stock that is held by non-affiliates exceeds $700 million as of the end of the second fiscal quarter, (2) the end of the fiscal year in which we have total annual gross revenues of $1 billion or more during such fiscal year, (3) the date on which we issue more than $1 billion in non-convertible debt in a three-year period or (4) December 31, 2018, the end of the fiscal year following the fifth anniversary of the date of the first sale of our Common Stock pursuant to an effective registration statement filed under the Securities Act. Decreased disclosures in our SEC filings due to our status as an "emerging growth company" may make it harder for investors to analyze our results of operations and financial prospects.

Even after we no longer qualify as an emerging growth company, we may still qualify as a "smaller reporting company," which would allow us to take advantage of many of the same exemptions from disclosure requirements, including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act and reduced disclosure obligations regarding executive compensation in this Annual Report and our periodic reports and proxy statements. Some investors may find our Common Stock less attractive because we rely on these exemptions, there may be a less active trading market for our Common Stock and our stock price may be more volatile.

Delaware law and our Certificate of Incorporation could discourage a change in control, or an acquisition of us by a third party, even if the acquisition would be favorable to you, and thereby adversely affect existing stockholders.

The Delaware General Corporation Law contain provisions that may have the effect of making more difficult or delaying attempts by others to obtain control of our Company, even when these attempts may be in the best interests of stockholders. Delaware law imposes conditions on certain business combination transactions with "interested stockholders." These provisions and others that could be adopted in the future could deter unsolicited takeovers or delay or prevent changes in our control or management, including transactions in which stockholders might otherwise receive a premium for their shares over then current market prices. These provisions may also limit the ability of stockholders to approve transactions that they may deem to be in their best interests.

Our Certificate of Incorporation empowers the Board of Directors to establish and issue a class of Preferred Stock, and to determine the rights, preferences and privileges of the Preferred Stock. These provisions give the Board of Directors the ability to deter, discourage or make more difficult a change in control of our company, even if such a change in control could be deemed in the interest of our stockholders or if such a change in control would provide our stockholders with a substantial premium for their shares over the then-prevailing market price for the Common Stock.

We may not be able to utilize all, or any, of our net operating loss carry-forwards.

We have significant net operating loss carry-forwards in the United States. As of December 31, 2017, the Company had potentially utilizable Federal and state net operating loss tax carryforwards of approximately $20,578,912. The net operating loss tax carryforwards will start to expire in 2033. In certain jurisdictions, if we are unable to earn sufficient income or profits to utilize such carry-forwards before they expire, they will no longer be available to offset future income or profits.

Table of Contents

In the United States, utilization of these net operating loss carry-forwards may be subject to a substantial annual limitation if there is an ownership change within the meaning of Section 382 of the Internal Revenue Code (“Section 382”). In general, an ownership change, as defined by Section 382, results from a transaction or series of transactions over a three-year period resulting in an ownership change of more than 50% of the outstanding stock of a company by certain stockholders or public groups. Since our formation, we have raised capital through the issuance of Common Stock, and other securities of ours, on several occasions, and we may continue to do so, which, combined with current or future shareholders’ disposition of ordinary shares, may or may not have resulted in such an ownership change. Such an ownership change may limit the amount of net operating loss carry-forwards that can be utilized to offset future taxable income.

ITEM 1B. UNRESOLVED STAFF COMMENTS

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 2. PROPERTIES

Our principal executive offices are located at 136 New London Turnpike, Glastonbury, CT 06033, USA and our telephone number is (860) 633-5565. We currently lease approximately 2,900 square feet of office space. The lease term is sixty-one (61) months with the ability to terminate after the completion of thirty-seven (37) months with written notice to the landlord no later than ninety days (90) prior to the completion of the thirty-seven months. We believe that our leased facilities are adequate to meet our needs at this time. We do not currently own any real property.

ITEM 3. LEGAL PROCEEDINGS

From time to time, we may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm business.

The Company defaulted under its Master Multiple Services Agreement (the “Digitas Agreement”) with Digitas, Inc., a Massachusetts corporation (“Digitas”), as a result of the Company’s failure to pay Digitas past due balances for the services Digitas provided under the Digitas Agreement. Digitas filed a claim against the Company for damages in the aggregate amount of $650,000 (the “Claimed Amount”), together with pre-judgment interest, post-judgment interest, costs, and attorneys’ fees. On November 15, 2017, the Company entered into a Settlement Agreement and Mutual Release (the “Settlement Agreement”) with Digitas, pursuant to which the Company agreed to pay Digitas an aggregate of $400,000, in full settlement of any and all claims arising from or relating to amounts due under the Master Multiple Services Agreement (the “Claims”). Digitas agreed to release the Company from any further Claims, subject only to the Company meeting its payment obligations under the Settlement Agreement and the Digitas Note (as defined below). Simultaneously with the execution of the Settlement Agreement, the Company issued a Promissory Note to Digitas (the “Digitas Note”) in the principal amount of $400,000. Pursuant to the Digitas Note, the Company is required to pay Digitas (a) $100,000 on or before November 17, 2017 (the “First Payment”), $100,000 on the eight (8) month anniversary of the First Payment, and (c) $200,000.00 on the one (1) year anniversary of the First Payment. If the Company defaults on its payment obligations under the Digitas Note, after notice and failure to cure, Digitas may file a Consent Judgment for the full Claimed Amount, less payments already made, if any, together with post-judgment interest and reasonable attorneys’ fees and costs incurred by Digitas for purposes of collection. On November 16, 2017, the Company made the First Payment of $100,000 to Digitas.

Certain of CÜR Media’s former employees have filed claims against the Company for payment of unpaid wages totaling $50,000 which remains outstanding. In addition, the Company has agreed to settlements on claims totaling $237,343 which also remain outstanding.

Cybercoders, Inc. (“Cybercoders”), a recruiter we used in connection with certain employee placements, has filed a claim against the Company for failure to pay cybercoders past due balances for the services they provided. The Company and Cybercoders have agreed to a settlement amount of $5,000.

24G, LLC (“24G”), a consultant that provided us with marketing services, has filed a claim against the Company for failure to pay 24G past due balances in the amount of $71,898 for the services they provided. The Company and 24G agreed to a settlement amount of $5,000. Following the closing of the Preferred Stock Unit Offering, the settlement with 24G was paid.

A consultant that provided us with software development services, has filed a claim against the Company for failure to pay past due balances for services provided. A judgement was entered and recorded in the Circuit Court for Montgomery County, Maryland for $60,000. As of this filing, the judgement has been paid by the Company.

An attorney for iTexico LLC (“iTexico”), a software developer we used, has contacted the Company in an effort to collect $53,750 of past due balances iTexico claims it is owed for the services they provided. The Company reached a settlement amount of $9,000 with iTexico and paid the amount in November 2017.

We are currently not aware of any other pending legal proceedings to which we are a party or of which any of our property is the subject, nor are we aware of any such proceedings that are contemplated by any governmental authority.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

Table of Contents

PART II

Market Information

Our Common Stock was approved for quotation on the OTCQB tier of the OTC marketplace in September 2013. Through February 11, 2014, our trading symbol was "DUSR." As of February 11, 2014, we were assigned a new trading symbol of "CURM." Trading in shares of our Common Stock on the OTCQB commenced on or about February 21, 2014. On or around September 29, 2016, our Common Stock was moved from the OTCQB to the OTC Pink tier of the OTC marketplace.

The following table sets forth the high and low last-bid prices for our Common Stock for the periods indicated, as reported by the OTCQB and OTC Pink tiers of the OTC marketplace. The quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission, and may not represent actual transactions. Our Common Stock is very thinly traded and, thus, pricing of our Common Stock in the OTC marketplace does not necessarily represent its fair market value. The information in the table below has been adjusted to give retroactive effect to the 1-for-13 Reverse Stock Split that we effected on February 16, 2016.

	High		Low
2016
First quarter (January 1^st through March 31^st)	$	7.93	$	5.20
Second quarter (April 1^st through June 30^th)	$	3.25	$	1.25
Third quarter (July 1^st through September 30^th)	$	2.01	$	0.21
Fourth quarter (October 1^st through December 31, 2016)	$	0.35	$	0.23

2017
First quarter (January 1^st through March 31^st)	$	0.40	$	0.27
Second quarter (April 1^st through June 30^th)	$	1.51	$	0.40
Third quarter (July 1^st through September 30^th)	$	1.50	$	0.25
Fourth quarter (October 1^st through December 31^st)	$	1.05	$	0.25

2018
First quarter (January 1^st through March 31^st)	$	1.24	$	0.521
Second quarter (April 1^st through April 30^th)	$	1.18	$	1.03

On April 30, 2018, the closing price of our Common Stock as quoted on OTC Pink tier of the OTC marketplace was $ 1.195.

Holders

As of April 30, 2018, we had 2,526,663 shares of Common Stock outstanding held by approximately 248 stockholders of record.

Table of Contents

Dividends

We have never declared or paid cash dividends on our capital stock. We intend to retain all available funds and any future earnings, if any, to fund the development and expansion of our business and we do not anticipate paying any cash dividends in the foreseeable future. Any future determination related to dividend policy will be made at the discretion of our Board of Directors.

Securities Authorized for Issuance under Equity Compensation Plans

The following table provides information as of December 31, 2017, with respect to the shares of Common Stock that may be issued under our existing equity compensation plans:

*Plan Category*	*Number of securities* *to be issued upon* *exercise of outstanding* *options, warrants* *and rights*		*Weighted-average* *exercise price of* *outstanding* *options, warrants* *and rights*		*Number of* *securities remaining* *available for future* issuance under equity compensation plans *(excluding securities* *reflected in column (a)*
	*(a)*		*(b)*		*(c)*
Equity compensation plans approved by security holders(1)		197,311	$	8.12		141,151
Equity compensation plans not approved by security holders(2)		71,796	$	5.13		235,897
Total		269,107	$	7.32		377,048

(1) 2014 Equity Incentive Plan

On January 23, 2014, our Board of Directors adopted, and on January 28, 2014 our stockholders approved, our 2014 Equity Incentive Plan ("2014 Plan"), which reserved a total of 307,693 shares of our Common Stock for issuance under the 2014 Plan. On April 21, 2014, we amended our 2014 Plan to increase the total number of shares of our Common Stock reserved for issuance thereunder from 307,693 to 326,924. On October 8, 2014, we amended our 2014 Plan to increase the total number of shares of our Common Stock reserved for issuance thereunder from 326,924 to 338,462.

If an incentive award granted under the 2014 Plan expires, terminates, is unexercised or is forfeited, or if any shares are surrendered to us in connection with an incentive award, the shares subject to such award and the surrendered shares will become available for further awards under the 2014 Plan.

In addition, the number of shares of our Common Stock subject to the 2014 Plan, any number of shares subject to any numerical limit in the 2014 Plan, and the number of shares and terms of any incentive award are expected to be adjusted in the event of any change in our outstanding our Common Stock by reason of any stock dividend, spin-off, split-up, stock split, reverse stock split, recapitalization, reclassification, merger, consolidation, liquidation, business combination or exchange of shares or similar transaction.

Administration

The compensation committee of the Board of Directors, or the Board of Directors in the absence of such a committee, will administer the 2014 Plan. Subject to the terms of the 2014 Plan, the compensation committee has complete authority and discretion to determine the terms of awards under the 2014 Plan.

Table of Contents

Grants

The 2014 Plan authorizes the grant to participants of nonqualified stock options, incentive stock options, restricted stock awards, restricted stock units, performance grants intended to comply with Section 162(m) of the Internal Revenue Code (as amended, the "Code") and stock appreciation rights, as described below:

	·	Options granted under the 2014 Plan entitle the grantee, upon exercise, to purchase a specified number of shares from us at a specified exercise price per share. The exercise price for shares of our Common Stock covered by an option cannot be less than the fair market value of our Common Stock on the date of grant unless agreed to otherwise at the time of the grant.

	·	Restricted stock awards and restricted stock units may be awarded on terms and conditions established by the compensation committee, which may include performance conditions for restricted stock awards and the lapse of restrictions on the achievement of one or more performance goals for restricted stock units.

	·	The compensation committee may make performance grants, each of which will contain performance goals for the award, including the performance criteria, the target and maximum amounts payable, and other terms and conditions.

	·	The 2014 Plan authorizes the granting of stock awards. The compensation committee will establish the number of shares of our Common Stock to be awarded and the terms applicable to each award, including performance restrictions.

	·	Stock appreciation rights ("SARs") entitle the participant to receive a distribution in an amount not to exceed the number of shares of our Common Stock subject to the portion of the SAR exercised multiplied by the difference between the market price of a share of our Common Stock on the date of exercise of the SAR and the market price of a share of our Common Stock on the date of grant of the SAR.

Duration, Amendment, and Termination

The Board of Directors has the power to amend, suspend or terminate the 2014 Plan without stockholder approval or ratification at any time or from time to time. No change may be made that increases the total number of shares of our Common Stock reserved for issuance pursuant to incentive awards or reduces the minimum exercise price for options or exchange of options for other incentive awards, unless such change is authorized by our stockholders within one year. Unless sooner terminated, the 2014 Plan would terminate ten years after it is adopted.

We have issued an aggregate of (i) 269,107 non-statutory stock options to purchase shares of our Common Stock at an average exercise price of approximately $7.06 per share, and (ii) 24,335 restricted stock awards (of which approximately 24,335 are fully vested at December 31, 2017 and represent 24,335 issued and outstanding shares of our Common Stock) under the 2014 Plan.

(2) 2015 Equity Incentive Plan

On September 25, 2015, the Board of Directors adopted the 2015 Equity Incentive Plan (the "2015 Plan"), to provide the Company with flexibility in its ability to motivate, attract, and retain the services of members of the Board of Directors, key employees and consultants. The 2015 Plan is subject to approval by the Company's stockholders within 12 months after the Effective Date. Pursuant to the 2015 Plan, as amended, in the event that stockholder approval is not obtained within 12 months after the effective date of the 2015 Plan, all incentive stock options granted under the 2015 Plan shall be treated as non-qualified stock options.

Table of Contents

Administration

The compensation committee of the Board of Directors, or the Board of Directors in the absence of such a compensation committee, will administer the 2015 Plan. Subject to the terms of the 2015 Plan, the compensation committee, or the Board of Directors in the absence of such a compensation committee, has complete authority and discretion to determine the terms of awards under the 2015 Plan.

Shares Reserved Under the 2015 Plan

A total of 307,693 shares of our Common Stock are reserved for issuance under the 2015 Plan. If an award granted under the 2015 Plan lapses, expires, terminates, is unexercised or is forfeited, or if any shares are surrendered to us in connection with an incentive award, the shares subject to such award and the surrendered shares will become available for further awards under the 2015 Plan.

Grants

The 2015 Plan authorizes the grant to participants of non-qualified stock options, incentive stock options, restricted stock awards, restricted stock units, performance grants intended to comply with Section 162(m) of the Internal Revenue Code (as amended, the "Code"), and stock appreciation rights, as described below:

	·	Options granted under the 2015 Plan entitle the grantee, upon exercise, to purchase a specified number of shares from us at a specified exercise price per share. The exercise price for shares of our Common Stock covered by an option cannot be less than the fair market value of our Common Stock on the date of grant unless otherwise agreed to at the time of the grant.

	·	Restricted stock awards and restricted stock units may be awarded on terms and conditions established by the Committee, or the Board in the absence of such a compensation committee, which may include performance conditions for restricted stock awards and the lapse of restrictions on the achievement of one or more performance goals for restricted stock units.

	·	The compensation committee, or the Board of Directors in the absence of such a compensation committee, may make performance grants, each of which will contain performance goals for the award, including the performance criteria, the target and maximum amounts payable, and other terms and conditions.

	·	The 2015 Plan authorizes the granting of stock awards. The compensation committee, or the Board of Directors in the absence of such a compensation committee, will establish the number of shares of our Common Stock to be awarded and the terms applicable to each award, including performance restrictions.

	·	Stock appreciation rights ("SARs") entitle the participant to receive a distribution in an amount not to exceed the number of shares of our Common Stock subject to the portion of the SAR exercised multiplied by the difference between the market price of a share of our Common Stock on the date of exercise of the SAR and the market price of a share of our Common Stock on the date of grant of the SAR.

Table of Contents

Duration, Amendment, and Termination

The Board of Directors has the power to amend, suspend or terminate the 2015 Plan without stockholder approval or ratification at any time or from time to time. However, no change may be made that materially increases the total number of shares of our Common Stock reserved for issuance under the 2015 Plan, or reduces the minimum exercise price for options or exchange of options for other incentive awards, unless such change is authorized by our stockholders. Unless sooner terminated, the 2015 Plan would terminate ten years after the Effective Date.

Adjustments

The number of shares of our Common Stock subject to the 2015 Plan, any number of shares subject to any numerical limit in the 2015 Plan, and the number of shares and terms of any award will be adjusted in the event of any change in our outstanding our Common Stock by reason of any stock dividend, spin-off, split-up, stock split, reverse stock split, recapitalization, reclassification, merger, consolidation, liquidation, business combination or exchange of shares or similar transaction.

We have issued an aggregate of (i) 71,796 non-statutory stock options to purchase shares of our Common Stock at an average exercise price of approximately $5.13 per share under the 2015 Plan.

Recent Sales of Unregistered Securities

During the fiscal year ended December 31, 2017, and the subsequent period through the date hereof, we did not have any issuances of unregistered securities, except as otherwise previously reported in our Current Reports on Form 8-K, or prior periodic reports.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

None.

ITEM 6. SELECTED FINANCIAL DATA

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

Table of Contents

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

The following management's discussion and analysis should be read in conjunction with our historical financial statements and the related notes thereto. The management's discussion and analysis contains forward-looking statements, such as statements of our plans, objectives, expectations and intentions. Any statements that are not statements of historical fact are forward-looking statements. When used, the words "believe," "plan," "intend," "anticipate," "target," "estimate," "expect" and the like, and/or future tense or conditional constructions ("will," "may," "could," "should," etc.), or similar expressions, identify certain of these forward-looking statements. These forward-looking statements are subject to risks and uncertainties, including those under "Risk Factors," above, that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. Our actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of several factors. We do not undertake any obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this Annual Report.

References in this section to "CÜR Media," "we," "us," "our," "the Company" and "our Company" refer to CÜR Media, Inc., and its consolidated subsidiary, CÜR Media, LLC (formerly Raditaz, LLC).

Basis of Presentation

The following discussion highlights our results of operations and the principal factors that have affected our financial condition as well as our liquidity and capital resources for the periods described, and provides information that management believes is relevant for an assessment and understanding of the statements of financial condition and results of operations presented herein. The financial information contained herein has been retroactivity adjusted for a reverse stock split at the rate of 1-for-13, which we effected on February 16, 2016. The following discussion and analysis are based on our audited financial statements contained in this Annual Report, which we have prepared in accordance with United States generally accepted accounting principles. You should read the discussion and analysis together with such financial statements and the related notes thereto.

The audited financial statements included in this Annual Report include a summary of our significant accounting policies, and should be read in conjunction with the discussion below. In the opinion of management, all material adjustments necessary to present fairly the results of operations for such periods have been included in these audited financial statements. All such adjustments are of a normal recurring nature.

General Overview

We were incorporated in the State of Delaware as Duane Street Corp. on November 17, 2011. Our original business was manufacturing and marketing baby products. Prior to the Contribution (as defined below), our Board of Directors determined to discontinue operations in this area and to seek a new business opportunity.

On January 28, 2014, we consummated the Contribution (“Contribution”) with CÜR Media, LLC, a limited liability company organized in the State of Connecticut on February 15, 2008, pursuant to a Contribution Agreement by and among the Company, CÜR Media, LLC, and the holders of a majority of CÜR Media, LLC's limited liability company membership interests (the "Contribution Agreement"). In connection with the Contribution, and in accordance with the terms and conditions of the Contribution Agreement, all outstanding securities of CÜR Media, LLC were exchanged for securities of ours.

Table of Contents

Prior to the Contribution, CÜR Media, LLC's activities since inception were devoted primarily to the development and commercialization of Raditaz, a DMCA compliant internet radio product. Raditaz was launched in early 2012 and the platform was continually developed and improved through November 2013 when its iOS, Android and web products were removed from the market, to allow us to focus on the further development of our CÜR Music product.

The Raditaz music streaming platform and products were under development since 2010 and, prior to the 2014 PPO (as defined below) were financed primarily from angel investments in the aggregate amount of approximately $4,858,000, $150,000 of financing from a promissory note from CT Innovations, Incorporated, and a $100,000 promissory note and a $100,000 grant from the State of Connecticut Department of Economic Development.

As a result of the Contribution, CÜR Media, LLC became our wholly owned subsidiary, and we adopted the business of CÜR Media, LLC, which is to develop and commercialize a streaming music experience for listening on the web and mobile devices, as our sole line of business (the “Music Streaming Business”).

In addition, on January 31, 2014, we increased our number of authorized shares to 310,000,000 shares, consisting of (i) 300,000,000 shares of Common Stock, par value $0.0001 per share, and (ii) 10,000,000 shares of Preferred Stock, par value $0.0001 per share.

Further, on January 31, 2014, our Board of Directors authorized a 1.26953123-for-1 forward split of our Common Stock, in the form of a dividend, pursuant to which each shareholder of our Common Stock as of the record date received 1.19260815 additional shares of Common Stock for each one share owned.

In a private placement financing we conducted with respect to which closings occurred on January 28, 2014, March 14, 2014 and March 28, 2014 (the "2014 PPO"), we sold an aggregate of 744,756 shares of our Common Stock, and warrants to purchase an aggregate of 744,756 shares of our Common Stock at an exercise price of $26.00 per share for a term of five (5) years ("PPO Warrants"), for gross proceeds of approximately $9,680,000 (before deducting placement agent fees and expenses of the 2014 PPO estimated at approximately $1,529,000).

The placement agent for the 2014 PPO and its sub-agent were paid an aggregate commission of approximately $968,000 and were issued warrants to purchase an aggregate of 74,483 shares of our Common Stock at an exercise price of $13.00 per share for a term of five (5) years ("Broker Warrants").

On April 6, 2015, we consummated an offer to amend and exercise the PPO Warrants (the "Offer to Amend and Exercise Warrants"). The PPO Warrants of holders who elected to participate in the Offer to Amend and Exercise Warrants were amended to, among other things, remove the price-based anti-dilution provisions contained therein and reduce the exercise price from $26.00 to $6.50 per share of Common Stock. Pursuant to the Offer to Amend and Exercise Warrants, an aggregate of 497,548 PPO Warrants were amended and exercised by their holders, for gross proceeds of approximately $3,234,000 (before deducting warrant agent fees and expenses of the Offer to Amend and Exercise estimated at approximately $417,000).

Effective on or prior to April 6, 2015, the Company and the holders of (a) 113,469 PPO Warrants, that chose not to participate in the Offer to Amend and Exercise Warrants ("Non-Participating Original Warrants"), and (b) all 74,483 Broker Warrants, approved an amendment to remove the price-based anti-dilution provisions in their warrants. As a result, the price-based anti-dilution provisions contained in these Non-Participating Original Warrants and Broker Warrants have been removed and are of no further force or effect as of April 6, 2015.

The warrant agent for the Offer to Amend and Exercise Warrants was paid an aggregate commission of approximately $323,350 and was issued warrants to purchase an aggregate of 49,752 shares of our Common Stock at an exercise price of $6.50 per share for a term of five (5) years ("Warrant Agent Warrants").

Table of Contents

Certain securities we issued in the 2014 PPO had price-based anti-dilution protection, if, within twenty-four (24) months after the final closing of the 2014 PPO, we issued additional shares of Common Stock or Common Stock equivalents (subject to customary exceptions) for a consideration per share less than $13.00. Of the 744,756 PPO Warrants, 133,739 still had these priced-based anti-dilution rights through March 28, 2016. With the consummation of the exercise and amendment of the PPO Warrants and the issuance of the Warrant Agent Warrants to the Warrant Agent, the anti-dilution provisions were triggered and the non-participating warrant holders received: (i) an aggregate of 17,180 additional shares of Common Stock (ii) a reduction in the price of their PPO Warrants from $26.00 per share to $23.01 per share, and (iii) an aggregate of 17,180 additional warrants to purchase shares of Common Stock of the Company at an exercise price of $23.01 per share.

On October 20, 2015, October 26, 2015, November 13, 2015, November 24, 2015, November 30, 2015, December 30, 2015 and January 14, 2016 we entered into Securities Purchase Agreements (in this case, the "Purchase Agreements") with certain "accredited investors (the "Unsecured Buyers"), pursuant to which the Unsecured Buyers purchased 12% Unsecured Convertible Promissory Notes of the Company (the "Unsecured Notes") in the aggregate principal amount of $2,113,500 (the "First Convertible Note Offering"). The aggregate gross proceeds to the Company were $2,113,500 (before deducting expenses related to the purchase and sale of the Unsecured Notes of approximately $45,000), of which $586,000 in proceeds were from members of the Board of Directors.

The Unsecured Notes have an aggregate principal balance of $2,113,500 and a stated maturity date of 5 years from the date of issuance. The principal on the Unsecured Notes bears interest at a rate of 12% per annum, which is also payable on maturity. On April 12, 2016, with the closing of the Secured Convertible Notes Offering (as defined below), certain terms of the Unsecured Notes were amended. Under the new terms of the Unsecured Notes, upon the closing of $15,000,000 in equity securities ("Equity Financing Securities") by the Company (in this case, a "Qualified Offering") all of the outstanding principal amount of the Unsecured Notes, together with accrued and unpaid interest due thereon, will automatically convert (in this case, a "Mandatory Conversion") into units of our securities (the "Unsecured Note Conversion Units") at a conversion price per Unsecured Note Conversion Unit equal to the lesser of (i) $5.60 or (ii) a 20% discount to the price per share of the Equity Financing Securities. Each Unsecured Note Conversion Unit will consist of one share (the "Unsecured Note Conversion Unit Shares") of our Common Stock, and one five-year warrant (the "Unsecured Note Conversion Unit Warrants") to purchase one additional share (the "Unsecured Note Conversion Unit Warrant Shares") of our Common Stock at an exercise price of 125% of the Qualified Offering unit price. The terms of the amendment were in exchange for the Unsecured Note holders' subordination to the Secured Note holders.

The Unsecured Note Conversion Unit Warrants, to be received upon conversion of the Unsecured Notes, provide for the purchase of shares of our Common Stock at an exercise price equal to (a) 125% of the price at which the Company's Equity Financing Securities are sold in a Qualified Offering. The Unsecured Note Conversion Unit Warrants are exercisable for cash only, for a term of 5 years from the date of issuance. The number of shares of Common Stock to be deliverable upon exercise of the Unsecured Note Conversion Unit Warrants is subject to adjustment for subdivision or consolidation of shares and other standard dilutive events.

The Company agreed to use its commercially reasonable efforts to file a registration statement ("Registration Statement") to register the Unsecured Note Conversion Unit Shares and Unsecured Note Conversion Unit Warrant Shares no later than (i) the date that is ninety (90) calendar days after the final closing under the Qualified Offering, or (ii) the date which is ninety (90) calendar days after the first optional conversion of the Unsecured Notes. The Company agreed to use its commercially reasonable efforts to have the Registration Statement declared effective no later than one hundred and eighty (180) calendar days after the Registration Statement is first filed with the SEC.

With the issuance of Unsecured Notes, the Anti-Dilution Rights were triggered and the holders of the Non-Participating Original Warrants received, or are entitled to receive: (i) an aggregate of 18,674 additional shares of Common Stock, (ii) a reduction in the price of their PPO Warrants from $23.01 per share to $20.50 per share, and (iii) an aggregate of 18,674 additional warrants to purchase shares of Common Stock of the Company at an exercise price of $20.50 per share.

Table of Contents

In early 2016, the Company entered into agreements ("Music Label Agreements") with certain music labels ("Music Labels"), pursuant to which the Company was provided limited, non-exclusive licenses to digitally distribute certain sound recordings and related materials owned or controlled by the Music Labels in connection with CÜR Music, the music streaming product we are developing (“CÜR Music”), within the United States and its territories, commonwealths, and possessions. The Company had also entered into agreements (“Publishing Agreements”) with certain music publishing companies (“Music Publishers”) either directly or through a third party, pursuant to which the Company had been provided the non-exclusive right and license to use certain musical works owned, controlled and/or administered by the Music Publishers in connection with CÜR Music, within the United States and its territories, commonwealths, and possessions. The Music Label Agreements and Publishing Agreements may be collectively referred to herein as the “Content Agreements,” and the Music Labels and Music Publishers may be collectively referred to herein as the “Content Providers.”

However, we defaulted on the Music Label Agreements as a result of our failure to pay advances due to the Music Labels pursuant to such agreements, and the Music Label Agreements were subsequently terminated. The Company also defaulted on its Music Label Agreement with Warner Music, Inc. (“WMG”) as a result of the Company’s failure to pay WMG the advance due pursuant to such agreement. WMG did not initiate termination of their agreement. The Company is currently in default of the Publishing Agreements and intends to enter into new agreements prior to the launch of CÜR Music.

On February 16, 2016, we effected a 1-for-13 reverse stock split (the “Reverse Stock Split”). Upon effectiveness of the Reverse Stock Split, every thirteen (13) outstanding shares of our Common Stock ("Old Common Stock") were, without any further action by us, or any holder thereof, combined into and automatically became one (1) share of our Common Stock. Any fractional shares have been rounded up to one whole common share. All shares of Common Stock eliminated as a result of the Reverse Stock Split have been cancelled such that they were returned to our authorized and unissued capital stock, and our capital has been reduced by an amount equal to the par value of the Old Common Stock so retired.

On April 12, 2016, April 15, 2016, May 26, 2016, June 7, 2016 and July 20, 2016 the Company entered into Securities Purchase Agreements (in this case, the "Purchase Agreements") with certain "accredited investors" (the "Secured Buyers"), pursuant to which the Secured Buyers purchased 12% Senior Secured Convertible Promissory Notes of the Company (the "Secured Notes") in the aggregate principal amount of $2,515,000 (before deducting placement agent fees and expenses of $282,454) (the "Second Convertible Note Offering"). The Company used the net proceeds from the Second Convertible Note Offering for certain payments to content owners, and working capital and general corporate purposes.

The Secured Notes are secured by a security interest in and lien on all now owned or hereafter acquired assets and property, real and personal, of the Company and its subsidiaries, including the Company's intellectual and technology property pursuant to the terms of a security agreement (in this case, the "Security Agreement") among the Company and the Secured Buyers. The security interest in and liens on all assets and property of the Company will be a first priority security interest.

Table of Contents

The Secured Notes have an aggregate principal balance of $2,515,000, and a stated maturity date of 6 months from the date of issuance. The principal on the Secured Notes bears interest at a rate of 12% per annum, which is also payable on maturity. The Secured Notes rank senior to all existing indebtedness of the Company, except as otherwise set forth in the Secured Notes. Upon the closing of a financing (in this case, a "Qualified Offering") by the Company during the term of the Secured Notes involving the sale of at least $15,000,000 in Equity Financing Securities, all of the outstanding principal amount of the Secured Notes, together with accrued and unpaid interest due thereon, will automatically convert (in this case, a "Mandatory Conversion") into units of the Company's securities (the "Second Units") at a conversion price per Second Unit equal to the lesser of (a) 80% of the price per share of the Equity Financing Securities sold in the Qualified Offering, or (b) $2.00. At any time prior to a Mandatory Conversion, the holders of the Secured Notes may convert all or part of the outstanding principal amount of the Secured Notes, together with accrued and unpaid interest due thereon, into Second Units at a conversion price of $2.00 per Unit (in this case, an "Optional Conversion"). Each Second Unit will consists of one share (the "Second Unit Shares") of the Company's Common Stock, and one five-year warrant (the "Second Unit Warrants") to purchase one additional share (the "Second Unit Warrant Shares") of the Company's Common Stock at an exercise price equal to (a) 125% of the price at which the Company's equity securities (or securities convertible into or exercisable for equity securities) are sold in a Qualified Offering in the event of a Mandatory Conversion, or (b) 125% of $2.00 in the event of an Optional Conversion. Upon failure by the Company to pay any principal amount or interest due under the Secured Notes within 5 days of the date such payment is due, or the occurrence of other event of default under the terms of the Secured Notes, the entire unpaid principal balance of the Secured Notes, together with any accrued and unpaid interest thereon, will become due and payable, without presentment, demand, protest or notice of any kind. In the event of any liquidation, dissolution or winding up of the Company, each holder of a Secured Note will be entitled to receive, pari passu with the other holders of the Secured Notes, and in preference to the holders of the Company's other outstanding securities, an amount equal to two times the principal amount of, and any accrued and unpaid interest on, such holder's Secured Note. The conversion price and number of Second Units issuable upon conversion of the Secured Notes will be subject to adjustment from time to time for subdivision or consolidation of shares and other standard dilutive events. On November 16, 2017, simultaneous with the Initial Closing discussed in Note 15 and in Item 3, the holders of all of the Company’s existing 12% senior secured convertible promissory notes, in the aggregate principal amount of $2,515,000, with accrued and unpaid interest in the aggregate of $561,203, assigned, conveyed, transferred and set over to CÜR Holdings Inc. all of the Secured Noteholders’ right, title, interest and obligations in, to and under the Secured Notes, and all claims, suits, causes of action and any other rights thereunder, in exchange for units of securities of CÜR Holdings Inc., at an exchange rate of $2.00 of principal and interest due under the Secured Notes per unit, in a transaction intended to be exempt from registration under the Securities Act, pursuant to Section 4(a)(2) and/or Rule 506 of Regulation D promulgated thereunder. Upon completion of the transaction, CÜR Media is now required to pay Holdings.

Pursuant to the terms of a Placement Agency Agreement (in this case, the "Placement Agency Agreement") between the Company and the placement agent for the Second Convertible Note Offering (in this case, the "Placement Agent"), in connection with the closing of the Second Convertible Note Offering, the Placement Agent was paid a commission of an aggregate of $236,500. In addition, the Placement Agent, or its designees, received warrants to purchase a number of shares of Common Stock equal to 10% of the number of Second Unit Shares into which Secured Notes sold in the Second Convertible Note Offering to Secured Buyers introduced to the Second Convertible Note Offering by the Placement Agent, and 8% of the number of Second Unit Shares into which Secured Notes sold in the Second Convertible Note Offering to Secured Buyers introduced to the Second Convertible Note Offering by the Company or its representatives, are converted upon a Mandatory Conversion, with a term of 5 years and an exercise price per share equal to the exercise price of the Second Unit Warrant Shares issued to Secured Buyers introduced to the Second Convertible Note Offering by the Placement Agent upon a Mandatory Conversion ("Placement Agent Warrants").

The Second Unit Warrants, to be received upon conversion of the Secured Notes, provide for the purchase of shares of the Company's Common Stock an exercise price equal to (a) 125% of the price at which the Company's Equity Financing Securities are sold in a Qualified Offering in the event of a Mandatory Conversion, or (b) 125% of $2.00 in the event of an Optional Conversion. The Second Unit Warrants are exercisable for cash only, for a term of five (5) years from the date of issuance. The number of shares of Common Stock to be deliverable upon exercise of the Second Unit Warrants is subject to adjustment for subdivision or consolidation of shares and other standard dilutive events.

The Company granted registration rights to each Secured Buyer with respect to the Second Unit Shares and Second Unit Warrant Shares, and to the Placement Agent, with respect to the Common Stock issuable upon exercise of the Placement Agent Warrants, in each case on a pari passu basis with, and upon substantially the same terms as the registration rights granted to, the investors in a Qualified Offering.

As of August 2016, we had laid off all of our employees and ceased significant operations, other than capital raising activities intended to continue our Music Streaming Business. These capital-raising activities were led by our Founder and then-sole director, Thomas Brophy.

Table of Contents

On September 11, 2017, we entered into a term sheet (the “Term Sheet”) with CUR Holdings, Inc., a related Delaware corporation, formed on August 14, 2017, for the purpose of raising capital to effectuate a transaction with the Company, or another company in the music streaming space (“Holdings”), pursuant to which the Company and Holdings agreed to consummate either a Merger (as defined below) or an Asset Transfer (as defined below), under certain circumstances. Pursuant to the Term Sheet, in the event the Company receives notification from the SEC that it will not institute the proposed Administrative Proceedings, or, if instituted, will discontinue such proceedings (“SEC Clearance”), Holdings will, subject to any required shareholder approval, merge with and into the Company, with the Company continuing as the surviving entity (the “Merger”); provided, however, that the boards of directors of the Company and Holdings may mutually agree to proceed with the Merger prior to receipt of SEC Clearance. If, however, the SEC commences the proposed Administrative Proceedings against the Company, and such proceedings result in the revocation of the registration of our Common Stock under the Exchange Act (“SEC Revocation”), the Company and Holdings will, subject to any required shareholder approval, enter into a fair value asset purchase and sale transaction, pursuant to which Holdings will acquire all of the intellectual property and other assets and liabilities constituting our Music Streaming Business (the “Asset Transfer” and, together with the Merger, a “Combination Transaction”); provided, however, that the boards of directors of the Company and Holdings may mutually agree to proceed with the Asset Transfer any time commencing on the ninety-first (91st) day after the effective date of the Term Sheet.

As of December 31, 2017, we had devoted substantially all of our efforts to product development, raising capital and building our technology infrastructure. As of that date, we did not receive any revenues from our planned principal operations.

Our Strategy

Our CÜR Music product is a new streaming music experience that combines the listening experience of free internet radio products with an on-demand listening experience for listening on web and mobile devices, beginning at $1.99 per month. We expect to launch our CÜR Music product in the second or third quarter of 2018. We will face competition from larger and more established media service providers which include traditional offline music distribution competitors and larger media companies like Apple, Google, Spotify, Amazon and others, and from other online digital music services. We will compete on the basis of a number of factors, including quality of experience, relevance, acceptance and diversity of content, ease of use, price, accessibility, perceptions of ad load, brand awareness and reputation. CÜR Music will target consumers who are seeking a more comprehensive music streaming service than current free, ad-supported music streaming products. We believe that the CÜR Music product will include a hybrid model that includes many features that free, ad-supported internet radio products provide, without interruptive advertising, with a limited on-demand offering, and will include a social toolset that enables consumers to curate certain aspects their playlists.

In addition to revenue from subscriptions, our business plan includes a second revenue stream of personalized advertising, which will not interrupt a stream, but will target a user's listening habits. The advertising may be in the form of, display ads, email and text messages. Our business plan further includes a third revenue stream from the sale of music, concert tickets and merchandise through our music streaming service, to be tailored to each listeners taste based on prior listening trends. We plan to sell advertising, music downloads and concert tickets and merchandise in the future subsequent to launch.

Our business plan includes distributing our music streaming service through Apple's iTunes App Store to iOS devices, Google's Google Play Store to Android devices and the internet, among other distribution channels and platforms. At launch, we plan to have an iOS application, Android application and a CÜR Music website. The CÜR Music application was previously submitted to and approved by the iTunes app store and the Google Play store and we anticipate it will be approved again upon resubmission.

We plan to source our music from MusicNet, Inc. d/b/a Media Net Digital, Inc. We also plan to use Amazon web services to support certain of the technological needs of the business.

We expect to bring CÜR Music to market, in the second or third quarter of 2018. As of December 31, 2017, we have adequate capital to launch CÜR Music however, we continue to pursue sources of equity and/or debt financing to support our operations. We need to raise a substantial amount of capital, to fully implement our business plan, market CÜR Music, meet additional content license cost obligations, and for general working capital.

Table of Contents

Recent Developments

Agreements with Content Providers

As previously reported, the Company had entered into agreements ("Music Label Agreements") with certain music labels ("Music Labels"), pursuant to which the Company has been provided limited, non-exclusive licenses to digitally distribute certain sound recordings and related materials owned or controlled by the Music Labels in connection with the Company's CÜR-branded Internet music service, CÜR Music, to be composed of three progressively priced and increasingly functional tiers, within the United States and its territories, commonwealths, and possessions. The Company had also entered into agreements ("Publishing Agreements") with certain music publishing companies ("Music Publishers") either directly or through a third party, pursuant to which the Company had been provided the non-exclusive right and license to use certain musical works owned, controlled and/or administered by the Music Publishers in connection with CÜR Music, within the United States and its territories, commonwealths, and possessions. The Music Label Agreements and Publishing Agreements may be collectively referred to herein as the "Content Agreements," and the Music Labels and Music Publishers may be collectively referred to herein as the "Content Providers.”

The Company was not able to make the initial payments when due on January 31, 2016. As a result, the company’s Music Label Agreements with Sony Music Entertainment (“SME”) and UMG Recordings, Inc. (“UMG”) were terminated as a result of the company’s failure to pay SME and UMG the advances due pursuant to such agreements, respectively. The Company also defaulted on its Music Label Agreement with Warner Music, Inc. (“WMG”) as a result of the Company’s failure to pay WMG the advance due pursuant to such agreement. WMG did not initiate termination of their agreement.

Prior to the Initial Closing of the Preferred Stock Unit Offering, and as a condition thereto, Holdings renegotiated the content licensing agreements (“New Music Label Agreements”). Upon consummation of the Initial Closing of the Preferred Stock Unit Offering, Holdings paid Label Advances due to the Music Labels pursuant to the New Music Label Agreements. The Company joined one of the New Music Label Agreements, while the other New Music Label Agreements provide Holdings with the right to sublicense its rights under such agreement to the Company. The New Music Label Agreements enable the Company to digitally distribute sound recordings and related materials owned or controlled by the Music Labels in connection with the Company’s Internet music service, CÜR Music. The New Music Label Agreements released the Company of prior obligations under the original Music Label Agreements. At the current time, the Company does not have a contract with holdings which requires payment for sublicenses and access to the sound recordings and related materials.

The Company is required to pay certain minimum content fees over the term of the Content Agreements with Content Providers as follows: $15,100,000 in the first year of the agreements, $24,500,000 in the second year of the agreements, and $18,400,000 in the third year of the agreements. We expect to bring CÜR Music to market in the second or third quarter of 2018. As of December 31, 2017, we expect that the net proceeds from the Holdings Offerings will be available to us and represented by the Post-Closing Line of Credit Note and will be sufficient to launch CÜR Music in the second or third quarter of 2018. We need to raise a substantial amount of capital to fully implement our business plan, market CÜR Music, for additional content license costs, and for general working capital.

Default on Secured Notes and Subsequent Assignment to Holdings

On October 12, 2016, October 15, 2016, November 26, 2016, December 7, 2016, December 20, 2016 and January 20, 2017, the principal and any accrued and unpaid interest on our outstanding Secured Notes in the principal amount of an aggregate of $2,515,000 became due and payable. We were unable to repay the noteholders at that time. Pursuant to the terms of the Secured Notes, our failure to pay any principal or interest within five (5) days of the date such payment was due constituted an event of default. Following the occurrence of an event of default, among other things, the interest rate on the Secured Notes increased to 15%. In addition to other remedies available to the noteholders, our obligation to repay amounts due under the Secured Notes is secured by a first priority security interest in and lien on all of our assets and property, including our intellectual property.

Table of Contents

At the effective time of the Initial Closing of the Preferred Stock Unit Offering, the holders (the “Secured Noteholders”) of all of the Company’s Secured Notes, with accrued and unpaid interest in the aggregate of $561,203, assigned, conveyed, transferred and set over to Holdings all of the Secured Noteholders’ right, title, interest and obligations in, to and under the Secured Notes, and all claims, suits, causes of action and any other rights thereunder, in exchange for units (each, a “Secured Note Conversion Unit” and, collectively, the “Secured Note Conversion Units”) of securities of Holdings, at an exchange rate of $2.00 of principal and interest due under the Secured Notes per unit, in an transaction intended to be exempt from registration under the Securities Act, pursuant to Section 4(a)(2) and/or Rule 506 of Regulation D promulgated thereunder (the “Secured Note Assignment Transaction”). Each Secured Note Conversion Unit consisted of (a) one (1) share of common stock of Holdings (each, a “Secured Note Conversion Share” and, collectively, the “Secured Note Conversion Shares”), and (b) a 5-year warrant (each, a “Secured Note Conversion Warrant” and, collectively, the “Secured Note Conversion Warrants”) to purchase one (1) share of common stock of Holdings for every share of common stock of Holdings received upon exchange, at an exercise price per share equal to $1.00. Upon completion of the transaction, CÜR Media will be required to pay Holdings.

The Assignment Transaction did not alter the obligation of the Company under the original Secured Notes.

Receipt of Wells Notice

On July 19, 2017, we received a “Wells Notice” from the staff (the “Staff”) of the SEC. The Wells Notice provides notification to the Company that the Staff has made a preliminary determination to recommend that the SEC institute administrative proceedings (“Administrative Proceedings”) against the Company pursuant to Sections 12(j) and 12(k) of the Exchange Act, based solely upon our failure to comply with its reporting obligations under Section 13(a) of the Exchange Act. Sections 12(j) grants the SEC the right, after notice and opportunity for a hearing, to revoke the registration of a security. Section 12(k) grants the SEC the right to suspend trading in a security.

In accordance with SEC rules, on August 25, 2017, we made a written submission to the SEC in response to the Wells Notice, in which, among other things, we conveyed our present intention to file the delinquent reports and become current with its SEC filing requirements and, as such, set forth the reasons why the proposed enforcement action should not be filed. While no assurances can be made, we believe that, as a result of making these filings, the SEC will have no further reason to institute the proposed Administrative Proceedings, or, if instituted, to continue such proceedings. However, there can be no assurance that the SEC will not bring an enforcement action against the Company, which could result in a trading suspension of our Common Stock and the de-registration of our securities under the Exchange Act. Administrative Proceedings, if instituted, will be held before an administrative law judge.

At the time we received the Wells Notice, the Company had not filed its quarterly reports on Form 10-Q with the SEC for the quarters ended June 30, 2016, September 30, 2016, March 31, 2017 and June 30, 2017. The Company also had not filed its Annual Report on Form 10-K for the year ended December 31, 2016. We have filed all three of the delinquent reports for the fiscal years ended December 31, 2017 and 2016.

Table of Contents

Defaults on Vendor Agreements

As of September 27, 2016, our Data License and Services Agreement (the "Rovi Agreement") with Rovi Data Solutions, Inc. and Veveo, Inc. (collectively, “Rovi”) terminated as a result of our failure to pay Rovi past due balances for the services they provided under the Rovi Agreement.

We are in default under our Distribution Agreement (the "MediaNet Agreement") with MusicNet, Inc., d/b/a MediaNet Digital, Inc. ("MediaNet") as a result of our failure to pay MediaNet past due balances for the services they provided under the MediaNet Agreement. To date, we have not received a notice of default from MediaNet. The Company intends to cure the default and/or enter into a new contract with MediaNet now that it is adequately funded.

On October 12, 2016, we received a notice of default from Zuora, Inc. ("Zuora") confirming that the Company is in default under its Master Subscription Agreement with Zuora (the "Zuora Agreement") as a result of our failure to pay Zuora past due balances for the services they provided under the Zuora Agreement. On July 31, 2017, the Company and Zuora signed a new order form (“New Order Form”) under the Zuora Master Subscription Agreement, providing for the full settlement and release of the parties from all obligations under the old order form, dated July 31, 2014, in consideration for entering into the New Order Form. Pursuant to the New Order Form, the Company will pay Zuora $150,000 for the first year of the three-year agreement for Zuora to provide subscription services to the Company.

We are in default under our Sponsorship Agreement (the "Live Nation Agreement") with Live Nation Marketing, Inc. ("Live Nation") as a result of the Company’s failure to pay Live Nation past due balances for the services they provided under the Live Nation Agreement. To date, we have not received a notice of default from Live Nation. The Company intends to cure the default now that it is adequately funded.

As of this date, we are in default of all of our vendor agreements as a result of not making the required payments.

Six-Month Line of Credit Promissory Note

On July 6, 2017, we entered into a Six-Month Line of Credit Promissory Note (the “Line of Credit Note”) with CUR Holdings, LLC, a New York limited liability company. The Line of Credit Note has a principal balance of $685,000, and a stated maturity date of December 6, 2017. The principal on the Line of Credit Note does not bear interest. The Line of Credit Note is not convertible. The Line of Credit Note ranks junior to the Company’s existing Secured Notes.

In connection with the Initial Closing (as defined below) of the Preferred Stock Unit Offering (as defined above), the Line of Credit Note was assigned and transferred to Holdings (as defined above) in exchange for 194,175 Unit Shares of Holdings and Unit Warrants to purchase 1,263,827 shares of common stock of Holdings issued to CUR Holdings, LLC. As a result, Holdings became the payee under the Line of Credit Note. Upon completion of the transaction, CÜR Media is now required to pay Holdings.

The assignment did not alter the obligation of the Company under the original Line of Credit Note. As of December 6, 2017, the Company is in default of its obligations to repay amounts due under the Line of Credit Note. Pursuant to the Line of Credit Note, the Company is required to pay the holder’s costs and expenses for collection, including reasonable attorneys’ fees.

Settlement Agreement and Mutual Release

As previously reported, the Company defaulted under its Master Multiple Services Agreement (the “Digitas Agreement”) with Digitas, Inc., a Massachusetts corporation (“Digitas”), as a result of the Company’s failure to pay Digitas past due balances for the services Digitas provided under the Digitas Agreement. Digitas filed a claim against the Company for damages in the aggregate amount of $650,000 (the “Claimed Amount”), together with pre-judgment interest, post-judgment interest, costs, and attorneys’ fees. On November 15, 2017, the Company entered into a Settlement Agreement and Mutual Release (the “Settlement Agreement”) with Digitas, pursuant to which the Company agreed to pay Digitas an aggregate of $400,000, in full settlement of any and all claims arising from or relating to amounts due under the Master Multiple Services Agreement (the “Claims”). Digitas agreed to release the Company from any further Claims, subject only to the Company meeting its payment obligations under the Settlement Agreement and the Digitas Note (as defined below).

Table of Contents

Simultaneously with the execution of the Settlement Agreement, the Company issued a Promissory Note to Digitas (the “Digitas Note”) in the principal amount of $400,000. Pursuant to the Digitas Note, the Company is required to pay Digitas (a) $100,000 on or before November 17, 2017 (the “First Payment”), $100,000 on the eight (8) month anniversary of the First Payment, and (c) $200,000.00 on the one (1) year anniversary of the First Payment. If the Company defaults on its payment obligations under the Digitas Note, after notice and failure to cure, Digitas may file a Consent Judgment for the full Claimed Amount, less payments already made, if any, together with post-judgment interest and reasonable attorneys’ fees and costs incurred by Digitas for purposes of collection.

At the effective time of the Initial Closing of the Preferred Stock Unit Offering (as defined below), the Company made the First Payment of $100,000 to Digitas.

Transactions and Proposed Additional Transactions with Holdings

On September 11, 2017, the Company entered into a term sheet (the “Term Sheet”) with CUR Holdings, Inc., a related Delaware corporation formed on August 14, 2017, for the purpose of raising capital to effectuate a transaction with the Company, or another company in the music streaming space (“Holdings”), pursuant to which the Company and Holdings agreed to consummate either a Merger (as defined below) or an Asset Transfer (as defined below), under certain circumstances. Pursuant to the Term Sheet, in the event the Company receives notification from the SEC that it will not institute the proposed administrative proceedings, or, if instituted, will discontinue such proceedings (“SEC Clearance”), Holdings will, subject to any required shareholder approval, merge with and into the Company, with the Company continuing as the surviving entity (the “Merger”); provided, however, that the boards of directors of the Company and Holdings may mutually agree to proceed with the Merger prior to receipt of SEC Clearance. If, however, the SEC commences the proposed administrative proceedings against the Company, and such proceedings result in the revocation of the registration of the Company’s Common Stock under the Exchange Act (“SEC Revocation”), the Company and Holdings will, subject to any required shareholder approval, enter into an asset purchase and sale transaction, pursuant to which Holdings will acquire all of the intellectual property and other assets and liabilities constituting the Company’s Music Streaming Business (the “Asset Transfer” and, together with the Merger, a “Combination Transaction”); provided, however, that the boards of directors of the Company and Holdings may mutually agree to proceed with the Asset Transfer any time commencing on the ninety-first (91st) day after the effective date of the Term Sheet.

In connection with the Initial Closing of the Preferred Stock Unit Offering, a placement agent (the “Placement Agent”) received a cash commission of $115,436, and warrants (“Placement Agent Warrants”) to purchase (a) 22,415 shares of Series A Preferred Stock of Holdings, with a term of five (5) years and an exercise price of $5.15 per share, and (b) 145,893 shares of common stock of Holdings, with a term of five (5) years and an exercise price of $1.00 per share.

Simultaneously with the closing of the Preferred Stock Unit Offering, Holdings consummated a private placement offering (the “$2.5 Million Note Offering” and, together with the Preferred Stock Unit Offering, the “Holdings Offerings”), to one “accredited investor” (the “New Note Purchaser”), intended to be exempt from registration under the Securities Act, pursuant to Section 4(a)(2) and/or Rule 506 of Regulation D promulgated thereunder, of (a) a 12% senior secured promissory note of Holdings, in the principal amount of $2,500,000 (the “New Note”), with a term of twelve (12) months, at a purchase price of 100% of the face value amount of the Note, and (b) 10-year warrants (the “New Note Warrants”) to purchase 1,000,000 shares of common stock of Holdings, at an exercise price per share of $0.0001.

Table of Contents

In connection with the closing of the $2.5 Million Note Offering, the Placement Agent received a cash commission of $250,000, and warrants (“Additional Placement Agent Warrants”) to purchase 383,800 shares of common stock of Holdings, with a term of five (5) years and an exercise price per Preferred Stock Unit of $0.0001.

The net proceeds from the Holdings Offerings, in the aggregate amount of $6,932,288 (after deducting fees and expenses related to the Holdings Offerings in the aggregate amount of $722,074 (including placement agent fees, legal fees and expenses and fees payable to the escrow agent)) are to be used to pay the required Label Advances (as defined below) to the Music Labels (as defined below) sufficient to allow Holdings and/or the Company to proceed with soliciting subscriptions for CÜR Music, the Company’s Internet music service, and to extend a line of credit to the Company (the “Post-Closing Line of Credit Note”), for up to the full amount of the aggregate net proceeds from the Holdings Offerings (1) to enable the Company to pay outstanding accounts payable, employee deferred compensation, and monthly payments due by the Company under the New Note, and (2) for working capital and general corporate purposes. While there is a process for requesting and approving drawdowns, it is not formally documented, approval is on a case by case basis and the terms and associated interest on the Post-Closing Line of Credit Note is to be determined, and will be reflected in the definitive documentation for the transaction.

In connection with the Secured Note Assignment Transaction, (a) Holdings issued 1,538,102 Units, consisting of 1,538,102 Secured Note Conversion Shares, and 1,538,102 Secured Note Conversion Warrants, and (b) Holdings became the sole payee under the Secured Notes.

In connection with the Secured Note Assignment Transaction, the Initial Placement Agent, received warrants (“Third Placement Agent Warrants”) to purchase (a) 86,377 shares of common stock of Holdings, with a term of five (5) years and an exercise price of $2.00 per share, and (b) 86,377 shares of common stock of Holdings, with a term of five (5) years and an exercise price of $1.00 per share.

Prior to the Initial Closing of the Preferred Stock Unit Offering, and as a condition thereto, Holdings entered directly into content licensing agreements (“New Music Label Agreements”) with the three major music labels (the “Music Labels”). Upon consummation of the Initial Closing of the Preferred Stock Unit Offering, Holdings paid Label Advances due to the Music Labels pursuant to the New Music Label Agreements in the aggregate amount of $2,500,000. In addition, Holdings issued the Music Labels warrants to purchase an aggregate of 1,750,000 shares of common stock of Holdings, at an exercise price of $1.00 per share.

Table of Contents

The Company joined the New Music Label Agreements, while the other two New Music Label Agreements provide CÜR Holdings with the right to sublicense its rights under such agreement to the Company. The New Music Label Agreements enable the Company to digitally distribute sound recordings and related materials owned or controlled by the Music Labels in connection with the Company’s Internet music service, CÜR Music. The New Music Label Agreements released the Company of prior obligations under the original Music Label Agreements. At the current time, the Company does not have a contract with Holdings that requires payment for sublicenses and access to the sound recordings and related materials.

On November 16, 2017, the board of directors of Holdings increased the number of members constituting the board of directors from one (1) to three (3). The board of directors of Holdings then appointed Thomas Brophy, the Company’s President, Chief Executive Officer, Interim Chief Financial Officer and Treasurer, and a member of the Company’s Board of Directors, and Edward P. Swyer, a member of the Board of Directors of the Company, as members of the board of directors of Holdings, to fill the two vacancies resulting from the increase to the number of seats on the board of directors, to serve until their successors shall be duly appointed, unless they resign, are removed from office, or are otherwise disqualified from serving as directors for Holdings.

Immediately following the Initial Closing of the Preferred Stock Unit Offering, Holdings issued one (1) share of its Series B voting preferred stock (“Series B Preferred Stock”) to William F. Duker, the President and Treasurer of Holdings, and a member of the board of directors of Holdings. Pursuant to the Certificate of Designation of Series B Voting Preferred stock of Holdings (the Series B Certificate of Designation”), Mr. Duker, the holder of the Series B Preferred Stock, has the right (a) to elect the number of directors on the board of directors of Holdings constituting the majority, and (b) to approve any merger (including the Merger), asset sale (including the Asset Transfer), or other fundamental transaction to be effected by Holdings.

As mentioned above, if the Company receives SEC Clearance (or, at the discretion of the boards of directors of the Company and Holdings, as described above), Holdings will consummate the Merger. The Company and Holdings anticipate that the Merger, if consummated, will qualify as a tax-free reorganization under the U.S. Internal Revenue Code.

The Company and Holdings anticipate that, if the Merger is consummated:

	·	the stockholders of Holdings will receive, in exchange for all of their issued and outstanding shares of capital stock of Holdings (including all issued and outstanding shares of preferred stock of Holdings), shares of the Company’s capital stock (including shares of preferred stock of the Company), at an exchange rate of 1-for-1, with appropriate adjustments and, otherwise, on their original terms and conditions;

	·	outstanding warrants to purchase shares of common stock of Holdings will be exchanged for warrants to purchase shares of the Company’s Common Stock, at the same ratio at which shares of outstanding capital stock of Holdings are exchanged for shares of the Company’s capital stock, with appropriate adjustments and, otherwise, on their original terms and conditions;

	·	the principal and any accrued and unpaid interest due under the Company’s existing 12% unsecured convertible promissory notes (the “Unsecured Notes”) will convert into units of the Company’s securities, at a conversion price of $2.00 of principal and interest due under said note per unit, each consisting of (a) one (1) share of the Company’s Common Stock, and (b) a 5-year warrant to purchase one (1) share of the Company’s Common Stock for every share of the Company’s Common Stock received upon conversion, at an exercise price equal to $1.00 per share;

	·	the Standard Holdings Note will be assigned and transferred to the Company, and the Company will become the payee under such note’

	·	the Line of Credit Note, the Secured Notes, and the Post-Closing Line of Credit Note will be forgiven and canceled by Holdings;

	·	the Company will assume the obligations under the $2,500,000 New Note; and

	·	the Company will assume the New Music Label Agreements with the Music Labels, if possible.

Table of Contents

As mentioned above, if there is an SEC Revocation of the Company’s Common Stock under the Exchange Act (or, at the discretion of the board of directors of the Company and Holdings, as described above), the Company and Holdings will consummate the Asset Transfer.

The Company and Holdings anticipate that, if the Asset Transfer is consummated:

	·	the Company’s stockholders will receive, in exchange for all of the assets and liabilities constituting the Company’s Music Streaming Business, shares of capital stock of Holdings, at an exchange rate of 1-for-1 of equivalent classes of preferred and common stock, with appropriate adjustments and, otherwise, on their original terms and conditions;

	·	outstanding warrants and stock options to purchase shares of the Company’s Common Stock will be exchanged for warrants and stock options to purchase shares of common stock of Holdings, at the same ratio at which shares of the Company’s outstanding capital stock are exchanged for shares of capital stock of Holdings, with appropriate adjustments and, otherwise, on their original terms and conditions;

	·	if necessary, the board of directors of Holdings will adopt an Equity Incentive Plan (the “EIP”) with such number of shares available under the EIP that equals 15% of the fully diluted capitalization of Holdings after giving effect to the Asset Transfer, covering outstanding stock options to purchase shares of the Company’s Common Stock, and for the future issuance, at the discretion of the board of directors of Holdings, of incentive awards to officers, key employees, consultants and directors;

	·	the principal and any accrued and unpaid interest due under the Company’s existing Unsecured Notes will convert into units of securities of Holdings, at a conversion price of $2.00 per unit, each unit consisting of (a) one (1) share of common stock of Holdings, and (b) a 5-year warrant to purchase one (1) share of common stock of Holdings for every share of common stock of Holdings received upon conversion, at an exercise price equal to $1.00 per share;

	·	the Standard Holdings Note will remain payable to Holdings;

	·	the Line of Credit Note, the Secured Notes, and the Post-Closing Line of Credit Note will be forgiven and canceled by Holdings as partial consideration for the transfer to Holdings of the assets and liabilities constituting the Company’s Music Streaming Business;

	·	Holdings will remain responsible for the obligations under the $2,500,000 New Note; and

	·	and sublicenses under the relevant New Music Label Agreements with the Music Labels will terminate.

In the event the Merger is consummated, the Company agreed that promptly, but no later than 120 calendar days from the consummation of the Merger, the Company will file a registration statement (on Form S-1, or similar form) with the SEC (the “Registration Statement”) covering (a) the shares of common stock underlying the Unit Shares and Unit Warrants issued in connection with the Preferred Stock Unit Offering, (b) the shares of common stock underlying New Note Warrants issued in connection with the $2.5 Million Note Offering, (c) the shares of common stock underlying the Placement Agent Warrants and the Additional Placement Agent Warrants, and (d) the Secured Note Conversion Shares and the shares of common stock underlying the Secured Note Conversion Warrants issued in connection with the Secured Note Assignment Transaction (the “Registrable Securities”). The Company will use its commercially reasonable efforts to ensure that the Registration Statement is declared effective by the SEC within 210 days of filing with the SEC. Any cutback resulting from the removal of any of the Registrable Securities from the Registration Statement in response to a comment from the Staff of the SEC limiting the number of shares of common stock which may be included in the Registration Statement, shall be allocated on a pro rata basis, based on the total number of such shares held by or issuable to each holder. The Company will keep the Registration Statement “evergreen” for at least one (1) year from the date it is declared effective by the SEC, or for such shorter period ending on the sale of all Registrable Shares thereunder.

Table of Contents

Following the closing of the Holdings Offerings, we appointed Thomas Brophy as President and Chief Executive Officer, John Egazarian as Head of Product, Chief Operating Officer, Michael Betts as Chief Technology Officer, and Kelly Sardo as Chief Financial Officer, Secretary and Treasurer, and have hired five other full-time employees. We have restarted our business operations and expect to launch CÜR Music in the second or third quarter of 2018.

Critical Accounting Estimates

Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities, 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. We continually evaluate our estimates and judgments, our commitments to strategic alliance partners and the timing of the achievement of collaboration milestones. We base our estimates and judgments on historical experience and other factors that we believe to be reasonable under the circumstances. Materially different results can occur as circumstances change and additional information becomes known. Besides the estimates identified above that are considered critical, we make many other accounting estimates in preparing our financial statements and related disclosures. All estimates, whether or not deemed critical, affect reported amounts of assets, liabilities, revenues and expenses, as well as disclosures of contingent assets and liabilities. These estimates and judgments are also based on historical experience and other factors that are believed to be reasonable under the circumstances. Materially different results can occur as circumstances change and additional information becomes known, even for estimates and judgments that are not deemed critical.

Basis of Presentation

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP"). Any reference to applicable guidance is meant to refer to the authoritative United States generally accepted accounting principles as found in the Accounting Standards Codification and ASUs of the FASB. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On an ongoing basis, our management evaluates its estimates, which include, but are not limited to, estimates related to accruals, stock-based compensation expense, warrants to purchase securities, and reported amounts of revenues and expenses during the reported period. We base our estimates on historical experience and other market-specific or other relevant assumptions that it believes to be reasonable under the circumstances. Actual results may differ from those estimates or assumptions.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Table of Contents

Research and Development Costs

All research and development costs, including costs to develop software used in the Company's applications, which do not meet the criteria for capitalization, are expensed when incurred. FASB ASC Topic 730 requires companies involved in research and development activities to capitalize non-refundable advance payments for such services pursuant to contractual arrangements because the right to receive those services represents an economic benefit. Such capitalized advances will be expensed when the services occur and the economic benefit is realized. There were no capitalized research and development services at December 31, 2017 and 2016.

Stock Compensation

Stock-based payments made to employees, including grants of stock options, are recognized in the statements of operations based on their estimated fair values. The Company recognizes stock-based compensation for awards granted that are expected to vest, on a straight-line basis using the single-option attribution method over the service period of the award, which is generally four years. The Company generally estimates the fair value of employee stock options using the Black-Scholes valuation model. The determination of the fair value of a stock-based award is affected by the deemed fair value of the underlying share price on the grant date, as well as other assumptions including the risk-free interest rate, the estimated volatility of the Company's stock price over the term of the award, the estimated period of time that the Company expects employees to hold their stock options and the expected dividend rate.

Stock-based payments made to non-employees, including grants of stock options, are recognized in the statements of operations based on their estimated fair values. The fair value of these options will be re-measured on each reporting date until the options vest. The re-measured fair value will be recognized as compensation expense over the remaining vesting term of the options.

Derivative Liabilities

We do not use derivative instruments to hedge exposure to cash flow, market, or foreign currency risks; however, we have warrants that contain embedded derivatives. We account for stock warrants as either equity instruments or derivative liabilities depending on the specific terms of the warrant agreement. Stock warrants that allow for cash settlement or provide for certain modifications of the warrant exercise price are accounted for as derivative liabilities. The Company evaluates embedded conversion features and bifurcates the embedded conversion feature if it is not clearly and closely related to the host agreement. The estimated fair values of the warrant liabilities were determined using a Black-Scholes option pricing model, which takes into account the probabilities of certain events occurring over the life of the warrants. The derivative liabilities are adjusted to their estimated fair values at each reporting period, with any decrease or increase in the estimated fair value being recorded in other income (expense).

Recently Issued Accounting Pronouncements

The Financial Accounting Standards Board issued an Accounting Standards Update, ASU 2017-11, Earnings Per Share (Topic 260), that simplifies the accounting for certain equity-linked financial instruments and embedded features with down round features that reduce the exercise price when the pricing of a future round of financing is lower. The Secured Notes and Unsecured Notes qualify for derivative treatment due to their embedded conversion feature. The guidance is effective for public business entities for annual periods beginning after December 15, 2018. Although early adoption is permitted for financial statement of fiscal years or interim periods that have not yet been issued or that have not yet been made available for issuance, the Company has not elected to early adopt.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which requires lessees to put most leases on their balance sheets by recognizing a lessee’s rights and obligations, while expenses will continue to be recognized in a similar manner to today’s legacy lease accounting guidance. This ASU could significantly affect the financial ratios used for external reporting and other purposes, such as debt covenant compliance. This ASU will be effective for the Company on January 1, 2019, with early adoption permitted. The Company is currently in the process of assessing the impact of this ASU on our consolidated financial statements.

Table of Contents

In April 2016, the FASB issued ASU No. 2016-10, Revenue from Contracts with Customers: Identifying performance obligations and licensing (Topic 606), to reduce the cost and complexity of applying the guidance on identifying promised goods or services around identifying performance obligations and implementation guidance on determining whether an entity’s promise to grant a license provides a customer with either a right to use the entity’s intellectual property (which is satisfied at a point in time) or a right to access the entity’s intellectual property (which is satisfied over time). The ASU defines a five-step process to achieve the core principal and, in doing so, it is possible more judgement and estimates may be required within the revenue recognition process than are currently in use. The ASU will be effective for the Company when we launch our music streaming product, CÜR Music, in the second or third quarter of 2018 and we are currently reviewing the effects of this pronouncement.

Results of Operations

Year Ended December 31, 2017 Compared to Year Ended December 31, 2016

	For the Years Ended December 31,
	2017			2016

REVENUES	$	292		$	3,487

OPERATING EXPENSES
Research and development		567,270			3,983,478
General and administrative		689,142			2,884,124
Stock based compensation		-			183,950
Depreciation and amortization		4,039			14,289
Loss on disposal of assets		-			14,909

TOTAL OPERATING EXPENSES		1,260,451			7,080,750

OTHER INCOME (EXPENSE)
Interest expense		(1,048,877	)		(2,952,075	)
Interest income		16			122
Loss on issuance of convertible debt		-			(120,266	)
Gain on debt relief		1,009,429			-
Change in fair value of derivative liabilities		(1,249,715	)		3,781,492

TOTAL OTHER INCOME (EXPENSE)		(1,289,147	)		709,273

NET LOSS	$	(2,549,306	)	$	(6,367,990	)

Revenues

We have not generated any material revenues for the years ended December 31, 2017 or 2016.

Operating Expenses

Overview

Total operating expenses for the year ended December 31, 2017 and 2016 were $1,260,451 and $7,080,750, respectively. The decrease in total operating expenses of $5,820,299, or approximately 82%, was primarily related to the curtailment of our business operations in August 2016. Operating expenses for 2017 related primarily to legal expenses associated with the financing in the second and fourth quarters. In addition, 2017 expenses also included new vendor contracts for subscription services, legal costs associated with label discussions and developer work.

Table of Contents

Research and Development Expenses

For the years ended December 31, 2017 and 2016, research and development expenses were $567,270 and $3,983,478, respectively. Research and development expenses decreased by $3,416,208, or approximately 86%, due to a decrease of $1,873,883 in compensation costs related to termination of all employees in August 2016 and a decrease in content related costs of $888,857 due to the 2016 write-off of advances; both of which resulted from the curtailment of operations in the third quarter of 2016. In addition, a decrease of $653,468 in hosting, development, marketing and other expenses resulted from operations curtailment.

General and Administrative Expenses

For the years ended December 31, 2017 and 2016, general and administrative expenses were $689,142 and $2,884,124, respectively. General and administrative expenses decreased by $2,194,982, or approximately 76%, primarily due to a decrease in distribution partner costs of $967,402 due to the 2016 acceleration of warrant expense, decrease in marketing and communications of $606,662, a decrease in wages of $313,635, a decrease in professional fees of $285,973 primarily comprised of legal expenses, and a decrease in facilities costs of $21,310. The decrease in all expenses related to the curtailment of operations in 2016. In 2017 expenses were for legal costs related to fundraising, the new vendor contract for subscription billing, legal costs associated with label discussions and developer work.

Stock Based Compensation Expenses

For the years ended December 31, 2017 and 2016, stock-based compensation expenses were $0 and $183,950, respectively. Stock based compensation expenses decreased due to the forfeiture of unvested stock options in August of 2016 related to the termination of employees.

Other Income (Expense)

For the years ended December 31, 2017 and 2016, other income (expense) was $(1,289,147) and $709,273 respectively. Other income (expense) decreased due to a change in the fair value of derivative liabilities of $5,031,207 and a decrease in interest expense of $1,903,198 primarily comprised of the amortization of the debt discount for notes that fully matured in the third quarter of 2016. The Expenses were offset by the gain on debt forgiveness of $1,009,429 resulting from structured settlements with vendors in the fourth quarter 2017.

Liquidity and Capital Resources

Sources of Liquidity

As of December 31, 2017, cash and cash equivalents were approximately $153,979 as compared to $1,508 at December 31, 2016.

As of December 31, 2017, we had a working capital deficit of $10,490,470. As of December 31, 2016, we had a working capital deficit of $8,652,119. The increase of $1,838,351 in working capital was attributable to an increase in accrued and other current liabilities, an increase in current notes payable associated with the line of credit from Holdings and an increase in derivative liabilities.

On November 16, 2017, simultaneous with the Initial Closing of the Preferred Stock Unit Offering, the Secured Noteholders, assigned, conveyed, transferred and set over to Holdings Inc. all of the Secured Noteholders’ right, title, interest and obligations in, to and under the Secured Notes, in the aggregate principal amount of $2,515,000, with accrued and unpaid interest in the aggregate of $561,203, and all claims, suits, causes of action and any other rights thereunder, in exchange for units of securities of Holdings, at an exchange rate of $2.00 of principal and interest due under the Secured Notes per unit. Upon completion of the transaction, CÜR Media is now required to pay Holdings.

Table of Contents

The net proceeds from the Holdings Offerings, in the aggregate amount of $6,932,288 (after deducting fees and expenses related to the Holdings Offerings in the aggregate amount of $722,074 (including placement agent fees, legal fees and expenses and fees payable to the escrow agent)) are to be used to pay the required Label Advances to the Music Labels sufficient to allow Holdings and/or the Company to proceed with soliciting subscriptions for CÜR Music, the Company’s Internet music service, and to extend a line of credit to the Company (the “Post-Closing Line of Credit Note”), for up to the full amount of the aggregate net proceeds from the Holdings Offerings (1) to enable the Company to pay outstanding accounts payable, employee deferred compensation, and monthly payments due by the Company under the New Note, and (2) for working capital and general corporate purposes. While there is a process for requesting and approving drawdowns, it is not formally documented, approval is on a case by case basis and the terms and associated interest on the Post-Closing Line of Credit Note is to be determined, and will be reflected in the definitive documentation for the transaction.

Our original agreements with UMG and SME have been terminated and we are in default of our original agreement with WMG. Simultaneously with the closings of the Holdings Offerings, Holdings and the Company entered into the New Music Label Agreements with UMG, SME and WMG. We also plan to enter into content licensing agreements with certain independent music labels, music publishers and performance rights organizations. The cost of entering into our previous content licensing agreements with major music labels, performance rights organizations and publishers including legal and consulting fees was approximately $9,000,000, the majority of which was initial prepayments to content providers. The Company was unable to raise the capital to enable it to pay the prepayments to content providers. As soon as the Post-Closing Line of Credit is in place with Holdings, we intend to have a dedicated team of software engineers, led by our Chief Technology Officer and Chief Operating Officer, working on enhancing the technology platform, as well as the iOS and Android applications and the CÜR Music website.

We expect to bring CÜR Music to market in the second or third quarter of 2018. As of December 31, 2017, we expect that the net proceeds from the Holdings Offerings will be available to us and represented by the Post-Closing Line of Credit Note and will be sufficient to launch CÜR Music. We need to raise a substantial amount of capital to fully implement our business plan, market CÜR Music, for additional content license costs, and for general working capital. There can be no assurance that additional financing will be available when required in sufficient amounts, on acceptable terms or at all. If we are unsuccessful at raising sufficient funds, for whatever reason, to fund our operations, we may be forced to seek a buyer for our business or seek a similar transaction. If all of these alternatives fail, we expect that we will be required to seek protection from creditors under applicable bankruptcy laws.

Net Cash Used in Operating Activities

Net cash used in operating activities was $2,380,198 for the year ended December 31, 2017, as compared to net cash used of $2,649,393 for the year ended December 31, 2016. The decrease of $269,195, or 11%, in net cash used in operations was primarily due to an increase in prepaid expenses of $1,000,000 related to the advance paid to Music Labels in the fourth quarter, a decrease in accounts payable of $1,310,449 in payments made to vendors and/or structured settlements, an increase in notes payable resulting from structured settlements of $300,000 and an increase in accruals of $506,049, offset by an increase in the fair market value of derivative liabilities of $1,249,715.

Net Cash Provided by Financing Activities

During the years ended December 31, 2017 and 2016, we received $2,532,669 and $2,650,167, respectively, in proceeds from the Line of Credit from Holdings and sale of Secured and Unsecured Notes, respectively.

Table of Contents

Going Concern

Our independent auditor has expressed doubt about our ability to continue as a going concern and believes that our ability is dependent on our ability to implement our business plan, raise capital and generate revenues. See Note 2 of our financial statements.

Off-Balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our stockholders.

Contractual Obligations

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Our financial statements are included beginning immediately following the signature page to this Annual Report. See Item 15 for a list of the financial statements included herein.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures\

We maintain disclosure controls and procedures, as defined in Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Exchange Act that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and that such information is accumulated and communicated to our senior management, currently consisting of Thomas Brophy, our President and Chief Executive Officer (Principal Executive) and Kelly Sardo, our Chief Financial Officer, Secretary and Treasurer (Principal Financial Officer), as appropriate to allow timely decisions regarding required disclosure. In connection with the preparation of this Annual Report, we carried out an evaluation, under the supervision and with the participation of our senior management, currently consisting of Thomas Brophy, our President and Chief Executive Officer (Principal Executive) and Kelly Sardo, our Chief Financial Officer, Secretary and Treasurer (Principal Financial Officer), of the effectiveness of the design and operation of our disclosure controls and procedures existing as of December 31, 2017. Based on the evaluation of these disclosure controls and procedures, and in light of the material weaknesses found in our internal controls over financial reporting, Thomas Brophy, our President and Chief Executive Officer (Principal Executive) and Kelly Sardo, our Chief Financial Officer, Secretary and Treasurer (Principal Financial Officer), concluded that our disclosure controls and procedures were not effective as of such date.

Table of Contents

Our management plans to initiate a series of measures to address these material weaknesses. We are working as quickly as possible to implement these initiatives.

Management's Report on Internal Control Over Financial Reporting

Our management 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 Exchange Act as a process designed by, or under the supervision of, our principal executive and principal financial officers and effected by our 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 accounting principles generally accepted in the United States of America 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 our assets;

	·	Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America and that our receipts and expenditures are being made only in accordance with authorizations of our management and Board of Directors; and

	·	Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our 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. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.

Our management, currently consisting of Thomas Brophy, our President and Chief Executive Officer (Principal Executive) and Kelly Sardo, our Chief Financial Officer, Secretary and Treasurer (Principal Financial Officer), assessed the effectiveness of our internal control over financial reporting, existing as of December 31, 2017, based on the criteria for effective internal control over financial reporting established in Internal Control--Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and SEC guidance on conducting such assessments. Based on that evaluation, we believe that, during the period covered by this report, such internal controls and procedures were not effective to detect the inappropriate application of US GAAP rules as more fully described below. This was due to deficiencies that existed in the design or operation of our internal controls over financial reporting that adversely affected our internal controls and that may be considered to be material weaknesses.

During the year ended December 31, 2017, and through the date hereof, the following changes occurred in our internal control over financial reporting:

	·	On October 31, 2017, Thomas Brophy, a Director of ours, was appointed as our President, Chief Executive Officer, Interim Chief Financial Officer and Treasurer, and our "Principal Executive Officer and Principal Accounting Officer" for SEC reporting purposes.

	·	On November 16, 2017, William West Duker and Edward P. Swyer were appointed as members of our Board of Directors.

	·	On February 12, 2018, Thomas Brophy resigned as our interim Chief Financial Officer and Treasurer. As a result of Mr. Brophy’s resignation as our interim Chief Financial Officer and Treasurer, he relinquished his role as the Company’s “Principal Financial Officer” for SEC reporting purposes.

	·	Effective immediately as of Mr. Brophy’s resignation, Kelly Sardo was appointed as our Chief Financial Officer and Treasurer. She continues as our Secretary, a title she has held since May 26, 2015. In addition, for SEC reporting purposes, Ms. Sardo was designated as our “Principal Financial Officer.”

Table of Contents

As a result of the foregoing, the matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were:

	·	lack of a functioning Audit Committee, Compensation Committee or Nominating and Corporate Governance Committee, and a lack of independent directors on our Board of Directors, resulting in ineffective

	·	oversight in the establishment and monitoring of required internal controls and procedures;

	·	inadequate segregation of duties consistent with control objectives, including lack of personnel resources and technical accounting expertise within the accounting function; and

	·	ineffective controls over period end financial disclosure and reporting processes.

These changes, which have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting, were identified in connection with the evaluation we conducted of the effectiveness of our internal control over financial reporting as of December 31, 2017.

Management's Remediation Initiatives

In an effort to remediate the identified material weaknesses and other deficiencies and enhance our internal controls, we plan to initiate, the following measures:

	·	We plan to appoint directors to our Board of Directors we deem to be “independent” within the definition of independence provided in the Marketplace Rules of The Nasdaq Stock Market and the independence requirements contemplated by Rule 10A-3 under the Securities Exchange Act of 1934;

	·	We plan to make appointments to our Compensation Committee, Nominating and Corporate Governance Committee and Audit Committee, including an "audit committee financial expert" as defined by applicable SEC rules, that has the requisite financial sophistication as defined under the applicable Nasdaq rules and regulations;

	·	We plan to create a position to segregate duties consistent with control objectives and other personnel resources with technical accounting expertise within the accounting function.

We are working as quickly as possible to implement these initiatives subject to the availability of required resources.

This Annual Report does not include an attestation report of our registered public accounting firm regarding our internal control over financial reporting. Management's report was not subject to attestation by our registered public accounting firm pursuant to rules of the SEC that exempt smaller reporting companies from this requirement.

Changes in Internal Control over Financial Reporting

Other than as previously described, there has been no change in our internal control over financial reporting identified in connection with the evaluation we conducted of the effectiveness of our internal control over financial reporting as of December 31, 2017, that occurred during our fourth quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

None

Table of Contents

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Directors and Executive Officers

Below are the names of and certain information regarding the Company's current executive officers and directors:

Name	Age	Position	Date Named to Board of Directors/as Executive Officer

Thomas Brophy	51	President, Chief Executive Officer and Director	January 28, 2014 (1)
Kelly Sardo	52	Chief Financial Officer, Secretary and Treasurer	May 26, 2015 (2)
John Egazarian	48	Head of Product, Chief Operating Officer	May 26, 2015 (3)
Michael Betts	54	Chief Technology Officer	November 13, 2014 (4)
William W. (“West”) Duker	29	Director	November 16, 2017
Edward P. Swyer	68	Director	November 16, 2017

________________

(1)	On April 29, 2016, Thomas Brophy’s title changed from President, Chief Executive Officer, and Chairman of the Board to Founder. He continued to serve as the sole member of our Board of Directors. On October 31, 2017, Mr. Brophy was appointed as our President, Chief Executive Officer, Interim Chief Financial Officer and Treasurer. On February 12, 2018, Mr. Brophy resigned as Interim Chief Financial Officer and Treasurer.

(2)	On August 16, 2016, we terminated Kelly Sardo as our Chief Financial Officer and Treasurer. Ms. Sardo continued to serve as our Secretary. On February 12, 2018, Ms. Sardo was appointed as our Chief Financial Officer and Treasurer.

(3)	On August 16, 2016, we terminated John Egazarian as our Chief Operating Officer. On January 2, 2018, Mr. Egazarian was appointed as our Head of Product, Chief Operating Officer.

(4)	On August 16, 2016, we terminated Michael Betts as our Chief Technology Officer. On January 8, 2018, Mr. Betts was appointed as our Chief Technology Officer.

Directors are elected to serve until the next annual meeting of stockholders and until their successors are elected and qualified. Directors are elected by a plurality of the votes cast at the annual meeting of stockholders and hold office until the expiration of the term for which he or she was elected and until a successor has been elected and qualified.

A majority of the authorized number of directors constitutes a quorum of our Board of Directors for the transaction of business. The directors must be present at the meeting to constitute a quorum. However, any action required or permitted to be taken by the Board of Directors may be taken without a meeting if all members of the Board of Directors individually or collectively consent in writing to the action.

Our Board of Directors is authorized to consist of five (5) members, and currently consists of three (3) members. Executive officers are appointed by the Board of Directors and serve at its pleasure.

The principal occupation and business experience during the past five years for our executive officers and directors is as follows:

Table of Contents

Thomas Brophy, 51, President, Chief Executive Officer, Interim Chief Financial Officer and Treasurer. Mr. Brophy has been involved in Executive roles of start-ups and growth companies since 1994. Mr. Brophy was the CFO of Interactive Search Holdings ("ISH") where he helped build a search toolbar business that propelled the company to be a leader in the industry. The Company was also one of the first companies to mass distribute smiley emoticons. ISH was acquired by Ask Jeeves, and subsequently, Ask Jeeves was acquired by Interactive Corp. (IACI). Mr. Brophy started his career at Deloitte & Touche, has been the Chief Financial Officer of several startup and growth companies, and had successful exits and has also been the Chief Financial Officer of a public company. Mr. Brophy is a graduate of the University of Connecticut.

Kelly Sardo, 52, Chief Financial Officer, Secretary and Treasurer. Ms. Sardo has almost 30 years of experience in finance and operations management with financial services and global multi-billion dollar organizations. She joined the Company in February 2014 from the accounting firm of Blum Shapiro where she was responsible for tax strategy and valuation consulting for large and small privately held companies since 2005. Prior to Blum Shapiro, Ms. Sardo held many roles within CIGNA’s Financial Development Program, most notably as Controller for the corporation. Prior to that, she was a Senior Accountant with Deloitte & Touche. She holds a B.S. degree in Accountancy from Bentley University and is certified in the State of Connecticut.

John Egazarian, 48, Head of Product, Chief Operating Officer. Mr. Egazarian has over 20 years of experience leading the delivery of innovative software initiatives in complex, competitive environments. Since August 2016, he served in the role of Project Director with Cognizant, Inc., a multi-national consulting company. From May 2015 through August 2016, he served as our Chief Operating Officer. Before this, commencing in February 2014, he served as our Senior Vice President of Mobile Solutions. Prior to joining our company, Mr. Egazarian led eBusiness for Fallon Community Health beginning in January 2012. Mr. Egazarian held leadership roles at Travelers Insurance from June 2008 through December 2011. Prior to that, he held various positions at WellPoint and TRC Companies. He started his career as in product delivery and project execution at Arthur Anderson. Mr. Egazarian is a graduate of the University of Connecticut, where he received a Bachelor of Arts degree in political science in 1993.

Michael Betts, 54, Chief Technology Officer. Mr. Betts is a veteran software professional with over 25 years of successfully delivering software solutions. Since August 2016, he served in the role of independent technical consultant with Software Development Group, a company that provides technical consulting services. From November 2014 through August 2016, he served as our Chief Technology Officer. Before this, commencing in May 2012, he served as our Senior Platform Architect. Prior to this, Mr. Betts was Chief Technology Officer, Architect at Artbox LLC, which he joined in September 2009. Prior to Artbox, he was Principal of Software Development Group LLC, whose major clients included Konica-Minolta, HP, NIST, and Microsoft. Mr. Betts received a Master’s Degree in Computer Science from Rensselaer Polytechnic Institute in 1995 and a B.S. degree in Computer Science Engineering / Electrical Engineering from the University of Connecticut in 1985.

William W. (“West”) Duker, 29, Director. Mr. Duker is a Managing Director of Rational Enterprise, a technology company that develops and sells enterprise software for information governance, data analytics, and electronic discovery. At Rational, Mr. Duker leads company-wide Marketing, including for its subsidiary, SiteLogistix, a litigation support services provider. Mr. Duker holds a Bachelor of Science degree from New York University’s Leonard N. Stern School of Business.

Edward P. Swyer, 68, Director. Mr. Swyer serves as the President at the Swyer Companies. Mr. Swyer is also a Managing Partner at Selected Properties of the Northeast. Mr. Swyer is a serial entrepreneur who has founded and grown several successful companies, including Capital Bank & Trust, the Swyer Companies, and Selected Properties of the Northeast. He served on the Boards of Central Hudson Gas & Electric Co. and Capital Bank & Trust Co. Mr. Swyer is a Member of Advisory Board at FA Technology.

Other Key Personnel

We have no significant employees other than the officers and directors described above.

Family Relationship

There are no family relationships among our directors or executive officers.

Table of Contents

Involvement in Certain Legal Proceedings

No executive officer or director of ours has been involved in the last ten years in any of the following:

	·	Any bankruptcy petition filed by or against any business or property of such person, or of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;

	·	Any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

	·	Being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities;

	·	Being found by a court of competent jurisdiction (in a civil action), the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;

	·	Being the subject of or a party to any judicial or administrative order, judgment, decree or finding, not subsequently reversed, suspended or vacated relating to an alleged violation of any federal or state securities or commodities law or regulation, or 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 any law or regulation prohibiting mail, fraud, wire fraud or fraud in connection with any business entity; or

	·	Being the subject of 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, any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

Compliance with Section 16(a) of the Exchange Act

Section 16(a) of the Securities Exchange Act of 1934 requires our directors, officers and persons who own more than 10% of a registered class of our equity securities to file with the SEC initial reports of ownership and reports of changes in ownership of Common Stock and other equity securities. Officers, directors and greater than 10% shareholders are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file.

We believe that the following filings were either made late or not filed pursuant to Section 16(a) of the Exchange Act:

	·	On October 31, 2017, Thomas Brophy, Thomas Brophy’s title changed to President, Chief Executive Officer, Interim Chief Financial Officer and Treasurer, Subsequently, on February 12, 2018, Mr. Brophy resigned as Interim Chief Financial Officer and Treasurer. No Form 4s were filed report these changes to his title.

	·	On November 16, 2017, William W. (“West”) Duker was appointed a member of our Board of Directors. No Form 3 was filed on Mr. Duker’s behalf.

	·	On November 16, 2017, Edward P. Swyer was appointed a member of our Board of Directors. No Form 3 was filed on Mr. Swyer’s behalf.

	·	On January 2, 2018, John Egazarian was appointed as our Head of Product, Chief Operating Officer. In connection with his appointment, the Company granted Mr. Egazarian, 10-year nonqualified stock options, under the Company’s 2015 EIP, to purchase 300,000 shares of the Company’s Common Stock, at an exercise price to be equal to the fair market value for a share of the Company’s Common Stock on the date of the grant, 50% of which shall vest on the date of grant, and the remainder of which shall vest pro rata on a monthly basis for the two (2) years thereafter. No Form 3 was filed on Mr. Egazarian’s behalf.

Table of Contents

	·	On January 8, 2018, Michael Betts was appointed as our Chief Technology Officer. In connection with his appointment, the Company granted Mr. Betts, 10-year nonqualified stock options, under the Company’s 2015 EIP, to purchase 400,000 shares of the Company’s Common Stock at an exercise price to be equal to the fair market value for a share of the Company’s Common Stock on the date of the grant, 50% of which shall vest on the date of grant, and the remainder of which shall vest pro rata on a monthly basis for the two (2) years thereafter. No Form 3 was filed on Mr. Betts’s behalf.

	·	On February 12, 2018, Kelly Sardo was appointed as our Chief Financial Officer and Treasurer. In connection with her appointment, the Company granted Ms. Sardo, 10-year nonqualified stock options, under the Company’s 2015 Plan, to purchase 400,000 shares of the Company’s Common Stock, at an exercise price to be equal to the fair market value for a share of the Company’s Common Stock on the date of the grant, which shall vest pro rata on a quarterly basis for the two (2) years following the date of the grant. No Form 3 was filed on Ms. Sardo’s behalf.

Code of Ethics

On September 25, 2015 we adopted a Code of Business Ethics for our employees, officers and directors (including our principal executive officer, principal financial officer and principal accounting officer) that complies with regulations of the Securities and Exchange Commission. The Code of Ethics is available free of charge on our website at www.curmusic.com and is filed as an exhibit to this report. We intend to timely disclose any amendments to, or waivers from, our Code of Ethics that are required to be publicly disclosed pursuant to rules of the SEC and any securities exchange on which our shares may be listed by filing such amendment or waiver with the SEC.

Board Committees

Our Board of Directors currently has three (3) members, Thomas Brophy, William West Duker and Edward P. Swyer. Mr. Brophy serves as our Chairman. Our Board of Directors is actively involved in our risk oversight function and collectively undertakes our risk oversight function. This review of our risk tolerances includes, but is not limited to, financial, legal and operational risks and other risks concerning our reputation and ethical standards.

We are a small company developing our product and have yet to generate operating revenues. We believe that our present management structure is appropriate for a company of our size and state of development.

Our Board of Directors may designate from among its members an executive committee and one or more other committees. On November 3, 2015, the Board of Directors established an Audit Committee, a Compensation Committee, and a Nominating and Corporate Governance Committee, each of which operates under a charter that has been approved by the Board of Directors.

Audit Committee

The Audit Committee (a) assists the Board of Directors in fulfilling its oversight of: (i) the quality and integrity of the Company's financial statements; (ii) the Company's compliance with legal and regulatory requirements relating to the Company's financial statements and related disclosures; (iii) the qualifications and independence of the Company's independent auditors; and (iv) the performance of the Company's independent auditors; and (b) prepares any reports that the rules of the Securities and Exchange Commission (the "SEC") require be included in the Company's annual proxy statement.

The members of the Audit Committee were Sanjan Dhody, as Chairman, Jay Samit and William Campbell, until their resignations from the Board of Directors on August 11, 2016, April 28, 2016, and August 20, 2016, respectively. None of the current members of our Board of Directors have been appointed to the Audit Committee. However, we expect to make appointments to the Audit Committee in the future. In the meantime, our entire Board of Directors presently serves the functions of an Audit Committee.

Table of Contents

A current copy of the Audit Committee's charter is available on the Company's website at www.curmusic.com.

Compensation Committee

The Compensation Committee (a) assists the Board of Directors in discharging its responsibilities with respect to compensation of the Company's executive officers and directors, (b) evaluates the performance of the executive officers of the Company, and (c) administers the Company's stock and incentive compensation plans and recommends changes in such plans to the Board of Directors as needed.

The members of the Compensation Committee were Jay Samit and Sanjan Dhody, until their resignations from the Board of Directors on April 28, 2016 and August 11, 2016, respectively. None of the current members of our Board of Directors have been appointed to the Compensation Committee. However, we expect to make appointments to the Compensation Committee in the future. In the meantime, our entire Board of Directors presently serves the functions of a Compensation Committee.

A current copy of the Compensation Committee's charter is available on the Company's website at www.curmusic.com.

Nominating and Corporate Governance Committee

The Nominating and Corporate Governance Committee assists the Board of Directors in (a) identifying qualified individuals to become directors, (b) determining the composition of the Board of Directors and its committees, (c) developing succession plans for executive officers, (d) monitoring a process to assess Board of Directors effectiveness, and (e) developing and implementing the Company's corporate governance procedures and policies.

The members of the Nominating and Corporate Governance Committee were William Campbell and Jay Samit, until their resignations from the Board of Directors on August 20, 2016 and April 28, 2016, respectively. None of the current members of our Board of Directors have been appointed to the Nominating and Corporate Governance Committee. However, we expect to make appointments to the Nominating and Corporate Governance Committee in the future. In the meantime, our entire Board of Directors presently serves the functions of a Nominating and Corporate Governance Committee.

A current copy of the Nominating and Corporate Governance Committee's charter is available on the Company's website at www.curmusic.com.

Shareholder Communications

Nominations of persons for election to the Board of Directors and the proposal of business to be transacted by the stockholders may be made at an annual meeting of stockholders (i) by or at the direction of the Board of Directors or (ii) by any stockholder of record of the Company who is entitled to vote at the meeting and who complies with the notice procedures set forth in Section 1.2 of our Amended and Restated Bylaws.

For nominations or business to be properly brought before an annual meeting of stockholders by a stockholder of record, (i) the stockholder must give timely notice thereof in writing to the Secretary of the Company (generally, to be timely, the notice must be received by the Secretary at the principal executive offices of the Company not less than 90 or more than 120 days prior to the one-year anniversary of the date on which the Company first mailed its proxy materials for the preceding year's annual meeting of stockholders ), (ii) any such business must be a proper matter for stockholder action under Delaware law and (iii) the stockholder's notice must include the information required by Section 1.2 of our Amended and Restated Bylaws.

Table of Contents

A person is not eligible for election or re-election as a director at an annual meeting of stockholders unless the person is nominated (i) by a stockholder of record in accordance with clause (iii) of Section 1.2(a) of our Amended and Restated Bylaws or (ii) by or at the direction of the Board of Directors (or a duly authorized committee thereof).

Only such business shall be conducted at an annual meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in Section 1.2 of our Amended and Restated Bylaws.

Nominations of persons for election to the Board of Directors may be made at a special meeting of stockholders at which directors are to be elected (a) by or at the direction of the Board of Directors (or a duly authorized committee thereof) or (b) by any stockholder of record who is entitled to vote at the meeting and who complies with the notice procedures set forth in Section 1.2 of our Amended and Restated Bylaws.

For nominations to be properly brought before a special meeting of stockholders by a stockholder of record, (i) the stockholder must give timely notice thereof in writing to the Secretary of the Company (generally, to be timely, the notice must be received by the secretary at the principal executive offices of the Company not later than the close of business on the later of the 90th day prior to such special meeting or the 10th day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting) and (ii) the stockholder's notice must include the information required by Section 1.2 of our Amended and Restated Bylaws.

A person is not eligible for election or re-election as a director at a special meeting of stockholders unless the person is nominated (i) by or at the direction of the Board of Directors (or a duly authorized committee thereof) or (ii) by a stockholder of record in accordance with the notice procedures set forth in Article I of our Amended and Restated Bylaws.

Subject to certain exceptions, special meetings of stockholders may be called only by (a) the Chairman of the Board, (b) the Chief Executive Officer of the Company or (c) the Board of Directors (the previous provision of the Amended and Restated Bylaws provided that special meetings of stockholders may be called by the Chairman of the Board, the President, the Vice President (if any), or the Secretary of the Company at the request in writing of the majority of the members of the Board of Directors or holders of a majority of the total voting power of all outstanding shares of stock of the Company then entitled to vote).

Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting by or at the direction of the Board of Directors (the previous provision of the Bylaws provided that only such business as is specified in the notice of special meeting shall come before such meeting).

At any meeting of the stockholders, the holders of shares of stock of the Company entitled to cast a majority of the total votes entitled to be cast by the holders of all outstanding capital stock of the Company, present in person or represented by proxy, shall constitute a quorum for all purposes, unless or except to the extent that the presence of a larger number is required by law (this provision is similar to the previous provision of the Amended and Restated Bylaws).

Where a separate vote by one or more classes or series is required, the holders of shares of stock of the Company entitled to cast a majority of the total votes entitled to be cast by the holders of the shares of the class or classes or series, present in person or represented by proxy, shall constitute a quorum entitled to take action with respect to that vote on that matter.

Table of Contents

ITEM 11. EXECUTIVE COMPENSATION

Summary Compensation Table

The following table sets forth information concerning the total compensation paid or accrued by us during the fiscal years ended December 31, 2017 and 2016 to (i) all individuals that served as our principal executive officer or acted in a similar capacity for us at any time during the fiscal years ended December 31, 2017 and 2016; (ii) all individuals that served as our principal financial officer or acted in a similar capacity for us at any time during the fiscal years ended December 31, 2017 and 2016; and (iii) all individuals that served as executive officers of ours at any time during the fiscal years ended December 31, 2017 and 2016 that received annual compensation during the fiscal years ended December 31, 2017 and 2016 in excess of $100,000.

Name & Principal Position	Fiscal Year ended	Salary ($)		Bonus ($)		Stock Awards ($)		Option Awards ($)		Non-Equity Incentive Plan Compensation ($)		Non-Qualified Deferred Compensation Earnings ($)		All Other Compensation ($)		Total ($)
Thomas Brophy	2017		31,250		0		0		0		0		0		0		31,250
President, Chief Executive Officer and Chairman of the Board (1)	2016		62,500		0		0		0		0		125,000		0		187,500

Kelly Sardo	2017		0				0		0		0		0		0		0
Chief Financial Officer, Secretary and Treasurer (2)	2016		37,500				0		68,118		0		68,750		0		174,368

John Egazarian	2017		0		0		0		0		0		0		0		0
Chief Operating Officer (3)	2016		56,250		0		0		48,657		0		103,125		0		208,032

Michael Betts	2017		0		0		0		0		0		0		0		0
Chief Technology Officer (4)	2016		37,500		0		0		69,666		0		68,750		0		175,916

J.P. Lespinasse	2017		0		0		0		0		0		0		0		0
Chief Marketing Officer (5)	2016		56,250		0		0		0		0		75,000		0		131,250

Joseph LaPlante	2017		0		0		0		0		0		0		0		0
Chief Content Officer (6)	2016		37,500		0		0		0		0		68,750		0		106,250

William Campbell	2017		0		0		0		0		0		0		0		0
Chief Strategy Officer (7)	2016		28,125		0		0		45,691		0		28,125		0		101,941

___________

(1)	On January 28, 2014, Mr. Brophy was appointed as our President, Chief Executive Officer, interim Chief Financial Officer, and Treasurer. On May 26, 2015, he resigned as our interim Chief Financial Officer and Treasurer, and was appointed as our Chairman of the Board. On April 29, 2016, Thomas Brophy’s title changed from President, Chief Executive Officer, and Chairman of the Board to Founder. On October 31, 2017, Mr. Brophy was appointed as our President, Chief Executive Officer, Interim Chief Financial Officer and Treasurer. On February 12, 2018, Mr. Brophy resigned as our interim Chief Financial Officer and Treasurer.

(2)	On May 26, 2015, Ms. Sardo was appointed as our Chief Financial Officer, Secretary and Treasurer. On August 16, 2016, we terminated Ms. Sardo as our Chief Financial Officer and Treasurer. Ms. Sardo continued to service as Secretary. On February 12, 2018, Ms. Sardo was appointed as our Chief Financial Officer and Treasurer.

(3)	On May 26, 2015, Mr. Egazarian was appointed as our Chief Operating Officer. On August 16, 2016, we terminated Mr. Egazarian as our Chief Operating Officer. On January 2, 2018, Mr. Egazarian was appointed as our Head of Product, Chief Operating Officer.

(4)	On November 13, 2014, Mr. Betts was appointed as our interim Chief Technology Officer. On May 26, 2015, the interim tag was removed from his title. On August 16, 2016, we terminated Mr. Betts as our Chief Technology Officer. On January 8, 2018, Mr. Betts was appointed as our Chief Technology Officer.

(5)	On March 30, 2015, Mr. Lespinasse was appointed as our Chief Marketing Officer. On August 16, 2016, we terminated Mr. Lespinasse as our Chief Marketing Officer.

(6)	On April 6, 2015, Mr. LaPlante was appointed as our Chief Content Officer. On August 16, 2016, we terminated Mr. LaPlante as our Chief Content Officer.

(7)	On April 29, 2016, Mr. Campbell was appointed as our Chief Strategy Officer. On August 16, 2016, we terminated Mr. Campbell as our Chief Strategy Officer.

Table of Contents

Outstanding Equity Awards at Fiscal Year-End

The table below summarizes all unexercised options, stock that has not vested, and equity incentive plan awards for each named executive officer as of the fiscal year ended December 31, 2017.

	Option Awards									Stock Awards
Name	Number of Securities Underlying Unexercised Option (#) Exercisable		Number of Securities Underlying Unexercised Options (#) Unexercisable		Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)		Option Exercise Price ($)		Option Expiration Date	Number of Shares or Units of Stock That Have Not Vested (#)		Market Value of Shares or Units of Stock That Have Not Vested ($)		Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)		Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested (#)

Thomas Brophy(1)		9,800		0		0	$	0.52	4/1/2022		0		0		0		0
Thomas Brophy(1)		14,699		0		0	$	0.52	10/1/2022		0		0		0		0
Thomas Brophy(1)		3,920		0		0	$	0.52	12/30/2022		0		0		0		0
Thomas Brophy(1)		30,770		0		0	$	13.00	3/11/2024		0		0		0		0
Thomas Brophy GRAT(2)		3,858		0		0	$	1.04	2/2/2019		0		0		0		0
Thomas Brophy GRAT(2)		9,800		0		0	$	0.0	10/17/2021		0		0		0		0
Kelly Sardo(3)		9,616		0		0	$	13.00	2/19/2024		0		0		0		0
Kelly Sardo(3)		13,462		0		0		5.33	1/5/2026		0		0		0		0
John Egazarian(4)		2,940		0		0	$	0.52	12/30/2022		0		0		0		0
		4,771		0		0	$	13.00	1/28/2024		0		0		0		0
Michael Betts(5)		2,940		0		0	$	0.52	5/7/2022		0		0		0		0
Michael Betts(5)		490		0		0	$	0.52	1/1/2023		0		0		0		0
Michael Betts(5)		5,880		0		0	$	1.04	8/1/2023		0		0		0		0
J.P. Lespinasse(6)		1,923		0		0	$	13.00	3/30/2025		0		0		0		0
Joseph LaPlante(7)		1,924		0		0	$	13.00	3/13/2024		0		0		0		0
		962		0		0	$	13.00	4/6/2025		0		0		0		0

_______________

(1)

On January 28, 2014, Mr. Brophy was appointed as our President, Chief Executive Officer, interim Chief Financial Officer, and Treasurer. On May 26, 2015, he resigned as our interim Chief Financial Officer and Treasurer, and was appointed as our Chairman of the Board. On April 29, 2016, Thomas Brophy’s title changed from President, Chief Executive Officer, and Chairman of the Board to Founder. On October 31, 2017, Mr. Brophy was appointed as our President, Chief Executive Officer, Interim Chief Financial Officer and Treasurer. On February 12, 2018 Mr. Brophy resigned as Interim Chief Financial Officer and Treasurer.

(2)	These options are held by Trust Under Article III of The Thomas E. Brophy 2004 Grantor Retained Annuity Trust Dated 3/2/2004 (the "Brophy Trust"). Karen P. Brophy, Mr. Brophy's wife, is the Trustee of the Brophy Trust.

(3)	On May 26, 2015, Ms. Sardo was appointed as our Chief Financial Officer, Secretary and Treasurer. On August 16, 2016, we terminated Ms. Sardo as our Chief Financial Officer and Treasurer. Ms. Sardo continued to serve as our Secretary. On February 12, 2018 Ms. Sardo was appointed as our Chief financial Officer and Treasurer.

(4)	On May 26, 2015, Mr. Egazarian was appointed as our Chief Operating Officer. On August 16, 2016, we terminated Mr. Egazarian as our Chief Operating Officer. On January 2, 2018, Mr. Egazarian was appointed as our Head of Product, Chief Operating Officer.

(5)	On November 13, 2014, Mr. Betts was appointed as our interim Chief Technology Officer. On May 26, 2015, the interim tag was removed from his title. On August 16, 2016, we terminated Mr. Betts as our Chief Technology Officer. On January 8, 2018, Mr. Betts was appointed as our Chief Technology Officer.

(6)	On March 30, 2015, Mr. Lespinasse was appointed as our Chief Marketing Officer. On August 16, 2016, we terminated Mr. Lespinasse as our Chief Marketing Officer.

(7)	On April 6, 2015, Mr. LaPlante was appointed as our Chief Content Officer. On August 16, 2016, we terminated Mr. LaPlante as our Chief Content Officer.

Table of Contents

Director Compensation

The following table sets forth information concerning the compensation earned for service on our Board of Directors during the fiscal year ended December 31, 2017 by each individual who served as a director at any time during the fiscal year, other than Mr. Brophy who was not separately compensated for his service on the Board of Directors.

Name	Fees Earned or Paid in Cash ($)		Stock Awards ($)		Option Awards ($)		Non-Equity Incentive Plan Compensation ($)		Non-Qualified Deferred Compensation Earnings ($)		All Other Compensation ($)		Total ($)

William West Duker (1)		0		0		0		0		0		0		0
Edward P. Swyer (2)		0		0		0		0		0		0		0

_____________

(1)	Mr. Duker was nominated to our Board of Directors on November 16, 2017.

(2)	Mr. Swyer was appointed as a member of our Board of Directors on November 16, 2017.

As of the fiscal year ended December 31, 2017, we had no plans in place and had never maintained any plans that provided for the payment of retirement benefits or benefits that will be paid primarily following retirement including, but not limited to, tax qualified deferred benefit plans, supplemental executive retirement plans, tax-qualified deferred contribution plans and nonqualified deferred contribution plans. Similarly, we had no contracts, agreements, plans or arrangements, whether written or unwritten, that provided for payments to the named executive officers or any other persons following, or in connection with the resignation, retirement or other termination of a named executive officer, or a change in control of us or a change in a named executive officer's responsibilities following a change in control.

Except as indicated below, we had no contracts, agreements, plans or arrangements, whether written or unwritten, that provide for payments to the named executive officers listed above.

Employment Agreements

Thomas Brophy Employment Agreement

On January 27, 2014, we entered into an Employment Agreement (the "Brophy Employment Agreement") with Thomas Brophy, pursuant to which he will serve as our President, Chief Executive Officer, interim Chief Financial Officer and Treasurer. The Brophy Employment Agreement has an initial term through December 31, 2015, which term shall be automatically extended for successive one- year periods unless terminated by either party on at least three months' advance written notice. In consideration for his services, Mr. Brophy will earn an initial annual base annual salary of $250,000 ("Base Salary"), and is entitled to receive a minimum annual bonus in amount of $50,000 ("Annual Bonus").

Table of Contents

In the event of Mr. Brophy's death or Disability, as such term is defined in the Brophy Employment Agreement, we will pay him for any unreimbursed expenses incurred, accrued but unpaid then current Base Salary and Annual Bonus and other accrued but unpaid employee benefits as provided in the Brophy Employment Agreement, in each case through the date of termination (the "Accrued Amounts"), for a period of six months following such death or Disability.

If Mr. Brophy's employment is terminated by us for a reason other than Cause, as such term is defined in the Brophy Employment Agreement, or by Mr. Brophy for Good Reason, as such term is defined in the Brophy Employment Agreement, and subject to Ms. Brophy's compliance with other terms of the Brophy Employment Agreement, then we will pay him (i) the Accrued Amounts, (ii) a lump sum payment equal to eighteen (18) months' Base Salary, which payment will be made on the 60th day following the date of termination, and (iii) if Mr. Brophy elects to continue his medical coverage under COBRA, we will pay for coverage under COBRA for eighteen (18) months following the date of termination.

If Mr. Brophy voluntarily terminates the Brophy Employment Agreement, or we terminate his employment for Cause, than he shall be entitled to receive the Accrued Amounts.

The Brophy Employment Agreement contains customary non-competition, non-solicitation and confidentiality covenants.

On April 29, 2016, Mr. Brophy’s title changed from President, Chief Executive Officer, and Chairman of the Board to Founder. On October 31, 2017, Mr. Brophy was appointed as our President, Chief Executive Officer, Interim Chief Financial Officer and Treasurer

John Egazarian Employment Agreement

On January 28, 2014, we entered into an Employment Agreement with Mr. Egazarian pursuant to which he served as our Vice President of Mobile Solutions. The term for the Agreement was not specified as it represents an "at will" contract of employment. Should Mr. Egazarian be terminated without cause, he will receive six months of severance. In consideration for his services, Mr. Egazarian will earn an initial annual base annual salary of $150,000. As further consideration, we agreed to grant Mr. Egazarian 10-year non-qualified stock options to purchase 9,542 shares of the Company's Common Stock, 25% of which shall vest on the date which is one year from the date of grant, and the remainder of which shall vest, pro rata, on a monthly basis, for the three (3) years thereafter. On June 2, 2015, Mr. Egazarian was appointed Chief Operating Officer. On August 16, 2016, we terminated Mr. Egazarian as our Chief Operating Officer. On January 2, 2018, Mr. Egazarian was appointed as our Head of Product, Chief Operating Officer.

Jean Pierre Lespinasse Employment Agreement

On March 30, 2015, we entered into an Employment Agreement with Mr. Lespinasse pursuant to which he is serving as Chief Marketing Officer. The term for the Agreement was not specified as it represents an "at will" contract of employment. Should Mr. Lespinasse be terminated without cause, he will receive three months of severance. In consideration for his services, Mr. Lespinasse will earn an initial base salary of $225,000 and is entitled to receive a bonus based on subscribership after launch of CUR Music. As further consideration, we agreed to grant Mr. Lespinasse at contract signing, 7,693 and 5,770 at launch, 10-year non-qualified stock options to purchase shares of the Company's Common Stock, 25% of which shall vest on the date which is one year from the date of grant, and the remainder of which shall vest, pro rata, on a monthly basis, for the three (3) years thereafter. On August 16, 2016, we terminated Mr. Lespinasse as our Chief Marketing Officer.

Joseph LaPlante Employment Agreement

On April 6, 2015, we entered into an Employment Agreement with Mr. LaPlante pursuant to which he is serving as Chief Content Officer. The term for the Agreement was not specified as it represents an "at will" contract of employment. Should Mr. LaPlante be terminated without cause, he will receive two months of severance and paid health insurance for twelve months. In consideration for his services, Mr. LaPlante will earn an initial base salary of $150,000 and base salary of $250,000 upon public launch. As further consideration, we agreed to grant Mr. LaPlante at contract signing, 3,847 and 5,770 at launch, 10-year non-qualified stock options to purchase shares of the Company's Common Stock, 25% of which shall vest on the date which is one year from the date of grant, and the remainder of which shall vest, pro rata, on a monthly basis, for the three (3) years thereafter. On August 16, 2016, we terminated Mr. LaPlante as our Chief Content Officer.

Table of Contents

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth information relating to the beneficial ownership of our Common Stock as of April 30, 2018 by:

	·	each person, or group of affiliated persons, known by us to beneficially own more than 5% of our outstanding shares of Common Stock;

	·	each of our directors;

	·	each of our named executive officers; and

	·	all directors and executive officers as a group.

The number of shares beneficially owned by each entity, person, director, executive officer or selling stockholder is determined in accordance with the rules of the SEC and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rules, beneficial ownership includes any shares over which the individual or entity has sole or shared voting power or investment power as well as any shares that the individual or entity has the right to acquire within 60 days of April 30, 2018 through the exercise of any stock option, warrants or other rights. Except as otherwise indicated, and subject to applicable community property laws, the persons named in the table have sole voting and investment power with respect to all shares of Common Stock held by that person or entity.

The percentage of shares beneficially owned is computed on the basis of 2,526,663 shares of our Common Stock outstanding as of April 30, 2018. Shares of our Common Stock that a person or entity has the right to acquire within 60 days of April 30, 2018 are deemed outstanding for purposes of computing the percentage ownership of the person or entity holding such rights, but are not deemed outstanding for purposes of computing the percentage ownership of any other person or entity, except with respect to the percentage ownership of all directors and executive officers as a group.

Unless otherwise indicated below, the address for each beneficial owner listed is c/o CÜR Media, Inc.

Title of Class: Common Stock

Name and Address of Beneficial Owner	Amount and Nature of Beneficial Ownership		Percentage of Class⁽¹⁾
5% Stockholders
E. Jeffrey Peierls⁽²⁾ 73 South Holman Way Golden, CO 80401		200,003		7.3	%
Named Executive Officers and Directors
Thomas Brophy⁽³⁾ President, Chief Executive Officer, interim Chief Financial Officer and Treasurer		696,513		25.4	%

Michael Betts⁽⁴⁾ Chief Technology Officer		250,977		9.0	%

John Egazarian⁽⁵⁾ Head of Product, Chief Operating Officer		188,808		7.0	%

Kelly Sardo⁽⁶⁾ Chief Financial Officer		73,078		2.8	%

William West Duker⁽⁷⁾ Director		0	*

Edward P. Swyer⁽⁸⁾ Director		0	*

All directors and officers as a group (6 persons)⁽⁹⁾		1,409,379		42.0	%

_____________

Less than 1%

Table of Contents

(1)	Percentages are based upon 2,526,663 shares of our Common Stock outstanding as of April 30, 2018, 20,174 of which had not yet been issued.

(2)	Includes 100,002 shares of Common Stock and 100,001 shares of Common Stock underlying vested warrants. The shares of Common Stock indicated as beneficially owned by E. Jeffrey Peierls include shares of Common Stock held by Brian E. Peierls and E. Jeffrey Peierls, and a series of trusts over which E. Jeffrey Peierls has sole power to vote or direct the vote, and to dispose or direct the disposition.

(3)	Consists of (a) 358,637 shares of Common Stock held by Mr. Brophy, (b) 123,183 shares of Common Stock held by the Brophy Trust, (c) 59,189 shares underlying vested stock options held by Mr. Brophy vesting within 60 days as of April 30, 2018 (d) 3,858 shares underlying vested stock options held by the Brophy Trust vesting within 60 days as of April 30, 2018, (e) 70,923 shares of Common Stock underlying the principle in convertible notes immediately convertible, (f) 70,923 shares of Common Stock issuable upon exercise of warrants underlying the principle in convertible notes immediately convertible and (g) 9,800 restricted stock awards held by the Brophy Trust. Karen P. Brophy, Mr. Brophy's wife, is the Trustee of the Brophy Trust and has sole voting and investment power over the shares owned thereby.

(4)	Includes 250,977 shares underlying vested stock options vesting within 60 days of April 30, 2018. Does not include 158,333 shares underlying stock options that will not have vested within 60 days of April 30, 2018. The issuance of these stock options is subject to the Company either amending the 2015 Plan, or adopting a new equity incentive plan, to increase the number of stock options the Company has available for issuance.
(5)	Includes 188,808 shares underlying vested stock options vesting within 60 days of April 30, 2018. Does not include 118,750 shares underlying stock options that will not have vested within 60 days of April 30, 2018. The issuance of these stock options is subject to the Company either amending the 2015 Plan, or adopting a new equity incentive plan, to increase the number of stock options the Company has available for issuance.

(6)	Includes 73,708 shares underlying vested stock options vesting within 60 days of April 30, 2018. Does not include 350,000 shares underlying stock options that will not have vested within 60 days of April 30, 2018. The issuance of these stock options is subject to the Company either amending the 2015 Plan, or adopting a new equity incentive plan, to increase the number of stock options the Company has available for issuance.

(7)	Mr. Duker does not currently beneficially own any shares of our Common Stock.

(8)	Mr. Swyer does not currently beneficially own any shares of our Common Stock.

(9)	Includes (a) 575,510 shares underlying vested stock options vesting within 60 days of April 30, 2018, and (b) 9,800 restricted stock awards, (c) 70,923 shares of Common Stock underlying the principle in convertible notes immediately convertible, and (e) 170,924 shares of Common Stock issuable upon exercise of vested warrants.

Change in Control

There are no existing arrangements that may result in a change in control of the Company.

Securities Authorized for Issuance under Equity Compensation Plans

See Item 5 "Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities -- Securities Authorized for Issuance under Equity Compensation Plans," for certain information with respect to our equity compensation plans as of December 31, 2017.

Table of Contents

Related Party Transactions

SEC rules require us to disclose any transaction since the beginning of our last fiscal year, or any currently proposed transaction, in which we are a participant and in which any related person has or will have a direct or indirect material interest involving the lesser of $120,000 or one percent (1%) of the average of our total assets as of the end of last two completed fiscal years. A related person is any executive officer, director, nominee for director, or holder of 5% or more of the Company's Common Stock, or an immediate family member of any of those persons.

Related Person Transaction Approval Policy

While we have no written policy regarding approval of transactions between us and a related person, our Board of Directors, as matter of appropriate corporate governance, reviews and approves all such transactions to the extent required by applicable rules and regulations. Generally, management would present any related person transactions proposed to be entered into by us to the Board of Directors for approval. The Board of Directors may approve the transaction if it is deemed to be in the best interests of our stockholders and the Company.

In addition to the Contribution, the 2014 PPO and the other transactions described elsewhere in this Annual Report, we have the following related party transaction:

Thomas Brophy Employment Agreement

On January 28, 2014, we entered into the Brophy Employment Agreement with Thomas Brophy, pursuant to which he will serve as our President, Chief Executive Officer, interim Chief Financial Officer and Treasurer. The Brophy Employment Agreement has an initial term through December 31, 2015, which term shall be automatically extended for successive one-year periods unless terminated by either party on at least three months' advance written notice. In consideration for his services, Mr. Brophy will earn an initial annual base annual salary of $250,000 ("Base Salary"), and is entitled to receive a minimum annual bonus in amount of $50,000 ("Annual Bonus").

If Mr. Brophy voluntarily terminates the Brophy Employment Agreement, or we terminate his employment for Cause, than he shall be entitled to receive the Accrued Amounts.

The Brophy Employment Agreement contains customary non-competition, non-solicitation and confidentiality covenants.

Table of Contents

Sale of 12% Unsecured Convertible Promissory Notes

As of January 14, 2016, Thomas Brophy, our President, Chief Executive Officer and Chairman of the Board of Directors, and Sanjan Dhody, a former director of ours, purchased $586,000 in Unsecured Notes of the Company in the principal amount of $461,000 and $125,000 respectively.

The Unsecured Notes have a stated maturity date of 5 years from the date of issuance. The principal on the Unsecured Notes bears interest at a rate of 12% per annum, which is also payable on maturity. Upon the closing of a financing by the Company during the term of the Unsecured Notes involving the sale of at least $2,500,000 in equity securities (a "Qualified Offering") by the Company ("Equity Financing Securities"), all of the outstanding principal amount of the Unsecured Notes, together with accrued and unpaid interest due thereon, will automatically convert ("Mandatory Conversion") into units of the Company's securities (the "Units") at a conversion price per Unit equal to the lesser of (i) $6.50, or (ii) a 15% discount to the price per share of the Equity Financing Securities. Each Unit will consist of one share (the "Unit Shares") of the Company's Common Stock, and one five-year warrant (the "Unit Warrants") to purchase one additional share (the "Unit Warrant Shares") of the Company's Common Stock at an exercise price of $9.75. At any time prior to a Mandatory Conversion, the note holder may convert all or part of the outstanding principal amount of the Unsecured Note, together with accrued and unpaid interest due thereon, into Units at a conversion price of $6.50 per Unit ("Optional conversion"). Upon failure by the Company to pay any principal amount or interest due under the Unsecured Notes within 5 days of the date such payment is due, or the occurrence of other event of default under the terms of the Notes, the entire unpaid principal balance of the Unsecured Note, together with any accrued and unpaid interest thereon, will become due and payable, without presentment, demand, protest or notice of any kind. The conversion price and number of Units issuable upon conversion of the Notes will be subject to adjustment from time to time for subdivision or consolidation of shares and other standard dilutive events.

The Unit Warrants provide for the purchase of shares of the Company's Common Stock an exercise price of $9.75. The Unit Warrants are exercisable for cash only, for a term of five (5) years from the date of issuance. The number of shares of Common Stock to be deliverable upon exercise of the Unit Warrants is subject to adjustment for subdivision or consolidation of shares and other standard dilutive events.

The Company has agreed to use its commercially reasonable efforts to file a registration statement ("Registration Statement") to register the Unit Shares and Unit Warrant Shares no later than (i) the date that is ninety (90) calendar days after the final closing under the Qualified Offering, or (ii) the date which is ninety (90) calendar days after the first Optional Conversion of the Unsecured Notes. The Company has agreed to use its commercially reasonable efforts to make the Registration Statement declared effective no later than one hundred and eighty (180) calendar days after the Registration Statement is first filed with the SEC.

Sale of 12% Senior Secured Convertible Promissory Notes

As of April 12, 2016, Thomas Brophy, our President, Chief Executive Officer and Chairman of the Board of Directors, purchased a Secured Note of the Company in the principal amount of $255,060.

The Secured Note has a stated maturity date of 6 months from the date of issuance. The principal on the Secured Notes bears interest at a rate of 12% per annum, which is also payable on maturity. The Secured Notes will rank senior to all existing indebtedness of the Company, except as otherwise set forth in the Secured Notes. Upon the closing of a financing (a "Qualified Offering") by the Company during the term of the Secured Notes involving the sale of at least $15,000,000 in equity securities by the Company ("Equity Financing Securities"), all of the outstanding principal amount of the Secured Notes, together with accrued and unpaid interest due thereon, will automatically convert ("Mandatory Conversion") into units of the Company's securities (the "Units") at a conversion price per Unit equal to the lesser of (a) 80% of the price per share of the Equity Financing Securities sold in the Qualified Offering, or (b) $2.00 ("Mandatory Conversion"). At any time prior to a Mandatory Conversion, the warrant holder may convert all or part of the outstanding principal amount of the Secured Note, together with accrued and unpaid interest due thereon, into Units at a conversion price of $2.00 per Unit ("Optional Conversion"). Each Unit will consists of one share (the "Unit Shares") of the Company's Common Stock, and one five-year warrant (the "Unit Warrants") to purchase one additional share (the "Unit Warrant Shares") of the Company's Common Stock at an exercise price equal to (a) 125% of the price at which the Company's equity securities (or securities convertible into or exercisable for equity securities) are sold in a Qualified Offering in the event of a Mandatory Conversion, or (b) 125% of $2.00 in the event of an Optional Conversion. Upon failure by the Company to pay any principal amount or interest due under the Secured Notes within 5 days of the date such payment is due, or the occurrence of other event of default under the terms of the Notes, the entire unpaid principal balance of the Secured Note, together with any accrued and unpaid interest thereon, will become due and payable, without presentment, demand, protest or notice of any kind. In the event of any liquidation, dissolution or winding up of the Company, each holder of a Note will be entitled to receive, pari passu with the other holders of the Secured Notes, and in preference to the holders of the Company's other outstanding securities, an amount equal to two times the principal amount of, and any accrued and unpaid interest on, such holder's Note. The conversion price and number of Units issuable upon conversion of the Secured Notes will be subject to adjustment from time to time for subdivision or consolidation of shares and other standard dilutive events.

Table of Contents

The Unit Warrants provide for the purchase of shares of the Company's Common Stock an exercise price equal to (a) 125% of the price at which the Company's equity securities (or securities convertible into or exercisable for equity securities) are sold in a Qualified Offering in the event of a Mandatory Conversion, or (b) 125% of $2.00 in the event of an Optional Conversion. The Unit Warrants are exercisable for cash only, for a term of 5 years from the date of issuance. The number of shares of Common Stock to be deliverable upon exercise of the Unit Warrants is subject to adjustment for subdivision or consolidation of shares and other standard dilutive events.

The Company will grant to each Investor in the Offering registration rights with respect to the Unit Shares and Unit Warrant Shares, and to the Placement Agent (as defined below), and any sub-agent of the Placement Agent, registration rights with respect to the Common Stock issuable upon exercise of the Placement Agent Warrants (as defined below), in each case on a pari passu basis with, and upon substantially the same terms as the registration rights granted to, the investors in any subsequent Additional Note Offerings, if any, and in a Qualified Offering.

On October 12, 2016 the principal and any accrued and unpaid interest on the Company’s outstanding Secured Notes became due and payable. The Company was unable to repay the noteholder at that time. Pursuant to the terms of the Secured Notes, the Company’s failure to pay any principal or interest within 5 days of the date such payment is due constituted an event of default. Following the occurrence of an event of default, among other things, the interest rate on the Secured Notes increased to 15%. In addition to other remedies available to the noteholder, the Company’s obligation to repay amounts due under the Secured Notes is secured by a first priority security interest in and lien on all of the Company’s assets and property, including the Company’s intellectual property. On November 16, 2017, simultaneous with the Initial Closing (as previously discussed), the holders of all of the Company’s existing Secured Notes (the “Secured Noteholders”), assigned, conveyed, transferred and set over to Holdings all of the Secured Noteholders’ right, title, interest and obligations in, to and under the Secured Notes, and all claims, suits, causes of action and any other rights thereunder, in exchange for units of securities of Holdings, at an exchange rate of $2.00 of principal and interest due under the Secured Notes per unit.

Director Independence

We are not currently subject to listing requirements of any national securities exchange or inter-dealer quotation system that has requirements that a majority of the Board of Directors be "independent" and, as a result, we are not at this time required to have our Board of Directors comprised of a majority of "Independent Directors." Our Board of Directors currently has three (3) members, Thomas Brophy, William West Duker and Edward P. Swyer. Mr. Brophy serves as our Chairman. Mr. Brophy is not “independent” within the definition of independence provided in the Marketplace Rules of The Nasdaq Stock Market and the independence requirements contemplated by Rule 10A-3 under the Securities Exchange Act of 1934. We have not yet assessed whether William West Duker and/or Edward P. Swyer qualify as independent.

Table of Contents

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit Fees

The aggregate fees billed to us by our principal accountants, Friedman, LLP ("Friedman"), for professional services rendered during the years ended December 31, 2017 and December 31, 2016 are set forth in the table below:

Fee Category	Year ended December 31, 2017		Year ended December 31, 2016

Audit fees (1)	$	51,698	$	125,065
Audit-related fees (2)	$	0		0
Tax fees (3)		0		0
All other fees (4)		0		0
Total fees	$	51,698	$	125,065

___________

(1)	Audit fees consist of fees incurred for professional services rendered for the audit of financial statements, for reviews of our interim consolidated financial statements included in our quarterly reports on Form 10-Q and for services that are normally provided in connection with statutory or regulatory filings or engagements.

(2)	Audit-related fees consist of fees billed for professional services that are reasonably related to the performance of the audit or review of our financial statements, but are not reported under "Audit fees."

(3)	Tax fees consist of fees billed for professional services relating to tax compliance, tax planning, and tax advice.

(4)	All other fees consist of fees billed for services not associated with audit or tax.

Audit Committee's Pre-Approval Practice

Prior to our engagement of our independent auditor, such engagement was approved by our Board of Directors. The services provided under this engagement may include audit services, audit-related services, tax services and other services. Pre-approval is generally provided for up to one year and any pre-approval is detailed as to the particular service or category of services and is generally subject to a specific budget. Pursuant our requirements, the independent auditors and management are required to report to our Board of Directors at least quarterly regarding the extent of services provided by the independent auditors in accordance with this pre-approval, and the fees for the services performed to date. Our Board of Directors may also pre-approve particular services on a case-by-case basis. All audit-related fees, tax fees and other fees incurred by us for the years ended December 31, 2016 and 2015 were approved by our Board of Directors.

Table of Contents

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

Financial Statements

See Index to Financial Statements immediately following the signature page of this Annual Report.

Financial Statement Schedules

All financial statement schedules are omitted because they are not applicable, or the required information is shown in the financial statements or notes thereto.

Exhibits

In reviewing the agreements included as exhibits to this Annual Report, please remember that they are included to provide you with information regarding their terms and are not intended to provide any other factual or disclosure information about the Company or the other parties to the agreements. The agreements may contain representations and warranties by each of the parties to the applicable agreement. These representations and warranties have been made solely for the benefit of the parties to the applicable agreement and:

	·	should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate;

	·	have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement;

	·	may apply standards of materiality in a way that is different from what may be viewed as material to you or other investors; and

	·	were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments.

Accordingly, these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other time. Additional information about the Company may be found elsewhere in this Annual Report and the Company's other public filings, which are available without charge through the SEC's website at http://www.sec.gov.

Table of Contents

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

CÜR MEDIA, INC.

CONSOLIDATED FINANCIAL STATEMENTS

Table of Contents

		Page

Audited Consolidated Financial Statements for the years ended December 31, 2017 and 2016

Report of Independent Registered Public Accounting Firm		F-2

Consolidated Balance Sheets as of December 31, 2017 and 2016		F-3

Consolidated Statements of Operations for the years ended December 31, 2017 and 2016		F-4

Consolidated Statements of Changes Stockholders' Deficiency for the years ended December 31, 2017 and 2016		F-5

Consolidated Statements of Cash Flows for the years ended December 31, 2017 and 2016		F-6

Notes to Consolidated Financial Statements		F-7

F-1

Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and

Stockholders of CUR Media, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of CUR Media, Inc. (the “Company”) as of December 31, 2017 and 2016, and the related consolidated statements of operations, stockholders’ deficiency, and cash flows for each of the years in the two-year period ended December 31, 2017, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2017 and 2016, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2017, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has recurring losses and negative cash flows from operations. These conditions, among others raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. If the Company is unable to obtain financing, there could be a material adverse effect on the Company.

/s/ Friedman LLP

We have served as the Company’s auditor since 2012.

East Hanover, New Jersey

May 7, 2018

F-2

Table of Contents

CÜR MEDIA, INC.

CONSOLIDATED BALANCE SHEETS

	December 31, 2017			December 31, 2016
ASSETS

CURRENT ASSETS
Cash and cash equivalents	$	153,979		$	1,508
Prepaid expenses		1,000,000			-
TOTAL CURRENT ASSETS		1,153,979			14,345

Property and equipment, net		2,502			6,541
TOTAL ASSETS	$	1,156,481		$	8,049

LIABILITIES AND STOCKHOLDERS' DEFICIENCY

CURRENT LIABILITES
Accounts payable	$	2,399,723		$	3,710,172
Accrued liabilities and other current liabilities		2,621,322			2,115,273
Line of credit – related party		1,847,670			-
Note payable, short-term		33,550			33,550
Note payable – related party		685,000			-
Related party secured convertible promissory notes, net		2,514,880			2,514,880
Derivative liabilities		1,542,304			292,589
TOTAL CURRENT LIABILITIES		11,644,449			8,666,464

Note payable - vendor		300,000			-
Unsecured convertible promissory notes, net		895,132			488,324
TOTAL LONG-TERM LIABILITIES		1,195,132			488,324

TOTAL LIABILITIES		12,839,581			9,154,788

STOCKHOLDERS' DEFICIENCY
Preferred Stock (.0001 par value, 10,000,000 shares authorized, none issued or outstanding as of December 31, 2017 or December 31, 2016)		-			-
Common Stock (.0001 par value, 300,000,000 shares authorized, 2,526,663 and 2,526,663 issued at December 31, 2017 and December 31, 2016, respectively, and 2,550,998 and 2,550,998 outstanding at December 31, 2017 and December 31, 2016, respectively)		253			253
Additional Paid-In-Capital		11,935,233			11,922,288
Accumulated Deficit		(23,618,586	)		(21,069,280	)
TOTAL STOCKHOLDERS' DEFICIENCY		(11,683,100	)		(9,146,739	)

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY	$	1,156,481		$	8,049

See accompanying notes to consolidated financial statements

F-3

Table of Contents

CÜR MEDIA, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

	For the Years Ended December 31,
	2017			2016

REVENUES	$	292		$	3,487

OPERATING EXPENSES
Research and development		567,270			3,983,478
General and administrative		689,142			2,884,124
Stock based compensation		-			183,950
Depreciation and amortization		4,039			14,289
Loss on disposal of assets		-			14,909

TOTAL OPERATING EXPENSES		1,260,451			7,080,750

OTHER INCOME (EXPENSE)
Interest expense		(1,048,877	)		(2,952,075	)
Interest income		16			122
Loss on issuance of convertible debt		-			(120,266	)
Gain on debt relief		1,009,429			-
Change in fair value of derivative liabilities		(1,249,715	)		3,781,492

TOTAL OTHER INCOME		(1,289,147	)		709,273

NET LOSS	$	(2,549,306	)	$	(6,367,990	)

Basic and diluted net loss per share	$	(1.00	)	$	(2.52	)

Weighted average number of shares outstanding basic and diluted		2,550,998			2,530,705

See accompanying notes to consolidated financial statements

F-4

Table of Contents

CÜR MEDIA, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIENCY

	Common Stock				Additional Paid In			Accumulated
	Shares		Amount		Capital			Deficit			Total
Balance, January 1, 2016		2,440,336	$	244	$	10,361,183		$	(14,701,290	)	$	(4,339,863	)
Reclassification of derivative liabilities to equity		-		-		291,415			-			291,415
Non-cash Label Warrant expense		-		-		967,402			-			967,402
Issuance of Common Stock for legal services		66,153		7		118,340			-			118,347
Issuance of Common Stock for price based antidilution protection		20,174		2		(2	)		-			-
Stock Compensation Expense		-		-		183,950			-			183,950
Net Loss		-		-		-			(6,367,990	)		(6,367,990	)
Balance, December 31, 2016		2,526,663	$	253	$	11,922,288		$	(21,069,280	)	$	(9,146,739	)
Non-cash warrant expense for consulting services		-		-		12,945			-			12,945
Net Loss		-		-		-			(2,549,306	)		(2,549,306	)
Balance, December 31, 2017		2,526,663	$	253	$	11,935,233		$	23,618,586		$	11,683,100

See accompanying notes to consolidated financial statements.

F-5

Table of Contents

CÜR MEDIA, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Years Ended December 31,
	2017			2016
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss	$	(2,549,306	)	$	(6,367,990	)
Adjustments to reconcile net loss to net cash used in operating activities
Gain on debt relief		(1,009,429	)		-
Depreciation and amortization		4,039			14,289
Stock compensation expense		-			183,950
Interest expense		406,809			2,464,833
Share based consulting services		-			118,347
Non-cash warrant expense		12,945			967,402
Change in fair value of derivative liabilities		1,249,715			(3,781,492	)
Loss on issuance of convertible debt		-			120,266
Disposal of property and equipment		-			15,616
Changes in assets and liabilities
Prepaid expenses		(1,000,000	)		10,611
Other current assets		-			3,000
Notes payable in settlement of accounts payable		300,000
Accounts payable		(301,020	)		1,831,581
Accrued liabilities and other current liabilities		506,049			1,770,194
Net cash used in operating activities		(2,380,198	)		(2,649,393	)

CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of note payable		-			(5,833	)
Proceeds from issuance of convertible promissory notes		-			2,656,000
Proceeds from issuance of notes payable – related party		2,532,669			-
Net cash provided by financing activities		2,532,669			2,650,167

NET INCREASE IN CASH		152,471			774

CASH, BEGINNING OF YEAR		1,508			734

CASH, END OF THE YEAR	$	153,979		$	1,508

Supplemental disclosure of cash and non-cash transaction:

Reclassification of derivative liabilities to equity				$	291,415

See accompanying notes to consolidated financial statements

F-6

Table of Contents

CÜR MEDIA, INC.

Notes to Consolidated Financial Statements

December 31, 2017 and 2016

Note 1 – Summary of Business and Basis of Presentation

Organization and Business

CÜR Media, Inc. (the "Company") was formed in the State of Delaware as Duane Street Corp. on November 17, 2011, to manufacture and market baby products. Prior to the Contribution (as defined below), the Company’s board of directors determined to discontinue operations in this area and to seek a new business opportunity.

CÜR Media, LLC (formerly known as Raditaz, LLC) ("Raditaz") was formed in Connecticut on February 15, 2008. On January 28, 2014, the members of Raditaz contributed their Raditaz membership interests (the "Contribution") to the Company in exchange for approximately 769,231 shares of the Company's common stock, $0.0001 par value per share (“Common Stock”), which resulted in Raditaz being a wholly owned subsidiary of the Company. Each membership interest of Raditaz, at the time of the Contribution was automatically converted into shares of the Company's Common Stock, with the result that the 39,249,885 membership interests outstanding immediately prior to the Contribution were converted into approximately 769,231 shares of the Company's Common Stock outstanding immediately thereafter.

As a result of the Contribution, the Company changed its business focus to the business of Raditaz, which is to develop and commercialize a streaming music experience for listening on the web and mobile devices (the “Music Streaming Business”). The Company is currently developing CÜR Music, a hybrid internet radio and on-demand music streaming service.

CUR Holdings, LLC, was formed in New York on July 6, 2017, for the purpose of making strategic investments of up to $1,000,000. On July 6, 2017 CUR Holdings, LLC loaned $685,000 to the Company, in exchange for which it received a Line of Credit Promissory Note from the Company in the principal amount of $685,000 (“Line of Credit Note”). In connection with the Initial Closing (as defined below) of the Preferred Stock Unit Offering (as defined below), the Line of Credit Note was assigned and transferred to CUR Holdings, Inc., a related Delaware corporation (“Holdings”), in exchange for 194,175 Unit Shares (as defined below”) of Holdings and Unit Warrants (as defined below) to purchase 1,263,827 shares of common stock of Holdings. As a result, Holdings became the payee under the Line of Credit Note and Standard Holding Note. Upon completion of the transaction, CUR Media is now required to pay Holdings.

Holdings was formed in the State of Delaware on August 14, 2017, for the purpose of raising capital to effectuate a transaction with the Company, or another company in the music streaming space. On September 11, 2017, the Company entered into a term sheet (the “Term Sheet”) with Holdings, pursuant to which the Company and Holdings agreed to consummate either a Merger (as defined below) or an Asset Transfer (as defined below), under certain circumstances. Pursuant to the Term Sheet, in the event the Company receives notification from the SEC that it will not institute the proposed Administrative Proceedings (as defined below), or, if instituted, will discontinue such proceedings (“SEC Clearance”), Holdings will, subject to any required shareholder approval, merge with and into the Company, with the Company continuing as the surviving entity (the “Merger”); provided, however, that the board of directors of the Company and Holdings may mutually agree to proceed with the Merger prior to receipt of SEC Clearance. If, however, the SEC commences the proposed Administrative Proceedings (as defined below) against the Company, and such proceedings result in the revocation of the registration of the Company’s Common Stock under the Exchange Act (“SEC Revocation”), the Company and Holdings will, subject to any required shareholder approval, enter into a fair value asset purchase and sale transaction, pursuant to which Holdings will acquire all of the intellectual property and other assets and liabilities constituting the Company’s Music Streaming Business (the “Asset Transfer” and, together with the Merger, a “Combination Transaction”); provided, however, that the board of directors of the Company and Holdings may mutually agree to proceed with the Asset Transfer any time commencing on the ninety-first (91st) day after the effective date of the Term Sheet.

F-7

Table of Contents

CÜR MEDIA, INC.

Notes to Consolidated Financial Statements

December 31, 2017 and 2016

Note 1 – Summary of Business and Basis of Presentation (Continued)

On November 16, 2017, Holdings consummated an initial closing (the “Initial Closing”) of its private placement offering (the “Preferred Stock Unit Offering”), to certain “accredited investors” (each, a “Unit Purchaser” and, collectively, the “Unit Purchasers”) and, simultaneously with the closing of the Preferred Stock Unit Offering, Holdings consummated a private placement offering (the “$2.5 Million Note Offering” and, together with the Preferred Stock Unit Offering, the “Offerings”), to one “accredited investor” (the “New Note Purchaser”). The net proceeds from the Offerings, in the aggregate amount of $6,932,288 (after deducting fees and expenses related to the Offerings in the aggregate amount of $722,074 (including placement agent fees, legal fees and expenses and fees payable to the escrow agent)) are to be used to pay the required Label Advances (as defined below) to the Music Labels (as defined below) sufficient to allow Holdings and/or the Company to proceed with soliciting subscriptions for CÜR Music, the Company’s Internet music service, and to extend a line of credit to the Company (the “Post-Closing Line of Credit Note”), for up to the full amount of the aggregate net proceeds from the Offerings (1) to enable the Company to pay outstanding accounts payable, employee deferred compensation, and monthly payments due by the Company under the New Note, and (2) for working capital and general corporate purposes. While there is a process for requesting and approving drawdowns, it is not formally documented, approval is on a case by case basis and the terms and associated interest on the Post-Closing Line of Credit Note is to be determined, and will be reflected in the definitive documentation for the transaction. As of December 31, 2017 and April 30, 2018, borrowings from the Post-Closing Line of Credit Note were $1,847,670 and $2,903,906, respectively.

Basis of Presentation

The accompanying consolidated financial statements include the activities of the Company, CÜR Media, Inc., and its wholly owned subsidiary, CÜR Media, LLC. All intercompany transactions have been eliminated in these consolidated financial statements.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On an ongoing basis, the Company’s management evaluates its estimates, which include, but are not limited to, estimates related to accruals, stock-based compensation expense, warrants to purchase securities, and reported amounts of expenses and accruals during the reported period. The Company bases its estimates on historical experience and other market-specific or other relevant assumptions that it believes to be reasonable under the circumstances. Actual results may differ from those estimates or assumptions.

Research and Development Costs

All research and development costs, including costs to develop software used in the Company's applications, are expensed when incurred. Non-refundable advance payments for such services pursuant to contractual arrangements because the right to receive those services represents an economic benefit are recorded as prepaid assets. Such advances will be expensed when the services occur and the economic benefit is realized. There were no prepaid research and development services at December 31, 2017 or 2016.

F-8

Table of Contents

CÜR MEDIA, INC.

Notes to Consolidated Financial Statements

December 31, 2017 and 2016

Note 1 – Summary of Business and Basis of Presentation (Continued)

Property and equipment

Property and equipment is recorded at cost, less accumulated depreciation and amortization. Depreciation is computed using the straight-line method based on the estimated useful lives of the assets as follows:

Servers, computers and other related equipment		3 years

Office furniture and equipment		3-5 years

Leasehold improvements		Shorter of the estimated useful life of 5 years or the lease term

Property and equipment is reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability of these assets is measured by a comparison of the carrying amounts to the future undiscounted cash flows the assets are expected to generate. If property and equipment are considered to be impaired, the impairment to be recognized equals the amount by which the carrying value of the asset exceeds its fair market value.

Stock Compensation

Derivative Liabilities

The Company does not use derivative instruments to hedge exposure to cash flow, market, or foreign currency risks; however, the Company has warrants and convertible promissory notes that contain freestanding and embedded derivatives. We account for stock warrants as either equity instruments or derivative liabilities depending on the specific terms of the warrant agreements. Warrants that allow for cash settlement or provide for certain modifications of the warrant exercise price are accounted for as derivative liabilities. The Company evaluates embedded conversion features and bifurcates the embedded conversion feature if it is not clearly and closely related to the host agreement.

The estimated fair values of the derivative liabilities were determined using a Black-Scholes option pricing model, which takes into account the probabilities of certain events occurring over the life of the instruments. The derivative liabilities are adjusted to their estimated fair values at each reporting period, with any decrease or increase in the estimated fair value being recorded in other income (expense).

F-9

Table of Contents

CÜR MEDIA, INC.

Notes to Consolidated Financial Statements

December 31, 2017 and 2016

Note 1 – Summary of Business and Basis of Presentation (Continued)

Cash and Cash Equivalents

The Company considers all highly liquid temporary cash investments with an original maturity of three months or less when purchased to be cash equivalents. At December 31, 2017, the Company's cash balances did not exceed the current insured amounts under the Federal Deposit Insurance Corporation.

Income Taxes

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, as well as net operating loss carryforwards. Deferred tax assets and liabilities are classified as non-current based on the classification of the related assets or liabilities for financial reporting, or according to the expected reversal dates of the specific temporary differences, if not related to an asset or liability for financial reporting. Valuation allowances are established against deferred tax assets if it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates or laws is recognized in operations in the period that includes the enactment date.

The Company has federal net operating loss (“NOL”) carryforwards which are subject to limitations under Section 382 of the Internal Revenue Code.

The 2017 Tax Cuts and Jobs Act (“Tax Reform”) was enacted on December 22, 2017. The Tax Reform includes a number of changes in existing tax law impacting businesses including a permanent reduction in the U.S. federal statutory rate from 34% to 21%, effective January 1, 2018. Under U.S. GAAP, changes in tax rates and tax law are accounted for in the period of enactment and deferred tax assets and liabilities are measured at the enacted tax rate. The rate reconciliation includes the Company’s assessment of the accounting under the Tax Reform which is preliminary and is based on information that was available to management at the time the consolidated financial statements were prepared.

The Company files income tax returns in the U.S. federal and state jurisdictions Tax years 2014 to 2015 remain open to examination for both the U.S. federal and state jurisdictions.

The Company applies the provisions of FASB ASC 740-10, Accounting for Uncertain Tax Positions, which clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The standard also provides guidance on de-recognition, classification, interest and penalties, and accounting in interim periods, disclosure and transitions.

The Company has concluded that there are no significant uncertain tax positions requiring recognition in the accompanying financial statements. The tax period that is subject to examination by major tax jurisdictions is three years ended December 31, 2015, for which the tax returns have been filed.

Fair Value of Financial Instruments

Generally accepted accounting principles require disclosing the fair value of financial instruments to the extent practicable for financial instruments, which are recognized or unrecognized in the balance sheet. The fair value of the financial instruments disclosed herein is not necessarily representative of the amount that could be realized or settled, nor does the fair value amount consider the tax consequences of realization or settlement. In assessing the fair value of financial instruments, the Company uses a variety of methods and assumptions, which are based on estimates of market conditions and risks existing at the time. For certain instruments, including cash and cash equivalents, accounts payable, and accrued expenses, it was estimated that the carrying amount approximated fair value because of the short maturities of these instruments. All debt is based on current rates at which the Company could borrow funds with similar remaining maturities and approximates fair value.

F-10

Table of Contents

CÜR MEDIA, INC.

Notes to Consolidated Financial Statements

December 31, 2017 and 2016

Note 1 – Summary of Business and Basis of Presentation (Continued)

GAAP establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use on unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is described below:

Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.

Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data.

Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.

Recent Authoritative Pronouncements

In April 2016, the FASB issued ASU No. 2016-10, Revenue from Contracts with Customers: Identifying performance obligations and licensing (Topic 606), to reduce the cost and complexity of applying the guidance on identifying promised goods or services around identifying performance obligations and implementation guidance on determining whether an entity’s promise to grant a license provides a customer with either a right to use the entity’s intellectual property (which is satisfied at a point in time) or a right to access the entity’s intellectual property (which is satisfied over time). The ASU defines a five-step process to achieve the core principal and, in doing so, it is possible more judgement and estimates may be required within the revenue recognition process than are currently in use. The ASU will be effective for the Company upon launching its music streaming product, CÜR Music, in the second or third quarter of 2018. Management is currently reviewing the effects of this pronouncement.

Note 2 - Going Concern Uncertainty

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of the liabilities in the normal course of business and does not include any adjustments that might result from uncertainty about the Company's ability to continue as a going concern.

F-11

Table of Contents

CÜR MEDIA, INC.

Notes to Consolidated Financial Statements

December 31, 2017 and 2016

Note 2 - Going Concern Uncertainty (Continued)

The Company incurred net losses since inception, including a net loss of $2,549,306 in the year ending December 31, 2017 and $6,367,990 in the year ending December 31, 2016. The Company has developed CÜR Music, a hybrid internet radio and on-demand music streaming service and has not generated material revenue from operations and anticipates needing additional capital subsequent to launching CÜR Music to execute the current operating plan and make required payments to Content Providers. These factors raise substantial doubt about the ability of the Company to continue as a going concern.

On November 16, 2017, Holdings, a related party, consummated the Initial Closing of the Preferred Stock Unit Offering and simultaneously with the closing of the Preferred Stock Unit Offering, Holdings also consummated a private placement offering of the $2.5 Million Note Offering. The net proceeds from the Preferred Stock Unit Offering and $2.5 Million Note Offering (as defined below) (together, the “Offerings”), in the aggregate amount of $6,932,288 (after deducting fees and expenses related to the Offerings in the aggregate amount of $722,074 (including placement agent fees, legal fees and expenses and fees payable to the escrow agent)) are to be used to pay the required Label Advances (as defined below) to the Music Labels (as defined below) sufficient to allow Holdings and/or the Company to proceed with soliciting subscriptions for CÜR Music, the Company’s Internet music service, and to extend the Post-Closing Line of Credit Note to the Company, for up to the full amount of the aggregate net proceeds from the Offerings (1) to enable the Company to pay outstanding accounts payable, employee deferred compensation, and monthly payments due by the Company under the New Note (as defined below), and (2) for working capital and general corporate purposes. Management also feels it can enter into structured settlements with vendors and streaming services. While there is a process for requesting and approving drawdowns, it is not formally documented, approval is on a case by case basis and the terms and associated interest on the Post-Closing Line of Credit Note is to be determined, and will be reflected in the definitive documentation for the transaction.

The Company continues to actively seek sources of equity or debt financing for ongoing support of its operations. Fundraising discussions have started, however no specific terms have been set. The Company expects to launch its CÜR Music streaming product in the second or third quarter of 2018 utilizing funds from Holdings Preferred Stock and Note Offerings via a Post-Closing Line of Credit Note between Holdings and the Company. No assurances can be provided that these funds will be sufficient to effectively launch CÜR Music or to sustain the Company’s operating cash requirements until cash flow from operations are achieved, if ever. In addition, there are no assurances that the Company will be able to secure additional financing or achieve and sustain a profitable level of operations. To the extent that the Company is unsuccessful in its plans, there could be a material adverse effect on the Company, which may include ceasing operations entirely.

Note 3 - Risks and Uncertainties

The Company operates in an industry that is subject to rapid technological change and intense competition. The Company's operations are subject to significant risk and uncertainties including financial, operational, technological, content licensing, regulatory and other risks including the potential for business failure.

SEC Wells Notice

On July 19, 2017, the Company received a “Wells Notice” from the staff (the “Staff”) of the SEC. The Wells Notice provides notification to the Company that the Staff has made a preliminary determination to recommend that the SEC institute administrative proceedings against the Company pursuant to Sections 12(j) and 12(k) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), based solely upon the Company’s failure to comply with its reporting obligations under Section 13(a) of the Exchange Act. Sections 12(j) grants the SEC the right, after notice and opportunity for a hearing, to revoke the registration of a security. Section 12(k) grants the SEC the right to suspend trading in a security.

F-12

Table of Contents

CÜR MEDIA, INC.

Notes to Consolidated Financial Statements

December 31, 2017 and 2016

Note 3 - Risks and Uncertainties (Continued)

The Company filed three of the delinquent reports for 2016 and the three delinquent reports for 2017.

Vendor Defaults

Rovi Data Solutions, Inc.

Live Nation

The Company is in default under its Sponsorship Agreement (the "Live Nation Agreement") with Live Nation Marketing, Inc. ("Live Nation") as a result of the Company’s failure to pay Live Nation past due balances for the services they provided under the Live Nation Agreement. Such past due balances are accrued as of December 31, 2017. To date, the Company has not received a notice of default from Live Nation.

Settlements

The Company has successfully negotiated settlements with vendors and recognized a gain from debt relief of $1,009,429 associated with these settlements. Management will continue to negotiate delinquent outstanding accounts payable with vendors.

F-13

Table of Contents

CÜR MEDIA, INC.

Notes to Consolidated Financial Statements

December 31, 2017 and 2016

Note 4 – Net Loss per Common Share

The Company’s basic income per common share is based on net income for the relevant period, divided by the weighted average number of common shares outstanding during the period. Diluted income per common share is based on net income, divided by the weighted average number of common shares outstanding during the period, including common share equivalents, such as outstanding option and warrants to the extent they are dilutive. The computation of diluted income per share for the year ended December 31, 2017 and December 31, 2016 does not include share equivalents as all warrants and options exceeded the average market price of the Common Stock.

	For the Year Ended December 31,
	2017			2016

Basic net loss per share:
Net loss	$	(2,549,306	)	$	(6,367,990	)
Weighted-average common shares outstanding		2,550,398			2,530,705
Basic net loss per share	$	(1.00	)	$	(2.52	)
Diluted net loss per share:
Net loss	$	(2,549,306	)	$	(6,367,990	)
Weighted-average common shares outstanding		2,550,398			2,530,705
Diluted net loss per share	$	(1.00	)	$	(2.52	)

The following table summarizes securities that, if exercised, would have an anti-dilutive effect on earnings per share.

	For the Year Ended December 31,
	2017		2016

Stock options		2,051,754		2,013,574
Warrants		2,465,397		2,346,869
Total potential dilutive securities not included in loss per share		4,517,150		4,360,442

Note 5 - Property and Equipment

Property and equipment consisted of the following:

	For the Year Ended December 31,
	2017			2016

Servers, computers and other related equipment	$	25,306		$	25,306
Office furniture		7,915			7,915
Leasehold improvements		-			-
Total property and equipment		33,221			33,221
Less: accumulated depreciation		(30,719	)		(26,680	)

Total Property and Equipment	$	2,502		$	6,541

Depreciation expense totaled $4,039 and $14,289 for the years ended December 31, 2017 and 2016, respectively. No impairments of property and equipment occurred or were recognized during the fiscal years ended December 31, 2017 and 2016.

F-14

Table of Contents

CÜR MEDIA, INC.

Notes to Consolidated Financial Statements

December 31, 2017 and 2016

Note 6 - Debt Instruments

Notes Payable

On June 19, 2012, the Company entered into a promissory note (“State of CT Note”) with State of Connecticut Department of Economic and Community Development (“CT DECD”) for up to $100,000. The State of CT Note bears interest at 2.5% per annum. Principal and interest is payable in forty-eight (48) equal, consecutive monthly installments. The full principal and all accrued interest was due and payable on June 19, 2017. The Company and CT DECD also entered into a security agreement whereby the State of CT Note is secured by all properties, assets and rights of the Company. As of December 31, 2017 and December 31, 2016, the balance due totaled $33,550. The DECD has not commenced any collection proceedings against the Company.

On July 6, 2017, the Company entered into the Line of Credit Note with CÜR Holdings, LLC. The Line of Credit Note has a principal balance of $685,000, and a stated maturity date of December 6, 2017. The principal on the Line of Credit Note does not bear interest. The Line of Credit Note is not convertible. The Line of Credit Note ranks junior to the Company’s existing Secured Notes (as defined below). In connection with the Initial Closing (as defined below) of the Preferred Stock Unit Offering (as defined in Note 15 below), the Line of Credit Note was assigned and transferred to Holdings as of November 16, 2017 in exchange for 194,175 Unit Shares of Holdings and Unit Warrants to purchase 1,263,827 shares of common stock of Holdings issued to CUR Holdings, LLC. As a result, Holdings became the payee under the Line of Credit Note. Upon completion of the transaction, CUR Media is now required to pay Holdings. The assignment did not alter the obligation of the Company under the original Line of Credit Note. As of December 6, 2017, the Company is in default of its obligations to repay amounts due under the Line of Credit Note. Pursuant to the Line of Credit Note, the Company is required to pay the holder’s costs and expenses for collection, including reasonable attorneys’ fees.

As previously reported, the Company defaulted under its Digitas Agreement with Digitas, as a result of the Company’s failure to pay Digitas past due balances for the services Digitas provided under the Digitas Agreement. Digitas filed a claim against the Company for damages in the aggregate amount of $650,000 (the “Claimed Amount”), together with pre-judgment interest, post-judgment interest, costs, and attorneys’ fees. On November 15, 2017, the Company entered into a Settlement Agreement and Mutual Release (the “Settlement Agreement”) with Digitas, pursuant to which the Company agreed to pay Digitas an aggregate of $400,000, in full settlement of any and all claims arising from or relating to amounts due under the Master Multiple Services Agreement (the “Claims”). Digitas agreed to release the Company from any further Claims, subject only to the Company meeting its payment obligations under the Settlement Agreement and the Digitas Note (as defined below). Simultaneously with the execution of the Settlement Agreement, the Company issued a Promissory Note to Digitas (the “Digitas Note”) in the principal amount of $400,000. Pursuant to the Digitas Note, the Company is required to pay Digitas (a) $100,000 on or before November 17, 2017 (the “First Payment”), $100,000 on the eight (8) month anniversary of the First Payment, and (c) $200,000.00 on the one (1) year anniversary of the First Payment. If the Company defaults on its payment obligations under the Digitas Note, after notice and failure to cure, Digitas may file a Consent Judgment for the full Claimed Amount, less payments already made, if any, together with post-judgment interest and reasonable attorneys’ fees and costs incurred by Digitas for purposes of collection. At the effective time of the Initial Closing of the Preferred Stock Unit Offering (as defined in Note 15 below), the Company made the First Payment of $100,000 to Digitas.

Convertible Promissory Notes, net

On October 20, 2015, October 26, 2015, November 13, 2015, November 24, 2015, November 30, 2015, December 30, 2015 and January 14, 2016, the Company closed on Securities Purchase Agreements (the “Unsecured Note Purchase Agreements”) with certain "accredited investors" (the “Unsecured Note Buyers”), pursuant to which the Unsecured Note Buyers purchased 12% Unsecured Convertible Promissory Notes of the Company (the “Unsecured Notes”) in the aggregate principal amount of $2,113,500 (the "Unsecured Convertible Note Offering"). The aggregate gross proceeds to the Company from the Unsecured Convertible Note Offering were $2,113,500 (before deducting expenses related to the purchase and sale of the Unsecured Notes of $45,000), of which $586,000 of the proceeds were from members of the Company’s board of directors.

F-15

Table of Contents

CÜR MEDIA, INC.

Notes to Consolidated Financial Statements

December 31, 2017 and 2016

Note 6 - Debt Instruments (Continued)

The Unsecured Notes have an aggregate principal balance of $2,113,500 and a stated maturity date of 5 years from the date of issuance. The principal on the Unsecured Notes bears interest at a rate of 12% per annum, which is also payable on maturity. On April 12, 2016, with the closing of the Secured Convertible Notes Offering, certain terms of the Unsecured Notes were amended. Under the new terms of the Unsecured Notes, upon the closing of $15,000,000 in equity securities ("Equity Financing Securities") by the Company (in this case, a "Qualified Offering") all of the outstanding principal amount of the Unsecured Notes, together with accrued and unpaid interest due thereon, will automatically convert (in this case, a "Mandatory Conversion") into units of the Company's securities (the "Unsecured Note Conversion Units") at a conversion price per Unsecured Note Conversion Unit equal to the lesser of (i) $5.60 or (ii) a 20% discount to the price per share of the Equity Financing Securities. Each Unsecured Note Conversion Unit will consist of one share (the "Unsecured Note Conversion Unit Shares") of the Company's Common Stock, and one five-year warrant (the "Unsecured Note Conversion Unit Warrants") to purchase one additional share (the "Unsecured Note Conversion Unit Warrant Shares") of the Company's Common Stock at an exercise price of 125% of the Qualified Offering unit price. The terms of the amendment were in exchange for the Unsecured Note holders' subordination to the Secured Note holders.

The embedded conversion feature in the Unsecured Notes was bifurcated to a derivative liability as it was not considered to be clearly and closely related to the host agreement. The Company recorded a derivative liability and debt discount of $2,034,037 upon issuance. The debt discount is being amortized to interest expense over the term of the loan. Refer to Note 7 for discussion of the derivative liability related to the Unsecured Notes. The unamortized debt discount was $1,218,368 at December 31, 2017 and the fair value of the derivative liability was $277,326 at December 31, 2017.

The Unsecured Note Conversion Unit Warrants, to be received upon conversion of the Unsecured Notes, provide for the purchase of shares of the Company's Common Stock at an exercise price equal to (a) 125% of the price at which the Company's Equity Financing Securities are sold in a Qualified Offering. The Unsecured Note Conversion Unit Warrants are exercisable for cash only, for a term of 5 years from the date of issuance. The number of shares of common stock to be deliverable upon exercise of the Unsecured Note Conversion Unit Warrants is subject to adjustment for subdivision or consolidation of shares and other standard dilutive events.

Convertible Secured Promissory Notes, net

On April 12, 2016, April 15, 2016, May 26, 2016, June 7, 2016 and July 20, 2016, the Company entered into Secured Note Purchase Agreements with certain Secured Note Buyers, pursuant to which the Secured Note Buyers purchased Secured Notes in the aggregate principal amount of $2,515,000 (before deducting placement agent fees and expenses of $282,454) of which $255,060 were from members of the Company’s board of directors.

The Secured Notes are secured by a security interest in and lien on all now owned or hereafter acquired assets and property, real and personal, of the Company and its subsidiaries, including the Company's intellectual and technology property pursuant to the terms of a security agreement ("Security Agreement") among the Company and the Secured Note Buyers. The security interest in and liens on all assets and property of the Company will be a first priority security interest.

F-16

Table of Contents

CÜR MEDIA, INC.

Notes to Consolidated Financial Statements

December 31, 2017 and 2016

Note 6 - Debt Instruments (Continued)

The Secured Notes have an aggregate principal balance of $2,515,000, and a stated maturity date of 6 months from the date of issuance. The principal on the Secured Notes bears interest at a rate of 12% per annum, which is also payable on maturity. The Secured Notes will rank senior to all existing indebtedness of the Company, except as otherwise set forth in the Secured Notes. Upon the closing of a Qualified Offering by the Company during the term of the Secured Notes involving the sale of at least $15,000,000 in Equity Financing Securities, all of the outstanding principal amount of the Secured Notes, together with accrued and unpaid interest due thereon, will automatically convert (in this case, a "Mandatory Conversion") into units of the Company's securities (the "Secured Note Conversion Units") at a conversion price per Secured Note Conversion Unit equal to the lesser of (a) 80% of the price per share of the Equity Financing Securities sold in the Qualified Offering, or (b) $2.00. At any time prior to a Mandatory Conversion, the holders of the Secured Notes may convert all or part of the outstanding principal amount of the Secured Notes, together with accrued and unpaid interest due thereon, into Second Units at a conversion price of $2.00 per Unit (in this case, an "Optional Conversion"). Each Secured Note Conversion Unit will consists of one share (the "Secured Note Conversion Unit Shares") of the Company's Common Stock, and one five-year warrant (the "Secured Note Conversion Unit Warrants") to purchase one additional share (the "Secured Note Conversion Unit Warrant Shares") of the Company's Common Stock at an exercise price equal to (a) 125% of the price at which the Company's Equity Financing Securities are sold in a Qualified Offering in the event of a Mandatory Conversion, or (b) 125% of $2.00 in the event of an Optional Conversion. Upon failure by the Company to pay any principal amount or interest due under the Secured Notes within 5 days of the date such payment is due, or the occurrence of other event of default under the terms of the Secured Notes, the entire unpaid principal balance of the Secured Notes, together with any accrued and unpaid interest thereon, will become due and payable, without presentment, demand, protest or notice of any kind. In the event of any liquidation, dissolution or winding up of the Company, each holder of a Secured Note will be entitled to receive, pari passu with the other holders of the Secured Notes, and in preference to the holders of the Company's other outstanding securities, an amount equal to two times the principal amount of, and any accrued and unpaid interest on, such holder's Secured Note. The conversion price and number of Secured Note Conversion Units issuable upon conversion of the Secured Notes will be subject to adjustment from time to time for subdivision or consolidation of shares and other standard dilutive events.

The Company was unable to repay the noteholders upon maturity of the Notes. Pursuant to the terms of the Secured Notes, the Company’s failure to pay any principal or interest within 5 days of the date such payment is due constitutes an event of default. Following the occurrence of an event of default, among other things, the interest rate on the Secured Notes increased to 15%. On November 16, 2017, simultaneous with the Initial Closing (as discussed in Note 15), the holders of all of the Company’s existing Secured Notes (the “Secured Noteholders”), in the aggregate principal amount of $2,515,000, with accrued and unpaid interest in the aggregate of $561,203, assigned, conveyed, transferred to Holdings all of the Secured Noteholders’ right, title, interest and obligations in, to and under the Secured Notes, and all claims, suits, causes of action and any other rights thereunder, in exchange for units of securities of Holdings, at an exchange rate of $2.00 of principal and interest due under the Secured Notes per unit. Upon completion of the transaction, CÜR Media is now required to pay Holdings which is classified as due to related party on the consolidated balance sheet.

Pursuant to the terms of a Placement Agency Agreement (in this case, the "Placement Agency Agreement") between the Company and the placement agent for the Secured Convertible Note Offering (in this case, the "Placement Agent"), in connection with the closing of the Secured Convertible Note Offering, the Placement Agent was paid a commission of an aggregate of $251,500. In addition, the Placement Agent, or its designees, received warrants to purchase a number of shares of the Company’s Common Stock equal to 10% of the number of Secured Note Conversion Unit Shares into which Secured Notes sold in the Secured Convertible Note Offering to Secured Buyers introduced to the Secured Convertible Note Offering by the Placement Agent, and 8% of the number of Secured Note Conversion Unit Shares into which Secured Notes sold in the Secured Convertible Note Offering to Secured Note Buyers introduced to the Secured Convertible Note Offering by the Company or its representatives the Placement Agent’s warrants have a term of 5 years and an exercise price per share equal to the exercise price of the Secured Note Conversion Unit Warrant Shares issued to Secured Buyers introduced to the Secured Convertible Note Offering by the Placement Agent upon conversion ("Placement Agent Warrants").

F-17

Table of Contents

CÜR MEDIA, INC.

Notes to Consolidated Financial Statements

December 31, 2017 and 2016

Note 6 - Debt Instruments (Continued)

The embedded conversion feature in the Secured Notes was bifurcated to a derivative liability as it was not considered to be clearly and closely related to the host agreement. The Company recorded a derivative liability and debt discount of $2,091,053 upon issuance. The debt discount was fully amortized to interest expense over the term of the loan. Refer to Note 5 for discussion of the derivative liability related to the Secured Notes. The derivative liability was $1,264,978 at December 31, 2017.

The Secured Note Conversion Unit Warrants, to be received upon conversion of the Secured Notes, provide for the purchase of shares of the Company's Common Stock at an exercise price equal to (a) 125% of the price at which the

Company's Equity Financing Securities are sold in a Qualified Offering in the event of a Mandatory Conversion, or (b) 125% of $2.00 in the event of an Optional Conversion. The Secured Note Conversion Unit Warrants are exercisable for cash only, for a term of 5 years from the date of issuance. The number of shares of Common Stock to be deliverable upon exercise of the Secured Note Conversion Unit Warrants is subject to adjustment for subdivision or consolidation of shares and other standard dilutive events.

The Company granted registration rights to each Secured Buyer with respect to the Secured Note Conversion Unit Shares and Secured Note Conversion Unit Warrant Shares, and to the Placement Agent, with respect to the Common Stock issuable upon exercise of the Placement Agent Warrants, in each case on a pari passu basis with, and upon substantially the same terms as the registration rights granted to, the investors in a Qualified Offering.

Note 7 - Derivative Liabilities

The PPO Warrants, 2014 Broker Warrants and Warrant Agent Warrants described in Note 9 qualify for derivative classification due to the price protection provisions on the exercise price. The initial fair value of these liabilities was recorded as an increase to derivative liabilities and a decrease in additional paid in capital as the warrants were issued in connection with the closings under the private placement offerings. The embedded conversion feature of the Unsecured Notes and Secured Notes described in Note 6 also qualifies for derivative classification. The initial fair value of these liabilities was recorded as an increase to derivative liabilities with a corresponding debt discount. The fair value of these liabilities will be re-measured at the end of every reporting period and the change in fair value will be reported in the statement of operations as a gain or loss on derivative financial instruments included in other income or expenses.

Certain securities the Company issued in the private placement offering it conducted in 2014 (the “2014 PPO”) had price-based anti-dilution protection, if, within twenty-four (24) months after the final closing of the 2014 PPO, March 28, 2016, the Company issued additional shares of Common Stock or Common Stock equivalents (subject to customary exceptions) for a consideration per share less than $13.00. Of the 744,756 original PPO warrants issued in the 2014 PPO (the “PPO Warrants”), 133,739 still remained with these priced-based anti-dilution rights. As of March 28, 2016, the price-based anti-dilution protection provisions expired. The Company re-measured the fair value of the warrants at March 28, 2016 and reclassified them to equity.

The table below sets forth a summary of changes in the fair value of the Company's Level 3 financial liabilities for the periods ended December 31, 2017 and 2016.

F-18

Table of Contents

CÜR MEDIA, INC.

Notes to Consolidated Financial Statements

December 31, 2017 and 2016

	December 31, 2017		December 31, 2016

Balance at the beginning of year	$	292,589	$	2,052,893

Addition of new derivative liabilities (warrants)		-		4,444

Change in fair value of warrants		-		(260,594	)

Addition of new derivative liabilities (conversion features)		-		2,312,603

Change in fair value of the conversion features on unsecured convertible notes		225,488		(1,554,582	)

Change in fair value of the conversion features on secured convertible notes		1,024,227		(1,970,760	)

Reclassification of derivative liabilities to equity		-		(291,415	)

Balance at the end of the year	$	1,542,304	$	292,589

The Company uses Level 3 inputs for its valuation methodology for the derivative liabilities as their fair values were determined using the Black-Scholes option pricing model based on various assumptions. The model incorporates the price of a share of the Company's Common Stock, volatility, risk free rate, dividend rate and estimated life.

Significant changes in any of these inputs in isolation would result in a significant change in the fair value measurement. The expected stock price volatility for the Company's derivatives is based on the historical volatility since the date of the Company's 2014 PPO. As required, these are classified based on the lowest level of input that is significant to the fair value measurement.

The weighted average per-share fair value of each Common Stock warrant derivative liability of $1.91 was determined at March 28, 2016, the date of expiration, using the Black-Scholes pricing model using the following weighted average assumptions:

Expected

Volatility

Risk-free

Interest Rate

Expected

Dividend Yield

Expected Life

(in years)

At March 28, 2016 – warrant derivative expiration date

158.84

1.76

3.45

The weighted average per-share fair value of the derivative liabilities associated with the embedded conversion features on the Unsecured Notes of $4.66, $0.16 and $0.89 determined at January 14, 2016 and December 31, 2016 and December 31, 2017, respectively using the Black-Scholes pricing model using the following weighted average assumptions:

	Expected Volatility			Risk-free Interest Rate			Expected Dividend Yield			Expected Life (in years)

Issuance on January 14, 2016		114.48	%		1.52	%		0	%		5.00
December 31, 2016		176.74	%		1.93	%		0	%		3.89
December 31, 2017		181.17	%		2.20	%		0	%		3.14

F-19

Table of Contents

CÜR MEDIA, INC.

Notes to Consolidated Financial Statements

December 31, 2017 and 2016

Note 7 - Derivative Liabilities (Continued)

The weighted average per-share fair value of the derivative liabilities associated with the embedded conversion features on the Secured Notes of $1.62, $2.69, $2.80, $2.07, $1.47, $0.19 and $1.01 determined at April 12, 2016, April 15, 2016, May 26, 2016, June 7, 2016, July 20, 2016, December 31, 2016 and December 31, 2017, respectively using the Black-Scholes pricing model using the following weighted average assumptions:

	Expected Volatility			Risk-free Interest Rate			Expected Dividend Yield			Expected Life (in years)

Issuance on April 12, 2016		159.81	%		1.22	%		0	%		5.00
Issuance on April 15, 2016		161.16	%		1.22	%		0	%		5.00
Issuance on May 26, 2016		165.03	%		1.35	%		0	%		5.00
Issuance on June 7, 2016		165.72	%		1.23	%		0	%		5.00
Issuance on July 20, 2016		166.24	%		1.15	%		0	%		5.00
December 31, 2016		176.74	%		1.93	%		0	%		4.31
December 31, 2017		181.17	%		2.20	%		0	%		3.31

Note 8 - Related Party Transactions

During the year ended December 31, 2016, the members of the Company’s board of directors funded a total of $141,000 under the Unsecured Notes and $255,060 under the Secured Notes.

CÜR Media and Holdings are considered to be related parties based on several factors, including common control. Please reference Notes 1, 4, 9 and 12 for details the nature of the relationship and transactions between the companies.

Note 9 - Common Stock Warrants

As discussed in Note 7, certain securities the Company issued in the 2014 PPO had price-based anti-dilution protection, if, within twenty-four (24) months after the final closing of the 2014 PPO, which occurred on March 28, 2016, the Company issues additional shares of Common Stock or common stock equivalents (subject to customary exceptions) for a consideration per share less than $13.00. Of the 744,756 original PPO Warrants, 133,739 still remained with these priced-based anti-dilution rights. Upon consummation of the Offer to Amend and Exercise the PPO Warrants, and the issuance of the Warrant Agent Warrants to the Warrant Agent, the anti-dilution provisions were triggered and the non-participating warrant holders received, or are entitled to receive (i) a reduction in the price of their PPO Warrants from $26.00 per share to $23.01 per share, (ii) an aggregate of 17,180 additional shares of Common Stock, and (iii) and aggregate of 17,180 additional warrants to purchase shares of Common Stock of the Company at an exercise price of $23.01 per share.

In addition, as discussed in Note 6, with the issuance of the Unsecured Notes, the anti-dilution provisions were triggered, and the non-participating warrant holders are now entitled to receive (i) a reduction in the price of their PPO Warrants from $23.01 per share to $20.50 per share, (ii) an aggregate of 18,674 additional shares of Common Stock, and (iii) an aggregate of 18,674 additional warrants to purchase shares of Common Stock of the Company at an exercise price of $20.50 per share.

On January 12, 2016, the Company warrants to certain content providers ("Content Provider Warrants") to purchase an aggregate of 215,279 shares (the "Content Provider Warrant Shares") of the Company's Common Stock, at a weighted average exercise price of $6.41 per share. The Content Provider Warrants have a weighted average contractual term of 6.45 years. The exercise price and number of Content Provider Warrant Shares are subject to adjustment for any stock dividend, stock split, stock combination, recapitalization, reclassification, reorganization or other similar event.

F-20

Table of Contents

CÜR MEDIA, INC.

Notes to Consolidated Financial Statements

December 31, 2017 and 2016

Note 9 - Common Stock Warrants (Continued)

On January 8, 2017, the Company entered into an employment agreement with an investor relations analyst, pursuant to which he agreed to provide the Company with certain investor relations services. In consideration for such services, the Company issued the investor relations analyst a 5-year warrant to purchase 40,000 shares of the Company’s Common Stock at an exercise price of $1.00 per share.

Common Stock warrant activity during the year ended December 31, 2017 was as follows:

	Common Stock Warrants Outstanding
	Warrants Outstanding		Weighted-Average Exercise Price

Balance as of December 31, 2016		622,576	$	14.66
Granted		40,000		1.00
Cancelled/Forfeited		-		-
Exercised		-		-
Balance as of December 31, 2017		662,576	$	13.83

The Company uses Level 3 inputs for its valuation methodology for the warrants issued, as their fair values were determined using the Black-Scholes option pricing model based on various assumptions. The model incorporates the price of a share of the Company's Common Stock, volatility, risk free rate, dividend rate and estimated life. Significant changes in any of these inputs in isolation would result in a significant change in the fair value measurement. The weighted average per-share fair value of each Common Stock warrant that qualified to be recorded as permanent equity of $0.32 was determined on the date of grant using the Black-Scholes pricing model using the following weighted average assumptions:

	Expected Volatility			Risk-free Interest Rate			Expected Dividend Yield			Expected Life (in years)

Issuance on January 12, 2016		114.03	%		1.79	%		0	%		6.45
Issuance on January 8, 2017		177.06	%		1.89	%		0	%		5.00

Note 10 – Common Stock

On May 26, 2015, the Company’s board of directors approved and authorized the Company to effect a reverse stock split (the "Reverse Stock Split") at a ratio of not less than 1-for-5 and not more than 1-for-15 (the "Reverse Split Ratio"). On February 9, 2016, the Company filed a certificate of amendment ("Certificate of Amendment") to its Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware, pursuant to which, effective as of February 16, 2016, the Company effected the Reverse Stock Split at a rate of 1-for-13. Throughout this report, the reverse split was retroactively applied to all periods presented.

F-21

Table of Contents

CÜR MEDIA, INC.

Notes to Consolidated Financial Statements

December 31, 2017 and 2016

Note 11 – Equity Incentive Awards

Stock Compensation Plans

In November 2008, the Company’s board of directors adopted the 2008 Restricted Stock Plan, as amended (the "2008 Plan"). The 2008 Plan provided for the issuance of restricted common shares ("options").

Under the 2008 Plan, the Company determined various terms and conditions of awards including option expiration dates (no more than ten years from the date of grant), vesting terms (generally over a four-year period), exercise price, and payment terms.

Certain of the Company's option grants included a right to repurchase a terminated individual's options at a repurchase price equal to the lower of the exercise price or the fair value of the restricted common stock at the termination date, during the eighteen (18) months following the termination of an individual's service with the Company, for any reason.

Upon closing of the Contribution discussed in Note 1, the board of directors adopted, and the stockholders approved, the 2014 Equity Incentive Plan (the "2014 Plan") which provides for the issuance of equity awards of up to 307,693 shares of Common Stock to officers, key employees, consultants and directors. Upon effectiveness of the Contribution, 500,000 options outstanding under the 2008 Plan were exchanged for an aggregate of (i) approximately 102,681 non-statutory stock options to purchase shares of the Company's Common Stock at an average exercise price of approximately $2.86 per share, and (ii) approximately 24,335 restricted stock awards (of which approximately 17,068 were fully vested and represented approximately 17,068 issued and outstanding shares of the Company's Common Stock). On April 21, 2014, we amended our 2014 Plan to increase the total number of shares of our Common Stock reserved for issuance thereunder from 307,693 to 326,924. On October 8, 2014, we amended our 2014 Plan to increase the total number of shares of our Common Stock reserved for issuance thereunder from 326,924 to 338,462.

The number of shares of our Common Stock subject to the 2014 Plan, any number of shares subject to any numerical limit in the 2014 Plan, and the number of shares and terms of any incentive award are expected to be adjusted in the event of any change in our outstanding Common Stock by reason of any stock dividend, spin-off, split-up, stock split, reverse stock split, recapitalization, reclassification, merger, consolidation, liquidation, business combination or exchange of shares or similar transaction.

On September 25, 2015, the Company’s board of directors adopted the 2015 Equity Incentive Plan (the "2015 Plan") to provide the Company with flexibility in its ability to motivate, attract, and retain the services of members of the board of directors, key employees and consultants. The 2015 Plan provides for the issuance of equity awards of up to 307,693 shares of Common Stock. The 2015 Plan was amended on September 23, 2016 to make certain clarifications with respect to the grant of incentive stock options under the 2015 Plan.

F-22

Table of Contents

CÜR MEDIA, INC.

Notes to Consolidated Financial Statements

December 31, 2017 and 2016

Note 11 – Equity Incentive Awards (Continued)

Stock Options

Option activity during the year ended December 31, 2017 was as follows:

	Options Outstanding
	Outstanding Options		Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term

Balance as of January 1, 2017		269,107	$	7.32		0.0
Granted		-	$	-
Cancelled/Forfeited		-	$	-
Exercised		-	$	-
Balance as of December 31, 2017		269,107	$	7.32		0.0
Exercisable December 31, 2017		269,107	$	7.32

Summary information regarding the options outstanding and exercisable at December 31, 2017 is as follows:

	Outstanding						Exercisable
Range of Exercise Prices	Number Outstanding (in shares)		Weighted Average Remaining Contractual Life (in years)		Weighted Average Exercise Price		Number Exercisable (in shares)		Weighted Average Exercise Price

$ 0.50 - 4.00		107,754		-	$	1.23		107,754	$	1.23

$ 4.01 - 8.00		43,671		-	$	6.66		43,671	$	6.66

$ 8.01 - 12.00		7,678		-	$	9.47		7,678	$	9.47

$ 12.01 - 23.01		110,004		-	$	13.41		110,004	$	13.41

		269,107						269,107

Valuation of Awards

Under ASC 718, the weighted average grant date fair value of options granted was $3.79 for options granted for the year ended December 31, 2016. There were no grants for the year ended December 31, 2017. The per-share fair value of each stock option was determined on the date of grant using the Black-Scholes model using the following weighted average assumptions:

F-23

Table of Contents

CÜR MEDIA, INC.

Notes to Consolidated Financial Statements

December 31, 2017 and 2016

Note 11 – Equity Incentive Awards (Continued)

	December 31, 2016
Exercise Price		2.75
Expected life (years)		6.00
Risk-free interest rate		1.93	%
Expected volatility		176.74	%
Expected dividend yield		0	%

The expected life of options granted represents the weighted average period that the options are expected to remain outstanding. The Company determined the expected life assumption based on the Company's historical exercise behavior combined with estimates of the post-vesting holding period. Prior to May 2015, the expected volatility used in the valuation of the stock options was based on historical volatility of publicly traded peer companies due to the limited trading history of the Company's Common Stock. During the second quarter of 2015, the expected stock price volatility for the Company's stock options was based on the historical volatility since the date of the Company's 2014 PPO. The risk-free interest rate is based on the implied yield currently available on U.S. Treasury issues with terms approximately equal to the expected life of the option. The Company currently has no history or expectation of paying cash dividends on its stock options.

Options to Non-Employees

The per-share fair value of options granted to non-employees is estimated on the date of grant and then re-measured each reporting period until the options vest using the Black- Scholes option pricing model with the same assumptions as those used for employee awards with the exception of expected term. The expected term for non- employee awards is the contractual term of 10 years on the date of grant. As of December 31, 2017 and 2016, a total of 23,777 options issued to non-employees were outstanding, and 23,777 were vested.

During the years ended December 31, 2017 and 2016, no stock-based compensation expenses related to option grants made to non-employees was recorded and all compensation cost related to stock options granted to non-employees was previously recognized. The fair value of these options will be re-measured each reporting date until the options vest. The re-measured fair value will be recognized as compensation expense over the remaining vesting term of the options.

Stock-based Compensation Expense

As of December 31, 2017, total compensation cost related to stock options granted, but not yet recognized, was $0 given that the Company laid off its entire workforce. Stock-based compensation expenses related to all employee and non-employee stock-based awards for the year ended December 31, 2017 and 2016 were $0 and $183,950, respectively.

Restricted Stock Awards

The Company issued restricted stock awards with respect to 24,335 underlying shares under the 2008 Plan. The restricted stock awards vested over a term of four years with 25% per year. As of December 31, 2017 and December 31, 2016, 24,335 restricted common shares were outstanding but not yet issued under these awards. The Company is obligated to issue these awards upon request by the holder of the award. During each of the twelve-month periods ended December 31, 2017 and 2016, the Company recorded $0 in stock based. As of December 31, 2017, there was no unrecognized stock-based compensation expense related to restricted stock awards granted.

F-24

Table of Contents

CÜR MEDIA, INC.

Notes to Consolidated Financial Statements

December 31, 2017 and 2016

Note 12 - Income Taxes

Prior to January 28, 2014 the Company's wholly owned subsidiary, CÜR Media, LLC was a limited liability company, accordingly no provision for income taxes has been made in the accompanying financial statement for the period from January 1, 2013 until January 28, 2014 as taxable income or losses are reportable on the tax returns of the members of the Company.

Prior to the Contribution, CÜR Media, Inc., formerly Duane Street, Inc., filed corporate income tax returns.

The Company measures deferred tax assets and liabilities using enacted tax rates that will apply in the years in which the temporary differences are expected to be recovered or paid. Accordingly, the Company’s deferred tax assets and liabilities including valuation allowance were adjusted to reflect the reduction in the U.S. corporate tax rates from 35% to 21%. This resulted in a $2,255,396 reduction in the provision and corresponding valuation allowance.

Income tax provision (benefit) for the year ended December 31, 2017 and 2016 is summarized below:

	2017			2016

Net operating loss carryforwards - Federal	$	3,795,457			5,706,090
Net operating loss carryforwards - State		95,066			582,490
Stock-based compensation		85,961			139,174
Other temporary differences		238,341			425,358
Totals		4,214,825			6,853,112
Less valuation allowance		(4,214,825	)		(6,853,112	)
Deferred tax assets	$	-			-

As of December 31, 2017, the Company had potentially utilizable Federal and state net operating loss tax carryforwards of approximately $18,799,000 and $20,179,000, respectively. The net operating loss tax carryforwards will start to expire in 2033.

The utilization of the Company's net operating losses may be subject to limitation due to the "change of ownership provisions" under Section 382 of the Internal Revenue Code and similar state provisions. Such limitation may result in the expiration of the net operating loss carryforwards before their utilization.

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 as of December 31, 2017 and 2016 are as follows:

	2017			2016
Statutory Federal tax rate		21.0	%		34.0	%
State income tax rate (net of Federal)		2.9	%		6.2	%
Other permanent differences		(10.6)	%		7.5	%
Effect of valuation allowance		(13.4)	%		(47.7	)%
Effective tax rate		0.0	%		0.0	%

A valuation allowance is provided when it is more likely than not that some portion or all of the deferred tax assets will not be realized. In accordance with ASC 740, at December 31, 2017 the Company determined that a valuation allowance should be recognized against deferred tax assets because, based on the weight of available evidence, it is more likely than not (i.e. greater than 50% probability) that some portion or all of the deferred tax asset may not be realized in the future. The Company recognized a reserve of 100% of the amounts of the deferred tax assets in the amount of $5,461,295.

Management believes that the Company does not have any tax positions that will result in a material impact on the Company's financial statements because of the adoption of ASC740. However, management's conclusion may be subject to adjustment at a later date based on ongoing analyses of tax laws, regulations and related Interpretations. The Company will report any tax-related interest and penalties related to uncertain tax positions as a component of income tax expense.

F-25

Table of Contents

CÜR MEDIA, INC.

Notes to Consolidated Financial Statements

December 31, 2017 and 2016

Note 12 - Income Taxes (Continued)

There are open statues of limitations for taxing authorities in federal and state jurisdictions to audit the Company's tax returns from 2012 through the current period. There have been no income tax related interest or penalties assessed or recorded.

Note 13 - Commitments and Contingencies

Master Subscription Agreement with Zuora

On July 31, 2014, the Company entered into a limited license agreement (the “Master Subscription Agreement”) with Zuora, Inc. (“Zuora”) that provided the Company with a non-exclusive, non-transferable worldwide limited license to use Zuora’s online integrated subscription management, billing, and data analysis services. The initial order form covered the implementation and development period ending October 31, 2014. In addition, the Company agreed to an initial 36-month service term, subsequent to implementation.

On October 12, 2016, CÜR Media received a notice of default from Zuora confirming that the Company was in default under the Master Subscription Agreement with Zuora as a result of the Company’s failure to pay Zuora past due balances in the amount of $112,734 for the services they provided under the Master Subscription Agreement.

On July 31, 2017, the Company and Zuora signed a new order form (“New Order Form”) under the Master Subscription Agreement, providing for the full settlement and release of the parties from all obligations under the old order form, dated July 31, 2014, in consideration for entering into the New Order Form. Upon execution of the New Order Form, the Company paid Zuora $125,000 and accrued $25,000 as of December 31, 2017 for the first year of the three-year agreement for Zuora to provide subscription services to the Company.

As of December 31, 2017, the Company has paid Zuora $125,000.

Distribution Agreement with MediaNet

On November 10, 2014, the Company entered into a Distribution Agreement (the “MediaNet Agreement”) with MediaNet Digital, Inc. (“MediaNet”) which provided the Company with a catalog of sound recordings and metadata which enabled and provided for the delivery of sound recordings to end users of CÜR Music. The agreement remains in effect for a period of three years following the effective date of November 7, 2014. The agreement automatically renews for successive one-year terms unless terminated by MediaNet or the Company.

Pursuant to the agreement, the Company was required to pay a set-up fee. In addition, the Company was required to pay a monthly technology licensing fee during the initial term, a monthly usage fee and pay for any additional professional services and technical assistance or customization of approximately $10,000 in the aggregate. To date, the Company has not received a notice of default from MediaNet and the MediaNet Agreement has not been terminated.

As of December 31, 2017, the Company has not made any payments to MediaNet however has accrued for balances due. The Company intends to cure the default and/or enter into a new contract with MediaNet now that it is adequately funded.

Content Licenses

The Company entered into agreements with certain music labels (“Music Label Agreements”), pursuant to which the Company was provided limited, non-exclusive licenses to digitally distribute certain sound recordings and related materials owned or controlled by the music labels (“Music Labels”) in connection with CUR Music. The Company had also entered into agreements with certain music publishing companies (“Publishing Agreements”), pursuant to which the Company was been provided the non-exclusive right and license to use certain musical works owned, controlled and/or administered by the music publishers (“Music Publishers”) in connection with CÜR Music, within the United States and its territories, commonwealths, and possessions. The Music Label Agreements and Publishing Agreements may be collectively referred to herein as the "Content Agreements," the Music Labels and Music Publishers may be collectively referred to herein as the "Content Providers."

F-26

Table of Contents

CÜR MEDIA, INC.

Notes to Consolidated Financial Statements

December 31, 2017 and 2016

Note 13 - Commitments and Contingencies (Continued)

The Company was not able to make the initial payments when due on January 31, 2016. As a result, the Company’s Music Label Agreements with Sony Music Entertainment ("SME") and UMG Recordings, Inc. ("UMG") were terminated as a result of the Company’s failure to pay SME and UMG the advances due pursuant to such agreements, respectively. The Company also defaulted of its Music Label Agreement with Warner Music, Inc. (“WMG”) as a result of the Company’s failure to pay WMG the advance due pursuant to such agreement. WMG did not initiate termination of their agreement.

Prior to the Initial Closing of the Preferred Stock Unit Offering, and as a condition thereto, Holdings renegotiated the content licensing agreements (“New Music Label Agreements”). Upon consummation of the Initial Closing of the Preferred Stock Unit Offering, Holdings paid Label Advances due to the Music Labels pursuant to the New Music Label Agreements in the aggregate amount of $2,500,000. The Company joined one of the New Music Label Agreements, while the other New Music Label Agreements provide Holdings with the right to sublicense its rights under such agreement to the Company. The New Music Label Agreements enable the Company to digitally distribute sound recordings and related materials owned or controlled by the Music Labels in connection with the Company’s Internet music service, CÜR Music. The New Music Label Agreements released the Company of prior obligations under the original Music Label Agreements. At the current time, the Company does not have a contract with Holdings that requires payment for sublicenses and access to the sound recordings and related materials.

The Company and Holdings are required to pay certain minimum content fees over the term of the Content Agreements with Content Providers as follows: $15,100,000 in the first year of the agreements, $24,500,000 in the second year of the agreements, and $18,400,000 in the third year of the agreements.

Minimum payments to be paid by the Company and/or Holdings related to the previously described contracts is summarized as follows:

Twelve Months Ended December 31,	Total

2018		9,730,000	*

2019		23,500,000	*

2020		14,337,500	*

_______________

*	Additional contract terms include per subscriber, stream or percentage of revenue charges.

Note 14 – Legal Proceedings

F-27

Table of Contents

CÜR MEDIA, INC.

Notes to Consolidated Financial Statements

December 31, 2017 and 2016

Note 14 – Legal Proceedings (Continued)

Certain of the Company’s former employees filed outstanding claims against the Company for payment of unpaid wages totaling $50,000 which are accrued and remain outstanding. The Company has agreed to settlements on other employee claims totaling $237,343 which also are accrued and remain outstanding.

Cybercoders, Inc. (“Cybercoders”), a recruiter used in connection with certain employee placements, has filed a claim against the Company for failure to pay Cybercoders past due balances for the services they provided. The Company and Cybercoders have agreed to a settlement amount of $5,000.

24G, LLC (“24G”), a consultant that provided the Company with marketing services, has filed a claim against the Company for failure to pay 24G past due balances in the amount of $71,898 for the services they provided. The Company reached settlement with 24G in November 2017.

A consultant that provided the Company with software development services, has filed a claim against the Company for failure to pay past due balances for services provided. A judgement was entered and recorded in the Circuit Court for Montgomery County, Maryland for $60,000 which was accrued by the Company.

An attorney for iTexico LLC (“iTexico”), a software developer the Company used, has contacted the Company in an effort to collect $53,750 of past due balances iTexico claims it is owed for the services they provided. The Company reached a settlement amount of $9,000 with iTexico in November 2017.

Note 15 – CUR Holdings, Inc.

Transactions and Proposed Additional Transactions with Holdings

F-28

Table of Contents

CÜR MEDIA, INC.

Notes to Consolidated Financial Statements

December 31, 2017 and 2016

Note 15 – CUR Holdings, Inc. (Continued)

The net proceeds from the Preferred Stock Unit Offering and $2.5 Million Note Offering (as defined below) (together, the “Offerings”), in the aggregate amount of $6,932,288 (after deducting fees and expenses related to the Offerings in the aggregate amount of $722,074 (including placement agent fees, legal fees and expenses and fees payable to the escrow agent)) are to be used to pay the required Label Advances (as defined below) to the Music Labels (as defined below) sufficient to allow Holdings and/or the Company to proceed with soliciting subscriptions for CÜR Music, the Company’s Internet music service, and to extend the Post-Closing Line of Credit Note to the Company, for up to the full amount of the aggregate net proceeds from the Offerings (1) to enable the Company to pay outstanding accounts payable, employee deferred compensation, and monthly payments due by the Company under the New Note (as defined below), and (2) for working capital and general corporate purposes. Management also feels it can enter into structured settlements with vendors and streaming services. While there is a process for requesting and approving drawdowns, it is not formally documented, approval is on a case by case basis and the terms and associated interest on the Post-Closing Line of Credit Note is to be determined, and will be reflected in the definitive documentation for the transaction.

In connection with the Initial Closing of the Preferred Stock Unit Offering, Holdings issued 1,195,033 Preferred Stock Units to the Unit Purchasers, consisting of 1,195,033 Unit Shares and 7,778,119 Unit Warrants, in consideration for (a) gross proceeds of $6,154,362 from the Preferred Stock Unit Offering.

Simultaneously with the closing of the Preferred Stock Unit Offering, Holdings consummated a private placement offering (the “$2.5 Million Note Offering” and, together with the Preferred Stock Unit Offering, the “Offerings”), to one “accredited investor” (the “New Note Purchaser”), intended to be exempt from registration under the Securities Act, pursuant to Section 4(a)(2) and/or Rule 506 of Regulation D promulgated thereunder, of (a) a 12% senior secured promissory note of Holdings, in the principal amount of $2,500,000 (the “New Note”), with a term of twelve (12) months, at a purchase price of 100% of the face value amount of the New Note, and (b) 10-year warrants (the “New Note Warrants”) to purchase 1,000,000 shares of common stock of Holdings, at an exercise price per share of $0.0001.

In addition, simultaneously with the Initial Closing of the Preferred Stock Unit Offering, the holders (the “Secured Noteholders”) of all of the Company’s existing 12% senior secured convertible promissory notes, in the aggregate principal amount of $2,515,000, with accrued and unpaid interest in the aggregate of $561,203 (each, a “Secured Note” and, collectively, the “Secured Notes”), assigned, conveyed, transferred and set over to Holdings all of the Secured Noteholders’ right, title, interest and obligations in, to and under the Secured Notes, and all claims, suits, causes of action and any other rights thereunder, in exchange for units (each, a “Secured Note Conversion Unit” and, collectively, the “Secured Note Conversion Units”) of securities of Holdings, at an exchange rate of $2.00 of principal and interest due under the Secured Notes per unit, in an transaction intended to be exempt from registration under the Securities Act, pursuant to Section 4(a)(2) and/or Rule 506 of Regulation D promulgated thereunder (the “Secured Note Assignment Transaction”). Each Secured Note Conversion Unit consisted of (a) one (1) share of common stock of Holdings (each, a “Secured Note Conversion Share” and, collectively, the “Secured Note Conversion Shares”), and (b) a 5-year warrant (each, a “Secured Note Conversion Warrant” and, collectively, the “Secured Note Conversion Warrants”) to purchase one (1) share of common stock of Holdings for every share of common stock of Holdings received upon exchange, at an exercise price per share equal to $1.00. Upon completion of the transaction, CÜR Media will be required to pay Holdings.

The Assignment Transaction did not alter the obligation of the Company under the original Secured Notes.

F-29

Table of Contents

CÜR MEDIA, INC.

Notes to Consolidated Financial Statements

December 31, 2017 and 2016

Note 15 – CUR Holdings, Inc. (Continued)

Prior to the Initial Closing of the Preferred Stock Unit Offering, and as a condition thereto, Holdings entered directly into content licensing agreements (“New Music Label Agreements”) with the three major music labels (the “Music Labels”). Upon consummation of the Initial Closing of the Preferred Stock Unit Offering, Holdings paid Label Advances due to the Music Labels pursuant to the Content Licensing Agreements in the aggregate amount of $2,500,000. In addition, Holdings issued the Music Labels warrants to purchase an aggregate of 1,750,000 shares of common stock of Holdings, at an exercise price of $1.00 per share.

The Company joined one of the New Music Label Agreements, while the other two New Music Label Agreements provide Holdings with the right to sublicense its rights under such agreement to the Company. The New Music Label Agreements enable the Company to digitally distribute sound recordings and related materials owned or controlled by the Music Labels in connection with the Company’s Internet music service, CÜR Music.

On November 16, 2017, the board of directors of Holdings increased the number of members constituting the board of directors from one (1) to three (3). The board of directors of Holdings then appointed Thomas Brophy, the Company’s President, Chief Executive Officer, Interim Chief Financial Officer and Treasurer, and a member of the Company’s board of directors, and Edward P. Swyer, a member of the board of directors of the Company, as members of the board of directors of Holdings, to fill the two vacancies resulting from the increase to the number of seats on the board of directors, to serve until their successors shall be duly appointed, unless they resign, are removed from office, or are otherwise disqualified from serving as directors for Holdings. As a result of the increase and parties nominated to the respective boards, the two companies have a common board of directors.

Immediately following the Initial Closing of the Preferred Stock Unit Offering, Holdings issued one (1) share of its Series B voting preferred stock (“Series B Preferred Stock”) to William F. Duker, the President and Treasurer of Holdings, and a member of the board of directors of Holdings. Pursuant to the Certificate of Designation of Series B Voting Preferred stock of Holdings (the Series B Certificate of Designation”), Mr. Duker, the holder of the Series B Preferred Stock, has the right (a) to elect the number of directors on the board of directors of Holdings constituting the majority, and (b) to approve any merger (including the Merger), asset sale (including the Asset Transfer), or other fundamental transaction to be effected by Holdings.

The Company and Holdings anticipate that, if the Merger is consummated:

	·	the stockholders of Holdings will receive, in exchange for all of their issued and outstanding shares of capital stock of Holdings (including all issued and outstanding shares of preferred stock of Holdings), shares of the Company’s capital stock (including shares of preferred stock of the Company), at an exchange rate of 1-for-1, with appropriate adjustments and, otherwise, on their original terms and conditions;

	·	outstanding warrants to purchase shares of common stock of Holdings will be exchanged for warrants to purchase shares of the Company’s Common Stock, at the same ratio at which shares of outstanding capital stock of Holdings are exchanged for shares of the Company’s capital stock, with appropriate adjustments and, otherwise, on their original terms and conditions;

F-30

Table of Contents

CÜR MEDIA, INC.

Notes to Consolidated Financial Statements

December 31, 2017 and 2016

Note 15 – CUR Holdings, Inc. (Continued)

	·	the principal and any accrued and unpaid interest due under the Company’s existing 12% unsecured convertible promissory notes (the “Unsecured Notes”) will convert into units of the Company’s securities, at a conversion price of $2.00 of principal and interest due under said note per unit, each consisting of (a) one (1) share of the Company’s Common Stock, and (b) a 5-year warrant to purchase one (1) share of the Company’s Common Stock for every share of the Company’s Common Stock received upon conversion, at an exercise price equal to $1.00 per share;

	·	the Standard Holdings Note will be assigned and transferred to the Company, and the Company will become the payee under such note;

	·	the Line of Credit Note, the Secured Notes, and the Post-Closing Line of Credit Note will be forgiven and canceled by Holdings;

	·	the Company will assume the obligations under the $2,500,000 New Note; and

	·	the Company will assume the New Music Label Agreements with the Music Labels, if possible.

The Company and Holdings anticipate that, if the Asset Transfer is consummated:

	·	the Company’s stockholders will receive, in exchange for all of the assets and liabilities constituting the Company’s Music Streaming Business, shares of capital stock of Holdings, at an exchange rate of 1-for-1 of equivalent classes of preferred and common stock, with appropriate adjustments and, otherwise, on their original terms and conditions;

	·	outstanding warrants and stock options to purchase shares of the Company’s Common Stock will be exchanged for warrants and stock options to purchase shares of common stock of Holdings, at the same ratio at which shares of the Company’s outstanding capital stock are exchanged for shares of capital stock of Holdings, with appropriate adjustments and, otherwise, on their original terms and conditions;

	·	if necessary, the board of directors of Holdings will adopt an Equity Incentive Plan (the “EIP”) with such number of shares available under the EIP that equals 15% of the fully diluted capitalization of Holdings after giving effect to the Asset Transfer, covering outstanding stock options to purchase shares of the Company’s Common Stock, and for the future issuance, at the discretion of the board of directors of Holdings, of incentive awards to officers, key employees, consultants and directors;

	·	the principal and any accrued and unpaid interest due under the Company’s existing Unsecured Notes will convert into units of securities of Holdings, at a conversion price of $2.00 per unit, each unit consisting of (a) one (1) share of common stock of Holdings, and (b) a 5-year warrant to purchase one (1) share of common stock of Holdings for every share of common stock of Holdings received upon conversion, at an exercise price equal to $1.00 per share;

	·	the Standard Holdings Note will remain payable to Holdings;

F-31

Table of Contents

CÜR MEDIA, INC.

Notes to Consolidated Financial Statements

December 31, 2017 and 2016

Note 15 – CUR Holdings, Inc. (Continued)

	·	the Line of Credit Note, the Secured Notes, and the Post-Closing Line of Credit Note will be forgiven and canceled by Holdings as partial consideration for the transfer to Holdings of the assets and liabilities constituting the Company’s Music Streaming Business;

	·	Holdings will remain responsible for the obligations under the $2,500,000 New Note; and

	·	and sublicenses under the relevant New Music Label Agreements with the Music Labels will terminate.

Simultaneously with the closing of the Offerings, shareholders representing at least fifty-one percent (51%) of the voting capital stock of each of the Company and Holdings, and of the Unit Purchasers in the Preferred Stock Unit Offering and Secured Noteholders in the Secured Note Assignment transaction, entered into voting agreements, pursuant to which they agreed to vote in favor of the Combination Transaction, as applicable.

Secured Note Conversion Shares and the shares of common stock underlying the Secured Note Conversion Warrants issued in connection with the Secured Note Assignment Transaction (the “Registrable Securities”). The Company will use its commercially reasonable efforts to ensure that the Registration Statement is declared effective by the SEC within 210 days of filing with the SEC. Any cutback resulting from the removal of any of the Registrable Securities from the Registration Statement in response to a comment from the Staff of the SEC limiting the number of shares of common stock which may be included in the Registration Statement, shall be allocated on a pro rata basis, based on the total number of such shares held by or issuable to each holder. The Company will keep the Registration Statement “evergreen” for at least one (1) year from the date it is declared effective by the SEC, or for such shorter period ending on the sale of all Registrable Shares thereunder.

F-32

Table of Contents

The following exhibits are included as part of this Annual Report:

EXHIBIT INDEX

Exhibit No.	SEC Report Reference No.	Description

3.1	3.2	Certificate of Incorporation, filed November 17, 2011 (1)
3.2	3.2	Amended and Restated Articles of Incorporation, filed January 31, 2014 (2)
3.3	3.1	Certificate of Amendment to Amended and Restated Articles of Incorporation of Registrant, filed February 9, 2016 (10)
3.4	3.3	By-Laws of the Registrant (1)
3.5	3.1	Amended and Restated Bylaws of the Registrant (8)
4.1	4.1	Form of 12% Unsecured Convertible Promissory Note (9)
4.2	4.2	Form of Unit Warrant in connection with Unsecured Convertible Note Offering (9)
4.3	4.5	Form of 12% Senior Secured Convertible Promissory Note (11)
4.4	4.6	Form of Unit Warrant in connection with Secured Convertible Note Offering (11)
4.5	4.7	Form of Placement Agent Warrant in connection with Secured Convertible Note Offering (11)
10.1†	10.11	2014 Equity Incentive Plan (2)
10.2†	10.1	First Amendment to 2014 Equity Incentive Plan (4)
10.3†	10.1	Second Amendment to 2014 Equity Incentive Plan (5)
10.4†	10.13	Form of Non-Qualified Stock Option Agreement for 2014 Equity Incentive Plan (3)
10.5†	10.1	2015 Equity Incentive Plan (8)
10.6†	10.2	Form of Non-Qualified Stock Option Agreement for 2015 Equity Incentive Plan (8)
10.7	10.1	Form of Securities Purchase Agreement in connection with Unsecured Convertible Note Offering (7)
10.8	10.4	Form of Second Omnibus Amendment to Transaction Documents in connection with Unsecured Convertible Note Offering (6)
10.9	10.2	Escrow Agreement in connection with Unsecured Convertible Note Offering (7)
10.10	10.3	Form of Registration Rights Agreement in connection with Unsecured Convertible Note Offering (7)
10.11	10.32	Form of Securities Purchase Agreement in connection with Secured Convertible Note Offering (11)
10.12	10.33	Escrow Agreement in connection with Secured Convertible Note Offering (11)
10.13	10.34	Security Agreement in connection with Secured Convertible Note Offering (11)
10.14	*	Six-Month Line of Credit Note
10.15	*	Term Sheet with CUR Holdings, Inc.
10.16	*	Form of Securities Purchase Agreement in connection with Holdings Preferred Stock Unit Offering
10.17	*	Form of Voting Agreement in connection with Holdings Preferred Stock Unit Offering
10.18	*	Form of Security Agreement in connection with Holdings Preferred Stock Unit Offering
10.19	*	Form of Omnibus Registration Rights Agreement in connection with Holdings Preferred Stock Unit Offering
10.20	*	Form of Securities Purchase Agreement in connection with $2.5 Million Note Offering
10.21	*	Form of Security Agreement in connection with $2.5 Million Note Offering
10.22	*	Form of Assignment and Transfer Agreement in connection with transfer of Secured Notes
10.23	*	Form of Voting Agreement in connection with transfer of Secured Notes
10.24	*	Form of Voting Agreement
10.25†	10.9	Employment Agreement, dated January 28, 2014, between the Registrant and Thomas Brophy (2)
10.26†	10.1	Employment Letter with John Egazarion (12)
10.27†	10.1	Employment Letter with Michael Betts (12)
10.28†	10.1	Employment Letter with Kelly Sardo (13)
14.1	14.1	Code of Business Conduct and Ethics of the Registrant (8)
21.1	*	List of Subsidiaries
31.1	*	Certification of Principal Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	*	Certification of Principal Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	*	Certifications of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	*	Certifications of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	*	XBRL Instance Document
101.SCH	*	XBRL Taxonomy Extension Schema Document
101.CAL	*	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	*	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	*	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	*	XBRL Taxonomy Extension Presentation Linkbase Document

__________

(1)	Filed with the Securities and Exchange Commission on September 7, 2012, as an exhibit, numbered as indicated above, to the Registrant's Registration Statement on Form S-1 (file no. 333-183760), which exhibit is incorporated herein by reference.

Table of Contents

(2)	Filed with the Securities and Exchange Commission on February 3, 2014, as an exhibit, numbered as indicated above, to the Registrant's Current Report on Form 8-K, dated January 28, 2014, which exhibit is incorporated herein by reference.

(3)	Filed with the Securities and Exchange Commission on March 17, 2014, as an exhibit, numbered as indicated above, to the Registrant's Current Report on Form 8-K, dated March 11, 2014, which exhibit is incorporated herein by reference.

(4)	Filed with the Securities and Exchange Commission on February 28, 2014, as an exhibit, numbered as indicated above, to the Registrant's Current Report on Form 8-K, dated February 24, 2014, which exhibit is incorporated herein by reference.

(5)	Filed with the Securities and Exchange Commission on April 25, 2014, as an exhibit, numbered as indicated above, to the Registrant's Current Report on Form 8-K, dated April 21, 2014, which exhibit is incorporated herein by reference.

(6)	Filed with the Securities and Exchange Commission on May 23, 2016, as an exhibit, numbered as indicated above, to the Registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 2016, which exhibit is incorporated herein by reference.

(7)	Filed with the SEC on October 26, 2015, as an exhibit, numbered as indicated above, to the Registrant's Current Report on Form 8-K, dated October 20, 2015, which exhibit is incorporated herein by reference.

(8)	Filed with the SEC on September 29, 2015, as an exhibit, numbered as indicated above, to the Registrant's Current Report on Form 8-K, dated September 25, 2015, which exhibit is incorporated herein by reference.

(9)	Filed with the SEC on October 26, 2015, as an exhibit, numbered as indicated above, to the Registrant's Current Report on Form 8-K, dated October 20, 2015, which exhibit is incorporated herein by reference.

(10)	Filed with the SEC on February 16, 2016, as an exhibit, numbered as indicated above, to the Registrant's Current Report on Form 8-K, dated February 9, 2016, which exhibit is incorporated herein by reference.

(11)	Filed with the Securities and Exchange Commission on April 14, 2016, as an exhibit, numbered as indicated above, to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2015, which exhibit is incorporated herein by reference.

(12)	Filed with the Securities and Exchange Commission on January 8, 2018, as an exhibit, numbered as indicated above, to the Registrant's Current Report on Form 8-K, dated January 2, 2018, which exhibit is incorporated herein by reference.

(13)	Filed with the Securities and Exchange Commission on February 16, 2018, as an exhibit, numbered as indicated above, to the Registrant's Current Report on Form 8-K, dated February 12, 2018, which exhibit is incorporated herein by reference.

†	Management contract or compensatory plan or arrangement
*	Filed herewith

Table of Contents

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this Annual Report to be signed on its behalf by the undersigned, thereunto duly authorized.

	CÜR MEDIA, INC.

Dated: May 7, 2018	By:	/s/ Thomas Brophy
	Name:	Thomas Brophy
	Title:	President and Chief Executive Officer
		(Principal Executive Officer)

Dated: May 7, 2018	By:	/s/ Kelly Sardo
	Name:	Kelly Sardo
	Title:	Chief Financial Officer, Secretary and Treasurer
		(Principal Financial Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Annual Report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Title	Date

/s/ Thomas Brophy
Thomas Brophy	President and Chief Executive Officer	May 7, 2018

/s/ William West Duker
William West Duker	Director	May 7, 2018

/s/ Edward P. Swyer
Edward P. Swyer	Director	May 7, 2018

Table of Contents

EXHIBIT INDEX

Exhibit No.	SEC Report Reference No.	Description

3.1	3.2	Certificate of Incorporation, filed November 17, 2011 (1)
3.2	3.2	Amended and Restated Articles of Incorporation, filed January 31, 2014 (2)
3.3	3.1	Certificate of Amendment to Amended and Restated Articles of Incorporation of Registrant, filed February 9, 2016 (10)
3.4	3.3	By-Laws of the Registrant (1)
3.5	3.1	Amended and Restated Bylaws of the Registrant (8)
4.1	4.1	Form of 12% Unsecured Convertible Promissory Note (9)
4.2	4.2	Form of Unit Warrant in connection with Unsecured Convertible Note Offering (9)
4.3	4.5	Form of 12% Senior Secured Convertible Promissory Note (11)
4.4	4.6	Form of Unit Warrant in connection with Secured Convertible Note Offering (11)
4.5	4.7	Form of Placement Agent Warrant in connection with Secured Convertible Note Offering (11)
10.1†	10.11	2014 Equity Incentive Plan (2)
10.2†	10.1	First Amendment to 2014 Equity Incentive Plan (4)
10.3†	10.1	Second Amendment to 2014 Equity Incentive Plan (5)
10.4†	10.13	Form of Non-Qualified Stock Option Agreement for 2014 Equity Incentive Plan (3)
10.5†	10.1	2015 Equity Incentive Plan (8)
10.6†	10.2	Form of Non-Qualified Stock Option Agreement for 2015 Equity Incentive Plan (8)
10.7	10.1	Form of Securities Purchase Agreement in connection with Unsecured Convertible Note Offering (7)
10.8	10.4	Form of Second Omnibus Amendment to Transaction Documents in connection with Unsecured Convertible Note Offering (6)
10.9	10.2	Escrow Agreement in connection with Unsecured Convertible Note Offering (7)
10.10	10.3	Form of Registration Rights Agreement in connection with Unsecured Convertible Note Offering (7)
10.11	10.32	Form of Securities Purchase Agreement in connection with Secured Convertible Note Offering (11)
10.12	10.33	Escrow Agreement in connection with Secured Convertible Note Offering (11)
10.13	10.34	Security Agreement in connection with Secured Convertible Note Offering (11)
10.14	*	Six-Month Line of Credit Note
10.15	*	Term Sheet with CUR Holdings, Inc.
10.16	*	Form of Securities Purchase Agreement in connection with Holdings Preferred Stock Unit Offering
10.17	*	Form of Voting Agreement in connection with Holdings Preferred Stock Unit Offering
10.18	*	Form of Security Agreement in connection with Holdings Preferred Stock Unit Offering
10.19	*	Form of Omnibus Registration Rights Agreement in connection with Holdings Preferred Stock Unit Offering
10.20	*	Form of Securities Purchase Agreement in connection with $2.5 Million Note Offering
10.21	*	Form of Security Agreement in connection with $2.5 Million Note Offering
10.22	*	Form of Assignment and Transfer Agreement in connection with transfer of Secured Notes
10.23	*	Form of Voting Agreement in connection with transfer of Secured Notes
10.24	*	Form of Voting Agreement
10.25†	10.9	Employment Agreement, dated January 28, 2014, between the Registrant and Thomas Brophy (2)
10.26†	10.1	Employment Letter with John Egazarion (12)
10.27†	10.1	Employment Letter with Michael Betts (12)
10.28†	10.1	Employment Letter with Kelly Sardo (13)
14.1	14.1	Code of Business Conduct and Ethics of the Registrant (8)
21.1	*	List of Subsidiaries
31.1	*	Certification of Principal Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	*	Certification of Principal Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	*	Certifications of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	*	Certifications of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	*	XBRL Instance Document
101.SCH	*	XBRL Taxonomy Extension Schema Document
101.CAL	*	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	*	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	*	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	*	XBRL Taxonomy Extension Presentation Linkbase Document

__________

(1)	Filed with the Securities and Exchange Commission on September 7, 2012, as an exhibit, numbered as indicated above, to the Registrant's Registration Statement on Form S-1 (file no. 333-183760), which exhibit is incorporated herein by reference.

Table of Contents

(2)	Filed with the Securities and Exchange Commission on February 3, 2014, as an exhibit, numbered as indicated above, to the Registrant's Current Report on Form 8-K, dated January 28, 2014, which exhibit is incorporated herein by reference.

(3)	Filed with the Securities and Exchange Commission on March 17, 2014, as an exhibit, numbered as indicated above, to the Registrant's Current Report on Form 8-K, dated March 11, 2014, which exhibit is incorporated herein by reference.

(4)	Filed with the Securities and Exchange Commission on February 28, 2014, as an exhibit, numbered as indicated above, to the Registrant's Current Report on Form 8-K, dated February 24, 2014, which exhibit is incorporated herein by reference.

(5)	Filed with the Securities and Exchange Commission on April 25, 2014, as an exhibit, numbered as indicated above, to the Registrant's Current Report on Form 8-K, dated April 21, 2014, which exhibit is incorporated herein by reference.

(6)	Filed with the Securities and Exchange Commission on May 23, 2016, as an exhibit, numbered as indicated above, to the Registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 2016, which exhibit is incorporated herein by reference.

(7)	Filed with the SEC on October 26, 2015, as an exhibit, numbered as indicated above, to the Registrant's Current Report on Form 8-K, dated October 20, 2015, which exhibit is incorporated herein by reference.

(8)	Filed with the SEC on September 29, 2015, as an exhibit, numbered as indicated above, to the Registrant's Current Report on Form 8-K, dated September 25, 2015, which exhibit is incorporated herein by reference.

(9)	Filed with the SEC on October 26, 2015, as an exhibit, numbered as indicated above, to the Registrant's Current Report on Form 8-K, dated October 20, 2015, which exhibit is incorporated herein by reference.

(10)	Filed with the SEC on February 16, 2016, as an exhibit, numbered as indicated above, to the Registrant's Current Report on Form 8-K, dated February 9, 2016, which exhibit is incorporated herein by reference.

(11)	Filed with the Securities and Exchange Commission on April 14, 2016, as an exhibit, numbered as indicated above, to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2015, which exhibit is incorporated herein by reference.

(12)	Filed with the Securities and Exchange Commission on January 8, 2018, as an exhibit, numbered as indicated above, to the Registrant's Current Report on Form 8-K, dated January 2, 2018, which exhibit is incorporated herein by reference.

(13)	Filed with the Securities and Exchange Commission on February 16, 2018, as an exhibit, numbered as indicated above, to the Registrant's Current Report on Form 8-K, dated February 12, 2018, which exhibit is incorporated herein by reference.
†	Management contract or compensatory plan or arrangement
*	Filed herewith

/s/ Friedman LLP

We have served as the Company’s auditor since 2012.

East Hanover, New Jersey
May 7, 2018

CUR MEDIA, INC. 10-K