HandHeld Entertainment

HandHeld Entertainment Sees Cash Flow Positive Results in 2007, Makes First Acquisition

HandHeld Entertainment execs project cash flow positive results in 2007 without the need to raise additional capital


San Francisco, CA -- (ReleaseWire) -- 11/16/2006 --Executives of HandHeld EntertainmentÔ (NASDAQ: ZVUE, ZVUEW) yesterday disclosed that the company expects to achieve cash flow positive results in 2007 based upon recent steps taken by the pioneer of the portable video player (PVP) industry.

The disclosures were made during HandHeld Entertainment’s first ever investor conference call, held yesterday afternoon, which is available for telephonic replay or viewing via the Internet – details are below.

The key points made by HandHeld Entertainment executives during yesterday’s call include the following:

1) Accelerate Content Growth

2) Focus the Hardware Business on Near-term Profitability

3) Implement an Operating Plan that is 12 Months to Cash Flow Positive

“With the steps we have taken and that we outlined yesterday afternoon, we plan to achieve cash flow positive results in 2007 without raising additional capital,” said Jeff Oscodar, president and chief executive officer of HandHeld Entertainment. “We are already cash-flowing our player business and our ZVUE business. We will soon begin cash-flowing our free video businesses with Dorks.com and FREE Stuff!. Wal-Mart will soon have the ZVUE 250 and ZVUE ZP3 players on its shelves. The ZVUE 250 will also be on retail shelves, including Wal-Mart, shortly. We will outsource all future PVP development efforts to leading OEMs worldwide, and we have right-sized and reallocated our personnel ranks to help us responsibly meet our objectives of increased market penetration and breakeven results in 2007.”

For further highlights of yesterday’s conference call held by HandHeld Entertainment, interested individuals are invited to listen to a replay by calling 877-660-6853 (in the United States) or 201-612-7415 (for international callers). The following pass codes (both of which are required for playback) are as follows: account #: 286 and conference ID #: 215796.

The conference call and attendant slide presentation can also be viewed online by visiting www.hheld.com/ir.

About the ZVUE
Available today in more than 1,800 Wal-Mart stores throughout the United States, as well as online at such locations as Amazon.com, the $99 (US) ZVUE plays videos and MP3 files available from the ZVUE.com download store and also allows users to view digital pictures from a digital camera or home video from a camcorder. The ZVUE offers full-color video and clear audio sound that gives users a robust, on-the-go digital experience when coupled with downloadable content from the ZVUE Web site.

About HandHeld Entertainment, Inc.
With shares and units of its common stock available for purchase on the NASDAQ Capital Market (ZVUE, ZVUEW) and Boston Stock Market (HDE, HDEW), HandHeld Entertainment is a digital-media-to-go company with a family of mass-market portable media players priced at mass-market prices as well as its own online video content store. Its ZVUE portable media players are available for purchase online and in retail locations across the U.S., while portable video lovers can visit HandHeld Entertainment’s video content store at www.zvue.com to buy pay-per-download videos. Customers can also download free user-generated video selections from Dorks.com, a HandHeld Entertainment company. For more information, visit www.hheld.com or call 415-495-6470.

HandHeld Entertainment, ZVUE and ZVUE.com are trademarks of HandHeld Entertainment. All other trademarks are property of their respective owners.

David Politis, Politis Communications, 801-523-3730(wk), 801-556-8184(cell), dpolitis@politis.com or
Jonathan Bacon, Politis Communications, 801-523-3730(wk), 801-660-7820(cell), jbacon@politis.com

Robert Prag, The Del Mar Consulting Group, Inc., 858-794-9500, bprag@delmarconsulting.com