2014

Max Sound CEO Releases MAXD Go To Market Strategy In Letter To Shareholders

To all MAXD Shareholders –

First, congratulations to all of our outstanding personnel team who have devoted countless hours to our success and to all of our investors who have become believers in our mission to make MAXD the new Brand Standard across all major audio vertical markets in Multi-media, Entertainment, and Communication Technology. After 30 months of Research and Development we have finally begun our Go-To-Market Strategy as a Sales and Marketing Driven company.

What follows is a summary of where we are at now, how we are taking MAXD to market, how we will make money going forward and what our sales model and revenue targets look like. I couldn't be more excited about our prospects. With the pieces we have in place already, we believe that just executing diligently on that will create a clear path to revenue, then cash flow positivity, and then serious profits. The following recap of publically available information is contained below to summarize the strategy we are employing to make us prominent in several vertical markets that have the potential for the highest sales and profit yields.

2012 provided many breakthroughs for us in our hardware and software development improvements allowing us to move into the "go to market" stage and begin to monetize MAXD technology, hence your investment in our company. Based upon what we are rolling out at this time, we expect to have enough tangible results between now and the end of Q1 2013 that we believe we will be able to forecast actual substantive numbers by Q2 2013 for the year and then going forward well into the future.

Earlier this year at the 54th Grammy Awards, we introduced MAXD to the music industry. Since then, we have made substantial progress in our efforts to roll out celebrity endorsements and consumer and industry adoption across several key multi-media vertical markets.

While several of the markets we are aligning with generally range in size from several billion to 75 billion dollars annually, the area we have tremendous focus on is the mobile industry which last year exceeded a trillion dollars. Growth expectations in Mobile is expected to increase for several more years as the world continues to expand its voracious demand for personal communication tools, resources and delivery.

The key elements we have been rolling out with are Celebrity Endorsements, Consumer Adoption, Industry Integration and Brand Awareness. Below is a recap of elements that have already transpired and are continuing to evolve as well as what we feel we will accomplish for the company and you our shareholders.

LiquidSpins.com
We have entered into a definitive agreement to acquire the assets of Liquid Spins which we expect to be complete and transitioned by the end of this month. Liquid Spins first major roll out to retail sales through music download cards begins this month in time for the holidays. Liquid Spins is a strategic move that aligns MAXD technology with a significant audience of music consumers. It allows us to promote music sales to everyone who uses the MAXD High Definition Audio App and it also allows music buyers to get a free app from us after they purchase music from Liquid Spins.

Most importantly, we receive the same 30% profit on every music sale, just like iTunes does. So here is the great differentiator - we are going to share a fourth of that profit or 7.5% on every sale with every Artist who wants to use the Liquid Spins QR (quick read code) and the MAXD HD Audio App to drive their fans to purchase their music from us. That is what we are doing Pitbull and we believe this will set the standard for us to do the same thing with many other artists. We believe most artists will be thrilled to receive an additional 7.5% on every sale of their music.

Liquid Spins has developed a unique marketing deployment that will put the world's largest music catalogues and MAXD App's in front of millions of potential retail consumers in 2013 and beyond. We believe that Liquid Spins has a decisive competitive advantage in the non-traditional markets.  To receive more information on the Liquid Spins branding strategy, send an email to liquidspins@maxsound.com       

Liquid Spins has aligned itself with InComm. InComm is the industry leading marketer, distributor and technology innovator of stored-value gift and prepaid products having 225,000 partner locations generating nearly $10 billion in retail sales of prepaid products in 2009 and over 1 billion customers every week. 

Just a few months ago, Digital music download sales reached the tipping point and now represent over 50% of all music sold having grown at a rate of 8.3% in 2011 to $5.23 billion, according to the IFPI (International Federation of the Phonographic Industry). Within the United States, the total digital music revenue rose 17.3 percent to $2.62 billion.

So revenue begins this month for MAXD due to Liquid Spins current roll out and by Q2 2013 we believe we will be able to forecast future outcomes based on the early results.

MAXDONLINE.com
The launch of MAXDONLINE.com  We have entered into agreements with some of the largest publishing houses to convert their Audio Books inventory to MAXD HD and sell them at our online store sharing the revenue with the publishers on a 50/50 basis of the retail price. We are currently processing the libraries of Simon and Shuster and Harper Collins among others and plan to launch them for sale in Q1.

The site is fully ready for launch including our search, preview and ecommerce functionality however the conversions are taking longer than expected due to the massive amount of titles we received and additional technology we are building to batch process these audiobooks.

For reference, audiobook revenues across trade publishing topped $2 billion in 2011, more than doubling from $869 million in 2010, according to the latest figures from Book Stats. As of today, we have an inventory of over 15,000 audio books ready for processing in MAXD HD Audio.

The benefit we feel we offer is that a MAXD Processed audiobook will be the smallest possible file size and will also sound better than any other version of the same book.

Qualcomm Snap Dragon Processor & Hexagon program
On September 27th, after many months of meetings, with our engineers performing MAXD HD tests of Cellular Voice, Music and Movies on smartphones, we entered into an agreement to join Qualcomm's Hexagon Access DSP Program. Our programmers are currently developing the MAXD HD audio technology for implementation onto the Snapdragon DSP S4 Processor.

The primary goal we had in joining this program was for MAXD HD audio to become embedded on the DSP (Digital Signal Processor) and available for licensing to 86 Qualcomm OEM's that represent a significant portion of the mobile Smartphone and tablet market globally.

Qualcomm is the global leader in chip sales in the Smartphone market. Neilson reports show that as of May 2012 110 million users in the US have Smartphone's accounting for 54.9% of the total US cellular phone market. Gartner reports that total Smartphone's sold globally in 2011 totaled 472 million. The study found that 821 million smartphones and tablets will be purchased worldwide in 2012 and pass the billion mark in 2013.

In years past, the timeline to market on a cellular device chipset for new technologies was as long as two years. Today however, thanks to the Qualcomm Hexagon program, the timeline can be shortened to six months. Our goal is to complete our development onto the Snapdragon Processor and then participate in the first half of 2013 with a licensing partnership that gives us the opportunity to become a relevant player in mobile audio. Stay tuned as this evolves because for us it is a very special opportunity for MAXD.

The MAXD HD Audio App Player
The launch of the Pitbull MAXD Android App Player will mark the beginning of our White Label program. We created this program to allow major artists and companies with significant web based and social media customers consuming audio products to customize the MAXD Player and push it out to their millions of consumers who will be experiencing MAXD HD Audio first for free and then upgrade to paid pro-versions which will become available in the near future.

In every version of White Labeled Apps we are customizing a unique "Buy Music tab" that direct the Artist's audience to buy music from Liquid Spins, thereby creating more sales of music for us and more money going back to each Artist thereby continually incentivizing them to drive their audiences to MAXD creating ever-increasing consumer adoption, brand awareness, sales and numerous cross promotional opportunities for us, artists and a variety of marketing partners.

The first free version of the MAXD HD Audio App for Mp3's only has just been made available on Google Play on the Android platform and we are well underway to completing the development and launching of Apple iOs and Windows platforms for release in Q1 2013. This is our first actual retail product and so it is an understatement to say we are ecstatic. Download the MAXD Pitbull App here.

Market research firm Gartner has forecasted that global mobile app store revenues will triple from $5.2 billion in 2010 to $15 billion in 2011, and keep growing to an astounding $58 billion by 2014.

Pitbull – Our International Brand Ambassador
For those of you who don't know who Pitbull is, just Google him. He is just about the biggest star in the world today in nearly every metric.

In the next 30 days, we will rollout a one minute Pitbull commercial in English and Spanish endorsing MAXD and the MAXD Pitbull App. We expect that from this, we will be able to project in Q1 how many free downloads we will receive from Pitbull's thirty-plus million fans on his social media who will see the commercial and a percentage will take the free download.

As the audience grows, we will launch a paid pro-version experimenting with different price points to see how many people will upgrade at what price and based on what features they find most desirable such as no ads, video with MAXD audio, video games with MAXD Audio and eventually streaming audio in MAXD.

We are splitting the App Revenue 50/50 with Pitbull, however we believe that we will be able to receive 75% of the future App revenue as our partnership opportunity grows and due to the fact that Artists will use the App primarily to receive the 7.5% additional profit on the sale of their own music. It is important to understand we are offering to give artists 7.5% that they don't currently receive and that they have no other way to get. For that, all they have to do is drive their audience to buy from Liquid Spins seamlessly through the App and through QR Codes added to all of their promotions.

The number of downloads we receive from Pitbull will give us a strong baseline on what other stars can deliver based on the size of their followings. As we accumulate millions of downloads, this has great value in terms of customer acquisition and opportunities to build sales and marketing relationships with these audiences and our product marketing partners at Liquid Spins.

AEG Network Live
On Sept 29th, AEG Network Live broadcast the Global Poverty Concert in Central Park NY to millions of viewers worldwide in MAXD HD Audio. This was a history-making event! The MAXD technology flawlessly restored all network streams to HD Audio in "Real time" for over 5 hours with no noticeable delay to video and no down time. As a reminder AEG Network LIVE is the industry's largest provider of live, digital and 3D entertainment.

John Rubey CEO of AEG Live was so impressed with the audio quality he has agreed to use MAXD HD Audio in future concert audio deployments around the world. This was the first real time network deployment of MAXD live.

The AEG relationship opens doors into its many companies that all have a large consumer demand for MAXD HD Audio including Regal Theaters and Cenemark Theaters totalling over 500 locations and 16,000 screens nationwide and more than 100 live venues around the world including Staples Center in Los Angeles. I am currently working with Mr. Rubey on a program to sell music and MAXD/AEG White Label Apps into the AEG global arena of consumers. By being in theaters nationwide, there is a serious opportunity to provide MAXD branding and audio quality awareness to audiences of movie goers every day.  

As this relationship with AEG expands in 2013, we believe we will be able to forecast what this will mean to our revenue potential in live venues and how it will factor in with our overall plan to combine MAXD HD Audio in Apps, with Artists, Major Brands and sales of music at Liquid Spins.

MAXD HD Audio Technology is currently delivering high definition audio in a tiny file size that is better for your hearing than today's mp3s. The implications are serious. MAXD mp3 files sound incredible but they're one-tenth the size of a .wav file and they sound better than the original. There's more claritydimensionarticulation and impact in every range of the audio spectrum. Plus artifacts and harshness are gone.

So no billion dollar changeover. No need for bigger pipes, bigger servers, new consumer appliances, or higher data costs that would be rejected by consumers anyway because they would refuse to pay for it. Nothing will change except the sound. Consumers won't have to move a muscle to adapt. Their phone data bills will stay the same as standard mp3. No higher data costs to download or stream high definition audio.

MAXD is proving that size matters, fitting life-like HD Audio into our existing mp3 and compressed audio eco-system. So the wait for high definition audio is over.

MAXD HD Audio technology has the ability to bring disruption of the best kind, much like Google taking over search from Yahoo. Google didn't need a whole new web browser to revolutionize search. They slid right into the existing eco-system. Once people got better search results, millions migrated. 

MAXD intends to become mainstream in much the same way. It's a time to get ready for a breakthrough technology that finally reverses mp3 audio degradation and can add new revenue to the bottom line for Companies in every vertical market in Entertainment Multi-media and Communication technologies. We believe a majority of audio content and gear can be powered by MAXD within the next two years.

Thank you sincerely for taking the time to listen and for your continued support.

Very truly yours,

John Blaisure
CEO, MAXD

Max Sound joins Qualcomm Hexagon Access Program
http://www.ktvn.com/story/19891120/max-sound-joins-qualcomm-hexagon-access-program   

MAXD & PITBULL DELIVER THE PARTY WORLDWIDE!
http://www.pitbullmusic.com/us/news/maxd-pitbull-deliver-party-worldwide-0

AEG Network LIVE to Broadcast Future Live Concert Events in MAXD HD
http://finance.yahoo.com/news/aeg-network-live-broadcast-future-130600173.html

Online Music Retailer, Liquid Spins to be acquired by MAXD
http://finance.yahoo.com/news/online-music-retailer-liquid-spins-140700226.html

Watch these 2 Liquid Spins videos –
https://vimeo.com/49295643 
https://vimeo.com/51820520

Max Sound to Re-master Entire Simon & Schuster Audio Book Catalog
http://finance.yahoo.com/news/simon-schusters-audiobook-catalogue-released-131500630.html

Harper Collins Audiobook Catalogue to be released in MAXD High Definition
http://finance.yahoo.com/news/harper-collins-audiobook-catalogue-released-140700707.html

MAXD and Mick Fleetwood on CNBC
http://www.youtube.com/watch?v=I8O1LoJlCFk

ABOUT MAX SOUND COROPORATION
MAXD is to audio what HD (High Definition) is to video. The MAXD™ Audio Process makes everything sound better and can convert any audio file to high definition quality while significantly reducing the file size. Visit us www.maxsound.com

Max Sound® and MAXD™ are registered trademarks and Patent Pending technologies wholly owned by Max Sound Corporation.  All other trademarks are the property of their respective owners.

SAFE HARBOR STATEMENT
Statements in this press release which are not purely historical, including statements regarding Max Sound's intentions, beliefs, expectations, representations, projections, plans or strategies regarding the future are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The forward-looking statements involve risks and uncertainties including, but not limited to, the risks associated with the effect of changing economic conditions, trends in the products markets, variations in the company's cash flow or adequacy of capital resources, market acceptance risks, technical development risks, and other risk factors. The company cautions investors not to place undue reliance on the forward-looking statements contained in this press release. Max Sound disclaims any obligation and does not undertake to update or revise any forward-looking statements in this press release.

Max Sound Corporation
John Blaisure Phone: 888-777-1987 

Email: john@maxsound.com

SOURCE Max Sound Corporation



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