Last month, the stock of Max Sound Corp (OTCBB:MAXD) recorded a new record low of $0.023 per share. From thereon, the stock has recovered strongly to levels of around $0.10. After gaining more than 22% to its value on Friday, the stock is trading around $0.096. If the positive momentum continues, the share price may surge above $0.10 in this week. In last trading session, the stock consolidated and closed with a loss of 2.19% at $0.0939.

The financial performance

At the start of April, Max Sound Filed the annual report for FY2014 and the numbers were dismal. As per the report, the company recorded cash of $36,000. The total current assets came at $131,000 and the total current liabilities stood at $131,000. The annual revenue was $2500 while annual net loss came at $9.8 million. The report states that Max Sound is not a financially sound firm. It has limited cash position, and a massive working capital deficit. The revenues are almost non-existent and the net loss stands around $10 million.

The dilution

The second problem associated with Max Sound is the size of outstanding convertible notes. At the end of FY2014, the company had more than $1.3 million as payable convertible notes. The company continued to sell more and in the first quarter of FY2015, it issued convertible notes worth $270,000. The report states that that almost $821,000 in convertible debt was translated into approximately 31.3 million of company’s common shares. It indicates that the conversion price was $0.026.

The plans

Max Sound outlines its plans for FY2015 in January. However, there has been no progress made till this time. It didn’t even update the shareholders on the lawsuit cases against the big technology firms. In last trading session, the stock price of Max Sound declined 2.19% to close the trading session at $0.0939. The decline came at a share volume of 6.44 million compared to average volume of 1.36 million.