Clean Transportation 8-K/A Entry into a Material Definitive Agreement

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.

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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.

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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.

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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.

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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.

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