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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
 
(Mark One)
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended: June 30, 2014
 
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: 333-183760 
 
CÜR MEDIA, INC.
(Exact name of registrant as specified in its charter)
 
Delaware
 
99-0375741
(State or other jurisdiction of incorporation or organization)
 
(IRS Employer Identification No.)
 
2217 New London Turnpike
South Glastonbury, CT 06073
(Address of principal executive offices)
 
(860) 430-1520
(Registrant’s telephone number, including area code)
 
N/A 
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ¨ No ¨
 
(Note: The registrant is a voluntary filer of reports under Section 13 or 15(d) of the Securities Exchange Act of 1934 and has filed during the preceding 12 months all reports it would have been required to file by Section 13 or 15(d) of the Securities Exchange Act of 1934 if the registrant had been subject to one of such Sections.)
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer
o
Accelerated filer
o
Non-accelerated filer
o
Smaller reporting company
x
(Do not check if a smaller reporting company)
     

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

As of August 14, 2014, there were 24,569,809 shares of the registrant’s common stock, par value $0.0001 per share, issued and outstanding.
 


 
 

 
CÜR MEDIA, INC.
 
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2014
 
TABLE OF CONTENTS
 
     
PAGE
 
         
PART I – FINANCIAL INFORMATION
         
Item 1.
Financial Statements (Unaudited)
    4  
           
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
    17  
           
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
    24  
           
Item 4.
Controls and Procedures
    24  
           
PART II – OTHER INFORMATION
           
Item 1.
Legal Proceedings
    25  
           
Item 1A.
Risk Factors
    25  
           
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
    25  
           
Item 3.
Defaults Upon Senior Securities
    25  
           
Item 4.
Mine Safety Disclosures
    25  
           
Item 5.
Other Information
    25  
           
Item 6.
Exhibits
    26  
           
SIGNATURES     27  

 
2

 
 
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

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

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

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

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

·  
Our ability to negotiate an economically feasible agreement with the major and independent music labels and publisher rights organizations;

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

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

·  
Our ability to comply with governmental regulation;

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

·  
The intensity of competition.

A description of these and other risks and uncertainties that could affect our business appears in the section captioned “Risk Factors” in the Annual Report on Form 10-K we filed with the SEC on March 31, 2014. The risks and uncertainties described under “Risk Factors” are not exhaustive.

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

All references in this Quarterly Report to the “Company”, “CÜR Media”, “we”, “us”, or “our”, are to CÜR Media, Inc. (formerly known as Duane Street Corp.).
 
 
3

 
 
PART I – FINANCIAL INFORMATION
 
ITEM 1. FINANCIAL STATEMENTS
 
The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States and the rules of the Securities and Exchange Commission (“SEC”), and should be read in conjunction with the audited financial statements and notes thereto contained in Amendment No. 2 to the Current Report on Form 8-K we filed with the SEC on April 23, 2014. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the periods presented have been reflected herein. The results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year.
 
 
4

 
 
CÜR MEDIA, INC.
INTERIM CONSOLIDATED FINANCIAL STATEMENTS

TABLE OF CONTENTS
 
     
Page
 
Condensed Consolidated Balance Sheets as of June 30, 2014 (unaudited) and December 31, 2013
    6  
         
Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2014 and 2013 (unaudited)
    7  
         
Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2014 and 2013 (unaudited)
    8  
         
Notes to Unaudited Interim Financial Statements
    9  

 
5

 
 
CÜR MEDIA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
 
   
June 30,
   
December 31,
 
   
2014
   
2013
 
ASSETS
             
CURRENT ASSETS
           
Cash and Cash Equivalents
  $ 5,938,999     $ -  
Prepaid Expenses
    10,996       27,835  
Other Current Assets
    3,000       3,000  
TOTAL CURRENT ASSETS
    5,952,995       30,835  
Property and Equipment, net
    46,797       3,545  
TOTAL ASSETS
  $ 5,999,792     $ 34,380  
                 
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
                 
CURRENT LIABILIITES
               
Accounts Payable
  $ 209,224     $ 170,838  
Accrued Liabilities and Other Current Liabilities
    85,263       236,426  
Note Payable, Short-Term
    25,304       175,000  
TOTAL CURRENT LIABILITIES
    319,791       582,264  
                 
Derivative Liability
    4,039,163       -  
Note Payable, Long-Term
    47,965       62,755  
TOTAL LONG TERM LIABILITIES
    4,087,128       62,755  
TOTAL LIABILITIES
    4,406,919       645,019  
                 
STOCKHOLDERS' DEFICIENCY
               
Preferred Stock (.0001 par value, 10,000,000 shares authorized, none issued or outstanding as of June 30, 2014 or December 31, 2013)
    -       -  
Common Stock (.0001 par value, 300,000,000 shares authorized, 24,569,809 and 13,114,032 issued at June 30, 2014 and December 31, 2013, respectively and 24,803,769 and 13,335,890 outstanding at June 30, 2014 and December 31, 2013, respectively)
    2,457       1,311  
Additional Paid-In-Capital
    4,682,359       4,924,194  
Deficit Accumulated During Development Stage
    (3,091,943 )     (5,536,144 )
TOTAL STOCKHOLDERS' DEFICIENCY
    1,592,873       (610,639 )
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY
  $ 5,999,792     $ 34,380  

See accompanying notes to financial statements.
 
 
6

 

CÜR Media, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
 
   
For the Three Months Ended June 30,
   
For the Six Months Ended June 30,
 
   
2014
   
2013
   
2014
   
2013
 
                         
REVENUES
  $ -     $ -     $ -     $ -  
                                 
OPERATING EXPENSES
                               
Research and Development
    955,112       276,812       1,617,443       530,374  
General and administrative
    308,852       12,857       433,335       37,102  
Stock based Compensation
    76,512       11,018       1,513,293       47,627  
Depreciation and amortization
    6,263       -       7,492       3,321  
                                 
TOTAL OPERATING EXPENSES
    1,346,739       300,687       3,571,563       618,424  
                                 
OTHER INCOME (EXPENSE)
                               
Interest Expense
    (496 )     (5,584 )     (4,834 )     (10,964 )
Interest Income
    1,440       8       2,554       12  
Change in fair value of derivative liabilities
    439,963       -       481,900       -  
                                 
TOTAL OTHER INCOME (EXPENSE)
    440,907       (5,576 )     479,620       (10,952 )
                                 
NET LOSS
  $ (905,832 )   $ (306,263 )   $ (3,091,943 )   $ (629,376 )
                                 
Basic and diluted net loss per share
  $ (0.04 )   $ (0.03 )   $ (0.15 )   $ (0.06 )
                                 
Weighted average number of shares outstanding, basic and diluted
    24,803,146       11,711,564       21,163,471       11,317,840  
 
See accompanying notes to financial statements.
 
 
7

 
 
CÜR MEDIA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
 
   
Six Months Ended June 30,
 
   
2014
   
2013
 
CASH FLOWS FROM OPERATING ACTIVITIES
           
Net Loss
  $ (3,091,943 )   $ (629,376 )
Adjustments to reconcile net loss to net cash used in operating activities
               
Depreciation and amortization
    7,492       3,321  
Stock based compensation
    1,513,293       47,627  
Change in fair value of derivative liabilities
    (481,900 )     -  
Changes in assets and liabilities
               
Prepaid Expenses
    16,839       (3,716 )
Other Current Assets
    -       3,577  
Accounts Payable
    38,386       121,259  
Accrued Liabilities and Other Current Liabilities
    (151,165 )     1,042  
Net cash used in operating activities
    (2,148,998 )     (456,266 )
                 
CASH FLOWS FROM INVESTING ACTIVITIES
               
Purchases of property and equipment
    (50,742 )     (1,201 )
Net cash used in investing activities
    (50,742 )     (1,201 )
                 
CASH FLOWS FROM FINANCING ACTIVITIES
               
Repayment of notes payable
    (164,486 )     (2,034 )
Proceeds from issuance of common stock
    8,303,225       534,000  
Net cash provided by financing activities
    8,138,739       531,966  
                 
NET INCREASE IN CASH
    5,938,999       74,499  
                 
CASH, BEGINNING OF PERIOD
    -       -  
                 
CASH, END OF PERIOD
  $ 5,938,999     $ 74,499  
 
See accompanying notes to financial statements.
 
 
8

 
 
CÜR MEDIA, INC.

Notes to Condensed Financial Statements
 For the Six Months Ended June 30, 2014 and 2013
(Unaudited)
 
Note 1 – Summary of Business and Basis of Presentation

Organization and Business

CÜR Media, LLC (formerly known as Raditaz, LLC) (“Raditaz”) was formed in Connecticut on February 15, 2008. On January 28, 2014, the members of Raditaz contributed their Raditaz membership interests (the “Contribution”) to CUR Media, Inc. (formerly known as Duane Street Corp.) (the “Company”) in exchange for approximately 10,000,000 shares of the Company’s common stock, which resulted in Raditaz being a wholly owned subsidiary of the Company. Each membership interest of Raditaz, at the time of the Contribution was automatically converted into shares of the Company’s common stock, with the result that the 39,249,885 membership interests outstanding immediately prior to the Contribution were converted into approximately 10,000,000 shares of the Company’s common stock outstanding immediately thereafter. The Contribution is considered to be a recapitalization of the Company which has been retrospectively applied to these financial statements for all periods presented. In connection with the recapitalization, the accumulated deficit of $5,536,144 from the period from February 15, 2008 (inception) through the date of the Contribution was reclassified to additional paid-in-capital.
 
As a result of the Contribution, the Company changed its business focus to the business of Raditaz, which is to develop and commercialize a streaming music experience for listening on the web and mobile devices. The Company is currently developing CÜR, a hybrid internet radio and on-demand music streaming service.

Basis of Presentation

The accompanying consolidated financial statements include the activities of CÜR Media, Inc. and its wholly owned subsidiary, CÜR Media, LLC. All intercompany transactions have been eliminated in these consolidated financial statements.
 
The financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles ("U.S. GAAP") for interim financial information and with the instructions to Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete consolidated financial statements. In the opinion of the Company's management, the financial statements include all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of the Company's financial position for the periods presented.
 
Certain information in footnote disclosures normally included in the financial statements were prepared in conformity with accounting principles generally accepted in the United States of America and have been condensed or omitted pursuant to such principles and the financial results for the periods presented may not be indicative of the full year’s results. The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in the Company’s audited financial statements in Amendment No. 2 to the Current Report on Form 8-K the filed with the SEC on April 23, 2014.
 
 
9

 
 
CÜR MEDIA, INC.

Notes to Condensed Financial Statements
 For the Six Months Ended June 30, 2014 and 2013
(Unaudited)
 
Use of estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Significant Accounting Policies

Other than as disclosed below, there have been no material changes in the Company’s significant accounting policies to those previously disclosed in Amendment No. 2 to the Current Report on Form 8-K the Company filed with the SEC on April 23, 2014.

Recently Adopted Accounting Pronouncements

In June 2014 the FASB issued ASU 2014-10 regarding development stage entities. The ASU removes the definition of development stage entity, as was previously defined under generally accepted accounting principles in the United States (U.S. GAAP), from the accounting standards codification, thereby removing the financial reporting distinction between development stage entities and other reporting entities from U.S. GAAP.

In addition, the ASU eliminates the requirements for development stage entities to (i) present inception-to-date information in the statement of income, cash flow and stockholders’ equity, (ii) label the financial statements as those of a development stage entity, (iii) disclose a description of the development stage activities in which the entity is engaged, and (iv) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage.

The Company has applied the ASU effective from the financial statements as of June 30, 2014.

Note 2 – Going Concern Uncertainty

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of the liabilities in the normal course of business and does not include any adjustments that might result from uncertainty about the Company’s ability to continue as a going concern.

The Company incurred a net loss of $3,091,943 and $629,067 in the six months ending June 30, 2014 and 2013, respectively. The Company is currently developing CÜR, a hybrid internet radio and on-demand music streaming service and has not generated material revenue from operations and anticipates needing additional capital prior to launching CÜR to execute the current operating plan. These factors raise a substantial doubt about the Company’s ability to continue as a going concern.

 
10

 
 
CÜR MEDIA, INC.

Notes to Condensed Financial Statements
 For the Six Months Ended June 30, 2014 and 2013
(Unaudited)
 
In connection with the Contribution, the Company completed a first closing of a private equity offering on January 28, 2014 whereby the Company raised approximately $4.075 million in proceeds prior to the deduction of expenses related to the transaction. In addition, the Company completed a second closing of a private equity offering on March 14, 2014 whereby the Company raised approximately $4.635 million in proceeds prior to the deduction of expenses related to the transaction. On March 28, 2014 the Company completed a third closing of a private equity offering whereby the Company raised $970,245 in proceeds prior to the deduction of expenses related to the transaction. The proceeds from the private equity offering will be used to fund ongoing operations of the Company. Based on management projections, the Company contemplates raising an additional $25 – $30 million or more prior to the planned launch of CÜR, to implement the business plan, market CÜR, provide content license costs, and for working capital. This fundraising has not yet begun, and no specific terms have been set. The Company plans to launch the CÜR music streaming product and platform in late 2014 or in the first quarter of 2015.
 
Management believes that it will be successful in obtaining sufficient financing to execute its operating plan. However, no assurances can be provided that the Company will secure additional financing or achieve and sustain a profitable level of operations. To the extent that the Company is unsuccessful in its plans, the Company may find it necessary to contemplate the sale of its assets and curtail operations.

Note 3 – Risks and Uncertainties

The Company operates in an industry that is subject to rapid technological change and intense competition. The Company’s operations are subject to significant risk and uncertainties including financial, operational, technological, content licensing, regulatory and other risks including the potential for business failure.

A description of some of the risks and uncertainties that could affect our business appears in the section captioned “Risk Factors” in the Annual Report on Form 10-K the Company filed with the SEC on March 31, 2014. The risks and uncertainties described under “Risk Factors” are not exhaustive.

Note 4 – Debt Instruments
 
On February 28, 2012, the Company entered into a convertible promissory drawdown note (“CI Note”) with Connecticut Innovations Incorporated (“CT Innovations”) for up to $150,000. The Company received $75,000 on February 28, 2012. The CI Note bore interest at 12% per annum, was due on February 28, 2014 and included a provision whereby, after a qualified financing, as defined, CT Innovations may have converted the amount outstanding under the CI Note, including principal and accrued interest into equity securities being sold by the Company, at a 25% discount to the offering price. The note included a provision whereby the lender could, at its sole discretion, demand payment in an amount equal to two times the principal and outstanding and unpaid interest as of the demand date upon the occurrence of a liquidation event or change of control event as defined in the CI Note. The Company received an additional $75,000 in connection with the CI Note on October 26, 2012. As of December 31, 2013, the Company had $150,000 in principal recorded as Note Payable in the short-term liability section of the Company’s balance sheet. Under the terms of the agreement, the CI Note was repaid in full with accrued interest on February 28, 2014.

On June 19, 2012, the Company entered into a promissory note (“State of CT Note”) with State of Connecticut Department of Economic and Community Development (“CT DECD”) for up to $100,000. The Company received $100,000 on June 19, 2012. The State of CT Note bears interest at 2.5% per annum. Commencing on the thirteenth month following the loan date and continuing on the first day of each month thereafter principal and interest shall be payable in 48 equal, consecutive monthly installments. The full principal and all accrued interest are due and payable on June 19, 2017. The Company and CT DECD also entered into a security agreement whereby the State of CT Note is secured by all properties, assets and rights of the Company. As of June 30, 2014 and December 31, 2013, the Company had $47,965 and $62,755 in principal recorded as Note Payable in the long-term sections of the Company’s balance sheet, respectively and $25,304 and $25,000 in short-term liability, respectively.

 
11

 
 
CÜR MEDIA, INC.

Notes to Condensed Financial Statements
 For the Six Months Ended June 30, 2014 and 2013
(Unaudited)
 
Note 5 – Derivative Liabilities
 
The PPO and agent warrants described in Note 8 qualify for derivative classification due to the price protection provisions on the exercise price. The initial fair value of these liabilities was recorded as an increase to derivative liabilities and a decrease in additional paid in capital as the warrants were issued in connection with the three closings under the private placement offerings. The fair value of these liabilities will be re-measured at the end of every reporting period and the change in fair value will be reported in the statement of operations as a gain or loss on derivative financial instruments included in other income or expenses.

The table below sets forth a summary of changes in the fair value of the Company’s Level 3 financial liabilities for the period ended June 30, 2014.

   
June 30, 2014
 
       
Balance at the beginning of period
  $ -  
         
Addition of new derivative liabilities (warrants)
    4,521,063  
         
Change in fair value of warrants
    (481,900 )
         
Balance at the end of the period
  $ 4,039,163  
 
The following table summarizes the change in fair value of derivatives:
 
Six months ended June 30, 2014
 
Change in fair value of derivative liabilities during:      
Three months ended March 31, 2014   $ (41,937 )
Three months ended June 30, 2014   $ (439,963 )
Six months ended June 30, 2014   $ (481,900 )
 
The Company uses Level 3 inputs for its valuation methodology for the warrant derivative liabilities and embedded conversion option liabilities as their fair values were determined using the Black-Scholes option pricing model based on various assumptions. The model incorporates the price of a share of the Company’s common stock, volatility, risk free rate, dividend rate and estimated life. Significant changes in any of these inputs in isolation would result in a significant change in the fair value measurement. As required, these are classified based on the lowest level of input that is significant to the fair value measurement. The weighted average per-share fair value of each Common Stock Warrant of $0.425 and $0.379 was determined on the date of grant and at June 30, 2014, respectively using the Black-Scholes pricing model using the following weighted average assumptions:

   
Expected
Volatility
   
Risk-free
Interest Rate
   
Expected
Dividend Yield
   
Expected Life
(in years)
 
                         
At issuance
    67.62 %     1.59 %     0 %     5.00  
At June 30, 2014
    64.57 %     1.62 %     0 %     4.66  

 
12

 
 
CÜR MEDIA, INC.

Notes to Condensed Financial Statements
 For the Six Months Ended June 30, 2014 and 2013
(Unaudited)
 
Note 6 – Related Party Transactions

The Company’s Chief Executive Officer paid personally certain expenses of the Company totaling $24,235 at December 31, 2013 which is reported as other current liabilities. There were no related party transactions for the period ended June 30, 2014.

Note 7 – Common Stock
 
Prior to the Contribution, the Company raised $61,526 by issuing 209,755 shares of the Company’s Common Stock at a price per share of $0.29. Additionally, on January 17, 2014 the Company issued 186,091 shares of common stock for proceeds of $99,694 in connection with the exercise of warrants.

On January 28, 2014, the members of Raditaz, contributed their Raditaz membership interests to the Company in exchange for approximately 10,000,000 shares of the Company’s common stock, which resulted in Raditaz being a wholly owned subsidiary of the Company. Each membership interest of Raditaz, at the time of Contribution were automatically converted into shares of the Company’s common stock, with the result that the 39,249,885 membership interests outstanding immediately prior to the Contribution was converted into approximately 10,000,000 shares of common stock outstanding immediately thereafter.
 
Concurrently with the closing of the Contribution and in contemplation of the Contribution, the Company held a closing of its private placement offering (“PPO”) of 4,075,036 units of its common stock, at a price of $1.00 per unit, for gross proceeds (before deducting commissions and expenses of the PPO) of $4,075,036. Each unit was comprised of one share of common stock and a warrant to purchase one share of the Company’s common stock. Each warrant carries a term of five years. An aggregate of 4,075,036 units were sold in the initial closing of the PPO with a total of 4,482,539 warrants issued, as discussed in Note 8.
 
On March 14, 2014, the Company consummated a second closing (the "Second Closing") of the PPO, in connection with which the Company issued and sold 4,635,019 additional units, at a purchase price of $1.00 per unit, for gross proceeds (before deducting commissions and expenses of the PPO) of $4,635,019. Each unit was comprised of one share of common stock and a warrant to purchase one share of the Company’s common stock. Each warrant carries a term of five years. An aggregate of 4,635,019 units were sold in the second closing of the PPO with a total of 5,098,520 warrants issued, as discussed in Note 8.
 
On March 28, 2014, the Company consummated a third and final closing of the PPO, in connection with which the Company issued and sold 970,300 additional units at the PPO Price of $1.00 per unit, for gross proceeds (before deducting commissions and expenses of the PPO) of $970,245. Each unit was comprised of one share of common stock and a warrant to purchase one share of the Company’s common stock. Each warrant carries a term of five years. An aggregate of 970,300 units were sold in the third and final closing of the PPO with a total of 1,067,330 warrants issued, as discussed in Note 8.
 
 
13

 
 
CÜR MEDIA, INC.

Notes to Condensed Financial Statements
 For the Six Months Ended June 30, 2014 and 2013
(Unaudited)
 
As a result of the three closings of the PPO discussed above, a total of 9,680,355 shares of common stock were issued. Proceeds were received of approximately $8,200,000, net of costs associated with the placement of approximately $1,500,000. As of June 30, 2014, warrants entitle their holders to purchase 9,680,355 shares of the Company’s common stock, with a term of five years and an exercise price of $2.00 per share and broker warrants entitle their holders to purchase 968,034 shares of the Company’s common stock, with a term of five years and an exercise price of $1.00 per share.
 
Prior to the Contribution, eleven stockholders of the Company (“Pre-Contribution Transaction Stockholders”), entered into an agreement with the Company (“Side Sale Agreement”) pursuant to which they agreed to cancel a portion of their shares after the initial PPO such that the aggregate number of shares they collectively held following such cancellation would be equal to 19.9% of the total outstanding shares of the Company’s common stock. Subsequent to the initial PPO, approximately 715,280 shares were cancelled in connection with the Side Sale Agreement. Terms included in the agreement discussed the issuance of additional shares to the shareholders in the event there were additional closings of the PPO following the initial closing so as to maintain their 19.9% common stock ownership position, in the aggregate. As a result of the second and third closing, an aggregate of approximately 1,379,631 restricted shares of common stock were issued to the Pre-Contribution Transaction Stockholders (the “Adjustment Shares”). The Company recorded $1,379,631 of stock based compensation expense in connection with the issuance of the shares with a fair value per share of $1.00.
 
On March 25, 2014 the Company entered into a contract with a consultant pursuant to which the Company was to issue shares to the consultant in exchange for advisory services. On June 4, 2014 the contract was mutually terminated and the consultant agreed to forfeit any shares he may have been entitled to under the agreement.
 
Note 8 – Common Stock Warrants
 
At December 31, 2013, the Company had warrants outstanding to purchase 1,227,656 shares of the Company’s common stock at $0.54 per share. Warrants to purchase 186,091 shares of common stock were exercised on January 17, 2014 for proceeds of $99,694. Prior to the Contribution of the Raditaz membership interests discussed above, the remaining warrants exercisable into 1,041,565 underlying shares were cancelled.
 
Concurrently with the closings of the Contribution and the private placement, discussed above, the Company issued warrants with respect to and aggregate of 9,680,355 underlying common shares to the investors in the PPO. Each warrant has a term of five years to purchase one share of common stock at $2.00 per share. The PPO warrants have weighted average anti-dilution and price protection, and a cashless exercise provision, which are subject to customary exceptions.
 
In addition, the placement agent in the PPO, and its sub-agents, received warrants exercisable for a period of five years to purchase a number of shares of Common Stock equal to 10% of the number of shares of common stock sold to investors introduced by it, with a per share exercise price of $1.00. As a result of the foregoing, the placement agent in the PPO, and its sub-agents, was issued warrants with respect to an aggregate of 968,034 underlying shares of the Company’s common stock. Common Stock Warrant activity during the six months ended June 30, 2014 was as follows:
 
   
Common Warrants Outstanding
 
   
Warrants Outstanding
   
Weighted-Average Exercise Price
 
             
Balance as of December 31, 2013
    1,227,656       0.54  
Granted
    10,648,389       1.91  
Cancelled/Forfeited
    (1,041,565 )     0.54  
Exercised
    (186,091 )     0.54  
Balance as of June 30, 2014
    10,648,389     $ 1.91  
 
 
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CÜR MEDIA, INC.

Notes to Condensed Financial Statements
 For the Six Months Ended June 30, 2014 and 2013
(Unaudited)
 
The weighted average per-share fair value of each Common Stock Warrant of $0.42 was determined on the date of grant using the Black-Scholes pricing model (see Note 5).
 
Note 9 – Equity Incentive Awards
 
Stock Compensation Plans
 
In November 2008, the board of directors of the Company adopted the 2008 Restricted Stock Plan, as amended (the “2008 Plan”). The 2008 Plan provided for the issuance of restricted common shares (“options”). Common Shares reserved for issuance under the 2008 Plan as of December 31, 2013 were 1,656,053.
 
Under the 2008 Plan, the Company determined various terms and conditions of awards including option expiration dates (no more than ten years from the date of grant), vesting terms (generally over a four-year period), exercise price, and payment terms.
 
Certain of the Company’s options grants included a right to repurchase a terminated individual’s options at a repurchase price equal to the lower of the exercise price or the fair value of the restricted common stock at the termination date, during the 18 months following the termination of an individual's service with the Company, for any reason. During the year ended December 31, 2013, the Company repurchased 10,191 options. No consideration was provided for the repurchases in either year as the fair value of the restricted common stock at the termination date was estimated to be zero.
 
Upon closing of the Contribution (discussed above), the board of directors of the Company adopted, and the stockholders approved, the 2014 Equity Incentive Plan (the “2014 Plan”) which provided for the issuance of equity awards of up to 4,000,000 shares of common stock to officers, key employees, consultants and directors. Upon effectiveness of the Contribution, 6,500,000 options outstanding under the 2008 Plan were exchanged for an aggregate of (i) approximately 1,339,722 non-statutory stock options to purchase shares of the Company’s common stock at an average exercise price of approximately $3.63 per share, and (ii) approximately 316,331 restricted stock awards (of which approximately 221,863 were fully vested at and represented approximately 221,863 issued and outstanding shares of the Company’s common stock).
 
On April 21, 2014, the 2014 Plan was amended to increase the total number of shares of common stock reserved for issuance thereunder from 4,000,000 to 4,250,000.
 
Under the 2014 Plan, the Company determines various terms and conditions of awards including option expiration dates (no more than ten years from the date of grant), vesting terms (generally over a four-year period), exercise price, and payment terms.
 
Stock Options
 
Option activity during the six months ended June 30, 2014 was as follows:
 
   
Options Outstanding
 
   
Outstanding Options
   
Weighted-Average Exercise Price
   
Weighted-Average Remaining Contractual Term
 
                   
Balance as of January 1, 2014
    1,339,728     $ 0.22       6.0  
Granted
    2,442,921     $ 1.00          
Cancelled/Forfeited
    (25,000 )   $ 1.00          
Repurchased
    -                  
Balance as of June 30, 2014
    3,757,649     $ 0.70       8.8  
Exercisable June 30, 2014
    921,774     $ 0.21          

 
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CÜR MEDIA, INC.

Notes to Condensed Financial Statements
 For the Six Months Ended June 30, 2014 and 2013
(Unaudited)
 
Valuation of Awards
 
Under ASC 718, the weighted average grant date fair value of options granted was $0.61 for options granted for the six months ended June 30, 2014. The per-share fair value of each stock option was determined on the date of grant using the Black-Scholes model using the following weighted average assumptions:
 
   
Six Months Ended
June 30, 2014
 
Exercise Price
    1.00  
Expected life (years)
    6.12  
Risk-free interest rate
    1.61 %
Expected volatility
    67.50 %
Expected dividend yield
    0 %
 
The expected life of options granted represents the weighted average period that the options are expected to remain outstanding. The Company determined the expected life assumption based on the Company's historical exercise behavior combined with estimates of the post-vesting holding period. Expected volatility is based on historical volatility of peer companies in the Company's industry that have similar vesting and contractual terms. The risk free interest rate is based on the implied yield currently available on U.S. Treasury issues with terms approximately equal to the expected life of the option. The Company currently has no history or expectation of paying cash dividends on its common membership interests.

Stock-based Compensation Expense 
 
As of June 30, 2014, total compensation cost related to stock options granted, but not yet recognized, was $1,396,430 which the Company expects to recognize over a weighted-average period of approximately 1.42 years. Stock-based compensation expenses related to all employee and non-employee stock-based awards were $133,662 and $47,627 for the six months ended June 30, 2014 and 2013, respectively.
 
Restricted Stock Awards

During 2011, the Company had issued restricted stock awards with respect to 359,640 underlying shares under the 2008 Plan. The restricted stock awards vested over a term of four years with 25% per year. As of December 31, 2013 and June 30, 2014, 221,858 and 233,960 restricted common shares were outstanding but not yet issued under these awards, respectively. The Company is obligated to issue these awards upon request by the holder of the award. During the each of the six month periods ended June 30, 2014 and 2013, the Company recorded stock based compensation of $919. As of June 30, 2014, unrecognized stock based compensation expense related to restricted stock awards granted, but not yet vested was $2,000 which the Company expects to recognize over a weighted average period of less than one year.

Note 10 – Subsequent Events
 
Management has evaluated all activity and concluded that no subsequent events have occurred that would require recognition in the financial statements or disclosure in the notes to the financial statements.
 
 
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
Forward-Looking Statements
 
The following management’s discussion and analysis should be read in conjunction with our historical financial statements and the related notes thereto. The management’s discussion and analysis contains forward-looking statements, such as statements of our plans, objectives, expectations and intentions. Any statements that are not statements of historical fact are forward-looking statements. When used, the words “believe,” “plan,” “intend,” “anticipate,” “target,” “estimate,” “expect” and the like, and/or future tense or conditional constructions (“will,” “may,” “could,” “should,” etc.), or similar expressions, identify certain of these forward-looking statements. These forward-looking statements are subject to risks and uncertainties, including those under “Risk Factors” in Amendment No. 1 to the Current Report on Form 8-K we filed with the SEC on March 31, 2014, that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. Our actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of several factors. We do not undertake any obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this Quarterly Report.
 
The following discussion highlights the our results of operations and the principal factors that have affected our financial condition as well as our liquidity and capital resources for the periods described, and provides information that management believes is relevant for an assessment and understanding of the statements of financial condition and results of operations presented herein. The following discussion and analysis are based on our unaudited financial statements contained in this Quarterly Report, which we have prepared in accordance with United States generally accepted accounting principles. You should read the discussion and analysis together with such financial statements and the related notes thereto.
 
References in this section to “CÜR Media,” “we,” “us,” “our,” “the Company” and “our Company” refer to CÜR Media, Inc. (formerly known as Duane Street Corp.), and its consolidated subsidiary, CÜR Media, LLC (formerly known as Raditaz, LLC) (“Raditaz”).
 
Basis of Presentation
 
As a result of the Contribution (as defined below) and the related change in our business and operations, a discussion of our past financial results is not pertinent, and under applicable accounting principles the historical financial results of Raditaz the accounting acquirer, prior to the Contribution are considered the historical financial results of the Company.
 
The audited financial statements for our fiscal year ended December 31, 2013 and the audited financial statements as amended filed with the Securities Exchange Commission on Form 8-K/A on April 23, 2014, include a summary of our significant accounting policies and should be read in conjunction with the discussion below. In the opinion of management, all material adjustments necessary to present fairly the results of operations for such periods have been included in these audited financial statements. All such adjustments are of a normal recurring nature.
 
 
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General Overview
 
Raditaz was founded as a Connecticut limited liability company in February 2008. Activities since inception were devoted primarily to the development and commercialization of Raditaz, a DMCA compliant internet radio product. Raditaz was launched in early 2012 and the platform was continually developed and improved through November 2013 when its iOS, Android and web products were removed from the market, to allow us to focus on the further development of our product.
 
The Raditaz music streaming platform and products have been under development since 2010 and, prior to the PPO (as defined below) have been financed from angel investments in the aggregate amount of approximately $4,858,000, $150,000 of financing from a promissory note from CT Innovations, Incorporated, and a $100,000 promissory note and a $100,000 grant from the State of Connecticut Department of Economic Development.
 
On January 28, 2014, we consummated a contribution transaction (the “Contribution”) with Raditaz, pursuant to a Contribution Agreement by and among the Company, Raditaz, and the holders of a majority of Raditaz’s limited liability company membership interests (the “Contribution Agreement”). In connection with the Contribution, and in accordance with the terms and conditions of the Contribution Agreement, all 39,249,885 outstanding Raditaz limited liability company membership interests were exchanged for approximately 10,000,000 restricted shares of our common stock, par value $0.0001 per share (“Common Stock”), and outstanding options to purchase 6,500,000 restricted common units of Raditaz were exchanged for an aggregate of (i) approximately 1,339,722 non-statutory stock options to purchase shares of our Common Stock at an average exercise price of approximately $3.63 per share, and (ii) approximately 316,331 restricted stock awards (of which approximately 221,863 were fully vested and represent approximately 221,863 outstanding shares of our Common Stock). As a result of the Contribution, Raditaz became our wholly owned subsidiary.
 
Upon the closing of the Contribution, pursuant to the terms and conditions of a Split-Off Agreement (the “Split-Off Agreement”) and a General Release Agreement (the “General Release Agreement”), we transferred all of our pre-Contribution operating assets and liabilities to our wholly-owned special-purpose subsidiary, Duane Street Split Corp., a Delaware corporation, formed on January 10, 2014 solely for this purpose (“Split-Off Subsidiary”). Thereafter, pursuant to the Split-Off Agreement, we transferred all of the outstanding shares of capital stock of Split-Off Subsidiary to Peretz Yehuda Aisenstark and Yair Shofel, our pre-Contribution majority stockholders, and former officers and directors (the “Split-Off”), in consideration of and in exchange for (i) the surrender and cancellation of an aggregate of 24,755,859 shares of our Common Stock held by Mr. Aisenstark and Mr. Shofel (which were cancelled and resumed the status of authorized but unissued shares of our Common Stock) and (ii) certain representations, covenants and indemnities.
 
In connection with the Contribution and Split-Off, we changed our business focus to the business of Raditaz, which is to develop and commercialize a streaming music experience for listening on the web and mobile devices, and will continue the existing business operations of Raditaz as a publicly-traded company. As a result of the Contribution and Split-Off, we ceased to be a shell company.
 
Also on January 28, 2014, we consummated an initial closing (the “Initial Closing”) of our private placement offering (the “PPO”) of a minimum of $4,000,000 through the sale of 4,000,000 units of our securities (each, a “Unit” and collectively, the “Units”), and a maximum of $7,000,000 through the sale of 7,000,000 Units, with an additional 1,000,000 Units subject to offer and sale at our discretion pursuant to an over-allotment option (the “Over-Allotment Option”), at an offering price of $1.00 per Unit (the “PPO Price”), each Unit comprised of one (1) share of our Common Stock and a warrant to purchase one (1) share of our Common Stock at an exercise price of $2.00 per share for a term of five (5) years (“PPO Warrants”). We sold an aggregate of approximately 4,075,036 Units in the Initial Closing of the PPO, for gross proceeds of approximately $4,075,036 (before deducting placement agent fees and expenses of the PPO estimated at approximately $818,254).
 
 
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The placement agent for the PPO and its sub-agent were paid an aggregate commission of approximately $407,504 and were issued warrants to purchase an aggregate of approximately 407,504 shares of our Common Stock at an exercise price of $1.00 per share for a term of five (5) years (“Broker Warrants”).
 
In connection with the Initial Closing of the PPO, our stockholders prior to the Contribution (excluding Peretz Yehuda Aisenstark and Yair Shofel, who surrendered their shares in the Split-Off) (the “Pre-Contribution Stockholders”), surrendered for cancellation an aggregate of approximately 715,280 shares of our Common Stock. These shares were cancelled pursuant to an agreement we had with the Pre-Contribution Stockholders to cancel a portion of their shares such that the aggregate number of shares they collectively held at the time of the Initial Closing of PPO was equal to 19.9% of the total outstanding shares of our Common Stock, giving effect to the Initial Closing of the PPO, the Split-Off and the Contribution.
 
On January 31, 2014, we changed our name to CÜR Media, Inc., a name which more accurately represents our new business focus. In connection with the name change, we changed our OTC trading symbol to “CURM.”
 
In addition, on January 31, 2014, we increased our number of authorized shares to 310,000,000 shares, consisting of (i) 300,000,000 shares of Common Stock, and (ii) 10,000,000 shares of “blank check” preferred stock, par value $0.0001 per share (“Preferred Stock”).
 
Further, on January 31, 2014, our Board of Directors authorized a 16.503906-for-1 forward split of our Common Stock, in the form of a dividend, with a record date of February 11, 2014 (the “Record Date”), and the payment date of February 14, 2014 (the “Payment Date”). On the Payment Date, each shareholder of our Common Stock as of the Record Date received 15.503906 additional shares of Common Stock for each one share owned. Share and per share numbers in this report relating to our Common Stock have been retrospectively adjusted to give effect to this forward stock spilt, unless otherwise stated.
 
Effective as of March 13, 2014, we increased the Over-Allotment Option for the PPO from 1,000,000 Units to 3,000,000 Units, such that the maximum aggregate number of Units that may be sold in the PPO, including the Over-Allotment Option, was 10,000,000 Units.
 
On March 14, 2014, we consummated a second closing (the “Second Closing”) of the PPO, in connection with which we issued and sold approximately 4,635,019 additional Units at the PPO Price. The aggregate additional gross proceeds from the Second Closing of the PPO were approximately $4,635,019 (before deducting placement agent fees and expenses of the PPO estimated at approximately $546,132).
 
The placement agent for the PPO and its sub-agent were paid an aggregate commission of approximately $463,447 and were issued Broker Warrants to purchase an aggregate of approximately 463,447 shares of our Common Stock.
 
On March 28, 2014, we consummated a third and final closing (the “Third Closing”) of the PPO, in connection with which we issued and sold approximately 970,300 additional Units at the PPO Price. The aggregate additional gross proceeds from the Third Closing of the PPO were approximately $970,245 (before deducting placement agent fees and expenses of the PPO estimated at approximately $171,102).
 
The placement agent for the PPO and its sub-agent were paid an aggregate commission of approximately $97,030 and were issued Broker Warrants to purchase an aggregate of approximately 97,030 shares of our Common Stock.
 
 
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In connection with the Third Closing of the PPO, we issued to the Pre-Contribution Stockholders an aggregate of approximately 1,379,631 shares of our Common Stock, in accordance with our agreement to issue to the Pre-Contribution Transaction Stockholders additional shares of our Common Stock so that their pro forma percentage ownership would remain 19.9%, giving effect to the Contribution, Spilt-Off and PPO.
 
As of June 30, 2014, we had devoted substantially all of our efforts to product development, raising capital and building our technology infrastructure. As of that date, we did not receive any revenues from our planned principal operations.
 
Our Strategy
 
Raditaz’s CÜR product (“CÜR”) is a new streaming music experience that combines the listening experience of free internet radio products with an on-demand listening experience for listening on web and mobile devices. CÜR will target consumers who are seeking a more comprehensive music streaming service. We believe that the CÜR product will include a hybrid model that includes many features that free, ad-supported internet radio products provide, without interruptive advertising, with a limited on-demand offering and will include a toolset that enables consumers to curate their playlists.
 
In addition to revenue from subscriptions, our business plan includes a second revenue stream of personalized advertising, which never interrupts a stream but targets a user’s listening habits. The advertising will be in the form of video, display ads, email and text messages. Advertisers may also create and sponsor playlists.
 
Our business plan further includes a third revenue stream from the sale of music, concert tickets and merchandise through our music streaming service, tailored to each listeners taste based on prior listening trends.
 
In addition, Raditaz’s business plan includes distributing CÜR’s music streaming service through Apple’s iTunes App Store to iOS devices, Google’s Google Play Store to Android devices and the internet, among other distribution channels and platforms. At launch, we plan to have an iOS application, Android application and a CÜR website.
 
We plan to source our music from Musicnet, Inc. d/b/a Medianet Digital, Inc. We also plan to use Amazon web services to support certain of the technological needs of the business.
 
We plan to launch our CÜR music streaming product and platform in late 2014 or in the first quarter of 2015.
 
Results of Operations

Three Month Period Ended June 30, 2014 Compared to Three Month Period Ended June 30, 2013

Revenues
 
We have not generated any material revenues for the three months ended June 30, 2014 or 2013.
 
 
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Operating Expenses
 
Overview
 
Total operating expenses for the three months ended June 30, 2014 and 2013 were $1,346,739 and $300,687, respectively. The increase in total operating expenses of $1,046,052, or approximately 348.3%,was primarily related to an increase in employee compensation of approximately $410,000, an increase in non-cash compensation expense for stock and warrant issuances of approximately $65,000, an increase in consultant expenses of approximately $362,000, an increase in professional services of approximately $110,000, an increase in other operating expenses of approximately $110,000, and an increase in marketing and advertising of approximately $92,000. These increases were partially offset by a decrease in content costs of approximately $95,000.
 
Research and Development Expenses
 
For the three months ended June 30, 2014 and 2013, research and development expenses were $955,112 and $276,812, respectively. Research and development expenses increased by $678,300, or approximately 245.0%, primarily due to an increase in consultant fees for application and business development of approximately $362,000, an increase in employee wages associated with the application development of approximately $317,000, an increase in other expenses for recruiting, travel, office and other expenses of approximately $106,000 and an increase in costs to create materials for business development of approximately $40,000. These increases were partially offset by a decrease in costs associated with music licensing and hosting of approximately $95,000 and 12,000, respectively.
 
General and Administrative Expenses
 
For the three months ended June 30, 2014 and 2013, general and administrative expenses were $308,852 and $12,857, respectively. General and administrative expenses increased by $295,995, or approximately 2,302.2%, primarily due to an increase of $148,000 in professional expenses, legal and accounting fees, related to the activities associated with the Contribution, re-capitalization and financial reporting requirements, $93,000 in compensation, and $53,000 in marketing and investor relations development. These increases were partially offset by a decrease in costs associated with the facilities. General and administrative expenses include wages expenses, facilities and professional fees.

Stock based Compensation Expenses

For the three months ended June 30, 2014 and 2013, stock based compensation expenses were $76,512 and $11,018, respectively. Stock based compensation expenses increased due to the grant of additional options since the second quarter of 2013 with a higher than average fair value.

Other Income (Expense)

For the three months ended June 30, 2014 and 2013, other income (expense) was $440, 907 and ($5,576), respectively. Other income (expense) increased due to change in fair value of the warrants issued in 2014.

Six Month Period Ended June 30, 2014 Compared to Six Month Period Ended June 30, 2013
 
Revenues
 
We have not generated any material revenues for the six months ended June 30, 2014 or 2013.
 
 
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Operating Expenses
 
Overview
 
Total operating expenses for the six months ended June 30, 2014 and 2013 were $3,571,563 and $618,424, respectively. The increase in total operating expenses of $2,953,139, or approximately 477.8%, was primarily related to an increase in employee compensation of approximately $656,000, an increase in non-cash compensation expense for stock and warrant issuances of approximately $1,466,000, an increase in consultant expenses of approximately $600,000, an increase in professional services of approximately $150,000, an increase in other operating expenses of approximately $175,000 and an increase in marketing and advertising of approximately $100,000. These increases were partially offset by a decrease in content costs of approximately $155,000.
 
Research and Development Expenses
 
For the six months ended June 30, 2014 and 2013, research and development expenses were $1,617,443 and $530,374, respectively. Research and development expenses increased by $1,087,069, or approximately 205.0%, primarily due to an increase in consultant fees for application and business development of approximately $600,000, an increase in employee wages associated with the application development of approximately $508,000, an increase in other expenses for travel, office and other expenses of approximately $171,000, and an increase in costs to create materials for business development of approximately $48,000. The increases were partially offset by a decrease in costs associated with music licensing of approximately $155,000.
 
General and Administrative Expenses
 
For the six months ended June 30, 2014 and 2013, general and administrative expenses were $433,335 and $37,102, respectively. General and administrative expenses increased by $396,233, or approximately 1068.0%, primarily due to an increase of $194,000 in professional expenses, legal and accounting fees, related to the activities associated with the Contribution, re-capitalization and financial reporting requirements, $147,000 in compensation, and $53,000 in marketing and investor relations development. General and administrative expenses include wages expenses, facilities and professional fees.

Stock based Compensation Expenses

For the six months ended June 30, 2014 and 2013, stock based compensation expenses were $1,513,293 and $47,627, respectively. Stock based compensation expenses increased due to the grant of additional options in the first half of 2014 with a higher average fair value.

Other Income (Expense)

For the six months ended June 30, 2014 and 2013, other income (expense) was $479,620 and ($10,952), respectively. Other income (expense) increased due to change in fair value of the warrants issued in 2014.

Liquidity and Capital Resources

Sources of Liquidity
 
Since inception, we satisfied our operating cash requirements from private placements of membership interests in Raditaz.
 
During 2011, Raditaz received subscriptions for the private placement of common stock in the amount of $1,023,746, which was funded to us at various dates during 2011.
 
In the first quarter of 2012, Raditaz received subscriptions and funding for the private placement of common stock in the amount of $322,515. At various dates between April 2012 and January 9, 2014, an additional $1,115,432 in subscriptions and funding for the private placement of common stock was funded to us.
 
 
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In January 2014, warrants to purchase 186,091 shares of common stock were exercised resulting in gross proceeds of $99,695.
 
We have raised aggregate gross proceeds of approximately $9,680,300 in our PPO (before deducting placement agent fees and expenses of the PPO of approximately $1,529,000). With the proceeds from the PPO, management believes we have sufficient capital to fund our research and development and related general and administrative expenses for at least the next 3-9 months of operations under our current business plan. Management believes we will need to raise additional capital prior to our planned launch of CÜR in late 2014 or in the first quarter of 2015.
 
We are contemplating raising an additional $25 - $30 million or more prior to the planned launch of CÜR, to be used for marketing CÜR, content license costs and working capital. This fundraising has not yet begun, and no specific terms have been set. There can be no assurance that financing will be available when required in sufficient amounts, on acceptable terms or at all.

We expect that we will need to raise funds in order to effectuate our business plan. We anticipate that we will need to seek financing through means such as borrowings from institutions or private or public equity or debt offerings. There can be no assurance that we will be able to raise such funds. If we are unsuccessful at raising sufficient funds, for whatever reason, to fund our operations, we may be forced to seek a buyer for our business or another entity with which we could create a joint venture. If all of these alternatives fail, we expect that we will be required to seek protection from creditors under applicable bankruptcy laws.

Net Cash Used in Operating Activities

Net cash used in operating activities was $2,148,998 for the six months ended June 30, 2014, as compared to net cash used of $456,266 for the six months ended June 30, 2013. The increase of $1,692,732, or 371%, in net cash used in operations was primarily due to an increase non-cash compensation expense of $1,465,666 offset by a decrease in accrued liabilities of $152,000, non-cash change in fair value of derivative liabilities of $481,900 and an increase in the net operating loss compared with six months ended June 30. 2013.

Net Cash Used in Investing Activities

During the six months ended June 30, 2014 and 2013, we used $ 50,742 and $1,201, respectively, of cash in investing activities. The cash used in investing activities in the six months ended June 30, 2014 was for the purchase of computers and related hard ware, software and other office equipment associated with additional staff and development.

Net Cash Provided by Financing Activities

During the six months ended June 30, 2014 and 2013, we received $8,138,739 and $531,966, respectively, in proceeds from the sale of common stock and/or warrants of the Company. The $8,138,739 we received during the six months ended June 30, 2014, was primarily related to the PPO.

Going Concern

Our independent auditor has expressed doubt about our ability to continue as a going concern and believes that our ability is dependent on our ability to implement our business plan, raise capital and generate revenues. See Note 2 of our financial statements.
 
 
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Off-Balance Sheet Arrangements
 
We have not entered into any off-balance sheet financing arrangements and have not formed any special purpose entities. We have not guaranteed any debt or commitments of other entities or entered into any options on non-financial assets.

Contractual Obligations

None.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.
 
ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures, as defined in Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Exchange Act that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and that such information is accumulated and communicated to our senior management, currently consisting of Thomas Brophy, our President, Chief Executive Officer, interim Chief Financial Officer and Treasurer (Principal Executive Officer and Principal Financial Officer), as appropriate to allow timely decisions regarding required disclosure.

Immediately following the Contribution, and in connection with the preparation of this Quarterly Report, we carried out an evaluation, under the supervision and with the participation of our senior management, currently consisting of Thomas Brophy, our President, Chief Executive Officer, interim Chief Financial Officer and Treasurer (Principal Executive Officer and Principal Financial Officer), of the effectiveness of the design and operation of our predecessor’s disclosure controls and procedures existing as of June 30, 2014. Based on the evaluation of these disclosure controls and procedures, and in light of the material weaknesses found in our internal controls over financial reporting, Thomas Brophy, our President, Chief Executive Officer, interim Chief Financial Officer and Treasurer (Principal Executive Officer and Principal Financial Officer) concluded that our disclosure controls and procedures were not effective as of such date.

Changes in Internal Control over Financial Reporting

There has been no change in our internal control over financial reporting identified in connection with our evaluation we conducted of the effectiveness of our internal control over financial reporting as of June 30, 2014, that occurred during our second quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
 
 
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PART II – OTHER INFORMATION
 
ITEM 1. LEGAL PROCEEDINGS
 
None.
 
ITEM 1A. RISK FACTORS
 
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.
 
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 
Other than as reported in our Current Reports on Form 8-K, or prior periodic reports, we have not sold any of our equity securities during the period covered by this Quarterly Report, or subsequent period through the date hereof, except as follows:

Between June 25, 2014 and August 11, 2014, we issued an aggregate of 125,000 non-statutory stock options under our 2014 Equity Incentive Plan to employees of the Company at an exercise price of $1.00 per share, a price equal to the PPO Price.

The issuances of the non-statutory stock options in connection with these transactions were exempt from registration under Rule 701 under the Securities Act as transactions pursuant to compensatory benefit plans and contracts relating to compensation as provided under Rule 701 or under Section 4(a)(2) of the Securities Act as transactions by an issuer not involving any public offering.
 
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
 
None.
 
ITEM 4. MINE SAFETY DISCLOSURES
 
Not applicable.
 
ITEM 5. OTHER INFORMATION
 
On June 26, 2014, we filed a Registration Statement on Form S-1 (File No. 333-197043) (the “Registration Statement”) to register for resale (a) the shares of common stock, and the shares of common stock issuable upon exercise of the common stock warrants, that were purchased in the PPO, (b) the shares of common stock issuable upon the exercise of the common stock warrants the placement agent, and its sub-agents, received in consideration for services they rendered in connection with the PPO, and (c) the Adjustment Shares issued to our Pre-Contribution Transaction Stockholders. The Registration Statement was declared effective by the SEC as of July 18, 2014. 
 
 
25

 
 
ITEM 6. EXHIBITS
 
In reviewing the agreements included as exhibits to this Quarterly Report, please remember that they are included to provide you with information regarding their terms and are not intended to provide any other factual or disclosure information about the Company or the other parties to the agreements. The agreements may contain representations and warranties by each of the parties to the applicable agreement. These representations and warranties have been made solely for the benefit of the parties to the applicable agreement and:

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

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

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

·  
were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments.
 
Accordingly, these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other time. Additional information about the Company may be found elsewhere in this Form 10-Q and the Company’s other public filings, which are available without charge through the SEC’s website at http://www.sec.gov.
 
The following exhibits are included as part of this report:
 
Exhibit No.
 
SEC Report
Reference No.
 
Description
         
31.1
 
**
 
Certification of Principal Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2
 
**
 
Certification of Principal Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1
 
**
 
Certifications of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2
 
**
 
Certifications of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS
 
**
 
XBRL Instance Document
101.SCH
 
**
 
XBRL Taxonomy Extension Schema Document
101.CAL
 
**
 
XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF
 
**
 
XBRL Taxonomy Extension Definition Linkbase Document
101.LAB
 
**
 
XBRL Taxonomy Extension Label Linkbase Document
101.PRE
 
**
 
XBRL Taxonomy Extension Presentation Linkbase Document
_________________
** Filed herewith
 
 
26

 
 
SIGNATURES
 
Pursuant to the requirements 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.
 
 
 
CÜR MEDIA, INC.
 
       
Dated: August 14, 2014
By: 
/s/ Thomas Brophy
 
 
Name:
Thomas Brophy
 
 
Title:
President, Chief Executive Officer, interim Chief Financial Officer and Treasurer (Principal Executive Officer and Principal Financial Officer)
 
 
 
27

 
 
EXHIBIT INDEX
 
Exhibit No.
 
SEC Report
Reference No.
 
Description
         
31.1
 
**
 
Certification of Principal Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2
 
**
 
Certification of Principal Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1
 
**
 
Certifications of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2
 
**
 
Certifications of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS
 
**
 
XBRL Instance Document
101.SCH
 
**
 
XBRL Taxonomy Extension Schema Document
101.CAL
 
**
 
XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF
 
**
 
XBRL Taxonomy Extension Definition Linkbase Document
101.LAB
 
**
 
XBRL Taxonomy Extension Label Linkbase Document
101.PRE
 
**
 
XBRL Taxonomy Extension Presentation Linkbase Document
         
_______________
* Management contract or compensatory plan or arrangement
 
** Filed herewith
 
 
28