Max Sound Corp (OTCBB:MAXD) is Sinking Again

Max Sound Corp (OTCBB:MAXD) have rather boldly placed a slogan under their logo which reads “The Sound Investment”. We’re pretty sure that there will be no shortage of people who will argue that this is not the best way to describe the company and its stock.

The ones who have been invested in a while, for example, saw the value of their shares drop from nearly $1 per share back in 2011 all the way down to just over $0.02 in March of this year. The ones who were jumping in last week are not particularly happy as well. MAXD bounced on July 13 when it gained 32% and a press release from a few days later suggested that it might be able to keep the gains this time. Unfortunately, the announcement didn’t really do much for the performance and after a couple of red sessions, the stock closed last week’s trading pretty much back where it started it – at a breath over $0.03 per share.

Many more people will argue that the term “sound investment” requires some sort of solid financial results and it must be said that MAXD is lagging behind on that front as well. Here, for example, is what the 10-Q for the first three months of this year looks like:

  • cash: $21,897
  • current assets: $94,388
  • current liabilities: $5,868,173
  • NO quarterly revenues
  • quarterly net loss: $1,973,423

All in all, it’s fair to say that so far, things have not been going according to plan. But what about the future? Is there anything to suggest that MAXD can turn things around?

Well, last week’s press release certainly sounds promising enough. With it, the management team said that they have signed their second licensing agreement in the span of a single month. MAXD‘s new partner is called Luna Mobile and it has agreed to pay money in order to use the MAX-D HD technology in its upcoming ROX V8 smartphone.

In addition to this, the management team, as well as some of the long-suffering shareholders appear to be pretty confident in the company’s ability to write a David vs Goliath type of story with their patent infringement case against Google. And they might just turn out to be right.

The problem is, the outcome of these events is still unknown and investors might be forced to wait for months before they see any real results in the financial reports. And in the meantime, the toxic debt could drag the stock underwater.

MAXD has already gone through quite a lot of convertible notes-related dilution. During Q1, the printing press pushed out nearly 30 million shares at an average rate of $0.026. The management team did try to keep the exuberant stock issuance at bay and they canceled some of their own shares, but the more recent notes can be turned into stock at a 40% discount which means that even with the stock cancellation plan in place, MAXD might still have some difficulties staying afloat. And that’s something you should definitely consider if you’re looking for a long-term investment.

If, on the other hand, you’re simply trying to find a lucrative trade, you might want to check out MAXD‘s newest press release which came out earlier today. It says that the company, along with an entity called Big Noise Institute, will train some students on the importance of audio quality and critical listening. Though it’s still unknown how this will help the company, investors appear to be pretty happy with the news. About eight minutes after the opening bell, MAXD is sitting at $0.035 per share (almost 13% in the green).

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