Seven Arts Entertainment Inc (SAPX)

[HASS1]

From: Kurtis Gustafson [mailto:[e-mail]]
Sent: Friday, February 03, 2012 11:21 AM
To: Peter Hoffman
Subject: Concened Investor



Dear Mr. Hoffman:



I am writing in regards to your company's recent share price and activity. Over the last few months Seven Arts Entertainment's share price has had an extreme volatile move in its share price. One day of large percentage gains, followed by a day of large percentage losses. In your last letter to the shareholders, you stated that your company was looking into the recent trading activity and were going to investigate. That was back in September and it appears that the same trading pattern is continuing to happen and we have not heard any follow-up on the investigation. I believe the shareholders deserve an explanation.



In addition, the March 1 deadline is approaching closer and it appears that the stock will not reach the required dollar mark for ten consecutive days by then. There appears to be events in the pipeline that may change that, but those appear to be many months away. People are blaming dilution for the stock's recent struggle. Your company is acquiring new assets, but financing these acquisitions through shares of stock. The shareholders have been very patient through these processes, but I feel we do deserve an explanation on the recent trading activity and steps that will be taken to avoid a possible de-listing. I know you are a busy person, so at your convenience can you please shed some light on the matters. I thank you for your time and will be awaiting your response.



Sincerely,



Kurtiss Gustafson



RESPONSE: Michael, please respond. We are filing for a six month extension permitted by NASDAQ and do not believe there will be a de-listing.