CLEAN TRANSPORTATION GROUP, INC. - FORM 8-K/A - EX-99.2 - PROFORMA - 123110, 033111 - August 30, 2011

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8-K/A - CLEAN TRANSP 8-K 081511 - CLEAN TRANSPORTATION GROUP, INC.cleantrans-8k081511.htm
EX-10.2 - EMPLOY AGREEMENT - DOTY - CLEAN TRANSPORTATION GROUP, INC.ex10-2.htm
EX-21.1 - SUBSIDIARIES - CLEAN TRANSPORTATION GROUP, INC.ex21-1.htm
EX-99.1 - FINANCIAL STATEMENTS - 123110-123109, 033110 - CLEAN TRANSPORTATION GROUP, INC.ex99-1.htm
EX-10.1 - DEFINITIVE AGREEMENT - CLEAN TRANSPORTATION GROUP, INC.ex10-1.htm
EXHIBIT 99.2
 


CLEAN TRANSPORTATION GROUP, INC.
NOTES TO UNAUDITED CONDENSED PRO FORMA FINANCIAL STATEMENTS
DECEMBER 31, 2010


On May 30, 2011, Clean Transportation Group, Inc. (the “Company”) closed on the transactions described in a Definitive Agreement dated May 13, 2011 (the “Agreement”).  Under the terms of the Agreement, the Company agreed to acquire 100% of the issued and outstanding shares of Engine Clean Solutions, Inc. (“Engine Clean”) in exchange for 2,500,000 shares of common stock of the Company and $500,000 cash, $300,000 of which is to be used to satisfy obligations of Engine Clean. The $500,000 is in the form of a note payable as of the date of closing. A shareholder also agreed to contribute back to the Company a total of 7,657,535 shares of the Company’s common stock.

This transfer ownership transaction resulted in Engine Clean becoming a wholly-owned subsidiary of the Company.

The following unaudited pro forma condensed balance sheet as of December 31, 2010 and the unaudited pro forma statement of operations for the year ended December 31, 2010 are derived from the historical financial statements of the Company and Engine Clean and have been prepared to give effect to the  acquisition of the Engine Clean as of December 31, 2010. The unaudited pro forma financial statements are presented as if the closing of Agreement had occurred as of December 31, 2010.

The following unaudited pro forma financial statements have been prepared for illustrative purposes only and do not purport to reflect the results the combined company may achieve in future periods or the historical results that would have been obtained. These unaudited pro forma financial statements, including the notes hereto, should be read in conjunction with (i) the historical financial statements for the Company and (ii) the historical financial statements of Engine Clean.



 


 
PRO FORMA ADJUSTMENTS

NOTE 1.   These unaudited pro forma combined financial statements reflect the following pro forma adjustments:

(a)
To record the acquisition of the shares of Engine Clean in exchange for 2,500,000 shares of the Company valued at $0.50 per share and a note payable of $500,000, $300,000 of which is to be used to satisfy obligations of Engine Clean with $14,917 of related party debt forgiveness. As of December 31, 2010, the Company has not identified any assets requiring fair value adjustment. Goodwill has been determined to be the total of the purchase price of $1,750,000 less the $300,000 used to satisfy debt obligations of Engine Clean, together with the deficit equity in Engine Clean at December 31, 2010 in the amount of $124,818.

(b)
To record the satisfaction of certain related party obligations of the Company totaling $142,217 in exchange for 284,434 shares of the Company’s common stock.

(c)
To record the contribution of 7,657,535 shares of the Company’s common stock back to the Company.


 
 
 
 
 
Clean Transportation Group Inc. and Engine Clean Solutions, Inc.
                          
Unaudited Condensed Combining Proforma Balance Sheet
                          
December 31, 2010
                              
   
Clean
    
Engine Clean
                    
   
Transportation
    
Solutions
    
Proforma
          
Consolidated
  
   
Group Inc.
    
Inc.
    
Adjustments
          
Proforma
  
ASSETS
                              
Current Assets:
                              
Cash and cash equivalents
  
$
401
    
$
28,245
     $                                                   -            
$
28,646
  
Accounts receivable
    
-
      
33,610
       -              
33,610
  
Inventories
    
-
      
179,972
       -              
179,972
  
Prepaid expenses
    
730
      
3,809
       -              
4,539
  
                                       
Total current assets
    
1,131
      
245,636
       -              
246,767
  
        Deposits           -       4,763        -             4,763  
Goodwill
                    
1,574,818
    
(a)
      
1,574,818
  
Equipment, net
     -      
41
       -              
41
  
                                         
Total Assets
  
$
1,131
    
$
250,440
    
$
1,574,818
            
$
1,826,389
  
                                         
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
                                        
Accounts payable and accrued liabilities
  
$
73,802
    
$
49,141
    
$
(66,975
)
  
(b)
    
$
55,968
  
Loan interest payable
     -      
20,754
      
(20,754
)
  
(a)
      
-
  
Income taxes payable
     -      
11,200
       -              
11,200
  
Loans payable
     -      
294,163
      
(294,163
)
  
(a)
      
-
  
Note payable
     -       -      
500,000
    
(a)
      
500,000
  
Due to related parties
    
75,242
       -      
(75,242
)
  
(b)
      
-
  
                                         
Total Current Liabilities
    
149,044
      
375,258
      
42,866
              
567,168
  
                                         
Total  Liabilities
    
149,044
      
375,258
      
42,866
              
567,168
  
                                         
Stockholder's Equity (Deficit):
                                        
Common stock
    
25,991
      
11,700
      
2,500
    
(a)
      
32,818
  
                     
284
    
(b)
          
                     
(7,657
)
  
(c)
          
                                         
Additional paid-in capital
    
569,112
      
27,322
      
1,387,235
    
(a)
      
2,133,259
  
                     
141,933
    
(b)
          
                     
7,657
    
(c)
          
                                         
Accumulated deficit
    
(743,016
)
    
(163,840
)
                    
(906,856
)
                                         
Total Stockholders' Equity (Deficit)
    
(147,913
)
    
(124,818
)
    
1,531,752
              
1,259,221
  
                                         
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
  
$
1,131
    
$
250,440
    
$
1,574,818
            
$
1,826,389
  
                                         
                                         
 
See notes to unaudited condensed proforma financial statements.
 
 
- 1 -
 
 
 

 
 
Clean Transportation Group Inc. and Engine Clean Solutions, Inc.
              
Unaudited Condensed Combining Proforma Statement of Operations
              
For the Year Ended  December 31, 2010
                        
   
Clean
    
Engine Clean
              
   
Transportation
    
Solutions
    
Proforma
    
Consolidated
  
   
Group Inc.
    
Inc.
    
Adjustments
    
Proforma
  
                         
Sales
  
$
-
    
$
857,466
    
$
-
    
$
857,466
  
Cost of sales
     -      
580,672
      
-
      
580,672
  
                                 
Gross profit
    
-
      
276,794
      
-
      
276,794
  
                                 
Operating Expenses
                                
Selling, general and administrative
    
56,699
      
210,499
      
-
      
267,198
  
Interest expense
    
4,657
      
4,760
      
-
      
9,417
  
                                 
     
61,356
      
215,259
              
276,615
  
                                 
Net income before income taxes
    
(61,356
)
    
61,535
      
-
      
179
  
                                 
Provision for income taxes
    
-
      
(12,000
)
    
-
      
(12,000
)
                                 
Net Loss
  
$
(61,356
)
  
$
49,535
    
$
-
    
$
(11,821
)
                                 
                                 
Net loss per common share - basic
                                
and diluted
  
$
(0.00
)
  
$
29.73
            
$
(0.00
)
                                 
Weighted average of common shares
                                
- basic and diluted
    
25,990,868
      
1,666
              
25,990,868
  
                                 
                                 
 
See notes to unaudited condensed proforma financial statements.
 

 
 
- 3 -
 
 
 
 
CLEAN TRANSPORTATION GROUP, INC.
NOTES TO UNAUDITED PRO FORMA FINANCIAL STATEMENTS
  MARCH 31, 2011


On May 30, 2011, Clean Transportation Group, Inc. (the “Company”) closed on the transactions described in a Definitive Agreement dated May 13, 2011 (the “Agreement ”).  Under the terms of the Agreement, the Company agreed to acquire 100% of the issued and outstanding shares of Engine Clean Solutions, Inc. (“Engine Clean”) in exchange for 2,500,000 shares of common stock of the Company and $500,000 cash, $300,000 of which is to be used to satisfy obligations of Engine Clean. $500,000 is in the form of a note payable as of the date of closing. A shareholder also agreed to contribute back to the company a total of 7,657,535 shares of the Company's common stock. 
 
This transfer ownership transaction resulted in Engine Clean becoming a wholly-owned subsidiary of the Company.

The following unaudited pro forma balance sheet as of March 31, 2011 and the unaudited pro forma statement of operations for the period ended March 31, 2011 are derived from the historical financial statements of the Company and Engine Clean and have been prepared to give effect to the  acquisition of the Engine Clean shares as of March 31, 2011. The unaudited pro forma financial statements have been presented as if the closing of Agreement had occurred as of March 31, 2011.
 
The following unaudited pro forma financial statements have been prepared for illustrative purposes only and do not purport to reflect the results the combined company may achieve in future periods or the historical results that would have been obtained. These unaudited pro forma financial statements, including the notes hereto, should be read in conjunction with (i) the historical financial statements for the Company and (ii) the historical financial statements of Engine Clean.
 


 
PRO FORMA ADJUSTMENTS

NOTE 1.  These unaudited pro forma combined financial statements reflect the following pro forma adjustments:

(a).
To record the acquisition of the shares of Engine Clean in exchange for 2,500,000 shares of the Company valued at $0.50 per share and a note payable of $500,000, $300,000 of which is to be used to satisfy obligations of Engine Clean with $6,080 of related party debt forgiveness. As of March 31, 2011, the Company has not identified any assets requiring fair value adjustment. Goodwill has been determined to be the total of the purchase price of $1,750,000 less the $300,000 used to satisfy debt obligations of Engine Clean, together with the deficit equity in Engine Clean of March 31, 2011 in the amount of $136,107. 

(b).
To record the satisfaction of certain related party obligations of the Company totaling $142,217 in exchange for 284,434 shares of the Company's common stock.

(c).
To record repurchase at par value and cancellation of 7,657,535 shares of common stock of the Company.

 
 
 
- 4 -
 
 

 
Clean Transportation Group Inc. and Engine Clean Solutions, Inc.
                    
Unaudited Condensed Combining Proforma Balance Sheet
                          
 March 31, 2011
                              
   
Clean
    
Engine Clean
                    
   
Transportation
    
Solutions,
    
Proforma
          
Combined
  
   
Group Inc.
    
Inc.
    
 Adjustments   
      
Proforma
  
ASSETS
                              
Current Assets:
                              
Cash and cash equivalents
  
$
400
    
$
6,234
     $                                                     -            
$
6,634
  
Accounts receivable
    
-
      
45,482
       -              
45,482
  
Inventories
    
-
      
150,790
       -              
150,790
  
Prepaid expenses
    
730
      
3,787
       -              
4,517
  
                                       
Total Current Assets
    
1,130
      
206,293
       -              
207,423
  
        Deposits     -       4,763       -           4,763  
Goodwill
    
-
      
-
      
1,586,107
    
(a)        
    
1,586,107
  
Equipment, net
    
-
      
-
        -              
-
  
                                         
Total Assets
  
$
1,130
    
$
211,056
    
$
1,586,107
            
$
1,798,293
  
                                         
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
                                        
Accounts payable and accrued liabilities
  
$
84,862
    
$
32,683
    
$
(66,975
)
  
(b)
    
$
50,570
  
Loan interest payable
    
-
      
20,917
      
(20,917
)
            
-
  
Income taxes payable
    
-
      
8,400
                      
8,400
  
Loans payable
    
-
      
285,163
      
(285,163
)
            
-
  
Note payable
    
-
      
-
      
500,000
    
(a)        
    
500,000
  
Due to related parties
    
81,242
      
-
      
(75,242
)
  
(b)        
    
6,000
  
                                         
Total Current Liabilities
    
166,104
      
347,163
      
51,703
              
564,970
  
                                         
Total Liabilities
    
166,104
      
347,163
      
51,703
              
564,970
  
                                         
Stockholders' Equity (Deficit):
                                        
Common stock
    
25,991
      
11,700
      
2,500
    
(a)        
    
32,818
  
                     
284
    
(b)        
        
                     
(7,657
)
  
(c)        
        
Additional paid-in capital
    
571,061
      
27,322
      
1,389,687
    
(a)        
    
2,137,660
  
                     
141,933
    
(b)       
        
                     
7,657
    
(c)       
        
Accumulated deficit
    
(762,026
)
    
(175,129
)
                    
(937,155
)
                                         
Total Stockholders' Equity (Deficit)
    
(164,974
)
    
(136,107
)
    
1,534,404
              
1,233,323
  
                                         
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
  
$
1,130
    
$
211,056
    
$
1,586,107
            
$
1,798,293
  
                                         
 

 
See notes to unaudited condensed proforma financial statements.
 
 
 
- 5 -
 
 
 
Clean Transportation Group Inc. and Engine Clean Solutions, Inc.
              
Unaudited Condensed Combining Proforma Statement of Operations
              
For the Three Months Ended March 31, 2011
                    
                         
   
Clean
    
Engine Clean
              
   
Transportation
    
Solutions
    
Proforma
    
Combined
  
   
Group Inc.
    
Inc.
    
Adjustments
    
Proforma
  
                         
Sales
  
$
-
    
$
149,673
    
$                                              -
    
$
149,673
  
Cost of sales
     -      
99,277
       -      
99,277
  
                               
Gross profit
    
-
      
50,396
       -      
50,396
  
                               
Operating Expenses
                              
Selling, general and administrative
    
17,061
      
63,146
       -      
80,207
  
Interest expense
    
1,949
      
1,339
       -      
3,288
  
                               
     
19,010
      
64,485
       -      
83,495
  
                               
Net income (loss) before income taxes
    
(19,010
)
    
(14,089
)
     -      
(33,099
)
                               
Provision for (benefit) income taxes
    
-
      
2,800
      
-
      
2,800
  
                                 
Net Loss
  
$
(19,010
)
  
$
(11,289
)
  
 $
 -    
$
(30,299
)
                                 
                                 
Net loss per common share - basic
                                
and diluted
  
$
(0.00
)
  
$
(6.78
)
          
$
(0.00
)
                                 
Weighted average of common shares
                                
- basic and diluted
    
25,990,868
      
1,666
              
25,990,868
  
                                 
                                 


 
See notes to unaudited condensed proforma financial statements.
 
 
- 6 -
 
 
 
 

CLEAN TRANSPORTATION GROUP, INC. Reports