Mass Hysteria Entertainment Company's Follow Up CEO letter to Shareholders

LOS ANGELES, Feb. 8, 2013 /PRNewswire/ - Mass Hysteria Entertainment Company, Inc. (MHYS: OTC Markets) provides a follow up letter to its shareholders from its CEO, Daniel Grodnik.

Dear Shareholders,

Further to my letter of February 1, 2013 I wanted to address several questions that have been raised regarding our decision to approve a 1,000 to 1 reverse stock split which became effective on February 1, 2013 (the "Reverse Stock Split"). I also wanted to give you some additional positive news that just occurred, which I believe will help us in 2013. 

First, let me discuss the Reverse Stock Split. As you know, our stock price has languished in the $ 0.0002 to $ 0.0003 trading range in the last few months and inhibited our ability to attract new investors and financing. Accordingly, after very careful consideration of the factors discussed below, our Board of Directors decided that it was in the best interest of the Company and its shareholders to effectuate a substantial exchange in the amount of issued stock, with the objective of increasing the share trading price. We believe that the Reverse Stock Split may enhance the appeal of our common stock to the financial community, including financial investors, and the general investing public. We believe that a number of financial investors are reluctant to invest in micro−priced securities and that brokerage firms may be reluctant to recommend such stock to their clients, which may be due in part to a perception that lower−priced securities are less promising as investments, are less liquid, or are less likely to be followed by research firms. We believe that the increased stock price resulting from the Reverse Stock Split may encourage greater interest in our common stock. Furthermore, the higher share price is designed to make it easier for shareholders to hold Mass Hysteria stock in their brokerage accounts.

The number of authorized shares of our common stock has not been reduced by the Reverse Stock Split. Accordingly, the Reverse Stock Split had the effect of increasing the authorized, but unissued, shares of our common stock. These shares may be used by us for various purposes in the future, including, among other things, financings or strategic partnerships, or acquisitions of assets or businesses. We felt these factors could be beneficial to our company and our stockholders as well.

It may take a few days before normal stock trading resumes, and your patience through this process is very much appreciated.

On the news front I am pleased to announce that we have entered into a definitive distribution agreement with the Megas Media Fund, who has an arrangement with Cinemavault, an international sales agent and Canadian distributor based in Toronto specializing in commercially viable and unique feature film and television projects, to distribute our next action/horror motion picture production entitled "Chomped 3D". The movie revolves around genetically enhanced alligators that invade the tiny island community of Grand Lafitte, Louisiana. Cinemavault intends to take the project to the upcoming Berlin Film Festival (February 7-17, 2013) to secure lucrative foreign pre-sale contracts, which with available Louisiana production film incentives, should finance a substantial portion of the production costs of the movie.

Secondly, we have entered into an agreement with a leading capital sourcing company under which for the next 120 days they will act as an investment consultant to the Company with the ultimate objective of helping us secure up to $2 million in long term financing. We need this level of capital injection to help us propel our emerging new business in the Interactive Cinema arena as well as sustain us as we ramp up the production of our motion picture slate for 2013 and beyond. We will be releasing more information shortly as we firm up the opportunities.

As always, the Board of Directors and Management would like to express our thanks to you, our shareholders, for your continued support of our Company and, in particular, for your patience while we complete the restructuring of our issued share capital with the hope of becoming more competitive going forward.

Daniel Grodnik
Chief Executive Officer

About Mass Hysteria:

Mass Hysteria Entertainment, Inc. is a multi-media entertainment company created to produce films with an interactive component as well as conventional motion pictures and TV programs. For more information please go to www.masshysteriafilms.com

Forward-Looking Safe Harbor Statement:
This press release contains forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. By their nature, forward-looking statements and forecasts involve risks and uncertainties because they relate to events and depend on circumstances that will occur in the near future. There are a number of factors that could cause actual results and developments to differ materially from forecasted results. These risks and uncertainties include product demand, market competition, fluctuations in advertising payout, delays in website & application development, technical issues beyond our control, reliance on the various platforms that we build applications on, and risks inherent in our operations. For a discussion of these risks and uncertainties, please see our filings with the Securities and Exchange Commission. Our public filings with the SEC are available from commercial document retrieval services and at the website maintained by the SEC at http://www.sec.gov.

Media Contact and Interview Requests:

Dan Grodnik CEO,
Email address: [email protected]

SOURCE Mass Hysteria Entertainment Company, Inc.