Venquest Capital Ltd.
TSX VENTURE : VC.P

August 08, 2005 18:52 ET

Venquest Capital Ltd. Third Quarter Financial Statements June 30, 2005

OAKVILLE, ONTARIO--(CCNMatthews - Aug. 8, 2005) - Venquest Capital Ltd. (TSX VENTURE:VC.P) ("Venquest" or the "Company") released today its unaudited financial statements for the third quarter ended June 30, 2005. The Company is a capital pool company which entered into an arm's length letter of agreement dated April 5, 2005 with Nightingale Informatix Corporation ("Nightingale") and the principal shareholders of Nightingale pursuant to which the Company and Nightingale have agreed to complete a business combination. This business combination is expected to constitute a Qualifying Transaction of the Company. Details of the transaction were set out in a press release by Venquest dated April 19, 2005 at www.sedar.com.

Pursuant to the terms of the Business Combination, the holders of the Nightingale Common Shares will receive one common share of Newco with a deemed value of $1.00 per Common Share for each Common Share owned whereas the holders of the Company's Common Shares will receive one Newco Common Share for 3.076923 Common Shares owned of the Company. Nightingale completed a private placement of $974,950 Nightingale Subscription Receipts at a price of $1.00 per receipt for gross proceeds of $974,950 on July 12, 2005. The Business Combination is expected to be completed by August 25, 2005 subject to TSX Venture acceptance and shareholder approval. In that regard the Annual and Special Meeting of Shareholders has been called for Thursday, August 25, 2005 to, amongst other things, approve the Business Combination.

The Company had net income for the three month period ended June 30, 2005 of $4,408 or $0.0004 per share (loss of $7,767 for the three month period ended March 31, 2005 or $0.0008 per share).

SUMMARY OF INCOME STATEMENT INFORMATION

Unaudited financial results for the third quarter ended June 30, 2005 with comparative results for the nine months ended June 30, 2005 are as follows:



------------------------------------------------------------------------
Income Statement Third Quarter Ended Nine Months Ended
June 30, 2005 June 30, 2005
------------------------------------------------------------------------
Interest income $9,589 $24,585
------------------------------------------------------------------------
Net income (loss) 4,408 (234,708)
------------------------------------------------------------------------
Per share - basic 0.0004 (0.027)
- diluted 0.0003 n/a
------------------------------------------------------------------------
Weighted average shares
outstanding - basic 10,100,000 8,630,403
- diluted 11,700,000 n/a
------------------------------------------------------------------------


Interim results of Operations for the Third Quarter ended June 30, 2005

For the third quarter ended June 30, 2005, the Company carried on no operations and had no revenues other than interest income of $9,589 (second quarter ended March 31, 2005 - $12,207). Expenses incurred during the quarter were $5,181 (March 31, 2005 - $19,974). During the third quarter the Company incurred costs for professional fees of $2,507 relating to accounting services. Professional fees for the second quarter ending March 31, 2005 were $8,739 and related to both legal and accounting services. The Company also incurred listing and filing fees of $2,612 during the period versus $10,754 for the quarter ended March 31, 2005.

The Company will continue to incur expenses relating to on going activities and for legal and other professional services necessary to complete the transaction with Nightingale.

Interim results for the Nine Months ended June 30, 2005

For the nine months ended June 30, 2005, the Company carried on no operations and had no revenues other than interest income of $24,585. Expenses for the period totaled $259,293. They were comprised of legal fees of ($4,059), accounting ($9,040), fees to maintain the Company's listing on the TSX Venture Exchange and its status as a reporting issuer ($13,913), a charge to income of $230,670 related to stock option compensation and bank charges of $103.

The Company reported a loss of $234,708 or a $0.027 loss per share for the nine month period ended June 30, 2005.

The Company invested the proceeds of its private placement and Initial Public Offering in a prime linked cashable guaranteed investment certificate.



SUMMARY OF CASH FLOW INFORMATION

------------------------------------------------------------------------
Cash Flow Third Quarter Ended as at Nine Months Ended
June 30, 2005 June 30, 2005
------------------------------------------------------------------------
Cash from operating activities ($4,954) ($37,540)
------------------------------------------------------------------------
Cash from investing activities 0 0
------------------------------------------------------------------------
Cash from financing activities 0 1,290,828
------------------------------------------------------------------------
Increase (decrease) in cash and
cash equivalents (31,778) 1,226,464
------------------------------------------------------------------------
Cash and cash equivalents
- beginning of period 1,735,693 477,451
------------------------------------------------------------------------
Cash and cash equivalents
- end of period 1,703,915 1,703,915
------------------------------------------------------------------------

As at June 30, 2005, the Company had net working capital of $1,749,169.


SUMMARY OF BALANCE SHEET INFORMATION

------------------------------------------------------------------------
Balance Sheet Third Quarter Ended
June 30, 2005
------------------------------------------------------------------------
Cash and cash equivalents $1,703,915
------------------------------------------------------------------------
Interest receivable 21,280
------------------------------------------------------------------------
Deferred charges 26,824
------------------------------------------------------------------------
Total assets 1,752,019
------------------------------------------------------------------------
Total liabilities 2,850
------------------------------------------------------------------------
Share capital 1,763,285
------------------------------------------------------------------------
Contributed surplus 230,670
------------------------------------------------------------------------
Deficit (244,786)
------------------------------------------------------------------------
Total shareholders' equity 1,749,169
------------------------------------------------------------------------
Total liabilities & shareholders' equity 1,752,019
------------------------------------------------------------------------


The Company incurred deferred charges in the third quarter in the amount of $26,824. The costs related to the Qualifying Transaction are not amortized and are comprised of legal fees ($18,798) and amounts paid to the TSX Venture Exchange ($8,026). These costs will be allocated at the time of the successful conclusion of the Qualifying Transaction.

As at June 30, 2005 the Company had accrued liabilities of $2,850 comprised of accounting fees.

Share Capital

The Company is authorized to issue an unlimited number of common shares and an unlimited number of preferred shares. As at June 30, 2005 there were 10,100,000 common shares and nil preferred shares issued and outstanding. As at December 31, 2004 the Company has 10,100,000 common shares issued and outstanding.

On July 30, 2004 the Company completed a private placement, resulting in the issuance of 4,200,000 common shares for gross proceeds of $525,000. After issue costs, comprised of legal ($25,880) listing fees paid to TSX Venture Exchange ($11,663) and corporate finance fees ($15,000) the Company had net proceeds of $472,457.

On December 8, 2004, the Company completed its Initial Public Offering pursuant to which it issued 5,900,000 common shares at a price of $0.25 per share for gross proceeds of $1,475,000 and net proceeds of $1,290,828 after payment of legal fees ($32,379), commissions ($147,500) and printing and other costs ($4293) of the issue. In connection with this offering, the Company granted to the agent an option to purchase 590,000 common shares at a price of $0.25 per share, exercisable until June 14, 2006.

The Company has granted to its directors and officers an aggregate of 1,010,000 incentive stock options pursuant to its stock option plan at an exercise price of $0.25 per share expiring July 31, 2009. Any common shares issued pursuant to the exercise of the incentive stock options prior to the completion of a Qualifying Transaction must be deposited into escrow.

The Company's unaudited June 30, 2005 financial statements may be viewed on SEDAR at www.sedar.com.

The TSX Venture Exchange Inc. does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Venquest Capital Ltd.
    Stephen Shaver
    CEO
    (905) 829-9115