10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_______________

FORM 10-Q

_______________

(Mark One)

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

For the quarterly period ended March 31, 2015

or

☐  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.)

2902A Colorado Avenue

Santa Monica, CA 90404

(Address of principal executive offices)

_______________

(800) 327-6293

(Registrant’s telephone number, including area code)

_______________

N/A

(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 ☒ No ☐

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 ☒ No ☐

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	☒
(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 ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock.

As of May 17, 2015, the registrant had  299,343,719 shares, par value $0.00001 per share, of common stock issued and outstanding.

MAX SOUND CORPORATION

FORM 10-Q

for the period ended March 31, 2015

INDEX 

PART I-- FINANCIAL INFORMATION
Item 1.	Financial Statements	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	37
Item 4.	Controls and Procedures	37
PART II-- OTHER INFORMATION
Item 1.	Legal Proceedings	38
Item 1A.	Risk Factors	40
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	40
Item 3.	Defaults Upon Senior Securities	42
Item 4.	Mine Safety Disclosures	42
Item 5.	Other Information	42
Item 6.	Exhibits	43
SIGNATURES		43

CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION

This Quarterly Report on Form 10-Q (this “Report”) contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “expect,” “predict,” “project,” “forecast,” “potential,” “continue” negatives thereof or similar expressions. Forward-looking statements speak only as of the date they are made, are based on various underlying assumptions and current expectations about the future and are not guarantees. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, level of activity, performance or achievement to be materially different from the results of operations or plans expressed or implied by such forward-looking statements.

We cannot predict all of the risks and uncertainties. Accordingly, such information should not be regarded as representations that the results or conditions described in such statements or that our objectives and plans will be

achieved and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements. These forward-looking statements are found at various places throughout this Report and include information concerning possible or assumed future results of our operations, including statements about potential acquisition or merger targets; business strategies; future cash flows; financing plans; plans and objectives of management; any other statements regarding future acquisitions, future cash needs, future operations, business plans and future financial results, and any other statements that are not historical facts.

These forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Report. All subsequent written and oral forward-looking statements concerning other matters addressed in this Report and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Report.

Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.

CERTAIN TERMS USED IN THIS REPORT

When this report uses the words “we,” “us,” “our,” and the “Company,” they refer to Max Sound Corporation, and “SEC” refers to the Securities and Exchange Commission.

PART I Ð FINANCIAL INFORMATION

Item 1. Financial Statements

MAX SOUND CORPORATION

CONTENTS

PAGE	1	CONDENSED BALANCE SHEETS AS OF MARCH 31, 2015 (UNAUDITED) AND AS OF DECEMBER 31, 2014 (AUDITED).
PAGE	2	CONDENSED STATEMENTS OF OPERATIONS FOR THE THREE MONTH ENDED MARCH 31, 2015 AND 2014 (UNAUDITED).
PAGE	4	CONDENSED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 2015 AND 2014 (UNAUDITED).
PAGES	5 - 27	NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED).

Max Sound Corporation

Condensed Balance Sheets

ASSETS

	March 31, 2015			December 31, 2014
	(UNAUDITED)
Current Assets
Cash	$	21,897		$	35,747
Inventory		8,796			38,071
Prepaid expenses		28,962			30,207
Debt offering costs - net		34,733			27,456
Total  Current Assets		94,388			131,481
Property and equipment, net		172,445			188,896
Other Assets
Security deposit		413			413
Intangible assets		17,587,006			17,850,595
Total  Other Assets		17,587,419			17,851,008
Total  Assets	$	17,854,252		$	18,171,385
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable	$	896,839		$	656,308
Accrued expenses		161,741			116,903
Line of credit - related party		220,478			268,227
Derivative liabilities		3,171,244			3,234,792
Convertible note payable, net of debt discount of $1,578,944 and $1,691,065 respectively		1,417,871			1,337,353
Total Current Liabilities		5,868,173			5,613,583
Commitments and Contingencies
Stockholders' Equity
Preferred stock,  $0.0001 par value; 10,000,000 shares authorized,
No shares issued and outstanding		—			—
Series, A Convertible Preferred stock,  $0.00001 par value; 10,000,000 shares authorized,
5,000,000 and 0 shares issued and outstanding, respectively		50			—
Common stock,  $0.00001 par value; 450,000,000 shares authorized,
284,188,822 and 373,442,040 shares issued and outstanding, respectively		2,841			3,733
Additional paid-in capital		51,613,168			50,209,989
Treasury stock		(519,575	)		(519,575	)
Accumulated deficit		(39,110,405	)		(37,136,345	)
Total Stockholders' Equity		11,986,079			12,557,802
Total Liabilities and Stockholders' Equity	$	17,854,252		$	18,171,385

See accompanying notes to condensed unaudited financial statements.

Max Sound Corporation

Condensed Statements of Operations

(UNAUDITED)

	For the Three Months Ended,
	March 31, 2015			March 31, 2014
Revenue	$	—		$	1,236
Operating Expenses
General and administrative		787,303			740,785
Consulting		69,837			133,812
Professional fees		117,624			277,474
Website development		5,000			22,881
Compensation		241,300			256,400
Total Operating Expenses		1,221,064			1,431,352
Loss from Operations		(1,221,064	)		(1,430,116	)
Other Income / (Expense)
Loss on inventory write off		(29,275	)		—
Gain (Loss) on extinguishment of debt		—			(116,582	)
Interest expense		(56,443	)		(18,596	)
Derivative Expense		(167,523	)		—
Amortization of debt offering costs		(53,093	)		(78,983	)
Loss on conversions		—			(42,085	)
Amortization of debt discount		(919,760	)		(786,155	)
Change in fair value of embedded derivative liability		473,735			(1,717,264	)
Total Other Income / (Expense)		(752,359	)		(2,759,665	)
Provision for Income  Taxes		—			—
Net Loss	$	(1,973,423	)	$	(4,189,781	)
Net Loss Per Share  - Basic and Diluted	$	(0.01	)	$	(0.01	)
Weighted average number of shares outstanding
during the year Basic and Diluted		341,970,037			313,207,471

See accompanying notes to condensed unaudited financial statements.

Max Sound Corporation

Condensed Statements of Cash Flows

(UNAUDITED)  

	For the Three Months Ended,
	March 31, 2015			March 31, 2014
Cash Flows From Operating Activities:
Net Loss	$	(1,973,423	)	$	(4,189,781	)
Adjustments to reconcile net loss to net cash used in operations
Depreciation/amortization		19,208			26,464
Common Stock and stock options issued for services		32,731			198,425
Loss on debt conversion		—			42,085
Amortization of intangible assets		263,590-			241,389
Amortization of stock based compensation		—			18,750
Amortization of debt issuance costs		17,361			96,402
Amortization of debt discount		953,494			728,736
Change in fair value of derivative liability		(460,555	)		1,717,264
Loss on debt extinguishment					18,596
Initial derivative expense		167,523			—
Changes in operating assets and liabilities:
Inventory		29,275			—
Prepaid expenses		1,245			50,799
Accounts payable		240,528			193,191
Cash overdraft					90,362
Accrued expenses		69,453			115,519
Net Cash Used In Operating Activities		(639,570	)		(651,799	)
Cash Flows From Investing Activities:
Cash paid in connection with acquisition of assets and intellectual property		—			—
Purchase of property equipment		(2,757	)		(14,979	)
Net Cash Used In Investing Activities		(2,757	)		(14,979	)
Cash Flows From Financing Activities:
Proceeds from stockholder loans / lines of credit		25,000			50,000
Repayment from stockholder loans / lines of credit		(75,000	)		(-)
Proceeds from issuance of convertible note, less offering costs and OID costs paid		733,477			450,000
Cash paid on convertible notes		(55,000	)
Net Cash Provided by Financing Activities		628,477			500,000
Net  Increase (Decrease) in Cash		(13,850	)		(166,778	)
Cash at Beginning of Period		35,747			166,778
Cash at End of Period	$	21,897		$	—
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 conversion of convertible debt and accrued interest	$	1,368,990		$	937,978
Conversion of common to preferred stock	$	1,200		$	—

See accompanying notes to condensed unaudited financial statements. 

MAX SOUND CORPORATION

NOTES TO FINANCIAL STATEMENTS

AS OF MARCH 31, 2015

(UNAUDITED)

NOTE 1           SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION

(A) Organization and Basis of Presentation

Max Sound Corporation (the "Company") was incorporated in Delaware on December 9, 2005, under the name 43010, Inc. The Company business operations are focused primarily on developing and launching audio technology software.

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 March 31, 2015 and 2014, 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 (“ASC Topic 350”). 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) Concentration of Credit Risk

The Company at times has cash in banks in excess of FDIC insurance limits. The Company had $0 in excess of FDIC insurance limits as of March 31, 2015 and 2014.

MAX SOUND CORPORATION

NOTES TO FINANCIAL STATEMENTS

AS OF MARCH 31, 2015

(UNAUDITED)

(G) 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 revenues of $0 and $1,236 for the years ended March 31, 2015 and 2014, respectively.

(H) 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 $0 and $4,805 for the years ended March 31, 2015 and 2014, respectively. 

(I) Identifiable Intangible Assets

As of March 31, 2015 and December 312, 2014, $7,500,275 of costs related to registering a trademark and acquiring technology rights (audio technology known as Max Audio Technology (MAXD) 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.

On November 15, 2012, the Company acquired the rights to assets and audio technology known as Liquid Spins, Inc. through a share exchange, whereby the Company issued 24,752,475 shares of common stock for their rights in Liquid Spins technology (See Note 8 (H)). As of March 31, 2015 and December 31, 2014, $8,096,731 and $8,338,121, respectively, of costs related to this intangible remain capitalized. The technology was placed in service on August 23, 2013 with a useful life of 10 years. However, the technology will be reviewed for impairment annually or more frequently if impairment indicators arise.

On May 19, 2014, the Company entered into an agreement with VSL Communications to acquire the rights to intellectual property titled “Optimized Data Transmission System and Method” (“ODT”) through a cash payment of $500,000 in addition to a share issuance, whereby the Company issued 10,000,000 shares of common stock, valued at $1,000,000 ($0.10/share). In exchange, the Company received a perpetual, exclusive, worldwide license to the ODT technology for all fields of use. In addition, the Company issued 1,000,000 shares of common stock, valued at $120,000 ($0.12/share), as compensation for the introduction and identification of a seller based on the agreement dated April 10, 2014.

As of March 31, 2015 and December 31, 2014, $1,620,000 of costs related to the “ODT” intangible asset remains capitalized. The technology will be reviewed for impairment annually or more frequently if impairment indicators arise. In connection with this agreement, the Company is obligated to make an additional five (5) payments totaling $1,000,000 to be made every 30 days, with the thirty (30) day periods to be waived if fund raising occurs on an anticipated faster time line. The payments of additional cash are contingent on the following funding criteria:

● The Company shall pay set increments of cash based on a percentage of gross funds received through funds raised.

● The Company shall pay 20% of such monies as soon as they are received.

MAX SOUND CORPORATION

NOTES TO FINANCIAL STATEMENTS

AS OF MARCH 31, 2015

(UNAUDITED)

In connection with funds raised through March 31, 2015, the Company recorded a liability and expensed $484,056 as royalty cost, related to the 20% fee, as of March 31, 2015, $30,000 has been paid . The remaining liability as of March 31, 2015, is $454,556 and is included in accounts payable.

The Company shall act as the exclusive agent to facilitate and negotiate any opportunities on behalf of ODT to Companies, Organizations and other qualified entities. Upon any closing, ODT shall receive 50% of gross dollars and the Company shall receive the other 50% at the time of a completion of any transaction opportunity, including legal settlements after subtracting applicable contingent legal fees. The term of the agreement is for the life of the acquired intellectual property.

On August 11, 2014, the Company and VSL simultaneously filed trade secret and patent infringement actions against Google, Inc. and its subsidiaries, YouTube, LLC and On2 Technologies, Inc., relating to proprietary and patented technology owned by Vedanti Systems Limited, a subsidiary of VSL.  The patent infringement complaint was brought in U.S. District Court for the District of Delaware and the trade secret suit was filed in Superior Court of California, County of Santa Clara.  The lawsuits contend that, in 2010, while Google was in discussions with Vedanti about the possibility of acquiring Vedanti's patented digital video streaming techniques and other proprietary methods, Google gained access to and received technical guidance regarding Vedanti’s proprietary codec, a computer program capable of encoding and decoding a digital data stream or signal.  The complaints allege that soon after the two companies initiated negotiations, Google began implementing Vedanti's technology into its own WebM/VP8 video codec without informing Vedanti, and without compensating Vedanti for its use.  Plaintiffs are seeking a permanent injunction against Google, compensatory damages, as well as treble damages. As exclusive agent to VSL to enforce all rights with respect to the subject technology, the Company has hired Grant & Eisenhofer, PA to represent the Company and VSL in the suits. These cases will be vigorously prosecuted and the Company believes it has a good likelihood of success. 

On May 22, 2014, the Company entered into a five (5) year agreement to acquire the rights to intellectual property titled “Engineered Architecture” (“EA Technology”) through a cash payment of $50,000 in addition to a share issuance, whereby the Company issued 4,000,000 shares of common stock, valued at $394,000 ($0.0985/share). In exchange, the Company received for the term of the agreement, the exclusive worldwide right to use the EA Technology. As of March 31, 2015, $392,200 of costs related to this intangible remains capitalized. The technology will be reviewed for impairment annually or more frequently if impairment indicators arise. In connection with this agreement, the Company is obligated to make an additional five (5) payments totaling $500,000 to be made every 30 days, with the thirty (30) day periods to be waived if fund raising occurs on an anticipated faster time line. The payments of additional cash are contingent on the following funding criteria:

● The Company shall pay set increments of cash based on a percentage of gross funds received through funds raised.

● The Company shall pay 10% of such monies as soon as they are received.

In connection with funds raised through March 31, 2015, the Company recorded a liability and expensed $242,028 as royalty cost, related to the 10% fee, as of March 31, 2015, $40,000 has been paid . The remaining liability as of March 31, 2015, is $202,028 and is included in accounts payable.

The Company shall act as the exclusive agent to facilitate and negotiate any opportunities on behalf of EA Technology to Companies, Organizations and other qualified entities. Upon any closing, EA shall receive 50% of gross dollars and the Company shall receive the other 50% at the time of a completion of any transaction opportunity, including legal settlements after subtracting applicable contingent legal fees. In the event the Company sublicenses EA to other entities, profits shall be split evenly 50%/50%.

(J) Impairment of Long-Lived Assets

The Company accounts for its long-lived assets in accordance with ASC Topic 360-10-05, “Accounting for the Impairment or Disposal of Long-Lived Assets.” ASC Topic 360-10-05 requires that long-lived assets, such as technology rights, be reviewed for impairment annually, or whenever events or changes in circumstances indicate that the historical cost carrying value of an asset may no longer be appropriate. The Company assesses recoverability of the carrying value of an asset by estimating the future net cash flows expected to result from the asset, including eventual disposition. If the future net cash flows are less than the carrying value of the asset, an impairment loss is recorded equal to the difference between the asset’s carrying value and fair value or disposable value. No impairments were recorded for the three months ended March 31, 2015 and 2014, respectively.

(K) 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 stock options would be anti-dilutive and accordingly, is excluded from the computation of earnings per share.

The computation of basic and diluted loss per share for the three months ended March 31, 2015 and 2014, excludes the common stock equivalents of the following potentially dilutive securities because their inclusion would be anti-dilutive:

	March 31, 2015		March 31, 2014
Stock Warrants (Exercise price - $0.25 - $.52/share)		6,500,000		3,385,000
Stock Options (Exercise price - $0.10 - $.50/share)		15,566,652		12,700,000
Convertible Debt  (Exercise price - $0.07 - $.0817/share)		177,891,339		29,778,963
Series A Convertible Preferred Shares ($0.04/share)		5,000,000		—
Total		204,957,991		45,863,963

(L) 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.

The Company's federal income tax returns are no longer subject to examination by the IRS for the years prior to 2011, and the related state income tax returns are no longer subject to examination by state authorities for the years prior to 2010.

(M) Business Segments

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

MAX SOUND CORPORATION

NOTES TO FINANCIAL STATEMENTS

AS OF MARCH 31, 2015

(UNAUDITED)

(N) Recent Accounting Pronouncements

On June 10, 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation ("ASUE 2014-10"). The guidance is intended to reduce the overall cost and complexity associated with financial reporting for development stage entities without reducing the availability of relevant information. The FASB also believes the changes will simplify the consolidation accounting guidance by removing the differential accounting requirements for development stage entities. As a result of these changes, there no longer will be any accounting or reporting differences in GAAP between development stage entities and other operating entities. For organizations defined as public business entities, the presentation and disclosure requirements in Topic 915 will no longer be required, starting with the first annual period beginning after December 15, 2014, including interim periods therein. Early application is permitted for any annual reporting period or interim period for which the entity's financial statements have not yet been issued (public business entities) or made available for issuance (other entities). The Company has elected early application of this ASU and implemented the changes in their financial statement for the year ended December 31, 2014.

In June 2014, FASB issued Accounting Standards Update (“ASU”) No. 2014-12, “Compensation – Stock Compensation (Topic 718); Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period”. The amendments in this ASU apply to all reporting entities that grant their employees share-based payments in which the terms of the award provide that a performance target that affects vesting could be achieved after the requisite service period. The amendments require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in Topic 718 as it relates to awards with performance conditions that affect vesting to account for such awards. For all entities, the amendments in this ASU are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. Entities may apply the amendments in this ASU either (a) prospectively to all awards granted or modified after the effective date or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. If retrospective transition is adopted, the cumulative effect of applying this update as of the beginning of the earliest annual period presented in the financial statements should be recognized as an adjustment to the opening retained earnings balance at that date. Additionally, if retrospective transition is adopted, an entity may use hindsight in measuring and recognizing the compensation cost. This updated guidance is not expected to have a material impact on our results of operations, cash flows or financial condition.  We are currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition.

In August 2014, the FASB issued Accounting Standards Update “ASU” 2014-15 on “Presentation of Financial Statements Going Concern (Subtopic 205-40) – Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”. Currently, there is no guidance in U.S. GAAP about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern or to provide related footnote disclosures. The amendments in this Update provide that guidance. In doing so, the amendments are intended to reduce diversity in the timing and content of footnote disclosures. The amendments require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). We are currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition.

All other newly issued accounting pronouncements but not yet effective have been deemed either immaterial or not applicable.

(O) Fair Value of Financial Instruments

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

(P) 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.

(Q) 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.

(R) 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. 

(S) Original Issue Discount

For certain convertible debt issued, the Company provides the debt holder with an original issue discount. The original issue discount is recorded to debt discount, reducing the face amount of the note and is amortized to interest expense over the life of the debt.

(T) Debt Issue Costs and Debt Discount

The Company may pay debt issue costs, and record debt discounts in connection with raising funds through the issuance of convertible debt. These costs are amortized to interest expense over the life of the debt. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed.

MAX SOUND CORPORATION

NOTES TO FINANCIAL STATEMENTS

AS OF MARCH 31, 2015

(UNAUDITED)

(U) Licensing & Distribution

On May 28, 2014, the Company entered into a license agreement with Akyumen Technologies Corp. (“Akyumen”), an original equipment manufacturer of mobile devices, for the non-exclusive, non-transferable, indivisible worldwide license rights to the use of Company’s API technology in Akyumen’s mobile devices.  The license is for five years and is renewable, with the Company’s approval, at Akyumen’s request.

As consideration for the above-referenced license rights, Akyumen agreed to pay the Company royalties of $2.50 per Akyumen device that utilizes the API technology, to be payable on a monthly basis within 15 days after the close of the calendar month.  Akyumen also agreed to pay, within three months of first sale, 50% of non-recurring engineering costs to port the Technology onto the operating systems of the Akyumen devices, inclusive of any local fees, taxes, or other charges.

On June 16, 2014, MAXD entered into a license and revenue share agreement with LOOKHU, an online subscription service that delivers movies, music, television shows, apps and games. The agreement grants LOOKHU non-exclusive, non-transferable, indivisible worldwide license rights to the distribution and use of the Company’s Application Programming Interface (“API”) audio processor technology. The license is for five years and is renewable, with the Company’s approval, at LOOKHU’s request.

As consideration for the above-referenced license rights, LOOKHU agreed to pay the Company royalties of $0.25 per month per paid subscription to the technology, to be payable on a monthly basis.  Additionally, LOOKHU agreed to pay the Company 4% of the net advertising revenue derived from advertising that utilizes the technology, to be payable on a quarterly basis.

Additionally, for the term of the agreement, the parties agreed to split, on a 50/50 basis, net revenue derived from sales of digital music or songs played from a LOOKHU software player, to be payable on a monthly basis.

(V) Inventory

Inventory consists primarily of gift cards and is valued at the lower of cost or market. Cost is determined using the weighted average method and average cost and is recomputed after each inventory purchase or sale. Inventory is periodically reviewed for obsolescence or impairment. During the three months ended March 31, 2015 the Company wrote-off impaired inventory totaling $29,275.

MAX SOUND CORPORATION

NOTES TO FINANCIAL STATEMENTS

AS OF MARCH 31, 2015

(UNAUDITED)

NOTE 2           GOING CONCERN 

As reflected in the accompanying audited financial statements, the Company had a net loss of $1,973,423 for the three months ended March 31, 2015, has an accumulated deficit of $39,110,405 as of March 31, 2015, and has negative cash flow from operations of $639,570 as of and for the three months ended March 31, 2015.

As the Company continues to incur losses, transition to profitability is dependent upon the successful commercialization of its products and achieving a level of revenues adequate to support the Company’s cost structure.

The Company may never achieve profitability, and unless and until it does, the Company will continue to need to raise additional cash. Management intends to fund future operations through additional private or public debt or equity offerings. Based on the Company’s operating plan, existing working capital at December 31, 2014 was not sufficient to meet the cash requirements to fund planned operations through January 31, 2015 without additional sources of cash. This raises substantial doubt about the Company’s ability to continue as a going concern.  The accompanying financial statements have been prepared assuming that the Company will continue as a going concern and do not include adjustments that might result from the outcome of this uncertainty.

MAX SOUND CORPORATION

NOTES TO FINANCIAL STATEMENTS

AS OF MARCH 31, 2015

(UNAUDITED)

NOTE 3           DEBT

Debt consists of the following:

	As of			As of
	March 31, 2015			December 31, 2014
Line of credit - related party	$	220,478		$	268,227
Convertible debt		2,996,815			3,028,418
Less: debt discount		(1,578,944	)		(1,691,065	)
Convertible debt - net		1,417,871			1,337,353
Total current debt	$	1,638,349		$	1,605,580

(A) Line of credit – related party

Line of credit with the principal stockholder consisted of the following activity and terms:

		Principal		Interest Rate		Maturity
Balance - December 31, 2014	$	268,227
Borrowings during the three months ended March 31, 2015		25,000		4	%	September 26, 2015
Interest accrual		2,250
Repayments		(75,000	)
Balance - March 31, 2015	$	220,478		4	%	September 26, 2015

(B) Convertible Debt

During the three months ended March 31, 2015 and year ended December 31, 2014, the Company issued convertible notes totaling $792,500 and $3,475,334, respectively. The Convertible notes issued for three months ended March 31, 2015 and year ended December 31, 2014, consist of the following terms:

			Three Months Ended		Year ended
			March 31, 2015		December 31, 2014
			Amount of		Amount of
			Principal Raised		Principal Raised
Interest Rate			2.5% - 10%		2.5% - 10%
Default interest rate			14% - 22%		14% - 22%
Maturity			February 26, 2015 - June 18, 2016		February 26, 2015 - June 18, 2016
Conversion terms 1	65% of the “Market Price”, which is the average of the lowest three (3) trading prices for the common stock during the ten (10) trading day period prior to the conversion.		689,500		689,500
Conversion terms 2	65% of the “Market Price”, which is the lowest trading prices for the common stock during the ten (10) trading day period prior to the conversion.		592,500		747,500
Conversion terms 3	70% of the “Market Price”, which is the average of the lowest three (3) trading prices for the common stock during the fifteen (15) trading day period prior to the conversion.		150,000		—
Conversion terms 4	70% of the “Market Price”, which is the average of the lowest three (3) trading prices for the common stock during the ten (10) trading day period prior to the conversion.		—		250,000
Conversion terms 5	70% of the “Market Price”, which is the average of the lowest three (3) trading prices for the common stock during the twenty (20) trading day period prior to the conversion.		50,000		125,000
Conversion terms 6	70% of the lower of the average of the three (3) lowest trading prices for the fifteen (15) day trading period 1 day prior to conversion.		—		50,000
Conversion terms 7	75% of the “Market Price”, which is the average of the lowest three (3) trading prices for the common stock during the ten (10) trading day period prior to the conversion.		—		848,334
Conversion terms 8	Convertible into $0.07/share.  After six month from the date of this note, conversion price shall equal the lower of $0.07/share or the variable conversion price - 75% of the average three (3) lowest closing prices during the ten (10) trading day period.		—		765,000
		$	792,500	$	3,475,334

The debt holders are entitled, at their option, to convert all or part of the principal and accrued interest into shares of the Company’s common stock at conversion prices and terms discussed above.    The Company classifies embedded conversion features in these notes as a derivative liability due to management’s assessment that the Company may not have sufficient authorized number of shares of common stock required to net-share settle or due to the existence of a ratchet due to an anti-dilution provision. See Note 4 regarding accounting for derivative liabilities.

During the three months ended March 31, 2015, the Company converted debt and accrued interest, totaling $791,444 into 29,796,782 shares of common stock.    

During the year ended December 31, 2014, the Company converted debt and accrued interest, totaling $3,421,019 into 48,998,342 shares of common stock.    Conversions of debt to equity occurring after the maturity date and penalties incurred resulted in a loss on settlement of $183,907.

MAX SOUND CORPORATION

NOTES TO FINANCIAL STATEMENTS

AS OF MARCH 31, 2015

(UNAUDITED)

Convertible debt consisted of the following activity and terms:

Convertible Debt Balance as of December 31, 2014	3,028,418		4% - 10%	February 26, 2015 - June 18, 2016
Borrowings during the three months ended March 31, 2015	792,500		8% - 10%
Non-Cash Reclassification of accrued interest converted	22,361
Repayments	(55,000	)
Conversion  of debt to into 29,796,782 shares of common stock with a valuation of $791,4448 ($0.02 - $0.039/share) including the accrued interest of $22,361	(791,444	)
Convertible Debt Balance as of March 31, 2015	2,996,815		4% - 10%	February 26, 2015 - June 18, 2016

(C) Debt Issue Costs

During the three months ended March 31, 2015, the Company paid debt issue costs totaling $26,938.

The following is a summary of the Company’s debt issue costs:

	Three Months Ended			Three Months Ended
	March 31, 2015			March 31, 2014
Debt issue costs	$	221,693		$	146,055
Accumulated amortization of debt issue costs		(184,960	)		(118,529	)
Debt issue costs - net	$	34,733		$	27,526

During the three months ended March 31, 2015 and 2014 the Company amortized $17,361 and $38,983 of debt issue costs, respectively.

(D) Debt Discount & Original Issue Discount

During the three months ended March 31, 2015 and December 31, 2014, the Company recorded debt discounts and original issue discounts totaling $841,373 and $3,199,391, respectively.

The debt discount recorded in 2015 and 2014 pertains to convertible debt that contains embedded conversion options that are required to bifurcated and reported at fair value and original issue discounts.

The Company amortized $953,494 and $728,736 during the three months ended March 31, 2015 and 2014, respectively, to amortization of debt discount expense.

		Three Months Ended			Three Months Ended
		March 31, 2015			March 31, 2014
Debt discount	$	2,532,438		$	2,923,369
Accumulated amortization of debt discount		(953,494	)		(1,712,320	)
Debt discount - Net	$	1,578,944		$	1,211,049

MAX SOUND CORPORATION

NOTES TO FINANCIAL STATEMENTS

AS OF MARCH 31, 2015

(UNAUDITED)

NOTE 4           DERIVATIVE LIABILITIES

The Company identified conversion features embedded within convertible debt issued in 2015 and 2014 and warrants issued in 2015 and 2014. The Company has determined that the features associated with the embedded conversion option should be accounted for at fair value as a derivative liability.

As a result of the application of ASC No. 815, the fair value of the conversion feature is summarized as follow:

Derivative Liability - December 31, 2014	$	3,234,792
Fair value at the commitment date for convertible instruments		974,533
Change in fair value of embedded derivative liability for convertible instruments		(460,555	)
Reclassification to additional paid in capital for financial instruments that ceased to be a derivative liability		(577,526	)
Derivative Liability - March 31, 2015	$	3,171,244

The Company recorded the debt discount to the extent of the gross proceeds raised, and expensed immediately the remaining value of the derivative as it exceeded the gross proceeds of the note.  The Company also recorded the value of the warrants issued for services as derivative expense for the three months ended March 31, 2015.  The Company recorded a derivative expense for the three months ended March 31, 2015 and 2014 of $167,523 and $0, respectively.

The fair value at the commitment and re-measurement dates for the Company’s derivative liabilities were based upon the following management assumptions as of March 31, 2015:

	Commitment Date		Re-measurement Date
Expected dividends:	0	%	0	%
Expected volatility:	133.33% - 149.37%		128.45% - 238.77%
Expected term:	0.97 - 2 Years		0.07 - 1.95 Years
Risk free interest rate:	0.01% - 1.16%		0.12% - 1.10%

The fair value at the commitment and re-measurement dates for the Company’s derivative liabilities were based upon the following management assumptions as of December 31, 2014:

	Commitment Date		Re-measurement Date
Expected dividends:	0	%	0	%
Expected volatility:	109% - 304%		120% - 140%
Expected term:	0.44 - 3 Years		0.16 - 2.9 Years
Risk free interest rate:	0.06% - 0.94%		0.12% - 1.10%

MAX SOUND CORPORATION

NOTES TO FINANCIAL STATEMENTS

AS OF MARCH 31, 2015

(UNAUDITED)

NOTE 5           PROPERTY AND EQUIPMENT

At December 31, 2014, and December 31, 2013, respectively, property and equipment is as follows:

		March 31, 2015			December 31, 2014
Website Development	$	294,795		$	294,795
Furniture and Equipment		99,881			99,881
Leasehold Improvements		6,573			6,573
Software		53,897			53,897
Music Equipment		2,247			2,247
Office Equipment		74,412			71,652
Domain Name		1,500			1,500
Sign		628			628
Total		533,933			531,173
Less: accumulated depreciation and amortization		(361,488	)		(342,277	)
Property and Equipment, Net	$	172,445		$	188,896

Depreciation/amortization expense for the three months ended March 31, 2015 totaled $19,208.

Depreciation/amortization expense for the three months ended March 31, 2014 totaled $26,464.

MAX SOUND CORPORATION

NOTES TO FINANCIAL STATEMENTS

AS OF MARCH 31, 2015

(UNAUDITED)

NOTE 6          STOCKHOLDERS' EQUITY

On November 10, 2014, the Company with the consent of the Majority Shareholder and Unanimous Written Consent of the Board of Directors filed with the State of Delaware an Amended Certificate of Incorporation increasing the authorized shares of common stock by 50,000,000 shares of common stock, and changing the par value to $.00001 per share.

On March 4, 2015, the Company with the consent of the Majority Shareholder and Unanimous Written Consent of the Board of Directors created and authorized the issuance of Series A Convertible Preferred stock, with a par value of $0.00001 per share. The face amount of state value of each Preferred Share of stock is $0.96.

(A) Common Stock 

During the three months ended March 31, 2015, the Company issued the following common stock:

Transaction Type	Quantity			Valuation			Range of Value per share
Conversion of convertible debt and accrued interest		29,796,782		$	791,444			$0.02715 - $0.14175
Services - rendered		950,000			32,730			$0.028 - $0.063
Return of shares		(120,000,000	)		(1,200	)	$	0.00001
Preferred stock issued in exchange of common stock		5,000,000			50		$	0.00001
Total shares issued		(89,253,218	)	$	1,401,650

 The following is a detailed description of transactions noted above:

1. Conversion of convertible debt and accrued interest

During the three months ended March 31, 2015, the Company converted debt and accrued interest, totaling $791,444 into 29,796,782 shares of common stock

2. Services Rendered

On February 28, 2015, the Company entered into a services agreement. In connection with this agreement, the consultant will receive 700,000 shares of fully vested common stock.

During the year ended December 31, 2014, the Company issued 250,000 shares of common stock valued at $12,850 in connection with employment agreements entered into (See Note 9 (A).

2. Return of Shares and Issuance of Preferred shares

On March 4, 2015 the Company filed a form 8K with the SEC associated with the Company entering into a Securities Exchange Agreement and the Company filing with the Secretary of State Delaware a Certificate of Designations, Preferences and Rights whereby, among other things, the Company for good and valuable consideration, agreed that in consideration of a large shareholder exchanging 120,000,000 shares of common stock back to the Company, the shareholder would receive 5,000,000 shares of Series A Convertible Preferred Stock of the Company at a Stated Value of $0.96 per share and a Conversion Price of $.0.04 per share. The Series A Convertible Preferred Stock carries certain voting preferences and will accrue dividends at a rate of 8% per annum Stated Value, payable in cash or in kind at the election of the Board of Directors. For the three months ended March 31, 2015, the Company recorded $30,000 as a dividend payable.

MAX SOUND CORPORATION

NOTES TO FINANCIAL STATEMENTS

AS OF MARCH 31, 2015

(UNAUDITED)

During the year ended December 31, 2014, the Company issued the following common stock:

Transaction Type	Quantity			Valuation		Range of Value per share
Conversion of convertible debt and accrued interest	48,998,342		$	3,421,019		$0.02715 - $0.14175
Services - rendered	3,150,000			678,030		$0.093 - $0.365
Acquisition of intangibles	15,000,000			1,514,000		$0.0985 - $0.12
Return of shares	(4,250,000	)		—		$0.00 - $0.00
Settlement of accounts payable	1,000,000			90,000	$	0.09
Total shares issued	63,898,342		$	5,703,049

The following is a detailed description of transactions noted above:

1. Conversion of convertible debt and accrued interest

During the year ended December 31, 2014, the Company converted debt and accrued interest, totaling $3,421,019 into 48,998,342 shares of common stock.    Conversions of debt to equity occurring after the maturity date and penalties incurred resulted in a loss on settlement of $183,911.

2. Services Rendered

During the year ended December 31, 2014, the Company issued 1,250,000 shares of common stock valued at $386,250 in connection with employment agreements entered into (See Note 9 (A).

On January 15, 2013, the Company entered into an agreement for legal services, pursuant to which the Company will pay $2,000 and issue 50,000 shares of fully vested common stock for the preparation, filing costs and fees of each provisional and regular patent application.  Through September 30, 2014, a total of 44 applications have been filed.  In connection with this agreement:

During the year ended December 31, 2014, the Company issued 800,000 shares of fully vested common stock for services having a fair value of $131,500 ($0.11 - $0.168/share).

On March 17, 2014, the Company entered into an advisory board agreement for a period of three years. In consideration for these services, during the nine months ended September 30, 2014, the Consultant was granted 100,000 shares of fully vested common stock valued at $9,300 ($0.09/share). (See note 7(B)).

On April 4, 2014, the Company entered into consulting services agreement. In consideration for these services, during the nine months ended September 30, 2014, the Consultant was granted 200,000 shares of fully vested common stock valued at $21,980 ($0.11/share). (See note 7(B)).

During the year ended December 31, 2014, the Company entered into a consulting services agreement related to marketing and the creation of Company awareness. In connection with this agreement, the consultant shall be paid $20,000 and was issued 200,000 fully vested shares of common stock valued at $31,000 ($0.16/share). (See note 7(B)).

On August 6, 2014, the Company entered into an advisory board agreement for a period of three years. In consideration for these services, during the nine months ended September 30, 2014, the Consultant was granted 100,000 fully vested shares of common stock valued at $16,500 ($0.17/share). (See note 7(B)).

On September 23, 2014, the Company entered into service agreement for a period of two years with the Company’s transfer agent. In consideration for these services, during the nine months ended September 30, 2014, 300,000 shares of fully vested common stock valued at $49,500 ($0.17/share) were granted and expensed.

On September 10, 2014, the Company entered into an advisory board agreement. In consideration for these services, during the nine months ended September 30, 2014, the Consultant was granted 100,000 shares of fully vested common stock valued at $16,000 ($0.16/share). (See note 7(B)).

On July 29, 2014, the Company entered into an investor relations agreement. In connection with this agreement, the Company is to issue 100,000 shares of common stock monthly and $5,500 in monthly fees. As of September 30, 2014, the agreement was terminated. In total, the consultant was issued 100,000 shares of fully vested common stock valued at $16,000 ($0.16/share) and was paid $5,500. (See note 7(B)).

MAX SOUND CORPORATION

NOTES TO FINANCIAL STATEMENTS

AS OF MARCH 31, 2015

(UNAUDITED)

3. Acquisition of intangibles

During the nine months ended September 30, 2014, the Company issued 15,000,000 common shares in connection with license agreements entered into and intangibles acquired. See Note 1(I)

4. Return of Shares

On August 3, 2012, the Company entered into an endorsement agreement with an unrelated third party for a period from August 3, 2012 through August 3, 2015.    In exchange for the services provided, the Company issued 3,000,000 shares of common stock having a fair value of $960,000 ($0.30/share) based upon fair value on the date of grant. As of January 2014, the August 3, 2012 agreement has been terminated and 3,000,000 shares have been returned to the Company (See note 7(B)).

In July of 2013, the Company entered into a financial advisor agreement for a period of six months with the advisor providing various assistance including introductions to potential investors. The Agreement calls for a fee of $25,000 with an additional $7,500 due and payable on the 1st day of the subsequent five months. On July 8, 2013, the Company issued 1,500,000 common shares as consideration for these services valued at $315,000. On April 15, 2014, the parties entered into a mutual termination agreement, as a result, 1,250,000 shares were returned to the Company.

5. Settlement of accounts payable

During the year ended December 31, 2014, the Company settled accounts payable totaling $154,320 through the issuance of $1,000,000 common shares with a valuation of $90,000. The Company recognize a gain on settlement of $64,320.

 (B) Stock Warrants

On November 25, 2014, the Company issued 200,000 warrants for services rendered. The Company recognized compensation expense of $11,972 on the date of issuance with the offset being recorded to derivative liabilities since the Company applied the provisions of ASC No. 815, pertaining to the potential settlement in a variable amount of shares given the company’s shares are tainted.    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 assumptions, dividend yield of zero, expected volatility of 128%; risk-free interest rates of 0.91%, 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 9(B)).

During the year ended December 31, 2014, the Company issued 750,000 warrants in connection with the entry into certain convertible debenture agreements. Each warrant vests immediately and expire February 26, 2017 – August 12, 2017 with an exercise price of $0.40.

The following tables summarize all warrant grants as of March 31, 2015, and the related changes during these periods are presented below:

Balance, December 31, 2014	3,750,000	$	0.38	1.7
Granted	—	$	—
Exercised	—	$	—
Cancelled/Forfeited	—	$	—
Balance, March 31, 2015	3,750,000	$	0.38	1.4

MAX SOUND CORPORATION

NOTES TO FINANCIAL STATEMENTS

AS OF MARCH 31, 2015

(UNAUDITED)

A summary of all outstanding and exercisable warrants as of March 31, 2015 is as follows:

				Weighted Average
	Exercise	Warrants	Warrants	Remaining		Aggregate
	Price	Outstanding	Exercisable	Contractual Life		Intrinsic Value
$	0.10	200,000	200,000	2.66	$	—
$	0.25	200,000	200,000	0.20	$	—
$	0.40	2,850,000	2,850,000	1.49	$	—
$	0.45	500,000	500,000	0.76	$	—
		3,750,000	3,750,000	1.4 years	$	—

 A summary of all outstanding and exercisable warrants as of December 31, 2014 is as follows:

				Weighted Average
	Exercise	Warrants	Warrants	Remaining		Aggregate
	Price	Outstanding	Exercisable	Contractual Life		Intrinsic Value
$	0.10	200,000	200,000	2.90	$	—
$	0.25	200,000	200,000	0.44	$	—
$	0.40	2,850,000	2,850,000	1.73	$	—
$	0.45	500,000	500,000	1.00	$	—
		3,750,000	3,750,000	1.7 years	$	—

(C) Stock Options

The following tables summarize all option grants as of March 31, 2015, and the related changes during these periods are presented below:

Outstanding - December 31, 2014	15,566,652	0.13	1.32
Granted	—	—	—
Exercised	—	—	—
Forfeited or Canceled	—	—	—
Outstanding - March 31, 2015	15,566,652	—	1.07
Exercisable - March 31, 2015	15,566,652

MAX SOUND CORPORATION

NOTES TO FINANCIAL STATEMENTS

AS OF MARCH 31, 2015

(UNAUDITED)

(D) 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).

On November 15, 2012, the Company acquired the rights to an audio technology known as Liquid Spins, Inc. through a share exchange, whereby the Company issued 24,752,475 shares of common stock for their rights in Liquid Spins technology and other assets having a value of $10,000,000 based upon recent market value ($0.404/share).    The following assets were acquired in the transaction:

	Three Months Ended			Year Ended
	March 31, 2015			December 31, 2014
Intangible at fair value, Opening Balance	$	9,303,679		$	9,303,679
Consideration transferred  at fair value:
Common stock - 24,752,475 Shares		—			—
Net assets acquired:
Current assets		—			—
Cash		—			—
Total net assets acquired		—			8,011
Amortization		(1,206,949	)		(965,559	)
Intangible at fair value, Ending Balance	$	8,096,731		$	8,338,121

During the year ended December 31, 2013, the Company received an additional $8,011 related to the acquisition which reduced the carrying value of the intangible asset as of December 31, 2013.  For the year ended December 31, 201, the Company recorded $965,559_ of amortization expense.

For the year ended December 31, 2014 and 2013, the Company recorded $965,559 and $343,898, respectively, of amortization expense.

For the three months ended March 31, 2015 and 2014, the Company recorded $241,390 and $241,389, respectively, of amortization expense.

(D) Share Exchange

For the three months ended March 31, 2015 and 2014, the Company recorded $241,390 and $241,389, respectively, of amortization expense.

MAX SOUND CORPORATION

NOTES TO FINANCIAL STATEMENTS

AS OF MARCH 31, 2015

(UNAUDITED)

NOTE 7         COMMITMENTS

(A) Employment Agreement

On January 9, 2013, the Company executed an employment agreement with its Director of New Business Development. The term of the agreement is for three years.   As compensation for services, the Director will receive a monthly compensation of $10,000.   Upon the first million dollars in gross sales the salary will increase to $12,000 per month.  In addition, the Director will receive up to 1,000,000 shares of common stock payable in lots of 125,000 per quarter beginning on January 1, 2013.    Also, employee for the first eight quarters of employment has a right to earn 125,000 additional 3 year stock options with a strike price of $0.50 per share as follows:

For each million of new gross sales - 125,000 additional 3-year stock options with a strike price of $.50 per share.

For the year ended December 31, 2014 and year ended December 31, 2013, the employee received 375,000 and 500,000 shares with a fair value of $95,625 and $127,500, respectively. For the three months ended March 31, 2015, the employee received 125,000 with a fair value of $7,875

On November 26, 2012, the Company executed an employment agreement with its VP of Music Entertainment. The term of the agreement is for two years.   As compensation for services, the VP will receive a monthly compensation of $8,000.   In addition, the employee will receive up to 1,000,000 shares of common stock payable in lots of 125,000 per quarter beginning on December 1, 2012.   In addition, the employee is entitled to a monthly commission equal to 5% of all profits from any sales of music from Liquid Spins that employee is directly responsible for bringing to the Company.   For the three months ended March 31, 2014 and year ended December 31, 2013, the employee received 125,000 and 500,000 shares with a fair value of $45,625 and $133,750, respectively. As of February 3, 2014, the employee was terminated with no additional compensation owed.

On November 26, 2012, the Company executed an employment agreement with its VP of Music Distribution. The term of the agreement is for two years.   As compensation for services, the VP will receive a monthly compensation of $7,000.    In addition, the employee will receive up to 1,000,000 shares of common stock payable in lots of 125,000 per quarter beginning on December 1, 2012.    In addition, the employee is entitled to a monthly commission equal to 5% of all profits from any sales of music from Liquid Spins that employee is directly responsible for bringing to the Company.   For the nine months ended September 30, 2014 and year ended December 31, 2013, the employee received 500,000 and 500,000 shares with a fair value of $182,500 and $133,750, respectively. For the three months ended March 31, 2015, the employee received 125,000 with a fair value of $4,975.

On June 11, 2012, the Company executed an employment agreement with its Senior Audio Engineer.   The term of the agreement is for five years.   As compensation for services, the Engineer will receive a monthly compensation of $6,000 beginning July 1, 2012.  In addition to the base salary, the employee is entitled to receive health benefits, and the employee will receive 1,000,000 shares of common stock payable in 125,000 increments per quarter beginning on July 1, 2012.   For year ended December 31, 2014 and year ended December 31, 2013, the employee received 250,000 and 500,000 shares with a fair value of $62,500 and $125,000, respectively.

(B) Consulting Agreement

On January 21, 2015, the Company entered into a consulting services agreement. In connection with this agreement, the consultant shall be paid $4,000 per month and receive up to 150,000 shares of common stock payable in lots of 50,000 per month and will be issued 90 days after the date of the signing of the agreement. For three months March 31, 2015, the Company recorded $9,000 in stock based compensation payable.

On January 21, 2015, the Company entered into a consulting services agreement. In connection with this agreement, the consultant shall be paid $4,000 per month and receive up to 150,000 shares of common stock payable in lots of 50,000 per month and will be issued 90 days after the date of the signing of the agreement. For three months March 31, 2015, the Company recorded $9,000 in stock based compensation payable.

On March 17, 2015, the Company entered into a services agreement. In connection with this agreement, the consultant will receive 300,000 shares of fully vested common stock, payable in lots of 100,000 shares of common stock per month and 5,000 per month. The agreement will continue until June 17, 2015. For three months March 31, 2015, the Company recorded $8,400 in stock based compensation payable.

On February 18, 2015, the Company entered into service agreement for a period of two years with the Company’s transfer agent for a period from September 23, 2014 to September 23, 2016. . In consideration for these services, during the three months ended March 31, 2015, 700,000 shares of fully vested common stock valued at $22,400 ($0.03/share) were granted.

MAX SOUND CORPORATION

NOTES TO FINANCIAL STATEMENTS

AS OF MARCH 31, 2015

(UNAUDITED)

On March 17, 2014, the Company entered into an advisory board agreement for a period of three years. In consideration for these services, during the nine months ended September 30, 2014, the Consultant was granted 100,000 shares of fully vested common stock valued at $9,300 ($0.09/share). Two additional blocks of 100,000 common shares shall be granted shall certain benchmarks be accomplished during the first year.

On April 24, 2014, the Company entered into consulting services agreement. In consideration for these services, during the nine months ended September 30, 2014, the Consultant was granted 200,000 shares of fully vested common stock valued at $21,980 ($0.11/share).

During the nine months ended September 30, 2014, the Company entered into a consulting services agreement related to marketing and the creation of Company awareness. In connection with this agreement, the consultant shall be paid $20,000 and was issued 200,000 shares of fully vested common stock valued at $31,000 ($0.16/share).

On August 6, 2014, the Company entered into an advisory board agreement for a period of three years. In consideration for these services, during the nine months ended September 30, 2014, the Consultant was granted 100,000 shares of fully vested common stock valued at $16,500 ($0.17/share).

On September 23, 2014, the Company entered into service agreement for a period of two years with the Company’s transfer agent. In consideration for these services, during the nine months ended September 30, 2014, 300,000 shares of fully vested common stock valued at $49,500 ($0.17/share) were granted.

On September 10, 2014, the Company entered into an advisory board agreement. In consideration for these services, during the nine months ended September 30, 2014, the Consultant was granted 100,000 shares of fully vested common stock valued at $16,000 ($0.16/share).

On July 29, 2014, the Company entered into an investor relations agreement. In connection with this agreement, the Company is to issue 100,000 shares of fully vested common stock monthly and $5,500 in monthly fees. As of September 30, 2014, the agreement was terminated. The consultant was issued 100,000 shares of common stock valued at $16,000 ($0.16/share) and was paid $5,500.

(C) Operating Lease Agreements

On September 20, 2012, the Company took over a month to month operating lease upon completing the asset purchase agreement with Liquid Spins. The lease began on October 1, 2012 at a monthly rate of $1,585. The Company gave notice to end this month to month lease, with a final end date of February 28, 2014.

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. At the current time the Company is continuing on with the existing office space on a month to month basis based on the previous terms and conditions of the recently expired lease.

(C) Research Agreement

On July 1, 2014, the Company entered into a research agreement with University of Florida for the service period to begin July 15, 2014 and ending no later than October 31, 2014. Subsequently on December 3, 2014, the Company modified the terms of the service period of the agreement to start on September 30,214 and ending no later than January 15,2015. The fee for research services is fixed at $49,910 and will be paid in four monthly installments of $12,678. For the year ended December 31, 2014 the Company recorded a liability and expensed $12,678 as research and development cost, as of December 31, 2014, $0 has been paid. The remaining liability as of December 31, 2014, is $12,678 and is included in accounts payable. For the three months ended March 31, 2015, the Company paid $12,678 and $0 is included in accounts payable.

MAX SOUND CORPORATION

NOTES TO FINANCIAL STATEMENTS

AS OF MARCH 31, 2015

(UNAUDITED)

NOTE 8       LITIGATION

From time to time, the Company may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm its business.

On February 21, 2012, the Company filed a suit for breach of contract, intentional misrepresentation, negligent misrepresentation, fraud, false advertising, and unfair competition with a former consultant.   It seeks damages due to their alleged failure to meet the contractual requirements regarding promotions.   The defendant has been served.   In September of 2014, the Company received a Default Judgment against the Defendant.    The Company is vigorously pursuing collection on this judgment.

On August 14, 2012, the Company, along with two shareholders of the Company, were named as a defendant in an action filed in the Superior Court for the State of California and the County of San Diego. The plaintiff alleges he was terminated by his former employer “Acoustics Control Sciences, LLC” (which is a company that is not affiliated with Max Sound Corporation) in August 2008 without receiving wages and other compensation allegedly due him. The plaintiff further claims that two of the members or “shareholders” of Acoustics Control Sciences, LLC, wrongfully transferred a patent owned by his former employer and this transfer prevented his former employer from paying the wages alleged due. According to the plaintiff, when the assets of his former employer were sold to the Company, Max Sound Corporation became a successor-in-interest to the plaintiff’s former employer. Plaintiff thus seeks unpaid wages and other compensation from each alleged successor-in-interest named in his complaint. This case will be vigorously prosecuted and has a good likelihood of success.

On August 11, 2014, the Company and VSL simultaneously filed trade secret and patent infringement actions against Google, Inc., and its subsidiaries YouTube, LLC, and On2 Technologies, Inc., relating to proprietary and patented technology owned by Vedanti Systems Limited (“Vedanti”), a subsidiary of VSL.  The patent infringement complaint was originally filed in the U.S. District Court for the District of Delaware; the trade secret suit was filed in Superior Court of California, County of Santa Clara.  On September 30, 2014, the Company filed notices of voluntary dismissal without prejudice as to both lawsuits. On October 1, 2014, the Company amended the patent complaint and filed it in the U.S. District Court for the Northern District of California. In this patent lawsuit, which remains pending, the Company contends that, in 2010, while Google was in discussions with Vedanti about the possibility of acquiring Vedanti's patented digital video streaming techniques and other proprietary methods, Google gained access to and received technical guidance regarding Vedanti’s proprietary codec, a computer program capable of encoding and decoding a digital data stream or signal.  The lawsuit further alleges that soon after Google and Vedanti initiated negotiations, Google willfully infringed Vedanti's patent by incorporating Vedanti's patented technology into Google's own VP8, VP9, WebM, YouTube, Google Adsense, Google Play, Google TV, Chromebook, Google Drive, Google Chromecast, Google Play-per-view, Google Glasses, Google+, Google’s Simplify, Google Maps, and Google Earth, without compensating Vedanti for such use.  Plaintiffs are seeking a permanent injunction against Google, compensatory damages, as well as treble damages. As exclusive agent to VSL to enforce all rights with respect to the subject technology, the Company has hired Grant & Eisenhofer PA and Buether Joe & Carpenter LLC to represent the Company in the suit on a contingency fee basis. The case will be vigorously prosecuted, and the Company believes it has a good likelihood of success. 

Additionally, on December 5, 2014, the Company, along with renowned architect Eli Attia, filed a lawsuit in the Superior Court of California, County of Santa Clara, against Google, its co-founders Sergey Brin and Larry Page, Google’s spinoff company Flux Factory, and senior executives of Flux. Plaintiffs’ allege misappropriation of trade secrets, breach of contract and other contract-related claims, breach of confidence, slander of title, violation of California’s Unfair Competition Law (California Business and Professionals Code §§ 17200 et seq.), and fraud, and also bring a claim for declaratory relief. The lawsuit contends that Google and the other Defendants stole Mr. Attia’s trade secrets, proprietary information, and know-how regarding a revolutionary architecture design and building process that he alone had invented, known as Engineered Architecture. Defendants are alleged to have engaged Mr. Attia in 2010 and 2011 to translate his architectural technology into software for a proof of concept, with the goal of determining at that point whether to continue with full-scale development with Mr. Attia. Instead, the lawsuit claims that once Mr. Attia had disclosed the trade secrets and proprietary information Defendants needed to bring the technology to market, they severed ties with Mr. Attia, and continued to use his technology without a license and without compensation, in order to bring the technology to market themselves. Plaintiffs seek a permanent injunction against Google, damages (including punitive damages), and restitution. As exclusive agent to Eli Attia to enforce all rights with respect to the subject technology, the Company has retained Buether Joe & Carpenter LLC to represent the Company in the suit, on a contingency fee basis. The case will be vigorously prosecuted, and the Company believes it has a good likelihood of success. 

On September 8 and 9, 2014, respectively, the Company and VSL were granted preliminary injunctions by the District Court of Berlin, Germany, against the Chinese company Shenzhen KTC Technology Co. Ltd. and the French company Pact Informatique S.A. Both companies have been offering products at the International Consumer Electronics Trade Show 2014 in Berlin, which, according to the company’s claim and the Preliminary Injunctions issued by the Court, infringed the rights to a patent. This patent is the German is the German part of the patent on optimized data transmission, owned by Vedanti, which is already asserted the United States infringement proceedings. The products in question are tablet computers and smart phones with Android OS and with the ability to encode videos in the format H.264. The injunctions were issued ex-parte and can be appealed by the Defendants. However, currently there are no indications that any prospective appeals will be interposed. The Company can still enforce claims for cost reimbursement with regard to these legal proceedings.

On December 2, 2014, the Company filed a patent infringement action against Google, Inc., Germany GmBH, Google Commerce Ltd. and YouTube LLC with the District Court of Mannheim, Germany. The asserted patent infringement concerns the same patent infringement asserted in the in the prior Germany Preliminary Injunctions described herein. The Complaint alleges that Google Inc. and it above-named subsidiaries are offering and selling products which can also decode and show videos, which have been encoded in a patent protected and proprietary way. The complaint also avers that YouTube LLC offers to German customers, which are encoded and transmitted in a manner claimed and protected by the patent. The Company mainly seeks a permanent injunction against the Defendants, damages and information regarding past infringements.

On January 26, 2015, the Company was named as a defendant in an action filed in the Superior Court for the State of California and the County of Los Angeles captioned Bibicoff Family Trust v. Max Sound Corporation (Case No. SC123679). In the complaint the plaintiff alleges a cause of action for breach of contract associated with the non-payment by the Company for certain services plaintiff agreed to provide to the Company. The Company interposed a cross-complaint against plaintiffs averring causes of action for breach of contract, fraud, and negligent misrepresentation by defendants with respect to defendants’ undisclosed inability to perform the services that are the subject of this dispute. This lawsuit will be vigorously defended and prosecuted. While this lawsuit is in its infancy, the Company believes there is a strong likelihood of success on the merits with respect to the defending and prosecuting this action.

The Company intends to vigorously prosecute these various patent infringement litigations. The Company believes it has a good likelihood of success associated with these patent infringement lawsuits. However, no assurance can be given by the Company as to the ultimate outcome of these actions or its effect on the Company. The law firm is prosecuting these action on a pure contingency fee basis.

No assurance can be given as to the ultimate outcome of these actions or its effect on the Company.

MAX SOUND CORPORATION

NOTES TO FINANCIAL STATEMENTS

AS OF MARCH 31, 2015

(UNAUDITED)

NOTE 9        INTANGIBLE ASSETS

As of December 31, 2014 and December 31, 2013, the Company owns certain trademarks and technology rights.    See Note 1 (I).

Intangible assets were comprised of the following at March 31, 2015 and December 31, 2014:

	Useful Life		March 31, 2015			December 31, 2014
Distribution rights	10 Years	$	9,647,577		$	9,647,577
Trademarks	Indefinite		7,500,000			7,500,000
Licensing Rights	Indefinite		2,064,000			2,064,000
Software	3 Years		—			—
Other	Indefinite		275			275
Accumulated amortization			(1,624,847	)		(1,361,257	)
Net carrying value		$	17,587,005		$	17,850,595

For the three months ended March 31, 2015 and 2014, amortization expense related to the intangibles with finite lives totaled $263,590 and $241,390, respectively, and was included in general and administrative expenses in the statement of operations.   

MAX SOUND CORPORATION

NOTES TO FINANCIAL STATEMENTS

AS OF MARCH 31, 2015

(UNAUDITED)

NOTE 10        SUBSEQUENT EVENTS

Through the filing of these financial statements, the Company converted a total of approximately $223,000 in convertible debt comprised of principal and accrued interest into approximately 9,704,897 common shares.

On April 1, 2015, the principal stockholder converted $150,000 of the line of credit owed into 5,000,000 shares of common stock at $0.03 per share.

On April 1, 2015, the Company issued 150,000 shares of common stock having a fair value of $4,470 ($0.0284/sh) in exchange for consulting services.

On April 1, 2015, the Company issued 150,000 shares of common stock having a fair value of $4,470 ($0.0284/sh) in exchange for consulting services. 

On April 1, 2015, the Company issued 300,000 shares of common stock having a f air value of $8,520 ($0.0284/sh) in exchange for consulting services.

On April 1, 2015, the Company extended the November 26, 2012 employment agreement with its VP of Music Development for another two year period, ending on November 27, 2016. The employee will receive 125,000 shares of common stock per quarter starting on April 1, 2015, and a salary of $10,000 per month. The employee's month base salary will increase to $14,000 per month in the event the Corporation received $1,000,000 from funding or revenues in the 2015 calendar year.

On April 21, 2015, the Company entered into an agreement whereby the Company will issue up to $54,600 in a convertible note. The note matures on April 21, 2016 and bears an interest charge of 8%. The conversion price equals the “Variable Conversion Price”, which is 65% of the lowest two trading prices for the common stock during the fifteen (15) trading day period prior to the conversion. The holder of the note has a right to convert all or any part of the outstanding unpaid principal amount into shares of common stock after six months. The Company received $52,000 of proceeds less and $2,600 in legal costs on April 21, 2015.

On April 21, 2015, the Company entered into an agreement whereby the Company will issue up to $204,000 in a convertible note. The note matures on January 23, 2016 and bears an interest charge of 8%. The conversion price equals the “Variable Conversion Price”, which is 65% of the lowest three trading prices for the common stock during the ten (10) trading day period prior to the conversion. The holder of the note has a right to convert all or any part of the outstanding unpaid principal amount into shares of common stock after six months. The Company received $200,000 of proceeds less and $4,000 in legal costs on April 27 , 2015.

On April 24, 2015, the Company entered into an agreement whereby the Company will issue up to $103,000 in a convertible note. The note matures on December 10, 2016 and bears an interest charge of 8%. The conversion price equals the “Variable Conversion Price”, which is lower of the either (i) the closing sale price of the common stock on the trading day immediate receding the closdite or and (ii) 65% of the lowest trading prices for the common stock during the ten (10) trading day period prior to the conversion. The holder of the note has a right to convert all or any part of the outstanding unpaid principal amount into shares of common stock after six months. The Company received $100,000 of proceeds less and $3,000 in legal costs on April 27, 2015.

On April 21, 2015, the Company entered into an agreement whereby the Company will issue up to $105,000 in a promissory note. The note matures on December 21, 2015 and bears an interest charge of 8%. On April 21, 2015, the Company entered into an agreement whereby the Company will issue up to $105,000 in a promissory note. The note matures on December 21, 2015 and bears an interest charge of 8%.

On April 21, 2015, the Company entered into an agreement whereby the Company will issue up to $105,000 in a convertible note. The note matures on April 21, 2016 and bears an interest charge of 8%. The conversion price equals the “Variable Conversion Price”, which is 65% of the lowest two trading prices for the common stock during the ten (10) trading day period prior to the conversion. The holder of the note has a right to convert all or any part of the outstanding unpaid principal amount into shares of common stock after six months. The Company received $95,000 of proceeds less $5,000 in debt issue costs and $5,000 in legal costs on April 21, 2015.

On May 1, 2015, the Company entered into an agreement whereby the Company will issue up to $150,000 in a convertible note. The note matures on November 1, 2015 and bears an interest charge of 8%. The conversion price equals the “Variable Conversion Price”, which is 60% of the lowest two trading prices for the common stock during the ten (10) trading day period prior to the conversion. The holder of the note has a right to convert all or any part of the outstanding unpaid principal amount into shares of common stock after six months. The Company received $147,000 of proceeds less and $3,000 in legal costs on May 1, 2015.

Subsequent to March 31, 2015, the Company received $106,000 from the principal stockholder under the terms of the line of credit and repaid $5,000 to the principal stockholder under the terms of the line of credit.

Subsequent to March 31, 2015, the Company repaid $455,729 on convertible notes.

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.

Overview

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 represents 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 current 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 world-wide 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. In February of 2012, after several successful demonstrations to multi-media industry company executives, we decided to shift the focus of the Company to the marketing of 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.

On December 3, 2012, the Company completed the purchase of the assets of Liquid Spins, Inc., a Colorado corporation (“Liquid Spins”).  Pursuant to the Asset Purchase Agreement, the assets of Liquid Spins were exchanged for 24,752,475 shares of common stock of the Company (the “Shares”), equal to $10,000,000 and a purchase price of $.404 per share.  The assets of Liquid Spins purchased included: record label distribution agreements; Liquid Spins technology inventory; independent arts programs; retail contracts for music distribution; physical inventory and office equipment; design and retail ready concepts; brand value; records; publishing catalog; and web assets.

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

Videos and news relating to the Company is available on the company website at http://www.maxsound.com. The MAX-D Technology Highlights Video summarizes the HD Audio™ process and shows the need for high definition (HD) Audio in several key vertical markets. The video explains MAX-D as what we believe to be the only dynamic HD Audio™ that is being offered to various 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 and through 2014, we have conducted financings to raise initial start-up money for the building of our internet search engine and social networking website and to start our operations.  In 2011, the Company shifted the focus of its business operations from their social networking website 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 2014.

We expect our financial requirements to increase with the additional expenses needed to market and promote the MAX-D Audio technology.  We plan to fund these additional expenses through financings and through loans from our stockholders and/or officers 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.

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,
	March 31, 2015			March 31, 2014
Revenue	$	—		$	1,236
Operating Expenses
General and administrative		787,303			740,785
Endorsement fees		—			—
Consulting		69,837			133,812
Professional fees		117,624			277,474
Website development		5,000			22,881
Compensation		241,300			256,400
Total Operating Expenses		1,221,064			1,431,352
Loss from Operations		(1,221,064	)		(1,430,116	)
Other Income / (Expense)
Other income		—			—
Gain on sale of intellectual property					—
Loss on inventory write off		(29,275	)
Gain (Loss) on extinguishment of debt		—			(116,582	)
Interest expense		(56,443	)		(18,596	)
Derivative Expense		(167,523	)		—
Amortization of debt offering costs		(53,093	)		(78,983	)
Loss on conversions		—			(42,085	)
Amortization of debt discount		(919,760	)		(786,155	)
Change in fair value of embedded derivative liability		473,735			(1,717,264	)
Total Other Income / (Expense)		(752,359	)		(2,759,665	)
Provision for Income  Taxes		—			—
Net Loss	$	(1,973,423	)	$	(4,189,781	)
Net Loss Per Share  - Basic and Diluted	$	(0.01	)	$	(0.01	)
Weighted average number of shares outstanding
during the year Basic and Diluted		341,970,037			313,207,471

For the three months ended March 31, 2015 and for the three months ended March 31, 2014.

General and Administrative Expenses: Our general and administrative expenses were $787,303 for the three months ended March 31, 2015 and $740,785 for the three months ended March 31, 2014, representing an increase of $46,516, or approximately 6%, as a result of increase in the general operation of the Company included added personnel, product development and marketing of our Max Sound Technology.

Consulting Fees:  Our consulting fees were $69,837 for the three months ended March 31, 2015 and $133,812 for the three months ended March 31, 2014, representing a decrease of $63,975, or approximately 48%. The Company has decreased the use of consultants to assist the Company.

Professional Fees: Our professional fees were $117,627 for the three months ended March 31, 2015 and $277,474 for the three months ended March 31, 2014, representing a decrease of $159,850, or approximately 58%, as a result of reduced legal fees.

Compensation: Our compensation expenses were $241,300 for the three months ended March 31, 2015 and $256,400 for the three months ended March 31, 2014, representing a decrease of $15,100, or approximately 6%, as a result of our expensing of monthly compensation to our CFO, CEO, CIO and to our CTO pursuant to their employment agreements.

Net Loss: Our net loss for the three months ended March 31, 2015 and 2014, was $1,973,423, compared to $4,189,781 for the three months ended March 31, 2014. While the operational expenses in marketing our Max Sound technology decreased from the same period of last year, the overall amount of our net loss substantially increased as a result of an increase in the change in the fair value of embedded derivative liability associated with the convertible debt.

Liquidity and Capital Resources

Revenues for the three months ended March 31, 2015 and 2014, were $0 and $1,236, respectively. We have an accumulated deficit of $39,110,405 for the period from December 9, 2005 (inception) to March 31, 2015, and have negative cash flow from operations of $639,570 for the three months ended March 31, 2015.  

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.

From our inception through March 31, 2015, our primary source of funds has been the proceeds of private offerings of our common stock, private financing, and loans from stockholders.  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.  

Below is a summary of our capital-raising activities for the three months ended March 31, 2015:

Private Financings

On December 24, 2014, the Company entered into an agreement with Blue Citi, LLC whereby the Company will issue up to $225,000 in a convertible note. The note matures on December 24, 2015 and bears an interest charge of 8%. The conversion price equals the “Variable Conversion Price”, which is 65% of the lowest three trading prices for the common stock during the ten (10) trading day period prior to the conversion. The holder of the note has a right to convert all or any part of the outstanding unpaid principal amount into shares of common stock after six months. The Company received $225,000 of proceeds less $10,750 in debt issue costs on and $4,250 in legal costs on January 5, 2015.

On January 21, 2015, the Company entered into an agreement with Vista Capital Investments, LLC, whereby the Company will issue up to $50,000 in a convertible note. The note matures on January 21, 2016 and bears an interest charge of 10. The conversion price equals the “Variable Conversion Price”, which is 70% of the lowest three trading prices for the common stock during the twenty (20) trading day period prior to the conversion. The holder of the note has a right to convert all or any part of the outstanding unpaid principal amount into shares of common stock after six months. The Company received $50,000 on January 21, 2015.

On February 27, 2015, the Company entered into an agreement with Toledo Advisors, LLC whereby the Company will issue up to $115,500 in a convertible note. The note matures on February 27, 2016 and bears an interest charge of 8%. The conversion price equals the “Variable Conversion Price”, which is 65% of the lowest three trading prices for the common stock during the ten (10) trading day period prior to the conversion. The holder of the note has a right to convert all or any part of the outstanding unpaid principal amount into shares of common stock after six months. The Company received $100,000 of proceeds, after $5,775 in debt issue costs on and $9,725 in legal costs on March 3, 2015.

On February 5, 2015, the Company entered into an agreement with Rock Capital, LLC whereby the Company will issue up to $36,750 in a convertible note. The note matures on February 25, 2016 and bears an interest charge of 8%. The conversion price equals the “Variable Conversion Price”, which is 65% of the lowest trading prices for the common stock during the ten (10) trading day period prior to the conversion. The holder of the note has a right to convert all or any part of the outstanding unpaid principal amount into shares of common stock after six months. The Company received $31,500 of proceeds, after $3,413 in debt issue costs on and $1,838 in OID costs on March 2, 2015.

On March 11, 2015, the Company entered into an agreement with JMJ Financial, whereby the Company will issue up to $150,000 in a convertible note.  The note matures on March 11, 2016 and bears a onetime interest charge of 5% after 90 days.  The conversion price equals the “Variable Conversion Price”, which is 70% of the “Market Price”, which is the average of the lowest three (3) trading prices for the common stock during the fifteen (15) trading day period prior to the conversion. 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 after six months.  The Company received $150,000 proceeds on march 11, 2015.

Also on May 12, 2014, the Company entered into an agreement with ADAR Bays, LLC to issue up to $210,000 in two convertible notes. Each note matures on May 12, 2015 and bears an interest rate of 8%.  The Company received $105,000 proceeds, less the $5,000 original issue discount pursuant to the terms of the first note, on May 16, 2014 and finder’s fees of $5,000 and the Company received $105,000 proceeds, less the $5,250 original issue discount pursuant to the terms of the first note, on May 16, 2014 and finder’s fees of $4,750 on January 12, 2015.      The Company received a secured note in the amount of $105,000 from the investor as consideration for the second note, payable by December 30, 2014, and secured by the pledge of the second note. Both convertible notes are convertible at a “Variable Conversion Price”, which is 65% of the “Market Price”, which is the lowest closing bid price for the common stock during the ten (10) trading day period prior to the conversion. The holder of each note has a right to convert all or any part of the outstanding an unpaid principal amount into shares of common stock at any time on or before the maturity date; provided, however, that the second note is not convertible until it has been fully paid for in cash.  The Company has a right to redeem each note as follows: (i) during the first 90 days after issuance, by paying an amount equal to 130% of the unpaid principal plus accrued unpaid interest; (ii) from the 90th to 180th day after issuance, by paying an amount equal to 140% of the unpaid principal plus accrued unpaid interest; and (iii) at any time upon a transfer of all or substantially all of the Company’s assets, a reclassification of the Company’s stock, a consolidation, merger or other reorganizational event, by paying an amount equal to 150% of the unpaid principal plus accrued unpaid interest.   

Also on March 17, 2015, the Company entered into an agreement with ADAR Bays, LLC to issue up to $210,000 in two convertible notes. Each note matures on March 17, 2016, and bears an interest rate of 8%.  The Company received $105,000 proceeds, less the $10,750 original issue discount pursuant to the terms of the first note, on May 16, 2014 and finder’s fees of $4,500.  Both convertible notes are convertible at a “Variable Conversion Price”, which is 65% of the “Market Price”, which is the lowest closing bid price for the common stock during the ten (10) trading day period prior to the conversion. The holder of each note has a right to convert all or any part of the outstanding an unpaid principal amount into shares of common stock at any time on or before the maturity date; provided, however, that the second note is not convertible until it has been fully paid for in cash.  The Company has a right to redeem each note as follows: (i) during the first 90 days after issuance, by paying an amount equal to 130% of the unpaid principal plus accrued unpaid interest; (ii) from the 90th to 180th day after issuance, by paying an amount equal to 140% of the unpaid principal plus accrued unpaid interest; and (iii) at any time upon a transfer of all or substantially all of the Company’s assets, a reclassification of the Company’s stock, a consolidation, merger or other reorganizational event, by paying an amount equal to 150% of the unpaid principal plus accrued unpaid interest.   

During the three months ended March 31, 2015 and December 31, 2014, the Company issued convertible notes totaling $792,500 and $3,475,334, respectively. The Convertible notes issued for three months ended March 31, 2015 and year ended December 31, 2014, consist of the following terms:

	For the Three Months Ended,
	March 31, 2015			March 31, 2014
Revenue	$	—		$	1,236
Operating Expenses
General and administrative		854,705			740,785
Endorsement fees		—			—
Consulting		69,837			133,812
Professional fees		117,624			277,474
Website development		5,000			22,881
Compensation		241,300			256,400
Total Operating Expenses		1,288,466			1,431,352
Loss from Operations		(1,288,466	)		(1,430,116	)
Other Income / (Expense)
Other income		—			—
Gain on sale of intellectual property					—
Loss on inventory write off		(29,275	)
Gain (Loss) on extinguishment of debt		—			(116,582	)
Interest expense		(56,740	)		(18,596	)
Derivative Expense		(485,412	)		—
Amortization of debt offering costs		(51,141	)		(78,983	)
Loss on conversions		(200,000	)		(42,085	)
Amortization of debt discount		(776,998	)		(786,155	)
Change in fair value of embedded derivative liability		1,281,915			(1,717,264	)
Total Other Income / (Expense)		(317,651	)		(2,759,665	)
Provision for Income  Taxes		—			—
Net Loss	$	(1,606,117	)	$	(4,189,781	)
Net Loss Per Share  - Basic and Diluted	$	(0.00	)	$	(0.01	)
Weighted average number of shares outstanding
during the year Basic and Diluted		341,970,037			313,207,471

The debt holders are entitled, at their option, to convert all or part of the principal and accrued interest into shares of the Company’s common stock at conversion prices and terms discussed above.  The Company classifies embedded conversion features in these notes as a derivative liability due to management’s assessment that the Company may not have sufficient authorized number of shares of common stock required to net-share settle or due to the existence of a ratchet due to an anti-dilution provision. See Note 4 regarding accounting for derivative liabilities.

Loans and Advances

We have entered into three Credit Line Agreements with Greg Halpern.  The first two were for $100,000 each and matured and expired in 2011.  The third Credit Line Agreement issued by Mr. Halpern in March 2010 is for an additional $500,000 and matured and expired 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%. On September 26, 2013, we entered into a Credit Line Agreement with Mr. Halpern for $1,000,000 that will mature and expire on or before the second anniversary of September 26, 2013.  Interest will accrue on each advance at an annual rate of 4%. As of December 31, 2013, the Company owed $0 in principal and $0 in accrued interest related to these loans and lines of credit.  We believe that the $1,000,000 line of credit issued will not be sufficient to cover the additional expense arising from maintenance of our regulatory filings with the SEC, and the marketing of our technology over the next twelve months, thus the Company will continue to pursue additional financing and/or additional funding in 2014 to continue marketing the Max Sound HD Audio Technology aggressively to Multi-Media Industry Users of Audio and Audio with Video products.

In 2014, the Company has received from Mr. Halpern additional net advances on the established lines of credit in the amount of $153,000 of which it has repaid $35,000.  As of December 31, 2014, the balance including accrued interest on the line of credit is $268,227.  This further demonstrates our Chairman’s ongoing commitment to continue financing the Company’s needs.  While the Company expects to have ongoing needs for additional financing, the amount of those needs are not clearly established as the Company moves forward.

During the three months ended March 31, 2015, the principal stockholder loaned an additional $25,000 and was repaid $75,000.  As of March 31, 2015, the line of credit balance including accrued interest totaled $220,478.

In the event that we are unable to obtain additional financing and/or funding or Mr. Halpern either fails to extend us more financing, declines to loan additional cash, declines to fund the line of credit, or declines to defer his salary payments, 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.

Recent Accounting Pronouncements

On June 10, 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation ("ASUE 2014-10"). The guidance is intended to reduce the overall cost and complexity associated with financial reporting for development stage entities without reducing the availability of relevant information. The Board also believes the changes will simplify the consolidation accounting guidance by removing the differential accounting requirements for development stage entities. As a result of these changes, there no longer will be any accounting or reporting differences in GAAP between development stage entities and other operating entities. For organizations defined as public business entities the presentation and disclosure requirements in Topic 915 will no longer be required starting with the first annual period beginning after December 15, 2014, including interim periods therein. Early application is permitted for any annual reporting period or interim period for which the entity's financial statements have not yet been issued (public business entities) or made available for issuance (other entities).

In June 2014, FASB issued Accounting Standards Update (“ASU”) No. 2014-12, “Compensation – Stock Compensation (Topic 718); Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period”. The amendments in this ASU apply to all reporting entities that grant their employees share-based payments in which the terms of the award provide that a performance target that affects vesting could be achieved after the requisite service period. The amendments require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in Topic 718 as it relates to awards with performance conditions that affect vesting to account for such awards. For all entities, the amendments in this ASU are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. Entities may apply the amendments in this ASU either (a) prospectively to all awards granted or modified after the effective date or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. If retrospective transition is adopted, the cumulative effect of applying this Update as of the beginning of the earliest annual period presented in the financial statements should be recognized as an adjustment to the opening retained earnings balance at that date. Additionally, if retrospective transition is adopted, an entity may use hindsight in measuring and recognizing the compensation cost. This updated guidance is not expected to have a material impact on our results of operations, cash flows or financial condition.  We are currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition.

In August 2014, the FASB issued Accounting Standards Update “ASU” 2014-15 on “Presentation of Financial Statements Going Concern (Subtopic 205-40) – Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”. Currently, there is no guidance in U.S. GAAP about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern or to provide related footnote disclosures. The amendments in this Update provide that guidance. In doing so, the amendments are intended to reduce diversity in the timing and content of footnote disclosures. The amendments require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). We are currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition.

All other newly issued accounting pronouncements but not yet effective have been deemed either immaterial or not applicable. 

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 $2,498 and $5 in revenue for the years ended December 31, 2013 and 2012, respectively.

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.  

Impairment of Long-Lived Assets

The Company accounts for its long-lived assets in accordance with ASC Topic 360-10-05, Accounting for the Impairment or Disposal of Long-Lived Assets."  ASC Topic 360-10-05 requires that long-lived assets, such as technology rights, be reviewed for impairment annually, or whenever events or changes in circumstances indicate that the historical cost carrying value of an asset may no longer be appropriate.  The Company assesses recoverability of the carrying value of an asset by estimating the future net cash flows expected to result from the asset, including the eventual disposition.  If the future net cash flows are less than the carrying value of an asset, an impairment loss is recorded equal to the difference between the asset's carrying value and fair value or disposable value.  For the year ended December 31, 2013, the Company completed an impairment analysis on its' long-lived assets, their technology rights, and determined that no impairment was necessary.

The Company believes that the accounting estimate related to asset impairment is a "critical accounting estimate" because the impairment methodology is highly susceptible to change from period to period, because it requires management to make assumptions about future cash flows, and because the impact of recognizing impairment could have a significant effect on operations. Management's assumptions about future cash flows require significant judgment because actual business operations of marketing the technology rights is in its infancy stages and managements expects that their future operating levels to fluctuate. The analysis included assumptions that are based on annual business plans and other forecasted results which are used to reflect market-based estimates of the risks associated with the projected cash flows, based on the best information available as of the date of the impairment test. There can be no assurance that the estimates and assumptions used in the impairment tests will prove to be accurate predictions of the future.  If the future adversely differs from management's best estimate of key economic assumptions, and if associated future cash flows materially decrease, the Company may be required to record impairment charges related to its indefinite life intangible asset. 

Prior to February 2011, the Company's business operations were related to the development and launching of a social networking website.  However, since February 2011, our business focus has been on the marketing of our Max Sound HD Audio Technology.  Since 2011, was our initial year of marketing our technology, management considers past operational levels to be inconsistent with future operations mainly due to the shift in business focus.  In our impairment testing, the Company made assumptions towards the income and expenses expected in the future including, but not limited to, determining the actual expenses incurred in the current year that were attributable to the new business focus in order to develop an annual cost benchmark, trends in the marketplace, feedback from current and past marketing activities, and assessments upon the useful life of the technology rights.

The Company's primary focus over the next three to five years will be centered on the marketing and implementation of their technology in order to take advantage of the current trends in the marketplace for users of their technology.  In particular, the Company expects that expenses will increase significantly from year to year over the next five years, at which time in year six and beyond the year-to-year change will be a minimal increase.  In addition, the Company expects minimal revenue over the next two years, while in year three to six the Company expects to realize significant year to year increases in revenue, at which time in year seven and beyond the year to year change will be a minimal increase.

As part of the impairment test, the Company reviewed its' initial useful life analysis, in reference to their technology, and updated this analysis with factors that existed at the time of the impairment testing and determined that nothing had occurred in the marketplace that would change their initial determination of the useful life of their technology. The analysis included researching known technological advances in the marketplace and determining if those advances which are similar to the Company's products would limit the useful life of the asset. The Company believes that the technological advances in the marketplace are geared to developing different playback devices and the implementation of technology that is similar to the Company's technology. Thus, the Company concluded that their technology rights continue to have an indefinite useful life. However, it is understood that technological advancements could happen in the future that would limit the useful life of their technology.  If a technology was created in the future that would limit the useful life of the technology, the Company would be required to update their impairment testing to include a useful life determination of the technology and may be required to record impairment charges at some time in the future.

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”.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are subject to certain market risks, including changes in interest rates and currency exchange rates.  We have not undertaken any specific actions to limit those exposures. 

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. 

PART II - OTHER INFORMATION 

Item 1. Legal Proceedings.

From time to time, the Company may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm its business.

On February 21, 2012, the Company filed a suit for breach of contract, intentional misrepresentation, negligent misrepresentation, fraud, false advertising, and unfair competition with a former consultant.   It seeks damages due to their alleged failure to meet the contractual requirements regarding promotions.   The defendant has been served.   In September of 2014, the Company received a Default Judgment against the Defendant.    The Company is vigorously pursuing collection on this judgment.

On August 14, 2012, the Company, along with two shareholders of the Company, were named as a defendant in an action filed in the Superior Court for the State of California and the County of San Diego. The plaintiff alleges he was terminated by his former employer “Acoustics Control Sciences, LLC” (which is a company that is not affiliated with Max Sound Corporation) in August 2008 without receiving wages and other compensation allegedly due him. The plaintiff further claims that two of the members or “shareholders” of Acoustics Control Sciences, LLC, wrongfully transferred a patent owned by his former employer and this transfer prevented his former employer from paying the wages alleged due. According to the plaintiff, when the assets of his former employer were sold to the Company, Max Sound Corporation became a successor-in-interest to the plaintiff’s former employer. Plaintiff thus seeks unpaid wages and other compensation from each alleged successor-in-interest named in his complaint. This case will be vigorously prosecuted and has a good likelihood of success.

On August 11, 2014, the Company and VSL simultaneously filed trade secret and patent infringement actions against Google, Inc., and its subsidiaries YouTube, LLC, and On2 Technologies, Inc., relating to proprietary and patented technology owned by Vedanti Systems Limited (“Vedanti”), a subsidiary of VSL.  The patent infringement complaint was originally filed in the U.S. District Court for the District of Delaware; the trade secret suit was filed in Superior Court of California, County of Santa Clara.  On September 30, 2014, the Company filed notices of voluntary dismissal without prejudice as to both lawsuits. On October 1, 2014, the Company amended the patent complaint and filed it in the U.S. District Court for the Northern District of California. In this patent lawsuit, which remains pending, the Company contends that, in 2010, while Google was in discussions with Vedanti about the possibility of acquiring Vedanti's patented digital video streaming techniques and other proprietary methods, Google gained access to and received technical guidance regarding Vedanti’s proprietary codec, a computer program capable of encoding and decoding a digital data stream or signal.  The lawsuit further alleges that soon after Google and Vedanti initiated negotiations, Google willfully infringed Vedanti's patent by incorporating Vedanti's patented technology into Google's own VP8, VP9, WebM, YouTube, Google Adsense, Google Play, Google TV, Chromebook, Google Drive, Google Chromecast, Google Play-per-view, Google Glasses, Google+, Google’s Simplify, Google Maps, and Google Earth, without compensating Vedanti for such use.  Plaintiffs are seeking a permanent injunction against Google, compensatory damages, as well as treble damages. As exclusive agent to VSL to enforce all rights with respect to the subject technology, the Company has hired Grant & Eisenhofer PA and Buether Joe & Carpenter LLC to represent the Company in the suit on a contingency fee basis. The case will be vigorously prosecuted, and the Company believes it has a good likelihood of success.  

Additionally, on December 5, 2014, the Company, along with renowned architect Eli Attia, filed a lawsuit in the Superior Court of California, County of Santa Clara, against Google, its co-founders Sergey Brin and Larry Page, Google’s spinoff company Flux Factory, and senior executives of Flux. Plaintiffs’ allege misappropriation of trade secrets, breach of contract and other contract-related claims, breach of confidence, slander of title, violation of California’s Unfair Competition Law (California Business and Professionals Code §§ 17200 et seq.), and fraud, and also bring a claim for declaratory relief. The lawsuit contends that Google and the other Defendants stole Mr. Attia’s trade secrets, proprietary information, and know-how regarding a revolutionary architecture design and building process that he alone had invented, known as Engineered Architecture. Defendants are alleged to have engaged Mr. Attia in 2010 and 2011 to translate his architectural technology into software for a proof of concept, with the goal of determining at that point whether to continue with full-scale development with Mr. Attia. Instead, the lawsuit claims that once Mr. Attia had disclosed the trade secrets and proprietary information Defendants needed to bring the technology to market, they severed ties with Mr. Attia, and continued to use his technology without a license and without compensation, in order to bring the technology to market themselves. Plaintiffs seek a permanent injunction against Google, damages (including punitive damages), and restitution. As exclusive agent to Eli Attia to enforce all rights with respect to the subject technology, the Company has retained Buether Joe & Carpenter LLC to represent the Company in the suit, on a contingency fee basis. The case will be vigorously prosecuted, and the Company believes it has a good likelihood of success. 

On September 8 and 9, 2014, respectively, the Company and VSL were granted preliminary injunctions by the District Court of Berlin, Germany, against the Chinese company Shenzhen KTC Technology Co. Ltd. and the French company Pact Informatique S.A. Both companies have been offering products at the International Consumer Electronics Trade Show 2014 in Berlin, which, according to the company’s claim and the Preliminary Injunctions issued by the Court, infringed the rights to a patent. This patent is the German is the German part of the patent on optimized data transmission, owned by Vedanti, which is already asserted the United States infringement proceedings. The products in question are tablet computers and smart phones with Android OS and with the ability to encode videos in the format H.264. The injunctions were issued ex-parte and can be appealed by the Defendants. However, currently there are no indications that any prospective appeals will be interposed. The Company can still enforce claims for cost reimbursement with regard to these legal proceedings.

On December 2, 2014, the Company filed a patent infringement action against Google, Inc., Germany GmBH, Google Commerce Ltd. and YouTube LLC with the District Court of Mannheim, Germany. The asserted patent infringement concerns the same patent infringement asserted in the in the prior Germany Preliminary Injunctions described herein. The Complaint alleges that Google Inc. and it above-named subsidiaries are offering and selling products which can also decode and show videos, which have been encoded in a patent protected and proprietary way. The complaint also avers that YouTube LLC offers to German customers, which are encoded and transmitted in a manner claimed and protected by the patent. The Company mainly seeks a permanent injunction against the Defendants, damages and information regarding past infringements.

On January 21, 2015, the Company filed a patent infringement action against Netflix Inc., Netflix Luxembourg S.a.r.l. and Netflix International B.V. with the District Court of Mannheim, Germany. The asserted patent is the same patent as in the German proceedings against Google Inc. and its subsidiaries. The Complaint alleges that Netflix Inc. and its subsidiaries are offering and transmitting video streams to German customers as part of their video-on-demand business model; the videos being encoded and transmitted in a manner claimed and protected by the patent. The Company primarily seeks a permanent injunction against the Defendants, plus damages and information regarding past infringements.

The Company intends to vigorously prosecute these various patent infringement litigations. The Company believes it has a good likelihood of success associated with these patent infringement lawsuits. However, no assurance can be given by the Company as to the ultimate outcome of these actions or its effect on the Company. The law firm is prosecuting these action on a pure contingency fee basis.

On January 26, 2015, the Company was named as a defendant in an action filed in the Superior Court for the State of California and the County of Los Angeles captioned Bibicoff Family Trust v. Max Sound Corporation (Case No. SC123679). In the complaint the plaintiff alleges a cause of action for breach of contract associated with the non-payment by the Company for certain services plaintiff agreed to provide to the Company. The Company interposed a cross-complaint against plaintiffs averring causes of action for breach of contract, fraud, and negligent misrepresentation by defendants with respect to defendants’ fraudulent and intentional undisclosed inability to perform the services that plaintiffs’ agreed to perform that are the subject of this dispute. This lawsuit will be vigorously defended and prosecuted. While this lawsuit is in its nacency, the Company believes there is a strong likelihood of success on the merits with respect to the defending and prosecuting this action.

No assurance can be given as to the ultimate outcome of these actions or its effect on the Company.

Item 1A. Risk Factors.

Not required for smaller reporting companies.

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

Private Financings

Below is a summary of our capital-raising activities for the three months ended March 31, 2015 and underlying terms:

 On March 31, 2015, the Company issued 125,000 shares of common stock for services having a fair value of $7,875 ($0.063/share).

On March 31, 2015, the Company issued 125,000 shares of common stock for services having a fair value of $4,975 ($0. 04/share).

On March 31, 2014, the Company issued 700,000 shares of common stock for services having a fair value of $19,880 ($0.028/share).

On March 31, 2015, the majority shareholder exchanged 120,000,000 shares of common stock of the Company for 5,000,000 shares of Series A Convertible Preferred Stock of the Company at a Stated Value of $0.96 per share and a Conversion Price of $0.04 per share.

On January 5, 2015, the Company entered into a conversion agreement with LG Capital Funding, LLC relating to a convertible promissory note dated May 1, 2014, with the original principal amount of $105,000 for 1,068,315 shares based on a conversion price of $0.0331 per share (See Note 6).

On March 2, 2015, the Company entered into a conversion agreement with LG Capital Funding, LLC relating to a convertible promissory note dated May 1, 2014, with the original principal amount of $105,000 for 735,207 shares based on a conversion price of $0.0222 per share (See Note 6).

On March 12, 2015, the Company entered into a conversion agreement with LG Capital Funding, LLC relating to a convertible promissory note dated May 1, 2014, with the original principal amount of $105,000 for 991,991 shares based on a conversion price of $0.0196 per share (See Note 6).

On March 7, 2015, the Company entered into a conversion agreement with Vista Capital Investments, LLC relating to a convertible promissory note dated March 19, 2014, with the original principal amount of $25,000 for 305,434 shares based on a conversion price of $0.0341 per share (See Note 6).

On January 7, 2015, the Company entered into a conversion agreement with Vista Capital Investments, LLC relating to a convertible promissory note dated March 19, 2014, with the original principal amount of $25,000 for 305,434 shares based on a conversion price of $0.0341 per share (See Note 6).

On January 15, 2015, the Company entered into a conversion agreement with Vista Capital Investments, LLC relating to a convertible promissory note dated May 23, 2014, with the original principal amount of $25,000 for 300,000 shares based on a conversion price of $0.0346 per share (See Note 6).

On January 28, 2015, the Company entered into a conversion agreement with Vista Capital Investments, LLC relating to a convertible promissory note dated May 23, 2014, with the original principal amount of $25,000 for 300,000 shares based on a conversion price of $0.0356 per share (See Note 6).

On February 10, 2015, the Company entered into a conversion agreement with Vista Capital Investments, LLC relating to a convertible promissory note dated May 23, 2014, with the original principal amount of $25,000 for 286,028 shares based on a conversion price of $0.0331 per share (See Note 6).

On February 25, 2015, the Company entered into a conversion agreement with Vista Capital Investments, LLC relating to a convertible promissory note dated July 28, 2014, with the original principal amount of $50,000 for 500,000 shares based on a conversion price of $0.0244 per share (See Note 6).

On March 12, 2015, the Company entered into a conversion agreement with Vista Capital Investments, LLC relating to a convertible promissory note dated July 28, 2014, with the original principal amount of $50,000 for 1,250,000 shares based on a conversion price of $0.0212 per share (See Note 6).

On January 2, 2015, the Company entered into a conversion agreement with Iliad Research and Trading, LP relating to a convertible promissory note dated February 27, 2014, with the original principal amount of $282,778 for 1,333,956 shares based on a conversion price of $0.03 per share (See Note 6).

On January 12, 2015, the Company entered into a conversion agreement with Iliad Research and Trading, LP relating to a convertible promissory note dated February 27, 2014, with the original principal amount of $282,778 for 1,051,359 shares based on a conversion price of $0.0380 per share (See Note 6).

On January 26, 2015, the Company entered into a conversion agreement with Iliad Research and Trading, LP relating to a convertible promissory note dated February 27, 2014, with the original principal amount of $282,778 for 881,342 shares based on a conversion price of $0.0340 per share (See Note 6).

On February 3, 2015, the Company entered into a conversion agreement with Iliad Research and Trading, LP relating to a convertible promissory note dated February 27, 2014, with the original principal amount of $282,778 for 925,526 shares based on a conversion price of $0.0324 per share (See Note 6).

On February 11, 2015, the Company entered into a conversion agreement with Iliad Research and Trading, LP relating to a convertible promissory note dated February 27, 2014, with the original principal amount of $282,778 for 1,031,779 shares based on a conversion price of $0.0291 per share (See Note 6).

On February 27, 2015, the Company entered into a conversion agreement with Iliad Research and Trading, LP relating to a convertible promissory note dated February 27, 2014, with the original principal amount of $282,778 for 1,362,769 shares based on a conversion price of $0.0220 per share (See Note 6).

On January 13, 2015, the Company entered into a conversion agreement with Adar Bays, LLC relating to a convertible promissory note dated January 12, 2015, with the original principal amount of $105,000 for 128,849 shares based on a conversion price of $0.0388 per share (See Note 6).

On January 20, 2015, the Company entered into a conversion agreement with Adar Bays, LLC relating to a convertible promissory note dated January 12, 2015, with the original principal amount of $105,000 for 521,512 shares based on a conversion price of $0.0345 per share (See Note 6).

On January 22, 2015, the Company entered into a conversion agreement with Adar Bays, LLC relating to a convertible promissory note dated January 12, 2015, with the original principal amount of $105,000 for 753,296 shares based on a conversion price of $0.0345 per share (See Note 6).

On January 28, 2015, the Company entered into a conversion agreement with Adar Bays, LLC relating to a convertible promissory note dated January 12, 2015, with the original principal amount of $105,000 for 559,441 shares based on a conversion price of $0.0322 per share (See Note 6).

On February 2, 2015, the Company entered into a conversion agreement with Adar Bays, LLC relating to a convertible promissory note dated January 12, 2015, with the original principal amount of $105,000 for 621,601 shares based on a conversion price of $0.0322 per share (See Note 6).

On February 10, 2015, the Company entered into a conversion agreement with Adar Bays, LLC relating to a convertible promissory note dated January 12, 2015, with the original principal amount of $105,000 for 340,368 shares based on a conversion price of $0.0294 per share (See Note 6).

On February 5, 2015, the Company entered into a conversion agreement with KBM Worldwide, Inc. relating to a convertible promissory note dated August 1, 2014, with the original principal amount of $253,500 for 1,577,287 shares based on a conversion price of $0.0317 per share (See Note 6).

On February 11, 2015, the Company entered into a conversion agreement with KBM Worldwide, Inc. relating to a convertible promissory note dated August 1, 2014, with the original principal amount of $253,500 for 1,798,561 shares based on a conversion price of $0.0278 per share (See Note 6).

On February 19, 2015, the Company entered into a conversion agreement with KBM Worldwide, Inc. relating to a convertible promissory note dated August 1, 2014, with the original principal amount of $253,500 for 2,136,752 shares based on a conversion price of $0.0234 per share (See Note 6).

On March 2, 2015, the Company entered into a conversion agreement with KBM Worldwide, Inc. relating to a convertible promissory note dated August 1, 2014, with the original principal amount of $253,500 for 5,165,455 shares based on a conversion price of $0.0220 per share (See Note 6).

On March 10, 2015, the Company entered into a conversion agreement with Horberg Ventures, relating to a convertible promissory note dated August 21, 2014, with the original principal amount of $250,000 for 1,987,084shares based on a conversion price of $0.0201 per share (See Note 6).

On February 21, 2015, the Company entered into a conversion agreement with Horberg Ventures, relating to a convertible promissory note dated August 21, 2014, with the original principal amount of $250,000 for 1,882,0870 shares based on a conversion price of $0.0212 per share (See Note 6).

On March 10, 2015, the Company entered into a conversion agreement with Horberg Ventures, relating to a convertible promissory note dated August 21, 2014, with the original principal amount of $250,000 for 1,987,084 shares based on a conversion price of $0.0201 per share (See Note 6).

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

Item 6. Exhibits

All 10 Form exhibits previously exhibited associated with all Company 10 Form filings are incorporated herein.

Exhibit Number	Description
10.1	8% Convertible Redeemable Note, dated Dec. 24, 2014 issued in 2015 to Blue Citi
10.2	8% Convertible Redeemable Note, dated March 17, 2015 issued to Adar Bays, LLC
10.3	8% Convertible Redeemable Note, dated Feb. 6, 2013 issued to Vista Capital Investments, LLC
10.4	8% Convertible Redeemable Note, dated Feb. 27, 2015 issued to Toledo Advisors, LLC
10.5	8% Convertible Redeemable Note, dated Mar. 11, 2015 issued to JMJ Financial
10.6	8% Convertible Redeemable Note, dated Feb. 25, 2015 issued to Rock Capital
10.7	Consulting Agreement with William Collins, dated Jan. 21, 2015
10.8	Consulting Agreement with J.B. Holding Group, dated Jan. 21, 2015
10.9	Consulting Agreement with Gabe Gunlock, LLC, dated Mar. 17, 2015
10.10	Extension of Employment Agreement, dated April 2, 2015
10.11	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 - Chief Executive Officer
10.12	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 - Chief Financial Officer
10.13	Certifications Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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.

	MAX SOUND CORPORATION
	(Registrant)
Date: May 18, 2015	By:	/s/ John Blaisure
		John Blaisure
		Chief Executive Officer (Principal Executive Officer)
	By:	/s/ Greg Halpern
		Greg Halpern
		Chief Financial Officer (Principal Financial and Accounting Officer)

EX-13

Exhibit 13.0

CERTIFICATION

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), the undersigned officer of Max Sound Corporation, a Delaware corporation (the "Company"), does hereby certify, to such officer's knowledge, that:

The Quarterly Report on Form 10-Q for the quarter ended March 31, 2015 (the "Form 10-Q") of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: May 18, 2015 By: /s/ John Blaisure John Blaisure Chief Executive Officer (principal executive officer)

By:	/s/ Greg Halpern
	Greg Halpern Chief Financial Officer
	(principal financial and accounting officer)

The foregoing certification is being furnished solely pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code) and is not being filed as part of Form 10-K or as a separate disclosure document.

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.

EX-11

Exhibit 11.0

CERTIFICATION

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 quarterly report on Form 10-Q of Max Sound Corporation (the "registrant");
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 presented 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 13a-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 principles;
(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 financial 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 involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Dated: May 18, 2015	Signature:	/s/ John Blaisure
		John Blaisure Chief Executive Officer
		(principal executive officer)

EX-12

Exhibit 12.0

CERTIFICATION

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 quarterly report on Form 10-Q of Max Sound Corporation (the "registrant");
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 presented 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 13a-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 principles;
(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 financial 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 involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Dated: May 18, 2015	Signature:	/s/ Greg Halpern
		Greg Halpern Chief Financial Officer (principal financial and accounting officer)

EX-10

UNANIMOUSCONSENTINLIEUOFASPECIALMEETINGOFDIRECTORSOFMAXSOUNDCORPORATION

ExtensionofPaulMyersEmploymentAgreement

Dated:April2,2015

Theundersigned,beingthedirectorsofMAXSOUNDCORPORATION,acorporationoftheStateofDelaware("Corporation”,“Employer”or“Company”),doesherebyauthorizeandapprovetheactionssetforthinthefollowingresolutionswithouttheformalityofconveningameeting,anddoesherebyconsenttothefollowingactionofthisCorporation, which actions are hereby deemed effective as of the date hereof:

WHEREAS,pursuanttotheEmploymentAgreemententeredintobetweentheCompanyandPaulD.Myers(“Employee”),onNovember26,2012(the“Agreement”),theCompanyanditsBoardofDirectorsingoodfaithhavecarriedforwardtheTermsandRecitalsfoundtherewithin.

WHEREAS,inconnectionwiththeabovedetermination,theBoardofDirectorsdeemsittobeinthebestinterestoftheCorporationtoadopttheresolutionssetforthbelow:

NOW,THEREFORE,BEIT

RESOLVED,TheBoardofDirectorsdeemsitinthebestinterestsoftheCompanytorenewtheEmploymentAgreementwithPaulD.Myersforatwo-yearperiod,endingonNovember27,2016.Beitfurther

RESOLVED,thattheEmployeeshallcontinuetoreceive125,000sharesofcommonstockperquarter,anduponsuchissuance,suchsharesshallbevalidlyissued,fullypaidandnonassessable.Beitfurther

RESOLVED,TheCompanyshallbeobligatedtopaytheEmployeeasalaryof$10,000permonth(the“BaseSalary”),payableinaccordancewiththeEmployer’sregularpayrollprocedure.TheCompanyshallincreasetheEmployee’smonthlybasesalaryto$14,000permonthintheeventthattheCorporationreceives$1,000,000fromfundingorrevenuesinthe2015calendaryear.Beitfurther

RESOLVED,thattheproperofficersoftheCorporationbe,andeachofthemherebyis,empoweredtoapproveorauthorize,asthecasemaybe,suchfurtheractionandthepreparation,execution,anddeliveryofallsuchfurtherinstrumentsanddocumentsinthenameandonbehalfoftheCorporation,andtopayallsuchexpensesandtaxes,asin theirjudgmentshallbe necessary,proper,oradvisablein orderto carry outthe intentand accomplish the purposes of the foregoing resolutions; and be it further

RESOLVED,thatasusedin theforegoing resolutions,theterm“theproperofficers”oftheCorporation shallmeantheChiefExecutiveOfficer,thePresident,andtheChiefFinancialOfficeroftheCorporation,andeachofthem,andwithrespecttomattersinvolvingonlycertification,attestationorcountersignatures,anySecretaryorAssistantSecretaryoftheCorporation;andthattheproperofficersoftheCorporationbe,andeachofthemactingaloneherebyis,authorizedandempowered, actinginthenameandonbehalfoftheCorporation,totakesuchactionandto executeand deliver all agreements, documents, and instruments referredto expressly or generallyin the preceding resolutions, and any amendments,supplements, or modifications to any of such agreements,documents, and instruments; such actions,agreements,documents, instruments,amendments,supplements, and modificationsshallbe in such form and substanceastheproperofficerexecutingthesamemay,inhisorhersolediscretion,deem tobeinthebestinterestof the Corporation in connection with or arising out of the actions contemplated by the foregoing resolutions; and be it further

RESOLVED,thatanyandallactionsheretoforetakenbythedirectorsorofficersoftheCorporationonbehalfoftheCorporationinfurtheranceoftheactionsauthorizedorcontemplatedbytheforegoingresolutionsbe,andtheyherebyare,ratified,approved,andconfirmedinallrespects,including,withoutlimitation,theexecutionanddeliveryofany documentsand instruments,including amendments,supplements, ormodifications thereto as have beennecessaryorappropriateinordertoeffectuatetheactionscontemplatedbytheforegoingresolutions;andbeitfurther

RESOLVED,thatthiswrittenconsentmaybeexecutedincounterparts,eachofwhichshallbedeemedanoriginal,butallofwhichtogethershallconstituteoneandthesameinstrument,andthatfacsimilesignaturesshallbedeemedtohavethesameeffectasoriginals;andbeitfurther

RESOLVED,thatthiswrittenconsentshallbefiledwiththeminutesofmeetingsoftheBoardandshallbetreatedforallpurposesasactiontakenbytheBoardatameeting.

[Signaturesfollowonnextpage]

INWITNESSWHEREOF,theundersigned,constitutingallofthemembersoftheBoard,haveexecutedthisUnanimousWrittenConsentoftheBoardofDirectorsinLieuofaSpecialMeetingasofthedatefirstabovewritten.

EX-9

WEBDESIGNANDSOCIALMEDIAENGAGEMENTAGREEMENT

ThisisanagreementmadeonMarch17,2015,byand between Max Sound Corporation, aDelaware Corporation ("Company") and GabeGunlock LLC of810 El CarmelPl.SanDiego, CA92109 ("Consultant").

1.Scope.Companyseeksadditionalwebdesignandhelpincreasingsocial med ia engagement for the Company. Consultant represents that he hasknowhowin these areas.

2. Term.ThetermofConsultant'sengagementby Companyhereunder shall commence on the date hereof and shall continue until June 17,2015 unless termi nated by eitherparty byproviding the other party with three (3) days advancewritten notice oftermination.If eitherparty terminates, then compensation earned willbe fully paidbut compensation not yet paid will not be due withno further responsibility by eitherparty except that Consultantwill insurethatCompany has all of the content and work product Consultant helpeddevelop for the Company.

3. Fee.TheCompanyshallpayConsultant$5,000permonthforthreemonthswith$3,000having been paid alreadyand thebalanceof $2,000 beingpaid onthe signingof thisagreement. Then on April 17 - $5,000 wi ll be paid to Consultantand thenagain onMay 17-$5,000 willbe paid again toConsultant. In addition to thiscompensationand subject to continuing consulting work with theCompany,theConsultantshall be entitled to andshallreceiveup to 300,000 sharesof restricted Rule 144 stock,payable in lots of 100,000 permonthandshallbe issuedbytheCom pany's TransferAgent upon thecompletionof thisthree-monthagreement or 30daysaftera termination by eitherparty. On June 17, the parties wil l consider all work completed underthis agreement but additionalwork maybe continueduponmutualagreement between the parti es.

4. ConfidentialInformation.Duringthetermofthis Agreement,theConsultant willhave accesstocertainconfidential informationand materials, including butnot limitedto information, ori ginatedby the Company or disclosed tothe Com pany by othersunderagreements to hold the same confidential("ConfidentialInformation "). Confidential Information further i ncl udes,but is not l imited to, alltechnical, engineering, property andinformation, financial,business practices, customerlists, customer identities and commercial informationheretoforeor hereafter disclosedor transmittedby the Com pany in any formand manner to the Consultant orotherwise received by theConsultant, whetherorally orin writing.Consultant acknowledges that Consultant shall not eitherdirectlyor indirect ly use, disclose or communicate to any person or entity any ConfidentialInformationfor any purpose at allwhether during or afterthe termofthis Agreement, except to the extent any such informationbecomesgenerallyknownto thepubl icthrough no faultof Consultant.f urthermore,thetermsofthis provision survive theTermofthis Agreement, orany terminationthereof.

5. IndependentContractor.NothinginthisAgreementshallbeconstrued tocreateanypartnership,employmentrelationshiporotherjoint venturebetweenCompany and Consultant. Neitherpartyshallhold itselfout contraryto the terms of this Agreementnor neither party shall becomeliableby reason of any representation,act or omission contrary totheprovisions of thisAgreement.

6. Work Product & Company Property. Duringthetermand while performing theservices ofthisAgreement,any and all work product shall be the property of Company. All materials, including withoutl imitation documents,drawings, drafts, notes, designs, computer media, online sites andcampaigns, electronic fi les and lists,including alladditions to, deletions from, alterationsof, and revisions in the foregoing(together the "Mater ials"), which are furnished to Consultant by Com pany or which are developed inthe process ofperform ing the Services,or embody or relate to theServices, theCompany Information or the Innovations,are the property ofCompany,andshall be returned byConsultantto Company promptly at Company's request togetherwith any copies thereof, and in any event promptlyupon expiration or termination of this Agreement forany

reason.ConsultantisgrantednorightsinortosuchMaterials, the Company Information ortheInnovations, except as necessary to fulfil l itsobligations underthisAgreement.Consultantshallnot useor disclose the Materials,Company Information or Innovations to any thirdparty.

7. EntireAgreement.ThisAgreement,constitutestheentireunderstandingand agreementofthe parties withrespect to its subject matter and supersedes all prior and contemporaneous agreementsor understandings,inducements orconditions,expressor im plied,written ororal, between theparties.

8. Miscellaneous.ThislettershallbegovernedbythesubstantivelawsoftheStateofCaliforniaCountyofSanDiego without regard to conflict of law principles. This Jetterconstitutesthe entire understandingand agreement between the parties hereto and their affil iates with respect to its subjectmatter and supersedes all prior or contemporaneous agreements, representations,warranties and understandings of such parties (whether oral or written). No promise,inducement,representationor agreement, other than as expresslyset forthherein,hasbeenmade to or by the parties hereto.Thislettermay be amended onlyby writtenagreement, signedbythe parties to bebound bythe amendment.Evidenceshallbeinadmissible to show agreementby and between such parties to anyterm or conditioncontraryto orin add ition to the terms andconditionscontainedin this J etter.Th is letter shall be construedaccordingto itsfair meaningand notstrictly foror againsteitherparty.Facsi mileor emailcopies are fully bindi ng under all applicable Jaws whetherwhole or in counterparts.

INWITNESSWHEREOF,thepartieshaveexecuted thisAgreementonthisdate:March17,201 5

Company:MaxSoundCorporation Consultant:GabeGunlockLLC

By:

EX-8

SOCIAL MEDIA ENGAGEMENT AGREEMENT

This is an agreement made on January 21, 2015, by and between Max Sound Corporation, a Delaware Corporation ("Company")and JB Holding GroupLLC ("Consultant").

1.Scope.Companyseeks socialmediaengagementforMaxSound'stechnologyandstock(OTCQB:MAXD). Consultant represents to Company that he has the know-how and abilities to increasesocial mediaengagement forthe Company.

2.Term.ThetermofConsultant'sengagement by Company hereunder shall commence on the date hereof and shallcontinuefor 90daysandthen month by month thereafter unless terminated by either party by providing the otherpartywith five (5) days advancewritten notice of termination.

3.Compliance.InconnectionwithConsultant'sattempt(s)toincrease social media engagement,Consultantshallcomplywith allapplicablelaws and shall specifically, butnot as alimitation thereof, and comply with the Confidential Information assetforth inSection 7 below.

4.AcceptanceofThird PartyAffiliates. The decision to dobusiness with any Affiliates introducedbyConsultantshall be in the solediscretion of the Company.

5.Fee. The Company shall pay Consultant $4,000 per month. Inadditiontothiscompensation and subject to continuing consulting work with the Company,the Consultant shall be entitled to and shall receive up to 1 50,000shares of restricted Rule 144stock, payab le in lotsof50,000 per month andshall be issued by the Company's TransferAgent90 days after the dateofthe signing of this agreement.

6.ConfidentialInformation.DuringthetermofthisAgreement,the Consultantwill have access tocertain confidential informationand materials, including but not limited to inform ation, originatedby the Company ordisclosed to the Companyby others under agreements to hold the same confidential ("Confidential Inform ation"). Confidential Information further incl udes, but is not limited to, alltechnical, engineering, property and information, financial, business practices, customer lists, customer identities and commercial information heretoforeor hereafter disclosed ortransmitted by the Company in any form andmannerto the Consultant orotherwise received bytheConsultant, whether orallyorin writing. Consultant acknowledges that Consultant shall not either directly or indirectly use, disclose or communicate to any person orentity any Confidential Information for any purpose at all whether during or after the term of this Agreement, except to the extent any such information becomesgenerally known to thepublic through nofault ofConsultant. Furthermore, theterms of this provision survivetheTerm of this Agreement, or any termination thereof.

7.IndependentContractor.NothinginthisAgreementshallbeconstruedtocreateanypartnership, employment relationshipor otherjoint venturebetween Company and Consultant. Neither party shall holditselfout contrary to the terms of this Agreement and neither party shall becomeliable by reason of any representation,act or omission contrary to the provisions of this Agreement.

8.Work Product & Company Property. Duringtheterm and while performing the services ofthis Agreement, any and all work product prepared to assist the Company shall be the property of Company . All materials, incl udingwithout limitation prospects,customer lists, documents,drawings,drafts, notes, designs, computer media, marketing materials, online sites and campaigns, electronic files and lists, i ncluding alladditions to,deletions from,alterations of,and revisions in the foregoing (together the "Materials"), which are furnished to Consu ltant by Company or whichare developedin the process of performing the Services, orembody orrelatetothe Services, the Company Information or the Innovation s, are the property of Company, and shall be returned byConsultant to Company promptly at Company's request together with any copies thereof, and in any event promptly upon expiration or termination of this Agreement for any reason. Consultantis granted no rights in or to such Materials, the Company Information or the Innovations, except as necessary to fulfill itsobligations under

thisAgreement. ConsultantshallnotuseordisclosetheMaterials, CompanyInformationorInnovationstoany third party.

9.EntireAgreement.ThisAgreementconstitutestheentireunderstanding and agreement ofthe parties withrespectto its subject matterand supersedesall prior andcontemporaneous agreements orunderstandi ngs, inducements orconditions, expressor implied, written or oral, between the parties.

I0.Miscellaneous.Thislettershallbegovernedbythesubstantivelawsofthe State ofCaliforniaandvenued in San Diego County in any action without regard to conflict of law princi ples. This letter constitutes the entire understanding and agreement betweenthe parties heretoand their affiliates withrespectto its subject matter and supersedes all prior orcontemporaneousagreements,representations, warrantiesand understandings of such parties (whether oralor written). No promise, inducement, representation or agreement, other than as expressly set forthherein,hasbeen madeto or by the parties hereto. This letter may be amended onlyby written agreement,signed by theparties to be bound by the amendment. Evidence shall be inadmissibleto showagreement byandbetweensuch partiesto any termor condition contrary to or inaddition to the termsand cond itions contained in this letter. This letter shall be construed according to itsfair meaning and notstrictlyfor or againsteither party.Facsimile or email copies areful ly bindingunder all applicablelaws whether wholeor i n counterparts.

INWITNESSWHEREOF,thepartieshaveexecutedthisAgreementonthisdate:January21, 2015

Company:MaxSoundCorporation Consultant:JBHoldingGroupLLC

By

JBHoldingGroupLLC

EX-7

WEBDESIGNANDSOCIALMEDIAENGAGEMENTAGREEMENT

ThisisanagreementmadeonJanuary21,2015,byandbetweenMaxSoundCorporation,aDelawareCorporation("Company")andWilliamCollins ("Consultant").

1. Scope. CompanyseeksadditionalwebdesignandhelpincreasingsocialmediaengagementfortheCompany.

2. Term.ThetermofConsultant’sengagementbyCompanyhereundershallcommenceonthedatehereofandshallcontinueindefinitelyuntilterminatedbyeitherpartybyprovidingtheotherpartywithfive(5)daysadvancewrittennoticeoftermination.

3. Fee.The Company shall pay Consultant $4,000 per month. Inadditiontothis compensationand subject tocontinuing consulting work withthe Company, the Consultant shall be entitled to and shall receiveup to 1 50,000shares of restrictedRule 144 stock, payab leinlots of 50,000per monthand shallbe issued bythe Company's Transfer Agent90 daysafterthe date of the signingof thisagreement.

4. ConfidentialInformation.DuringthetermofthisAgreement,theConsultantwillhave accesstocertainconfidentialinformationandmaterials,includingbutnotlimitedtoinformation,originatedbytheCompanyordisclosed to the Company by others under agreements to hold the same confidential (“Confidential Information”). Confidential Information further includes, but is not limited to, all technical, engineering, propertyandinformation,financial, business practices, customer lists,customer identities and commercial informationheretoforeorhereafterdisclosedortransmittedbytheCompanyinanyform and manner to the Consultant orotherwise received by the Consultant, whether orally orin writing. Consultant acknowledges that Consultant shall not either directly or indirectly use, disclose or communicate to any person orentity anyConfidential Information for any purpose at all whether during or after the term of this Agreement, except to the extentany such information becomes generally known to the public through no faultof Consultant. Furthermore, the terms of this provision survive the Term of this Agreement, or any termination thereof.

5. IndependentContractor.NothinginthisAgreementshallbeconstruedtocreateanypartnership,employmentrelationshiporotherjointventurebetweenCompanyandConsultant. NeitherpartyshallholditselfoutcontrarytothetermsofthisAgreementnorneitherpartyshallbecomeliable by reason of any representation, act oromission contrary to the provisions of this Agreement.

6. WorkProduct& Company Property. Duringthetermand while performing the services ofthisAgreement,anyandallworkproductshallbethepropertyofCompany.Allmaterials,includingwithoutlimitationdocuments,drawings,drafts,notes,designs, computer media, online sites and campaigns, electronic files andlists,includingalladditionsto,deletionsfrom,alterationsof,andrevisionsintheforegoing(togetherthe “Materials”), whicharefurnishedtoConsultant by Companyor whicharedevelopedin theprocessof performingtheServices,orembodyorrelatetotheServices,theCompanyInformationortheInnovations,arethe propertyofCompany,andshallbereturnedbyConsultanttoCompanypromptlyatCompany'srequesttogether with any copies thereof, and in any event promptly upon expiration or termination of this Agreement for any reason.Consultant is granted no rights in or to such Materials, the Company Information or the Innovations, exceptasnecessary to fulfillitsobligationsunderthisAgreement. Consultant shall not use or disclose the Materials, Company Information or Innovations to any third party.

7. EntireAgreement.ThisAgreement,constitutestheentire understanding and agreement of the parties withrespecttoitssubjectmatterandsupersedesallpriorandcontemporaneousagreementsorunderstandings,inducementsorconditions,expressorimplied,writtenororal,betweentheparties.

8. Miscellaneous.ThislettershallbegovernedbythesubstantivelawsoftheStateofCaliforniaCountyofSanDiegowithoutregardtoconflictoflawprinciples.Thisletterconstitutestheentireunderstandingandagreementbetweenthepartiesheretoandtheiraffiliateswithrespecttoitssubjectmatterandsupersedesallprioror contemporaneous agreements, representations, warranties and understandings of such parties (whether oral or

written).Nopromise,inducement,representationoragreement,otherthanasexpresslysetforthherein,hasbeenmadetoorbythepartieshereto. Thislettermaybeamendedonlybywrittenagreement,signedbythepartiestobeboundbytheamendment.Evidenceshallbeinadmissibletoshowagreementbyandbetweensuchpartiestoanytermor conditioncontrary to or in addition to the terms and conditions contained in this letter. This letter shallbe construed according to its fair meaning and notstrictly for or against eitherparty. Facsimile or email copies are fully binding under all applicable laws whether whole or in counterparts.

INWITNESSWHEREOF,thepartieshaveexecutedthisAgreementonthisdate:January21,2015

EX-1.01

THISNOTEANDTHECOMMONSTOCK ISSUABLEUPONCONVERSIONOFTHISNOTE HAVENOTBEENANDWILLNOTBE REGISTEREDWITHTHEUNITEDSTATES SECURITIESANDEXCHANGECOMMISSIONOR THESECURITIESCOMMISSIONOFANYSTATE PURSUANTTOANEXEMPTIONFROM REGISTRATIONPROVIDEDUNDERTHE SECURITIESACTOF1933,ASAMENDED,AND THE RULES AND REGULATIONS PROMULGATEDTHEREUNDER(THE "1933 ACT”)

US $36,750.00

MAXSOUND CORPORATION.

8%CONVERTIBLEREDEEMABLENOTE DUE FEBRUARY 25, 2016

FORVALUERECEIVED,MaxSoundCorporation.(the“Company”)promisestopaytotheorderofROCKCAPITAL,LLCanditsauthorizedsuccessorsandpermittedassigns("Holder"),theaggregateprincipalfaceamountofThirtySixThousandSevenHundredFifty Dollarsexactly(U.S.$36,750.00)onFebruary25,2016("MaturityDate")andtopayinterestontheprincipalamountoutstandinghereunderattherateof8%perannumcommencingonFebru- ary25,2015.ThisNotecontainsa5%originalissuediscountsuchthatthepurchasepriceofthe noteis$35,000.00.TheinterestwillbepaidtotheHolderinwhosenamethisNoteisregistered onthe records ofthe Company regardingregistration and transfersof this Note. The principal of, and interest on, this Note are payable at 3820 East Mercer Way, Mercer Island, WA 98040, initially, and if changed, last appearing on the records of the Company as designated in writing by the Holder hereoffrom time to time. TheCompany will pay each interest payment and the outstandingprincipal dueupon thisNote before oron theMaturity Date, lessany amountsre- quired bylaw tobe deductedor withheld,to theHolder ofthis Noteby checkor wiretransfer addressed to such Holder at the last address appearing on the records of the Company. The for- warding of such check or wire transfer shall constitute a payment of outstanding principal here- under and shall satisfy and discharge the liability for principal on this Note to the extent of the sum represented by such check or wire transfer. Interest shall be payable in Common Stock (as defined below) pursuant to paragraph 4(b) herein.

ThisNoteissubjecttothefollowingadditionalprovisions:

GH

Initials

1.ThisNoteisexchangeableforanequalaggregateprincipalamountof Notesofdifferentauthorizeddenominations,asrequestedbytheHoldersurrenderingthesame. Noservicechargewillbemadeforsuchregistrationortransferorexchange,exceptthatHolder shallpayanytaxorothergovernmentalchargespayableinconnectiontherewith.

2.TheCompanyshallbeentitledtowithholdfromallpaymentsanyamounts requiredtobewithheldunderapplicablelaws.

3.ThisNotemaybetransferredorexchangedonlyincompliancewiththe SecuritiesActof1933,asamended("Act")andapplicablestatesecuritieslaws.Anyattempted transfertoanon-qualifyingpartyshallbetreatedbytheCompanyasvoid.Priortoduepresent- mentfortransferofthisNote,theCompanyandanyagentoftheCompanymaytreattheperson inwhosenamethisNoteisdulyregisteredontheCompany'srecordsastheownerhereofforall otherpurposes,whetherornotthis Notebeoverdue,andneithertheCompanynoranysuch agentshallbeaffectedorboundbynoticetothecontrary.AnyHolderofthisNoteelectingto exercisetherightofconversionsetforthinSection4(a)hereof,inadditiontotherequirements setforthinSection4(a),andanyprospectivetransfereeofthisNote,alsoisrequiredtogivethe CompanywrittenconfirmationthatthisNoteisbeingconverted("NoticeofConversion")inthe formannexedheretoasExhibitA.Thedateofreceipt(includingreceipt bytelecopy)ofsuch Notice of Conversion shall be the Conversion Date.

4.(a) TheHolderofthisNoteisentitled,atitsoption, toconvertallor anyamountoftheprincipalfaceamountofthisNotethenoutstandingintosharesoftheCompa- ny'scommonstock(the"CommonStock")ataprice("ConversionPrice")foreachshareof CommonStockequalto65%ofthelowestdailyVWAPoftheCommonStockasreportedon theNationalQuotationsBureauOTCQBexchangewhichtheCompany’ssharesaretradedor anyexchangeuponwhichtheCommonStock maybetradedinthefuture("Exchange"),forthe ten prior trading days including the day upon which a Notice of Conversion is received by the Company (provided such Notice of Conversion is delivered by fax or other electronic method of communicationtothe Companyafter4 P.M.EasternStandard orDaylightSavings Timeif the Holder wishesto includethe samedayclosing price).If theshareshave notbeen deliveredwith- in3businessdays,theNoticeofConversionmayberescinded.Suchconversionshallbeeffec- tuatedbytheCompanydeliveringthesharesofCommonStocktotheHolderwithin3business days of receipt by the Company of the Notice of Conversion. Once the Holder has received such shares of CommonStock, the Holdershall surrender thisNote to theCompany, executed bythe Holder evidencing such Holder's intention to convert this Note or a specified portion hereof, and accompanied byproperassignment hereofinblank.Accruedbut unpaidinterestshall besubject to conversion. No fractional shares or scrip representing fractions of shares will be issued on conversion, but the number of shares issuable shall be rounded to the nearest whole share. In the eventtheCompanyexperiencesaDTC“Chill”onitsshares,theconversionpriceshallbede- creasedto 55%instead of65% whilethat “Chill”is ineffect. In noevent shallthe Holderbe al- lowed to effect a conversion if such conversion, along with all other shares of Company Com- monStockbeneficiallyownedbytheHolderanditsaffiliateswouldexceed9.9%oftheout- standing shares of the Common Stock of the Company.

2

(b)InterestonanyunpaidprincipalbalanceofthisNoteshallbepaidatthe rateof8%perannum.InterestshallbepaidbytheCompanyinCommonStock("Interest Shares").Holdermay,atanytime,sendinaNoticeofConversiontotheCompanyforInterest SharesbasedontheformulaprovidedinSection4(a)above.Thedollaramountconvertedinto InterestSharesshallbealloraportionoftheaccruedinterestcalculatedontheunpaidprincipal balanceofthisNotetothedateofsuchnotice.

(c)DuringthefirstsixmonthsthisNoteisineffect,theCompanymayre- deemthisNotebypayingtotheHolderanamountasfollows:(i)iftheredemptionoccurswithin thefirst90daysthenanamountequalto130%oftheunpaidprincipalamountofthisNotealong

withanyprepaidandearnedinterest,(ii)iftheredemptionoccursafterthefirst90daysbutbe- forethe181stdayfollowingtheissuanceofthisNote,thenanamountequalto135%oftheun- paidprincipalamountofthisNotealongwithanyprepaidandearnedinterest.ThisNotemaynot beredeemedafter180days.Theredemptionmustbeclosedandpaidforwithin3businessdays

oftheCompanysendingtheredemptiondemandortheredemptionwillbeinvalidandtheCom- panymaynotredeemthisNote.

(d)Upon(i)atransferofallorsubstantiallyalloftheassetsoftheCompany toanypersoninasingletransactionorseriesofrelatedtransactions,(ii)areclassification,capital reorganizationorotherchangeorexchangeofoutstandingsharesoftheCommonStock,other thanaforwardorreversestocksplitorstockdividend,or(iii)anyconsolidationormergerofthe CompanywithorintoanotherpersonorentityinwhichtheCompanyisnotthesurvivingentity (otherthanamergerwhich iseffectedsolelytochangethejurisdictionofincorporationofthe Companyandresultsinareclassification,conversionorexchangeofoutstandingsharesof CommonStocksolelyintosharesofCommonStock)(eachofitems(i),(ii)and(iii)beingre- ferredtoasa"SaleEvent"),then,ineachcase, theCompanyshall,uponrequestoftheHolder, redeem this Note in cash for 150% of the principal amount, plus accrued but unpaid interest through the date of redemption, or at the election of the Holder, such Holder may convert the un- paid principalamountofthisNote(togetherwiththe amountofaccruedbutunpaidinterest)into shares ofCommonStockimmediatelypriortosuchSale EventattheConversionPrice.

(e)In caseofany SaleEvent(not toincludea saleofall orsubstantiallyall of theCompany’sassets)inconnectionwithwhichthisNoteisnotredeemedorconverted,the CompanyshallcauseeffectiveprovisiontobemadesothattheHolderofthisNoteshallhave therightthereafter,byconvertingthisNote,topurchaseorconvertthisNoteintothekindand numberofsharesofstockorothersecuritiesorproperty(includingcash)receivableuponsuch reclassification,capitalreorganizationorotherchange,consolidationormerger byaholderof thenumberofsharesofCommonStockthatcouldhavebeenpurchaseduponexerciseofthe NoteandatthesameConversionPrice,asdefinedinthisNote,immediatelypriortosuchSale Event.TheforegoingprovisionsshallsimilarlyapplytosuccessiveSaleEvents.Iftheconsidera- tionreceivedbytheholdersofCommonStockisotherthancash,thevalueshallbeasdeter- mined bythe Boardof Directorsof theCompany orsuccessor personor entityacting ingood faith.

5. NoprovisionofthisNoteshallalterorimpairtheobligationoftheCom-

3

pany,whichisabsoluteandunconditional,topaytheprincipalof,andintereston,thisNoteat thetime,place,andrate,andintheform,hereinprescribed.

6.TheCompanyherebyexpresslywaivesdemandandpresentmentforpay- ment,noticeofnon-payment,protest,noticeofprotest,noticeofdishonor,noticeofacceleration orintenttoaccelerate,anddiligenceintakinganyactiontocollectamountscalledforhereunder andshallbedirectlyandprimarilyliableforthepaymentofallsumsowingandtobeowing hereto.

7.TheCompanyagreestopayallcostsandexpenses,includingreasonable attorneys'feesandexpenses,whichmaybeincurredbytheHolderincollectinganyamountdue underthisNote.

8. Ifoneormoreofthefollowingdescribed"EventsofDefault"shalloccur:

(a)TheCompanyshalldefaultinthepaymentofprincipalorinterestonthis NoteoranyothernoteissuedtotheHolderbytheCompany;or

(b)AnyoftherepresentationsorwarrantiesmadebytheCompanyhereinor inanycertificateorfinancialorotherwrittenstatementsheretoforeorhereafterfurnishedbyor onbehalfoftheCompanyinconnectionwiththeexecutionanddeliveryofthisNote,ortheSe- curitiesPurchaseAgreementunderwhichthisnotewasissuedshallbefalseormisleadinginany respect;or

(c)TheCompanyshallfailtoperformorobserve,inanyrespect,anycove- nant,term,provision,condition,agreementorobligationoftheCompanyunderthisNoteorany othernoteissuedtotheHolder;or

(d)TheCompanyshall(1)becomeinsolvent;(2)admitinwritingitsinability topayitsdebtsgenerallyastheymature;(3)makeanassignmentforthebenefitofcreditorsor commenceproceedingsforitsdissolution;(4)applyfororconsenttotheappointmentofatrus- tee,liquidatororreceiverforitsorforasubstantialpartofitspropertyorbusiness;(5)fileapeti- tionforbankruptcyrelief,consenttothefilingofsuchpetitionorhavefiledagainstitaninvol- untarypetitionforbankruptcyrelief,allunderfederalorstatelawsasapplicable;or

(e)Atrustee,liquidatororreceivershallbeappointedfortheCompanyorfor a substantialpartofitspropertyorbusinesswithoutits consentandshallnotbedischargedwith- insixty(60)daysaftersuchappointment;or

(f)Any governmentalagencyoranycourtofcompetentjurisdictionatthein- stanceofanygovernmentalagencyshallassumecustodyorcontrolofthewholeoranysubstan- tialportionofthepropertiesorassetsoftheCompany;or

(g)One or more money judgments, writsor warrants of attachment, orsimilar process,inexcessoffiftythousanddollars($50,000)intheaggregate,shallbeenteredorfiled

4

againsttheCompanyoranyofitspropertiesorotherassetsandshallremainunpaid,unvacated, unbondedorunstayedforaperiodoffifteen(15)daysorinanyeventlaterthanfive(5)days priortothedateofanyproposedsalethereunder;or

(h)TheCompanyshallhavedefaultedonorbreachedanytermofanyother noteofsimilardebtinstrumentintowhichtheCompanyhasenteredandfailedtocuresuchde- faultwithintheappropriategraceperiod;or

(i)TheCompanyshallhaveitsCommonStockdelistedfromanexchange (includingtheOTCBBexchange)or,iftheCommonStocktradesonanexchange,thentrading intheCommonStockshallbesuspendedformorethan10consecutivedays;

(j)IfamajorityofthemembersoftheBoardofDirectorsoftheCompanyon thedatehereofarenolongerservingasmembersoftheBoard;

(k)TheCompanyshallnotdelivertotheHoldertheCommonStockpursuant toparagraph4hereinwithoutrestrictivelegendwithin3businessdaysofitsreceiptofaNotice ofConversion;or

(l)TheCompanyshallnotreplenishthereservesetforthinSection12,with- in3businessdaysoftherequestoftheHolder.(m)TheCompanyshallnotbe“current”inits filingswiththeSecuritiesandExchangeCommission;or

(m)TheCompanyshallnotbe“current”initsfilingswiththeSecuritiesand ExchangeCommission;or

(n)TheCompanyshalllosethe“bid”priceforitsstockinamarket(including theOTCQBmarketplaceorotherexchange).

Then,oratanytimethereafter,unlesscuredwithin5days,andineachandeverysuchcase,un- lesssuchEventofDefaultshallhavebeenwaivedinwritingbytheHolder(whichwaivershall notbedeemedtobeawaiverofanysubsequentdefault)attheoptionoftheHolderandinthe Holder'ssolediscretion,theHoldermayconsiderthisNoteimmediatelydueandpayable,with- outpresentment,demand,protestor(further)noticeofanykind(otherthannoticeofaccelera- tion),allofwhichareherebyexpresslywaived,anythinghereinorinanynoteorotherinstru- mentscontainedtothecontrarynotwithstanding,andtheHoldermayimmediately,andwithout expiration ofanyperiodofgrace,enforceanyandallof theHolder'srightsandremediesprovid- edhereinoranyotherrightsorremediesaffordedbylaw.UponanEventofDefault,interest shall accrue at a default interest rate of24% per annum or, if such rateis usurious or not permit- tedbycurrentlaw,thenatthehighestrateofinterestpermittedbylaw. Intheeventofabreach

ofSection8(k)thepenaltyshallbe$250perdaythesharesarenotissuedbeginningonthe4th dayaftertheconversionnoticewasdeliveredtotheCompany. Thispenaltyshallincreaseto

$500perdaybeginningonthe10thday.ThepenaltyforabreachofSection8(n)shallbeanin- creaseoftheoutstandingprincipalamountsby20%. IncaseofabreachofSection8(i),theout-

standingprincipaldueunderthisNoteshallincreaseby50%.IfthisNoteisnotpaidatmaturity,

5

theoutstandingprincipaldueunderthisNoteshallincreaseby10%.

IftheHoldershallcommenceanactionorproceedingtoenforceanyprovisionsofthisNote,in- cluding,withoutlimitation,engaginganattorney,theniftheHolderprevailsinsuchaction,the HoldershallbereimbursedbytheCompanyforitsattorneys’feesandothercostsandexpenses incurredintheinvestigation,preparationandprosecutionofsuchactionorproceeding.

Make-WholeforFailuretoDeliverLoss.AttheHolder’selection,ifthe CompanyfailsforanyreasontodelivertotheHoldertheconversionsharesbythebythe3rd businessdayfollowingthedeliveryofaNoticeofConversiontotheCompanyandiftheHolder incursaFailuretoDeliverLoss,thenatanytimetheHoldermayprovidetheCompanywritten noticeindicatingtheamountspayabletotheHolderinrespectoftheFailuretoDeliverLossand theCompanymustmaketheHolderwholeasfollows:

FailuretoDeliverLoss=[(Hightradepriceatanytimeonorafterthedayofexercise)x(Num- berofconversionshares)]

TheCompanymustpaytheFailuretoDeliverLossbycashpayment,andanysuchcashpayment mustbemadebythethirdbusinessdayfromthetimeoftheHolder’swrittennoticetotheCom- pany.

9.IncaseanyprovisionofthisNoteisheldbyacourtofcompetentjurisdic- tiontobeexcessiveinscopeorotherwiseinvalidorunenforceable,suchprovisionshallbead- justedratherthanvoided,ifpossible,sothatitisenforceabletothemaximumextentpossible, andthevalidityandenforceabilityoftheremainingprovisionsofthisNotewillnotinanyway beaffectedorimpairedthereby.

10.NeitherthisNotenoranytermhereofmaybeamended,waived,dis- chargedorterminatedotherthanbyawritteninstrumentsignedbytheCompanyandtheHolder.

11.TheCompanyrepresentsthatitisnota“shell”issuerandhasneverbeena “shell”issuerorthatifitpreviouslyhasbeena“shell”issuerthatatleast12monthshavepassed sincetheCompanyhasreportedform10typeinformationindicatingitisnolongera“shellissu- er.Further.The Company willinstruct its counselto either(i) write a144- 3(a)(9) opinionto al- lowforsalabilityoftheconversionsharesor(ii)acceptsuchopinionfromHolder’scounsel.

12.TheCompanyshallissueirrevocabletransferagentinstructionsreserving 2,400,000sharesofitsCommonStockforconversionsunderthisNote(the“ShareReserve”). ThereserveshallbereplenishedasneededtoallowforconversionsofthisNote.Uponfull conversionofthisNote,any sharesremainingintheShare Reserveshallbecancelled. TheCom- panyshallpayallcostsassociatedwithissuinganddeliveringtheshares.Thecompanyshouldat alltimes reserve aminimum of twotimes the amountof shares required ifthe note wouldbe ful- lyconverted.TheHoldermayreasonablyrequestincreasesfromtimetotimetoreservesuch amounts.

13.TheCompanywillgivetheHolderdirectnoticeofanycorporateactions, includingbutnotlimitedtonamechanges,stocksplits,recapitalizationsetc.Thisnoticeshallbe

giventotheHolderassoonaspossibleunderlaw.

14.ThisNoteshallbegovernedbyandconstruedinaccordancewiththelaws ofNewYorkapplicabletocontractsmadeandwhollytobeperformedwithintheStateofNewYorkandshallbebindinguponthesuccessorsandassignsofeachpartyhereto.TheHolderand theCompanyherebymutuallywaivetrialbyjuryandconsenttoexclusivejurisdictionandvenue inthecourtsoftheStateofNewYork.ThisAgreementmaybeexecutedincounterparts,and thefacsimiletransmissionofanexecutedcounterparttothisAgreementshallbeeffectiveasan original.

INWITNESSWHEREOF,theCompanyhascausedthisNotetobedulyexecut- edbyanofficerthereuntodulyauthorized.

Dated: 02/25/2015

MAXSOUNDCORPORATION

By:

Title: CFO

EXHIBITA

NOTICEOFCONVERSION

(TobeExecutedbytheRegisteredHolderinordertoConverttheNote)

The undersigned herebyirrevocably electsto convert$ oftheabove Noteinto SharesofCommonStockofMaxSoundCorporation.(“Shares”)accord-ingtotheconditionssetforthinsuchNote,asofthedatewrittenbelow.

IfSharesaretobeissuedinthenameofapersonotherthantheundersigned,the undersignedwillpayalltransferandothertaxesandchargespayablewithrespectthereto.

Date of Conversion: ApplicableConversion Price: Signature:

[PrintNameofHolderandTitleofSigner]

Address:

SSNorEIN:

Sharesaretoberegisteredinthefollowingname:

Name: Address: Tel: Fax: SSN orEIN:

Sharesaretobesentordeliveredtothefollowingaccount:

AccountName: Address:

EX-5

$500,000CONVERTIBLENOTE

FORVALUE RECEIVED,MaxSoundCorporation,aDelawarecorporation(the"Issuer" of this Security) with at least 363,904,570 common shares issuedand outstanding, issues this Security and promises to paytoJMJ Financial ,a Nevadasoleproprietorship, oritsAssignees (the "Investor") thePrincipalSum along withtheInterestRate andany other fees accordingto the terms herein. This Note will become effectiveonly upon execution byboth parties and delivery of thefust paymentof Consideration by the Investor (the "EffectiveDate").

ThePrincipalSumis$500,000(fivehundred thousand) plus accrued andunpaid interestandanyotherfees.TheConsideration is

$450,000(fourhundredfiftythousand)payab.lebywire(thereexistsa$50,000originalissuediscount(the"OID")).TheInvestor shallpay$150,000 of Considerat ionuponclosing of this Note.TheInvestor maypayadditionalConsideration to the Issuer in such amounts and at such dates as mutually agreed. THE PRINCIPAL SUM DUE TO THE INVESTOR SHALLBE PRORATED BASEDON THE CONSIDERATION ACTUALLYPAIDBY INVESTOR (PLUS ANAPPROXIMATE 10% ORIGINAL ISSUE DISCOUNT THAT IS PRORATEDBASED ON THE CONSIDERATION ACTUALLY PAID BY THE INVESTOR AS WELL AS ANY OTHERINTERESTOR FEES) SUCH THAT THE ISSUER IS ONLY REQU IRED TOREPAY THE AMOUNT FUNDED AND THE ISSUER IS NOT REQUCRED TOREPAY ANY UNFUNDED PORTION OFTIDSN OTE.

TheMaturityDateistwoyearsfromtheEffectiveDateofeachpayment(the"MaturityDate")andisthedateuponwhichthe Principa l Sumof thisNote, as wellas any unpaid interest and other fee ·,shall be due and payable.The Conversion Price is 70%of the average of the 3 lowest lTade pricesi n the15trading daysprevious to the conversion (In the case thatconversion shares arenot del iverableby DWAC an add itional 1 0% d iscou nt wi l lapply;and if thesharesare ineligible fordeposit into theDTC system and only eligiblefor Xclearing deposit an additional5% discount sha ll apply; in the case of both an additional cumulative15% discount shallapply). Unless otherwise agreed in writing by both parl'i es, at no limewill the Investor convert any amountof theNote into common stock thatwou ld resultinthe rnvestorowning more than 4.99% ofthe commonstockoutstanding.

1. ZEROPercentInterest for theFirst ThreeMonths.TheIssuermayrepaythis Noteatanytimeon or before 180 days from the Effective Date,after whichthe Issuer may notmakefarU1er paym ents on thisNote prior to th e Maturity Date withoutwritten approval from the lnvestor. If the Issuer repays a paymen t of Consideration on or before 90 days from the Effective Date ofthat payment, th eInterest Rate 011that pay men t ofConsideration shall be ZERO PERCENT (0%). If theIssuer doesnot repay a payment of Consideration on or before90duys from its Effective Date , a one-tim e Interest charge of 5% shall be applied tothe Pri ncipal Sum. Any interest payable isi n addi tion to the OID,and that OID (or prorated OID,if applicable) remains payable regardlessof time andma 1111er of paymentbythe rssuer.

2.Conversion.TheInvestorhastheright,atanytimeaftertheEffectiveDate,atits election,toconvert all or partoftheoutstanding and u npaid Principal Sum and accruedinterest (and any other foes) into shares of fully paid and non-assessableshares ofcommon stockof the Issuerasper th i s conversion formul11: Number of sharesreceivable upon conversionequals thedollarconversion amount d ividedby U1e Conversion Price. Conversions may bedelivered lo the Issuerbymethod ofthe Investor'schoice (includingbut not l imited loemail, facsimile,mai l, overnight courier, orpersonal delivery), and all conversions shallbe cashless and notrequirefurther paym entfrom the Investor . If no objection isdeliveredfrom theIssuer to the Investor regarding anyvariable or calculation oftheconversion noticewithin24 hoursofdelivery oftheconversion notice, theIssuershall have beentherea fterdeemed tohave irrevoe11bly confirmed and irrevocably ratifiedsuchnoticeofconversionandwaived any objection thereto. TheIssuershalldeliver the shares from any conversion to theInvestor (in any name directed by theInvestor)within3(three) businessdays of conversion notice delivery.

3.ConversionDelays.IftheIssuerfailstodeliversharesinaccordancewiththetimeframe stated iu ection2, the Investor,atanytime prior toselling a llof those shares, may rescind a 1y portio 11, inwholeorin part,of thatparticularconversion attributable to the unsold sharesandhavethe rescinded conversionamoimtretu rnedtothePrincipal Sum withthe resci nded conversionsharesreturned 10 U1e Issuer(underthe[nvestor'sand theIssuer 's expectationstJiatanyreturned conversion amountswill tack back to the original date ofthe Nore).Inaddition, for eachconversion, in tJ1eeventthatsharesare notdelivernd bythe folll'tllbusinessday (inclusi ve of thedayof conversion), a penalty of $2,000perdaywill beassessed for eachday after thethi rd business day(inclusiveof thedayofthe conversion) unti lshare deliveryi made;and such penalty wi llbe added to the PrincipalSum of the Note (under the Investor 's andthe Issuer 's expectationsthat any penalty amounts will lackback tothe originaldate of the ote).

4. ReservationofShares.AtalltimesduringwhichthisNoteisconvertible,theIssuerwillreservefromitsauthorizedandunissuedCommon Stock to provide fortheissuance of Common Stock upon thefull conversion of thisNote . The Issuer will at all

timesreserveatleastl0,000,000sharesofCommonStockforconversion.

5.PiggybackRegistrationRights.TheIssuershallincludeonthenextregistrationstatementtheIssuerfileswithSEC(oronthe subsequent registration statementifsuch registration statementis withdrawn)all shares issuableupon conversionof thisNote. Failuretodo so will result in liquidated damages of 25%ofthe outstanding principalbalanceof thisNote, butnotless than$25,000, being immediatelydue and payable tothe Investor at its election in the form of cashpayment or addition tothe balance of this Note.

6. ThisSection6intentionallyleftblank

7.Default.ThefollowingareeventsofdefaultunderthisNote: (i)theIssuershallfailtopay anyprincipalunder the Note whendue andpayabl e(orpayable by conversion) thereunder;or(ii)the Issuer shallfail topay any interest orany otheramount under theNote

whendueandpayable(orpayablebyconversion)thereunder;or(iii)areceiver, trusteeorothersimilarofficial shall beappointedover the Issuer oramaterialpaii of itsassetsand such appointmenthal lremain uncontestedfortwenty (20)days orshall notbe dism issed ordischarged within sixty(60)days;or(iv) theIssuer shall become insolvent orgenerally failstopay or admitsin writingits inability to pay, itsdebts astbey become due, subject toapplicable grace periods if any; or (v) theIs uer shallmake a general assignment for the benefit ofcreditors; or (vi)the Issuer shallfile a petition for relief under anybankruptcy, insolvency or similar law (domestic or foreign); or (vii) an involuntary proceedingshallbe commenced or filed against the Issuer; or (viii)the Issuer shall lose its status as "DTC Eligible" ortheIssuer's shareholders shall lose theability to deposit(either electronically or by physical certificates, or otherwise) sharesinto the DTC System;or(ix) the Issuer shallbecome delinquent in its filingrequirements as afully-reporting issuer registered withtheSEC;or (x)the Issuersha llfai l to meet a ll requirements tosatisfy the availability ofRule 144 to the Investor or itsassigns including but not limited to timelyfulfillment of its filing requirementsas a fully-reportingissuer registeredwiththe SEC, requirements forXBRL filings, andrequ irementsfordisclosure of financial statements onitswebsite.

8.Remedies.Intheeventofanydefault,theoutstandingprincipalamountofthis Note, plusaccrued butunpaid interest,liquidated damages, feesandother amounts owing inrespectthereof throughthe date of acceleration, shall become, at theInvestor's election,immediately dueand payable incash at the M andatoryDefault Amount. TheMandatory DefaultAmount meansthe greater of(i) theoutstanding principalamount of this Notepl us allaccruedandunpaidinterest, liquidateddamages, fees and other amounts hereon,dividedbytheConversionPriceont11edatetheMandatoryDefaultAmountis either demandedor paid in full, whicheverhasa lower Conversion Price,multiplied by the V WAPonthedatethe Mandatory Default Amount iseitherdemandedor paidin full, whichever has a higherVWAP, or (ii) 150% ofthe outstandingprincipal amount of this Note , plus 100% of accruedand unpaid interest,liquidateddamages, fees and other amounts hereon. Commencing five (5) days after the occurrence of any event of default that resultsintheeventualacceleration of thisNote, the interest rateonthis Note shall accrueat aninterest rateequal tothelesserof 18%per annum or themaximum ratepennitted under applicable law. Inconnection with such accelerationdescribedherein, the Investor need notprovide, andthe Issuerhereby waives, any presentment, demand, protest orothernotice ofany kind, and theInvestormay immediately and without expiration of anygrace period enforce any and all ofitsrights and remedieshereunder and allother remedies available toit under applicable law. Suchacceleration may be rescinded and annulled by the Investor at anytime prior topayment hereunder and the Investor shallhave all rights asa holder ofthenoteu ntil such ti m e,ifany, as the[nvcstorreceives full payment pursuant to this Section 8.No such rescission or annulment shall a ffect any subseq uen t event of default or impair any right consequent thereon . Nothing herein shall limitthe Investor's right topursue any other remed iesavailableto it atlaw or in equityincluding, without limitation , a decree ofspecificperformanc eand/or i njunct i ve reliefwi th respect to theIssuer's fai lure to timel y deliver certificates representing shares of CommonStockupon conversion ofthe Noteasreq u ired pu rsuanttothe termshereof.

9.NoShorting.TheInvestoragreesthatsolongasthisNotefromtheIssuertotheInvestorremainsoutstanding,theInvestor will notenterintoor effect "short sales" ofthe Common Stockor hedging transaction which establishes a net short positionwithrespecttotheCommon Stockof theIssuer. TheIssueracknowledgesand agrees that upondelivery of aconversion notice by theInvestor,the Investor immediatelyownsthesharesof CommonStock described in tho conversion noticeandanysale of those sharesissuable undersuch conversionnoticewouldnotbe considered short sales.

10.Assignability.TheIssuermaynotassignthisNote. ThisNotewillbebindingupontheIssueranditssuccessorsandwillinureto thebenefitoftheInvestor anditssuccessors andassignsandmaybeassignedbythe Investor to anyonewithoutthe Issuer's approval.

lI.GoverningLaw.This otewillbegovernedby,and construed andenforcedin accordancewith, the laws of the Stateof Nevada ,withoutregard to the conflictof lawsprinciples thereof. Any action brought by either party against the other concerning the tra 1sactionscontemplated by this Agreement shall bebrought only in the state courts ofFlorida or inthe federalcourts located in M iami-DadeCounty,i n the State o[Florida.Both parties andthe individuals signingthis Agreement agree to submit to the jurisdictionofsuch courts.

12.Delivery ofProcess by theInvestor totheIssuer. IntheeventofanyactionorproceedingbytheInvestoragainsttheIssuer,andonlybytheInvestor againstthe Issuer,serviceof copiesof summonsand/orcomplaint and/or any otherprocess whichmay be served in anysuchactionor proceeding maybemadeby theInvestor viaU.S. Mail,overnightdelivery servicesuchas FedEx or UPS, email, fax, orprocess server,orbymailingorotherwisedeliveringa copy ofsuchprocess totheIssuer atits lastknown attorney as setforth inits most recentSECfiling.

13.AttorneyFees.Ifanyattorneyis employedbyeitherpartywithregardto anylegalorequitableaction,arbitrationorother proceeding brought by such party for enforcement of this Note or because of an a llegeddispute, breach, default or misrepresentat ion in connection with any of the provisionsof this Note, the prevailing party will be enti tledto recover from the otherparty reasonable attorneys' feesand othercosts and expenses incurred, in addition to any other reliefto whichthe prevailing party may beentitled.

14.OpinionofCounsel.Intheeventthatanopinionofcounselisneededforanymatterrelatedto this Note, the Investorhastheright tohaveany suchopinionprovided by its counsel. Investor also hasthe rightto haveanysuchopinionprovidedbyIssuer'scounsel.

15.Notices.Anynoticerequiredorpermittedhereunder(includingConversionNotices)mustbeinwritingand either personally served, sent by facsim i le or email transmission, or sent byovernightcourier. Notices will bedeemedeffectively deliveredat thetimeoftransmissionif byfacsimileor email, and if by overnightcourier the business day after suchnotice is deposited withthecourierservice for del ivery.

Issuer:

[SignaturePagetoFollow]

Investor:

Gc;ld2

MaxSoundCorporation

ChiefFinancialOfficer

Date:03/10/15

[SignaturePageto$500,000ConvertibleNote]

Marchl0. 2015 GlobexTrnnsl'cr,LLC

780DeltonaBoulevard,Suite202 Deltona,FL 32725

LadiesandGentlemen:

. X·D(··,®!

·.G..:

TECHNOLOGYREDEFINED ...

MaxSoundCorporntiun,a Delawarecorporation(the"Company")and.IMJFinancial(the"Investor")entered into u $500,000Convertible Note(the'"Nole") dated March 9. 201 5. A copyof' thcNote is aLtac hcd hereto. You

shoultlfamiliarizeyourselfwithyourissuance anddelivery obligat ions. m; Transfer Agen t, cunta i ned therei n.

Youan.:herebyirrevocablyauthorizetlcllldinstructedtoreserveasufficientnumberu f' shares or common stock (" ommonSt·ock") of the Company a tleast 1 0,000 000 {ten mi ll i on) sha resor Commonstock for thl! Note which slloul<l be held in reserve for t he Investor as or th is dutc) for issuance uponfull con versi on of'the Note i n accordance withthe te1111s t hereof. I n t he cvenr !'hat the price pershare of the Common Stock falls below 50'i'o or the c l osi ng price011 the d ote oflh is l etter the I nvestor mayi'rom ti111eto time provide you wit h wri tten notice to

increasethenumberorshoresofCommonStockso1·c ·ervcd , wi tho ut a n y furtheraction or con li rmat i onoft he

Company,tos11chnumberofsharesasequalsfivet i mes t he outstand i ngNot e ba l ancea t t he l imeof t he noti ce d i vided by t he average ofthecl osing prices ol' t hcCommonStock for t he three t rad ingdaysprior lot hedate of thenot ice. I nvestor hasagreed that int heeventt he stock pricei ncreases. the 1·cservecanbedecreased

proportionally.Intheeventofareversestocksplit'thereserveshoul d rema i nunehangcd un l ess i nstruc ted by the Investorand the Com pa ny .

TheabilitytoprocessanoticeofeonvcrsionundertheNote(a "ConversionNot ice")in at i mely ma nner isa malcrialobligation oftheCompany pursuant t ot heNote. Yo ur fi rm islwn;by i rrevoca blym1t hori zed and instructed toissue shares ("Shares") of Common Stock oC thc Compa n y tot heI n vestor wit hou t any furtheraction or co n lirnrntion byt heCom pany ( fromt hereserve, bu t i n theeventt here arc insu f ficient reserve shares of Com monStock toaccommodat eaConve rsion No tice (clcfined bel ow) yourf irm a ndt heCom pu ny agreet hat

theConversionNoticeshouldbecompletedusingauthorizedbutun issued shares or CommonStockthatthe

Companyhasinit'streasury)uponyourreceiptfromtheInvestorof aConve rsionN oticeexecuted bythe

Investor. TheSharesshouldbeissuedwithoutanyrestrictive h:ge nd if: (A) t heI nvestorprovi des youwit h anopinion ofcounsel orthc Investor, i n form,su bst ance and scope c ustomary foropin ionsofcounsel incompa rable transactions (and satisfactorytot hetransf"eragent),toth e effect Llin1 the Shares issued10theln veslor p urs uan t to theConversion Notice are no\ "restricted securities" as de lined in Rule 144 and should be issued lo theInvestor without any restrictive legend,provided that t heCompany is current onits SEC filings and theopinion is dated witl1 in90 daysfrom thedate of theissuance ortrnnsferrequest;a nd (8) the numberof Shares!o be issued is less

than4.99'% ofthetotalissuedcommonstockoftheCompany.

TheCompanyherebyrequeststhatyouri·lrmnetimmediately,withoutdelay andw i thout the need for anyaction or confirmation bythe Com pany wi th respect lo the i ssua nceol' Corn rnonStockp u rsuant lo any Conversi on Notices received from the I nvestor.

TheSharesshallnotbesubjecttoanystop-transferrestrictionsatanytime.TheCompan yherebyconl'irrnsto

yonandtotheInvestorthatnoinstructionotherthanascontemplatedhereinwill be given to you by tile Com pan y withrespecttothe matters referenced herein. TheCompany herebyauthorizes you, andyou sha l l beobi iga tcd, to d isrega rd anycontra ry i nst ruction received byor onbch a l f of the Compa ny or nny other p<.:rson purporting to represent the Com pany.

YouareherebyauthorizedanddirectedtopromptlydiscloselotheInvestor, after lnvestor's requesl rrom timeto t ime, the total n um ber of shares of Common Stock i s ucd and ouls!andi ng and the tota l numberof shares of Common Stock llrn l are au thori zed bu tunissuccland u nreserved .

TheCompanyshallindemnifyyouandyourofficers,directors,principals,partners,agentsandrepresentatives, andholdeachofthemharmlessfromand againstanyand allloss,liability, damage,c.laimorexpense (including the reasonable feesanddiS;buraementsofils attomeys) incurre.d by oi·asserted against youor any o-fthem arising

no

outoforinconnectiontheinstructionssetforthherein,theperfonnanceofyourdutishereunderandotherwfaein respectbereof,. inoludingthecostsandexpensesof defendingyourselforthemselvesagains'anychumorliability hereunder., except that the Companyshallnot heliablehereunderas to matters inrespectof whichit Is determined thatyou haveJtct.edwith gtoss negligei1ceorin bad faith (which gross negligence orbad faith musthe determined by afinul, non-appcal n bl e order, j\ldgment,decree or rulingof aeourt of c0mpetent jurisdic tion). You shall have

liabilitytotheCompanyinresp.ecttoanyactiontakenoranyfailuretoactinrespectofthisifsuchaction was taken or omittedto.fue taken in goo,d faith,andyou shall be entitledto rely in thisregard on the advice of counsel.

TheBoru:dofDirectorsoftheCompanyhasapprovedtheforegoing(irrevocableinstructions)anddoeshereby extendthe Company's irrevocable agreement to indemnifyyourfirmfor a\llo.ss, liabilityor expense incarrying out the authority and direction herein contained on the tt?nns herein set forth.

IftheCompany'saccountisinarrearswiththeTransferAgent,theT1:ansferAgentshallnothavartyobligation t©actup.ontheseinstructions;however the Investor shall have the option to CU1'e the outstanding b,alance with the TransferAgent.

TheCompanyagreesthatintheeventthatthl.llTransferAge11tresignsastheCompany'strnnsferageat,oriftheCompanydecides.to switchor terniinatethe current TransferAgent, the Companyshallengageasuitable replacement transfer agentthatwil1agreeto serve astransfer agentfurthe Company andbe bound bythe terms and conditions of these Irrevecable Instructionswithin flve (5) businesi; days.

Th.eInvestorisintendei;ltobeandisthirdpmtybeneficiaryhereof,andnoamendment01·modificationtothe instru.ction.ssetfor.thberelum:ay bemaoewithout theconsent oftheInvestor.

VerytruJy:yours,

By:--::::=-----1-'---------

C1regHalpern

ChiefFinancialOfficer

GlobexTransfer,LLC

By:_·....._-------

Name:

Title:

EX-4

THISNOTEANDTHECOMMONSTOCK ISSUABLEUPONCONVERSIONOFTHISNOTE HAVENOTBEENANDWILLNOTBE REGISTEREDWITHTHEUNITEDSTATES SECURITIESANDEXCHANGECOMMISSIONOR THESECURITIESCOMMISSIONOFANYSTATE PURSUANTTOANEXEMPTIONFROM REGISTRATIONPROVIDEDUNDERTHE SECURITIESACTOF1933,ASAMENDED,AND THE RULES AND REGULATIONS PROMULGATEDTHEREUNDER(THE "1933 ACT”)

US $115,500.00

MAXSOUND CORPORATION.

8%CONVERTIBLEREDEEMABLENOTE DUE FEBRUARY27,2016

FORVALUERECEIVED,MaxSoundCorporation.(the“Company”)promisestopaytotheorderofTOLEDOADVISORS,LLCanditsauthorizedsuccessorsandpermittedassigns("Holder"),theaggregateprincipalfaceamountofOneHundredFifteenThousandFiveHundred Dollarsexactly(U.S.$115,500.00)onFebruary27,2016("MaturityDate")andtopayinterest ontheprincipalamountoutstandinghereunderattherate of8%perannumcommencingonFeb- ruary27,2015.TheCompanyacknowledgesthisNotewasissuedwitha5%originalissuedis- count(OID)andassuchtheissuancepricewas$110,000.00.Theinterestwillbepaidtothe HolderinwhosenamethisNoteisregisteredontherecordsoftheCompanyregardingregistra-

tionandtransfersofthisNote.Theprincipalof,andintereston,thisNotearepayableat6415th Street,Lakewood,NJ08701,initially,andifchanged,lastappearingontherecordsoftheCom-

panyasdesignatedinwritingbytheHolderhereoffromtimetotime.TheCompanywillpay eachinterestpaymentandthe outstandingprincipaldueupon thisNotebeforeor ontheMaturity Date,lessanyamountsrequiredbylawtobedeductedorwithheld,totheHolderofthisNoteby checkorwiretransferaddressedtosuchHolderatthelastaddressappearingontherecordsof theCompany.Theforwardingofsuchcheckorwiretransfershallconstituteapaymentofout- standingprincipalhereunderandshallsatisfyanddischargetheliabilityforprincipalonthis Notetotheextentofthesumrepresentedbysuchcheckorwiretransfer.Interestshallbepaya- bleinCommonStock(asdefinedbelow)pursuanttoparagraph4(b)herein.

ThisNoteissubjecttothefollowingadditionalprovisions:

GH

Initials

1.ThisNoteisexchangeableforanequalaggregateprincipalamountof Notesofdifferentauthorizeddenominations,asrequestedbytheHoldersurrenderingthesame. Noservicechargewillbemadeforsuchregistrationortransferorexchange,exceptthatHolder shallpayanytaxorothergovernmentalchargespayableinconnectiontherewith.

2.TheCompanyshallbeentitledtowithholdfromallpaymentsanyamounts requiredtobewithheldunderapplicablelaws.

3.ThisNotemaybetransferredorexchangedonlyincompliancewiththe SecuritiesActof1933,asamended("Act")andapplicablestatesecuritieslaws.Anyattempted transfertoanon-qualifyingpartyshallbetreatedbytheCompanyasvoid.Priortoduepresent- mentfortransferofthisNote,theCompanyandanyagentoftheCompanymaytreattheperson inwhosenamethisNoteisdulyregisteredontheCompany'srecordsastheownerhereofforall otherpurposes,whetherornotthis Notebeoverdue,andneithertheCompanynoranysuch agentshallbeaffectedorboundbynoticetothecontrary.AnyHolderofthisNoteelectingto exercisetherightofconversionsetforthinSection4(a)hereof,inadditiontotherequirements setforthinSection4(a),andanyprospectivetransfereeofthisNote,alsoisrequiredtogivethe CompanywrittenconfirmationthatthisNoteisbeingconverted("NoticeofConversion")inthe formannexedheretoasExhibitA.Thedateofreceipt(includingreceipt bytelecopy)ofsuch Notice of Conversion shall be the Conversion Date.

4.(a) TheHolderofthisNoteisentitled,atitsoption, toconvertallor anyamountoftheprincipalfaceamountofthisNotethenoutstandingintosharesoftheCompa- ny'scommonstock(the"CommonStock")ataprice("ConversionPrice")foreachshareof CommonStockequalto65%ofthelowestdailyVWAPoftheCommonStockasreportedontheNationalQuotationsBureauOTCQBexchangewhichtheCompany’ssharesaretradedor anyexchangeuponwhichtheCommonStockmaybetradedinthefuture("Exchange"),forthe ten prior trading days including the day upon which a Notice of Conversion is received by the Company (provided such Notice of Conversion is delivered by fax or other electronic method of communicationtothe Companyafter4 P.M.EasternStandard orDaylightSavings Timeif the Holder wishesto includethe samedayclosing price).If theshareshave notbeen deliveredwith- in3 business days, theNotice of Conversion maybe rescinded. Such conversion shallbe effec- tuatedby the Companydelivering the shares ofCommon Stock tothe Holder within 3 business days ofreceiptbytheCompanyoftheNoticeofConversion. OncetheHolderhasreceivedsuch shares of CommonStock, the Holdershall surrender thisNote to theCompany, executed bythe Holder evidencing such Holder's intention to convert this Note or a specified portion hereof, and accompanied byproperassignment hereofinblank.Accruedbut unpaidinterestshall besubject to conversion. No fractional shares or scrip representing fractions of shares will be issued on conversion, butthenumber of sharesissuableshall beroundedto thenearestwholeshare. Inthe eventtheCompanyexperiencesaDTC“Chill”onitsshares,theconversionpriceshallbede- creasedto 55 %instead of 65%while that “Chill” isin effect. Inno event shall theHolder be al- lowed to effect a conversion if such conversion, along with all other shares of Company Com- monStockbeneficiallyownedbytheHolderanditsaffiliateswouldexceed9.9%oftheout- standing shares of the Common Stock of the Company.

(b)InterestonanyunpaidprincipalbalanceofthisNoteshallbepaidatthe rateof8%perannum.InterestshallbepaidbytheCompanyinCommonStock("Interest Shares").Holdermay,atanytime,sendinaNoticeofConversiontotheCompanyforInterest SharesbasedontheformulaprovidedinSection4(a)above.Thedollaramountconvertedinto InterestSharesshallbealloraportionoftheaccruedinterestcalculatedontheunpaidprincipal balanceofthisNotetothedateofsuchnotice.

(c)DuringthefirstsixmonthsthisNoteisineffect,theCompanymayre- deemthisNotebypayingtotheHolderanamountasfollows:(i)iftheredemptionoccurswithin thefirst90daysthenanamountequalto130%oftheunpaidprincipalamountofthisNotealong

withanyprepaidandearnedinterest,(ii)iftheredemptionoccursafterthefirst90daysbutbe- forethe180thdayfollowingtheissuanceofthisNote,thenanamountequalto135%oftheun- paidprincipalamountofthisNotealongwithanyprepaidandearnedinterest.ThisNotemaynot beredeemedafter180days.Theredemptionmustbeclosedandpaidforwithin3businessdays

oftheCompanysendingtheredemptiondemandortheredemptionwillbeinvalidandtheCom- panymaynotredeemthisNote.

(d)Upon(i)atransferofallorsubstantiallyalloftheassetsoftheCompany toanypersoninasingletransactionorseriesofrelatedtransactions,(ii)areclassification,capital reorganizationorotherchangeorexchangeofoutstandingsharesoftheCommonStock,other thanaforwardorreversestocksplitorstockdividend,or(iii)anyconsolidationormergerofthe CompanywithorintoanotherpersonorentityinwhichtheCompanyisnotthesurvivingentity (otherthanamergerwhich iseffectedsolelytochangethejurisdictionofincorporationofthe Companyandresultsinareclassification,conversionorexchangeofoutstandingsharesof CommonStocksolelyintosharesofCommonStock)(eachofitems(i),(ii)and(iii)beingre- ferredtoasa"SaleEvent"),then,ineachcase, theCompanyshall,uponrequestoftheHolder, redeem this Note in cash for 150% of the principal amount, plus accrued but unpaid interest through the date of redemption, or at the election of the Holder, such Holder may convert the un- paid principalamountofthisNote(togetherwiththe amountofaccruedbutunpaidinterest)into shares ofCommonStockimmediatelypriortosuchSale EventattheConversionPrice.

(e)In caseofany SaleEvent(not toincludea saleofall orsubstantiallyall of theCompany’sassets)inconnectionwithwhichthisNoteisnotredeemedorconverted,the CompanyshallcauseeffectiveprovisiontobemadesothattheHolderofthisNoteshallhave therightthereafter,byconvertingthisNote,topurchaseorconvertthisNoteintothekindand numberofsharesofstockorothersecuritiesorproperty(includingcash)receivableuponsuch reclassification,capitalreorganizationorotherchange,consolidationormerger byaholderof thenumberofsharesofCommonStockthatcouldhavebeenpurchaseduponexerciseofthe NoteandatthesameConversionPrice,asdefinedinthisNote,immediatelypriortosuchSale Event.TheforegoingprovisionsshallsimilarlyapplytosuccessiveSaleEvents.Iftheconsidera- tionreceivedbytheholdersofCommonStockisotherthancash,thevalueshallbeasdeter- mined bythe Boardof Directorsof theCompany orsuccessor personor entityacting ingood faith.

5.NoprovisionofthisNoteshallalterorimpairtheobligationoftheCom- pany,whichisabsoluteandunconditional,topaytheprincipalof,andintereston,thisNoteat thetime,place,andrate,andintheform,hereinprescribed.

6.TheCompanyherebyexpresslywaivesdemandandpresentmentforpay- ment,noticeofnon-payment,protest,noticeofprotest,noticeofdishonor,noticeofacceleration orintenttoaccelerate,anddiligenceintakinganyactiontocollectamountscalledforhereunder andshallbedirectlyandprimarilyliableforthepaymentofallsumsowingandtobeowing hereto.

7.TheCompanyagreestopayallcostsandexpenses,includingreasonable attorneys'feesandexpenses,whichmaybeincurredbytheHolderincollectinganyamountdue underthisNote.

8. Ifoneormoreofthefollowingdescribed"EventsofDefault"shalloccur:

(a)TheCompanyshalldefaultinthepaymentofprincipalorinterestonthis NoteoranyothernoteissuedtotheHolderbytheCompany;or

(b)AnyoftherepresentationsorwarrantiesmadebytheCompanyhereinor inanycertificateorfinancialorotherwrittenstatementsheretoforeorhereafterfurnishedbyor onbehalfoftheCompanyinconnectionwiththeexecutionanddeliveryofthisNote,ortheSe- curitiesPurchaseAgreementunderwhichthisnotewasissuedshallbefalseormisleadinginany respect;or

(c)TheCompanyshallfailtoperformorobserve,inanyrespect,anycove- nant,term,provision,condition,agreementorobligationoftheCompanyunderthisNoteorany othernoteissuedtotheHolder;or

(d)TheCompanyshall(1)becomeinsolvent;(2)admitinwritingitsinability topayitsdebtsgenerallyastheymature;(3)makeanassignmentforthebenefitofcreditorsor commenceproceedingsforitsdissolution;(4)applyfororconsenttotheappointmentofatrus- tee,liquidatororreceiverforitsorforasubstantialpartofitspropertyorbusiness;(5)fileapeti- tionforbankruptcyrelief,consenttothefilingofsuchpetitionorhavefiledagainstitaninvol- untarypetitionforbankruptcyrelief,allunderfederalorstatelawsasapplicable;or

(e)Atrustee,liquidatororreceivershallbeappointedfortheCompanyorfor a substantialpartofitspropertyorbusinesswithoutits consentandshallnotbedischargedwith- insixty(60)daysaftersuchappointment;or

(f)Any governmentalagencyoranycourtofcompetentjurisdictionatthein- stanceofanygovernmentalagencyshallassumecustodyorcontrolofthewholeoranysubstan- tialportionofthepropertiesorassetsoftheCompany;or

(g) Oneor more money judgments, writs or warrants of attachment, or similar

process,inexcessoffiftythousanddollars($50,000)intheaggregate,shallbeenteredorfiledagainsttheCompanyoranyofitspropertiesorotherassetsandshallremainunpaid,unvacated, unbondedorunstayedforaperiodoffifteen(15)daysorinanyeventlaterthanfive(5)days priortothedateofanyproposedsalethereunder;or

(h)TheCompanyshallhavedefaultedonorbreachedanytermofanyother noteofsimilardebtinstrumentintowhichtheCompanyhasenteredandfailedtocuresuchde- faultwithintheappropriategraceperiod;or

(i)TheCompanyshallhaveitsCommonStockdelistedfromanexchange (includingtheOTCBBexchange)or,iftheCommonStocktradesonanexchange,thentrading intheCommonStockshallbesuspendedformorethan10consecutivedays;

(j)IfamajorityofthemembersoftheBoardofDirectorsoftheCompanyon thedatehereofarenolongerservingasmembersoftheBoard;

(k)TheCompanyshallnotdelivertotheHoldertheCommonStockpursuant toparagraph4hereinwithoutrestrictivelegendwithin3businessdaysofitsreceiptofaNotice ofConversion;or

(l)TheCompanyshallnotreplenishthereservesetforthinSection12,with- in3businessdaysoftherequestoftheHolder.If theCompanydoesnotreplenishthereserveset forthinSection12,within5businessdaysoftherequestoftheHolderthentheconversiondis- countsetforthinSection4(a)shallbeincreasedfroma35%conversiondiscounttoa50%con- versiondiscountandshallbeincreasedfromthe50%conversiondiscounttheninineffecttoan 80% conversiondiscountiftheincreaseisnoteffectivewithin10businessdaysofthereplen- ishmentrequest;or

(m)TheCompanyshallnotbe“current”initsfilingswiththeSecuritiesand ExchangeCommission;or

(n)TheCompanyshalllosethe“bid”priceforitsstockinamarket(including theOTCQBmarketplaceorotherexchange).

Then,oratanytimethereafter,unlesscuredwithin5days,andineachandeverysuchcase,un- lesssuchEventofDefaultshallhavebeenwaivedinwritingbytheHolder(whichwaivershall notbedeemedtobeawaiverofanysubsequentdefault)attheoptionoftheHolderandinthe Holder'ssolediscretion,theHoldermayconsiderthisNoteimmediatelydueandpayable,with- outpresentment,demand,protestor(further)noticeofanykind(otherthannoticeofaccelera- tion),allofwhichareherebyexpresslywaived,anythinghereinorinanynoteorotherinstru- mentscontainedtothecontrarynotwithstanding,andtheHoldermayimmediately,andwithout expiration ofanyperiod ofgrace,enforceany andallof theHolder'srightsand remediesprovid- edhereinoranyotherrightsorremediesaffordedbylaw. UponanEventofDefault,interest shallaccrueatadefaultinterestrateof 24%perannumor,ifsuchrateisusuriousornotpermit- tedbycurrentlaw,thenatthehighestrateofinterestpermittedbylaw. Intheeventofabreach

5

ofSection8(k)thepenaltyshallbe$250perdaythesharesarenotissuedbeginningonthe4th dayaftertheconversionnoticewasdeliveredtotheCompany. Thispenaltyshallincreaseto

$500perdaybeginningonthe10thday.ThepenaltyforabreachofSection8(n)shallbeanin- creaseoftheoutstandingprincipalamountsby20%. IncaseofabreachofSection8(i),theout-

standingprincipaldueunderthisNoteshallincreaseby50%.IfthisNoteisnotpaidatmaturity, theoutstandingprincipaldueunderthisNoteshallincreaseby10%.

IftheHoldershallcommenceanactionorproceedingtoenforceanyprovisionsofthisNote,in- cluding,withoutlimitation,engaginganattorney,theniftheHolderprevailsinsuchaction,the HoldershallbereimbursedbytheCompanyforitsattorneys’feesandothercostsandexpenses incurredintheinvestigation,preparationandprosecutionofsuchactionorproceeding.

Make-WholeforFailuretoDeliverLoss.AttheHolder’selection,ifthe CompanyfailsforanyreasontodelivertotheHoldertheconversionsharesbythebythe3rd businessdayfollowingthedeliveryofaNoticeofConversiontotheCompanyandiftheHolder incursaFailuretoDeliverLoss,thenatanytimetheHoldermayprovidetheCompanywritten noticeindicatingtheamountspayabletotheHolderinrespectoftheFailuretoDeliverLossand theCompanymustmaketheHolderwholeasfollows:

FailuretoDeliverLoss=[(Hightradepriceatanytimeonorafterthedayofexercise)x(Num- berofconversionshares)]

TheCompanymustpaytheFailuretoDeliverLossbycashpayment,andanysuchcashpayment mustbemadebythethirdbusinessdayfromthetimeoftheHolder’swrittennoticetotheCom- pany.

9.IncaseanyprovisionofthisNoteisheldbyacourtofcompetentjurisdic- tiontobeexcessiveinscopeorotherwiseinvalidorunenforceable,suchprovisionshallbead- justedratherthanvoided,ifpossible,sothatitisenforceabletothemaximumextentpossible, andthevalidityandenforceabilityoftheremainingprovisionsofthisNotewillnotinanyway beaffectedorimpairedthereby.

10.NeitherthisNotenoranytermhereofmaybeamended,waived,dis- chargedorterminatedotherthanbyawritteninstrumentsignedbytheCompanyandtheHolder.

11.TheCompanyrepresentsthatitisnota“shell”issuerandhasneverbeena “shell”issuerorthatifitpreviouslyhasbeena“shell”issuerthatatleast12monthshavepassed sincetheCompanyhasreportedform10typeinformationindicatingitisnolongera“shellissu- er.Further.The Company willinstruct its counselto either(i) write a144- 3(a)(9) opinionto al- lowforsalabilityoftheconversionsharesor(ii)acceptsuchopinionfromHolder’scounsel.

12.TheCompanyshallissueirrevocabletransferagentinstructionsreserving 10,000,000sharesofitsCommonStockforconversionsunderthisNote(the“ShareReserve”). UponfullconversionofthisNote,anysharesremainingintheShareReserveshallbecancelled. TheCompanyshallpayallcostsassociatedwithissuinganddeliveringtheshares.Thecompany shouldatalltimesreserveaminimumoftwotimestheamountofsharesrequiredifthenote

wouldbefullyconverted.Thereserveshallbereplenishedasneededtoallowforconversionsof thisNoteusingsaid2xreserve,providedanincreasenoticemaynotbedeliveredmorethanonce every30daysforthefirst5monthstheNoteisineffect,beginningonthe60thday.

13.TheCompanywillgivetheHolderdirectnoticeofanycorporateactions, includingbutnotlimitedtonamechanges,stocksplits,recapitalizationsetc.Thisnoticeshallbe giventotheHolderassoonaspossibleunderlaw.

14.ThisNoteshallbegovernedbyandconstruedinaccordancewiththelaws ofNewYorkapplicabletocontractsmadeandwhollytobeperformedwithintheStateofNewYorkandshallbebindinguponthesuccessorsandassignsofeachpartyhereto.TheHolderand theCompanyherebymutuallywaivetrialbyjuryandconsenttoexclusivejurisdictionandvenue inthecourtsoftheStateofNewYork.ThisAgreementmaybeexecutedincounterparts,and thefacsimiletransmissionofanexecutedcounterparttothisAgreementshallbeeffectiveasan original.

INWITNESSWHEREOF,theCompanyhascausedthisNotetobedulyexecutedbyanofficer thereuntodulyauthorized.

Dated: 02/27/2015

MAXSOUNDCORPORATION

By:

Title:CFO

EXHIBITA

NOTICEOFCONVERSION

(TobeExecutedbytheRegisteredHolderinordertoConverttheNote)

The undersigned herebyirrevocably electsto convert$ oftheabove Noteinto SharesofCommonStockofMaxSoundCorporation.(“Shares”)accord-ingtotheconditionssetforthinsuchNote,asofthedatewrittenbelow.

IfSharesaretobeissuedinthenameofapersonotherthantheundersigned,the undersignedwillpayalltransferandothertaxesandchargespayablewithrespectthereto.

Date of Conversion: ApplicableConversion Price: Signature:

[PrintNameofHolderandTitleofSigner]

Address:

SSNorEIN:

Sharesaretoberegisteredinthefollowingname:

Name: Address: Tel: Fax: SSN or EIN:

Sharesaretobesentordeliveredtothefollowingaccount:

AccountName: Address:

EX-3

NEITHERTHISNOTENORTHESECURITIESINTOWHICHTHISNOTEISCONVERTIBLEHAVEBEENREGISTEREDWITHTHESECURITIESANDEXCHANGECOMMISSIONORTHESECURITIESCOMMISSIONOFANYSTATE.THESESECURITIESHAVE BEENSOLDIN RELIANCEUPONAN EXEMPTION FROMREGISTRATIONUNDER THESECURITIESACT OF1933,ASAMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAYNOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDERTHESECURITIES ACT ORPURSUANT TOANAVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATIONREQUIREMENTS OF THESECURITIES ACT ANDIN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.

MAX SOUND CORPORATION

CONVERTIBLENOTE

IssuanceDate:February6,2013

OriginalPrincipalAmount: $333,000

NoteNo.MAXD-1 ConsiderationPaidatClose: $25,000

FORVALUERECEIVED,MaxSoundCorporation.,aDelawarecorporation(the"Company"),herebypromisestopaytotheorderofVistaCapitalInvestments,LLCorregisteredassigns(the"Holder")theamountsetoutaboveastheOriginalPrincipalAmount(as reduced pursuant to the terms hereof pursuant to redemption, conversion or otherwise, the "Principal")whendue,whetherupontheMaturityDate(asdefinedbelow),acceleration, redemption or otherwise (in each case in accordance with the terms hereof) and to pay interest ("Interest") on any outstanding Principal at the applicable Interest Rate from the date set out above as theIssuance Date (the "Issuance Date")until the same becomesdue and payable,upon the Maturity Date oracceleration, conversion, redemption or otherwise (in eachcase in accordance with the terms hereof).

TheOriginalPrincipalAmountis$333,000(threehundredthirtythreethousand)plusaccruedandunpaidinterestandanyotherfees.TheConsiderationis$300,000(threehundredthousand)payablebywire(thereexistsa$33,000originalissuediscount(the"OID")).TheHoldershallpay$25,000ofConsiderationuponclosingofthisNote.TheHoldermaypay additional Consideration to the Borrower in such amounts and at suchdates as Holder may choose in its sole discretion.

THEPRINCIPALSUMDUETOHOLDERSHALLBEPRORATEDBASEDONTHECONSIDERATIONPAIDBYHOLDER(PLUSANAPPROXIMATE10%ORIGINALISSUEDISCOUNTTHATISPRORATEDBASEDONTHECONSIDERATIONPAIDBYTHE HOLDER ASWELLAS ANYOTHER INTERESTORFEES)SUCHTHAT THE BORROWERIS ONLY REQUIRED TO REPAY THE AMOUNTFUNDED AND THE BORROWER IS NOT REQUIRED TO REPAY ANY UNFUNDED PORTION OF THIS NOTE.

(1)GENERALTERMS

(a)Paymentof Principal.The"Maturity Date"shallbeoneyearfromthe date ofeachpaymentof Consideration, as maybeextended atthe option of the Holderin theeventthat,andforsolongas,anEventofDefault(asdefinedbelow)shallhaveoccurredandbecontinuingontheMaturityDate(asmaybeextendedpursuant to thisSection 1)oranyevent shall have occurred andbe continuingonthe Maturity Date (as may beextended pursuant tothis Section 1) that with the passage of time and the failure to cure would result in an Event of Default.

(b)Interest.Aone-timeinterestchargeof tenpercent(10%)("InterestRate")shallbeappliedontheIssuanceDatetotheOriginalPrincipalSum.InteresthereundershallbepaidontheMaturityDate(orsooneras providedherein)totheHolderoritsassigneein whosenamethis Noteisregistered on therecordsoftheCompanyregarding registration and transfers ofNotes in cash or converted intoCommon Stock at the Conversion Price providedthe Equity Conditions are satisfied.

(c)Security.ThisNoteshallnotbesecuredbyanycollateraloranyassetspledgedtotheHolder

(2) EVENTSOFDEFAULT.

(a)An"Event of Default",whereverusedherein,meansanyone ofthefollowingevents(whateverthereasonandwhetheritshallbevoluntaryorinvoluntaryoreffectedby operationof lawor pursuant to any judgment,decree or order of any court,or any order, rule or regulation of any administrative or governmental body):

(i)TheCompany'sfailuretopaytotheHolderanyamountofPrincipal,Interest,orotheramountswhenandasdueunderthis Note(including,withoutlimitation,the Company'sfailureto pay any redemptionpayments or amountshereunder)or any other Transaction Document;

(ii) AConversionFailureasdefinedinsection3(b)(ii)

(iii)TheCompany orany subsidiary oftheCompanyshallcommence,orthereshallbecommencedagainsttheCompanyoranysubsidiaryoftheCompanyunder anyapplicable bankruptcyor insolvency lawsasnoworhereafterineffect or anysuccessorthereto,or theCompany or any subsidiary ofthe Company commences any other proceeding under any reorganization, arrangement, adjustment of debt, relief of debtors, dissolution,insolvencyor liquidationor similar lawof anyjurisdiction whether now or hereafter in effect relating to theCompany orany subsidiary of the Company orthere is commenced againstthe Company orany subsidiary of the Company anysuchbankruptcy,insolvency or other proceeding which remains undismissed for a period of 61 days; or the Company or anysubsidiary of the Company is adjudicated insolvent or bankrupt; or any order of relief or other order approving any such case or proceedingis entered; or theCompanyor anysubsidiaryofthe Company suffers any appointment of any custodian, private or court appointed receiver or the like for it or anysubstantial part of its property which continues undischarged or unstayed for a

periodofsixtyone(61)days;ortheCompanyoranysubsidiaryoftheCompanymakesageneralassignmentforthebenefitofcreditors;ortheCompanyor anysubsidiaryoftheCompanyshallfail to pay, or shall state that it is unable to pay, or shall be unable to pay, its debts generally as they become due; or the Company or any subsidiary ofthe Company shall call a meetingof its creditors with a view to arranginga composition, adjustment or restructuringof its debts; or the Company or any subsidiaryof the Company shall byany act or failure to act expressly indicate its consent to, approval of or acquiescence in any of the foregoing; or any corporate or other action is taken by the Company or any subsidiary of the Company for thepurpose of effecting any of the foregoing;

(iv)TheCompany orany subsidiary oftheCompanyshalldefaultinanyofitsobligationsunderanyotherNoteoranymortgage,creditagreementorotherfacility,indentureagreement,factoringagreementor otherinstrumentunder whichthere maybeissued,or by whichtheremaybe securedorevidencedanyindebtednessforborrowedmoneyormoneydueunderanylong term leasing or factoring arrangement of the Companyor any subsidiary of the Company in an amount exceeding $100,000, whether such indebtedness now exists or shall hereafter be created;and

(b)TheCommonStockissuspendedordelistedfortradingontheOvertheCounterBulletinBoardmarket(the"PrimaryMarket").

(c) TheCompanylosesitsstatusas"DTCEligible."

(d)TheCompanyshallbecomelateordelinquentinitsfilingrequirementsasafully-reportingissuerregisteredwiththeSecurities&ExchangeCommission.

(e)UponreceivingaNoticeofDefault,theCompanyshallhaveagraceperiodoften(10)daystocuretheDefault.

(3)CONVERSIONOFNOTE. ThisNoteshallbeconvertibleintosharesoftheCompany'sCommonStock,onthetermsandconditionssetforthinthisSection3.

(a)ConversionRight.SubjecttotheprovisionsofSection3(c), atanytimeortimesonorafter theIssuanceDate,theHoldershallbeentitledto convertanyportionoftheoutstandingandunpaidConversionAmount(asdefinedbelow) intofully paidand nonassessablesharesofCommonStock inaccordance withSection3(b),at theConversion Price (as defined below). The number of shares of Common Stock issuable upon conversion of any Conversion Amount pursuant to this Section 3(a) shall be equal to the quotient of dividing the Conversion Amount by the Conversion Price. The Companyshall not issue any fraction of ashare of Common Stock upon any conversion.If the issuance would result in the issuance of a fraction of a share of Common Stock, the Company shall round such fraction of a share of CommonStockuptothe nearestwholeshare. TheCompany shallpay anyand alltransferagent fees, legal fees, costs and any other fees or costs that may be incurred or charged in connection with the issuance of shares of the Company's Common Stock to the Holder arising out of or relating to the conversion of thisNote.

(i)"ConversionAmount"meanstheportionoftheOriginalPrincipalAmountandInteresttobeconverted,plusanypenalties,redeemedorotherwisewithrespect to which this determination is being made.

(ii)"ConversionPrice"shallequal70%oftheaverageofthe3lowest trades occurringduringthetwenty(20) consecutive TradingDays immediatelyprecedingtheapplicableConversionDateonwhichtheHolderelectstoconvert allorpartofthisNote, subject to adjustment as provided in this Note.

(b) MechanicsofConversion.

(i)OptionalConversion.ToconvertanyConversionAmountintosharesofCommonStockonanydate(a"ConversionDate"),theHoldershall(A)transmitbyemail,facsimile(orotherwisedeliver),forreceiptonorpriorto11:59p.m.,NewYork,NYTime,on such date,acopyofan executednotice ofconversionin the form attachedhereto as Exhibit A (the "Conversion Notice") to the Company. On or before the third Business Day following thedateofreceiptofaConversionNotice(the"ShareDeliveryDate"),theCompany shall (A) if legends arenot required to be placed on certificates of Common Stock pursuant to the then existing provisions ofRule 144of the SecuritiesActof1933 ("Rule 144") and provided that the Transfer Agent is participating in the DepositoryTrust Company's ("DTC")Fast Automated Securities Transfer Program, credit such aggregate number of shares of Common Stock to which the Holder shall be entitled to the Holder's or its designee's balanceaccount with DTCthroughitsDepositWithdrawalAgentCommissionsystemor(B)iftheTransferAgentis not participatingintheDTC FastAutomated Securities Transfer Program, issue and deliver to the address as specified in the Conversion Notice, a certificate, registered in the name of the Holder oritsdesignee,forthe numberofsharesofCommon StocktowhichtheHolder shallbe entitled which certificates shall not bear any restrictive legends unless required pursuantthe Rule

144.IfthisNoteisphysicallysurrenderedforconversionandtheoutstandingPrincipalofthisNoteisgreaterthanthePrincipalportionoftheConversionAmountbeingconverted,thentheCompanyshall,uponrequestoftheHolder, assoonaspracticableand innoeventlaterthan three(3) Business Days after receiptof this Note and atits own expense, issue and deliver to the holder a new Note representing the outstanding Principal not converted.The Person or Personsentitled to receive the shares of Common Stock issuable upon a conversion of this Note shall be treated for allpurposes asthe record holder or holders of suchshares of CommonStock uponthe transmission of a Conversion Notice.

(ii)Company's Failure to Timely Convert. Ifwithintwo (2)TradingDaysaftertheCompany'sreceiptofthefacsimileoremailcopyofaConversion NoticetheCompanyshall fail toissueand delivertoHoldervia"DWAC/FAST" electronic transferthenumber of shares of Common Stock to which the Holder is entitled upon such holder'sconversion of anyConversion Amount (a "Conversion Failure"), the Original Principal Amount of the Note shall increase by$2,000 per dayuntil the Companyissues and delivers acertificateto the Holder or credit the Holder's balance account with DTC for the number of shares of CommonStocktowhich theHolderisentitleduponsuchholder's conversionofanyConversion Amount (under Holder's and Company's expectation that any penalty amountswill tackbackto theIssuanceDate). Company willnotbe subjecttoany penalties once its trans/er agent processes the shares to the DWAC system.If the Company fails to deliver shares inaccordance withthe timeframe statedinthisSection,resultingina ConversionFailure,theHolder,at any

timepriortosellingallofthoseshares,mayrescindanyportion,inwholeorinpart,ofthatparticular conversionattributabletotheunsold sharesandhavetherescindedconversionamountreturnedtothePrincipalSumwiththerescindedconversionsharesreturnedtotheCompany(underHolder'sandCompany's expectationsthat any returnedconversionamounts will tack back to the original date of the Note).

(iii)DWAC/FASTEligibility.IftheCompanyfailsforanyreasontodelivertotheHoldertheSharesbyDWAC/FASTelectronictransfer(suchasbydeliveringaphysical stockcertificate),or ifthereisa Conversion Failureas definedinSection 3(b)(ii),and if theHolder incurs a Market Price Loss, then at any timesubsequent to incurring the loss theHolder may providethe Company written notice indicating theamounts payable to the Holder inrespect of the Market Price Loss andthe Company mustmake the Holder whole by either ofthefollowing options at Holder'selection:

MarketPriceLoss=[(Hightradepricefortheperiodbetweentheday ofconversionandthedaythesharesclearintheHolder'sbrokerageaccount)x(Numberofsharesreceivablefromtheconversion)] -[(NetSalesprice realizedby Holder)x(Numberof shares receivable from the conversion)].

OptionA-PayMarketPriceLossinCash.TheCompanymustpaytheMarketPriceLossbycashpayment,andany suchcashpayment mustbemadeby thethirdbusiness day fromthe timeof the Holder's writtennotice totheCompany.

OptionB -AddMarketPriceLosstoPrincipalSum.TheCompanymustpaytheMarketPriceLossbyaddingtheMarketPriceLosstothebalanceofthePrincipalSum(underHolder'sand the Company's expectation that any Market PriceLoss amounts will tack back to the Issuance Date).

InthecasethatconversionsharesarenotdeliverablebyDWAC/FASTelectronictransferanadditional5%discounttotheConversionPricewillapply.

(iv)DTCEligibility.IftheCompanylosesitsstatusas"DTCEligible"foranyreason,the PrincipalAmount oftheNote shallincreasebytenthousand dollars($15,000) (under Holder's and Company's expectation that any Principal Amount increase will tackbacktotheIssuance Date).In addition,theConversionPrice shallbe redefinedto equal 50%ofthelowesttradeoccurringduringthetwentyfive(25)consecutiveTradingDays immediately precedingtheapplicableConversionDateonwhichtheHolderelectstoconvert all or part of thisNote, subject to adjustmentas provided in thisNote.

(v)Book-Entry.Notwithstandinganythingtothecontrarysetforthherein,uponconversionofanyportionofthisNoteinaccordancewiththetermshereof,theHolder shall notberequired to physicallysurrender this Note to theCompanyunless (A) the full Conversion Amount represented by this Note is being converted or (B) the Holder has provided the Company with prior written notice (which notice may be included in a Conversion Notice) requesting reissuance ofthisNote uponphysicalsurrender of thisNote. The Holder and the Company shall maintain records showing the Principal andInterest converted and the dates of such conversions or shall use such other method, reasonably satisfactory to the Holder and the Company,soasnottorequire physicalsurrenderof thisNote uponconversion.

(c) LimitationsonConversionsorTrading.

(i)BeneficialOwnership.TheCompanyshallnoteffectanyconversionsofthisNoteandtheHoldershallnothavetherighttoconvertanyportionofthisNoteorreceivesharesofCommonStockaspaymentofinteresthereunder totheextentthatafter giving effecttosuchconversionorreceiptofsuchinterestpayment,theHolder,togetherwith any affiliate thereof, would beneficially own (as determined in accordance with Section 13(d) of theExchangeActandtherulespromulgatedthereunder)inexcessof4.99%ofthenumberof sharesof CommonStock outstandingimmediatelyafter giving effect to such conversion or receipt of shares as payment of interest.Since the Holder will not be obligated to report to the Company thenumber ofshares ofCommonStock itmayhold atthe time ofa conversion hereunder, unless the conversion at issue would result in the issuance of shares of Common Stock in excess of4.99% ofthe then outstandingshares ofCommon Stock withoutregard to any other shares which may be beneficially owned by theHolderoran affiliate thereof, theHoldershall have the authority and obligation to determine whether the restriction contained in this Section will limit any particular conversion hereunder and to the extent that the Holderdetermines that the limitation contained in this Section applies, the determination of which portion of the principal amount of this Note is convertible shall be the responsibility and obligation ofthe Holder. Ifthe Holder has delivered a Conversion Notice for a principal amount of this Note that, without regard to any other shares that the Holder or its affiliates may beneficially own, would result in the issuance in excess of the permitted amount hereunder, the Company shallnotify theHolderofthisfactandshallhonortheconversionforthemaximum principal amount permitted tobeconvertedonsuchConversionDateinaccordance withSection 3(a) and, any principal amount tendered for conversion in excess of the permitted amount hereunder shall remain outstanding under this Note. The provisions of this Section may be waived byaHolder (but onlyas to itselfand notto anyother Holder)upon notlessthan 65 days prior notice to the Company.Other Holders shallbe unaffected by any such waiver.

(d) OtherProvisions.

(i)ShareReservation.TheCompanyshallatalltimesreserveandkeepavailableoutofitsauthorizedCommonStockthefullnumberofsharesofCommonStockissuable uponconversion of all outstandingamounts underthis Note;and within five (5) Business Days followingthe receipt bythe Companyofa Holder's notice thatsuchminimum number of Underlying Shares is not soreserved, the Company shall promptly reserve a sufficient number of shares of Common Stock to comply with such requirement. The Company will at all times reserve at least3,000,000 shares of Common Stock for conversion.

(ii)Prepayment.AtanytimeaftertheIssuanceDate,theCompanyshallhavetheoption,upon10businessdays'noticetoHolder,topre-paytheentireremainingoutstandingprincipalamountofthis Noteincash,providedthat (i)theCompany shall paythe Holder 150% of the Principal Amountoutstanding plusInterest in repayment hereof, (ii) such amount mustbe paid in cash on the next business day following such 10 business day notice period,and(iii)theHoldermay still convertthis Notepursuanttothetermshereofatall times until such prepayment amount has been received in full. Except as set forth in this Section the Company may notprepay thisNote inwholeor inpart.

(iii)AllcalculationsunderthisSection3shallberoundeduptothenearest$0.00001orwholeshare.

(iv)NothinghereinshalllimitaHolder'srighttopursueactualdamagesordeclareanEventofDefaultpursuanttoSection2hereinfortheCompany'sfailuretodelivercertificatesrepresentingsharesofCommonStockuponconversionwithintheperiodspecified herein and such Holder shall havethe right to pursue all remedies availableto it at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief, in each case withoutthe need to posta bond or provide other security. The exercise of any suchrightsshallnotprohibitthe Holderfromseekingtoenforce damagespursuanttoany other Section hereof or under applicable law.

(4)PIGGYBACK REGISTRATION RIGHTS. TheCompanyshall includeon the nextregistrationstatementthe Companyfiles with SEC(oron thesubsequentregistrationstatementifsuchregistrationstatementiswithdrawn)allsharesissuableuponconversionofthis Note.Failure to do so will result in liquidated damages of 25% of the outstanding principal balance ofthis Note,but not less than $25,000, being immediately due and payable to theHolderatitselection inthe form of cashpayment or additiontothebalance of this Note.

(5) REISSUANCEOFTHISNOTE.

(a)Assignability.TheCompanymaynotassignthisNote.ThisNotewillbebindingupontheCompanyanditssuccessorsandwillinuretothebenefitoftheHolderandits successorsand assigns and may be assignedby the Holder toanyone of its choosing withoutCompany'sapproval.

(b)Lost,StolenorMutilatedNote.UponreceiptbytheCompanyofevidencereasonablysatisfactorytotheCompanyoftheloss,theft,destructionormutilationofthis Note, and, inthe caseof loss, theft ordestruction, of anyindemnification undertaking by the Holder to the Company in customary form and, in the case of mutilation, upon surrender and cancellation of this Note, the Company shall execute and deliver to the Holder a new Note representing the outstanding Principal.

(6)NOTICES.Anynotices,consents,waiversorothercommunicationsrequiredorpermittedtobegivenunderthetermshereofmustbeinwritingandwillbedeemedtohavebeendelivered:(i)uponreceipt,whendeliveredpersonally; (ii)uponreceipt,whensent byfacsimile(provided confirmationoftransmissionismechanicallyor electronicallygenerated and kept on file by the sending party) (iii) upon receipt, when sent by email; or (iv) one (1) Trading Day after deposit with a nationally recognized overnight delivery service, in each case properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be those set forth in the communications and documents that each party has provided the other immediately preceding the issuance of this Note or at such other address and/or facsimile number and/or to the attention of such other person as the recipient party has specified bywritten notice given to each other partythree (3) Business Days prior to the effectiveness of such change. Written confirmation of receipt (i) given by the recipient of such notice, consent, waiver or other communication, (ii) mechanically or electronically generated by the sender's facsimile machine containing the time, date, recipient facsimile number

andanimageofthefirstpageofsuchtransmissionor(iii)providedbyanationallyrecognizedovernightdeliveryservice,shallberebuttableevidenceofpersonalservice,receiptbyfacsimileor receiptfroma nationallyrecognizedovernight deliveryserviceinaccordancewithclause (i),

(ii)or(iii)above,respectively.

Theaddressesforsuchcommunicationsshallbe:IftotheCompany,to:

MAXSOUNDCORPORATION

2902AColoradoAvenueSantaMonica,CA90404Attn:GregHalpern

Email:greg@maxsound.com

IftotheHolder:

VISTACAPITALINVESTMENTS,LLC

4342VistaWay

La Mesa CA91941

Attn:DavidClark,ManagerEmail:dclark@vci.us.com

(7)APPLICABLELAWANDVENUE.ThisNoteshallbegovernedbyandconstruedinaccordancewiththelawsoftheStateof California,withoutgivingeffecttoconflictsoflaws thereof. Any actionbroughtby eitherparty againsttheother concerning the transactions contemplated bythisAgreement shallbe broughtonlyinthe state courts of California orinthefederalcourtslocatedinSan DiegoCounty,inthe Stateof California. Both parties and the individuals signing this Agreement agree to submit to the jurisdiction of such courts.

(a)WAIVER.AnywaiverbytheHolderofabreachofanyprovisionofthisNoteshallnotoperateasorbeconstruedtobeawaiverofanyotherbreachofsuchprovisionorofanybreachofanyotherprovisionofthisNote.ThefailureoftheHoldertoinsistuponstrictadherenceto any termofthisNote ononeormoreoccasionsshallnotbe considereda waiver or deprive that partyof the right thereafter to insist upon strict adherence to that term or any othertermof this Note.Any waiver mustbeinwriting.

[SignaturePageFollows]

INWITNESSWHEREOF,theCompanyhascausedthisConvertibleNotetobedulyexecutedbyadulyauthorizedofficerasofthedatesetforthabove.

COMPANY:

MAXSOUNDCORPORATION

By:

Name:Title:

HOLDER:

VISTACAPITALINVESTMENTS,LLC.

By:

Name:DavidClarkTitle:Manager

EXHIBITA-CONVERSIONNOTICE

(TobeexecutedbytheHolderinordertoConvertthe Note)

TO:

Theundersignedherebyirrevocablyelectstoconvert$ oftheprincipal amount of Note No. into Shares of Common Stock ofaccording to the conditions stated therein, as oftheConversion Date written below.

NoteBalanceBefore Conversion

$

Conversion Date:Conversion Amountto be

converted: $

LowTradedPrice(oflast20

trading days) $

ConversionFactor

ConversionPrice: $

Number of shares ofCommonStockto beissued:

NoteBalance After Conversion: $

Please issuetheshares ofCommonStockinthe following name andto thefollowing address:Issueto:

Authorized Signature:Name:

Title:

BrokerName:

Broker DTCParticipantCode:Account Number:

EX-2

THISNOTEANDTHECOMMONSTOCKISSUABLEUPONCONVERSIONOFTHISNOTEHAVENOTBEENANDWILLNOTBEREGISTEREDWITHTHEUNITEDSTATESSECURITIESANDEXCHANGECOMMISSIONORTHESECURITIESCOMMISSIONOFANYSTATEPURSUANTTO AN EXEMPTION FROM REGISTRATION PROVIDED UNDER THE SECURITIES ACT OF1933, ASAMENDED, ANDTHE RULES AND REGULATIONSPROMULGATED THEREUNDER(THE "1933 ACT”)

US $110,250.00

MAX SOUND CORPORATION.

8%CONVERTIBLEREDEEMABLENOTEDUE MARCH 17, 2016

FORVALUERECEIVED,MaxSoundCorporation.(the“Company”)promisestopaytotheorderofADARBAYS,LLCanditsauthorizedsuccessorsandpermittedassigns("Hold- er"),theaggregateprincipalfaceamountofOneHundredTenThousandTwoHundredFiftyDollarsexactly(U.S.$110,250.00)onMarch17,2016("MaturityDate")andtopayinterestontheprincipalamountoutstandinghereunderattherateof8%perannumcommencingonMarch 17,2015.TheCompanyacknowledgesthisNotewasissuedwitha5%originalissuedis-count (OID) and as such the issuance price was $105,000.00. The interest will be paid to the Holder inwhose namethis Note isregistered onthe recordsofthe Companyregarding registra-tionandtransfers of this Note. The principalof, and interest on, this Noteare payable at3411 Indian Creek Drive,Suite403, MiamiBeach,FL33140, initially, andifchanged, lastappearing ontherecords of the Company as designated in writing by the Holder hereof from time to time. The Company will pay each interest payment and the outstanding principal due upon this Note before or on theMaturityDate,lessany amounts requiredby law tobe deducted orwithheld,to the HolderofthisNote bycheckorwire transferaddressedtosuch Holder atthelast addressap- pearing on the records of the Company. The forwarding of such check or wire transfer shall con- stitute a payment ofoutstanding principal hereunderand shall satisfyand discharge the liability for principal on this Note to the extent of the sum represented by such check or wire transfer. In-terest shall be payable in Common Stock (as defined below) pursuant to paragraph 4(b) herein.

ThisNoteissubjecttothefollowingadditionalprovisions:

GH

Initials

1.ThisNoteisexchangeableforanequalaggregateprincipalamountofNotesofdifferentauthorizeddenominations,asrequestedbytheHoldersurrenderingthesame.Noservicechargewillbemadeforsuchregistrationortransferorexchange,exceptthatHoldershallpayanytaxorothergovernmentalchargespayableinconnectiontherewith.

2.TheCompanyshallbeentitledtowithholdfromallpaymentsanyamountsrequiredtobewithheldunderapplicablelaws.

3.ThisNotemaybetransferredorexchangedonlyincompliancewiththeSecuritiesActof1933,asamended("Act")andapplicablestatesecuritieslaws.Anyattemptedtransfertoanon-qualifyingpartyshallbetreatedbytheCompanyasvoid.Priortoduepresent-mentfortransferofthisNote,theCompanyandanyagentoftheCompanymaytreatthepersoninwhosenamethisNoteisdulyregisteredontheCompany'srecordsastheownerhereofforallotherpurposes,whetherornotthisNotebeoverdue,and neither the Companynorany suchagent shall be affected or bound by notice to the contrary. Any Holder of this Note electing toexercise the right of conversion set forth in Section 4(a) hereof, in addition to the requirementssetforth in Section 4(a), and anyprospective transfereeof thisNote, also isrequired to givethe CompanywrittenconfirmationthatthisNoteisbeingconverted("NoticeofConversion")inthe formannexedheretoasExhibitA.Thedateofreceipt(includingreceiptbytelecopy)ofsuchNotice of Conversion shall be the Conversion Date.

4.(a) TheHolderofthisNoteisentitled,atitsoption, toconvertallorany amount oftheprincipalfaceamount ofthis Notethen outstandinginto sharesof theCompa-ny'scommonstock(the"CommonStock")ataprice("ConversionPrice")foreachshareofCommonStockequalto65%ofthelowestdailyVWAPoftheCommonStockasreportedontheNationalQuotationsBureauOTCQBexchangewhich theCompany’ssharesaretradedoranyexchangeuponwhich theCommon Stockmaybetradedinthefuture ("Exchange"),for the ten prior trading days including the dayupon whichaNoticeof Conversionis receivedby theCompany (provided such Notice of Conversion is delivered by fax or other electronic method ofcommunicationtotheCompanyafter4P.M. EasternStandardorDaylightSavingsTimeif theHolderwishesto include the sameday closing price). If the shareshavenot been delivered with- in 3 business days, the Notice of Conversion may be rescinded. Such conversion shall be effec- tuated by the Company delivering the shares of Common Stock to the Holder within 3 businessdays ofreceipt bytheCompany ofthe Notice ofConversion. Once the Holder has received suchsharesofCommonStock,theHoldershallsurrenderthisNotetotheCompany,executed bytheHolder evidencing such Holder's intentionto convertthis Note or a specified portion hereof, andaccompanied by proper assignmenthereofin blank. Accrued butunpaid interest shall be subject toconversion. Nofractional sharesorscriprepresenting fractionsof shareswill be issued on conversion, but the number of shares issuable shall be rounded to the nearest whole share. In theeventthe Companyexperiences aDTC “Chill” on itsshares, theconversion priceshall bede-creased to55%insteadof65% whilethat “Chill” isineffect. In noevent shall the Holder be al- lowed to effect a conversion if such conversion,along with all other shares of Company Com-monStockbeneficiallyownedbytheHolderanditsaffiliateswouldexceed9.9%oftheout-standing shares of the Common Stock of the Company.

(b)InterestonanyunpaidprincipalbalanceofthisNoteshallbepaidattherateof8%perannum.InterestshallbepaidbytheCompanyinCommonStock("InterestShares").Holdermay,atanytime,sendinaNoticeofConversiontotheCompanyforInterestSharesbasedontheformulaprovidedinSection4(a)above.ThedollaramountconvertedintoInterestSharesshallbealloraportionoftheaccruedinterestcalculatedontheunpaidprincipalbalanceofthis Noteto thedateofsuchnotice.

(c)DuringthefirstsixmonthsthisNoteisineffect,theCompanymayre-deemthisNotebypayingtotheHolderanamountasfollows:(i)iftheredemptionoccurswithinthefirst90daysthenanamountequalto130%oftheunpaidprincipalamountofthisNotealong

withanyprepaidandearnedinterest,(ii)iftheredemptionoccursafterthefirst90daysbutbe-forethe180thdayfollowingtheissuanceofthisNote,thenanamountequalto135%oftheun-paidprincipalamountofthisNotealongwithanyprepaidandearnedinterest.ThisNotemaynotberedeemedafter180days.Theredemptionmustbeclosedandpaidforwithin3businessdays

oftheCompanysendingtheredemptiondemandortheredemptionwillbeinvalidandtheCom-panymaynotredeemthisNote.

(d)Upon(i)atransferofallorsubstantiallyalloftheassetsoftheCompanytoanypersoninasingletransactionorseriesofrelatedtransactions,(ii)areclassification,capitalreorganizationorotherchangeorexchangeofoutstandingsharesoftheCommonStock,otherthanaforward orreverse stocksplit orstock dividend,or (iii)anyconsolidation or merger of theCompanywithorintoanotherpersonorentityinwhichtheCompanyisnotthesurvivingentity(otherthanamergerwhichiseffectedsolelytochangethejurisdictionofincorporationoftheCompany and results in a reclassification, conversion or exchange of outstanding shares of CommonStocksolelyintosharesofCommonStock)(eachofitems(i),(ii)and(iii)beingre- ferredtoasa"SaleEvent"),then,ineachcase,theCompanyshall,uponrequest oftheHolder, redeem this Note in cash for 150% of the principal amount, plus accrued but unpaid interest through the dateofredemption,or at theelection of the Holder, such Holder mayconvert the un- paidprincipalamount of this Note(together withthe amount of accrued butunpaidinterest) intosharesofCommonStockimmediately priorto suchSaleEvent atthe ConversionPrice.

(e)In case of any Sale Event (not to include a sale of all or substantially all oftheCompany’sassets)inconnectionwithwhichthisNoteisnotredeemedorconverted,theCompanyshallcauseeffectiveprovisiontobemadesothattheHolderofthisNoteshallhavetherightthereafter,byconvertingthisNote,topurchaseorconvertthisNoteintothekindandnumberofsharesofstockorothersecuritiesorproperty(includingcash)receivableuponsuchreclassification,capitalreorganizationorotherchange,consolidationormergerbyaholderof thenumberofsharesofCommonStockthatcouldhavebeenpurchaseduponexerciseoftheNote and at the same Conversion Price, as defined in this Note, immediately prior to such Sale Event. The foregoing provisions shall similarly apply to successive Sale Events. If the considera-tionreceivedbytheholdersofCommonStockisotherthancash,thevalueshallbeasdeter- minedbytheBoardofDirectorsoftheCompanyorsuccessorpersonorentityactingingoodfaith.

5.NoprovisionofthisNoteshallalterorimpairtheobligationoftheCom-pany,whichisabsoluteandunconditional,topaytheprincipalof,andintereston,thisNoteatthetime,place,andrate,andintheform,hereinprescribed.

6.TheCompanyherebyexpresslywaivesdemandandpresentmentforpay-ment,noticeofnon-payment,protest,noticeofprotest,noticeofdishonor,noticeofacceleration orintenttoaccelerate,anddiligenceintakinganyactiontocollectamountscalledforhereunder andshallbedirectlyandprimarilyliableforthepaymentofallsumsowingandtobeowinghereto.

7.TheCompanyagreestopayallcostsandexpenses,includingreasonable attorneys'feesandexpenses,whichmaybeincurredbytheHolderincollectinganyamountdueunderthisNote.

8. Ifoneormoreofthefollowingdescribed"EventsofDefault"shalloccur:

(a)TheCompanyshalldefaultinthepaymentofprincipalorinterestonthisNoteoranyothernoteissuedtotheHolderbytheCompany;or

(b)AnyoftherepresentationsorwarrantiesmadebytheCompanyhereinorinanycertificateorfinancialorotherwrittenstatementsheretoforeorhereafterfurnishedbyoronbehalfoftheCompanyinconnectionwiththeexecutionanddeliveryofthisNote,ortheSe-curitiesPurchaseAgreementunderwhichthisnotewasissuedshallbefalseormisleadinginanyrespect;or

(c)TheCompanyshallfailtoperformorobserve,inanyrespect,anycove-nant,term,provision,condition,agreementorobligationoftheCompanyunderthisNoteoranyothernoteissuedtotheHolder;or

(d)TheCompanyshall(1)becomeinsolvent;(2)admitinwritingitsinabilitytopayitsdebtsgenerallyastheymature;(3)makeanassignmentforthebenefitofcreditorsor commenceproceedingsforitsdissolution;(4)applyfororconsenttotheappointmentofatrus-tee,liquidatororreceiverforitsorforasubstantialpartofitspropertyorbusiness;(5)fileapeti-tionforbankruptcyrelief,consenttothefilingofsuchpetition orhavefiledagainstitaninvol- untary petition forbankruptcy relief,all under federalor statelaws as applicable; or

(e)Atrustee,liquidatororreceivershallbeappointedfortheCompanyorfora substantialpart of its property or business without its consentand shall not be discharged with-insixty(60)daysaftersuchappointment;or

(f)Any governmental agencyor anycourt ofcompetent jurisdiction at thein-stanceofanygovernmentalagencyshallassumecustodyorcontrolofthewholeoranysubstan-tialportionofthepropertiesorassetsoftheCompany;or

(g) One or moremoney judgments, writs or warrants of attachment,or similar

process,inexcessoffiftythousanddollars($50,000)intheaggregate,shallbeenteredorfiledagainsttheCompanyoranyofitspropertiesorotherassetsandshallremainunpaid,unvacated,unbondedorunstayedforaperiodoffifteen(15)daysorinanyeventlaterthanfive(5)days priortothedateofanyproposedsalethereunder;or

(h)TheCompanyshallhavedefaultedonorbreachedanytermofanyothernoteofsimilardebtinstrumentintowhichtheCompanyhasenteredandfailedtocuresuchde-faultwithintheappropriategraceperiod;or

(i)TheCompanyshallhaveitsCommonStockdelistedfromanexchange(includingtheOTCBBexchange)or,iftheCommonStocktradesonanexchange,thentradingintheCommonStockshallbesuspendedformorethan10consecutivedays;

(j)If amajority ofthemembers oftheBoard ofDirectorsoftheCompany onthedatehereofarenolongerservingasmembersoftheBoard;

(k)TheCompanyshallnotdelivertotheHoldertheCommonStockpursuanttoparagraph4hereinwithoutrestrictivelegendwithin3businessdaysofitsreceiptofaNoticeofConversion;or

(l)TheCompanyshallnotreplenishthereservesetforthinSection12,with-in3businessdaysoftherequestofthe Holder. IftheCompanydoesnotreplenishthereserve setforthinSection12,within5businessdaysoftherequestoftheHolderthentheconversiondis-countsetforthinSection4(a)shallbeincreasedfroma35%conversiondiscounttoa50%con-versiondiscountandshallbeincreasedfromthe50%conversiondiscounttheninineffecttoan80%conversiondiscount iftheincrease isnot effectivewithin 10 businessdays ofthereplen- ishment request; or

(m)TheCompanyshallnotbe“current”initsfilingswiththeSecuritiesandExchangeCommission;or

(n)TheCompanyshalllosethe“bid”priceforitsstockinamarket(includingtheOTCQBmarketplaceorotherexchange).

Then,oratanytimethereafter,unlesscuredwithin5days,andineachandeverysuchcase,un-lesssuchEventofDefaultshallhavebeenwaivedinwritingbytheHolder(whichwaivershallnotbedeemedtobeawaiverofanysubsequentdefault)attheoptionoftheHolderandintheHolder'ssolediscretion,theHoldermayconsiderthisNoteimmediatelydueandpayable,with-outpresentment,demand,protestor(further)noticeofanykind(otherthannoticeofaccelera-tion),allof which are herebyexpressly waived, anything hereinor inany noteor otherinstru-mentscontainedtothecontrarynotwithstanding,andtheHoldermayimmediately,andwithout expirationof any period of grace,enforce any and allof the Holder's rights andremedies provid- ed herein or any other rights or remedies afforded by law. Upon an Event of Default, interest shall accrueat adefaultinterest rateof24%perannum or,ifsuchrateisusuriousornotpermit- tedbycurrentlaw,thenatthehighestrateofinterest permittedbylaw. Intheeventofabreach

5

ofSection8(k)thepenaltyshallbe$250perdaythesharesarenotissuedbeginningonthe4thdayaftertheconversionnoticewasdeliveredtotheCompany. Thispenaltyshallincreaseto

$500perdaybeginningonthe10thday.ThepenaltyforabreachofSection8(n)shallbeanin-creaseoftheoutstandingprincipalamountsby20%. IncaseofabreachofSection8(i),theout-

standingprincipaldueunderthisNoteshallincreaseby50%.IfthisNoteisnotpaidatmaturity,theoutstandingprincipaldueunderthisNoteshallincreaseby10%.

IftheHoldershallcommenceanactionorproceedingtoenforceanyprovisionsofthisNote,in-cluding,withoutlimitation,engaginganattorney,theniftheHolderprevailsinsuchaction,theHoldershallbereimbursedbytheCompanyforitsattorneys’feesandothercostsandexpensesincurredintheinvestigation,preparationandprosecutionofsuchactionorproceeding.

Make-WholeforFailuretoDeliverLoss.AttheHolder’selection,iftheCompanyfailsforanyreasontodelivertotheHoldertheconversionsharesbythebythe3rdbusinessdayfollowingthedeliveryofaNoticeofConversiontotheCompanyandiftheHolderincursaFailuretoDeliverLoss,thenatanytimetheHoldermayprovidetheCompanywrittennoticeindicatingtheamountspayabletotheHolderinrespectoftheFailuretoDeliverLossand the Company must make the Holder whole as follows:

FailuretoDeliverLoss=[(Hightradepriceatanytimeonorafterthedayofexercise)x(Num-berofconversionshares)]

TheCompanymustpaytheFailuretoDeliverLossbycashpayment,andanysuchcashpaymentmustbemadebythethirdbusinessdayfromthetimeoftheHolder’swrittennoticetotheCom-pany.

9.In case anyprovision ofthis Noteisheld bya courtof competent jurisdic-tiontobeexcessiveinscopeorotherwiseinvalidorunenforceable,suchprovisionshallbead-justedratherthanvoided,ifpossible,sothatitisenforceabletothemaximumextentpossible,andthevalidityandenforceabilityoftheremainingprovisionsofthisNotewillnotinanywaybeaffected or impaired thereby.

10.NeitherthisNotenoranytermhereofmaybeamended,waived,dis-chargedorterminatedotherthanbyawritteninstrumentsignedbytheCompanyandtheHolder.

11.TheCompanyrepresentsthatitisnota“shell”issuerandhasneverbeena “shell”issuerorthatifitpreviouslyhasbeena“shell”issuerthatatleast12monthshavepassed since theCompanyhasreportedform10type information indicating itis no longer a“shell issu-er.Further. TheCompany will instructitscounseltoeither(i) write a 144- 3(a)(9) opiniontoal-lowforsalabilityoftheconversionsharesor(ii)acceptsuchopinionfromHolder’scounsel.

12.TheCompanyshallissueirrevocabletransferagentinstructionsreserving10,000,000sharesofitsCommonStockforconversionsunderthisNote(the“ShareReserve”).UponfullconversionofthisNote,anysharesremainingintheShareReserveshallbecancelled.The Company shall payall costs associated with issuingand deliveringthe shares. Thecompanyshouldatalltimesreserveaminimumoftwotimestheamountofsharesrequiredifthenote

wouldbefullyconverted.ThereserveshallbereplenishedasneededtoallowforconversionsofthisNoteusingsaid2xreserve,providedanincreasenoticemaynotbedeliveredmorethanonceevery30daysforthefirst5monthstheNoteisineffect,beginningonthe60thday.

13.TheCompanywillgivetheHolderdirectnoticeofanycorporateactions,includingbutnotlimitedtonamechanges,stocksplits,recapitalizationsetc.ThisnoticeshallbegiventotheHolderassoonaspossibleunderlaw.

14.This Noteshallbegovernedby andconstruedin accordancewiththe lawsofNewYorkapplicabletocontractsmadeandwhollytobeperformedwithintheStateofNewYorkandshallbebindinguponthesuccessorsandassignsofeachpartyhereto.TheHolderandtheCompanyherebymutuallywaivetrialbyjuryandconsenttoexclusivejurisdictionandvenueinthecourtsoftheStateofNewYork.ThisAgreementmaybeexecutedincounterparts,andthe facsimiletransmission ofanexecutedcounterpart to this Agreementshallbeeffectiveasan original.

INWITNESSWHEREOF,theCompanyhascausedthisNotetobedulyexecutedbyanofficerthereuntodulyauthorized.

Dated:03/17/2015

MAX SOUND CORPORATION

By:

Title:CFO

EXHIBITA

NOTICE OF CONVERSION

(TobeExecutedbytheRegisteredHolderinordertoConverttheNote)

Theundersigned hereby irrevocablyelects toconvert$ oftheabove Noteinto SharesofCommonStockofMaxSoundCorporation.(“Shares”)accord-ingtotheconditionssetforthinsuchNote,asofthedatewrittenbelow.

IfSharesaretobeissuedinthenameofapersonotherthantheundersigned,theundersignedwillpayalltransferandothertaxesandchargespayablewithrespectthereto.

Date of Conversion: ApplicableConversion Price: Signature:

[PrintNameofHolderandTitleofSigner]

Address:

SSNorEIN:

Sharesaretoberegisteredinthefollowingname:

Name: Address: Tel: Fax: SSN orEIN:

Sharesaretobesentordeliveredtothefollowingaccount:

AccountName: Address:

EX-1

THISNOTEANDTHECOMMONSTOCKISSUABLEUPONCONVERSIONOFTHISNOTEHAVENOTBEENANDWILLNOTBEREGISTEREDWITHTHEUNITED STATES SECURITIES AND EXCHANGE COMMISSION OR THESECURITIESCOMMISSIONOF ANY STATE PURSUANTTOAN EXEMPTIONFROM REGISTRATION PROVIDED UNDER THE SECURITIESACTOF 1933,ASAMENDED,ANDTHE RULES AND REGULATIONS PROMULGATED THEREUNDER(THE "1933 ACT”)

US $225,750.00

MAX SOUND CORPORATION.

8% CONVERTIBLE REDEEMABLENOTEDUE DECEMBER 24, 2015

FORVALUERECEIVED,MaxSoundCorporation.(the“Company”)promisestopaytotheorderofBLUECITI,LLCanditsauthorizedsuccessorsandpermittedassigns("Holder"),the aggregate principalface amount of TwoHundred TwentyFiveThousand Seven HundredFif-tyDollarsexactly(U.S.$225,750.00)onDecember24,2015("MaturityDate")andtopayinter- est on the principal amount outstanding hereunder at the rate of 8% per annum commencing on December 22, 2014. The Companyacknowledges this Note was issued with a 5% original issue discount (OID) and as such the issuance price was $215,000.00. The interest will be paid to the Holder in whose name this Note is registered on the records of the Companyregardingregistra- tionandtransfersofthisNote. The principalof, andintereston,thisNoteare payableat 440East79thStreetSuite4M,New York,NY10075,initially,andifchanged,lastappearingonthe records of the Company as designated in writing by the Holder hereof from time to time. The Companywillpayeachinterestpaymentandtheoutstanding principaldue uponthisNotebefore or on the Maturity Date, less any amounts required bylaw to be deducted or withheld, to the HolderofthisNote by checkorwire transferaddressedtosuchHolderatthelastaddressappear- ingon the records of the Company.The forwardingof such check or wire transfer shall consti- tute a payment ofoutstandingprincipalhereunderandshallsatisfyanddischarge theliabilityfor principalonthisNoteto theextentofthesum representedby suchcheckorwire transfer. Inter- est shall be payable in Common Stock (as defined below) pursuant to paragraph 4(b) herein.

This Note is subject to the following additional provisions:

GH

Initials

1.ThisNoteisexchangeableforanequalaggregateprincipalamountof

Notesofdifferentauthorizeddenominations,asrequestedbytheHoldersurrenderingthesame.Noservicechargewillbemadeforsuchregistrationortransferorexchange,exceptthatHoldershall payanytaxor othergovernmental charges payable in connection therewith.

2.TheCompanyshall beentitled to withhold from all payments anyamountsrequired to bewithheld under applicable laws.

3.ThisNotemaybetransferredorexchangedonlyincompliancewiththeSecuritiesActof1933,asamended("Act")andapplicablestatesecuritieslaws.Anyattemptedtransfertoanon-qualifying party shall betreated by theCompany as void. Priorto duepresent- mentfor transferof this Note,theCompany andany agent ofthe Company may treat theperson in whose namethis Note is duly registeredonthe Company'srecordsas theownerhereofforallother purposes, whether or not this Note be overdue, and neither the Company nor any such agent shall be affected or bound bynotice to the contrary. AnyHolder of this Note electingto exercise the right of conversion set forth in Section 4(a) hereof, in addition to the requirements setforthinSection4(a),andany prospective transferee ofthisNote,alsoisrequiredtogivethe Company written confirmationthatthisNote isbeingconverted("Notice of Conversion") inthe form annexedhereto as Exhibit A.Thedateofreceipt (includingreceipt by telecopy)ofsuch Notice of Conversion shall bethe Conversion Date.

4.(a) TheHolderofthisNoteisentitled,atitsoption, toconvertalloranyamountoftheprincipalfaceamountofthisNotethenoutstandingintosharesoftheCompa- ny's common stock (the "Common Stock")without restrictive legend ofany nature,at a price ("Conversion Price") for each share of Common Stock equal tothe lower of (i) 65% of the low- est daily VWAP of the Common Stock as reported on the National Quotations BureauOTCQB exchange which the Company’s shares are traded or anyexchange upon which the Common Stockmaybetradedin thefuture ("Exchange"),fortheten priortrading days includingthe day uponwhicha Notice ofConversionisreceived by the Company (providedsuch Notice of Con- version is delivered byfax or other electronic method of communication to the Companyafter 4

P.M.EasternStandardorDaylightSavingsTimeiftheHolderwishestoincludethesamedayclosingprice)or(ii)$0.18pershare.Iftheshareshavenotbeendeliveredwithin3businessdays,the Notice ofConversionmay be rescinded.Suchconversionshallbe effectuated by theCompanydeliveringthe sharesofCommonStocktotheHolderwithin3businessdays of receipt by the Company of the Notice of Conversion. Once the Holder has received such shares of CommonStock, the Holder shallsurrender thisNote tothe Company,executed bythe Holder evidencingsuch Holder's intention to convert thisNote or a specified portion hereof, and accom- paniedbyproperassignmenthereofin blank.Accruedbut unpaid interest shall besubject to conversion.No fractional shares or scrip representing fractions of shares will be issued on con- version,butthenumber ofsharesissuableshallbe roundedtothenearestwhole share. Inthe event the Company experiences a DTC “Chill” on its shares, the conversion price shall be de- creasedto55%instead of65%whilethat“Chill”isineffect. Innoevent shalltheHolderbe al- lowedtoeffectaconversion ifsuchconversion, along withall othersharesofCompany Com- mon StockbeneficiallyownedbytheHolderandits affiliates wouldexceed9.9%oftheout- standingshares of theCommon Stock of the Company.

(b)Interest on any unpaid principalbalanceofthisNote shallbepaidat

therateof8%perannum.InterestshallbepaidbytheCompanyinCommonStock("InterestShares").Holdermay,atanytime,sendinaNotice ofConversiontotheCompany forInterest SharesbasedontheformulaprovidedinSection4(a) above.Thedollar amountconvertedinto Interest Shares shall be all or a portion of theaccrued interestcalculated on the unpaid principal balance of this Noteto the date of such notice.

(c)DuringthefirstsixmonthsthisNoteisineffect,theCompanymayre-deemthisNote bypayingtotheHolderanamountasfollows:(i)iftheredemptionoccurswithinthefirst90daysthenanamountequalto125%oftheunpaidprincipalamountofthisNotealongwith any prepaid and earned interest, (ii) if the redemption occurs after the first 90 days but be- fore the 150thday following the issuance of this Note, then an amount equal to 135% of the un-paid principal amount of this Note along with any prepaid and earned interest and (iii) if the re- demption occurs after the first 150 days but before the 181stday following the issuance of this Note, then an amount equal to 145% of the unpaid principal amount of this Note along with any prepaid and earned interest. This Note maynot be redeemed after 180 days. The redemption must be closed and paid for within 3 business days of the Company sending the redemption de-

mand orthe redemption will be invalid and the Companymaynot redeem this Note.

(d)Upon(i)atransferofallorsubstantiallyalloftheassetsoftheCompanyto anypersonin a singletransaction orseriesofrelated transactions, (ii) a reclassification,capitalreorganizationorotherchangeorexchangeofoutstandingsharesofthe CommonStock,other than aforwardorreverse stock splitorstock dividend, or(iii) anyconsolidation ormergerofthe Company with or into another person or entity in which the Company is not the surviving entity (otherthanamergerwhichiseffectedsolely to changethejurisdictionofincorporationofthe Company and results in a reclassification, conversion or exchange of outstanding shares of CommonStocksolely intosharesofCommonStock)(eachofitems(i),(ii)and(iii)beingre- ferredtoasa"SaleEvent"),then, ineach case,theCompany shall,upon requestof theHolder, redeem this Note in cash for 150% of the principal amount, plus accrued but unpaid interest throughthedateofredemption,orattheelectionoftheHolder,suchHolder may convert theun- paid principal amount of this Note(togetherwith the amount ofaccrued but unpaid interest) into shares of Common Stock immediately priorto such Sale Event at the Conversion Price.

(e)Incase of any SaleEvent(nottoincludeasaleofallorsubstantially alloftheCompany’sassets)inconnectionwithwhichthisNoteisnotredeemedorconverted,theCompany shall cause effective provision to be made so that the Holder of this Note shall havethe right thereafter, by converting this Note, to purchase or convert this Note into the kind and number of shares of stock or other securities or property (including cash) receivable upon such reclassification, capital reorganization or other change, consolidation or merger by a holder of the number of shares of Common Stock that could have been purchased upon exercise of the Note and at the same Conversion Price, as defined in this Note, immediately prior to such Sale Event.The foregoingprovisionsshallsimilarly apply tosuccessiveSaleEvents.Iftheconsidera- tion received by the holders of Common Stock is other than cash, the value shall be as deter- mined by the Board of Directors of the Company or successor person or entity acting in good faith.

5.NoprovisionofthisNoteshallalterorimpairtheobligationoftheCom-pany,whichisabsoluteandunconditional,topaytheprincipalof,andintereston,thisNoteatthe time, place, andrate,and in the form, herein prescribed.

6.TheCompanyherebyexpresslywaivesdemandandpresentmentforpay-ment,noticeofnon-payment,protest,noticeofprotest,noticeofdishonor,noticeofaccelerationorintenttoaccelerate,anddiligenceintakinganyactiontocollectamountscalledforhereunderandshallbedirectly andprimarily liablefor thepaymentofallsumsowing andtobeowing hereto.

7.TheCompanyagreestopayallcostsandexpenses,includingreasonableattorneys'feesandexpenses,whichmaybeincurredbytheHolderincollectinganyamountdue under this Note.

8. Ifoneor moreof the followingdescribed"Events of Default"shall occur:

(a)TheCompanyshalldefaultinthepaymentofprincipalorinterestonthisNoteor anyother noteissued to the Holder bytheCompany; or

(b)AnyoftherepresentationsorwarrantiesmadebytheCompanyhereinorinanycertificateorfinancialorotherwrittenstatementsheretoforeorhereafterfurnishedbyoronbehalfoftheCompanyinconnectionwiththeexecutionanddelivery ofthisNote,ortheSe- curitiesPurchase Agreementunderwhichthisnotewasissued shallbefalseormisleading in any respect; or

(c)TheCompanyshallfailtoperformorobserve,inanyrespect,anycove-nant,term,provision,condition,agreementorobligationoftheCompanyunderthisNoteoranyother note issued to theHolder; or

(d)TheCompanyshall(1)becomeinsolvent;(2)admitinwritingitsinabilitytopayitsdebtsgenerallyastheymature;(3)makeanassignmentforthebenefitofcreditorsor commence proceedingsforitsdissolution;(4) applyfororconsenttotheappointmentofa trus- tee, liquidatororreceiverfor its orforasubstantial part ofits property orbusiness; (5) fileapeti- tionforbankruptcy relief, consenttothe filing of such petitionor have filed against it aninvol- untary petition for bankruptcy relief,all under federal or statelaws as applicable; or

(e)Atrustee,liquidatororreceivershallbeappointedfortheCompanyorforasubstantialpartofitsproperty orbusinesswithoutitsconsentandshallnotbedischargedwith-in sixty(60) daysafter such appointment; or

(f)Anygovernmentalagencyoranycourtofcompetentjurisdictionatthein-stanceofanygovernmentalagencyshallassumecustodyorcontrolofthewholeoranysubstan-tial portion ofthe properties or assets of the Company; or

(g)Oneormoremoneyjudgments,writsorwarrantsofattachment,orsimilarprocess, in excess of fifty thousand dollars ($50,000)intheaggregate,shallbeenteredor

filedagainsttheCompanyoranyofitspropertiesorotherassetsandshallremainunpaid,unvacated,unbondedorunstayedforaperiodoffifteen(15)daysorinanyeventlaterthanfive

(5)days priorto thedateofanyproposed sale thereunder; or

(h)TheCompanyshallhavedefaultedonorbreachedanytermofanyothernoteofsimilardebtinstrumentintowhichtheCompanyhasenteredandfailedtocuresuchde-fault within the appropriate grace period; or

(i)TheCompanyshallhaveitsCommonStockdelistedfromanexchange(includingtheOTCBBexchange)or,iftheCommonStocktradesonanexchange,thentrading in theCommon Stock shall be suspended for morethan 10 consecutive days;

(j)IfamajorityofthemembersoftheBoardofDirectorsoftheCompanyonthe date hereofareno longer servingas members of theBoard;

(k)TheCompanyshallnotdelivertotheHoldertheCommonStockpursuanttoparagraph4hereinwithoutrestrictivelegendwithin3businessdaysofitsreceiptofaNoticeof Conversion; or

(l)TheCompanyshallnotreplenishthereservesetforthinSection12,with-in 3 business days of therequest of theHolder. (m)TheCompanyshallnotbe“current”initsfilings with the Securities and Exchange Commission; or

(m)TheCompanyshallnotbe“current”initsfilingswiththeSecuritiesandExchange Commission; or

(n)The Companyshalllosethe“bid”price for itsstockinamarket(includingthe OTCQBmarketplaceor other exchange).

Then,oratanytimethereafter,unlesscuredwithin5days,andineachandeverysuchcase,un-lesssuchEventofDefaultshallhavebeenwaivedinwritingbytheHolder(whichwaivershallnotbedeemedtobeawaiver ofany subsequentdefault)attheoptionof theHolderandinthe Holder'ssolediscretion,theHoldermay consider thisNoteimmediatelydueandpayable,with- out presentment, demand, protest or (further) notice of any kind (other than notice of accelera- tion), all of which areherebyexpressly waived, anythingherein or in anynote or other instru- ments contained to the contrarynotwithstanding, and the Holder may immediately, and without expirationof anyperiodof grace,enforceany andall of theHolder'srights andremediesprovid- ed herein or anyother rights or remedies afforded by law. Upon an Event of Default, interest shallaccrueatadefaultinterestrateof 24%perannumor,ifsuchrateisusuriousornotpermit- tedbycurrentlaw,thenatthehighest rateofinterest permittedbylaw. Intheeventofabreach

ofSection8(k)thepenaltyshallbe$250perdaythesharesarenotissuedbeginningonthe4th

dayaftertheconversionnoticewasdeliveredtotheCompany. Thispenaltyshallincreaseto

$500perdaybeginningonthe10thday.ThepenaltyforabreachofSection8(n)shallbeanin-creaseoftheoutstandingprincipalamountsby20%.IncaseofabreachofSection8(i),theout- standing principaldueunderthisNoteshallincrease by 50%.IfthisNoteisnotpaidatmaturity, the outstandingprincipal due under this Note shall increase by 10%.

5

IftheHoldershallcommenceanactionorproceedingtoenforceanyprovisionsofthisNote,in-cluding,withoutlimitation,engaginganattorney,theniftheHolderprevailsinsuchaction,theHoldershall bereimbursedbythe Companyfor its attorneys’fees andothercosts andexpenses incurred in theinvestigation, preparation and prosecution ofsuchaction orproceeding.

Make-WholeforFailuretoDeliverLoss.AttheHolder’selection,iftheCompanyfailsforanyreasontodelivertotheHoldertheconversionsharesbythebythe3rdbusiness dayfollowing the deliveryof a Notice of Conversion to the Company and if the Holder incurs a Failure toDeliver Loss, thenat any time the Holder may provide the Company written notice indicating the amounts payable to the Holder in respect of the Failure to Deliver Loss and the Company must makethe Holder wholeas follows:

FailuretoDeliverLoss=[(Hightradepriceatanytimeonorafterthedayofexercise)x(Num-ber ofconversion shares)]

TheCompanymust paythe Failure to DeliverLoss bycash payment, andanysuch cash paymentmustbemadebythethirdbusinessdayfromthetimeoftheHolder’swrittennoticetotheCom-pany.

9.Incaseany provisionofthisNoteisheldbyacourtofcompetentjurisdic-tiontobeexcessiveinscopeorotherwiseinvalidorunenforceable,suchprovisionshallbead-justedrather than voided,ifpossible, sothatit is enforceable tothemaximumextentpossible, andthevalidity andenforceability oftheremaining provisionsofthisNotewillnot inany way be affected or impaired thereby.

10.NeitherthisNotenoranytermhereofmaybeamended,waived,dis-charged or terminated other than byawritten instrument signed bytheCompanyand the Holder.

11.The Companyrepresentsthatitisnota“shell”issuerandhasneverbeena“shell”issuerorthatifitpreviouslyhasbeena“shell”issuerthatatleast12monthshavepassedsincetheCompany hasreportedform10typeinformationindicatingitisnolongera“shellissu-er.Further.TheCompanywillinstructitscounsel toeither(i)writea144-3(a)(9)opiniontoal-low for salabilityof the conversion shares or (ii) accept such opinion fromHolder’s counsel.

12.TheCompanyshallissueirrevocabletransferagentinstructionsreserving10,000,000sharesofitsCommonStockforconversionsunderthisNote(the“ShareReserve”).ThereserveshallbereplenishedasneededtoallowforconversionsofthisNote.Uponfullconversion of this Note, any shares remainingin the Share Reserve shall be cancelled.The Com- pany shall pay all costs associated with issuing and delivering the shares.

13.TheCompanywillgivetheHolderdirectnoticeofanycorporateactions,including butnotlimitedtonamechanges,stocksplits,recapitalizationsetc.Thisnoticeshallbegiven to the Holder as soon as possible under law.

14.ThisNoteshallbegovernedby andconstruedinaccordancewiththelawsofNewYorkapplicabletocontractsmadeand whollytobeperformedwithintheStateofNew

Yorkandshallbebindinguponthesuccessorsandassignsofeachparty hereto.TheHolderandthe Companyherebymutuallywaivetrial byjuryand consent to exclusivejurisdiction and venueinthecourtsoftheStateofNewYork. ThisAgreementmay beexecutedincounterparts,and the facsimile transmission of an executed counterpart to this Agreement shall be effective as an original.

INWITNESSWHEREOF,theCompanyhascausedthisNotetobedulyexecut-ed byan officer thereunto dulyauthorized.

Dated:12/23/14

MAX SOUND CORPORATION

By:Greg HalpernTitle: Chairman

EXHIBIT A

NOTICE OFCONVERSION

(To be Executed bytheRegistered Holder in order to Convert theNote)

Theundersignedherebyirrevocablyelectstoconvert$ oftheaboveNoteinto SharesofCommonStockofMaxSoundCorporation.(“Shares”)accord-ingto the conditions set forth in such Note, as of the date written below.

IfSharesaretobeissuedinthenameofapersonotherthantheundersigned,theundersigned will payall transfer and othertaxes and charges payablewith respect thereto.

Date of Conversion: Applicable Conversion Price: Signature:

[Print Name ofHolder and Titleof Signer]

Address:

SSN or EIN:

Shares areto be registered in the following name:

Name: Address: Tel: Fax: SSN orEIN:

Shares areto be sent or delivered to thefollowing account:

Account Name: Address:

XML

Intangible Assets - Summary of Intangible Assets (Details) (USD $)	3 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Accumulated Amortization	$ (1,624,847)	$ (1,361,257)
Intangible Asset, Net Carrying Value	17,587,006	17,850,595
Trademarks
Intangible Asset, Gross	7,500,000	7,500,000
Other Indefinite Asset
Intangible Asset, Gross	275	275
Indefinite Intellectual Property
Intangible Asset, Gross	1,620,000
Computer Software, Intangible Asset [Member]
Useful Life	3 years
Finite Intellectual Property
Useful Life	5 years
Intangible Asset, Gross	444,000
Distribution Rights Member
Useful Life	10 years
Intangible Asset, Gross	$ 9,647,577	$ 9,647,577

XML

Stockholders' Equity - Summary of Common Stock (Details) (USD $)	3 Months Ended	12 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Conversion of convertible debt and accrued interest, Shares	29,796,782	48,998,342
Conversion of convertible debt and accrued interest, Value	$ 784,768	$ 3,421,019
Return of shares, Shares	(120,000,000)
Acquistion of intangibles, Shares		15,000,000
Acquistion of intangibles, Value		1,514,000
Settlement of accounts payable, Shares		1,000,000
Settlement of accounts payable, Value		90,000
Total shares issued, Shares	84,253,218
Maximum
Conversion of convertible debt and accrued interest, Value per share	$ 0.14175	$ 0.14175
Services - rendered, Value per share	$ 0.039
Return of shares, Shares	0.04
Acquistion of intangibles, Value per share		0.12
Preferred stock issued in exchange of common stock, Value per share	1
Settlement of accounts payable, Value per share
Minimum
Conversion of convertible debt and accrued interest, Value per share	$ 0.02715	$ 0.02715
Services - rendered, Value per share	$ 0.019
Return of shares, Shares	0.04
Acquistion of intangibles, Value per share		0.0985
Preferred stock issued in exchange of common stock, Value per share	$ 1

XML

Property and Equipment (Details Narrative) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Notes to Financial Statements
Depreciation/Amortization Expense	$ 19,207	$ 26,464

XML

Stockholders' Equity - Summary of assets acquired (Details) (Parenthetical)	3 Months Ended	12 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Equity [Abstract]
Common Stock Shares Issued	24,752,475	24,752,475

XML

Convertible Debt - Derivative Liabilities

3 Months Ended

Mar. 31, 2015

Notes to Financial Statements

Convertible Debt - Derivative Liabilities

NOTE 4           DERIVATIVE LIABILITIES

The Company identified conversion features embedded within convertible debt issued in 2015 and 2014 and warrants issued in 2015 and 2014. The Company has determined that the features associated with the embedded conversion option should be accounted for at fair value as a derivative liability.

As a result of the application of ASC No. 815, the fair value of the conversion feature is summarized as follow:

Derivative Liability - December 31, 2014	$	3,234,792
Fair value at the commitment date for convertible instruments		974,533
Change in fair value of embedded derivative liability for convertible instruments		(460,555	)
Reclassification to additional paid in capital for financial instruments that ceased to be a derivative liability		(577,526	)
Derivative Liability - March 31, 2015	$	3,171,244

The Company recorded the debt discount to the extent of the gross proceeds raised, and expensed immediately the remaining value of the derivative as it exceeded the gross proceeds of the note.  The Company also recorded the value of the warrants issued for services as derivative expense for the three months ended March 31, 2015.  The Company recorded a derivative expense for the three months ended March 31, 2015 and 2014 of $167,523 and $0, respectively.

The fair value at the commitment and re-measurement dates for the Company’s derivative liabilities were based upon the following management assumptions as of March 31, 2015:

	Commitment Date		Re-measurement Date
Expected dividends:	0	%	0	%
Expected volatility:	133.33% - 149.37%		128.45% - 238.77%
Expected term:	0.97 - 2 Years		0.07 - 1.95 Years
Risk free interest rate:	0.01% - 1.16%		0.12% - 1.10%

The fair value at the commitment and re-measurement dates for the Company’s derivative liabilities were based upon the following management assumptions as of December 31, 2014:

	Commitment Date		Re-measurement Date
Expected dividends:	0	%	0	%
Expected volatility:	109% - 304%		120% - 140%
Expected term:	0.44 - 3 Years		0.16 - 2.9 Years
Risk free interest rate:	0.06% - 0.94%		0.12% - 1.10%

XML

Debt - Schedule Of Debt Instruments (Details) (USD $)	3 Months Ended	12 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Interest Rate, Minimum	8.00%
Interest Rate, Maximum	10.00%
Conversion Terms 1
Conversion Terms	65% of the “Market Price”, which is the average of the lowest three (3) trading prices for the common stock during the fifteen (15) trading day period prior to the conversion.	65% of the “Market Price”, which is the average of the lowest three (3) trading prices for the common stock during the fifteen (15) trading day period prior to the conversion.
Amount of Principle Raised
Conversion Terms 2
Conversion Terms	65% of the “Market Price”, which is the average of the lowest three (3) trading prices for the common stock during the ten (10) trading day period prior to the conversion.	65% of the “Market Price”, which is the average of the lowest three (3) trading prices for the common stock during the ten (10) trading day period prior to the conversion.
Amount of Principle Raised	689,500	689,500
Conversion Terms 3
Conversion Terms	65% of the “Market Price”, which is the lowest trading prices for the common stock during the ten (10) trading day period prior to the conversion.	65% of the “Market Price”, which is the lowest trading prices for the common stock during the ten (10) trading day period prior to the conversion.
Amount of Principle Raised	1,303,250	747,500
Conversion Terms 4
Conversion Terms	70% of the “Market Price”, which is lower of the average closing bid price for the common stock during the ten (10) trading day period	70% of the “Market Price”, which is lower of the average closing bid price for the common stock during the ten (10) trading day period
Amount of Principle Raised
Conversion Terms 5
Conversion Terms	70% of the “Market Price”, which is the average of the lowest three (3) trading prices for the common stock during the fifteen (15) trading day period prior to the conversion.	70% of the “Market Price”, which is the average of the lowest three (3) trading prices for the common stock during the fifteen (15) trading day period prior to the conversion.
Amount of Principle Raised	150,000
Conversion Terms 6
Conversion Terms	70% of the “Market Price”, which is the average of the lowest three (3) trading prices for the common stock during the ten (10) trading day period prior to the conversion.	70% of the “Market Price”, which is the average of the lowest three (3) trading prices for the common stock during the ten (10) trading day period prior to the conversion.
Amount of Principle Raised	250,000	250,000
Conversion Terms 7
Conversion Terms	70% of the “Market Price”, which is the average of the lowest three (3) trading prices for the common stock during the twenty (20) trading day period prior to the conversion.	70% of the “Market Price”, which is the average of the lowest three (3) trading prices for the common stock during the twenty (20) trading day period prior to the conversion.
Amount of Principle Raised	175,000	125,000
Conversion Terms 8
Conversion Terms	70% of the lower of the average of the three (3) lowest trading prices for the fifteen (15) day trading period 1 day prior to conversion.	70% of the lower of the average of the three (3) lowest trading prices for the fifteen (15) day trading period 1 day prior to conversion.
Amount of Principle Raised	50,000	50,000
Conversion Terms 9
Conversion Terms	75% of the “Market Price”, which is the average of the lowest three (3) trading prices for the common stock during the ten (10) trading day period prior to the conversion.	75% of the “Market Price”, which is the average of the lowest three (3) trading prices for the common stock during the ten (10) trading day period prior to the conversion.
Amount of Principle Raised	848,334	848,334
Conversion Terms 10
Conversion Terms	Convertible into $0.07/share.  After six month from the date of this note, conversion price shall equal the lower of $0.07/share or the variable conversion price - 75% of the average three (3) lowest closing prices during the ten (10) trading day period.	Convertible into $0.07/share.  After six month from the date of this note, conversion price shall equal the lower of $0.07/share or the variable conversion price - 75% of the average three (3) lowest closing prices during the ten (10) trading day period.
Amount of Principle Raised	$ 765,000	$ 765,000
Debt Instruments
Interest Rate, Minimum	2.50%	2.50%
Interest Rate, Maximum	10.00%	10.00%
Default Interest Rate, Minimum	14.00%	14.00%
Default Interest Rate, Maximum	22.00%	22.00%
Maturity	February 26, 2015 - June 18, 2016	February 26, 2015 - June 18, 2016

XML

Debt - Debt Discount (Details) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Debt Disclosure [Abstract]
Debt discount	$ 5,602,373	$ 2,923,369
Accumulated amortization of debt discount	(3,972,602)	(1,712,320)
Debt discount - Net	$ 1,629,771	$ 1,211,049

XML

Debt - Summary of Convertable Debt (Details) (USD $)	Mar. 31, 2015	Dec. 31, 2014
Debt Disclosure [Abstract]
Line of credit - related party	$ 220,478	$ 268,227
Convertible debt	2,996,815	3,028,418
Less: debt discount	(1,629,771)	(1,691,065)
Convertible debt - net	1,367,044	1,337,353
Total current debt	$ 1,587,522	$ 1,605,580

XML

Property and Equipment (Details) (USD $)	Mar. 31, 2015	Dec. 31, 2014	Mar. 31, 2014
Summary of property and equipment
Total	$ 533,933	$ 531,173
Less: accumulated depreciation and amortization	(361,487)	(342,277)
Property & Equipment, Net	172,445	188,896
Furniture and Equipment [Member]
Summary of property and equipment
Total		99,881	99,881
Internet Domain Names [Member]
Summary of property and equipment
Total		1,500	1,500
Sign [Member]
Summary of property and equipment
Total		628	628
Office Equipment [Member]
Summary of property and equipment
Total		56,897	74,412
Computer Software, Intangible Asset [Member]
Summary of property and equipment
Total		53,897	53,897
Leasehold Improvements [Member]
Summary of property and equipment
Total		6,573	6,573
Music Equipment [Member]
Summary of property and equipment
Total			2,247
Website Development [Member]
Summary of property and equipment
Total		$ 294,795	$ 294,795

XML

Debt

3 Months Ended

Mar. 31, 2015

Debt Disclosure [Abstract]

Debt

NOTE 3           DEBT

Debt consists of the following:

	As of			As of
	March 31, 2015			December 31, 2014
Line of credit - related party	$	220,478		$	268,227
Convertible debt		2,996,815			3,028,418
Less: debt discount		(1,578,944	)		(1,691,065	)
Convertible debt - net		1,417,871			1,337,353
Total current debt	$	1,638,349		$	1,605,580

(A) Line of credit – related party

Line of credit with the principal stockholder consisted of the following activity and terms:

		Principal		Interest Rate		Maturity
Balance - December 31, 2014	$	268,227
Borrowings during the three months ended March 31, 2015		25,000		4	%	September 26, 2015
Interest accrual		2,250
Repayments		(75,000	)
Balance - March 31, 2015	$	220,478		4	%	September 26, 2015

(B) Convertible Debt

During the three months ended March 31, 2015 and year ended December 31, 2014, the Company issued convertible notes totaling $792,500 and $3,475,334, respectively. The Convertible notes issued for three months ended March 31, 2015 and year ended December 31, 2014, consist of the following terms:

			Three Months Ended		Year ended
			March 31, 2015		December 31, 2014
			Amount of		Amount of
			Principal Raised		Principal Raised
Interest Rate			2.5% - 10%		2.5% - 10%
Default interest rate			14% - 22%		14% - 22%
Maturity			February 26, 2015 - June 18, 2016		February 26, 2015 - June 18, 2016
Conversion terms 1	65% of the “Market Price”, which is the average of the lowest three (3) trading prices for the common stock during the ten (10) trading day period prior to the conversion.		689,500		689,500
Conversion terms 2	65% of the “Market Price”, which is the lowest trading prices for the common stock during the ten (10) trading day period prior to the conversion.		592,500		747,500
Conversion terms 3	70% of the “Market Price”, which is the average of the lowest three (3) trading prices for the common stock during the fifteen (15) trading day period prior to the conversion.		150,000		—
Conversion terms 4	70% of the “Market Price”, which is the average of the lowest three (3) trading prices for the common stock during the ten (10) trading day period prior to the conversion.		—		250,000
Conversion terms 5	70% of the “Market Price”, which is the average of the lowest three (3) trading prices for the common stock during the twenty (20) trading day period prior to the conversion.		50,000		125,000
Conversion terms 6	70% of the lower of the average of the three (3) lowest trading prices for the fifteen (15) day trading period 1 day prior to conversion.		—		50,000
Conversion terms 7	75% of the “Market Price”, which is the average of the lowest three (3) trading prices for the common stock during the ten (10) trading day period prior to the conversion.		—		848,334
Conversion terms 8	Convertible into $0.07/share.  After six month from the date of this note, conversion price shall equal the lower of $0.07/share or the variable conversion price - 75% of the average three (3) lowest closing prices during the ten (10) trading day period.		—		765,000
		$	792,500	$	3,475,334

The debt holders are entitled, at their option, to convert all or part of the principal and accrued interest into shares of the Company’s common stock at conversion prices and terms discussed above.    The Company classifies embedded conversion features in these notes as a derivative liability due to management’s assessment that the Company may not have sufficient authorized number of shares of common stock required to net-share settle or due to the existence of a ratchet due to an anti-dilution provision. See Note 4 regarding accounting for derivative liabilities.

During the three months ended March 31, 2015, the Company converted debt and accrued interest, totaling $791,444 into 29,796,782 shares of common stock.    

During the year ended December 31, 2014, the Company converted debt and accrued interest, totaling $3,421,019 into 48,998,342 shares of common stock.    Conversions of debt to equity occurring after the maturity date and penalties incurred resulted in a loss on settlement of $183,907.

MAX SOUND CORPORATION

NOTES TO FINANCIAL STATEMENTS

AS OF MARCH 31, 2015

(UNAUDITED)

Convertible debt consisted of the following activity and terms:

Convertible Debt Balance as of December 31, 2014	3,028,418		4% - 10%	February 26, 2015 - June 18, 2016
Borrowings during the three months ended March 31, 2015	792,500		8% - 10%
Non-Cash Reclassification of accrued interest converted	22,361
Repayments	(55,000	)
Conversion  of debt to into 29,796,782 shares of common stock with a valuation of $791,4448 ($0.02 - $0.039/share) including the accrued interest of $22,361	(791,444	)
Convertible Debt Balance as of March 31, 2015	2,996,815		4% - 10%	February 26, 2015 - June 18, 2016

(C) Debt Issue Costs

During the three months ended March 31, 2015, the Company paid debt issue costs totaling $26,938.

The following is a summary of the Company’s debt issue costs:

	Three Months Ended			Three Months Ended
	March 31, 2015			March 31, 2014
Debt issue costs	$	221,693		$	146,055
Accumulated amortization of debt issue costs		(184,960	)		(118,529	)
Debt issue costs - net	$	34,733		$	27,526

During the three months ended March 31, 2015 and 2014 the Company amortized $17,361 and $38,983 of debt issue costs, respectively.

(D) Debt Discount & Original Issue Discount

During the three months ended March 31, 2015 and December 31, 2014, the Company recorded debt discounts and original issue discounts totaling $841,373 and $3,199,391, respectively.

The debt discount recorded in 2015 and 2014 pertains to convertible debt that contains embedded conversion options that are required to bifurcated and reported at fair value and original issue discounts.

The Company amortized $953,494 and $728,736 during the three months ended March 31, 2015 and 2014, respectively, to amortization of debt discount expense.

		Three Months Ended			Three Months Ended
		March 31, 2015			March 31, 2014
Debt discount	$	2,532,438		$	2,923,369
Accumulated amortization of debt discount		(953,494	)		(1,712,320	)
Debt discount - Net	$	1,578,944		$	1,211,049

XML

Debt - Line of Credit Related Party (Details) (USD $)	3 Months Ended
	Mar. 31, 2015
Debt Disclosure [Abstract]
Beginning Balance	$ 268,227
Borrowings, Interest Rate	4.00%
Borrowings, Maturity	Sep. 26, 2015
Repayments	(75,000)
Ending Balance	$ 220,477

XML

Intangible Assets (Details 1) (USD $)	Mar. 31, 2015	Mar. 31, 2014
Three Month Ended March, 31:
Finite-Lived Intangible Assets, Net	$ 263,590	$ 241,390

XML

Balance Sheets (Unaudited) (USD $)	Mar. 31, 2015	Dec. 31, 2014
Current Assets
Cash	$ 21,896	$ 35,747
Inventory	8,796	38,071
Prepaid expenses	28,962	30,207
Debt offering costs - net	34,733	27,456
Total Current Assets	94,388	131,481
Property and equipment, net	172,445	188,896
Other Assets
Security deposit	413	413
Intangible assets	17,587,006	17,850,595
Total Other Assets	17,587,419	17,851,008
Total Assets	17,856,206	18,171,385
Current Liabilities
Accounts payable	896,839	656,308
Accrued expenses	161,741	116,903
Line of credit - related party	220,478	268,227
Derivative liabilities	3,171,244	3,234,792
Convertible note payable, net of debt discount of $1,629,771 and $1,691,065 respectively	1,417,871	1,337,353
Total Current Liabilities	5,868,173	5,613,583
Stockholders' Equity
Additional paid-in capital	51,613,168	50,209,989
Treasury stock	(519,575)	(519,575)
Accumulated deficit	(39,110,405)	(37,136,345)
Total Liabilities and Stockholders' Equity	17,854,252	18,171,385
Common Stock
Stockholders' Equity
Common stock, $0.00001 par value; 450,000,000 shares authorized, 284,188,822 and 373,442,040 shares issued and outstanding, respectively	2,841	3,733
Preferred Stock
Stockholders' Equity
Preferred stock, $0.00001 par value; 10,000,000 shares authorized, No shares issued and outstanding, Series, A Convertible Preferred stock, $0.00001 par value; 10,000,000 shares authorized, 5,000,000 and 0 shares issued and outstanding, respectively
Series A Preferred Stock [Member]
Stockholders' Equity
Preferred stock, $0.00001 par value; 10,000,000 shares authorized, No shares issued and outstanding, Series, A Convertible Preferred stock, $0.00001 par value; 10,000,000 shares authorized, 5,000,000 and 0 shares issued and outstanding, respectively	$ 50

XML

Summary of Significant Accounting Policies and Organization

3 Months Ended

Mar. 31, 2015

Notes to Financial Statements

Summary of Significant Accounting Policies and Organization

NOTE 1           SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION

(A) Organization and Basis of Presentation

Max Sound Corporation (the "Company") was incorporated in Delaware on December 9, 2005, under the name 43010, Inc. The Company business operations are focused primarily on developing and launching audio technology software.

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 March 31, 2015 and 2014, 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 (‘ASC Topic 350'). 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) Concentration of Credit Risk

The Company at times has cash in banks in excess of FDIC insurance limits. The Company had $0 in excess of FDIC insurance limits as of March 31, 2015 and 2014.

(G) 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 revenues of $0 and $1,236 for the years ended March 31, 2015 and 2014, respectively.

(H) 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 $0 and $4,805 for the years ended March 31, 2015 and 2014, respectively.

(I) Identifiable Intangible Assets

As of March 31, 2015 and December 312, 2014, $7,500,275 of costs related to registering a trademark and acquiring technology rights (audio technology known as Max Audio Technology (MAXD) 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.

On November 15, 2012, the Company acquired the rights to assets and audio technology known as Liquid Spins, Inc. through a share exchange, whereby the Company issued 24,752,475 shares of common stock for their rights in Liquid Spins technology (See Note 8 (H)). As of March 31, 2015 and December 31, 2014, $8,096,731 and $8,338,121, respectively, of costs related to this intangible remain capitalized. The technology was placed in service on August 23, 2013 with a useful life of 10 years. However, the technology will be reviewed for impairment annually or more frequently if impairment indicators arise.

On May 19, 2014, the Company entered into an agreement with VSL Communications to acquire the rights to intellectual property titled ‘Optimized Data Transmission System and Method' (‘ODT') through a cash payment of $500,000 in addition to a share issuance, whereby the Company issued 10,000,000 shares of common stock, valued at $1,000,000 ($0.10/share). In exchange, the Company received a perpetual, exclusive, worldwide license to the ODT technology for all fields of use. In addition, the Company issued 1,000,000 shares of common stock, valued at $120,000 ($0.12/share), as compensation for the introduction and identification of a seller based on the agreement dated April 10, 2014.

As of March 31, 2015 and December 31, 2014, $1,620,000 of costs related to the ‘ODT' intangible asset remains capitalized. The technology will be reviewed for impairment annually or more frequently if impairment indicators arise. In connection with this agreement, the Company is obligated to make an additional five (5) payments totaling $1,000,000 to be made every 30 days, with the thirty (30) day periods to be waived if fund raising occurs on an anticipated faster time line. The payments of additional cash are contingent on the following funding criteria:

● The Company shall pay set increments of cash based on a percentage of gross funds received through funds raised.

● The Company shall pay 20% of such monies as soon as they are received.

In connection with funds raised through March 31, 2015, the Company recorded a liability and expensed $484,056 as royalty cost, related to the 20% fee, as of March 31, 2015, $30,000 has been paid . The remaining liability as of March 31, 2015, is $454,556 and is included in accounts payable.

The Company shall act as the exclusive agent to facilitate and negotiate any opportunities on behalf of ODT to Companies, Organizations and other qualified entities. Upon any closing, ODT shall receive 50% of gross dollars and the Company shall receive the other 50% at the time of a completion of any transaction opportunity, including legal settlements after subtracting applicable contingent legal fees. The term of the agreement is for the life of the acquired intellectual property.

On August 11, 2014, the Company and VSL simultaneously filed trade secret and patent infringement actions against Google, Inc. and its subsidiaries, YouTube, LLC and On2 Technologies, Inc., relating to proprietary and patented technology owned by Vedanti Systems Limited, a subsidiary of VSL.  The patent infringement complaint was brought in U.S. District Court for the District of Delaware and the trade secret suit was filed in Superior Court of California, County of Santa Clara.  The lawsuits contend that, in 2010, while Google was in discussions with Vedanti about the possibility of acquiring Vedanti's patented digital video streaming techniques and other proprietary methods, Google gained access to and received technical guidance regarding Vedanti's proprietary codec, a computer program capable of encoding and decoding a digital data stream or signal.  The complaints allege that soon after the two companies initiated negotiations, Google began implementing Vedanti's technology into its own WebM/VP8 video codec without informing Vedanti, and without compensating Vedanti for its use.  Plaintiffs are seeking a permanent injunction against Google, compensatory damages, as well as treble damages. As exclusive agent to VSL to enforce all rights with respect to the subject technology, the Company has hired Grant & Eisenhofer, PA to represent the Company and VSL in the suits. These cases will be vigorously prosecuted and the Company believes it has a good likelihood of success. 

On May 22, 2014, the Company entered into a five (5) year agreement to acquire the rights to intellectual property titled ‘Engineered Architecture' (‘EA Technology') through a cash payment of $50,000 in addition to a share issuance, whereby the Company issued 4,000,000 shares of common stock, valued at $394,000 ($0.0985/share). In exchange, the Company received for the term of the agreement, the exclusive worldwide right to use the EA Technology. As of March 31, 2015, $392,200 of costs related to this intangible remains capitalized. The technology will be reviewed for impairment annually or more frequently if impairment indicators arise. In connection with this agreement, the Company is obligated to make an additional five (5) payments totaling $500,000 to be made every 30 days, with the thirty (30) day periods to be waived if fund raising occurs on an anticipated faster time line. The payments of additional cash are contingent on the following funding criteria:

● The Company shall pay set increments of cash based on a percentage of gross funds received through funds raised.

● The Company shall pay 10% of such monies as soon as they are received.

In connection with funds raised through March 31, 2015, the Company recorded a liability and expensed $242,028 as royalty cost, related to the 10% fee, as of March 31, 2015, $40,000 has been paid. The remaining liability as of March 31, 2015, is $202,028 and is included in accounts payable.

The Company shall act as the exclusive agent to facilitate and negotiate any opportunities on behalf of EA Technology to Companies, Organizations and other qualified entities. Upon any closing, EA shall receive 50% of gross dollars and the Company shall receive the other 50% at the time of a completion of any transaction opportunity, including legal settlements after subtracting applicable contingent legal fees. In the event the Company sublicenses EA to other entities, profits shall be split evenly 50%/50%.

(J) Impairment of Long-Lived Assets

The Company accounts for its long-lived assets in accordance with ASC Topic 360-10-05, ‘Accounting for the Impairment or Disposal of Long-Lived Assets.' ASC Topic 360-10-05 requires that long-lived assets, such as technology rights, be reviewed for impairment annually, or whenever events or changes in circumstances indicate that the historical cost carrying value of an asset may no longer be appropriate. The Company assesses recoverability of the carrying value of an asset by estimating the future net cash flows expected to result from the asset, including eventual disposition. If the future net cash flows are less than the carrying value of the asset, an impairment loss is recorded equal to the difference between the asset’s carrying value and fair value or disposable value. No impairments were recorded for the three months ended March 31, 2015 and 2014, respectively.

(K) 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 stock options would be anti-dilutive and accordingly, is excluded from the computation of earnings per share.

The computation of basic and diluted loss per share for the three months ended March 31, 2015 and 2014, excludes the common stock equivalents of the following potentially dilutive securities because their inclusion would be anti-dilutive:

	March 31, 2015		March 31, 2014
Stock Warrants (Exercise price - $0.25 - $.52/share)		6,500,000		3,385,000
Stock Options (Exercise price - $0.10 - $.50/share)		15,566,652		12,700,000
Convertible Debt  (Exercise price - $0.07 - $.0817/share)		167,428,643		29,778,963
Series A Convertible Preferred Shares ($0.04/share)		5,000,000		—
Total		194,495,295		45,863,963

(L) 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.

The Company's federal income tax returns are no longer subject to examination by the IRS for the years prior to 2011, and the related state income tax returns are no longer subject to examination by state authorities for the years prior to 2010.

(M) Business Segments

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

(N) Recent Accounting Pronouncements

On June 10, 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation ("ASUE 2014-10"). The guidance is intended to reduce the overall cost and complexity associated with financial reporting for development stage entities without reducing the availability of relevant information. The FASB also believes the changes will simplify the consolidation accounting guidance by removing the differential accounting requirements for development stage entities. As a result of these changes, there no longer will be any accounting or reporting differences in GAAP between development stage entities and other operating entities. For organizations defined as public business entities, the presentation and disclosure requirements in Topic 915 will no longer be required, starting with the first annual period beginning after December 15, 2014, including interim periods therein. Early application is permitted for any annual reporting period or interim period for which the entity's financial statements have not yet been issued (public business entities) or made available for issuance (other entities). The Company has elected early application of this ASU and implemented the changes in their financial statement for the year ended December 31, 2014.

In June 2014, FASB issued Accounting Standards Update ('ASU') No. 2014-12, 'Compensation Ð Stock Compensation (Topic 718); Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period'. The amendments in this ASU apply to all reporting entities that grant their employees share-based payments in which the terms of the award provide that a performance target that affects vesting could be achieved after the requisite service period. The amendments require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in Topic 718 as it relates to awards with performance conditions that affect vesting to account for such awards. For all entities, the amendments in this ASU are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. Entities may apply the amendments in this ASU either (a) prospectively to all awards granted or modified after the effective date or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. If retrospective transition is adopted, the cumulative effect of applying this update as of the beginning of the earliest annual period presented in the financial statements should be recognized as an adjustment to the opening retained earnings balance at that date. Additionally, if retrospective transition is adopted, an entity may use hindsight in measuring and recognizing the compensation cost. This updated guidance is not expected to have a material impact on our results of operations, cash flows or financial condition.  We are currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition.

In August 2014, the FASB issued Accounting Standards Update 'ASU' 2014-15 on 'Presentation of Financial Statements Going Concern (Subtopic 205-40) Ð Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern'. Currently, there is no guidance in U.S. GAAP about management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern or to provide related footnote disclosures. The amendments in this Update provide that guidance. In doing so, the amendments are intended to reduce diversity in the timing and content of footnote disclosures. The amendments require management to assess an entity's ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management's plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management's plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one

year after the date that the financial statements are issued (or available to be issued). We are currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition.

All other newly issued accounting pronouncements but not yet effective have been deemed either immaterial or not applicable.

(O) Fair Value of Financial Instruments

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

(P) 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 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.

(Q) 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.

(R) 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. 

(S) Original Issue Discount

For certain convertible debt issued, the Company provides the debt holder with an original issue discount. The original issue discount is recorded to debt discount, reducing the face amount of the note and is amortized to interest expense over the life of the debt.

(T) Debt Issue Costs and Debt Discount

The Company may pay debt issue costs, and record debt discounts in connection with raising funds through the issuance of convertible debt. These costs are amortized to interest expense over the life of the debt. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed.

(U) Licensing & Distribution

On May 28, 2014, the Company entered into a license agreement with Akyumen Technologies Corp. ('Akyumen'), an original equipment manufacturer of mobile devices, for the non-exclusive, non-transferable, indivisible worldwide license rights to the use of Company's API technology in Akyumen's mobile devices.  The license is for five years and is renewable, with the Company's approval, at Akyumen's request.

As consideration for the above-referenced license rights, Akyumen agreed to pay the Company royalties of $2.50 per Akyumen device that utilizes the API technology, to be payable on a monthly basis within 15 days after the close of the calendar month.  Akyumen also agreed to pay, within three months of first sale, 50% of non-recurring engineering costs to port the Technology onto the operating systems of the Akyumen devices, inclusive of any local fees, taxes, or other charges.

On June 16, 2014, MAXD entered into a license and revenue share agreement with LOOKHU, an online subscription service that delivers movies, music, television shows, apps and games. The agreement grants LOOKHU non-exclusive, non-transferable, indivisible worldwide license rights to the distribution and use of the Company's Application Programming Interface (‘API’) audio processor technology. The license is for five years and is renewable, with the Company's approval, at LOOKHU's request.

As consideration for the above-referenced license rights, LOOKHU agreed to pay the Company royalties of $0.25 per month per paid subscription to the technology, to be payable on a monthly basis.  Additionally, LOOKHU agreed to pay the Company 4% of the net advertising revenue derived from advertising that utilizes the technology, to be payable on a quarterly basis.

Additionally, for the term of the agreement, the parties agreed to split, on a 50/50 basis, net revenue derived from sales of digital music or songs played from a LOOKHU software player, to be payable on a monthly basis.

XML

Stockholders' Equity - Summary of all outstanding and exercisable warrants (Details) (USD $)	Mar. 31, 2015 Y
Warrants Outstanding	3,750,000
Warrants Exercisable	3,750,000
Remaining Contractual Life	1.4
$0.25
Exercise Price	0.25
Warrants Outstanding	200,000
Warrants Exercisable	200,000
Remaining Contractual Life	0.20
$0.40
Exercise Price	0.40
Warrants Outstanding	2,850,000
Warrants Exercisable	2,850,000
Remaining Contractual Life	1.49
$0.45
Exercise Price	0.45
Warrants Outstanding	500,000
Warrants Exercisable	500,000
Remaining Contractual Life	0.76
$0.25
Exercise Price	0.10
Warrants Outstanding	200,000
Warrants Exercisable	200,000
Remaining Contractual Life	2.66

XML

Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Summary of Intangible Assets

XML

Stockholders' Equity - Summary of assets acquired (Details) (USD $)	3 Months Ended	12 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Equity [Abstract]
Goodwill at fair value, Opening Balance		$ 9,303,679
Consideration transferred at fair value:
Common stock
Net assets acquired:
Current assets
Cash
Total net assets acquired		8,011
Amortization	(1,206,949)	(965,559)
Goodwill at fair value, Ending Balance	$ 8,096,731	$ 8,338,121

XML

Going Concern (Details Narrative) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Notes to Financial Statements
Net Loss	$ (1,973,423)	$ (4,189,781)
Working Capital Deficit	(38,742,462)
Cash Flow from Operations	$ (637,592)

XML

Going Concern

3 Months Ended

Mar. 31, 2015

Notes to Financial Statements

Going Concern

NOTE 2           GOING CONCERN 

As reflected in the accompanying audited financial statements, the Company had a net loss of $1,606,117 for the three months ended March 31, 2015, has an accumulated deficit of $38,742,462 as of March 31, 2015, and has negative cash flow from operations of $637,592 as of and for the three months ended March 31, 2015.

As the Company continues to incur losses, transition to profitability is dependent upon the successful commercialization of its products and achieving a level of revenues adequate to support the Company's cost structure.

The Company may never achieve profitability, and unless and until it does, the Company will continue to need to raise additional cash. Management intends to fund future operations through additional private or public debt or equity offerings. Based on the Company's operating plan, existing working capital at December 31, 2014 was not sufficient to meet the cash requirements to fund planned operations through January 31, 2015 without additional sources of cash. This raises substantial doubt about the Company's ability to continue as a going concern.  The accompanying financial statements have been prepared assuming that the Company will continue as a going concern and do not include adjustments that might result from the outcome of this uncertainty.

XML

Balance Sheets (Parenthetical) (USD $)	Mar. 31, 2015	Dec. 31, 2014
Common Stock
Common stock, par value	$ 0.00001	$ 0.00001
Preferred Stock
Preferred stock, par value	$ 0.00001	$ 0.00001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	5,000,000	0
Preferred stock, shares outstanding	5,000,000	0
Common stock, shares authorized	450,000,000	450,000,000
Common stock, shares issued	284,188,822	373,442,040
Common stock, shares outstanding	284,188,822	373,442,040

XML

Summary of Significant Accounting Policies and Organization (Tables)

9 Months Ended

Sep. 30, 2014

Accounting Policies [Abstract]

Summary of potentially dilutive securities

	March 31, 2015		March 31, 2014
Stock Warrants (Exercise price - $0.25 - $.52/share)		6,500,000		3,385,000
Stock Options (Exercise price - $0.10 - $.50/share)		15,566,652		12,700,000
Convertible Debt  (Exercise price - $0.07 - $.0817/share)		167,428,643		29,778,963
Series A Convertible Preferred Shares ($0.04/share)		5,000,000		—
Total		194,495,295		45,863,963

XML

Document and Entity Information (USD $)	3 Months Ended
	Mar. 31, 2015	Apr. 01, 2015
Document And Entity Information
Entity Registrant Name	Max Sound Corporation
Entity Central Index Key	0001353499
Document Type	10-Q
Document Period End Date	Mar. 31, 2015
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Voluntary Filer?	Yes
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Public Float		$ 201,475,590
Entity Common Stock, Shares Outstanding		285,044,350
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2015

XML

Debt (Tables)

3 Months Ended

Mar. 31, 2015

Debt Disclosure [Abstract]

Summary of Convertable Debt

	As of			As of
	March 31, 2015			December 31, 2014
Line of credit - related party	$	220,478		$	268,227
Convertible debt		2,996,815			3,028,418
Less: debt discount		(1,629,771	)		(1,691,065	)
Convertible debt - net		1,367,044			1,337,353
Total current debt	$	1,587,522		$	1,605,580

Line of Credit Related Party

Convertible Debt

Convertible Debt Balance as of December 31, 2014	3,028,418		4% - 10%	February 26, 2015 - June 18, 2016
Borrowings during the three months ended March 31, 2015	792,500		8% - 10%
Non-Cash Reclassification of accrued interest converted	22,361
Repayments	(55,000	)
Conversion  of debt to into 29,796,782 shares of common stock with a valuation of $791,4448 ($0.02 - $0.039/share) including the accrued interest of $22,361	(791,444	)
Convertible Debt Balance as of March 31, 2015	2,996,815		4% - 10%	February 26, 2015 - June 18, 2016

Debt Issue Costs

Debt Discount

XML

Statements of Operations (Unaudited) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Income Statement [Abstract]
Revenue		$ 1,236
Operating Expenses
General and administrative	787,303	740,785
Endorsement fees
Consulting	69,837	133,812
Professional fees	117,624	277,474
Website development	5,000	22,881
Compensation	241,300	256,400
Total Operating Expenses	1,221,064	1,431,352
Loss from Operations	(1,221,064)	(1,430,116)
Other Income / (Expense)
Other income
Gain on sale of intellectual property
Loss on inventory write off	(29,275)
Gain (Loss) on extinguishment of debt		(116,582)
Interest expense	(56,443)	(18,596)
Derivative Expense	(167,523)
Amortization of debt offering costs	(53,093)	(78,983)
Loss on conversions		(42,085)
Amortization of debt discount	(752,359)	(786,155)
Change in fair value of embedded derivative liability	473,735	(1,717,264)
Total Other Income / (Expense)	(752,359)	(2,759,665)
Provision for Income Taxes
Net Income (Loss)	$ (1,973,423)	$ (4,189,781)
Net Loss Per Share - Basic and Diluted	$ (0.01)	$ (0.01)
Weighted average number of shares outstanding during the year Basic and Diluted	341,970,037	313,207,471

XML

Commitments

3 Months Ended

Mar. 31, 2015

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS

NOTE 7         COMMITMENTS

(A) Employment Agreement

On January 9, 2013, the Company executed an employment agreement with its Director of New Business Development. The term of the agreement is for three years.   As compensation for services, the Director will receive a monthly compensation of $10,000.   Upon the first million dollars in gross sales the salary will increase to $12,000 per month.  In addition, the Director will receive up to 1,000,000 shares of common stock payable in lots of 125,000 per quarter beginning on January 1, 2013.    Also, employee for the first eight quarters of employment has a right to earn 125,000 additional 3 year stock options with a strike price of $0.50 per share as follows:

For each million of new gross sales - 125,000 additional 3-year stock options with a strike price of $.50 per share.

For the year ended December 31, 2014 and year ended December 31, 2013, the employee received 375,000 and 500,000 shares with a fair value of $95,625 and $127,500, respectively. For the three months ended March 31, 2015, the employee received 125,000 with a fair value of $7,875

On November 26, 2012, the Company executed an employment agreement with its VP of Music Entertainment. The term of the agreement is for two years.   As compensation for services, the VP will receive a monthly compensation of $8,000.   In addition, the employee will receive up to 1,000,000 shares of common stock payable in lots of 125,000 per quarter beginning on December 1, 2012.   In addition, the employee is entitled to a monthly commission equal to 5% of all profits from any sales of music from Liquid Spins that employee is directly responsible for bringing to the Company.   For the three months ended March 31, 2014 and year ended December 31, 2013, the employee received 125,000 and 500,000 shares with a fair value of $45,625 and $133,750, respectively. As of February 3, 2014, the employee was terminated with no additional compensation owed.

On November 26, 2012, the Company executed an employment agreement with its VP of Music Distribution. The term of the agreement is for two years.   As compensation for services, the VP will receive a monthly compensation of $7,000.    In addition, the employee will receive up to 1,000,000 shares of common stock payable in lots of 125,000 per quarter beginning on December 1, 2012.    In addition, the employee is entitled to a monthly commission equal to 5% of all profits from any sales of music from Liquid Spins that employee is directly responsible for bringing to the Company.   For the nine months ended September 30, 2014 and year ended December 31, 2013, the employee received 500,000 and 500,000 shares with a fair value of $182,500 and $133,750, respectively. For the three months ended March 31, 2015, the employee received 125,000 with a fair value of $4,975.

On June 11, 2012, the Company executed an employment agreement with its Senior Audio Engineer.   The term of the agreement is for five years.   As compensation for services, the Engineer will receive a monthly compensation of $6,000 beginning July 1, 2012.  In addition to the base salary, the employee is entitled to receive health benefits, and the employee will receive 1,000,000 shares of common stock payable in 125,000 increments per quarter beginning on July 1, 2012.   For year ended December 31, 2014 and year ended December 31, 2013, the employee received 250,000 and 500,000 shares with a fair value of $62,500 and $125,000, respectively.

(B) Consulting Agreement

On January 21, 2015, the Company entered into a consulting services agreement. In connection with this agreement, the consultant shall be paid $4,000 per month and receive up to 150,000 shares of common stock payable in lots of 50,000 per month and will be issued 90 days after the date of the signing of the agreement. For three months March 31, 2015, the Company recorded $9,000 in stock based compensation payable.

On January 21, 2015, the Company entered into a consulting services agreement. In connection with this agreement, the consultant shall be paid $4,000 per month and receive up to 150,000 shares of common stock payable in lots of 50,000 per month and will be issued 90 days after the date of the signing of the agreement. For three months March 31, 2015, the Company recorded $9,000 in stock based compensation payable.

On March 17, 2015, the Company entered into a services agreement. In connection with this agreement, the consultant will receive 300,000 shares of fully vested common stock, payable in lots of 100,000 shares of common stock per month and 5,000 per month. The agreement will continue until June 17, 2015. For three months March 31, 2015, the Company recorded $8,400 in stock based compensation payable.

On February 18, 2015, the Company entered into service agreement for a period of two years with the Company’s transfer agent for a period from September 23, 2014 to September 23, 2016. . In consideration for these services, during the three months ended March 31, 2015, 700,000 shares of fully vested common stock valued at $22,400 ($0.03/share) were granted.

MAX SOUND CORPORATION

NOTES TO FINANCIAL STATEMENTS

AS OF MARCH 31, 2015

(UNAUDITED)

On March 17, 2014, the Company entered into an advisory board agreement for a period of three years. In consideration for these services, during the nine months ended September 30, 2014, the Consultant was granted 100,000 shares of fully vested common stock valued at $9,300 ($0.09/share). Two additional blocks of 100,000 common shares shall be granted shall certain benchmarks be accomplished during the first year.

On April 24, 2014, the Company entered into consulting services agreement. In consideration for these services, during the nine months ended September 30, 2014, the Consultant was granted 200,000 shares of fully vested common stock valued at $21,980 ($0.11/share).

During the nine months ended September 30, 2014, the Company entered into a consulting services agreement related to marketing and the creation of Company awareness. In connection with this agreement, the consultant shall be paid $20,000 and was issued 200,000 shares of fully vested common stock valued at $31,000 ($0.16/share).

On August 6, 2014, the Company entered into an advisory board agreement for a period of three years. In consideration for these services, during the nine months ended September 30, 2014, the Consultant was granted 100,000 shares of fully vested common stock valued at $16,500 ($0.17/share).

On September 23, 2014, the Company entered into service agreement for a period of two years with the Company’s transfer agent. In consideration for these services, during the nine months ended September 30, 2014, 300,000 shares of fully vested common stock valued at $49,500 ($0.17/share) were granted.

On September 10, 2014, the Company entered into an advisory board agreement. In consideration for these services, during the nine months ended September 30, 2014, the Consultant was granted 100,000 shares of fully vested common stock valued at $16,000 ($0.16/share).

On July 29, 2014, the Company entered into an investor relations agreement. In connection with this agreement, the Company is to issue 100,000 shares of fully vested common stock monthly and $5,500 in monthly fees. As of September 30, 2014, the agreement was terminated. The consultant was issued 100,000 shares of common stock valued at $16,000 ($0.16/share) and was paid $5,500.

(C) Operating Lease Agreements

On September 20, 2012, the Company took over a month to month operating lease upon completing the asset purchase agreement with Liquid Spins. The lease began on October 1, 2012 at a monthly rate of $1,585. The Company gave notice to end this month to month lease, with a final end date of February 28, 2014.

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. At the current time the Company is continuing on with the existing office space on a month to month basis based on the previous terms and conditions of the recently expired lease.

(C) Research Agreement

On July 1, 2014, the Company entered into a research agreement with University of Florida for the service period to begin July 15, 2014 and ending no later than October 31, 2014. Subsequently on December 3, 2014, the Company modified the terms of the service period of the agreement to start on September 30,214 and ending no later than January 15,2015. The fee for research services is fixed at $49,910 and will be paid in four monthly installments of $12,678. For the year ended December 31, 2014 the Company recorded a liability and expensed $12,678 as research and development cost, as of December 31, 2014, $0 has been paid. The remaining liability as of December 31, 2014, is $12,678 and is included in accounts payable. For the three months ended March 31, 2015, the Company paid $12,678 and $0 is included in accounts payable.

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Stockholders' Equity

3 Months Ended

Mar. 31, 2015

Equity [Abstract]

STOCKHOLDERS' EQUITY

NOTE 6          STOCKHOLDERS' EQUITY

On November 10, 2014, the Company with the consent of the Majority Shareholder and Unanimous Written Consent of the Board of Directors filed with the State of Delaware an Amended Certificate of Incorporation increasing the authorized shares of common stock by 50,000,000 shares of common stock, and changing the par value to $.00001 per share.

On March 4, 2015, the Company with the consent of the Majority Shareholder and Unanimous Written Consent of the Board of Directors created and authorized the issuance of Series A Convertible Preferred stock, with a par value of $0.00001 per share. The face amount of state value of each Preferred Share of stock is $0.96.

(A) Common Stock 

During the three months ended March 31, 2015, the Company issued the following common stock:

Transaction Type	Quantity			Valuation			Range of Value per share
Conversion of convertible debt and accrued interest		29,796,782		$	791,444			$0.02715 - $0.14175
Services - rendered		950,000			32,730			$0.028 - $0.063
Return of shares		(120,000,000	)		(1,200	)	$	0.00001
Preferred stock issued in exchange of common stock		5,000,000			50		$	0.00001
Total shares issued		(89,253,218	)	$	1,401,650

 The following is a detailed description of transactions noted above:

1. Conversion of convertible debt and accrued interest

During the three months ended March 31, 2015, the Company converted debt and accrued interest, totaling $791,444 into 29,796,782 shares of common stock

2. Services Rendered

On February 28, 2015, the Company entered into a services agreement. In connection with this agreement, the consultant will receive 700,000 shares of fully vested common stock.

During the year ended December 31, 2014, the Company issued 250,000 shares of common stock valued at $12,850 in connection with employment agreements entered into (See Note 9 (A).

2. Return of Shares and Issuance of Preferred shares

On March 4, 2015 the Company filed a form 8K with the SEC associated with the Company entering into a Securities Exchange Agreement and the Company filing with the Secretary of State Delaware a Certificate of Designations, Preferences and Rights whereby, among other things, the Company for good and valuable consideration, agreed that in consideration of a large shareholder exchanging 120,000,000 shares of common stock back to the Company, the shareholder would receive 5,000,000 shares of Series A Convertible Preferred Stock of the Company at a Stated Value of $0.96 per share and a Conversion Price of $.0.04 per share. The Series A Convertible Preferred Stock carries certain voting preferences and will accrue dividends at a rate of 8% per annum Stated Value, payable in cash or in kind at the election of the Board of Directors. For the three months ended March 31, 2015, the Company recorded $30,000 as a dividend payable.

MAX SOUND CORPORATION

NOTES TO FINANCIAL STATEMENTS

AS OF MARCH 31, 2015

(UNAUDITED)

During the year ended December 31, 2014, the Company issued the following common stock:

Transaction Type	Quantity			Valuation		Range of Value per share
Conversion of convertible debt and accrued interest	48,998,342		$	3,421,019		$0.02715 - $0.14175
Services - rendered	3,150,000			678,030		$0.093 - $0.365
Acquisition of intangibles	15,000,000			1,514,000		$0.0985 - $0.12
Return of shares	(4,250,000	)		—		$0.00 - $0.00
Settlement of accounts payable	1,000,000			90,000	$	0.09
Total shares issued	63,898,342		$	5,703,049

The following is a detailed description of transactions noted above:

1. Conversion of convertible debt and accrued interest

During the year ended December 31, 2014, the Company converted debt and accrued interest, totaling $3,421,019 into 48,998,342 shares of common stock.    Conversions of debt to equity occurring after the maturity date and penalties incurred resulted in a loss on settlement of $183,911.

2. Services Rendered

During the year ended December 31, 2014, the Company issued 1,250,000 shares of common stock valued at $386,250 in connection with employment agreements entered into (See Note 9 (A).

On January 15, 2013, the Company entered into an agreement for legal services, pursuant to which the Company will pay $2,000 and issue 50,000 shares of fully vested common stock for the preparation, filing costs and fees of each provisional and regular patent application.  Through September 30, 2014, a total of 44 applications have been filed.  In connection with this agreement:

During the year ended December 31, 2014, the Company issued 800,000 shares of fully vested common stock for services having a fair value of $131,500 ($0.11 - $0.168/share).

On March 17, 2014, the Company entered into an advisory board agreement for a period of three years. In consideration for these services, during the nine months ended September 30, 2014, the Consultant was granted 100,000 shares of fully vested common stock valued at $9,300 ($0.09/share). (See note 7(B)).

On April 4, 2014, the Company entered into consulting services agreement. In consideration for these services, during the nine months ended September 30, 2014, the Consultant was granted 200,000 shares of fully vested common stock valued at $21,980 ($0.11/share). (See note 7(B)).

During the year ended December 31, 2014, the Company entered into a consulting services agreement related to marketing and the creation of Company awareness. In connection with this agreement, the consultant shall be paid $20,000 and was issued 200,000 fully vested shares of common stock valued at $31,000 ($0.16/share). (See note 7(B)).

On August 6, 2014, the Company entered into an advisory board agreement for a period of three years. In consideration for these services, during the nine months ended September 30, 2014, the Consultant was granted 100,000 fully vested shares of common stock valued at $16,500 ($0.17/share). (See note 7(B)).

On September 23, 2014, the Company entered into service agreement for a period of two years with the Company’s transfer agent. In consideration for these services, during the nine months ended September 30, 2014, 300,000 shares of fully vested common stock valued at $49,500 ($0.17/share) were granted and expensed.

On September 10, 2014, the Company entered into an advisory board agreement. In consideration for these services, during the nine months ended September 30, 2014, the Consultant was granted 100,000 shares of fully vested common stock valued at $16,000 ($0.16/share). (See note 7(B)).

On July 29, 2014, the Company entered into an investor relations agreement. In connection with this agreement, the Company is to issue 100,000 shares of common stock monthly and $5,500 in monthly fees. As of September 30, 2014, the agreement was terminated. In total, the consultant was issued 100,000 shares of fully vested common stock valued at $16,000 ($0.16/share) and was paid $5,500. (See note 7(B)).

MAX SOUND CORPORATION

NOTES TO FINANCIAL STATEMENTS

AS OF MARCH 31, 2015

(UNAUDITED)

3. Acquisition of intangibles

During the nine months ended September 30, 2014, the Company issued 15,000,000 common shares in connection with license agreements entered into and intangibles acquired. See Note 1(I)

4. Return of Shares

On August 3, 2012, the Company entered into an endorsement agreement with an unrelated third party for a period from August 3, 2012 through August 3, 2015.    In exchange for the services provided, the Company issued 3,000,000 shares of common stock having a fair value of $960,000 ($0.30/share) based upon fair value on the date of grant. As of January 2014, the August 3, 2012 agreement has been terminated and 3,000,000 shares have been returned to the Company (See note 7(B)).

In July of 2013, the Company entered into a financial advisor agreement for a period of six months with the advisor providing various assistance including introductions to potential investors. The Agreement calls for a fee of $25,000 with an additional $7,500 due and payable on the 1st day of the subsequent five months. On July 8, 2013, the Company issued 1,500,000 common shares as consideration for these services valued at $315,000. On April 15, 2014, the parties entered into a mutual termination agreement, as a result, 1,250,000 shares were returned to the Company.

5. Settlement of accounts payable

During the year ended December 31, 2014, the Company settled accounts payable totaling $154,320 through the issuance of $1,000,000 common shares with a valuation of $90,000. The Company recognize a gain on settlement of $64,320.

 (B) Stock Warrants

On November 25, 2014, the Company issued 200,000 warrants for services rendered. The Company recognized compensation expense of $11,972 on the date of issuance with the offset being recorded to derivative liabilities since the Company applied the provisions of ASC No. 815, pertaining to the potential settlement in a variable amount of shares given the company’s shares are tainted.    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 assumptions, dividend yield of zero, expected volatility of 128%; risk-free interest rates of 0.91%, 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 9(B)).

During the year ended December 31, 2014, the Company issued 750,000 warrants in connection with the entry into certain convertible debenture agreements. Each warrant vests immediately and expire February 26, 2017 – August 12, 2017 with an exercise price of $0.40.

The following tables summarize all warrant grants as of March 31, 2015, and the related changes during these periods are presented below:

Balance, December 31, 2014	3,750,000	$	0.38	1.7
Granted	—	$	—
Exercised	—	$	—
Cancelled/Forfeited	—	$	—
Balance, March 31, 2015	3,750,000	$	0.38	1.4

MAX SOUND CORPORATION

NOTES TO FINANCIAL STATEMENTS

AS OF MARCH 31, 2015

(UNAUDITED)

A summary of all outstanding and exercisable warrants as of March 31, 2015 is as follows:

				Weighted Average
	Exercise	Warrants	Warrants	Remaining		Aggregate
	Price	Outstanding	Exercisable	Contractual Life		Intrinsic Value
$	0.10	200,000	200,000	2.66	$	—
$	0.25	200,000	200,000	0.20	$	—
$	0.40	2,850,000	2,850,000	1.49	$	—
$	0.45	500,000	500,000	0.76	$	—
		3,750,000	3,750,000	1.4 years	$	—

 A summary of all outstanding and exercisable warrants as of December 31, 2014 is as follows:

				Weighted Average
	Exercise	Warrants	Warrants	Remaining		Aggregate
	Price	Outstanding	Exercisable	Contractual Life		Intrinsic Value
$	0.10	200,000	200,000	2.90	$	—
$	0.25	200,000	200,000	0.44	$	—
$	0.40	2,850,000	2,850,000	1.73	$	—
$	0.45	500,000	500,000	1.00	$	—
		3,750,000	3,750,000	1.7 years	$	—

(C) Stock Options

The following tables summarize all option grants as of March 31, 2015, and the related changes during these periods are presented below:

Outstanding - December 31, 2014	15,566,652	0.13	1.32
Granted	—	—	—
Exercised	—	—	—
Forfeited or Canceled	—	—	—
Outstanding - March 31, 2015	15,566,652	—	1.07
Exercisable - March 31, 2015	15,566,652

MAX SOUND CORPORATION

NOTES TO FINANCIAL STATEMENTS

AS OF MARCH 31, 2015

(UNAUDITED)

(D) 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).

On November 15, 2012, the Company acquired the rights to an audio technology known as Liquid Spins, Inc. through a share exchange, whereby the Company issued 24,752,475 shares of common stock for their rights in Liquid Spins technology and other assets having a value of $10,000,000 based upon recent market value ($0.404/share).    The following assets were acquired in the transaction:

	Three Months Ended			Year Ended
	March 31, 2015			December 31, 2014
Intangible at fair value, Opening Balance	$	9,303,679		$	9,303,679
Consideration transferred  at fair value:
Common stock - 24,752,475 Shares		—			—
Net assets acquired:
Current assets		—			—
Cash		—			—
Total net assets acquired		—			8,011
Amortization		(1,206,949	)		(965,559	)
Intangible at fair value, Ending Balance	$	8,096,731		$	8,338,121

During the year ended December 31, 2013, the Company received an additional $8,011 related to the acquisition which reduced the carrying value of the intangible asset as of December 31, 2013.  For the year ended December 31, 201, the Company recorded $965,559_ of amortization expense.

For the year ended December 31, 2014 and 2013, the Company recorded $965,559 and $343,898, respectively, of amortization expense.

For the three months ended March 31, 2015 and 2014, the Company recorded $241,390 and $241,389, respectively, of amortization expense.

(D) Share Exchange

For the three months ended March 31, 2015 and 2014, the Company recorded $241,390 and $241,389, respectively, of amortization expense.

XML

Summary of Significant Accounting Policies and Organization (Details)	3 Months Ended		15 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2015
Summary of potentially dilutive securities
Potentially dilutive securities	194,495,295	45,863,963
Preferred Stock
Summary of potentially dilutive securities
Potentially dilutive securities	5,000
Convertible Debt Securities [Member]
Summary of potentially dilutive securities
Potentially dilutive securities	37,761,355	29,778,963
Equity Option [Member]
Summary of potentially dilutive securities
Potentially dilutive securities	15,566,652	12,700,000
Warrant [Member]
Summary of potentially dilutive securities
Potentially dilutive securities	6,500,000		3,385,000

XML

Convertible Debt - Derivative Liabilities (Tables)

3 Months Ended

Mar. 31, 2015

Notes to Financial Statements

Management Assumptions

Management Assumptions

	Commitment Date		Re-measurement Date
Expected dividends:	0	%	0	%
Expected volatility:	109% - 304%		120% - 140%
Expected term:	0.44 - 3 Years		0.16 - 2.9 Years
Risk free interest rate:	0.06% - 0.94%		0.12% - 1.10%

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Subsequent Events

3 Months Ended

Mar. 31, 2015

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

NOTE 10        SUBSEQUENT EVENTS

Through the filing of these financial statements, the Company converted a total of approximately $223,000 in convertible debt comprised of principal and accrued interest into approximately 9,704,897 common shares.

On April 1, 2015, the principal stockholder converted $150,000 of the line of credit owed into 5,000,000 shares of common stock at $0.03 per share.

On April 1, 2015, the Company issued 150,000 shares of common stock having a fair value of $4,470 ($0.0284/sh) in exchange for consulting services.

On April 1, 2015, the Company issued 300,000 shares of common stock having a f air value of $8,520 ($0.0284/sh) in exchange for consulting services.

On April 1, 2015, the Company extended the November 26, 2012 employment agreement with its VP of Music Development for another two year period, ending on November 27, 2016. The employee will receive 125,000 shares of common stock per quarter starting on April 1, 2015, and a salary of $10,000 per month. The employee's month base salary will increase to $14,000 per month in the event the Corporation received $1,000,000 from funding or revenues in the 2015 calendar year.

On April 21, 2015, the Company entered into an agreement whereby the Company will issue up to $54,600 in a convertible note. The note matures on April 21, 2016 and bears an interest charge of 8%. The conversion price equals the “Variable Conversion Price”, which is 65% of the lowest two trading prices for the common stock during the fifteen (15) trading day period prior to the conversion. The holder of the note has a right to convert all or any part of the outstanding unpaid principal amount into shares of common stock after six months. The Company received $52,000 of proceeds less and $2,600 in legal costs on April 21, 2015.

On April 21, 2015, the Company entered into an agreement whereby the Company will issue up to $204,000 in a convertible note. The note matures on January 23, 2016 and bears an interest charge of 8%. The conversion price equals the “Variable Conversion Price”, which is 65% of the lowest three trading prices for the common stock during the ten (10) trading day period prior to the conversion. The holder of the note has a right to convert all or any part of the outstanding unpaid principal amount into shares of common stock after six months. The Company received $200,000 of proceeds less and $4,000 in legal costs on April 27 , 2015.

On April 24, 2015, the Company entered into an agreement whereby the Company will issue up to $103,000 in a convertible note. The note matures on December 10, 2016 and bears an interest charge of 8%. The conversion price equals the “Variable Conversion Price”, which is lower of the either (i) the closing sale price of the common stock on the trading day immediate receding the closdite or and (ii) 65% of the lowest trading prices for the common stock during the ten (10) trading day period prior to the conversion. The holder of the note has a right to convert all or any part of the outstanding unpaid principal amount into shares of common stock after six months. The Company received $100,000 of proceeds less and $3,000 in legal costs on April 27, 2015.

On April 21, 2015, the Company entered into an agreement whereby the Company will issue up to $105,000 in a promissory note. The note matures on December 21, 2015 and bears an interest charge of 8%. On April 21, 2015, the Company entered into an agreement whereby the Company will issue up to $105,000 in a promissory note. The note matures on December 21, 2015 and bears an interest charge of 8%.

On April 21, 2015, the Company entered into an agreement whereby the Company will issue up to $105,000 in a convertible note. The note matures on April 21, 2016 and bears an interest charge of 8%. The conversion price equals the “Variable Conversion Price”, which is 65% of the lowest two trading prices for the common stock during the ten (10) trading day period prior to the conversion. The holder of the note has a right to convert all or any part of the outstanding unpaid principal amount into shares of common stock after six months. The Company received $95,000 of proceeds less $5,000 in debt issue costs and $5,000 in legal costs on April 21, 2015.

On May 1, 2015, the Company entered into an agreement whereby the Company will issue up to $150,000 in a convertible note. The note matures on November 1, 2015 and bears an interest charge of 8%. The conversion price equals the “Variable Conversion Price”, which is 60% of the lowest two trading prices for the common stock during the ten (10) trading day period prior to the conversion. The holder of the note has a right to convert all or any part of the outstanding unpaid principal amount into shares of common stock after six months. The Company received $147,000 of proceeds less and $3,000 in legal costs on May 1, 2015.

Subsequent to March 31, 2015, the Company received $106,000 from the principal stockholder under the terms of the line of credit and repaid $5,000 to the principal stockholder under the terms of the line of credit.

Subsequent to March 31, 2015, the Company repaid $455,729 on convertible notes.

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Litigation

3 Months Ended

Mar. 31, 2015

Loss Contingency [Abstract]

LITIGATION

NOTE 8       LITIGATION

From time to time, the Company may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm its business.

On February 21, 2012, the Company filed a suit for breach of contract, intentional misrepresentation, negligent misrepresentation, fraud, false advertising, and unfair competition with a former consultant.   It seeks damages due to their alleged failure to meet the contractual requirements regarding promotions.   The defendant has been served.   In September of 2014, the Company received a Default Judgment against the Defendant.    The Company is vigorously pursuing collection on this judgment.

On August 14, 2012, the Company, along with two shareholders of the Company, were named as a defendant in an action filed in the Superior Court for the State of California and the County of San Diego. The plaintiff alleges he was terminated by his former employer “Acoustics Control Sciences, LLC” (which is a company that is not affiliated with Max Sound Corporation) in August 2008 without receiving wages and other compensation allegedly due him. The plaintiff further claims that two of the members or “shareholders” of Acoustics Control Sciences, LLC, wrongfully transferred a patent owned by his former employer and this transfer prevented his former employer from paying the wages alleged due. According to the plaintiff, when the assets of his former employer were sold to the Company, Max Sound Corporation became a successor-in-interest to the plaintiff’s former employer. Plaintiff thus seeks unpaid wages and other compensation from each alleged successor-in-interest named in his complaint. This case will be vigorously prosecuted and has a good likelihood of success.

On August 11, 2014, the Company and VSL simultaneously filed trade secret and patent infringement actions against Google, Inc., and its subsidiaries YouTube, LLC, and On2 Technologies, Inc., relating to proprietary and patented technology owned by Vedanti Systems Limited (“Vedanti”), a subsidiary of VSL.  The patent infringement complaint was originally filed in the U.S. District Court for the District of Delaware; the trade secret suit was filed in Superior Court of California, County of Santa Clara.  On September 30, 2014, the Company filed notices of voluntary dismissal without prejudice as to both lawsuits. On October 1, 2014, the Company amended the patent complaint and filed it in the U.S. District Court for the Northern District of California. In this patent lawsuit, which remains pending, the Company contends that, in 2010, while Google was in discussions with Vedanti about the possibility of acquiring Vedanti's patented digital video streaming techniques and other proprietary methods, Google gained access to and received technical guidance regarding Vedanti’s proprietary codec, a computer program capable of encoding and decoding a digital data stream or signal.  The lawsuit further alleges that soon after Google and Vedanti initiated negotiations, Google willfully infringed Vedanti's patent by incorporating Vedanti's patented technology into Google's own VP8, VP9, WebM, YouTube, Google Adsense, Google Play, Google TV, Chromebook, Google Drive, Google Chromecast, Google Play-per-view, Google Glasses, Google+, Google’s Simplify, Google Maps, and Google Earth, without compensating Vedanti for such use.  Plaintiffs are seeking a permanent injunction against Google, compensatory damages, as well as treble damages. As exclusive agent to VSL to enforce all rights with respect to the subject technology, the Company has hired Grant & Eisenhofer PA and Buether Joe & Carpenter LLC to represent the Company in the suit on a contingency fee basis. The case will be vigorously prosecuted, and the Company believes it has a good likelihood of success. 

Additionally, on December 5, 2014, the Company, along with renowned architect Eli Attia, filed a lawsuit in the Superior Court of California, County of Santa Clara, against Google, its co-founders Sergey Brin and Larry Page, Google’s spinoff company Flux Factory, and senior executives of Flux. Plaintiffs’ allege misappropriation of trade secrets, breach of contract and other contract-related claims, breach of confidence, slander of title, violation of California’s Unfair Competition Law (California Business and Professionals Code §§ 17200 et seq.), and fraud, and also bring a claim for declaratory relief. The lawsuit contends that Google and the other Defendants stole Mr. Attia’s trade secrets, proprietary information, and know-how regarding a revolutionary architecture design and building process that he alone had invented, known as Engineered Architecture. Defendants are alleged to have engaged Mr. Attia in 2010 and 2011 to translate his architectural technology into software for a proof of concept, with the goal of determining at that point whether to continue with full-scale development with Mr. Attia. Instead, the lawsuit claims that once Mr. Attia had disclosed the trade secrets and proprietary information Defendants needed to bring the technology to market, they severed ties with Mr. Attia, and continued to use his technology without a license and without compensation, in order to bring the technology to market themselves. Plaintiffs seek a permanent injunction against Google, damages (including punitive damages), and restitution. As exclusive agent to Eli Attia to enforce all rights with respect to the subject technology, the Company has retained Buether Joe & Carpenter LLC to represent the Company in the suit, on a contingency fee basis. The case will be vigorously prosecuted, and the Company believes it has a good likelihood of success. 

On September 8 and 9, 2014, respectively, the Company and VSL were granted preliminary injunctions by the District Court of Berlin, Germany, against the Chinese company Shenzhen KTC Technology Co. Ltd. and the French company Pact Informatique S.A. Both companies have been offering products at the International Consumer Electronics Trade Show 2014 in Berlin, which, according to the company’s claim and the Preliminary Injunctions issued by the Court, infringed the rights to a patent. This patent is the German is the German part of the patent on optimized data transmission, owned by Vedanti, which is already asserted the United States infringement proceedings. The products in question are tablet computers and smart phones with Android OS and with the ability to encode videos in the format H.264. The injunctions were issued ex-parte and can be appealed by the Defendants. However, currently there are no indications that any prospective appeals will be interposed. The Company can still enforce claims for cost reimbursement with regard to these legal proceedings.

On December 2, 2014, the Company filed a patent infringement action against Google, Inc., Germany GmBH, Google Commerce Ltd. and YouTube LLC with the District Court of Mannheim, Germany. The asserted patent infringement concerns the same patent infringement asserted in the in the prior Germany Preliminary Injunctions described herein. The Complaint alleges that Google Inc. and it above-named subsidiaries are offering and selling products which can also decode and show videos, which have been encoded in a patent protected and proprietary way. The complaint also avers that YouTube LLC offers to German customers, which are encoded and transmitted in a manner claimed and protected by the patent. The Company mainly seeks a permanent injunction against the Defendants, damages and information regarding past infringements.

On January 26, 2015, the Company was named as a defendant in an action filed in the Superior Court for the State of California and the County of Los Angeles captioned Bibicoff Family Trust v. Max Sound Corporation (Case No. SC123679). In the complaint the plaintiff alleges a cause of action for breach of contract associated with the non-payment by the Company for certain services plaintiff agreed to provide to the Company. The Company interposed a cross-complaint against plaintiffs averring causes of action for breach of contract, fraud, and negligent misrepresentation by defendants with respect to defendants’ undisclosed inability to perform the services that are the subject of this dispute. This lawsuit will be vigorously defended and prosecuted. While this lawsuit is in its infancy, the Company believes there is a strong likelihood of success on the merits with respect to the defending and prosecuting this action.

The Company intends to vigorously prosecute these various patent infringement litigations. The Company believes it has a good likelihood of success associated with these patent infringement lawsuits. However, no assurance can be given by the Company as to the ultimate outcome of these actions or its effect on the Company. The law firm is prosecuting these action on a pure contingency fee basis.

No assurance can be given as to the ultimate outcome of these actions or its effect on the Company.

XML

Intangible Assets

3 Months Ended

Mar. 31, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

INTANGIBLE ASSETS

NOTE 9        INTANGIBLE ASSETS

As of December 31, 2014 and December 31, 2013, the Company owns certain trademarks and technology rights.    See Note 1 (I).

Intangible assets were comprised of the following at March 31, 2015 and December 31, 2014:

	Useful Life		March 31, 2015			December 31, 2014
Distribution rights	10 Years	$	9,647,577		$	9,647,577
Trademarks	Indefinite		7,500,000			7,500,000
Licensing Rights	Indefinite		2,064,000			2,064,000
Software	3 Years		—			—
Other	Indefinite		275			275
Accumulated amortization			(1,624,847	)		(1,361,257	)
Net carrying value		$	17,587,005		$	17,850,595

For the three months ended March 31, 2015 and 2014, amortization expense related to the intangibles with finite lives totaled $263,590 and $241,390, respectively, and was included in general and administrative expenses in the statement of operations.   

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Summary of Significant Accounting Policies and Organization (Policies)

3 Months Ended

Mar. 31, 2015

Notes to Financial Statements

Organization and Basis of Presentation

(A) Organization and Basis of Presentation

Max Sound Corporation (the "Company") was incorporated in Delaware on December 9, 2005, under the name 43010, Inc. The Company business operations are focused primarily on developing and launching audio technology software.

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.

Use of Estimates

(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.

Cash and Cash Equivalents

(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 March 31, 2015 and 2014, the Company had no cash equivalents.

Property and Equipment

(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.

Research and Development

(E) Research and Development

The Company has adopted the provisions of FASB Accounting Standards Codification No. 350, Intangibles - Goodwill & Other (‘ASC Topic 350'). 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.

Concentration of Credit Risk

(F) Concentration of Credit Risk

The Company at times has cash in banks in excess of FDIC insurance limits. The Company had $0 in excess of FDIC insurance limits as of March 31, 2015 and 2014.

Revenue Recognition

(G) 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 revenues of $0 and $1,236 for the years ended March 31, 2015 and 2014, respectively.

Advertising Costs

(H) 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 $0 and $4,805 for the years ended March 31, 2015 and 2014, respectively.

Identifiable Intangible Assets

(I) Identifiable Intangible Assets

As of March 31, 2015 and December 312, 2014, $7,500,275 of costs related to registering a trademark and acquiring technology rights (audio technology known as Max Audio Technology (MAXD) 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.

On November 15, 2012, the Company acquired the rights to assets and audio technology known as Liquid Spins, Inc. through a share exchange, whereby the Company issued 24,752,475 shares of common stock for their rights in Liquid Spins technology (See Note 8 (H)). As of March 31, 2015 and December 31, 2014, $8,096,731 and $8,338,121, respectively, of costs related to this intangible remain capitalized. The technology was placed in service on August 23, 2013 with a useful life of 10 years. However, the technology will be reviewed for impairment annually or more frequently if impairment indicators arise.

On May 19, 2014, the Company entered into an agreement with VSL Communications to acquire the rights to intellectual property titled ‘Optimized Data Transmission System and Method' (‘ODT') through a cash payment of $500,000 in addition to a share issuance, whereby the Company issued 10,000,000 shares of common stock, valued at $1,000,000 ($0.10/share). In exchange, the Company received a perpetual, exclusive, worldwide license to the ODT technology for all fields of use. In addition, the Company issued 1,000,000 shares of common stock, valued at $120,000 ($0.12/share), as compensation for the introduction and identification of a seller based on the agreement dated April 10, 2014.

As of March 31, 2015 and December 31, 2014, $1,620,000 of costs related to the ‘ODT' intangible asset remains capitalized. The technology will be reviewed for impairment annually or more frequently if impairment indicators arise. In connection with this agreement, the Company is obligated to make an additional five (5) payments totaling $1,000,000 to be made every 30 days, with the thirty (30) day periods to be waived if fund raising occurs on an anticipated faster time line. The payments of additional cash are contingent on the following funding criteria:

● The Company shall pay set increments of cash based on a percentage of gross funds received through funds raised.

● The Company shall pay 20% of such monies as soon as they are received.

In connection with funds raised through March 31, 2015, the Company recorded a liability and expensed $484,056 as royalty cost, related to the 20% fee, as of March 31, 2015, $30,000 has been paid . The remaining liability as of March 31, 2015, is $454,556 and is included in accounts payable.

The Company shall act as the exclusive agent to facilitate and negotiate any opportunities on behalf of ODT to Companies, Organizations and other qualified entities. Upon any closing, ODT shall receive 50% of gross dollars and the Company shall receive the other 50% at the time of a completion of any transaction opportunity, including legal settlements after subtracting applicable contingent legal fees. The term of the agreement is for the life of the acquired intellectual property.

On August 11, 2014, the Company and VSL simultaneously filed trade secret and patent infringement actions against Google, Inc. and its subsidiaries, YouTube, LLC and On2 Technologies, Inc., relating to proprietary and patented technology owned by Vedanti Systems Limited, a subsidiary of VSL.  The patent infringement complaint was brought in U.S. District Court for the District of Delaware and the trade secret suit was filed in Superior Court of California, County of Santa Clara.  The lawsuits contend that, in 2010, while Google was in discussions with Vedanti about the possibility of acquiring Vedanti's patented digital video streaming techniques and other proprietary methods, Google gained access to and received technical guidance regarding Vedanti's proprietary codec, a computer program capable of encoding and decoding a digital data stream or signal.  The complaints allege that soon after the two companies initiated negotiations, Google began implementing Vedanti's technology into its own WebM/VP8 video codec without informing Vedanti, and without compensating Vedanti for its use.  Plaintiffs are seeking a permanent injunction against Google, compensatory damages, as well as treble damages. As exclusive agent to VSL to enforce all rights with respect to the subject technology, the Company has hired Grant & Eisenhofer, PA to represent the Company and VSL in the suits. These cases will be vigorously prosecuted and the Company believes it has a good likelihood of success. 

On May 22, 2014, the Company entered into a five (5) year agreement to acquire the rights to intellectual property titled ‘Engineered Architecture' (‘EA Technology') through a cash payment of $50,000 in addition to a share issuance, whereby the Company issued 4,000,000 shares of common stock, valued at $394,000 ($0.0985/share). In exchange, the Company received for the term of the agreement, the exclusive worldwide right to use the EA Technology. As of March 31, 2015, $392,200 of costs related to this intangible remains capitalized. The technology will be reviewed for impairment annually or more frequently if impairment indicators arise. In connection with this agreement, the Company is obligated to make an additional five (5) payments totaling $500,000 to be made every 30 days, with the thirty (30) day periods to be waived if fund raising occurs on an anticipated faster time line. The payments of additional cash are contingent on the following funding criteria:

● The Company shall pay set increments of cash based on a percentage of gross funds received through funds raised.

● The Company shall pay 10% of such monies as soon as they are received.

In connection with funds raised through March 31, 2015, the Company recorded a liability and expensed $242,028 as royalty cost, related to the 10% fee, as of March 31, 2015, $40,000 has been paid. The remaining liability as of March 31, 2015, is $202,028 and is included in accounts payable.

The Company shall act as the exclusive agent to facilitate and negotiate any opportunities on behalf of EA Technology to Companies, Organizations and other qualified entities. Upon any closing, EA shall receive 50% of gross dollars and the Company shall receive the other 50% at the time of a completion of any transaction opportunity, including legal settlements after subtracting applicable contingent legal fees. In the event the Company sublicenses EA to other entities, profits shall be split evenly 50%/50%.

Impairment of Long-Lived Assets

(J) Impairment of Long-Lived Assets

The Company accounts for its long-lived assets in accordance with ASC Topic 360-10-05, ‘Accounting for the Impairment or Disposal of Long-Lived Assets.' ASC Topic 360-10-05 requires that long-lived assets, such as technology rights, be reviewed for impairment annually, or whenever events or changes in circumstances indicate that the historical cost carrying value of an asset may no longer be appropriate. The Company assesses recoverability of the carrying value of an asset by estimating the future net cash flows expected to result from the asset, including eventual disposition. If the future net cash flows are less than the carrying value of the asset, an impairment loss is recorded equal to the difference between the asset’s carrying value and fair value or disposable value. No impairments were recorded for the three months ended March 31, 2015 and 2014, respectively.

Loss Per Share

(K) 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 stock options would be anti-dilutive and accordingly, is excluded from the computation of earnings per share.

The computation of basic and diluted loss per share for the three months ended March 31, 2015 and 2014, excludes the common stock equivalents of the following potentially dilutive securities because their inclusion would be anti-dilutive:

	March 31, 2015		March 31, 2014
Stock Warrants (Exercise price - $0.25 - $.52/share)		6,500,000		3,385,000
Stock Options (Exercise price - $0.10 - $.50/share)		15,566,652		12,700,000
Convertible Debt  (Exercise price - $0.07 - $.0817/share)		167,428,643		29,778,963
Series A Convertible Preferred Shares ($0.04/share)		5,000,000		—
Total		194,495,295		45,863,963

Income Taxes

(L) 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.

The Company's federal income tax returns are no longer subject to examination by the IRS for the years prior to 2011, and the related state income tax returns are no longer subject to examination by state authorities for the years prior to 2010.

Business Segments

(M) Business Segments

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

Recent Accounting Pronouncements

(N) Recent Accounting Pronouncements

On June 10, 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation ("ASUE 2014-10"). The guidance is intended to reduce the overall cost and complexity associated with financial reporting for development stage entities without reducing the availability of relevant information. The FASB also believes the changes will simplify the consolidation accounting guidance by removing the differential accounting requirements for development stage entities. As a result of these changes, there no longer will be any accounting or reporting differences in GAAP between development stage entities and other operating entities. For organizations defined as public business entities, the presentation and disclosure requirements in Topic 915 will no longer be required, starting with the first annual period beginning after December 15, 2014, including interim periods therein. Early application is permitted for any annual reporting period or interim period for which the entity's financial statements have not yet been issued (public business entities) or made available for issuance (other entities). The Company has elected early application of this ASU and implemented the changes in their financial statement for the year ended December 31, 2014.

In June 2014, FASB issued Accounting Standards Update ('ASU') No. 2014-12, 'Compensation Ð Stock Compensation (Topic 718); Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period'. The amendments in this ASU apply to all reporting entities that grant their employees share-based payments in which the terms of the award provide that a performance target that affects vesting could be achieved after the requisite service period. The amendments require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in Topic 718 as it relates to awards with performance conditions that affect vesting to account for such awards. For all entities, the amendments in this ASU are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. Entities may apply the amendments in this ASU either (a) prospectively to all awards granted or modified after the effective date or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. If retrospective transition is adopted, the cumulative effect of applying this update as of the beginning of the earliest annual period presented in the financial statements should be recognized as an adjustment to the opening retained earnings balance at that date. Additionally, if retrospective transition is adopted, an entity may use hindsight in measuring and recognizing the compensation cost. This updated guidance is not expected to have a material impact on our results of operations, cash flows or financial condition.  We are currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition.

In August 2014, the FASB issued Accounting Standards Update 'ASU' 2014-15 on 'Presentation of Financial Statements Going Concern (Subtopic 205-40) Ð Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern'. Currently, there is no guidance in U.S. GAAP about management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern or to provide related footnote disclosures. The amendments in this Update provide that guidance. In doing so, the amendments are intended to reduce diversity in the timing and content of footnote disclosures. The amendments require management to assess an entity's ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management's plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management's plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one

year after the date that the financial statements are issued (or available to be issued). We are currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition.

All other newly issued accounting pronouncements but not yet effective have been deemed either immaterial or not applicable.

Fair Value of Financial Instruments

(O) Fair Value of Financial Instruments

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

Stock-Based Compensation

(P) 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 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.

Reclassification

(Q) 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.

Derivative Financial Instruments

(R) 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. 

Original Issue Discount

(S) Original Issue Discount

For certain convertible debt issued, the Company provides the debt holder with an original issue discount. The original issue discount is recorded to debt discount, reducing the face amount of the note and is amortized to interest expense over the life of the debt.

Debt Issue Costs and Debt Discount

(T) Debt Issue Costs and Debt Discount

The Company may pay debt issue costs, and record debt discounts in connection with raising funds through the issuance of convertible debt. These costs are amortized to interest expense over the life of the debt. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed.

Licensing & Distribution

(U) Licensing & Distribution

On May 28, 2014, the Company entered into a license agreement with Akyumen Technologies Corp. ('Akyumen'), an original equipment manufacturer of mobile devices, for the non-exclusive, non-transferable, indivisible worldwide license rights to the use of Company's API technology in Akyumen's mobile devices.  The license is for five years and is renewable, with the Company's approval, at Akyumen's request.

As consideration for the above-referenced license rights, Akyumen agreed to pay the Company royalties of $2.50 per Akyumen device that utilizes the API technology, to be payable on a monthly basis within 15 days after the close of the calendar month.  Akyumen also agreed to pay, within three months of first sale, 50% of non-recurring engineering costs to port the Technology onto the operating systems of the Akyumen devices, inclusive of any local fees, taxes, or other charges.

On June 16, 2014, MAXD entered into a license and revenue share agreement with LOOKHU, an online subscription service that delivers movies, music, television shows, apps and games. The agreement grants LOOKHU non-exclusive, non-transferable, indivisible worldwide license rights to the distribution and use of the Company's Application Programming Interface (‘API’) audio processor technology. The license is for five years and is renewable, with the Company's approval, at LOOKHU's request.

As consideration for the above-referenced license rights, LOOKHU agreed to pay the Company royalties of $0.25 per month per paid subscription to the technology, to be payable on a monthly basis.  Additionally, LOOKHU agreed to pay the Company 4% of the net advertising revenue derived from advertising that utilizes the technology, to be payable on a quarterly basis.

Additionally, for the term of the agreement, the parties agreed to split, on a 50/50 basis, net revenue derived from sales of digital music or songs played from a LOOKHU software player, to be payable on a monthly basis.

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Stockholders' Equity - Summary of warrants activity (Details)	3 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Equity [Abstract]
Number of Warrants, Balance	3,750,000	3,750,000
Weighted Average Remaining Contractual Life (in Years)	1 year 4 months 24 days

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Stockholders' Equity (Tables)

3 Months Ended

12 Months Ended

Mar. 31, 2015

Dec. 31, 2014

Equity [Abstract]

Summary of Common Stock

Transaction Type	Quantity			Valuation			Range of Value per share
Conversion of convertible debt and accrued interest		29,796,782		$	791,444			$0.02715 - $0.14175
Services - rendered		950,000			32,730			$0.028 - $0.063
Return of shares		(120,000,000	)		(1,200	)	$	0.00001
Preferred stock issued in exchange of common stock		5,000,000			50		$	0.00001
Total shares issued		(89,253,218	)	$	1,401,650

Transaction Type	Quantity			Valuation		Range of Value per share
Conversion of convertible debt and accrued interest	48,998,342		$	3,421,019		$0.02715 - $0.14175
Services - rendered	3,150,000			678,030		$0.093 - $0.365
Acquisition of intangibles	15,000,000			1,514,000		$0.0985 - $0.12
Return of shares	(4,250,000	)		—		$0.00 - $0.00
Settlement of accounts payable	1,000,000			90,000	$	0.09
Total shares issued	63,898,342		$	5,703,049

Summary of warrants activity

Balance, December 31, 2014	3,750,000	$	0.38	1.7
Granted	—	$	—
Exercised	—	$	—
Cancelled/Forfeited	—	$	—
Balance, March 31, 2015	3,750,000	$	0.38	1.4

Summary of all outstanding and exercisable warrants

				Weighted Average
	Exercise	Warrants	Warrants	Remaining		Aggregate
	Price	Outstanding	Exercisable	Contractual Life		Intrinsic Value
$	0.10	200,000	200,000	2.90	$	—
$	0.25	200,000	200,000	0.44	$	—
$	0.40	2,850,000	2,850,000	1.73	$	—
$	0.45	500,000	500,000	1.00	$	—
		3,750,000	3,750,000	1.7 years	$	—

					Weighted Average
	Exercise	Warrants	Warrants	Warrants	Remaining		Aggregate
	Price	Outstanding	Exercisable	Exercisable	Contractual Life		Intrinsic Value
$	0.10	200,000	200,000	200,000	2.90	$	—
$	0.25	200,000	200,000	200,000	0.44	$	—
$	0.40	2,850,000	2,850,000	2,850,000	1.73	$	—
$	0.45	500,000	500,000	500,000	1.00	$	—
		3,750,000	3,750,000	3,750,000	1.7 years	$	—

Summary of assets acquired

	Three Months Ended			Year Ended
	March 31, 2015			December 31, 2014
Intangible at fair value, Opening Balance	$	9,303,679		$	9,303,679
Consideration transferred  at fair value:
Common stock - 24,752,475 Shares		—			—
Net assets acquired:
Current assets		—			—
Cash		—			—
Total net assets acquired		—			8,011
Amortization		(1,206,949	)		(965,559	)
Intangible at fair value, Ending Balance	$	8,096,731		$	8,338,121

Summary of option activity

Outstanding - December 31, 2014	15,566,652	0.13	1.32
Granted	—	—	—
Exercised	—	—	—
Forfeited or Canceled	—	—	—
Outstanding - March 31, 2015	15,566,652	—	1.07
Exercisable - March 31, 2015	15,566,652

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Debt - Convertible Debt (Details) (USD $)	3 Months Ended
	Mar. 31, 2015
Borrowings during period	$ 792,500
Non-Cash Reclassification of accrued interest converted	15,665
Repayments	(55,000)
Conversion of debt to into 29,796,782 shares of common stock with a valuation of $784,768 ($0.09 - $0.27/share) including the accrued interest of $15,665	(784,768)
Convertible Debt Beginning Balance, Value	3,028,418
Convertible Debt Ending Balance, Value	$ 2,996,815
Convertible Debt, Interest Rate, During Period, Minimum	8.00%
Convertible Debt, Interest rate, During Period, Maximum	10.00%
Convertible Debt, Maturity	February 26, 2015 - June 18, 2016
Convertible Debt, Interest Rate, Beginning Value, Minimum	4.00%
Convertible Debt, Interest Rate, Ending Value, Maximum	10.00%
Convertible Debt, Interest Rate, Ending Value, Minimum	4.00%
Convertible Debt, Interst Rate, Ending Value, Maximum	10.00%

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Stockholders' Equity - Summary of option activity (Details) (USD $)	Dec. 31, 2013
Equity [Abstract]
Beginning Balance - Outstanding, Shares	15,566,652
Beginning Balance - Outstanding, Weighted Average Exercise Price	$ 0
Ending Balance - Outstanding, Shares	15,566,652
Ending Balance - Outstanding, Weighted Average Exercise Price	$ 0

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Statements of Cash Flows (Unaudited) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Cash Flows From Operating Activities:
Net Loss	$ (1,973,423)	$ (4,189,781)
Adjustments to reconcile net loss to net cash used in operations
Depreciation/Amortization	19,208	82,211
Stock and stock options issued for services	32,731	1,568,601
Warrants issued for services
Loss on debt conversion settled through the issuance of stock		42,085
Amortization of intangible	263,590	343,898
Amortization of stock based compensation		18,750
Amortization of debt offering costs	17,361	96,402
Amortization of debt discount	953,494	728,736
Change in fair value of derivative liability	(460,555)	1,717,264
Loss on debt extinguishment		18,596
Derivative Expense	(167,523)
Warrants issued for services treated as derivative liabilities
Cash paid in connection with acquisition of assets and intellectual property
Changes in operating assets and liabilities:
(Increase)/Decrease in inventory	29,275
(Increase)/Decrease in prepaid expenses	1,245	50,799
Increase/(Decrease) accounts payable	240,528	193,191
Cash Overdraft		90,362
Increase/(Decrease) in accrued expenses	69,453	115,519
Net Cash Used In Operating Activities	(639,570)	(651,799)
Cash Flows From Investing Activities:
Cash paid in connection with acquisition of assets and intellectual property
Purchase of property equipment	(2,757)	(14,979)
Net Cash Used In Investing Activities	(2,757)	(14,979)
Cash Flows From Financing Activities:
Proceeds from stockholder loans / lines of credit	25,000	50,000
Repayment from stockholder loans / lines of credit	(75,000)
Cash paid on convertible notes	(55,000)
Proceeds from issuance of convertible note, less offering costs and OID costs paid	733,477	450,000
Proceeds from warrants exercised		43,080
Net Cash Provided by Financing Activities	628,477	500,000
Net Increase / (Decrease) in Cash	(13,850)	(166,778)
Cash at Beginning of Period	35,747	166,778
Cash at End of Period	21,897
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 conversion of convertible debt and accrued interest	1,368,990	937,978
Conversion of common to preferred stock	$ 1,200

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Property and Equipment

3 Months Ended

Mar. 31, 2015

Notes to Financial Statements

Property and Equipment

NOTE 5           PROPERTY AND EQUIPMENT

At December 31, 2014, and December 31, 2013, respectively, property and equipment is as follows:

		March 31, 2015			December 31, 2014
Website Development	$	294,795		$	294,795
Furniture and Equipment		99,881			99,881
Leasehold Improvements		6,573			6,573
Software		53,897			53,897
Music Equipment		2,247			2,247
Office Equipment		74,412			71,652
Domain Name		1,500			1,500
Sign		628			628
Total		533,933			531,173
Less: accumulated depreciation and amortization		(361,487	)		(342,277	)
Property and Equipment, Net	$	172,446		$	188,896

Depreciation/amortization expense for the three months ended March 31, 2015 totaled $19,207.

Depreciation/amortization expense for the three months ended March 31, 2014 totaled $26,464.

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Debt - Debt Issue Costs (Details) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Debt Disclosure [Abstract]
Debt issue costs	$ 221,693	$ 146,055
Accumulated amortization of debt issue costs	(185,006)	(118,529)
Debt issue costs - net	$ 36,687	$ 27,526

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Stockholders' Equity - Summary of fair value based upon management assumptions (Details) (USD $)	3 Months Ended	12 Months Ended
	Mar. 31, 2015	Dec. 31, 2013
Equity [Abstract]
Expected dividends	$ 0	$ 0
Expected volatility	137.82%	14030.00%
Expected term	3	3
Risk free interest rate	1.00%	3.70%

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Property and Equipment (Tables)

3 Months Ended

Mar. 31, 2015

Notes to Financial Statements

Summary of property and equipment

		March 31, 2015			December 31, 2014
Website Development	$	294,795		$	294,795
Furniture and Equipment		99,881			99,881
Leasehold Improvements		6,573			6,573
Software		53,897			53,897
Music Equipment		2,247			2,247
Office Equipment		74,412			71,652
Domain Name		1,500			1,500
Sign		628			628
Total		533,933			531,173
Less: accumulated depreciation and amortization		(361,487	)		(342,277	)
Property and Equipment, Net	$	172,446		$	188,896