Max Sound Corp (OTCBB:MAXD) Slips Hard On Court Order

In yesterday’s session Max Sound Corp (OTCMKTS:MAXD) slipped hard around noon, pushed over the edge by a press release. The company announced Google’s motion to dismiss MAXD‘s complaint was granted by the court, based on the standing issue. By the closing bell MAXD found itself nearly 23% in the red on its biggest daily volume for the past 52-weeks.

The sell-off that took place yesterday is in a way understandable. MAXD is not exactly doing a stellar job on the business side of things, with a disappointing quarterly that went up in mid-November, and the company’s biggest bet seem to be the patent infringement lawsuits that it is throwing about.

The reason for the slip is that things are not going too well with MAXD‘s lawsuit against Google and Youtube in the USA for patent infringement on technology patented by MAXD. After Google filed a motion to dismiss MAXD‘s complaint, with the allegation that the claims in it were invalid, only this Tuesday the court issued an order, granting Google’s request based “only on the standing issue”.

MAXD is, naturally, going to appeal the court’s decision, but given the pace at which this sort of issue is usually resolved, it will likely be a while before investors can get any closure on the matter.

There is little to be excited about the company’s performance looking at its latest balance sheet. Here is the brief summary of MAXD‘s balance sheet that was published on Nov 13:

  • $20 thousand in cash
  • $7.4 million in current liabilities
  • ZERO in revenues for Jan – Sep 2015
  • $7.5 million in net loss for Jan – Sep 2015

There is also the matter with the delicious discounted convertible debt detailed in the report, with provisions to convert into shares at discounts ranging from 25% to 40% from the lowest trading prices of MAXD stock 10 to 20 days prior to conversion.

MAXD is expecting the outcome of another court hearing in Germany, with final judgment expected to arrive in early December. A favorable outcome could help lift MAXD stock once more.

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