Max Sound Corp (OTCMKTS:MAXD) Is Sitting On The Fence

After trading between$0.0014 and $0.001 for over two months, Max Sound Corp (OTCMKTS:MAXD) nearly tripled in value to $0.0028 on September 20 2017 with savvy investors making profits of over 50% within the day.In this article, we give you the details of Max Sound Corp and what can be expected from the company in the future.Share price movement in the last one year. MAXD Daily ChartFrom trading at $0.3, Max Sound Corp has suffered a massive drop in value due to dilution of its ownership shares. Between December 2012 and December 2016, outstanding shares were diluted from 287 million to 935 million. However, there are claims by the company management that the loss in value was a result of continued manipulative trading practices and naked short selling of the stock. For our readers who may not be familiar with the company, here is a brief description.Overview of the companyMax Sound Corp.was founded by current chairman, Greg J. Halpern on December 9, 2005 and is headquartered in Santa Monica, CA.The firm specializes in the development of audio technology software and is engaged activities to sell and license products and services based on its patent-pending MAX-D HD audio technology for sound recording and playback that dramatically improves the listener's experience. The firm has also made investments in motion picture, music recording, video game, broadcasting, Internet video and audio, automobile infotainment systems and consumer electronics.Recent DevelopmentsEarlier in May 2014, MAXD entered into a representation agreement with world renowned architect Eli Attia giving MAXD the exclusive right to pursue claims on itsbehalf against violators of Attia’s intellectual property rights.The lawsuit was filed on December 5, 2014, in the Superior Court of California, County of Santa Clara, against Google and its co-founders Sergey Brin and Larry Page, Google’s spinoff company Flux Factory, and senior executives of Flux alleging among other causes of action misappropriation of trade secrets and breach of contract.The lawsuit stated that Google and the other Defendants stole Mr. Attia’s trade secrets, proprietary information, and know-how regarding a revolutionary architecture design and building process that he alone had invented, known as Engineered Architecture which Google called Genie before it changed the name to Flux.On October 4, 2017 the Superior Court of California issued an order granting a motion to add a fourth amended complaintof racketeeringto the case. The fourth amended complaint is now deemed filed and served.Max Sound recently registered complaints of being victimized by Manipulative Trading Practices and Abusive Naked Short Selling for the past three years with the perpetrator’s objective to lower its share price and harm the company. Some claims have been made that Google Inc. related individuals have allegedly been a part ofthis act. Many shareholders reported that while acquiring shares in the open market, MAXD share price often fell almost immediately after they received their confirmation of purchase from their brokers. The complaints have been registered with the Securities and Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA).The company also announced in November 2016 that it had entered into an agreement with Vedanti Systems Limited and Vedanti Licensing Limited (VLL) to resolve a dispute over the International Optimized Data Transmission (ODT) patent portfolio previously owned by Vedanti. The agreement stated that VLL and MAXD would become co-owners of the pioneering portfolio. The agreement further stated that both firms would work together on existing business opportunities and will jointly implement strategies for monetizing the ODT patents and defending the patents from invalidity challenges.Financial PerformanceOn April 15, 2016, MAXD announced that they paid current convertible debt of $3.6 million and consolidated the remaining debt to a "friendly, long-term, strategic financing partner". This was initially well received by the market, but a few weeks later, the shares were diluted from 285 million to 647 million shares revealing further loss in shareholder value.However the debt settlement helped to allay fears that the firm’s debts would force it out of business. It also provided a platform for a deal to be struck with Imperalis Holdings for Imperalis' acquisition of MAXD’s HD Audio Technology IP component assets.The purchase price paid to MAXD was 48,000,000 restricted shares of common stock, restricted for one year, to be issued upon closing.MAXD declared revenue of $2.49 million and loss of $9.8 million in December 2014. Since then, there have been no declared revenues although costs have still been incurred. Between 2014 and 2016, the losses have accumulated to over $40 million. On the back of this, it is unlikely that any new investors would be attracted to the company’s shares.Further analysis shows that retained earnings have remained on a steady decline over the past five years, with liabilities rising by roughly 50% between 2012 and 2016. With no disclosure from the management on intended strategies to turn around the situation, it may be safe to say that the company’s future is very dependent on the results of its pending lawsuits. ConclusionThe results of MAXD over the past few years make it difficult to see any upside in investing in the company. However, it is worth noting that if the lawsuit against Google and it related parties is successful, the company would suddenly be reborn and shareholders would be able to reap rewards. This may just be the time to be bold when others are fearful as recommended by Warren Buffet.We will be updating our subscribers as soon as we know more. For the latest updates on MAXD, sign up below!Image courtesy of Ronald Gosling via FlickrDisclosure: We have no position in MAXD and have not been compensated for this article.