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Dear MAXD Shareholders,
I want to thank each of you for your continual support as we strive towards finally achieving the sales and share value that we feel will be in our sites before the end of 2018.
STOCK MANIPULATION FROM ILLEGAL NAKED SHORT SELLING
Earlier this summer Max Sound Corp. engaged a leading provider of Regulation SHO compliance monitoring, short sale trading statistics and market integrity surveillance to examine substantial short selling of its stock. The results were shocking and disturbing: “Max Sound Corporation (MAXD) has and is being victimized by Manipulative Trading Practices and Abusive Naked Short Selling for the past three years with the culprit’s objective to lower the price and harm the Company,” said John Blaisure – CEO, Max Sound Corp.
“We asked the SEC and FINRA to act on MAXD’s complaints and accelerate their investigations on the five major Market Makers, which are performing these illegal naked short selling activities, share counterfeiting and failing to deliver shares,” added Mr. Blaisure. “For anyone who doubts the reality of Naked Short Selling as a way that these market makers steal around 70 billion dollars a year of real equity from American middle class and blue collar investors who believe in the Small American Business Microcaps they are the primary investors of, here is a letter the Company received on July 23, 2018 along with a 198 page published report from the first court recognized expert on the subject of Naked Short Selling – Attorney Wes Christian of Christian Smith and Jewel.”
“Several months ago I was hired as a “Naked Short Selling Expert” for a particular case in Federal Court of the Southern District of Florida (the “Case”). In the Case, which was tried before the court last week, I opined that: a) 40 to 70 percent of the daily trading volume (from Sept 2007 to Sept 2008) were counterfeit shares in the form of fails to deliver; and b) there were another 45 million shares in “hidden fails”, which were revealed by virtue of a new Cusip number assigned to the “replacement shares” issued after a 4500 to 1 reverse split. This reverse split required to redeem your physical share(s) with the old Cusip number for a new share(s) with a different Cusip number. The final conclusion I reached was that there were 100 million counterfeit shares sold when the total shares issued by the company were only 65 million. The SEC and the DOJ filed NO REBUTTAL TO MY REPORT. In fact, they accepted my report into evidence and told another lawyer from Kravath (after both sides rested) that they did not rebutt anything because they were TERRIFIED OF ME AND MY FINDINGS. This is, to my knowledge, the first time: 1) a court has accepted anyone as a naked short selling expert; and 2) allowed such report (and my rebuttal report) to be put into evidence. This is important to all of us litigating in this space, as we now have a precedent for this. In addition, the revelation of the level of counterfeit shares was compelling. I have enclosed my report and all exhibits for your review. Please note the number of sanctions and fines against wall street which single spaced is 25 pages, the vast majority of which is for mis-marking tickets long when they are short, not borrowing shares, and failing to deliver etc.
MAXD’s Market Makers are Knight/Virtu (NITE), Cantor Fitzgerald (CANT), Canaccord Genuity (CSTI), Citadel (CDEL) and eTrade/G1 (ETRF).
Many of our investors have been following and asking about the Naked Short Selling that has been happening to their various penny stocks (including MAXD) and are interested in knowing more about stock manipulation and the corresponding SEC and FINRA-filed complaints. Again today, in conjunction with release, we have filed our third set of complaints with the SEC and FINRA and are requesting once more that they enforce the law that is there for them and requires them to stop this activity.
“Since MAXD filed complaints with the country’s top regulatory bodies, these same bad actors have continued their all-out assault on the Company’s stock, but we are confident that either a short squeeze, or FINRA and/or SEC intervention is eminent to eliminate this blatant theft of our shareholder’s equity” continued Mr. Blaisure. “We estimate that there are currently 22 billion shares short which is about 4 times the number of shares issued and outstanding. We believe there will soon be significant buy-ins so it will be interesting to see if any of the 5 market makers blinks first. Technically, there are only enough shares for one of the market makers to financially survive the short squeeze we are working on.”
To learn more here is a primer on the subject:
http://counterfeitingstock.com/CounterfeitingStock.html and here is a powerful article put into actual practice https://theintercept.com/series/penny-stock-chronicles/
HD AUDIO TECHNOLOGY AND LICENSING
Late last year I had a tremendously positive trip to China and met with industry leaders at the Hong Kong Summit trip. The opportunity to port onto an enormous mobile chipset market with MAX-D Voice became evident and we are significantly far along in the completion of the development phase.
During the first and second quarters of 2018, at the request of several large OEMs, the Company conducted Audio Lab tests to greatly improve cellular voice calls with our improved technology and it is finally becoming clear to many Mobile Phone OEMs that the demand for a higher quality, clearer phone call is very important to consumers.
Since 2014, most of you have been following the ongoing ups-and-downs of our litigation battles with Google. The first battle related to the Optimized Data Transmission patents, including U.S. Patent …339, sometimes labeled “David vs. Googleiath” was where Google sent back a road-map of the technology theft on yellow Post It notes, and the second was the Attia litigation, including the Court-granted leave to amend the complaint to add causes of action against defendants for civil violations of the federal Racketeer Influenced and Corrupt Organizations Act (commonly known as RICO).
The 339 Patent matter for Optimized Video Data Transmission is up for Appeal this fall and the positive outcome there will substantially affect our financial success going forward.
“In the Attia matter, the Fifth Amended Complaint was just filed along with Attia’s Stipulation for Entry of Order of Dismissal,” said Mr. Blaisure. “This allows the State Case for Trade Secret Theft and Misappropriation to go back to the State Court at the present time, and the RICO case to go to the Appeals Court where we will get a fair hearing, instead of the Court in Google’s backyard where the court nearly always rules in their favor regardless of right or wrong. We know we have a good likelihood of success associated with these lawsuits and continue to fight on towards either a beneficial settlement or a court ordered verdict. Both cases are on a contingency and there is a third party litigation funder looking to cover the costs going forward. In either case, MAX-D has dramatically lowered its costs going forward so our upside has been improved while substantially eliminating our future cost risk to get to the finish line.”
THE COALITION AGAINST GOOGLE
In response to the overwhelming number of requests from various individuals and small businesses harmed by the internet giant, last year Max Sound committed to lead THE COALITION AGAINST GOOGLE. Since that announcement, many victims have come forward and joined this coalition. Our team has been working daily, compiling an ever-growing database of Google victims and released, “The Catalog of Google Crimes”. You can visit http://GoogleCrimes.org and download this Catalog. The site also allows anyone to add their stories to the Catalog by using the submission page and lastly, you can delete Google and all of its products from your life permanently by following the step-by-step supplement at http://GoogleCrimes.org/take-back-your-privacy. “We have been informed that in addition to the nearly 8 billion dollars of fines since last year against Google for Anti-trust violations that there are many other potential damages of that magnitude or greater that Google will potentially face down the road,” continued Mr. Blaisure.
As you can imagine, running a Company that is simultaneously developing and deploying its core technology, fighting Google while dealing with naked short sellers who are also RegSHO violators takes a lot of resources. We are truly grateful to our strong shareholder base that continues to buy stock even as it gets sold short with counterfeit shares by market makers. We also are grateful that our convertible debt notes were recently bought out by an investor friendly to the Company, which we expect will soon help with the stock price and dilution.
OTHER AREAS OF PROGRESS AND COMPANY ASSETS
Last June, the United States Patent and Trademark Office issued patent 9,679,427 on MAXD IP for Biometric Audio Security. A great deal of interest was generated at the Hong Kong Asia Summit and we will continue to seek license opportunity discussions with these interested companies in 2018. The Company has been granted the following registered trademarks: Max Sound®, MAXD® and MAX-D Audio Perfected® and HD Audio®.
The MAX-D API (Application Programming Interface) allows the MAX-D algorithm to be inserted into applications such as streaming services, auto head units, DSP memory in chips and speakers, developer platforms and web-based applications. Our MAX-D HD Audio App is used and enjoyed by a user base of well over 500,000 subscribers and MAX-D continues to play a role in the hearing health initiatives of our youth and is working towards reversing this silent epidemic. A few years ago we announced the successful results of a University of Florida study demonstrating MAX-D’s hearing health benefits, and our Chairman met with leaders in Washington DC from the Congressional Hearing Health Caucus and the National Institute of Health.
ONWARD TO SUCCESS
We continue to strive and move forward with our technologies and litigations while at the same time minimizing debt and dilution as much as possible. While nothing has moved nearly as fast as we had all hoped, with the progress we’ve made we are more optimistic than ever that success through major brand recognition and revenue is imminent in 2018.
Thank you sincerely for taking up your valuable time to go over this with us and for your continued support.
Very truly yours,
John Blaisure - CEO
Max Sound Corporation
ABOUT MAX SOUND COROPORATION
MAX-D is to audio what HD (High Definition) is to video. The MAX-D® Audio Process makes everything sound better and can convert any audio file to high definition quality while significantly reducing the file size. Visit us www.maxd.audio Max Sound® and MAX-D® are Registered Trademarks and Patent Pending technologies wholly owned by Max Sound Corporation. All other trademarks are the property of their respective owners.
ABOUT MAX-D HD AUDIO TECHNOLOGY
The MAX-D HD Audio Technology is currently delivering Clean, High Definition Audio without increasing file size - fitting life-like HD Audio into our existing gigantic ever-growing compressed audio eco-system. We believe that we are nearing additional licensing adoption with a number of companies interested in the cost savings provided by MAX-D as we reduce data streaming costs while providing a higher quality HD Audio experience. In parallel to providing reduce data streaming costs, we also provide additional savings to potential licensors by delivering a nearly seamless low cost changeover. The MAX-D Technology can now be added quickly and economically to any industry or audio platform, as there is no need for bigger pipes, bigger servers, new consumer appliances, or higher data costs (which would be rejected by today’s cost-conscious consumers and data providers). Although smaller file sizes and cost savings are beginning to captivate companies who are looking closely at their bottom-lines. The average consumer is interested in the CLEAN HD SOUND! Whether your music is streamed with MAX-D or voice is processed with MAX-D - MAX-D HD Audio Simply Sounds Better. Consumers agree that MAX-D MP3 files sound incredible (yet remains one-tenth the size of a .wav file). MAX-D provides more clarity, dimension, articulation and impact in every range of the audio spectrum while random artifacts and harshness are gone.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995: Statements in this press release 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 press release. Max Sound disclaims any obligation and does not undertake to update or revise any forward-looking statements in this press release. Expanded and historical information is made available to the public by Max Sound Corporation and its Affiliates on its website www.maxd.audio or at www.sec.gov
SOURCE: Max Sound Corporation