Pre-Launch Status & General Updates for the MYFLIX Streaming Venture

Good Morning HHSE Friends & Followers - On the "content" side of the venture, upload activities continue on the first 1,200 titles for the MyFlix site, and we anticipate moving into the next set of masters (2,000+ titles) by the end of this week. Regarding "marketing" - HHSE is in pre-production of two MyFlix videos that explain and promote the service. Filming is expected to occur within the next three weeks. Other marketing efforts include a seven (7) faceted campaign that also include traditional advertising (both paid and barter), social media, influencers / taste-makers, mainstream publicity, targeted P.R. and national media.

As some longs will recall, HHSE pursued two previous paths for the launch of the streaming site. In 2014, extensive research was made for the "VODWIZ" site (prior name) to be hosted in the Arkansas Technology Center through a bank of high-speed computers attached to the internet via fiber optics and backed-up with remote stations in geographically diverse locations. The costs for this operational concept proved prohibitive... so the company looked at a "hosting" arrangement with a third-party supplier (Nanotech) that over a protracted two-year time-span simply did not prove to be a viable fit. Ultimately, the opportunity to be hosted through Amazon - utilizing their vast digital network and infrastructure - revitalized the venture's viability and dramatically reduced the MyFlix start-up costs.  

But it's still very costly to acquire the rights and upload film masters - to build a consumer friendly site - and most importantly, to PROMOTE the site so that consumer traffic drives the revenue streams. 

This is why HHSE has entered into an off-balance sheet financing agreement for MyFlix: a structure which provides the funding for the venture's creation and launch, while preserving HHSE's right to earn full ownership. Similar to a home mortgage, HHSE owns MyFlix, subject to the retirement of the note (which balance is to be repaid to the lenders from the share of incoming revenues otherwise designated for HHSE). On the HHSE Registration Statement, disclosures and balance sheet, the loan proceeds paid towards the creation and launch of MyFlix will be recognized as a HHSE loan payable, secured for the benefit of the lenders by the assignment of incoming revenues from MyFlix.

HHSE Management felt that this form of traditional lending structure offered a cleaner financing mechanism than more complex fundings that involved stock issuances (which stock-based financing structures have proven to be unpopular with shareholders).  The concept of having the MyFlix venture "pay for itself" and through cash-flow made sense for a variety of reasons which will be further detailed in the Registration Statement.  

HHSE's enthusiasm for the viability of this new MyFlix division grows with each day of progress in the build-up and launch activities... and we feel vindicated to have learnt from prior missteps and taken this wise course toward success. 

Stay Tuned!