Knowlton Capital Inc.
TSX VENTURE : KCI.P

May 31, 2006 12:57 ET

Knowlton Capital Announces the Filing of the Filing Statement

MONTREAL, QUEBEC--(CCNMatthews - May 31, 2006) - Knowlton Capital Inc. ("Knowlton") (TSX VENTURE:KCI.P) announces that it has completed the filing of its filing statement dated May 30, 2006 ("Filing Statement"), in connection with its qualifying transaction consisting in the acquisition of the target company Buzz Telecom Inc. ("Buzz Telecom"). Knowlton's qualifying transaction consists in the acquisition of all issued and outstanding shares of Buzz Telecom in exchange for up to 16,000,000 Knowlton common shares at a deemed price of $0.25 per share (the "Acquisition"). The Acquisition is expected to constitute a "Qualifying Transaction" for Knowlton as defined in Policy 2.4 of the TSX Venture Exchange (the "Exchange") Corporate Finance Manual. The particulars of the Acquisition are set forth in the Filing Statement which can be consulted on SEDAR at the following address: www.sedar.com.

The Acquisition is subject to the completion of a concurrent financing by way of a private placement of a minimum of 1,075,000 Knowlton common shares at a price of $0.20 per share for gross proceeds of $215,000 and a maximum of 3,000,000 shares of Knowlton for gross proceeds of $600,000. The agent participating in the private placement will receive a cash commission equal to 10% of the gross proceeds of the issue. If Desjardins Securities Inc. acts as agent, it will be entitled to receive an additional 10% commission payable by the issuance of warrants of Knowlton at an exercise price of $0.25 per share, expiring 18 months following the closing of the Acquisition.

It is expected that the closing of the proposed financing and of the Acquisition will take place on or about June 30, 2006. The Filing Statement of Knowlton is available on SEDAR.

Completion of the Qualifying Transaction is subject to a number of conditions, including, but not limited to, regulatory and Exchange acceptance and completion of the private placement. The transaction cannot close until the required regulatory approvals pursuant to laws, regulations and applicable policies are obtained. There can be no assurance that the transaction will be completed as proposed or at all. Investors are cautioned that, except as disclosed in the Filing Statement prepared in connection with the transaction, any information released or received with respect to the transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative. The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

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