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 as They Highlight Recent Steps Taken by the Portable Video Player A handheld device that plays videos. The term may refer to lightweight flash-based or hard disk-based MP4 players that download video content from a computer or to heavier, but still very portable, devices that play DVDs. See portable DVD player, Portable Media Center and portable media player. Industry Pioneer Designed to Achieve Success with Its "Complete Portable Video Ecosystem" and Acquires Popular User Generated Video Site SAN FRANCISCO San Francisco (săn frănsĭs`kō), city (1990 pop. 723,959), coextensive with San Francisco co., W Calif., on the tip of a peninsula between the Pacific Ocean and San Francisco Bay, which are connected by the strait known as the Golden -- Executives of HandHeld Entertainment[TM] (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : 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 See portable video player. ) 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: * The $1.5 million acquisition of Dorks.com (a free user-generated video download Web site attracting upward of more than; above. See also: Upward one million unique visitors A count of how many different people access a Web site. For example, if a user leaves and comes back to the site five times during the measurement period, that person is counted as one unique visitor, but would count as five "user sessions. per month); * The expectations that HandHeld Entertainment will be able to drive Dorks.com traffic to three million to five million unique visitors per month in 2007 and generate advertising revenue from Dorks.com (something not previously attempted by Dorks.com management); * The forthcoming launch of FREE Stuff! on ZVUE.com[TM] offering the first user-generated content The production of content by the general public rather than by paid professionals and experts in the field. Mostly available on the Web via blogs and wikis, user-generated content refers to material such as the daily news, encyclopedias and other references, movie and product reviews as on ZVUE.com; * The support of Windows Mobile The Windows platform from Microsoft for handheld devices, including PDAs, cellphones and Portable Media Centers. See Pocket PC, Pocket PC Phone Edition, Smartphone and Portable Media Center. Video 5.0, enabling millions of smartphone and PDA (Personal Digital Assistant) A handheld computer for managing contacts, appointments and tasks. It typically includes a name and address database, calendar, to-do list and note taker, which are the functions in a personal information manager (see PIM). users to download videos from ZVUE.com for playback on their devices; * The continued efforts by HandHeld Entertainment to license and acquire compelling portable video content and build one of the largest online libraries of downloadable videos, including yesterday's announcement of its agreement with Comedy Time Network, which will provide hundreds of hours of comedy stand-up stand·up or stand-up adj. 1. Standing erect; upright: a standup collar. 2. Taken, done, or used while standing: a standup supper; a standup bar. routines and sketches designed specifically for portable devices, such as portable video players and smartphones; and 2) Focus the Hardware Business on Near-term Profitability: * The fact that HandHeld Entertainment's new value-priced $99 ZVUE[TM] 250 PVP begins shipping next week into approximately 2,000 Wal-Mart stores nationwide, replacing the ZVUE 200; * The launch of the $69 ZVUE ZP3[TM] MP3 player A digital music player that supports the MP3 format, which was the audio format that started a revolution in online music downloads and distribution. All portable music players, the iPod being the most popular, support MP3 along with one or more other audio formats. pre-loaded with 30 of the top songs of 2006 and with a firm initial order for 36,000 units being delivered into retail stores this November; * The expectation that heightened PVP marketing efforts this Holiday Season by Microsoft and Apple will allow HandHeld Entertainment to achieve sales uplift as customers compare the ZVUE value/price proposition in stores; * The canceling of HandHeld Entertainment's efforts to complete the launches of the ZVUE 400 and 500 PVPs citing the need to avoid competing head-to-head with players priced at $249 and above, such as Apple Computer's iPod and Microsoft's Zune; and 3) Implement an Operating Plan that is 12 Months to Cash Flow Positive: * The dramatic reduction of HandHeld Entertainment's personnel ranks to match company objectives to achieve cash flow positive status in 2007; * The announcement of HandHeld Entertainment's settlement of a trademark infringement Trademark infringement is a violation of the exclusive rights attaching to a trademark without the authorization of the trademark owner or any licensees (provided that such authorization was within the scope of the license). lawsuit with Microsoft, which resulted in a net cash settlement of $1.4 million to HandHeld Entertainment; * Plans to outsource future PVP development efforts to leading original equipment manufacturers worldwide (OEMs), cutting time-to-market to four-to-five months versus 12 to 18 months, something HandHeld Entertainment did with its recently announced ZVUE ZP3 MP3 player; and * Eliminating HandHeld Entertainment's radio and print advertising programs and replacing them with "retail detail" efforts to ensure the proper placement of ZVUE players on store shelves, the most important factor identified by surveys in driving retail sales success for consumer electronics devices. "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 Noun 1. market penetration - the extent to which a product is recognized and bought by customers in a particular market penetration - the act of entering into or through something; "the penetration of upper management by women" and breakeven breakeven 1. The level of output or sales necessary to cover fixed expenses. Companies in industries that have high fixed costs and, consequently, high breakevens, such as automobile and steel manufacturing, are likely to exhibit large fluctuations 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 United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. ) 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 Originally called the NASDAQ Small Cap Market, NASDAQ announced a name change to the NASDAQ Capital Market on September 27, 2005. [1] The NASDAQ Capital Market exists for securities of smaller, less-capitalized companies (small caps) that do not qualify for (ZVUE, ZVUEW) and Boston Stock Market (HDE HDE Hauptverband des Deutschen Einzelhandels (Central Association of German Retail Trade) HDE Humanitarian Device Exemption HDE Heavy-Duty Engine HDE Holdrege, Nebraska (airport code) , 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. "Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " Statement Under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 This release contains forward-looking statements. To the extent that any statements made in this release contain information that is not historical, these statements are forward-looking. These statements are subject to risks and uncertainties that cannot be predicted or quantified and, consequently, actual results may differ materially from those expressed or implied by these forward-looking statements. These risks and uncertainties include, without limitation: HandHeld Entertainment's dependence on contract manufacturing of its products; its reliance on a single major mass-market retailer; its ability to develop and market successfully and in a timely manner new products and services; its ability to predict market demand for, and gain market acceptance of, its products and services; the impact of competitive products and services and of alternative technological advances; its ability to raise additional capital to finance its activities; its limited and unprofitable operating history; its ability to operate as a public company; its ability to reduce product return rates; the affect of inventory and price protections required by major retailers; the availability and affordability of digital media content; its ability to protect its proprietary information and to avoid infringement of others' proprietary rights; its ability to attract and retain qualified senior management and research and development personnel; the reliability and security of its information systems and networks; and other factors described in HandHeld Entertainment's filings with the Securities and Exchange Commission, including Annual Reports on Form 10-KSB, Quarterly Reports on Form 10-QSB and Current Reports on Form 8-K Form 8-K The form required by the SEC when a publicly held company incurs any event that might affect its financial situation or the share value of its stock. Form 8-K See 8-K. . These forward-looking statements are made as of the date hereof. HandHeld Entertainment does not undertake any obligation to publicly update any forward-looking statements. As a result, investors should not place undue reliance on these forward-looking statements. |
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