Ensign Services Inc (GREY: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.

Ensign Services Inc. (OTCBB: ESVC) announced that it completed a reverse merger with Tin Nghia Petrol Joint Stock Company in August 2009. Management believes the reverse merger transaction is one of the first successful reverse mergers of a Vietnamese company on the U.S. stock exchanges. The Company intends to complete a name change to Timex Assets and Services

Company Snap Shot: (Reminds us of CBEH in some respect).

• Timex A&S has 28 petrol stations along major routes in Vietnam's Dong Nai province and is one of the key suppliers of gasoline to factories in the region's industrial parks.
  
• Timex A&S is one of the two leading gas retailers in Dong Nai province and has the advantage of owning the land on which its gas stations are operated.
  
• Vietnam is one of Southeast Asia’s fastest growing economies, trailing only China; the country has the second-fastest growing economy with 8-9 percent growth in 2005, 2006 and 2007 and 6.2 percent in 2008.

Expansion Plan Details:

• The Company intends to expand its business through the acquisition and construction of additional gas stations on major national routes and industrial parks.
  
• We intend to expand the gas stations we currently co-own to include convenience stores (sometimes referred to as “c-stores”). Rather than a petrol station that offers a few food items for purchase, management anticipates that the Community Service Centers (“CSC”) will serve to draw local residents to the stations for many reasons beyond filling their gas tanks or buying a few items that they may need in an emergency. We believe that convenience stores in Vietnam will evolve into a unique place where customers can do everything from paying their bills, sending a fax or purchasing phone cards for calls overseas. The goal of the concept is for the stores to not only are residents’ corner stores, but also their post office, bank, home office and much more.
  
• 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.

Financial Details:

• In its 2009 10K, for the year ended September 30, 2009, the Company had audited revenues of over $76 million, gross profit of over $3.6 million and net income of over $1.5 million.
  
• First Quarter EPS unimpressive. Dilution may be an issue

Net income decreased from $390,090 for the three months ended December 31, 2008 to $89,517 for the comparable period in 2009, a decrease of $300,573 or 77.1%, due to increases in operating and financial expenses. Starting from 2009, the Company obtained external borrowings to finance its working capital, therefore more financial expenses will be incurred.

Margins Taking a hit due to increasing gasoline prices: The increase was mainly due to an increase in the average price the Company paid to its suppliers for the purchase of gasoline.

Post Merger Share Calculation:

• 10,000,000: Pre reverse merger outstanding shares
• 45,900,000: Newly issued shares of Common Stock (August. 2009)

GeoTeam® best effort calculation of total post reverse merger outstanding shares assuming full conversions:  55,900,000

Note:

Pursuant to the Escrow Agreement, the Company placed 30,405,800 Acquisition Shares into an escrow account, pending the approval and registration of the Subsequent Acquisition in accordance with applicable Vietnamese laws and regulations. Upon the Subsequent Closing, the Escrow Shares will be released to the Timex A&S Shareholders, and 51% of the outstanding capital of Timex A&S will be released to the Company. If the Subsequent Closing has not been completed by December 31, 2012, any Escrow Shares or outstanding shares of Timex A&S held in the escrow account shall be returned to the Company and the Timex A&S Shareholders, respectively, unless otherwise agreed by the parties.