Mass Hysteria Entertainment Company's CEO letter to Shareholders

LOS ANGELES, Feb. 1, 2013 /PRNewswire/ -- Mass Hysteria Entertainment Company, Inc. (OTCQB: MHYSD) provides the following letter to its shareholders from its CEO, Daniel Grodnik.

Dear Shareholders,

I am writing to update you on the latest very exciting developments in our Company and the excellent prospects that I believe are firmly in our grasp in 2013.

The past year was an incredibly difficult and frustrating one not only for us but for many independent movie producers as a whole. 2012 was one of those rare years in my 30 plus years of filmmaking that I was simply unable to place a motion picture into production. The continued devaluation of the home video business and the increased value on marquee names made the availability of film financing scarcer than I have seen in years. If you exclude "The Avengers" and "The Hunger Games", US theater attendance was down in 2012. Audiences are now much more selective with the outlay of their box office money as there are many more alternative entertainment choices available today. But we see this change as an opportunity for us, as explained below.

But, before I turn to 2013, I also wanted to confirm that the memorandums of understandings announced by us in August 2012 regarding our potential acquisition of two subsidiary businesses to provide revenue and cash flow – a real estate development company and an international air cargo company – did not survive the due diligence process. Accordingly, negotiations came to an end towards the end of last year and we redirected our focus to enhancing and invigorating our core motion picture business – especially our interactive cinema experience.

On November 14, 2012, we were thrilled to announce that we had entered into software agreement with technology engineers Patrick Greene and Alexander Harrington to complete the development of the Mass Hysteria Interactive proprietary software that will allow theater audiences to engage with motion pictures in live-time using their Smart-phones. As previously announced, the technology, called Side Flick™ is designed to allow audience members to engage with unique second screen content on their Smart phones in sync with the movie up on the big screen. We believe Side Flick is our game changer; a potential avenue to bring audiences back into the theaters by offering a whole new way to enjoy the movies. Our company is built on the premise that there is room in the marketplace for an alternative movie going experience – one that is engaged and interactive versus the current hundred year old iteration that is strictly passive. We believe Side Flick will give us the ability to mitigate many of the issues we experienced in 2012 in terms of getting our movies into production because it's the center piece of the movie experience and not dependent on the home entertainment dollar or marquee stars. We are presently beta-testing Side Flick with live audiences and are preparing to bring the technology to market in first quarter 2013. Our first objective is to try to close a deal with a major exhibition chain that we have been speaking to for more than a year. Concurrently, we will be talking to Hollywood Studios about financing an original Mass Hysteria movie from a script we developed with Pat Proft, an established screenwriter with credits including the "Police Academy" and "Naked Gun" movies to the recently completed "Scary Movie 5" for The Weinstein Company.

As excited as we are about Side Flick, we continue to mine the traditional movie business and are making progress to place movies into production. In the coming weeks we will be announcing new movies and distribution deals. I am therefore pleased to report that your company continues its journey to complete and launch its game changing interactive cinema technology in the near term, coupled with the strategic production of commercial motion pictures, and looks forward to a successful 2013.

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.

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:
Erik Bright
Prodigy Public relations
310-857-2020  x131
[email protected]

SOURCE Mass Hysteria Entertainment Company, Inc.

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