UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14C INFORMATION
Information
Statement Pursuant to Section 14(c) of the Securities Exchange Act of 1934
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Preliminary
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Definitive
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MASS
HYSTERIA ENTERTAINMENT COMPANY, INC.
(Name
of Registrant as Specified in Its Charter)
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of Filing Fee (Check the appropriate box):
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MASS
HYSTERIA ENTERTAINMENT COMPANY, INC.
2920
W. Olive Avenue, Suite 208
Burbank,
California 91505
(818)
459-8200
NOTICE
OF STOCKHOLDER ACTION BY WRITTEN CONSENT
On
October 3, 2014, Mass Hysteria Entertainment Company, Inc. (the “Company”) notified its stockholders of a stockholder
action by written consent. In the notice and information statement sent on October 3, 2014, the Company indicated that its Board
of Directors and the holders of a majority of the voting power of our voting stock had approved amendments to the Company’s
amended and restated articles of incorporation (the “Articles”) that would have the effect of changing the Company’s
corporate name and increasing its authorized capital stock from 2,010,000,000 to 3,010,000,000 shares. The Company disclosed that
it expected that the amendments would become effective on or about October 23, 2014, at such time as a certificate of amendment
to our Articles was filed with the Secretary of State of Nevada. On October 16, 2014, subsequent to distribution of the notice
and information statement, our Board of Directors determined that it is in the best interest of the Company and its stockholders
(i) to maintain the Company’s corporate name as Mass Hysteria Entertainment Company, Inc. and abandon its plan to change
the corporate name, and (ii) to increase our authorized capital stock from 2,010,000,000 to 10,010,000,000 shares. Therefore,
the Company will not effect the amendments to its Articles discussed in the notice and information statement dated October 3,
2014.
In
addition, on October 16, 2014, the Company’s Board of Directors and stockholders holding a majority of the Company’s
voting power took action by written consent to approve the following action:
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1. |
Amend
our amended and restated articles of incorporation to increase our authorized capital stock from 2,010,000,000 to 10,010,000,000
shares. |
Stockholders
of record at the close of business on October 16, 2014 are entitled to notice of this stockholder action by written consent. Because
this action has been approved by the holders of the required majority of the voting power of our voting stock, no proxies were
or are being solicited. We anticipate that the above action will become effective on or about November 17, 2014, at such time
as a certificate of amendment to our Articles is filed with the Secretary of State of Nevada.
Attached
hereto for your review is an Information Statement relating to the above-described action. Please read this Information Statement
carefully. It describes the essential terms of the action to be taken. Additional information about the Company is contained in
its reports filed with or furnished to the Securities and Exchange Commission (the “SEC”). These reports, their accompanying
exhibits and other documents filed with the SEC may be inspected without charge at the Public Reference Section of the SEC at
100 F Street, N.E., Washington, D.C. 20549. Copies of such material may also be obtained from the SEC at prescribed rates. The
SEC also maintains a website that contains reports, proxy and information statements and other information regarding public companies
that file reports with the SEC. Copies of these reports may be obtained on the SEC’s website at www.sec.gov.
WE
ARE NOT ASKING YOU FOR A PROXY AND
YOU
ARE REQUESTED NOT TO SEND US A PROXY
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By
Order of the Board of Directors, |
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/s/
Daniel Grodnik |
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Daniel Grodnik |
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Chief Executive
Officer |
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Burbank, California |
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October __, 2014 |
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MASS
HYSTERIA ENTERTAINMENT COMPANY, INC.
2920
W. Olive Avenue, Suite 208
Burbank,
California 91505
(818)
459-8200
October
16, 2014
INFORMATION
STATEMENT
INFORMATION
CONCERNING THE ACTION BY WRITTEN CONSENT
Pursuant
to Section 14(c) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Regulation 14C promulgated
thereunder, the notice and this information statement (this “Information Statement”) will be mailed on or about October
____, 2014 to the stockholders of record, as of October 16, 2014 (the “Record Date”), of Mass Hysteria Entertainment
Company, Inc., a Nevada corporation (hereinafter referred to as “we,” “us,” “our,” “Mass
Hysteria” or the “Company”). This Information Statement is being circulated to advise stockholders of an action
already approved and taken without a meeting by written consent of the stockholders who hold a majority of the voting power of
our voting stock.
WE
ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY
The
action to be effective at least 20 days after the mailing of this Information Statement is as follows:
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1. |
Amend
our amended and restated articles of incorporation (the “Articles”) to increase our authorized capital stock from
2,010,000,000 to 10,010,000,000 shares (the “Share Increase Amendment”). |
On
October 3, 2014, we notified our stockholders of stockholder actions by written consent. In the notice and information statement
sent on October 3, 2014, we indicated that our board of directors and the holders of a majority of the voting power of our voting
stock had approved amendments to our Articles that would have the effect of (i) changing our corporate name from Mass Hysteria
Entertainment Company, Inc. to Remark Pictures, Inc. and (ii) increasing our authorized capital stock from 2,010,000,000 to 3,010,000,000
shares. We disclosed that we expected that the amendments would become effective on or about October 23, 2014, at such time as
a certificate of amendment to our Articles was filed with the Secretary of State of Nevada. On October 16, 2014, subsequent to
distribution of the notice and information statement, our board of directors determined that it is in our best interest and in
our stockholders’ best interest (x) to maintain the Company’s corporate name as Mass Hysteria Entertainment Company,
Inc. and abandon its plan to change the corporate name, and (y) to increase our authorized capital stock from 2,010,000,000 to
10,010,000,000 shares. Therefore, we will not effect the amendments to our Articles discussed in the notice and information statement
distributed to stockholders on October 3, 2014.
In
addition, on October 16, 2014, our board of directors unanimously approved the Share Increase Amendment. Subsequent to our board
of directors’ approval of the Share Increase Amendment, the holders of a majority of the voting power of our voting stock
approved, by written consent, the Share Increase Amendment on October 16, 2014. We expect that the Share Increase Amendment will
be effective on or about November 17, 2014, at such time as a certificate of amendment to our Articles is filed with the Secretary
of State of Nevada.
Pursuant
to Rule 14c-2 promulgated under the Exchange Act, the Share Increase Amendment will not be effected until at least 20 calendar
days after the mailing of this Information Statement to Mass Hysteria stockholders. The Share Increase Amendment will be effective
after the expiration of such 20-day period, at such time as a certificate of amendment to our Articles is filed with the Secretary
of State of Nevada.
Stockholders
of record on the Record Date who did not consent to the Share Increase Amendment are not entitled to dissenters’ rights
under Nevada law.
RECORD
DATE AND VOTING SECURITIES
Only
stockholders of record at the close of business on October 16, 2014, the Record Date, are entitled to notice of the information
disclosed in this Information Statement. As of the Record Date, our authorized securities consist of 2,000,000,000 shares of common
stock with a par value of $0.00001 per share and 10,000,000 shares of Series A preferred stock with a par value of $0.00001 per
share. As of the Record Date, there were 1,833,384,071 shares of common stock issued and outstanding held by 95 holders of record,
and there were 10,000 shares of Series A preferred stock issued and outstanding. Holders of our Series A preferred stock are not
entitled to a liquidation preference.
Holders
of our common stock are entitled to one vote per share. Holders of our Series A preferred stock are entitled to the number of
votes on such matters equal to the product of (x) the number of shares of the Series A preferred stock held by such holder, (y)
the number of issued and outstanding shares of our common stock on a fully diluted basis, as of the Record Date, and (z) 0.0002.
The Series A preferred stock is not convertible, and holders of our Series A preferred stock are not entitled to a liquidation
preference. The Series A preferred stock is entitled to 3,666,800,784 votes. Accordingly, there are 5,500,201,176 votes outstanding,
voting together as a single class.
THIS
IS NOT A NOTICE OF A MEETING OF STOCKHOLDERS AND NO STOCKHOLDERS’ MEETING WILL BE HELD TO CONSIDER ANY MATTER DESCRIBED
HEREIN. THIS INFORMATION STATEMENT IS BEING FURNISHED TO YOU SOLELY FOR THE PURPOSE OF INFORMING YOU OF THE MATTER DESCRIBED HEREIN.
STOCKHOLDERS’
RIGHTS
The
elimination of the need for a special meeting of the stockholders to approve the action described in this Information Statement
is authorized by Section 78.320(2) of the Nevada Revised Statutes. Section 78.320(2) provides that any action required or permitted
to be taken at a meeting of stockholders of a corporation may be taken without a meeting, before or after the action, if a written
consent thereto is signed by the stockholders holding at least a majority of the voting power. In order to eliminate the costs
and management time involved in holding a special meeting and in order to effect the action disclosed herein as quickly as possible
in order to accomplish the purposes of our Company, we chose to obtain the written consent of a majority of the Company’s
voting power to approve the action described in this Information Statement.
The
action described in this Information Statement cannot be taken until at least 20 calendar days after this Information Statement
has first been sent or given to our stockholders.
EXPENSES
The
costs of preparing, printing and mailing this Information Statement will be borne by Mass Hysteria.
STOCKHOLDERS
SHARING AN ADDRESS
We
will deliver only one Information Statement to multiple stockholders sharing an address unless we have received contrary instructions
from one or more of the stockholders. We undertake to deliver promptly, upon written or oral request, a separate copy of the Information
Statement to a stockholder at a shared address to which a single copy of the Information Statement is delivered. A stockholder
can notify us that the stockholder wishes to receive a separate copy of the Information Statement by contacting us at the address
or phone number set forth above. Conversely, if multiple stockholders sharing an address receive multiple Information Statements
and wish to receive only one, such stockholders can notify us at the address or phone number set forth above.
OUR
BUSINESS
We
were incorporated in Nevada on November 2, 2005 under the name “Michael Lambert, Inc.” Until 2009, we manufactured
handbags.
On
August 5, 2009, pursuant to the terms of a Stock Purchase Agreement, Daniel Grodnik (our Chief Executive Officer) and certain
affiliated parties purchased a total of 7,985 shares of our issued and outstanding common stock (the “Change of Control”).
This constituted majority control of the Company. In addition to the shares purchased, the Company also issued 42,015 shares to
Daniel Grodnik and certain affiliated parties in connection with the Change of Control. The total of 50,000 shares issued to Daniel
Grodnik and the affiliated parties represented 74.6% of our outstanding common stock as of the effective date of the Change of
Control.
In
connection with the Change of Control, we changed our name to Mass Hysteria Entertainment Company, Inc. and also changed our business
plan. We are now a development stage multi-media entertainment company created to produce feature films for theatrical, DVD, video
on demand and television distribution with an interactive component for commercial, documentary and educational film market. Our
plan is to eventually produce a minimum of two original interactive theatrical films annually, and also create a second screen
(mobile) experience for non-Company films. In addition, we intend to continue creating traditional film and television projects.
The
Company is entering a time of great change in the entertainment business. The motion picture business has had four significant
revenue streams (theatrical, home video, cable and broadcast) since the early 1980s. Today, home video is in decline and new profit
centers are opening up such as video-on-demand and internet portals that rely on micro-transactions. The Company plans to create
movies that will take advantage of traditional revenue streams that are still viable, and at the same time, avail itself of those
revenue streams that will define new media’s involvement in the film business. The Company has developed a mobile application
that allows the user to interact with the film in live time.
Over
the next 12 months, the Company hopes to develop at least one short film to be interactive with a custom built application (the
“App”) and beta test it with a live audience. This could be a revenue source for the Company, depending on our ability
to raise capital and generate interest in the experience. The App will allow audiences to interact, via their handset, with theatrical
movies. We believe the App will provide a unique immersive quality that can offer each theatrical audience member a customizable
and shareable movie entertainment experience. We recently agreed to end our relationship with our software development group to
develop the App under the name SideKickTM and instead expect to retain a new software developer to assist in developing
the software under our own trade name in the near future.
During
the fiscal quarter ended May 31, 2014, we also shifted our focus toward new television and film projects. To that end, we are
in preliminary discussions with Lionsgate Television to produce a new TV reality series. We are also involved as an executive
producer on a new film being financed by an Emmet/Furla Productions. It was announced at the recent Cannes Film Festival that
Robert DeNiro has agreed to play a role in the film. The film does not yet have a start date. Both these projects are in the development
stage, meaning there is no revenue being generated to the Company until (or if) they are set for production.
MATTER
NO. 1: AMENDMENT OF ARTICLES TO INCREASE
OUR
AUTHORIZED CAPITAL STOCK FROM 2,010,000,000 TO 10,010,000,000 SHARES
On
October 16, 2014, our board of directors approved, subject to stockholder approval, an amendment of our Articles that will have
the effect of increasing our authorized capital stock from 2,010,000,000 to 10,010,000,000 shares. Subsequent to our board of
directors’ approval of the Share Increase Amendment, the holders of a majority of the voting power of our voting stock approved,
by written consent, the Share Increase Amendment on October 16, 2014. We expect that the Share Increase Amendment will be effective
on or about November 17, 2014, at such time as a certificate of amendment to our Articles is filed with the Secretary of State
of Nevada.
Increase
in Authorized Shares
We
currently have authorized capital stock of 2,000,000,000 shares of common stock, par value $0.00001 per share, and 10,000,000
shares of Series A preferred stock with a par value of $0.00001 per share. As of the Record Date, there were 1,833,384,071 shares
of common stock issued and outstanding and 10,000 shares of Series A preferred stock issued and outstanding. When the Share Increase
Amendment becomes effective, our authorized shares of common stock will increase from 2,000,000,000 to 10,000,000,000. Adoption
of the Share Increase Amendment will not affect the number of authorized shares of Series A preferred stock. When the Share Increase
Amendment becomes effective, there will be no immediate change in the number of issued and outstanding common shares. Although
the Share Increase Amendment would not have any immediate dilutive effect on the proportionate voting power or other rights of
our existing stockholders, any future issuance of additional authorized shares of our common stock may, among other things, dilute
the earnings per share of our common stock and the equity and voting rights of those holding our common stock at the time the
additional shares are issued.
Purposes
of the Increase in Authorized Shares
Having
an increased number of authorized but unissued shares of our capital stock would allow us to take prompt action with respect to
corporate opportunities that develop, without the delay and expense of convening a special meeting of stockholders for the purpose
of approving an increase in our capitalization. The newly authorized common stock would be available for issuance from time to
time as determined by our board of directors for any proper corporate purpose. Such purposes might include, without limitation,
issuance in public or private sales for cash as a means of obtaining additional capital for use in our business and operations,
and issuance as part or all of the consideration required to be paid by us for acquisitions of other businesses or assets.
On
September 23, 2014, our board of directors and the holders of a majority of the voting power of our voting stock approved, among
other things, an amendment to our Articles that would have the effect of increasing our authorized common stock from 2,000,000,000
to 3,000,000,000, and providing us with 1,000,000,000 additional shares of authorized common stock. On October 3, 2014, we distributed
to stockholders a notice and information statement discussing, among other things, this proposed share increase.
On
October 16, 2014, subsequent to distribution of the notice and information statement on October 3, 2014, our board of directors
determined that it is in our best interest and in our stockholders’ best interest not to effect the proposed Articles amendments.
With respect to the then-proposed authorized share increase, subsequent to the distribution to stockholders of the notice and
information statement on October 3, 2014, we determined that the proposed additional 1,000,000,000 shares of authorized common
stock would not provide us with sufficient flexibility to take prompt action with respect to corporate opportunities that may
develop.
Accordingly,
on October 16, 2014, our board of directors and the holders of a majority of the voting power of our voting stock approved an
amendment to our Articles that would have the effect of increasing our authorized common stock from 2,000,000,000 to 10,000,000,000,
and providing us with 8,000,000,000 additional shares of authorized common stock. We believe this will place us in a better position
to react quickly in response to corporate opportunities that may develop. Notwithstanding the foregoing, we have no obligation
to issue such additional shares and there are no plans, proposals or arrangements currently contemplated by us that would involve
the issuance of the additional shares to acquire another company or its assets, or for any other corporate purpose stated.
Potential
Anti-Takeover Effects of the Increase in Capital Stock
Any
additional issuance of common stock could, under certain circumstances, have the effect of delaying or preventing a change in
control of our company by increasing the number of outstanding shares entitled to vote and by increasing the number of votes required
to approve a change in control. Shares of common stock could be issued, or rights to purchase such shares could be issued, to
render more difficult or discourage an attempt to obtain control of our company by means of a tender offer, proxy contest, merger
or otherwise. The ability of our board of directors to issue such additional shares of common stock could discourage an attempt
by a party to acquire control of our company by tender offer or other means. Such issuances could therefore deprive stockholders
of benefits that could result from such an attempt, such as the realization of a premium over the market price that such an attempt
could cause. Moreover, the issuance of such additional shares of common stock to persons whose interests are aligned with that
of our board of directors could make it more difficult to remove incumbent officers and directors from office, even if such change
were to be favorable to stockholders generally.
Although
the increased proportion of unissued authorized shares to issued shares could, under certain circumstances, have an anti-takeover
effect (for example, by permitting issuances that would dilute the stock ownership of a person seeking to effect a change in the
composition of our board or contemplating a tender offer or other transaction for the combination of our company with another
company), the Share Change Amendment was not proposed or adopted in response to any effort of which we are aware to accumulate
shares of common stock or obtain control of us, nor is it part of a plan by management to recommend a series of similar actions
having an anti-takeover effect to the board and our stockholders.
Our
board believes that it is advisable and in the best interests of our company to have available additional authorized but unissued
shares of common stock in an amount adequate to provide for our future needs. The unissued shares of common stock will be available
for issuance from time to time as may be deemed advisable or required for various purposes, including the issuance of shares in
connection with financing or acquisition transactions. We have no present plans or commitments for the issuance or use of the
proposed shares of common stock in connection with any financing.
INTEREST
OF CERTAIN PERSONS IN OR OPPOSITION TO MATTER TO BE ACTED UPON
Except
as disclosed elsewhere in this Information Statement, none of the following persons has any substantial interest, direct or indirect,
by security holdings or otherwise in any matter to be acted upon:
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any director or
officer of our Company, |
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any proposed nominee
for election as a director of our Company, and |
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any associate
or affiliate of any of the foregoing persons. |
The
stockholdings of our directors and officers are listed below in the section entitled “Security Ownership of Certain Beneficial
Owners and Management.” No director has advised us that he intends to oppose the Share Increase Amendment.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth certain information regarding the beneficial ownership of our common stock as of October 16, 2014 by
the following persons:
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each
person who is known to be the beneficial owner of more than five percent (5%) of our issued and outstanding shares of common
stock, |
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each
of our directors and executive officers, and |
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all
of our directors and executive officers as a group. |
Beneficial
ownership is determined in accordance with the rules and regulations of the SEC. The number of shares and the percentage beneficially
owned by each individual listed above include shares that are subject to options held by that individual that are immediately
exercisable or exercisable within 60 days from October 16, 2014, and the number of shares and the percentage beneficially owned
by all officers and directors as a group includes shares subject to options held by all officers and directors as a group that
are immediately exercisable or exercisable within 60 days from October 16, 2014.
Name
and address | |
Number
of Common
Shares Beneficially
Owned | | |
Percentage
Owned (1) | | |
Number
of Series A
Shares Beneficially Owned | | |
Percentage
Owned (2) | | |
Percentage
of Total
Voting Power (3) | |
Daniel Grodnik | |
| 193,244,571 | (4) | |
| 10.5 | % | |
| 10,000 | | |
| 100 | % | |
| 70.2 | % |
All officers and directors as a group (1 person) | |
| 193,244,571 | (4) | |
| 10.5 | % | |
| 10,000 | | |
| 100 | % | |
| 70.2 | % |
(1) |
Calculated
on the basis of 1,833,384,071 shares of common stock issued and outstanding. |
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(2) |
Calculated
on the basis of 10,000 shares of Series A preferred stock issued and outstanding. |
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(3) |
Holders
of our common stock are entitled to one vote per share, for a total of 1,833,384,071 votes. Holders of our Series A
preferred stock are entitled to the number of votes on such matters equal to the product of (a) the number of shares of
the Series A preferred stock held by such holder, (b) the number of issued and outstanding shares of Mass
Hysteria’s common stock on a fully-diluted basis, as of the Record Date, and (c) 0.0002, for a total of
5,500,201,176 votes. |
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(4) |
Includes
15,321 shares under presently exercisable options. |
Changes
in Control
We
are unaware of any contract or other arrangement the operation of which may at a subsequent date result in a change of control
of our Company.
ADDITIONAL
INFORMATION
We
are subject to the informational requirements of Section 15(d) of the Exchange Act. Accordingly, we file annual, quarterly and
other reports and information with the SEC. The Company’s filings with the SEC are available to the public on the SEC’s
website at www.sec.gov. Those filings will also be available to the public on, or accessible through, our corporate website at
www.masshysteriafilms.com. You may also read and copy, at SEC prescribed rates, any document we file with the SEC at the SEC’s
Public Reference Room located at 100 F Street, NE., Washington, D.C. 20549. You can call the SEC at 1-800-SEC-0330 to obtain information
on the operation of the Public Reference Room. You may also request a copy of these filings, at no cost, by writing to us at 2920
W. Olive Avenue, Suite 208, Burbank, CA 91505 or by telephoning us at (818) 459-8200.
Our
principal executive office is located at 2920 W. Olive Avenue, Suite 208, Burbank, CA 91505. Our corporate website is www.masshysteriafilms.com
and our phone number is (818) 459-8200.