Penfold Capital Acquisition III Corporation
TSX VENTURE : PNF.P

November 15, 2010 15:25 ET

Penfold Capital Acquisition III Corporation Announces Proposed Qualifying Transaction With Phonetime Inc.

TORONTO, ONTARIO--(Marketwire - Nov. 15, 2010) -

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Penfold Capital Acquisition III Corporation ("Penfold" or the "Corporation"), a capital pool company listed on the TSX Venture Exchange Inc. (the "Exchange") (TSX VENTURE:PNF.P), announced today that it has entered into a subscription agreement (the "Agreement") with Phonetime Inc. ("Phonetime"), a company listed on the Toronto Stock Exchange (the "TSX") under the symbol "PHD", providing for its participation in Phonetime's proposed private placement (the "Private Placement") which, upon completion, will constitute the Corporation's qualifying transaction pursuant to the policies of the Exchange (the "Qualifying Transaction"). The Qualification Transaction will not constitute a Non-Arm's Length Qualifying Transaction for purposes of Policy 2.4 of the Exchange.

Under the Agreement, the Corporation shall invest its available cash reserves (to be not less than $700,000) in the Private Placement and subscribe for not less than 10,00,000 units of Phonetime (each, a "Phonetime Unit"). The Phonetime Units will be issued pursuant to applicable prospectus and registration exemptions under National Instrument 45-106 ("NI 45-106"). Pursuant to the Private Placement, Phonetime will sell and issue $700,000 of Phonetime Units. Each Phonetime Unit will be comprised of one common share of Phonetime (each, a "Phonetime Common Share") and 0.4 warrants (each, a "Phonetime Warrant"). Each whole Phonetime Warrant entitles the holder thereof to purchase one Phonetime Common Share at a price of $0.07 for a period of 12 months from the date of issuance of such Phonetime Warrants. The Private Placement is anticipated to close on or about December 17, 2010, subject to the approval of the TSX and the Exchange.

Upon completion of the Private Placement, the Corporation intends to distribute the Phonetime Units held by it to the shareholders of the Corporation on a pro-rata basis as a return of capital (the "Return of Capital"). The shareholders as of November 15, 2010 (the "Record Date") will be eligible to receive the Phonetime Units, in proportion to the number of Common Shares of the Corporation held by them on the Record Date. In addition, all options to acquire Common shares of the Corporation will be cancelled upon completion of the Private Placement. In accordance with requirements of the Exchange, all of the Phonetime Units received by the directors and officers of the Corporation (Gary M. Clifford, Salil Munjal, Jim A. Zadra and Joshua M. Silber) and the founding shareholders of the Corporation will be subject to an 18-month escrow.

As soon as practicable after the distribution of the Phonetime Units, the Corporation the Corporation will dissolve and delist its Common Shares from trading on the Exchange.

At the special meeting of shareholders of the Corporation to be held on December 15, 2010 (the "Meeting"), shareholders will be asked to vote for or to vote against or withhold from voting for, inter alia, the approval of a resolution approving the investment in Phonetime and the Return of Capital. In accordance with Policy 2.4 of the Exchange, in order for the resolution to pass it must be approved by a Majority of the Minority shareholders of the Corporation. As well, the Exchange requirements preclude all of the directors and officers of the Corporation (Gary M. Clifford, Salil Munjal, Jim A. Zadra and Joshua M. Silber) from voting on the resolution.

The Corporation and Phonetime anticipate that the Corporation's purchase of Phonetime Units will occur as soon as practicable following approval of the investment by the shareholders of the Corporation at the Meeting after which the Corporation will commence the distribution of Phonetime Units.

There will be no change in the composition of the board of directors or in the officers of the Corporation or Phonetime as a result of the Qualifying Transaction. Gary Clifford serves at the Chairman and CEO of both Phonetime and Penfold. Gary Clifford and Salil Munjal, collectively, own approximately 22.37% of the issued and outstanding common shares of the Corporation and 3.92% of the issued and outstanding common shares of Phonetime.

About Phonetime Inc.

Phonetime is an international telecommunications Network carrier. Phonetime provides long-distance services to major telephone carriers around the world. Phonetime's common shares trade on the Toronto Stock Exchange under the symbol PHD. More information can be found at the Company's website, www.phonetime.com.

About Penfold Capital Acquisition III Corporation

The Corporation is a "capital pool company" in accordance with Exchange policies, and at present, the Corporation does not own any assets other than cash. To date, the Corporation has not conducted any active business operations. Completion of the transaction is subject to a number of conditions, including but not limited to, Exchange acceptance, shareholder approval of the Corporation, including majority of the minority shareholder approval in accordance with the policies of the Exchange and the closing of the Private Placement in the minimum amount of $700,000. 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 management information circular to be prepared in connection with the Qualifying Transaction, any information released or received with respect to the Qualifying Transaction may not be accurate or complete and should not be relied upon. Trading in securities of a capital pool company should be considered highly speculative.

Certain information in this press release may contain forward-looking statements. This information is based on current expectations that are subject to significant risks and uncertainties that are difficult to predict. Actual results might differ materially from results suggested in any forward-looking statements. The Corporation assumes no obligation to update the forward looking statements, or to update the reasons why actual results could differ from those reflected in the forward looking-statements unless and until required by securities laws applicable to the Corporation. Additional information identifying risks and uncertainties is contained in filings by the Corporation with the Canadian securities regulators, which filings are available at www.sedar.com.

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.

Contact Information

  • Penfold Capital Acquisiton III Corporation
    Gary Clifford, President, Chief Executive Officer,
    Chief Financial Officer and Director
    416 418 9802
    gary@penfoldcapital.com