SOURCE: Max Sound Corporation

Max Sound Corporation

January 07, 2015 19:50 ET

Max Sound CEO Letter to Shareholders

SANTA MONICA, CA--(Marketwired - January 07, 2015) -

Dear MAX-D Shareholders,

What follows is a summary of where Max Sound Corporation (OTCQB: MAXD) stands today; a discussion of our progress throughout the past year, and where we believe the Company is headed in 2015. I will outline the opportunities for the MAX-D HD Audio products, its market positioning and provide an update on our litigation against Google, Inc.

Let me start by thanking all of our investors, who have become believers in our mission to make MAX-D HD the new consumer audio brand standard across all major vertical markets including: multimedia, entertainment, and communication. I'd also like to acknowledge all of my outstanding personnel who make up the MAX-D Team, each of whom has devoted countless hours, pushing us toward our ultimate goal. All of us at MAX-D are "All in" and the only option we can envision for 2015 is great success.

THE MAX-D HD AUDIO TECHNOLOGY
The MAX-D HD Audio Technology delivers high definition audio without increasing file size. We believe MAX-D HD is better for your hearing than today's highly compressed audio and anticipate that research to support will be available soon. MAX-D MP3 files sound incredible. In fact, in numerous consumer audio tests, MAX-D HD sounded better to listeners than high-resolution WAV files. MAX-D HD remains one-tenth the size of a WAV file, with more claritydimensionarticulation and impact in every range of the audio spectrum. MAX-D HD can sound as good as the original recording because the artifacts, phase anomalies and harshness are gone. MAX-D makes every audio source and file sound better so we are a benefit to every listener on every device and in every technology. In every single example where audio is delivered we can give the consumer a better experience than they are getting now, whether they have Sonos, Beats, Dolby, Bose, Sony, Pono and so on.

MAX-D HD Audio Technology does not require any high cost equipment changeover and can be added to any product (e.g. speakers, headphones, mobile devices) or online content delivery (e.g. streaming, cable, video games) to provide better sounding audio. There is no need for bigger pipes, bigger servers, new consumer devices, or higher data costs (which would be rejected by today's cost conscious consumers). As I mentioned above, MAX-D HD significantly reduces the data delivery costs, which results in huge financial savings to content providers and consumers. The only change is exceptional sound and faster delivery. MAX-D HD proves that size matters, fitting true-to-life HD Audio into existing MP3's and its gigantic compressed audio eco-system. So the world's wait for true high definition audio is over.

When consumers hear MAX-D HD Audio demonstrations, they immediately recognize the value of our Technology. Whether heard from a sound bar, smart device, headphones, a car entertainment system, a home theatre or on stereo speakers, the listening experience is redefined and taken to whole new level! Our MAX-D HD demos have consistently led all consumers to ask two questions: "What is that?" and "How do I get it?" For that reason, we believe we have struck gold with this technology.

In the past year, it has become clear which markets will give us the fastest acceptance and the quickest realization of our collective dreams, consumer adoption, brand awareness and financial success. Every day my team and I are focused on creating revenue events with big name customers and their associated partners. As we pursue and conquer these opportunities, it will be clear to our shareholders, manufacturers and content providers -- that consumers prefer the audio perfection created by MAX-D HD!

THE OPEN MARKET
As I have stated previously, when stock performance fails to meet expectations (yours and ours), the tendency is to use recent pricing as the only indicator of the Company's value. However, the Company has evolved significantly over the past year and had many positive developments, which has resulted in a better and more valuable position for Max Sound Corporation today. I believe the Company's true value has yet to be realized especially when only looking at share price.

Ask yourself -- "What would Max Sound's value be if consumers all over the world realized how MAX-D HD provides a far better audio experience?" You probably have an idea what that value could be, which is probably why you first invested in Max Sound Corporation. We have an idea too, which is why we keep investing our time, energy and financial resources (over seven figures has already been invested by our founders). I have personally invested four months of my salary purchasing MAXD stock in the open market, because I strongly feel our shares are severely undervalued. Our goal is that everyone will know about MAX-D HD and everyone will know about MAX-D stock. Right now the investor audience is small, but as you'll learn below, we think we now have the necessary elements for our shareholder base to grow substantially in 2015.

From time-to-time, I hear from shareholders who want to know why we have yet to sign the big name deals or whether or not we know how to get critical acceptance of our technology. We are confident that we currently have the right people, the necessary industry contacts, a solid Advisory Board and the deals in development that will lead to financial success and share value in 2015. We had a long road of three years of research and development just to gain acceptance by industry experts. But we now have enough support by industry insiders who understand that MAX-D HD Audio is an algorithm that consumers love and will pay for. 

2014 A YEAR IN REVIEW
Research & Development of the MAX-D HD Audio Technologies continues to be our major focus now that we have entered our licensing phase. However, this R&D is the exciting kind. It involves working with partners, and prospective partners, who are integrating or developing use of our application into their platforms.

Our sales and marketing teams are laser focused on penetrating the smart device industry, content streaming industry, auto industry and the television and film industry (post production audio for movie companies). The development team has concentrated on enhancing the existing MAX-D HD API, while developing additional API interfaces. The MAX-D API can be deployed across all streaming platforms along with most audio/video web based services. MAX-D HD can now reside in audio hardware (speakers and audio receivers -- such as car smart head units).

One accomplishment in Q4 of 2014 was the completion of testing for Industry MAX-D HD Audio Boxes. I'll talk more about that below.

We've also completed the initial development of the MAX-D Accurate Voice. Not only does it dramatically improve voice quality on cellular devices, it also has the ability to improve voice recognition in homes smart devices and auto infotainment systems.

To hear for yourself play this link on a computer with decent speakers:
http://vimeo.com/99080610

As demonstrated by our key partners, and most recently by market trends, the focus of the Company has been to develop the MAX-D HD Audio Technology for industries having the highest potential sales and profit yields.

The year 2014 provided many breakthroughs for us in the software development of MAX-D HD for Android OS, Windows OS, Apple iOS and a universal MAX-D API.

The MAX-D API
We now have a MAX-D API (Application Programming Interface) that allows the MAX-D HD proprietary algorithm and coding to be inserted into applications such as streaming services, automotive head units, DSP memory in speakers, developer platforms and web-based applications. We currently have our API in what appears to be the final phase of testing with brand leaders in auto manufacturing, chip sets, gaming consoles and streaming content. Each of these industry leaders has their own custom version of the Android platform as well as other hybrid platforms. Our engineering and programming teams are working hand-in-hand to accomplish a successful integration of MAX-D HD for all platforms.

QUALCOMM SNAP DRAGON PROCESSOR & HEXAGON PROGRAM
Since our debut at the Qualcomm Uplinq conference in San Diego over a year ago, we remain engaged with some of the largest OEM's in the device smartphone market. Our sales and engineering teams are currently engaged in advanced high-level strategic meetings with industry leaders in chip manufacturing and device hardware. We are currently operating under several NDA's and R&D Test Agreements with today's most well known industry leaders to implement and license the MAX-D HD Technology onto their platforms.

Please go to the links below to learn more:
Video Link of booth: http://vimeo.com/77764981
Snapdragon Interview Link: http://youtu.be/hMOiieiIYIw

THE MAX-D HD AUDIO APP PLAYER
We almost trippled our Mobile App user base in 2014 (with no dedicated marketing budget being employed -- until later in 2015), and currently have over 80,000 subscribers on the free version of our HD Audio App for MP3's on Android. We are also in final weeks of Beta testing of our latest MAX-D HD Apple iOs App that will support current iPhones and iPads. We plan on a Q1 2015 launch onto the Apple App Store.

We are also exploring a subscription model in 2015. The subscription model would offer millions of consumers a MAX-D HD Audio experience a free 30-day trial, and then be able to upgrade to a paid annual subscription. We continue to track the audio equalizer app market and see a growing demand for consumers wanting a better audio experience. We estimate the current market producing ten's of millions of dollars with over eight million users currently using some kind of application to enhance their sound using mainly static frequency equalization (EQ) to improve the degraded sound they are experiencing due to compressed audio. MAX-D HD is a far better choice and user experience than what the market currently provides. However, while this is an opportunity we are taking a hard look at, we will have to weigh the risk vs. reward against emerging partner opportunities to determine whether or not that would create unwanted competition with new licensing business. Stay tuned.

MAX-D HD Audio Box
As stated in my previous letter "the majority of the post-production houses that produce audio for the motion picture industry have requested a MAX-D HD Box". The MAX-D HD Box is a small Windows®-based computer that allows audio engineers to apply our patent pending MAX-D HD Audio technology to protect the original audio quality as it is compressed and distributed downstream throughout the internet in all compressed formats. We now have internal testing boxes completed, and anticipate delivering the first boxes to several markets in Q2 2015 and one of the top post film production houses is now engaged with us negotiating their first feature film deal to employ MAX-D HD Audio.

THE AUTOMOBILE INDUSTRY
With the success at the 2014 CES (Consumer Electronics Show) in Las Vegas last January (which is where I'm at again this year as I release this letter). We are currently under NDA and Testing Agreements with some key leaders in the Auto Industry. It's been a slow, but steady, process to infiltrate the supply chains of these giant auto suppliers and manufacturers, but I'm very confident that we will have a positive outcome.

A recent article featured in autonews.com states that by 2018, the majority of cars will have a fully internet-connected smart device in the dashboard. Max Sound has discovered a wide-open first market mover advantage, in what appears to be a newfound billion-dollar market.

Just in case you missed the CES videos you can watch them here:
http://vimeo.com/84691816 CES MAX-D HD Audio Challenge 1 -- Las Vegas 
http://vimeo.com/85476097 CES MAX-D HD Audio Challenge 2 -- Las Vegas

STREAMING INDUSTRY
We now have the ability to demonstrate MAX-D HD in real-time to leaders in the streaming industry. I'm pleased that my sales team is currently engaged under NDA's and Testing Agreements with some of these companies.

Max Sound has been able to prove that we can produce a much higher quality HD audio stream than what is currently being provided to their consumers, PLUS reduce internet transport costs by as much as 66%.

CURRENT LICENSING

AKYUMEN TECHNOLOGIES CORP.
We announced last summer that Akyumen signed a licensing agreement with Max Sound. http://maxsound.com/news/more-than-one-million/?p=3 This agreement provides Max Sound $2.50 per device. In December, the CEO of Akyumen notified me that they have a contract in Asia representing 5 million units. He further indicated that they are in high-level talks with major cellular carriers in Europe and the Middle East, estimating that another 10 million units should come from those regions in 2015.

Akyumen also announced in November 2014 the building of a $51 million state of the art manufacturing and assembly facility in Bahrain, giving Akyumen the ability to produce over 10 million units for that region, and creating over 1,000 new jobs.
http://bizbahrain.com/content/akyumen-technologies-build-51-million-facility-bahrain

We continue to work with the Akyumen executives and developers to help them get MAX-D HD Audio ported onto their devices and into the consumer marketplace. I have been asked when the Akyumen product line will roll out. Akyumen is a new company with several milestones that still need to take place for them to get to market. Then they will have to be successful in getting consumers to believe in their products. It has been pointed out that projector phones have been tried without much success in the past few years. However, past devices feature small 3 x 3 feet low-resolution Pico screens that have looked terrible, and I know that anyone who has seen the 10 x 10 feet High Definition video produced by the Akyumen device has been totally amazed by what the picture looks like (including my team, as I carry a working Akyumen device). So the product is a massive improvement, but they still need good product reviews and consumer excitement to launch this smart device into stardom. With those things accomplished, and the numbers Akyumen projects that they will achieve, our $2.50 net license fee per device would bring significant earnings to our bottom line.

LOOKHU, INC.
This summer we announced that LOOKHU signed a licensing agreement with Max Sound for MAX-D HD. http://maxsound.com/news/maxd-agreement-lookhu/?p=2 This agreement requires that MAX-D will receive $0.25 cents per month, per paid LOOKHU subscription, and 4% of all advertising revenue. Our team is currently working closely with the LOOKHU programmers, and building the LOOKHU/MAX-D HD Audio player. LOOKHU expects the MAX-D HD powered version to be available in late Q-1 2015.

VSL COMMUNICATIONS
We are always on the look out for strategic technology partnerships that are directly in our business path, and the VSL technology is just such an arrangement.

Last summer, we announced that Max Sound Corporation had acquired a worldwide license and representation rights to a patented video and data technology "Optimized Data Transmission System and Method" which allows the end-user licensee to transport 100% of data bandwidth content in only 3% of the bandwidth with the same lossless quality. This is a 33 times reduction in transport cost and the time it takes for the video or digital content to be viewed by the end-user. http://finance.yahoo.com/news/max-sound-corporation-signed-licensing-004435831.html

The representation rights of this global multi-billion-dollar market technology are currently being enforced in the United States and in Germany. 

MAX SOUND LITIGATION
In September 2014 we had filed against Google on the infringement of the VSL "Optimized Data Transmission" Patent. The lawsuit was taken on a contingent fee basis by our law firm. http://finance.yahoo.com/news/googles-sticky-notes-could-lead-105500049.html Since then, we have filed our complaints here in the USA. http://finance.yahoo.com/news/max-sound-corp-files-two-162700176.html and in addition we were granted a preliminary injunction in Germany against certain Google Android OEM's, seizing devices at IFA -- the top industry event in Germany. http://finance.yahoo.com/news/vsl-communications-max-sound-corporation-133000028.html

In December 2014, we filed for a permanent injunction infringement suit in Germany against Google, Inc. and its subsidiary YouTube. http://finance.yahoo.com/news/max-sound-files-patent-suit-071359554.html

During the past few months, press around the world has been commenting on our pending litigations.

Then on December 19, 2014 I issued a Press Release discussing these suits and outlining what we believe outlines Google's master plan on how to steal Trade Secrets and Intellectual Property. http://finance.yahoo.com/news/several-actions-against-google-max-192822278.html 

Based on the existing legal activity, we believe we will successfully monetize the VSL technology in 2015, which would open the door to many additional profitable opportunities.

I encourage all MAXD shareholders to open and read all the links above completely to understand the vastness of this venture.

EA TECHNOLOGY
This IP case is another matter that Max Sound has brought against Google, Inc. in December. With this legal action, Max Sound follows its international strategy of comprehensively asserting our protective rights. http://finance.yahoo.com/news/max-sound-files-complaint-against-195500298.html  

YEAR END SUMMARY
Max Sound Corporation's byline is Technologies Redefined; and as you can see, we are constantly evolving into a Company that is focused on providing products that will enhance lives and better our world. We will continue to focus on licensing, partnering and selling to the right companies and industries that will yield the highest revenue, profit and growth potential for all of our shareholders. We continue to strive and move in a positive direction, and be assured that we will not be satisfied until our sales goals and value growth become reality.

As we move into 2015, I expect the MAXD stock valuation to exceed our current levels and represent our Company's true market potential. Thank you sincerely for taking the time to read my review and for your continued support.

Very truly yours,

John Blaisure - CEO
Max Sound Corporation

ABOUT MAX SOUND COROPORATION
Max Sound provides a better solution for Audio, Video and Data transmissions. Max Sound is the Company that brings forth technologies for the betterment of our world, including MAX-D HD Audio and VSL's Optimized Data Transmission Technology. Max Sound®, MAXD® and MAX-D Audio Perfected® are registered trademarks. All other trademarks are the property of their respective owners. To learn more about the MAX-D Technology, please visit http://www.maxsound.com.

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995: Statements in this CEO letter which are not purely historical, including statements regarding Max Sound's intentions, beliefs, expectations, representations, projections, plans or strategies regarding the future are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The forward-looking statements involve risks and uncertainties including, but not limited to, the risks associated with the effect of changing economic conditions, trends in the products markets, variations in the Company's cash flow or adequacy of capital resources, market acceptance risks, technical development risks, and other risk factors. The company cautions investors not to place undue reliance on the forward-looking statements contained in this CEO letter. Max Sound disclaims any obligation and does not undertake to update or revise any forward-looking statements in this CEO letter. Expanded and historical information is made available to the public by Max Sound Corporation and its Affiliates on its website http://www.maxsound.com or at http://www.sec.gov

SOURCE Max Sound Corporation

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