Phonetime Inc.
TSX : PHD

Phonetime Inc.
Penfold Capital Acquisition III Corporation
TSX VENTURE : PNF.P

December 21, 2010 16:00 ET

Penfold Capital Acquisition III Corporation and Phonetime Inc. Announce Completion of Private Placement

Penfold Completes Qualifying Transaction and Announces Distribution to Shareholders and Dissolution

TORONTO, ONTARIO--(Marketwire - Dec. 21, 2010) -

FOR RELEASE IN CANADA ONLY (NOT FOR DISTRIBUTION TO THE UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES)

Penfold Capital Acquisition III Corporation ("Penfold") (TSX VENTURE:PNF.P), a capital pool company, and Phonetime Inc. ("Phonetime") (TSX:PHD) are pleased to announce the completion of the previously announced Private Placement to Penfold of 10 million Units of Phonetime, subject to receipt of final approval from the TSX Venture Exchange Inc. (the "Exchange") and the Toronto Stock Exchange. The Private Placement transaction constitutes Penfold's qualifying transaction (the "Qualifying Transaction") for purposes of Policy 2.4 of the Exchange. Pursuant to the Qualifying Transaction, Penfold acquired the 10 million Phonetime Units issued by way of Private Placement in consideration for all of its available cash reserves after payment of expenses related to the Qualifying Transaction, consisting of $700,000. Each Phonetime Unit is 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 Qualifying Transaction remains subject to Penfold filing final documentation with the Exchange.

The approval of a majority of the minority of Penfold shareholders for the Qualifying Transaction was obtained at special meeting of shareholders of Penfold held on December 15, 2010. In connection with the approval of the Qualifying Transaction, the shareholders of Penfold also approved the reduction of stated capital and return of capital by Penfold ratably among the shareholders according to their rights and interest in Penfold and the voluntary dissolution of Penfold.

Forthwith following the completion of the private placement investment into Phonetime, Penfold shall distribute all of the securities underlying the units of Phonetime purchased in the private placement to the shareholders of Penfold of record as of November 15, 2010. As a result, each shareholder of record will receive from Phonetime's transfer agent approximately 1.48 Phonetime Common Shares and approximately 0.6 Phonetime Warrant for each common share of Penfold held by them. Each whole Phonetime Warrant entitles the holder thereof to purchase one additional Phonetime Common Share at a price of $0.07 for a period of 12 months following the closing. All such securities of Phonetime are subject to a four-month hold period.

The common shares of Penfold will remain halted pending final Exchange approval of the Qualifying Transaction and the issuance by the Exchange of a Final Exchange Bulletin. Upon final approval, Penfold will be delisted and dissolved and all outstanding equity rights in Penfold will be cancelled. Any securities of Phonetime distributed to shareholders of Penfold whose securities of Penfold have been held in escrow will also be held in escrow under the same terms and conditions as such securities of Penfold.

Additional details regarding the Qualifying Transaction, return of capital to the shareholders and the dissolution are available in the management information circular of Penfold dated November 18, 2010, which has been filed with the Exchange and is available on SEDAR at www.sedar.com.

Cautionary Note Regarding Forward-looking Statements

This news release contains forward-looking statements that involve risks and uncertainties that could cause the results of Penfold to differ materially from management's current expectations. Actual results may differ materially due to a number of factors including, among others: the sale and issuance of additional Phonetime units in the private placement, the timing of the return of capital to the shareholders and the dissolution of Penfold. The matters discussed in this news release also involve risks and uncertainties described in Penfold's documents filed from time to time with the Canadian securities regulatory authorities. Penfold assumes no obligation to update the forward-looking information contained in this new release.

THE TSX VENTURE EXCHANGE INC. HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

Contact Information

  • Penfold Capital Acquisition III Corporation
    Gary Clifford, Chairman, President, Chief
    Executive Officer, Chief Financial Officer and Director
    416-418-9802
    gary@penfoldcapital.com
    or
    Phonetime Inc.
    Gary Clifford
    Chairman and Chief Executive Officer (Interim)
    416-418-9802