Phonetime Inc.

Phonetime Inc.

February 26, 2010 17:04 ET

Phonetime Acquires Tax Loss Company in Same Line of Business

MISSISSAUGA, ONTARIO--(Marketwire - Feb. 26, 2010) - Phonetime Inc. (TSX:PHD), a leading provider of international long-distance telecommunication services, announced today it has acquired all of the outstanding shares of Modern Digital Communications Inc. ("MDCI"), a telecom company based in Victoria, B.C.

MDCI, which recently concluded a Proposal under the Bankruptcy and Insolvency Act (Canada) has an accumulated tax loss pool of approximately $4.5 million. Management believes that the acquisition of MDCI and its significant tax loss pool provides Phonetime and its shareholders the opportunity for future tax savings. The purchase price is comprised of a cash payment of $202,500 and 1 million common shares of Phonetime.

About Phonetime Inc.

Established in 1994, Phonetime is a leading supplier of long distance telecommunications services internationally, on a wholesale basis, and in Canada to retail consumers. Through its Wholesale Division, Phonetime buys and resells long-distance services to major telephone carriers around the world using its call trading platform. Through its Consumer Division, Phonetime provides subscription-based long distance services to targeted ethnic consumers across Canada and competitively markets a range of long distance phone cards. Phonetime's common shares trade on the Toronto Stock Exchange under the symbol PHD. More information can be found at the Company's website,

Caution Regarding Forward Looking Information:

This press release contains forward-looking statements, which may be identified by words like "expects", "anticipates", "plans", "intends", "indicates" or similar expressions. These statements are not a guarantee of future performance and are inherently subject to risks and uncertainties. Phonetime's actual results could differ materially from those currently anticipated due to a number of factors set forth in reports and other documents filed by the Company with Canadian securities regulatory authorities from time to time.

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