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MISSISSAUGA, ONTARIO--(Marketwire - May 14, 2010) - Phonetime Inc. (the "Company") (TSX:PHD) is providing this news release in accordance with National Policy 12-203 - Cease Trade Orders for Continuous Disclosure Defaults ("NP 12-203"). In its initial default announcement of April 1, 2010 (the "Default Notice"), the Company announced that it did not file its audited annual financial statements for the year ended December 31, 2009, its management's discussion and analysis relating to the Annual Financial Statements, and its annual information form (collectively, the "Annual Required Filings") on or before the prescribed deadline of March 31, 2010.

As previously announced, on April 15, 2010 the Ontario Securities Commission issued a temporary management cease trade order in respect of the Company's late filing of financial statements. The issuance of such temporary cease trade order does not affect the ability of persons who have not been directors, officers or insiders of the Company to trade in their securities. However, the securities regulatory authorities, in their discretion, may determine that it would be appropriate to issue a general issuer cease trade order affecting all of the Company's securities. Until such time that the Annual Required Filings are filed or the securities regulatory authorities issue a general cease trade order, the Company will continue to provide bi-weekly updates, as contemplated by NP 12-203.

Other than as set out herein and in the Company's Press Release of May 5, 2010, the Company reports that since the Default Notice: (i) there is no material change to the information set out in the Default Notice that has not been generally disclosed; (ii) there has been no failure by the Company in fulfilling its stated intentions with respect to satisfying the provisions of the alternative information guidelines set out in NP 12-203; (iii) there has not been any other specified default by the Company under NP 12-203; and (iv) there is no other material information concerning the affairs of the Company that has not been generally disclosed.

Update on Financial Statements

The Company also announced that it expects to file its restated annual and interim consolidated financial statements for 2008 and 2007, by May 15^th, 2010 and the annual consolidated financial statements for 2009 by May 22^nd, 2010. The Company expects that it will file its interim consolidated financial statements for the first quarter of 2010 by May 30^th, 2010.

About Phonetime Inc.

Phonetime is an international telecommunications Network carrier. Phonetime provides long-distance services to major telephone carriers around the world. In 2009, Phonetime carried in excess of 8 billion minutes for customers. 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 ].

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.