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Press release from Marketwire

Phonetime Provides Update on Corporate Matters

Tuesday, October 04, 2011

Phonetime Provides Update on Corporate Matters17:01 EDT Tuesday, October 04, 2011AJAX, ONTARIO--(Marketwire - Oct. 4, 2011) - Phonetime Inc. (TSX:PHD) provided today an update on various corporate matters.Settlement of Lawsuit filed by Agent against Phonetime and Phonetime counter lawsuit --- On October 3rd, 2011, the Company entered into a settlement agreement with a former Agent providing for the withdrawal of the Agent's $1.7 Million lawsuit against Phonetime and a withdrawal by Phonetime of its counter lawsuit against the Agent. The settlement is not expected to have a material effect on the Company's financials results or prospects.Refiling of Q2 – 2011 interim financial statements to more fully comply with IFRS --- On October 4th, 2011, the Company filed amended financial statements and MD&A to more fully comply with disclosure requirements under IFRS. The Company emphasized that the revised statements and MD&A disclose no change whatsoever in assets, liabilities, equity, or income from that previously filed. Copies of the revised financial statements for the second quarter of 2011 are available at www.sedar.com.Extension of Bank Facility --- On September 28, 2011, the Company entered into an agreement with its senior lender to extend its existing banking facility on the same terms until April 30, 2012. The facility was previously scheduled to mature on September 30, 2011.Expiry of Common Share Purchase Warrants --- On September 21, 2011, 33.1 million outstanding Common Share Purchase Warrants of the Company, with an exercise price of $0.09 per common share, expired. At September 30, 2011, the Company has 5 million remaining Common Share Purchase Warrants outstanding, at various exercises prices ranging from $0.07 to $0.30 per common share. During 2011, an aggregate of 69.3 million Common Share Purchase Warrants expired.Launch of website (www.phonetime.com) --- On October 4th, 2011, the Company launched its new website www.phonetime.com. Please visit and give us your comments."I am pleased with Phonetime's progress following the 2010 re-organization of the Company", said Gary Clifford, Chairman and Interim CEO.About Phonetime Inc.Phonetime handles the completion of long distance telecommunications around the world. In 2010, Phonetime completed 720 million phone calls with duration of over 4 billion minutes in 2010. Phonetime is a best in class provider of outsourced telecommunication services. Phonetime's common shares are traded on the Toronto Stock Exchange under the symbol PHD. More information can be found at the Company's website, www.phonetime.com.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. See www.sedar.com which contains all securities files.FOR FURTHER INFORMATION PLEASE CONTACT: Gary CliffordPhonetime Inc.Chairman of the Board and CEO (Interim)+416-418-9802www.phonetime.com