UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington,WASHINGTON, D.C. 20549

FORM 10-K

Annual Report Pursuant to Section(Mark One)

x ANNUAL REPORT PURSUANT TO SECTION 13 orOR 15(d) of the Securities Exchange Act ofOF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended:ended December 31, 20172018

or

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

For the transition period from ________________ to ________________

Commission file number 333-204857

CURE PHARMACEUTICAL HOLDING CORP.

(Exact name of registrant as specified in its charter)

1620 Beacon Place, Oxnard, California 93033

(Address of Principal Executive Office)Offices) (Zip Code)

(805) 824-0410

(Registrant’s telephone number, including area code)

Securities registered under Section 12(b) of the Exchange Act:code: None(805) 824-0410

Securities registered underpursuant to Section 12(b) of the Act:

Common stock, par value $0.001 per share

Securities registered pursuant to Section 12(g) of the Exchange Act:

Common Stock, par value $0.001 per shareNone

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

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

Indicate by checkmarkcheck 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 pastpreceding 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. xYes x No ¨ No

Indicate by checkmarkcheck mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes x No ¨

Indicate by check mark if disclosure of delinquent filers in responsepursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

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

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

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

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

The registrant had 29,870,390 shares of common stock outstanding as of March 27, 2019. The aggregate market value of voting and non-votingthe common equitystock held by non-affiliates of the registrant as of June 30, 2017,2018 was approximately $190,010,016 based on$15,179,621, as computed by reference to the closing sales price of thesuch common stock on such date as reported on the OTCQB Marketplace operated by theThe OTC Markets Group, Inc.

On March 21, 2018 we had 23,951,252 shares of common stock, par value $0.001 per share (the “Common Stock”) issued and outstanding.on such date.

CURE PHARMACEUTICAL HOLDING CORP.

2018 FORM 10-K ANNUAL REPORT

Table of ContentsTABLE OF CONTENTS

 

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FORWARD-LOOKING STATEMENTS

CertainCAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

The following discussion should be read in conjunction with the financial statements madeand related notes contained elsewhere in this Annual Report on Form 10-K10-K. Certain statements made in this discussion are “forward-looking statements” regardingwithin the plansmeaning of 27A of the Securities Act of 1933, as amended (the “Securities Act”), and objectivesSection 21E of the Securities Exchange Act of 1934, as amended. These statements are based upon beliefs of, and information currently available to, the Company’s management for future operations.as well as estimates and assumptions made by the Company’s management. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. When used herein, the words “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “future,” “intend,” “plan,” “predict,” “project,” “target,” “potential,” “will,” “would,” “could,” “should,” “continue” or the negative of these terms and similar expressions as they relate to the Company or the Company’s management identify forward-looking statements. Such statements reflect the current view of the Company with respect to future events and are subject to risks, uncertainties, assumptions, and other factors, including the risks relating to the Company’s business, industry, and the Company’s operations and results of operations. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned.

Forward-looking statements are inherently subject to risks and uncertainties, many of which we cannot predict with accuracy and some of which we might not even anticipate. Although we believe that the expectations reflected in such forward-looking statements are based upon reasonable assumptions at the time made, we can give no assurance that such expectations will be achieved. Future events and actual results, financial and otherwise, may differ materially from the results discussed in the forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements after the date of this Annual Report on Form 10-K or to conform them to actual results, new information, future events or otherwise, except as otherwise required by securities and other applicable laws.

Our financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). These accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenues and expenses during the periods presented. Our financial statements would be affected to the extent there are material differences between these estimates and actual results. The following discussion should be read in conjunction with our financial statements and notes thereto appearing elsewhere in this report.

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The following factors, among others, could cause our or our industry’s future results to differ materially from historical results or those anticipated:

	·	our ability to obtain additional and substantial funding for our company on an immediate basis, whether pursuant to a capital raising transaction arising from the sale of our securities, a strategic transaction or otherwise;
	·	our ability to attract and/or maintain research, development, commercialization and manufacturing partners;
	·	the ability of our company and/or a partner to successfully complete product research and development, including pre-clinical and clinical studies and commercialization;
	·	the ability of our company and/or a partner to obtain required governmental approvals, including product patent approvals;
	·	the ability of our company and/or a partner to develop and commercialize products that can compete favorably with those of our competitors;
	·	the timing of costs and expenses related to the research and development programs of our company and/or our partners;
	·	the timing and recognition of revenue from milestone payments and other sources not related to product sales;
	·	our ability to obtain suitable facilities in which to conduct our planned business operations on acceptable terms and on a timely basis;
	·	our ability to satisfy our disclosure obligations under the Securities Exchange Act of 1934, as amended, and to maintain the registration of our common stock thereunder;
	·	our ability to attract and retain qualified officers, employees and consultants as necessary; and
	·	costs associated with any product liability claims, patent prosecution, patent infringement lawsuits and other lawsuits.

These statements are only predictions and involve known and unknown risks, uncertainties and other factors, thatincluding the risks in the section entitled “Risk Factors” set forth in this Annual Report on Form 10-K for the year ended December 31, 2018, any of which may cause our Company’s or our industry’s actual results, levels of activity, performance or achievements of CURE Pharmaceutical Holding Corp. to be materially different from any future results, levels of activity, performance or achievements expressed or implied by suchthese forward-looking statements. TheThese risks may cause the Company’s or its industry’s actual results, levels of activity or performance to be materially different from any future results, levels of activity or performance expressed or implied by these forward-looking statements included hereinstatements.

These factors are based on current expectations that involve numerous risks and uncertainties. The Company’s plans and objectives are based, in part, on assumptions involving the continued expansion of business. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, allimportant factors of which we are difficult or impossible to predict accurately and many of which are beyond the control of the Company. Although the Company believes its assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance the forward-looking statements included in this report will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein particularly in view of the current state of our operations, the inclusion of such information should not be regarded as a statement by us or any other person that our objectives and plans will be achieved. Factorscurrently aware that could cause actual results, performance or achievements to differ materially from those expressed in any of our forward-looking statements. We operate in a continually changing business environment, and new risk factors emerge from time to time. Other unknown or implied by such forward-looking statements include, but are not limited to, theunpredictable factors set forth herein under the headings “Description of Business”.also could have material adverse effects on our future results, performance or achievements. We undertake no obligation to revisecannot assure you that projected results or update publicly any forward-looking statements unless required by law.events will be achieved or will occur.

Unless otherwise indicated or the context requires otherwise, the words “we,” “us,” “our,” the “Company” or “our Company” or “CURE” refer to CURE Pharmaceutical Holding Corp., a Nevada corporation, its wholly-owned subsidiary, CURE Pharmaceutical Corporation, a California corporation (“CURE Pharmaceutical”), and its 63% majority-owned subsidiary, Oak Therapeutics Inc., a California corporation (“Oak”).

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PART I

ITEM 1. BUSINESS HISTORY AND OVERVIEW

Overview

CURE Pharmaceutical Holding Corp. (the “Company”is 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, which may include clinical development and regulatory approval, and license the product rights to partners responsible for marketing, sales and distribution, while retaining exclusive manufacturing rights. We operate in a 25,000 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, 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:

CURE 3068 (CUREfilm Sleep – Commercially Launched)

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.

CURE 5079 (CUREfilm Sleep – Commercially Launched)

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.

CURE 5003 (CUREfilm Blue)

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.

CURE 5067 (CUREfilm D)

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. The product is currently in the optimization development stage. We are seeking distributors in other territories.

CURE 5200

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.

CURE 5209

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.

CURE 5210 (CUREfilm Beta-Caryophyllene)

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.

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Background

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 registrant’s common stock executed a written consent to change registrant’s name from Makkanotti Group Corp. to CURE Pharmaceutical 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, the registrant,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 the registrantus and a holder of a majority of theour issued and outstanding capital stock of the registrant prior to the closing (the “Majority Stockholder”), on the one hand, and CURE Pharmaceutical, Corporation, a California corporation (“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.”

The following is a brief description of the terms and conditions of the Exchange Agreement and the transactions contemplated thereunder that are material to the registrant:

·

Share Exchange and Share Cancellations. The registrant shall issue 9,010,000 restricted shares of its common stock, $0.001 par value per share (“Common Stock”), to the CURE Pharm Shareholders in the aggregate, in exchange for 2,718,253 shares of CURE Pharmaceutical’s common stock held by them, representing 100% of the then issued and outstanding common stock of CURE Pharmaceutical (the “Share Exchange”). In connection with the Share Exchange, the Majority Stockholder agreed to cancel 16,181,400 shares of Common Stock of the registrant in exchange for a warrant (the “Majority Stockholder Warrant”) to purchase up to 1,640,305 shares of Common Stock of the registrant at an exercise price of $2.00 per share and with an exercise period of four years commencing on the date of issuance of the warrant. In addition, one other shareholder of the registrant entered into a share cancellation agreement with the registrant whereby such shareholder agreed to cancel 652,390 shares of the registrant’s common stock at the closing of the Share Exchange in order to induce CURE Pharmaceutical to enter into the Exchange Agreement.

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As a result of the Share Exchange, CURE Pharmaceutical became a wholly owned subsidiary of the registrant,Company, and the CURE PharmPharmaceutical Shareholders and CURE PharmPharmaceutical Noteholders became theour controlling shareholders owning, at such time, approximately 65% of the registrant.

The closing of the transactions contemplated under the Exchange Agreement (the “Closing”) took place on November 7, 2016 (the “Closing Date”). As a result, the registrant had a total of 23,266,733 shares of common stockour issued and outstanding at the Closing Date, with the CURE Pharm Shareholders and Noteholders collectively owning approximately 64.97% of the registrant’s issued and outstanding Common Stock.

CURE Pharmaceutical Corporation

Our wholly owned subsidiary and operating business, CURE Pharmaceutical, located in Oxnard, California was originally incorporated in July 2011 to develop novel drug formulation and delivery technologies.

The pharmaceutical industry is facing ever-growing R&D expenditure 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. In addition to these challenges to the industry’s operators, many leading drugs are coming off-patent, creating a need to fill revenue gaps. 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.

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 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 pharmaceutical companies taking a keen interest in reformulating their drugs as part of their lifecycle management protocols.

The veterinary industry, which is under pressure to acquire new products and revenue streams, will benefit from similar formulation-focused commercial strategies, addressing a significant need for improved ease of administration by animal caregivers and handlers.

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CUREfilm^TM Technology

The founders of CURE Pharmaceutical are pioneers in drug delivery and oral thin film (OTF), having launched the first therapeutic OTF product, Chloraseptic® relief strips in 2003. OTF products are about the size of a postage stamp and can deliver medicines through the mucosal tissue in the mouth, sublingually or buccally – on the cheek or via the gastrointestinal tract. Oral transmucosal drug delivery is a non-invasive route for drug delivery that allows for absorption directly into the vascularized tissue in the mouth, bypassing the hepatic first pass effect. This leads to reduced drug exposure, and can offer a rapid onset of action. As an OTF, pharmaceutical actives can be either pre-solubilized or encapsulated, or both for more effective GI absorption and/or sustained release. The quick dissolution nature of OTF means that no water is required for administration, improving patient compliance - especially among the elderly, children, and in conditions where patients have difficulty in swallowing.

The CUREfilm platform is a scalable and versatile formulation and drug delivery system for both oral (OTF) and transdermal (skin) delivery. CUREfilm formulations can improve or match the pharmacokinetics of drugs in accordance with the desired outcome. The platform is compatible with a broad spectrum of molecules, for the formulation of both investigational and marketed prescription, OTC and nutraceutical products.

The competitive advantages of the CUREfilm platform over other OTF technology are protected by issued and pending patents, as well as trade secrets, and are as follows:

	1.	A dual layer approach with a liquid-based film layer and a powder matrix layer. The powder composition which may include an active ingredient, can be used to modulate the mucoadhesiveness of the film as well as the dissolution and absorption rates of the medicament. This approach protects the active ingredient from high shear and heat which can degrade the drug.
	2.	Micro-encapsulation of drug actives that allows for loading higher amounts of an active ingredient, such that we can deliver lower potency drugs in a single dose. By extension, multiple actives can be loaded onto a single dose. The micro-encapsulation process, envelopes all or part the active ingredients with microscopic particles or droplets to protect and shield them. This technique allows the delivery of higher dosing with better flavor masking, increase stability of the active ingredient as well sustained drug release.
	3.	Proprietary equipment design and manufacturing processes, pursued as trade secrets, allow us to produce CUREfilm products at commercial scale in a cGMP environment.

Business Strategy

Our commercial strategy is designed to mitigate risk by pursuing a diversified model.

	1.	Nutraceuticals. We manufacture select nutraceuticals that complement our portfolio and align with our mission, in partnership with distributors. This approach provides us with short term revenue opportunities.
	2.	Pharmaceuticals. We partner with companies that are responsible for clinical development and regulatory approval with the FDA and/or other regulatory bodies, as well as for the marketing and distribution of the products. On a case-by-case basis, we may be responsible for providing all or part of the documentation required for regulatory submissions and for conducting the preclinical testing of our products. Deal terms may include upfront licensing fees, development costs, milestone payments and exclusive manufacturing rights. Within this category, we are further diversifying risk and return by pursuing product life cycle opportunities (e.g. Sildenafil CUREfilm) as well as investigational drugs (e.g. PEA & Dronabinol combination CUREfilm). While we currently manufacture nutraceutical products in our state-of-the-art cGMP oral film manufacturing facility, we are undertaking steps to manufacture pharmaceutical products for commercial use.
	3.	Cannabinoids. 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 don’t 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 other plant extracts that, together, provide maximum therapeutic benefit. We are investing in 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 undertaking steps to research scheduled drugs at our Oxnard facility.
	4.	Underserved patient populations. Consistent with our mission of improving the lives of all people in need, regardless of geography or economic status, we have made our technology available to a private company, Oak Therapeutics (“Oak”), that is developing novel drug formulations for patients in developing nations (“Territory”). On November 10, 2017, we received 269,000 shares of Oak as consideration for an exclusive license to our patents 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 own approximately 63% of Oak’s outstanding shares and have consolidated Oak’s financial statements as of the fourth quarter 2017. Oak has completed a Phase I Small Business Innovative Research Contract (“SBIR”) from the National Institutes of Health to develop a formulation for 300mg of Isoniazid in a rapidly dissolving film as an anti-tuberculosis treatment option. Oak is currently in the application process for Phase II of the SBIR program to continue its research and development and focus on manufacturing scale up, clinical trials and commercialization.

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Product Portfolio and Pipeline

We are selling CUREfilm dietary supplements and developing CUREfilm prescription and OTC pharmaceutical drugs. These include:

Marketed:

Research:

Competition

We face competition from other companies, 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. Many of our competitors, including Monosol, BioDelivery Sciences International, IntelGenx and LTS Lohmann, have substantially greater financial, technical and human resources than we have. 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.

ITEM 1A. RISK FACTORS

Not required for smaller reporting companies.

ITEM 1B. UNRESOLVED STAFF COMMENTS.

Not Applicable.

ITEM 2. PROPERTIES.

Our principal executive offices and manufacturing facility are located at 1620 Beacon Place, Oxnard, California 93033. The offices and manufacturing facility consists of approximately 25,000 square feet. The Company also leases additional office and warehouse space at 1610 and 1612 Fiske Place, Oxnard, California 93033, which contains approximately 6,547 square feet as well as a research and development space located at 2029 Becker Drive, Lawrence, KS 66047, which contains approximately 1,350 square feet. All facilities are currently on month-to-month leases. Rent expense was $294,646 and $286,539 for the years ended December 31, 2017 and 2016, respectively.

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ITEM 3. LEGAL PROCEEDINGS.

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 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 is requesting relief in this matter for a 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 the additional expenses will be incurred in order to defend this matter. As such, the Company cannot determine whether there is a reasonable possibility that a loss will be incurred nor can it estimate the range of any such potential loss. Accordingly, the Company has not accrued an amount for any potential loss associated with this action.

Currently, there are no orders, judgments, or decrees of any governmental agency or administrator, or of any court of competent jurisdiction, revoking or suspending for cause any license, permit or other authority to engage in the securities business or in the sale of a particular security or temporarily or permanently restraining any of our incoming officers or directors from engaging in or continuing any conduct, practice or employment in connection with the purchase or sale of securities, or convicting such person of any felony or misdemeanor involving a security, or any aspect of the securities business or of theft or of any felony. Nor are any of the officers or directors of any corporation or entity affiliated with us so enjoined.

ITEM 4. MINE SAFETY DISCLOSURES.

Not Applicable.

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PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

Market Information

The Company’s common stock is listed on the “OTC Markets” under the Symbol “CURR”. Trading in stocks quoted on the OTC Bulletin Board is often thin and is characterized by wide fluctuations in trading prices due to many factors that may be unrelated to a company’s operations or business prospects. We cannot assure you that there will be a market in the future for our common stock.

OTC Bulletin Board securities are not listed or traded on the floor of an organized national or regional stock exchange. Instead, OTC Bulletin Board securities transactions are conducted through a telephone and computer network connecting dealers in stocks. OTC Bulletin Board issuers are traditionally smaller companies that do not meet the financial and other listing requirements of a regional or national stock exchange.

Our shares of common stock began trading on January 18, 2017.

Number of Holders

As of December 31, 2017, the 23,901,252 issued and outstanding shares of common stock were held by a total of 99 shareholders of record. 

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The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a market price of less than $5.00, other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the SEC, that: (a) contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading; (b) contains a description of the broker’s or dealer’s duties to the customer and of the rights and remedies available to the customer with respect to a violation of such duties or other requirements of the securities laws; (c) contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price; (d) contains a toll-free telephone number for inquiries on disciplinary actions; (e) defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and (f) contains such other information and is in such form, including language, type size and format, as the SEC shall require by rule or regulation.

The broker-dealer also must provide, prior to effecting any transaction in a penny stock, the customer with (a) bid and offer quotations for the penny stock; (b) the compensation of the broker-dealer and its salesperson in the transaction; (c) the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and (d) a monthly account statement showing the market value of each penny stock held in the customer’s account.

In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written acknowledgment of the receipt of a risk disclosure statement, a written agreement as to transactions involving penny stocks, and a signed and dated copy of a written suitability statement.

These disclosure requirements may have the effect of reducing the trading activity for our Common Stock. Therefore, stockholders may have difficulty selling our securities.

Dividends

The Company has never paid cash dividends on its common stock. We intend to keep future earnings, if any, to finance the expansion of our business, and we do not anticipate that any cash dividends will be paid in the foreseeable future. The registrant’s future payment of dividends will depend on the registrant’s earnings, capital requirements, expansion plans, financial condition and other relevant factors that the registrant’s board of directors may deem relevant. The registrant’s accumulated deficit currently limits the registrant’s ability to pay dividends.

Securities Authorized for Issuance under Equity Compensation Plans

On December 27, 2017, the Company held a special meeting of stockholders (the “Meeting”) at the Company’s corporate office located at 1620 Beacon Place, Oxnard, California 93033. At the Meeting, the stockholders voted on the various proposals, including the Company’s 2017 Equity incentive plan, described in detail in the Company’s definitive proxy statement for the Meeting filed with the Securities and Exchange Commission on December 13, 2017. The Company’s 2017 Equity Incentive Plan was approved and the voting results are disclosed in the Company’s Form 8-K filing with the Securities and Exchange Commission on December 29, 2017.

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The Company does not have any individual compensation arrangements with respect to its common or preferred stock. The issuance of any of our common or preferred stock is within the discretion of our Board of Directors, which has the power to issue any or all of our authorized but unissued shares without stockholder approval.

Recent Sales of Unregistered Securities

On April 7, 2017, the Company issued 14,579 common stock shares at $6.86 per share for consulting services to be performed over a one year period.

On April 24, 2017, the Company issued 100,000 common stock shares at $7.00 per share for consulting services to be performed over a six month period.

On May 18, 2017, the Company issued 300,000 common stock shares at $2.10 per share for consulting services to be performed over a one year period.

On August 21, 2017, the Company issued 100,000 common stock shares at $5.30 per share for consulting services to be performed over a four month period.

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.

From May 11, 2017 to December 14, 2017, the Company issued 360,000 warrants in connection with the issuance of $1,800,000 convertible promissory notes. The warrants have an exercise price of the lower of $7.00 per share or the price per share in the Company’s latest debt or equity financing greater than $3,000,000 and a term of 3 years.

From May 11, 2017 to December14, 2017, the Company issued up to $1,900,000 convertible promissory notes due between November 11, 2017 and June 14, 2018. The notes bear interest at 8% per year and are convertible into common stock at the lower of $7.00 per share or the price per share in the Company’s latest debt or equity financing greater than $3,000,000.

On October 30, 2017, the Company issued 50,000 common stock shares at $3.50 per share for consulting services to be performed over a one year period.

Purchase of Our Equity Securities by Officers and Directors

None

ITEM 6. SELECTED FINANCIAL DATA.

Not applicable to smaller reporting companies.

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

The following discussion and analysis of the results of operations and financial condition of CURE Pharmaceutical Holding Corp., a Nevada corporation for the years ended December 31, 2017 and 2016 should be read in conjunction with the financial statements of CURE Pharmaceutical Holding Corp., and the notes to those financial statements that are included elsewhere in this Form 10-K. This discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as CURE Pharmaceutical Holding Corp.’s plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those set forth under the Business sections in this Form 10-K. Words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions are used to identify forward-looking statements.

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BUSINESS

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.

CURE Pharmaceutical Corporation

Our wholly owned subsidiary and operating business, CURE Pharmaceutical Corporation, located in Oxnard, California was originally incorporated in July 2011 to develop novel drug formulation and delivery technologies.

The pharmaceutical industry is facing ever-growing R&D expenditureexpenditures 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 dwarve 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 leadingmarketed 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 addresses 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.

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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 ininvestigating reformulating their drugs as part of their lifecycle management protocols.

The veterinary industry, which is under pressure to acquire new products and revenue streams, will benefit from similar formulation-focused commercial strategies, addressing a significant need for improved ease of administration by animal caregivers and handlers.Our Strategy

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

Pharmaceuticals

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

Cannabinoids

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.

Nutraceuticals

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.

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Underserved Patient Populations

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. Oak has completed a Phase I Small Business Innovative Research Contract (“SBIR”) from the National Institutes of Health to develop a formulation for 300mg of Isoniazid in a rapidly dissolving film as an anti-tuberculosis treatment option. Oak applied for Phase II grant of the SBIR program which was not awarded.

CUREFilm™CUREfilm^TM Technology

The founders of CURE PharmaceuticalsPharmaceutical are pioneers in drug delivery and oral thin film (OTF),ODF, having launched the first therapeutic OTFODF product, Chloraseptic® relief strips in 2003. OTFODF products are about the size of a postage stamp and can deliver medicines through the mucosal tissue in the mouth, sublingually or buccally – on the cheek or more traditionally via the gastrointestinalGI tract. Oral transmucosal drug delivery is a non-invasive route for drug delivery that allows for absorption directly into the vascularized tissue in the mouth, bypassing the hepatic first pass effect. This leads to reduced drug exposure and can offer a rapid onset of action. As an OTF, pharmaceutical activesoral ODF, active ingredients can be either pre-solubilized within the matrix or encapsulated, or both for more effective GI absorption and/or sustained release. The quick dissolution nature of OTFODF means that no water is required for administration, improving 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:

Safety and Efficacy

Patient Experience and Medication Adherence

Manufacturing and logistics

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

The specific advantages below are present with multiple CUREfilm products and platform technologies. The advantages listed below are expressly described in CURE’s patent documents. Other advantages are present in 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.

Intellectual Property

The competitive advantages of the CUREfilm platform and products over other OTFODF technology and products are protected by issued and pendingending patents, as well as trade secrets such as proprietary equipment design and are as follows:

	1.	A dual layer approach with a liquid-based film layer and a powder matrix layer. The powder compositionmanufacturing processes which may include an active ingredient, can be used to modulate the mucoadhesiveness of the film as well as the dissolution and absorption rates of the medicament. This approach protects the active ingredient from high shear and heat which can degrade the drug.
	2.	Micro-encapsulation of drug actives that allows for loading higher amounts of an active ingredient, such that we can deliver lower potency drugs in a single dose. By extension, multiple actives can be loaded onto a single dose. The micro-encapsulation process, envelopes all or part the active ingredients with microscopic particles or droplets to protect and shield them. This technique allows the delivery of higher dosing with better flavor masking, increase stability of the active ingredient as well sustained drug release.
	3.	Proprietary equipment design and manufacturing processes, pursued as trade secrets, 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 (10) issued patents, nine (9) 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. 9 Table of Contents   Business StrategyGranted 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 term extensions that might be available following the grant of marketing authorizations. 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. CUREfilm BlueTM With Pfizer’s last U.S. patents covering Viagra® expiring in 2020, we expect multiple generic sildenafil entrants worldwide. Within the lucrative erectile dysfunction (ED), our North American competitors with advanced drug delivery technology, IntelGenx Corporation and Acquestive Therapeutics are pursuing reformulation of generic Cialis®, a lower dose ED drug. There are a few companies selling Sildenafil citrate oral thin film products outside of the United States such as CTC Bio, Zim Laboratories and Seoul Pharma in Asia and IBSA Farmaceutici Italia and Sandoz in Europe. Our goal is for CUREfilm Blue to be the first Sildenafil citrate oral thin film to be approved by the FDA. CUREfilm DTM There are currently no Cholecalciferol (vitamin D3) oral thin films on the market in the United States. Our main competitor for this product in the United States is Everidis Health Sciences’ ReplestaTM, a medical food formulated as a chewable wafer. CUREfilm SleepTM While there are a few melatonin oral thin film products on the market in the United States, most do not combine multiple active ingredients. CUREfilm β-caryophylleneTM There are currently no β-caryophyllene oral thin film products on the market, with most such terpenes currently being sold as liquid concentrates. Recent Developments During the Year-Ended December 31, 2018 Registrations On November 21, 2018, CURE Pharmaceutical obtained a new registration with the U.S. Drug Enforcement Administration as a manufacturer authorized to handle Schedule 1 controlled substances. With this license, the Company will develop and manufacture cannabinoid-based pharmaceutical products using its CUREfilm technology, such as dronabinol-based oral thin films. Per 21 CFR § 1304.33, this registration now requires the Company to report certain acquisition and distribution activities, along with inventory and manufacturing activities, to the ARCOS Unit of the Drug Enforcement Administration. 10 Table of Contents On March 12, 2019, the Company announced its ability to handle Schedule 1 controlled substances has extended to the manufacturing of cannabis plant extracts and synthetic cannabidiol. This extended license allows CURE to take advantage of its latest U.S. Patent No. 10,238,705 for the extraction and purification of cannabis plant material, as well as subsequent processing of cannabis extracts for drug formulation. Licensing Agreement On September 4, 2018, we entered into its first multi-year licensing agreement (the “Licensing Agreement”) with Canopy Growth Corporation, a company that engages in the production and sale of medical cannabis (“Canopy”). Under the terms of the Licensing Agreement, Canopy will have an exclusive license to certain of the Company’s intellectual property rights, including the Company’s CUREfilm technology for use with cannabis extracts and biosynthetic cannabinoids (“Products”) and our trademarks in markets around the world where it is legal for Canopy to sell the Products, excluding Asia. We will retain the right to manufacture synthetic cannabinoids for pharmaceutical applications. Canopy will manufacture CUREfilms that deliver cannabis extracts, expanding the commercialization and monetization of the CUREfilm technology. The parties will collaborate on new products and uses for the products. Canopy shall pay to CURE approximately $250,000 for costs associated with a feasibility study and technology transfer as well as certain milestone payments and royalties on product sales by Canopy with minimum royalties starting in 2020. We have successfully completed the feasibility study contemplated under the Licensing Agreement, receiving several payments in connection therewith and we are initiating the technology transfer activities as contemplated under the License Agreement. Securities Purchase Agreements On October 15, 2018, we entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with accredited investors (each an “Investor” and collectively, the “Investors”). Pursuant to the terms of the Securities Purchase Agreement, we sold up to $2,000,000 in convertible notes (the “Notes”), initially convertible into shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”) at a conversion price equal to $2.50 at the earlier of (1) the Investor’s discretion or (2) 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 and results in a listing of the Company’s Common Stock on a national securities exchange. The Notes shall be issued in tranches with (1) a closing of $250,000 on October 15, 2018; (2) a closing of $250,000 on or before November 15, 2018; (3) a closing of $250,000 on or before December 1, 2018; and a closing of $1,250,000 on or before December 31, 2018. Convertible Promissory Notes 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. During the first quarter of 2019, the Company repaid $275,000 of convertible promissory notes. On February 13, 2019, $750,000 of convertible promissory notes plus accrued interest and penalties of $135,825 were converted in 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 in 591,757 common stock shares of the Company. 11 Table of Contents On April 24, 2018, we entered into a 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. Between May 18, 2018 and June 29, 2018, we entered into convertible promissory notes totaling $750,000 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. On July 7, 2018, a convertible promissory note of $250,000 plus accrued interest of $13,398 was converted into 297,288 common stock shares of the Company. On September 27, 2018, we entered into 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. On February 13, 2019, $575,000 of convertible promissory notes plus accrued interest and penalties of $78,034 were converted in 353,221 common stock shares of the Company. Between October 15, 2018 and December 3, 2018, we entered into convertible promissory notes totaling $575,000 due on 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 of related transactions, which offering definitely 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 yet been paid. 12 Table of Contents Departure, Appointment or Compensatory Arrangements of Directors or Certain Officers On December 17, 2018, we appointed Gene Salkind, MD as director of the Company. Dr. Salkind, age 64, is board certified in neurological surgery by the American Board of Neurological Surgery and completed various residencies, fellowships and postgraduate training at Abington Memorial hospital, The Graduate Hospital, Veteran’s Administration Hospital, Pennsylvania Hospital, Children’s Hospital of Philadelphia, and the Hospital of the University of Pennsylvania. Further detail on Dr. Salkind’s background and compensation provided under “Directors, Executive Officers and Corporate Governance”. On November 15, 2018, we entered into an employment agreement with Alex Katz (the “Employment Agreement”) pursuant to which Mr. Katz shall serve as the Chief Financial Officer of the Company beginning on November 15, 2018 (the “Effective Date”). In connection with the appointment of Mr. Katz as Chief Financial Officer, Mark Udell, Chief Financial Officer of the Company since November 2016, resigned from such position, effective November 15, 2018, and will serve as the Company’s Chief Accounting Officer. Further detail on Mr. Katz’s background and compensation provided under “Executive Compensation”. On January 22, 2018, the Board of Directors (the “Board”) of CURE Pharmaceutical Holding Corp., a Nevada corporation (the “Company”), appointed Jessica Rousset as the Company’s Chief Operating Officer. Further detail on Ms. Rousset’s background and compensation provided under “Executive Compensation”. Corporate and Available Information   Our commercial strategyannual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports are available free of charge though our website (http://www.curepharmaceutical.com) as soon as practicable after such material is designedelectronically filed with, or furnished to, mitigate riskthe Securities and Exchange Commission (the “SEC”). Except as otherwise stated in these documents, the information contained on our website or available by pursuing a diversified model.hyperlink from our website is not incorporated by reference into this report or any other documents we file, with or furnish to, the SEC.   1. Nutraceuticals. We manufacture select nutraceuticals that complement our portfolio and align with our mission, in partnership with distributors. This approach provides us with short term revenue opportunities. 2. Pharmaceuticals. We partner with companies that are responsible for clinical development and regulatory approval with the FDA and/or other regulatory bodies, as well as for the marketing and distribution of the products. On a case-by-case basis, we may be responsible for providing all or part of the documentation required for regulatory submissions and for conducting the preclinical testing of our products. Deal terms may include upfront licensing fees, development costs, milestone payments and exclusive manufacturing rights. Within this category, we are further diversifying risk and return by pursuing product life cycle opportunities (e.g. Sildenafil CUREfilm) as well as investigational drugs (e.g. PEA & Dronabinol combination CUREfilm). While we currently manufacture nutraceutical products in our state-of-the-art cGMP oral film manufacturing facility, we are undertaking steps to manufacture pharmaceutical products for commercial use. 3. Cannabinoids. 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 don’t 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 other plant extracts that, together, provide maximum therapeutic benefit. We are investing in 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 undertaking steps to research scheduled drugs at our Oxnard facility. 4. Underserved patient populations. Consistent with our mission of improving the lives of all people in need, regardless of geography or economic status, we have made our technology available to a private company, Oak Therapeutics (“Oak”), that is developing novel drug formulations for patients in developing nations (“Territory”). On November 10, 2017, we received 269,000 shares of Oak as consideration for an exclusive license to our patents 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 own approximately 63% of Oak’s outstanding shares and have consolidated Oak’s financial statements as of the fourth quarter 2017. Oak has completed a Phase I Small Business Innovative Research Contract (“SBIR”) from the National Institutes of Health to develop a formulation for 300mg of Isoniazid in a rapidly dissolving film as an anti-tuberculosis treatment option. Oak is currently in the application process for Phase II of the SBIR program to continue its research and development and focus on manufacturing scale up, clinical trials and commercialization. OfficeITEM 1A. RISK FACTORS   Our corporate officebusiness is located at 1620 Beacon Place, Oxnard, California 93033.subject to many risks and uncertainties, which may affect our future financial performance. If any of the events or circumstances described below occur, our business and financial performance could be adversely affected, our actual results could differ materially from our expectations, and the price of our stock could decline. The risks and uncertainties discussed below are not the only ones we face. There may be additional risks and uncertainties not currently known to us or that we currently do not believe are material that may adversely affect our business and financial performance. You should carefully consider the risks described below, together with all other information included in this prospectus including our financial statements and related notes, before making an investment decision. The statements contained in this prospectus that are not historic facts are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by forward-looking statements. If any of the following risks actually occurs, our business, financial condition or results of operations could be harmed. In that case, the trading price of our common stock could decline, and investors in our securities may lose all or part of their investment. Risks Related to Our phone numberBusiness and Industry The success of our pharmaceutical product candidates is (805) 824-0410.dependent on our business partners’ ability to conduct clinical trials, obtain regulatory approval, market and sell our products. We cannot give any assurance that any of our pharmaceutical product candidates will receive regulatory approval, which is necessary before they can be commercialized. In addition to developing and launching dietary supplements, we have invested substantial efforts and financial resources to design and develop our pharmaceutical products, including conducting product characterization, validation and scale up and providing general and administrative support for these operations. Our future success is dependent on our ability with our partners, to successfully develop, obtain regulatory approval for, and then successfully commercialize one or more pharmaceutical product candidates. We currently generate no revenue from sales of any pharmaceutical product, and we may never be able to develop or commercialize a marketable pharmaceutical product.     13   Table of Contents   RESULTSClinical drug development involves a lengthy and expensive process with an uncertain outcome, and results of earlier studies may not be predictive of future study results. Clinical testing is expensive and can take many years to complete, and its outcome is inherently uncertain. Failure can occur at any time during the clinical study process. In vitro testing and characterization of our product candidates may not be predictive of the clinical results. Product candidates that have shown promising results in early-stage clinical studies may still suffer significant setbacks in subsequent advanced clinical studies. There is a high failure rate for drugs proceeding through clinical studies, and product candidates in later stages of clinical studies may fail to show the desired safety and efficacy traits despite having progressed satisfactorily through preclinical studies and initial clinical studies. A number of companies in the pharmaceutical industry have suffered significant setbacks in advanced clinical studies due to lack of efficacy or adverse safety profiles, notwithstanding promising results in earlier studies. Moreover, preclinical and clinical data are often susceptible to varying interpretations and analyses. We do not know whether any Phase I, Phase II, Phase III or other clinical studies such as bioequivalency studies conducted with our partners, will demonstrate consistent or adequate efficacy and safety sufficient to obtain regulatory approval to market our product candidates.   The life sciences industry is highly competitive and subject to rapid technological change. If our competitors and potential competitors develop superior products and technologies, our competitive position and results of operations would suffer. We face intense competition from a number of companies that offer products in our target markets, many of which have substantially greater financial resources and larger, more established marketing, sales and service organizations than we do. The life sciences industry is characterized by rapid and continuous technological innovation. We may need to develop new technologies for our products to remain competitive. One or more of our current or future competitors could render our present or future products obsolete or uneconomical by technological advances. We may also encounter other problems in the process of delivering new products to the marketplace, such as problems related to design, development or manufacturing of such products, and as a result we may be unsuccessful in selling such products. Our future success depends on our ability to compete effectively against current technologies, as well as to respond effectively to technological advances by developing and marketing products that are competitive in the continually changing technological landscape. The report of our independent registered public accounting firm contains an explanatory paragraph regarding substantial doubt about our ability to continue as a going concern. The report of our independent registered public accounting firm on our audited financial statements as of and for the year ended December 31, 2018 contains an explanatory paragraph regarding substantial doubt about our ability to continue as a going concern. Our financial statements do not include any adjustments that might result from the outcome of the uncertainty regarding our ability to continue as a going concern. This going concern opinion could materially limit our ability to raise additional funds through the issuance of equity or debt securities or otherwise. Further reports on our financial statements may include an explanatory paragraph with respect to our ability to continue as a going concern. 14 Table of Contents We have not generated any revenue from the sale of our current pharmaceutical product candidates and may never be profitable. We have not yet commercialized any of our pharmaceutical product candidates. We have generated minimal revenues from the sale of our nutraceutical products, and we expect modest growth in sales of these products over the next 2-3 years. We do not know whether or when we will become profitable. Our ability to generate revenue and achieve profitability depends on our ability to successfully complete the development of, and to commercialize, our product candidates and on the demand for our product candidates. Our ability to generate revenue and achieve profitability depends on our ability, alone or with commercialization partners, to successfully complete the development of, and obtain the regulatory and marketing approvals necessary to commercialize, one or more of our product candidates. Our ability to generate future revenue from product candidate sales depends heavily on our success in many areas, including but not limited to: · obtaining and maintaining financial support from pharmaceutical and other commercialization partners to advance product development, testing and scale up; · our partners ability and commitment to obtain regulatory and marketing approvals for pharmaceutical product candidates; · our partners ability and commitment to obtain market acceptance of our products; · establishing and maintaining supply and manufacturing relationships with third parties that can provide adequate (in amount and quality) products to support market demand for our product candidates, if approved; · addressing any competing pharmaceutical or biotechnological and market developments; · identifying, assessing, acquiring and/or developing new product candidates; · negotiating favorable terms in any collaboration, licensing or other arrangements into which we may enter; · ourselves or our partners becoming a target of litigation for possible patent infringement; · maintaining, protecting and expanding our portfolio of intellectual property rights, including patents, trade secrets and know-how; and · attracting, hiring and retaining qualified personnel. We or our suppliers may experience development or manufacturing problems or delays that could limit the growth of our revenue or increase our losses. We may encounter unforeseen situations in the manufacturing of our products that could result in delays or shortfalls in our production. Our suppliers may also face similar delays or shortfalls. In addition, our or our suppliers’ production processes may have to change to accommodate any significant future expansion of our manufacturing capacity, which may increase our or our suppliers’ manufacturing costs, delay production of our products, reduce our product gross margin and adversely impact our business. If we are unable to keep up with demand for our products by successfully manufacturing and shipping our products in a timely manner, our revenue could be impaired, market acceptance for our products could be adversely affected and our customers might instead purchase our competitors’ products. In addition, developing manufacturing procedures for new products may require developing specific production processes for those products. Developing such processes could be time consuming and any unexpected difficulty in doing so can delay the introduction of a product. Our ability to compete depends on our ability to attract and retain talented employees. Our future success depends on our ability to identify, attract, train, integrate and retain highly qualified technical, development, sales and marketing, managerial and administrative personnel. Competition for highly skilled individuals is extremely intense and we face difficulty identifying and hiring qualified personnel in many areas of our business. We may not be able to hire and retain such personnel at compensation levels consistent with our existing compensation and salary structure. Many of the companies with which we compete for hiring experienced employees have greater resources than we have. If we fail to identify, attract, train, integrate and retain highly qualified and motivated personnel, our reputation could suffer and our business, financial condition and results of operations could be adversely affected. Our future success also depends on the continued service and performance of our senior management team. The replacement of members of our senior management team likely would involve significant time and costs, and the loss of any these individuals may delay or prevent the achievement of our business objectives. If we do not achieve, sustain or successfully manage our anticipated growth, our business and prospects will be harmed. If we are unable to obtain or sustain adequate revenue growth, our financial results could suffer. Furthermore, significant growth will place strains on our management and our operational and financial systems and processes, and our operating costs may escalate even faster than planned. If we cannot effectively manage our expanding operations and our costs, we may not be able to grow effectively, or we may grow at a slower pace. Additionally, if we do not successfully forecast the timing of regulatory authorization for our products, marketing and subsequent demand for our products or manage our anticipated expenses accordingly, our operating results will be harmed. 15 Table of Contents New technologies could emerge that might offer better combinations of price and performance than our current or product. It is critical to our success that we anticipate changes in technology and customer requirements and to successfully introduce, on a timely and cost-effective basis, new, enhanced and competitive technologies that meet the needs of current and prospective customers. If we do not successfully innovate and introduce new technology into our product lines or manage the transitions to new product offerings, our revenues, results of operations and business will be adversely impacted. Competitors may be able to respond more quickly and effectively than we can to new or changing opportunities, technologies, standards or customer requirements. We anticipate that we will face increased competition in the future as existing companies and competitors develop new or improved products and as new companies enter the market with new technologies. If the market opportunities for our product candidates are smaller than we believe they are, our revenue may be adversely affected, and our business may suffer. Our projections of both the number of people who have our target diseases, as well as the subset of people with these diseases who have the potential to benefit from treatment with our product candidates, are based on our beliefs and estimates. These estimates have been derived from a variety of sources, including the scientific literature, surveys of clinics, or market research and may prove to be incorrect. Further, new studies may change the estimated incidence or prevalence of these diseases. The number of patients may turn out to be lower than expected. The effort to identify patients with diseases we seek to treat is in early stages, and we cannot accurately predict the number of patients for whom treatment might be possible. We face intense competition and rapid technological change and the possibility that our competitors may discover, develop or commercialize drugs that are similar, more advanced or more effective than ours, which may adversely affect our financial condition and our ability to successfully commercialize our product candidates. The biotechnology and pharmaceutical industries are highly competitive. There are many pharmaceutical companies, biotechnology companies, public and private universities and research organizations actively engaged in the research and development of products that may be similar to our product candidates. We compete with other companies within the drug delivery industry may have a competitive advantage over us due to their greater size, cash flows and institutional experience. Some of these drug delivery competitors include Aquestive Therapeutics Inc (formerly Monosol Rx), Tesa-Labtec GmbH, BioDelivery Sciences International, Inc., LTS Lohmann Therapy Systems Corp and IntelGenx. New entrants such as Zim Laboratories in India and CMG Pharmaceuticals in Korea are also pursuing ODF products. Some of these competitors, such as IntelGenx are also pursuing cannabinoid formulations. Our cannabinoid product candidates may compete with medical and recreational marijuana, in markets where the recreational and/or medical use of marijuana is legal. There is support in the United States for further legalization of marijuana. In markets where recreational and/or medical marijuana is not legal, our product candidates may compete with marijuana purchased in the illegal drug market. We cannot assess the extent to which patients may utilize marijuana obtained illegally for the treatment of the indications for which we are developing our product candidates. Compared to us, many of our competitors may have significantly greater financial, technical and other resources, such as larger research and development staff and experienced marketing and manufacturing organizations. As a result of these factors, our competitors may have an advantage in marketing their approved products and may obtain regulatory approval of their product candidates before we are able to, which may limit our ability to develop or commercialize our product candidates. Our competitors may also develop drugs that are safer, more effective, more widely used and less expensive than ours, and may also be more successful than us in manufacturing and marketing their products. These advantages could materially impact our ability to develop and commercialize our product candidates successfully. 16 Table of Contents Even if we successfully develop our product candidates, and obtain marketing approval for them, other treatments or therapeutics may be preferred, and we may not be successful in commercializing our product candidates or in bringing them to market. Additional mergers and acquisitions in the biotechnology and pharmaceutical industries may result in even more resources being concentrated in our competitors. As a result, these companies may obtain regulatory approval more rapidly than we are able to and may be more effective in selling and marketing their products as well. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large, established companies. Competition may increase further as a result of advances in the commercial applicability of technologies and greater availability of capital for investment in these industries. Our competitors may succeed in developing, acquiring or licensing on an exclusive basis, products that are more effective or less costly than any product candidate that we may develop, or achieve earlier patent protection, regulatory approval, product commercialization and market penetration than we do. Additionally, technologies developed by our competitors may render our potential product candidates uneconomical or obsolete, and we may not be successful in marketing our product candidates against competitors. We currently have no marketing and sales organization. If we are unable to establish sales and marketing capabilities or enter into agreements with third parties to market and sell our product candidates, we may be unable to generate any revenue. We as a company have no experience selling and marketing our products and we currently have no marketing or sales organization. To successfully commercialize any products that may result from our development programs, we rely on partners to market and distribute our products. Any failure or delay in securing an appropriate partner would adversely impact the commercialization of our products. If our partners do not commit sufficient resources to market and distribute our future products, and we are unable to develop the necessary marketing capabilities on our own, we will be unable to generate sufficient product revenue to sustain our business. We may be competing with companies that currently have extensive and well-funded marketing and sales operations. Without an internal team or the support of a third party to perform marketing and sales functions, we may be unable to compete successfully against these more established companies. The commercial success of any current or future product candidate will depend upon the degree of market acceptance by physicians, patients, third-party payors and others in the medical community. Even with the requisite approvals from the FDA, the commercial success of our product candidates will depend in part on the medical community, patients and third-party payors accepting our product candidates as medically useful, cost-effective and safe. Any product that we bring to the market may not gain market acceptance by physicians, patients, third-party payors and others in the medical community. The degree of market acceptance of any of our product candidates, if approved for commercial sale, will depend on a number of factors, including: · the safety and efficacy of the product as demonstrated in clinical studies and potential advantages over competing treatments; · the prevalence and severity of any side effects, including any limitations or warnings contained in a product’s approved labeling; · the clinical indications for which approval is granted; · relative convenience and ease of administration; · the cost of treatment, particularly in relation to competing treatments; · the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies; · the strength of marketing and distribution support and timing of market introduction of competitive products; · publicity concerning our products or competing products and treatments; and · sufficient third-party insurance coverage and reimbursement. 17 Table of Contents Even if a potential product displays a favorable efficacy and safety profile in preclinical and clinical studies, market acceptance of the product will not be fully known until after it is launched. Our partners’ efforts to educate the medical community and third-party payors on the benefits of the product candidates may require significant resources and may never be successful. If our product candidates are approved but fail to achieve an adequate level of acceptance by physicians, patients, third-party payors and others in the medical community, we will not be able to generate sufficient revenue to become or remain profitable. RevenuesRisks Relating to Our Financial Position and Need for Additional Capital We may not be able to continue to operate as a going concern. Our independent registered public accounting firm has included an explanatory paragraph relating to our ability to continue as a going concern in its report on our audited financial statements. We may be unable to continue to operate without the threat of liquidation for the foreseeable future. Even if future financing is successful, we expect that we will need to raise substantial additional funding before we can expect to become profitable from sales of our product candidates. This additional financing may not be available on acceptable terms, or at all. Failure to obtain this necessary capital when needed may force us to delay, limit or terminate our product candidate development efforts or other operations. As of December 31, 2018, our cash and cash equivalents were approximately $500,000, a working capital deficit of approximately $7 million and an accumulated deficit of approximately $29 million. Upon the completion of future financing, we expect that our existing cash and cash equivalents will be sufficient to fund operations . Even if future financing is completed, we expect that we may require substantial additional capital to commercialize our product candidates. In addition, our operating plans may change as a result of many factors that may currently be unknown to us, and we may need to seek additional funds sooner than planned. Our future funding requirements will depend on many factors, including but not limited to: · the scope, rate of progress, results and cost of product development, clinical studies, preclinical testing, and other related activities; · the cost, timing and outcomes of regulatory approvals; · the cost and timing of establishing sales, marketing, and distribution capabilities; and · the terms and timing of any collaborative, licensing, and other arrangements that we may establish. Any additional fundraising efforts may divert our management from their day-to-day activities, which may adversely affect our ability to develop and commercialize our product candidates. In addition, we cannot guarantee that future financing will be available in sufficient amounts or on terms acceptable to us, if at all. Moreover, the terms of any financing may adversely affect the holdings or the rights of holders of our securities and the issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the market price of our shares to decline. The incurrence of indebtedness could result in increased fixed payment obligations, and we may be required to agree to certain restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire, sell or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business. We could also be required to seek funds through arrangements with collaborative partners or otherwise at an earlier stage than otherwise would be desirable, and we may be required to relinquish rights to some of our technologies or product candidates or otherwise agree to terms unfavorable to us, any of which may have a material adverse effect on our business, operating results and prospects. Even if we believe that we have sufficient funds for our current or future operating plans, we may seek additional capital if market conditions are favorable or if we have specific strategic considerations. If we are unable to obtain funding on a timely basis, we may be required to significantly curtail, delay or discontinue one or more of our research or development programs or the commercialization of any product candidates or be unable to expand our operations or otherwise capitalize on our business opportunities, as desired, which could materially affect our business, financial condition and results of operations. 18 Table of Contents We are a drug delivery and development company and have a limited operating history on which to assess the prospects for our business, have incurred significant losses since the date of our inception, and anticipate that we will continue to incur significant losses until we are able to successfully commercialize our product candidates. Since our inception we have been operating as a specialty pharmaceutical company and have a limited operating history on which to assess the prospects for our business, have incurred significant losses, and anticipate that we will continue to incur significant losses for the foreseeable future. We have historically incurred substantial net losses, including net losses of approximately $4,157,480 in 2016, approximately $8,149,885 in 2017, and approximately $10,400,401 in 2018. As of December 31, 2017 and 2018, we had an accumulated deficit of approximately $18,868,599 and approximately $29,269,000, respectively. We have devoted substantially all of our financial resources to develop our product candidates. We have financed our operations primarily through the issuance of equity securities and convertible notes. The amount of our future net losses will depend, in part, on completing the development of our product candidates, the demand for our product candidates, the rate of our future expenditures and our ability to obtain funding through the issuance of our securities, strategic collaborations or grants. Pharmaceutical product development is a highly speculative undertaking and involves a substantial degree of risk. We are in the late stages of preclinical and at the early stages of clinical development for our product candidates, we have not yet commenced pivotal clinical studies for any product candidate, and it may be several years, if ever, before we complete pivotal clinical studies and have a product candidate approved for commercialization. Even if we obtain regulatory approval to market a product candidate, our future revenue will depend upon the size of the markets for which our product candidates may receive approval and our ability to achieve sufficient market acceptance, pricing, reimbursement from third-party payors and adequate market share for our product candidates in those markets. We expect to continue to incur significant losses until we are able to commercialize our first pharmaceutical product candidates, which we may not be successful in achieving. We anticipate that our expenses will increase substantially if and as we: · continue the research and development of our product candidates; · expand our manufacturing capabilities; · seek regulatory and marketing approvals for our product candidates that successfully complete clinical studies; · establish a sales, marketing, and distribution infrastructure to commercialize our product candidates; · seek to identify, assess, acquire, license, and/or develop other product candidates and subsequent generations of our current product candidates; · seek to maintain, protect, and expand our intellectual property portfolio; · seek to attract and retain skilled personnel; and · create additional infrastructure to support our operations as a public company and our product candidate development and planned future commercialization efforts. Raising additional capital may cause dilution to our existing stockholders and restrict our operations or require us to relinquish certain intellectual property rights. We may seek additional capital through a combination of public and private equity offerings, debt financings, strategic partnerships and alliances, licensing arrangements and grants. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our existing stockholders may be diluted, and the terms may include liquidation or other preferences that adversely affect the rights of our stockholders. Debt and receivables financings may be coupled with an equity component, such as warrants to purchase shares, which could also result in dilution of our existing stockholders’ ownership. The incurrence of indebtedness would result in increased fixed payment obligations and could also result in certain restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business. If we raise additional funds through strategic partnerships and alliances and licensing arrangements with third parties, we may have to relinquish valuable rights to our products or grant licenses on terms that are not favorable to us. A failure to obtain adequate funds may cause us to curtail certain operational activities, including research and development, regulatory trials, sales and marketing, and manufacturing operations, in order to reduce costs and sustain the business, and would have a material adverse effect on our business and financial condition. 19 Table of Contents Our inability to raise capital on acceptable terms in the future may cause us to delay, diminish, or curtail certain operational activities, including research and development activities, clinical trials, sales and marketing, and other operations, in order to reduce costs and sustain the business, and such inability would have a material adverse effect on our business and financial condition. We expect capital outlays and operating expenditures to increase over the next several years as we work to expand our commercial activities, expand our development activities, conduct clinical trials, expand manufacturing operations and expand our infrastructure. We may need to raise additional capital to, among other things: · fund clinical trials and preclinical trials for our products as requested or required by regulatory agencies; · sustain commercialization of our new products; · expand and automate our manufacturing capabilities; · increase our sales and marketing efforts to drive market adoption and address competitive developments; · finance capital expenditures and our general and administrative expenses; · develop new products; · maintain, expand and protect our intellectual property portfolio; · add operational, financial and management information systems; and · hire additional research and development, quality control, scientific, and general and administrative personnel. Our present and future funding requirements will depend on many factors, including but not limited to: · the progress and timing of clinical trials; · the level of research and development investment required to maintain and improve our technology position; · cost of filing, prosecuting, defending and enforcing patent claims and other intellectual property rights, if any; · our efforts to acquire or license complementary technologies or acquire complementary businesses; · changes in product development plans needed to address any difficulties in commercialization or changing market conditions; · competing technological and market developments; · changes in regulatory policies or laws that may affect our operations; and · changes in physician acceptance or medical society recommendations that may affect commercial efforts. We have broad discretion in the use of the net proceeds from financing and may not use them effectively. Our management will have broad discretion in the application of the net proceeds from financing. Because of the number and variability of factors that will determine our use of the net proceeds from the financing, their ultimate use may vary substantially from their currently intended use. Our management may not apply our cash from financing in ways that ultimately increase the value of any investment in our securities or enhance stockholder value. The failure by our management to apply these funds effectively could harm our business. Pending their use, we may invest the net proceeds from future financing in short-term, investment-grade, interest-bearing securities. These investments may not yield a favorable return to our stockholders. If we do not invest or apply our cash in ways that enhance stockholder value, we may fail to achieve expected financial results, which may result in a decline in the price of our shares of common stock, and, therefore, may negatively impact our ability to raise capital, invest in or expand our business, acquire additional products or licenses, commercialize our products, or continue our operations. Market and economic conditions may negatively impact our business, financial condition and share price. Concerns over inflation, energy costs, geopolitical issues, the U.S. mortgage market and a declining real estate market, unstable global credit markets and financial conditions, and volatile oil prices have led to periods of significant economic instability, diminished liquidity and credit availability, declines in consumer confidence and discretionary spending, diminished expectations for the global economy and expectations of slower global economic growth going forward, increased unemployment rates, and increased credit defaults in recent years. Our general business strategy may be adversely affected by any such economic downturns, volatile business environments and continued unstable or unpredictable economic and market conditions. If these conditions continue to deteriorate or do not improve, it may make any necessary debt or equity financing more difficult to complete, more costly, and more dilutive. Failure to secure any necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance, and share price and could require us to delay or abandon development or commercialization plans. In addition, there is a risk that one or more of our current and future service providers, manufacturers, suppliers, hospitals and other medical facilities, our third-party payers, and other partners could be negatively affected by these difficult economic times, which could adversely affect our ability to attain our operating goals on schedule and on budget or meet our business and financial objectives. 20 Table of Contents Risks Related to Intellectual Property The extent to which we can protect our technologies through intellectual property rights that we own, acquire or license is uncertain. We employ a variety of proprietary and patented technologies and methods in connection with our products we sell or are developing. We cannot provide any assurance that the intellectual property rights that we own, or license provide effective protection from competitive threats or that we would prevail in any litigation in which our intellectual property rights are challenged. In addition, we may not be successful in obtaining new proprietary or patented technologies or methods in the future, whether through acquiring ownership or through licenses from third parties. Our currently pending or future patent applications may not result in issued patents, and we cannot predict how long it may take for a patent to issue on any of our pending patent applications, assuming a patent does issue. Other parties may challenge patents issued or exclusively licensed to us, or courts or administrative agencies will hold our patents or the patents we license on an exclusive basis to be valid and enforceable. We may not be successful in defending challenges made against our patents and other intellectual property rights. Any third-party challenge to any of our patents could result in the unenforceability or invalidity of some or all of the claims of such patents and could be time consuming and expensive. The extent to which the patent rights of life sciences companies effectively protect their technologies is often highly uncertain and involves complex legal and factual questions for which important legal principles remain unresolved. No consistent policy regarding the proper scope of allowable claims of patents held by life sciences companies has emerged to date in the United States. Various courts, including the U.S. Supreme Court, have rendered decisions that impact the scope of patentability of certain inventions or discoveries relating to products. These decisions generally stand for the proposition that inventions that recite laws of nature are not themselves patentable unless they have sufficient additional features that provide practical assurance that the processes are genuine inventive applications of those laws rather than patent drafting efforts designed to monopolize a law of nature itself. What constitutes a “sufficient” additional feature for this purpose is uncertain. While we do not generally rely on gene sequence patents, this evolving case law in the United States may adversely impact our ability to obtain new patents and may facilitate third-party challenges to our existing owned and exclusively licensed patents. We cannot predict the breadth of claims that may be allowed or enforced in patents we own. For example: · the inventor(s) named in one or more of our patents or patent applications might not have been the first to have made the relevant invention; · the inventor (or his assignee) might not have been the first to file a patent application for the claimed invention; · others may independently develop similar or alternative technologies or may successfully replicate our product and technologies; · it is possible that the patents we own, or in which have exclusive license rights may not provide us with any competitive advantages or may be challenged by third parties and found to be invalid or unenforceable; · any patents we obtain or exclusively license may expire before, or within a limited time period after, the products and services relating to such patents are commercialized; · we may not develop or acquire additional proprietary technologies that are patentable; and · others may acquire patents that could be asserted against us in a manner that could have an adverse effect on our business. 21 Table of Contents The patent prosecution process is expensive and time-consuming, is highly uncertain and involves complex legal and factual questions. Recent patent reform legislation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents. Our success depends in large part on our ability to obtain and maintain patent protection in the United States and other countries with respect to our proprietary technology and product candidates. We seek to protect our proprietary position by filing in the United States patent applications related to our novel technologies and product candidates that are important to our business. The patent prosecution process is expensive and time-consuming, and we may not be able to file and prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner. It is also possible that we will fail to identify patentable aspects of our research and development output before it is too late to obtain patent protection. In addition, we may not pursue or obtain patent protection in all major markets. Moreover, in some circumstances, we may not have the right to control the preparation, filing or prosecution of patent applications, or to maintain the patents, covering technology that we license from third parties. In some circumstances, our licensors may have the right to enforce the licensed patents without our involvement or consent, or to decide not to enforce or to allow us to enforce the licensed patents. Therefore, these patents and patent applications may not be prosecuted and enforced in a manner consistent with the best interests of our business. If any of our licensors fail to maintain such patents, or lose rights to those patents, the rights that we have licensed may be reduced or eliminated and our right to develop and commercialize any of our product candidates that are the subject of such licensed rights could be adversely affected. Our pending and future patent applications may not result in patents being issued which protect our technology or products, in whole or in part, or which effectively prevent others from commercializing competitive technologies and products. In particular, during prosecution of any patent application, the issuance of any patents based on the application may depend upon our ability to generate additional nonclinical or clinical data that support the patentability of our proposed claims. We may not be able to generate sufficient additional data on a timely basis, or at all. Moreover, changes in either the patent laws or interpretation of the patent laws in the United States or other countries may diminish the value of our patents or narrow the scope of our patent protection. Moreover, we may be subject to a third-party pre-issuance submission of prior art to the USPTO, or become involved in opposition, derivation, reexamination, inter partes review, post-grant review or interference proceedings or other patent office proceedings or litigation, in the United States or elsewhere, challenging our patent rights or the patent rights of others. An adverse determination in any such submission or proceeding could reduce the scope of, or invalidate, our patent rights; allow third parties to commercialize our technology or products and compete directly with us, without payment to us; or result in our inability to manufacture or commercialize products without infringing third-party patent rights. In addition, if the breadth or strength of protection provided by our owned and licensed patents and patent applications is threatened, it could dissuade companies from collaborating with us to license, develop or commercialize current or future product candidates. Obtaining and maintaining our patent protection depends upon compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements. The USPTO require compliance with a number of procedural, documentary, fee payment and other provisions during the patent prosecution process and following the issuance of a patent. There are situations in which noncompliance with these requirements can result in abandonment or lapse of a patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. In such an event, competitors might be able to enter the market earlier than would otherwise have been the case if our patent were in force. 22 Table of Contents We may not be able to identify infringements of our patents and accordingly the enforcement of our intellectual property rights may be difficult. The drug substance in some of our product candidates is repurposed, which means that it is available in other pharmaceutical products for the purpose of treating indications that are different from the indications for our product candidates. It is possible that if we receive regulatory approval to market and sell our drug candidates, some patients that receive a prescription could be sold the same drug substance but not our product candidate. It would be difficult, if not impossible for us to identify such instances that may constitute an infringement of our patents. In addition, because the drug substance of some of our product candidates is repurposed, such substance may not be eligible for patent protection or data exclusivity. Our intellectual property rights may not be sufficient to protect our competitive position and to prevent others from manufacturing, using or selling competing products. The scope of our owned and exclusively licensed intellectual property rights will not be sufficient to prevent others from manufacturing, using or selling competing products. Competitors could purchase our product and attempt to replicate some or all of the competitive advantages we derive from our development efforts, willfully infringe our intellectual property rights, design around our protected technology or develop their own competitive technologies and thereby avoid infringing our intellectual property rights. If our intellectual property is not sufficient to effectively prevent our competitors from developing and selling similar products, our competitive position and our business could be adversely affected. We may become involved in disputes relating to our intellectual property rights and may need to resort to litigation in order to defend and enforce our intellectual property rights. Extensive litigation regarding patents and other intellectual property rights has been common in the medical industry. Litigation may be necessary to assert infringement claims, protect trade secrets or know-how and determine the enforceability, scope and validity of certain proprietary rights. Litigation may even be necessary to resolve disputes of inventorship or ownership of proprietary rights. The defense and prosecution of intellectual property lawsuits, USPTO interference or derivation proceedings and related legal and administrative proceedings (e.g., a re-examination) in the United States and internationally involve complex legal and factual questions. As a result, such proceedings are costly and time consuming to pursue, and their outcome is uncertain. Even if we prevail in such a proceeding in which we assert our intellectual property rights against third parties, the remedy we obtain may not be commercially meaningful or adequately compensate us for any damages we may have suffered. If we do not prevail in such a proceeding, our patents could potentially be declared to be invalid, unenforceable or narrowed in scope, or we could otherwise lose valuable intellectual property rights. Similar proceedings involving the intellectual property we exclusively license could also have an impact on our business. Further, if any of our other owned or exclusively licensed patents are declared invalid, unenforceable or narrowed in scope, our competitive position could be adversely affected. We may be subject to claims challenging the inventorship of our intellectual property. We may be subject to claims that former employees, collaborators or other third parties have an interest in, or right to compensation, with respect to our current patent and patent applications, future patents or other intellectual property as an inventor or co-inventor. For example, we may have inventorship disputes arise from conflicting obligations of consultants or others who are involved in developing our product candidates. Litigation may be necessary to defend against these and other claims challenging inventorship or claiming the right to compensation. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive ownership of, or right to use, valuable intellectual property. Such an outcome could have a material adverse effect on our business. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees. If we are unable to maintain effective proprietary rights for our products, we may not be able to compete effectively in our markets. In addition to the protection afforded by any patents currently owned and that may be granted, historically, we have relied on trade secret protection and confidentiality agreements to protect proprietary know-how that is not patentable or that we elect not to patent, processes that are not easily known, knowable or easily ascertainable, and for which patent infringement is difficult to monitor and enforce and any other elements of our product candidate discovery and development processes that involve proprietary know-how, information or technology that is not covered by patents. However, trade secrets can be difficult to protect. We seek to protect our proprietary technology and processes, in part, by entering into confidentiality agreements with our employees, consultants, scientific advisors, and contractors. We also seek to preserve the integrity and confidentiality of our data, trade secrets and intellectual property by maintaining physical security of our premises and physical and electronic security of our information technology systems. Agreements or security measures may be breached, and we may not have adequate remedies for any breach. In addition, our trade secrets and intellectual property may otherwise become known or be independently discovered by competitors. 23 Table of Contents We cannot provide any assurances that our trade secrets and other confidential proprietary information will not be disclosed in violation of our confidentiality agreements or that competitors will not otherwise gain access to our trade secrets or independently develop substantially equivalent information and techniques. Also, misappropriation or unauthorized and unavoidable disclosure of our trade secrets and intellectual property could impair our competitive position and may have a material adverse effect on our business. Additionally, if the steps taken to maintain our trade secrets and intellectual property are deemed inadequate, we may have insufficient recourse against third parties for misappropriating any trade secret. We could face claims that our activities or the manufacture, use or sale of our products infringe the intellectual property rights of others, which could cause us to pay damages or licensing fees and limit our ability to sell some or all of our productsand services. Our research, development and commercialization activities may infringe or be claimed to infringe patents or other intellectual property rights owned by other parties of which we may be unaware because the relevant patent applications may have been filed but not yet published. Certain of our competitors and other companies have substantial patent portfolios and may attempt to use patent litigation as a means to obtain a competitive advantage or to extract licensing revenue. In addition to patent infringement claims, we may also be subject to other claims relating to the violation of intellectual property rights, such as claims that we have misappropriated trade secrets or infringed third party trademarks. The risks of being involved in such litigation may also increase as we gain greater visibility as a public company and as we gain commercial acceptance of our products and move into new markets and applications for our products. Regardless of merit or outcome, our involvement in any litigation, interference or other administrative proceedings could cause us to incur substantial expense and could significantly divert the efforts of our technical and management personnel. Any public announcements related to litigation or interference proceedings initiated or threatened against us could cause our share price to decline. An adverse determination, or any actions we take or agreements we enter into in order to resolve or avoid disputes, may subject us to the loss of our proprietary position or to significant liabilities, or require us to seek licenses that may include substantial cost and ongoing royalties. Licenses may not be available from third parties or may not be obtainable on satisfactory terms. An adverse determination or a failure to obtain necessary licenses may restrict or prevent us from manufacturing and selling our products and offering our services. These outcomes could materially harm our business, financial condition and results of operations. Our failure to secure trademark registrations could adversely affect our business and our ability to market our products. Our trademark applications in the United States and any other jurisdictions where we may file may not be allowed for registration, and our registered trademarks may not be maintained or enforced. During trademark registration proceedings, we may receive rejections. Although we are given an opportunity to respond to those rejections, we may be unable to overcome such rejections. In addition, in the USPTO, third parties are given an opportunity to oppose pending trademark applications and to seek to cancel registered trademarks. Opposition or cancellation proceedings may be filed against our applications and/or registrations, and our applications and/or registrations may not survive such proceedings. Failure to secure such trademark registrations in the United States could adversely affect our business and our ability to market our and products. 24 Table of Contents We may be unable to adequately prevent disclosure of trade secrets and other proprietary information, or the misappropriation of the intellectual property we regard as our own. We rely on trade secrets to protect our proprietary know how and technological advances, particularly where we do not believe patent protection is appropriate or obtainable. Nevertheless, trade secrets are difficult to protect. We rely in part on confidentiality agreements with our employees, consultants, third party contractors, third party collaborators and other advisors to protect our trade secrets and other proprietary information. These agreements generally require that the other party to the agreement keep confidential and not disclose to third parties all confidential information developed by us or made known to the other party by us during the course of the other party’s relationship with us. These agreements may not effectively prevent disclosure of confidential information and may not provide an adequate remedy in the event of unauthorized disclosure of confidential information. Monitoring unauthorized disclosure is difficult, and we do not know whether the steps we have taken to prevent such disclosure are, or will be, adequate. If we were to seek to pursue a claim that a third party had illegally obtained and was using our trade secrets, it would be expensive and time consuming, and the outcome would be unpredictable. Further, courts outside the United States may be less willing to protect trade secrets. In addition, others may independently discover our trade secrets and proprietary information and therefore be free to use such trade secrets and proprietary information. Costly and time-consuming litigation could be necessary to enforce and determine the scope of our proprietary rights. In addition, our trade secrets and proprietary information may be misappropriated as a result of breaches of our electronic or physical security systems in which case we may have no legal recourse. Failure to obtain, or maintain, trade secret protection could enable competitors to use our proprietary information to develop products that compete with our products or cause additional, material adverse effects upon our competitive business position. Future sales and issuances of our common stock or rights to purchase common stock could result in additional dilution of the percentage ownership of our stockholders and could cause our share price to fall. We expect that significant additional capital will be needed in the future to continue our planned operations, including expanding research and development, funding clinical trials, purchasing of capital equipment, hiring new personnel, commercializing, and continuing activities as an operating public company. To the extent we raise additional capital by issuing equity securities, our stockholders may experience substantial dilution. We may sell common stock, convertible securities or other equity securities in one or more transactions at prices and in a manner we determine from time to time. If we sell common stock, convertible securities or other equity securities in more than one transaction, investors may be materially diluted by subsequent sales. Such sales may also result in material dilution to our existing stockholders, and new investors could gain rights superior to our existing stockholders. “Penny stock” rules may make buying or selling our securities difficult, which may make our stock less liquid and make it harder for investors to buy and sell our securities. If at any time in the future our shares of common stock are not listed for trading by NASDAQ and begin to trade on an over-the-counter market such as the Over- the-Counter Bulletin Board or any quotation system maintained by OTC Markets, Inc., trading in our securities will be subject to the SEC’s “penny stock” rules and, if we are not listing for trading by NASDAQ, it is anticipated that trading in our securities will continue to be subject to the penny stock rules for the foreseeable future. The SEC has adopted regulations that generally define a penny stock to be any equity security that has a market price of less than $5.00 per share, subject to certain exceptions. These rules require that any broker-dealer who recommends our securities to persons other than prior customers and accredited investors must, prior to the sale, make a special written suitability determination for the purchaser and receive the purchaser’s written agreement to execute the transaction. Unless an exception is available, the regulations require the delivery, prior to any transaction involving a penny stock, of a disclosure schedule explaining the penny stock market and the risks associated with trading in the penny stock market. In addition, broker-dealers must disclose commissions payable to both the broker-dealer and the registered representative and current quotations for the securities they offer. The additional burdens imposed upon broker-dealers by these requirements may discourage broker-dealers from recommending transactions in our securities, which could severely limit the liquidity of our securities and consequently adversely affect the market price for our securities. 25 Table of Contents NASDAQ may delist our common stock from its exchange, which could limit investors’ ability to make transactions in our common stock and subject us to additional trading restrictions. Should we fail to satisfy the continued listing requirements of the NASDAQ Capital Market, such as the corporate governance requirements or the minimum closing bid price requirement, NASDAQ may take steps to delist our common stock. Such a delisting would likely have a negative effect on the price of our common stock and would impair your ability to sell or purchase our common stock when you wish to do so. In the event of a delisting, we would take actions to restore our compliance with the NASDAQ Capital Market’s listing requirements, but we can provide no assurance that any such action taken by us would allow our common stock to become listed again, stabilize the market price or improve the liquidity of our common stock, prevent our common stock from dropping below the NASDAQ Capital Market’s minimum bid price requirement or prevent future non-compliance with the NASDAQ Capital Market’s listing requirements. If the NASDAQ Capital Market does not maintain the listing of our securities for trading on its exchange, we could face significant material adverse consequences, including: · a limited availability of market quotations for our securities; · reduced liquidity with respect to our securities; · a determination that our shares of common stock are “penny stock” which will require brokers trading in our shares of common stock to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for our shares of common stock; · a limited amount of news and analyst coverage for our company; and · decreased ability to issue additional securities or obtain additional financing in the future. Therefore, it may be difficult for our stockholders to sell any shares if they desire or need to sell them. Financial reporting obligations of being a public company in the United States are expensive and time consuming and place significant demands on our management and other personnel. The additional obligations of being a public company in the United States require significant expenditures and place significant demands on our management and other personnel, including costs resulting from public company reporting obligations under the Securities Exchange Act of 1934, as amended, or the Exchange Act, and the rules and regulations regarding corporate governance practices, including those under the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, and the listing requirements of the NASDAQ Capital Market. The listing requirements of The NASDAQ Global Market require that we satisfy certain corporate governance requirements relating to director independence, distributing annual and interim reports, stockholder meetings, approvals and voting, soliciting proxies, conflicts of interest and a code of conduct. Our management and other personnel devote a substantial amount of time to ensure that we comply with all of these requirements. Moreover, despite recent reforms made possible by the JOBS Act (certain provisions of which we are taking advantage of), the reporting requirements, rules, and regulations will make some activities more time-consuming and costlier, particularly after we are no longer an “emerging growth company.” Any changes that we make to comply with these obligations may not be sufficient to allow us to satisfy our obligations as a public company on a timely basis, or at all. In addition, as a public company we are required to file accurate and timely quarterly and annual reports with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended. Any failure to report our financial results on an accurate and timely basis could result in sanctions, lawsuits, delisting of our shares from The NASDAQ Capital Market or other adverse consequences that would materially harm to our business. In addition, being a public company could make it more difficult or more costly for us to obtain certain types of insurance, including directors’ and officers’ liability insurance, and we may be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. The impact of these events could also make it more difficult for us to attract and retain qualified persons to serve on our Board of Directors, our board committees or as executive officers. We do not intend to pay cash dividends on our shares of common stock so any returns will be limited to the value of our shares. We currently anticipate that we will retain future earnings for the development, operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future. Any return to stockholders will therefore be limited to the increase, if any, of our share price. 26 Table of Contents We have elected to use the extended transition periods for complying with new or revised accounting standards. We have elected to use the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transaction period provided in Section 7(a)(2)(B). As a result, our financial statements may not be comparable to those of companies that comply with public company effective dates. Our management is required to devote substantial time to compliance initiatives. As a public company, we incur significant legal, accounting and other expenses that we did not incur as a newly formed entity. The Sarbanes-Oxley Act, as well as rules subsequently implemented by the Securities and Exchange Commission, and NASDAQ, have imposed various new requirements on public companies, including requiring establishment and maintenance of effective disclosure and financial controls and changes in corporate governance practices. Our management and other personnel devote a substantial amount of time to these new compliance initiatives. Moreover, these rules and regulations increase our legal and financial compliance costs and make some activities more time consuming and costly. We expect these rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance and we may be required to incur substantial costs to maintain the same or similar coverage. ITEM 1B. UNRESOLVED STAFF COMMENTS Not Applicable. ITEM 2. PROPERTIES We do not own any real property. Our principal executive offices and manufacturing facility are located at 1620 Beacon Place, Oxnard, California 93033. The offices and manufacturing facility consist of approximately 25,000 square feet. The Company also leases additional office and warehouse space at 1610 and 1612 Fiske Place, Oxnard, California 93033, which contains approximately 6,547 square feet as well as a research and development space located at 2029 Becker Drive, Lawrence, KS 66047, which contains approximately 1,350 square feet. We vacated this location in August 2018. All facilities are currently on month-to-month leases. Rent expense was $267,754 and $294,646 for the years ended December 31, 2018 and 2017, respectively. We believe that our facilities are generally in good condition and suitable to carry on our business. We also believe that, if required, suitable alternative or additional space will be available to us on commercially reasonable terms. ITEM 3. LEGAL PROCEEDINGS 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. Legal Proceedings Regarding Sandy Sierra Garate 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 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 is requesting relief in this matter for a 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. On February 13, 2019, the Company and the Applicant entered 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 to be paid to the Applicant’s attorney. On February 20, 2019, the Company received an Order Approving Compromise and Release of WCAB Case No: ADJ 10686812 based on the Agreement entered into with the Applicant. Currently, there are no orders, judgments, or decrees of any governmental agency or administrator, or of any court of competent jurisdiction, revoking or suspending for cause any license, permit or other authority to engage in the securities business or in the sale of a particular security or temporarily or permanently restraining any of our incoming officers or directors from engaging in or continuing any conduct, practice or employment in connection with the purchase or sale of securities, or convicting such person of any felony or misdemeanor involving a security, or any aspect of the securities business or of theft or of any felony. Nor are any of the officers or directors of any corporation or entity affiliated with us so enjoined. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 27 Table of Contents PART II ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Holders As of March 27, 2019, there were 93 holders of record of our common stock. Dividend Policy To date, we have paid no dividends on our common stock and do not expect to pay cash dividends in the foreseeable future. We plan to retain all earnings to provide funds for the operations of our company. In the future, our Board of Directors will decide whether to declare and pay dividends based upon our earnings, financial condition, capital requirements, and other factors that our Board of Directors may consider relevant. We are not under any contractual restriction as to present or future ability to pay dividends, however, the terms of any financing arrangements that we may enter into may restrict our ability to pay any dividends. Unregistered Sales of Equity Securities During the fiscal year ended December 31, 2018, our financing activities consisted of the following: On January 24, 2018, the Company issued 50,000 common stock shares at $1.48 per share for consulting services to be performed over a one-year period. The total value of this issuance was $74,000 and as of December 31, 2018. 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 rights to the Assigned Patents. As consideration for the assignment 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 issued on the Effective Date; (b) 10,000 Shares will be issued for each Abandoned Application the prosecution 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 year ended December 31, 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. Total value of these issuances was $97,000. On May 16, 2018, the Company issued 70,150 common stock shares at $0.65 per share for consulting services performed. The total value of this issuance was $45,614. On May 16, 2018, the Company issued 1,000,000 common stock shares at $0.97 per share for consulting services to be performed over a 30-month period. The total value of this issuance was $970,000 and as of December 31, 2018, $630,664 is included in prepaid expenses and other assets. On July 17, 2018, the Company issued 70,000 common stock shares at $1.85 per share for consulting services to be performed over a six-month period. The total value of this issuance was $129,500. On July 17, 2018, the Company issued 69,444 common stock shares at $0.72 per share for the cancellation of two months’ rent and overages for property tax and general liability insurance. The total value of this issuance was $50,000. On July 17, 2018, the Company issued 250,000 common stock shares at $1.10 per share for strategic marketing and development advisory services to be performed over a six-month period. The total value of this issuance was $275,000. On August 3, 2018, the Company entered into a Media Advertising Agreement (“Agreement”).  Per the terms of the Agreement, the Company was to issue 30,000 common stock shares at $1.88 per share for providing media and advertising services over a six-month period.  The total value of these issuances was $56,400 and as of December 31, 2018, $10,422 is included in prepaid expenses and other assets. 28 Table of Contents On August 17, 2018, the Company issued a total of 115,000 common stock shares at $1.65 per share for compensation of extending the maturity dates of convertible promissory notes of three note holders. The total value of this issuance was $189,750. 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 115,000 common stock shares issued as a debt discount that has been fully amortized as of December 31, 2018. On September 4, 2018, the Company issued 90,000 common stock shares at $0.71 per share and 90,000 shares at $1.00 per share for media and advertising services to be performed over a six-month period. The total value of these issuances was $153,900. On September 4, 2018, the Company issued 90,000 common stock shares at $3.24 per share for media and advertising services to be performed over a six-month period. The total value of this issuance was $291,600 and as of December 31, 2018, $90,333 is included in prepaid expenses and other assets. On September 5, 2018, the Company issued an unsecured $150,000 Promissory Note (“Note”) with an individual.  As part of the issuance of the Note, the Company is to issue 50,000 common stock shares as an equity kicker at a $2.88 price per share.  Total value of this issuance was $144,000. On October 9, 2018, the United States Patent and Trademark Office (“USPTO”) allowed for an oral thin film patent (U.S. Patent No. 10,092,611), which covers the processing and integration of bioactive cannabinoid molecules into oral thin film dosage forms, such as CUREfilmTM.  These molecules, such as cannabidiol (CBD), are obtained from the Company’s patented methods (U.S. Patent Nos. 9,044,390 and 9,186,386) of extraction and purification of cannabis plant material.  This patent allowance by the USPTO and per the patent purchase agreement entered into on April 2, 2018, the Company will issue 50,000 common stock shares at a $2.81 price per share.  As of the date of this filing, the Company has not yet issued these shares.  Total value of this issuance was $140,500. On October 31, 2018, the Company issued a total of 115,000 common stock shares at $1.95 per share for compensation of extending the maturity dates of convertible promissory notes of three note holders. The total value of this issuance was $224,250. 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 115,000 common stock shares issued as a debt discount that has been fully amortized as of December 31, 2018. On October 31, 2018, the Company issued a total of 30,000 common stock shares at $1.95 per share for compensation of extending the maturity date of a promissory note. The total value of this issuance was $58,500. The Company considered if the amendment of the 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 December 31, 2018. On November 7, 2018, the Company issued 41,482 common stock shares at $2.26 per share for investor relations consulting services to be performed over a six-month period. The total value of this issuance was $93,750. On November 13, 2018, the Company issued 25,000 common stock shares at $2.36 per share for settlement of accounts payable due to a vendor. The total value of this issuance was $58,888. On November 26, 2018, the Company issued 90,000 common stock shares at $2.09 per share for media and advertising services to be performed over a six-month period. The total value of this issuance was $188,100. 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 of $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. On December 31, 2018, the Company issued a total of 20,000 common stock shares at $1.50 per share for compensation of extending the maturity date of a promissory note. The total value of this issuance was $30,000. The Company considered if the amendment of the 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 20,000 common stock shares issued as a debt discount, where $30,000 is recorded as a debt discount as of December 31, 2018. 29 Table of Contents Stock Payable 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-K for the year ended December 31, 2018, the company has not yet issued these common stock shares and has recorded a stock payable. On November 7, 2018, the Company is to issue 13,287 common stock shares at $2.26 per share for investor relations consulting services to be performed over a six-month period.  The total value of this issuance was $31,250 and as of December 31, 2018 is included in stock payable.  As of December 31, 2018, $21,296 is included in prepaid expense and other assets. On December 14, 2017, the Company is to issue a $100,000 convertible promissory note to a company due June 14, 2018. In connection with issuance of this convertible promissory note, the Company is to issue 150,000 common stock shares at $2.05 per share per the terms of the convertible promissory note. As of December 31, 2018, the Company has not yet issued these common stock shares and thus the Company recorded a stock payable for $307,500. As of December 31, 2018, the Company still has $308,328 worth of stock payable not yet issued that is from the year ended December 31, 2017 audited figures. Convertible Notes and Equity-Linked Securities From January 30, 2018 to March 28, 2018, the Company issued up to $2,025,000 convertible promissory notes with investors (“Investors”) with $1,275,000 due November 30, 2018 and $750,000 due February 28, 2019. 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.  During the first quarter of 2019, the Company repaid $275,000 of convertible promissory notes.  On February 13, 2019, $750,000 of convertible promissory notes plus accrued interest and penalties of $135,825 were converted in 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 in 591,757 common stock shares of the Company. On April 24, 2018, we entered into a 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. 30 Table of Contents Between May 18, 2018 and June 29, 2018, we entered into convertible promissory notes 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. On September 27, 2018, we entered into 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. Between October 15, 2018 and December 3, 2018, we entered into convertible promissory notes totaling $575,000 due on 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 of related transactions, which offering definitely 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 yet been paid. All of the securities issued in the transactions described above were issued without registration under the Securities Act in reliance upon the exemptions provided in Section 4(2) or Regulation S of the Securities Act. Except with respect to securities sold pursuant to Regulation S, the recipients of securities in each such transaction acquired the securities for investment only and not with a view to or for sale in connection with any distribution thereof. Appropriate legends were affixed to the share certificates issued in all of the above transactions. Each of the recipients also represented that they were “accredited investors” within the meaning of Rule 501(a) of Regulation D under the Securities Act or had such knowledge and experience in financial and business matters as to be able to evaluate the merits and risks of an investment in its common stock. All recipients had adequate access, through their relationships with the Company and its officers and directors, to information about the Company. None of the transactions described above involved general solicitation or advertising. Issuer Purchases of Equity Securities We do not have a stock repurchase program for our common stock and have not otherwise purchased any shares of our common stock. 31 Table of Contents ITEM 6. SELECTED FINANCIAL DATA Not applicable. ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to provide information necessary to understand our audited consolidated financial statements for the two-year period ended December 31, 2018 and highlight certain other information which, in the opinion of management, will enhance a reader’s understanding of our financial condition, changes in financial condition and results of operations. In particular, the discussion is intended to provide an analysis of significant trends and material changes in our financial position and the operating results of our business during the year ended December 31, 2018, as compared to the year ended December 31, 2017. This discussion should be read in conjunction with our consolidated financial statements for the two-year period ended December 31, 2018 and related notes included in Part II, Item 8 of this annual report on Form 10-K. Cautionary Notice Regarding Forward Looking Statements The information contained in this Item 7 contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Actual results may materially differ from those projected in the forward-looking statements as a result of certain risks and uncertainties set forth in this report. Although management believes that the assumptions made and expectations reflected in the forward-looking statements are reasonable, there is no assurance that the underlying assumptions will, in fact, prove to be correct or that actual results will not be different from expectations expressed in this report. We desire to take advantage of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. This filing contains a number of forward-looking statements that reflect management’s current views and expectations with respect to our business, strategies, products, future results and events, and financial performance. All statements made in this filing other than statements of historical fact, including statements addressing operating performance, clinical developments, which management expects or anticipates will or may occur in the future, including statements relating to our technology, market expectations, future revenues, financing alternatives, statements expressing general optimism about future operating results, and non-historical information, are forward looking statements. In particular, the words, “believe,” “expect,” intend,” “anticipate,” “estimate,” “may,” variations of such words, and similar expressions identify forward-looking statements, but are not exclusive means of identifying such statements, and their absence does not mean that the statement is not forward-looking. These forward-looking statements are subject to certain risks and uncertainties, including those discussed below. Our actual results, performance or achievements could differ materially from historical results as well as those expressed in, anticipated, or implied by these forward-looking statements. We do not undertake any obligations to revise these forward-looking statements to reflect any future events or circumstances. Readers should not place undue reliance on these forward-looking statements, which are based on management’s current expectations and projections about future events, are not guarantees of future performance, are subject to risks, uncertainties and assumptions (particularly in “Item 1A – Risk Factors”) and apply only as of the date of this filing. Our actual results, performance or achievements could differ materially from the results expressed in, or implied by, these forward-looking statements. Factors which could cause or contribute to such differences could include, but are not limited to, the risks to be discussed in this Annual Report on Form 10-K and in the press releases and other communications to shareholders issued by us from time to time which attempt to advise interested parties of the risks and factors which may affect our business. We undertake no obligations to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. For additional information regarding forward-looking statements, see Item 1 – Our Business – “Forward-Looking Statements.” 32 Table of Contents Corporate Overview Overview We are a biopharmaceutical company focusing 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 registrant’s common stock executed a written consent to change registrant’s name from Makkanotti Group Corp. to CURE Pharmaceutical 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. Nature of Business 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: CURE 3068 (CUREfilm Sleep – Commercially Launched) 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. CURE 5079 (CUREfilm Sleep – Commercially Launched) 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. 33 Table of Contents CURE 5003 (CUREfilm Blue) 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. CURE 5067 (CUREfilm D) 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. The product is currently in the optimization development stage. We are seeking distributors in other territories. CURE 5200 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. CURE 5209 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. CURE 5210 (CUREfilm Beta-Caryophyllene) 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. Results of Operations Comparison of the Year Ended December 31, 2018 to the Year Ended December 31, 2017 Revenue   Revenues for the year ended December 31, 20172018 were $180,404, an increase from $84,165 generated in the year ended December 31, 2016. Revenues have increased by $96,239 in the year ended December 31, 2017$583,941, as compared to the year ended December 31, 2016. The increase was due to the increase in sales to one customer$180,404 for our Sleep OTF product and we expect to see a larger increase in 2018 as well. In addition, the Company completed two research and development deals with two customers during the year ended December 31, 2017. The Company did not generate this type of revenue inincrease was primarily due to orders from ID Life for CURE 3068. Revenues earned from ID Life have increased by 277% for the year ended December 31, 2016.2018, compared to the same period in 2017. Additionally, we successfully shipped an order for CURE 5079 for another customer during the year ended December 31, 2018. As this was a new product in 2018, we did not generate revenue from this product during the same period in 2017. The Company also completed feasibility and scale-up of CURE 5003 (CUREfilm Blue) during the first quarter of 2018 and completed a feasibility study of CURE 5200 (ODF Substrate). The Company did not generate these types of revenue in the same period in 2017.   Cost of Goods Sold   Cost of goods sold was $180,629 in$279,924 for the year ended December 31, 20172018 compared to $153,330 in$180,629 for the year ended December 31, 2016.2017. Cost of goods sold increased by $27,299 in the year ended December 31, 2017 compared to the year ended December 31, 2016. During the year ended December 31, 2017, the Company incurred higher sales in both compared to the year ended December 31, 2016 resulting in higher cost of goods sold$99,295 for the year ended December 31, 20172018 compared to the same period in 2016.2017, which was primarily due to the increased sales to ID Life for CURE 3068 as well as sales from CURE 5079 during the year ended December 31, 2018. 34 Table of Contents   Selling, GeneralResearch and AdministrativeDevelopment Expenses   Selling, generalResearch and administrativedevelopment expenses were $1,408,595 for the year ended December 31, 2017 amounted2018, as compared to $5,914,514, and$1,427,341 for year ended December 31, 2016 amounted to $3,103,710. For the year ended December 31, 20172017. Research and 2016, selling, general and administrativedevelopment expenses were mainly comprised of amortization, commission, insurance, payroll, consulting, marketing, public company expenses, legal, accounting, facility rent and travel expenses. The increase in the selling, general and administrative expenses duringdecreased by $18,746 for the year ended December 31, 2017 compared to the year ended December 31, 2016 was due to the increase in payroll2018, as well as noncash transactions relating to amortization of common stock issued for consulting services, commissions and recording the fair value of warrants issued for services totaling $3,143,805. In addition, the Company increased our marketing expenses during the year-ended December 31, 2017 compared to the same period in 2016 as we began to rebrand the Company Research and Development Expenses For the year ended December 31, 2017, research and development expenses increased to $1,427,341 compared2017. The decrease was primarily due to the year ended December 31, 2016 of $753,369. As the Company was ablenot incurring expenses related to raise funds during 2016 and 2017 by issuing convertible promissory notes, we were able to continue to focus on spending to improve our intellectual property. At the same time the Company focused on developing potential partnerships with pharmaceutical and bioscience companies and new OTC and prescription products. This is evident by our research and development deals for the development of a Sildenafil CUREfilm and a PEA and Dronabinol combination CUREfilm as well as our investment in preclinicalpre-clinical study 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. In addition, our subsidiary Oak Therapeutics, Inc. has completed a Phase I Small Business Innovative Research Contract (“SBIR”) fromeffects during the National Institutes of Health to develop a formulation for 300mg of Isoniazid in a rapidly dissolving filmyear ended December 31, 2018 as an anti-tuberculosis treatment option. Oak is currentlywe did in the application process for Phase II ofsame period in 2017. However, the SBIR programCompany did increase our work relating to continue itsother research and development projects as evidenced by work performed under development and/or supply agreements for CURE 5003 (CUREfilm Blue), CURE 5198 (CUREfilm Entourage), CURE 5067 (CUREfilm D), CURE 5200 (ODF Substrate) and focus on manufacturing scale up, clinical trialsits own development of CURE 5079 and commercialization.CURE 5210. Selling, General and Administrative Expenses Our expenses for the year ended December 31, 2018 are summarized as follows in comparison to our expenses for the year ended December 31, 2017.     Year Ended       December 31, 2018     December 31, 2017                 Consulting   $ 2,477,341     $ 2,597,778   Salaries and wages     1,099,265       953,888   Selling, general and administrative     1,086,126       1,896,266   Professional and investor relations     947,100       466,609   Noncash compensation     843,281       -   Total operating expenses   $ 6,453,113     $ 5,914,541   Consulting Consulting expense decreased by $120,437 for the year ended December 31, 2018, as compared to the year ended December 31, 2017. This was due to the Company decreasing the amount of consultants used during the year ended December 31, 2018 compared to the same period in 2017. In addition, majority of the expenses related to noncash consulting services where the Company issued common stock shares in exchange for services performed. Salaries and wages Salaries and wages expense increased by approximately $145,000, as compared to the year ended December 31, 2017. This was due to the Company hiring a new VP of Manufacturing and a VP of Strategy and Business Development as well as issuing restricted stock to several key employees from our 2017 Equity Incentive Plan. Selling, General and Administrative Selling, general and administrative (“SG&A”) expense decreased by approximately $810,000 for the year ended December 31, 2018, as compared to the year ended December 31, 2017.  This was primarily due to the Company recording the fair value of warrants issued of $832,000 as commission earned in relation to the Company’s Private Label Exclusive Distribution and License agreement with Red Barn Pet Products, LLC during the year ended December 31, 2017.  The Company did not incur this type of expense during the same period in 2018. Professional and Investor Relations Professional and investor relations expenses increased by approximately $480,000 for the year ended December 31, 2018, as compared to the year ended December 31, 2017. This was due to the Company increasing our investor relation efforts to help increase awareness of our Company with potential new investors as well as to update our existing shareholder base. In addition, the Company increased our legal and accounting professional services during the year end December 31, 2018 compared to the same period in 2017 as to assist the Company in strategic planning and advisory for potential business acquisitions, patent and technology acquisitions and general and corporate compliance services.     1435   Table of Contents   Other Income/ExpensesNon-cash Compensation   Other income/expensesNon-cash compensation expense increased by approximately $843,000 for the yearsyear ended December 31, 2017 and 2016 amounted to $821,588 and $231,236, respectively. The increase of $590,352 is mainly due2018, as compared to the company recording the change in derivative liability of $742,109 offset by the increase in interest expense of $1,460,612year ended December 31, 2017. This was primarily due to the Company recording the amortization of beneficial conversion features and fair value of warrants issued.vested stock options and vested restricted stock issued from our 2017 Equity Incentive Plan during the year ended December 31, 2018. The Company did not issue any stock options or restricted stock from our 2017 Equity Incentive Plan during the same period in 2017.   Other Expense     Year Ended       December 31, 2018     December 31, 2017   Interest expense   $ 3,037,299     $ 1,582,184   Change in fair value of derivative liability     229,291       (742,109 ) Other expense     183,962       3,580   Loss on disposal of property & equipment     -       12,351   Interest income     -       (6 ) Other income     (577,370 )     (34,412 ) Total other expense, net   $ 2,873,182     $ 821,588   Total net other expense for the year ended December 31, 2018 increased approximately $2 million, as compared to the year ended December 31, 2017. The increase is primarily attributable to (i) the approximately $1 million increase in debt discount attributable to outstanding debt amortized over 2017; (ii) the approximately $1 million decrease in the change in fair value of the derivative liability over 2017 due to the decrease. The decrease was due to the Company’s stock price decreasing $0.10 when comparing December 31, 2017 to December 31, 2018; and (iii) the approximately $0.5 million increase in other income is due to the Company recognizing a deposit received of $560,000 in relation to a license fee for distribution and selling various specific formulations of sports related OTF and transdermal products (“Products”) by entering into an Exclusive License and Distribution Agreement (“Agreement”) with a distributing company (“Distributor”) on August 10, 2016 (“Effective Date”). Per the terms of the Agreement, in order to maintain the rights granted under the Agreement, the Distributor must make a minimum order amount of $1,500,000 of the collective Products within the first 24 months following the Effective Date of this Agreement. After the 24 months period ended, the Company sent a letter to the Distributor on October 12, 2018 to give notice that they are in default as per the terms of the Agreement (“Default Letter”). The Distributor acknowledged the Default Letter as well as acknowledging they are not to receive a refund on their license fee of $560,000. Therefore, the Company recognized this license fee during the year ended December 31, 2018 as other income. The Company did not incur this type of transaction during the same period in 2017. Liquidity and& Capital Resources Working Capital Deficit     December 31, 2018     December 31, 2017   Current assets   $ 1,587,923     $ 744,497   Current liabilities     (8,551,579 )     (3,529,071 ) Working capital (deficiency)   $ (6,963,656 )   $ (2,784,574 ) Working capital deficit as of December 31, 2018 was approximately $7 million, as compared to a working capital deficit of approximately $2.8 million as of December 31, 2017. 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 December 31, 2017, current assets were approximately $0.75 million primarily attributable to prepaid expenses of approximately $0.6 million. 36 Table of Contents   As of December 31, 2017, our total assets were $2,099,885 comprised of cash of $108,249, accounts receivable of $4,364, inventory of $44,996, prepaid expenses and other assets of $586,888, net property equipment of $337,361, net intangibles of $900,472 and other assets of $117,555. Our total2018, current liabilities were $4,089,071approximately $8.6 million, comprised primarily of accounts(i) approximately $6.2 million in notes and convertible notes payable, of $544,980, accrued expenses of $129,978, current portion of loan and note payables of $850,425, current portion of convertible promissory notes of $1,551,488,(ii) $0.6 million in derivative liability, of $90,738, deferred revenue of $361,462,(iii) approximately $0.8 million in accounts payable; and license fees of $560,000. As(iv) approximately $0.5 million in accrued expenses. Comparatively, as of December 31, 2016, our total assets were $2,835,092 comprised of cash of $1,106,142, accounts receivable of $7,049, inventory of $81,285, prepaid expenses and other assets of $223,879, net property equipment of $370,648, net intangibles of $894,510, and other assets of $151,579. Our total2017, current liabilities were $1,118,039approximately $3.5 million, comprised primarily of (i) approximately $2.3 million in notes and convertible notes payable, (ii) $0.1 million in derivative liability, (iii) approximately $0.5 million in accounts payablepayable; and (iv) approximately $0.1 million in accrued expenses. Current liabilities increased by approximately $5.0 million, which was primarily attributable to the issuance of $265,386, accrued expenses$4.2 million in new convertible debt and an increase of $26,305, current portion of loan and note payables of $83,277, current portion of capital lease payable of $9,453, deferred revenue of $173,618, and license fees of $560,000.approximately $0.5 million in the derivative liability.   Cash flowsFlows and liquidity     Year Ended       December 31, 2018     December 31, 2017                 Net cash used in operating activities   $ (4,099,196 )   $ (3,555,668 ) Net cash used in investing activities     (137,791 )     (88,920 ) Net cash provided by financing activities     4,629,700       2,646,695   Increase in cash   $ (392,713 )   $ 997,893   Net cash used in Operating Activities Net cash used in operating activities For was approximately $4.1 million during the year ended December 31, 2017, operating activities consumed $3,555,668 of cash.2018. This was primarily due to the result of a net loss of $8,149,885,approximately $10.4 million, partially offset by depreciation and(i) the amortization of $164,596,the debt discount of approximately $2.1 million, (ii) stock based compensation of approximately $1.6 million, (iii) the fair value of stock issued for amending convertible notes of approximately $0.5 million, (iv) the fair value of vested stock options of approximately $0.8 million ; and (v) the fair value of warrant granted for commission expense of approximately $0.7 million. Comparatively, net cash used in operating activities was approximately $3.6 million during the year ended December 31, 2017. This was primarily due to the net loss of approximately $8.1 million offset by (i) the amortization of the debt discount of approximately $1 million, (ii) stock-based compensation of approximately $2.3 million, (iii) amortization of warrants granted for discount of convertible promissory notes of $535,195,approximately $0.5 million; and (iv) the fair value of warrants granted for commission expense $832,000, amortization of prepaid stock-based compensation of $2,311,805, amortization of loan discounts of $953,179 and the change in derivative liability of $742,109 as well as the changes in prepaid expenses and other assets of $104,091, accounts payable of $279,594, accrued expenses of $102,882 and deferred revenue of $187,844.approximately $0.8 million.   ForNet cash used in Investing Activities Net cash used in investing activities during the year ended December 31, 2016, operating activities consumed $3,516,4302018 was due to (i) the purchase of cash. This was primarilyan intangible asset for approximately $75,000 and (ii) the resultpurchase of aproperty and equipment for approximately $63,000. Comparatively, net loss of $4,157,480, offset by depreciation and amortization of $172,608 and warrants granted for services of $607,906 as well as the changes in inventory of $110,180, prepaid expenses and other assets of $185,757, and accounts payable of $298,204. Cash flowscash used in investing activities Investment activities used an additional $88,920 of cash during the year ended December 31, 2017 primarilywas due to (i) the purchase of an intangible asset for approximately $50,000; (ii) the purchase of property and equipment for approximately $0.1 million; and (iii) cash from the acquisition of Oak Therapeutics, Inc. of $65,702, payments for patents and costs associated in the development and improvement of our intellectual property of $49,480, investment in joint venture of $5,000 and acquisition of property and equipment of $100,142.approximately $65,000.   InvestmentNet cash provided by Financing Activities Net cash provided by financing activities used an additional $206,767 of cashapproximately $4.6 million during the year ended December 31, 2016,2018 was primarily due to payments for patentsthe approximately $4.2 million received from the issuances of new convertible notes payable and costs associatedapproximately $0.5 million in the development and improvementproceeds from issuances of our intellectual property of $45,930, payment for a note receivable of $18,290, investment in joint venture of $20,421 and acquisition of property and equipment of $122,126. Cash flows provided by financing activities Financing activities provided $2,646,695 of cash forcommon stock. Correspondingly, during the year ended December 31, 2017, net cash provided by financing activities was approximately $2.6 million. This was primarily as the resultattributable to proceeds of proceedsapproximately $2.9 million from the issuanceissuances of new convertible promissory notes of $2,855,549 andpayable which was offset by approximately $0.2 million in repayments of convertible promissory note and loan payables of $199,401 and capital lease payments of $9,453.loans payable.   Financing activities provided $4,815,987We 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 forand/or the year ended December 31, 2016, primarilydeferral, reduction, or elimination of significant planned expenditures, we may not have the cash resources to continue as the result of proceeds from the issuance of convertible promissory notes of $5,855,575 and repayments of convertible promissory note and loan payables of $1,039,588.a going concern thereafter. 37 Table of Contents Going Concern   The accompanying consolidated financial statements in this Form 10-K are presentedhave been prepared on the basis that the Company iswe will continue as a going concern. Going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. At December 31, 2018, we had a significant accumulated deficit of approximately $29 million and a working capital deficit of approximately $7 million. Our operating activities consume the majority of our cash resources. We anticipate that we will continue to incur operating losses as we execute our commercialization plans for CURE 3068, CURE 5079 and CURE 5003 and continue the development of CURE 5067, CURE 5209 and CURE 5210, as well as strategic and business overdevelopment initiatives. In addition, we have had and will continue to have negative cash flows from operations, at least into the near future. We have previously funded, and plan to continue funding, our losses primarily through the issuance of convertible notes payable as well as the sale of common, combined with or without warrants, and cash generated from the out-licensing or sale of our licensed assets. As of the date of this report, we had approximately $700,000 of cash on hand, which is expected to operating cash needs for two months. However, we are currently discussing various financing alternatives with certain investors, although we cannot be certain that we will be able to obtain such funds required for our operations at terms acceptable to us or at all. During 2018, we raised approximately $4.2 million net proceeds from the issuance of various convertible notes payable and approximately $0.5 million from the issuance of common stock. For our assessment as of December 31, 2018, we have considered the amount raised and we believe that the $4.7 million will not provide us the ability to continue as a going concern for one year from the issuance date of this Form 10-K. We will continue to attempt to obtain future financing or engage in strategic transactions which may require us to curtail our operations. We cannot predict, with certainty, the financial statements.outcome of our actions to generate liquidity, including the availability of additional equity or debt financing, or whether such actions would generate the expected liquidity as currently planned.   Future Financing We will require additional funds to implement the growth strategy for our business. As mentioned above, we have, in the past, raised additional capital to supplement our commercialization, clinical development and operational expenses. We will need to raise additional funds required through equity financing, debt financing, strategic alliances or other sources, which may result in further dilution in the equity ownership of our shares. There can be no assurance that additional financing will be available when needed or, if available, that it can be obtained on commercially reasonable terms. If we will not be able to obtain the additional financing on a timely basis as required, or generate significant material revenues from operations, we will not be able to meet our other obligations as they become due and will be forced to scale down or perhaps even cease our operations. Off-Balance Sheet Arrangements   We had noAs of December 31, 2018, we did not have any off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of December 31, 2017.SEC Regulation S-K.   InflationCritical Accounting Policies and Estimates   We do not believe that inflation has had a material effect on our Company’s results of operations. CRITICAL ESTIMATES AND JUDGMENTS The preparation of the Company’s financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management evaluates its estimates and judgments, including those related to receivables and accrued expenses. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable based on the circumstances. Actual results may differ from these estimates under different assumptions or conditions. The mostOur significant accounting estimates inherent in the preparation of the Company’s financial statements include estimates as to the appropriate carrying value of the Company’s intangible assets, the amount of stock compensation, and the amount of accrued liabilities that are not readily attainable from other sources. These accounting policies are more fully described at relevant sections in this discussion and analysis and in the notes to theour consolidated financial statements.statements included herein for the period ended December 31, 2018, located in Item 8 – Financial Statements and Supplemental Data. New and Recently Adopted Accounting Pronouncements Any new and recently adopted accounting pronouncements are more fully described in Note 1 to our consolidated financial statements included herein for the year ended December 31, 2018, , located in Item 8 – Financial Statements and Supplemental Data.     1538   Table of Contents   CRITICAL ACCOUNTING POLICIES 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 conditions. Impairment of Long-Lived Assets 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. 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. The Company did not write off any patents during the year ended December 31, 2017. The Company wrote off $58,522 of patents during the year ended December 31, 2016. Going Concern The Company has an accumulated deficit balance as of December 31, 2017 and net loss during the year ended December 31, 2017; the Company’s financial statements are prepared using U.S. GAAP applicable to a going concern for the next twelve months from the date of this filing, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. 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 2018. In order to continue as a going concern and to develop a reliable source of revenues, and achieve a profitable level of operations the Company will need, among other things, additional capital resources. Management’s plans to continue as a going concern include raising additional capital through borrowing and/or sales of equity and debt securities. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. 16 Table of Contents 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 $8,000,000 to $10,000,000 in capital over the next 12 months through either the issuance of shares of the Company’s common stock to accredited investors or issuance of convertible promissory notes to accredited investors. Management believes that the capital raised through these methods will be sufficient to sustain operations for the next 12 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. 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. Fair Value of Financial Instruments Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of December 31, 2017 and 2016. The respective carrying value of certain on-balance-sheet financial instruments, approximate their fair values. These financial instruments include cash, accounts receivable, accounts payable, accrued expenses and notes payable. Fair values were assumed to approximate carrying values for these financial instruments because they are short term in nature and their carrying amounts approximate fair values or they are receivable or payable on demand. The Company uses fair value measurements under the three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure for fair value measures. The three levels are defined as follows: · Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. · Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. · Level 3 inputs to the valuation methodology are unobservable and significant to the fair value. Recent Accounting Pronouncements In January 2016, the FASB issued an accounting standard update which requires, among other things, that entities measure equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) at fair value, with changes in fair value recognized in earnings. Under the standard, entities will no longer be able to recognize unrealized holding gains and losses on equity securities classified today as available for sale as a component of other comprehensive income. For equity investments without readily determinable fair values the cost method of accounting is also eliminated, however subject to certain exceptions, entities will be able to elect to record equity investments without readily determinable fair values at cost, less impairment and plus or minus adjustments for observable price changes, with all such changes recognized in earnings. This new standard does not change the guidance for classifying and measuring investments in debt securities and loans. The standard is effective for us on July 1, 2018 (the first quarter of our 2019 fiscal year). The Company is currently evaluating the anticipated impact of this standard on our consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. Topic 842 affects any entity that enters into a lease, with some specified scope exemptions. The guidance in this Update supersedes Topic 840, Leases. The core principle of Topic 842 is that a lessee should recognize the assets and liabilities that arise from leases. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For public companies, the amendments in this Update are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. We are currently evaluating the impact of adopting ASU No. 2016-02 on our consolidated financial statements. 17 Table of Contents In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) that clarifies how to apply revenue recognition guidance related to whether an entity is a principal or an agent. ASU 2016-08 clarifies that the analysis must focus on whether the entity has control of the goods or services before they are transferred to the customer and provides additional guidance about how to apply the control principle when services are provided and when goods or services are combined with other goods or services. The effective date for ASU 2016-08 is the same as the effective date of ASU 2014-09 as amended by ASU 2015-14, for annual reporting periods beginning after December 15, 2017, including interim periods within those years. The Company does not anticipate a significant impact upon adoption. In March 2016, the FASB issued ASU No. 2016-09, Compensation – Stock Compensation, or ASU No. 2016-09. The areas for simplification in this Update involve several 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. For public entities, the amendments in this Update are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted in any interim or annual period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity that elects early adoption must adopt all of the amendments in the same period. Amendments related to the timing of when excess tax benefits are recognized, minimum statutory withholding requirements, forfeitures, and intrinsic value should be applied using a modified retrospective transition method by means of a cumulative-effect adjustment to equity as of the beginning of the period in which the guidance is adopted. Amendments related to the presentation of employee taxes paid on the statement of cash flows when an employer withholds shares to meet the minimum statutory withholding requirement should be applied retrospectively. Amendments requiring recognition of excess tax benefits and tax deficiencies in the income statement and the practical expedient for estimating expected term should be applied prospectively. An entity may elect to apply the amendments related to the presentation of excess tax benefits on the statement of cash flows using either a prospective transition method or a retrospective transition method. We are currently evaluating the impact of adopting ASU No. 2016-09 on our consolidated financial statements. In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, which provides further guidance on identifying performance obligations and improves the operability and understandability of licensing implementation guidance. The effective date for ASU 2016-10 is the same as the effective date of ASU 2014-09 as amended by ASU 2015-14, for annual reporting periods beginning after December 15, 2017, including interim periods within those years. The Company does not anticipate a significant impact upon adoption. FASB ASU 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients” was issued in June 2016 and clarifies the objective of the collectability criterion, presentation of taxes collected from customers, non-cash consideration, contract modifications at transition, completed contracts at transition and how guidance in Topic 606 is retrospectively applied. The amendments do not change the core principle of the guidance in Topic 606. The effective dates are the same as those for Topic 606. FASB ASU 2014-12, “Compensation - Stock Compensation (Topic 718), Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period” was issued June 2014. This guidance was issued to resolve diversity in accounting for performance targets. A performance target in a share-based payment that affects vesting and that could be achieved after the requisite service period should be accounted for as a performance condition and should not be reflected in the award’s grant date fair value. Compensation cost should be recognized over the required service period, if it is probable that the performance condition will be achieved. The guidance is effective for annual periods beginning after December 15, 2015 and interim periods within those annual periods. This update did not have a significant impact upon early adoption. FASB ASU 2014-15, “Presentation of Financial Statements-Going Concern (Subtopic 205-40), Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern” was issued September 2014. This provides guidance on determining when and how to disclose going-concern uncertainties in the financial statements. The new standard requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date the financial statements are issued. An entity must provide certain disclosures if conditions or events raise substantial doubt about the entity’s ability to continue as a going concern. The ASU applies to all entities and is effective for annual periods ending after December 15, 2016, and interim periods thereafter, with early adoption permitted. The Company does not anticipate a significant impact upon adoption. FASB ASU 2015-11, “Simplifying the Measurement of Inventory” was issued in July 2015. This requires entities to measure most inventory “at the lower of cost and net realizable value,” thereby simplifying the current guidance under which an entity must measure inventory at the lower of cost or market. The ASU will not apply to inventories that are measured by using either the last-in, first-out method or the retail inventory method. For public business entities, the ASU is effective prospectively for annual periods beginning after December 15, 2016, and interim periods therein. Upon transition, entities must disclose the nature of and reason for the accounting change. The Company does not anticipate a significant impact upon adoption. FASB ASU No. 2015-15, Interest—Imputation of Interest: Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements” was issued in August 2015 which permits an entity to report deferred debt issuance costs associated with a line-of-credit arrangement as an asset and to amortize such costs over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings under the credit line. The ASU applies to all entities and is effective for public business entities for annual periods beginning after December 15, 2015, and interim periods thereafter, with early adoption permitted. The guidance should be applied on a retrospective basis. The Company does not anticipate a significant impact upon adoption. 18 Table of Contents FASB ASU 2015-17, “Income Taxes Balance Sheet Classification of Deferred Taxes” was issued in November 2015. This requires entities to classify deferred tax liabilities and assets as noncurrent in a classified statement of financial position and applies to all entities that present a classified statement of financial position. For public entities, this update is effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company does not anticipate a significant impact upon adoption. FASB ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326)” was issued in June 2016. This ASU amends the Board’s guidance on the impairment of financial instruments. Under the new guidance, an entity recognizes as an allowance its estimate of expected credit losses, which the FASB believes will result in more timely recognition of such losses. This ASU is effective for fiscal years beginning after December 15, 2019. Early adoption will be permitted. The Company does not anticipate a significant impact upon adoption. ECONOMY AND INFLATION Except as disclosed herein, we have not experienced any significant cancellation of orders due to the downturn in the economy and only a small number of customers requested delays in delivery or production of orders in process. Our management believes that inflation has not had a material effect on our results of operations. OFF-BALANCE SHEET AND CONTRACTUAL ARRANGEMENTS We do not have any off-balance sheet or contractual arrangements that are reasonably likely to have a current or future effect on our financial condition, revenues, and results of operations, liquidity or capital expenditures. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.   Not Applicable.applicable.   ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.   Our consolidated financial statements andThe information called for by Item 8 is included following the related notes begin“Index to Financial Statements” on Pagepage F-1 which are includedcontained in this Annual Report on Form 10-K.   19 Table of Contents ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.   None.   ITEM 9A. CONTROLS AND PROCEDURES.PROCEDURES   (a) Evaluation of Disclosure Controls and Procedures   Our principal executive and principal financial officers have evaluated the effectiveness of ourWe maintain disclosure controls and procedures as(as that term is defined in Rules 13a – 15(e)13a-15(e) and 15d – 15(e)15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods required underspecified in the SEC’s rules and forms, and that thesuch information is gatheredaccumulated and communicated to our management, including our principalchief executive officer and principalchief financial officer, as appropriate, to allow for timely decisions regarding required disclosure.disclosures. In designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives.   Our principalmanagement, with the participation of our chief executive officer and principalchief financial officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(c) as of the end of the period covered by this report. Based on thisupon that evaluation and subject to the foregoing, our principalchief executive officer and principalchief financial officer concluded that, our disclosure controls and procedures were not effective as ofdue to the end of the period covered by this report. This annual report does not include an attestation report of our registered public accounting firm regardingmaterial weaknesses in internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission.reporting described below.   Management’s Annual Report on Internal Control Over Financial Reporting   Our managementManagement of our Company and its consolidated subsidiaries 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. Ourreporting. The Company’s internal control over financial reporting is a process designed under the supervision of its chief executive and chief financial officers and effected by the Company’s Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of its consolidated financial statements for external reporting purposes in accordance with U.S. generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that: 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. 20 Table of Contents   Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,In addition, 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.   Material Weakness in Internal Control over Financial Reporting Management assessed the effectiveness of ourthe Company’s internal control over financial reporting as of December 31, 2017. Based2018, 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 forthestablished in the report entitled Internal Control--IntegratedControl—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO. The COSO framework summarizes each ofCommission. Based on this assessment, management has determined that the components of a company’sCompany’s internal control system, including (i) the control environment, (ii) risk assessment, (iii) control activities, (iv) information and communication and (v) monitoring.over financial reporting as of December 31, 2018 was not effective.   Identified Material Weakness 39 Table of Contents   A material weakness, as defined in the standards established by the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. The ineffectiveness of the Company’s internal control over financial reporting was due to the following material weaknesses which are indicative of many small companies with small number of staff: (i) inadequate segregation of duties consistent with control objectives. Management’s Plan to Remediate the Material Weakness Management has been implementing and continues to implement measures designed to ensure that control deficiencies contributing to the material weaknesses are remediated, such that these controls are designed, implemented, and operating effectively. The remediation actions planned include: (i) re-design of our accounting processes and control procedures; and (ii) identify gaps in our skills base and the expertise of our staff required to meet the financial reporting requirements of a public company. During the fiscal year ended December 31, 2018, we continued to execute upon our planned remediation actions which are all intended to strengthen our overall control environment. During the fourth quarter of fiscal year 2018 management hired a Chief Financial Officer. Our new Chief Financial Officer is an experienced C-Level executive and consultant as well as a licensed CPA. Also, during the 4th quarter of fiscal year 2018 the Company hired a consulting firm with expertise in functional areas of finance and accounting. We believe the above additions will improve the Company’s material weakness of a lack of segregation of duties as well as add to the overall oversight of internal. While we believe these additions will address the Company’s lack of segregation of duties, due to the timing of the events, they were not able to mitigate the material weakness for the year ended December 31, 2018. We are committed to maintaining a strong internal control environment and believe that these remediation efforts will represent significant improvements in our control environment. Our management will continue to monitor and evaluate the relevance of our risk-based approach and the effectiveness of our internal controls and procedures over financial reporting on an ongoing basis and is committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow. Management’s report on internal control over financial reporting was not subject to attestation by the Company’s registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit the a Smaller Reporting Company to provide only Management’s report in this annual report, which may increase the risk that weaknesses or deficiencies 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 December 31, 2017: As of December 31, 2017, 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 insure 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.go undetected.   (b) Changes Inin Internal Control Overover Financial Reporting   There werehave been no changes in our internal controlscontrol over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter ended December 31, 20172018 that have materially affected, or isthat are reasonably likely to have a materially affect, on our internal control over financial reporting.   ITEM 9B. OTHER INFORMATION   None.On July 9, 2018, CURE entered into a non-binding term sheet to acquire all of the non-pain assets of Therapix Biosciences Ltd., an Israeli company (“Therapix”), (the “Therapix Transaction”) in consideration for the issuance by CURE to Therapix’s shareholders of an unspecified number of our shares of common stock to be mutually agreed by the parties based on an independent third party valuation of our common stock and the assets acquired. On September 26, 2018, the Company and Therapix agreed to terminate any discussions and any definitive agreements regarding the Therapix Transaction. In conjunction with the end of the discussions regarding the Therapix Transaction, as of the date of this filing, the Company and Therapix have agreed to terminate the development agreement dated October 27, 2017, for a Palmitoylethanolamine (PEA) & Dronabinol (THC) CUREfilm ODF, although a final termination agreement has not been executed.     2140   Table of Contents   PART III   ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.   Our executive officers, directorsThe following table sets forth certain information regarding our Directors and significant employeesExecutive Officers. The age of each Director and their ages and their respective positionsExecutive Officer listed below is given as of December 31, 2017 were as follows:2018.   Name   Age   Position Robert Davidson   5051   Chairman of the Board, Chief Executive Officer Edward MaliskiAlex Katz (1)   6958   Chief ScientificFinancial Officer President Wayne Nasby(1)Jessica Rousset (2)   5642   Chief Operating Officer Mark Udell   40 Chief Financial Officer, Treasurer and Secretary Jessica Rousset(2) 41   Chief BusinessAccounting Officer, Treasurer and Secretary William Yuan   5758   Director Charles Berman   7475   Director Alan Einstein 5253 Director   (1) 1. Wayne Nasby resigned as Alex Katz was appointed the Company’s Chief OperatingFinancial Officer effective January 21, 2018.November 15, 2018, replacing Mark Udell who remains with the Company as Chief Accounting Officer, Treasurer and Secretary. (2) 2. Jessica Rousset was also appointed the Company’s Chief Operating Officer effective January 22, 2018.2018, replacing Wayne Nasby.   Officers are elected annually by the Board of Directors (subject to the terms of any employment agreement), at our annual meeting, to hold such office until an officer’s successor has been duly appointed and qualified, unless an officer sooner dies, resigns or is removed by the Board. Background ofOur Executive Officers and Directors The following is a brief account of the education and business experience of the incoming directors and executive officers during at least the past five years, indicating the person’s principal occupation during the period, and the name and principal business of the organization by which he or she was employed.   Robert Davidson – Chairman of the Board and Chief Executive Officer   Robert Davidson has served as the Chairman of the Board and Chief Executive Officer of CURE Pharmaceutical since July 2011. Prior to his role at CURE Pharmaceutical, Mr. Davidson served as President and Chief Executive Officer of InnoZen Inc., Chief Executive Officer of Gel Tech LLC, Chief Executive Officer of Bio delivery Technologies Inc., and Director of HealthSport Inc. Mr. Davidson was responsible for the development of several drug delivery technologies and commercial brand extensions. He has worked with brands such as Chloraseptic™, Suppress™, as well as Pediastrip™, a private label electrolyte oral thin film sold in major drug store chains. Mr. Davidson is also considered an industry expert leader in OTFODF technology. Mr. Davidson received his B.S. degree with a concentration in Biological Life Sciences from the University of the State of New York, Excelsior College. He has a Masters Certificate in Applied Project Management from Villanova University, Masters of Public Health from American Military University, Virginia and a Masters in Health and Wellness from Liberty University, Virginia. Mr. Davidson is also a Certified Performance Enhancement Specialist and Fitness Nutrition Specialist through the National Academy of Sports Medicine and attended Post-Graduate Studies at the University of Cambridge. Mr. Davidson’s experience as our Chief Executive Officer and Chairman, and his extensive knowledge of OTFODF and drug delivery technologies qualifies him to serve on our Board.   Alex Katz – Chief Financial Officer Mr. Katz is an experienced C-Level executive, consultant and venture capital investor, with significant experience as an attorney and a CPA. He has been working with seed, early-stage and growth companies for over 30 years. He is also a Director with Eventus Consulting, P.C., a private, CFO-services firm that specializes in operational finance, capital advisory and SEC compliance for publicly-traded and emerging growth companies. Mr. Katz has provided professional services to a variety of companies, including those engaged in manufacturing, distribution, technology, construction and service companies. As an attorney, Mr. Katz focuses on tax, M&A and corporate law. Mr. Katz also has experience serving as a board member to numerous companies. Since September 2008, Mr. Katz has been Managing Partner and will continue as a Partner of ff Venture Capital, a leading New York venture capital firm. Mr. Katz also serves as Co-Founder and Managing Partner of Differential Venture Partners, LLC, an emerging New York venture capital firm that invests in Series Seed and early-stage technology companies. Alex practiced law with Mesirov Gelman and was a founding partner of Katz and Miele, LLP, a tax and corporate law specialty firm. He served as Chief Executive Officer of Fastener Distribution and Marketing Company, Inc., an industrial supply company, and was responsible for raising funds to implement its strategy of obtaining market share through internal growth and five external acquisitions. In addition, Alex was Chief Financial Officer of Lenape Dynamic, Inc., a metal forging company, for which he also raised capital to complete a roll-up strategy and was responsible for dramatically increasing that company’s operating margins. Alex earned a Bachelor of Science in Business Administration from Drexel University and a Juris Doctor degree from Temple University School of Law.   2241   Table of Contents   Edward Maliski, PhD – President and Chief Science Officer Dr. Edward Maliski has served as the President, Chief Science Officer and Director of CURE Pharmaceutical since July 2011. Dr. Maliski is an accomplished research scientist with 30 years of experience in the development of pharmaceutical and biotechnology products. As an executive leader and strategist, Dr. Maliski contributed his expertise in project management and chemical research to facilitate the transfer of new discoveries into pharmaceutical products for the Sterling Winthrop Research Institute, Glaxo Research Institute, Merck & Co., and Amgen Inc. Additionally, Dr. Maliski has worked with several successful start-up companies. Wayne NasbyJessica Rousset – Chief Operating Officer   Wayne Nasby hadJessica Rousset has served as the Company’s Chief Operating Officer since January 22, 2018. She previously served since March 15, 2017 as the Company’s Chief Business Officer, oversees operations and directordrives corporate strategy and growth. Mrs. Rousset previously served as Head of Cure PharmaceuticalInnovation at Children’s Hospital Los Angeles, where over a ten-year period from July 2011 until January 21, 2018. He has over 302006 to November 2016, she helped launch both therapeutic and medical device companies and founded and operated a national pediatric technology accelerator. Prior to that, Mrs. Rousset held positions at The Scripps Research Institute and GlaxoSmithKline Biologicals in laboratory, clinical research and business development roles. She is a seasoned business development and commercialization leader, expert in bridging corporate, academic and governmental interests toward the common goal of improving patient’s lives. She brings more than fifteen years of experience fostering innovation in large organizations and advising start-ups to bring novel healthcare solutions to market and into clinical use. She trained as a biochemical engineer at the healthcare industry and has been recognized by industry and regulatory leaders for his proven track recordInstitut National des Sciences Appliquées in cGMP pharmaceutical regulatory compliance and innovation. Prior to Cure Pharmaceutical, Mr. Nasby served as the Vice President of Operations at InnoZen, Inc. He also served in various management positions at Amgen Inc. within quality assurance, supply chain, and corporate project management. During his twenty year tenure at Amgen, Inc., Mr. Nasby also established and directed distribution of pharmaceutical products to Asia, Australia, Europe and Puerto Rico.Lyon, France.   Mark Udell CPA – Chief FinancialAccounting Officer, Treasurer and TreasurerSecretary   Mark Udell has served as the Chief FinancialAccounting Officer since November 2018 and as Treasurer and Secretary of CURE Pharmaceutical since July 2011. He is a Certified Public Accountant with over 17 years of experience in finance and accounting. Prior to joining the Company in 2011, Mr. Udell served as InnoZen, Inc.’s Chief Accounting Officer and Controller and was responsible for establishing, monitoring and enforcing policies and procedures for the company as well as conducting audits and working with external auditors. While working at CURE and InnoZen, Inc., Mr. Udell gained valuable knowledge in the drug delivery industry and is a key contributor in the development and commercialization of various drug delivery technologies. He has also held the position as Auditing Manager at Green Hasson & Janks, LLP in Los Angeles. Mr. Udell received his B.A. in Business Economics with a concentration in accounting from the University of California, Santa Barbara.   Jessica Rousset – Chief Business OfficerOur Directors   Jessica Rousset has been with the Company since March 15, 2017 as the Company’s Chief Business Officer where Mrs. Rousset oversees operations and drives corporate strategy and growth. Mrs. Rousset was also appointed as the Company’s Chief Operating Officer on January 22, 2018. She is a seasoned business development and commercialization leader, expert in bridging corporate, academic and governmental interests toward the common goal of improving patient’s lives. She brings more than fifteen years of experience fostering innovation in large organizations and advising start-ups to bring novel healthcare solutions to market and into clinical use. Mrs. Rousset previously served as Head of Innovation at Children’s Hospital Los Angeles, where over a ten year period from 2011 to 2016, she helped launch both therapeutic and medical device companies and founded and operated a national pediatric technology accelerator. Prior to that, Mrs. Rousset held positions at The Scripps Research Institute and GlaxoSmithkline Biologicals in laboratory, clinical research and business development roles. She trained as a biochemical engineer at the Institut National des Sciences Appliquées in Lyon, France. 23 Table of Contents William Yuan – Director   William Yuan – Director Williamhas served as a director of the Company since November 7, 2016. Mr. Yuan was most recently Chairman and CEO of Fortress Hill Holdings, an Asian-based investment banking firm. With 23 years in global finance experience, he has served as a key strategist and advisor to international institutions. U.S. companies advised by Mr. Yuan include Amgen Corp., Biogen, GE Capital, Warner Brothers Studios, and Fox News. He has also guided such leading Asian institutions as Sina.com, Shanghai Petrochemicals, Jinlia Pharmaceutical and Tsingtao Beer Corp. In 1995, Mr. Yuan led Merrill Lynch Asset Management Asia, and managed one of the largest pension/retirement funds in the world, with a $488 billion portfolio under his leadership. Simultaneously, he was chairman and portfolio manager of the $1.2 billion AmerAsia Hedge Fund. In 1993, he was the founder and managing director of the Corporate Institutional Services Group at Merrill Lynch Asset Management. Prior to that, Mr. Yuan served as a senior-vice president and co-manager at Morgan Stanley Smith Barney’s Portfolio Management Corporation with dual functions as co-head of the Capital Markets Derivative team, and Chairman of the Technology Investment Management and Executive Policy Committee. He began his finance career at Goldman Sachs in 1983 as an investment banker in Mergers & Acquisitions. Mr. Yuan is a member of the International Who’s Who of Finance, Technology, Media and Telecom. Mr. Yuan holds a Bachelor of Science degree in Economics from Cornell University and attended Harvard University’s John F. Kennedy School as a Mason Fellow. Mr. Yuan’s extensive finance, investment banking and corporate strategy background as well as his experience advising large pharmaceutical companies such as Amgen, Biogen and Jinlia Pharmaceutical qualify him to serve on our Board. Mr. Yuan serves on our Audit, Compensation and Nominating / Corporate Governance Committees. 42 Table of Contents Chris Berman – Director   Charles Berman - Director Most recentlyhas served as a director of the Company since November 7, 2016. Mr. Berman was a former shareholder of the international law firm of Greenberg Traurig from early 2003 to February 2016. Since February 2016, Mr. Berman has been Of Counsel to Bugnion, SPA, an international firm that protects intellectual property rights. Mr. Berman has also worked with Hemopet, a non-profit organization and has served as General Counsel since 2016. Charles Berman has focused his practice in patent work for more than 40 years. His clients included both major corporations and smaller companies, which he represents within the U.S. and internationally. He has a degree in electrical engineering and a law degree from the University of Witwatersrand in Johannesburg, where he also started his legal career, concentrating in patent work. In 1978 Berman joined Lyon & Lyon’s Los Angeles office as an associate, and then was a partner in other national law firms including Merchant & Gould of Minnesota. He is admitted to practice before the US Patent and Trademark Office, the U.S. District Court, Central District of California and the US Supreme Court. From 1996-2000, he served as president, secretary and treasurer of the Los Angeles Intellectual Property Law Association (“LAIPLA”), and has represented LAIPLA and the California State Bar Intellectual Property Section before the U.S. Bar/European Patent Office- Liaison Council and the U.S. Bar/Japanese Patent Office- Liaison Council since 1990. Berman also has been a member of the Editorial Board of Managing Intellectual Property magazine since 1992. A board member of the American Intellectual Property Association from 1995 to 1998, he was a founding fellow of the AIPLA and served as Chair of the Fellows. Mr. Berman’s extensive work experience as a patent attorney providing legal services to major corporations and smaller companies, both within the U.S. and internationally, qualifies him to serve on our Board. Mr. Berman serves on our Audit, Compensation and Nominating / Corporate Governance Committees.   Alan Einstein -– Director   Dr. Alan Einstein, grandson to famed Albert Einstein, has served as a director of the Company since February 28, 2017. Dr. Einstein been practicing medicine since 1996. His educational history includes a BachelorsBachelor’s of Science undergraduate degree in Physical Chemistry from The University of Florida. Subsequently, he earned his medical degree from The College of Osteopathic Medicine and Surgery in Des Moines, Iowa, in 1992. Subsequently, Dr. Einstein completed his Internship and Residency training at The Johns Hopkins University School of Medicine/Sinai Hospital program in Internal Medicine, in Baltimore, MD in 1995, where he was recognized as, “The Outstanding Senior Resident of the Year.” Dr. Einstein is also involved in medical research utilizing Umbilical Cord Blood stem cells, with a particular interest in Parkinson’s disease. Dr. Einstein also assisted Senator David Shafer in the writing and passage of Georgia’s first and only Cord Blood stem cell bill. Furthermore, in July 2006, Georgia’s Governor Sonny Perdue appointed Dr. Einstein to the “Commission for Newborn Umbilical Cord Blood Research and Medical Treatment.” He emphasizes health and preventative care to allow individuals to achieve their maximum potential. He has numerous areas of medical expertise including cardiovascular diseases, diabetes, thyroid and hormone metabolism disorders. He emphasizes returning adults to a normal hormonal state, yet via a more natural route. Furthermore, Dr. Einstein is a thought leader in the area of metabolic syndrome and its role in weight gain and overall health and longevity. He has presented to his medical peers at numerous medical institutions and conferences around the country and has been featured on Video Health Magazine and Diabetes News Stand. Dr. Einstein prides himself in individualized and unrushed medical care. He takes detailed histories and performs thorough physical examinations while paying attention to detail.   Dr. Einstein’s extensive medical and scientific knowledge together with his thought leadership in the Company’s industry qualifies him to serve on our Board. Mr. Einstein serves on our Audit Committee. There are no family relationships between any of the above executive officers or directors or any other person nominated or chosen to become an executive officer or a director.   2443   Table of Contents   TermBoard of OfficeDirectors   Our Board of Directors currently consists of seven members. All directors are appointed for a one-year term to hold office until the next annual meeting of our shareholders orstockholders. At each annual meeting of stockholders, the successors to directors whose terms then expire are elected to serve from the time of election and qualification until removed from office in accordance with our bylaws.the next annual meeting following election.   Our executive officers are appointedManagement has been delegated the responsibility for meeting defined corporate objectives, implementing approved strategic and operating plans, carrying on our business in the ordinary course, managing cash flow, evaluating new business opportunities, recruiting staff and complying with applicable regulatory requirements. The Board of Directors exercises its supervision over management by our boardreviewing and approving long-term strategic, business and capital plans, material contracts and business transactions, and all debt and equity financing transactions and stock issuances. Director Independence The Board of Directors utilizes NASDAQ’s standards for determining the independence of its members. In applying these standards, the Board considers commercial, industrial, banking, consulting, legal, accounting, charitable and familial relationships, among others, in assessing the independence of directors, and hold office until removed by the board.must disclose any basis for determining that a relationship is not material.   Significant EmployeesThe Board has concluded that each of Messrs. Yuan, Berman and Einstein are “independent” based on the listing standards of the Nasdaq Stock Market, having concluded that any relationship between such director and our company, in its opinion, does not interfere with the exercise of independent judgment in carrying out the responsibilities of a director.   None.Board Committees   Family RelationshipsThe Board of Directors held four (4) meetings during 2018. During 2018, all directors, with the exception of Alan Einstein, attended 100% of the aggregate number of meetings of the Board of Directors that were held during the time that they served as members of the Board of Directors. Mr. Einstein did not attend any meetings during 2018. We do not have a formal policy regarding attendance by members of the Board of Directors at the annual meeting of stockholders, but we strongly encourage all members of the Board of Directors to attend our annual meetings and expect such attendance except in the event of extraordinary circumstances. We did not have an annual meeting of stockholders for the 2018 fiscal year.   There are no family relationships between or amongCommittees of the directors, executive officers or persons nominated or chosen by us to become directors or executive officers.Board of Directors   Involvement in Certain Legal ProceedingsThe Board of Directors has established and currently maintains the following three standing committees: the Audit Committee, the Compensation Committee, and the Nominating and Corporate Governance Committee (the “N&GC”). The Board of Directors has adopted written charters for each of these committees, which we make available free of charge on or through our Internet website, along with other items related to corporate governance matters, including our Code of Business Conduct and Ethics applicable to all employees, officers and directors. We maintain our Internet website at http://www.curepharmaceutical.com. You can access our committee charters and code of conduct on our website by first clicking “Investors” and then “Corporate Governance.”   ToWe intend to disclose on our Internet website any amendments to or waivers from our Code of Business Conduct and Ethics, as well as any amendments to the bestcharters of any of our knowledge, duringstanding committees. Any stockholder may also obtain copies of these documents, free of charge, by sending a request in writing to: Cure Pharmaceutical Holding Corp., 1620 Beacon Place, Oxnard, California 93033. Currently, the past five years, noneAudit Committee consists of Mr. Yuan (Chair), Messrs. Berman and Einstein, the following occurred with respect to a present director, person nominated to become director, executive officer, or control person: (1) any bankruptcy petition filed by or against any businessCompensation Committee consists of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; (2) any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); (3) being subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his or her involvement in any type of business, securities or banking activities; and (4) being found by a court of competent jurisdiction (in a civil action)Mr. Berman (Chair), the SEC or the Commodities Futures Trading Commission to have violated a federal or state securities or commodities law,Mr. Yuan, and the judgment hasN&GC consists of Mr. Berman (Chair), Mr. Yuan. During the 2018 fiscal year, the Audit Committee, Compensation Committee and the N&GC did not been reversed, suspended or vacated.hold any meetings. 44 Table of Contents   Audit Committee   We do not have a separately-designated standing audit committee. The entire board of directors performsAmong other functions, the functions of an audit committee, but no written charter governs the actions of the board of directors when performing the functions of that would generally be performed by an audit committee. The board of directorsAudit Committee reviews and approves the selectionengagement of our independent accountantsauditors to perform audit and meetsany permissible non-audit services, evaluates the performance, independence and interactsqualifications of our independent auditors and determining whether to retain our existing independent auditors or to engage new independent auditors, reviews our annual and quarterly financial statements and reports, including the disclosures contained in the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and discussing the statements and reports with theour independent accountants to discuss issues related to financial reporting. In addition, the board of directors reviews the scopeauditors and results of the audit with the independent accountants,management, reviews with our independent auditors and management significant issues that arise regarding accounting principles and the independent accountants our annual operating results, considers thefinancial statement presentation and matters concerning scope, adequacy and effectiveness of our internal accounting proceduresfinancial controls, reviews our major financial risk exposures, including the guidelines and considers other auditingpolicies to govern the process by which risk assessment and accounting matters including fees to be paid to the independent auditorrisk management is implemented, and reviews and evaluates on an annual basis the performance of the independent auditor.audit committee, including compliance of the audit committee with its charter.   We do not have an audit committee financial expert becauseThe Board of Directors has determined that each of the sizecurrent members of the Audit Committee is an independent director within the meaning of the NASDAQ independence standards and Rule 10A-3 promulgated by the SEC under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In addition, the Board of Directors has determined that Mr. Yuan qualifies as an Audit Committee Financial Expert under applicable SEC Rules and satisfies the NASDAQ standards of financial literacy and financial or accounting expertise or experience. Compensation Committee The Compensation Committee’s functions include reviewing, modifying and approving (or if it deems appropriate, making recommendations to the full Board of Directors regarding) our overall compensation strategy and policies, reviewing and approving compensation, the performance goals and objectives relevant to the compensation, and other terms of employment of our Chief Executive Officers and our other executive officers, reviewing and approving (or if it deems appropriate, making recommendations to the full Board of Directors regarding) the equity incentive plans, compensation plans and similar programs advisable for us, as well as modifying, amending or terminating existing plans and programs, reviewing and approving the terms of employment agreements, severance arrangements, change in control protections and any other compensatory arrangements for our executive officers, reviewing with management and approving our disclosures under the caption “Compensation Discussion and Analysis” in our periodic reports or proxy statements to be filed with the SEC, and preparing the report that the SEC requires in our annual proxy statement. Neither the Compensation Committee nor the Board of Directors retained any consultants to assist in the review and approval of the compensation and benefits for the executive officers of our company during 2018. The Board of Directors has determined that each current member of the Compensation Committee is an independent director within the meaning of the NASDAQ independence standards. Nominating and Corporate Governance Committee The N&GC functions include identifying, reviewing and evaluating candidates to serve on our Board of Directors consistent with criteria approved by our Board of Directors, evaluating director performance on our Board of Directors and applicable committees of our Board of Directors and determining whether continued service on our board of directors at this time. We believe that we do not require an audit committee financial expert at this time because we retain outside consultants who possess these attributes.is appropriate, evaluating, nominating and recommending individuals for membership on our Board of Directors, and evaluating nominations by stockholders for election to our Board of Directors.   Nominating CommitteeThe Board of Directors has determined that each current member of the N&GC is an independent director within the meaning of the NASDAQ independence standards.   We do not have a nominating committee. The board of directors acts as the nominating committeeSee “Directors, Executive Officers and membersCorporate Governance – Directors” above for descriptions of the board participate in the discussions. If the sizerelevant education and experience of each member of the board expands,above stated committees. SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Section 16(a) of the board will reconsiderSecurities Exchange Act of 1934, as amended (the “Exchange Act”), requires officers and directors of the needCompany and persons who beneficially own more than ten percent (10%) of the Common Stock outstanding to file initial statements of beneficial ownership of Common Stock (Form 3) and statements of changes in beneficial ownership of Common Stock (Forms 4 or desirability5) with the SEC. Officers, directors and greater than 10% stockholders are required by SEC regulation to furnish us with copies of all such forms they file. Our records reflect that all reports which were required to be filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, as amended, were filed on a nominating committee.timely basis.     2545   Table of Contents    Compensation CommitteeCorporate Code of Conduct and Ethics   We do not haveOur Board of Directors has adopted a compensation committee. Ifwritten code of business conduct and ethics that applies to our directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. Copies of our corporate code of conduct and ethics are available, without charge, upon request in writing to Cure Pharmaceutical Holding Corp., 1620 Beacon Place, Oxnard, California 93033, and are posted on the sizeinvestor relations section of the board expands, the board will reconsider the need or desirability of a compensation committee. For the fiscal year ending December 31, 2017, the board of directors: 1. Reviewed and discussed the audited financial statements with management, and 2. Reviewed and discussed the written disclosures and the letter from our independent auditors on the matters relating to the auditor’s independence. Based upon the board of directors’ review and discussion of the matters above, the board of directors authorizedour website, which is located at www.curepharmaceutical.com. The inclusion of the audited financial statements for the year ended December 31, 2017 to be includedour website address in this Annual Report on Form 10-K and filed withdoes not include or incorporate by reference the Securities and Exchange Commission. information on our website into this Annual Report on Form 10-K. We also intend to disclose any amendments to the Corporate Code of Conduct and Ethics, Disclosure We adopted a Codeor any waivers of Ethics. The code of ethics is availableits requirements, on the Company'sour website.   ITEM 11. EXECUTIVE COMPENSATION.Selection of Board Candidates In selecting candidates for the Board of Directors, the Board (or, as used throughout this section, the N&GC, as applicable) begins by determining whether the incumbent directors whose terms expire at the annual meeting of stockholders desire and are qualified to continue their service on the Board of Directors. If there are positions on the Board of Directors for which the Board will not be renominating an incumbent director, or if there is a vacancy on the Board of Directors, the Board will solicit recommendations for nominees from persons whom the Board believes are likely to be familiar with qualified candidates, including members of our Board of Directors and our senior management. The Board may also engage a search firm to assist in the identification of qualified candidates. The Board will review and evaluate those candidates whom it believes merit serious consideration, taking into account all available information concerning the candidate, the existing composition and mix of talent and expertise on the Board of Directors and other factors that it deems relevant. In conducting its review and evaluation, the committees may solicit the views of management and other members of the Board of Directors and may conduct interviews of proposed candidates.   The following executive compensation disclosure reflectsBoard generally requires that all compensationcandidates for the periods ended December 31, 2017Board of Directors be of the highest personal and 2016,professional integrity and have demonstrated exceptional ability and judgement. The Board will consider whether such candidate will be effective, in conjunction with the other members of the Board of Directors, in collectively serving the long-term interests of our stockholders. In addition, the Board requires that all candidates have no interests that materially conflict with our interest and those of our stockholders, have meaningful management, advisory or policy making experience, have general appreciation of the major business issues facing us and have adequate time to devote to service on the Board of Directors. The Board will consider stockholder recommendations for nominees to fill director positions, provided that the Board will not entertain stockholder nominations from stockholders who do not meet the eligibility criteria for submission of stockholder proposals under Rule 14a-8 of Regulation 14A under the Exchange Act. Stockholders may submit written recommendations for nominees to the Board of Directors, together with appropriate biographical information and qualification of such nominees as required by our Bylaws, to our Cooperate Secretary following the same procedures as described in “Stockholder Communications” in our Proxy Statement. In order for a nominee for directorship submitted by a stockholder to be considered, such recommendation must be received by the Corporate Secretary by the time period set forth in our principal executive officer, principal financial officer,most recent proxy statement for the submission of stockholder proposals under Rule 14a-8 of Regulation 14A under the Exchange Act. The Corporate Secretary shall then deliver any such communications to the Chairman of the Board or the N&GC, as applicable. The Board will evaluate stockholder recommendations for candidates for the Board of Directors using the same criteria as for other candidates, except that the Board may consider, as one of the factors in its evaluation of stockholder recommended candidates, the size and most highly compensated executive officers.duration of the interest of the recommending stockholder or stockholder group in our equity.     2646   Table of Contents   SUMMARY COMPENSATION TABLEBoard Leadership Structure and Role in Risk Oversight   Name & Principal Position   Fiscal Year Ended December 31,   Salary ($)     Bonus ($)     All Other Compensation ($)     Total ($)                                 Robert Davidson (1)   2017     155,000       -       -       155,000   Chief Executive Officer and Chairman   2016     118,333       -       -       118,333                                         Edward Maliski (1)   2017     60,000       -       -       60,000   President, Chief Scientific Officer   2016     37,500       -       -       37,500                                         Wayne Nasby (1) (2)   2017     129,783       -       -       129,783   Chief Operating Officer   2016     104,792       -       -       104,792                                         Mark Udell   2017     115,000       -       -       115,000   Chief Financial Officer, Treasurer and Secretary   2016     102,305       -       -       102,305                                         Jessica Rousset (3)   2017     127,953       -       -       127,953   Chief Business Officer   2016     -       -       -       -                                         Michael Hlavsa (4)   2017     -       -       -       -       2016     -       -       -       -                                         Anna Ioannou (5)   2017     -       -       -       -       2016     -       -       -       -   _____________Our Board of Directors is currently chaired by our Chief Executive Officer Robert Davidson, who was appointed to serve in such capacity effective July 2011. Our amended and restated bylaws provide our Board of Directors with flexibility to combine or separate the positions of Chairman of the Board and Chief Executive Officer in accordance with its determination that utilizing one or the other structure is in the best interests of our company. Our Board of Directors has appointed Robert Davidson to serve as Chairman of the Board and Bill Yuan, to serve as Lead Independent Director. As Chairman of the Board and our Chief Executive Officer, Mr. Davidson facilitates communications between members of our Board of Directors and works with management in the preparation of the agenda for each board meeting. All of our directors are encouraged to make suggestions for board agenda items or pre-meeting materials. Mr. Yuan presides over the executive sessions of the Board of Directors in which Mr. Davidson does not participate and serves as a liaison to Mr. Davidson and management on behalf of the independent members of the Board of Directors. Our Board of Directors has concluded that our current leadership structure is appropriate at this time. However, the Board of Directors periodically reviews our leadership structure and may make such changes in the future as it deems appropriate. Our Board of Directors and the Audit Committee thereof is responsible for overseeing the risk management processes on behalf of our company. The Board and, to the extent applicable, the Audit Committee, receive and review periodic reports from management, auditors, legal counsel and others, as considered appropriate regarding our company’s assessment of risks. Where applicable, the Audit Committee reports regularly to the full Board of Directors with respect to risk management processes. The Audit Committee and the full board of Directors focus on the most significant risks facing our company and our company’s general risk management strategy, and also ensure that risks undertaken by our company are consistent with the Board’s appetite for risk. While the Board oversees the risk management of our company, management is responsible for day-to-day risk management processes. We believe this division of responsibilities is the most effective approach for addressing the risks facing our company and that our Board leadership structure supports this approach. ITEM 11. EXECUTIVE COMPENSATION The following table sets forth information regarding compensation earned during 2018 and 2017 by our principal executive officer and our other most highly compensated executive officers as of the end of the 2018 fiscal year (“Named Executive Officers”). 47 Table of Contents Summary Compensation Table Name and Principal Position   Year     Salary ($)     Bonus ($)     Stock Awards ($)     Option Awards ($)     All Other Compensation ($)     Total ($)   Robert Davidson, Chief Executive Officer and Chairman   2018       175,833       -       23,125       251,558       15,082       465,598       2017       155,000       -       -       -       -       155,000                                                           Alex Katz(4), Chief Financial Officer   2018       3,864       -       -       -       -       3,864       2017       -       -       -       -       -       -                                                           Jessica Rousset(2), Chief Operating Officer   2018       180,000       -       29,600       208,268       19,284       437,152       2017       127,953       -       -       -       -       127,953                                                           Wayne Nasby(1), former Chief Operating Officer   2018       3,063       -       -       -       65,000       68,063       2017       129,783       -       -       -       -       127,783                                                           Mark Udell(3), Chief Accounting Officer, Treasurer and Secretary   2018       115,000       -       -       89,258       -       204,258       2017       115,000       -       -       -       -       115,000                                                           Edward Maliski(5), former President and Chief Scientific Officer   2018       32,924       -       -       29,753       -       62,677       2017       60,000       -       -       -       -       60,000   __________  (1) This does not include convertible promissory notes issued to such executive in connection with accrued payroll as described in “Certain Relationships and Related Transactions” under Item 2.01 “Completion of Acquisition or Disposition of Assets” in the Form 8-K filed December 13, 2016. (2) Wayne Nasby entered into a separation agreement that was effective January 21, 20182018. (3)(2) Jessica Rousset was appointed to Chief Operating Officer effective January 22, 20182018. (4)(3) Michael HlavsaMark Udell resigned as the Company’s president, chief executiveChief Financial Officer effective November 15, 2018, with the appointment of Alex Kats as the Company’s Chief Financial Officer. Mr. Udell remains with the Company as Chief Accounting Officer, Treasurer and treasurer on November 7, 2016.Secretary. (5)(4) Anna IoannouAlex Katz was appointed the Company’s Chief Financial Officer effective November 15, 2018, replacing Mark Udell who remains with the Company as Chief Accounting Officer, Treasurer and Secretary. (5) Edward Maliski resigned as the Company’s president, chief executiveCompany President and treasurer onChief Scientific Officer effective June 28, 2016.30, 2018 and entered into a Confidential Severance and General Release Agreement. On July 1, 2018, Mr. Maliski entered into a Consulting Agreement with the Company.     2748   Table of Contents   DirectorAll Other Compensation   The following table below summarizes allprovides information regarding each component of compensation earnedfor 2018 and 2017 included in the All Other Compensation column in the Summary Compensation Table above. Represents amounts paid in New Israeli Shekels (NIS) and converted at average exchange rates for the year. Name   Year   Gross Up of Payroll Taxes Paid for Restricted Stock Issued $     Severance Pay $     Total $   Robert Davidson   2018     15,082       -       15,082       2017     -       -       -                                 Jessica Rousset   2018     19,284       -       19,284       2017     -       -       -                                 Wayne Nasby   2018     -       65,000       65,000       2017     -       -       -   Outstanding Equity Awards at December 31, 2018 The following sets forth information regarding the outstanding equity awards held by eachour Named Executive Officers as of the end of our directors for services performed2018 fiscal year:     Option Awards           Stock Awards       Number of Securities Underlying Unexercised Options (#)     Number of Securities Underlying Unexercised Options (#)     Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options     Option Exercise Price     Option Expiration     Number of Shares or Units of Stock That Have Not Vested     Market Value of Shares or Units of Stock That Have Not Vested     Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested     Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested   Name   Exercisable     Unexercisable     (#)     (#)     Date     (#)     ($)     (#)     ($)   Robert Davidson     185,594       237,156       237,156     $ 0.61 - $0.74     April 6, 2028       -       -       -       -   Alex Katz     -       -       -       -       -       -       -       -       -   Jessica Rousset     134,375       215,625       215,625     $ 0.61 - $0.74     April 6, 2028       -       -       -       -   Mark Udell     28,125       121,875       121,875     $ 0.74     April 6, 2028       -       -       -       -   Edward Maliski     9,375       40,625       40,625     $ 0.74     April 6, 2028       -       -       -       -   Option Exercises in 2018 There were no option exercises by our named executive officers during our fiscal year ended December 31, 2017 and 2016.2018.   Narrative Disclosure to Summary Compensation Table Alex Katz On November 15, 2018, the Company entered into an employment agreement with Alex Katz pursuant to which Mr. Katz shall serve as the Chief Financial Officer of the Company. In the performance of such duties, Mr. Katz shall receive a base salary at a rate of $2,500 per month; payment of an annual bonus as determined by the Company in its sole discretion; participation in the Company’s pension plan; a grant of 100,000 stock options exercisable at a price per share equal to the volume-weighted average of the high and low selling prices of the Company’s common stock reported on the OTC Bulletin Board for the five trading days in the Company’s common stock beginning with the third such trading day following November 15, 2018, and ending with the seventh such trading day following November 15, 2018, and which shall vest as to one quarter of such at the end of each three-month period during the term; and reimbursement of expenses. The term of employment under the employment agreement shall commence on the November 15, 2018 and continue for a period of one year, unless terminated in accordance with Section 6 of the employment agreement. Name Fiscal Year Ended Salary ($) Bonus ($) Stock Awards ($) Non-qualified Deferred Comp Earnings ($) All Other Comp ($) Total ($) 49 Robert Davidson 2017 - - - - - - 2016 - - - - - - William Yuan 2017 - - - - - - 2016 - - - - - - Charles Berman 2017 - - - - - - 2016 - - - - - - Anna Ioannou (1) 2017 - - - - - - 2016 - - - - - - Michael Hlavsa (2) 2017 - - - - - - 2016 - - - - - - Alan Einstein 2017 2016 Table of Contents __________________ (1) Anna Ioannou resigned as the Company’s director on June 28, 2016. (2) Michael Hlavsa resigned as the Company’s director on November 7, 2016.   Employment AgreementsJessica Rousset   On March 15, 2017, (the “Effective Date”), the Company entered into an employment agreement with Jessica Rousset (“Executive”) to serve as the Company’s Chief Business Officer with such customary responsibilities, duties and authority normally associated with such position. In the performance of such duties, the ExecutiveMs. Rousset shall report to the Board of Directors and shall receive a base salary at a rate of $145,000 per annum (such annual base salary, as it may be adjusted from time to time, the “Annual Base Salary”). The Annual Base Salary shall be paid in equal installments in accordance with the customary payroll practices of the Company, but no less frequently than monthly. The Company’s Board shall review the Executive’sMs. Rousset’s salary at least once a year and shall increase her salary if, in the sole discretion of the Board, an increase is warranted. The term of employment under the employment agreement (the “Term”) shall commence on the Effective DateMarch 15, 2017 and continue for a period of one year, unless terminated in accordance with Section 3 of the employment agreement. Following the expiration of the initial Term, the Term shall be extended by one year unless terminated by either the Executive or the Company.   28 Table of Contents On January 22, 2018, the Company appointed Ms. Rousset Chief Operating Officer to fill the vacancy resulting from Wayne Nasby’s separation from the Company.   Potential Payments Upon Termination or Change-in-ControlWayne Nasby   TheOn January 22, 2018, the Company and WayneMr. Nasby entered into a Separation Agreement which granted Mr. Nasby a separation payment totaling $65,000 which is equivalent to six months of his base salary, less standard payroll deductions and withholdings, in six monthly payments beginning January 31, 2018. Additionally, the Company will pay Mr. Nasby’s COBRA premiums for six months following the Separation Date, totaling approximately $35,000.   We currentlyDirector Compensation The following Director Compensation Table sets forth information concerning compensation for services rendered to our independent directors for fiscal year 2018: Name   Fees Earned or Paid in Cash ($)     Stock Awards ($)     Option Awards ($)(1)     All Other Compensation ($)     Total ($)   William Yuan     -       -       89,258       -       89,258   Charles Berman     -       -       59,505       -       59,505   Alan Einstein     -       -       59,505       -       59,505   (1) In accordance with SEC rules, the amounts in this column reflect the fair value on the grant date of the option awards granted to the named executive, calculated in accordance with ASC Topic 718. Stock options were valued using the Black-Scholes model. The grant-date fair value does not necessarily reflect the value of shares which may be received in the future with respect to these awards. The grant-date fair value of the stock options in this column is a non-cash expense for the Company that reflects the fair value of the stock options on the grant date and therefore does not affect our cash balance. The fair value of the stock options will likely vary from the actual value the holder receives because the actual value depends on the number of options exercised and the market price of our common stock on the date of exercise. For a discussion of the assumptions made in the valuation of the stock options, see Note 12 (Stock Based Compensation) to our financial statements, which are included in the Annual Report on Form 10-K. Compensation Policy for Non-Employee Directors. The Company does not have no other contract, agreement, plan or arrangement, whether written or unwritten, that providesa formal policy regarding compensation for paymentsnon-employee directors. Directors are not paid for meetings attended. However, for the year ended December 31, 2018, the Company, as part of its Equity Incentive Plan, granted stock options to a named executive officer at, following, or in connection with any termination, including without limitation resignation, severance, retirement or a constructive termination of a named executive officer, or a change in control of the registrant or a change in the named executive officer’s responsibilities, with respect to each named executive officer.Messrs. Yuan and Berman and Dr. Einstein, see table above. 50 Table of Contents   ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS   The following table sets forth certain information regarding the ownership of our common stock as of March 21, 2018 with respect27, 2019 (the “Determination Date”) by: (i) each current director of our company and each director nominee; (ii) each of our Named Executive Officers; (iii) all current executive officers and directors of our company as a group; and (iv) all those known by us to thebe beneficial ownership of the outstanding common stock by (i) any holderowners of more than five percent (5%) percent; (ii) each of our executive officerscommon stock. Beneficial ownership and directors; and (iii) our directors and executive officers as a group. Except as otherwise indicated, eachpercentage ownership are determined in accordance with the rules of the stockholders listed belowSEC. Under these rules, beneficial ownership generally includes any shares as to which the individual or entity has sole or shared voting power or investment power and includes any shares that an individual or entity has the right to acquire beneficial ownership of within 60 days of the Determination Date, through the exercise of any option, warrant or similar right (such instruments being deemed to be “presently exercisable”). In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares of our common stock that could be issued upon the exercise of presently exercisable options and warrants are considered to be outstanding. These shares, however, are not considered outstanding as of the Determination Date when computing the percentage ownership of each other person. To our knowledge, except as indicated in the footnotes to the following table, and subject to state community property laws where applicable, all beneficial owners named in the following table have sole voting and investment power overwith respect to all shares shown as beneficially owned by them. Percentage of ownership is based on 29,870,390 shares of common stock outstanding as of the Determination Date. Unless otherwise indicated, the business address of each person in the table below is c/o Cure Pharmaceuticals Holding Corp., 1620 Beacon Place, Oxnard, California 93033. No shares beneficially owned.identified below are subject to a pledge.   Named Executives Officers and Directors (1)   Number of Shares Beneficially Owned (2)     Percent of Class (3)                 Robert Davidson     535,469       2.24 % Edward Maliski     471,131       1.97 % Mark Udell     442,632       1.85 % Jessica Rousset     -       -   William Yuan     -       -   Charles Berman     -       -   Alan Einstein     -       -                     All Executive Officers and Directors as a group (7 person)     1,449,232       6.06 %                   5% Shareholders                 The Branstetter Group (5)     2,754,626       11.53 % Climate Change Investigation, Innovation and Investment Company, LLC (6)     3,000,000       12.55 % ___________________Security Ownership of 5% or Greater Beneficial Owners Name and Address of Beneficial Owner   Amount and Nature of Beneficial Ownership (1)     Percent(1)   Climate Change Investigation, Innovation and Investment Company, LLC(3)     2,706,974       9.1 % Hangar202, LLC(2)     2,579,109       8.6 % Security Ownership of Directors and Executive Officers Name and Address of Beneficial Owner   Amount and Nature of Beneficial Ownership (1)     Percent(1)   Robert Davidson     964,469 (4)     3.2 % Jessica Rousset     390,000 (5)     1.3 % Mark Udell     592,632 (6)     2 % Alex Katz     -       - %  William Yuan     100,000 (7)     1 % Charles Berman     100,000 (8)     1 % Allen Einstein     100,000 (9)     1 % Directors & Executive Officers as a Group (7 persons)     2,247,101       7.5 % 51 Table of Contents Notes: (1) UnlessPercentage of ownership is based on 29,870,390 shares of our common stock outstanding as of March 27, 2019. Except as otherwise noted,indicated, we believe that the address for eachbeneficial owners of the named beneficialcommon stock listed above, based on information furnished by such owners, is: 1620 Beacon Place, Oxnard, California 93035. (2) have sole investment and voting power with respect to such shares, subject to community property laws where applicable. Beneficial ownership is determined in accordance with the rules of the CommissionSEC and generally includes voting or investment power with respect to securities. Under the rulesShares of the Commission, a person (or group of persons) is deemedcommon stock subject to be a “beneficial owner” of a security if he or she, directly or indirectly, has or shares a power to vote or to direct the voting of such security. Accordingly, more than one person may be deemed to be a beneficial owner of the same security. In accordance with Commission rules, shares of Common Stock that may be acquired upon exercise of stock options or warrants which are currently exercisable or which become exercisable within 60 days, are deemed outstanding for purposes of computing the percentage ownership of the dateperson holding such option or warrants but are not deemed outstanding for purposes of computing the table are deemed beneficially owned by the optionees. Subject to community property laws, where applicable, we believe the persons or entities named in the table above have sole voting and investment power with respect to all sharespercentage ownership of the Common Stock indicated as beneficially owned by them.any other person. (3)(2) In determining percentageJames Victor Branstetter is a control person of outstanding, we included shares issued and outstanding, shares obligated to be issued and the securities identified (if consisting of derivative securities) as if issued. As of December 31, 2017, we had 23,901,252 shares of common stock. (4) Hangar202, LLC. The address for this shareholder is 2712711 North Sepulveda Blvd., Manhattan Beach, California 90266. (5) (3) James Farrell is a control person of Climate Change Investigation, Innovation and Investment Company LLC. The address for this shareholder is 12 San Rafael Avenue, Belvedere, California 94920. (4) Consists of (i) 510,469 common stock shares, (ii) 354,000 ordinary shares issuable upon exercise of outstanding options at a price of $0.74 per share, (iii) 68,750 ordinary shares issuable upon exercise of outstanding options at a price of $0.61 per share, and (iv) 31,250 restricted shares issuable upon exercise of outstanding options at a price of $0.74 per share. (5) Consists of (i) 290,000 ordinary shares issuable upon exercise of outstanding options at a price of $0.74 per share, (ii) 60,000 ordinary shares issuable upon exercise of outstanding options at a price of $0.61 per share and (iii) 40,000 restricted shares issuable upon exercise of outstanding options at a price of $0.74 per share. (6) Consists of (i) 442,632 common stock shares and (ii) 150,000 ordinary shares issuable upon exercise of outstanding options at a price of $0.74 per share. (7) Consists of (i) 100,000 ordinary shares issuable upon exercise of outstanding options at a price of $0.74 per share. (8) Consists of (i) 100,000 ordinary shares issuable upon exercise of outstanding options at a price of $0.74 per share. (9) Includes (i) 100,000 ordinary shares issuable upon exercise of outstanding options at a price of $0.74 per share. Securities Authorized for Issuance Under Existing Equity Compensation Plans On October 11, 2018, the Company filed a Form S-8 amending the Company’s 2017 Equity incentive plan, described in detail in the Company’s definitive proxy statement for the Meeting filed with the Securities and Exchange Commission on December 13, 2017. The amendment authorized an additional 5,000,000 shares to be added to the 2017 Equity incentive plan pool.     2952   Table of Contents   The Company does not have any individual compensation arrangements with respect to its common or preferred stock. The issuance of any of our common or preferred stock is within the discretion of our Board of Directors, which has the power to issue any or all of our authorized but unissued shares without stockholder approval. The following table summarizes certain information regarding our equity compensation plans as of December 31, 2018: Plan Category   Number of Securities to be Issued Upon Exercise of Outstanding Options     Weighted-Average Exercise Price of Outstanding Options     Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a))       (a)     (b)     (c)   Equity compensation plans approved by security holders (1)     2,313,050     $ 0.79       2,065,700   Equity compensation plans not approved by security holders     -     $ -       -   Total     2,313,050     $ 0.79       2,065,700   (1) Consists of the 2017 Equity Incentive Plan. For a short description of those plans, see Note 13 to our 2018 Consolidated Financial Statements included in this Annual Report on Form 10-K for the year ended December 31, 2018. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTORDIRECTORS INDEPENDENCE.   As of March 31, 2016Approval for Related Party Transactions It is our sole officerpractice and director advanced us $4,032, which is not a part of a Loan Agreement. Anna Ioannou verbally agreedpolicy to loan this amountcomply with all applicable laws, rules and regulations regarding related-person transactions. The Company requires that all employees, including officers and directors, disclose to the Company. The loanCEO the nature of any company business that is not interest bearing, withoutconducted with any profitrelated party of such employee, officer or director (including any immediate family member of such employee, officer or director, and has no set maturity date, andany entity owned or controlled by such persons). If the Company intendstransaction involves an officer or director of our company, the CEO must bring the transaction to repay the loan as cash flow becomes available. Ms. Ioannou was not repaid from the proceedsattention of the offeringAudit Committee or, in 2016. There is no due date for the repaymentabsence of an Audit Committee the funds advanced by Ms. Ioannou. Ms. Ioannou will be repaid from revenues of operations iffull Board, which must review and when we generate significant revenues to payapprove the obligation. There is a written agreement evidencingtransaction in writing in advance. In considering such transactions, the advancement of funds by Ms. Ioannou.Audit Committee (or the full Board, as applicable) takes into account the relevant available facts and circumstances Transactions with Related Parties Financial Service Agreement with Eventus Consulting, P.C.   On various dates from October 31, 2014 to February 2, 2015, CURE Pharmaceutical issued convertible promissory notes to Ronick, Inc.November 1, 2018, the Company entered into a financial services agreement with a related, party, Eventus Consulting, P.C. (“Eventus”), (“Ronick”) totaling $89,000 that were due on February 25, 2016, but Ronick has agreed to extendof which Mr. Alex Katz, the due date to August 31, 2016. Robert Davidson, ourCompany’s Chief ExecutiveFinancial Officer, and director, is a shareholderDirector. Pursuant to the agreement Eventus will provide certain accounting, financial and strategic consulting services to the Company for a period of Ronick. Interest is payable at 3%one year, unless otherwise terminated. The Company shall pay Eventus $22,500 per annum and is secured by technology and patent rights. Principal and accrued interest is convertible into common stock at $4.00 per share. This conversion is subject to an adjustment if CURE Pharmaceutical sells stock or grants conversion rates at a lower price; however, Ronick has subsequently agreed to waive these conversion rights and will convert at $4.00 per share. As of October 6, 2016, Ronick has converted $35,260 of principal and unpaid accrued interest into 8,815 of common stock shares of CURE Pharmaceutical. As of October 6, 2016, Ronick converted $35,290 of principal and unpaid accrued interest into 8,822 of common stock shares of CURE Pharmaceutical. On December 31, 2015, CURE Pharmaceutical converted $100,150 of accrued payrollmonth for Robert Davidson into a convertible promissory note. As of October 6, 2016, Robert Davidson has converted $38,415 of principal and unpaid accrued interest into 9,604 of common stock shares of CURE Pharmaceutical. On October 17, 2016, Robert Davidson transferred his convertible promissory note to Ronick. On that same date, Ronick converted $38,449 of principal and unpaid accrued interest into 9,612 of common stock shares of CURE Pharmaceutical. On December 31, 2015, CURE Pharmaceutical converted $94,312 of accrued payroll for Wayne Nasby, our Chief Operating Officer, into a convertible promissory note. As of October 6, 2016, Wayne Nasby has converted $48,241 of principal and unpaid accrued interest into 12,060 of common stock shares of the CURE Pharmaceutical. As of October 17, 2016, Wayne Nasby converted $48,284 of principal and unpaid accrued interest into 12,071 of common stock shares of CURE Pharmaceutical. On December 31, 2015, CURE Pharmaceutical converted $77,250 of accrued payroll for Edward Maliski, our President and Chief Science Officer, into a convertible promissory note. As of October 6, 2016, Edward Maliski has converted $39,514 of principal and unpaid accrued interest into 9,878 of common stock shares of CURE Pharmaceutical. As of October 17, 2016, Edward Maliski converted $39,549 of principal and unpaid accrued interest into 9,887 of common stock shares of CURE Pharmaceutical. On December 31, 2015, CURE Pharmaceutical converted $51,500 of accrued payroll for Jonathan Turman into a convertible promissory note. As of October 6, 2016, Jonathan Turman has converted $26,343 of principal and unpaid accrued interest into 6,586 of common stock shares of CURE Pharmaceutical. As of October 17, 2016, Jonathan Turman converted $26,366 of principal and unpaid accrued interest into 6,591 of common stock shares of CURE Pharmaceutical. At December 31, 2017, two of our executive officers, Robert Davidson and Mark Udell, had $7,931 and $13,716, respectively, due to them and are included in accounts payable. At December 31, 2016, one of our executive officers, Robert Davidson, had $10,992 due to him and is included in accounts payable. ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES. Our financial statements for the fiscal years ended December 31, 2017 and 2016 were audited by RBSM LLP.all work performed.     3053   Table of Contents   Since we do not have a formal audit committee,Named Executive Officers and Current Directors For information regarding compensation for our boardnamed executive officers and current directors, see “Executive Compensation.” Director Independence See “Directors, Executive Officers and Corporate Governance – Director Independence” and “Directors, Executive Officers and Corporate Governance – Board Committees” in Item 10 above. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES The Board of directors serves as our audit committee. We have not adopted pre-approval policies and procedures with respect to our accountants. AllDirectors of the services provided and fees charged byCompany has appointed RBSM LLP (“RBSM”), as our independent registered public accounting firms were approved byfirm (the “Independent Auditor”) for the board of directors. Services rendered by RBSM LLP fiscal year ending December 31, 2018. The following is a summary oftable sets forth the fees billed to the Company for professional services rendered by RBSM LLP for the years ended December 31, 20172018 and 2016.2017:   Services   2018     2017   Audit Fees (1)   $ 85,811     $ 85,000   Audit-Related fees (2)     18,000       -   Tax fees (3)     5,000       1,500   Total fees   $ 108,811     $ 86,500   Fee Category   2017     2016   Audit fees   $ 85,000     $ 85,510   Audit-related fees     -       -   Tax fees     1,500       3,000   Other fees     -       -   Total Fees   $ 86,500     $ 88,510   ___________  (1) Audit Fees – These consisted of the aggregate fees for professional services rendered in connection with (i) the audit of our annual financial statements and(ii) the review of the financial statements included in our Quarterly Reports on Form 10-Q for the quarters ended March 31, June 30 and September 30. (2) Audit- related Fees - These consisted of professional services rendered in connection with our Form S-1, Form S-1/A and Form S-8. (3) Tax Fees - These consisted of services performed in preparation of the Company’s corporate Federal and State tax returns.   Policy onAudit fees.Committee Pre-Approval of Audit fees represent feesand Permissible Non-audit Services of Independent Public Accountant Consistent with SEC policies regarding auditor independence, the Audit Committee has responsibility for professionalappointing, setting compensation and overseeing the work of our independent registered public accounting firm. In recognition of this responsibility, the Audit Committee has established a policy to pre-approve all audit and permissible non-audit services performedprovided by RBSM LLPour independent registered public accounting firm. Prior to engagement of an independent registered public accounting firm for the next year’s audit, management will submit an aggregate of our annual financial statements andservices expected to be rendered during that year for each of four categories of services to the reviewAudit Committee for approval. 1. Audit services include audit work performed in the preparation of our quarterly financial statements, as well as work that generally only an independent registered public accounting firm can reasonably be expected to provide, including comfort letters, statutory audits, and attest services and consultation regarding financial accounting and/or reporting standards. 2. Audit-Related services are for assurance and related services that are normally provided in connection with statutorytraditionally performed by an independent registered public accounting firm, including due diligence related to mergers and acquisitions, employee benefit plan audits, and special procedures required to meet certain regulatory filings or engagements.requirements.   3. Audit-related fees.Tax We did not incur any other fees for services include all services performed by RBSM LLP, other thanan independent registered public accounting firm’s tax personnel except those services specifically related to the services coveredaudit of the financial statements, and includes fees in “Audit Fees” for the fiscal years ended December 31, 2017 or 2016.areas of tax compliance, tax planning, and tax advice.   4. TaxOther Fees. Tax fees represent fees for professional are those associated with services performed by RBSM LLP fornot captured in the corporate tax preparation for the Federal and State.other categories. The Company generally does not request such services from our independent registered public accounting firm.   OtherPrior to engagement, the Audit Committee pre-approves these services by category of service. The fees. RBSM LLP did are budgeted, and the Audit Committee requires our independent registered public accounting firm and management to report actual fees versus the budget periodically throughout the year by category of service. During the year, circumstances may arise when it may become necessary to engage our independent registered public accounting firm for additional services not receive any other fees during forcontemplated in the fiscal years ended December 31, 2017 or 2016.original pre-approval. In those instances, the Audit Committee requires specific pre-approval before engaging our independent registered public accounting firm.   The Audit Committee may delegate pre-approval authority to one or more of its members. The member to whom such authority is delegated must report, for informational purposes only, any pre-approval decisions to the Audit Committee at its next scheduled meeting. 54 Table of Contents PART IV ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULESSCHEDULES..   Exhibit Number   Description (2) Plan of acquisition, reorganization, arrangement, liquidation or succession 2.1   Share Exchange and Conversion Agreement dated November 7,8, 2016 (incorporated by reference from the registrant’sto our Current Report on Form 8-K filed on November 15, 2016) (3) (i) Articles of Incorporation; and (ii) Bylaws 3.1   Articles of Incorporation (incorporated by reference from the registrant’sto our Registration Statement on Form S-1 filed on June 10, 2015) 3.1.13.2 Bylaws (incorporated by reference to our Registration Statement on Form S-1 filed on June 10, 2015) 3.3   Certificate of Amendment to Articles of Incorporation (incorporated by reference to theour Current Report on Form 8-K as filed with the Securities and Exchange Commission on December 14, 2016) 3.23.4   Bylaws (incorporated by reference from the registrant’s Registration Statement on Form S-1 filed on June 10, 2015) 3.2.1 AmendmentAmendments to the Bylaws (incorporated by reference from the registrant’sto our Current Report on Form 8-K filed on November 15, 2016) (10) Material Contracts 10.1   Agreement for the Sale of Assets dated August 19,June 28, 2016 (incorporated by reference from the registrant’sto our Current Report on Form 8-K filed on August 26, 2016) 10.2   Form of Share Cancellation Agreement dated November 7, 2016 (incorporated by reference from the registrant’sto our Current Report on Form 8-K filed on November 15, 2016) 10.3   Form of Warrant to Purchase Common Stock dated November 7, 2016 (incorporated by reference from the registrant’sto our Current Report on Form 8-K filed on November 15, 2016) 10.4   Form of Warrant to Purchase Common Stock dated December 6, 2016 (incorporated by reference from the registrant’sto our Current Report on Form 8-K filed on December 14, 2016). 10.5   Form of Securities Purchase Agreement between CURE Pharmaceutical Holding Corp. and various investors for up to $5,000 in convertible promissory notes, dated March 20, 2018.*2018 (incorporated by reference to our Annual Report on Form 10-K filed on March 26, 2018) 10.5.110.6   Form of 9% Convertible Promissory Note dated March 20, 2018.*2018 (incorporated by reference to our Annual Report on Form 10-K filed on March 26, 2018) 10.5.210.7   Form ofCommon Stock Purchase Warrant dated March 20, 2018.*2018 (incorporated by reference to our Annual Report on Form 10-K filed on March 26, 2018) 21.110.8 Securities Purchase Agreement dated October 15, 2018 (incorporated by reference to our Current Report on Form 8-K filed on October 18, 2018) 10.9 Employment Agreement dated November 15, 2018 (incorporated by reference to our Current Report on Form 8-K filed on November 20, 2018) 10.9 Securities Purchase Agreement dated December 14, 2018 (incorporated by reference to our Current Report on Form 8-K filed on January 7, 2019) 10.10 Advisory Consulting Agreement with an individual dated December 14, 2018 (incorporated by reference to our Current Report on Form 8-K filed on January 7, 2019) (14) Code of Ethics 14.1 Code of Ethics (incorporated by reference to our Registration Statement on Form S-1 filed on July 9, 2018) (21) Subsidiaries of the Registrant 21.1*   List of Subsidiaries of the Registrant (incorporated by reference to the Form 8-K, as filed with the Securities and Exchange Commission on November 15, 2016). (23) Consents of Experts and Counsel 31.223.1*   CertificationConsent of Chief Executive Officer and Chief Financial Officer Pursuant to Securities Exchange Act Rule 13a-14(a)\15d-14(a)*Independent Registered Public Accounting Firm (31) Rule 13a-14(a)/15d-14(a) Certification 32.131.1*   Section 302 Certification under the Sarbanes-Oxley Act of Chief Financial Officer pursuant to Rule 13a-14(a)2002 of the Securities Exchange Act of 1934*Principal Executive Officer 10131.2* �� Section 302 Certification under the Sarbanes-Oxley Act of 2002 of the Principal Financial Officer and Principal Accounting Officer (32) Section 1350 Certification 32.1* Section 906 Certification under the Sarbanes-Oxley Act of 2002 of the Principal Executive Officer 32.2* Section 906 Certification under the Sarbanes-Oxley Act of 2002 of the Principal Financial Officer and Principal Accounting Officer (99) Additional Exhibits 99.1 Press Release dated September 5, 2018 (incorporated by reference to our Current Report on Form 8-K filed on September 5, 2018) (101)*   Interactive data files pursuant to Rule 405 of Regulation S-TData Files 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 _____________________ * Filed herewith   ITEM 16. FORM 10-K SUMMARY Not applicable.   3155   Table of Contents SIGNATURES   FINANCIAL STATEMENTSPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. CURE PHARMACEUTICAL HOLDING CORP. By: /s/ Robert Davidson Robert Davidson Chief Executive Officer Date: April 1, 2019 By: /s/ Alex Katz Alex Katz Chief Financial Officer Date: April 1, 2019 By: /s/ Mark Udell Mark Udell Chief Accounting Officer, Treasurer and Secretary Date: April 1, 2019 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. By: /s/ Robert Davidson Robert Davidson Chief Executive Officer, Chairman of the Board and Director Date: April 1, 2019 By: /s/ William Yuan William Yuan Director Date: April 1, 2019 By: /s/ Alan Einstein Alan Einstein Director Date: April 1, 2019 By: /s/ Gene Salkind, MD Gene Salkind, MD Director Date: April 1, 2019 56 Table of Contents   ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA CURE PHARMACEUTICAL HOLDING CORP. CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2018 TABLE OF CONTENTS     Page REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM F-2 CONSOLIDATED FINANCIAL STATEMENTS:   Report of Independent Registered Public Accounting Firm F-2   Consolidated Balance Sheets as of December 31, 2017 and 2016 F-3   Consolidated Statements of Operations for the Years Ended December 31, 2017 and 2016 F-4   Consolidated Statements of Changes Stockholders’ Equity (Deficit) for the Years Ended December 31, 2017 and 2016Deficit F-5   Consolidated Statements of Cash Flows for the Years Ended December 31, 2017 and 2016 F-6   Notes to Consolidated Financial Statements F-7 to F-31 F-7     F-1   Table of Contents   REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM    To the Board of Directors and Stockholders of Cure Pharmaceutical Holding Corp.Corp and Subsidiaries   Opinion on the Financial Statements   We have audited the accompanying consolidated balance sheets of Cure Pharmaceutical Holding Corp. and subsidiariesCorp (the Company) as of December 31, 20172018 and 2016,2017, and the related consolidated statements of operations, statement of stockholders’ equity (deficit),stockholders deficit and cash flows for each of the years in the two-yeartwo year period ended December 31, 2017,2018, and the related notes (collectively referred to as the notes to consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2018 and 2017, and 2016, and the consolidated results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2017 and 2016,2018, in conformity with accounting principles generally accepted in the United States of America.   The Company's Ability to Continue as a Going Concern   The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has an accumulated deficit, recurring losses, and expects continuing future losses, and has stated that substantial doubt exists about the Company’sCompany s ability to continue as a going concern. Management's evaluation of the events and conditions and management’smanagement s plans regarding these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.   BasisBasis for Opinion   These consolidated financial statements are the responsibility of the Company’sCompany s management. Our responsibility is to express an opinion on the Company’sCompany s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.   We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’sCompany s internal control over financial reporting. Accordingly, we express no such opinion.   Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.   /s/ RBSM LLP   We have served as the Company’sCompany s auditor since 2015.   Henderson, NV   March 23, 2018April 1, 2019     F-2   Table of Contents   CURE Pharmaceutical Holding Corp CURE PHARMACEUTICAL HOLDING CORP AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS                   December 31, 2018     December 31, 2017   ASSETS             Current assets:             Cash   $ 500,962     $ 108,249   Accounts receivable, net     102,799       4,364   Inventory     37,776       44,996   Prepaid expenses and other assets     946,386       586,888   Total current assets     1,587,923       744,497                     Property and equipment, net     299,910       337,361   Intellectual property and patents, net     1,206,011       900,472   Prepaid expenses and other assets     232,407       -   Other assets     69,837       117,555                     Total assets   $ 3,396,088     $ 2,099,885                     Liabilities and Stockholders' Equity                 Current liabilities:                 Accounts payable   $ 774,387     $ 544,980   Accrued expenses     508,733       129,978   Loan payable     105,125       50,425   Notes payable, net     920,000       800,000   Convertible promissory notes, net     5,242,431       1,551,488   Derivative Liability     617,628       90,738   Deferred revenue     383,275       361,462   Total current liabilities     8,551,579       3,529,071                     License Fees     -       560,000                     Total liabilities     8,551,579     �� 4,089,071                     Commitments and Contingencies (see Note 16)                                   Stockholders' deficit:                 Common stock: $0.001 par value; authorized 75,000,000 shares; 26,784,019 shares and 23,901,252 issued and outstanding as of December 31, 2018 and 2017, respectively     26,785       23,902   Additional paid-in capital     23,424,737       16,483,632   Stock payable     645,575       324,995   Accumulated deficit     (29,269,000 )     (18,868,599 ) Total CURE Pharmaceutical Holding Corp stockholders’ deficit     (5,171,903 )     (2,036,070 )                   Noncontrolling interest     16,412       46,884                     Total stockholders' deficit     (5,155,491 )     (1,989,186 )                   Total liabilities and stockholders' deficit   $ 3,396,088     $ 2,099,885   Consolidated Balance Sheets     December 31, 2017     December 31, 2016   Assets Current assets:             Cash   $ 108,249     $ 1,106,142   Accounts receivable     4,364       7,049   Inventory     44,996       81,285   Prepaid expenses and other assets     586,888       223,879   Total current assets     744,497       1,418,355   Property and equipment, net     337,361       370,648   Intellectual property and patents, net     900,472       894,510   Other assets     117,555       151,579   Total assets   $ 2,099,885     $ 2,835,092                     Liabilities and Equity (Deficit) Current liabilities:                 Accounts payable   $ 544,980     $ 265,386   Accrued expenses     129,978       26,305   Loan payable     50,425       33,277   Notes payable     800,000       50,000   Capital lease payable     -       9,453   Convertible promissory notes     1,551,488       -   Derivative liability     90,738       -   Deferred revenue     361,462       173,618   Total current liabilities     3,529,071       558,039   License fees     560,000       560,000   Total liabilities     4,089,071       1,118,039                     Equity (deficit):                 Common stock: $0.001 par value; authorized 75,000,000 shares; 23,901,252 and 23,336,673 shares issued and outstanding as of December 31, 2017 and 2016, respectively     23,902       23,337   Additional paid-in capital     16,483,632       12,412,430   Stock payable     324,995       -   Accumulated deficit     (18,868,599 )     (10,718,714 ) Total CURE Pharmaceutical Holding Corp stockholders’ equity     (2,036,070 )      1,717,053   Noncontrolling interest in subsidiary     46,884       -   Total equity (deficit)     (1,989,186 )     1,717,053   Total liabilities and equity (deficit)   $ 2,099,885     $ 2,835,092     The accompanying notes are an integral part of these consolidated financial statementsstatements.     F-3   Table of Contents   CURE Pharmaceutical Holding Corp CURE PHARMACEUTICAL HOLDING CORP AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS               For the Years ended       December 31, 2018     December 31, 2017   Revenue:             Net product sales   $ 519,205     $ 148,886   Consulting research & development income     63,192       9,696   Shipping and other sales     1,544       21,822   Total revenues     583,941       180,404                     Cost of goods sold:                 Cost of goods sold     279,924       180,629                     Gross profit (loss)     304,017       (225 )                   Operating expenses:                 Research and development expenses     1,408,595       1,427,341   Selling, general and administrative expenses     6,453,113       5,914,541                     Total operating expenses     7,861,708       7,341,882                     Net Operating (loss) before other income (expense)     (7,557,691 )     (7,342,107 )                   Other income (expense):                 Interest income     -       6   Other income     577,370       34,412   Loss on disposal of property, plant & equipment     -       (12,351 ) Change in fair value of derivative liability     (229,291 )     742,109   Other expense     (183,962 )     (3,580 ) Interest expense     (3,037,299 )     (1,582,184 )                   Other income (expense)     (2,873,182 )     (821,588 )                   Net loss before income taxes     (10,430,873 )     (8,163,695 )                   Provision for income taxes     -       -                     Net loss     (10,430,873 )     (8,163,695 )                   Net loss attributable to non-controlling interest     (30,472 )     (13,810 )                   Net loss attributable to Cure Pharmaceutical Holding Corp.     (10,400,401 )     (8,149,885 )                   Net loss per share                 Basic and Diluted   $ (0.42 )   $ (0.34 )                   Weighted average common shares outstanding                 Basic and Diluted     24,999,824       23,649,432   Consolidated Statements of Operations     For the Year Ended December 31, 2017     For the Year Ended December 31, 2016   Revenue             Net product sales   $ 148,886     $ 73,347   Consulting research & development income     9,696       3,356   Shipping and other sales     21,822       7,462   Total revenues     180,404       84,165                     Cost of goods sold     180,629       153,330   Gross loss     (225 )     (69,165 ) Research and development expenses     1,427,341       753,369   Selling, general and administrative expenses     5,914,541       3,103,710   Total costs and expenses     7,341,882       3,857,079   Net loss from operations     (7,342,107 )     (3,926,244 ) Other income (expense):                 Interest income     6       436   Other income     34,412       38,460   Loss on disposal of PP&E     (12,351 )     (3,323 ) Change in derivative liability     742,109       -   Other expense     (3,580 )     (145,237 ) Interest expense     (1,582,184 )     (121,572 ) Other income (expense)     (821,588 )     (231,236 ) Net loss before income taxes     (8,163,695 )     (4,157,480 ) Provision for income taxes     -       -   Net loss before noncontrolling interest     (8,163,695 )     -   Noncontrolling interest     (13,810 )     -   Net loss attributed to stockholders   $ (8,149,885 )   $ (4,157,480 )                   Net loss attributed to stockholders per share, basic and diluted   $ (0.34 )   $ (0.46 )                   Weighted average shares outstanding, basic and diluted     23,649,432       9,097,973     The accompanying notes are an integral part of these consolidated financial statementsstatements.     F-4   Table of Contents   CURE Pharmaceutical Holding Corp CURE PHARMACEUTICAL HOLDING CORP AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT                                                                 Additional                               Common Stock      Paid-in      Stock      Accumulated      Noncontrolling              Shares      Par      Capital      Payable      Deficit      Interest      Total   Balance, December 31, 2016     23,336,673     $ 23,337     $ 12,412,430     $ -     $ (10,718,714 )   $ -     $ 1,717,053   Issuance of common stock for professional services     564,579       565       2,204,435                               2,205,000   Warrants granted                     1,181,057                               1,181,057   Common stock owed but not yet issued                     (828 )     324,995                       324,167   Loan discounts                     686,538                               686,538   Noncontrolling interest of Oak Therapeutics, Inc.                                             46,884       46,884   Net loss                                     (8,149,885 )             (8,149,885 ) Balance, December 31, 2017     23,901,252     $ 23,902     $ 16,483,632     $ 324,995     $ (18,868,599 )   $ 46,884     $ (1,989,186 ) Issuance of common stock for professional services     1,871,657       1,872       2,275,993       14,583                       2,292,448   Issuance of common stock for cancellation of accounts payable     94,444       94       99,044                               99,138   Issuance of common stock for purchase of patents     170,000       170       237,330       42,600                       280,100   Issuance of common stock for extension of maturity dates relating to convertible promissory notes     330,000       330       646,170                               646,500   Issuance of common stock for cash     416,666       417       499,583                               500,000   Warrants granted                     662,632                               662,632   Beneficial conversion features                     1,677,072                               1,677,072   Fair value of stock options and restricted stock granted                     843,281                               843,281   Common stock payable for note conversion                             263,397                       263,397   Noncontrolling interest of Oak Therapeutics, Inc.                                             (30,472 )     (30,472 ) Net loss                                     (10,400,401 )             (10,400,401 ) Balance, December 31, 2018     26,784,019     $ 26,785     $ 23,424,737     $ 645,575     $ (29,269,000 )   $ 16,412     $ (5,155,491 ) Consolidated Statement of Stockholders’ Equity (Deficit)                 Additional                               Common Stock     Paid-in     Stock     Accumulated     Noncontrolling             Shares     Par     Capital     Payable     Deficit     Interest     Total   Balance, December 31, 2015     6,629,260     $ 6,629     $ 2,721,102     $ -     $ (6,561,234 )   $ -     $ (3,833,503 ) Issuance of common stock for conversion of convertible promissory notes     2,380,740       2,381       2,870,626       -       -       -       2,873,007   Recapitalization of the Company     8,150,210       8,150       (8,150 )     -       -       -       -   Issuance of common stock for conversion of convertible promissory notes     6,106,463       6,107       6,100,356       -       -       -       6,106,463   Issuance of common stock for professional services     70,000       70       69,930       -       -       -       70,000   Warrants granted     -       -       658,566       -               -       658,566   Net loss     -       -       -       -       (4,157,480 )     -       (4,157,480 ) Balance, December 31, 2016     23,336,673     $ 23,337     $ 12,412,430     $ -     $ (10,718,714 )   $ -     $ 1,717,053   Issuance of common stock for professional services     564,579       565       2,204,435       -       -       -       2,205,000   Warrants granted for commissions earned     -       -       832,000       -       -       -       832,000   Warrants granted for services     -       -       349,057       -       -       -       349,057   Common stock owed but not yet issued     -       -       (828 )     324,995       -       -       324,167   Loan discounts     -       -       686,538       -       -       -       686,538   Noncontrolling interest of Oak Therapeutics, Inc.     -       -       -       -       -       46,884       46,884   Net loss     -       -       -       -       (8,149,885 )     -       (8,149,885 ) Balance, December 31, 2017     23,901,252     $ 23,902     $ 16,483,632     $ 324,995     $ (18,868,599 )   $ 46,884     $ (1,989,186 ) The accompanying notes are an integral part of these consolidated financial statementsstatements.     F-5   Table of Contents    CURE Pharmaceutical Holding Corp CURE PHARMACEUTICAL HOLDING CORP AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS       For the Year Ended       December 31, 2018     December 31, 2017                 CASH FLOWS FROM OPERATING ACTIVITIES             Net loss   $ (10,430,873 )   $ (8,149,885 ) Adjustment to reconcile net loss to net cash used in operating activities:                 Stock based compensation - services     45,614       2,311,805   Stock based compensation - prepaid     1,570,086       -   Stock issued for amending convertible promissory notes     502,500       -   Depreciation and amortization     149,803       164,596   Amortization of loan discounts     2,104,614       953,179   Bad debt expense     7,500       -   Inventory reserve for obsolesce     5,633       -   Gain on settlement of accounts payable     (9,750 )     -   Gain on license fee     (560,000 )     -   Loss on joint venture     13,612       -   Change of fair value in derivative liabilities     229,291       (742,109 ) Initial debt discount     -       (2,475 ) Fair value of vested stock options     843,281       -   Loss on disposal of PP&E     -       12,351   Amortization of warrants granted for discount of convertible notes     -       535,195   Warrants granted for commission expense     662,632       832,000                     Change in other assets and liabilities:                 Accounts receivable     (105,935 )     2,685   Inventory     1,587       36,289   Prepaid expenses and other assets     84,843       (104,091 ) Other assets     34,106       38,282   Accounts payable     338,295       279,594   Accrued expenses     392,152       102,882   Deferred revenue     21,813       187,844   Cash used in operating activities     (4,099,196 )     (3,555,668 )                   Cash flows from investing activities                 Cash from acquisition of company     -       65,702   Purchase in intangible assets     (74,537 )     (49,480 ) Payment to joint venture investment     -       (5,000 ) Acquisition of property and equipment, net     (63,254 )     (100,142 ) Cash used in investing activities     (137,791 )     (88,920 )                   Cash flows from financing activities                 Proceeds from convertible notes payable     4,175,000       2,855,549   Proceeds from common stock issuance     500,000       -   Proceeds from notes payable     250,000       -   Proceeds from loans payable     105,125       -   Repayment of convertible notes payable     (250,000 )     -   Repayment of notes payable     (100,000 )     -   Repayment of loans payable     (50,425 )     (199,401 ) Capital lease payments     -       (9,453 ) Cash provided by financing activities     4,629,700       2,646,695   Net increase (decrease) in cash and cash equivalents     392,713       (997,893 ) Cash and cash equivalents, beginning of period     108,249       1,106,142   Cash and cash equivalents, end of period   $ 500,962     $ 108,249                     Supplemental cash flow information                 Cash paid for interest and income taxes:                 Interest   $ 69,628     $ 36,249   Income taxes   $ -     $ -   Non-cash financing activities:                 Common stock related to prepaid expense   $ 935,665     $ 258,918   Loan discount relating to note payable   $ -     $ 10,000   Loan discount related to convertible promissory notes   $ -     $ 832,846   Liabilities assumed from acquisition   $ -     $ 1,791   Warrants granted for discount on convertible promissory notes   $ 1,677,072     $ -   Common stock to be issued for patents   $ 280,100     $ -   Accrued interest converted to convertible note   $ 10,000     $ -   Common stock payable for note conversion   $ 263,397     $ -   Common issued for settlement of accounts payable   $ 108,888     $ -   Consolidated Statements of Cash Flows     For the Year Ended     For the Year Ended       December 31, 2017     December 31, 2016                 Cash flows from operating activities             Net loss   $ (8,149,885 )   $ (4,157,480 ) Adjustment to reconcile net loss to net cash used in operating activities:                 Common stock issued for services     -       70,000   Stock based compensation – prepaid expenses     2,311,805       607,906   Depreciation and amortization     164,596       172,608   Amortization of loan discounts     953,179       -   Bad debt expense     -       36,238   Change in derivative liability     (742,109 )     -   Loss from joint venture     (2,475 )     (4,334 ) Noncontrolling interest     (13,810 )     -   Write off of intangible assets     -       58,522   Loss on disposal of PP&E     12,351       3,323   Amortization of warrants granted for discount of convertible notes     535,195       -   Warrants granted for commission expense     832,000       -   Change in other assets and liabilities:                 Restricted cash     -       49,980   Accounts receivable     2,685       (5,142 ) Inventory     36,289       110,180   Prepaid expenses and other assets     (104,091 )     (185,757 ) Other assets     38,282       50,996   Accounts payable     279,594       (298,204 ) Accrued expenses     102,882       16,635   Deferred revenue     187,844       (41,901 ) Net cash used in operating activities     (3,555,668 )     (3,516,430 )                   Cash flows from investing activities                 Cash from acquisition of company     65,702       -   Advance of note receivable     -       (18,290 ) Purchase in intangible assets     (49,480 )     (45,930 ) Payment to investment     (5,000 )     (20,421 ) Acquisition of property and equipment, net     (100,142 )     (122,126 ) Net cash used in investing activities     (88,920 )     (206,767 )                   Cash flows from financing activities                 Proceeds from loan     2,855,549       5,855,575   Loan repayments     (199,401 )     (1,028,226 ) Capital lease payments     (9,453 )     (11,362 ) Net cash provided by financing activities     2,646,695       4,815,987                     Net increase (decrease) in cash and cash equivalents     (997,893 )     1,092,790   Cash and cash equivalents, beginning of period     1,106,142       13,352   Cash and cash equivalents, end of period   $ 108,249     $ 1,106,142                     Supplemental cash flow information                                   Cash paid for interest and income taxes:                 Interest   $ 36,249     $ 93,001   Income taxes   $ -     $ -                     Non-cash financing activities:                 Common stock related to prepaid expenses   $ 258,918     $ -   Loan discount related to convertible promissory notes   $ 832,846     $ -   Liabilities assumed from acquisition   $ 1,791     $ -   Convertible promissory notes and accrued interest converted to common stock   $ -     $ 8,979,470   Warrants granted as payment for accounts payable   $ -     $ 50,660   The accompanying notes are an integral part of these consolidated financial statementsstatements.     F-6   Table of Contents   CURE PHARMACEUTICALPHARMACEUTICALS HOLDING CORP CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE FISCAL YEARS ENDED DECEMBER 31, 2018 AND 2017   NOTE 1 – NATURE OFORGANIZATION AND BUSINESS OPERATIONS Business Operations   CURE Pharmaceutical Holding CorpCorp., its wholly-owned subsidiary, CURE Pharmaceutical Corporation (“CURE Pharmaceutical”) and its 63% majority owned subsidiary Oak Therapeutics, Inc. (“Oak”) (collectively (the “Company”“Company,” “we,” “our,” “us,” or “CURE”), is an 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 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). We currently have two commercial products and several development programs underway: CURE 3068 (CUREfilm Sleep – Commercially Launched) 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. CURE 5079 (CUREfilm Sleep – Commercially Launched) 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. CURE 5003 (CUREfilm Blue) 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. CURE 5067 (CUREfilm D) 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. The product is currently in the optimization development stage. We are seeking distributors in other territories. CURE 5200 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. F-7 Table of Contents CURE 5209 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. CURE 5210 (CUREfilm Beta-Caryophyllene) 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. Background CURE, formally 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 shall bewas the surviving entity. The transaction iswas accounted for using the reverse acquisition method of accounting. As a result of the recapitalization and change in control, CURE Pharmaceutical iswas the acquiring entity in accordance with ASC 805, Business Combinations. CURE Pharmaceutical Holding Corp is a specialty pharmaceutical and bioscience company with a focus in drug delivery technologies. CURE leverages novel drug delivery technologies to develop and commercialize new applications of proven therapeutics through Oral Thin Film (“OTF”) via our proprietary patented CUREFilm™ Technology as well as through transdermal applications. Our micro encapsulation of drug actives in our CUREFilm™ Technology allows for a higher volume of an active and if required, multiple actives to be produced on a single oral thin film strip. The Company is focused on partnering with pharmaceutical and biotech companies seeking to deliver drug actives utilizing and benefitting from our proprietary OTF and transdermal applications and when preferable to take our own products from clinical process to commercialization. We are focused on both the human and veterinary prescription, OTC and nutraceutical markets. CURE represents the complete solution for OTF drug delivery therapeutics from inception to finished product utilizing our CGMP/FDA registered manufacturing facility and processes. In July 2017, the Company, Therapix Biosciences Ltd. (“Therapix”), a specialty clinical-stage pharmaceutical company dedicated to the development of cannabinoid-based drugs headquartered in Israel, and Assuta Medical Centers, Ltd., a medical services center located in Israel, entered into a nonbinding memorandum of understanding to collaborate to advance, research, develop and commercialize potential therapeutic products in the fields of personalized medicine and cannabinoids. On October 27, 2017, the Company entered into a development agreement with Therapix where the Company will formulate and develop pharmaceutical products using Therapix’s proprietary compounds while utilizing the Company’s proprietary OTF technology.   Consistent with our mission of improving the lives of all people in need, regardless of geography or economic status, we have made our technology available to a private company, Oak Therapeutics (“Oak”), that is developing novel drug formulations for patients in developing nations (“Territory”). On November 10, 2017, we received 269,000 shares of Oak as consideration for an exclusive license to our patents 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 own approximately 63% of Oak’s outstanding shares and have consolidated Oak’s financial statements as of the fourth quarter 2017. Oak has completed a Phase I Small Business Innovative Research Contract (“SBIR”) from the National Institutes of Health to develop a formulation for 300mg of Isoniazid in a rapidly dissolving film as an anti-tuberculosis treatment option. Oak is currently in the application process for Phase II of the SBIR program to continue its research and development and focus on manufacturing scale up, clinical trials and commercialization.   NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying 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.   F-7F-8   Table of Contents   NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of consolidation and basis of presentationConsolidation   The 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.   Going Concern and Management’s Liquidity Plans The accompanying consolidated financial statements have been prepared on the basis that we will continue as a going concern, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business. At December 31, 2018, we had a significant accumulated deficit of approximately $29 million and a negative working capital of approximately $7 million. Our operating activities consume the majority of our cash resources. We anticipate that we will continue to 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, at least into the near future. We have previously funded, and plan to continue funding, 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 lesser extent, equipment financing facilities and secured loans. However, we cannot be certain that we will be able to obtain such funds required for our operations at terms acceptable to 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 $8,000,000 to $10,000,000 in capital over the next 12 months 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 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 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. The accompanying consolidated financial statements 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 be unable to continue as a going concern. Reclassifications Certain reclassifications have been made to prior year’s consolidated financial statements to enhance comparability with the current year’s consolidated financial statements. Use of Estimates   The preparation of the accompanying consolidated financial statements in conformity with U.S. 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 and the reported amounts of revenue and expenses during the reportingreported period. Significant areas requiring the use of management estimates include, but are not limited to, the allowance for doubtful accounts, valuation of intangible assets and the assumptions used to calculate derivative liabilities. Actual results could differ materially from those estimates. At December 31, 2017 and 2016 included in thesesuch estimates areunder different assumptions about collection of accounts receivable, and useful life of fixed and intangible assets, tax valuation analysis, and warrant fair values.or circumstances. F-9 Table of Contents   Cash and Cash Equivalents   The Company considers all cash on hand and in banks, including accounts in book overdraft positions, certificates of deposit and other highly-liquidhighly liquid investments with maturities of three months or less when purchased,at the time of purchase to be cash and cash equivalents. As of December 31, 20172018, and 20162017, the Company had no cash equivalents. At December 31, 20172018 and 2016,2017, 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. At December 31, 2018 and 2017, the Company had $245,988 and $0 in excess of the federal insurance limit, respectively.   Investment in Associates   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 have joint control over those policies.   The results of assets and liabilities of associates are incorporated in the 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 CURECure 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 December 31, 2017,2018, the Company has only contributed $5,000 to the Joint Venture. F-8 Table of Contents The Company is looking to dissolve this Joint Venture due to Pace’s insolvency and we are no longer looking to develop these Products.   On June 30, 2015, our subsidiary, Oak Therapeutics, Inc. (“Oak”), issued 25,000 shares of its common stock in exchange for $10,000 and 181,251 common stock shares of Pace Wellness, Inc. (“Pace”) at a value of $1.00 per share, which represents 1.8% interest in Pace. Oak has fully written off the investment as of the acquisition date, November 10, 2017. Acquisitions   On November 10, 2017, we received 269,000 shares of Oak as consideration for an exclusive license to our patents rights in developing nations, along with a royalty-free non-exclusive license to any improvements made by Oak. 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. The following summarizes the consideration paid for Oak and the amounts of the assets and liabilities assumed recognized at the acquisition date, as well as the fair value at the acquisition date of the noncontrolling interest in Oak.       As of November 10, 2017   Consideration       License of CURE’s intellectual property   $ 139,000   Fair value of total consideration transferred   $ 139,000     F-10 Table of Contents Recognized amounts of identifiable assets acquired and liabilities assumed       Cash   $ 65,702   Intangible asset     139,000   Accrued expenses     (791 ) Loans from shareholder     (4,217 ) Total identifiable net assets     199,694   Noncontrolling interest in Oak     (60,694 ) CURE’s interest in Oak   $ 139,000     Unaudited pro forma results of operations for the year ended December 31, 2017, as if the Company and Oak 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.       December 31, 2017   Net revenues   $ 363,434   Net loss     (8,099,441 )           Net loss per share, basic and diluted   $ (0.34 )   F-9 Table of Contents Property and Equipment   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:   Manufacturing equipment 5-7 Yearsyears   Computer and other equipment 3-7 Yearsyears   Leasehold Improvements Lesser of useful life or the term of the lease   Revenue Recognition The Company recognizes revenue in accordance with the FASB ASC 605, Revenue Recognition. ASC 605 requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred and/or service has been performed; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. The Company believes that these criteria are satisfied upon shipment from our facility. Freight billed to customers is presented as revenues, and the related freight costs are presented as cost of goods sold. Deferred revenue is recognized when earned and all significant obligations have been satisfied. Accounts receivableReceivable   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 December 31, 2018 and 2017, management determined that an allowance was necessary which amounted to approximately $7,500 and $0, respectively.   Inventory   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.   F-11 Table of Contents Advertising Expense   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 advertising costs of $13,062$0 and $12,000$13,062 for the years ended December 31, 20172018 and 2016,2017, respectively.   Research and Development   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 $1,427,341$1,408,595 and $753,369$1,427,341 for the year ended December 31, 20172018 and 2016,2017, respectively.   Income Taxes   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.   Fair Value of Financial Instruments The Company follows FASB ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”), for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements and establishes a framework for measuring fair value and expands disclosure about 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: 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. 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 for these instruments as management believes that such notes constitute substantially all of the 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)   F-10F-12   Table of Contents   Impairment of Long-Lived Assets We review all of our long-lived assets for impairment indicators throughout the year and perform detailed testing whenever impairment indicators are present. In addition, we perform detailed impairment testing for indefinite-lived intangible assets, at least annually, at December 31. When necessary, we record charges for impairments. Specifically: · 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. Management determined that no impairment indicators were present and that no impairment charges were necessary as of December 31, 2018 or 2017. Revenue Recognition 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 prior and has been applied prospectively in the Company’s financial statements beginning January 1, 2018. Revenues under Topic 606 are required to be recognized either at a “point in time” or “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. To achieve the core principle of Topic 606, we perform the following steps: 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. 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 and development income include services for the development of OTF products utilizing our CureFilm™ Technology. Most of our development contracts have 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 consolidated balance sheets. At December 31, 2018 and 2017 we had deferred revenues of $383,275 and $361,462, respectively. F-13 Table of Contents Cost of Revenues Cost of revenues primarily consists of labor and manufacturing costs for our products. Stock-Based Compensation   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.   Convertible Debentures   Beneficial Conversion Feature   If the conversion features of conventional convertible debt providesprovide 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“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.   Derivative Liabilities   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 December 31, 20172018 and 2016,December 31, 2017, 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.(See Note 10).   Basic and diluted loss per shareNon-controlling Interests in Consolidated Financial Statements   Basic loss per shareThe Company follows ASC 810-10-65, “Non-controlling Interests in Consolidated Financial Statements.” This statement clarifies that a non-controlling (minority) interest in a subsidiary is computed by dividingan ownership interest in the entity that should be reported as equity in the consolidated financial statements. It also requires consolidated net lossincome to common stockholders forinclude the period byamounts attributable to both the weighted average numberparent and non-controlling interest, with disclosure on the face of common shares outstanding during the period. Diluted loss per share is computed by dividingconsolidated income statement of the net loss foramounts attributed to the period byparent and to the weighted average numbernon-controlling interest. In accordance with ASC 810-10-45-21, the losses attributable to the parent and the non-controlling interest in subsidiary may exceed their interests in the subsidiary’s equity. The excess and any further losses attributable to the parent and the non-controlling interest shall be attributed to those interests even if that attribution results in a deficit non-controlling interest balance. As of commonDecember 31, 2018, and dilutive common equivalent shares outstanding during2017, the period. Common equivalent shares, which consistCompany reflected a non-controlling interest of stock options$16,412 and warrants, have been excluded from$46,884, respectively, in connection with our majority-owned subsidiary, Oak Therapeutics Inc. as reflected in the diluted loss per share calculation because their effect is anti-dilutive.accompanying consolidated balance sheets. December 31, 2017 Number of common stock shares issued and outstanding 23,901,252 Number of common stock shares from conversion of convertible notes 307,904 Number of common stock shares from exercise of warrants 360,000 Total fully-diluted common stock shares 24,569,156     F-11F-14   Table of Contents   Going ConcernNet Loss per Common Share Basic net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding during the 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 adjusted for the dilutive effect of the change in fair value liability for price adjustable warrants, if applicable.   The Company’s financial statements are prepared using U.S. GAAP applicable to a going concern, which contemplates the realizationfollowing number of assets and liquidation of liabilities in the normal course of business. The Company had an accumulated deficit at December 31, 2017 of $18,868,599. The Company had a working deficit of $2,784,574 as of December 31, 2017. These factors raise substantial doubt about the Company’s ability to continue as a going concern for one yearshares have been excluded 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. We expect that we will continue to generate losses from operations throughout 2018.diluted net income (loss) since such inclusion would be anti-dilutive:   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.     Year ended December 31,       2018     2017                 Restricted stock and stock options outstanding     97,742       -   Warrants     2,879,695       360,000   Shares to be issued upon conversion of convertible payable     236,475       307,904                     Total     3,213,912       667,904     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 $8,000,000 to $10,000,000 in capital over the next 12 months 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 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 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. Fair Value MeasurementsRecent Accounting Pronouncements The Company adopted the provisions of ASC Topic 820, “Fair Value Measurements and Disclosures”, which defines fair value as used in numerous accounting pronouncements, establishes a framework for measuring fair value and expands disclosure of fair value measurements. The estimated fair value of certain financial instruments, including cash and cash equivalents are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments. 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 assets or liabilities valued at fair value on a recurring basis for the years ended December 31, 2017 and 2016. F-12 Table of Contents Long-lived Assets 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. 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. As of December 31, 2017 and 2016, our qualitative analysis of long-lived assets did not indicate any impairment. Concentrations of Credit Risk In the normal course of business, the Company provided credit terms to its customers; however, collateral was not required. Accordingly, the Company performed credit evaluations of its customers and maintained allowances for possible losses which, when realized, were within the range of management’s expectations. From time to time, a higher concentration of credit risk existed on outstanding accounts receivable for a select number of customers due to individual buying patterns. Cost of Sales Cost of sales includes the purchase cost of products sold and all costs associated with getting the products to our customers, including transportation costs. Shipping Costs Shipping and handling costs billed to customers are recorded in sales. Shipping costs incurred by the company are recorded in selling, general and administrative expenses. Related parties Parties are considered to be related to the Company if the parties that, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. All transactions with related parties shall be recorded at fair value of the goods or services exchanged. Recently Issued Standards   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 financial statements with more decision-useful information. This ASU iswas effective for the Company in the first quarter of 2018. Early adoption iswas not permitted except for limited provisions. The Company does not expect the adoption of this amendment toASU 2016-01 did not have a material effectan impact on its financial condition and results of operations. In January 2016, the FASB issued an accounting standard update which requires, among other things, that entities measure equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) at fair value, with changes in fair value recognized in earnings. Under the standard, entities will no longer be able to recognize unrealized holding gains and losses on equity securities classified today as available for sale as a component of other comprehensive income. For equity investments without readily determinable fair values the cost method of accounting is also eliminated, however subject to certain exceptions, entities will be able to elect to record equity investments without readily determinable fair values at cost, less impairment and plus or minus adjustments for observable price changes, with all such changes recognized in earnings. This new standard does not change the guidance for classifying and measuring investments in debt securities and loans. The standard is effective for us on July 1, 2018 (the first quarter of our 2019 fiscal year). The Company is currently evaluating the anticipated impact of this standard on ourCompany’s consolidated financial statements. F-13 Table of Contents   In February 2016, the FASB issued ASU 2016-02—Leases (Topic 842), requiring lessees to recognize a right-of-use asset2016-02, "Leases" ("ASU 2016-02"). This guidance, as amended by subsequent ASU's on the topic, improves transparency and acomparability among companies by recognizing right of use (ROU) assets and lease liabilityliabilities 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. Theand by disclosing key information about leasing arrangements. ASU No. 2016-02 is effective date of the new standard for public companies isbusiness entities for fiscal yearsannual 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 interim periods within those fiscal years. Early adoption is permitted. 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 mustprovides 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 adopted using a modified retrospective transitionreassessed. The new standard also provides practical expedients for ongoing accounting and requires applicationwe do not expect to elect any of these practical expedients on adoption. We continue to assess the impact of the new guidance atstandard and believe it will not have a material effect on the beginning of the earliest comparative period presented. The Company is evaluating the effect that the updated standard will have on its consolidated financial statements and related disclosures. In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) that clarifies how to apply revenue recognition guidance related to whether an entity is a principal or an agent. ASU 2016-08 clarifies that the analysis must focus on whether the entity has control of the goods or services before they are transferred to the customer and provides additional guidance about how to apply the control principle when services are provided and when goods or services are combined with other goods or services. The effective date for ASU 2016-08 is the same as the effective date of ASU 2014-09 as amended by ASU 2015-14, for annual reporting periods beginning after December 15, 2017, including interim periods within those years. The Company does not anticipate a significant impact upon adoption.balance sheet.   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 April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, which provides further guidance on identifying performance obligations and improves the operability and understandability of licensing implementation guidance. The effective date for ASU 2016-10 is the same as the effective date of ASU 2014-09 as amended by ASU 2015-14, for annual reporting periods beginning after December 15, 2017, including interim periods within those years. The Company does not anticipate a significant impact upon adoption. In May 2016, the FASB issued ASU No. 2016-12, “Revenue“Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients”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 Company doesadoption of ASU 2016-12 did not anticipate a significanthave an impact upon adoption.on the Company’s consolidated financial statements. F-15 Table of Contents   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 Company doesdid not anticipate a significantearly adopt. The adoption of ASU 2016-15 did not have an impact upon adoption. F-14 Table of Contents on the Company’s consolidated financial statements.   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 bebecame effective for the Company on January 1, 2018; however, early adoption is permitted with prospective2018. There are various other updates recently issued, most of which represented technical corrections to the accounting literature or application to any business development transaction.specific industries and did not have a material impact on the Company’s financial position, results of operations or cash flows.   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 arebecame effective for the Company in the first quarter of 2018, with early adoption permitted.2018. The adoption of ASU 2017-09 isdid not expectedhave an impact on the Company’s 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 anany 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.   NOTE 3 – ACCOUNTS RECEIVABLE Accounts receivable, net of allowances for sales returns and doubtful accounts, consisted of the following:     December 31, 2017     December 31, 2016                 Trade accounts receivable   $ 4,364     $ 7,049   Less allowances     -       -   Total accounts receivable, net   $ 4,364     $ 7,049   NOTE 4 – PREPAID EXPENSES AND OTHER ASSETS   As of December 31, 20172018, and December 31, 2016,2017, prepaid expenses and other assets consisted of the following:       December 31, 2017     December 31, 2016                 Prepaid consulting services – stock-based compensation   $ 258,918     $ 150,168   Prepaid consulting services   116,167     -   Prepaid clinical study     110,538       -   Prepaid insurance     60,180       42,785   Other Receivables     5,858       10,948   Prepaid inventory     12,182       13,178   Prepaid expenses     23,045       6,800   Prepaid expenses and other assets   $ 586,888     $ 223,879   F-15 Table of Contents     December 31, 2018     December 31, 2017                 Prepaid consulting services – stock-based compensation   $ 935,883     $ 258,918   Prepaid consulting services     82,167       116,167   Prepaid clinical study     -       110,538   Prepaid insurance     120,877       60,180   Other Receivables     2,666       5,858   Prepaid inventory     -       12,182   Prepaid expenses     37,200       23,045   Prepaid expenses and other assets     1,178,793       586,888   Current portion of prepaid expenses and other assets     (946,386 )     -   Prepaid expenses and other assets less current portion   $ 232,407     $ 586,888     NOTE 5 -4 – INVENTORY   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 net realizable value. F-16 Table of Contents   The carrying value of inventory consisted of the following:     December 31, 2017   December 31, 2016     December 31, 2018     December 31, 2017                       Raw Materials   $ 67,664   $ 68,047     $ 25,297   $ 67,664   Packaging Components   17,546   84,927     7,687   17,546   Work-In-Process   829   17,406     8,162   829   Finished Goods   -   -     -   -       86,039       170,380       41,146       86,039   Reserve for Obsolescence     (41,043 )     (89,095 )     (3,370 )     (41,043 ) Total inventory   $ 44,996     $ 81,285     $ 37,776     $ 44,996     NOTE 65 – PROPERTY AND EQUIPMENT AND INTANGIBLE ASSETS   As of December 31, 20172018, and 2016,2017, property and equipment and intangible assets consisted of the following:     December 31, 2017     December 31, 2016     December 31, 2018     December 31, 2017                       Manufacturing equipment   $ 797,513   $ 769,074     $ 841,098   $ 797,513   Computer and other equipment   169,499   116,747     183,346   169,499   Leasehold improvements     42,666       36,066       48,488       42,666   Less accumulated depreciation     (672,317 )     (551,239 )     (773,022 )     (672,317 ) Property and Equipment, net   $ 337,361     $ 370,648     $ 299,910     $ 337,361     Depreciation expense forFor the years ended December 31, 2018 and 2017, depreciation expense amounted to $100,705 and 2016 was $121,078, and $129,985 respectively, which includes depreciation of $6,024 and $8,640 for capitalized leased assets for each of the years ended December 31, 2017 and 2016.ended. Accumulated depreciation for property held under capital leases were $43,201 and $37,177 and $28,537 asfor the years ended December 31, 20172018 and 2016,2017, respectively.       December 31, 2017     December 31, 2016                 Intellectual Property   $ 814,582     $ 814,582   Patents     224,527       175,047   Less accumulated amortization     (138,637 )     (95,119 ) Intangible assets, net   $ 900,472     $ 894,510   NOTE 6 - INTANGIBLE ASSETS   The Company incurred $49,480$74,537 and $45,930$49,480 of legal patent costs that were capitalized during the yearsyear ended December 31, 2018 and 2017, and 2016, respectively. TheIn addition, the Company wrote off $58,522purchased $280,100 of intangiblespatents through the issuance of 200,000 common stock shares of the Company during the year ended December 31, 2016.2018 and no shares were issued for the purchase of patents for the year ended December 31, 2017. F-17 Table of Contents Intangible Asset Summary The following table summarizes the estimated fair values as of December 31, 2018 of the identifiable intangible assets acquired, their useful life, and method of amortization:     Estimated Fair Value     Remaining Estimated Useful Life (Years)     Annual Amortization Expense   Intellectual Property   $ 814,582       14.41     $ 40,824   Patents     579,164       17.96       8,274   Total   $ 1,393,746             $ 49,098   Less: accumulated amortization     (187,735 )                 Intellectual property and patents, net     1,206,011                   Less: pending patents not subject to amortization     (293,237 )                 Net intangible assets subject to amortization   $ 912,774                   The net intangible asset was $1,206,011, net of accumulated amortization of $187,735, as of December 31, 2018. Amortization expense was $49,098 and $43,518 for the years ended December 31, 20172018 and 2016 was $43,518 and $42,663,2017, respectively.   The estimated aggregate amortization expense over each of the next five years is as follows:   2018   $ 43,518   2019   43,518     $ 49,098   2020   43,518     49,098   2021   43,518     49,098   2022   43,518     49,098   2023   49,098   Thereafter     513,785       667,286   Total Amortization   $ 731,375     $ 912,774   NOTE 7 - RELATED PARTY TRANSACTIONS Due to Related Party The Company and other related entities have had a commonality of ownership and/or management control, and as a result, the reported operating results and /or financial position of the Company could significantly differ from what would have been obtained if such entities were autonomous. On November 1, 2018, the Company entered into a financial services agreement with a related party, Eventus Consulting, P.C. (“Eventus”), of which Mr. Alex Katz, the Company’s Chief Financial Officer, is a Director. Pursuant to the agreement Eventus will provide certain accounting, financial and strategic consulting services to the Company for a period of one year, unless otherwise terminated. The Company shall pay Eventus $22,500 per month for all work performed. Resignation and Appointment of Officer and Directors On January 22, 2018, the Company entered into a Separation Agreement with Wayne Nasby, our Chief Operating Officer. In connection with the Separation Agreement Mr. Nasby will receive: (i) six months base salary, less standard payroll deductions and withholdings, in six monthly installments beginning January 31, 2018, and (ii) health insurance COBRA premiums for six months following, totaling approximately $35,000. As of December 31, 2018, the Company has paid off the amounts owed to Mr. Nasby.     F-16F-18   Table of Contents NOTE 7 – NOTE RECEIVABLE Note receivable consists of the following at December 31, 2017 and 2016:     2017     2016                 The note receivable is a promissory note with a company bearing an interest rate of 8% per annum, principal and accrued and unpaid interest is payable on demand of the Company any time before November 11, 2016 or by November 11, 2016 if no demand is made prior to such date. This note has been written off in 2016.   $ -     $ 17,948   The note receivable is a promissory note with a company bearing an interest rate of 8% per annum, principal and accrued and unpaid interest is payable on demand of the Company any time before March 29, 2017 or by March 29, 2017 if no demand is made prior to such date. This note has been written off in 2016.     -       18,290         -       36,238   Less allowances     -       (36,238 ) Current portion of note receivable     -       -   Note receivable, less current portion   $ -     $ -     NOTE 8 – LOAN PAYABLE   Loan payable consists of the following at December 31, 20172018 and 2016:2017:     2017     2016     December 31, 2018     December 31, 2017   Note to a company due August 29, 2019, including interest at 6% per annum, unsecured, interest due monthly   $ 105,125     $ -   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   $ 50,425   $ -     -     50,425   Note to a company due September 29, 2017 including interest at 13,25% per annum; unsecured; interest due monthly   -   33,277     $ 50,425     $ 33,277   Current portion of loan payable     (105,125 )     (50,425 ) Loan payable, less current portion   $ -     $ -     Interest expense for the yearyears ended December 31, 2018 and 2017 was $1,483 and 2016 was $2,011, and $930, respectively.   NOTE 9 –- NOTES PAYABLE   Notes payable consist of the following at December 31, 20172018 and 2016:2017:     December 31, 2017     December 31, 2016     December 31, 2018     December 31, 2017                       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   $ -   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. On February 14, 2019, the Company entered into a Debt Conversion Agreement where $250,000 of $650,000 of the outstanding balance was converted into 135,135 common stock shares of the Company   $ 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   -     -   100,000   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 February 28, 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. On January 31, 2019, we entered into an amendment to extend the maturity date to April 1, 2019.   150,000   -   Note to a company due April 30 2019, 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, then the Company shall issue 25,000 common stock shares to the noteholder. On January 1, 2019, we entered into an Amendment to extend the maturity date to June 30, 2019.   100,000   -               950,000   800,000     $ 800,000   $ 50,000             Unamortized discount     (30,000 )     -   Current portion of loan payable     (920,000 )     (800,000 ) Loan payable, less current portion   $ -     $ -     During the yearyears ended December 31, 20172018 and 2016,2017, the Company incurred $10,000$552,500 and $0,$10,000, respectively, amortization of discount. Interest expense for the yearyears ended December 31, 2018 and 2017 was $69,726 and 2016 was $30,226, and $0, respectively.     F-17F-19   Table of Contents   NOTE 10 – CONVERTIBLE PROMISSORY NOTES   Convertible promissory notes consist of the following at December 31, 20172018 and 2016:2017:       December 31, 2017     December 31, 2016                 Convertible promissory notes totaling $1,900,000 due between November 11, 2017 and May 8, 2018, 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 November 11, 2017 and May 8, 2018; convertible promissory notes totaling $1,300,000 were amended to extend the maturity date to March 31, 2018   $ 1,900,000     $ -                           1,900,000       -   Unamortized discount     (348,512 )     -   Convertible promissory notes   $ 1,551,488     $ -       December 31, 2018     December 31, 2017                 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.   $ 1,400,000     $ 1,900,000   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     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       -   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 $575,000 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       -         5,575,000       1,900,000                     Unamortized discount     (332,569 )     (348,512 ) Current portion of convertible promissory notes     5,242,431       1,551,488   Convertible promissory notes, less current portion   $ -     $ -     During the yearyears ended December 31, 20172018 and 2016,2017, the Company incurred $1,170,873$2,057,950 and $0,$1,170,873, respectively, amortization of discount. Interest expense for the yearyears ended December 31, 2018 and 2017 was $354,192 and 2016 was $84,161, and $0, respectively. F-20 Table of Contents   NOTE 11 – DERIVATIVE LIABILITY 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 December 31, 2018 for assets and liabilities measured at fair value on a recurring basis:     Total     Level 1     Level 2     Level 3   Fair value of Derivative Liability   $ 617,628     $ -     $ -     $ 617,628     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:       Level I     Level II     Level III     Total                                     Derivative liability   $ —     $ —     $ (90,738 )   $ (90,738 ) No financial assets or liabilities were measured on a recurring basis as of December 31, 2016.     Total     Level 1     Level 2     Level 3   Fair value of Derivative Liability   $ 90,738     $ -     $ -     $ 90,738     The Company has issued convertible promissory notes during 2018 and 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 20172018 were as follows:   F-18 Table of Contents December 31, 2017 Significant assumptions (weighted-average):assumptions:       Risk-free interest rate at grant date   2.51% - 2.94 2.20 % Expected stock price volatility   90.76% - 156.15 75.43 % Expected dividend payout     -   Expected option life (in years)     1   Expected forfeiture rate     0 %   The following istable presents a reconciliation of the derivative liability for 2017:measured at fair value on a recurring basis from December 31, 2016 to December 31, 2018:       December 31, 2017   Value at December 31, 2016   $ -   Initial value at the debt issuance     832,846   Decrease in value     (742,108 ) Value at December 31, 2017   $ 90,738       Fair value of derivative liabilities   Balance at December 31, 2016   $ -   Initial fair value of derivative liability recorded as debt discount     832,847   Gain on change in fair value included in earnings     (742,109 ) 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   F-21 Table of Contents   NOTE 12 – WARRANT AGREEMENTS   On January 3, 2017,24, 2018, the Company issued 1,300,000an additional 55,000 warrants at a fair market value of $50,094 and with an exercise price of $1.00 per share in connection with commissions earnedissuance of $1,100,000 convertible promissory notes in relation2017 and amended on January 24, 2018 to extend the Company’s Private Label Exclusive Distributionmaturity date to March 31, 2018. 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 License agreement with Red Barn Pet Products, LLC.concluded that the amendments of the convertible promissory notes were debt modifications. The Company recorded the fair market value of the 55,000 warrants issued as a debt discount that has been fully amortized as of December 31, 2018.   From May 11, 2017 to December 31, 2017,On April 15, 2018, the Company issued 360,000an additional 275,000 warrants at a fair market value of $87,828 and with an exercise price of $1.00 per share in connection with issuance 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 convertible promissory notes. 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 275,000 warrants issued as a debt discount that has been fully amortized as of December 31, 2018. On May 1, 2018, the Company issued 110,000 warrants at a fair market value of $27,479 and with an exercise price of $1.00 per share in connection with commission earned for the issuance of convertible promissory notes by the Company. On July 7, 2018, the Company issued 148,644 warrants at a fair market value of $48,249 and with an exercise price of $1.00 per share in connection with the issuanceconversion of $1,800,000a convertible promissory notes. The warrants have an exercise pricenote issued by the Company. As per the warrant agreement dated May 15, 2018, the Company shall issue fifty percent (50%) of the lowerCompany’s common stock shares issued upon conversion of $7.00 per share or the price per share inconvertible promissory note. The convertible promissory note is to be converted into 297,288 common stock shares of the Company’s latest debt or equity financing greater than $3,000,000Company and as a termresult, 148,644 warrants were issued. As of 3 years.our filing of our Form 10K for the year ended December 31, 2018. The company has not yet issued these common stock shares and has recorded a stock payable.   Warrants that vest at the end of a one-year period are amortized over the vesting period using the straight-line method.   The Company’s warrant activity was as follows:     Warrants     Weighted Average Exercise Price     Weighted Average Contractual Remaining Life     Warrants     Weighted Average Exercise Price     Weighted Average Contractual Remaining Life   Outstanding, December 31, 2016   4,392,107   1.97   6.17   Outstanding, December 31, 2017   4,752,107   2.9   4.98   Granted   1,660,000   3.08   2.62     588,644   1.00   2.51   Exercised   (1,300,000 )   (3.94 )   -     -   -   -   Forfeited/Expired     -       -       -       -       -       -   Outstanding, December 31, 2017     4,752,107       2.90       4.98   Exercisable at December 31, 2017     3,101,026       3.40       3.93   Outstanding, December 31, 2018     5,340,751       2.20       3.80   Exercisable at December 31, 2018     4,316,751       2.25       3.17       F-19F-22   Table of Contents   The change in warrant value for the year ended December 31, 2018 and 2017 was $662,632 and 2016 was $1,181,057, and $607,906, respectively.   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     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   4,752,107   4.98   $ 2.90   3,101,026   $ 3.40     5,340,751       3.80     $ 2.20       4,316,751     $ 2.25     4,752,107   4.98   $ 2.90   3,101,026   $ 3.40     5,340,751       3.80     $ 2.20       4,316,751     $ 2.25     The weighted-average fair value of warrants granted to during the yearyears ended December 31, 20172018 and year ended December 31, 2016,2017, 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:     December 31, 2017     December 31, 2016     December 31, 2018     December 31, 2017   Significant assumptions (weighted-average):                     Risk-free interest rate at grant date   1.92 %   1.83 %   2.51 %   1.92 % Expected stock price volatility   84.43 %   84.42 %   156.15 %   84.43 % Expected dividend payout   -   -     -   -   Expected option life (in years)   3   3     3   3   Expected forfeiture rate   0 %   0 %   0 %   0 %   NOTE 13 – STOCKHOLDERS’ EQUITYSTOCK INCENTIVE PLANS   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. On April 6, 2018, the Company awarded 371,250 Restricted Common Stock (“RCS”), 1,251,700 Non-statutory Stock Options (“NSO”) and 932,750 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 November 27, 2018, the Company awarded 250,000 RCS and 128,600 NSO to employees and consultants at a $1.81 price per share. Vesting period for the awarded RCS and NSO’s range from immediate to quarterly over a 4-year period. For NSO’s awarded, the term to exercise is 10 years. F-23 Table of Contents Authorized Stock Options   The Company has authorized to issue is 75,000,000 common shares with a parCompany’s stock option activity was as follows:     Options     Weighted Average Exercise Price     Weighted Average Contractual Remaining Life   Outstanding, December 31, 2017     -       -       -   Granted     2,313,050       0.79       9.27   Exercised     -       -       -   Forfeited/Expired     -       -       -   Outstanding, December 31, 2018     2,313,050       0.79       9.27   Exercisable at December 31, 2018     847,613       0.81       9.27   Range of Exercise Price   Number of Awards     Weighted Average Remaining Contractual Life (years)     Weighted Average Exercise Price     Number of Warrants Exercisable     Weighted Average Exercise Price   $0.61 - $1.81     2,313,050       9.27     $ 0.79       847,613     $ 0.81         2,313,050       9.27     $ 0.79       847,613     $ 0.81   The aggregate intrinsic value of $0.001 per share.options outstanding and exercisable at December 31, 2018 was $6,334. The aggregate grant date fair value of options granted during the years ended December 31, 2018 and 2017 amounted to $1,541,353 and $0, respectively. Compensation expense related to stock options was $576,306 and $0 for the years ended December 31, 2018 and 2017, respectively.   As of December 31, 2017 and December 31, 2016, there were 23,901,252 and 23,336,673 shares2018, the total unrecognized fair value compensation cost related to unvested stock options was $965,047, which is to be recognized over a remaining weighted average period of the Company’s common stock issued and outstanding, respectively.approximately 9.27years.   The weighted-average fair value of options granted during the years ended December 31, 2018 and 2017, 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:     December 31, 2018     December 31, 2017   Significant assumptions (weighted-average):             Risk-free interest rate at grant date     2.51 %     0 % Expected stock price volatility     156.15 %     0 % Expected dividend payout     -       -   Expected option life (in years)     10       -   Expected forfeiture rate     0 %     0 % F-24 Table of Contents Common ShareRestricted Stock The Company’s restricted stock activity was as follows: Compensation expense related to restricted shares was $269,204 and $0 for the years ended December 31, 2018 and 2017, respectively. Information relating to non-vested restricted award shares is as follows:     Restricted Stock Shares     Weighted Average Grant Date Fair Value   Non-vested, December 31, 2017     -       -   Granted     621,250       1.17   Vested     (303,542 )     0.89   Forfeited/Expired     -       -   Non-vested, December 31, 2018     317,708       1.44   NOTE 14 - STOCKHOLDERS’ EQUITY Stock Issuances   On April 7, 2017,January 24, 2018, the Company issued 14,57950,000 common stock shares at $6.86$1.48 per share for consulting services to be performed over a one yearone-year period. The total value of this issuance was $100,000$74,000 and as of December 31, 2017, $26,5752018, $218 is included in prepaid expenses and other assets.   On April 24, 2017,2, 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 rights to the Assigned Patents. As consideration for the assignment 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 issued on the Effective Date; (b) 10,000 Shares will be issued for each Abandoned Application the prosecution 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 year ended December 31, 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. Total value of these issuances was $97,000. On May 16, 2018, the Company issued 100,00070,150 common stock shares at $7.00$0.65 per share for consulting services performed. The total value of this issuance was $45,614. On May 16, 2018, the Company issued 1,000,000 common stock shares at $0.97 per share for consulting services to be performed over a six month30-month period. The total value of this issuance was $700,000.$970,000 and as of December 31, 2018, $630,664 is included in prepaid expenses and other assets.   On May 18, 2017,July 17, 2018, the Company issued 300,00070,000 common stock shares at $2.10$1.85 per share for consulting services to be performed over a one yearsix-month period. The total value of this issuance was $630,000$129,500. On July 17, 2018, the Company issued 69,444 common stock shares at $0.72 per share for the cancellation of two months’ rent and overages for property tax and general liability insurance. The total value of this issuance was $50,000. On July 17, 2018, the Company issued 250,000 common stock shares at $1.10 per share for strategic marketing and development advisory services to be performed over a six-month period. The total value of this issuance was $275,000. On August 17, 2018, the Company issued a total of 115,000 common stock shares at $1.65 per share for compensation of extending the maturity dates of convertible promissory notes of three note holders. The total value of this issuance was $189,750. 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 115,000 common stock shares issued as a debt discount that has been fully amortized as of December 31, 2018. On September 4, 2018, the Company issued 90,000 common stock shares at $0.71 per share and 90,000 shares at $1.00 per share for media and advertising services to be performed over a six-month period. The total value of these issuances was $153,900. F-25 Table of Contents On September 4, 2018, the Company issued 90,000 common stock shares at $3.24 per share for media and advertising services to be performed over a six-month period. The total value of this issuance was $291,600 and as of December 31, 2017, $39,6992018, $90,333 is included in prepaid expenses and other assets.   On August 21, 2017,3, 2018, the Company issued 100,000entered into a Media Advertising Agreement (“Agreement”). Per the terms of the Agreement, the Company was to issue 30,000 common stock shares at $5.30$1.88 per share for consultingproviding media and advertising services to be performed over a four monthsix-month period. The total value of this issuancethese issuances was $530,000. On October 15, 2017, the Company issued 50,000 common stock shares at $4.90 per share for consulting services to be performed over a one year period. The total value of this issuance was $245,000$56,400 and as of December 31, 2017, $192,6442018, $10,422 is included in prepaid expenses and other assets.   On September 5, 2018, the Company issued an unsecured $150,000 Promissory Note (“Note”) with an individual. As part of the issuance of the Note, the Company is to issue 50,000 common stock shares as an equity kicker at a $2.88 price per share. Total valued of this issuance was $144,000. On October 9, 2018, the United States Patent and Trademark Office (“USPTO”) allowed for an oral thin film patent (U.S. Patent No. 10,092,611), which covers the processing and integration of bioactive cannabinoid molecules into oral thin film dosage forms, such as CUREfilm™. These molecules, such as cannabidiol (CBD), are obtained from the Company’s patented methods (U.S. Patent No. 9,044,390 and 9,186,386) of extraction and purification of cannabis plant material. This patent allowance by the USPTO and per the patent purchase agreement entered on April 2, 2018, the Company will issue 50,000 common stock shares at $2.81 price per share. As of the date of this filing, the Company has not yet issued these shares. Total value of this issuance was $140,500. On October 31, 2018, the Company issued a total of 115,000 common stock shares at $1.95 per share for compensation of extending the maturity dates of convertible promissory notes of three note holders. The total value of this issuance was $224,250. 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 115,000 common stock shares issued as a debt discount that has been fully amortized as of December 31, 2018. On October 31, 2018, the Company issued a total of 30,000 common stock shares at $1.95 per share for compensation of extending the maturity date of a promissory note. The total value of this issuance was $58,500. The Company considered if the amendment of the 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 December 31, 2018. On November 7, 2018, the Company issued 41,482 common stock shares at $2.26 per share for investor relations consulting services to be performed over a six-month period. The total value of this issuance was $93,750 and as of December 31, 2018, $65,781 is included in prepaid expenses and other assets. On November 13, 2018, the Company issued 25,000 common stock shares at $2.36 per share for settlement of $59,000 accounts payable due to a vendor. The total value of this issuance was $49,250. The Company recorded a gain from settlement of $9,750. On November 26, 2018, the Company issued 90,000 common stock shares at $2.09 per share for media and advertising services to be performed over a six-month period. The total value of this issuance was $188,100 and as of December 31, 2018, $116,540 is included in prepaid expenses and other assets. 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 of $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. F-26 Table of Contents On December 31, 2018, the Company issued a total of 20,000 common stock shares at $1.50 per share for compensation of extending the maturity date of a promissory note. The total value of this issuance was $30,000. The Company considered if the amendment of the 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 20,000 common stock shares issued as a debt discount, where $30,000 is recorded as a debt discount as of December 31, 2018. Stock Payable 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-K for the year ended December 31, 2018, the company has not yet issued these common stock shares and has recorded a stock payable. On November 7, 2018, the Company is to issue 13,827 common stock shares at $2.26 per share for investor relations consulting services to be performed over a six-month period. The total value of this issuance was $31,250 and as of December 31, 2018 is included in stock payable. As of December 31, 2018, $21,296 is included in prepaid expense and other assets.   On December 14, 2017, the Company issuedis to issue a $100,000 convertible promissory note to a company due June 14, 2018. In connection with issuance of this convertible promissory note, the Company is to issue 150,000 common stock shares at $2.05 per share per the terms of the convertible promissory note. As of December 31, 2017,2018, the Company has not yet issued these common stock shares and thus the Company recorded a stock payable for $307,500.   NOTE 15 - INTELLECTUAL PROPERTY AND COLLABORATIVE AGREEMENTS On October 15, 2017,September 4, 2018, Cure Pharmaceutical Holding Corp., through its subsidiary, Cure Pharmaceutical Corp. (together, the “Company”) entered into its first multi-year licensing agreement (the “Licensing Agreement”) with Canopy Growth Corporation, a company that engages in the production and sale of medical cannabis (“Canopy”). Under the terms of the Licensing Agreement, Canopy will have an exclusive license to certain of the Company’s intellectual property rights, including the Company’s patented, multi-layer oral thin film (OTF), CUREfilm™ technology for use with cannabis extracts and biosynthetic cannabinoids (“Products”) and the Company’s trademarks in markets around the world where it is legal for Canopy to sell the Products, excluding Asia. The Company will retain the right to manufacture synthetic cannabinoids for pharmaceutical applications. Canopy will manufacture CUREfilms that deliver cannabis extracts, expanding the commercialization and monetization of the CUREfilm technology. The parties will collaborate on new products and uses for the products. Canopy shall pay the Company entered intoapproximately $250,000 for costs associated with a Consulting Agreement (“Agreement”)feasibility study and technology transfer as well as certain milestone payments and royalties on product sales by Canopy with an individual (“Consultant”) to provide business development advisory services. In consideration for the Consultant’s services provided, the Company shall grant 100,000 common stock shares, where 50,000 common stock shares shall be issued on October 15, 2017 and the remaining 50,000 common stock shares shall be granted to the Consultant within 90 days of execution of the Agreement. The Company issued 50,000 common stock shares at $4.90 per share for consulting services to be performed over a one year period on October 15, 2017. As the Company did not issue the remaining 50,000 common stock shares before the year ended December 31, 2017, the Company recorded a stock payable of $16,667, which is includedminimum royalties starting in consulting expenses. F-20 Table of Contents 2020.   NOTE 1416 - COMMITMENTS AND CONTINGENCIES   Litigation   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.   F-27 Table of Contents 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 is requesting relief in this matter for a one halfone-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 the additional expenses will be incurred in order to defend this matter. As such,On February 13, 2019, the Company cannot determine whether thereand 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 willto be incurred nor can it estimatepaid to the range of any such potential loss. Accordingly,Applicant’s attorney. On February 20, 2019, the Company has not accruedreceived an amount for any potential loss associatedOrder Approving Compromise and Release of WCAB Case No: ADJ 10686812 based on the Agreement entered into with this action.the Company and the Applicant.   Operating leasesLeases   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, with a lease payment of $19,997 per month.lease.   The Company also leasesleased additional office and warehouse space at 1610 and 1612 Fiske Place, Oxnard, CA 93033, which contains approximately 6,5472,227 square feet. The Company is currentlywas on a month-to-month lease with a lease payment of $4,763 per month. The Company also leases additional research and development space at 2029 Becker Drive, Lawrence, KS 66047, which contains approximately 1,350 square feet. The Company is currentlyvacated this facility on a month-to-month lease, with a lease payment of $1,000 per month.August 6, 2018.   Total rent expense for the years ended December 31, 2018 and 2017 was $267,754 and 2016 was $294,646, and $286,539, respectively.   NOTE 15 - RELATED PARTY TRANSACTIONS On various dates from October 31, 2014 to February 2, 2015, CURE Pharmaceutical issued convertible promissory notes to Ronick, Inc., (“Ronick”) totaling $89,000 that were due on February 25, 2016, but Ronick has agreed to extend the due date to August 31, 2016. Robert Davidson, our Chief Executive Officer and director, is a shareholder of Ronick. Interest is payable at 3% per annum and is secured by technology and patent rights. Principal and accrued interest is convertible into common stock at $4.00 per share. This conversion is subject to an adjustment if CURE Pharmaceutical sells stock or grants conversion rates at a lower price; however, Ronick has subsequently agreed to waive these conversion rights and will convert at $4.00 per share. As of October 6, 2016, Ronick has converted $35,260 of principal and unpaid accrued interest into 8,815 of common stock shares of CURE Pharmaceutical. As of October 6, 2016, Ronick converted $35,290 of principal and unpaid accrued interest into 8,822 of common stock shares of CURE Pharmaceutical. On December 31, 2015, CURE Pharmaceutical converted $100,150 of accrued payroll for Robert Davidson into a convertible promissory note. As of October 6, 2016, Robert Davidson has converted $38,415 of principal and unpaid accrued interest into 9,604 of common stock shares of CURE Pharmaceutical. On October 17 2016, Robert Davidson transferred his convertible promissory note to Ronick. On that same date, Ronick converted $38,449 of principal and unpaid accrued interest into 9,612 of common stock shares of CURE Pharmaceutical. On December 31, 2015, CURE Pharmaceutical converted $94,312 of accrued payroll for Wayne Nasby, our Chief Operating Officer, into a convertible promissory note. As of October 6, 2016, Wayne Nasby has converted $48,241 of principal and unpaid accrued interest into 12,060 of common stock shares of the CURE Pharmaceutical. As of October 17, 2016, Wayne Nasby converted $48,284 of principal and unpaid accrued interest into 12,071 of common stock shares of CURE Pharmaceutical. F-21 Table of Contents On December 31, 2015, CURE Pharmaceutical converted $77,250 of accrued payroll for Edward Maliski, our President and Chief Science Officer, into a convertible promissory note. As of October 6, 2016, Edward Maliski has converted $39,514 of principal and unpaid accrued interest into 9,878 of common stock shares of CURE Pharmaceutical. As of October 17, 2016, Edward Maliski converted $39,549 of principal and unpaid accrued interest into 9,887 of common stock shares of CURE Pharmaceutical. On December 31, 2015, CURE Pharmaceutical converted $51,500 of accrued payroll for Jonathan Turman into a convertible promissory note. As of October 6, 2016, Jonathan Turman has converted $26,343 of principal and unpaid accrued interest into 6,586 of common stock shares of CURE Pharmaceutical. As of October 17, 2016, Jonathan Turman converted $26,366 of principal and unpaid accrued interest into 6,591 of common stock shares of CURE Pharmaceutical. At December 31, 2017, two of our executive officers, Robert Davidson and Mark Udell, had $7,931 and $13,716, respectively, due to them and are included in accounts payable. At December 31, 2016, one of our executive officers, Robert Davidson, had $10,992 due to him and is included in accounts payable. NOTE 16 – INCOME TAXES   The Company utilizes FASB ASC740, “Incomeaccounts for income taxes under ASC Topic 740: Income Taxes” which requires the recognition of deferred tax assets and liabilities for both the expected future tax consequencesimpact of events that have been included indifferences between 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 enactedfor the expected future tax lawsbenefit to be derived from tax losses and statutory tax rates applicable tocredit carry forwards. ASC Topic 740 additionally requires the periods in which the differences are expected to affect taxable income. Aestablishment of a valuation allowance is recorded when it is “more likely-than-not” that ato reflect the likelihood of realization of deferred tax asset will not be realized.assets.   The tax reform bill that Congress voted to approve December 20,22, 2017, also known as the “Tax Cuts and Jobs Act”, made sweeping modifications to the Internal Revenue Code, including a much lower corporate tax rate, changes to credits and deductions, and a move to a territorial system for corporations that have overseas earnings. The act replaced the prior-law graduated corporate tax rate, which taxed income over $10 million at 35%, with a flat rate of 21%.   The Company generated a deferred tax asset through net operating loss carry-forwards. Management of the Company’s analysis indicates the net operating losses would be subject to significant limitations pursuant to Internal Revenue Code Section 382.382/383. The Company has not completed its IRC Section 382 Valuation, as required and the NOL’s because of potential Change of Ownerships might limit the usage or render the NOL’s completely worthless. Therefore, Management of the Company based upon Management’s evaluation has recorded a Full Valuation Reserve (100%), since it is more likely than not that no benefit will be realized for the Deferred Tax Assets.   Deferred income taxes arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. Deferred taxes are classified as current or non-current, depending on the classification of assets and liabilities to which they relate. Deferred taxes arising from temporary differences that are not related to an asset or liability are classified as current or noncurrent depending on the periods in which the temporary differences are expected to reverse. The Company does not have any uncertain tax positions.   The total deferred tax asset is calculated by multiplying a domestic (US) 2128 percent marginal tax rate by the cumulative Net Operating Loss Carryforwards (“NOL”). The Company currently has net operating loss carryforwards of approximately $17,385,131,$24,875,602, which expire through 2037.2038. The deferred tax asset related to the NOL carryforwards Management has determined based on all the available information that a 100% Valuation reserve is required.   F-28 Table of Contents The provision for incomes taxes for the years ending December 31 is as follows:       2017     2016   Current expense             Federal   $ -     $ -   State     -       -                     Deferred expense                 Federal   $ -     $ -   State     -       -   Total income tax expense   $ -     $ -   F-22 Table of Contents     2018     2017   Current expense             Federal   $ -     $ -   State     -       -                     Deferred expense                 Federal   $ -     $ -   State     -       -   Total income tax expense   $ -     $ -     Deferred income tax (liabilities) assets at December 31 are as follows:     2017     2016     2018     2017   Deferred income tax assets                     Net operating loss carryforward   $ 5,585,508   $ 4,622,321     $ 7,422,809   $ 5,585,508   Deferred revenue   107,860   74,378     114,369   107,860   Allowance for doubtful accounts   1,306   15,524     8,929   1,306   Accrued expenses     11,346       8,699       20,781       11,346   Total deferred tax assets     5,706,020       4,720,922       7,566,888       5,706,020                       Deferred income tax liabilities                     State income taxes   (353,750 )   (329,222 )   (469,148 )   (353,750 ) Depreciation and amortization   (16,065 )   (23,120 )   (16,194 )   (16,065 ) Valuation allowance     (5,336,205 )     (4,368,580 )     (7,081,546 )     (5,336,205 ) Total deferred tax liabilities     (5,706,020 )     (4,720,922 )     (7,566,888 )     (5,706,020 )                     Deferred income tax, net   $ -     $ -     $ -     $ -   Open income tax years for audit purposes (Federal and State) are from 2014 through 2018.  The Company has not been serviced with any audit notices, as of the year ended December 31, 2018.   NOTE 17 –18 - SUBSEQUENT EVENTS   In connectionExcept for the event(s) discussed below, there were no subsequent events that required recognition or disclosure. The Company evaluated subsequent events through the date the financial statements were issued and filed with a Consulting Agreement with an individual, the Company issued the remaining 50,000 common stock shares at $1.48 per share on January 24, 2018 for consulting services to be performed over a one year period.Securities and Exchange Commission.   On January 30,December 14, 2018, the Company received in total $1,000,000 by issuing a convertible promissory note (“Convertible Note”) to an individual (“Holder”) that is due November 30, 2018 (“Maturity Date”). The Convertible Note shall accrue interest at 9% per annum, to be paid quarterly in cash on the last trading day of each fiscal quarter staring with June 30, 2018 and is unsecured. At any time after June 30, 2018 until the Maturity Date, the outstanding principal amount of this Note (the “Principal Amount”), plus all accrued but unpaid interest shall be convertible at the option of the Holder, in whole or in part, into shares of Common Stock, at any time and from time to time (the “Optional Conversion”), at 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 the Notice of Conversion, (the “Optional Conversion Price”). If on or prior to the Maturity Date, the Company consummates its 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 Common Stock or preferred stock and enables the Company to list its Common Stock on a national securities exchange (“Qualified Offering”), the entire Principal Amount of this Note shall be automatically converted into shares of Common Stock (the “Mandatory Conversion” and together with the Optional Conversion, the “Conversion”) at a price per share equal to 75% of the price of the Qualified Offering (the “Mandatory Conversion Price” together with Optional Conversion Price, the “Conversion Price”). On February 20, 2018, (the “Effective Date”) the Company entered into aan Advisory Consulting Agreement (“Agreement”) with an individual (“Consultant”) to perform strategic marketing and development services. The term. Per the terms of the Agreement, is for one year from the Effective Date and the Company shall compensate the Consultant’s services by issuing 250,000 restrictedis to issue 50,000 common stock shares of the Company. AsCompany that vest 30 days from December 14, 2018 and an additional 250,000 common sock shares of the date of the Company’s filing of its Form 10-K for the fiscal year ended December 31, 2017,Company that vest monthly over 24 months. On January 14, 2019, the Company has not yet issued these restricted common stock shares. On February 23, 2018, (the “Effective Date”) the Company entered into a Consulting Agreement (“Agreement”) with Liviakis Financial Communications, Inc. (“Consultant”) to perform services in investors’ communication and public relations with existing and prospective shareholders, brokers, dealers and other investment professionals with respect to the Company’s current and proposed activities. The term of the Agreement is for 30 months from the Effective Date and the Company shall compensate the Consultant’s services by issuing 1,000,000 restricted50,000 common stock shares of the Company. AsCompany at $1.84 per share per the terms of the date of the Company’s filing of its Form 10-K for the fiscal year ended December 31, 2017,this Agreement. On February 14, 2019, the Company has not yet issued these restricted10,417 common stock shares. 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 stockCompany at $3.35 per share per the terms of the Company remain available for grant as of the Company’s filing of its Form 10-K for the fiscal year ended December 31, 2017. 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. No awards have been granted as of the date of the Company’s filing of its Form 10-K for the fiscal year ended December 31, 2017.this Agreement.   On March 20,December 14, 2018, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”“SPA”) with investorsan accredited investor for the purchase of 833,333 shares of common stock of the Company (the “Investors”“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 saleterms of upthe SPA, the Company and the investor agreed to $5,000,000multiple 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 January 1, 2019, the Company amended a promissory note totaling $100,000 to extend the maturity date to June 30, 2019.  For extending the maturity date, the Company will pay an additional $2,000. On January 7, 2019, the Company repaid two convertible promissory notes totaling $250,000, plus accrued interest of $30,466. On January 31, 2019, the Company repaid five convertible promissory notes totaling $275,000, plus accrued interest and penalties of $47,644. On January 31, 2019, the Company amended a promissory note totaling $150,000 to extend the maturity date to February 28, 2019. For extending the maturity date, the Company will pay $20,000.  Subsequently, on February 28, 2019, the Company amended the promissory note to extend the maturity date to April 1, 2019.  For extending the maturity date, the Company will pay an additional $20,000. 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. In addition, the Company has paid a total of $200,000 towards the principal balance of one convertible promissory note. On February 15, 2019, the Company entered into a Debt Conversion Agreement (“Agreement”) to convert $400,000 of convertible promissory notes (“Convertible Notes”) that are due November 30, 2018 (“Maturity Date”). The Convertible Notes shall accrueplus accrued interest at 9% per annum, to be paid quarterly in cash on the last trading day of each fiscal quarter beginning on June 30, 2018 and are unsecured. At any time after June 30, 2018 until the Maturity Date, the outstanding principal amounts of these Notes (the “Principal Amounts”), plus all accrued but unpaid interest shall be convertible at the option of the Holders, in whole or in part,$71,342 into 254,779 common stock shares of the Company’s Common Stock, at any time and from time to time, atCompany 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 Stockcommon stock on the OTC Markets for the five consecutive trading days prior to the delivery of the notice of conversion, . If on or prior to the Maturity Date, the Company consummates its 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 Common Stock or preferred stock and enables the Company to list its Common Stock on a national securities exchange (“Qualified Offering”), the entire Principal Amounts of these Notes shall be automatically converted into shares of Common Stock at a price per share equal to 75% of the price of the Qualified Offering. 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.days.     F-23F-29   Table of Contents   On February 13, 2019, the Company 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 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 of the date of the issuance, the Company issued 349,788 common stock shares and 482, 577 common stock shares remain issuable.  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 “SIGNATURESNote”) 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. As long as the Borrower is not in default, the Maturity Date shall be automatically extended by the Borrower and Lender for one-month periods unless either the Borrower or the Lender notifies the other party in writing of its intention not to extend the Maturity Date, which notification must be delivered no later than 10 days prior to the then-current Maturity Date. On February 15, 2019, the Company entered into a Debt Conversion Agreement (“Agreement”) with a convertible promissory note holder totaling $500,000 plus accrued interest of $28,588 that were converted into 285,723 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 of the date of this issuance, the Company has not issued the 285,723 common stock shares.  In connection with the conversion of the convertible promissory notes, the Company will issue 312,500 warrants that were priced at $2.00 price per share. 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. 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. 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 Company’s common stock on the OTC Markets for five consecutive trading days. F-30 Table of Contents 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 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 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 March 31, 2019, the Company and CURE Chemistry Inc., wholly owned subsidiary of the Company (“Merger Sub”), entered into an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”) with Chemistry Holdings, Inc., a Delaware corporation (“Chemistry Holdings”) for the Company to acquire Chemistry Holdings pursuant to a merger of the Merger Sub with and into Chemistry Holdings (the “Merger”). Pursuant to the Merger, Chemistry Holdings will become a wholly-owned subsidiary of the Company and the stockholders of Chemistry Holdings will receive shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”) in exchange for all of the issued and outstanding shares of Chemistry Holdings.  Subject to the satisfaction of the certain conditions to the Merger, the Merger Agreement provides for the acquisition of Chemistry Holdings to occur on or before April 30, 2019 (the “Closing Date”).   In accordance withaddition to the requirementsMerger Agreement, the Company received an investment of Section 13 or 15(d)$2,000,000 (the “Principal Amount”) from Chemistry Holdings pursuant to a convertible note (the “Note”). If the Merger does not close by April 30, 2019, the Note will convert into 598,802 shares of the Exchange Act,Common Stock on May 1, 2019 at a conversion price of $3.34.  If the registrant has duly caused this report toMerger closes by April 30, 2019, the Note will become an intercompany payable and will be signed on its behalf by the undersigned, thereunto duly authorized. CURE PHARMACEUTICAL HOLDING CORP. Date: March 23, 2018 By: /s/ Robert Davidson Robert Davidson Chief Executive Officer By: /s/ Mark Udell Mark Udell Chief Financial Officer In accordance with the Exchange Act, this report has been signed below by the following persons on March 23, 2018, on behalfcancelled without any shares of the registrant and in the capacities Indicated. Signature Title /s/ Robert Davidson Chief Executive Officer, Chairman of the Board and Director Robert Davidson /s/ Mark Udell Chief Financial Officer, Treasurer and Secretary Mark Udell Principal Financial Officer and Principal Accounting Officer /s/ William Yuan Director William Yuan /s/ Charles Berman Director Charles Berman /s/ Alan Einstein Director Alan Einstein Common Stock being issued.    32 F-31