In last trading session, the stock price of Max Sound Corp (OTCMKTS:MAXD) gained more than 8% to close the day at $0.00650. The gains came at a share volume of 12.37 million compared to average share volume of 12.56 million. Last day gains were a follow-through of last week up move that came after the company announced about the repayment of debt.
Last week, Max Sound reported that it had paid back debt of $3.6 million against the convertible notes. It is indeed a great news as such quantum of toxic convertible debt had the potential of devastating the share structure of any OTC Marketplace company. So does it makes a positive development for Max Sound?
Well, not exactly as a couple of weeks ago, Max Sound reported that the count of issued and outstanding shares stood at 647 million shares compared to 285 million a year ago. This indicates that the investors have suffered a lot already.
As per the latest filed 10-K. Max Sound reported cash of $211,000. The total current assets came in at $330,000 while total current liabilities amounted to $7.3 million. So far, the company has reported $0 in revenue. The loss from operations in the last reported period was $5.5 million. Nearly, $5.8 million of the total debts can largely be attributed to derivative liabilities and convertible notes.
This leaves big room for stock dilution and it cannot be ignored. Investors should note that any notes that Max Sound still has outstanding possibly convert at the 40% discount rate. The facts suggest that investor value is not as safe as the company’s boastful press release shows it out to be. On top of that, Max Sound is an underperforming OTC penny stock firm that is yet to report any revenue, but is recording net loss by the millions.