Parlay Entertainment Inc.
TSX VENTURE : PEI.H

Parlay Entertainment Inc.

August 13, 2012 15:14 ET

Parlay Entertainment Provides an Update on Corporate Matters

BURLINGTON, ONTARIO--(Marketwire - Aug. 13, 2012) -

All amounts in Canadian Dollars

Parlay Entertainment Inc. (TSX VENTURE:PEI.H) (the "Company"), is pleased to announce that trading in the Company's common shares is scheduled to be reinstated on NEX effective the opening Tuesday, August 14, 2012.

Reinstatement of Trading

As referred to in our press release dated July 6, 2012, the Ontario Securities Commission ("OSC") and the British Columbia Securities Commission granted a permanent revocation of the cease trade orders (the "CTO's") issued by them against the Company. Following the revocation of the CTO's, on July 25, 2012 the Company submitted an application with the TSX Venture Exchange ("TSXV") to have the trading in the Company's shares reinstated.

The Company is inactive and is attempting to reactivate its business. As of the date of this press release, the Company has no business plan nor has it the resources to develop a business plan. It is as a result of this that the shares of the Company will be reinstated to trading on NEX. NEX is a separate board of the TSXV for companies previously listed on the TSXV or the Toronto Stock Exchange which have failed to maintain compliance with the ongoing financial listing standards of those markets. NEX has been designed to provide a forum for the trading of publicly listed shell companies while they seek and undertake transactions in furtherance of their reactivation as companies which will carry on an active business.

At present, the Company has three directors: Mr. Craig D. Schneider, Mr. Alan D. Vichert and Mr. David Callander. Mr. Schneider holds the office of Chief Executive Officer and Mr. Callander holds the office of Chief Financial Officer. The Company does not have three independent directors and the ordinary responsibilities of an audit committee have been temporarily assumed by the directors. It is anticipated that the audit committee will be reconstituted when the Company is able to appoint sufficient independent directors to meet the applicable requirements.

In its press release dated July 9, 2012, the Company described a proposed corporate transaction which is intended to close by September 15, 2012 in accordance with the most recent extension of the November 29, 2011 letter of intent (the "LOI"), between BDO Canada Limited ("BDO"), Parlay's Proposal Trustee, and a third party (the "Party"). The Party will acquire control of the Company with the intention of preserving the Company's existence and reactivating it with a suitable business. In this regard, as part of the process undertaken in order to secure the lifting of the CTO's, the Company provided an undertaking to the OSC that it will not complete a transaction outside of Canada to reactivate its business unless it complies with applicable securities law with respect to filing a preliminary and final prospectus for the proposed transaction and it receives the required regulatory approvals.

It may be necessary to further extend the closing date under the LOI to allow time for the remaining matters to be completed. These matters include having the Party fund BDO with $30,000 to finalize the proposal. Such payment will enable BDO to assign to the Party the remaining liabilities (the "Liabilities") of the Company that are not discharged via the proposal. The Liabilities are estimated to be $525,000. Seven shareholders of the Company have entered into irrevocable agreements to sell 50% of their shareholdings to the Party and to relinquish to the Party all voting rights over the 50% of the shares that the seven shareholders are retaining. Accordingly, on closing of this proposed transaction, the Party will own approximately 27.6% of the outstanding shares of Parlay and will exercise voting control over a further approximately 27.6% of the outstanding shares of Parlay for a total voting position of approximately 55.2%.

Whether, and when, the Company can successfully complete the proposal process is uncertain. Should the proposal be completed, the Company will have disposed of substantially all of its assets; however, the Liabilities acquired by the Party will remain on the Company's books.

On completion of the proposal, management of the Company will identify new business opportunities for the Company. The ability of the board of directors and management to identify such new business opportunities and access sufficient funding to take advantage of any identified new business opportunities is uncertain at this time.

Immediately following the resumption of trading, the Company intends to undertake a working capital equity financing to raise up to $400,000 by the private placement issuance of common shares at a deemed price of $0.05 per share. The Company also may effect a reorganization of its share capital by consolidating its shares on a 2:1 basis, subject to shareholder and regulatory approval as required.

The Company has filed notice on SEDAR (www.sedar.com) that it will hold an annual and special meeting (the "AGM") of its shareholders on October 3, 2012 with a record date of August 31, 2012. At the AGM, the proposed share consolidation and the settlement of the Liabilities by a debt settlement share issuance, among other matters, will be considered by shareholders.

This document may contain statements about expected future events and/or financial and operating results of Parlay Entertainment Inc. that are forward-looking. By their nature, forward-looking statements require the Company to make assumptions and are subject to inherent risks and uncertainties. There is significant risk that predictions and other forward-looking statements will not prove to be accurate. Readers are cautioned not to place undue reliance on forward-looking statements as a number of factors could cause actual future results, conditions, actions or events to differ materially from the targets, expectations, estimates or intentions expressed in the forward-looking statements.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.

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