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.

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