x Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

¨ Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§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 x No ¨

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 “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

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. x

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

On ~~August~~May 13, ~~2018,~~2019, we had ~~25,021,427~~30,547,469 shares of common stock, par value $0.001 per share (the “Common Stock”) issued and outstanding.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

For the Three ~~and Six~~ Months Ended ~~June 30,~~March 31, 2019 and 2018 ~~and 2017~~

	Three Months Ended June 30,						Six Months Ended June 30,						For the Three Months Ended
	2018			2017			2018			2017			March 31, 2019			March 31, 2018
Revenue
Revenue:
Net product sales	$	149,418		$	32,073		$	218,740		$	59,570		$	-		$	69,322
Consulting research & development income		7,500			-			43,192			4,448			72,000			35,692
Shipping and other sales		-			6,812			-			6,812			2,500			-
Total revenues		156,918			38,885			261,932			70,830			74,500			105,014

Cost of goods sold:
Cost of goods sold		69,988			39,598			129,074			75,148			2,584			59,086
Gross profit (loss)		86,930			(713	)		132,858			(4,318	)

Gross profit														71,916			45,928

Operating expenses:
Research and development expenses		376,840			205,648			803,369			425,268			360,870			426,529
Selling, general and administrative expenses		2,033,761			2,194,950			3,052,271			4,597,497			2,365,086			1,018,510
Total costs and expenses		2,410,601			2,400,598			3,855,640			5,022,765
Net loss from operations		(2,323,671	)		(2,401,311	)		(3,722,782	)		(5,027,083	)

Total operating expenses														2,725,956			1,445,039

Net Operating (loss) before other income (expense)														(2,654,040	)		(1,399,111	)

Other income (expense):
Interest income		-			1			-			5			-			-
Other income		86			8,571			7,619			17,142			-			7,533
Loss on disposal of PP&E		-			(12,351	)		-			(12,351	)
Change in derivative liability		181,610			(42,545	)		206,387			(42,545	)
Change in fair value of derivative liability														(152,620	)		24,777
Other expense		(1,826	)		(6,394	)		(109,707	)		(7,388	)		(271,201	)		(107,881	)
Interest expense		(266,429	)		(87,054	)		(700,259	)		(89,205	)		(3,297,480	)		(433,830	)
Loss on conversion of convertible promissory notes														(3,659,518	)		-

Other income (expense)		(86,559	)		(139,772	)		(595,960	)		(134,342	)		(7,380,819	)		(509,401	)

Net loss before income taxes		(2,410,230	)		(2,541,083	)		(4,318,742	)		(5,161,425	)		(10,034,859	)		(1,908,512	)

Provision for income taxes		-			-			-			-			-			-

Net loss		(2,410,230	)		(2,541,083	)		(4,318,742	)		(5,161,425	)		(10,034,859	)		(1,908,512	)
Net loss attributed to noncontrolling interest		(7,903	)		-			(14,578	)		-
Net loss attributed to CURE Pharmaceutical Holding Corp	$	(2,402,327	)		(2,541,083	)	$	(4,304,164	)	$	(5,161,425	)

Net loss per share, basic and diluted	$	(0.10	)		(0.11	)	$	(0.18	)	$	(0.22	)
Net loss attributable to non-controlling interest														(6,691	)		(6,676	)

Weighted average shares outstanding, basic and diluted		24,217,808			23,436,696			24,210,688			23,593,105
Net loss attributable to Cure Pharmaceutical Holding Corp.														(10,028,168	)		(1,901,836	)

Net loss per share, basic
Basic and diluted													$	(0.35	)	$	(0.08	)

Weighted average common shares outstanding
Basic and diluted														28,595,784			23,937,919

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

For the ~~Six~~Three Months Ended ~~June 30,~~March 31, 2019 and 2018 ~~and 2017~~

					Additional
	Common Stock				Paid-in			Stock		Accumulated			Noncontrolling
	Shares		Par		Capital			Payable		Deficit			Interest			Total
Balance, December 31, 2018		26,784,019	$	26,785	$	23,424,737		$	645,575	$	(29,269,000	)	$	16,412		$	(5,155,491	)
Issuance of common stock for professional services		86,744		87		165,371			355,952								521,410
Issuance of common stock for extension of maturity dates relating to convertible promissory notes		105,000		105		320,744											320,849
Issuance of common stock for conversion of convertible promissory notes		2,844,156		2,844		8,620,784			938,260								9,561,888
Issuance of common stock from the equity incentive plan		130,208		130		(130	)										-
Issuance of common stock for cash		416,667		416		499,584											500,000
Issuance of common stock for cancellation of accounts payable									64,520								64,520
Warrants granted						3,035,190											3,035,190
Beneficial conversion features						801,331											801,331
Fair value of stock options and restricted stock granted						230,291											230,291
Noncontrolling interest of Oak Therapeutics, Inc.														(6,691	)		(6,691	)
Net loss											(10,028,168	)					(10,028,168	)
Balance, March 31, 2019		30,366,794	$	30,367	$	37,097,902		$	2,004,307	$	(39,297,168	)	$	9,721		$	(154,871	)

					Additional
	Common Stock				Paid-in		Stock		Accumulated			Noncontrolling
	Shares		Par		Capital		Payable		Deficit			Interest			Total
Balance, December 31, 2017		23,901,252	$	23,902	$	16,483,632	$	324,995	$	(18,868,599	)	$	46,885		$	(1,989,185	)
Issuance of common stock for professional services		50,000		50		73,950		1,228,333								1,302,333
Warrants granted						37,137										37,137
Beneficial conversion features						646,126										646,126
Noncontrolling interest of Oak Therapeutics, Inc.													(6,676	)		(6,676	)
Net loss										(1,901,836	)					(1,901,836	)
Balance, March 31, 2018		23,951,252	$	23,952	$	17,240,845	$	1,553,328	$	(20,770,435	)	$	40,209		$	(1,912,101	)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

	For the Three Months Ended
	March 31, 2019			March 31, 2018

CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(10,034,859	)	$	(1,908,512	)

Adjustment to reconcile net loss to net cash used in operating activities:

Stock based compensation - services		91,833			-
Stock based compensation - prepaid		468,146			237,689
Stock issued for amending convertible promissory notes		320,850			-
Loss on conversion of convertible promissory notes		3,659,518			-
Warrant expense from convertible promissory notes		2,173,056			-
Depreciation and amortization		40,437			34,954
Amortization of loan discounts		488,274			360,089
Recovery of bad debt expense		(7,500	)		-
Inventory reserve for obsolesce		2,436			-
Change of fair value in derivative liabilities		152,620			(24,777	)
Fair value of vested stock options		230,291			-
Warrants granted for commission expense		590,933			37,137
Warrants granted for broker fee expense		271,201			-

Change in other assets and liabilities:
Accounts receivable		110,299			(35,543	)
Inventory		(4,461	)		(24,991	)
Prepaid expenses and other assets		41,466			58,813
Other assets		10,684			8,687
Accounts payable		151,747			14,225
Accrued expenses		193,128			53,621
Deferred revenue		(72,000	)		35,022
License fees		97,500			-

Cash used in operating activities		(1,024,401	)		(1,153,586	)

Cash flows from investing activities
Purchase in intangible assets		(21,180	)		(6,638	)
Acquisition of property and equipment, net		(23,122	)		(15,549	)

Cash used in investing activities		(44,302	)		(22,187	)

Cash flows from financing activities
Proceeds from convertible notes payable		3,425,000			2,025,000
Proceeds from common stock issuance		500,000			-
Repayment of convertible notes payable		(725,000	)		-
Repayment of loans payable		(38,283	)		(116,899	)

Cash provided by financing activities		3,161,717			1,908,101

Net increase in cash and cash equivalents		2,093,014			732,328

Cash and cash equivalents, beginning of period		500,962			108,249

Cash and cash equivalents, end of period	$	2,593,976		$	840,577

Supplemental cash flow information

Cash paid for interest and income taxes:
Interest	$	81,341		$	19,973
Income taxes	$	-		$	-

Non-cash financing activities:
Common stock related to prepaid expense	$	-		$	1,323,562
Warrants granted for discount on convertible promissory notes	$	-		$	646,127
Common stock issued for conversion of promissory notes and accrued interest	$	5,373,781		$	-
Common stock payable for note conversion	$	528,589		$	-
Common issued for settlement of accounts payable	$	64,520		$	-
Beneficial conversion features for convertible promissory notes	$	801,331		$	-

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

CURE Pharmaceutical Holding Corp. (the “Company”) was incorporated in the State of Nevada on May 15, 2014. The Company was formerly named Makkanotti Group Corp. which was formed to engage in the business of manufacturing food paper bags in Nicosia, Cyprus.

On November 7, 2016, the board of directors and the majority stockholder of the then outstanding shares of the registrant’s common stock executed a written consent to change the registrant’s name to CURE Pharmaceutical Holdings Corp. from Makkanotti Group Corp. The Certificate of Amendment to Articles of Incorporation was filed with the State of Nevada on November 30, 2016.

~~Our wholly owned subsidiary and operating business,~~, its wholly-owned subsidiaries, CURE Pharmaceutical Corporation ~~located in Oxnard, California was originally incorporated in July 2011.~~

~~The Company~~(“CURE Pharmaceutical”) and its 63% majority owned subsidiary Oak Therapeutics, Inc. (“Oak”) (collectively (the “Company,” “we,” “our,” “us,” or “CURE”) is aan emerging growth company focusing on drug formulation and delivery technology company that researches and manufactures novel dosage forms to improve drug safety, efficacy and patient adherence. Our mission is to improve lives by redefining how medications are delivered and experienced. Our business strategy is to develop products using our proprietary technology, license the product rights to partners responsible for clinical development, regulatory approval, marketing and sales and retain exclusive manufacturing rights. We operate a 25,000 ~~sqft~~square foot cGMP manufacturing plant in Oxnard, CA.

Our technology platform includes oral dissolving film (ODF) and transdermal formulations. We apply our technology to pharmaceutical drugs and dietary supplements. ODF products are about the size of a postage stamp and composed of excipients such as polymers, stabilizers, lipids and surfactants which are all generally recognized as safe. They can be designed to deliver active ingredients to the gastrointestinal tract (GI) when placed on the tongue and swallowed, or directly to the blood stream when placed under the tongue (sublingual) or on the inner lining of the cheek and lip (buccal).

~~Our~~We currently have two commercial ~~strategy seeks to mitigate risk by pursuing a diversified model.~~

~~1. Dietary supplements. We manufacture select dietary supplements that complement our portfolio~~products and align with our mission which are white labeled and distributed by third parties. Dietary supplements are regulated under the Dietary Supplement Health and Education Act of 1994 (DSHEA) under which supplements are effectively by the FDA for Good Manufacturing Practices under 21 CFR Part 111 but do not require FDA approval. By developing, manufacturing and selling dietary supplement, we can generate modest short term revenue while and improving our production capabilities.

~~2. Pharmaceuticals. We partner with companies that are responsible for clinical~~several development regulatory approval, marketing and sales of the products. We provide the Chemistry, Manufacturing, and Controls (CMC) documentation required for regulatory submissions and in some instances, we may conduct the preclinical testing. Deal terms may include upfront licensing fees, development costs, milestone payments, royalties and exclusive manufacturing rights. Within this category, we are further diversifying risk and return by pursuing both competitive differentiation of marketed drugs (product life cycle opportunities) and improved pharmacokinetics of investigational drugs. While we currently commercially manufacture dietary supplements in our facility, we are undertaking steps to scale up manufacturing of pharmaceutical drugs for clinical and commercial use.

3. Cannabinoids. We are researching and developing drugs in the cannabinoid family of molecules. The oral bioavailability of cannabinoids is very low due to extensive gut and liver metabolism. Consequently, potency and release times are unpredictable and inconsistent. Moreover, cannabinoids don’t readily dissolve in water which adds to dosing difficulties and discrepancies. In addition to improving bioavailability, CUREfilm technology enables the loading of combinations of cannabinoids and other plant extracts that, together, provide maximum therapeutic benefit. Development and manufacturing of cannabinoid drugs are regulated by the FDA and the Drug enforcement Agency (DEA). A research license filed with the DEA in January 2018 was determined to be submitted in error given our proposed activities. As such, we have applied for a Schedule 1 manufacturer license with the DEA.

4. Underserved patient populations. Consistent with our mission of improving the lives of all people in need, regardless of geography or economic status, we licensed our technology to our majority-owned subsidiary, Oak Therapeutics, for the development of novel drug formulations for patients in developing nations such as a rapidly dissolving film to treat tuberculosis.programs underway:

CURE, formerly known as Makkanotti Group Corp, was incorporated in the State of Nevada on May 15, 2014. The Company was originally formed to engage in the business of manufacturing food paper bags in Nicosia, Cyprus. On November 7, 2016, the Company changed its name to CURE Pharmaceutical Holding Corp.

On November 7, 2016, the Company, in a reverse take-over transaction, acquired CURE Pharmaceutical Corporation (“CURE Pharmaceutical”), a specialty pharmaceutical and bioscience company based in California that specializes in drug delivery technologies, by executing a Share Exchange Agreement and Conversion Agreement (“Exchange Agreement”) by and among the Company and a holder of a majority of the issued and outstanding capital stock of the registrant prior to the closing (the “Majority Stockholder”), on the one hand, and CURE Pharmaceutical, a California corporation, all of the shareholders of CURE Pharmaceutical’s issued and outstanding share capital (the “CURE Pharm Shareholders”) and the holders of certain convertible promissory notes of CURE Pharmaceutical (“CURE Pharm Noteholders”), on the other hand. Hereinafter, this share exchange transaction is described as the “Share Exchange.” As a result of the Share Exchange, CURE Pharmaceutical became a wholly owned subsidiary of the Company, and the CURE Pharm Shareholders and CURE Pharm Noteholders became the controlling shareholders of the Company.

For accounting purposes, CURE Pharmaceutical was the surviving entity. The transaction was accounted for using the reverse acquisition method of accounting. As a result of the recapitalization and change in control, CURE Pharmaceutical was the acquiring entity in accordance with ASC 805, Business Combinations.

We licensed our technology available to a private company, Oak Therapeutics (“Oak”), to develop products for sale in the developing world (“Territory”). On November 10, 2017, we received 269,000 shares of Oak as consideration for an exclusive license to our patent rights in the Territory, along with a royalty-free non-exclusive license to any improvements made by Oak. As a result of this transaction, we owned approximately 63% of Oak’s outstanding shares and have consolidated Oak’s financial statements as of the fourth quarter 2017. Due to the lack of performance by Oak under the license agreement, on April 15, 2019, we terminated all contractual relationships with Oak, including the license and surrendered our Oak shares to Oak. Further information can be found in NOTE 15 – SUBSEQUENT EVENTS.

The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The summary of significant accounting policies presented below is designed to assist in understanding the Company’s financial statements. Such financial statements and accompanying notes are the representations of Company’s management, who is responsible for their integrity and objectivity.

The condensed consolidated financial statements include the accounts of CURE Pharmaceutical Holding Corp (“CPHC”), its wholly-owned subsidiary, CURE Pharmaceutical Corporation (“CURE”) and its 63% majority owned subsidiary Oak Therapeutics, Inc. (“OAK”), collectively referred to as (“CURE”, “we”, “us”, “our” or the “Company”). All significant inter-company balances and transactions have been eliminated in consolidation. The Company’s film strip product represents the principal operations of the Company.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial statements and with the instructions to Form 10-Q and Article 8 of Regulation S-X of the United States Securities and Exchange Commission (“SEC”). Accordingly, they do not contain all information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of ~~June 30, 2018,~~March 31, 2019, and the results of operations and cash flows for the periods presented. The results of operations for the three ~~and six~~ months ended ~~June 30,~~March 31, 2019 and 2018, ~~and 2017,~~ are not necessarily indicative of the operating results for the full fiscal year or any future period. These unaudited condensed consolidated financial statements should be read in conjunction with the financial statements and related notes thereto included in Form 10-K for the fiscal period ended December 31, ~~2017~~2018 filed with the Securities and Exchange Commission (the “SEC”) on ~~March 26, 2018.~~April 1, 2019.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. These estimates and assumptions also affect the reported amounts of revenues, costs and expenses during the reporting period. Management evaluates these estimates and assumptions on a regular basis. Actual results could differ from those estimates.

The Company considers all cash on hand and in banks, including accounts in book overdraft positions, certificates of deposit and other highly-liquid investments with maturities of three months or less, when purchased, to be cash and cash equivalents. As of ~~June 30, 2018~~March 31, 2019 and December 31, ~~2017,~~2018, the Company had no cash equivalents. At ~~June 30, 2018~~March 31, 2019 and December 31, ~~2017,~~2018, the Company maintains its cash and cash equivalents in banks insured by the Federal Deposit Insurance Corporation (“FDIC”) in accounts that at times may be in excess of the federally insured limit of $250,000 per bank. The Company minimizes this risk by placing its cash deposits with major financial institutions.

An associate is an entity over which the Company has significant influence through a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but not control or joint control over those policies.

The results of assets and liabilities of associates are incorporated in the condensed consolidated financial statements using the equity method of accounting. Under the equity method, investments in associates are carried in the consolidated balance sheet at cost as adjusted for post-acquisition changes in the Company’s share of the net assets of the associate, less any impairment in the value of the investment. Losses of an associate in excess of the Company’s interest in that associate are not recognized. Additional losses are provided for, and a liability is recognized, only to the extent that the Company has incurred legal or constructive obligations or made payments on behalf of the associate.

Any excess of the cost of acquisition over the Company’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities of the associate recognized at the date of acquisition is recognized as goodwill. The goodwill is included within the carrying amount of the investment.

On January 8, 2016, the Company received 50% ownership in Cure Innovations, Inc (“CI”). CI was created in 2015 by IncuBrands Studio, Inc (“IncuBrands”). The Company and IncuBrands each own 50% of the common stock of CI. The Company and IncuBrands entered into a Joint Venture agreement in 2013 to distribute several OTF products utilizing IncuBrands marketing and contacts in various industries as well as utilize the Company’s technology and capabilities of manufacturing OTF’s. On December 28, 2018, in agreement with IncuBrands, the Company dissolved CI as we did not see a viable future relating to this joint venture.

On December 6, 2016, the Company entered into a Joint Venture Agreement (“Joint Venture”) with Pace Wellness, Inc. (“Pace”) to jointly develop three Active Pharmaceutical Ingredients (“API”) within the nonprescription and/or Over-the-Counter (OTC) medicines specifically utilizing the Company’s patented and proprietary CUREFilm™ Technology. The three API’s to be jointly developed are Diphenhydramine HCL, Omeprazole and a third API to be determined at a later date (“Products”). Pace shall be the exclusive global distributor of the Products under the Solves Strips® branding or other private or branded labels. All benefits, advantages, and liabilities derived from, or incurred in respect of the Joint Venture shall be borne by the parties in proportion of their respective participating interests of 50/50 equal interest. As of ~~June 30, 2018,~~March 31, 2019, the Company has only contributed $5,000 to the Joint Venture. The Company is looking to dissolve this Joint Venture due to Pace’s insolvency and we are no longer looking to develop these Products.

The Company capitalizes expenditures related to property and equipment, subject to a minimum rule, that have a useful life greater than one year for: (1) assets purchased; (2) existing assets that are replaced, improved or the useful lives have been extended; or (3) all land, regardless of cost. Acquisitions of new assets, additions, replacements and improvements (other than land) costing less than the minimum rule in addition to maintenance and repair costs, including any planned major maintenance activities, are expensed as incurred. Depreciation has been provided using the straight-line method on the following estimated useful lives:

Accounts receivable are generally unsecured. The Company establishes an allowance for doubtful accounts receivable based on the age of outstanding invoices and management’s evaluation of collectability. Accounts are written off after all reasonable collection efforts have been exhausted and management concludes that likelihood of collection is remote. Any future recoveries are applied against the allowance for doubtful accounts. At March 31, 2019 and December 31, 2018, management determined that an allowance was necessary which amounted to approximately $0 and $7,500, respectively.

Inventory is stated at the lower of cost or net realizable value. The Company determines the cost of its inventory, which includes amounts related to materials, direct labor, and manufacturing overhead, on a first-in, first-out basis. The Company performs an assessment of the recoverability of capitalized inventory during each reporting period and writes down any excess and obsolete inventories to their realizable value in the period in which the impairment is first identified.

~~Long-lived assets include equipment and intangible assets other than those with indefinite lives.~~ We ~~assess the carrying value~~review all of our long-lived ~~asset groups when~~assets for impairment indicators ofthroughout the year and perform detailed testing whenever impairment ~~exist and recognize an~~indicators are present. In addition, we perform detailed impairment ~~loss when the carrying amount of a long-lived asset is not recoverable when compared to undiscounted cash flows expected to result from the use and eventual disposition of the asset.~~testing for indefinite-lived intangible assets, at least annually, at December 31. When necessary, we record charges for impairments. Specifically:

Indicators of impairment include significant underperformance relative to historical or projected future operating results, significant changes in our use of the assets or in our business strategy, loss of or changes in customer relationships and significant negative industry or economic trends. When indications of impairment arise for a particular asset or group of assets, we assess the future recoverability of the carrying value of the asset (or asset group) based on an undiscounted cash flow analysis. If carrying value exceeds projected, net, undiscounted cash flows, an additional analysis is performed to determine the fair value of the asset (or asset group), typically a discounted cash flow analysis, and an impairment charge is recorded for the excess of carrying value over fair value. There was

Management determined that no impairment ~~on our long-lived assets during the three~~indicators were present and ~~six month periods ended June 30, 2018 and 2017.~~

~~Table of Contents~~

that no impairment charges were necessary as of March 31, 2019 or December 31, 2018.

We recognize revenue in accordance with Accounting Standards Codification (“ASC”) 606, “Revenue Recognition”. The Company adopted Topic 606 using a modified retrospective approach for the years ended December 31, 2017 and ~~will be~~prior and has been applied prospectively in the Company’s financial statements ~~from~~beginning January 1, ~~2018 forward.~~2018. Revenues under Topic 606 are required to be recognized either at a “point in time” or ~~“ over~~“over time”, depending on the facts and circumstances of the arrangement, and will be evaluated using a five-step model. The adoption of Topic 606 did not have a material impact on the Company’s financial statements, at initial implementation nor will it have a material impact on an ongoing basis.

We derive revenues from two primary sources: products and services. Product revenue includes the shipment of product according to the agreement with our customers. Services include research and development contracts for the development of OTF products utilizing our CureFilm™ Technology or our other proprietary technologies. Rarely, contracts with customers contain multiple performance obligations. For these contracts, the Company accounts for individual performance obligations separately if they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. Standalone selling prices are typically estimated based on observable transactions when these services are sold on a standalone basis.

The Company’s ~~consulting research~~formulation and product development income include services for the development of OTF products utilizing our CureFilm™ Technology. ~~Most of our~~Our development contracts have up to four phases. Revenue is recognized based on progress toward completion of the performance obligation in each phase. The method to measure progress toward completion requires judgment and is based on the nature of the products or services to be provided. The Company generally uses the input method to measure progress for its contracts because it best depicts the transfer of assets to the customer, which occurs as the Company incurs costs for the contracts. Under the cost-to-cost measure of progress, the progress toward completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. Revenue is recorded proportionally as costs are incurred. Costs to fulfill these obligations mainly include materials, labor, supplies and consultants.

Deferred revenue is shown separately in the condensed consolidated balance sheets. At ~~June 30,~~March 31, 2019 and December 31, 2018 we had deferred ~~revenue~~revenues of ~~$408,263. At December 31, 2017, we had deferred revenue of $361,462.~~$311,275 and $383,275, respectively.

The Company expenses marketing, promotions and advertising costs as incurred. Such costs are included in general and administrative expense in the accompanying statements of operations. The Company ~~recorded~~did not record advertising costs ~~of $58,984 and $98,823~~ for the three ~~and six month~~months periods ended ~~June 30, 2018, respectively. The Company recorded advertising costs of $68,893~~March 31, 2019 and ~~$95,226, for the three and six month periods ended June 30, 2017, respectively.~~2018.

Costs incurred in connection with the development of new products and processes are charged to research and development expenses as incurred. The Company recorded research and development expenses of ~~$376,840~~$360,870 and ~~$803,369~~$426,529 for the three ~~and six month~~months periods ended ~~June 30,~~March 31, 2019 and 2018, respectively. ~~The Company recorded research and development expenses of $205,648 and $425,268 for the three and six month periods ended June 30, 2017, respectively.~~

The Company utilizes FASB ASC 740, “Income Taxes,” which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the tax basis of assets and liabilities and their financial reporting amounts based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. A valuation allowance is recorded when it is “more likely-than-not” that a deferred tax asset will not be realized.

The Company generated a deferred tax asset through net operating loss carry-forward. However, a valuation allowance of 100% has been established due to the uncertainty of the Company’s realization of the net operating loss carry forward prior to its expiration.

Stock-based compensation is accounted for based on the requirements of the Share-Based Payment Topic of ASC 718 which requires recognition in the consolidated financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). The ASC also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award.

Pursuant to ASC Topic 505-50, for share-based payments to consultants and other third-parties, compensation expense is determined at the “measurement date.” The expense is recognized over the vesting period of the award. Until the measurement date is reached, the total amount of compensation expense remains uncertain. The Company initially records compensation expense based on the fair value of the award at the reporting date.

If the conversion features of conventional convertible debt provides for a rate of conversion that is below market value, this feature is characterized as a beneficial conversion feature (“BCF”). A BCF is recorded by the Company as a debt discount pursuant to ASC Topic 470-20 ““Debt with Conversion and Other Options.” In those circumstances, the convertible debt is recorded net of the discount related to the BCF and the Company amortizes the discount to interest expense over the life of the debt using the effective interest method.

ASC 815-40 (formerly SFAS No. 133 “Accounting for derivative instruments and hedging activities”), requires that embedded derivative instruments be bifurcated and assessed, along with free-standing derivative instruments such as warrants, on their issuance date and in accordance with ASC 815-40-15 (formerly EITF 00-19 “Accounting for derivative financial instruments indexed to, and potentially settled in, a company’s own stock”) to determine whether they should be considered a derivative liability and measured at their fair value for accounting purposes. In determining the appropriate fair value, the Company uses the Black-Scholes option pricing formula and present value pricing. At ~~June 30, 2018~~March 31, 2019 and December 31, ~~2017,~~2018, the Company adjusted its derivative liability to its fair value, and reflected the change in fair value, in its consolidated statement of operations and comprehensive loss.

The Company ~~adopted the provisions of~~follows FASB ASC ~~Topic~~ 820, “Fair Value Measurements and Disclosures” (“ASC 820”), ~~which defines~~for assets and liabilities measured at fair value ~~as used in numerous~~on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting ~~pronouncements,~~principles that require the use of fair value measurements and establishes a framework for measuring fair value and expands disclosure ofabout such fair value measurements.

ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:

The carrying amounts reported in the balance sheet for cash, accounts receivable, accounts payable, accrued expenses and notes and loans payable approximate their estimated fair market value based on the short-term maturity of these instruments. The carrying amount of the notes and convertible promissory notes approximates the estimated fair value ~~of certain financial~~for these instruments ~~including cash and cash equivalents are carried at historical cost basis, which approximates their fair values because~~as management believes that such notes constitute substantially all of the ~~short-term nature of these instruments.~~Company’s debt and the interest payable on the notes approximates the Company’s incremental borrowing rate. We measured the liability for price adjustable warrants and embedded derivative features in the convertible notes, using the probability adjusted Black-Scholes option pricing model (“Black-Scholes”), which management has determined approximates values using more complex methods, using Level 3 inputs. (See Note 10)

ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value:

~~Level 1 — quoted prices in active markets for identical assets or liabilities~~

~~Level 2 — quoted prices for similar assets and liabilities in active markets or inputs that are observable~~

~~Level 3 — inputs that are unobservable (for example cash flow modeling inputs based on assumptions)~~

~~The Company has no assets or liabilities valued at fair value on a recurring basis.~~

Basic net loss per common share is computed by dividing the net loss ~~to common stockholders for the period~~ by the weighted average number of common shares outstanding during the ~~period.~~period, excluding any unvested restricted stock awards. Diluted net loss per share includes the effect of common stock equivalents (stock options, unvested restricted stock, and warrants) when, under either the treasury or if-converted method, such inclusion in the computation would be dilutive. Net loss is ~~computed by dividing the net loss~~adjusted for the ~~period by~~dilutive effect of the ~~weighted average~~change in fair value liability for price adjustable warrants, if applicable.

The following number of ~~common and dilutive common equivalent~~ shares ~~outstanding during the period. Common equivalent shares, which consist of stock options and warrants,~~ have been excluded from ~~the~~ diluted ~~loss per share calculation because their effect is anti-dilutive.~~net income (loss) since such inclusion would be anti-dilutive:

The ~~Company’s~~accompanying condensed consolidated financial statements ~~are~~have been prepared ~~using U.S. GAAP applicable to~~on the basis that we will continue as a going concern, which contemplates ~~the~~ realization of assets and ~~liquidation~~the satisfaction of liabilities in the normal course of business. ~~The Company~~At March 31, 2019, we had ana significant accumulated deficit ~~at June 30, 2018~~ of ~~$23,172,763. The Company had~~approximately $39.3 million and a negative working capital ~~deficit~~ of ~~$4,869,293 as~~approximately $1.8 million. Our operating activities consume the majority of June 30, 2018. These factors raise substantial doubt about the Company’s ability to continue as a going concern for one year from the issuance of the financial statements. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it establishes a revenue stream and becomes profitable. The Company is continually analyzing its current costs and is attempting to make additional cost reductions where possible.our cash resources. We ~~expect~~anticipate that we will continue to ~~generate losses from operations throughout 2018.~~

~~Historically, the Company has had~~incur operating losses as we execute our commercialization and research and development plans, as well as strategic and business development initiatives. In addition, we have had and will continue to have negative cash flows from operations, ~~which cast significant doubt upon~~at least into the ~~Company’s ability~~near future. We have previously funded, and plan to continue asfunding, our losses primarily through the sale of common and preferred stock, combined with or without warrants, the sale of notes, revenue provided from our license agreements and, to a ~~going concern. The Company~~lesser extent, equipment financing facilities and secured loans. However, we cannot be certain that we will ~~need~~be able to ~~raise capital in order~~obtain such funds required for our operations at terms acceptable to fund its operations. This need may be adversely impacted by uncertain market conditions and changes in the regulatory environment. To address its financing requirements, the Company intends to seek financing through debt and equity issuances to existing stockholders.us or at all.

Specifically, management has identified that a minimum of $4,000,000 of capital is needed over the next 12 months in order sustain operations. These capital needs take into account, among other things, management’s plans to advance intellectual property, maintenance of patents, upgrades for manufacturing and to hire personnel for business development. Management has outlined a plan to raise between ~~$6,000,000~~$8,000,000 to ~~$8,000,000~~$10,000,000 in capital over the next 12 months through a merger and $1,000,000 to $2,000,000 through the issuance of shares of the Company’s common stock to accredited investors. Management believes that the capital raised through these methods will be sufficient to sustain operations for the next 12 to 18 months. However, the outcome of these matters cannot be predicted with certainty at this time.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern for one year from the issuance of the financial statements. The accompanying ~~condensed~~ consolidated financial statements do not include any adjustments relating to the recoverability and classification of assets and liabilities that might be necessary if the Company is unable to continue as a going concern.

~~In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities.~~ The ~~purpose is to enhance the reporting model for financial instruments to provide users of~~accompanying consolidated financial statements ~~with more decision-useful information. This ASU is effective for~~do not include any adjustments relating to the recoverability of and classification of assets carrying amounts or the amount and classification of liabilities that might result should the Company in the first quarter of 2018. Early adoption is not permitted except for limited provisions. The adoption of ASU 2016-01 did not have an impact on the Company’s condensed consolidated financial statements.

~~In February 2016, the FASB issued ASU 2016-02—Leases (Topic 842), requiring lessees~~be unable to ~~recognize a right-of-use asset and a lease liability on the balance sheet for all leases with the exception of short-term leases. For lessees, leases will~~ continue to be classified as either operating or finance leases in the income statement. The effective date of the new standard for public companies is for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early adoption is permitted. The new standard must be adopted using a modified retrospective transition and requires application of the new guidance at the beginning of the earliest comparative period presented. The Company is evaluating the effect that the updated standard will have on its financial statements and related disclosures.

In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The new standard requires recognition of the income tax effects of vested or settled awards in the income statement and involves several other aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. This new standard became effective for the Company on January 1, 2017. The adoption of this standard did not have a material impact on its financial position, results of operations or statements of cash flows upon adoption.

In May 2016, the FASB issued ASU No. 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients”, to clarify certain core recognition principles including collectability, sales tax presentation, noncash consideration, contract modifications and completed contracts at transition and disclosures no longer required if the full retrospective transition method is adopted. The effective date and transition requirements for these amendments are annual reporting periods beginning after December 15, 2017, including interim reporting periods therein, and that would also permit public entities to elect to adopt the amendments as of the original effective date as applicable to reporting periods beginning after December 15, 2016. The new guidance allows for the amendment to be applied either retrospectively to each prior reporting period presented or retrospectively as a ~~cumulative-effect adjustment as of the date of adoption. The adoption of ASU 2016-12 did not have an impact on the Company’s condensed consolidated financial statements.~~

In August, 2016, the FASB issued Accounting Standards Update No. 2016-15, Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force) (“ASU 2016-15”). The amendments in ASU 2016-15 address eight specific cash flow issues and apply to all entities that are required to present a statement of cash flows under ASC Topic 230, Statement of Cash Flows. The amendments in ASU 2016-15 are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption during an interim period. The adoption of ASU 2016-15 did not have an impact on the Company’s condensed consolidated financial statements.going concern.

In February 2016, the FASB issued ASU 2016-02, "Leases" ("ASU 2016-02"). This guidance, as amended by subsequent ASU's on the topic, improves transparency and comparability among companies by recognizing right of use (ROU) assets and lease liabilities on the balance sheet and by disclosing key information about leasing arrangements. ASU No. 2016-02 is effective for public business entities for annual periods, including interim periods within those annual periods, beginning after December 15, 2018, with early adoption permitted. We will adopt ASU No. 2016-02 in our fiscal year beginning January 1, 2019 and will use the alternative transition method provided by the FASB in ASU No. 2018-10, “Codification Improvements to Topic 842, Leases” and ASU No. 2018-11, “Leases (Topic 842): Targeted Improvements”, with no restatement of comparative periods.

The new standard provides optional practical expedients in transition. We expect to only elect the "package of practical expedients" where, under the new standard, prior conclusions about lease identification, lease classification and initial direct costs do not need to be reassessed. The new standard also provides practical expedients for ongoing accounting and we do not expect to elect any of these practical expedients on adoption. We continue to assess the impact of the new standard and believe it will not have a material effect on the condensed consolidated balance sheet.

In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. This new standard clarifies the definition of a business and provides a screen to determine when an integrated set of assets and activities is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. This new standard ~~will be~~became effective for the Company on January 1, ~~2018; however, early adoption is permitted with prospective application to any business development transaction.~~2018. There are various other updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and ~~are~~did not ~~expected to a~~ have a material impact on the Company’s financial position, results of operations or cash flows.

In January 2017, the FASB issued ASU No. 2017-04, Intangibles-Goodwill and Other (Topic 350). ASU. 2017-04 simplifies the subsequent measurement of goodwill by removing the second step of the two‑step impairment test. The amendment requires an entity to perform its annual, or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. ASU 2017-04 becomes effective for the Company on January 1, 2020 with early adoption permitted and will be applied prospectively.

In May 2017, the FASB issued ASU No. 2017-09, Compensation-Stock Compensation: Scope of Modification Accounting, which provides clarification on when modification accounting should be used for changes to the terms or conditions of a share-based payment award. This ASU does not change the accounting for modifications but clarifies that modification accounting guidance should only be applied if there is a change to the value, vesting conditions or award classification and would not be required if the changes are considered non-substantive. The amendments of this ASU ~~are~~became effective for the Company in the first quarter of ~~2018, with early adoption permitted.~~2018. The adoption of ASU 2017-09 did not have an impact on the Company’s condensed consolidated financial statements.

In June 2018, the FASB issued ASU No. 2018-7, Compensation – Stock Compensation (Topic 718) — Improvements to Nonemployee Share-Based Payment Accounting. This guidance supersedes ASC 505-50 and expands the scope of ASC 718 to include all share-based payment arrangements related to the acquisition of goods and services from both nonemployees and employees. The amendments should be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. The guidance permits early adoption and was adopted by the Company in the first quarter of fiscal year 2019. The adoption of this ASU did not have any impact on the Company’s consolidated financial statements.

There are various other updates recently issued, however, they are not expected to a have a material impact on the Company’s consolidated financial position, results of operations or cash flows.

Inventory consists of raw materials, packaging components, work-in-process and finished goods. The Company’s inventory is stated at the lower of cost (FIFO cost basis) or market. The carrying value of inventory consisted of the following at ~~June 30, 2018~~March 31, 2019 and December 31, ~~2017:~~2018:

	June 30, 2018			December 31, 2017			March 31, 2019			December 31, 2018
Raw materials	$	72,041		$	67,664		$	27,094		$	25,297
Packaging components		27,209			17,546			7,687			7,687
Work-in-process		40,066			829			8,162			8,162
		139,316			86,039			42,943			41,146
Reserve for obsolescence		(39,489	)		(41,043	)		(3,142	)		(3,370	)
Total inventory	$	99,827		$	44,996		$	39,801		$	37,776

As of ~~June 30, 2018~~March 31, 2019 and December 31, ~~2017,~~2018, prepaid expenses and other assets consisted of the following:

	June 30, 2018			December 31, 2017			March 31, 2019			December 31, 2018

Prepaid consulting services– stock-based compensation	$	1,041,332		$	258,918		$	897,313		$	935,883
Prepaid consulting services		109,140			116,167			73,667			82,167
Prepaid clinical study		-			110,538
Prepaid insurance		27,354			60,180			87,911			120,877
Other receivables		5,883			5,858			2,666			2,666
Prepaid inventory		-			12,182
Prepaid expenses		31,670			23,045			37,200			37,200
Prepaid expenses and other assets		1,215,379			586,888			1,098,757			1,178,793
Current portion of prepaid expenses and other assets		(717,040	)		(586,888	)		(965,641	)		(946,386	)
Prepaid expenses and other assets less current portion	$	498,339		$	-		$	133,116		$	232,407

As of ~~June 30, 2018~~March 31, 2019 and December 31, ~~2017,~~2018, property and equipment ~~and intangible assets~~ consisted of the following:

	June 30, 2018			December 31, 2017			March 31, 2019			December 31, 2018

Manufacturing equipment	$	811,618		$	797,513		$	857,612		$	841,098
Computer and other equipment		176,839			169,499			186,655			183,346
Leasehold improvements		44,638			42,666			51,788			48,488
Less accumulated depreciation		(721,970	)		(672,317	)		(799,230	)		(773,022	)
Property and Equipment, net	$	311,125		$	337,361		$	296,825		$	299,910

~~Depreciation expense for~~For the three ~~and six month~~months periods ended ~~June 30,~~March 31, 2019 and 2018, ~~was $25,597~~depreciation expense amounted to $26,207 and ~~$49,652, respectively. Depreciation expense for the three and six month periods ended June 30, 2017 was $37,437 and $76,442,~~$24,055, respectively, which includes depreciation of ~~$2,160~~$0 and ~~$4,320~~$2,160 for capitalized leased assets for each of the periods ended, respectively. Accumulated depreciation for property held under capital leases were $43,201 and $39,337 for the three months periods ended March 31, 2019 and ~~six months ended June 30, 2017,~~2018, respectively.

The Company incurred ~~$47,632~~$21,180 and ~~$16,555~~$6,638 of legal patent costs that were capitalized during the ~~six~~three months ~~period~~periods ended ~~June 30,~~March 31, 2019 and 2018, ~~and 2017,~~ respectively. In addition, the Company did not purchase any patents through issuance of common stock shares of the Company for the three months period ended March 31, 2019. The Company purchased ~~$97,000~~$280,100 of patents through the issuance of ~~120,000~~200,000 common stock shares of the ~~Company. As~~Company during the year ended December 31, 2018.

The following table summarizes the estimated fair values as of ~~June 30, 2018, these shares have not yet been issued.~~March 31, 2019 of the identifiable intangible assets acquired, their useful life, and method of amortization:

The net intangible asset was $1,212,961, net of accumulated amortization of $201,965, as of March 31, 2019. Amortization expense was $14,230 and $10,899 for the three ~~and six month~~months periods ended ~~June 30,~~March 31, 2019 and 2018, ~~was $11,613 and $22,512, respectively. Amortization expense for the three and six month periods ended June 30, 2017 was $10,821 and $21,720,~~ respectively.

The estimated aggregate amortization expense over each of the next five years is as follows:

~~Loan payable consists of the following at June 30, 2018 and December 31, 2017:~~

Interest expense for the three and six month periods ended June 30, 2018 was $496 and $1,296, respectively. Interest expense for the three and six month periods ended June 30, 2017 was $653 and $1,665, respectively.

Interest expense for the three months periods ended March 31, 2019 and 2018 was $2,230 and $800, respectively.

Notes payable consist of the following at ~~June 30, 2018~~March 31, 2019 and December 31, ~~2017:~~2018:

	June 30, 2018			December 31, 2017			March 31, 2019			December 31, 2018

Note to a company amended on August 27, 2017 and due on or before one month from the amended date and the maturity date shall be extended for one month periods as long as the Company is not in default, interest shall accrue at 10% per annum, secured by the Company’s intellectual property	$	650,000		$	650,000
Note to a company of $100,000 due January 31, 2018 including interest of $3,000 per month, unsecured, principal and interest due at maturity, principal and interest repaid on January 23, 2018		-			100,000
Note to a company amended on August 27, 2017 and February 27, 2019, due on or before one month from the amended date and the maturity date shall be extended for one month periods as long as the Company is not in default, interest shall accrue at 10% per annum, secured by the Company’s intellectual property							$	400,000		$	650,000
Note to an individual, non-interest bearing, unsecured and has no fixed terms of repayment		50,000			50,000			50,000			50,000
Note to an individual due April 1, 2019, interest payable at 6% per annum, unsecured, principal and accrued interest due at maturity. The Company issued 50,000 shares of its common stock on October 18, 2018 at a price per share of $2.88 as an equity kicker. This note and accrued interest was repaid on April 2, 2019,								150,000			150,000
Note to a company due December 15, 2018, interest payable at 5% per annum, unsecured, principal and accrued interest due at maturity. If this note is still outstanding as of the date of any bona fide sale of the Company’s preferred stock or common stock in excess of $4,000,000 in gross proceeds, in one transaction or a serious of related transactions, which offering definitively sets a price per share of common stock and results in a listing of the Company’s common stock on a national securities exchange. On January 1, 2019, we entered into an Amendment to extend the maturity date to June 30, 2019.								100,000			100,000
		700,000			800,000			700,000			950,000

Unamortized discount								(625	)		(30,000	)
Current portion of loan payable		(700,000	)		(800,000	)		(699,375	)		(920,000	)
Loan payable, less current portion	$	-		$	-		$	-		$	-

Interest expense for the three ~~and six~~ month periods ended ~~June 30,~~March 31, 2019 and 2018 was ~~$16,205~~$21,661 and ~~$32,233,~~$19,027, respectively. ~~No interest expense was incurred for the three and six month periods ended June 30, 2017.~~

Convertible promissory notes consist of the following at ~~June 30, 2018~~March 31, 2019 and December 31, ~~2017:~~2018:

	March 31, 2019		December 31, 2018

Convertible promissory notes totaling $1,400,000 due between December 31, 2018 and February 28, 2019, interest payable at 8% per annum; unsecured; principal and accrued interest convertible into common stock at the lower of $7.00 per share or the price per share of the latest closing of a debt or equity offering by the Company greater than $3,000,000; accrued interest due between December 31, 2018 and February 28, 2019. A total of $250,000 convertible promissory notes was repaid in 2018 and $450,000 convertible promissory notes were repaid in 2019. A total $400,000 of convertible promissory notes plus accrued interest of $71,342 have been converted in to 254,779 common stock shares of the Company in 2019. Remaining $550,000 of convertible promissory notes are currently in default.	$	550,000	$	1,400,000
Convertible promissory notes totaling $1,275,000 due November 30, 2018 and $750,000 due February 28, 2019, interest payable at 9% per annum; unsecured; principal and accrued interest convertible into common stock at either the price per share equal to the average closing price of the Company’s Common Stock on the OTC Markets for the five consecutive trading days prior to the delivery of a Notice of Conversion (“Optional Conversion”) or price per share equal to 75% of the price of the Company’s next bona fide sale of its preferred stock or Common Stock in excess of $4,000,000 in gross proceeds, in one transaction or a series of related transactions, which offering definitively sets a price per share of the Company’s Common Stock or preferred stock and enables the Company to list its common stock on a national securities exchange; accrued interest to be paid quarterly beginning September 30, 2018, which has not yet been paid. During the first quarter of 2019, the Company repaid $275,000. On February 13, 2019, $750,000 of convertible promissory notes plus accrued interest and penalties of $135,825 were converted into 479,144 common stock shares of the Company. On February 15, 2019, $1,000,000 of convertible promissory notes plus accrued interest and penalties of $94,750 were converted into 591,757 common stock shares of the Company.		-		2,025,000
Convertible promissory note totaling $500,000 due April 30, 2019, interest payable at 9% per annum; unsecured; principal and accrued interest convertible into common stock at a price per share (the “ Voluntary Conversion PPS “) equal to 75% of the average of the closing prices of the Company’s Common Stock on the OTC Market (or any other market on which the common stock of the Company is then listed for trading) over the thirty (30) consecutive trading days prior to the delivery of the notice of conversion by the Investor to the Company, or, if at the time of such conversion the shares of the Company’s Common Stock are not listed for trading, then the entire then outstanding Investment Amount shall be converted into that number of shares of the most senior class of shares of the Company existing at the time of such conversion, at a price per share equal to 75% of the fair market value of such Common Stock as shall be determined by the Board of Directors based on, among others, a valuation prepared by an independent third party and which shall have been submitted to the Company not more than 90 days prior to the date of such determination by the Board of Directors. In the event of the consummation by the Company, on or before the Maturity Date, of a transaction or series of related transactions in which the Company issues equity securities of the Company in consideration of at least US$4,000,000 (a “ Financing “), the then outstanding Investment Amount not previously converted hereunder shall be automatically converted, immediately prior to (but conditioned upon) the consummation of such Financing, into such number of shares (or a sub-class thereof) issued by the Company in the Financing, equal to the outstanding Investment Amount divided by a price per share equal to 75% of the lowest price per share paid to the Company in the Financing. In the event the Financing is not consummated by the Maturity Date, then the outstanding Investment Amount as of the Maturity Date not previously converted hereunder shall be automatically converted, on the Maturity Date, into such number of shares (or a sub-class thereof) issued by the Company in the Financing, equal to the outstanding Investment Amount divided by the Voluntary Conversion PPS. This convertible promissory note and accrued interest was repaid on April 29, 2019.		500,000		500,000
Convertible promissory note totaling $500,000 due December 31, 2018, interest payable at 9% per annum; secured by all assets of the company; principal and accrued interest convertible into common stock at either the price per share equal to the average closing price of the Company’s Common Stock on the OTC Markets for the five consecutive trading days prior to the delivery of a Notice of Conversion (“Optional Conversion”) or price per share equal to 75% of the price of the Company’s next bona fide sale of its preferred stock or Common Stock in excess of $4,000,000 in gross proceeds, in one transaction or a series of related transactions, which offering definitively sets a price per share of the Company’s Common Stock or preferred stock and enables the Company to list its common stock on a national securities exchange; accrued interest to be paid quarterly beginning September 30, 2018. In 2019, the noteholder of this convertible promissory note entered into a debt conversion agreement to convert this convertible promissory note plus accrued interest into common stock shares of the Company at a $1.85 conversion price.		-		500,000

During the three ~~and six~~ month ~~period~~periods ended ~~June 30,~~March 31, 2019 and 2018, the Company incurred ~~$224,936~~$458,899 and ~~$372,544,~~$147,608, respectively, ~~amortization of discount. During the three and six month periods ended June 30, 2017, the Company incurred $77,683~~ amortization of discount. Interest expense for the three ~~and six~~ month periods ended ~~June 30,~~March 31, 2019 and 2018 was ~~$89,759~~$72,813 and ~~$142,153,~~$303,174, respectively. ~~Interest expense for the three and six month periods ended June 30, 2017 was $3,306.~~

The Company evaluates its convertible instruments, options, warrants or other contracts, to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for under ASC Topic 815, “Derivatives and Hedging.” The result of this accounting treatment is that the fair value of the derivative is marked-to-market each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statement of operations as other income (expense). Upon conversion or exercise of a derivative instruments, the instrument is marked to fair value at the conversion date then that fair value is reclassified to equity. Equity instruments that are initially classified as equity that become subject to reclassification under ASC Topic 815 are reclassified to liabilities at the fair value of the instrument on the reclassification date.

The following table summarizes fair value measurements by level at ~~June 30,~~March 31, 2019 for assets and liabilities measured at fair value on a recurring basis:

The following table summarizes fair value measurements by level at December 31, 2018 for assets and liabilities measured at fair value on a recurring basis:

~~The following table summarizes fair value measurements by level at December 31, 2017 for assets and liabilities measured at fair value on a recurring basis:~~

The Company has issued convertible promissory notes during ~~2017~~2018 and ~~2018.~~2017. The convertible notes require us to record the value of the conversion feature as a liability, at fair value, pursuant to ASC 815, including provisions in the notes that protect the holders from declines in the Company’s stock price, which is considered outside the control of the Company. The derivative liabilities are marked-to-market each reporting period and changes in fair value are recorded as a non-operating gain or loss in our statement of operations, until they are completely settled. The fair value of the conversion feature is determined each reporting period using the Black-Scholes option pricing model and is affected by changes in inputs to that model including our stock price, expected stock price volatility, dividends, interest rates and expected term. The assumptions used in valuing the derivative liability during ~~2018~~2019 were as follows:

The following istable presents a reconciliation of the derivative liability ~~for 2018:~~measured at fair value on a recurring basis from December 31, 2017 to March 31, 2019:

On December 29, 2017 (“Effective Date”), the Company adopted the CURE Pharmaceutical Holding Corp. 2017 Equity Incentive Plan (the “Plan”), pursuant to which an aggregate of 5,000,000 shares of the common stock of the Company are available for grant. The Board of Directors have determined that it is in the best interests of the Company and its stockholders to provide an additional incentive for certain employees, including executive officers, and non-employee members of the Board of Directors of the Company by granting to them awards with respect to the common stock of the Company pursuant to the Plan. The Plan seeks to achieve this purpose by providing for awards in the form of Options, Stock Appreciation Rights, Restricted Stock Awards, Restricted Stock Units, Performance Shares, Performance Units, Cash-Based Awards and Other Stock-Based Awards (“Awards”). The Plan will continue in effect until its termination by the Committee; provided, however, that all Awards must be granted, if at all, within ten (10) years from the Effective Date.

The Company ~~awarded 371,250~~did not issue any Restricted Common Stock (“RCS”), ~~1,251,700~~ Nonstatutory Stock Options (“NSO”) ~~and 932,750~~or Incentive Stock Options (“ISO”) to any employees, including executive officers, non-employee members of the Board of Directors of the Company, members of the Advisory Board Committee and consultants ~~at a $0.74 price per share.~~during the three months period ended March 31, 2019. Vesting period for ~~the~~ awarded RCS, NSO and ISO’s range from immediate to quarterly over a 4 year period. For NSO’s and ISO awarded, the term to exercise their NSO or ISO is 10 years.

	Options		Weighted Average Exercise Price		Weighted Average Contractual Remaining Life		Options			Weighted Average Exercise Price		Weighted Average Contractual Remaining Life
Outstanding, December 31, 2017		-		-		-		2,313,050			0.79		9.27
Granted		2,184,450		0.74		9.78		-			-		-
Exercised		-		-		-		-			-		-
Forfeited/Expired		-		-		-		(89,544	)		0.74		-
Outstanding, June 30, 2018		2,184,450		0.74		9.78
Exercisable at June 30, 2018		527,231		0.74		9.78
Outstanding, December 31, 2018								2,223,506			0.79		9.02
Exercisable at December 31, 2018								982,934			0.81		9.02

The aggregate intrinsic value of options outstanding and exercisable at ~~June 30, 2018~~March 31, 2019 was ~~$0.~~$7,926.

The aggregate grant date fair value of options granted during the ~~six~~three months ended ~~June 30, 2018~~March 31, 2019 and year ended December 31, ~~2017~~2018 amounted to ~~$1,229,862~~$1,488,070 and ~~$0,~~$1,541,353, respectively. Compensation expense related to stock options was ~~$313,730~~$94,041 and $0 for the three ~~and six month~~months periods ended ~~June 30, 2018. No compensation expense related to stock options were incurred during the three~~March 31, 2019 and ~~six month periods ended June 30, 2017.~~2018, respectively.

As of ~~June 30, 2018,~~March 31, 2019, the total unrecognized fair value compensation cost related to unvested stock options was ~~$986,132,~~$817,722, which is to be recognized over a remaining weighted average period of approximately ~~9.78~~9.02 years.

The weighted-average fair value of options granted during the ~~six~~three months ended ~~June 30, 2018~~March 31, 2019 and year ended December 31, ~~2017,~~2018, and the weighted-average significant assumptions used to determine those fair values, using a Black-Scholes-Merton (“Black-Scholes”) option pricing model are as follows:

June 30,
2018

December 31,
2017

Significant assumptions (weighted-average):

Risk-free interest rate at grant date

2.73 %

0 %
Expected stock price volatility

90.76 %

0 %
Expected dividend payout

-

-

Expected option life (in years)

10

-

Expected forfeiture rate

0 %

0 %

Compensation expense related to restricted shares was ~~$147,538~~$136,250 and $0 for the three ~~and six month~~months periods ended ~~June 30,~~March 31, 2019 and 2018, respectively. ~~There was no compensation expense related to restricted shares for the three and six month periods ended June 30, 2017.~~ Information relating to non-vested restricted award shares is as follows:

	Restricted Stock Shares			Weighted Average Grant Date Fair Value		Restricted Stock Shares			Weighted Average Grant Date Fair Value
Non-vested, December 31, 2017		-			-
Non-vested, December 31, 2018							317,708			1.44
Granted		371,250			0.74		-			-
Vested		(199,375	)		0.74		(93,750	)		1.44
Forfeited/Expired		-			-		-			-
Non-vested, June 30, 2018		171,875			0.74
Non-vested, March 31, 2019							223,958			1.44

On ~~January 24, 2018,~~February 13, 2019, the Company issued ~~an additional 55,000~~657,655 warrants at a fair market value of ~~$50,094~~$1,792,965 and with an exercise price of ~~$1.00~~$2.31 per share in connection with ~~issuance~~the conversion of ~~$1,100,000~~$1,325,000 convertible promissory ~~notes in 2017 and amended on January 24, 2018 to extend the maturity date to March 31, 2018.~~notes.

On ~~April 15, 2018,~~February 13, 2019, the Company issued ~~an additional 275,000~~99,476 warrants at a fair market value of ~~$87,828~~$271,202 and with an exercise price of ~~$1.00~~$2.31 per share in connection with ~~issuance~~the broker fees earned from the conversion of $1,100,000 convertible promissory notes in 2017, amended on January 24, 2018 to extend the maturity date to March 31, 2018 and a second amendment on April 15, 2018 to extend the maturity date to May 31, 2018. In addition, the Company extended the term of the warrant agreements for one additional year for each of the$1,325,000 convertible promissory notes.

On ~~May 1, 2018,~~February 15, 2019, the Company issued ~~110,000~~312,500 warrants at a fair market value of ~~$27,479~~$866,620 and with an exercise price of ~~$1.00~~$2.00 per share in connection with the conversion of $500,000 convertible promissory ~~notes purchased~~notes.

On February 15, 2019, the Company issued by295,879 warrants at a fair market value of $814,834 and with an exercise price of $2.31 per share in connection with the ~~Company.~~conversion of $1,000,000 convertible promissory notes.

Warrants that vest at the end of a one-year period are amortized over the vesting period using the straight-line method.

	Warrants		Weighted Average Exercise Price		Weighted Average Contractual Remaining Life		Warrants		Weighted Average Exercise Price		Weighted Average Contractual Remaining Life
Outstanding, December 31, 2017		4,752,107		2.90		4.98
Outstanding, December 31, 2018								5,340,751		2.20		3.80
Granted		440,000		1.00		3.25		1,365,510		2.24		3.33
Exercised		-		-		-		-		-		-
Forfeited/Expired		-		-		-		-		-		-
Outstanding, June 30, 2018		5,192,107		1.98		2.74
Exercisable at June 30, 2018		3,656,107		1.97		2.76
Outstanding, March 31, 2019								6,706,261		2.01		2.08
Exercisable at March 31, 2019								5,682,261		2.01		2.15

Range of Exercise Price

Number of Warrants

Weighted Average Remaining Contractual Life (years)

Weighted Average Exercise Price

Number of Warrants Exercisable

Weighted Average Exercise Price

Range of Exercise Price

Number of Warrants

Weighted Average Remaining Contractual Life (years)

Weighted Average Exercise Price

Number of Warrants Exercisable

Weighted Average Exercise Price

1.00 – $7.00

5,192,107

2.74

1.98

3,656,107

1.97

1.00 – $7.00

6,706,261

2.08

2.01

5,682,261

2.01

5,192,107

2.74

1.98

3,656,107

1.97

5,340,751

2.08

2.01

5,682,261

2.01

The weighted-average fair value of warrants granted to during the ~~six~~three months ended ~~June 30, 2018~~March 31, 2019 and year ended December 31, ~~2017,~~2018, and the weighted-average significant assumptions used to determine those fair values, using a Black-Scholes-Merton (“Black-Scholes”) option pricing model are as follows:

	June 30, 2018			December 31, 2017			March 31, 2019			December 31, 2018
Significant assumptions (weighted-average):
Risk-free interest rate at grant date		2.73	%		2.20	%		2.23	%		2.51	%
Expected stock price volatility		90.76	%		75.43	%		138.42	%		156.15	%
Expected dividend payout		-			-			-			-
Expected option life (in years)		3			3			3			3
Expected forfeiture rate		0	%		0	%		0	%		0	%

~~The Company has authorized to issue is 75,000,000 common shares with a par value of $0.001 per share.~~

~~As of June 30, 2018 and December 31, 2017, there were 25,021,427 and 23,901,252 shares of the Company’s common stock issued and outstanding, respectively.~~

On January ~~24, 2018,~~1, 2019, the Company issued ~~50,000~~13,827 common stock shares at ~~$1.48~~$2.26 per share for investor relations consulting services to be performed over a ~~one year~~six-month period. The total value of this issuance was ~~$74,000~~$31,249 and as of ~~June 30, 2018, $23,108~~March 31, 2019, $6,388 is included in prepaid expenses and other assets.

On ~~May 16,~~December 14, 2018, the Company ~~issued 70,150~~entered into an Advisory Consulting Agreement (“Agreement”). Per the terms of the Agreement, the Company is to issue 50,000 common stock shares of the Company that vest 30 days from December 14, 2018 and an additional 250,000 common stock shares of the Company that vest monthly over 24 months. On January 14, 2019, the Company issued 50,000 common stock shares of the Company at ~~$0.65~~$1.84 per share per the terms of this Agreement. On February 14, 2019, the Company issued 10,417 common stock shares of the Company at $3.35 per share per the terms of this Agreement.

On December 14, 2018, the Company entered into a Securities Purchase Agreement (the “SPA”) with an accredited investor for ~~consulting services performed.~~the purchase of 833,333 shares of common stock of the Company (the “Shares” or “Securities”) at $1.20 per share (the “Share Price”) for a total purchase price of One Million Dollars ($1,000,000) (the “Purchase Price”). Per the terms of the SPA, the Company and the investor agreed to multiple Closings and Closing Dates (as hereinafter defined): (1) a Closing of $250,000 five (5) business days after the Closing Date; (2) a Closing of $250,000 ten (10) business days after the Closing Date; (3) a Closing of $250,000 thirty (30) business days after the Closing Date; and (4) a Closing $250,000 sixty (60) business days after the Closing Date. Each of the aforementioned being a Closing and the dates of each Closing being a Closing Date. The investor funded $250,000 on December 26, 2018 and the Company issued 208,333 common stock shares. The investor funded another $250,000 on December 31, 2018 and the Company issued another 208,333 common stock shares. The investor funded $250,000 on January 22, 2019 and another $250,000 on February 25, 2019 and the Company issued 208,333 common stock shares and 208,334 common stock shares, respectively.

On February 1, 2019, the Company amended two convertible promissory notes totaling $600,000 to extend the maturity dates to February 28, 2019. For extending the maturity date, the Company will issue a total of 30,000 common stock shares of the Company at $2.32 price per share. The total value of this issuance was ~~$45,614.~~$69,600. The Company considered if the amendment of the convertible promissory note was a debt modification or extinguishment based on the guidelines of ASC 470-50, and concluded that the amendments of the convertible promissory notes were debt modifications. The Company recorded the fair market value of the 30,000 common stock shares issued as a debt discount that has been fully amortized as of March 31, 2019.

On ~~May 16, 2018,~~February 13, 2019, the Company ~~issued 1,000,000~~entered into Debt Conversion Agreements (“Agreements”) with thirty convertible promissory note holders totaling $1,325,000 plus accrued interest and penalties of $213,859 that were converted into 832,365 common stock shares ~~at $0.97~~of the Company with a conversion price per share $1.85 which was based on a 20% discount to the average closing price of the Company’s common stock on the OTC Markets for ~~consulting services~~five consecutive trading days. As a result of the lower conversion price compared to the fair market value of the common stock on the date of issuance, the Company recorded a loss on conversion of $812,241. In connection with the conversion of the convertible promissory notes, the Company will issue 657,655 warrants that were priced at $2.31 price per share.

On February 14, 2019, the Company entered into a Debt Conversion Agreement (“Agreement”), where $250,000 (Two Hundred Fifty Thousand Dollars) of $650,000 (Six Hundred Fifty Thousand Dollars) of the Outstanding Balance under the Senior Secured Promissory Note effective April 27, 2017 which was replaced with an Amended and Restated Senior Secured Promissory Note dated August 27, 2017 (the “Note”) shall be ~~performed over~~converted into 135,135 (One Hundred Thirty-Five Thousand, One Hundred Thirty-Five) shares of Common Stock of the Company (the “Conversion Shares”) at a ~~30 month period.~~conversion price of $1.85 per share (a discounted rate calculated as an approximation based on 20% discount on 5 days volume weighted average price of the market rate). As a result of the lower conversion price compared to the fair market value of the common stock on the date of issuance, the Company recorded a loss on conversion of $201,351.

On February 14, 2019, the Company entered into a First Amendment to Amended and Restated Senior Secured Promissory Note, that amends the Senior Secured Promissory Note effective April 27, 2017 which was replaced with an Amended and Restated Senior Secured Promissory Note effective August 27, 2017 (“Amended Agreement”) with the Note Holder (“Holder”). The Company and the Holder have agreed that the Maturity Date shall be extended to February 27, 2019 in exchange for 75,000 common stock shares of the Company at a price per share of $3.35. The total value of this issuance was ~~$970,000~~$251,250. The Company considered if the amendment of the convertible promissory note was a debt modification or extinguishment based on the guidelines of ASC 470-50, and concluded that the amendments of the convertible promissory notes were debt modifications. The Company recorded the fair market value of the 75,000 common stock shares issued as a debt discount that has been fully amortized as of March 31, 2019.

On February 15, 2019, the Company entered into a Debt Conversion Agreement (“Agreement”) to convert $400,000 of convertible promissory notes plus accrued interest of $71,342 into 254,779 common stock shares of the Company with a conversion price per share $1.85 which was based on a 20% discount to the average closing price of the Company’s common stock on the OTC Markets for five consecutive trading days. As a result of the lower conversion price compared to the fair market value of the common stock on the date of issuance, the Company recorded a loss on conversion of $630,238.

On February 15, 2019, the Company entered into a Debt Conversion Agreement (“Agreement”) with a convertible promissory note holder totaling $1,000,000 plus accrued interest of $94,750 that were converted into 591,757 common stock shares of the Company with a conversion price per share $1.85 which was based on a 20% discount to the average closing price of the Company’s common stock on the OTC Markets for five consecutive trading days. As a result of the lower conversion price compared to the fair market value of the common stock on the date of issuance, the Company recorded a loss on conversion of $860,087. In connection with the conversion of the convertible promissory notes, the Company will issue 295,879 warrants that were priced at $2.31 price per share.

On February 15, 2019, the Company entered into a Debt Conversion Agreement (“Agreement”) with a convertible promissory note holder totaling $1,575,000 plus accrued interest of $18,406 that were converted into 861,301 common stock shares of the Company with a conversion price per share $1.85 which was based on a 20% discount to the average closing price of the Company’s common stock on the OTC Markets for five consecutive trading days. As a result of the lower conversion price compared to the fair market value of the common stock on the date of issuance, the Company recorded a loss on conversion of $745,929.

On February 19, 2019, the Company entered into a Debt Conversion Agreement (“Agreement”) with a convertible promissory note holder totaling $425,000 plus accrued interest of $425 that were converted into 168,819 common stock shares of the Company with a conversion price per share $2.52 which was based on a 20% discount to the average closing price of the Company’s common stock on the OTC Markets for five consecutive trading days.

On February 19, 2019, the Company entered into a Consulting Agreement (“Agreement”) with a Company. Per the terms of the Agreement, the Company is to issue 25,000 common stock shares of the Company for providing investor relations services, where 12,500 common stock shares of the Company are due immediately and the remaining 12,500 common stock shares of the Company is due June ~~30, 2018, $831,429 is included in prepaid expenses~~19, 2019. On February 19, 2019, the Company issued 250,000 common stock shares of the Company at $3.39 per share.

On February 25, 2019, the Company issued 46,875 and ~~other assets.~~83,333 common stock shares of the Company at $0.74 and $1.81 per share, respectively, relating to restricted stock issued from the Company’s 2017 Equity Incentive Plan.

On January ~~11, 2018,~~4, 2019, the Company entered into a Consulting Agreement (“Agreement”) with an individual. Per the terms of the Agreement, the Company is to issue 45,000 common stock shares of the Company for providing investor relations services. As of our filing of our Form 10-Q for the quarterly period ended March 31, 2019, the company has not yet issued these common stock shares and has recorded a stock payable of $68,400.

On January 15, 2019, the Company entered into an Advisory Consulting Agreement (“Agreement”) with ~~a Company (“Consultant”) to provide scientific and technical advisory services. In consideration for~~an individual. Per the ~~Consultant’s services provided,~~terms of the Agreement, the Company ~~shall grant 70,000 restricted~~is to issue 50,000 common stock shares ~~at $1.85 price per share over a six month~~of the Company for providing investor relations services. As of our filing of our Form 10-Q for the quarterly period ~~where 70,000 restricted~~ended March 31, 2019, the company has not yet issued these common stock shares ~~vesting immediately. As the Company did not issue the 70,000 restricted common stock shares, the Company~~and has recorded a stock payable of ~~$129,000. As of June 30, 2018, $7,780 is included in prepaid expenses and other assets.~~$92,000.

On February ~~20, 2018,~~15, 2019, the Company entered into a ~~Consulting~~Debt Conversion Agreement (“Agreement”) with ~~an individual (“Consultant”) to provide strategic marketing and development advisory services. In consideration for the Consultant’s services provided, the Company shall grant 250,000 restricted~~a convertible promissory note holder totaling $500,000 plus accrued interest of $28,588 that were converted into 285,723 common stock shares ~~at $1.10~~of the Company with a conversion price per share ~~over~~$1.85 which was based on a ~~six month~~20% discount to the average closing price of the Company’s common stock on the OTC Markets for five consecutive trading days. As of our filing of our Form 10-Q for the quarterly period ~~where 250,000 restricted~~ended March 31, 2019, the company has not yet issued these common stock shares ~~vesting immediately. As the Company did not issue the 250,000 restricted common stock shares, the Company~~and has recorded a stock payable of ~~$275,000.~~$528,588. As a result of ~~June 30, 2018, $77,486 is included in prepaid expenses and other assets.~~

~~On April 2, 2018 (the “Effective Date”),~~ the Company entered into a patent purchase agreement (“Agreement”) with an individual (“Assignor”) who is the owner of all rights, title and interest in and to certain Assigned Patents to purchase the rightslower conversion price compared to the ~~Assigned Patents. As consideration for the assignment~~fair market value of the Assigned Patents and other rights under the Agreement, the Company shall issue to Assignor shares of its Common Stock (“Shares”) as follows, provided, that the maximum number of Shares issuable hereunder shall not exceed Two Hundred Thousand (200,000): (a) 50,000 Shares will be issuedcommon stock on the ~~Effective Date; (b) 10,000 Shares will be issued for each Abandoned Application the prosecution~~date of ~~which is revived by the United States Patent and Trademark Office (“USPTO”); and (c) 50,000 Shares will be issued upon~~ issuance, by the USPTO of each patent that includes at least one specific claim in a patent application that recites subject matter to be defined by Assignee in its sole discretion (“Target Claim”). For the six months period ended June 30, 2018, the Company owed 50,000 Shares at $0.69 price per share, 20,000 Shares at $0.70 price per share and 50,000 shares at $0.97 price per share, for a total of 120,000 Shares. As the Company has not yet issued the 120,000 Shares as of June 30, 2018, the Company recorded a ~~stock payable~~loss on conversion of ~~$97,000, where $96,286 is included in intellectual property and patents as~~$409,672. In connection with the conversion of ~~June 30, 2018.~~the convertible promissory notes, the Company will issue 312,500 warrants that were priced at $2.00 price per share.

On ~~April 10, 2018 (“Execution Date”),~~February 26, 2019, the Company entered into a Media Advertising Agreement (“Agreement”) ~~with a company (“Consultant”)~~. Per the terms of the Agreement, the Company was to ~~provide~~issue 60,000 common stock shares at $3.78 per share for providing media and advertising services over a six month period. ~~In consideration for the Consultant’s services provided, the Company shall grant 90,000 restricted common stock shares, vesting immediately,~~The total value of these issuances was $226,800 and as of the Execution Date and 90,000 three months from the Execution Date, vesting immediately. For the six months period ended June 30, 2018, the Company owed 90,000 shares at $0.71 price per share. As the Company did not issue the 90,000 restricted common stock shares, the Company recorded a stock payable of $63,900. As of June 30, 2018, $30,071March 31, 2019, $185,450 is included in prepaid expenses and other assets.

~~On May 16, 2018, the Company entered into a Stock Purchase Agreement (“SPA”) with an individual (“Landlord”)~~ As of our filing of our Form 10-Q for the ~~cancellation of two months rent and overages for property tax and general liability insurance. In consideration for~~quarterly period ended March 31, 2019, the ~~Landlord’s cancellations, the Company shall grant 69,444 restricted~~company has not yet issued these common stock shares at $0.72 price per share, where 69,444 restricted common stock shares vesting immediately. As the Company did not issue the 69,444 restricted common stock shares before the six months period ended June 30, 2018, the Companyand has recorded a stock payable of ~~$50,000. As the Company did not issue the 69,444 Shares, the Company recorded a stock payable of $50,000 as of June 30, 2018.~~$226,800.

From time to time, we may become involved in various lawsuits and legal proceedings that 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 our business. The only significant matter of which the Company is aware of is discussed below.

On May 22, 2017, Sandy Sierra Garate (“Applicant”), an employee of the Company, filed an application for benefits due to serious and willful misconduct of the employer pursuant to labor code section 4553 with the State of California Workers’ Compensation Appeals Board (“WCAB”) (WCAB Case No: ADJ 10686812) resulting in injury arising out of and in the course of the Applicant’s employment on August 5, 2016. The Applicant iswas requesting relief in this matter for a ~~one half~~one-half increase in all compensation recoverable in connection with the injury of August 5, 2016, for the allowance of costs and expenses in an amount to be determined and for such further relief as is deemed appropriate. ~~The Company is currently unable to determine what additional expenses will be incurred in order to defend this matter. As such,~~On February 13, 2019, the Company ~~cannot determine whether there~~and the Applicant entered to into a Workers’ Compensation Appeals Board Compromise and Release Agreement (“Agreement”) where the Applicant was awarded a settlement amount of $8,500 relating to WCAB Case No: ADJ 10686812. Out of the settlement amount, $1,250 is ~~a reasonable possibility that a loss will~~to be ~~incurred nor can it estimate~~paid to the ~~range of any such potential loss. Accordingly,~~Applicant’s attorney. On February 20, 2019, the Company ~~has not accrued~~received an ~~amount for any potential loss associated~~Order Approving Compromise and Release of WCAB Case No: ADJ 10686812 based on the Agreement entered into with ~~this action.~~the Company and the Applicant.

The Company maintains its corporate offices and manufacturing facility at 1620 Beacon Place, Oxnard, CA 93033, which contains approximately 25,000 square feet. The Company is currently on a month-to-month lease.

The Company also leased additional office and warehouse space at 1612 Fiske Place, Oxnard, CA 93033, which contains approximately 2,227 square feet. The Company was on a month-to-month lease and vacated this facility on August 6, 2018.

Total rent expense for the three ~~and six month~~months periods ended ~~June 30,~~March 31, 2019 and 2018 was ~~$67,792~~$63,028 and ~~$141,670,~~$74,178, respectively. ~~Total rent expense for the three and six month periods ended June 30, 2017 was $73,416 and $145,815, respectively.~~

On June 30, 2018, Edward Maliski, President and Chief Scientific Officer of the Company, retired from his position and entered into a Confidential Severance and General Release Agreement. On July 1, 2018, Edward Maliski (“Consultant”) entered into a Consulting Agreement (“Agreement”) with the Company with a term of 4 years. Per the Agreement, the Consultant will advise on new and existing product formulations and make recommendations based on best practices and latest innovations, advise on analytical method development and assist with patent prosecution matters (“Services”). The Consultant will be compensated at an hourly rate of $300 per hour and is not expected to exceed 10 hours per month. It is understood that the total cost to the Company for Services provided under the Agreement shall not exceed $36,000 during such one-year period.

~~On July 9, 2018,~~April 8, 2019, the Company entered into a ~~non-binding Confidential Term Sheet (“Term Sheet)~~Securities Purchase Agreement (the “SPA”) with ~~Therapix Bioscience Ltd.,~~ an Israeli public company (“Therapix”). The Company will acquire all of Therapix’s non-pain assets, which include several clinical drug candidates as well as two pre-clinical drug candidates (“Assets”), in considerationaccredited investor for the ~~issuance by the Company to Therapix~~purchase of ~~newly issued~~150,000 shares of common stock of the Company (the “Shares”~~). The number of Shares to be issued as consideration for the Assets (the “Acquisition”~~ or “Securities”) shall be mutually agreed by the parties based on an independent third party valuation of the Assets and the Shares. A condition of the closing for the Acquisition shall be raising additional financing, some of which will be provide by Therapix.

~~On July 27, 2018, the Company issued a $250,000 convertible promissory note with an investor (“Investor”), secured by all assets of the Company and due December 31, 2018. The notes bear interest~~ at ~~9% per year and are convertible into common stock at either a price~~$3.30 per share ~~equal to the average closing~~(the “Share Price”) for a total purchase price of ~~the Company’s Common Stock on the OTC Markets for the five consecutive trading days prior to the delivery~~$495,000. As of a Notice of Conversion (“Optional Conversion”) or price per share equal to 75% of the price of the Company’s next bona fide sale of its preferred stock or Common Stock in excess of $4,000,000 in gross proceeds, in one transaction or a series of related transactions, which offering definitively sets a price per share of the Company’s Common Stock or preferred stock and enables the Company to list its common stock on a national securities exchange. The Investors in this offering also received warrants (the “Warrants”) for the option to purchase equal to 50% of the shares of Common Stock that the Investor is entitled to receive in connection with the conversion of the Investor’s Note. The Warrants’ price per share shall equal the lower of (a) $2.00 or (b) 125% of the price per share of the Qualified Offering. If the Qualified Offering has not occurred, then the Exercise Price shall be $2.00. The Warrants will have a three-year term and shall be exercisable in cash.

~~On July 7, 2018, a convertible promissory note and accrued interest totaling $263,398 was converted into 297,288 shares of common stock of the Company at a price of $0.886 per share. As of~~our filing of our Form 10-Q for the quarterly period ended ~~June 30, 2018,~~March 31, 2019, the ~~Company~~company has not yet issued these ~~shares of~~ common ~~stock.~~stock shares.

On ~~July 31, 2018,~~April 9, 2019, the Company ~~amended four convertible promissory notes totaling $850,000 to extend~~entered into a Securities Purchase Agreement (the “SPA”) with an accredited investor for the ~~maturity dates to August 31, 2018. For extending the maturity date, the Company will issue a total~~purchase of ~~180,000~~100,000 shares of common stock ~~shares~~ of the Company (the “Shares” or “Securities”) at ~~$1.65~~$3.30 per ~~share.~~share (the “Share Price”) for a total purchase price of $330,000. As of our filing of our Form 10-Q for the quarterly period ended March 31, 2019, the company has not yet issued these common stock shares.

On April 12, 2019, the Company entered into a Securities Purchase Agreement (the “SPA”) with an accredited investor for the purchase of 15,152 shares of common stock of the Company (the “Shares” or “Securities”) at $3.30 per share (the “Share Price”) for a total purchase price of $50,000. As of our filing of our Form 10-Q for the quarterly period ended March 31, 2019, the company has not yet issued these common stock shares.

On April 15, 2019, the Company entered into a Securities Purchase Agreement (the “SPA”) with an accredited investor for the purchase of 60,606 shares of common stock of the Company (the “Shares” or “Securities”) at $3.30 per share (the “Share Price”) for a total purchase price of $200,000. As of our filing of our Form 10-Q for the quarterly period ended March 31, 2019, the company has not yet issued these common stock shares.

On April 15, 2019, the Company entered into a Securities Purchase Agreement (the “SPA”) with an accredited investor for the purchase of 15,152 shares of common stock of the Company (the “Shares” or “Securities”) at $3.30 per share (the “Share Price”) for a total purchase price of $50,000. As of our filing of our Form 10-Q for the quarterly period ended March 31, 2019, the company has not yet issued these common stock shares.

On April 15, 2019, the Company entered into a Termination and Release Agreement (“Agreement”) with Oak Therapeutics (“Oak”) to surrender all of its Oak shares to Oak and terminating any rights the Company might have to acquire additional shares or interest in Oak. The parties terminated all contractual relationships between them, whether written or verbal, express or implied. All license or other rights previously granted by Oak to the Company or the Company to Oak were terminated, including all licenses or rights of any kind granted by the Company.

On April 17, 2019, the Company entered into a Securities Purchase Agreement (the “SPA”) with an accredited investor for the purchase of 127,273 shares of common stock of the Company (the “Shares” or “Securities”) at $3.30 per share (the “Share Price”) for a total purchase price of $420,000. As of our filing of our Form 10-Q for the quarterly period ended March 31, 2019, the company has not yet issued these common stock shares.

On May 6, 2019, the Company entered into a Securities Purchase Agreement (the “SPA”) with an accredited investor for the purchase of 15,151 shares of common stock of the Company (the “Shares” or “Securities”) at $3.30 per share (the “Share Price”) for a total purchase price of $50,000. As of our filing of our Form 10-Q for the quarterly period ended March 31, 2019, the company has not yet issued these common stock shares.

On May 13, 2019, the Company entered into a Securities Purchase Agreement (the “SPA”) with an accredited investor for the purchase of 45,455 shares of common stock of the Company (the “Shares” or “Securities”) at $3.30 per share (the “Share Price”) for a total purchase price of $150,000. As of our filing of our Form 10-Q for the quarterly period ended March 31, 2019, the company has not yet issued these common stock shares.

On May 14, 2019 (the “Closing Date”), Cure Pharmaceutical Holding Corp., a Nevada corporation (the “Company”), and CURE Chemistry Inc., a Delaware corporation and wholly owned subsidiary of the Company (“Merger Sub”), completed the transactions contemplated by the Agreement and Plan of Merger and Reorganization, dated March 31, 2019 (the “Merger Agreement”), with Chemistry Holdings, Inc., a Delaware corporation (“Chemistry Holdings”). As agreed in the Merger Agreement, the Company acquired Chemistry Holdings pursuant to a merger of the Merger Sub with and into Chemistry Holdings (the “Merger”). Pursuant to the Merger, Chemistry Holdings became a wholly-owned subsidiary of the Company and the stockholders of Chemistry Holdings received shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”) and warrants to purchase Common Stock in exchange for all of the issued and outstanding shares of Chemistry Holdings.

In connection with signing the Merger Agreement, the Company received an investment of $2,000,000 (the “Principal Amount”) from Chemistry Holdings pursuant to a convertible note (the “Note”). Such Note, on the Closing Date, supersedes the amended convertible note executed on April 30, 2019 and became an intercompany payable and will be cancelled. As a condition to closing, Chemistry Holdings had a cash balance at closing of at least $8,000,000 plus the amount of certain liabilities and expenses (the “Closing Cash Requirement”).

The maximum number of shares of Common Stock that may be issued to the stockholders of Chemistry Holdings in connection with the Merger, including escrowed shares and shares issuable pursuant to earn-out provisions and warrants, is 32,072,283 shares allocated as follows: (i) 5,700,000 shares of Common Stock as upfront consideration issued at the Closing (the “Upfront Consideration”); (ii) 7,128,913 shares to be held in escrow, subject to indemnification and clawback rights that lapse upon the achievement of certain milestones; (iii) 3,207,228 shares that may be issued pursuant to an earn-out over five years upon the achievement of certain technological implementations; (iv) 8,018,071 shares that may be issued pursuant to an earn-out over two years upon the achievement of certain revenue goals; and (v) 8,018,071 shares issuable upon exercise of warrants that become exercisable upon achieving certain revenue goals between the second and fourth anniversary of the Closing Date at an exercise price of $5.01 per share, exercisable, to the extent vested, for five years from the Closing Date.

In addition, certain stockholders of Chemistry Holdings agreed to return to the Company certain shares of Common Stock (approximately 231,294 shares) in satisfaction of their tax withholding obligations related to the exercise of Chemistry Holdings stock options in connection with the Merger.

Unaudited pro forma results of operations for the three months ended March 31, 2019 and 2018, as if the Company and Chemistry Holdings had been combined as of the beginning of the period, follows. The pro forma results include estimates and assumptions which management believes are reasonable. However, pro forma results are not necessarily indicative of the results that would have occurred if the business combination had been in effect on the dates indicated, or which may result in the future.

	CURE Pharmaceutical Holding Corp for the Three Months Ended March 31, 2019			Chemistry Holdings Inc for the Three Months Ended March 31, 2019			Chemistry Spirits LLC for the Three Months Ended March 31, 2019			Chemistry Labs LLC for the Three Months Ended March 31, 2019			Consolidated
Net revenues	$	74,500		$	-		$	-		$	-		$	74,500
Net loss	(10,028,168		)		(5,054	)		(2,137	)		(26,323	)		(10,061,682	)

Net loss per share, basic and diluted	$	(0.17	)	$	-		$	-		$	-		$	(0.17	)

	CURE Pharmaceutical Holding Corp for the Three Months Ended March 31, 2018			Chemistry Holdings Inc for the Three Months Ended March 31, 2018		Chemistry Spirits LLC for the Three Months Ended March 31, 2018			Chemistry Labs LLC for the Three Months Ended March 31, 2018		Consolidated
Net revenues	$	105,014		$	-	$	-		$	326,172	$	431,186
Net income (loss)		(1,901,836	)		21,599		(88,535	)		29,347		(1,939,425	)

Net loss per share, basic and diluted	$	(0.03	)	$	-	$	-		$	-	$	(0.03	)

Statements made in this Form 10-Q that are not historical or current facts are “forward-looking statements” made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 (the “Act”) and Section 21E of the Securities Exchange Act of 1934. These statements often can be identified by the use of terms such as “may,” “will,” “expect,” “believe,” “anticipate,” “estimate,” “approximate” or “continue,” or the negative thereof. We intend that such forward-looking statements be subject to the safe harbors for such statements. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management’s best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events.

We are a biopharmaceutical company focusing on the development and manufacturing of drug formulation and drug delivery technologies in novel dosage forms to improve drug safety, efficacy and patient adherence. Our mission to improve lives by redefining how medications are delivered and experienced. Our business strategy is to develop products using our proprietary technology, license the product rights to partners responsible for clinical development, regulatory approval, marketing and sales and retain exclusive manufacturing rights. We operate in a 25,000 square foot cGMP manufacturing plant in Oxnard, CA.

We were incorporated in the State of Nevada on May 15, 2014. The Company was formerly named Makkanotti Group Corp. which was formed to engage in the business of manufacturing food paper bags in Nicosia, Cyprus.

On November 7, 2016, the board of directors and the majority stockholder of the then outstanding shares of ~~the~~ registrant’s common stock executed a written consent to change ~~the~~ registrant’s name from Makkanotti Group Corp. to CURE Pharmaceutical ~~Holdings Corp. from Makkanotti Group~~Holding Corp. The Certificate of Amendment to Articles of Incorporation was filed with the State of Nevada on November 30, 2016.

Further, on November 7, 2016, we, in a reverse take-over transaction, acquired a specialty pharmaceutical and bioscience company based in California that specializes in drug delivery technologies, by executing a Share Exchange Agreement and Conversion Agreement (“Exchange Agreement”) by and among us and a holder of a majority of our issued and outstanding capital stock prior to the closing (the “Majority Stockholder”), on the one hand, and CURE Pharmaceutical, all of the shareholders of CURE Pharmaceutical’s issued and outstanding share capital (the “CURE Pharm Shareholders”) and the holders of certain convertible promissory notes of CURE Pharmaceutical (“CURE Pharm Noteholders”), on the other hand. Hereinafter, this share exchange transaction is described as the “Share Exchange.”

As a result of the Share Exchange, CURE Pharmaceutical became a wholly owned subsidiary of the Company, and the CURE Pharm Shareholders and CURE Pharm Noteholders became our controlling shareholders owning, at such time, approximately 65% of our issued and outstanding common stock. For accounting purposes, CURE Pharmaceutical was the surviving entity. As a result of the recapitalization and change in control, CURE Pharmaceutical was deemed to be the accounting acquirer in accordance with ASC 805, Business Combinations.

Our technology platform includes oral dissolving film (“ODF”) and transdermal formulations. We apply our technology to pharmaceutical drugs and dietary supplements. ODF products are about the size of a postage stamp and composed of excipients such as polymers, stabilizers, lipids and surfactants which are all generally recognized as safe. They can be designed to deliver active ingredients to the gastrointestinal, or GI, tract when placed on the tongue and swallowed, or directly to the blood stream when placed under the tongue (sublingual) or on the inner lining of the cheek and lip (buccal).

We currently have two commercial products and several development programs underway:

This is a melatonin-containing sleep aid CUREfilm ODF that is manufactured and sold as a dietary supplement under the brand name “ID Life Sleep Strips”. Our non-exclusive distributor is ID Life, a health and wellness company focused on customized nutrition and selling within the United States. We completed a purchase order with ID Life for approximately 3,200,000 units of product in 2018 and we are seeking additional distributors.

This novel sleep aid containing a dietary cannabinoid CUREfilm ODF was launched Q3 2018 by Incubrands under the brand name “Sleep Stripzzz”. The distribution rights were exclusive through the end of 2018. A purchase order was placed on February 22, 2018 and we are seeking additional distributors.

We are developing a sildenafil CUREfilm ODF for oral administration. The product, which will be launched for the treatment of erectile disorder, is in early stage clinical development with human studies planned in 2019. We completed a pre-IND meeting with the FDA on March 21, 2019.

We are developing a 50,000IU, once per week, Vitamin D3 CUREfilm ODF for oral administration. On February 18, 2017, we entered into an exclusive 5-year license and distribution agreement with Meroven Limited in the MENA region: Iraq, Saudi Arabia, Yemen, Syria, UAE, Jordan, Palestine, Lebanon, Oman, Kuwait, Qatar, Bahrain, Sudan, Egypt, Tunisia, Morocco, Algeria and Africa. On April 30, 2019, we entered into a supply agreement with Meroven Limited for this product for distribution in the United States. The product is currently in the optimization development stage.

We are developing a dietary cannabinoid ODF using food grade beta-caryophyllene to target the CB2 receptor. We are in early feasibility stages of development of this product and have not yet signed with a distribution partner.

We are developing a novel CUREfilm ODF substrate with an undisclosed partner. On June 4, 2018, we entered into a development agreement with an undisclosed partner for product development feasibility of CURE 5200. In order to protect CURE’s and our partner’s competitive advantage, no details of the product have been disclosed at this stage.

We are developing a CUREfilm ODF for mood enhancement as a dietary supplement. On May 30, 2018, we entered into a development agreement with an undisclosed partner for product development feasibility of CURE 5209. In order to protect CURE’s and our partner’s competitive advantage, no further details of the product have been disclosed at this stage.

Our wholly owned subsidiary and operating business, CURE Pharmaceutical Corporation, located in Oxnard, California was originally incorporated in July ~~2011.~~

~~Industry Overview~~2011 to develop novel drug formulation and ~~Trends~~delivery technologies.

The pharmaceutical industry is facing ever-growing R&D ~~expenditure~~expenditures and fewer new drug approvals as a result of increasing regulation, a failure to predict safety problems or a lack of efficacy early in a drug’s development, and high investment in new technologies to improve the speed and accuracy of drug development. Researching and developing new molecular entities (NMEs) is risky as measured by an ever-increasing R&D spend (13.4% average increase per year), low clinical trial success rate (10%) and sluggish NME drug approvals – with 55 NMEs approved in 2018. Faced with these challenges, drug developers are looking toward alternative dosage forms, for which R&D investments dwarves those of NMEs. Alternative dosage forms can address safety and efficacy limitations observed during clinical development of an NME using conventional formulations, by improving its pharmacokinetic profile.

In addition to these challenges, ~~to the industry’s operators,~~ many ~~leading~~marketed drugs are coming off-patent, creating a need to fill revenue gaps. Novel dosage forms can offer strategies for surviving patent cliffs by extending market exclusivity when they address a bona fide unmet need.

The pharmaceutical industry is also challenged by the many patients who do not adhere to a regime of prescription drugs because of side effects, difficulty in administration or the taste of a drug. According to HealthPrize and Capgemini, the loss of global revenues by drug makers due to non-adherence to medicines is $630 billion every year and according to a recent paper published in The Annals of Pharmacotherapy titled "Cost of Prescription Drug-Related Morbidity and Mortality" the estimated annual cost of prescription drug-related morbidity and mortality resulting from nonoptimized medication therapy was $528.4 billion in 2016 US dollars and about 275,689 deaths per year. Medication adherence and the patient experience can be improved with strategies such as replacing an injectable drug with a sublingual drug, simplifying the dosing schedule with a sustained release dosage form and reducing toxicities by avoiding the GI tract (e.g. through transdermal or transmucosal delivery).

Improved formulations can address these many challenges by cutting down development costs, reducing the time to market, extending product patent protection, improving patient compliance and increasing drug efficacy. For example, reformulation can enable drug repositioning, the process of finding new uses for failed drugs, such as those abandoned for lack of efficacy or excessive toxicity after Phase II trials, or marketed drugs for which new uses will extend patent life and, therefore, profitability.

The FDA approves more reformulations than new chemical entities (NCEs) each year under Section (505)(b)(2) of the Food, Drug, and Cosmetic Act, (“505(b)(2)”) the FDA. The number of 2017 NDA approvals that used the 505(b)(2) regulatory pathway rose dramatically from 45 approvals in each of the last two years to an all-time high of 63 in 2017. Under Section (505)(b)(2), the FDA may grant market exclusivity for a term of up to three years of exclusivity following approval of a listed drug that contains previously approved active ingredients but is approved in a new dosage, dosage form, route of administration or indication for use. Taken together, the exclusivity period of a drug and the lower R&D cost for reformulating a drug, have led to some pharmaceutical companies ~~taking a keen interest in~~investigating reformulating their drugs as part of their lifecycle management protocols.

~~We are a drug formulation and delivery technology company that researches and manufactures novel dosage forms to improve drug safety, efficacy and patient adherence.~~ Our ~~mission is to improve lives by redefining how medications are delivered and experienced.~~ Strategy

Our ~~business~~commercial strategy is designed to mitigate risk by pursuing a diversified model in the following categories:

We partner with companies that are responsible for marketing and distribution of the products we develop ~~products using our proprietary technology, license the product rights to partners~~and manufacture. On a case-by-case basis, we may be responsible for clinical development and regulatory approval ~~marketing~~with the FDA and/or other regulatory bodies. Deal terms may include upfront licensing fees, development costs, milestone payments, royalties and ~~sales and retain~~ exclusive manufacturing rights. ~~We operate a 25,000 sqft~~Within this category, we are pursuing products with 505(b)(2) approval pathways such as our Sildenafil ODF – CUREfilm Blue. While we currently manufacture nutraceutical products in our state-of-the-art cGMP oral dissolving film manufacturing ~~plant in Oxnard, CA.~~facility, we are undertaking steps to manufacture pharmaceutical products for commercial use.

~~Our~~We are specifically investing in pharmaceutical-grade cannabinoid products, such as tetrahydrocannabinol (THC) and cannabidiol (CBD). The oral bioavailability of cannabinoids is very low due to extensive “first-pass” metabolism. Consequently, potency and release times are unpredictable and inconsistent. Moreover, cannabinoids do not readily dissolve in water which adds to dosing difficulties and discrepancies. In addition to improving bioavailability, CUREfilm enables the loading of combinations of cannabinoids and botanical extracts which may provide maximum therapeutic benefit. We have a licensing rights agreement with Canopy Growth Corporation (“Canopy”) for the global commercialization of ODFs containing cannabinoids, under which Canopy is granted non-exclusive in the United States and exclusive rights in the rest of the world excluding Asia. We are sponsoring preclinical cannabinoid research at the Technion – Israel Institute of Technology, where the laboratory of Dr. Dedi Meiri is identifying specific combinations of cannabinoids with anti-tumor effects. We are registered with the Drug Enforcement Agency (DEA) to manufacture schedule 1 controlled substances at the Oxnard facility.

Increasingly, patients are encouraged to take part in their own treatments, and a consumer market has been developing midway between the supermarket-based world of consumer goods companies and the scientific, pharmacy-based world of pharmaceutical firms. The front lines of this battle are nutraceutical products that have been proven to help prevent or cure disease. Breakthroughs in functional medicine suggest a number of opportunities for pharmaceutical companies like CURE. Functional medicines focus on the imbalances underlying disease processes (rather than only symptomatic relief) and they rely on molecular nutrition for patient-specific solutions. These types of nutraceuticals can be synergistic with pharmaceutical treatments. We therefore focus on evidence-based nutraceuticals that are differentiated by using proprietary and/or proven active ingredients that we formulate for greater stability, overall quality and increased bioavailability. Nutraceutical products do not require FDA approval but do require following all GMPs. Thus, they are less costly and faster to launch in the marketplace. While manufacturing fees for nutraceuticals have lower margins than prescription drugs, they provide us with short term revenue opportunities.

As a drug delivery company, we seek to grow our technological capabilities through internal innovation and acquisitions. On March 31, 2019, we entered into an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”) with Chemistry Holdings, Inc., a Delaware corporation (“Chemistry Holdings”) to acquire Chemistry Holdings, with a closing date to complete the transaction on May 13, 2019. Chemistry Holdings is a formulation technology company that is developing innovative delivery systems for nutraceutical, pharmaceutical and other industries. There is an increased demand for solid, chewable or dissolvable products for immediate and controlled-release, oral delivery of active ingredients and particularly poorly soluble active pharmaceutical ingredients. However, such dosage forms can pose challenges such as (i) stability of the active ingredient, (ii) overall integrity and shelf life of the product, and (iii) palatability. Chemistry Holdings is developing a novel biopolymer technology for both liquid encapsulation and microencapsulation of dry powders, which are designed to improve the stability and solubility of active ingredients. Encapsulated active ingredients can then be formulated in various final dosage forms including oral thin film. This technology extends our technology platform ~~includes~~beyond oral soluble films, to chewables and fast dissolving ~~film (ODF)~~tablets along with micro- and ~~transdermal formulations. We apply our technology to pharmaceutical drugs and dietary supplements.~~nano-encapsulation methods. Further information can be found in NOTE 15 – SUBSEQUENT EVENTS.

On November 10, 2017, we received 269,000 shares of Oak Therapeutics as consideration for an exclusive license to certain patents rights and trademarks of CURE for the commercialization of products in developing nations as defined in the 2013 International Statistics Institute. As a result of this transaction, we own approximately 63% of Oak’s outstanding shares and have consolidated Oak’s financial statements as of the fourth quarter 2017. Due to the lack of performance by Oak under the license agreement, on April 15, 2019, we terminated all contractual relationships with Oak, including the exclusive license and we surrendered our Oak shares to Oak. Further information can be found in NOTE 15 – SUBSEQUENT EVENTS.

The founders of CURE Pharmaceutical are pioneers in drug delivery and ODF, having launched the first therapeutic ODF product, Chloraseptic® relief strips in 2003. ODF products are about the size of a postage stamp and ~~composed of excipients such as polymers, stabilizers, lipids and surfactants which are all generally recognized as safe. They~~ can ~~be designed to~~ deliver ~~active ingredients to~~medicines through the ~~gastrointestinal tract (GI) when placed~~mucosal tissue in the mouth, sublingually or buccally – on the ~~tongue and swallowed,~~cheek or ~~directly to~~more traditionally via the ~~blood stream when placed under the tongue (sublingual) or on the inner lining of the cheek and lip (buccal).~~

~~Sublingual and buccal~~GI tract. Oral transmucosal drug delivery ~~are~~is a non-invasive ~~routes~~route for drug delivery that allows for absorption directly into the vascularized tissue in the mouth, ~~avoiding degradation of~~bypassing the ~~active molecule in the stomach, intestines and liver. These routes can reduce overall~~hepatic first pass effect. This leads to reduced drug exposure and ~~toxicities.~~

can offer a rapid onset of action. As an oral ODF, active ingredients ~~are often~~can be either pre-solubilized within the ~~film~~ matrix ~~which can accelerate the onset of action, whether the~~or encapsulated, or both for more effective GI ~~is targeted of the systemic circulation. Active ingredients can also be encapsulated within the film matrix which can cause a~~absorption and/or sustained ~~release profile. Combined sustain release and rapid release strategies can be achieved with ODFs.~~

~~ODFs can be designed for rapid~~release. The quick dissolution ~~or slower dissolution in the case of a buccal patch. In each case, ODFs must mask the taste of the active ingredient if unpalatable, throughout the dissolution process. The self-dissolving~~ nature of ODF means that no water ~~or swallowing are~~is required for administration, improving ~~medication adherence~~patient compliance - especially among the elderly, children, and in conditions where patients have difficulty in swallowing.

ODFs have significant advantages compared to other dosage forms (e.g., tablets and capsules), including:

The CUREfilm platform is a scalable and versatile formulation and drug delivery system for both oral (ODF) and transdermal (skin) delivery. We believe that CUREfilm formulations can improve or match the pharmacokinetics of drugs ~~depending on~~in accordance with the desired outcome. The platform is compatible with a broad spectrum of molecules, ~~and can be applied to~~for the formulation of both investigational and marketed prescription drugs ~~or dietary supplements.~~and nutraceutical products.

~~Our~~The specific advantages below are present with multiple CUREfilm ~~transdermal technology has been tested at laboratory scale on a dozen different molecules. Our CUREfilm ODF technology, which is our core focus, has been used to develop hundreds of~~ products ~~at laboratory scale~~ and ~~over 20 dietary supplements at commercial scale~~platform technologies. The advantages listed below are expressly described in ~~our GMP plant located~~CURE’s patent documents. Other advantages are present in ~~Oxnard, CA.~~specific products and platform technologies but not outlined in the patent documents and kept as trade secrets and proprietary equipment designs. Additional advantages are described in pending and unpublished patent documents.

The competitive advantages of the CUREfilm platform and products over other ODF technology and products are protected by issued and ~~pending~~ending patents, as well as trade secrets such as proprietary equipment design and manufacturing processes which allow us to produce CUREfilm products at commercial scale in a cGMP environment. We will be able to protect our technology and products from unauthorized use by third parties only to the extent it is covered by valid and enforceable claims of our patents or is effectively maintained as trade secrets. Patents and other proprietary rights are thus an essential element of our business.

Our success will depend in part on our ability to obtain and maintain proprietary protection for our product candidates, technology, and know-how, to operate without infringing on the proprietary rights of others, and to prevent others from infringing it proprietary rights. Our policy is to seek to protect our proprietary position by, among other methods, filing U.S. and foreign patent applications related to our proprietary technology, inventions, and improvements that are important to the development of our business. We also rely on trade secrets, know-how, continuing technological innovation, and in-licensing opportunities to develop and maintain our proprietary position.

We own or have exclusive rights to ten (11) issued patents, eight (8) pending applications in the United States, one (1) pending application in China and one (1) international Patent Cooperation Treaty (“PCT”) patent application. These patents and applications relate, among others, to (1) a method and apparatus for minimizing heat, moisture, and shear damage to medicant incorporated into an edible film, (2) edible films for administration of medicaments to animals, (3) methods for modulating dissolution, bioavailability, bioequivalence, (4) pharmaceutical composition and method of manufacturing, (5) pharmaceutical composition with ionically crosslinked polymer encapsulation of active ingredient, (6) multi-layered high dosage dissolvable film for oral administration, (7) thin films with high load of active ingredient, (8) high dosage dissolvable films for oral administration, (9) methods and composition for improving sleep, (10) oral dissolvable film that includes plant extracts and (10) rapidly disintegrating film matrix for moisture sensitive compounds.

Granted U.S. patents will expire between 2023 and 2035, excluding any patent term extensions that might be available following the grant of marketing authorizations. If issued, pending applications would expire in 2038, excluding any patent term adjustment that might be available following the grant of the patent and any patent ~~application portfolio are listed below.~~term extensions that might be available following the grant of marketing authorizations.

~~Our commercial strategy seeks to mitigate risk~~As of the date of this filing, we have 16 full-time employees. None of our employees are covered by ~~pursuing a diversified model.~~

~~1. Dietary supplements.~~collective bargaining agreements. We ~~manufacture select dietary supplements that complement~~consider our ~~portfolio and align~~relations with our mission which are white labeled and distributed by third parties. Dietary supplements are regulated under the Dietary Supplement Health and Education Act of 1994 (DSHEA) under which supplements are effectively by the FDA for Good Manufacturing Practices under 21 CFR Part 111 but do not require FDA approval. By developing, manufacturing and selling dietary supplement, we can generate modest short term revenue while and improving our production capabilities.

2. Pharmaceuticals. We partner with companies that are responsible for clinical development, regulatory approval, marketing and sales of the products. We provide the Chemistry, Manufacturing, and Controls (CMC) documentation required for regulatory submissions and in some instances, we may conduct the preclinical testing. Deal terms may include upfront licensing fees, development costs, milestone payments, royalties and exclusive manufacturing rights. Within this category, we are further diversifying risk and return by pursuing both competitive differentiation of marketed drugs (product life cycle opportunities) and improved pharmacokinetics of investigational drugs. While we currently commercially manufacture dietary supplements in our facility, we are undertaking steps to scale up manufacturing of pharmaceutical drugs for clinical and commercial use.

3. Cannabinoids. We are researching and developing drugs in the cannabinoid family of molecules. The oral bioavailability of cannabinoids is very low due to extensive gut and liver metabolism. Consequently, potency and release times are unpredictable and inconsistent. Moreover, cannabinoids don’t readily dissolve in water which adds to dosing difficulties and discrepancies. In addition to improving bioavailability, CUREfilm technology enables the loading of combinations of cannabinoids and other plant extracts that, together, provide maximum therapeutic benefit. Development and manufacturing of cannabinoid drugs are regulated by the FDA and the Drug enforcement Agency (DEA). A research license filed with the DEA in January 2018 was determinedemployees to be ~~submitted in error given our proposed activities. As such, we have applied for a Schedule 1 manufacturer license with the DEA.~~

We will drive growth by (1) securing additional distributors for our dietary supplements, (2) out licensing rights to our drug products in available territories; (3) in-licensing novel drug delivery technologies and cannabinoid related patents and (4) developing additional ODF drug products with biotech and pharmaceutical partners.

Our product portfolio includes dietary supplements and prescription drugs. To manufacture our products, we depend on raw material suppliers and packaging material suppliers. There are several global suppliers of packaging laminate appropriate for dietary supplements and drug product ODFs. We are currently purchasing our packaging laminate from Glenroy Inc. and Bemis Company.

This is a melatonin-containing sleep aid CUREfilm ODF that is manufactured and sold as a dietary supplement. Our non-exclusive distributor is ID Life, a health and wellness company focused on customized nutrition and selling within the United States. We have an open purchase order with ID Life for 3,210,252 units of product in 2018.

We are developing a sildenafil CUREfilm ODF for p.o. administration. On August 1, 2017, we entered into a development agreement with an undisclosed partner for China, Hong Kong, Japan, Korea, Singapore, Philippines, Taiwan, Vietnam and Thailand. The product which will be launched for the treatment of erectile disorder, is in late stage development. We are qualifying the API supplier and have qualified our contract packaging partner.

We are developing a 50,000IU, once per week, vitamin D3 CUREfilm ODF for p.o. administration. On February 18, 2017, we entered into an exclusive 5-year license and distribution agreement with Meroven Limited in the MENA region: Iraq, Saudi Arabia, Yemen, Syria, UAE, Jordan, Palestine, Lebanon, Oman, Kuwait, Qatar, Bahrain, Sudan, Egypt, Tunisia, Morocco, Algeria and Africa. The product is currently in the optimization development stage.

This is a novel sleep aid CUREfilm ODF that will be manufactured and sold as a dietary supplement. A purchase order was placed on February 22, 2018 by a distributor in the United States. In order to protect CURE’s and our partner’s competitive advantage, no further details of the product can be disclosed at this stage.

We are developing a Palmitoylethanolamine (PEA) & Dronabinol (THC) CUREfilm ODF for buccal administration. On October 27, 2017, we entered into a development agreement with Therapix Biosciences for worldwide rights. The product is in formulation development for PEA. We will need our DEA license to incorporate THC into the product.

We are developing a novel CUREfilm ODF substrate with an undisclosed partner. On June 4, 2018, we entered into a development agreement with an undisclosed partner for product development feasibility of CURE 5200. In order to protect CURE’s and our partner’s competitive advantage, no further details of the product can be disclosed at this stage.

~~Our office located at 1620 Beacon Place, Oxnard, California 93033. Our phone number is (805) 824-0410.~~

We will be required to comply with all regulations, rules and directives of governmental authorities and agencies applicable to our business in any jurisdiction which we would conduct activities. We do not believe that regulation will have a material impact on the way we conduct our business.

Revenues for the Three ~~and Six~~ Months Ended ~~June 30,~~March 31, 2019 and 2018 ~~and 2017.~~

Revenues for the three ~~and six~~ months ended ~~June 30, 2018 were $156,918 and $216,932, respectively,~~March 31, 2019 was $74,500 as compared to ~~$38,885 and $70,830~~$105,014 for the three ~~and six~~ months ended ~~June 30, 2017, respectively.~~March 31, 2018. The ~~increase~~decrease was principally due to the Company ~~increased~~seeing a decrease in orders from ID Life, LLC for Sleep Strips. ~~Revenues earned from ID Life have increased by 441% for~~However, the ~~six months ended June 30, 2018 compared to the same period~~Company experienced an increase in ~~2017. In addition,~~research and development income as the Company successfully completed a new sleep OTF product for another customer during the three months ended June 30, 2018. As this was a new customer in 2018, we did not generate this type of revenue in the same period in 2017. Finally, The Company completed phases I ~~and II~~ of our research and development agreement with ~~Aveneon Technology Ltd.~~Canopy Growth Corporation. for the development of a ~~Sildenafil~~CBD OTF and with Isagenix for the development of CURE 5209 during the 1^st quarter of ~~2018. The Company did not generate this type of revenue in the same period in 2017.~~2019.

Cost of goods sold was ~~$69,988 and $129,074~~$2,584 in the three ~~and six~~ months ended ~~June 30, 2018~~March 31, 2019 compared to ~~$39,598 and $75,148~~59,086 in the three ~~and six~~ months ended ~~June 30, 2017.~~March 31, 2018. Cost of goods sold ~~increased~~decreased by ~~$30,390 and $53,926 in~~$56,502 during the three ~~and six~~ months ended ~~June 30, 2018~~March 31, 2019 compared to the three ~~and six~~ months ended ~~June 30, 2017, which~~March 31, 2018. The decrease was primarily due to the ~~increased sales to ID Life for Sleep Strips as well as sales from a new customer for another sleep OTF product during the three and six month periods ended June 30, 2018. In addition, the~~ Company ~~generated~~not generating revenue from ID Life ~~on higher margin products in the three and six months ended June 30, 2018 compared to the same period in 2017.~~

Selling, general and administrative expenses for the three and six months ended June 30, 2018 amounted to $2,033,761 and $3,052,271, respectively, and for the three and six months ended June 30, 2017 amounted to $2,194,950 and $4,597,497, respectively. For the three and six months ended June 30, 2018 and 2017, selling, general and administrative expenses were mainly comprised of amortization, commission, insurance, payroll, consulting, investor relation services, PR services and rent expenses. The decrease in the three and six months ended June 30, 2018 compared toduring the three months ~~and six~~ended March 31, 2019 as where the company did incur revenues during the three months ended June 30, 2017 was mainly due to the decrease in noncash transactions relating to common stock issued for consulting services and recording the fair value of warrants issued for services recorded in the three and six months ended June 30, 2017 compared to the same period inMarch 31, 2018. ~~However, the decrease was offset by the increases in payroll, legal, accounting, investor relations, and PR services.~~

For the three ~~and six~~ months ended ~~June 30, 2018,~~March 31, 2019, research and development expenses ~~increased~~decreased to ~~$376,840 and $803,369, respectively,~~$360,870 compared to the three ~~and six~~ months ended ~~June 30, 2017~~March 31, 2018 of ~~$205,648 and $425,268, respectively.~~$426,529. The ~~increase~~decrease in research and development expenses is mainly due to the ~~Company’s focus on~~Company no longer developing ~~potential partnerships~~a PEA CUREfilm as this development project has been canceled as well as not incurring costs associated with ~~pharmaceutical~~the preclinical cannabinoid research at the Technion – Israel Institute of Technology, where the laboratory of Dr. Dedi Meiri is identifying specific combinations of cannabinoids with anti-tumor effects. However, the decrease in these projects was offset with the continuous development of CURE 5003 (CUREfilm Blue), CURE 5067 (CUREfilm D), CURE 5200, CURE 5209 and ~~bioscience companies~~CURE 5210 (CUREfilm Beta-Caryophyllene) during the three months ended March 31, 2019.

Selling, General and ~~new OTC and prescription products. This is evident by our research and development deals~~Administrative Expenses

Our expenses for the ~~development~~three months ended March 31, 2019 are summarized as follows in comparison to our expenses for the three months ended March 31, 2018.

Consulting expense increased by $886,897 for the three months ended March 31, 2019, as compared to the three months ended March 31, 2018. This was due to the Company increasing the number of consultants used during the three months ended March 31, 2018 compared to the same period in 2018. In addition, majority of the expenses related to noncash consulting services where the Company issued common stock shares in exchange for services performed over a ~~Sildenafil CUREfilm,~~period of time as well as the recording of the fair market value of warrants vested during the three months ended March 31, 2019 for services performed.

Salaries and wages expense decreased by approximately $10,000 during the three months ended March 31, 2019 as compared to the three months ended March 31, 2018. This was due two less officers employed during the three months ended March 31, 2019 compared to the same period in 2018. However, this decrease in officers was offset by the Company recognizing a ~~Palmitoylethanolamine (PEA) & Dronabinol (THC) CUREfilm ODF~~full quarters worth of salary during the three months ended March 31, 2019 for ~~buccal administration, a novel CUREfilm ODF substrate~~two officers hired during the three months ended March 31, 2018.

Selling, general and administrative (“SG&A”) expense increased by approximately $82,000 for the three months ended March 31, 2019, as compared to the three months ended March 31, 2018. This was due to the following factors: (i) increase in our D&O insurance as the Company increased coverage by getting an excess D&O policy, (ii) increase in our sales and marketing efforts to promote the technology and Company and (iii) increase in conference expenses as the Company attending more conferences in the three months ended March 31, 2019 compared to the same period in 2018.

Professional and investor relations expenses increased by approximately $158,000 for the three months ended March 31, 2019 as compared to the three months ended March 31, 2018. This was due to the Company increasing our investor relation efforts to help increase awareness of our Company with ~~an undisclosed partner, and a CUREfilm ODF for mood enhancement~~potential new investors as ~~a dietary supplement once per week.~~well as to update our existing shareholder base. In addition, the Company ~~continues~~increased our legal and accounting professional services during the three months ended March 31, 2019 compared to ~~work~~the same period in 2018 as to assist the Company in strategic planning and advisory for potential business acquisitions, patent and technology acquisitions and general and corporate compliance services.

Non-cash compensation expense increased by approximately $230,000 for the three months ended March 31, 2019 as compared to the three months ended December 31, 2018. This was primarily due to the Company recording the fair value of vested stock options and vested restricted stock issued from our 2017 Equity Incentive Plan during the three months ended March 31, 2019. The Company did not issue any stock options or restricted stock from our 2017 Equity Incentive Plan during the same period in 2018.

Other expense increased by approximately $6.8 million during the three months ended March 31, 2019 as compared to the three months ended March 31, 2018. This was mainly due to (i) recording of fair value of warrants issued relating to convertible promissory notes (ii) change in the warrant values relating to convertible promissory notes and (iii) a loss on ~~the development~~conversion on convertible promissory notes of $3.7 million due to additional shares to be issued as a result of a ~~50,000IU vitamin D3 CUREfilm ODF for p.o. administration as well as developing a novel sleep aid CUREfilm ODF that will be manufactured and sold as a dietary supplement.~~lower conversion price compared to the fair market value at the date of issuance.

Working capital deficit as of March 31, 2019 was approximately $1.8 million, as compared to a working capital deficit of approximately $7 million as of December 31, 2018. As of March 31, 2019, current assets were approximately $3.6 million, primarily attributable to (i) an increase in cash of approximately $2 million primarily due to the issuance of new convertible debt. As of December 31, 2018, current assets were approximately $1.6 million, primarily attributable to (i) an increase in cash of approximately $0.4 million primarily due to the issuance of new convertible debt and (ii) an increase in prepaid expenses of approximately $0.4 million primarily due to prepaid stock-based compensation.

As of June 30, 2018, our total assets were $2,976,725 comprised of cash of $161,051, accounts receivable of $66,165, inventory of $99,827, prepaid expenses and other assets of $1,215,379, net property and equipment of $311,125, net intangibles of $1,022,593, and other assets of $100,585. Our totalMarch 31, 2019, current liabilities were ~~$6,473,376~~approximately $5.4 million, comprised primarily of ~~accounts~~(i) approximately $3.1 million in notes and convertible notes payable, ~~of $601,291, accrued expenses of $264,328, current portion of loan and note payables of $716,323, convertible promissory notes, net, of $3,741,221,~~(ii) $0.8 million in derivative liability, (iii) approximately $0.8 million in accounts payable; and (iv) approximately $0.3 million in accrued expenses. Comparatively, as of ~~$181,950, deferred revenue~~December 31, 2018, current liabilities were approximately $8.6 million, comprised primarily of ~~$408,263~~(i) approximately $6.2 million in notes and ~~license fees of $560,000.~~convertible notes payable, (ii) $0.6 million in derivative liability, (iii) approximately $0.8 million in accounts payable; and (iv) approximately $0.5 million in accrued expenses.

~~For~~ was approximately $1 million during the ~~six~~three months ended ~~June 30, 2018, operating activities consumed $2,267,047 of cash.~~March 31, 2019. This was primarily due to the ~~result of a~~ net loss of ~~$4,318,742,~~approximately $10 million, partially offset by ~~depreciation and~~(i) the amortization of ~~$72,164, amortization~~the debt discount of approximately $0.5 million, (ii) stock based compensation ~~– prepaid expenses~~ of ~~$713,537, amortization~~approximately $0.6 million, (iii) the fair value of ~~loan discounts of $519,770, noncash compensation of $461,268, common~~ stock issued for ~~services~~amending convertible notes of ~~$45,615, change in derivative liabilities~~approximately $0.3 million, (iv) the fair value of ~~$206,441, warrants~~vested stock options of approximately $0.3 million (v) fair value of warrant granted for commission expense of $94,277 as well as the changes in accounts receivable of $61,801, inventory of $54,831, prepaid expenses of $153,705, other assets of $16,970, accounts payable of $106,311, accrued expenses of $144,350 and deferred revenue of $46,801. For the six months ended June 30, 2017, operating activities consumed $2,075,795 of cash. This was primarily the result of a netapproximately $0.6 million, (vi) loss of $5,161,425, offset by depreciation and amortization of $98,161, amortization of prepaid stock-based compensation of $552,010, amortization of loan discounts of $82,933, warrants issued for services of $2,717,620 as well as the changes in inventory of $22,704, prepaid expenses of $594,061, accounts payable of $151,350 and deferred revenue of $18,982.

Investment activities used an additional $71,049 of cash during the six months ended June 30, 2018, primarily as a result of payments for patents and costs associated in the development and improvement of our intellectual property of $47,632 and acquisition of property and equipment of $23,417. Investment activities used an additional $64,350 of cash during the six months ended June 30, 2017, primarily as a result of payments for patents and costs associated in the development and improvement of our intellectual property of $16,555, payment to joint venture investment of $5,000 and acquisition of property and equipment of $42,795.

~~Financing activities provided $2,390,898 of cash for the six months ended June 30, 2018, primarily as the result of proceeds from the issuance~~on conversion of convertible promissory notes of ~~$2,775,000~~approximately $3.7 million, (vii) warrant expense from convertible promissory notes of approximately $2.2 million; and (viii) the fair value of warrant granted for broker fee expense of approximately $0.3 million.

Comparatively, net cash used in operating activities was approximately $1.1 million during the three months ended March 31, 2018. This was primarily due to the net loss of approximately $1.9 million offset by (i) the amortization of the debt discount of approximately $0.3 million, and (ii) stock-based compensation of approximately $0.2 million.

Net cash used in investing activities during the three months ended March 31, 2019 was due to (i) the purchase of an intangible asset for approximately $21,000 and (ii) the purchase of property and equipment for approximately $23,000. Comparatively, net cash used in investing activities during the three months ended March 31, 2018 was due to (i) the purchase of an intangible asset for approximately $7,000, and (ii) the purchase of property and equipment for approximately $15,000.

Net cash provided by financing activities of approximately $3.1 million during the three months ended March 31, 2019 was primarily due to the approximately $3.4 million received from the issuances of new convertible notes payable and approximately $0.5 million in proceeds from issuances of common stock which was offset by approximately $0.7 million in repayments of convertible promissory ~~note~~notes and ~~loan payables~~loans payable. Correspondingly, during the three months ended March 31, 2018, net cash provided by financing activities was approximately $1.9 million. This was primarily attributable to proceeds of ~~$384,102. Financing activities provided $1,311,964~~approximately $2.0 million from the issuances of new convertible notes payable which was offset by approximately $0.1 million in repayments of loans payable.

We may need to raise additional operating capital in calendar year 2019 in order to maintain our operations and to realize our business plan. Without additional sources of cash ~~for~~and/or the ~~six months ended June 30, 2017, primarily~~deferral, reduction, or elimination of significant planned expenditures, we may not have the cash resources to continue as ~~the result of proceeds from loans of $1,340,000 and repayments of loan and capital lease payables of $28,036.~~a going concern thereafter.

The preparation of financial statements in conformity with generally accepted accounting principles of the United States (“U.S. GAAP”) requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities in the financial statements and accompanying notes. The SEC has defined a company’s critical accounting policies as the ones that are most important to the portrayal of the company’s financial condition and results of operations, and which require the company to make its most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. Based on this definition, we have identified the critical accounting policies and judgments addressed below. We also have other key accounting policies, which involve the use of estimates, judgments, and assumptions that are significant to understanding our results. For additional information, see Note 2 – “Summary of Significant Accounting Policies”. Although we believe that our estimates, assumptions, and judgments are reasonable, they are based upon information presently available. Actual results may differ significantly from these estimates under different assumptions, judgments, or ~~condition~~condition.

Long-lived assets include equipment and intangible assets other than those with indefinite lives. We assess the carrying value of our long-lived asset groups when indicators of impairment exist and recognize an impairment loss when the carrying amount of a long-lived asset is not recoverable when compared to undiscounted cash flows expected to result from the use and eventual disposition of the asset.

For the year ended December 31, ~~2017,~~2018, the ~~auditors~~auditors’ opinion contained a going concern paragraph, which stated that the Company had an accumulated deficit, working deficit and net ~~loss, these~~loss. These factors raise substantial doubt about the Company’s ability to continue as a going concern for one year from the issuance of the financial statements.

The Company has an accumulated deficit balance as of ~~June 30, 2018.~~March 31, 2019. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it establishes a revenue stream and becomes profitable. The Company is continually analyzing its current costs and is attempting to make additional cost reductions where possible. We expect that we will continue to generate losses from operations throughout the remainder of ~~2018.~~2019.

Historically, the Company has had operating losses and negative cash flows from operations which cast significant doubt upon the Company’s ability to continue as a going concern. The Company will need to raise capital in order to fund its operations. This need may be adversely impacted by uncertain market conditions and changes in the regulatory environment. To address its financing requirements, the Company intends to seek financing through debt and equity issuances to existing stockholders.

Specifically, management has identified that a minimum of $4,000,000 of capital is needed over the next 12 months in order sustain operations. These capital needs take into account, among other things, management’s plans to advance intellectual property, maintenance of patents, upgrades for manufacturing and to hire personnel for business development. Management has outlined a plan to raise ~~$6,000,000~~$8,000,000 to ~~$8,000,000~~$10,000,000 in capital over the next 12 months through a merger and $1,000,000 to $2,000,000 through the issuance of shares of the Company’s common stock to accredited investors. Management believes that the capital raised through these methods will be sufficient to sustain operations for the next 12 to 18 months. If we cannot raise additional funds when we need or want them, our operations and prospects could be negatively affected. However, the outcome of these matters cannot be predicted with certainty at this time.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments relating to the recoverability and classification of assets and liabilities that might be necessary if the Company is unable to continue as a going concern.

As of the date of this Quarterly Report, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(t) under the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that:

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, 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.

Management assessed the effectiveness of our internal control over financial reporting as of ~~June 30, 2018.~~March 31, 2019. Based on this assessment, management concluded that the Company did not maintain effective internal controls over financial reporting as a result of the identified material weakness in our internal control over financial reporting described below. In making this assessment, management used the framework set forth in the report entitled Internal Control--Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO. The COSO framework summarizes each of the components of a company’s internal control system, including (i) the control environment, (ii) risk assessment, (iii) control activities, (iv) information and communication and (v) monitoring.

A material weakness in our internal control over financial reporting is a control deficiency, or combination of control deficiencies, that results in more than a remote likelihood that a material misstatement or the financial statements will not be prevented or detected. Management identified the segregation of duties as a material weakness during its assessment of internal controls over financial reporting as of ~~June 30, 2018.~~March 31, 2019. As of ~~June 30, 2018,~~March 31, 2019, we had one full-time employee with the requisite expertise in the key functional areas of finance and accounting. As a result, there is a lack of proper segregation of duties necessary to ensure that all transactions are accounted for accurately and in a timely manner. As our resources allow, we will add financial personnel to our management team.

Management, with the participation of the Company’s Principal Executive Officer and Principal Financial Officer, carried out an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a15(e) and 15d15(e)) as of ~~June 30, 2018,~~March 31, 2019, the end of the period covered by this Quarterly Report on Form 10-Q (the “Evaluation Date”). Based upon that evaluation, the Company’s Principal Executive Officer and Principal Financial Officer have concluded that as of the Evaluation Date, the Company’s disclosure controls are not effective as a result of the identified material weakness described herein.

There were no changes in our internal controls over financial reporting during the fiscal quarter ended ~~June 30, 2018~~March 31, 2019 that materially affected, or is reasonably likely to have a material effect, on our internal control over financial reporting.

The information set forth under Note 1314 of Notes to Unaudited Condensed Consolidated Financial Statements, included in Part I, Item 1 of this report, is incorporated herein by reference.

The shares of common stock described above were issued without registration under the Securities Act of 1933 (the “Securities Act”) in reliance on the exemptions provided by Section 4(a)(2) of the Securities Act promulgated thereunder and in reliance on similar exemptions under applicable state laws.

On January 24, 2018, the Company issued an additional 55,000 warrants in connection with the issuance of $1,100,000 convertible promissory notes issued in 2017. The warrants have an exercise price of $1.00 per share and a term of 3 years.

From January 30, 2018 to March 28, 2018, the Company issued up to $2,025,000 convertible promissory notes with investors (“Investors”) due November 30, 2018. The notes bear interest at 9% per year and are convertible into common stock at either a price per share equal to the average closing price of the Company’s Common Stock on the OTC Markets for the five consecutive trading days prior to the delivery of a Notice of Conversion (“Optional Conversion”) or price per share equal to 75% of the price of the Company’s next bona fide sale of its preferred stock or Common Stock in excess of $4,000,000 in gross proceeds, in one transaction or a series of related transactions, which offering definitively sets a price per share of the Company’s Common Stock or preferred stock and enables the Company to list its common stock on a national securities exchange. The Investors in this offering also received warrants (the “Warrants”) for the option to purchase equal to 50% of the shares of Common Stock that the Investor is entitled to receive in connection with the conversion of the Investor’s Note. The Warrants’ price per share shall equal the lower of (a) $2.00 or (b) 125% of the price per share of the Qualified Offering. The Warrants will have a three year term and shall be exercisable in cash.

The Company has previously adopted and maintains the CURE Pharmaceutical Holding Corp. 2017 Equity Incentive Plan (the “Plan”), pursuant to which an aggregate of 5,000,000 shares of the common stock of the Company were authorized to be granted. The Board of Directors have determined that it is in the best interests of the Company and its stockholders to provide an additional incentive for certain employees, including executive officers, and non-employee members of the Board of Directors of the Company by granting to them awards with respect to the common stock of the Company pursuant to the Plan. On April 6, 2018, the Company awarded 500,000 Restricted Common Stock (“RCS”), 1,251,700 Nonstatutory Stock Options (“NSO”) and 804,000 Incentive Stock Options (“ISO”) to employees, including executive officers, non-employee members of the Board of Directors of the Company, members of the Advisory Board Committee and consultants at a $0.74 price per share. Vesting period for the awarded RCS, NSO and ISO’s range from immediate to quarterly over a 4 year period. For NSO’s and ISO awarded, the term to exercise their NSO or ISO is 10 years.

On April 15, 2018, the Company amended six convertible promissory notes totaling $1,100,000 to extend the maturity dates to May 31, 2018. For extending the maturity date, the Company granted an additional 275,000 warrants to purchase common stock of the Company at a strike price of $1.00 per share. In addition, the Company extended the term of the warrant agreements for one additional year for each of the convertible promissory notes. On April 23, 2018, the Company repaid two of these convertible promissory notes totaling $250,000.

~~On April 24, 2018, the Company received in~~ total $500,000 (“Investment Amount”) by issuing a convertible promissory note (“Convertible Note”) to a Company, Therapix Biosciences Ltd., (“Investor”) that is due April 30, 2019 (“Maturity Date”). The Convertible Note shall accrue interest at 9% per annum and is unsecured. Unless earlier converted, at the election of the Investor, the entire then outstanding Investment Amount shall be converted into that number of shares of the most senior class of shares of the Company existing at the time of such conversion, at a price per share (the “ ~~Voluntary Conversion PPS~~ “) equal to 75% of the average of the closing prices of the Company’s Common Stock on the OTC Market (or any other market on which the common stock of the Company is then listed for trading) over the thirty (30) consecutive trading days prior to the delivery of the notice of conversion by the Investor to the Company, or, if at the time of such conversion the shares of the Company’s Common Stock are not listed for trading, then the entire then outstanding Investment Amount shall be converted into that number of shares of the most senior class of shares of the Company existing at the time of such conversion, at a price per share equal to 75% of the fair market value of ~~such Common Stock as shall be determined by the Board of Directors based on, among others, a valuation prepared by an independent third party~~this issuance was $31,249 and which shall have been submitted to the Company not more than 90 days prior to the date of such determination by the Board of Directors. In the event of the consummation by the Company, on or before the Maturity Date, of a transaction or series of related transactions in which the Company issues equity securities of the Company in consideration of at least US$4,000,000 (a “ ~~Financing~~ “), the then outstanding Investment Amount not previously converted hereunder shall be automatically converted, immediately prior to (but conditioned upon) the consummation of such Financing, into such number of shares (or a sub-class thereof) issued by the Company in the Financing, equal to the outstanding Investment Amount divided by a price per share equal to 75% of the lowest price per share paid to the Company in the Financing. In the event the Financing is not consummated by the Maturity Date, then the outstanding Investment Amount as of ~~the Maturity Date not previously converted hereunder shall be automatically converted, on the Maturity Date, into such number of shares (or a sub-class thereof) issued by the Company~~March 31, 2019, $6,388 is included in ~~the Financing, equal to the outstanding Investment Amount divided by the Voluntary Conversion PPS.~~prepaid expenses and other assets.

On ~~May 1,~~December 14, 2018, the Company entered into an Advisory Consulting Agreement (“Agreement”). Per the terms of the Agreement, the Company is to issue 50,000 common stock shares of the Company that vest 30 days from December 14, 2018 and an additional 250,000 common stock shares of the Company that vest monthly over 24 months. On January 14, 2019, the Company issued ~~110,000 warrants~~50,000 common stock shares of the Company at $1.84 per share per the terms of this Agreement. On February 14, 2019, the Company issued 10,417 common stock shares of the Company at $3.35 per share per the terms of this Agreement.

On December 14, 2018, the Company entered into a Securities Purchase Agreement (the “SPA”) with an accredited investor for the purchase of 833,333 shares of common stock of the Company (the “Shares” or “Securities”) at $1.20 per share (the “Share Price”) for a total purchase price of One Million Dollars ($1,000,000) (the “Purchase Price”). Per the terms of the SPA, the Company and the investor agreed to multiple Closings and Closing Dates (as hereinafter defined): (1) a Closing of $250,000 five (5) business days after the Closing Date; (2) a Closing of $250,000 ten (10) business days after the Closing Date; (3) a Closing of $250,000 thirty (30) business days after the Closing Date; and (4) a Closing $250,000 sixty (60) business days after the Closing Date. Each of the aforementioned being a Closing and the dates of each Closing being a Closing Date. The investor funded $250,000 on December 26, 2018 and the Company issued 208,333 common stock shares. The investor funded another $250,000 on December 31, 2018 and the Company issued another 208,333 common stock shares. The investor funded $250,000 on January 22, 2019 and another $250,000 on February 25, 2019 and the Company issued 208,333 common stock shares and 208,334 common stock shares, respectively.

On February 1, 2019, the Company amended two convertible promissory notes totaling $600,000 to extend the maturity dates to February 28, 2019. For extending the maturity date, the Company will issue a total of 30,000 common stock shares of the Company at $2.32 price per share. The total value of this issuance was $69,600. The Company considered if the amendment of the convertible promissory note was a debt modification or extinguishment based on the guidelines of ASC 470-50, and concluded that the amendments of the convertible promissory notes were debt modifications. The Company recorded the fair market value of ~~$27,479 and with an exercise price~~the 30,000 common stock shares issued as a debt discount that has been fully amortized as of ~~$1.00 per share in connection with convertible promissory notes purchased issued by the Company.~~March 31, 2019.

On ~~May 15, 2018,~~February 13, 2019, the Company ~~issued a $250,000~~entered into Debt Conversion Agreements (“Agreements”) with thirty convertible promissory note ~~with an investor (“Investor”) due December 31, 2018. The notes bear~~holders totaling $1,325,000 plus accrued interest ~~at 9% per year~~ and ~~are convertible~~penalties of $213,859 that were converted into 832,365 common stock ~~at either~~shares of the Company with a conversion price per share ~~equal~~$1.85 which was based on a 20% discount to the average closing price of the Company’s ~~Common Stock~~common stock on the OTC Markets for ~~the~~ five consecutive trading days prior to the delivery of a Notice of Conversion (“Optional Conversion”) or price per share equal to 75% of the price of the Company’s next bona fide sale of its preferred stock or Common Stock in excess of $4,000,000 in gross proceeds, in one transaction or a series of related transactions, which offering definitively sets a price per share of the Company’s Common Stock or preferred stock and enables the Company to list its common stock on a national securities exchange. The Investors in this offering also received warrants (the “Warrants”) for the option to purchase equal to 50% of the shares of Common Stock that the Investor is entitled to receive indays. In connection with the conversion of the ~~Investor’s Note. The Warrants’~~convertible promissory notes, the Company will issue 657,655 warrants that were priced at $2.31 price per ~~share shall equal~~share.

On February 14, 2019, the ~~lower~~Company entered into a Debt Conversion Agreement (“Agreement”), where $250,000 (Two Hundred Fifty Thousand Dollars) of ~~(a) $2.00 or (b) 125%~~$650,000 (Six Hundred Fifty Thousand Dollars) of the Outstanding Balance under the Senior Secured Promissory Note effective April 27, 2017 which was replaced with an Amended and Restated Senior Secured Promissory Note dated August 27, 2017 (the “Note”) shall be converted into 135,135 (One Hundred Thirty-Five Thousand, One Hundred Thirty-Five) shares of Common Stock of the Company (the “Conversion Shares”) at a conversion price of $1.85 per share (a discounted rate calculated as an approximation based on 20% discount on 5 days volume weighted average price of the market rate).

On February 14, 2019, the Company entered into a First Amendment to Amended and Restated Senior Secured Promissory Note, that amends the Senior Secured Promissory Note effective April 27, 2017 which was replaced with an Amended and Restated Senior Secured Promissory Note effective August 27, 2017 (“Amended Agreement”) with the Note Holder (“Holder”). The Company and the Holder have agreed that the Maturity Date shall be extended to February 27, 2019 in exchange for 75,000 common stock shares of the Company at a price per share of $3.35. The total value of this issuance was $251,250. The Company considered if the ~~Qualified Offering. If~~amendment of the ~~Qualified Offering has not occurred, then~~convertible promissory note was a debt modification or extinguishment based on the ~~Exercise Price shall be $2.00. The Warrants will have a three-year term~~guidelines of ASC 470-50, and ~~shall be exercisable in cash.~~

~~From May 18, 2018 to June 29, 2018,~~concluded that the ~~Company issued a total~~amendments of ~~$250,000~~the convertible promissory notes ~~(“Convertible Notes”) with an investor (“Investor”) due December 31, 2018.~~were debt modifications. The ~~Convertible Notes are secured by all~~Company recorded the fair market value of the ~~assets~~75,000 common stock shares issued as a debt discount that has been fully amortized as of March 31, 2019.

On February 15, 2019, the Company entered into a Debt Conversion Agreement (“Agreement”) to convert $400,000 of convertible promissory notes plus accrued interest of $71,342 into 254,779 common stock shares of the Company ~~and Subsidiaries, including ownership of the Subsidiaries The notes bear interest at 9% per year and are convertible into common stock at either~~with a conversion price per share ~~equal~~$1.85 which was based on a 20% discount to the average closing price of the Company’s ~~Common Stock~~common stock on the OTC Markets for ~~the~~ five consecutive trading ~~days prior to~~days.

On February 15, 2019, the ~~delivery~~Company entered into a Debt Conversion Agreement (“Agreement”) with a convertible promissory note holder totaling $1,000,000 plus accrued interest of $94,750 that were converted into 591,757 common stock shares of the Company with a ~~Notice of Conversion (“Optional Conversion”) or~~conversion price per share ~~equal~~$1.85 which was based on a 20% discount to ~~75% of~~ the average closing price of the Company’s next bona fide sale of its preferred stock or Common Stock in excess of $4,000,000 in gross proceeds, in one transaction or a series of related transactions, which offering definitively sets a price per share of the Company’s Common Stock or preferred stock and enables the Company to list its common stock on ~~a national securities exchange. The Investors in this offering also received warrants (the “Warrants”)~~the OTC Markets for ~~the option to purchase equal to 50% of the shares of Common Stock that the Investor is entitled to receive in~~five consecutive trading days. In connection with the conversion of the ~~Investor’s Note. The Warrants’~~convertible promissory notes, the Company will issue 295,879 warrants that were priced at $2.31 price per share.

On February 15, 2019, the Company entered into a Debt Conversion Agreement (“Agreement”) with a convertible promissory note holder totaling $1,575,000 plus accrued interest of $18,406 that were converted into 861,301 common stock shares of the Company with a conversion price per share ~~shall equal~~$1.85 which was based on a 20% discount to the ~~lower~~average closing price of ~~(a) $2.00 or (b) 125%~~the Company’s common stock on the OTC Markets for five consecutive trading days.

On February 19, 2019, the Company entered into a Debt Conversion Agreement (“Agreement”) with a convertible promissory note holder totaling $425,000 plus accrued interest of $425 that were converted into 168,819 common stock shares of the Company with a conversion price per share $1.85 which was based on a 20% discount to the average closing price of the ~~Qualified Offering. If~~Company’s common stock on the ~~Qualified Offering has not occurred, then the Exercise Price shall be $2.00. The Warrants will have a three-year term and shall be exercisable in cash.~~OTC Markets for five consecutive trading days.

On ~~May 16, 2018,~~February 19, 2019, the Company entered into a Consulting Agreement (“Agreement”) with a Company. Per the terms of the Agreement, the Company is to issue 25,000 common stock shares of the Company for providing investor relations services, where 12,500 common stock shares of the Company are due immediately and the remaining 12,500 common stock shares of the Company is due June 19, 2019. On February 19, 2019, the Company issued ~~1,000,000~~250,000 common stock shares of the Company at ~~$0.97~~$3.39 per ~~share for investor relation services to be performed over 30 month period.~~share.

On ~~May 16, 2018,~~February 25, 2019, the Company issued ~~70,175~~46,875 and 83,333 common stock shares of the Company at ~~$0.65~~$0.74 and $1.81 per share, ~~for consulting services performed.~~respectively, relating to restricted stock issued from the Company’s 2017 Equity Incentive Plan.

The warrants and notes described above were issued and sold without registration under the Securities Act in reliance on the exemptions provided by Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder and in reliance on similar exemptions under applicable state laws.

Table of Contents

~~None.~~As of March 31, 2019, there were two convertible promissory notes (“Notes”) totaling $550,000 that were in default. The Company has offered to either repay the Notes or request to have them converted into common stock shares of the Company. As of our filing of our Form 10-Q for the quarterly period ended March 31, 2019, the note holders of the Notes have not yet communicated their intent to either receive payment or convert.

In accordance with the requirements of the Exchange Act, the Registrant caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	x
		Emerging growth company	x

		Page

PART I. FINANCIAL INFORMATION:

Item 1.	Unaudited Condensed Consolidated Financial Statements	3

	Condensed Consolidated Balance Sheets as of ~~June 30, 2018~~March 31, 2019 (Unaudited) and December 31, ~~2017~~2018	3

	Unaudited Condensed Consolidated Statements of Operations for the three ~~and six~~ month periods ended ~~June 30,~~March 31, 2019 and 2018 ~~and 2017~~	4

	Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Deficit for the three month periods ended March 31, 2019 and 2018	5

	Unaudited Condensed Consolidated Statements of Cash Flows for the ~~six~~three month periods ended ~~June 30,~~March 31, 2019 and 2018 ~~and 2017~~	56

	Notes to the Unaudited Condensed Consolidated Financial Statements	67

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2129

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2741

Item 4.	Controls and Procedures	2841

PART II. OTHER INFORMATION:

Item 1.	Legal Proceedings	2942

Item 1A.	Risk Factors	2942

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2942

Item 3.	Defaults Upon Senior Securities	3045

Item 4.	Mine Safety Disclosure	3045

Item 5.	Other Information	3045

Item 6.	Exhibits	3146

	Signatures	3247

	March 31, 2019			December 31, 2018
ASSETS	(Unaudited)			(Audited)
Current assets:
Cash	$	2,593,976		$	500,962
Accounts receivable, net		-			102,799
Inventory		39,801			37,776
Prepaid expenses and other assets		965,641			946,386
Total current assets		3,599,418			1,587,923

Property and equipment, net		296,825			299,910
Intellectual property and patents, net		1,212,961			1,206,011
Prepaid expenses and other assets		133,116			232,407
Other assets		59,153			69,837

Total assets	$	5,301,473		$	3,396,088

Liabilities and Stockholders' Deficit
Current liabilities:
Accounts payable	$	861,614		$	774,387
Accrued expenses		274,491			508,733
Loan payable		66,842			105,125
Notes payable, net		699,375			920,000
Convertible promissory notes, net		2,374,999			5,242,431
Derivative Liability		770,248			617,628
Deferred revenue		311,275			383,275
Total current liabilities		5,358,844			8,551,579

License Fees		97,500			-

Total liabilities		5,456,344			8,551,579

Commitments and Contingencies (see Note 14)

Stockholders' deficit:
Common stock: $0.001 par value; authorized 75,000,000 shares; 30,366,794 shares and 26,784,019 issued and outstanding as of March 31, 2019 and December 31, 2018, respectively		30,367			26,785
Additional paid-in capital		37,097,902			23,424,737
Stock payable		2,004,307			645,575
Accumulated deficit		(39,297,168	)		(29,269,000	)
Total CURE Pharmaceutical Holding Corp stockholders’ deficit		(164,592	)		(5,171,903	)

Noncontrolling interest		9,721			16,412

Total stockholders' deficit		(154,871	)		(5,155,491	)

Total liabilities and stockholders' deficit	$	5,301,473		$	3,396,088

Manufacturing equipment		5-7 Years
Computer and other equipment		3-7 Years
Leasehold Improvements		Lesser of useful life or the term of the lease

	·	For finite-lived intangible assets, such as developed technology rights, and for other long-lived assets, we compare the undiscounted amount of the projected cash flows associated with the asset, or asset group, to the carrying amount. If the carrying amount is found to be greater, we record an impairment loss for the excess of book value over fair value. In addition, in all cases of an impairment review, we re-evaluate the remaining useful lives of the assets and modify them, as appropriate; and

	·	For indefinite-lived intangible assets, such as acquired in-process R&D assets, each year and whenever impairment indicators are present, we determine the fair value of the asset and record an impairment loss for the excess of book value over fair value, if any.

	June 30, 2018			December 31, 2017
	Unaudited
Assets
Current assets:
Cash	$	161,051		$	108,249
Accounts receivable		66,165			4,364
Inventory		99,827			44,996
Prepaid expenses and other assets		717,040			586,888
Total current assets		1,044,083			744,497
Property and equipment, net		311,125			337,361
Intellectual property and patents, net		1,022,593			900,472
Prepaid expenses and other assets		498,339			-
Other assets		100,585			117,555
Total assets	$	2,976,725		$	2,099,885

Liabilities and Deficit
Current liabilities:
Accounts payable	$	601,291		$	544,980
Accrued expenses		264,328			129,978
Loan payable		16,323			50,425
Notes payable		700,000			800,000
Convertible promissory notes, net of unamortized discount		3,741,221			1,551,488
Derivative liability		181,950			90,738
Deferred revenue		408,263			361,462
Total current liabilities		5,913,376			3,529,071
License fees		560,000			560,000
Total liabilities		6,473,376			4,089,071

Deficit:
Common stock: $0.001 par value; authorized 75,000,000 shares; 25,021,427 and 23,901,252 shares issued and outstanding as of June 30, 2018 and December 31, 2017, respectively		25,022			23,902
Additional paid-in capital		18,695,056			16,483,632
Stock payable		923,728			324,995
Accumulated deficit		(23,172,763	)		(18,868,599	)
Total CURE Pharmaceutical Holding Corp stockholders’ deficit		(3,528,957	)		(2,036,070	)
Noncontrolling interest in subsidiary		32,306			46,884
Total deficit		(3,496,651	)		(1,989,186	)
Total liabilities and deficit	$	2,976,725		$	2,099,885

	For the Six Months Ended			For the Six Months Ended
	June 30, 2018			June 30, 2017

Cash flows from operating activities
Net loss	$	(4,318,742	)	$	(5,161,425	)
Adjustment to reconcile net loss to net cash used in operating activities:
Amortization of stock based compensation – prepaid expenses		713,537			552,010
Loss on disposal of PP&E		-			12,351
Stock issued for services		45,615			-
Equity incentive compensation		461,268			-
Depreciation and amortization		72,164			98,161
Amortization of loan discounts		519,716			82,933
Change in derivative liabilities		(206,387	)		42,545
Warrants granted for commission expense		94,277			-
Warrants granted for services		-			2,717,620
Change in other assets and liabilities:
Accounts receivable		(61,801	)		(6,394	)
Inventory		(54,831	)		(22,704	)
Prepaid expenses and other assets		153,705			(594,061	)
Other assets		16,970			22,701
Accounts payable		106,311			151,350
Accrued expenses		144,350			10,136
Deferred revenue		46,801			18,982
Net cash used in operating activities		(2,267,047	)		(2,075,795	)

Cash flows from investing activities
Purchase in intangible assets		(47,632	)		(16,555	)
Payment to joint venture		-			(5,000	)
Acquisition of property and equipment, net		(23,417	)		(42,795	)
Net cash used in investing activities		(71,049	)		(64,350	)

Cash flows from financing activities
Proceeds from convertible promissory notes		2,775,000			1,340,000
Loan repayments		(384,102	)		(21,817	)
Capital lease payments		-			(6,219	)
Net cash provided by financing activities		2,390,898			1,311,964

Net increase (decrease) in cash and cash equivalents		52,802			(828,181	)
Cash and cash equivalents, beginning of period		108,249			1,106,142
Cash and cash equivalents, end of period	$	161,051		$	277,961

Supplemental cash flow information

Cash paid for interest and income taxes:
Interest	$	33,359		$	2,967
Income taxes	$	-		$	-

Non-cash financing activities:
Common stock related to prepaid expenses	$	1,041,114		$	1,430,000
Warrants granted for discount on convertible promissory notes	$	567,385		$	676,746
Loan discount relating to note payable	$	-		$	10,000
Common stock to be issued for settlement of accounts payable	$	50,000		$	-
Common stock to be issued for patents	$	97,000		$	-
Accrued interest converted to convertible promissory note	$	10,000		$	-

1.	Identify the contract(s) with customer;
2.	Identify the performance obligations in the contract;
3.	Determine the transactions price;
4.	Allocate the transactions price to the performance obligations in the contract; and
5.	Recognize revenue when (or as) we satisfy a performance obligation.

Level 1:	Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2:	Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

Level 3:	Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use.

	~~June 30,~~ ~~2018~~

~~Number of common stock shares issued and outstanding~~		~~25,021,427~~
~~Number of common stock shares from conversion of convertible notes~~		~~3,546,908~~
~~Number of common stock shares from exercise of warrants~~		~~3,656,107~~
~~Number of common stock shares from exercise of stock options~~		~~527,231~~
~~Total fully-diluted common stock shares~~		~~32,751,673~~

	Year ended December 31,
	March 31, 2019		December 31, 2018

Restricted stock and stock options outstanding		-		97,742
Warrants		90,000		2,879,695
Shares to be issued upon conversion of convertible payable		115,047		236,475

Total		205,047		3,213,912

	June 30, 2018			December 31, 2017

Intellectual Property	$	814,582		$	814,582
Patents		369,159			224,527
Less accumulated amortization		(161,148	)		(138,637	)
Intangible assets, net	$	1,022,593		$	900,472

	Estimated Fair Value			Remaining Estimated Useful Life (Years)		Three Months Amortization Expense
Intellectual Property	$	814,582			14.41	$	10,206
Patents		600,344			17.96		4,024
Total	$	1,414,926				$	14,230
Less: accumulated amortization		(201,965	)
Intellectual property and patents, net		1,212,961
Less: pending patents not subject to amortization		(272,415	)
Net intangible assets subject to amortization	$	940,546

2018	$	23,940
2019		45,110
2020		45,110
2021		45,110
2022		45,110
Thereafter		576,982
Total Amortization	$	781,362

	June 30, 2018			December 31, 2017
Notes to a company due August 29, 2018 and September 21, 2018, including interest at 7.55% and 7.05%, respectively per annum; unsecured; interest due monthly	$	16,323		$	50,425
Current portion of loan payable		(16,323	)		(50,425	)
Loan payable, less current portion	$	-		$	-

2019	$	43,950
2020		58,600
2021		58,600
2022		58,600
2023		58,600
Thereafter		662,196
Total Amortization	$	940,546

	March 31, 2019			December 31, 2018
Notes to a company due September 29, 2019, including interest at 6.00% per annum; unsecured; interest due monthly	$	66,842		$	105,125
Current portion of loan payable		(66,842	)		(105,125	)
Loan payable, less current portion	$	-		$	-

Convertible promissory notes totaling $575,000 due June 27, 2019, interest payable at 9% per annum; unsecured; principal and accrued interest convertible into common stock at either the price per share equal to the average closing price of the Company’s Common Stock on the OTC Markets for the five consecutive trading days prior to the delivery of a Notice of Conversion (“Optional Conversion”) or price per share equal to 75% of the price of the Company’s next bona fide sale of its preferred stock or Common Stock in excess of $4,000,000 in gross proceeds, in one transaction or a series of related transactions, which offering definitively sets a price per share of the Company’s Common Stock or preferred stock and enables the Company to list its common stock on a national securities exchange; accrued interest to be paid quarterly beginning December 31, 2018. $575,000 convertible promissory notes due June 27, 2019 plus accrued interest and penalties of $78,034 have been converted into 353,221 common stock shares of the Company in 2019.		-			575,000
Convertible promissory notes totaling $2,000,000 due October 31, 2019, interest payable at 9% per annum; unsecured; principal and accrued interest convertible into common stock at either the price per share equal to the average closing price of the Company’s Common Stock on the OTC Markets for the five consecutive trading days prior to the delivery of a Notice of Conversion (“Optional Conversion”) or price per share equal to 75% of the price of the Company’s next bona fide sale of its preferred stock or Common Stock in excess of $4,000,000 in gross proceeds, in one transaction or a series of related transactions, which offering definitively sets a price per share of the Company’s Common Stock or preferred stock and enables the Company to list its common stock on a national securities exchange; accrued interest to be paid quarterly beginning December 31, 2018, which has not yet been paid. In 2019, the noteholder of this convertible promissory note entered into a debt conversion agreement to convert this convertible promissory note plus accrued interest into common stock shares of the Company at a $1.85 conversion price.		-			575,000
Convertible demand note totaling $2,000,000 due on demand at any time after the earlier of (i) an Event of Default, (ii) the closing of a proposed merger (the “Merger”) of a wholly-owned subsidiary of the Company with and into Chemistry Holdings, Inc., a Delaware corporation, and (iii) May 13, 2019 if a binding definitive agreement and plan of merger with respect to the Merger has not been executed by that date, in each case if this Note has not previously converted into Common Stock. If the Merger has not been consummated by May 13, 2019, the outstanding principal balance of this Note (the “Outstanding Balance”) shall automatically be converted (the “Conversion”) into shares of common stock, par value $0.001 per share, of the Company at a price per share equal to $3.34 (the “Conversion Price”) effective as of May 13, 2019 (the “Conversion Date”), and the Outstanding Balance shall thereafter be considered repaid in full. Please see Note 15 - Subsequent Events footnote for further information.		2,000,000			-
		3,050,000			5,575,000

Unamortized discount		(675,001	)		(332,569	)
Current portion of convertible promissory notes		2,374,999			5,242,431
Convertible promissory notes, less current portion	$	-		$	-

		Total				Level 1				Level 2				Level 3
Fair value of Derivative Liability		$	770,248			$	-			$	-			$	770,248

	Level I		Level II		Level III			Total
Derivative liability	$	-	$	-	$	(181,950	)	$	(181,950	)

	~~June 30,~~ ~~2018~~
Significant ~~assumptions (weighted-average):~~assumptions:
Risk-free interest rate at grant date		~~2.73~~2.23	%
Expected stock price volatility		~~90.76~~138.42	%
Expected dividend payout		-
Expected option life (in years)		1
Expected forfeiture rate		0	%

	June 30, 2018
Value at December 31, 2017	$	90,738
Decrease in value		(206,387	)
Initial value at debt issuance		297,599
Value at June 30, 2018	$	181,950

	Fair value of derivative liabilities
Balance at December 31, 2017	$	90,738
Initial fair value of derivative liability recorded as debt discount		297,599
Loss on change in fair value included in earnings		229,291
Balance at December 31, 2018		617,628
Loss on change in fair value included in earnings		152,620
Balance at March 31, 2019	$	770,248

Range of Exercise Price	Number of Awards		Weighted Average Remaining Contractual Life (years)		Weighted Average Exercise Price		Number of Awards Exercisable		Weighted Average Exercise Price
$0.61 - $1.81		2,223,506		9.02	$	0.79		982,934	$	0.81
		2,223,506		9.02	$	0.79		982,934	$	0.81

	·	Potential for rapid onset of action which can be especially useful for indications such as motion sickness, erectile dysfunction, seizures, allergic attack or coughing, bronchitis or asthma.
	·	Potential to extend a drug’s half-life and consequently extending dosage intervals
	·	Transmucosal delivery can improve a drug’s safety profile of therapy such as reduced gastric irritation
	·	Transmucosal delivery can improve a drug’s efficacy in patients with GI absorption issues.
	·	Accuracy in the administered dose can be better assured for each film.

	·	Difficulty swallowing tablets and capsules can be a problem for many individuals and can lead to a variety of adverse events and patient noncompliance with treatment regimens. It is estimated that over 16 million people in the United States have some difficulty swallowing, also known as dysphagia. Studies in adults evaluating the effect of tablet and capsule size on ease of swallowing suggest that increases in size are associated with increases in patient complaints related to swallowing difficulties at tablet sizes greater than approximately 8 mm in diameter. ODFs can readily be taken without the need to swallow or use of water or other beverages.
	·	Upon administration, there is a relatively low risk of the patient choking which can be most beneficial for patients suffering from motion sickness, dysphagia and repeated emesis.
	·	Easily administered to bedridden and non-cooperative patients (e.g., geriatric, pediatric, and psychiatric). They are hard to spit out.
	·	Configured with physical dimensions such that it is relatively easy and convenient to store and carry. Patients can conveniently carry multiple dissolvable films in his or her pocket or wallet. A single dose of strip can be carried individually without requiring the secondary container.
	·	ODFs are flexible with a pleasant mouth feel unlike oral dissolvable tablets which are brittle.

	·	The pouches or sachets offer larger printable 2D areas which traditional drug product formats do not. This allows the manufacturer to adapt to rapidly evolving labeling and regulatory requirements for information and anti-counterfeiting, such as product serialization.
	·	The manufacturing process has a low carbon foot print, with lower use of water for component preparation and sterilization as compared with other dosage forms.
	·	Even though not necessarily sterile, each dose unit is packed individually avoiding contact with other units.
	·	Tensile strength and plasticity of ODF allow for handling single, individual dose units without damage to the dosage form.
	·	Multiple SKUs can be produced by simply modifying the length of the ODF
	·	Enables anti-counterfeit management and dose management
	·	Adaptable for use with dispensing devices for pharmacy preparation or self-administration
	·	Can be easily and conveniently handled, stored, and transported at room temperature

	·	Loading of multiple active ingredients on one dose unit
	·	Can accommodate high drug load per dose unit (e.g. > 200 mg)
	·	Quickly dissolving/disintegrating (e.g. < 2 minutes)
	·	Potential for low moisture level (e.g. < 10 wt.% water)
	·	Can achieve desired performance characteristics while maintaining pleasant feeling in the mouth (e.g. soft, plush feeling with pliable film)
	·	Can achieve desired performance characteristics while formulating active ingredients susceptible to degradation from low pH environments, light, heat, moisture, and oxygen
	·	Multiple and unique ways to mask the bitter, metallic or salty taste of an active ingredient

We applied for six (6) trademark and logomark registrations, for which the opposition periods have expired without any opposition being filed. Competition We face competition from pharmaceutical companies, generic drug companies, wellness and nutraceutical companies, as well as organizations developing advanced drug delivery platforms such as Acquestive Therapeutics, BioDelivery Sciences International, IntelGenx, ARx Pharma and LTS Lohmann which have substantially greater financial, technical and human resources than we have. Furthermore, we face competition from these entities as well as universities, governmental agencies and other public and private research organizations for collaborative arrangements with pharmaceutical and biotechnology companies, in recruiting and retaining highly qualified scientific and management personnel and for licenses to additional technologies. Our success will be based in part on our ability to develop and manufacture products that address unmet medical needs and create value to patients at competitive price points. In addition, continuing to build our intellectual property portfolio and designing innovative approaches that surpass our competitors’ patents will be critical to success. Environmental Compliance Our research and development activities involve the controlled use of hazardous materials and chemicals. We are subject to federal, state and local laws and regulations governing the use, storage, handling and disposal of these materials and specific waste products. We are also subject to numerous environmental, health and workplace safety laws and regulations, including those governing laboratory procedures, exposure to blood-borne pathogens and the handling of bio-hazardous materials. The cost of compliance with these laws and regulations could be significant and may adversely affect capital expenditures to the extent we are required to procure expensive capital equipment to meet regulatory requirements. At this time, we believe that we are in compliance with environmental regulations applicable to our research and development and manufacturing facility located in Oxnard, California.	~~Serial No. /~~	~~Filing Date/~~ ~~Application~~
~~Title~~	~~Patent No.~~	~~Date~~	~~Type~~	~~Status~~
~~Method and apparatus for minimizing heat, moisture,~~
~~and shear damage to medicant~~	~~8,840,919~~	~~23-Sep-14~~	~~Utility~~	~~Issued~~
~~Method and apparatus for minimizing heat, moisture,~~
~~and shear damage to medicant~~	~~9,155,698~~	~~13-Oct-15~~	~~Utility~~	~~Issued~~
~~Edible films for administration of medicaments to animals~~	~~9,561,182~~	~~7-Feb-17~~	~~Utility~~	~~Issued~~
~~Methods for modulating dissolution, bioavailability,~~
~~bioequivalence~~	~~8,999,372~~	~~7-Apr-15~~	~~Utility~~	~~Issued~~
~~Pharmaceutical Composition and Method of Manufacturing~~	~~9,044,390~~	~~2-Jun-15~~	~~Utility~~	~~Issued~~
~~Pharmaceutical Composition and Method of Manufacturing~~	~~9,186,386~~	~~17-Nov-15~~	~~Utility~~	~~Issued~~
~~Pharmaceutical Composition and Method of Manufacturing (New)~~	~~9,980,996~~	~~29-May-18~~	~~Utility~~	~~Issued~~
~~Pharmaceutical Composition and Method of Manufacturing~~	~~14/934,940~~	~~6-Nov-15~~	~~Utility~~	~~Pending~~
~~Pharmaceutical Composition with Ionically Crosslinked~~
~~Polymer Encapsulation of Active Ingredient~~	~~15/315,264~~	~~30-Nov-16~~	~~Utility~~	~~Pending~~
~~Method and Apparatus For Minimizing Heat, Moisture,~~
~~and Shear Damage To Medicants and Other Compositions~~
~~During Incorporation of Same with Edible Films~~	~~15/666,057~~	~~1-Aug-17~~	~~Utility~~	~~Pending~~
~~Thin Film with High Load of Active Ingredient~~	~~13/890,875~~	~~9-May-13~~	~~Utility~~	~~Pending~~
~~Thin Film with High Load of Active Ingredient~~	~~14/069,239~~	~~31-Oct-13~~	~~Utility~~	~~Pending~~
~~Thin Film with High Load of Active Ingredient~~	~~2.0148~~	~~9-May-13~~	CN	~~Pending~~
~~High dosage dissolvable films for oral administration~~	~~62/521,463~~	~~18-Jun-17~~	~~PRV~~	~~Pending~~
~~Dose dispensing apparatus, systems, and methods~~	~~62/574,647~~	~~19-Oct-17~~	~~PRV~~	~~Pending~~
~~High dosage dissolvable films for oral administration (New)~~	~~PCT/US18/380341~~	~~8-Jun-18~~	~~PCT~~	~~Pending~~
~~Methods and Compositions For Improving Sleep (New)~~	~~62/680,325~~	~~4-Jun-18~~	~~PRV~~	~~Pending~~
~~Rapidly disintegrating film matrix for moisture sensitive compounds (New)~~	~~60,696,359~~	~~11-Jul-2018~~	~~PRV~~	~~Pending~~

	Three Months Ended
	March 31, 2019		March 31, 2018

Consulting	$	1,232,193	$	345,296
Salaries and wages		246,713		256,841
Selling, general and administrative		312,960		231,057
Professional and investor relations		342,929		185,316
Noncash compensation		230,291		-
Total operating expenses	$	2,365,086	$	1,018,510

	March 31, 2019			December 31, 2018
Current assets	$	3,599,418		$	1,587,923
Current liabilities		(5,358,844	)		(8,551,579	)
Working capital (deficiency)	$	(1,759,426	)	$	(6,963,656	)

	1.	Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;

	2.	Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that our receipts and expenditures are being made only in accordance with the authorization of our management and directors; and

	3.	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.

31.1		Certification of Chief Executive Officer pursuant to section 302 of the Sarbanes-Oxley Act of 2002
31.2		Certification of Chief Financial Officer pursuant to section 302 of the Sarbanes-Oxley Act of 2002
32.1		Certification 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		Certification 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

	CURE PHARMACEUTICAL HOLDING CORP.

Dated: ~~August 20, 2018~~May 17, 2019	By:	/s/ Robert Davidson
		Robert Davidson
		Chief Executive Officer

/s/ Mark Udell
Mark Udell
Chief ~~Financial~~Accounting Officer
~~August 20, 2018~~May 17, 2019