Mass Hysteria Entertainment Co. (fka MHYS)

[NASCOW]

Reasons for Authorizing the Directors to Effectuate a Stock Split or Reverse Stock Split without Stockholder Approval

The board of directors believes that an amendment to our articles of incorporation authorizing our board of directors to effectuate a stock split or reverse stock split without stockholder approval will provide flexibility for both our management and business. The proposed amendment to the articles of incorporation would allow us to implement a stock split or reverse stock split of any class or series of our capital stock without correspondingly increasing or decreasing the number of authorized shares of the same class or series by means of a resolution adopted by its board of directors without obtaining the approval of the stockholders or the approval of the holders of shares of the affected class or series. Authorization of a stock split or reverse stock split without correspondingly increasing or decreasing the number of authorized shares of the same class or series without stockholder approval is important to us, inasmuch as we will be able to change our outstanding capital stock to more efficiently meet our future needs. Presently, we need to go to the time and expense of having a stockholder’s meeting or to have the stockholders with a majority of voting power act by written consent in order to effectuate a stock split or reverse stock split without correspondingly increasing or decreasing the number of authorized shares of the same class or series, which includes the time and expense of filing and distributing proxy or information materials in compliance with the rules and regulations of the SEC under Section 14 of the Securities Exchange Act of 1934, as amended. We seek be able to quickly deal with situations calling for us to modify our capital structure, such as equity financings, convertible debt financings, certain types of mergers and acquisitions, adoption of employee benefit and equity compensation plans, reorganizations (whether pursuant to bankruptcy laws or otherwise), recapitalizations, and if Mass Hysteria’s common stock trades at a value below par value. Although our management considers it likely that Mass Hysteria will authorize a reverse stock split in the future, we do not have current plans to implement any stock split.

Nevada Law

Under Nevada law, the articles of incorporation of a Nevada corporation may contain a provision that allows the corporation’s board of directors to effectuate a stock split or reverse stock split without correspondingly increasing or decreasing the number of authorized shares of the same class or series without obtaining the approval of the stockholders or the approval of the holders of shares of the affected class or series.

Nevada Revised Statutes Section 78.037, which governs what optional provisions may be contained in the articles of incorporation for a Nevada corporation, states the following:

“The articles of incorporation may also contain any provision, not contrary to the laws of this State:

1. For the management of the business and for the conduct of the affairs of the corporation;
2. Creating, defining, limiting or regulating the powers of the corporation or the rights, powers or duties of the directors, the officers or the stockholders, or any class of the stockholders, or the holders of bonds or other obligations of the corporation; or
3. Governing the distribution or division of the profits of the corporation.”

Hilarious since they are in Nevada Corporate Default Status

So I would assume their share structure is now 2Billion A/S and 683K O/S