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

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IN THE UNITED STATES 


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.
Penfold Cap Acquisition Iii Cp (TSXV:PNF.P)
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