FOR IMMEDIATE RELEASE

FOR IMMEDIATE RELEASE
(Free-Press-Release.com) January 18, 2007 -- SAN FRANCISCO � Jan. 18, 2007 � HandHeld Entertainment� (NASDAQ: ZVUE, ZVUEW) today announced it has completed a PIPE offering (Private Investment in Public Equity) which raised $3.83 million and is intended to expand the company�s user-generated content assets, as well as provide capital for general working capital purposes.

In connection with the January 17, 2007 closing, the company issued approximately 1.3 million shares of common stock and two tranches of warrants to purchase common stock under the following terms:

� five-year warrants to purchase 957,500 shares of common stock with an exercise price of $3.50 per share (117 percent of the offering price), and

� five-year warrants to purchase 957,500 shares of common stock exercisable at $4.00 per share (133 percent of the offering price) which are exercisable commencing July 17, 2007. Following July, 17, 2007, the warrants are redeemable at the company�s option if the price of HandHeld Entertainment�s common stock trades above $5.20 per share for five consecutive trading days. Upon redemption, the company anticipates it could receive as much as $3.8 million in additional proceeds upon exercise of the warrants.

The company has agreed to file a registration statement with the United States Securities and Exchange Commission no later than January 31, 2007 and have it become effective no later than March 15, 2007. If the company is unable to meet these deadlines, then the exercise price of the investor warrants will decrease as specified in the subscription agreement.

�Since mid-November, we have acquired three Web sites that feature user-generated and user-submitted videos and other forms of media, and we plan to acquire more,� said Jeff Oscodar, president and chief executive officer of HandHeld Entertainment. �These acquisitions have created a network of Web properties that attracted more than 5 million unique visitors in December, more than a full year ahead of our plans. With these funds, we have an opportunity to move quickly to continue acquiring high-quality Web sites with significant traffic thereby accelerating our business plan in 2007.�

Following this transaction, HandHeld Entertainment has approximately 12.7 million shares of common stock outstanding and approximately 3.9 million warrants.

This news release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction.