10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_______________

FORM 10-Q

_______________

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2011

or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______to______.

MAX SOUND CORPORATION

 (Exact name of registrant as specified in charter)

DELAWARE	000-51886	26-3534190
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S Employer Identification No.)

10685-B Hazelhurst Drive #6572

Houston, Texas 77043

 (Address of principal executive offices)

 _______________

210-401-7667

(Registrant’s telephone number, including area code)

_______________

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	x
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock. As of November 14, 2011, there were 254,764,661 shares, par value $.0001 per share, of Common Stock issued and outstanding.

MAX SOUND CORPORATION

FORM 10-Q

September 30, 2011

INDEX

PART I-- FINANCIAL INFORMATION

Item 1.	Financial Statements	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2
Item 3	Quantitative and Qualitative Disclosures About Market Risk	8
Item 4.	Controls and Procedures	8

PART II-- OTHER INFORMATION

Item 1	Legal Proceedings	9
Item 1A	Risk Factors	9
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	9
Item 3.	Defaults Upon Senior Securities	9
Item 4.	Removed and Reserved	9
Item 5.	Other Information	9
Item 6.	Exhibits	9

SIGNATURES

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

MAX SOUND CORPORATION

(f/k/a SO ACT NETWORK, INC.)

(A DEVELOPMENT STAGE COMPANY)

CONTENTS

PAGE	F-1	CONDENSED BALANCE SHEETS AS OF SEPTEMBER 30, 2011 (UNAUDITED) AND AS OF DECEMBER 31, 2010 (AUDITED).
PAGE	F-2	CONDENSED STATEMENTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEBMER 30, 2011 AND 2010 AND FOR THE PERIOD DECEMBER 9, 2005 (INCEPTION) TO SEPTEMBER 30, 2011 (UNAUDITED).
PAGE	F-3	CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY FOR THE PERIOD FROM DECEMBER 9, 2005 (INCEPTION) TO SEPTEMBER 30, 2011 (UNAUDITED).
PAGE	F-4	CONDENSED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011 AND 2010 AND FOR THE PERIOD DECEMBER 9, 2005 (INCEPTION) TO SEPTEMBER 30, 2011 (UNAUDITED).
PAGES	F-5 - F-35	NOTES TO FINANCIAL STATEMENTS (UNAUDITED).

1

Max Sound Corporation
f/k/a So Act Network, Inc.
(A Development Stage Company)
Condensed Balance Sheets
ASSETS
	September 30, 2011			December 31, 2010
	UNAUDITED
Current Assets
Cash	$	1,121,486		$	297
Prepaid expenses		-			5,799
Total  Current Assets		1,121,486			6,096
Property and equipment, net		87,873			65,370
Other Assets
Security deposit		4,123			3,710
Intangible assets		7,800,275			7,500,275
Total  Other Assets		7,804,398			7,503,985
Total  Assets	$	9,013,757		$	7,575,451
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable	$	133,308		$	159,527
Accrued expenses		258,169			258,152
Derivative liability		-			13,262
Convertible note payable - net of debt discount		-			44,864
Loan payable - related party		31,130			239,480
Total Current Liabilities		422,607			715,285
Commitments and Contingencies
Stockholders' Equity
Preferred stock,  $0.0001 par value; 10,000,000 shares authorized,
No shares issued and outstanding		-			-
Common stock,  $0.0001 par value; 400,000,000 shares authorized,
254,560,866 and 221,055,221 shares issued and outstanding, respectively		25,457			22,106
Deferred compensation		-			(1,803,285	)
Additional paid-in capital		22,256,355			17,509,682
Deficit accumulated during the development stage		(13,690,662	)		(8,868,337	)
Total Stockholders' Equity		8,591,150			6,860,166
Total Liabilities and Stockholders' Equity	$	9,013,757		$	7,575,451

See accompanying notes to condensed unaudited financial statements.

F-1

Max Sound Corporation
f/k/a So Act Network, Inc.
(A Development Stage Company)
Statements of Operations
UNAUDITED
	For the Three Months Ended,						For the Nine Months Ended,						For the Period From
	September 30, 2011			September 30, 2010			September 30, 2011			September 30, 2010			December 9, 2005 (Inception) to September 30, 2011
Revenue	$	3,000		$	7,576		$	3,000		$	9,934		$	13,826
Operating Expenses
General and administrative		132,761			93,619			201,896			162,165			569,675
Endorsement fees		754,000			443,362			1,573,273			1,358,419			4,942,277
Consulting		394,541			11,449			2,776,647			2,770,108			6,823,840
Professional fees		34,439			45,438			101,998			98,956			321,374
Website development		-			-			-			159,409			251,263
Compensation		66,000			54,000			174,000			162,000			649,549
Total Operating Expenses		1,381,741			647,868			4,827,814			4,711,057			13,557,978
Loss from Operations		(1,378,741	)		(640,292	)		(4,824,814	)		(4,701,123	)		(13,544,152	)
Other Income / (Expense)
Interest income		278			-			303			-			303
Gain on extinguishment of debt		-			-			-			-			6,643
Interest expense		(258	)		(2,590	)		(5,940	)		(6,685	)		(17,001	)
Amortization of Debt Discount		(5,288	)		(2,194	)		(14,659	)		(2,194	)		(24,932	)
Change in fair value of embedded derivative liability		54,870			(51	)		22,785			(51	)		24,932
Total Other Income / (Expense)		49,602			(4,835	)		2,489			(8,930	)		(10,055	)
Provision for Income  Taxes		-			-			-			-			-
Net Loss	$	(1,329,139	)	$	(645,127	)	$	(4,822,325	)	$	(4,710,053	)	$	(13,554,207	)
Net Loss Per Share  - Basic and Diluted	$	(0.01	)	$	(0.00	)	$	(0.02	)	$	(0.02	)
Weighted average number of shares outstanding
during the year Basic and Diluted		251,117,752			219,991,814			234,195,631			205,006,017

See accompanying notes to condensed unaudited financial statements.

F-2

Max Sound Corporation
f/k/a So Act Network, Inc.
(A Development Stage Company)
Condensed Statement of Changes in Stockholders' Equity
For the Period from December 9, 2005 (Inception) to September 30, 2011
	Preferred stock				Common stock						Additional												Total
											paid-in			Accumulated			Subscription			Deferred			Stockholder's
	Shares		Amount		Shares			Amount			capital			Deficit			Receivable			Compensation			Equity
Balance, December 9, 2005 (Inception)		-	$	-		-		$	-		$	-		$	-		$	-		$	-		$	-
Stock issued on acceptance of incorporation expenses		-		-		100,000			10.000			90			-			-			-			100
Net loss for the period December 9, 2005 (Inception) to December 31, 2005		-		-		-			-			-			(400	)		-			-			(400	)
Balance, December 31, 2005		-		-		100,000			10.000			90			(400	)		-			-			(300	)
Net loss for the year ended December 31, 2006		-		-		-			-			-			(1,450	)		-			-			(1,450	)
Balance, December 31, 2006		-		-		100,000			10.000			90			(1,850	)		-			-			(1,750	)
Net loss for the year ended December 31, 2007		-		-		-			-			-			(1,400	)		-						(1,400	)
Balance, December 31, 2007		-		-		100,000			10.000			90			(3,250	)		-			-			(3,150	)
Common stock issued for services to founder ($0.001/sh)		-		-		44,900,000			4,490.000			40,410			-			-			-			44,900
Common stock issued for cash ($0.25/sh)		-		-		473,000			47.000			118,203			-			(67,750	)		-			50,500
Common stock issued for services ($0.25/sh)		-		-		12,000			1.000			2,999			-			-			-			3,000
Shares issued in connection with stock dividend		-		-		136,455,000			13,646.000			122,809			(136,455	)		-			-			-
In kind contribution of rent - related party		-		-		-			-			2,913			-			-			-			2,913
Accrued expenses payment made by a former shareholder		-		-		-			-			4,400			-			-			-			4,400
Net loss for the year ended December 31, 2008		-		-		-			-			-			(117,115	)		-			-			(117,115	)
Balance, December 31, 2008		-		-		181,940,000			18,194.000			291,824			(256,820	)		(67,750	)		-			(14,552	)
Common stock issued for cash ($0.25/sh)		-		-		62,000			6.000			15,494			-			-			-			15,500
Common stock issued for services ($0.25/sh)		-		-		24,000			2.000			5,998			-			-			-			6,000
Common stock issued for services ($0.35/sh)		-		-		1,700,000			170.000			594,830			-			-			(499,333	)		95,667
Common stock issued for services ($0.0625/sh)		-		-		935,714			94.000			58,388			-			-			-			58,482
Warrants issued for services		-		-		-			-			823,077			-			-			-			823,077
Common stock issued for services ($1.50/sh)		-		-		30,000			3.000			44,997			-			-			(39,699	)		5,301
Common stock issued for services ($1.77/sh)		-		-		30,000			3.000			53,097			-			-			(53,100	)		-
Common stock issued for services ($1.78/sh)		-		-		100,000			10.000			177,990			-			-			(166,052	)		11,948
Common stock issued for services ($1.80/sh)		-		-		100,000			10.000			179,990			-			-			(168,904	)		11,096
Common stock issued for services ($1.93/sh)		-		-		2,830,000			283.000			5,461,617			-			-			(5,459,098	)		2,802
Common stock issued for services ($1.94/sh)		-		-		30,000			3.000			58,197			-			-			(58,200	)		-
Common stock issued for services ($1.95/sh)		-		-		920,000			92.000			1,793,908			-			-			(1,135,808	)		658,192
Common stock issued for services ($2.00/sh)		-		-		300,000			30.000			599,970			-			-			(506,423	)		93,577
Return of common stock issued for services ($0.35/sh)		-		-		(1,100,000	)		(110.000	)		(384,890	)		-			-			385,000			-
Shares issued in connection with stock dividend		-		-		258,000			26.000			(26	)		-			-			-			-
Stock offering costs		-		-		-			-			(850	)		-			-			-			(850	)
Collection of subscription receivable		-		-		-			-			-			-			67,750			-			67,750
In kind contribution of rent - related party		-		-		-			-			12,600			-			-			-			12,600
Deferred compensation realized		-		-		-			-			-			-			-			114,333			114,333
Net loss for the year ended December 31, 2009		-		-		-			-			-			(2,298,552	)		-			-			(2,298,552	)
Balance, December 31, 2009		-		-		188,159,714			18,816.000			9,786,211			(2,555,372	)		-			(7,587,284	)		(337,629	)
Common stock issued for cash ($0.25/sh)		-		-		1,200,000			120.000			299,880			-			-			-			300,000
Accrued salary conversion into common stock ($0.30/sh)		-		-		945,507			95.000			283,557			-			-			-			283,652
Common stock issued for services ($0.15/sh)		-		-		250,000			25.000			37,475			-			-			-			37,500
Common stock issued for services ($0.18/sh)		-		-		100,000			10.000			17,990			-			-			-			18,000
Common stock issued for services ($0.19/sh)		-		-		100,000			10.000			18,990			-			-			-			19,000
Common stock issued for services ($0.20/sh)		-		-		210,000			21.000			41,979			-			-			-			42,000
Common stock issued for services ($0.25/sh)		-		-		140,000			14.000			34,986			-			-			-			35,000
Common stock issued in exchange for technology rights ($0.25/sh)		-		-		30,000,000			3,000.000			7,497,000			-			-			-			7,500,000
Return of common stock issued for services ($1.05/sh)		-		-		(150,000	)		(15.000	)		15			-			-			-			-
Common stock issued for services ($1.24/Sh)		-		-		1,000,000			100.000			1,239,900			-			-			(1,097,315	)		142,685
Common stock issued for services ($1.70/sh)		-		-		100,000			10.000			169,990			-			-			(152,534	)		17,466
Cancellation of shares held in escrow ($1.93/sh)		-		-		(1,000,000	)		(100.000	)		(1,929,900	)		-			-			487,802			(1,442,198	)
Warrants issued for services		-		-		-			-			10,559			-			-			-			10,559
Blue sky fees		-		-		-			-			(400	)		-			-			-			(400	)
Stock and financing offering costs		-		-		-			-			(8,000	)											(8,000	)
In kind contribution of rent - related party		-		-		-			-			9,450			-			-			-			9,450
Deferred compensation realized		-		-		-			-			-			-			-			6,546,046			6,546,046
Net loss for the year ended December 31, 2010		-		-		-			-			-			(6,312,965	)		-			-			(6,312,965	)
Balance, December 31, 2010		-		-		221,055,221			22,106			17,509,682			(8,868,337	)		-			(1,803,285	)		6,860,166
Common stock issued in exchange for assets ($0.10/sh)		-		-		3,000,000			300			299,700			-			-			-			300,000
Common stock issued for services ($0.07/sh)		-		-		2,000,000			200			139,800			-			-			-			140,000
Common stock issued for services ($0.08/sh)		-		-		1,006,500			100			80,420			-			-			-			80,520
Common stock issued for services ($0.10/sh)		-		-		3,066,462			307			306,339			-			-			-			306,646
Common stock issued for services ($0.11/sh)		-		-		500,000			50			54,950			-			-			-			55,000
Common stock issued for services ($0.22/sh)		-		-		15,403			2			3,386			-			-			-			3,388
Common stock issued for services ($0.23/sh)		-		-		100,000			10			22,990			-			-			-			23,000
Common stock issued for services ($0.25/sh)		-		-		702,860			71			175,644			-			-			-			175,715
Common stock issued for services ($0.33/sh)		-		-		100,000			10			32,990			-			-			-			33,000
Common stock issued for services ($0.35/sh)		-		-		2,443			1			854			-			-			-			855
Common stock issued for services ($0.39/sh)		-		-		101,500			10			39,575			-			-			-			39,585
Convertible debt conversion into common stock ($0.0295/sh)		-		-		271,186			27			7,973			-			-			-			8,000
Convertible debt conversion into common stock ($0.0315/sh)		-		-		587,382			59			18,444			-			-			-			18,503
Convertible debt conversion into common stock ($0.032/sh)		-		-		109,375			11			3,489			-			-			-			3,500
Convertible debt conversion into common stock ($0.0336/sh)		-		-		357,143			36			11,964			-			-			-			12,000
Convertible debt conversion into common stock ($0.0454/sh)		-		-		220,264			22			9,978			-			-			-			10,000
Convertible debt conversion into common stock ($0.1554/sh)		-		-		77,220			7			11,993			-			-			-			12,000
Convertible debt conversion into common stock ($0.1455/sh)		-		-		96,220			9			13,991			-			-			-			14,000
Convertible debt conversion into common stock ($0.1339/sh)		-		-		116,505			11			15,589			-			-			-			15,600
Accrued salary conversion into common stock ($0.11/sh)		-		-		1,309,091			131			143,869			-			-			-			144,000
Line of credit conversion into common stock ($0.11/sh)		-		-		909,091			91			99,909			-			-			-			100,000
Common stock issued for cash ($0.10/sh)		-		-		7,920,000			792			791,208			-			(397,000	)		-			395,000
Collection of stock subscripton receivable		-		-		-			-			-			-			397,000			-			397,000
Common stock issued for cash ($0.10/sh)		-		-		10,937,000			1,094			1,092,606			-			-			-			1,093,700
Warrants issued for services		-		-		-			-			248,498			-			-			-			248,498
Stock and financing offering costs		-		-		-			-			(79,280	)		-			-			-			(79,280	)
Amortization of stock options		-		-		-			-			1,199,794			-			-			-			1,199,794
Deferred compensation realized		-		-		-			-			-			-			-			1,803,285			1,803,285
Net loss for the nine months ended September 30, 2011		-		-		-			-			-			(4,822,325	)		-			-			(4,822,325	)
Balance, September 30, 2011 (UNAUDITED)		-	$	-		254,560,866		$	25,457		$	22,256,355		$	(13,690,662	)	$	-		$	-		$	8,591,150

See accompanying notes to condensed unaudited financial statements.

F-3

Max Sound Corporation
f/k/a So Act Network, Inc.
(A Development Stage Company)
Statements of Cash Flows
UNAUDITED
	For the Nine Months Ended						For the Period From
	September 30, 2011			September 30, 2010			December 9, 2005 (Inception) to September 30, 2011
Cash Flows From Operating Activities:
Net Loss	$	(4,822,325	)	$	(4,710,053	)	$	(13,554,207	)
Adjustments to reconcile net loss to net cash used in operations
Depreciation/Amortization		25,633			28,525			77,070
Depreciation for abandonment of website		38,794			-			38,794
In kind contribution of rent - related party		-			9,450			24,963
Stock issued for services		857,709			211,151			2,160,425
Warrants issued for services		248,498			10,559			1,082,134
Amortization of stock options		1,199,794			-			1,199,794
Bluesky Fees		-			(400	)		(1,250	)
Amortization of stock based compensation		1,803,285			3,811,996			7,021,466
Security deposit		(413	)		(3,710	)		(4,123	)
Amortization of debt discount		14,659			2,194			(24,932	)
Change in fair value of derivative liability		(22,785	)		51			24,932
Changes in operating assets and liabilities:
(Increase)/Decrease in accounts receivable		-			(448	)		-
(Increase)/Decrease in prepaid expenses		5,799			(4,775	)		-
Increase/(Decrease) in deferred revenue		-			594			-
Increase/(Decrease) accounts payable		(26,219	)		86,548			133,308
Increase(Decrease) in warrant liabilities		-			-			-
Increase/(Decrease) in accrued expenses		147,620			226,537			689,424
Net Cash Used In Operating Activities		(529,951	)		(331,781	)		(1,132,202	)
Cash Flows From Investing Activities:
Register of trademark		-			-			(275	)
Purchase of property equipment		(86,930	)		(2,550	)		(203,737	)
Net Cash Used In Investing Activities		(86,930	)		(2,550	)		(204,012	)
Cash Flows From Financing Activities:
Proceeds from stockholder loans		134,150			200,350			536,683
Repayment of stockholder loans		(242,500	)		(197,800	)		(405,553	)
Accrued expenses payment made by a former shareholder		-			-			4,400
Proceeds from issuance of convertible note, net of offering costs		37,500			50,000			84,500
Proceeds from issuance of stock, net of subscriptions receivable and net of offering costs		1,411,920			292,000			1,772,920
Proceeds from collection of stock subscription receivable		397,000			-			464,750
Net Cash Provided by Financing Activities		1,738,070			344,550			2,457,700
Net Increase / (Decrease) in Cash		1,121,189			10,219			1,121,486
Cash at Beginning of Period		297			5,390			-
Cash at End of Period	$	1,121,486		$	15,609		$	1,121,486
Supplemental disclosure of cash flow information:
Cash paid for interest	$	-		$	-		$	-
Cash paid for taxes	$	-		$	-		$	-
Supplemental disclosure of non-cash investing and financing activities:
Shares issued in connection with intellectual property	$	300,000		$	-		$	7,800,000
Shares issued in conversion of related party accrued compensation	$	144,000		$	-		$	427,652
Shares issued in conversion of related party line of credit	$	100,000		$	-		$	100,000
Shares issued in conversion of convertible debt and accrued interest	$	93,603		$	-		$	93,603
Shares issued in connection with stock dividend	$	-		$	258		$	136,713
Stock sold for subscription	$	397,000		$	-		$	464,750

See accompanying notes to condensed unaudited financial statements.

F-4

MAX SOUND CORPORATION (f/k/a SO ACT NETWORK, INC.)

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2011

(UNAUDITED)

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION

(A)  Organization and Basis of Presentation

Max Sound Corporation (f/k/a So Act Network, Inc.) (the "Company") was incorporated in Delaware on December 9, 2005.  The Company is currently in the development stage, and on or around February 2011, the Company changed its business operations to focus primarily on developing and launching audio technology software.

Prior to February 2011, the Company's business operations were focused on creating search technologies within an online networking platform.

The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in The United States of America and the rules and regulations of the Securities and Exchange Commission for interim financial information.  Accordingly, they do not include all the information necessary for a comprehensive presentation of financial position and results of operations.

It is management's opinion, however, that all material adjustments (consisting of normal and recurring adjustments) have been made which are necessary for a fair financial statements presentation.  The results for the interim period are not necessarily indicative of the results to be expected for the year.

Effective March 1, 2011, the Company filed with the State of Delaware a Certificate of Amendment of Certificate of Incorporation changing our name from So Act Network, Inc. to Max Sound Corporation.

(B) Use of Estimates

In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported period.  Actual results could differ from those estimates.

(C) Cash and Cash Equivalents

For purposes of the cash flow statements, the Company considers all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents.  As of September 30, 2011 and December 31, 2010, the Company had no cash equivalents.

F-5

MAX SOUND CORPORATION (f/k/a SO ACT NETWORK, INC.)

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2011

(UNAUDITED)

(D) Property and Equipment

Property and equipment are stated at cost, less accumulated depreciation.  Expenditures for maintenance and repairs are charged to expense as incurred.  Depreciation is provided using the straight-line method over the estimated useful life of three to five years.

(E) Research and Development

The Company has adopted the provisions of FASB Accounting Standards Codification No. 350, Intangibles – Goodwill & Other.  Costs incurred in the planning stage of a website are expensed as research and development while costs incurred in the development stage are capitalized and amortized over the life of the asset, estimated to be three years.  Expenses subsequent to the launch have been expensed as website development expenses.

(F) Revenue Recognition

The Company recognized revenue on arrangements in accordance with FASB Codification Topic 605, “Revenue Recognition” (“ASC Topic 605”).  Under ASC Topic 605, revenue is recognized only when the price is fixed and determinable, persuasive evidence of an arrangement exists, the service is performed and collectability of the resulting receivable is reasonably assured.  We had revenue of $3,000 and $9,934 for the nine months ended September 30, 2011 and 2010, respectively.

(G) Advertising Costs

Advertising costs are expensed as incurred and include the costs of public relations activities.  These costs are included in consulting and general and administrative expenses and totaled $25,170 and $13,646 for the nine months ended September 30, 2011 and 2010, respectively.

(H) Identifiable Intangible Assets

As of September 30, 2011 and 2010, $7,800,275 and $7,500,275, respectively of costs related to registering a trademark and acquiring technology rights have been capitalized.  It has been determined that the trademark and technology rights have an indefinite useful life and are not subject to amortization.  However, the trademark and technology rights will be reviewed for impairment annually or more frequently if impairment indicators arise.

F-6

MAX SOUND CORPORATION (f/k/a SO ACT NETWORK, INC.)

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2011

(UNAUDITED)

(I) Loss Per Share

In accordance with accounting guidance now codified as FASB ASC Topic 260, “Earnings per Share,”  Basic earnings per share (“EPS”) is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted EPS gives effect to all dilutive potential of shares of common stock outstanding during the period including stock options or warrants, using the treasury stock method (by using the average stock price for the period to determine the number of shares assumed to be purchased from the exercise of stock options or warrants), and convertible debt or convertible preferred stock, using the if-converted method. Diluted EPS excludes all dilutive potential of shares of common stock if their effect is anti-dilutive.   Because of the Company’s net losses, the effects of stock warrants and convertible debt would be anti-dilutive and accordingly, is excluded from the computation of earnings per share.  The number of such shares excluded from the computations of diluted loss per share totaled 2,715,800 and 1,760,000 for stock warrants, 12,000,000 and 0 for stock options, and 0 and 660,502 shares issuable upon the conversion of convertible debt for the nine months ended September 30, 2011 and 2010, respectively.

(J) Income Taxes

The Company accounts for income taxes under FASB Codification Topic 740-10-25 (“ASC 740-10-25”) Income Taxes.  Under ASC 740-10-25, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.  Under ASC 740-10-25, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

(K) Business Segments

The Company operates in one segment and therefore segment information is not presented.

(L) Recent Accounting Pronouncements

There are no new accounting pronouncements that are expected to have a material impact on the Company’s financial statements.

(M) Fair Value of Financial Instruments

The carrying amounts on the Company’s financial instruments including accounts payable, accrued expenses, and loan payable-related party, approximate fair value due to the relatively short period to maturity for these instruments.

F-7

MAX SOUND CORPORATION (f/k/a SO ACT NETWORK, INC.)

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2011

(UNAUDITED)

(N) Stock-Based Compensation

In December 2004, the FASB issued FASB Accounting Standards Codification No. 718, Compensation – Stock Compensation.  Under FASB Accounting Standards Codification No. 718, companies are required to measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share-based compensation arrangements include stock options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans.  As such, compensation cost is measured on the date of grant at their fair value.  Such compensation amounts, if any, are amortized over the respective vesting periods of the option grant.  The Company applies this statement prospectively.

Equity instruments (“instruments”) issued to other than employees are recorded on the basis of the fair value of the instruments, as required by FASB Accounting Standards Codification No. 718.  FASB Accounting Standards Codification No. 505, Equity Based Payments to Non-Employees defines the measurement date and recognition period for such instruments.  In general, the measurement date is when either a (a) performance commitment, as defined, is reached or (b) the earlier of (i) the non-employee performance is complete or (ii) the instruments are vested. The measured value related to the instruments is recognized over a period based on the facts and circumstances of each particular grant as defined in the FASB Accounting Standards Codification.

(O) Reclassification

Certain amounts from prior periods have been reclassified to conform to the current period presentation.  These reclassifications had no impact on the Company's net loss or cash flows.

(P) Derivative Financial Instruments

Fair value accounting requires bifurcation of embedded derivative instruments such as conversion features in convertible debt or equity instruments, and measurement of their fair value for accounting purposes.  In determining the appropriate fair value, the Company uses the Black-Scholes option-pricing model.  In assessing the convertible debt instruments, management determines if the convertible debt host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement.  If the instrument is not considered conventional convertible debt, the Company will continue its evaluation process of these instruments as derivative financial instruments.

Once determined, derivative liabilities are adjusted to reflect fair value at each reporting period end, with any increase or decrease in the fair value being recorded in results of operations as an adjustment to fair value of derivatives.  In addition, the fair value of freestanding derivative instruments such as warrants, are also valued using the Black-Scholes option-pricing model.

F-8

MAX SOUND CORPORATION (f/k/a SO ACT NETWORK, INC.)

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2011

(UNAUDITED)

(Q) Concentration of Credit Risk

At September 30, 2011, 100% of sales earned was from one customer.

At September 30, 2010, 20% of sales earned were from one customer.

NOTE 2              GOING CONCERN

As reflected in the accompanying financial statements, the Company is in the development stage with minimal operations, has an accumulated deficit of $13,690,662 for the period from December 9, 2005 (inception) to September 30, 2011, and has negative cash flow from operations of $1,132,202 from inception.  This raises substantial doubt about its ability to continue as a going concern.  The ability of the Company to continue as a going concern is dependent on the Company’s ability to raise additional capital and implement its business plan.  The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Management believes that actions presently being taken to obtain additional funding and implement its strategic plans provide the opportunity for the Company to continue as a going concern.

NOTE 3              NOTE PAYABLE – PRINCIPAL STOCKHOLDER

During the year ended December 31, 2008, the Company received $18,803 from the principal stockholder.  Pursuant to the terms of the loan, the loan is bearing an annual interest rate of 3.25% and due on demand.  In 2008, the Company repaid $15,000 in principal to the principal stockholder.  In 2009, the Company repaid $3,803 in principal to the principal stockholder.  As of December 31, 2010, the principal portion of this principal stockholder loan balance has been repaid (See Note 9).

On May 11, 2009, the Company received $9,500 from the principal stockholder.  During the year ended December 31, 2009, the Company repaid $1,500 in principal to the principal stockholder.  Pursuant to the terms of the loan, the loan is bearing an annual interest rate of 3.25% and is due on demand (See Note 9).

On May 22, 2009, the Company received $15,000 from the principal stockholder.  In January of 2010, the Company repaid $3,000 in principal to the principal stockholder under the terms of the loan.  In June of 2010, the Company repaid $3,000 in principal to the principal stockholder under the terms of the loan.  Pursuant to the terms of the loan, the loan is bearing an annual interest rate of 3.25% and is due on demand (See Note 9).

F-9

MAX SOUND CORPORATION (f/k/a SO ACT NETWORK, INC.)

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2011

(UNAUDITED)

On May 26, 2009 the Company received $16,700 from the principal stockholder.  In May of 2010, the Company repaid $15,700 in principal to the principal stockholder under the term of this loan.  Pursuant to the terms of the loan, the loan is bearing an annual interest rate of 3.25% and is due on demand (See Note 9).

As of September 30, 2011, the Company owes $18,000 in principal and $2,072 of accrued interest to the principal stockholder related to these principal stockholder loans (See Note 9).

NOTE 4              LINE OF CREDIT – PRINCIPAL STOCKHOLDER

On May 28, 2009, the Company entered into a two year line of credit agreement with the principal stockholder in the amount of $100,000.  The line of credit carries an interest rate of 3.25%.  As of September 30, 2011, the principal stockholder has advanced the Company $100,000 and was repaid $100,000 under the terms of this line of credit agreement (See Note 9).

On November 10, 2009, the Company entered into a two year line of credit agreement with the principal stockholder in the amount of $100,000.  The line of credit carries an interest rate of 3.25%.  As of September 30, 2011, the principal stockholder has advanced $100,000 to the Company and was repaid $100,000 under the terms of this line of credit agreement (See Note 9).

On March 25, 2010, the Company entered into a two year line of credit agreement with the principal stockholder in the amount of $500,000.  The line of credit carries an interest rate of 3.25%.  On February 17, 2011, the principal stockholder converted $100,000 of the line of credit owed into 909,091 shares of common stock at $0.11 per share.  As of September 30, 2011, the principal stockholder has advanced $276,680 to the Company and was repaid $163,550 under the terms of this line of credit agreement. (See Note 7(G) and Note 9).

As of September 30, 2011, the Company owes $13,130 in principal and $11,283 of accrued interest to the principal stockholder related to these lines of credit (See Note 9).

F-10

MAX SOUND CORPORATION (f/k/a SO ACT NETWORK, INC.)

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2011

(UNAUDITED)

NOTE 5 PROPERTY AND EQUIPMENT

At September 30, 2011, and December 31, 2010, respectively, property and equipment is as follows:

	September 30, 2011			December 31, 2010
Website Development	$	112,722		$	112,722
Furniture and Equipment		70,343			-
Leasehold Improvements		5,167			-
Software		11,820			400
Office Equipment		2,185			2,185
Domain Name		1,500			1,500
Less accumulated depreciation and amortization		(115,864	)		(51,437	)
	$	87,873		$	65,370

Depreciation/amortization expense for the nine months ended September 30, 2011, and 2010, was $64,427 and $28,525, respectively.  On August 16, 2011, the Company abandoned its' social networking website and thus recorded a charge of $38,794, as part of the depreciation expense for the period ended September 30, 2011, which is related to the abandonment of the website.

NOTE 6 CONVERTIBLE DEBT

On July 6, 2010, the Company entered into an agreement whereby the Company will issue up to $50,000 in a convertible note.  The note matured on March 30, 2011, and bears an interest rate of 8%.  Any unpaid amount as of the maturity date bears an interest rate of 22%.  The holder of the note has a right to convert all or any part of the outstanding an unpaid principal amount into shares of common stock.  The conversion prices equals the "Variable Conversion Price", which is 59% of the "Market Price", which is the average of the lowest six trading prices for the Common Stock during the ten trading day period prior to the conversion.  In July of 2010, the Company received $50,000 proceeds less the $3,000 finder’s fee pursuant to the terms of this convertible note.  During the nine months ended September 30, 2011, the note holder converted $52,003 of the note payable and accrued interest into 1,545,350 shares of the company stock.  As of September 30, 2011, the Company owed $0 in principal and $0 in accrued interest on this note.  (See Note 7 (G)).

F-11

MAX SOUND CORPORATION (f/k/a SO ACT NETWORK, INC.)

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2011

(UNAUDITED)

The Company computed the fair value of the conversion feature at the commitment date, based on the following management assumptions:

Exercise price	$0.1377
Expected dividends	0%
Expected volatility	172.27%
Expected term: conversion feature	267 days
Risk free interest rate	0.32%

The fair value of the embedded conversion option on the commitment date was $15,409.  The Company recorded a related debt discount of $15,409, which was amortized over the life of the debt.  For the year ended December 31, 2010, the Company amortized $10,273 of debt discount.  For the nine months ended September 30, 2011, the Company amortized $5,136 of debt discount.

At September 30, 2011 the Company recorded the derivative liability at its fair value of $0, due to the principal and accrued interest were paid in full.  As a result of the remeasurement, the Company recorded a change in fair value associated with this derivative liability as a decrease in the expense totaling $13,262 for the nine months ended September 30, 2011.

On February 17, 2011, the Company entered into an agreement whereby the Company will issue up to $40,000 in a convertible note.  The note matures on November 17, 2011, and bears an interest rate of 8%.  The holder of the note has a right to convert all or any part of the outstanding an unpaid principal amount into shares of common stock.  The conversion prices equals the "Variable Conversion Price", which is 59% of the "Market Price", which is the average of the lowest six trading prices for the Common Stock during the ten trading day period prior to the conversion.  In February of 2011, the Company received $40,000 proceeds less the $2,500 finder’s fee pursuant to the terms of this convertible note.  During the nine months ended September 30, 2011, the note holder converted $41,600 of the note payable and accrued interest into 289,945 shares of the company stock.  As of September 30, 2011, the Company owed $0 in principal and $0 in accrued interest on this note.  (See Note 7 (G)).

The Company computed the fair value of the conversion feature at the commitment date, based on the following management assumptions:

Exercise price	$0.0738
Expected dividends	0%
Expected volatility	456.63%
Expected term: conversion feature	365 days
Risk free interest rate	0.27%

The fair value of the embedded conversion option on the commitment date was $9,523.  The Company recorded a related debt discount of $9,523, which is amortized over the life of the debt.  For the nine months ended September 30, 2011, the Company amortized $9,523 of debt discount.

F-12

MAX SOUND CORPORATION (f/k/a SO ACT NETWORK, INC.)

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2011

(UNAUDITED)

At September 30, 2011 the Company recorded the derivative liability at its fair value of $0, due to the principal and accrued interest were paid in full.  As a result of the remeasurement, the Company recorded a change in fair value associated with this derivative liability as a decrease in the expense totaling $9,523 for the nine months ended September 30, 2011.

NOTE 7 STOCKHOLDERS’ EQUITY

(A) Common Stock Issued for Cash

On December 31, 2005, the Company issued 100,000 shares of common stock for cash of $100 in exchange for acceptance of the incorporation expenses for the Company ($0.001/share).   As a result of the forward split, the 100,000 shares were increased to 400,000 shares ($0.00025/share) (See Note 7(D)).

For the year ended December 31, 2008, the Company issued 473,000 shares of common stock for cash of $118,250 ($0.25/share), of which $67,750 was a subscription receivable.   During the month of January 2009, $67,750 of stock subscription receivable was collected.  As a result of the forward split, the 473,000 shares were increased to 1,892,000 shares ($0.0625/share). (See Note 7(D)).

On January 2, 2009, the Company entered into stock purchase agreements to issue 20,000 shares of common stock for cash of $5,000 ($0.25/share).   As a result of the forward split, the 20,000 shares were increased to 80,000 shares ($0.0625/share) (See Note 7(D)).

On January 3, 2009, the Company entered into stock purchase agreements to issue 2,000 shares of common stock for cash of $500 ($0.25/share).  As a result of the forward split, the 2,000 shares were increased to 8,000 shares ($0.0625/share) (See Note 7(D)).

On January 3, 2009, the Company entered into stock purchase agreements to issue 2,000 shares of common stock for cash of $500 ($0.25/share).  As a result of the forward split, the 2,000 shares were increased to 8,000 shares ($0.0625/share) (See Note 7(D)).

On January 11, 2009, the Company entered into stock purchase agreements to issue 32,000 shares of common stock for cash of $8,000 ($0.25/share).  As a result of the forward split, the 32,000 shares were increased to 128,000 shares ($0.0625/share) (See Note 7(D)).

On January 12, 2009, the Company entered into stock purchase agreements to issue 2,000 shares of common stock for cash of $500 ($0.25/share).   As a result of the forward split, the 2,000 shares were increased to 8,000 shares ($0.0625/share) (See Note 7(D)).

On January 15, 2009, the Company entered into stock purchase agreements to issue 4,000 shares of common stock for cash of $1,000 ($0.25/share).  As a result of the forward split, the 4,000 shares were increased to 16,000 shares ($0.0625/share) (See Note 7(D)).

F-13

MAX SOUND CORPORATION (f/k/a SO ACT NETWORK, INC.)

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2011

(UNAUDITED)

In February of 2009, the Company paid direct offering costs of $850 related to the securities sold in 2009.

On May 27, 2010 the Company issued one unit; each unit consisted of 100,000 shares of common stock and 100,000 warrants to purchase common stock, for cash of $22,500 net of the $2,500 finder’s fee ($0.25/share).  Each warrant is exercisable for a three year period and has an exercise price of $0.50 per share (See Note 7(C)).

On July 23, 2010, the Company issued one unit; each unit consisted of 100,000 share of common stock and 100,000 warrants to purchase common stock, for cash of $25,000 ($0.25/share).  Each warrant is exercisable for a three year period and has an exercise price of $0.50 per share (See Note 7(C).

On August 5, 2010, the Company issued 10 units; each unit consisted of 100,000 shares of common stock and 100,000 warrants to purchase common stock, for cash of $250,000 ($0.25/share).  Each warrant is exercisable for a three year period and has an exercise price of $0.50 per share (See Note 7(C).

During the year ended December 31, 2010, the Company paid direct offering costs of $2,900 related to the securities sold in 2010.

On January 24, 2011, the Company issued 10,000 shares of common stock for cash of $1,000 ($0.10/share).

On February 23, 2011, the Company issued 300,000 shares of common stock for cash of $30,000 ($0.10/share).

On March 21, 2011, the Company issued 150,000 shares of common stock for cash of $15,000 ($0.10/share).

On May 2, 2011, the Company issued 2,000,000 shares of common stock for cash of $200,000 ($0.10/share).

During the month of June 2011, the Company issued 5,460,000 shares of common stock for cash of $546,000 ($0.10/share) of which $397,000 was a subscription receivable.  The Company received the entire $397,000 of subscription receivable in July 2011.

During the months of July, August and September, the Company issued 10,937,000 shares of common stock for cash of $1,093,700 ($0.10/share).

During the nine months ended September 30, 2011, the Company paid $76,780 in finder’s fees and issued 955,800 in warrants related to the stock sold in 2011.

F-14

MAX SOUND CORPORATION (f/k/a SO ACT NETWORK, INC.)

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2011

(UNAUDITED)

(B) Stock Issued for Services

On October 14, 2008, the Company issued 44,900,000 shares of common stock to its founder having a fair value of $44,900 ($0.001/share) in exchange for services provided.  As a result of the forward split, the 44,900,000 shares were increased to 179,600,000 shares and its purchase price was similarly adjusted to $0.00025((See Note 7(D) and Note 9).

On November 24, 2008, the Company issued 4,000 shares of common stock having a fair value of $1,000 ($0.25/share) in exchange for consulting services.  As a result of the forward split, the 4,000 shares were increased to 16,000 shares and its purchase price was similarly adjusted to $0.0625/share (See Note 7(D)).

On December 5, 2008, the Company issued 4,000 shares of common stock having a fair value of $1,000 ($0.25/share) in exchange for consulting services.  As a result of the forward split, the 4,000 shares were increased to 16,000 shares and its purchase price was similarly adjusted to $0.0625/share (See Note 7(D)).

On December 20, 2008, the Company issued 4,000 shares of common stock having a fair value of $1,000 ($0.25/share) in exchange for consulting services.  As a result of the forward split, the 4,000 shares were increased to 16,000 shares and its purchase price was similarly adjusted to $0.0625/share (See Note 7(D)).

On January 12, 2009, the Company issued 4,000 shares of common stock having a fair value of $1,000 ($0.25/share) in exchange for consulting services.  As a result of the forward split, the 4,000 shares were increased to 16,000 shares and its purchase price was similarly adjusted to $0.0625/share (See Note 7(D)).

On January 14, 2009, the Company issued 20,000 shares of common stock having a fair value of $5,000 ($0.25/share) in exchange for services related to a development services agreement entered on January 19, 2009.  As a result of the forward split, the 20,000 shares were increased to 80,000 shares and its purchase price was similarly adjusted to $0.0625/share (See Note 7(D) and Note 8(B)).

On August 25, 2009, the Company issued 50,000 shares of common stock having a fair value of $3,125 ($0.0625/share), based upon the fair value on the date of grant, in exchange for professional services.

On August 31, 2009, the Company issued 885,714 shares of common stock in exchange for services valued at $62,000 related to the development services agreement entered into on January 19, 2009.  Based on the most recent fair market value at that time, the shares were valued at $55,357 ($0.0625/share), resulting in the recognition of a gain on the extinguishment of debt of $6,643 (See Note 8(B)).

F-15

MAX SOUND CORPORATION (f/k/a SO ACT NETWORK, INC.)

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2011

(UNAUDITED)

On September 18, 2009, the Company issued 500,000 shares of common stock as compensation pursuant to the terms of a consulting agreement, having a fair value of $175,000 ($0.35/share) based upon fair value on the date of grant.  On November 11, 2009, the Company cancelled the agreement and 300,000 shares of common stock were returned to the Company. As of December 31, 2009, $70,000 was recorded as consulting expense and $105,000 of deferred compensation was reclassified to $0 (See Note 8(B)).

On September 18, 2009, the Company issued 600,000 shares of common stock as compensation pursuant to the terms of a consulting agreement, having a fair value of $210,000 ($0.35/share) based upon fair value on the date of grant.  On November 18, 2009, the Company cancelled the agreement and 400,000 shares of common stock were returned to the Company.  As of December 31, 2009, $70,000 was recorded as consulting expense and $140,000 of deferred compensation was reclassified to $0 (See Note 8(B)).

On September 21, 2009, the Company issued 600,000 shares of common stock as compensation pursuant to the terms of a consulting agreement, having a fair value of $210,000 ($0.35/share) based upon fair value on the date of grant.  On December 18, 2009, the Company terminated the consulting agreement and 400,000 shares were returned to the Company.  As of December 31, 2009, $70,000 was recorded as consulting expense and $140,000 of deferred compensation was reclassified to $0 (See Note 8(B)).

On November 12, 2009, the Company issued 100,000 shares of common stock as compensation pursuant to the terms of the consulting agreement, having a fair value of $178,000 ($1.78/share) based upon fair value on the date of grant.  During 2009 and 2010, $11,948 and $89,000 was recorded as consulting expense, respectively.  For the nine months ended September 30, 2011, $77,052 is recorded as consulting expense and $0 is recorded as deferred compensation (See Note 8(B)).

On November 12, 2009, the Company issued 200,000 shares of common stock as compensation pursuant to the terms of the consulting agreement, having a fair value of $400,000 ($2.00/share) based upon fair value on the date of grant.  During 2009 and 2010, $22,466 and $200,000 was recorded as consulting expense, respectively.  For the nine months ended September 30, 2011, $177,534 is recorded as consulting expense and $0 is recorded as deferred compensation (See Note 8(B)).

On November 16, 2009, the Company issued 100,000 shares of common stock as compensation pursuant to the terms of the consulting agreements, having a fair value of $180,000 ($1.80/share) based upon fair value on the date of grant.  During 2009 and 2010, $11,096 and $90,000 was recorded as consulting expense, respectively.  For the nine months ended September 30, 2011, $78,904 is recorded as consulting expense and $0 is recorded as deferred compensation (See Note 8(B)).

F-16

MAX SOUND CORPORATION (f/k/a SO ACT NETWORK, INC.)

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2011

(UNAUDITED)

On November 18, 2009, the Company issued 30,000 shares of common stock as compensation pursuant to the terms of the consulting agreement, having a fair value of $45,000 ($1.50/share) based upon fair value on the date of grant.  During 2009, $5,301 was recorded as consulting expense.  For the year ended December 31, 2010, $39,699 was recorded as consulting expense. (See Note 8(B)).

On November 21, 2009, the Company issued 30,000 shares of common stock as compensation pursuant to the terms of the marketing agreement, having a fair value of $53,100 ($1.77/share) based upon fair value on the date of grant.  For the year ended December 31, 2010, $53,100 was recorded as consulting expense (See Note 8(B)).

On December 3, 2009, the Company issued 240,000 shares of common stock as compensation pursuant to the terms of the consulting agreement, having a fair value of $468,000 ($1.95/share) based upon fair value on the date of grant.  As of December 31, 2009, $468,000 was recorded as consulting expense (See Note 8(B)).

On December 3, 2009, the Company issued 35,000 shares of common stock as compensation pursuant to the terms of the commission agreement, having a fair value of $68,250 ($1.95/share) based upon fair value on the date of grant.  As of December 31, 2009, $68,250 was recorded as consulting expense (See Note 8(B)).

On December 3, 2009, the Company issued 35,000 shares of common stock as compensation pursuant to the terms of the consulting agreement, having a fair value of $68,250 ($1.95/share) based upon fair value on the date of grant.  As of December 31, 2009, $68,250 was recorded as consulting expense (Note 8(B)).

On December 3, 2009, the Company issued 10,000 shares of common stock as compensation pursuant to the terms of the commission agreement, having a fair value of $19,500 ($1.95/share) based upon fair value on the date of grant.  As of December 31, 2009, $19,500 is recorded as consulting expense (See Note 8(B)).

On December 15, 2009, the Company issued 100,000 shares of common stock as compensation pursuant to the terms of the consulting agreement, having a fair value of $200,000 ($2.00/share) based upon fair value on the date of grant.  During 2009, $71,111 was recorded as consulting expense.  For the year ended December 31, 2010, $128,889 was recorded as consulting expense (See Note 8(B)).

On December 27, 2009, the Company issued 10,000 shares of common stock as compensation pursuant to the terms of the consulting agreement, having a fair value of $19,400 ($1.94/share) based upon fair value on the date of grant.  For the year ended December 31, 2010, $19,400 was recorded as consulting expense (See Note 8(B)).

F-17

MAX SOUND CORPORATION (f/k/a SO ACT NETWORK, INC.)

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2011

(UNAUDITED)

On December 27, 2009, the Company issued 10,000 shares of common stock as compensation pursuant to the terms of the consulting agreement, having a fair value of $19,400 ($1.94/share) based upon fair value on the date of grant.  For the year ended December 31, 2010, $19,400 was recorded as consulting expense (See Note 8(B)).

On December 27, 2009, the Company issued 10,000 shares of common stock as compensation pursuant to the terms of the consulting agreement, having a fair value of $19,400 ($1.94/share) based upon fair value on the date of grant.  For the year ended December 31, 2010, $19,400 was recorded as consulting expense (See Note 8(B)).

On December 30, 2009, the Company issued 1,500,000 shares of common stock as compensation pursuant to the terms of the advertising agreement, having a fair value of $2,895,000 ($1.93/share) based upon fair value on the date of grant.  In 2010, the Company cancelled a portion of the agreement and as a result, 1,000,000 shares of common stock were returned to the Company.  For the year ended December 31, 2010, $965,000 was recorded as consulting expense (See Note 8(B)).

On December 31, 2009, the Company issued 75,000 shares of common stock as compensation pursuant to the terms of the consulting agreement, having a fair value of $144,750 ($1.93/share) based upon fair value on the date of grant.  For the year ended December 31, 2010, $116,374 was recorded as consulting expense.  For the nine months ended September 30, 2011, $28,376 is recorded as consulting expense (See Note 8(B)).

On December 31, 2009, the Company issued 75,000 shares of common stock as compensation pursuant to the terms of the consulting agreement, having a fair value of $144,750 ($1.93/share) based upon fair value on the date of grant.  For the year ended December 31, 2010, $116,374 was recorded as consulting expense.  For the nine months ended September 30, 2011, $28,376 is recorded as consulting expense (See Note 8(B)).

On December 31, 2009, the Company issued 500,000 shares of common stock as compensation pursuant to the terms of the consulting agreement, having a fair value of $965,000 ($1.93/share) based upon fair value on the date of grant.  For the year ended December 31, 2010, $965,000 was recorded as consulting expense (See Note 8(B)).

During December of 2009, the Company issued 680,000 shares of common stock as compensation pursuant to the terms of the consulting agreements, having a fair value of $1,312,400 ($1.93/share) based upon fair value on the date of grant.  During 2009 and 2010, $2,802 and $709,116 was recorded as consulting expense, respectively.  For the nine months ended September 30, 2011, $600,482 is recorded as consulting expense and $0 is recorded as deferred compensation (See Note 8(B)).

F-18

MAX SOUND CORPORATION (f/k/a SO ACT NETWORK, INC.)

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2011

(UNAUDITED)

During December of 2009, the Company issued 600,000 shares of common stock as compensation pursuant to the terms of the consulting agreements, having a fair value of $1,170,000 ($1.95/share) based upon fair value on the date of grant.  During 2009 and 2010, $34,192 and $585,000 was recorded as consulting expense, respectively.  For the nine months ended September 30, 2011, $550,808 is recorded as consulting expense and $0 is recorded as deferred compensation (See Note 8(B)).

On January 15, 2010, the Company issued 100,000 shares of common stock as compensation pursuant to the terms of the consulting agreement, having a fair value of $170,000 ($1.70/share) based upon fair value on the date of grant.  For the year ended December 31, 2010, $81,507 was recorded as consulting expense.  For the nine months ended September 30, 2011, $88,493 is recorded as consulting expense and $0 is recorded as deferred compensation (See Note 8(B)).

On February 17, 2010, the Company entered into a twelve month consulting agreement with an unrelated third party effective February 17, 2010.  In exchange for the services provided, the Company issued 1,000,000 shares of common stock having a fair value of $1,240,000 ($1.24/share) based upon fair value on the date of grant.  For the year ended December 31, 2010, $1,066,740 was recorded as consulting expense.  For the nine months ended September 30, 2011, $173,260 is recorded as consulting expense (See Note 8(B)).

On June 1, 2010, the Company entered into a twelve month consulting agreement for consulting and business services.  As part of the agreement, the Company issued 40,000 shares as a nonrefundable retainer fee having a value of $10,000 ($0.25/share) based upon fair value on the date of the agreement.  (See Note 8(B)).

On July 23, 2010, the Company issued 10,000 shares of common stock pursuant to a consulting agreement for consulting services having a fair value of $2,000 ($0.20/share) based upon fair value on the grant date (See Note 8(B)).

On August 1, 2010, the Company issued 200,000 shares of common stock pursuant to a consulting agreement for consulting services having a fair value of $40,000 ($0.20/share) based upon fair value on the grant date (See Note 8(B)).

On September 1, 2010, the Company issued 100,000 shares of common stock pursuant to a consulting agreement for consulting services having a fair value of $19,000 ($0.19/share) based upon fair value on the grant date (See Note 8(B)).

On October 1, 2010, the Company issued 100,000 shares of common stock pursuant to a consulting agreement for consulting services having a fair value of $18,000 ($0.18/share) based upon fair value on the grant date (See Note 8(B)).

On November 1, 2010, the Company issued 100,000 shares of common stock pursuant to a consulting agreement for consulting services having a fair value of $25,000 ($0.25/share) based upon fair value on the grant date (See Note 8(B)).

F-19

MAX SOUND CORPORATION (f/k/a SO ACT NETWORK, INC.)

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2011

(UNAUDITED)

On December 14, 2010, the Company issued 250,000 shares of common stock pursuant to a consulting agreement for consulting services having a fair value of $37,500 ($0.15/share) based upon fair value on the grant date (See Note 8(B)).

On January 17, 2011, the Company issued 3,000,000 shares of common stock to its' new CEO pursuant to an employment agreement having a fair value of $300,000 ($0.10/share) based upon fair value on the grant date.  (See Note 8(A)).

On February 17, 2011, the Company issued 500,000 shares of common stock pursuant to a consulting agreement for consulting services having a fair value of $55,000 ($0.11/share) based upon fair value on the grant date (See Note 8(B)).

On March 3, 2011, the Company issued 1,000,000 shares of common stock pursuant to a consulting agreement for consulting services having a fair value of $80,000 ($0.08/share) based upon fair value on the grant date (See Note 8(B)).

On May 17, 2011, the Company issued 2,000,000 shares of common stock pursuant to an employment agreement having a fair value of $140,000 ($0.07/share) based upon fair value on the grant date.  (See Note 8(A)).

During June 2011, the Company issued 300,000 shares of common stock pursuant to  consulting agreements for consulting services having a fair value of $75,000 ($0.25/share) based upon fair value on the grant date (See Note 8(B)).

On June 15, 2011, the Company issued 15,980 shares of common stock pursuant to a consulting agreement for consulting services having a fair value of $1,598 ($0.10/share) based upon the terms of the consulting agreement (See Note 8(B)).

On July 1, 2011, the Company issued 6,500 shares of common stock pursuant to a consulting agreement for marketing and promotional services having a fair value of $520 ($0.08/share) based upon the terms of the consulting agreement (See Note 8(B)).

During July and August of 2011., the Company issued 50,482 shares of common stock pursuant to two consulting agreement for consulting services having a fair value of $5,048 ($0.10/share) based upon the terms of the consulting agreements (See Note 8(B)).

On August 14, 2011, the Company issued 2,443 shares of common stock pursuant to a consulting agreement for consulting services having a fair value of $855 ($0.35/share) based upon the terms of the consulting agreement (See Note 8(B)).

F-20

MAX SOUND CORPORATION (f/k/a SO ACT NETWORK, INC.)

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2011

(UNAUDITED)

On September 12, 2011, the Company issued 2,860 shares of common stock pursuant to a consulting agreement for consulting services having a fair value of $715 ($0.25/share) based upon the terms of the consulting agreement (See Note 8(B)).

On September 18, 2011, the Company issued 15,403 shares of common stock pursuant to a consulting agreement for consulting services having a fair value of $3,388 ($0.22/share) based upon the terms of the consulting agreement (See Note 8(B)).

On September 25, 2011, the Company issued 1,500 shares of common stock pursuant to a consulting agreement for consulting services having a fair value of $585 ($0.39/share) based upon the terms of the consulting agreement (See Note 8(B)).

On September 19, 2011, the Company issued 100,000 shares of common stock pursuant to a consulting agreement for consulting services having a fair value of $23,000 ($0.23/share) based upon the terms of the consulting agreement (See Note 8(B)).

On September 21, 2011, the Company issued 400,000 shares of common stock pursuant to a consulting agreement for consulting services having a fair value of $100,000 ($0.25/share) based upon the terms of the consulting agreement (See Note 8(B)).

On September 24, 2011, the Company issued 100,000 shares of common stock pursuant to a consulting agreement for consulting services having a fair value of $33,000 ($0.33/share) based upon the terms of the consulting agreement (See Note 8(B)).

On September 27, 2011, the Company issued 100,000 shares of common stock pursuant to two consulting agreements for consulting services having a fair value of $39,000 ($0.22/share) based upon the terms of the consulting agreements (See Note 8(B)).

(C) Common Stock Warrants

On December 30, 2009, the Company issued 500,000 warrants under a consulting agreement. The Company recognized an expense of $823,077 for the year ended December 31, 2009.  The Company recorded the fair value of the warrants  based on the fair value of each warrant grant estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions used for grants in 2009, dividend yield of zero, expected volatility of 112.80%; risk-free interest rates of 1.65%, expected life of three years. The warrants vested immediately.   The warrants expire in three years from the date of issuance and have an exercise price of $0.52 per share.

On May 27, 2010, the Company issued 10,000 warrants under a consulting agreement. The Company recognized an expense of $1,782 for the year ended December 31, 2010.  The Company recorded the fair value of the warrants  based on the fair value of each warrant grant estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions used for grants in 2010, dividend yield of zero, expected volatility of 152.80%; risk-free interest rates of 1.35%, expected life of three years. The warrants vested immediately.   The warrants expire in three years from the date of issuance and have an exercise price of $0.50 per share (See Note 8(B)).

F-21

MAX SOUND CORPORATION (f/k/a SO ACT NETWORK, INC.)

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2011

(UNAUDITED)

On June 1, 2010, the Company issued 40,000 warrants under a consulting agreement. The Company recognized an expense of $7,184 for the year ended December 31, 2010.  The Company recorded the fair value of the warrants  based on the fair value of each warrant grant estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions used for grants in 2010, dividend yield of zero, expected volatility of 145.70%; risk-free interest rates of 1.26%, expected life of three years.  The warrants vested immediately.  The warrants expire in three years from the date of issuance and have an exercise price of $0.50 per share (See Note 8(B)).

On July 23, 2010, the Company issued 10,000 warrants under a consulting agreement. The Company recognized an expense of $1,593 for the year ended December 31, 2010.  The Company recorded the fair value of the warrants  based on the fair value of each warrant grant estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions used for grants in 2010, dividend yield of zero, expected volatility of 172.90%; risk-free interest rates of 0.94%, expected life of three years. The warrants vested immediately.   The warrants expire in three years from the date of issuance and have an exercise price of $0.50 per share (See Note 8(B)).

In September of 2011, the Company issued 955,800 warrants under various consulting agreements. The Company recognized an expense of $248,498 for the nine months ended September 30, 2011.  The Company recorded the fair value of the warrants  based on the fair value of each warrant grant estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions used for grants in 2011, dividend yield of zero, expected volatility of 461.11%; risk-free interest rates of 0.33%, expected life of three years. The warrants vested immediately.   The warrants expire in three years from the date of issuance and have an exercise price of $0.10 per share (See Note 8(B)).

The following tables summarize all warrant grants as of September 30, 2011, and December 31, 2010, and the related changes during these periods are presented below:

	Number of Options		Weighted Average Exercise Price
Stock Warrants
Balance at December 31, 2010		1,760,000	$	0.51
Granted		955,800	$	0.10
Exercised		-
Forfeited		-
Balance at September 30, 2011		2,715,800	$	0.36
Options Exercisable at September 30, 2011		2,715,800	$	0.36
Weighted Average Fair Value of Options Granted			$	0.36

Warrants Outstanding								Warrants Exercisable
Range of Exercise Price		Number Outstanding at September 30, 2011		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price		Number Exercisable at September 30, 2011		Weighted Average Exercise Price
$	0.52		500,000		1.25	$	0.52		500,000	$	0.52
$	0.50		1,260,000		1.49	$	0.50		1,260,000	$	0.50
$	0.10		955,800		2.92	$	0.10		955,800	$	0.10

In connection with the warrants issued for cash and services, the Company has an aggregate of 2,715,800 and 1,760,000 warrants outstanding as of September 30, 2011 and 2010, respectively.  As of September 30, 2011, the Company has reserved 2,715,800 shares of common stock for the future exercise of the warrants.

(D) Stock Split Effected in the Form of a Stock Dividend

On January 16, 2009, the Company's Board of Directors declared a four-for-one stock split to be effected in the form of a stock dividend.  The stock split was distributed on January 16, 2009 to shareholders of record.  A total of 136,713,000 shares of common stock were issued.  All basic and diluted loss per share and average shares outstanding information has been adjusted to reflect the aforementioned stock dividend.

(E) Amendment to Articles of Incorporation

On January 27, 2009, the Company amended its Articles of Incorporation to provide for an increase in its authorized share capital. The authorized capital stock increased to 250,000,000 common shares at a par value of $0.001 per share, and 10,000,000 preferred shares at a par value of $0.001 with class and series designations, voting rights, and relative rights and preferences to be determined by the Board of Directors of the Company from time to time.

On June 2, 2010, the Company amended its Articles of Incorporation to provide for an increase in its authorized share capital. The authorized capital stock increased to 295,000,000 common shares at a par value of $0.001 per share.

F-22

MAX SOUND CORPORATION (f/k/a SO ACT NETWORK, INC.)

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2011

(UNAUDITED)

On September 20, 2010, the Company amended its Articles of Incorporation to provide for an increase in its authorized share capital and a change in the par value per share. The authorized capital stock increased to 400,000,000 common shares at a par value of $0.0001 per share.

Effective March 1, 2011, the Company filed with the State of Delaware a Certificate of Amendment of Certificate of Incorporation changing our name from So Act Network, Inc. to Max Sound Corporation.

(F) In Kind Contribution

During the fourth quarter of 2008, a former stockholder of the Company paid $4,400 of operating expenses on behalf of the Company.

During the fourth quarter of 2008, the principal stockholder contributed office space with a fair market value of $2,913 (See Note 9).

For the year ended December 31, 2009, the principal stockholder contributed office space with a fair market value of $12,600 (See Note 9).

For the year ended December 31, 2010, the principal stockholder contributed office space with a fair value of $9,450 (See Note 9).

(G) Share Conversion

On June 2, 2010, a principal stockholder converted $283,652 of accrued compensation into 945,507 shares of common stock at $0.30 per share (See Note 9).

On February 17, 2011, a principal stockholder converted $144,000 of accrued compensation into 1,309,091 shares of common stock at $0.11 per share (See Note 9).

On February 17, 2011, a principal stockholder converted $100,000 of a line of credit owed into 909,091 shares of common stock at $.011 per share (See Note 4 and Note 9).

On January 18, 2011, the Company entered into a conversion agreement executed by a note holder for 109,375 shares based on a conversion price of $0.032 per share (See Note 6).

On February 9, 2011, the Company entered into a conversion agreement executed by a note holder for 271,186 shares based on a conversion price of $0.0295 per share (See Note 6).

On February 15, 2011, the Company entered into a conversion agreement executed by a note holder for 357,143 shares based on a conversion price of $0.0336 per share (See Note 6).

F-23

MAX SOUND CORPORATION (f/k/a SO ACT NETWORK, INC.)

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2011

(UNAUDITED)

On February 23, 2011, the Company entered into a conversion agreement executed by a note holder for 220,264 shares based on a conversion price of $0.0454 per share (See Note 6).

On April 11, 2011, the Company entered into a conversion agreement executed by a note holder for 587,382 shares based on a conversion price of $0.0315 per share (See Note 6).

On August 25, 2011, the Company entered into a conversion agreement executed by a note holder for 77,220 shares based on a conversion price of $0.1554 per share (See Note 6).

On August 30, 2011, the Company entered into a conversion agreement executed by a note holder for 96,220 shares based on a conversion price of $0.1455 per share (See Note 6).

On September 12, 2011, the Company entered into a conversion agreement executed by a note holder for 116,505 shares based on a conversion price of $0.1339 per share (See Note 6).

(H) Share Exchange

On May 11, 2010, the Company acquired the rights to an audio technology known as Max Audio Technology (Max) through a share exchange, whereby the Company issued 30,000,000 shares of common stock to two individuals in exchange for their rights in Max having a value of $7,500,000 based upon recent market value ($0.25/share) (See Note 8(B)).

On January 17, 2011, the Company acquired the rights to software technology known as Blog Software, Social Media Vault, Social Media Bar and Trending Topix (BSST) through a share exchange, whereby the Company issued 3,000,000 shares of common stock to two individuals in exchange for their rights to BSST having a value of $300,000 based upon recent market value ($0.10/share).

(I) Stock Options

On January 17, 2011, the Company issued 12,000,000 options to buy common shares of the Company's stock at $0.12 per share, good for three years, to its' new CEO pursuant to an employment agreement.  The Company recognized an expense of $1,199,794 for the nine months ended September 30, 2011.  The Company recorded the fair value of the options  based on the fair value of each option grant estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions used for grants in 2010; dividend yield of zero, expected volatility of 436.04%, risk-free interest rates of 1.00%, expected life of three years.  The options vest immediately (See Note 8 (A)).

F-24

MAX SOUND CORPORATION (f/k/a SO ACT NETWORK, INC.)

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2011

(UNAUDITED)

NOTE 8              COMMITMENTS

(A)  Employment Agreement

On October 13, 2008, the Company executed an employment agreement with its President and CEO.  The term of the agreement is for ten years.  As compensation for services, the President will receive a monthly compensation of $18,000 beginning October 13, 2008.  In addition, to the base salary, the employee is entitled to receive a 10% commission of all sales of the Corporation.  The agreement also calls for the employee to receive health benefits.  For the nine months ended September 30, 2011, the Company has recorded $162,000 in compensation expense (See Note 9).

On January 17, 2011, the Company executed an employment agreement with an executive to be CEO for five years.  As compensation for services, the executive will receive a monthly compensation of $8,000 beginning after the completion of at least one million dollars of new funding to the Corporation or can be paid as commissions from sales brought to the Company, whichever comes first. In addition to the base salary, the employee is entitled to receive a 20% commission of all sales the executive is directly responsible for bringing to the Company.  The agreement also calls for the executive to receive, upon execution of the agreement, three million shares of Rule 144 common stock and twelve million options, which are good for three years, to buy shares of Rule 144 common stock at $0.12/share.  As a supplement to the agreement, on February 4, 2011, the executive shall receive an additional twenty million common shares directly from the President of the Company. On August 25, 2011, an addendum to the agreement was made to increase the monthly compensation to $12,000, beginning September 1, 2011.  The agreement also calls for the employee to receive health benefits.  For the nine months ended September 30, 2011, the Company has recorded $12,000 in compensation expense (See Note 7(B) and 7(I)).

On May 17, 2011, the Company executed an employment agreement with its Chief Internet Officer (“CIO”).  The term of the agreement is for five years.  As compensation for services, the CIO will receive a monthly compensation of $9,000 beginning at the completion of at least one million dollars of new funding.  In addition to the base salary, the employee is entitled to receive health benefits.  The agreement also calls for the CIO to receive two million shares of Rule 144 common stock upon the execution of the agreement.  On August 25, 2011, an addendum to the agreement was made to increase the monthly compensation to $12,000, beginning October 1, 2011 (See Note 7(B)).

F-25

MAX SOUND CORPORATION (f/k/a SO ACT NETWORK, INC.)

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2011

(UNAUDITED)

(B)  Consulting Agreement

On January 19, 2009, the Company entered into a development services agreement to construct social network software for a fee of $150 and $375 an hour.  The contract will remain in place until either party desires to cancel.  A retainer fee of $20,000 has been paid upon the execution of the agreement and will be used towards the services provided.  In addition, on January 14, 2009 the Company issued 20,000 shares in exchange for services valued at $5,000 ($0.25/share).  As a result of the forward split, the 20,000 shares were increased to 80,000 shares and its purchase price was similarly adjusted to $0.0625 (See Note 7(B) and Note 7(D)).  On May 29, 2009 the Company amended the consulting agreement by reducing the hourly rate to $75 an hour and reducing the outstanding balance due by $17,163. On August 31, 2009, the Company issued 885,714 shares of common stock in exchange for services valued at $62,000 related to the development services agreement entered into on January 19, 2009.  Based on the most recent fair market value at that time, the shares were valued at $55,357 ($0.0625/share), resulting in the recognition of a gain on the extinguishment of debt of $6,643 (See Note 7(B)).

On January 20, 2009, the Company entered into a service agreement with a transfer agent to become the Company's transfer agent for the purpose of maintaining stock ownership and transfer records for the Company.

On September 17, 2009, the Company entered into a six month consulting agreement with an unrelated third party to provide public relations services.  In exchange for the services provided, on September 18, 2009 the Company issued 500,000 shares of common stock having a fair value of $175,000 ($0.35/share) based upon fair value on the date of grant.  The Company has an option to cancel the contract during the first ninety days of the agreement and 200,000 shares will be returned back to the Company.  On November 11, 2009, the Company cancelled the agreement and 300,000 shares of common stock were returned to the Company.   As of December 31, 2009, $70,000 is recorded as consulting expense and $105,000 of deferred compensation was reclassified to $0 (See Note 7(B)).

On September 18, 2009, the Company entered into a six month consulting agreement with an unrelated third party to provide public relations services.  In exchange for the services provided the Company issued 600,000 shares of common stock having a fair value of $210,000 ($0.35/share) based upon fair value on the date of grant.  Shares will be issued on or before December 18, 2009 in six 100,000 increments.  The Company has an option to cancel the contract at any time, in such event; the consultant will return a prorated amount of shares based on the months remaining in the consulting agreement.   On November 18, 2009, the Company cancelled the agreement and 400,000 shares of common stock were returned to the Company.  As of December 31, 2009 $70,000 is recorded as consulting expense and $140,000 of deferred compensation was reclassified to $0 (See Note 7(B)).

On September 21, 2009, the Company entered into an eight month consulting agreement with an unrelated third party to provide public relations services.  In exchange for the services provided, the Company issued 600,000 shares of common stock having a fair value of $210,000 ($0.35/share) based upon fair value on the date of grant.  Shares will be issued on or before September 18, 2009, December 18, 2009, and March 18, 2010, in 200,000 increments.  The Company has an option to cancel the contract at any time and no additional stock issuances will be due.  On December 18, 2009, the Company cancelled the agreement and 400,000 shares of common stock were returned to the Company.  As of December 31, 2009, $70,000 is recorded as consulting expense and $140,000 of deferred compensation was reclassified to $0 (See Note 7(B)).

F-26

MAX SOUND CORPORATION (f/k/a SO ACT NETWORK, INC.)

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2011

(UNAUDITED)

On October 20, 2009, the Company entered into a marketing agreement with an unrelated third party.  In exchange for the services provided on November 21, 2009, the Company issued 30,000 shares of common stock having a fair value $53,100 ($1.77/share) based upon fair value on the date of grant, and compensation of $5,000, of which $2,500 was paid in 2009 upon the execution of the agreement and the remaining $2,500 was paid in 2010 upon completion (See Note 7(B)).

During the months of November and December 2009, the Company entered into celebrity endorsement agreements for a period of one to two years of service.  In total, 1,710,000 shares of common stock were issued having a fair value of $3,285,400 based upon fair value on the respective date of grant.  During 2009 and 2010, $87,805 and $1,712,815 was recorded as consulting expense, respectively.  For the nine months ended September 30, 2011, $1,484,780 is recorded as consulting expense, and $0 is recorded as deferred compensation (See Note 7(B)).

On December 3, 2009, the Company entered into a commission agreement with an unrelated third party.  The company will pay a 10% commission in shares of common stock for every passive endorsement.  In exchange for the services provided the Company issued 35,000 shares of common stock having a fair value $68,250 ($1.95/share) based upon fair value on the date of grant (See Note 7(B)).

On December 3, 2009, the Company entered into a commission agreement with an unrelated third party.  The company will pay a 10% commission in shares of common stock for every passive endorsement.  In exchange for the services provided the Company issued 240,000 shares of common stock having a fair value $468,000 ($1.95/share) based upon fair value on the date of grant (See Note 7(B)).

On December 3, 2009, the Company entered into a commission agreement with an unrelated third party.  The company will pay a 10% commission in shares of common stock for every passive endorsement.  In exchange for the services provided the Company issued 35,000 shares of common stock having a fair value $68,250 ($1.95/share) based upon fair value on the date of grant (See Note 7(B)).

On December 3, 2009, the Company entered into a commission agreement with an unrelated third party.  The company will pay a 10% commission in shares of common stock for every passive endorsement.  In exchange for the services provided the Company issued 10,000 shares of common stock having a fair value $19,500 ($1.95/share) based upon fair value on the date of grant (See Note 7(B)).

F-27

MAX SOUND CORPORATION (f/k/a SO ACT NETWORK, INC.)

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2011

(UNAUDITED)

On December 15, 2009, the Company entered into a consulting agreement with an unrelated third party to provide investor services.  The Company will receive a 10% of the gross receipts from the investor relations revenue for a two year period.  In exchange for the satisfactory services provided, on December 15, 2009, the Company issued 100,000 shares of common stock having a fair value of $200,000 ($2/share) based upon fair value on the date of grant (See Note 7(B)).

On December 27, 2009, the Company entered into a consulting agreement with an unrelated third party to provide film work.  In exchange for the services provided the Company issued 10,000 shares of common stock having a fair value $19,400 ($1.94/share) based upon fair value on the date of grant (See Note 7(B)).

On December 27, 2009, the Company entered into an endorsement agreement with an unrelated third party to provide film work.  In exchange for the services provided the Company issued 10,000 shares of common stock having a fair value $19,400 ($1.94/share) based upon fair value on the date of grant (See Note 7(B)).

On December 27, 2009, the Company entered into a consulting agreement with an unrelated third party to provide film scripting, editing and production work.  In exchange for the services provided the Company issued 10,000 shares of common stock having a fair value $19,400 ($1.94/share) based upon fair value on the date of grant (See Note 7(B)).

On December 30, 2009, the Company entered into a marketing agreement with an unrelated third party for a period from January 2010 to December 2010.  In exchange for the services provided, the Company issued 500,000 shares of common stock having a fair value of $965,000 ($1.93/share) based upon fair value on the date of grant.  An additional 1,000,000 shares of common stock having a fair value of $1,930,000 ($1.93/share) based upon fair value on the date of grant, were issued for an additional sponsorship commitment. The additional 1,000,000 shares were to be held in escrow until June 30, 2010, at which point the unrelated party would have 15 days to accept or decline the additional shares.As of December 31, 2010, the shares were returned back to the Company’s treasury due to non-performance of services and no additional shares will be issued (See Note 7(B)).

On December 31, 2009, the Company entered into a consulting agreement with an unrelated third party for a period from December 31, 2009 through March 30, 2011.  In exchange for the services provided, the Company issued 75,000 shares of common stock having a fair value of $144,750 ($1.93/share) based upon fair value on the date of grant, and deliverable in three increments of 25,000 shares of common stock each. The first 25,000 shares will be delivered upon the execution of the agreement and the other two increments will be delivered in six and twelve months upon the successful fulfillment of the agreement (See Note 7(B)).

F-28

MAX SOUND CORPORATION (f/k/a SO ACT NETWORK, INC.)

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2011

(UNAUDITED)

On December 31, 2009, the Company entered into a consulting agreement with an unrelated third party for a period from December 31, 2009 through March 30, 2011.  In exchange for the services provided, the Company issued 75,000 shares of common stock having a fair value of $144,750 ($1.93/share) based upon fair value on the date of grant, and deliverable in three increments of 25,000 each. The first 25,000 shares will be delivered upon the execution of the agreement and the other two will be delivered in six and twelve months upon the successful fulfillment of the agreement (See Note 7(B)).

On December 31, 2009, the Company entered into a consulting agreement with an unrelated third party for a period from December 31, 2009 through December 31, 2010.  In exchange for the services provided, the Company issued 500,000 shares of common stock having a fair value of $965,000 ($1.93/share) based upon fair value on the date of grant (See Note 7(B)).

On January 11, 2010, the Company entered into a twelve month agreement with an unrelated third party for investor relations press release service for an annual fee of $14,250 and an initial onetime fee of $250.

On January 15, 2010, the Company entered into a two year celebrity endorsement agreement.  In total, 100,000 shares of common stock were issued having a fair value of $170,000($1.70/share) based upon fair value on the date of grant (See Note 7(B)).

On February 1, 2010, the Company entered into a twelve month consulting agreement effective February 5, 2010, with an unrelated third party to produce music compositions for a fee of $500.  The agreement can be renewed for up to two additional years for a fee of $500 for the first renewal year and $750 for the second renewal year.

On February 17, 2010, the Company entered into a twelve month consulting agreement with an unrelated third party effective February 17, 2010.  In exchange for the services provided, the Company issued 1,000,000 shares of common stock having a fair value of $1,240,000 ($1.24/share) based upon fair value on the date of grant (See Note 7(B)).

On June 1, 2010, the Company entered into a twelve month consulting agreement to provide for consulting and business services in raising capital.  The Company agrees to pay a finder’s fee on all capital raised in stock and warrants.  The Company paid an initial nonrefundable retainer fee by issuing 40,000 shares of stock having a value of $10,000 ($0.25/share) based upon fair value on the date of the agreement.  In conjunction with the stock payment, the Company also issued one warrant attached to each share of stock exercisable at $0.50 per warrant.  Based upon the number of shares (40,000 shares) of stock issued, the Company issued 40,000 warrants (See Note 7(B) and (C).

F-29

MAX SOUND CORPORATION (f/k/a SO ACT NETWORK, INC.)

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2011

(UNAUDITED)

On May 11, 2010, the Company acquired the rights to an audio technology known as Max Audio Technology (Max) through a share exchange, whereby the Company issued 30,000,000 shares of common stock to two individuals in exchange for their rights in Max having a value of $7,500,000 based upon recent market value ($0.25/share).  (See Note 7(H)).

In accordance with the share exchange, the former owners to the rights of Max became Executives of the Company.  The two new executives individually entered into employment agreements with the Company on May 11, 2010.  The term of the employment agreements are for ten years of service at a monthly compensation of $8,500 for each executive.  In addition, the Executives are entitled to receive 5% of all revenues derived from the sale of all products and services related to the Max Audio Technology.  On January 2, 2011, the agreement was cancelled.

On April 15, 2010, the Company entered into a finder’s fee agreement.  For each qualified investor introduced to the Company by the consultant, the Company will pay a 10% fee in cash equal to 10% of the dollar amount of securities purchased,  In addition, the Company will pay a 10% fee in warrants equal to 10% of the number of shares of stock purchased (See Note 7(C)).

On August 8, 2010, the Company entered into a consulting agreement with an unrelated third party to provide consulting services.  Upon the execution of the agreement the consultant received 100,000 shares of common stock.  A monthly issuance of 100,000 shares of common stock will be issued as a compensation of services provided.  The term of the agreement is for three months and will continue to renew for three month intervals unless cancelled by either party.  The agreement was cancelled on November 1, 2010 (See Note 7(B)).

On August 17, 2010, the Company entered into a consulting agreement.  The agreement shall remain in effect until terminated.  In exchange for the services provided, the consultant will receive a $500 a month allowance for general expenses.  In addition, for all the new business brought to the Company the consultant will receive a 10% compensation for each gross dollar received by the Company.  On February 15, 2011, the Company terminated the agreement.

On December 14, 2010, the Company entered into to a consulting agreement for consulting and advertising services.  Upon the execution of the agreement, the consultant received 250,000 shares with an additional 750,000 shares to be issued upon consultant obtaining sponsorship rights in the year 2011.  The sponsorship rights were not obtained and the agreement was cancelled in 2011 and the additional 750,000 shares were never issued (See Note 7(B)).

F-30

MAX SOUND CORPORATION (f/k/a SO ACT NETWORK, INC.)

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2011

(UNAUDITED)

On February 17, 2011, the Company entered into a consulting agreement for public relations and communications services.  In exchange for the services provided, the consultant received 500,000 shares of common stock. The term of the agreement is for one year.

On March 3, 2011, the Company entered into a consulting agreement for public relations and communications services.  In exchange for the services provided, the consultant received 1,000,000 shares of common stock. The term of the agreement is for one year.

On July 1, 2011, the Company entered into a consulting agreement with an unrelated third party for trade show services.  In exchange for the services provided, the consultant received 6,500 shares of common stock at $0.08/per share. The agreement was for one-time services. (See Note 7(B)).

On June 10, 2011, the Company entered into a five year advisory board consulting agreement with three persons to provide for consulting and business services.  In exchange for the services provided, the consultants received 100,000 shares of common stock each.  (See Note 7(B)).

On June 15, 2011, the Company entered into a consulting agreement with an unrelated third party for software and computer technology services.  In exchange for the services provided, the consultant will be paid $70 per hour with $50 per hour paid in cash and $20 per hour paid in Company stock at $0.10 per share.  The term of the agreement is for one year. (See Note 7(B)).

In September 2011, the Company entered into a five year advisory board consulting agreement with two individuals to provide for consulting and business services.  In exchange for the services provided, each consultant received 100,000 shares of Company stock at $0.23 and $0.33 per share.  The terms of the agreements are for five years. (See Note 7(B)).

In September 2011, the Company entered into a five year advisory board consulting agreement with two individuals to provide for consulting and business services.  In exchange for the services provided, each consultant received 50,000 shares of Company stock at $0.39 per share.  The terms of the agreements are for five years. (See Note 7(B)).

During the three months ended September 30, 2011, the Company entered into an agreement with an unrelated third party for software and computer technology services. In exchange for the services provided, the consultant received 34,053 shares of common stock at $0.10 – $0.39 per share. The term of the agreement is for one year. (See Note 7(B)).

F-31

MAX SOUND CORPORATION (f/k/a SO ACT NETWORK, INC.)

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2011

(UNAUDITED)

In July of 2011, the Company entered into a finder’s fee agreement with third party consultants.  For each qualified investor introduced to the Company by the consultants, the Company will pay a 10% fee in cash equal to 10% of the dollar amount of securities purchased,  In addition, the Company will pay a 10% fee in warrants equal to 10% of the number of shares of stock purchased (See Note 7(C)).

On September 21, 2011, the Company entered into a consulting agreement with an unrelated third party for investor relation services.  In exchange for the services provided, the consultant received 400,000 shares of Company stock at $0.25 per share.  The term of the agreement is for six months. (See Note 7(B)).

(C) Operating Lease Agreements

On September 1, 2010 the Company executed a three-year non-cancelable operating lease for its new corporate office space. The lease began on October 1, 2010 and expires on September 30, 2013.  Total base rent due during the term of the lease is $134,880.

NOTE 9              RELATED PARTY TRANSACTIONS

During the year ended December 31, 2008, the Company received $18,803 from the principal stockholder.  Pursuant to the terms of the loan, the loan is bearing an annual interest rate of 3.25% and due on demand.  In 2008, the Company repaid $15,000 in principal to the principal stockholder.  In 2009, the Company repaid $3,803 in principal to the principal stockholder.  As of December 31, 2010, the principal portion of this principal stockholder loan balance has been repaid (See Note 3).

On May 11, 2009, the Company received $9,500 from a principal stockholder. During the year ended December 31, 2009, the Company repaid $1,500 in principal to the principal stockholder.  Pursuant to the terms of the loan, the loan is bearing an annual interest rate of 3.25% and is due on demand (See Note 3).

On May 22, 2009, the Company received $15,000 from a principal stockholder.  In January of 2010, the Company repaid $3,000 in principal to a principal stockholder under the terms of the loan.  In June of 2010, the Company repaid $3,000 in principal to the principal stockholder under the terms of the loan.  Pursuant to the terms of the loan, the loan is bearing an annual interest rate of 3.25% and is due on demand (See Note 3).

On May 26, 2009, the Company received $16,700 from a principal stockholder.  In May of 2010, the Company repaid $15,700 in principal to the principal stockholder under the terms of this loan.  Pursuant to the terms of the loan, the loan is bearing an annual interest rate of 3.25% and is due on demand (See Note 3).

As of September 30, 2011, the Company owes $18,000 in principal and $2,072 of accrued interest to the principal stockholder related to these principal loans (See Note 3).

F-32

MAX SOUND CORPORATION (f/k/a SO ACT NETWORK, INC.)

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2011

(UNAUDITED)

On May 28, 2009, the Company entered into a two year line of credit agreement with a principal stockholder in the amount of $100,000.  The line of credit carries an interest rate at 3.25%.  As of September 30, 2011, the principal shareholder has advanced the Company $100,000 and was repaid $100,000 under the terms of this line of credit agreement (See Note 4).

On November 10, 2009, the Company entered into a two year line of credit agreement with a principal stockholder in the amount of $100,000.  The line of credit carries an interest rate at 3.25%.  As of September 30, 2011, the principal shareholder has advanced $100,000 to the Company and was repaid $100,000 under the terms of this line of credit agreement (See Note 4).

On March 25, 2010, the Company entered into a two year line of credit agreement with the principal stockholder in the amount of $500,000.  The line of credit carries an interest rate of 3.25%.  On February 17, 2011, the principal stockholder converted $100,000 of the line of credit owed into 909,091 shares of common stock at $0.11 per share.  As of September 30, 2011, the principal stockholder has advanced $276,680 to the Company and was repaid $163,550 under this line of credit agreement (See Note 7(G) and Note 4).

As of September 30, 2011, the Company owes $13,130 in principal and $11,283 of accrued interest to the principal stockholder related to these lines of credit (See Note 4).

On October 14, 2008, the Company issued 44,900,000 shares of common stock to its founder having a fair value of $44,900 ($0.001/share) in exchange for services provided.  As a result of the forward split, the 44,900,000 shares were increased to 179,600,000 shares and its purchase price was similarly adjusted to $0.00025 (See Note 7(B) and Note 7(D)).

On October 13, 2008, the Company executed an employment agreement with its President and CEO.  The term of the agreement is ten years.  As compensation for services, the President will receive a monthly compensation of $18,000 beginning October 13, 2008.  In addition, to the base salary, the employee is entitled to receive a 10% commission of all sales of the Corporation.  The agreement also calls for the employee to receive health benefits (See Note 8(A)).

On June 2, 2010, a principal stockholder converted $283,652 of accrued compensation into 945,507 shares of common stock at $0.30 per share.  (See Note 7(G)).

On February 17, 2011, a principal stockholder converted $144,000 of accrued compensation into 1,309,091 shares of common stock at $.0.11 per share. (See Note 7(G)).

During the fourth quarter of 2008, the principal stockholder contributed office space with a fair market value of $2,913 (See Note 7(F)).

F-33

MAX SOUND CORPORATION (f/k/a SO ACT NETWORK, INC.)

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2011

(UNAUDITED)

For the year ended December 31, 2009, the principal stockholder contributed office space with a fair market value of $12,600 (See Note 7(F)).

For the year ended December 31, 2010, the principal stockholder contributed office space with a fair value of $9,450 (See Note 7(F)).

NOTE 10            SUBSEQUENT EVENTS

In preparing these financial statements, the Company has evaluated events and transactions for potential recognition or disclosure as follows:

During October 2011, the Company issued 100,000 shares of common stock for consulting services having a fair value of $47,000 ($0.47/share).

On October 1, 2011, the Company issued 3,795 shares of common stock for research and development services having a fair value of $1,784 ($0.47/share).

On October 28, 2011, the Company issued 100,000 shares of common stock for consulting services having a fair value of $88,000 ($0.88/share).

During October 2011, the Company repaid $13,130 principal and $11,370 of accrued interest related to the related party line of credit.

F-34

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following plan of operation provides information which management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read along with our financial statements and notes thereto. This section includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our predictions.

Corporate History and Structure

We were incorporated in the State of Delaware as of December 9, 2005 as 43010, Inc. to engage in any lawful corporate undertaking, including, but not limited to, locating and negotiating with a business entity for combination in the form of a merger, stock-for-stock exchange or stock-for-assets exchange. On October 7, 2008, pursuant to the terms of a stock purchase agreement, Mr. Greg Halpern purchased a total of 100,000 shares of our common stock from Michael Raleigh for an aggregate of $30,000 in cash. The total of 100,000 shares represented 100% of our issued and outstanding common stock at the time of the transfer. As a result, Mr. Halpern became our sole shareholder. As part of the acquisition, and pursuant to the Stock Purchase Agreement, Michael Raleigh, our then President, CEO, CFO, and Chairman resigned from all the positions he held in the company, and Mr. Halpern was appointed as our President, CEO CFO and Chairman. The original business model was developed by Mr. Halpern in September of 2008 and began when he joined the company on October 7, 2008. In October 2008, we became a development stage company focused on creating an Internet search engine and networking web site. 

In May of 2010, we acquired the worldwide rights to all fields of use for Max Sound HD Audio technology. In November of 2010, we opened our post-production facility for Max Sound HD Audio in Santa Monica California.  On January 17, 2011, Greg Halpern resigned as our CEO and we entered into an employment agreement with John Blaisure to serve as our new CEO.  In February of 2011, after several successful demonstrations of our Max Sound Audio technology to various multi-media industry company executives, we decided to shift the focus of the Company to the Max Sound HD Audio technology and commenced the name change from So Act Network, Inc. to Max Sound Corporation and the symbol from SOAN to MAXD.

The Company is in negotiations with several multi-media companies that will utilize our HD Audio solution in the future.

A new video is currently available on the company website at http://www.maxsound.com. The Max Sound® Technology Highlights Video is 10 minutes long and summarizes the HD Audio™ process including meeting the inventor of the technology and showing the need for high definition audio in several key vertical markets.

Plan of Operation

We began our operations on October 8, 2008 when we purchased the Form 10 Company from the previous owners.  Since that date, we have completed financing to raise initial start-up money for the building of our internet search engine and social networking and to start our operations.  

We have also received three loans from Mr. Greg Halpern, in the amount of $9,500, $15,000 and $16,700 on May 11, May 22, and May 26, 2009, respectively.  Each of the loans bears an interest rate equal to the prime rate as of the date of issuance.  As of September 30, 2011, the Company owes $18,000 in principal and $2,072 in accrued interest on these loans.

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We have also entered into three Credit Line Agreements with Greg Halpern.  The first two have a $0 principal balance and one expired in May of 2011, and the second expires in November of 2011.  The third Credit Line Agreement issued by Mr. Halpern in March 2010 is for an additional $500,000 and will mature in 2012.  All three agreements accrue interest at the prime rate as of the date of issuance.  The prime rate of interest is the rate of interest that major banks charge their most creditworthy customers.  For the purposes of these agreements, we shall determine the prime rate by using the prime rate reported by the Wall Street Journal on the date funds are extended to the Company.  Based on the prime rate as of the date of issuance, the prime rate shall be 3.25%.  As of September 30, 2011, the Company owes $13,130 in principal and $11,283 in accrued interest related to the third line of credit. Although, we believe that the $13,130 already used and the$486,870 remaining on the third line of credit along with the capital raised by the funding campaign in the summer of 2011 will allow the Company to cover the additional expense arising from maintenance of our regulatory filings with the SEC, the development of our technology, and will allow for the Company to continue marketing the Max Sound HD Audio Technology to Multi-Media Industry Users of Audio and Audio with Video products.

In 2011, the Company has received from Mr. Halpern additional net advances on the established lines of credit in the amount of $134,150 and forgiveness of amounts owed to Mr. Halpern of $244,000 through conversion of debt notes and accrued salary into shares at $0.11 cents per share.  This further demonstrates our Chairman’s three-year long and ongoing commitment thus far to continue financing the Company’s needs.  While the Company expects to have ongoing needs for additional financing, the amount of those needs is not clearly established as the Company moves forward.

In February of 2011, management shifted the primary focus of the Company to the marketing of the Max Sound HD Audio Technology.  The Company believes that Max Sound HD Audio Technology is a game changer for several vertical markets whose demand will create revenue opportunities in the fourth quarter of 2011 that will meet the Company’s needs to eliminate its going concern status in 2012.

We expect our financial requirements to increase with the additional expenses needed to promote the Max Sound® Audio technology.  We plan to fund these additional expenses by loans from Mr. Halpern based on existing lines of credit and we are also considering various private funding opportunities until such time that our revenue stream is adequate enough to provide the necessary funds.

In the event that we are unable to obtain additional funding or Mr. Halpern either fails to extend us more financing, declines to loan additional cash, declines to fund the line of credit, declines to defer his salary payments, or seeks repayment of his existing loans, we will no longer be able to continue to operate and will have to cease operations unless we begin to generate sufficient revenue to cover our costs.

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Results of Operations

The following tables set forth key components of our results of operations for the periods indicated, in dollars, and key components of our revenue for the period indicated, in dollars.

	For the three months Ended September 30,
	2011			2010
Revenue	$	3,000		$	7,576
Operating Expenses
General and Administrative		132,761			93,619
Endorsement Fees *		754,000			443,362
Consulting Fees *		394,541			11,449
Professional Fees		34,439			45,438
Website Development		-			-
Compensation		66,000			54,000
Total Operating Expenses		1,381,741			647,868
Loss from Operations		(1,378,741	)		(640,292	)
Other Income / (Expense)
Interest Income		278			-
Interest Expense		(258	)		(2,590	)
Amortization of Debt Discount		(5,288	)		(2,194	)
Change in fair value of embedded derivative liability		54,870			(51	)
Total Other Income / (Expense)		49,602			(4,835	)
Provision for Income  Taxes		-			-
Net Loss	$	(1,329,139	)	$	(645,127	)
Net Loss Per Share  - Basic and Diluted	$	(0.01	)	$	(0.00	)
Weighted average number of shares outstanding
during the year Basic and Diluted		251,117,752			219,991,814

* The line items Endorsement Fees and Consulting Fees represent mainly non-recurring compensation in the form of stock at the then current market value at the time of entering into the services agreement.

For the three months ended September 30, 2011 and for the three months ended September 30, 2010

General and Administrative Expenses: Our general and administrative expenses were $132,761 for the three months ended September 30, 2011 and $93,619 for the three months ended September 30, 2010, representing an increase of $39,142 or approximately 41.80%, as a result of our expenses on the general operation of the Company including increases due to the renting and operation of our sound studio and decreases due to less marketing of our social networking website.

Endorsement Fees:  Our endorsement fees were $754,000 for the three months ended September 30, 2011 and $443,362 for the three months ended September 30, 2010, representing an increase of $310,638 or approximately 70.06% as a result of the acceleration in expensing of the remaining multi-year consulting agreements related to the marketing of our social networking website which was abandoned on August 16, 2011.

Consulting Fees:  Our consulting fees were $394,541 for the three months ended September 30, 2011 and $11,449 for the three months ended September 30, 2010, representing an increase of $383,092 or approximately 3346.07% as a result of an increase in the members of the advisory board, the use of consultants to assist the Company in raising capital, and the promotion of the Max Sound Technology as well as a  decrease in our use of consultants needed for promotional and marketing services related to our social networking website.

Professional Fees: Our professional fees were $34,439 for the three months ended September 30, 2011 and $45,438 for the three months ended September 30, 2010, representing a decrease of $10,999 or approximately 24.20% as a result of greater efficiencies by the Company in the quarter fulfillment of its regulatory obligations.

Website Development: Our website development expenses were $0 for the three months ended September 30, 2011 and $0 for the three months ended September 30, 2010, due to our discontinuance of the development and hosting services related to our former social networking website.

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Compensation: Our compensation expenses were $66,000 for the three months ended September 30, 2011 and $54,000 for the three months ended September 30, 2010, as a result of our expensing of monthly compensation to our President and CFO, and to our CEO pursuant to their employment agreements.

Net Loss: Our net loss for the three months ended September 30, 2011 and 2010, were $1,329,139, compared to $645,127, respectively. The increase in net loss was the result of the expenses associated with the abandonment of our social networking website and the increased operational expenses in marketing our Max Sound technology.

The following tables set forth key components of our results of operations for the periods indicated, in dollars, and key components of our revenue for the period indicated, in dollars.

	For the nine months Ended September 30,
	2011			2010
Revenue	$	3,000			9,934
Operating Expenses
General and Administrative		201,896			162,165
Endorsement Fees *		1,573,273			1,358,419
Consulting Fees *		2,776,647			2,770,108
Professional Fees		101,998			98,956
Website Development		-			159,409
Compensation		174,000			162,000
Total Operating Expenses		4,827,814			4,711,057
Loss from Operations		(4,824,814)			(4,701,123	)
Other Income/(Expense)
Interest Income		303
Interest Expense		(5,940	)		(6,685	)
Amortization of Debt Discount		(14,659	)		(2,194	)
Change in fair value of embedded derivative liability		22,785			(51	)
Total Other Income/(Expense)		2,489			(8,930	)
Provision for Income  Taxes		0			0
Net Loss	$	(4,822,325	)	$	(4,710,053	)
Net Loss Per Share  - Basic and Diluted	$	(0.02	)	$	(0.02	)
Weighted average number of shares outstanding
during the year Basic and Diluted		234,195,631			205,006,017

* The line items Endorsement Fees and Consulting Fees represent mainly non-recurring compensation in the form of stock at the then current market value at the time of entering into the services agreement.

5

For the nine months ended September 30, 2011 and for the nine months ended September 30, 2010

General and Administrative Expenses: Our general and administrative expenses were $201,896 for the nine months ended September 30, 2011 and $162,165 for the nine months ended September 30, 2010, representing an increase of $39,731 or approximately 24.5% as a result of our expenses on the general operation of the Company including increases due to the renting and operation of our sound studio and decreases due to less marketing of our social networking website.. 

Endorsement Fees:  Our endorsement fees were $1,573,273 for the nine months ended September 30, 2011 and $1,358,419 for the nine months ended September 30, 2010, representing an increase of $214,854 or approximately 15.81% as a result of the acceleration in expensing of the remaining multi-year consulting agreements related to the marketing of our social networking website which was abandoned on August 16, 2011.

Consulting Fees:  Our consulting fees were $2,776,647 for the nine months ended September 30, 2011 and $2,770,108 for the nine months ended September 30, 2010, representing an increase of $6,539 or approximately .23% as a result of the an increase in the members of the advisory board, the use of consultants to assist the Company in raising capital, and the promotion of the Max Sound Technology, as well as a  decrease in our use of consultants needed for promotional and marketing services related to our social networking website.

Professional Fees: Our professional fees were $101,998 for the nine months ended September 30, 2011 and $98,956 for the nine months ended September 30, 2010, representing an increase of $3,042 or approximately 3.07% as a result of the increased expenses associated with the conversion to XBRL to fulfill the Company’s regulatory obligations.

Website Development: Our website development expenses were $0 for the nine months ended September 30, 2011 and $159,409 for the nine months ended September 30, 2010, representing a decrease of $159,409 or 100% due to our discontinuance of development and hosting services related to our former social networking website.

Compensation: Our compensation expenses were $174,000 for the nine months ended September 30, 2011 and $162,000 for the nine months ended September 30, 2010, as a result of our expensing of monthly compensation to our President and CFO, and our CEO pursuant to employment agreements.

Net Loss: Our net loss for the nine months ended September 30, 2011 and 2010, were $4,822,325, compared to $4,710,053, respectively. The increase in net loss was the result of the expenses associated with the abandonment of our social networking website and the increased operational expenses in marketing our Max Sound technology.

Liquidity and Capital Resources

As reflected in the accompanying financial statements, the Company is in the development stage with minimal operations.  Revenue was $3,000 and $7,576 for the three months ended September 30, 2011 and 2010, respectively. We have an accumulated deficit of $13,690,662 for the period from December 9, 2005 (inception) to September 30, 2011, and have negative cash flow from operations of $1,132,202 from inception.  

Our financial statements have been presented on the basis that it is a going concern, which contemplates the realization of revenues from our subscriber base and the satisfaction of liabilities in the normal course of business. We have incurred losses from inception. These factors raise substantial doubt about our ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company's ability to raise additional capital and implement its business plan. The financial statements do not include any adjustments that would be necessary if the Company is unable to continue as a going concern.

Management believes the actions presently being taken to obtain additional funding and implement its strategic plans provide for the Company to continue as a going concern.

From our inception through September 30, 2011, our primary source of funds has been the proceeds of private offerings of our common stock and loans from our principal stockholder. Our need to obtain capital from outside investors is expected to continue until we are able to achieve profitable operations, if ever. There is no assurance that management will be successful in fulfilling all or any elements of its plans.  

6

We have received three loans from Mr. Greg Halpern, in the amount of $9,500, $15,000 and $16,700 on May 11, May 22, and May 26, 2009, respectively. During the nine months ended September 30, 2011, the Company repaid $23,200 in principal to the principal stockholder. Each of these loans is due upon demand and accrue interest at the prime rate as of the date of issuance. The prime rate of interest is the rate of interest that major banks charge their most creditworthy customers. For the purposes of this agreement, we shall determine the prime rate by using the prime rate reported by the Wall Street Journal on the date funds are extended to the Company. Based on the prime rate as of the date of issuance, we have determined that the prime rate shall be 3.25%. As of September 30, 2011, we owed $18,000 in principal and $2,072 in accrued interest.

We have entered into three lines of credit with our principal stockholder, Mr. Greg Halpern, in the amount of $100,000, $100,000, and $500,000, respectively. Pursuant to the lines of credit agreements, the lines of credits bear an annual interest rate of 3.25% and are due on May 29, 2011, November 11, 2011, and March 25, 2012.  As of September 30, 2011, we owe $13,130 in principal and accrued interest of $11,283 related to these lines of credit

On October 13, 2008, the Company entered into an employment agreement with the principal stockholder whereby the principal stockholder would be paid $18,000 per month for a term of ten (10) years for services rendered as the Chief Executive Officer of the Company.

On February 17, 2011 the Company’s Board authorized the issuance and conversion of 2,218,182 shares of par value $.0001 common stock at $0.11 per share as payment to the principal stockholder for conversion of $100,000 of the debt outstanding and $144,000 in accrued wages payable. Pursuant to the Board’s authorization and resulting issuance of shares, the principal shareholder has entered into an agreement (the “Conversion Agreement”) with the Company relinquishing the Company from any further obligation to the principal shareholder with respect to $100,000 of the note payable.

Recent Accounting Pronouncements

There are no new accounting pronouncements that are expected to have a material impact on the Company's financial position or results of operations.

Critical Accounting Policies and Estimates

Our financial statements and related public financial information are based on the application of accounting principles generally accepted in the United States (“GAAP”). GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenues and expense amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use of estimates and underlying accounting assumptions adhere to

GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements.

Use of Estimates:In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported period.  Actual results could differ from those estimates.

Revenue Recognition:  Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable and collectability is assured.  We had $3,000 and $7,576 in revenue for the three months ended September 30, 2011 and 2010, respectively.

7

Stock-Based Compensation:

In December 2004, the FASB issued FASB Accounting Standards Codification No. 718, Compensation – Stock Compensation.  Under FASB Accounting Standards Codification No. 718, companies are required to measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share-based compensation arrangements include stock options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. As such, compensation cost is measured on the date of grant at their fair value. Such compensation amounts, if any, are amortized over the respective vesting periods of the option grant. The Company applies this statement prospectively.

Equity instruments (“instruments”) issued to other than employees are recorded on the basis of the fair value of the instruments, as required by FASB Accounting Standards Codification No. 718.  FASB Accounting Standards Codification No. 505, Equity Based Payments to Non-Employees defines the measurement date and recognition period for such instruments.  In general, the measurement date is when either a (a) performance commitment, as defined, is reached or (b) the earlier of (i) the non-employee performance is complete or (ii) the instruments are vested. The measured value related to the instruments is recognized over a period based on the facts and circumstances of each particular grant as defined in the FASB Accounting Standards Codification.

Derivative Financial Instruments

Fair value accounting requires bifurcation of embedded derivative instruments such as conversion features in convertible debt or equity instruments, and measurement of their fair value for accounting purposes. In determining the appropriate fair value, the Company uses the Black-Scholes option-pricing model.  In assessing the convertible debt instruments, management determines if the convertible debt host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement.  If the instrument is not considered conventional convertible debt, the Company will continue its evaluation process of these instruments as derivative financial instruments.

Once determined, derivative liabilities are adjusted to reflect fair value at each reporting period end, with any increase or decrease in the fair value being recorded in results of operations as an adjustment to fair value of derivatives.  In addition, the fair value of freestanding derivative instruments such as warrants, are also valued using the Black-Scholes option-pricing model.  

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements, financings, or other relationships with unconsolidated entities or other persons, also known as “special purpose entities” (SPEs).

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not required for Smaller Reporting Companies.

Item 4.  Controls and Procedures

Disclosure controls and procedures.Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”), the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s principal executive officer and principal financial officer of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Company’s principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in internal control over financial reporting. There have been no changes in our internal control over financial reporting that occurred during the quarter covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

8

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

Item 1A. Risk Factors.

Not required for smaller reporting companies.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Removed and Reserved.

None.

Item 5. Other Information.

None

Item 6. Exhibits

              31.1 Certification of Principal Executive Officer of the Registrant pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

              31.2 Certification of Principal Financial Officer of the Registrant pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

              32.1 Certification of Principal Executive Officer of the Registrant pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

              32.2 Certification of Principal Financial Officer of the Registrant pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 101  Interactive Data File (Form 10-Q for the quarterly period ended September 30, 2011 furnished in XBRL).

In accordance with SEC Release 33-8238, Exhibits 32.1 and 32.2 are being furnished and not filed.

9

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Dated: November 14, 2011	MAX SOUND CORPORATION
	By:	/s/John Blaisure
		John Blaisure President and Chief Executive Officer (Duly Authorized Officer and Principal Executive Officer)

By:	/s/Greg Halpern
	Greg Halpern Chief Financial Officer (Duly Authorized Officer and Principal Financial Officer)

10

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, John Blaisure, certify that:

1. I have reviewed this Form 10-Q of Max Sound Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods present in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13-a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principals;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financing reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involved management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Max Sound Corporation
By:	/s/ John Blaisure
	John Blaisure
	President and Chief Executive Officer
	(Principal Executive Officer)

November 14, 2011

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Greg Halpern, certify that:

1. I have reviewed this Form 10-Q of Max Sound Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods present in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13-a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principals;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financing reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involved management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Max Sound Corporation

By:	/s/ Greg Halpern
	Greg Halpern
	Chief Financial Officer
	(Principal Financial Officer)

November 14, 2011

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Max Sound Corporation (the “Company”) on Form 10-Q for the period ended September 30, 2011 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John Blaisure, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.	The information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and result of operations of Max Sound Corporation

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

Max Sound Corporation
By:	/s/ John Blaisure
	John Blaisure
	President and Chief Executive Officer
	(Principal Executive Officer)

Date: November 14, 2011

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Max Sound Corporation (the “Company”) on Form 10-Q for the period ended September 30, 2011 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Greg Halpern, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.	The information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and result of operations of Max Sound Corporation

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

Max Sound Corporation

By:	/s/ Greg Halpern
	Greg Halpern
	Chief Financial Officer
	(Principal Financial Officer)

Date: November 14, 2011

XML

Condensed Balance Sheets ( Parenthentical) (Unaudited) (USD $)	Sep. 30, 2011	Dec. 31, 2010
Statement of Financial Position [Abstract]
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	400,000,000	400,000,000
Common stock, shares issued	254,560,866	221,055,221
Common stock, shares outstanding	254,560,866	221,055,221

XML

Statements of Operations (Unaudited) (USD $) Share data in Thousands, except Per Share data	3 Months Ended		9 Months Ended		70 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011
Revenue	$ 3,000	$ 7,576	$ 3,000	$ 9,934	$ 13,826
Operating Expenses
General and administrative	132,761	93,619	201,896	162,165	569,675
Endorsement fees	754,000	443,362	1,573,273	1,358,419	4,942,277
Consulting	394,541	11,449	2,776,647	2,770,108	6,823,840
Professional fees	34,439	45,438	101,998	98,956	321,374
Website development	0	0	0	159,409	251,263
Compensation	66,000	54,000	174,000	162,000	649,549
Total Operating Expenses	1,381,741	647,868	4,827,814	4,711,057	13,557,978
Loss from Operations	(1,378,741)	(640,292)	(4,824,814)	(4,701,123)	(13,544,152)
Other Income / (Expense)
Interest income	278	0	303	0	303
Gain on extinguishment of debt	0	0	0	0	6,643
Interest expense	(258)	(2,590)	(5,940)	(6,685)	(17,001)
Amortization of Debt Discount	(5,288)	(2,194)	(14,659)	(2,194)	(24,932)
Change in fair value of embedded derivative liability	54,870	(51)	22,785	(51)	24,932
Total Other Income / (Expense)	49,602	(4,835)	2,489	(8,930)	(10,055)
Provision for Income Taxes	0	0	0	0	0
Net Loss	$ (1,329,139)	$ (645,127)	$ (4,822,325)	$ (4,710,053)	$ (13,554,207)
Net Loss Per Share - Basic and Diluted	$ (0.01)	$ 0	$ (0.02)	$ (0.02)
Weighted average number of shares outstanding during the year Basic and Diluted	251,117,752	219,991,814	234,195,631	205,006,017

XML

Document and Entity Information	9 Months Ended
	Sep. 30, 2011	Nov. 14, 2011
Document and Entity Information [Abstract]
Entity Registrant Name	Max Sound Corp
Entity Central Index Key	0001353499
Document Type	10-Q
Document Period End Date	Sep. 30, 2011
Amendment Flag	false
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	Q3
Current Fiscal Year End Date	--12-31
dei_EntityVoluntaryFilers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		254,764,661
Trading Symbol	maxd

XML

Property and Equipment

9 Months Ended

Sep. 30, 2011

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment Disclosure [Text Block]

NOTE 5 PROPERTY AND EQUIPMENT

At September 30, 2011, and December 31, 2010, respectively, property and equipment is as follows:

	September 30, 2011			December 31, 2010
Website Development	$	112,722		$	112,722
Furniture and Equipment		70,343			-
Leasehold Improvements		5,167			-
Software		11,820			400
Office Equipment		2,185			2,185
Domain Name		1,500			1,500
Less accumulated depreciation and amortization		(115,864	)		(51,437	)
	$	87,873		$	65,370

Depreciation/amortization expense for the nine months ended September 30, 2011, and 2010, was $64,427 and $28,525, respectively.  On August 16, 2011, the Company abandoned its' social networking website and thus recorded a charge of $38,794, as part of the depreciation expense for the period ended September 30, 2011, which is related to the abandonment of the website.

XML

Subsequent Events

9 Months Ended

Sep. 30, 2011

Subsequent Events [Abstract]

Subsequent Events [Text Block]

NOTE 10             SUBSEQUENT EVENTS

In preparing these financial statements, the Company has evaluated events and transactions for potential recognition or disclosure as follows:

During October 2011, the Company issued 100,000 shares of common stock for consulting services having a fair value of $47,000 ($0.47/share).

On October 1, 2011, the Company issued 3,795 shares of common stock for research and development services having a fair value of $1,784 ($0.47/share).

On October 28, 2011, the Company issued 100,000 shares of common stock for consulting services having a fair value of $88,000 ($0.88/share).

During October 2011, the Company repaid $13,130 principal and $11,370 of accrued interest related to the related party line of credit.

XML

Summary of Significant Accounting Policies and Organization

9 Months Ended

Sep. 30, 2011

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Text Block]

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION

(A)   Organization and Basis of Presentation

Max Sound Corporation (f/k/a So Act Network, Inc.) (the "Company") was incorporated in Delaware on December 9, 2005.  The Company is currently in the development stage, and on or around February 2011, the Company changed its business operations to focus primarily on developing and launching audio technology software.

Prior to February 2011, the Company's business operations were focused on creating search technologies within an online networking platform.

The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in The United States of America and the rules and regulations of the Securities and Exchange Commission for interim financial information.  Accordingly, they do not include all the information necessary for a comprehensive presentation of financial position and results of operations.

It is management's opinion, however, that all material adjustments (consisting of normal and recurring adjustments) have been made which are necessary for a fair financial statements presentation.  The results for the interim period are not necessarily indicative of the results to be expected for the year.

Effective March 1, 2011, the Company filed with the State of Delaware a Certificate of Amendment of Certificate of Incorporation changing our name from So Act Network, Inc. to Max Sound Corporation.

(B) Use of Estimates

In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported period.  Actual results could differ from those estimates.

(C) Cash and Cash Equivalents

For purposes of the cash flow statements, the Company considers all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents.  As of September 30, 2011 and December 31, 2010, the Company had no cash equivalents.

(D) Property and Equipment

Property and equipment are stated at cost, less accumulated depreciation.  Expenditures for maintenance and repairs are charged to expense as incurred.  Depreciation is provided using the straight-line method over the estimated useful life of three to five years.

(E) Research and Development

The Company has adopted the provisions of FASB Accounting Standards Codification No. 350, Intangibles – Goodwill & Other .  Costs incurred in the planning stage of a website are expensed as research and development while costs incurred in the development stage are capitalized and amortized over the life of the asset, estimated to be three years.  Expenses subsequent to the launch have been expensed as website development expenses.

(F) Revenue Recognition

The Company recognized revenue on arrangements in accordance with FASB Codification Topic 605, “Revenue Recognition” (“ASC Topic 605”).  Under ASC Topic 605, revenue is recognized only when the price is fixed and determinable, persuasive evidence of an arrangement exists, the service is performed and collectability of the resulting receivable is reasonably assured.  We had revenue of $3,000 and $9,934 for the nine months ended September 30, 2011 and 2010, respectively.

(G) Advertising Costs

Advertising costs are expensed as incurred and include the costs of public relations activities.  These costs are included in consulting and general and administrative expenses and totaled $25,170 and $13,646 for the nine months ended September 30, 2011 and 2010, respectively.

(H) Identifiable Intangible Assets

As of September 30, 2011 and 2010, $7,800,275 and $7,500,275, respectively of costs related to registering a trademark and acquiring technology rights have been capitalized.  It has been determined that the trademark and technology rights have an indefinite useful life and are not subject to amortization.  However, the trademark and technology rights will be reviewed for impairment annually or more frequently if impairment indicators arise.

(I) Loss Per Share

In accordance with accounting guidance now codified as FASB ASC Topic 260, “Earnings per Share,”   Basic earnings per share (“EPS”) is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted EPS gives effect to all dilutive potential of shares of common stock outstanding during the period including stock options or warrants, using the treasury stock method (by using the average stock price for the period to determine the number of shares assumed to be purchased from the exercise of stock options or warrants), and convertible debt or convertible preferred stock, using the if-converted method. Diluted EPS excludes all dilutive potential of shares of common stock if their effect is anti-dilutive.   Because of the Company’s net losses, the effects of stock warrants and convertible debt would be anti-dilutive and accordingly, is excluded from the computation of earnings per share.  The number of such shares excluded from the computations of diluted loss per share totaled 2,715,800 and 1,760,000 for stock warrants, 12,000,000 and 0 for stock options, and 0 and 660,502 shares issuable upon the conversion of convertible debt for the nine months ended September 30, 2011 and 2010, respectively.

(J) Income Taxes

The Company accounts for income taxes under FASB Codification Topic 740-10-25 (“ASC 740-10-25”) Income Taxes.  Under ASC 740-10-25, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.  Under ASC 740-10-25, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

(K) Business Segments

The Company operates in one segment and therefore segment information is not presented.

(L) Recent Accounting Pronouncements

There are no new accounting pronouncements that are expected to have a material impact on the Company’s financial statements.

(M) Fair Value of Financial Instruments

The carrying amounts on the Company’s financial instruments including accounts payable, accrued expenses, and loan payable-related party, approximate fair value due to the relatively short period to maturity for these instruments.

(N) Stock-Based Compensation

In December 2004, the FASB issued FASB Accounting Standards Codification No. 718, Compensation – Stock Compensation .  Under FASB Accounting Standards Codification No. 718, companies are required to measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share-based compensation arrangements include stock options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans.  As such, compensation cost is measured on the date of grant at their fair value.  Such compensation amounts, if any, are amortized over the respective vesting periods of the option grant.  The Company applies this statement prospectively.

Equity instruments (“instruments”) issued to other than employees are recorded on the basis of the fair value of the instruments, as required by FASB Accounting Standards Codification No. 718.  FASB Accounting Standards Codification No. 505, Equity Based Payments to Non-Employees defines the measurement date and recognition period for such instruments.  In general, the measurement date is when either a (a) performance commitment, as defined, is reached or (b) the earlier of (i) the non-employee performance is complete or (ii) the instruments are vested. The measured value related to the instruments is recognized over a period based on the facts and circumstances of each particular grant as defined in the FASB Accounting Standards Codification.

(O) Reclassification

Certain amounts from prior periods have been reclassified to conform to the current period presentation.  These reclassifications had no impact on the Company's net loss or cash flows.

(P) Derivative Financial Instruments

Fair value accounting requires bifurcation of embedded derivative instruments such as conversion features in convertible debt or equity instruments, and measurement of their fair value for accounting purposes.  In determining the appropriate fair value, the Company uses the Black-Scholes option-pricing model.  In assessing the convertible debt instruments, management determines if the convertible debt host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement.  If the instrument is not considered conventional convertible debt, the Company will continue its evaluation process of these instruments as derivative financial instruments.

Once determined, derivative liabilities are adjusted to reflect fair value at each reporting period end, with any increase or decrease in the fair value being recorded in results of operations as an adjustment to fair value of derivatives.  In addition, the fair value of freestanding derivative instruments such as warrants, are also valued using the Black-Scholes option-pricing model.

(Q) Concentration of Credit Risk

At September 30, 2011, 100% of sales earned was from one customer.

At September 30, 2010, 20% of sales earned were from one customer.

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Stockholders' Equity

9 Months Ended

Sep. 30, 2011

Stockholders' Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

NOTE 7 STOCKHOLDERS’ EQUITY

(A) Common Stock Issued for Cash

On December 31, 2005, the Company issued 100,000 shares of common stock for cash of $100 in exchange for acceptance of the incorporation expenses for the Company ($0.001/share).   As a result of the forward split, the 100,000 shares were increased to 400,000 shares ($0.00025/share) (See Note 7(D)).

For the year ended December 31, 2008, the Company issued 473,000 shares of common stock for cash of $118,250 ($0.25/share), of which $67,750 was a subscription receivable.   During the month of January 2009, $67,750 of stock subscription receivable was collected.  As a result of the forward split, the 473,000 shares were increased to 1,892,000 shares ($0.0625/share). (See Note 7(D)).

On January 2, 2009, the Company entered into stock purchase agreements to issue 20,000 shares of common stock for cash of $5,000 ($0.25/share).   As a result of the forward split, the 20,000 shares were increased to 80,000 shares ($0.0625/share) (See Note 7(D)).

On January 3, 2009, the Company entered into stock purchase agreements to issue 2,000 shares of common stock for cash of $500 ($0.25/share).  As a result of the forward split, the 2,000 shares were increased to 8,000 shares ($0.0625/share) (See Note 7(D)).

On January 3, 2009, the Company entered into stock purchase agreements to issue 2,000 shares of common stock for cash of $500 ($0.25/share).  As a result of the forward split, the 2,000 shares were increased to 8,000 shares ($0.0625/share) (See Note 7(D)).

On January 11, 2009, the Company entered into stock purchase agreements to issue 32,000 shares of common stock for cash of $8,000 ($0.25/share).  As a result of the forward split, the 32,000 shares were increased to 128,000 shares ($0.0625/share) (See Note 7(D)).

On January 12, 2009, the Company entered into stock purchase agreements to issue 2,000 shares of common stock for cash of $500 ($0.25/share).   As a result of the forward split, the 2,000 shares were increased to 8,000 shares ($0.0625/share) (See Note 7(D)).

On January 15, 2009, the Company entered into stock purchase agreements to issue 4,000 shares of common stock for cash of $1,000 ($0.25/share).  As a result of the forward split, the 4,000 shares were increased to 16,000 shares ($0.0625/share) (See Note 7(D)).

In February of 2009, the Company paid direct offering costs of $850 related to the securities sold in 2009.

On May 27, 2010 the Company issued one unit; each unit consisted of 100,000 shares of common stock and 100,000 warrants to purchase common stock, for cash of $22,500 net of the $2,500 finder’s fee ($0.25/share).  Each warrant is exercisable for a three year period and has an exercise price of $0.50 per share (See Note 7(C)).

On July 23, 2010, the Company issued one unit; each unit consisted of 100,000 share of common stock and 100,000 warrants to purchase common stock, for cash of $25,000 ($0.25/share).  Each warrant is exercisable for a three year period and has an exercise price of $0.50 per share (See Note 7(C).

On August 5, 2010, the Company issued 10 units; each unit consisted of 100,000 shares of common stock and 100,000 warrants to purchase common stock, for cash of $250,000 ($0.25/share).  Each warrant is exercisable for a three year period and has an exercise price of $0.50 per share (See Note 7(C).

During the year ended December 31, 2010, the Company paid direct offering costs of $2,900 related to the securities sold in 2010.

On January 24, 2011, the Company issued 10,000 shares of common stock for cash of $1,000 ($0.10/share).

On February 23, 2011, the Company issued 300,000 shares of common stock for cash of $30,000 ($0.10/share).

On March 21, 2011, the Company issued 150,000 shares of common stock for cash of $15,000 ($0.10/share).

On May 2, 2011, the Company issued 2,000,000 shares of common stock for cash of $200,000 ($0.10/share).

During the month of June 2011, the Company issued 5,460,000 shares of common stock for cash of $546,000 ($0.10/share) of which $397,000 was a subscription receivable.  The Company received the entire $397,000 of subscription receivable in July 2011.

During the months of July, August and September, the Company issued 10,937,000 shares of common stock for cash of $1,093,700 ($0.10/share).

During the nine months ended September 30, 2011, the Company paid $76,780 in finder’s fees and issued 955,800 in warrants related to the stock sold in 2011.

(B) Stock Issued for Services

On October 14, 2008, the Company issued 44,900,000 shares of common stock to its founder having a fair value of $44,900 ($0.001/share) in exchange for services provided.  As a result of the forward split, the 44,900,000 shares were increased to 179,600,000 shares and its purchase price was similarly adjusted to $0.00025((See Note 7(D) and Note 9).

On November 24, 2008, the Company issued 4,000 shares of common stock having a fair value of $1,000 ($0.25/share) in exchange for consulting services.  As a result of the forward split, the 4,000 shares were increased to 16,000 shares and its purchase price was similarly adjusted to $0.0625/share (See Note 7(D)).

On December 5, 2008, the Company issued 4,000 shares of common stock having a fair value of $1,000 ($0.25/share) in exchange for consulting services.  As a result of the forward split, the 4,000 shares were increased to 16,000 shares and its purchase price was similarly adjusted to $0.0625/share (See Note 7(D)).

On December 20, 2008, the Company issued 4,000 shares of common stock having a fair value of $1,000 ($0.25/share) in exchange for consulting services.  As a result of the forward split, the 4,000 shares were increased to 16,000 shares and its purchase price was similarly adjusted to $0.0625/share (See Note 7(D)).

On January 12, 2009, the Company issued 4,000 shares of common stock having a fair value of $1,000 ($0.25/share) in exchange for consulting services.  As a result of the forward split, the 4,000 shares were increased to 16,000 shares and its purchase price was similarly adjusted to $0.0625/share (See Note 7(D)).

On January 14, 2009, the Company issued 20,000 shares of common stock having a fair value of $5,000 ($0.25/share) in exchange for services related to a development services agreement entered on January 19, 2009.  As a result of the forward split, the 20,000 shares were increased to 80,000 shares and its purchase price was similarly adjusted to $0.0625/share (See Note 7(D) and Note 8(B)).

On August 25, 2009, the Company issued 50,000 shares of common stock having a fair value of $3,125 ($0.0625/share), based upon the fair value on the date of grant, in exchange for professional services.

On August 31, 2009, the Company issued 885,714 shares of common stock in exchange for services valued at $62,000 related to the development services agreement entered into on January 19, 2009.  Based on the most recent fair market value at that time, the shares were valued at $55,357 ($0.0625/share), resulting in the recognition of a gain on the extinguishment of debt of $6,643 (See Note 8(B)).

On September 18, 2009, the Company issued 500,000 shares of common stock as compensation pursuant to the terms of a consulting agreement, having a fair value of $175,000 ($0.35/share) based upon fair value on the date of grant.  On November 11, 2009, the Company cancelled the agreement and 300,000 shares of common stock were returned to the Company. As of December 31, 2009, $70,000 was recorded as consulting expense and $105,000 of deferred compensation was reclassified to $0 (See Note 8(B)).

On September 18, 2009, the Company issued 600,000 shares of common stock as compensation pursuant to the terms of a consulting agreement, having a fair value of $210,000 ($0.35/share) based upon fair value on the date of grant.  On November 18, 2009, the Company cancelled the agreement and 400,000 shares of common stock were returned to the Company.  As of December 31, 2009, $70,000 was recorded as consulting expense and $140,000 of deferred compensation was reclassified to $0 (See Note 8(B)).

On September 21, 2009, the Company issued 600,000 shares of common stock as compensation pursuant to the terms of a consulting agreement, having a fair value of $210,000 ($0.35/share) based upon fair value on the date of grant.  On December 18, 2009, the Company terminated the consulting agreement and 400,000 shares were returned to the Company.  As of December 31, 2009, $70,000 was recorded as consulting expense and $140,000 of deferred compensation was reclassified to $0 (See Note 8(B)).

On November 12, 2009, the Company issued 100,000 shares of common stock as compensation pursuant to the terms of the consulting agreement, having a fair value of $178,000 ($1.78/share) based upon fair value on the date of grant.  During 2009 and 2010, $11,948 and $89,000 was recorded as consulting expense, respectively.  For the nine months ended September 30, 2011, $77,052 is recorded as consulting expense and $0 is recorded as deferred compensation (See Note 8(B)).

On November 12, 2009, the Company issued 200,000 shares of common stock as compensation pursuant to the terms of the consulting agreement, having a fair value of $400,000 ($2.00/share) based upon fair value on the date of grant.  During 2009 and 2010, $22,466 and $200,000 was recorded as consulting expense, respectively.  For the nine months ended September 30, 2011, $177,534 is recorded as consulting expense and $0 is recorded as deferred compensation (See Note 8(B)).

On November 16, 2009, the Company issued 100,000 shares of common stock as compensation pursuant to the terms of the consulting agreements, having a fair value of $180,000 ($1.80/share) based upon fair value on the date of grant.  During 2009 and 2010, $11,096 and $90,000 was recorded as consulting expense, respectively.  For the nine months ended September 30, 2011, $78,904 is recorded as consulting expense and $0 is recorded as deferred compensation (See Note 8(B)).

On November 18, 2009, the Company issued 30,000 shares of common stock as compensation pursuant to the terms of the consulting agreement, having a fair value of $45,000 ($1.50/share) based upon fair value on the date of grant.  During 2009, $5,301 was recorded as consulting expense.  For the year ended December 31, 2010, $39,699 was recorded as consulting expense. (See Note 8(B)).

On November 21, 2009, the Company issued 30,000 shares of common stock as compensation pursuant to the terms of the marketing agreement, having a fair value of $53,100 ($1.77/share) based upon fair value on the date of grant.  For the year ended December 31, 2010, $53,100 was recorded as consulting expense (See Note 8(B)).

On December 3, 2009, the Company issued 240,000 shares of common stock as compensation pursuant to the terms of the consulting agreement, having a fair value of $468,000 ($1.95/share) based upon fair value on the date of grant.  As of December 31, 2009, $468,000 was recorded as consulting expense (See Note 8(B)).

On December 3, 2009, the Company issued 35,000 shares of common stock as compensation pursuant to the terms of the commission agreement, having a fair value of $68,250 ($1.95/share) based upon fair value on the date of grant.  As of December 31, 2009, $68,250 was recorded as consulting expense (See Note 8(B)).

On December 3, 2009, the Company issued 35,000 shares of common stock as compensation pursuant to the terms of the consulting agreement, having a fair value of $68,250 ($1.95/share) based upon fair value on the date of grant.  As of December 31, 2009, $68,250 was recorded as consulting expense (Note 8(B)).

On December 3, 2009, the Company issued 10,000 shares of common stock as compensation pursuant to the terms of the commission agreement, having a fair value of $19,500 ($1.95/share) based upon fair value on the date of grant.  As of December 31, 2009, $19,500 is recorded as consulting expense (See Note 8(B)).

On December 15, 2009, the Company issued 100,000 shares of common stock as compensation pursuant to the terms of the consulting agreement, having a fair value of $200,000 ($2.00/share) based upon fair value on the date of grant.  During 2009, $71,111 was recorded as consulting expense.  For the year ended December 31, 2010, $128,889 was recorded as consulting expense (See Note 8(B)).

On December 27, 2009, the Company issued 10,000 shares of common stock as compensation pursuant to the terms of the consulting agreement, having a fair value of $19,400 ($1.94/share) based upon fair value on the date of grant.  For the year ended December 31, 2010, $19,400 was recorded as consulting expense (See Note 8(B)).

On December 27, 2009, the Company issued 10,000 shares of common stock as compensation pursuant to the terms of the consulting agreement, having a fair value of $19,400 ($1.94/share) based upon fair value on the date of grant.  For the year ended December 31, 2010, $19,400 was recorded as consulting expense (See Note 8(B)).

On December 27, 2009, the Company issued 10,000 shares of common stock as compensation pursuant to the terms of the consulting agreement, having a fair value of $19,400 ($1.94/share) based upon fair value on the date of grant.  For the year ended December 31, 2010, $19,400 was recorded as consulting expense (See Note 8(B)).

On December 30, 2009, the Company issued 1,500,000 shares of common stock as compensation pursuant to the terms of the advertising agreement, having a fair value of $2,895,000 ($1.93/share) based upon fair value on the date of grant.  In 2010, the Company cancelled a portion of the agreement and as a result, 1,000,000 shares of common stock were returned to the Company.  For the year ended December 31, 2010, $965,000 was recorded as consulting expense (See Note 8(B)).

On December 31, 2009, the Company issued 75,000 shares of common stock as compensation pursuant to the terms of the consulting agreement, having a fair value of $144,750 ($1.93/share) based upon fair value on the date of grant.  For the year ended December 31, 2010, $116,374 was recorded as consulting expense.  For the nine months ended September 30, 2011, $28,376 is recorded as consulting expense (See Note 8(B)).

On December 31, 2009, the Company issued 75,000 shares of common stock as compensation pursuant to the terms of the consulting agreement, having a fair value of $144,750 ($1.93/share) based upon fair value on the date of grant.  For the year ended December 31, 2010, $116,374 was recorded as consulting expense.  For the nine months ended September 30, 2011, $28,376 is recorded as consulting expense (See Note 8(B)).

On December 31, 2009, the Company issued 500,000 shares of common stock as compensation pursuant to the terms of the consulting agreement, having a fair value of $965,000 ($1.93/share) based upon fair value on the date of grant.  For the year ended December 31, 2010, $965,000 was recorded as consulting expense (See Note 8(B)).

During December of 2009, the Company issued 680,000 shares of common stock as compensation pursuant to the terms of the consulting agreements, having a fair value of $1,312,400 ($1.93/share) based upon fair value on the date of grant.  During 2009 and 2010, $2,802 and $709,116 was recorded as consulting expense, respectively.  For the nine months ended September 30, 2011, $600,482 is recorded as consulting expense and $0 is recorded as deferred compensation (See Note 8(B)).

During December of 2009, the Company issued 600,000 shares of common stock as compensation pursuant to the terms of the consulting agreements, having a fair value of $1,170,000 ($1.95/share) based upon fair value on the date of grant.  During 2009 and 2010, $34,192 and $585,000 was recorded as consulting expense, respectively.  For the nine months ended September 30, 2011, $550,808 is recorded as consulting expense and $0 is recorded as deferred compensation (See Note 8(B)).

On January 15, 2010, the Company issued 100,000 shares of common stock as compensation pursuant to the terms of the consulting agreement, having a fair value of $170,000 ($1.70/share) based upon fair value on the date of grant.  For the year ended December 31, 2010, $81,507 was recorded as consulting expense.  For the nine months ended September 30, 2011, $88,493 is recorded as consulting expense and $0 is recorded as deferred compensation (See Note 8(B)).

On February 17, 2010, the Company entered into a twelve month consulting agreement with an unrelated third party effective February 17, 2010.  In exchange for the services provided, the Company issued 1,000,000 shares of common stock having a fair value of $1,240,000 ($1.24/share) based upon fair value on the date of grant.  For the year ended December 31, 2010, $1,066,740 was recorded as consulting expense.  For the nine months ended September 30, 2011, $173,260 is recorded as consulting expense (See Note 8(B)).

On June 1, 2010, the Company entered into a twelve month consulting agreement for consulting and business services.  As part of the agreement, the Company issued 40,000 shares as a nonrefundable retainer fee having a value of $10,000 ($0.25/share) based upon fair value on the date of the agreement.  (See Note 8(B)).

On July 23, 2010, the Company issued 10,000 shares of common stock pursuant to a consulting agreement for consulting services having a fair value of $2,000 ($0.20/share) based upon fair value on the grant date (See Note 8(B)).

On August 1, 2010, the Company issued 200,000 shares of common stock pursuant to a consulting agreement for consulting services having a fair value of $40,000 ($0.20/share) based upon fair value on the grant date (See Note 8(B)).

On September 1, 2010, the Company issued 100,000 shares of common stock pursuant to a consulting agreement for consulting services having a fair value of $19,000 ($0.19/share) based upon fair value on the grant date (See Note 8(B)).

On October 1, 2010, the Company issued 100,000 shares of common stock pursuant to a consulting agreement for consulting services having a fair value of $18,000 ($0.18/share) based upon fair value on the grant date (See Note 8(B)).

On November 1, 2010, the Company issued 100,000 shares of common stock pursuant to a consulting agreement for consulting services having a fair value of $25,000 ($0.25/share) based upon fair value on the grant date (See Note 8(B)).

On December 14, 2010, the Company issued 250,000 shares of common stock pursuant to a consulting agreement for consulting services having a fair value of $37,500 ($0.15/share) based upon fair value on the grant date (See Note 8(B)).

On January 17, 2011, the Company issued 3,000,000 shares of common stock to its' new CEO pursuant to an employment agreement having a fair value of $300,000 ($0.10/share) based upon fair value on the grant date.  (See Note 8(A)).

On February 17, 2011, the Company issued 500,000 shares of common stock pursuant to a consulting agreement for consulting services having a fair value of $55,000 ($0.11/share) based upon fair value on the grant date (See Note 8(B)).

On March 3, 2011, the Company issued 1,000,000 shares of common stock pursuant to a consulting agreement for consulting services having a fair value of $80,000 ($0.08/share) based upon fair value on the grant date (See Note 8(B)).

On May 17, 2011, the Company issued 2,000,000 shares of common stock pursuant to an employment agreement having a fair value of $140,000 ($0.07/share) based upon fair value on the grant date.  (See Note 8(A)).

During June 2011, the Company issued 300,000 shares of common stock pursuant to  consulting agreements for consulting services having a fair value of $75,000 ($0.25/share) based upon fair value on the grant date (See Note 8(B)).

On June 15, 2011, the Company issued 15,980 shares of common stock pursuant to a consulting agreement for consulting services having a fair value of $1,598 ($0.10/share) based upon the terms of the consulting agreement (See Note 8(B)).

On July 1, 2011, the Company issued 6,500 shares of common stock pursuant to a consulting agreement for marketing and promotional services having a fair value of $520 ($0.08/share) based upon the terms of the consulting agreement (See Note 8(B)).

During July and August of 2011., the Company issued 50,482 shares of common stock pursuant to two consulting agreement for consulting services having a fair value of $5,048 ($0.10/share) based upon the terms of the consulting agreements (See Note 8(B)).

On August 14, 2011, the Company issued 2,443 shares of common stock pursuant to a consulting agreement for consulting services having a fair value of $855 ($0.35/share) based upon the terms of the consulting agreement (See Note 8(B)).

On September 12, 2011, the Company issued 2,860 shares of common stock pursuant to a consulting agreement for consulting services having a fair value of $715 ($0.25/share) based upon the terms of the consulting agreement (See Note 8(B)).

On September 18, 2011, the Company issued 15,403 shares of common stock pursuant to a consulting agreement for consulting services having a fair value of $3,388 ($0.22/share) based upon the terms of the consulting agreement (See Note 8(B)).

On September 25, 2011, the Company issued 1,500 shares of common stock pursuant to a consulting agreement for consulting services having a fair value of $585 ($0.39/share) based upon the terms of the consulting agreement (See Note 8(B)).

On September 19, 2011, the Company issued 100,000 shares of common stock pursuant to a consulting agreement for consulting services having a fair value of $23,000 ($0.23/share) based upon the terms of the consulting agreement (See Note 8(B)).

On September 21, 2011, the Company issued 400,000 shares of common stock pursuant to a consulting agreement for consulting services having a fair value of $100,000 ($0.25/share) based upon the terms of the consulting agreement (See Note 8(B)).

On September 24, 2011, the Company issued 100,000 shares of common stock pursuant to a consulting agreement for consulting services having a fair value of $33,000 ($0.33/share) based upon the terms of the consulting agreement (See Note 8(B)).

On September 27, 2011, the Company issued 100,000 shares of common stock pursuant to two consulting agreements for consulting services having a fair value of $39,000 ($0.22/share) based upon the terms of the consulting agreements (See Note 8(B)).

(C) Common Stock Warrants

On December 30, 2009, the Company issued 500,000 warrants under a consulting agreement. The Company recognized an expense of $823,077 for the year ended December 31, 2009.  The Company recorded the fair value of the warrants  based on the fair value of each warrant grant estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions used for grants in 2009, dividend yield of zero, expected volatility of 112.80%; risk-free interest rates of 1.65%, expected life of three years. The warrants vested immediately.   The warrants expire in three years from the date of issuance and have an exercise price of $0.52 per share.

On May 27, 2010, the Company issued 10,000 warrants under a consulting agreement. The Company recognized an expense of $1,782 for the year ended December 31, 2010.  The Company recorded the fair value of the warrants  based on the fair value of each warrant grant estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions used for grants in 2010, dividend yield of zero, expected volatility of 152.80%; risk-free interest rates of 1.35%, expected life of three years. The warrants vested immediately.   The warrants expire in three years from the date of issuance and have an exercise price of $0.50 per share (See Note 8(B)).

On June 1, 2010, the Company issued 40,000 warrants under a consulting agreement. The Company recognized an expense of $7,184 for the year ended December 31, 2010.  The Company recorded the fair value of the warrants  based on the fair value of each warrant grant estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions used for grants in 2010, dividend yield of zero, expected volatility of 145.70%; risk-free interest rates of 1.26%, expected life of three years.  The warrants vested immediately.  The warrants expire in three years from the date of issuance and have an exercise price of $0.50 per share (See Note 8(B)).

On July 23, 2010, the Company issued 10,000 warrants under a consulting agreement. The Company recognized an expense of $1,593 for the year ended December 31, 2010.  The Company recorded the fair value of the warrants  based on the fair value of each warrant grant estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions used for grants in 2010, dividend yield of zero, expected volatility of 172.90%; risk-free interest rates of 0.94%, expected life of three years. The warrants vested immediately.   The warrants expire in three years from the date of issuance and have an exercise price of $0.50 per share (See Note 8(B)).

In September of 2011, the Company issued 955,800 warrants under various consulting agreements. The Company recognized an expense of $248,498 for the nine months ended September 30, 2011.  The Company recorded the fair value of the warrants  based on the fair value of each warrant grant estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions used for grants in 2011, dividend yield of zero, expected volatility of 461.11%; risk-free interest rates of 0.33%, expected life of three years. The warrants vested immediately.   The warrants expire in three years from the date of issuance and have an exercise price of $0.10 per share (See Note 8(B)).

The following tables summarize all warrant grants as of September 30, 2011, and December 31, 2010, and the related changes during these periods are presented below:

	Number of Options		Weighted Average Exercise Price
Stock Warrants
Balance at December 31, 2010		1,760,000	$	0.51
Granted		955,800	$	0.10
Exercised		-
Forfeited		-
Balance at September 30, 2011		2,715,800	$	0.36
Options Exercisable at September 30, 2011		2,715,800	$	0.36
Weighted Average Fair Value of Options Granted			$	0.36

Warrants Outstanding								Warrants Exercisable
Range of Exercise Price		Number Outstanding at September 30, 2011		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price		Number Exercisable at September 30, 2011		Weighted Average Exercise Price
$	0.52		500,000		1.25	$	0.52		500,000	$	0.52
$	0.50		1,260,000		1.49	$	0.50		1,260,000	$	0.50
$	0.10		955,800		2.92	$	0.10		955,800	$	0.10

In connection with the warrants issued for cash and services, the Company has an aggregate of 2,715,800 and 1,760,000 warrants outstanding as of September 30, 2011 and 2010, respectively.  As of September 30, 2011, the Company has reserved 2,715,800 shares of common stock for the future exercise of the warrants.

(D) Stock Split Effected in the Form of a Stock Dividend

On January 16, 2009, the Company's Board of Directors declared a four-for-one stock split to be effected in the form of a stock dividend.  The stock split was distributed on January 16, 2009 to shareholders of record.  A total of 136,713,000 shares of common stock were issued.  All basic and diluted loss per share and average shares outstanding information has been adjusted to reflect the aforementioned stock dividend.

(E) Amendment to Articles of Incorporation

On January 27, 2009, the Company amended its Articles of Incorporation to provide for an increase in its authorized share capital. The authorized capital stock increased to 250,000,000 common shares at a par value of $0.001 per share, and 10,000,000 preferred shares at a par value of $0.001 with class and series designations, voting rights, and relative rights and preferences to be determined by the Board of Directors of the Company from time to time.

On June 2, 2010, the Company amended its Articles of Incorporation to provide for an increase in its authorized share capital. The authorized capital stock increased to 295,000,000 common shares at a par value of $0.001 per share.

On September 20, 2010, the Company amended its Articles of Incorporation to provide for an increase in its authorized share capital and a change in the par value per share. The authorized capital stock increased to 400,000,000 common shares at a par value of $0.0001 per share.

Effective March 1, 2011, the Company filed with the State of Delaware a Certificate of Amendment of Certificate of Incorporation changing our name from So Act Network, Inc. to Max Sound Corporation.

(F) In Kind Contribution

During the fourth quarter of 2008, a former stockholder of the Company paid $4,400 of operating expenses on behalf of the Company.

During the fourth quarter of 2008, the principal stockholder contributed office space with a fair market value of $2,913 (See Note 9).

For the year ended December 31, 2009, the principal stockholder contributed office space with a fair market value of $12,600 (See Note 9).

For the year ended December 31, 2010, the principal stockholder contributed office space with a fair value of $9,450 (See Note 9).

(G) Share Conversion

On June 2, 2010, a principal stockholder converted $283,652 of accrued compensation into 945,507 shares of common stock at $0.30 per share (See Note 9).

On February 17, 2011, a principal stockholder converted $144,000 of accrued compensation into 1,309,091 shares of common stock at $0.11 per share (See Note 9).

On February 17, 2011, a principal stockholder converted $100,000 of a line of credit owed into 909,091 shares of common stock at $.011 per share (See Note 4 and Note 9).

On January 18, 2011, the Company entered into a conversion agreement executed by a note holder for 109,375 shares based on a conversion price of $0.032 per share (See Note 6).

On February 9, 2011, the Company entered into a conversion agreement executed by a note holder for 271,186 shares based on a conversion price of $0.0295 per share (See Note 6).

On February 15, 2011, the Company entered into a conversion agreement executed by a note holder for 357,143 shares based on a conversion price of $0.0336 per share (See Note 6).

On February 23, 2011, the Company entered into a conversion agreement executed by a note holder for 220,264 shares based on a conversion price of $0.0454 per share (See Note 6).

On April 11, 2011, the Company entered into a conversion agreement executed by a note holder for 587,382 shares based on a conversion price of $0.0315 per share (See Note 6).

On August 25, 2011, the Company entered into a conversion agreement executed by a note holder for 77,220 shares based on a conversion price of $0.1554 per share (See Note 6).

On August 30, 2011, the Company entered into a conversion agreement executed by a note holder for 96,220 shares based on a conversion price of $0.1455 per share (See Note 6).

On September 12, 2011, the Company entered into a conversion agreement executed by a note holder for 116,505 shares based on a conversion price of $0.1339 per share (See Note 6).

(H) Share Exchange

On May 11, 2010, the Company acquired the rights to an audio technology known as Max Audio Technology (Max) through a share exchange, whereby the Company issued 30,000,000 shares of common stock to two individuals in exchange for their rights in Max having a value of $7,500,000 based upon recent market value ($0.25/share) (See Note 8(B)).

On January 17, 2011, the Company acquired the rights to software technology known as Blog Software, Social Media Vault, Social Media Bar and Trending Topix (BSST) through a share exchange, whereby the Company issued 3,000,000 shares of common stock to two individuals in exchange for their rights to BSST having a value of $300,000 based upon recent market value ($0.10/share).

(I) Stock Options

On January 17, 2011, the Company issued 12,000,000 options to buy common shares of the Company's stock at $0.12 per share, good for three years, to its' new CEO pursuant to an employment agreement.  The Company recognized an expense of $1,199,794 for the nine months ended September 30, 2011.  The Company recorded the fair value of the options  based on the fair value of each option grant estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions used for grants in 2010; dividend yield of zero, expected volatility of 436.04%, risk-free interest rates of 1.00%, expected life of three years.  The options vest immediately (See Note 8 (A)).

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Commitments

9 Months Ended

Sep. 30, 2011

Commitments and Contingencies Disclosure [Abstract]

Commitments Disclosure [Text Block]

NOTE 8               COMMITMENTS

(A)   Employment Agreement

On October 13, 2008, the Company executed an employment agreement with its President and CEO.  The term of the agreement is for ten years.  As compensation for services, the President will receive a monthly compensation of $18,000 beginning October 13, 2008.  In addition, to the base salary, the employee is entitled to receive a 10% commission of all sales of the Corporation.  The agreement also calls for the employee to receive health benefits.  For the nine months ended September 30, 2011, the Company has recorded $162,000 in compensation expense (See Note 9).

On January 17, 2011, the Company executed an employment agreement with an executive to be CEO for five years.  As compensation for services, the executive will receive a monthly compensation of $8,000 beginning after the completion of at least one million dollars of new funding to the Corporation or can be paid as commissions from sales brought to the Company, whichever comes first. In addition to the base salary, the employee is entitled to receive a 20% commission of all sales the executive is directly responsible for bringing to the Company.  The agreement also calls for the executive to receive, upon execution of the agreement, three million shares of Rule 144 common stock and twelve million options, which are good for three years, to buy shares of Rule 144 common stock at $0.12/share.  As a supplement to the agreement, on February 4, 2011, the executive shall receive an additional twenty million common shares directly from the President of the Company. On August 25, 2011, an addendum to the agreement was made to increase the monthly compensation to $12,000, beginning September 1, 2011.  The agreement also calls for the employee to receive health benefits.  For the nine months ended September 30, 2011, the Company has recorded $12,000 in compensation expense (See Note 7(B) and 7(I)).

On May 17, 2011, the Company executed an employment agreement with its Chief Internet Officer (“CIO”).  The term of the agreement is for five years.  As compensation for services, the CIO will receive a monthly compensation of $9,000 beginning at the completion of at least one million dollars of new funding.  In addition to the base salary, the employee is entitled to receive health benefits.  The agreement also calls for the CIO to receive two million shares of Rule 144 common stock upon the execution of the agreement.  On August 25, 2011, an addendum to the agreement was made to increase the monthly compensation to $12,000, beginning October 1, 2011 (See Note 7(B)).

(B)   Consulting Agreement

On January 19, 2009, the Company entered into a development services agreement to construct social network software for a fee of $150 and $375 an hour.  The contract will remain in place until either party desires to cancel.  A retainer fee of $20,000 has been paid upon the execution of the agreement and will be used towards the services provided.  In addition, on January 14, 2009 the Company issued 20,000 shares in exchange for services valued at $5,000 ($0.25/share).  As a result of the forward split, the 20,000 shares were increased to 80,000 shares and its purchase price was similarly adjusted to $0.0625 (See Note 7(B) and Note 7(D)).  On May 29, 2009 the Company amended the consulting agreement by reducing the hourly rate to $75 an hour and reducing the outstanding balance due by $17,163. On August 31, 2009, the Company issued 885,714 shares of common stock in exchange for services valued at $62,000 related to the development services agreement entered into on January 19, 2009.  Based on the most recent fair market value at that time, the shares were valued at $55,357 ($0.0625/share), resulting in the recognition of a gain on the extinguishment of debt of $6,643 (See Note 7(B)).

On January 20, 2009, the Company entered into a service agreement with a transfer agent to become the Company's transfer agent for the purpose of maintaining stock ownership and transfer records for the Company.

On September 17, 2009, the Company entered into a six month consulting agreement with an unrelated third party to provide public relations services.  In exchange for the services provided, on September 18, 2009 the Company issued 500,000 shares of common stock having a fair value of $175,000 ($0.35/share) based upon fair value on the date of grant.  The Company has an option to cancel the contract during the first ninety days of the agreement and 200,000 shares will be returned back to the Company.  On November 11, 2009, the Company cancelled the agreement and 300,000 shares of common stock were returned to the Company.   As of December 31, 2009, $70,000 is recorded as consulting expense and $105,000 of deferred compensation was reclassified to $0 (See Note 7(B)).

On September 18, 2009, the Company entered into a six month consulting agreement with an unrelated third party to provide public relations services.  In exchange for the services provided the Company issued 600,000 shares of common stock having a fair value of $210,000 ($0.35/share) based upon fair value on the date of grant.  Shares will be issued on or before December 18, 2009 in six 100,000 increments.  The Company has an option to cancel the contract at any time, in such event; the consultant will return a prorated amount of shares based on the months remaining in the consulting agreement.   On November 18, 2009, the Company cancelled the agreement and 400,000 shares of common stock were returned to the Company.  As of December 31, 2009 $70,000 is recorded as consulting expense and $140,000 of deferred compensation was reclassified to $0 (See Note 7(B)).

On September 21, 2009, the Company entered into an eight month consulting agreement with an unrelated third party to provide public relations services.  In exchange for the services provided, the Company issued 600,000 shares of common stock having a fair value of $210,000 ($0.35/share) based upon fair value on the date of grant.  Shares will be issued on or before September 18, 2009, December 18, 2009, and March 18, 2010, in 200,000 increments.  The Company has an option to cancel the contract at any time and no additional stock issuances will be due.  On December 18, 2009, the Company cancelled the agreement and 400,000 shares of common stock were returned to the Company.  As of December 31, 2009, $70,000 is recorded as consulting expense and $140,000 of deferred compensation was reclassified to $0 (See Note 7(B)).

On October 20, 2009, the Company entered into a marketing agreement with an unrelated third party.  In exchange for the services provided on November 21, 2009, the Company issued 30,000 shares of common stock having a fair value $53,100 ($1.77/share) based upon fair value on the date of grant, and compensation of $5,000, of which $2,500 was paid in 2009 upon the execution of the agreement and the remaining $2,500 was paid in 2010 upon completion (See Note 7(B)).

During the months of November and December 2009, the Company entered into celebrity endorsement agreements for a period of one to two years of service.  In total, 1,710,000 shares of common stock were issued having a fair value of $3,285,400 based upon fair value on the respective date of grant.  During 2009 and 2010, $87,805 and $1,712,815 was recorded as consulting expense, respectively.  For the nine months ended September 30, 2011, $1,484,780 is recorded as consulting expense, and $0 is recorded as deferred compensation (See Note 7(B)).

On December 3, 2009, the Company entered into a commission agreement with an unrelated third party.  The company will pay a 10% commission in shares of common stock for every passive endorsement.  In exchange for the services provided the Company issued 35,000 shares of common stock having a fair value $68,250 ($1.95/share) based upon fair value on the date of grant (See Note 7(B)).

On December 3, 2009, the Company entered into a commission agreement with an unrelated third party.  The company will pay a 10% commission in shares of common stock for every passive endorsement.  In exchange for the services provided the Company issued 240,000 shares of common stock having a fair value $468,000 ($1.95/share) based upon fair value on the date of grant (See Note 7(B)).

On December 3, 2009, the Company entered into a commission agreement with an unrelated third party.  The company will pay a 10% commission in shares of common stock for every passive endorsement.  In exchange for the services provided the Company issued 35,000 shares of common stock having a fair value $68,250 ($1.95/share) based upon fair value on the date of grant (See Note 7(B)).

On December 3, 2009, the Company entered into a commission agreement with an unrelated third party.  The company will pay a 10% commission in shares of common stock for every passive endorsement.  In exchange for the services provided the Company issued 10,000 shares of common stock having a fair value $19,500 ($1.95/share) based upon fair value on the date of grant (See Note 7(B)).

On December 15, 2009, the Company entered into a consulting agreement with an unrelated third party to provide investor services.  The Company will receive a 10% of the gross receipts from the investor relations revenue for a two year period.  In exchange for the satisfactory services provided, on December 15, 2009, the Company issued 100,000 shares of common stock having a fair value of $200,000 ($2/share) based upon fair value on the date of grant (See Note 7(B)).

On December 27, 2009, the Company entered into a consulting agreement with an unrelated third party to provide film work.  In exchange for the services provided the Company issued 10,000 shares of common stock having a fair value $19,400 ($1.94/share) based upon fair value on the date of grant (See Note 7(B)).

On December 27, 2009, the Company entered into an endorsement agreement with an unrelated third party to provide film work.  In exchange for the services provided the Company issued 10,000 shares of common stock having a fair value $19,400 ($1.94/share) based upon fair value on the date of grant (See Note 7(B)).

On December 27, 2009, the Company entered into a consulting agreement with an unrelated third party to provide film scripting, editing and production work.  In exchange for the services provided the Company issued 10,000 shares of common stock having a fair value $19,400 ($1.94/share) based upon fair value on the date of grant (See Note 7(B)).

On December 30, 2009, the Company entered into a marketing agreement with an unrelated third party for a period from January 2010 to December 2010.  In exchange for the services provided, the Company issued 500,000 shares of common stock having a fair value of $965,000 ($1.93/share) based upon fair value on the date of grant.  An additional 1,000,000 shares of common stock having a fair value of $1,930,000 ($1.93/share) based upon fair value on the date of grant, were issued for an additional sponsorship commitment. The additional 1,000,000 shares were to be held in escrow until June 30, 2010, at which point the unrelated party would have 15 days to accept or decline the additional shares.As of December 31, 2010, the shares were returned back to the Company’s treasury due to non-performance of services and no additional shares will be issued (See Note 7(B)).

On December 31, 2009, the Company entered into a consulting agreement with an unrelated third party for a period from December 31, 2009 through March 30, 2011.  In exchange for the services provided, the Company issued 75,000 shares of common stock having a fair value of $144,750 ($1.93/share) based upon fair value on the date of grant, and deliverable in three increments of 25,000 shares of common stock each. The first 25,000 shares will be delivered upon the execution of the agreement and the other two increments will be delivered in six and twelve months upon the successful fulfillment of the agreement (See Note 7(B)).

On December 31, 2009, the Company entered into a consulting agreement with an unrelated third party for a period from December 31, 2009 through March 30, 2011.  In exchange for the services provided, the Company issued 75,000 shares of common stock having a fair value of $144,750 ($1.93/share) based upon fair value on the date of grant, and deliverable in three increments of 25,000 each. The first 25,000 shares will be delivered upon the execution of the agreement and the other two will be delivered in six and twelve months upon the successful fulfillment of the agreement (See Note 7(B)).

On December 31, 2009, the Company entered into a consulting agreement with an unrelated third party for a period from December 31, 2009 through December 31, 2010.  In exchange for the services provided, the Company issued 500,000 shares of common stock having a fair value of $965,000 ($1.93/share) based upon fair value on the date of grant (See Note 7(B)).

On January 11, 2010, the Company entered into a twelve month agreement with an unrelated third party for investor relations press release service for an annual fee of $14,250 and an initial onetime fee of $250.

On January 15, 2010, the Company entered into a two year celebrity endorsement agreement.  In total, 100,000 shares of common stock were issued having a fair value of $170,000($1.70/share) based upon fair value on the date of grant (See Note 7(B)).

On February 1, 2010, the Company entered into a twelve month consulting agreement effective February 5, 2010, with an unrelated third party to produce music compositions for a fee of $500.  The agreement can be renewed for up to two additional years for a fee of $500 for the first renewal year and $750 for the second renewal year.

On February 17, 2010, the Company entered into a twelve month consulting agreement with an unrelated third party effective February 17, 2010.  In exchange for the services provided, the Company issued 1,000,000 shares of common stock having a fair value of $1,240,000 ($1.24/share) based upon fair value on the date of grant (See Note 7(B)).

On June 1, 2010, the Company entered into a twelve month consulting agreement to provide for consulting and business services in raising capital.  The Company agrees to pay a finder’s fee on all capital raised in stock and warrants.  The Company paid an initial nonrefundable retainer fee by issuing 40,000 shares of stock having a value of $10,000 ($0.25/share) based upon fair value on the date of the agreement.  In conjunction with the stock payment, the Company also issued one warrant attached to each share of stock exercisable at $0.50 per warrant.  Based upon the number of shares (40,000 shares) of stock issued, the Company issued 40,000 warrants (See Note 7(B) and (C).

On May 11, 2010, the Company acquired the rights to an audio technology known as Max Audio Technology (Max) through a share exchange, whereby the Company issued 30,000,000 shares of common stock to two individuals in exchange for their rights in Max having a value of $7,500,000 based upon recent market value ($0.25/share).  (See Note 7(H)).

In accordance with the share exchange, the former owners to the rights of Max became Executives of the Company.  The two new executives individually entered into employment agreements with the Company on May 11, 2010.  The term of the employment agreements are for ten years of service at a monthly compensation of $8,500 for each executive.  In addition, the Executives are entitled to receive 5% of all revenues derived from the sale of all products and services related to the Max Audio Technology.  On January 2, 2011, the agreement was cancelled.

On April 15, 2010, the Company entered into a finder’s fee agreement.  For each qualified investor introduced to the Company by the consultant, the Company will pay a 10% fee in cash equal to 10% of the dollar amount of securities purchased,  In addition, the Company will pay a 10% fee in warrants equal to 10% of the number of shares of stock purchased (See Note 7(C)).

On August 8, 2010, the Company entered into a consulting agreement with an unrelated third party to provide consulting services.  Upon the execution of the agreement the consultant received 100,000 shares of common stock.  A monthly issuance of 100,000 shares of common stock will be issued as a compensation of services provided.  The term of the agreement is for three months and will continue to renew for three month intervals unless cancelled by either party.  The agreement was cancelled on November 1, 2010 (See Note 7(B)).

On August 17, 2010, the Company entered into a consulting agreement.  The agreement shall remain in effect until terminated.  In exchange for the services provided, the consultant will receive a $500 a month allowance for general expenses.  In addition, for all the new business brought to the Company the consultant will receive a 10% compensation for each gross dollar received by the Company.  On February 15, 2011, the Company terminated the agreement.

On December 14, 2010, the Company entered into to a consulting agreement for consulting and advertising services.  Upon the execution of the agreement, the consultant received 250,000 shares with an additional 750,000 shares to be issued upon consultant obtaining sponsorship rights in the year 2011.  The sponsorship rights were not obtained and the agreement was cancelled in 2011 and the additional 750,000 shares were never issued (See Note 7(B)).

On February 17, 2011, the Company entered into a consulting agreement for public relations and communications services.  In exchange for the services provided, the consultant received 500,000 shares of common stock. The term of the agreement is for one year.

On March 3, 2011, the Company entered into a consulting agreement for public relations and communications services.  In exchange for the services provided, the consultant received 1,000,000 shares of common stock. The term of the agreement is for one year.

On July 1, 2011, the Company entered into a consulting agreement with an unrelated third party for trade show services.  In exchange for the services provided, the consultant received 6,500 shares of common stock at $0.08/per share. The agreement was for one-time services. (See Note 7(B)).

On June 10, 2011, the Company entered into a five year advisory board consulting agreement with three persons to provide for consulting and business services.  In exchange for the services provided, the consultants received 100,000 shares of common stock each.  (See Note 7(B)).

On June 15, 2011, the Company entered into a consulting agreement with an unrelated third party for software and computer technology services.  In exchange for the services provided, the consultant will be paid $70 per hour with $50 per hour paid in cash and $20 per hour paid in Company stock at $0.10 per share.  The term of the agreement is for one year. (See Note 7(B)).

In September 2011, the Company entered into a five year advisory board consulting agreement with two individuals to provide for consulting and business services.  In exchange for the services provided, each consultant received 100,000 shares of Company stock at $0.23 and $0.33 per share.  The terms of the agreements are for five years. (See Note 7(B)).

In September 2011, the Company entered into a five year advisory board consulting agreement with two individuals to provide for consulting and business services.  In exchange for the services provided, each consultant received 50,000 shares of Company stock at $0.39 per share.  The terms of the agreements are for five years. (See Note 7(B)).

During the three months ended September 30, 2011, the Company entered into an agreement with an unrelated third party for software and computer technology services. In exchange for the services provided, the consultant received 34,053 shares of common stock at $0.10 – $0.39 per share. The term of the agreement is for one year. (See Note 7(B)).

In July of 2011, the Company entered into a finder’s fee agreement with third party consultants.  For each qualified investor introduced to the Company by the consultants, the Company will pay a 10% fee in cash equal to 10% of the dollar amount of securities purchased,  In addition, the Company will pay a 10% fee in warrants equal to 10% of the number of shares of stock purchased (See Note 7(C)).

On September 21, 2011, the Company entered into a consulting agreement with an unrelated third party for investor relation services.  In exchange for the services provided, the consultant received 400,000 shares of Company stock at $0.25 per share.  The term of the agreement is for six months. (See Note 7(B)).

(C) Operating Lease Agreements

On September 1, 2010 the Company executed a three-year non-cancelable operating lease for its new corporate office space. The lease began on October 1, 2010 and expires on September 30, 2013.  Total base rent due during the term of the lease is $134,880.

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Convertible Debt

9 Months Ended

Sep. 30, 2011

Convertible Debt [Abstract]

Debt Disclosure [Text Block]

NOTE 6 CONVERTIBLE DEBT

On July 6, 2010, the Company entered into an agreement whereby the Company will issue up to $50,000 in a convertible note.  The note matured on March 30, 2011, and bears an interest rate of 8%.  Any unpaid amount as of the maturity date bears an interest rate of 22%.  The holder of the note has a right to convert all or any part of the outstanding an unpaid principal amount into shares of common stock.  The conversion prices equals the "Variable Conversion Price", which is 59% of the "Market Price", which is the average of the lowest six trading prices for the Common Stock during the ten trading day period prior to the conversion.  In July of 2010, the Company received $50,000 proceeds less the $3,000 finder’s fee pursuant to the terms of this convertible note.  During the nine months ended September 30, 2011, the note holder converted $52,003 of the note payable and accrued interest into 1,545,350 shares of the company stock.  As of September 30, 2011, the Company owed $0 in principal and $0 in accrued interest on this note.  (See Note 7 (G)).

The Company computed the fair value of the conversion feature at the commitment date, based on the following management assumptions:

Exercise price	$0.1377
Expected dividends	0%
Expected volatility	172.27%
Expected term: conversion feature	267 days
Risk free interest rate	0.32%

The fair value of the embedded conversion option on the commitment date was $15,409.  The Company recorded a related debt discount of $15,409, which was amortized over the life of the debt.  For the year ended December 31, 2010, the Company amortized $10,273 of debt discount.  For the nine months ended September 30, 2011, the Company amortized $5,136 of debt discount.

At September 30, 2011 the Company recorded the derivative liability at its fair value of $0, due to the principal and accrued interest were paid in full.  As a result of the remeasurement, the Company recorded a change in fair value associated with this derivative liability as a decrease in the expense totaling $13,262 for the nine months ended September 30, 2011.

On February 17, 2011, the Company entered into an agreement whereby the Company will issue up to $40,000 in a convertible note.  The note matures on November 17, 2011, and bears an interest rate of 8%.  The holder of the note has a right to convert all or any part of the outstanding an unpaid principal amount into shares of common stock.  The conversion prices equals the "Variable Conversion Price", which is 59% of the "Market Price", which is the average of the lowest six trading prices for the Common Stock during the ten trading day period prior to the conversion.  In February of 2011, the Company received $40,000 proceeds less the $2,500 finder’s fee pursuant to the terms of this convertible note.  During the nine months ended September 30, 2011, the note holder converted $41,600 of the note payable and accrued interest into 289,945 shares of the company stock.  As of September 30, 2011, the Company owed $0 in principal and $0 in accrued interest on this note.  (See Note 7 (G)).

The Company computed the fair value of the conversion feature at the commitment date, based on the following management assumptions:

Exercise price	$0.0738
Expected dividends	0%
Expected volatility	456.63%
Expected term: conversion feature	365 days
Risk free interest rate	0.27%

The fair value of the embedded conversion option on the commitment date was $9,523.  The Company recorded a related debt discount of $9,523, which is amortized over the life of the debt.  For the nine months ended September 30, 2011, the Company amortized $9,523 of debt discount.

At September 30, 2011 the Company recorded the derivative liability at its fair value of $0, due to the principal and accrued interest were paid in full.  As a result of the remeasurement, the Company recorded a change in fair value associated with this derivative liability as a decrease in the expense totaling $9,523 for the nine months ended September 30, 2011.

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Condensed Statement of Changes in Stockholders' Equity (Parenthetical) (Unaudited) (USD $)	9 Months Ended	12 Months Ended
	Sep. 30, 2011	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Statement of Stockholders' Equity [Abstract]
Common stock issued for services to founder ($0.001/sh)				$ 0.001
Common stock issued for cash ($0.25/sh)		$ 0.25	$ 0.25	$ 0.25
Common stock issued for services ($0.25/sh)	$ 0.25	$ 0.25	$ 0.25	$ 0.25
Common stock issued for services ($0.35/sh)	$ 0.35		$ 0.35
Common stock issued for services ($0.0625/sh)			$ 0.0625
Common stock issued for services ($1.50/sh)			$ 1.50
Common stock issued for services ($1.77/sh)			$ 1.77
Common stock issued for services ($1.78/sh)			$ 1.78
Common stock issued for services ($1.80/sh)			$ 1.80
Common stock issued for services ($1.93/sh)			$ 1.93
Common stock issued for services ($1.94/sh)			$ 1.94
Common stock issued for services ($1.95/sh)			$ 1.95
Common stock issued for services ($2.00/sh)			$ 2
Return of common stock issued for services ($0.35/sh)			$ 0.35
Return of common stock issued for services ($1.05/sh)		$ 1.05
Accrued salary conversion into common stock ($0.30/sh)		$ 0.30
Common stock issued for services ($0.15/sh)		$ 0.15
Common stock issued for services ($0.18/sh)		$ 0.18
Common stock issued for services ($0.19/sh)		$ 0.19
Common stock issued for services ($0.20/sh)		$ 0.20
Common stock issued in exchange for technology rights ($0.25/sh)		$ 0.25
Common stock issued for services ($1.24/Sh)		$ 1.24
Common stock issued for services ($1.70/sh)		$ 1.70
Cancellation of shares held in escrow ($1.93/sh)		$ 1.93
Common stock issued in exchange for assets ($.10/sh)	$ 0.10
Common stock issued for services ($0.07/sh)	$ 0.07
Common stock issued for services ($0.08/sh)	$ 0.08
Common stock issued for services ($.10/sh)	$ 0.10
Common stock issued for services ($0.11/sh)	$ 0.11
Common stock issued for services ($0.22/sh)	$ 0.22
Common stock issued for services ($0.23/sh)	$ 0.23
Common stock issued for services ($0.33/sh)	$ 0.33
Common stock issued for services ($0.39/sh)	$ 0.39
Convertible debt conversion into common stock ($0.0295/sh)	$ 0.0295
Convertible debt conversion into common stock ($0.0315/sh)	$ 0.0315
Convertible debt conversion into common stock ($0.032/sh)	$ 0.032
Convertible debt conversion into common stock ($0.0336/sh)	$ 0.0336
Convertible debt conversion into common stock ($0.0454/sh)	$ 0.0454
Convertible debt conversion into common stock ($0.1339/sh)	$ 0.1339
Convertible debt conversion into common stock ($0.1455/sh)	$ 0.1455
Convertible debt conversion into common stock ($0.1554/sh)	$ 0.1554
Accrued salary conversion into common stock ($0.11/sh)	$ 0.11
Common stock issued for cash ($0.10/sh)	$ 0.10
Line of credit conversion into common stock ($0.11/sh)	$ 0.11
Common stock issued for cash ($0.10/sh)	$ 0.10

XML

Going Concern

9 Months Ended

Sep. 30, 2011

Going Concern [Abstract]

Going Concern [Text Block]

NOTE 2               GOING CONCERN

As reflected in the accompanying financial statements, the Company is in the development stage with minimal operations, has an accumulated deficit of $13,690,662 for the period from December 9, 2005 (inception) to September 30, 2011, and has negative cash flow from operations of $1,132,202 from inception.  This raises substantial doubt about its ability to continue as a going concern.  The ability of the Company to continue as a going concern is dependent on the Company’s ability to raise additional capital and implement its business plan.  The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Management believes that actions presently being taken to obtain additional funding and implement its strategic plans provide the opportunity for the Company to continue as a going concern

XML

Note Payable - Principal Stockholder

9 Months Ended

Sep. 30, 2011

Due to Related Parties [Abstract]

Note Payable - Principal Stockholder [Text Block]

NOTE 3               NOTE PAYABLE – PRINCIPAL STOCKHOLDER

During the year ended December 31, 2008, the Company received $18,803 from the principal stockholder.  Pursuant to the terms of the loan, the loan is bearing an annual interest rate of 3.25% and due on demand.  In 2008, the Company repaid $15,000 in principal to the principal stockholder.  In 2009, the Company repaid $3,803 in principal to the principal stockholder.  As of December 31, 2010, the principal portion of this principal stockholder loan balance has been repaid (See Note 9).

On May 11, 2009, the Company received $9,500 from the principal stockholder.  During the year ended December 31, 2009, the Company repaid $1,500 in principal to the principal stockholder.  Pursuant to the terms of the loan, the loan is bearing an annual interest rate of 3.25% and is due on demand (See Note 9).

On May 22, 2009, the Company received $15,000 from the principal stockholder.  In January of 2010, the Company repaid $3,000 in principal to the principal stockholder under the terms of the loan.  In June of 2010, the Company repaid $3,000 in principal to the principal stockholder under the terms of the loan.  Pursuant to the terms of the loan, the loan is bearing an annual interest rate of 3.25% and is due on demand (See Note 9).

On May 26, 2009 the Company received $16,700 from the principal stockholder.  In May of 2010, the Company repaid $15,700 in principal to the principal stockholder under the term of this loan.  Pursuant to the terms of the loan, the loan is bearing an annual interest rate of 3.25% and is due on demand (See Note 9).

As of September 30, 2011, the Company owes $18,000 in principal and $2,072 of accrued interest to the principal stockholder related to these principal stockholder loans (See Note 9).

XML

Line of Credit - Principal Stockholder

9 Months Ended

Sep. 30, 2011

Long-term Line of Credit [Abstract]

Line Of Credit - Principal Stockholder [Text Block]

NOTE 4               LINE OF CREDIT – PRINCIPAL STOCKHOLDER

On May 28, 2009, the Company entered into a two year line of credit agreement with the principal stockholder in the amount of $100,000.  The line of credit carries an interest rate of 3.25%.  As of September 30, 2011, the principal stockholder has advanced the Company $100,000 and was repaid $100,000 under the terms of this line of credit agreement (See Note 9).

On November 10, 2009, the Company entered into a two year line of credit agreement with the principal stockholder in the amount of $100,000.  The line of credit carries an interest rate of 3.25%.  As of September 30, 2011, the principal stockholder has advanced $100,000 to the Company and was repaid $100,000 under the terms of this line of credit agreement (See Note 9).

On March 25, 2010, the Company entered into a two year line of credit agreement with the principal stockholder in the amount of $500,000.  The line of credit carries an interest rate of 3.25%.  On February 17, 2011, the principal stockholder converted $100,000 of the line of credit owed into 909,091 shares of common stock at $0.11 per share.  As of September 30, 2011, the principal stockholder has advanced $276,680 to the Company and was repaid $163,550 under the terms of this line of credit agreement. (See Note 7(G) and Note 9).

As of September 30, 2011, the Company owes $13,130 in principal and $11,283 of accrued interest to the principal stockholder related to these lines of credit (See Note 9).

XML

Condensed Statement of Changes in Shareholders' Equity (Unaudited) (USD $)	Total	Preferred Stock	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Subscription Receivable	Deferred Compensation
Beginning Balance, at Dec. 09, 2005	$ 0	$ 0	$ 0	$ 0	$ 0	$ 0	$ 0
Beginning Balance, (Shares) at Dec. 09, 2005	0	0	0	0	0	0	0
Stock issued on acceptance of incorporation expenses	100	0	10	90	0	0	0
Stock issued on acceptance of incorporation expenses (Shares)	0	0	100,000	0	0	0	0
Net loss for the period	(400)	0	0	0	(400)	0	0
Balance, at Dec. 31, 2005	(300)	0	10	90	(400)	0	0
Balance, (Shares) at Dec. 31, 2005	0	0	100,000	0	0	0	0
Net loss for the period	(1,450)	0	0	0	(1,450)	0	0
Balance, at Dec. 31, 2006	(1,750)	0	10	90	(1,850)	0	0
Balance, (Shares) at Dec. 31, 2006	0	0	100,000	0	0	0	0
Net loss for the period	(1,400)	0	0	0	(1,400)	0	0
Balance, at Dec. 31, 2007	(3,150)	0	10	90	(3,250)	0	0
Balance, (Shares) at Dec. 31, 2007	0	0	100,000	0	(3,250)	0	0
Common stock issued for services to founder ($0.001/sh)	44,900	0	4,490	40,410	0	0	0
Common stock issued for services to founder ($0.001/sh) (Shares)	0	0	44,900,000	0	0	0	0
Common stock issued for cash ($0.25/sh)	50,500	0	47	118,203	0	(67,750)	0
Common stock issued for cash ($0.25/sh) (Shares)	0	0	473,000	0	0	0	0
Common stock issued for services ($0.25/sh)	3,000	0	1	2,999	0	0	0
Common stock issued for services ($0.25/sh) (Shares)	0	0	12,000	0	0	0	0
Shares issued in connection with stock dividend	0	0	13,646	122,809	(136,455)	0	0
Shares issued in connection with stock dividend (Shares)	0	0	136,455,000	0	0	0	0
In kind contribution of rent - related party	2,913	0	0	2,913	0	0	0
Net loss for the period	(117,115)	0	0	0	(117,115)	0	0
Accrued expenses payment made by a former shareholder	4,400	0	0	4,400	0	0	0
Balance, at Dec. 31, 2008	(14,552)	0	18,194	291,824	(256,820)	(67,750)	0
Balance, (Shares) at Dec. 31, 2008	0	0	181,940,000	0	0	0	0
Common stock issued for cash ($0.25/sh)	15,500	0	6	15,494	0	0	0
Common stock issued for cash ($0.25/sh) (Shares)	0	0	62,000	0	0	0	0
Common stock issued for services ($0.25/sh)	6,000	0	2	5,998	0	0	0
Common stock issued for services ($0.25/sh) (Shares)	0	0	24,000	0	0	0	0
Common stock issued for services ($0.35/sh)	95,667	0	170	594,830	0	0	(499,333)
Common stock issued for services ($0.35/sh) (Shares)	0	0	1,700,000	0	0	0	0
Common stock issued for services ($0.0625/sh)	58,482	0	94	58,388	0	0	0
Common stock issued for services ($0.0625/sh) (Shares)	0	0	935,714	0	0	0	0
Common stock issued for services ($1.50/sh)	5,301	0	3	44,997	0	0	(39,699)
Common stock issued for services ($1.50/sh) (Shares)	0	0	30,000	0	0	0	0
Warrants issued for services	823,077	0	0	823,077	0	0	0
Common stock issued for services ($1.77/sh)	0	0	3	53,097	0	0	(53,100)
Common stock issued for services ($1.77/sh) (Shares)	0	0	30,000	0	0	0	0
Common stock issued for services ($1.78/sh)	11,948	0	10	177,990	0	0	(166,052)
Common stock issued for services ($1.78/sh) (Shares)	0	0	100,000	0	0	0	0
Common stock issued for services ($1.80/sh)	11,096	0	10	179,990	0	0	(168,904)
Common stock issued for services ($1.80/sh) (Shares)	0	0	100,000	0	0	0	0
Common stock issued for services ($1.93/sh)	2,802	0	283	5,461,617	0	0	(5,459,098)
Common stock issued for services ($1.93/sh) (Shares)	0	0	2,830,000	0	0	0	0
Common stock issued for services ($1.94/sh)	0	0	3	58,197	0	0	(58,200)
Common stock issued for services ($1.94/sh) (Shares)	0	0	30,000	0	0	0	0
Common stock issued for services ($1.95/sh)	658,192	0	92	1,793,908	0	0	(1,135,808)
Common stock issued for services ($1.95/sh) (Shares)	0	0	920,000	0	0	0	0
Common stock issued for services ($2.00/sh)	93,577	0	30	599,970	0	0	(506,423)
Common stock issued for services ($2.00/sh) (Shares)	0	0	300,000	0	0	0	0
Return of common stock issued for services ($0.35/sh)	0	0	(110)	(384,890)	0	0	385,000
Return of common stock issued for services ($0.35/sh) (Shares)	0	0	(1,100,000)	0	0	0	0
Shares issued in connection with stock dividend	0	0	26	(26)	0	0	0
Shares issued in connection with stock dividend (Shares)	0	0	258,000	0	0	0	0
Stock and financing offering costs	(850)	0	0	(850)	0	0	0
Collection of stock subscripton receivable	67,750	0	0	0	0	67,750	0
In kind contribution of rent - related party	12,600	0	0	12,600	0	0	0
Deferred compensation realized	114,333	0	0	0	0	0	114,333
Net loss for the period	(2,298,552)	0	0	0	(2,298,552)	0	0
Balance, at Dec. 31, 2009	(337,629)	0	18,816	9,786,211	(2,555,372)	0	(7,587,284)
Balance, (Shares) at Dec. 31, 2009	0	0	188,159,714	0	0	0	0
Common stock issued for cash ($0.25/sh)	300,000	0	120	299,880	0	0	0
Common stock issued for cash ($0.25/sh) (Shares)	0	0	1,200,000	0	0	0	0
Accrued salary conversion into common stock ($0.30/sh)	283,652	0	95	283,557	0	0	0
Accrued salary conversion into common stock ($0.30/sh) (Shares)	0	0	945,507	0	0	0	0
Common stock issued for services ($0.15/sh)	37,500	0	25	37,475	0	0	0
Common stock issued for services ($0.15/sh) (Shares)	0	0	250,000	0	0	0	0
Common stock issued for services ($0.18/sh)	18,000	0	10	17,990	0	0	0
Common stock issued for services ($0.18/sh) (Shares)	0	0	100,000	0	0	0	0
Common stock issued for services ($0.19/sh)	19,000	0	10	18,990	0	0	0
Common stock issued for services ($0.19/sh) (Shares)	0	0	100,000	0	0	0	0
Common stock issued for services ($0.20/sh)	42,000	0	21	41,979	0	0	0
Common stock issued for services ($0.20/sh) (Shares)	0	0	210,000	0	0	0	0
Common stock issued for services ($0.25/sh)	35,000	0	14	34,986	0	0	0
Common stock issued for services ($0.25/sh) (Shares)	0	0	140,000	0	0	0	0
Common stock issued in exchange for technology rights ($0.25/sh)	7,500,000	0	3,000	7,497,000	0	0	0
Common stock issued in exchange for technology rights ($0.25/sh) (Shares)	0	0	30,000,000	0	0	0	0
Common stock issued for services ($0.35/sh)		0	(15)	15	0	0	0
Common stock issued for services ($0.35/sh) (Shares)		0	(150,000)	0	0	0	0
Return of common stock issued for services ($1.05/sh)	0	0	(15)	15	0	0	0
Return of common stock issued for services ($1.05/sh) (Shares)	0	0	(150,000)	0	0	0	0
Common stock issued for services ($1.24/Sh)	142,685	0	100	1,239,900	0	0	(1,097,315)
Common stock issued for services ($1.24/Sh) (Shares)	0	0	1,000,000	0	0	0	0
Common stock issued for services ($1.70/sh)	17,466	0	10	169,990	0	0	(152,534)
Common stock issued for services ($1.70/sh) (Shares)	0	0	100,000	0	0	0	0
Cancellation of shares held in escrow ($1.93/sh)	(1,442,198)	0	(100)	(1,929,900)	0	0	487,802
Cancellation of shares held in escrow ($1.93/sh) (Shares)	0	0	(1,000,000)	0	0	0	0
Warrants issued for services	10,559	0	0	10,559	0	0	0
Blue sky fees	(400)	0	0	(400)	0	0	0
Stock and financing offering costs	(8,000)	0	0	(8,000)	0	0	0
In kind contribution of rent - related party	9,450	0	0	9,450	0	0	0
Deferred compensation realized	6,546,046	0	0	0	0	0	6,546,046
Net loss for the period	(6,312,965)	0	0	0	(6,312,965)	0	0
Balance, at Dec. 31, 2010	6,860,166	0	22,106	17,509,682	(8,868,337)	0	(1,803,285)
Balance, (Shares) at Dec. 31, 2010	0	0	221,055,221	0	0	0	0
Common stock issued in exchange for assets ($0.10/sh)	300,000	0	300	299,700	0	0	0
Common stock issued in exchange for assets ($0.10/sh) (Shares)	0	0	3,000,000	0	0	0	0
Common stock issued for services ($0.07/sh)	140,000	0	200	139,800	0	0	0
Common stock issued for services ($0.07/sh) (Shares)	0	0	2,000,000	0	0	0	0
Common stock issued for services ($0.08/sh)	80,520	0	100	80,420	0	0	0
Common stock issued for services ($0.08/sh) (Shares)	0	0	1,006,500	0	0	0	0
Common stock issued for services ($0.10/sh)	306,646	0	307	306,339	0	0	0
Common stock issued for services ($.10/sh) (Shares)	0	0	3,066,462	0	0	0	0
Common stock issued for services ($0.11/sh)	55,000	0	50	54,950	0	0	0
Common stock issued for services ($0.11/sh) (Shares)	0	0	500,000	0	0	0	0
Common stock issued for services ($0.22/sh)	3,388	0	2	3,386	0	0	0
Common stock issued for services ($0.22/sh) (shares)	0	0	15,403	0	0	0	0
Common stock issued for services ($0.23/sh)	23,000	0	10	22,990	0	0	0
Common stock issued for services ($0.23/sh) (shares)	0	0	100,000	0	0	0	0
Common stock issued for services ($0.25/sh)	175,715	0	71	175,644	0	0	0
Common stock issued for services ($0.25/sh) (Shares)	0	0	702,860	0	0	0	0
Common stock issued for services ($0.33/sh)	33,000	0	10	32,990	0	0	0
Common stock issued for services ($0.33/sh) (shares)	0	0	100,000	0	0	0	0
Common stock issued for services ($0.35/sh)	855	0	1	854	0	0	0
Common stock issued for services ($0.35/sh) (Shares)	0	0	2,443	0	0	0	0
Common stock issued for services ($0.39/sh)	39,585	0	10	39,575	0	0	0
Common stock issued for services ($0.39/sh) (shares)	0	0	101,500	0	0	0	0
Warrants issued for services	248,498	0	0	248,498	0	0	0
Convertible debt conversion into common stock ($0.0295/sh)	8,000	0	27	7,973	0	0	0
Convertible debt conversion into common stock ($0.0295/sh) (Shares)	0	0	271,186	0	0	0	0
Convertible debt conversion into common stock ($0.0315/sh)	18,503	0	59	18,444	0	0	0
Convertible debt conversion into common stock ($0.0315/sh) (Shares)	0	0	587,382	0	0	0	0
Convertible debt conversion into common stock ($0.032/sh)	3,500	0	11	3,489	0	0	0
Convertible debt conversion into common stock ($0.032/sh) (Shares)	0	0	109,375	0	0	0	0
Convertible debt conversion into common stock ($0.0336/sh)	12,000	0	36	11,964	0	0	0
Convertible debt conversion into common stock ($0.0336/sh) (Shares)	0	0	357,143	0	0	0	0
Convertible debt conversion into common stock ($0.0454/sh)	10,000	0	22	9,978	0	0	0
Convertible debt conversion into common stock ($0.0454/sh) (Shares)	0	0	220,264	0	0	0	0
Convertible debt conversion into common stock ($0.1554/sh)	12,000	0	7	11,993	0	0	0
Convertible debt conversion into common stock ($0.1554/sh) (shares)	0	0	77,220	0	0	0	0
Convertible debt conversion into common stock ($0.1455/sh)	14,000	0	9	13,991	0	0	0
Convertible debt conversion into common stock ($0.1455/sh) (shares)	0	0	96,220	0	0	0	0
Convertible debt conversion into common stock ($0.1339/sh)	15,600	0	11	15,589	0	0	0
Convertible debt conversion into common stock ($0.1339/sh) (shares)	0	0	116,505	0	0	0	0
Accrued salary conversion into common stock ($0.11/sh)	144,000	0	131	143,869	0	0	0
Accrued salary conversion into common stock ($0.11/sh) (Shares)	0	0	1,309,091	0	0	0	0
Line of credit conversion into common stock ($0.11/sh)	100,000	0	91	99,909	0	0	0
Line of credit conversion into common stock ($0.11/sh) (Shares)	0	0	909,091	0	0	0	0
Common stock issued for cash ($0.10/sh)	395,000	0	792	791,208	0	(397,000)	0
Common stock issued for cash ($0.10/sh) (Shares)	0	0	7,920,000	0	0	0	0
Common stock issued for cash ($0.10/sh)	1,093,700	0	1,094	1,092,606	0	0	0
Common stock issued for cash ($0.10/sh) (shares)	0	0	10,937,000	0	0	0	0
Stock and financing offering costs	(79,280)	0	0	(79,280)	0	0	0
Amortization of stock options	1,199,794	0	0	1,199,794	0	0	0
Collection of stock subscripton receivable	397,000	0	0	0	0	397,000	0
Deferred compensation realized	1,803,285	0	0	0	0	0	1,803,285
Net loss for the period	(4,822,325)	0	0	0	(4,822,325)	0	0
Balance, at Sep. 30, 2011	$ 8,591,150	$ 0	$ 25,457	$ 22,256,355	$ (13,690,662)	$ 0	$ 0
Balance, (Shares) at Sep. 30, 2011	0	0	254,560,866	0	0	0	0

XML

Statements of Cash Flows (Unaudited) (USD $)	9 Months Ended		70 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011
Cash Flows From Operating Activities:
Net Loss	$ (4,822,325)	$ (4,710,053)	$ (13,554,207)
Adjustments to reconcile net loss to net cash used in operations
Depreciation/Amortization	25,633	28,525	77,070
Depreciation for abandonment of website	38,794	0	38,794
In kind contribution of rent - related party	0	9,450	24,963
Stock issued for services	857,709	211,151	2,160,425
Warrants issued for services	248,498	10,559	1,082,134
Amortization of stock options	1,199,794	0	1,199,794
Bluesky Fees	0	(400)	(1,250)
Amortization of stock based compensation	1,803,285	3,811,996	7,021,466
Security deposit	(413)	(3,710)	(4,123)
Amortization of debt discount	14,659	2,194	(24,932)
Change in fair value of derivative liability	(22,785)	51	24,932
Changes in operating assets and liabilities:
(Increase)/Decrease in accounts receivable	0	(448)	0
(Increase)/Decrease in prepaid expenses	5,799	(4,775)	0
Increase/(Decrease) in deferred revenue	0	594	0
Increase/(Decrease) accounts payable	(26,219)	86,548	133,308
Increase(Decrease) in warrant liabilities	0	0	0
Increase/(Decrease) in accrued expenses	147,620	226,537	689,424
Net Cash Used In Operating Activities	(529,951)	(331,781)	(1,132,202)
Cash Flows From Investing Activities:
Register of trademark	0	0	(275)
Purchase of property equipment	(86,930)	(2,550)	(203,737)
Net Cash Used In Investing Activities	(86,930)	(2,550)	(204,012)
Cash Flows From Financing Activities:
Proceeds from stockholder loans	134,150	200,350	536,683
Repayment of stockholder loans	(242,500)	(197,800)	(405,553)
Accrued expenses payment made by a former shareholder	0	0	4,400
Proceeds from issuance of convertible note, net of offering costs	37,500	50,000	84,500
Proceeds from issuance of stock, net of subscriptions receivable and net of offering costs	1,411,920	292,000	1,772,920
Proceeds from collection of stock subscription receivable	397,000	0	464,750
Net Cash Provided by Financing Activities	1,738,070	344,550	2,457,700
Net Increase / (Decrease) in Cash	1,121,189	10,219	1,121,486
Cash at Beginning of Period	297	5,390	0
Cash at End of Period	1,121,486	15,609	1,121,486
Supplemental disclosure of cash flow information:
Cash paid for interest	0	0	0
Cash paid for taxes	0	0	0
Supplemental disclosure of non-cash investing and financing activities:
Shares issued in connection with intellectual property	300,000	0	7,800,000
Shares issued in conversion of related party accrued compensation	144,000	0	427,652
Shares issued in conversion of related party line of credit	100,000	0	100,000
Shares issued in conversion of convertible debt and accrued interest	93,603	0	93,603
Shares issued in connection with stock dividend	0	258	136,713
Stock sold for subscription	$ 397,000	$ 0	$ 464,750

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Related Party Transactions

9 Months Ended

Sep. 30, 2011

Related Party Transactions [Abstract]

Related Party Transactions Disclosure [Text Block]

NOTE 9               RELATED PARTY TRANSACTIONS

During the year ended December 31, 2008, the Company received $18,803 from the principal stockholder.  Pursuant to the terms of the loan, the loan is bearing an annual interest rate of 3.25% and due on demand.  In 2008, the Company repaid $15,000 in principal to the principal stockholder.  In 2009, the Company repaid $3,803 in principal to the principal stockholder.  As of December 31, 2010, the principal portion of this principal stockholder loan balance has been repaid (See Note 3).

On May 11, 2009, the Company received $9,500 from a principal stockholder. During the year ended December 31, 2009, the Company repaid $1,500 in principal to the principal stockholder.  Pursuant to the terms of the loan, the loan is bearing an annual interest rate of 3.25% and is due on demand (See Note 3).

On May 22, 2009, the Company received $15,000 from a principal stockholder.  In January of 2010, the Company repaid $3,000 in principal to a principal stockholder under the terms of the loan.  In June of 2010, the Company repaid $3,000 in principal to the principal stockholder under the terms of the loan.  Pursuant to the terms of the loan, the loan is bearing an annual interest rate of 3.25% and is due on demand (See Note 3).

On May 26, 2009, the Company received $16,700 from a principal stockholder.  In May of 2010, the Company repaid $15,700 in principal to the principal stockholder under the terms of this loan.  Pursuant to the terms of the loan, the loan is bearing an annual interest rate of 3.25% and is due on demand (See Note 3).

As of September 30, 2011, the Company owes $18,000 in principal and $2,072 of accrued interest to the principal stockholder related to these principal loans (See Note 3).

On May 28, 2009, the Company entered into a two year line of credit agreement with a principal stockholder in the amount of $100,000.  The line of credit carries an interest rate at 3.25%.  As of September 30, 2011, the principal shareholder has advanced the Company $100,000 and was repaid $100,000 under the terms of this line of credit agreement (See Note 4).

On November 10, 2009, the Company entered into a two year line of credit agreement with a principal stockholder in the amount of $100,000.  The line of credit carries an interest rate at 3.25%.  As of September 30, 2011, the principal shareholder has advanced $100,000 to the Company and was repaid $100,000 under the terms of this line of credit agreement (See Note 4).

On March 25, 2010, the Company entered into a two year line of credit agreement with the principal stockholder in the amount of $500,000.  The line of credit carries an interest rate of 3.25%.  On February 17, 2011, the principal stockholder converted $100,000 of the line of credit owed into 909,091 shares of common stock at $0.11 per share.  As of September 30, 2011, the principal stockholder has advanced $276,680 to the Company and was repaid $163,550 under this line of credit agreement (See Note 7(G) and Note 4).

As of September 30, 2011, the Company owes $13,130 in principal and $11,283 of accrued interest to the principal stockholder related to these lines of credit (See Note 4).

On October 14, 2008, the Company issued 44,900,000 shares of common stock to its founder having a fair value of $44,900 ($0.001/share) in exchange for services provided.  As a result of the forward split, the 44,900,000 shares were increased to 179,600,000 shares and its purchase price was similarly adjusted to $0.00025 (See Note 7(B) and Note 7(D)).

On October 13, 2008, the Company executed an employment agreement with its President and CEO.  The term of the agreement is ten years.  As compensation for services, the President will receive a monthly compensation of $18,000 beginning October 13, 2008.  In addition, to the base salary, the employee is entitled to receive a 10% commission of all sales of the Corporation.  The agreement also calls for the employee to receive health benefits (See Note 8(A)).

On June 2, 2010, a principal stockholder converted $283,652 of accrued compensation into 945,507 shares of common stock at $0.30 per share.  (See Note 7(G)).

On February 17, 2011, a principal stockholder converted $144,000 of accrued compensation into 1,309,091 shares of common stock at $.0.11 per share. (See Note 7(G)).

During the fourth quarter of 2008, the principal stockholder contributed office space with a fair market value of $2,913 (See Note 7(F)).

For the year ended December 31, 2009, the principal stockholder contributed office space with a fair market value of $12,600 (See Note 7(F)).

For the year ended December 31, 2010, the principal stockholder contributed office space with a fair value of $9,450 (See Note 7(F)).

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Condensed Balance Sheets (Unaudited) (USD $)	Sep. 30, 2011	Dec. 31, 2010
Current Assets
Cash	$ 1,121,486	$ 297
Prepaid expenses	0	5,799
Total Current Assets	1,121,486	6,096
Property and equipment, net	87,873	65,370
Other Assets
Security deposit	4,123	3,710
Intangible assets	7,800,275	7,500,275
Total Other Assets	7,804,398	7,503,985
Total Assets	9,013,757	7,575,451
Current Liabilities
Accounts payable	133,308	159,527
Accrued expenses	258,169	258,152
Derivative liability	0	13,262
Convertible note payable - net of debt discount	0	44,864
Loan payable - related party	31,130	239,480
Total Current Liabilities	422,607	715,285
Commitments and Contingencies
Stockholders' Equity
Preferred stock, $0.0001 par value; 10,000,000 shares authorized, No shares issued and outstanding	0	0
Common stock, $0.0001 par value; 400,000,000 shares authorized, 254,560,866 and 221,055,221 shares issued and outstanding, respectively	25,457	22,106
Deferred compensation	0	(1,803,285)
Additional paid-in capital	22,256,355	17,509,682
Deficit accumulated during the development stage	(13,690,662)	(8,868,337)
Total Stockholders' Equity	8,591,150	6,860,166
Total Liabilities and Stockholders' Equity	$ 9,013,757	$ 7,575,451