Ensign Services (PINK:ESVC)

Our financing requirements for the opening of our planned convenience stores will be significant. In the event that such financing is not procured, we may be forced to curtail our growth plans.

Funding Requirements for the Convenience Stores

Timex A&S plans to develop a convenience store network of 40 stores over a three-year period. Some of the c-stores will be done by retrofitting existing properties, while the others will involve acquiring additional land adjacent to gas stations. For gas stations with higher traffic flows, a larger c-store will be built to cater for the higher customer flow. These large c-stores have higher setup costs and land acquisition costs due to its size. The setup costs for large stores are estimated to be approximately US$0.7 million as compared to the US$0.5 million per store costs of regular size c-stores. The land acquisition cost is estimates to also higher at US$0.7 million as compared to US$0.35 million for a regular store.

Startup Costs per Store

Convenience Store Development Plan

Total Number of Gas Stations and Convenience Stores

The Company anticipates that the setup costs for convenience stores include consulting fees, startup inventory, architectural plans, branding, marketing assistance and Point-of-Sale (“POS”) consulting. Management anticipates that in most instances the Company will need to acquire land adjacent to Timex A&S’s gas stations on which to construct its planned convenience stores. In some cases, the Company might be able to lease or sublet the land from third party; however, it is assumed that land would be acquired in the following model.