MOTIVATING THE MASSES INC - FORM 10-K

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EX-32.2 - EXHIBIT 32.2 - MOTIVATING THE MASSES INC	s105677_ex32-2.htm
EX-32.1 - EXHIBIT 32.1 - MOTIVATING THE MASSES INC	s105677_ex32-1.htm
EX-31.2 - EXHIBIT 31.2 - MOTIVATING THE MASSES INC	s105677_ex31-2.htm
EX-31.1 - EXHIBIT 31.1 - MOTIVATING THE MASSES INC	s105677_ex31-1.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

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

For the Fiscal year ended December 31, 2016

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

For the transition period from _________ to __________

Commission File Number 333-187554

MOTIVATING THE MASSES, INC.

(Exact name of registrant as specified in its charter)

Nevada		88-0410660
(State or Other Jurisdiction of		(I.R.S. Employer
Incorporation or Organization)		Identification No.)

5950 La Place Court, Suite 160 Carlsbad, California		92008
(Address of Principal Executive Offices)		(Zip Code)

(760) 931-9400

(Registrant's telephone number, including area code)

Not Applicable

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

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

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

Common Stock, $.001 par value per share

Title of class

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

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

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark if disclosure of delinquent filers pursuant 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 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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

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

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

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of June 30, 2016: $6,668,752.

As of April 14, 2017, the Company had 14,750,734 shares of its common stock issued and outstanding, par value $0.001 per share.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Company’s definitive information statement (“Information Statement”) for its annual meeting of stockholders for fiscal year ended December 31, 2016 (“Annual Meeting of 2016”) are incorporated by reference into Part III of this Annual Report on Form 10-K to the extent stated herein. Such Information Statement will be filed with the Securities and Exchange Commission (the “SEC”) within 120 days of the end of the Company’s fiscal year ended December 31, 2016.

		Page

	PART I

Item 1.	Business	3
Item 1A.	Risk Factors	15
Item 1B.	Unresolved Staff Comments	26
Item 2.	Properties	26
Item 3.	Legal Proceedings	26
Item 4.	Mine Safety Disclosures	26

	PART II

Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	27
Item 6.	Selected Financial Data	29
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	33
Item 8.	Financial Statements and Supplementary Data	33
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	35
Item 9A.	Controls and Procedures	35
Item 9B.	Other Information	36

	PART III

Item 10.	Directors, Executive Officers and Corporate Governance	36
Item 11.	Executive Compensation	36
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	36
Item 13.	Certain Relationships and Related Transactions, and Director Independence	37
Item 14.	Principal Accounting Fees and Services	37

	PART IV

Item 15.	Exhibits, Financial Statement Schedules	37

PART I

Forward-Looking Information

This Annual Report of Motivating the Masses, Inc. on Form 10-K contains forward-looking statements, including but not limited to those identified with the words, “anticipates,” “believes,” “expects,” “plans,” “intends,” “objectives,” and similar expressions. These statements reflect management’s best judgment based on factors known at the time of such statements. The reader may find discussions containing such forward-looking statements in the material set forth under “Management’s Discussion and Analysis and Plan of Operations,” generally, and specifically therein under the captions “Liquidity and Capital Resources” as well as elsewhere in this Annual Report on Form 10-K. Actual events or results may differ materially from those discussed herein. The forward-looking statements specified in the following information have been compiled by our management on the basis of assumptions made by management and considered by management to be reasonable. Our future operating results, however, are impossible to predict and no representation, guaranty, or warranty is to be inferred from those forward-looking statements. The assumptions used for purposes of the forward-looking statements specified in the following information represent estimates of future events and are subject to uncertainty as to possible changes in economic, legislative, industry, and other circumstances. As a result, the identification and interpretation of data and other information and their use in developing and selecting assumptions from and among reasonable alternatives require the exercise of judgment. To the extent that the assumed events do not occur, the outcome may vary substantially from anticipated or projected results, and, accordingly, no opinion is expressed on the achievability of those forward-looking statements. No assurance can be given that any of the assumptions relating to the forward-looking statements specified in the following information are accurate, and we assume no obligation to update any such forward-looking statements.

ITEM 1. BUSINESS

BACKGROUND

Founded on September 2, 1998 under the laws of the state of Nevada, Motivating the Masses, Inc. (“MNMT” or the “Company”) provides professional development and coaching services through a series of proprietary and customized programs. We are headquartered in Carlsbad, California. Our coaches travel throughout the country and the world to empower businesses with full-scale strategies from business plan preparation to fully-integrated marketing programs.

SUMMARY OF BUSINESS OPERATIONS

Our business consultation services address the range of today’s best practices in strategic planning, cash flow planning, cost control, budgeting, product costing, designing an estimating system, management issues, wage and compensation systems, new product introduction systems, inventory management, production planning, people management systems, compensation structures, and business performance metrics.

Our business division provides customized workshops for companies of all sizes, from start-up to multi-national corporations. Our team of highly experienced business coaches meet with commercial clients and deliver detailed and time-proven success strategies and motivational tools designed to unleash the skills and talents of our clients’ employees. Our coaches also work directly with corporate executives to help refine their own skills in the critical areas of negotiation, leadership development and employee training.

For individuals, we work one on one and with groups small and large to change mindsets and transform lives. Under our philosophy of “No Matter What Obstacles One faces”, our coaches and trainers show how to push past limitations and reach the next steps in success, wealth, and happiness.

Our proprietary programs are available for sale at our live events as well as on our web site. Our coaches provide the tools, insights and techniques that help people of all ages and from all walks of life triumph in their personal and professional goals. Our programs and content have been developed and honed under the leadership of Lisa Nichols, our CEO. Lisa has developed an outstanding reputation in the professional development industry. Over the past 19 years, over 230,000 individuals have participated in our coaching and development programs, and we have touched over 36 million people via multiple media platforms.

We believe that our business has been driven by delivery of best-in-class content, the regular introduction of new content and delivery methods, as well as the expansion of our sales and content-delivery channels. We are also of the opinion that these initiatives have enabled us to increase our client base, improve overall retention, and create a business model with strong recurring revenue.

Our services are grouped into two disciplines: Business Segment and Personal Segment. The following summarizes the key service offerings in each segment.

Business Segment (79% of 2016 revenue)

Global Leadership Program (GLP) is a 12-month program with group coaching that provides students with a step-by-step guide on building a business around an individual brand. This segment accounted for 30% of our business segment revenue in 2016.

Executive Coaching Services focus on a client’s specific goals and are delivered by our highly experienced team of coaches. Coaching services are delivered in a variety of formats including online, one-day VIP days and/or six to ten-session coaching programs. This business line accounted for 24% of our business segment revenue in 2016.

Business Academy and 14K are seven-month training programs for entrepreneurs that are looking to increase their revenue and grow their brand. 14K was rebranded into Business Academy in mid-2016. This segment accounted for 17% of our business segment revenue in 2016.

Keynotes/Speaking Fees are generated by our coaches at major industry events and at private gatherings. These events also offer us the opportunity to promote our capabilities and other product/service offerings. This segment accounted for 16% of our business segment revenue in 2016.

Speak and Write to Make Millions is a live training program offered over three days and teaches attendees how to speak powerfully, write best sellers, and increase their income. This segment accounted for 9% of our business segment revenue in 2016.

Speakers Vault is a comprehensive on-line training program for speakers. This segment accounted for 4% of our business segment revenue in 2016.

Personal Segment (16% of 2016 revenue)

Breakthrough the Retreat is an intimate, up-close and personal four-day intensive program with Lisa Nichols and three master facilitators. The program is designed for executives and entrepreneurs ready to take a big step in their lives, to enhance their happiness and income. This program accounted for 43% of our personal segment revenue in 2016.

Abundance Now includes two live events and a 12-part online course that includes 12 video modules featuring Lisa Nichols and workbooks for each module. This program accounted for 35% of our personal segment revenue in 2016.

Transformational Coaching is geared toward personal development, and is provided over six sessions in a 12-week period. This segment accounted for 12% of our personal segment revenue in 2016.

28 Days To Results and No Matter What are our newest on-line modules that we introduced in late 2016. These programs accounted for 6% of our personal segment revenue in 2016.

Motivating the Teen Spirit is an advanced life skills training for teens and their parents. Trainings are conducted three to four times a year in the United States as well as the Bahamas. Teenagers learn what their own emotional prosperity looks like, and parents are empowered with the skills needed to effectively communicate with their children. This program accounted for 4% of our personal segment revenue in 2016.

Royalties (5% of 2016 revenue)

Royalties largely represent payments relating to sales of the following publications: Abundance Now: Amplify Your Life & Achieve Prosperity Today and No Matter What!: 9 Steps to Living the Life You Love.

Markets and Clients

We focus our business on two primary markets – the small business segment (businesses with more than one employee/owner), and the entrepreneur segment, which includes home-based and one-person business operations. However, the Company has the capabilities and experience of serving larger organizations including Black Entertainment Television (BET), Google, Wells Fargo, Citi, Disney, General Motors, State Farm, Rockwell, The Steve Harvey Group and BMW.

Our target clients are skilled "technicians" who are gifted in the work of their business, but typically do not have the resources to have in-house staff dedicated to strategic planning, professional development and/or coaching.

In 2016, we served over 4,500 clients. We service clients from across the US as well as those based in international markets including the United Kingdom, Ireland, Australia, Malaysia, Spain, Hungary, Canada and Africa.

Personnel

We currently employ 8 full-time staff and two independent contractors. The employee base comprises of executive management, management, administration, and coaching personnel. Overall, we have what we believe is a highly competent and experienced team and a culture that is geared toward driving client satisfaction.

In addition to Lisa Nichols and Susie Carder, our core team of coaches consists of the following individuals:

Tia Ross, Director and Master Facilitator of Motivating the Teen Spirit – Ms. Ross facilitates workshops that focus on emotional healthiness and personal accountability. She has touched the lives of parents and youth in schools, in the juvenile justice system, and in social services across the nation. Ms. Ross also oversees the Teen & Youth and Parent Coaching programs at MNMT. Her experience is in the juvenile justice system of San Diego, including student worker, family support worker, SAY San Diego, CAT Team, WINGS Program Coordinator, and church services leader with volunteers of probation. She received her Bachelors of Science Degree from San Diego State University.

Margaret Packer, Executive Manager & Executive Coach – Ms. Packer manages the corporate movement and culture of MNMT. She is an accomplished leader who is organized and driven, with 15 years of experience upholding and executing the Company’s values and goals. Ms. Packer is the Master Facilitator of MNMT’s “World Class Executive Support Training” program.

Matt Gill – Mr. Gill began his journey with Motivating The Masses back in 2007 first as a Certified Facilitator for Motivating the Teen Spirit and now serves also as our Community Fulfillment Director & Personal Development Coach. He is dedicated to supporting and empowering the MNMT Community and is responsible for the overall experience and delivery of content and programs offered at MNMT. Mr. Gill has impacted the lives of adults and teens world-wide through coaching and Motivating The Teen Spirit program. He has extensive, recognized and rewarding experience as a trainer & coach including developing and delivering curriculum for companies such as Red Robin International, Six Flags & Disney. Prior to coming on board full time with MNMT, Mr. Gill served as Training & Events Director for Fix Your Funnel & Short Sale Genius where he trained and created education programs for Real Estate Agents and Marketing Entrepreneurs.

Dr. Ray Charles – Coaching is Dr. Ray’s life’s work. He is called to be A Ray of Light® (disarming the internal saboteurs) in the depth of the soul of business and business leaders, so that they can fully express the excellence in their DNA (Distinct Natural Ability). Dr. Ray received a post-graduate degree in Chemical Engineering that led him into the Oil & Gas, Investment Banking, and Risk Management industries. In 2000, driven by a deep conviction to lead leaders, he transitioned into full time ministry to offer spiritual coaching (Executive Coaching with a spiritual spin) to numerous leaders in the business, government, education, faith-based sectors. In 2008, he returned to Corporate America, to lead a high performance team within the nonprofit sector. He launched his Training and Development Company in 2015.

Value and Marketability Strengths

Operational

Name and Reputation: Over the past 18 years, we developed a strong reputation in the personal development industry and are well recognized for the quality of our programs and content delivery. We built a strong brand recognition and benefited from Ms. Nichols’ well-established name and identity in the marketplace. We currently have a global reach of more than 36 million.

Range of Programs and Service Offerings: We developed proprietary programs for business owners and executives. Our focus on developing best-in-class content and regularly updating its programs helped us stay at the forefront of the industry. We offer six programs in our Business segment and five programs in our Personal segment. We engage in a multi-segment strategy in our marketplace and offer products ranging in price from $28 to $47,500.

Diversified Client Base: No client represents more than 1% of our sales. The diversified customer base reduces the likelihood that our business will be significantly impacted by the loss of a single account.

Proprietary Expertise: We carved out a niche in the marketplace by focusing on the needs of small to medium-sized businesses. Further, we have developed unique programs geared toward leadership development and enhancing speaking and writing capabilities for skilled professionals.

Growth Opportunities: We launched two evergreen programs in the fourth quarter of 2016. Preliminary sales of these programs and the existing online modules exceeded $450,000 in 2016. We are confident that we can grow this business further with by expanding our marketing campaign to our captured audience of social media followers and our client database.

Operations and Company Structure: We built a strong personnel base including a seasoned executive management team, marketing and client service professionals, and experienced coaches. Further, we developed best practices with respect to program delivery and promotional activities.

Corporate Relationships: Many of the most prestigious corporations turn to us as a prime go-to resource for hands-on business-building coaching and training – as well as to help them bring their transformational messages to audiences across the US and around the world with customized live training events. Black Entertainment Television (BET), Google, Wells Fargo, Citi, Disney, General Motors, State Farm, Rockwell, The Steve Harvey Group and BMW are among the renowned companies that have utilized our services for professional management and leadership training.

International Reach: Our live speaking engagements has a global reach of 36 million, including a multi-country tour of South Africa, and key appearances in the United Kingdom, Malaysia, Ireland, Kazakhstan, Thailand, Hungary, Spain, Dominican Republic, Aruba, Costa Rica, Kiev, Mexico, Bali, Swaziland, Canada, Taiwan, British Virgin Islands, Slovenia, Greece, Australia and Barbados..

External

Market for the Company’s Services: The self-help marketplace experience two major shifts over the past four years. The demand for online content has risen dramatically. Secondly, there has been dramatic shift in the key participants in our marketplace. Steven Covey, Zig Ziglar and Jim Rohn have all passed away. Robert Kyoski filed for bankruptcy and Peter Lowe’s Get Motivated seminars went out of business. Louise Hay is in her 80s and Jack Canfield and Less Brown appear to be cutting back on their road schedules. Toby Robbins continues to have a strong presence in the marketplace but the marketplace is looking for new and fresh motivational speakers to fill the void left by the aforementioned individuals. With Lisa Nichols’ universal appeal, global reach of 36 million and our extensive content library and online training platform, we are strategically positioned to capitalize on this opportunity and be the next large-scale player in this space.

Products and Services

We are recognized as an industry leader in the professional development marketplace. We provide executive coaching and related services to business owners and executives.

We also help small business owners and entrepreneurs achieve their desired objectives generally related to quality of life in their professional and personal lives. We have developed a range of proprietary programs and services content, which offer a significant competitive advantage in the marketplace.

We have differentiated ourselves in the marketplace through a three-pronged approach to our business:

•

Creating best-in-class content and solutions in each of its service segments;

•

Continuing to invest in the refinement and expansion of content categories; and

•

Significantly increasing the size and capabilities of various sales and content-delivery channels.

Each year we make significant investments in the development and enhancement of our existing content, and the development of new services, features, and products that help small business owners and entrepreneurs achieve their goals and objectives. As an example, we launched several on-line training modules including 28 Days To Results, No Matter What and Speaker’s Vault. These new modules along with Abundant Life Course, which was launched in late 2015, collectively produced over $450,000 in new revenue in 2016.

We expect to continue introducing new and refreshed content and delivery methods. At the same time, we are making investments to expand the size and capabilities of our sales and delivery forces to attract and retain clients. One of our key strategic objectives is to consistently deliver quality results to clients. We are focused on ensuring that our content and offerings are best-in-class, and that they have a measurable, lasting impact on clients’ results. Our leadership places a strong emphasis on client satisfaction, and operates with the philosophy that measurable improvement in clients’ businesses is key to retaining current clients and obtaining new sales opportunities.

We incorporate a comprehensive quality-control program when providing professional development services to ensure client satisfaction. We view each contract as an agreement between partners who wish to create a close and mutually beneficial long-term relationship.

Revenue Trend

Our revenue grew from $1.6 million in 2013 to $5.2 million in 2016, an average annual growth rate of 48%.

We expanded our marketing efforts and introduced new programs in 2016, which contributed to our record growth in 2016. Speaking fees exhibited a 300% increase, from $197,000 in 2015 to over $670,000 in 2016. The Company also launched its entrepreneurial programs in 2016: 14K and Business Academy, which collectively produced $745,000 in new revenue.

Revenue Segmentation

Our services are grouped in the following two disciplines: Business Segment and Personal Segment.

	Business Segment	Personal Segment
Services	Global Leadership Program	Retreats
	Executive Coaching	Abundance Now
	Business Academy / 14K	Transformational Coaching
	Keynotes / Speaking Fees Speak and Write to Make Millions Speakers’ Vault	28 Days / No Matter What Online Modules Motivating the Teen Spirit

Business Lines

The following summarizes our key service offerings by segment.

Business Segment

Global Leadership Program (GLP)

Our GLP program is priced at $47,500 and is a 12-month program that provides 96 hours of face-to-face small group interaction with monthly ‘mastermind’ calls and by-weekly accountability sessions. The program focuses on: (i) six critical steps for increasing the impact of current content; (ii) ways to have any audience member feel like they are the only ones in the room; (iii) learning the secrets of having participants take action on their goals; (iv) uncovering how the masters have people run to the back of the room to purchase more; (v) building trust and rapport in 60 seconds; (vi) developing a product library; (vii) learning to structure fees and multiplying income streams; (viii) producing an online presence; (ix) building a brand; and (x) monetizing one’s message.

Executive Coaching Services

We provide Executive Coaching services that focus on a client’s specific goals. This service is considered a premium service offered to “platinum” clients as it provides one on one exclusive coaching to shape, clarify, launch and accelerate a client’s business strategy. Products and programs vary from online programs where clients dictate the speed and duration of their program, to either a one-day VIP day or six to ten private coaching sessions. Our Coaching services segment represented 24% of our business segment revenue in 2016, or a total of approximately $1 million.

All of our coaches have a proven track record of personal and business success. Our coaching team includes four salaried employees and two independent contractors (with 1-year contracts). The pricing for Executive Coaching ranges from $12,500 to $25,000 depending on the coach and type of service provided.

Our clients either pay in full or make payments that coincide with the progress of their programs. We offer a 3-day cancellation policy on all of our program and services. Clients wishing to cancel after the three days, primarily due to financial reasons, can downgrade to a lower cost program. In the event clients wish to cancel and have paid for the service prior to receiving value, we offer a credit (no refunds are given); credits remain on the books for 12 months. Clients usually elect to close out their credits with coaching sessions or purchase an alternative service.

Business Academy and 14K

Represents a seven-month training program for entrepreneurs. 14K was rebranded into Business Academy in mid-2016. Programs includes seven teaching modules of intensive training with Lisa Nichols and/or Susie Carder and seven implementation calls with a master facilitator (7 ninety minute sessions, one hour of content and 30 minutes of Q&A) focusing on a wide range of topics including (1) business plan development training, (2) guidance on how to speak powerfully and increase stage impact, and (3) how to successfully host a profitable event.

Keynotes / Speaking Fees

Speaking fees range from $15,000 to $120,000 per event. Keynote speaking events include (i) Industry Events where we are paid to teach, and allowed to sell our programs, products and tools, (ii) Industry Events where we are not paid to teach, but still receive wide exposure to the industry, and we are allowed to sell our programs, products and tools, and (iii) Private Events where we are paid to teach but there is little to no exposure or opportunity to sell our programs, products and tools.

Speak and Write to Make Millions

An annual 3-day workshop event, Speak and Write to Make Millions is designed for those just starting out in the growing personal growth industry as speakers or writers – or for seasoned professionals looking to enhance their work and build their careers. Students attend live or online from over 30 countries. Speak and Write to Make Millions unveils the success principles behind getting works published, platform speaking and creating a thriving business based on attendees’ books and speaking subject matter. Featuring Lisa Nichols along with our top coaches, topics for the much-anticipated event become a comprehensive primer for building a successful career in motivational speaking – or just learning the key tools of the trade to enhance any executive position – as well as paving the way for a bestseller in the burgeoning self-help book category. This event will attract 500 to 850 in-person participants and over 2,000 participants on-line. Traditionally, over 35% of the in-person participants and 3% to 5 % of the online participants will purchase an additional service. The training, conducted in the spring each year, is offered for $597 (excluding room and board).

Speakers Vault

A comprehensive on-line training program with 54 models split into three programs that provides behind the scenes access in the exact sequence Motivating the Masses uses at its Events for Speakers, Authors and Coaches.

Personal Segment

Breakthrough the Retreat

Breakthrough the Retreat is an intimate up-close and personal four-day breakthrough training with Lisa Nichols and three other personal development master facilitators within MNMT. This program is conducted once a year, and priced at $6,997 (double occupancy including room and board) with a maximum occupancy of 50 participants.

Abundance Now

Our Abundance Now is a 12-part online course that includes 12 video modules featuring Lisa Nichols and includes workbooks for each module. The online course is a companion piece to Lisa Nichols’ newest book “Abundance Now”. The course is priced at $997.

Transformational Coaching

Transformational coaching services focus primarily on personal development. Coaches provide one on one coaching, assisting clients to push past limiting beliefs, addressing fears, setting clear goals and creating a realistic plan to achieve them. Our coaches also set up an accountability system to increase results. This coaching is offered at a cost of $6,800, which includes six private sessions over a 12-week period.

28 Days To Results and No Matter What

28 Days To Results is priced at $28 and includes 28 daily videos and daily action steps that will take customers through the 9 environments that make up an individual’s persona, and take meaningful action to produce results in all 9 areas. No Matter What online series is a 6-part, online training program that helps customers create breakthroughs in all areas of their life, and is priced at $194.

Motivating the Teen Spirit

Motivating the Teen Spirit is an advanced life skills training for teens and their parents. Teenagers learn what their own emotional prosperity looks like, and parents are empowered with the skills needed to effectively communicate with their children (e.g., listening to what is not being said, hearing a child’s silent cry for help, etc.). More than 80% of the attendees return to a subsequent training and/or go on to volunteer or facilitate future trainings. The price to attend is $198 total for a parent and teenager.

Intellectual Property

We have secured registered trademarks for the following names:

Yes! Yes!

Motivating the Teen Spirit

No Matter What

Motivating the Masses

Abundance Now

Customer Markets

We focus on two markets, the small business segment (businesses with more than one employee/owner), and the entrepreneur segment, which includes home-based and one-person business operations. Although we can service larger organizations, the greatest benefit of our services is derived from businesses with under $10 million in annual sales. The majority of these companies are comprised of "technicians" who are gifted in the work of their business, but typically do not have the resources to have in-house staff dedicated to strategic planning, professional development and/or coaching. Management’s goal is to secure approximately two-thirds of all its business from the small business segment because these organizations generally have greater financial resources than the entrepreneur segment.

The small business and entrepreneur markets are ideal targets for several reasons. As a small or entrepreneurial business, resources are often limited to core business functions such as production, administration, finance and distribution. Professional development, training, coaching and planning frequently go unnoticed and are often forgotten. As economic pressures increase and competition intensifies, these companies look for effective ways to increase their performance. Furthermore, as a small or entrepreneurial business, the owner is typically an accountable technician which means he or she has everything on the line with regard to their business succeeding or not, and that their area of expertise is in the business they are "in." Frequently, a technician will be attracted to the "work" of the business and neglect the fundamental health of the business, which includes nurturing both themselves and the customer base.

Geographic Markets

Each year, we join with a ‘who’s who’ of the motivational world to help deliver several of the most well attended live event training sessions in the US and in cities around the world. Mind Valley – Vishen Lakhiani’s global transformational powerhouse that is actively pushing the envelope in education for all ages in over 35 countries, represents one of the many partners that join with us to bring life-changing guidance and motivation to millions worldwide. We currently have clients in Australia, Africa and Europe in addition to our strong client base in the United States.

Market Analysis

Our activities and offerings embrace all of the industry’s touch points, including large-venue live showcase events, more intimate seminars and workshops, personal coaching and corporate training, and bestselling self-empowerment media such as DVD’s, books and audio CD programs. We are immersed in the full range of transformational categories, from business/sales skills and business/career opportunities to improving relationships and weight loss/fitness. At the same time, we are set apart as a company that is home to a team of highly- regarded motivational coaches based in cities across the country who provide their rich expertise to people from all walks of life and growth businesses of all sizes. We are deeply connected to our audiences and committed to bringing real change to millions the world over.

On an annual basis, the Company reaches 36 million people through its many media partnerships – including The Steve Harvey Show, The Today Show, Amplified Leaders and Mindvalley.

We design comprehensive coaching products and programs for personal enhancement and business applications. Our clients all share in common such goals as elevating their business acumen and profitability; uplifting their brand and unique selling proposition; and advancing their organization’s purpose and success in the marketplace.

Individuals that we attract often have average annual incomes exceeding $100,000, are college educated (many have advanced degrees), culturally diverse, well-traveled and entrepreneurially astute. The core demographic we serve are men and women between 35 and 55 who are vested in enhancing the quality of their lives, building additional skillsets and committed to enriching their communities.

The market is divided by distribution channel and product as follows:

Size of Related U.S. Self-Improvement Products & Services Market

($ in millions)	2011		2014		Avg. yearly growth: 2015- 2018F
Motivational Speakers *		199		200		3.0	%
Personal coaching (U.S.)		707		760		4.0	%
Public seminars		308		335		3.6	%
Total Value	$	1,214	$	1,295		3.7	%

Source: Marketdata estimates & forecasts

* top 9 speakers only

We believe that one of our growth drivers for 2017 will be the full-scale launch of our e-learning platform, which we expect to capitalize on the dramatic surge in demand for e-learning. According to Statistics MRC report titled “Global E-Learning Market Outlook (2014-2022)” released in September 2015, the e-earning market was approximately $165.36 billion in 2014 and is expected to grow at a compound annual growth rate of 5.08% to reach $243.8 billion by 2022. The reports cites the following key factors that are favoring the market’s growth: flexibility in learning, low cost, easy accessibility, increased effectiveness by animated learning, rise in number of internet users and an increasing access of broadband pooled with mobile phones with online capabilities. The United States leads in e-learning sales followed by Asia.

Competitive Landscape

The key element in purchase decisions made in the industry is trust in the reputation and reliability of the professional development firm. The professional development industry is fragmented and disorganized, with thousands of smaller consulting organizations and individual consultants for every one of the few dozen well-known companies.

Our competitors range from major international name-brand consultants to tens of thousands of individuals. One of our challenges is establishing ourselves as a complete professional development company, creating "other" experts the client trust outside of Lisa Nichols while creating trust and confidence at the same level on a consistent basis. When dealing with the small or entrepreneurial business market, cost or price is one of our greatest obstacles. We have therefore chosen to focus on building our brand as a reliable, cost effective and successful business relationship partner with our clientele.

One of our key competitive advantages is the relationship we build with clients. We offer clients a unique experience that is ongoing and reinforces development, versus a typical "one-time" seminar format. Our programs provide development and support for a year or more. Since each strategic workshop client immediately qualifies for one-on-one coaching, we’re able to manage and monitor the specific progress of each client throughout his or her development process.

Sales and Marketing

Overview

We believe that our primary keys to success are: (i) market exposure – building reputation and mind share; (ii) market penetration – both breadth and depth; (iii) client acquisition; (iv) client retention; and (v) achieving or surpassing projections through strong performance and fiscal management.

We generate revenue through the sale of our products and services. We have found that clients that attend our workshops have in essence pre-qualified themselves as people who are interested in learning about business and are willing to invest time and money to do so. At our seminars, we typically sell additional programs, tools and support to participants. At our typical seminar, 35% of the participants will spend at least $3,500 for some sort of after training education or support.

Marketing Strategy

Our marketing strategy is simple and cost-effective: exposure through live business seminars, which are delivered all over North America. We participated in, or conducted, over 25 live events in 2016 and this number is expected to grow to 30 in 2017. We are currently partnering with some of the leading online marketing firms to design and implement a robust and effective online marketing strategy.

Business Development Activities

We focus on marketing directly to over 600,000 professionals included in our proprietary database of over 215,000 (includes past and current clients, as well as any participant who attended an MNMT seminar and completed an evaluation) and 500,000 professionals via our social media platforms. We send a weekly newsletter featuring new products and services, success stories, and information on upcoming events. We believe that this approach results in considerable and consistent exposure with minimal cost.

One of our goals in 2017 is to build and leverage our database and client base to grow revenues. We conduct direct mailing with key affiliate partners, using the following four proven methods:

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Sample Previews: These are invitation-only workshops that we host for referral sources (i.e., accountants, attorneys, financial planners, insurance professionals) as well as owners of businesses in a target market. The previews will be the actual first year program offered to paying clients. The intent is to provide value and proof of the strategic workshop process so that clients will be comfortable making referrals.

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Free Talks/Networking: This is an excellent opportunity for new coaches and new trainers to get exposure. These talks are given to Chambers of Commerce, trade councils, professional organizations, etc. Based on our industry experience it is most beneficial to have at least two of these talks per month and attend two networking events per month.

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Referrals: Referrals make up a large part of our business. They create an effective drip campaign and a concentrated effort will leverage this opportunity.

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Other Income Generators / Special Project Assistance: This includes writing private programs for specific businesses, designing custom programs, and retainer based coaching on an ongoing basis.

Executive Officers of the Company

As of the date of this Report, the principal executive officers of the Company are: (i) Lisa Nichols as the Chief Executive Officer; and (ii) Scott Ryder as the Treasurer, Chief Financial Officer and Secretary:

Name and Address	Age	Position(s)

Lisa Nichols	50	Chief Executive Officer and Chief Creative Officer

Scott Ryder	47	Treasurer, Chief Financial Officer and Secretary

Lisa Nichols, Chief Executive Officer and Chief Creative Officer

Lisa Nichols is the founder of the Company. She is a best-selling author, a popular public speaker and a powerful coach. Ms. Nichols has been honored with many awards in recognition for her empowering work, including the Humanitarian Award from South Africa, the Ambassador of Good Will Award, Emotional Literacy award, The Legoland Foundation’s Heart of Learning Award. The Mayor of Henderson, Nevada has proclaimed November 20th as Motivating the Teen Spirit Day. And recently the Mayor of Houston, Texas proclaimed May 9th as Lisa Nichols day for her dedication to service, philanthropy and healing. Her book, No Matter What! hit 6 bestsellers list, including the New York Times list. Lisa graduated from Dorsey High School in 1984.

Scott M. Ryder Jr., Treasurer, Chief Financial Officer and Secretary

Scott Ryder is responsible for the Company’s accounting, investor relations, financial decision support, financial planning & analysis, internal audit, tax, human resources and information technology. Prior to joining the Company, Mr. Ryder served as Chief Financial Officer of The ManKind Project USA from 2014 to 2016, a renowned global non-profit charitable organization whose high-profile work empowers men worldwide to missions of service on behalf of their communities. From 2000 to 2012, he served as Head of Operations, Investment Banking Group for D.A. Davidson & Company, a full-service investment firm with $45 billion in client assets under management, and as Chief Operating Officer/Chief Compliance Officer for McGladrey Capital Markets LLC (Costa Mesa). Scott earned his Master of Business Administration with honors from the Paul Merage School of Business, University of California, Irvine, in 2000 and Bachelor of Arts in Economics from the University of Redlands in 1991.

Involvement in Certain Legal Proceedings

To our knowledge, during the past ten years, none of our executive officers has:

been convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

had any bankruptcy petition filed by or against the business or property of the person, or of any partnership, corporation or business association of which he was a general partner or executive officer, either at the time of the bankruptcy filing or within two years prior to that time;

been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction or federal or state authority, permanently or temporarily enjoining, barring, suspending or otherwise limiting, his involvement in any type of business, securities, futures, commodities, investment, banking, savings and loan, or insurance activities, or to be associated with persons engaged in any such activity;

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

been the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated (not including any settlement of a civil proceeding among private litigants), relating to an alleged violation of any federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or

been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

Premises

The Company currently occupies office space at 5950 La Place Court, Carlsbad, California. In July of 2016, the Company signed a sixty-five (65) calendar month lease for the office space starting July 25, 2016, for $13,347 a month for the first year, $13,748 a month for the second year, $14,160 a month for the third year, $14,586 a month for the fourth year, $15,022 a month for the fifth year, and $15,473 for months 61 to 65. For months two (2) through eleven (11), the rent shall be abated in the amount of $6,674.

Minimum future lease payments under the agreement are as follows:

2017	$	122,131
2018	$	167,036
2019	$	172,050
2020	$	177,212
2021	$	182,519

ITEM 1A. RISK FACTORS

An investment in these securities involves an exceptionally high degree of risk and is extremely speculative in nature. Following are what we believe are all the material risks involved if you decide to purchase shares in this offering.

The risks described below are the ones we believe are most important for you to consider. These risks are not the only ones that we face. If events anticipated by any of the following risks actually occur, our business, operating results or financial condition could suffer and the price of our common stock could decline.

Risks Relating To Our Business

We are a development stage business which has limited capital, a limited operating history and is subject to risks involved with speculative early-stage companies.

As of the date of this Report, we have limited capital and a limited operating history. Therefore, we are subject to the risks involved with any speculative early-stage enterprise. There is no assurance that we will be able to successfully structure, market and distribute our products or services. We may experience continuing net losses and negative cash flows from operations. The extent of continuing losses and negative cash flows from operations and the time required to reach profitability are highly uncertain. There is no assurance that we will be able to achieve profitability or that profitability, if achieved, can be sustained on an ongoing basis. Such risks for us include, but are not limited to:

An evolving, unpredictable and unproven business model;

An intensely competitive developing market with low barriers to entry;

Managing growth;

Dependence on key personnel;

Limited operating capital and limited access to credit; and

Other unforeseen changes and developments.

In order to address these risks, the Company must, among other things:

Implement and successfully execute its business strategy;

Provide superior customer service;

Respond to competitive developments;

Attract, retain and motivate qualified personnel; and

Respond to unforeseen and changing circumstances.

We cannot assure you that we will succeed in addressing these risks.

Although we experience our most profitable year in our 19 year history in 2016, we have a history of operating losses.

We have a history of operating losses. Further, we may be dependent on sales of our equity securities and debt financing to meet our cash requirements. Although we realized a record profit of $408,994 in 2016, we incurred loss of $1,300,037 for the year ended December 31, 2015. As of December 31, 2016 and 2015, we had an accumulated deficit of $3,740,397 and $4,884,986. Although we do expect positive cash flow from operations in 2017, there is no assurance that actual cash requirements will not exceed our estimates. There is no assurance that the demand for personal development coaching products will allow us to achieve profitability. In particular, additional capital may be required in the event that further working capital is necessary because our operating costs increase beyond our expectations or we encounter greater costs associated with general and administrative expenses or offering costs.

Our recent growth, the introduction of our Motivating the Masses Programs, products and services and our entry into new markets makes it difficult for us to evaluate our current and future business prospects, and we may be unable to effectively manage our growth and new initiatives, which may increase the risk of your investment and could harm our business, financial condition, results of operations and cash flow.

We were incorporated on September 2, 1998 under the laws of the State of Nevada. Since inception, we have developed and marketed our Motivating the Masses Programs with continually evolving new content based on client’s needs and current demands. Because many of our current products and services are relatively new and we have recently entered a new market, we may be unable to evaluate the relative success and future prospects, particularly in light of our goals to continually grow our existing and new customer base, expand our product and service offerings, acquire and integrate complementary businesses and enter new markets.

In addition, our growth, recent product introductions and entry into a relative new market may place a significant strain on our resources and increase demands on our executive management, personnel and systems, and our operational, administrative and financial resources may be inadequate. We may also not be able to maintain or accelerate our current growth rate, effectively manage our expanding operations, or achieve planned growth on a timely or profitable basis, particularly if the number of consumers and businesses using our products and services increase or their demands and needs change as our business expands. Our management is required to expand its knowledge of diverse aspects of strategic coaching programs as well as professional development coaching programs, leadership, career or management coaching and maintain relationships with our consumers and businesses across several sectors of the business industry and market. If we are unable to manage our growth and expand operations effectively, we may experience operating inefficiencies, the quality of our products and services could deteriorate, and our business and results of operations could be materially adversely affected.

The recent ongoing additions of new programs within our Business and Personal segments make it difficult for us to evaluate our current and future business prospects. If our services within Business and Personal segments fail to achieve widespread acceptance by consumers and businesses and/or other institutions, our growth and profitability may suffer.

The use of executive coaching (Business segment) and personal development coaching (Personal segment) programs is one approach in the traditional business educational markets. There can be no assurance that executive coaching and personal development coaching programs and services will achieve long-term success in the business educational markets. Our success depends in part upon the continued adoption by businesses and consumers of executive coaching and personal development coaching programs educational initiatives. Some may oppose third-party education in principle and the executive coaching and personal development coaching programs in general. As a necessary corollary to the acceptance of our Motivating the Masses Programs, our growth depends in part on acceptance of the role of executive coaching and personal development coaching programs and the availability of access. If the acceptance of executive coaching and personal development coaching programs do not continue to increase, our ability to continue to grow our business could be materially impaired.

A substantial majority of our revenue is generated by sales of within our business segment (e.g., executive coaching). Revenues from our business and personal development segments may be difficult to predict and declines in sales of our executive and personal development coaching products may materially adversely affect our business and results of operations.

For the year ended December 31, 2016, sales of business segment accounted for approximately 79% of our revenue. For the year ended December 31, 2015, business segment accounted for approximately 83% of our revenues. We anticipate that revenue from sales of business segment will continue to account for a substantial majority of our revenue for the next few years. Typical coaching contracts vary by client and can span anywhere from 3-9 months depending on need. We also have an annual program, Global Leadership Program (GLP), which consists of a 3-day event 4 times per year along with group coaching calls in between the live events. Clients that have cancelled out of that program have enrolled into one-on-one coaching for more personalized coaching. If a client wants to cancel their services from one of our programs, there is a no refund policy. The Company can apply the clients credit toward other products or services. Sales of our personal segment accounted for approximately 16% of our total sales. Sales of our business and personal segments and/or products or services may decline or fluctuate as a result of a number of factors, including decreased demand, adverse regulatory actions, pricing pressures, competitive factors or any other reason. These and other factors that may affect our sales are not predictive of the future, and, as a result, we cannot accurately predict consumer and/or business demand. If sales to new consumers and businesses decline or our current consumers and professional businesses do not continue to attend our seminars, our revenue may decline, which would negatively impact our business, financial condition, results of operations and cash flow.

System disruptions, vulnerability from security risks to our networks, databases and an inability to expand and upgrade our systems in a timely manner could damage our reputation, impact our ability to generate revenue and limit our ability to attract and retain consumers and businesses to attend our seminars and purchase our products.

The performance and reliability of our technology infrastructure is critical to our business. Any failure to maintain satisfactory online performance, reliability, security or availability of our web platform infrastructure may significantly reduce customer satisfaction and damage our reputation, which would negatively impact our ability to attract new customers. The risks associated with our web platform include: (i) breakdowns or system failures resulting in a prolonged shutdown of our servers, including failures attributable to power shutdowns or attempts to gain unauthorized access to our systems, which may cause loss or corruption of data or malfunction of software or hardware; (ii) disruption or failure in our collocation providers, which would make it difficult or impossible for our consumers to log on to our websites; (iii) damage from fire, flood, tornado, power loss or telecommunications failures; (iv) infiltration by hackers or other unauthorized persons; and (v) any infection by or spread of computer viruses.

In addition, increases in the volume of traffic on our website could strain the capacity of our existing infrastructure, which could lead to slower response times or system failures. This would cause a disruption or suspension of our product and service offerings. Any web platform interruption or inadequacy that causes performance issues or interruptions in the availability of our websites could reduce consumer satisfaction and result in a reduction in the number of consumers using our products and services. If sustained or repeated, these performance issues could reduce the attractiveness of our websites and products and services. We may need to incur additional costs to upgrade our computer systems in order to accommodate system disruptions, security risks and increased demand if we anticipate that our systems cannot handle higher volumes of traffic in the future. However, the costs and complexities involved in expanding and upgrading our systems may prevent us from doing so in a timely manner and may prevent us from adequately meeting the demand placed on our systems.

Any significant interruption in the operations of our data centers could cause a loss of data and disrupt our ability to manage our network hardware and software and technological infrastructure, and any significant interruption in the operations of our call center could disrupt our ability to respond to requests for help or service and process orders in a timely manner.

All of our web platform servers and routers, including backup servers, are currently located in our facility in California. As part of our disaster recovery arrangements, we will replicate all of our customers’ data in a separate backup facility. If we are not successful in implementing this plan, we will face additional risks relating to the central location of our servers. Any disruption of operations or damage to these servers could materially harm our ability to operate our business. We also may need to make additional investments to improve the performance of our platform and prevent disruption of our services. Any disruption or significant interruption in the operations of our data centers may result in a loss of customer satisfaction and limit our ability to retain and attract customers.

Our future success is dependent on Internet technology developments and our ability to adapt to these and other technological changes and to meet evolving industry standards.

Our ability to execute our strategy of delivering some of our products over the Internet and generating the related expected revenues is dependent on the development and maintenance of Internet technology as well as our ability to adapt our solutions to changes in Internet technology.

We may encounter difficulties responding to these and other technological changes that could delay our introduction of products and services. Software industries are characterized by rapid technological change and obsolescence, frequent product introduction, and evolving industry standards. Our future success will, to a significant extent, depend on our ability to enhance our existing products, develop and introduce new products, satisfy an expanded range of customer needs, and achieve market acceptance. We may not have sufficient resources to make the necessary investments to develop and implement the technological advances required to maintain our competitive position.

Domestic and foreign government regulation relating to the internet or our Motivating the Masses’ programs and services could cause us to incur significant expense, and failure to comply with applicable regulations could make our business less efficient or even impossible to continue to operate.

As web-based commerce continues to evolve, increasing regulation by federal, state or foreign agencies becomes more likely. In addition, taxation of services provided over the internet or other charges imposed by government agencies or by private organizations for accessing the internet may also be imposed. Any regulation imposing greater fees for internet use or restricting information exchange over the internet could result in a decline in the use of the internet and the viability of internet-based services, which could materially harm our business.

If we are unable to maintain and enhance our Motivating the Masses brand identity, our business and results of operations may suffer.

The continued development of our Motivating the Masses brand identity is important to our business, and expanding executive coaching and personal development coaching brand awareness is critical to attracting and retaining our consumers and businesses. Our existing and potential consumers may not be aware of the relationship of our product brands with one another, particularly the seminars, books, CDs and DVDs, which serve as an umbrella for our Motivating the Masses Programs. If we intend to increase revenues and extend our geographic reach, maintaining quality and consistency across all of our products and services may become more difficult to achieve, and any significant and well-publicized failure to maintain this quality and consistency will have a detrimental effect on our Motivating the Masses brand. We cannot provide assurances that our sales and marketing efforts will be successful in further promoting our Motivating the Masses brand in a competitive and cost-effective manner. If we are unable to maintain and enhance our Motivating the Masses brand recognition and increase awareness of our products and services, or if we incur excessive sales and marketing expense, our business and results of operations could be materially adversely affected.

Our future growth and profitability may depend in large part upon the effectiveness and efficiency of our marketing expenditures in recruiting new consumers and businesses.

Our future growth and profitability will depend in large part upon the effectiveness and efficiency of our marketing expenditures, including our ability to: (i) create greater awareness of our Motivating the Masses Programs and band name; (ii) select the right market, media and specific media vehicles in which to advertise; (iii) identify the most effective and efficient level of spending in each market, media and specific media vehicle; (iv) determine the appropriate creative message and media mix for advertising, marketing and promotional expenditures; (v) effectively manage marketing costs, including creative and media expense in order to generate and maintain acceptable consumer acquisition costs; (vi) generate leads for sales, including obtaining lists of businesses in a cost-effective manner; (vii) drive traffic to our website; and (viii) convert consumer and business inquiries into actual attendance at seminars.

We recently hired a nationally recognized public relations firm to expand our footprint in the market. Our former model relied on word of mouth and events. We have never invested in a public relations firm. The hiring of a public relations firm coupled with the expansion of our training team, we believe we will serve more clients and more markets, thus increasing sales and services.

Our planned marketing expenditures may not result in increased revenue or generate sufficient levels of Motivating the Masses Programs and brand awareness, and we may not be able to increase our net sales at the same rate as we increase our advertising expenditures.

We operate in a market which is subject to rapid technological and other changes, and increasing competition could lead to pricing pressures, reduced operating margins, loss of market share and increased capital expenditures.

The markets for our executive coaching and personal development coaching products and services are highly competitive, and we expect increased competition in the future that could adversely affect our revenue and market share. Although many individuals and businesses are attempting to address this need in the market place, the bulk of this education still takes the form of explaining product details. Those current competitors include but are not limited to: (i) providers of executive coaching and personal development coaching seminars, products and materials; (ii) companies that provide executive coaching and personal development coaching product software and web-based services; (iii) traditional print executive coaching and personal development coaching product materials; and (iv) non-profit and membership educational organizations and government agencies that offer online and offline executive coaching and personal development coaching products and services, including in some cases at no cost. Some of our competitors may have more resources than we do, and several may have larger customer bases and greater brand recognition in the industry markets we serve. Further, larger established companies with high brand recognition may develop online executive coaching and personal development coaching products and services that are competitive with our core products and services. These competitors may be able to devote greater resources than us to the development, promotion and sale of their services and respond more quickly than we can to new technologies or changes in literacy, consumer requirements or preferences. We may not be able to compete effectively with current or future competitors, especially those with significantly greater resources or more established customer bases, which may materially adversely affect our sales and our business.

The confidentiality, non-disclosure and other agreements we use to protect our products, trade secrets and proprietary information may prove unenforceable or inadequate.

We protect our products, trade secrets and proprietary information, in part, by requiring all of our employees and consultants to enter into agreements providing for the maintenance of confidentiality. We also enter into non-disclosure agreements with our technical consultants to protect our confidential and proprietary information. We cannot assure you that our confidentiality agreements with our employees, consultants and other third parties will not be breached, that we will be able to effectively enforce these agreements, that we will have adequate remedies for any breach, or that our trade secrets and other proprietary information will not be disclosed or will otherwise be protected.

Protection of our intellectual property is limited, and any misuse of our intellectual property by others could harm our business, reputation and competitive position.

Our trademarks, copyrights, trade secrets, trade dress and designs are valuable and integral to our success and competitive position. However, we cannot assure you that we will be able to adequately protect our proprietary rights through reliance on a combination of copyrights, trademarks, trade secrets, confidentiality procedures, contractual provisions and technical measures from outside influences. Protection of trade secrets and other intellectual property rights in the markets in which we operate and compete is highly uncertain and may involve complex legal questions. We cannot completely prevent the unauthorized use or infringement of our intellectual property rights, as such prevention is inherently difficult.

We also expect that the more successful we are, the more likely that competitors will try to illegally use our proprietary information and develop products that are similar to ours, which may infringe on our proprietary rights. In addition, we could potentially lose future trade secret protection for our source code if any unauthorized disclosure of such code occurs. The loss of future trade secret protection could make it easier for third parties to compete with our products by copying functionality. Any changes in, or unexpected interpretations of, the trade secret and other intellectual property laws in any country in which we operate may compromise our ability to enforce our trade secret and intellectual property rights. Costly and time-consuming litigation could be necessary to enforce and determine the scope of our confidential information and trade secret protection. If we are unable to protect our proprietary rights or if third parties independently develop or gain access to our or similar technologies, our business, service revenue, reputation and competitive position could be materially adversely affected.

We have not registered copyrights for all of our Motivating the Masses Programs and products, which may limit our ability to enforce them.

We have not registered our copyrights in all of our materials, website information, designs or other copyrightable works. The United States Copyright Act automatically protects all of our copyrightable works, but without registration we cannot enforce those copyrights against infringers or seek certain statutory remedies for any such infringement. Preventing others from copying our products, written materials and other copyrightable works is important to our overall success in the marketplace. In the event we decide to enforce any of our copyrights against infringers, we will first be required to register the relevant copyrights, and we cannot be sure that all of the material for which we seek copyright registration would be registerable in whole or in part, or that once registered, we would be successful in bringing a copyright claim against any such infringers.

We do not have protection of our intellectual property and any misuse of our intellectual property by others could harm our business, reputation and competitive position.

Our trademarks, copyrights, trade secrets and designs are valuable and integral to our success and competitive position. We have not filed for protection with the U.S. Patent, Copyright and Trademark Office for protection regarding some of our intellectual property. And, we cannot assure you that we will be able to adequately protect our proprietary rights through reliance on a combination of copyrights, trademarks, trade secrets, confidentiality procedures, contractual provisions and technical measures from outside influences. Protection of trade secrets and other intellectual property rights in the markets in which we operate and compete is highly uncertain and may involve complex legal questions. We cannot completely prevent the unauthorized use or infringement of our intellectual property rights, as such prevention is inherently difficult.

Inadvertent infringement by us on the rights of others could adversely affect our results of operations.

We cannot assure you that our course materials, other educational contents or other intellectual properties developed or used by us do not or will not infringe upon patents, valid copyrights or other intellectual property rights held by third parties. Although we believe our products and services have been independently developed and that none of our products or services infringes on the rights of others, third parties may assert infringement claims against us in the future. We may be required to modify our products, services or technologies or obtain a license to permit our continued use of those rights. We may not be able to do so in a timely manner or upon reasonable terms and conditions. Failure to do so could harm our business and operating results.

Although we are not aware of any pending or threatened claims, if any such claim arises in the future, litigation or other dispute resolution proceedings may be necessary to retain our ability to offer our current and future services and products, which could result in substantial costs and diversion of our financial and management resources. Furthermore, if we are found to have violated the intellectual property rights of others, we may be enjoined from using such intellectual property rights, incur additional costs to license or develop alternative intellectual property rights and be forced to pay fines and damages, any of which may materially and adversely affect our business.

We must monitor and protect our internet domain name to preserve its value. We may be unable to prevent third parties from acquiring a domain name that is similar to, infringe on or otherwise decrease the value of our trademarks.

We own the domain name “MotivatingtheMasses.com”. Third parties may acquire substantially similar domain names that decrease the value of our domain name and trademarks and other proprietary rights which may hurt our business. Moreover, the regulation of domain names in the United States and foreign countries is subject to change. Governing bodies could appoint additional domain name registrars or modify the requirements for holding domain names. Governing bodies could also establish additional “top-level” domains, which are the portion of the web address that appears to the right of the “dot,” such as “com,” “net,” “gov” or “org.” As a result, we may not maintain exclusive rights to all potentially relevant domain names in the United States or in other countries in which we conduct business, which could harm our business and reputation.

Our future success depends on our ability to retain our key employees.

We are dependent on the services of Lisa Nichols, our founder, Chief Executive Officer, and Susie Carder, an independent contractor and a member of our Board, and Scott Ryder, our Chief Financial Officer, and our other executive officers and members of our senior management team. Other than non-compete provisions of limited duration included in employment agreements that we may or will have with certain executives, we do not generally seek non-compete agreements with key personnel, and they may leave and subsequently compete against us. The loss of service of any of our senior management team, particularly those who are not party to employment agreements with us, or our failure to attract and retain other qualified and experienced personnel on acceptable terms, could have a material adverse effect on our business.

We may be unable to attract and retain the skilled employees needed to sustain and grow our business.

Our success to date has largely depended on, and will continue to depend on, the skills, efforts and motivations of our executive team and employees, who generally have significant experience with our Company and within the motivational speaking industry. Our success also depends largely on our ability to attract and retain highly qualified coaches, marketing professionals, IT engineers and programmers, to train professionals for content writing and editing sales and marketing managers and corporate management personnel. We may experience difficulties in locating and hiring qualified personnel and in retaining such personnel once hired, which may materially and adversely affect our business.

Although we do not currently transact a material amount of business in foreign countries, we intend to expand into international markets, which will subject us to additional economic, operational and political risks that could increase our costs and make it difficult for us to continue to operate profitably.

We market our Motivating the Masses Programs and products primarily in the United States and intend to expand into other international markets, including Africa, Australia, Asia and Europe. The addition of international operations may require significant expenditure of financial and management resources and result in increased administrative and compliance costs. The international market has been demanding our services for the past 5 years, with limited resources we haven’t been able to capitalize on the growth opportunity. We intend to utilize a portion of the proceeds of this Offering to try and strategically penetrate those markets. As a result of such expansion, we will be increasingly subject to the risks inherent in conducting business internationally, including: (i) foreign currency fluctuations, which could result in reduced revenue and increased operating expense; (ii) potentially longer payment and sales cycles; (iii) increased difficulty in collecting accounts receivable; (iv) the effect of applicable foreign tax structures, including tax rates that may be higher than tax rates in the United States or taxes that may be duplicative of those imposed in the United States; (vi) tariffs and trade barriers; (vii) general economic and political conditions in each country; (ix) inadequate intellectual property protection in foreign countries; (x) uncertainty regarding liability for information retrieved and replicated in foreign countries; (xi) the difficulties and increased expense in complying with a variety of domestic and foreign laws, regulations and trade standards, including the Foreign Corrupt Practices Act; and (xi) unexpected changes in regulatory requirements.

We may need additional capital in the future, but there is no assurance that funds will be available on acceptable terms, or at all.

We may need to raise additional funds in order to achieve growth or fund other business initiatives. This financing may not be available in sufficient amounts or on terms acceptable to us and may be dilutive to existing stockholders if raised through additional equity offerings. Additionally, any securities issued to raise funds may have rights, preferences or privileges senior to those of existing stockholders. If adequate funds are not available or are not available on acceptable terms, our ability to expand, develop or enhance services or products, or respond to competitive pressures may be materially limited.

Any existing indebtedness could adversely affect our financial condition and we may not be able to fulfill our debt obligations.

Any proposed indebtedness may contain various covenants that may limit our ability to, among other things: (i) incur or guarantee additional indebtedness; (ii) pay dividends or make other distributions to our stockholders; (iii) make restricted payments; (iv) engage in transactions with affiliates; and (v) enter into proposed business transactions or combinations. These restrictions could limit our ability to withstand general economic downturns that could affect our business, obtain future financing, make acquisitions or capital expenditures, conduct operations or otherwise capitalize on business opportunities that may arise. Additionally, if we incur substantial debt for working capital purposes, we may use a significant portion of our cash flow to pay interest on our outstanding debt, limiting the amount available for working capital, capital expenditures and other general corporate purposes.

We may be more vulnerable to adverse economic conditions than less leveraged competitors and thus less able to withstand competitive pressures. If our cash flow is inadequate to make interest and principal payments on our debt, we might have to refinance our indebtedness or issue additional equity or other securities and may not be successful in those efforts or may not obtain terms favorable to us. Additionally, our ability to finance working capital needs and general corporate purposes for the public and private markets, as well as the associated cost of funding, is dependent, in part, on our credit ratings, which may be adversely affected if we experience declining service revenue. Any of these events could reduce our ability to generate cash available for investment or debt repayment or to make improvements or respond to events that would enhance profitability.

There is doubt about our ability to continue as a going concern due to recurring losses and working capital shortages, which means that we may not be able to continue operations unless we maintain profitability.

Our independent certified public accountant stated in their audit report for years ended December 31, 2016 and 2015 that we have suffered recurring losses from operations up through 2015 that raise doubt about our ability to continue as a going concern.

Up until 2015, we experienced recurring operating losses and we have a working capital deficiency as of December 31, 2016. There is a possibility that our revenues will not be sufficient to meet our operating costs. There is doubt that we can continue as a going concern.

There can be no assurance that we will continue to generate revenues from operations or obtain sufficient capital on acceptable terms, if at all. Failure to obtain such capital or generate such operating revenues would have an adverse impact on our financial position and results of operations and ability to continue as a going concern. Our operating and capital requirements during the next fiscal year and thereafter will vary based on a number of factors, including the level of sales and marketing activities for our services and products. There can be no assurance that additional private or public finances, including debt or equity financing, will be available as needed or, if available, on terms favorable to us. Any additional equity financing may be dilutive to stockholders and such additional equity securities may have rights, preferences or privileges that are senior to those of our existing common stock. Furthermore, debt financing, if available, will require payment of interest and may involve restrictive covenants that could impose limitations on our operating flexibility

Risks Related to Our Securities

Our stock may be subject to rules relating to "penny stock".

The Securities and Exchange Act of 1934, as amended (the “Exchange Act”), requires additional disclosure relating to the market for "penny stocks." A penny stock is generally defined to be any equity security not listed on NASDAQ or a national securities exchange that has a market price of less than $5.00 per share, subject to certain exceptions.

Among these exceptions are shares issued by companies that have:

net tangible assets of at least $2 million, if the issuer has been in continuous operation for three years;

net tangible assets of at least $5 million, if the issuer has been in continuous operation for less than three years; or

average annual revenue of at least $6 million for each of the last three years.

The Company does not currently meet the requirements of these exceptions; therefore, the Company’s stock would be deemed penny stocks for purposes of the Exchange Act if and at any time while the Company's common stock trades below $5.00 per share. In such case, trading in the Company's shares would be regulated pursuant to Rules 15-g-1 through 15-g-6 and 15-g-9 of the Exchange Act. Under these rules, brokers or dealers recommending our shares to prospective buyers would be required, unless an exemption is available, to:

deliver a lengthy disclosure statement in a form designated by the SEC relating to the penny stock market to any potential buyers, and obtain a written acknowledgement from each buyer that such disclosure statement has been received by the buyer prior to any transaction involving our shares;

provide detailed written disclosure to buyers of current price quotations for our shares, and of any sales commissions or other compensation payable to any broker or dealer, or any other related person, involved in the transaction; and

send monthly statements to buyers disclosing updated price information for any penny stocks held in their accounts, and these monthly statements must include specified information on the limited market for penny stocks.

In addition, if the Company is subject to the penny stock rules, all brokers or dealers involved in a transaction in which our shares are sold to any buyer, other than an established customer or "accredited investor," must make a special written determination that the Company's shares would be a suitable investment for the buyer, and the brokers or dealers must receive the buyer's written agreement to purchase our shares, as well as the buyer's written acknowledgement that the suitability determination made by the broker or dealer accurately reflects the buyer's financial situation, investment experience and investment objectives, prior to completing any transaction in our shares. These Exchange Act rules may limit the ability or willingness of brokers and other market participants to make a market in our shares and may limit the ability of our shareholders to sell in the secondary market, through brokers, dealers or otherwise. The Company also understands that many brokerage firms will discourage their customers from trading in shares falling within the "penny stock" definition due to the added regulatory and disclosure burdens imposed by these Exchange Act rules. The SEC from time to time may propose and implement even more stringent regulatory or disclosure requirements on shares not listed on NASDAQ or on a national securities exchange. The adoption of the proposed changes that may be made in the future could have an adverse effect on the trading market for the Company's shares and the consequent value of our Convertible Debentures and Warrants.

The market price of our securities could be subject to volatility.

The market price of our securities is likely to be highly volatile and subject to wide fluctuations in response to factors such as:

variations in our actual and perceived operating results;

news regarding gains or losses of customers or partners by us or our competitors;

news regarding gains or losses of key personnel by us or our competitors;

announcements of competitive developments, acquisitions or strategic alliances in our industry by us or our competitors;

changes in earnings estimates or buy/sell recommendations by financial analysts;

potential litigation;

general market conditions or other developments affecting us or our industry; and

the operating and stock price performance of other companies, other industries and other events or factors beyond our control.

In addition, the securities markets have from time to time experienced significant price and volume fluctuations that are not related to the operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of the shares.

We have no cash dividend policy.

We do not presently intend to pay cash dividends in the foreseeable future, as any earnings must be retained for use in current operations. Investors must not look to an investment in the Company as a source of cash distributions.

If we fail to maintain an effective system of internal control over financial reporting and disclosure controls and procedures, we may be unable to accurately report our financial results and comply with the reporting requirements under the Exchange Act.

Effective internal controls are necessary for us to provide reliable financial reports and effectively prevent fraud. We maintain a system of internal control over financial reporting, which is defined as a process designed by, or under the supervision of, our principal executive officer and principal financial officer, or persons performing similar functions, and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP.

As a public company, we have significant additional requirements for enhanced financial reporting and internal controls. We are be required to document and test our internal control procedures in order to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, which requires annual management assessments of the effectiveness of our internal controls over financial reporting. In addition, an independent registered public accounting firm is required to attest to the effectiveness of our internal control over financial reporting beginning with our annual report on Form 10-K following the date on which we cease to qualify as an emerging growth company if we become an accelerated filer or large accelerated filer. The process of designing and implementing effective internal controls is a continuous effort that requires us to anticipate and react to changes in our business and the economic and regulatory environments and to expend significant resources to maintain a system of internal controls that is adequate to satisfy our reporting obligations as a public company.

We cannot assure you that we will not, in the future, identify areas requiring improvement in our internal control over financial reporting. We cannot assure you that the measures we will take to remediate any areas in need of improvement will be successful or that we will implement and maintain adequate controls over our financial processes and reporting in the future as we continue our growth. If we are unable to establish appropriate internal financial reporting controls and procedures, it could cause us to fail to meet our reporting obligations, result in the restatement of our financial statements, harm our operating results, subject us to regulatory scrutiny and sanction, cause investors to lose confidence in our reported financial information and have a material adverse effect on the market price of our shares.

Risks Related to A Potential Rescission Offer

A previous offering conducted by us may have violated certain federal and/or state securities laws, and we may need to conduct a rescission offer to repurchase the securities we previously issued. Moreover, we may continue to have potential liability even after the rescission offer is made.

During the period beginning June 2011 and ending January 2015, in an offering pursuant to Rule 506 of Regulation D, we inadvertently allowed certain of our securities to be sold to more than 35 investors who may not qualified as “Accredited Investors” as such term is defined in the Securities Act of 1933; accordingly, those securities we issued in such offering may not have been exempt from the registration or qualification requirements under the Securities Act of 1933 and the securities laws of certain states. Accordingly, we may have liability to purchaser of such securities and/or may need to conduct a rescission offer to all holders of any outstanding securities subject to rescission to repurchase such securities at their purchase price plus statutory interest.

The Securities Act of 1933 does not provide that a rescission offer will extinguish a holder’s right to rescind the issuance of shares that were not registered or exempt from the registration requirements under the Securities Act of 1933. Consequently, should any recipients of our rescission offer reject the offer, expressly or impliedly, we may remain liable under the Securities Act of 1933 for the purchase price of the securities that are subject to the rescission offer.

A rescission offering may not bar claims relating to our possible non-compliance with federal and/or state securities laws, and we may continue to be contingently liable for rescission or damages of an indeterminate amount.

A rescission offer, if conducted by us, is not an admission that we did not comply with any federal or state registration or disclosure requirement, nor is it a waiver by us of any applicable statute of limitations or any potential defense we may have. It is not certain that a rescission offering will have the effect of barring claims relating to our possible non-compliance with applicable federal and state securities laws. If a person accepts a rescission offer, we believe our potential liability to that person will be eliminated. Should a rescission offer be rejected, we may continue to be contingently liable for rescission or damages, which could result in a material adverse effect on our results of operations and financial condition. In addition, a rescission offer will not prevent regulators from pursuing enforcement actions or imposing penalties and fines against us with respect to any violations of securities laws. Any rescission offer may have a material impact on our financial condition and liquidity.

If we conduct the rescission offer, it may affect our cash balances.

If we conduct a rescission offer, it will be funded from our existing cash balances. Any rescission payments would reduce funds available to the Company for its operations. If all persons eligible to participate in the rescission offer accept our offer to the full extent, we will need to pay a total of $2.5 million and our results of operations, cash balances or financial condition will be affected. In the event that we did not have adequate capital for the purpose of purchasing the securities subject to rescission, it would adversely affect our ability to continue operations.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

Description of Property

Minimum future lease payments under the agreement are as follows:

2017	$	122,131
2018	$	167,036
2019	$	172,050
2020	$	177,212
2021	$	182,519

ITEM 3. LEGAL PROCEEDINGS

There are no current, past, pending or threatened legal proceedings or administrative actions either by or against the issuer that could have a material effect on the issuer’s business, financial condition, or operations.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

PART II

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

MARKET INFORMATION

The Company became a reporting company on September 18, 2013 upon the effectiveness of its Registration Statement on Form S-1 registration statement filed with the SEC. As of the date of this filing, the Company’s stock is listed for quotation on OTC Pink under the ticker symbol of “MNMT” since February 26, 2015.

The following table sets forth the range of high and low bid prices for the Company’s common stock for each of the two recent fiscal years. These quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions. On April 14, 2017, the closing price of the Company’s common stock as reported on the OTC Pink marketplace was $0.35 per share.

Quarter Ended	High		Low
March 31, 2015		***		***
June 30, 2015		***		***
September 30, 2015	$	1.20	$	0.70
December 31, 2015	$	0.70	$	0.60
March 31, 2016	$	0.60	$	0.60
June 30, 2016	$	0.65	$	0.44
September 30, 2016	$	0.20	$	0.20
December 31, 2016	$	0.20	$	0.20

***There were no trading activities of the Company’s common stock until July 14, 2015.

HOLDERS

The approximate number of stockholders of record as of April 14, 2017 is 119. The number of stockholders of record does not include beneficial owners of our common stock, whose shares are held in the names of various dealers, clearing agencies, banks, brokers and other fiduciaries.

DIVIDEND POLICY

No dividends have ever been declared by the Board of Directors on our common stock. Our losses do not currently indicate the ability to pay any cash dividends, and we do not have the intention of paying cash dividends on our common stock in the foreseeable future.

EQUITY COMPENSATION PLAN

The Company’s 2016 Equity Incentive Plan (the “2016 Plan”, filed as Exhibit A to its Definitive Information Statement on Schedule 14C filed with the SEC on April 29, 2016) was adopted by the Board of Directors on April 26, 2016 and approved by its shareholders holding a majority of the Company’s shares of common stock via written consent on April 26, 2016.

Purpose

The purposes of the 2016 Plan are (i) to attract and retain the best available personnel for positions of substantial responsibility; (ii) to provide incentives to individuals who perform services for the Company, and (iii) to promote the success of the Company’s business.

Forms of Awards

The 2016 Plan provides for the grant of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock, restricted stock units, performance units, performance shares and other stock or cash awards as the administrator of the plan may determine.

Share Reserve Limit, Counting and Adjustment

The 2016 Plan provides for the issuance of up to 1,500,000 shares of common stock as incentive awards granted to executive officers, key employees, consultants and directors. If an incentive award granted under the 2016 Plan expires, terminates, is unexercised or is forfeited, or if any shares are surrendered in connection with an incentive award, the shares subject to such award and the surrendered shares will become available for further awards under the 2016 Plan.

Shares issued under the 2016 Plan through the settlement, assumption or substitution of outstanding awards or obligations to grant future awards as a condition of acquiring another entity do not reduce the maximum number of shares available under the 2016 Plan. In addition, the number of shares of common stock subject to the 2016 Plan, any number of shares subject to any numerical limit in the 2016 Plan, and the number of shares and terms of any incentive award may be adjusted in the event of any change in our outstanding common stock by reason of any stock dividend, spin-off, split-up, stock split, reverse stock split, recapitalization, reclassification, merger, consolidation, liquidation, business combination or exchange of shares or similar transaction.

Administration

The Board will administer the 2016 Plan. Subject to the terms of the 2016 Plan, the Board would have complete authority and discretion to determine the terms of awards under the 2016 Plan.

Descriptions of Types of Awards

The 2016 Plan authorizes the grant to 2016 Plan participants of nonqualified stock options, incentive stock options, restricted stock awards, restricted stock units, performance grants intended to comply with Section 162(m) of the Internal Revenue Code, as amended, and stock appreciation rights, as described below:

Options granted under the 2016 Plan entitle the grantee, upon exercise, to purchase a specified number of shares from the Company at a specified exercise price per share. The exercise price for shares of common stock covered by an option cannot be less than the fair market value of the common stock on the date of grant unless agreed to otherwise at the time of the grant.

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

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

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

Duration, Amendment, and Termination

The Board has the power to amend, suspend or terminate the 2016 Plan without stockholder approval or ratification at any time or from time to time. No change may be made that increases the total number of shares of common stock reserved for issuance pursuant to incentive awards or reduces the minimum exercise price for options or exchange of options for other incentive awards, unless such change is authorized by our stockholders within one year. Unless sooner terminated, the 2016 Plan would terminate ten years after it is adopted.

RECENT SALES OF UNREGISTERED SECURITIES

Common shares issued

In the year ended December 31, 2016, the Company issued 27,619 shares of common stock as stock dividend.

As of the date of this filing, the Company has 14,750,734 share of common stock and 0 shares of preferred stock outstanding, respectively.

Purchases of Equity Securities by the Registrant and Affiliated Purchasers

During the period from January 1, 2016 to September 30, 2016, the Company repurchased and retired 258,697 shares for $129,349, or $0.50 per share. The Company reacquired 1,500,000 shares in June 2016 that were previously issued as shares for services rendered.

Share Exchange Agreement

Motivating the Teen Spirit, LLC (MTS), was founded by the Company’s CEO, Lisa Nichols, and provided similar products and services that were also offered by the Company.

In August of 2012, MTS was dissolved and ceased operations. In conjunction with the dissolution of MTS, the Company acquired the assets and intellectual property of MTS through a share exchange, whereby the Company issued 70,000 shares of common stock to 14 individuals in exchange for their rights in the assets and intellectual property of MTS having a value of $35,000 based upon recent market value. At the time of the share exchange, the Company received $60,000 in cash and intellectual property, representing all of the assets of MTS. The Company allocated the $60,000 received as follows: $26,836 for the repayment of the loan to MTS, and the remaining $33,164 of cash was recorded as an additional cash asset to the Company. As a result of the share exchange, the Company valued the intellectual property of MTS at $1,836 which is the difference between the value of shares given and value of assets received.

PENNY STOCK REGULATION

Shares of our common stock will probably be subject to rules adopted the SEC that regulate broker-dealer practices in connection with transactions in “penny stocks.” Penny stocks are generally equity securities with a 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 those securities is provided by the exchange or system). The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from those rules, deliver a standardized risk disclosure document prepared by the SEC, which contains the following:

●

a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading;

●

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 violation to such duties or other requirements of securities’ laws;

●

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;

●

a toll-free telephone number for inquiries on disciplinary actions;

●

definitions of significant terms in the disclosure document or in the conduct of trading in penny stocks; and

●

such other information and is in such form (including language, type, size and format), as the SEC shall require by rule or regulation.

Prior to effecting any transaction in penny stock, the broker-dealer also must provide the customer the following:

●

the bid and offer quotations for the penny stock;

●

the compensation of the broker-dealer and its salesperson in the transaction;

●

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

●

monthly account statements 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 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 in the secondary market for a stock that becomes subject to the penny stock rules. Holders of shares of our common stock may have difficulty selling those shares because our common stock will probably be subject to the penny stock rules.

ITEM 6. SELECTED FINANCIAL DATA

Not applicable.

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

The following discussion and analysis of financial condition and results of operations is based upon, and should be read in conjunction with our audited financial statements and related notes thereto included elsewhere in this report.

The Company was formed in September 1998. The Company has an accumulated deficit of $4,679,895 from inception to December 31, 2016. To date management has been able to finance the initial phase of implementation of the Company’s business plan via private placements of its common stock. Management plans to initiate and grow the Company’s business of providing top-quality professional development and coaching products and services.

The Company plans to use its existing contacts, customer base and social media reach to generate both short and long-term coaching contracts, and build its on-line service platform. Its long-term profitability will rely on new clients obtained through strategic alliances, a comprehensive marketing program and a successful referral program. The Company has focused on professional development, strategic workshops, one-on-one coaching and special project relationships. The Company's expansion will provide a separate and comprehensive coaching development program, mastermind session, and an online training portal.

The Company is currently working on an online platform that will utilize previously created evergreen material that will be sold online in the form of instructional videos and webinars that will incrementally increase revenues without increasing costs. The costs are being incurred now through the creation of the technology but the revenues will be realized in the years to come with very minimal costs in the form of website hosting and video hosting.

The Company has employed new coaches that will broaden the capacity and depth for coaching clients. With a broader, deeper product mix, the Company hopes to remain profitable in 2017.

Revenues

Revenues for the year ended December 31, 2016 were $5,143,718 compared to 3,219,858 for the year ended December 31, 2015, which was an increase of $1,923,859. The increase in revenues was due to new revenues from Business Academy ($467,000), Speakers’ Vault ($207,000) and Abundant Life Course ($140,000) coupled with substantial growth in our keynote/speaking fees ($483,000), Retreats ($239,000), Royalties ($110,000), Personal Development Coaching ($78,000) and ticket sales at our Speak & Write ($226,000) events.

The Company generates a significant amount of its revenue from holding event seminars and/or multi-day conferences, which are usually held during the last three to six months of each calendar year. Due to the seasonal timing when these event seminars and/or multi day conferences are held, the Company will recognize a significant amount of its revenue in the later part of each year. As a result of these seminars and/or multi day conferences, the Company is able to generate multi-month (anywhere from two to twelve months in term) consulting contracts.

Cost of Revenues

Cost of revenues for the year ended December 31, 2016 were $2,285,657 compared to $1,905,326 for the year ended December 31, 2015, which was an increase of $380,331. The gross margin for the year ended December 31, 2016 was 55% of sales compared to 41% for the year ended December 31, 2015. The increase in gross margin was due to two factors: a significant increase in sales of the Company’s online training products that have high contribution margins, and improved efficiencies in producing its live events that reduced the events’ cost of production.

Operating Activities

For the Years ended December 31, 2016 and 2015

Total operating expenses were $2,638,565 for the year ended December 31, 2016 compared to $2,614,569 for the year ended December 31, 2015, which represents an increase of $23,996. The reason for the relatively slight increase compared to over a million in additional revenue was the successful launch of the Company’s online training programs, which were largely developed in prior years. These programs operate with minimal overhead. The Company also realized improved operational efficiencies relating to personnel, office space and the Company’s use of contractors.

Consulting expense was $648,030 for the year ended December 31, 2016 as compared to $433,112 for the year ended December 31, 2015, resulting in an increase of $215,068. The increase was from increased video production costs relating to the Company’s on-line training programs, and retaining a marketing professional to develop the Company’s evergreen launch funnels.

General and administrative expenses for the year ended December 31, 2016 were $781,480 as compared to $936,858 for the year ended December 31, 2015, resulting in a decrease of $155,378. The decrease was due to lower travel expenses; lower banking fees and the elimination of the Company’s financial consulting agreement with its investment banker.

Professional fees were $235,645 for the year ended December 31, 2016 as compared to $78,691 for the year ended December 31, 2015, resulting in an increase of $156,954. The increase was largely due to one-time accounting expenses and attorney fees in the first quarter of 2016 associated with the re-audit of our 2014 financial statements.

Wages and other compensation was $973,410 for the year ended December 31, 2016 as compared to $1,165,908 for the year ended December 31, 2015, resulting in a decrease of $192,498. The decrease was largely due to improved efficiencies in the Company’s sales operations and Susie Carder resigning as President and Chief Operating Officer in the third quarter of 2016.

Total operating income for the year ended December 31, 2016 was $219,496 as compared to a loss of $1,300,037 for the year ended December 31, 2015, resulting in an increase of $1,519,533. The primary reason for the increase was the successful launch of the Company’s online training programs, which were largely developed in prior years. These programs operate with minimal overhead. The Company also realized improved operational efficiencies relating to personnel, office space and the Company’s use of contractors.

Liquidity and Capital Resources

The Company plans on building new programs and expanding on current programs through the raising of capital through the sale of common stock.

For the years ended December 31, 2016 and 2015

The Company’s cash balance was $62,733 as of December 31, 2016 as compared to $80,991 as of December 31, 2015.

Liquidity is the ability of a company to generate adequate amounts of cash to meet its needs for cash. The following table provides certain selected balance sheet comparisons between December 31, 2016 and December 31, 2015:

	December 31,			December 31,			$			Percent
	2016			2015			Change			Change
Working Capital	$	(1,899,066	)	$	(1,960,095	)	$	61,029			3	%
Cash		62,733			81,187			(18,454	)		(23	%)
Total current assets		236,608			95,930			140,678			147	%
Total assets		297,220			237,495			59,724			25	%
Accounts payable and accrued liabilities		911,582			592,708			318,874			54	%
Deferred revenues		1,224,092			1,572,644			(348,552	)		(22	%)
Total current liabilities		2,135,674			2,165,351			(29,677	)		(1	%)
Total liabilities	$	2,135,674		$	2,165,351		$	(29,677	)		(1	%)

Our working capital improved by $61,029 from negative $1,960,095 as of December 31, 2015 to negative $1,899,066 as of December 31, 2016, mainly from decreases in deferred revenue and increases in accounts receivable.

During the year ended December 31, 2016, net cash provided by operating activities was $112,063 compared to $76,984 for the year ended December 31, 2015.

Net cash used in investing activities for the year ended December 31, 2016 was $1,264, which consisted of purchases of equipment. Net cash used in investing activities for the year ended December 31, 2015 was $12,367, which also consisted primarily of equipment purchases.

Net cash provided from financing activities for the year-ended December 31, 2016 were negative $129,058, which consisted largely of $129,499 in stock repurchases. Net cash provided from financing activities for the year ended December 31, 2015 were negative $7,436, which consisted largely of $13,000 in stock repurchases.

The Company’s management is reviewing new ways to cut costs and increase revenues so they can increase operational efficiency in the future. The Company plans to increase the utilization of their website with users and have increased material that will be sold online in the form of instructional videos and webinars that will incrementally increase revenues without increasing costs. The costs are being incurred now through the creation of the technology but the revenues will be realized in the years to come with very minimal costs in the form of website hosting and video hosting. Online Campaigns and major advertising mediums are ways to increase exposure and increase traffic to increase sales. Major public relations and television appearances for all coaches and trainers increase brand awareness and demand for all team members. The Company is also looking at raising funds through private placements.

During the year ended December 31, 2016, the Company had a net income of $219,496, positive cash flow from operations of $112,063, and negative working capital of approximately $1898,066. The negative working capital balance was mainly due to having a deferred revenue balance of $1.2 million. The Company launched an evergreen marketing funnel in late 2015 and two more in the second quarter of 2017. Collectively, they are expected to contribute 10% to 15% of the Company’s overall revenue in 2017. The added revenue will offset any potential shortfall from our Keynote revenue as Lisa Nichols redirects her efforts to the media side of the business. Given the Company maintained positive cash flow from operations, a high deferred revenue balance coupled with a low accounts receivable balance, and the launch of several evergreen marketing funnels that will generate additional sales of $25k to $75k per month, the Company believes that it will have sufficient capital to operate over the 12 months immediately following the issuance of its financial reports.

MATERIAL COMMITMENTS

Employment Agreement

On May 1, 2016, the Company executed employment agreements with Lisa Nichols, Chief Executive Officer and Susie Carder, then Chief Operating Officer, both of who also serve on the Company’s Board of Directors. On October 6, 2016 the employment agreement with Scott Ryder, Chief Financial Officer, automatically renewed for another year. Pursuant to their employment agreements, Ms. Nichols shall receive an annual salary of $225,000, Ms. Carder an annual salary of $200,000, and Mr. Ryder an annual salary of $150,000.

Lease

Minimum future lease payments under the agreement are as follows:

2017	$	122,131
2018	$	167,036
2019	$	172,050
2020	$	177,212
2021	$	182,519

PURCHASE OF SIGNIFICANT EQUIPMENT

We do not intend to purchase any significant equipment during the next twelve months.

RECENTLY ISSUED ACCOUNTING STANDARDS

The following describes the recently issued accounting standards used in reporting our financial condition and results of operations. In some cases, accounting standards allow more than one alternative accounting method for reporting. Such is the case with accounting for oil and gas activities described below. In those cases, our reported results of operations would be different should we employ an alternative accounting method.

In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-09 - Compensation - Stock Compensation, which simplifies the accounting for the tax effects related to stock based compensation, including adjustments to how excess tax benefits and a company’s payments for tax withholdings should be classified, amongst other items. ASU 2016-09 is effective for financial statements issued for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact that ASU 2016-09 will have on its statement of financial position or financial statement disclosures.

In November 2015, the FASB issued ASU 2015-17 - Balance Sheet Classification of Deferred Taxes to simplify the presentation of deferred income taxes. ASU 2015-17 requires that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. ASU 2015-17 is effective for financial statements issued for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. The Company is currently evaluating the impact that ASU 2015-17 will have on its statement of financial position or financial statement disclosures.

In August 2015, the FASB issued ASU No. 2015-14 - Revenue from Contracts with Customers (Topic 606) — Deferral of the Effective Date, which defers the effective date of ASU 2014-09 for one year and permits early adoption as early as the original effective date of ASU 2014-09. The new revenue standard may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. The Company is currently evaluating the impact that ASU 2014-09 will have on its statement of financial position or financial statement disclosures.

In April 2015, the FASB issued ASU 2015-03-Simplifying the Presentation of Debt Issuance Costs. This standard amends existing guidance to require the presentation of debt issuance costs in the balance sheet as a deduction from the carrying amount of the related debt liability instead of a deferred charge. It is effective for annual reporting periods beginning after December 15, 2015, but early adoption is permitted. The Company is currently evaluating the impact the adoption of this standard will have on our consolidated financial statements.

In August 2014, the FASB issued 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”. The new standard provides guidance as to management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosures. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted. The Company has elected to early adopt the provisions of ASU 2014-10 for these audited financial statements.

In May 2014, the FASB issued ASU 2014-09-Revenue from Contracts with Customers, which will supersede nearly all existing revenue recognition guidance under US GAAP. The standard's core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company is currently evaluating our existing revenue recognition policies to determine whether any contracts in the scope of the guidance will be materially affected by the new requirements. The effects may include identifying performance obligations in existing arrangements, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. The new standard is effective beginning with the first quarter of our 2018 fiscal year. Early adoption is not permitted. The standard allows for either "full retrospective" adoption, meaning the standard is applied to all of the periods presented, or "modified retrospective" adoption, meaning the standard is applied only to the most current period presented in the financial statements. On April 1, 2015, the FASB proposed deferring the effective date by one year to December 15, 2017 for annual reporting periods beginning after that date. The FASB also proposed permitting early adoption of the standard, but not before the original effective date of December 15, 2016. We are currently evaluating the transition method that will be elected.

Our management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying financial statements.

OFF BALANCE SHEET ARRANGEMENTS

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

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The financial statements required by Item 8 are presented in the following order:

TABLE OF CONTENTS

Report of Independent Registered Public Accounting Firm	F-1

Balance Sheets as December 31, 2016 and 2015	F-2

Statements of Operations for years ended December 31, 2016 and 2015	F-3

Statement of Stockholders Deficit for years ended December 31, 2016 and 2015	F-4

Statements of Cash Flows for years ended December 31, 2016 and 2015	F-5

Notes to Financial Statements	F-6

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors

Motivating the Masses Inc

Carlsbad, CA

We have audited the accompanying balance sheets of Motivating the Masses, Inc. (the "Company") as of December 31, 2016 and 2015, and the related statements of operations, shareholders' deficit and cash flows for each of the years in the two year period ended December 31, 2016. Motivating the Masses, Inc.’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company was not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2016 and 2015, and the results of its operations and its cash flows for each of the years in the two year period ended December 31, 2016, in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has suffered recurring losses from operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Anton & Chia, LLP

Newport Beach, CA

April 14, 2017

F-1

MOTIVATING THE MASSES, INC.

BALANCE SHEETS

	December 31,			December 31,
	2016			2015

ASSETS
Current Assets:
Cash	$	62,733		$	80,991
Accounts receivable, net		142,470			-
Other current assets		31,405			14,939
Total Current Assets		236,608			95,930

Property and equipment, net		14,192			25,811

Other Assets:
Deposits		46,419			115,755
Total Other Assets		46,419			115,755

Total Assets	$	297,220		$	237,495

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current Liabilities:
Accounts payable and accrued expenses	$	909,089		$	591,055
Deferred revenue		1,224,092			1,572,644
Line of credit		2,493			1,652
Total Current Liabilities		2,135,674			2,165,351

Total Liabilities		2,135,674			2,165,351

Stockholders' Deficit:
Preferred Stock, $0.001 Par value, 1,000,000 shares authorized,
No shares issued and outstanding		-			-
Common Stock, $0.001 Par value, 75,000,000 shares authorized 16,250,734 and 16,481,812 shares issued and outstanding, respectively		16,251			16,482
Stock subscription receivable		(27,100	)		(27,100	)
Additional paid in capital		2,853,789			2,967,747
Treasury Stock		(1,500	)		-
Accumulated deficit		(4,679,895	)		(4,884,986	)
Total Stockholders' Deficit		(1,838,454	)		(1,927,856	)

Total Liabilities and Stockholders' Deficit	$	297,220		$	237,495

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

F-2

MOTIVATING THE MASSES, INC.

STATEMENTS OF OPERATIONS

	For the Years Ended
	December 31,
	2016		2015

Revenues	$	5,143,718	$	3,219,858
Costs of services		2,285,657		1,905,326

Gross Margin		2,858,061		1,314,532

Operating Expenses:
Consulting		648,030		433,112
General and administrative		781,480		936,858
Professional fees		235,645		78,691
Wages and other compensation		973,410		1,165,908
Total Operating Expenses		2,638,565		2,614,569

Income (Loss) from Operations		219,496		(1,300,037	)

Net Income (Loss) Before Income Taxes		219,496		(1,300,037	)

Provision for Income Taxes		-		-

Net Income (Loss)	$	219,496	$	(1,300,037	)

Net Income (Loss) per Share - Basic and Diluted	$	0.01	$	(0.08	)

Weighted average number of shares outstanding - Basic and Diluted		15,500,826		16,207,913

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

F-3

MOTIVATING THE MASSES, INC.

STATEMENT OF STOCKHOLDERS' DEFICIT

For the years ended December 31, 2016 and 2015

										Stock			Additional			Retained
	Common			Common			Treasury			Subscription			Paid in			Earnings
	Shares			Stock			Stock			Receivable			Capital			(Deficit)			Total

Balance, December 31, 2014		15,624,300			15,624						(11,000	)		2,539,849			(3,190,293	)		(645,820	)

Stock issued as dividend		783,312			783						-			390,873			(391,656	)		-
Stock issued for services		40,000			40						-			19,960						20,000
Stock issued for cash		54,200			54						(16,100	)		27,046						11,000
Stock repurchased		(20,000	)		(20	)					-			(9,980	)		(3,000	)		(13,000	)
Net loss for the year ended December 31, 2015		-			-						-			-			(1,300,037	)		(1,300,037	)
Balance, December 31, 2015		16,481,812		$	16,482					$	(27,100	)	$	2,967,748		$	(4,884,986	)	$	(1,927,856	)

Stock issued as dividend		27,619			28						-			13,782			(13,810	)		-
Stock repurchased		(1,758,697	)		(259	)		(1,500	)		-			(127,740	)		(595	)		(130,094	)
Net Income for the year ended December 31, 2016		-			-						-			-			219,496			219,496
Balance, December 31, 2016		14,750,734		$	16,251			(1,500	)	$	(27,100	)	$	2,853,790		$	(4,679,895	)	$	(1,838,454	)

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

F-4

MOTIVATING THE MASSES, INC.

STATEMENTS OF CASH FLOWS

	For the Years Ended
	December 31,
	2016			2015
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) for the Period	$	219,496		$	(1,300,037	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Common stock issued for services		-			20,000
Depreciation and amortization		12,882			15,591
Provision for Bad Debt		-			9,153
Changes in Operating Assets and Liabilities
Accounts receivable		(142,470	)		-
Other current assets		(16,662	)		110,648
Deferred revenue		(348,551	)		799,830
Deposits		69,336			(22,537	)
Accounts payable & accrued expenses		318,033			444,336
Net Cash Provided by Operating Activities		112,063			76,984

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment		(1,264	)		(12,367	)
Net Cash Used In Investing Activities		(1,264	)		(12,367	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from line of credit		3,619			100,263
Repayments on line of credit		(2,778	)		(105,699	)
Stock Repurchase		(115,690	)		(13,000	)
Proceeds from issuance of common stock, net of stock subscription receivable and net of stock offering costs		(14,209	)		11,000
Net Cash Used In Financing Activities		(129,058	)		(7,436	)

Net (Decrease) Increase in Cash		(18,259	)		57,181

Cash at Beginning of Period		80,991			23,810

Cash at End of Period	$	62,733		$	80,991

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during period:
Interest	$	-		$	-
Franchise and Income Taxes	$	-		$	-
Non Cash investing and financing activities:
Stock issued for dividend	$	13,810		$	783,312

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

F-5

MOTIVATING THE MASSES, INC.

NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2016 and 2015

NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

Motivating the Masses, Inc. (the “Company”) was incorporated under the laws of the state of Nevada on September 2, 1998. The Company was founded by Lisa S. Nichols for the purpose of providing high quality resources for business coaching, and professional and management development techniques both on a global scale.

The Company’s products and services revolve around the personal and business coaching programs written and developed by their CEO Lisa Nichols. The program sells as a package of books and DVD’s at their local and national training seminars, and on the Company’s website. The Company has contract rights to the sales of the product. The Company, through their CEO and a core team of coaches, also provide training and development programs through local and national seminars, on-site employee training, public and private speaking engagements, and customized life-coaching programs.

Our services are grouped into two disciplines: Business Segment and Personal Segment. The Business Segment represented 79% of the Company’s overall revenue and the Personal Segment represented 16% of overall revenue.

Our services are grouped in the following two disciplines: Business Segment and Personal Segment.

	Business Segment	Personal Segment
Services	Global Leadership Program	Retreats
	Executive Coaching	Abundance Now
	Business Academy / 14K	Transformational Coaching
	Keynotes / Speaking Fees Speak and Write to Make Millions Speakers’ Vault	28 Days / No Matter What online training Motivating the Teen Spirit

In February of 2013, the Company amended its Articles of Incorporation to provide for an increase in its’ authorized share capital. The authorized common stock increased to 75,000,000 shares at a par value of $0.001 per share.

NOTE 2 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles 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 revenues and expenses during the reporting period. Accordingly, actual results could differ from those estimates. Such estimates include management’s assessments of the carrying value of certain assets, useful lives of assets, and related depreciation and amortization methods applied.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and accounts receivable. The Company maintains its cash balances at high quality financial institutions to mitigate this risk. The Company performs ongoing credit evaluations of its customers and generally does not require collateral. The Company records an allowance for doubtful accounts in accordance with the procedures discussed below. Past-due amounts are written off against the allowance for doubtful accounts when collections are believed to be unlikely and all collection efforts have ceased.

The Company had approximately $-0- in excess of FDIC insurance limits as of December 31, 2016 and December 31, 2015, respectively.

Cash equivalents

The Company considers all highly liquid investments with an original maturity of six months or less when purchased to be cash equivalents. At December 31, 2016 and December 31, 2015, the Company had no cash equivalents.

F-6

Fair value of financial instruments

The Company adopted the provisions of FASB ASC 820 (the “Fair Value Topic”) which defines fair value, establishes a framework for measuring fair value under GAAP, and expands disclosures about fair value measurements.

The Fair Value Topic 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. It requires that valuation techniques maximize the use of observable inputs and minimize the use of unobservable inputs. It also establishes a fair value hierarchy, which prioritizes the valuation inputs into six broad levels.

The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:

A) Market approach—Uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. Prices may be indicated by pricing guides, sale transactions, market trades, or other sources;

B) Cost approach—Based on the amount that currently would be required to replace the service capacity of an asset (replacement cost); and

C) Income approach—Uses valuation techniques to convert future amounts to a single present amount based on current market expectations about the future amounts (includes present value techniques, and option-pricing models). Net present value is an income approach where a stream of expected cash flows is discounted at an appropriate market interest rate.

Level 1: Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. An active market for an asset or liability is a market in which transactions for the asset or liability occur with significant frequency and volume to provide pricing information on an ongoing basis.

Level 2: Observable inputs other than Level 1 inputs. Example of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.

Level 3: Unobservable inputs based on the Company’s assessment of the assumptions that are market participants would use in pricing the asset or liability.

The carrying amount of the Company’s financial assets and liabilities, such as cash, prepaid expenses, deposits, accounts payable, accrued expenses, and deferred revenue approximate their fair value because of the short maturity of those instruments.

The Company had no assets and/or liabilities measured at fair value on a recurring basis at December 31, 2016 and December 31, 2015, respectively, using the market and income approaches.

F-7

Property and Equipment

Property and equipment are recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation is computed by the straight-line method over the assets estimated useful life of six (3) years for equipment, (5) years for automobile, and (7) years for furniture and fixtures. Upon sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in statements of operations.

Identifiable Intangible Assets

The Company had not identifiable intangible assets as of December 31, 2016 and December 31, 2015.

Impairment of long-lived assets

The Company follows paragraph 360-10-05-4 of the FASB Accounting Standards Codification for its long-lived assets. The Company’s long-lived assets, such as intellectual property, are required to be reviewed for impairment annually, or whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable.

The Company assesses the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of long-lived assets over their remaining estimated useful lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives.

The Company determined that there were no impairments of long-lived assets as of December 31, 2016 and December 31, 2015.

Commitments and contingencies

The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.

Revenue recognition

The Company follows paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company will recognize revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured. In addition, the Company records allowances for accounts receivable that are estimated to not be collected.

A portion of the Company’s revenues are from coaching and/or training services provided under contracts that are greater than one month in length. These contracts are billed in total at the onset of the contact period, and to the extent that billings exceed revenue earned, the Company will record such amount as deferred revenue until the revenue is earned. We recognize revenue on these contracts in the period the coaching and/or training services are provided under the contract. Expenses associated with providing the coaching and/or training services are recognized in the period the services are provided which coincides with when the revenue is earned. Clients either pay in full or make payments that coincide with the progress of their programs. The Company generally will not begin services until full payment, or a down payment, is received. The Company offers a 3-day cancellation policy on its program and services. However, the Company provides a 30 day money back guarantee on its 28 Days To Results and No Matter What online modules, which is a standard industry practice.

Deferred Revenue

As of December 31, 2016 and December 31, 2015, the Company has a deferred revenues balance of $1,224,092 and $1,572,644, respectively.

F-8

Income taxes

The Company follows Section 740-10-30 of the FASB Accounting Standards Codification, which requires 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 based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the fiscal year in which the temporary differences are expected to be recovered or settled. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

The Company adopted section 740-10-25 of the FASB Accounting Standards Codification (“Section 740-10-25”) with regards to uncertainty in income taxes. Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The Company had no material adjustments to its assets and/or liabilities for unrecognized income tax benefits according to the provisions of Section 740-10-25.

Stock-Based Compensation

In December 2004, the FASB issued FASB Accounting Standards Codification No. 718, Compensation – Stock Compensation. Under FASB Accounting Standards Codification No. 718, companies are required to measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share-based compensation arrangements include stock options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. As such, compensation cost is measured on the date of grant at their fair value. Such compensation amounts, if any, are amortized over the respective vesting periods of the option grant. The Company applies this statement prospectively.

Equity instruments (“instruments”) issued to other than employees are recorded on the basis of the fair value of the instruments, as required by FASB Accounting Standards Codification No. 718. FASB Accounting Standards Codification No. 505, Equity Based Payments to Non-Employees defines the measurement date and recognition period for such instruments. In general, the measurement date is when either a (a) performance commitment, as defined, is reached or (b) the earlier of (i) the non-employee performance is complete or (ii) the instruments are vested. The measured value related to the instruments is recognized over a period based on the facts and circumstances of each particular grant as defined in the FASB Accounting Standards Codification.

Net income (loss) per share

The Company computes basic and diluted earnings per share amounts pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic earnings per share is computed by dividing net income (loss) available to common shareholders, by the weighted average number of shares of common stock outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted earnings per share is computed by dividing net income (loss) available to common shareholders by the diluted weighted average number of shares of common stock during the period. The diluted weighted average number of common shares outstanding is the basic weighted number of shares adjusted as of the first day of the year for any potentially diluted debt or equity.

There were no potentially dilutive shares outstanding as of December 31, 2016 and December 31, 2015, respectively.

F-9

Recently issued accounting pronouncements

We have decided to take advantage of the exemptions provided to emerging growth companies under the JOBS Act and as a result our financial statements may not be comparable to companies that comply with public company effective dates. We may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, delay compliance with new or revised accounting standards that have different effective dates for public and private companies until they are made applicable to private companies.

In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016- 09 - Compensation - Stock Compensation, which simplifies the accounting for the tax effects related to stock based compensation, including adjustments to how excess tax benefits and a company’s payments for tax withholdings should be classified, amongst other items. ASU 2016-09 is effective for financial statements issued for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact that ASU 2016-09 will have on its statement of financial position or financial statement disclosures.

In November 2015, the FASB issued ASU 2015-17 - Balance Sheet Classification of Deferred Taxes to simplify the presentation of deferred income taxes. ASU 2015-17 requires that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. ASU 2015-17 is effective for financial statements issued for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. The Company is currently evaluating the impact that ASU 2015-17 will have on its statement of financial position or financial statement disclosures.

In August 2014, the FASB issued 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”. The new standard provides guidance as to management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosures. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted. The Company has elected to early adopt the provisions of ASU 2014-10 for these audited financial statements.

Company management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying financial statements.

NOTE 3 - GOING CONCERN

These financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The Company's ability to continue as a going concern is contingent upon its ability to maintain profitable operations.

During the year ended December 31, 2016, the Company had a net income of $219,496, positive cash flow from operations of $112,063, negative working capital of $1.9 million, and a Stockholder Deficit of $1,838,454. The negative working capital balance was mainly due to having a deferred revenue balance of $1.2 million. The Company launched an evergreen marketing funnel in late 2015 and two more in the second quarter of 2017. Collectively, they are expected to contribute 10% to 15% of the Company’s overall revenue in 2017. The added revenue will offset any potential shortfall from our Keynote revenue as Lisa Nichols redirects her efforts to the media side of the business. Given the Company maintained positive cash flow from operations, a high deferred revenue balance coupled with a low accounts receivable balance, and the launch of several evergreen marketing funnels that will generate additional sales of $25,000 to $75,000 per month, the Company believes that it will have sufficient capital to operate over the 12 months immediately following the issuance of its financial reports.

There can be no assurance, however, that the company will be successful in generating sufficient cash flows from operations to meet its future obligations.

NOTE 4 – ACCOUNTS RECEIVABLE

The Company reported an accounts receivable balance of $142,470 as of December 31, 2016 and did not have any accounts receivable as of December 31, 2015. The Company reported a zero balance for the Allowance for Doubtful Accounts.

F-10

NOTE 5 – PROPERTY AND EQUIPMENT

Property and equipment is stated at cost, less accumulated depreciation, as of December 31, 2016 and December 31, 2015, consisted of the following:

	December 31, 2016			December 31, 2015
Equipment	$	61,336		$	60,073
Furniture & Fixtures		25,910			25,910
Less: Accumulated Depreciation		(73,054	)		(60,172	)
Net Property and Equipment	$	14,192		$	25,811

Depreciation expense for the years ended December 31, 2016 and 2015 was $12,882 and $15,591, respectively.

NOTE 6 – COMMITMENTS & CONTINGENCIES

Employment Agreement

The employment agreements for the officers stipulate a potential bonus at the discretion of the Board of Directors. In the year ended December 31, 2016, the Company did not pay any bonuses to its officers.

F-11

Lease

Minimum future lease payments under the agreement are as follows:

2017	$	122,131
2018	$	167,036
2019	$	172,050
2020	$	177,212
2021	$	182,519

NOTE 7 – RELATED PARTY TRANSACTIONS

Consulting Agreement

On October 17, 2016, Susie Carder tendered her resignation as President and Chief Operating Officer of the Company. On the same day, the Company and Ms. Carder entered into an independent contractor agreement regarding Ms. Carder’s role as a consultant to the Company to focus primarily on developing the Company’s coaching services. Ms. Carder has worked with Lisa Nichols and MNMT for over 15 years, and has an extensive understanding of our business and our clientele. Under the terms of her Independent Contractor Agreement, Ms. Carder will receive a monthly retainer of $18,750 in addition to the following:

Coaching: Coaching given to clients will be paid at a rate of 30% of contracted amount. For Business Academy clients, the percentage paid will be 15% of contracted amount.

Internal Event Sales: As a speaker at the event, Susie Carder is eligible to receive 1% of sales made. In the event that there are multiple speakers, a percentage of 1.5% of sales will be divided evenly and paid to the speakers. As Account Manager/Project Manager for the event, Susie Carder is eligible to receive 2% of sales made. In the event there are multiple account/project managers, the 2% compensation will be split accordingly.

NOTE 8 – STOCKHOLDERS’ DEFICIT

Common and Preferred Shares authorized

The Company was incorporated on September 2, 1998, at which time the Company authorized 3,000,000 shares of common stock with .001 par value and 1,000,000 shares of preferred stock with .001 par value.

Amendment to Articles of Incorporation

Common shares issued

In the year ended December 31, 2016, the Company issued 27,619 shares of common stock as stock dividend.

Purchases of Equity Securities by the Registrant and Affiliated Purchasers

The Company repurchased and retired 258,697 shares for $129,349, or $0.50 per share. The Company also reacquired 1,500,000 shares that were previously issued as shares for services rendered.

NOTE 9 – WARRANTS

Alma Diversified Holdings LLC owns 1,365,000 warrants to purchase shares of the Company's common stock the aggregate amount and at the exercise price of $0.001. SDR Diversified Holdings LLC owns 585,000 warrants to purchase shares of the Company's common stock in the aggregate amount and at the exercise price of $0.001.

F-12

NOTE 10 – INCOME TAX

Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

	2016			2015

Deferred tax liability:	$	-		$	-
Deferred tax asset
Net Operating Loss Carryforward		1,365,485			1,559,185
Accruals		181,403
Valuation allowance		(1,546,888	)		(1,559,185	)
Net deferred tax asset		—			—
Net deferred tax liability	$	—		$	—

The provision for income taxes has been computed as follows:

	2016			2015
Tax expense at statutory rate - federal		34	%		34	%
State tax expense, net of federal funds		5.83	%		5.83	%
Valuation Allowance		(39.83	)%		(39.83	)%

Tax expense at actual rate	$	—		$	—

At December 31, 2016, the Company had net operating loss carryforwards of approximately $5,260,575 that may be offset against future taxable income from the year 2016 to 2036. The net change in the valuation allowance for the years ended December 31, 2016 and 2015 was a decrease of $12,297 and an increase of $451,700. No tax benefit has been reported in the December 31, 2016 financial statements since the potential tax benefit is offset by a valuation allowance of the same amount.

Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carryforwards for Federal Income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carryforwards may be limited as to use in future years.

F-13

The Company's federal income tax returns are no longer subject to examination by the IRS for the years prior to 2009, and the related state income tax returns are no longer subject to examination by state authorities for the years prior to 2009. Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carryforwards for Federal Income tax reporting purposes are subject to annual limitations, should a change in ownership occur, net operating loss carryforwards may be limited as to use in future years.

NOTE 11 – RESCISION OFFER

During the period beginning June 2011 and ending January 2015, in an offering pursuant to Rule 506 of Regulation D, we inadvertently allowed certain of our securities to be sold to more than 35 investors who may not qualify as “Accredited Investors” as such term is defined in the Securities Act of 1933; accordingly, those securities we issued in such offering may not have been exempt from the registration or qualification requirements under the Securities Act of 1933 and the securities laws of certain states. Accordingly, the purchasers of such securities may be entitled to demand a rescission of their previous security purchases of common stock.

As of the date of this filing and in connection with this matter, no shareholder has requested a rescission and the Company has not made a rescission offer.

NOTE 12 – SUBSEQUENT EVENTS

Management was evaluated subsequent events pursuant to the requirements of ASC Topic 855 and has determined that, other than listed below, no material subsequent events exist through the date of this filing.

On January 15, 2017, the Board of Directors awarded individual cash bonuses of $50,000 to Lisa Nichols, Susie Carder and Scott Ryder.

In February of 2017, the Company issued 209,474 shares of common stock as stock dividend to current shareholders as loyalty shares based on their investment on March 31, 2015 at fair value.

F-14

ITEM 9. Changes in and Disagreements With Accounts on Accounting and Financial Disclosures

None.

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that are designed to be effective in providing reasonable assurance that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to our management to allow timely decisions regarding required disclosure.

In designing and evaluating disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute assurance of achieving the desired objectives. Also, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. The design of any system of controls 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. As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of management, including our chief executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based upon that evaluation, management concluded that our disclosure controls and procedures were not effective as of December 31, 2016 to cause the information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods prescribed by SEC, and that such information is accumulated and communicated to management, including our chief executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Management's Report on Internal Control Over Financial Reporting

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, performed an evaluation to determine whether any change in our internal controls over financial reporting occurred during the year ended December 31, 2016. Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that no change occurred in the Company's internal controls over financial reporting during the year ended December 31, 2016 that has materially affected, or is reasonably likely to materially affect, the Company's internal controls over financial reporting, including:

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

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of management and our directors; and

Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Because of its inherent limitations, our internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. 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.

Our Chief Executive Officer and Chief Financial Officer assessed the effectiveness of our internal control over financial reporting as of December 31, 2016. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control — Integrated Framework 2013.

Based on our assessment, our Chief Executive Officer and Chief Financial Officer believed that, as of December 31, 2016, our internal control over financial reporting was not effective based on those criteria, due to the following:

Deficiencies in the Company’s revenue recognition process. Lack of effective communication between executive coaches and the accounting department wherein revenue was recognized on coaching services and VIP days that had been delayed.

Accordingly, management believes, based on its knowledge, that (1) this report does not contain any untrue statement of a material fact or omit to state a material face necessary to make the statements made not misleading with respect to the period covered by this report, and (2) the financial statements, and other financial information included in this report, fairly present in all material respects our financial condition, results of operations and cash flows for the years and periods then ended.

This report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to the rules of the SEC that permit us to provide only management’s report in this report.

Changes in Internal Control Over Financial Reporting

There were no significant changes in our internal control over financial reporting during the fiscal quarter ended December 31, 2016, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information.

None.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required under this item is incorporated herein by reference to the information regarding directors, executive officers and corporate governance included in our Information Statement for our Annual Meeting of 2015 to be filed with the SEC within 120 days of the end of the Company’s fiscal year ended December 31, 2016.

ITEM 11. EXECUTIVE COMPENSATION

The following table provides certain information regarding compensation awarded to, earned by or paid to persons serving as our Chief Executive Officer during fiscal 2016 and 2015 and our two other most highly compensated officers who had total compensation exceeding $100,000 for fiscal 2016 (each a "named executive officer")

Summary Compensation Table
Name and Principal Position	Year		Salary ($)		Bonus ($)		Stock Awards ($)		Option Awards ($)		Non-Equity Incentive Plan Compensation ($)		Nonqualified Deferred Compensation Earnings ($)		All Other Compensation ($)		Total ($)
Lisa Nichols, CEO and Director		2016		225,000		152,002		-		-		-		-		152,002		377,002
		2015		225,000		231,077		-		-		-		-		231,077		456,077


Susie Carder, President, COO and a Director		2016		116,667		32,705		-		-		-		-		32,705		149,372
		2015		200,000		152,555		-		-		-		-		152,555		352,555

Scott Ryder, Treasurer, Secretary and CFO (3)		2016		150,000		40,874		-		-		-		-		-		190,874
		2015		34,375		-		-		-		-		-		-		34,375

(1)

Susie Carder resigned as Chief Operating Officer in October 2016

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

The information required under this item is incorporated herein by reference to the information regarding security ownership of certain beneficial owners and management and related stockholder matters included in our Information Statement for our Annual Meeting of 2015 to be filed with the SEC within 120 days of the end of the Company’s fiscal year ended December 31, 2016.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

The information required under this item is incorporated herein by reference to the information regarding certain relationships and related transactions and director independence included in our Information Statement for our Annual Meeting of 2015 to be filed with the SEC within 120 days of the end of the Company’s fiscal year ended December 31, 2016.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

Audit Fees

Audit fees consist of fees for professional services rendered for the audit of the Company's consolidated financial statements included in the Company's Annual Report on Form 10-K and the review of financial statements included in the Company's Quarterly Reports on Form 10-Q. The aggregate fees billed for professional services rendered by our principal accountant, Anton and Chia, LLP, for audit and review services for the fiscal years ended December 31, 2016 and December 31, 2015 were $111,851 and $58,000, respectively.

Accountant fees consist of fees for professional services rendered for the preparation and filing of the Company’s annual tax returns. The aggregate fees billed for professional services rendered by our principal tax accountant, Sahmel & Associates, LLP, for tax preparation and filing services for the fiscal years ended December 31, 2016 and December 31, 2015 were $3,000 and $-0-, respectively.

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

Incorporated by reference

Filed

Period

Filing

Exhibit

Exhibit Description

herewith

Form

ending

Exhibit

date

3.1

Articles of Incorporation

S-1

3.1

3/27/2013

3.2

Corporate By-Laws

S-1

3.2

3/27/2013

3.3

Amendment to Articles of Incorporation, dated February 28, 2013

S-1/A

3.3

6/6/2013

10.1

Employment Agreement between Motivating the Masses and Lisa Nichols, dated May 1, 2016

10-Q

10.1

5/23/2016

10.2

Employment Agreement between Motivating the Masses and Scott Ryder, dated October 12, 2015

10-K

10.5

4/19/2016

10.3

Independent Contractor Agreement between Motivating the Masses and Susie Carder, dated October 17, 2016

8-K

10.1

10/18/2016

10.4

Sublease agreement, dated July 1, 2012

10-K

10.6

3/28/2014

101.INS

XBRL Instance Document

101.SCH

XBRL Taxonomy Extension Schema Document

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB

XBRL Taxonomy Extension Label Linkbase Document

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document

101.DEF

XBRL Taxonomy Extension Definition Linkbase Definition

31.1

Rule 13a-14(a)/15d-14(a) certification of Chief Executive Officer

31.2

Rule 13a-14(a)/15d-14(a) certification of principal financial and accounting officer

32.1

Section 1350 certification of Chief Executive Officer

32.2

Section 1350 certification of principal financial and accounting officer

SIGNATURES

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

	MOTIVATING THE MASSES, INC.

April 14, 2017	By:	/s/ Lisa Nichols
	Lisa Nichols, Chief Executive Officer (Principal Executive Officer)

April 14, 2017	By:	/s/ Scott Ryder
	Scott Ryder, Chief Financial Officer (Principal Financial Officer)

KNOW ALL MEN BY THESE PRESENTS, that we, the undersigned officers and directors Motivating The Masses, Inc., a Nevada corporation (the “Registrant”), do hereby constitute and appoint Lisa Nichols and Scott Ryder, and each of them, as his or her true and lawful attorney-in-fact and agents, with full power of substitution and re-substitution, for him and in his name, place, and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming that all said attorneys-in-fact and agents, or any of them or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report on Form 10-K has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Person	Capacity	Date

/s/ Lisa Nichols	Chief Executive Officer and Director	April 14, 2017
Lisa Nichols	(Principal Executive Officer)

/s/ Scott Ryder	Chief Financial Officer	April 14, 2017
Scott Ryder	(Principal Financial and Accounting Officer)

/s/ Susie Carder	Director	April 14, 2017
Susie Carder

MOTIVATING THE MASSES INC - FORM 10-K - April 14, 2017

Attached files

MOTIVATING THE MASSES INC Reports