UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

[X]

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the Six Months and Quarter Ended June 30, 2012

[ ]

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 000-52206

CLEAN TRANSPORTATION GROUP, INC.

(Exact name of registrant as specified in its charter)

Utah

73-1083773

(State or other jurisdiction of

(I.R.S. Employer Identification No.)

incorporation or organization)

7810 Marchwood Place, Vancouver BC, Canada V5S 4A6

(Address of principal executive offices)

(604) 202-3212

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company

Large accelerated filer

[ ]

Accelerated filer

[ ]

Non-accelerated filer

[ ]

Smaller reporting company

[X]

(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No X

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date.

Class

Outstanding as of August 20, 2012

Common Stock, $0.001 par value

26,117,767

TABLE OF CONTENTS


	PART I — FINANCIAL INFORMATION	Page
Item 1.	Financial Statements ………………………………………………………………………...	3
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations..	15
Item 3.	Quantitative and Qualitative Disclosures about Market Risk …………………….………...	22
Item 4.	Controls and Procedures ……………………………………………………….……………	22
	PART II — OTHER INFORMATION
Item 1.	Legal Proceedings …………………………………………………………….…………….	23
Item 1A.	Risk Factors …………………………………………………………………….……….….	23
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds ………….……...…………...	23
Item 3.	Defaults upon Senior Securities ………………………………………….…………………	23
Item 4.	Submission of Matters to a Vote of Securities Holders …………………………………….	26
Item 5.	Other Information ……………………...………………………….………….……….…….	23
Item 6.	Exhibits ………………………………………………………………..…………………….	23
	Signatures …………………………………………………………………………………...	24

PART I — FINANCIAL INFORMATION

Item 1.

Financial Statements

The accompanying interim unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three month and six month periods ended June 30, 2012 are not necessarily indicative of the results that may be expected for the year ending December 31, 2012. For further information, refer to the financial statements for the year ended December 31, 2011 and the notes thereto included in the Company’s Annual 10-K Report.

CLEAN TRANSPORTATION GROUP, INC.

Consolidated Financial Statements

June 30, 2012

CONTENTS


Consolidated Balance Sheets……………………………………………......……………………...	4
Consolidated Statements of Operations…………………………..........…………………………	5
Consolidated Statements of Stockholders’ Deficit……..………………………………….	6
Consolidated Statements of Cash Flows………………..………………………………………...	7
Notes to the Consolidated Financial Statements…..………….……………………………………	8


CLEAN TRANSPORTATION GROUP, INC.
Consolidated Balance Sheets

ASSETS

	June 30,	December 31,
	2012	2011
	(unaudited)
CURRENT ASSETS
Cash	$ 13,860	$ 742
Accounts receivable	65,021	40,171
Loans receivable	5,249	5,249
Inventory	181,667	182,432
Prepaid expenses and deposits	4,678	156,980
Total Current Assets	270,475	385,574

PROPERTY, PLANT AND EQUIPMENT, net (note 6)	45,433	51,233

DEPOSITS	4,763	4,763
INTELLECTUAL PROPERTY, net (note 5)	63,438	74,312
TOTAL ASSETS	$ 384,109	$ 515,882

LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
Line of credit and reserve accounts	$ 69,700	$ 69,700
Accounts payable	165,036	91,522
Accrued liabilities	218,684	119,013
Notes payable (note 7)	15,000	15,000
Due to related parties (notes 2 and 7)	499,024	462,453
Total Current Liabilities	967,444	757,688
Total Liabilities	967,444	757,688

STOCKHOLDERS' DEFICIT
Preferred stock, $0.001 par value, 20,000,000 shares
authorized; no shares outstanding	-	-
Common stock, $0.001 par value, 200,000,000 shares
authorized; 26,117,767 shares issued and outstanding at both dates	26,118	26,118
Additional paid-in capital	1,136,689	1,119,587
Accumulated deficit	(1,746,142)	(1,387,511)
Total Stockholders' Equity (Deficit)	(583,335)	(241,806)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$ 384,109	$ 515,882

The accompanying notes are an integral part of these consolidated financial statements.


CLEAN TRANSPORTATION GROUP, INC.
Consolidated Statement of Operations
(Unaudited)

	For the 3 Months Ended		For the 6 Months Ended
	June 30,		June 30,
	2012	2011	2012	2011

SALES	$ 197,659	$ 49,745	$ 316,181	$ 49,745

COST OF SALES, excluding depreciation	107,882	35,094	168,681	35,094

	89,777	14,651	147,500	14,651

OPERATING EXPENSES

General and administrative	218,783	205,058	461,042	222,060
Depreciation and amortization expense	8,337	-	16,674	-

Total Operating Expenses	227,120	205,058	477,716	222,060

LOSS FROM OPERATIONS	(137,343)	(190,407)	(330,216)	(207,409)

OTHER EXPENSES

Interest expense	17,348	1,103	28,415	3,053

Total Other Expenses	17,348	1,103	28,415	3,053

NET LOSS	$(154,691)	$(191,510)	$(358,631)	$(210,462)

BASIC LOSS PER SHARE	$ (0.01)	$ (0.01)	$ (0.01)	$ (0.01)


WEIGHTED AVERAGE SHARES OUTSTANDING	26,117,767	25,990,868	26,117,767	25,984,978

The accompanying notes are an integral part of these consolidated financial statements.


CLEAN TRANSPORTATION GROUP, INC.
Consolidated Statement of Stockholders' Deficit


			Additional		Total
	Common Stock		Paid-in	Accumulated	Stockholders'
	Shares	Amount	Capital	Deficit	Deficit


Balance, December 31, 2010	25,990,868	$25,991	$ 569,112	$ (743,016)	$ (147,913)

Interest expense contributed related
to related party payables	-	-	14,510	-	14,510

Rent and other expenses contributed by an officer	-	-	2,000	-	2,000

Common stock issued for business acquisition	2,500,000	2,500	3,149	-	5,649

Common stock issued for debt conversion
at $0.10 per share	284,434	284	28,159	-	28,443

Common stock issued for services at $0.10 per share	5,000,000	5,000	495,000	-	500,000

Contribution of shares back to treasury	(7,657,535)	(7,657)	7,657	-	-

Net loss for the year ended
December 31, 2011	-	-	-	(644,495)	(644,495)

Balance, December 31, 2011	26,117,767	26,118	1,119,587	(1,387,511)	(241,806)

Interest and other expenses contributed by related
parties (unaudited)	-	-	17,102	-	17,102

Net loss for the six months ended
June 30, 2012 (unaudited)	-	-	-	(358,631)	(358,631)

Balance, June 30, 2012	26,117,767	$26,118	$ 1,36,689	$ (1,746,142)	$ (583,335)

The accompanying notes are an integral part of these consolidated financial statements.


CLEAN TRANSPORTATION GROUP, INC.
Consolidated Statement of Cash Flows
(Unaudited)
	For the Six Months Ended
	June 30,
	2012	2011

CASH FLOWS FROM OPERATING ACTIVITIES

Net loss	$ (358,631)	$ (210,462)
Adjustments to reconcile net loss to
net cash used by operating activities
Contributed capital for expenses	17,102	3,053
Stock Issued for Services	-	500,000
Depreciation and amortization	16,674	-
Change in operating assets and liabilities
(Increase) decrease in accounts receivable	(24,850)	10,705
(Increase) decrease in inventory	765	8,951
(Increase) decrease in prepaid expenses	152,302	(343,750)
(Increase) decrease in other receivables	-	(38)
Increase (decrease) in accounts payable	73,514	12,148
Increase (decrease) in accrued liabilities	99,671	7,786

Net Cash Provided (Used) by Operating Activities	$ (23,453)	$ (11,607)

CASH FLOWS FROM INVESTING ACTIVITIES	-	-

CASH FLOWS FROM FINANCING ACTIVITIES

Advances from related parties	59,771	85,659
Proceeds from bank loan	-	19,000
Repayment of related party advances	(23,200)	(75,242)

Net Cash Provided by Financing Activities	36,571	29,417

INCREASE (DECREASE) IN CASH	13,118	17,810

CASH AT BEGINNING OF PERIOD	742	401

CASH AT END OF PERIOD	$ 13,860	$ 18,211

SUPPLEMENTAL CASH FLOW INFORMATION:

CASH PAID FOR:

Taxes	$ -	$ -
Interest	$ -	$ -

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
Stock issued in retirement of debt	$ -	$ 28,433
Common stock issued for acquisition	$ -	$ 5,648

The accompanying notes are an integral part of these consolidated financial statements.

CLEAN TRANSPORTATION GROUP, INC.

Notes to Consolidated Financial Statements

June 30, 2012

NOTE 1 -

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

CLEAN TRANSPORTATION GROUP, INC. (the “Company”) was organized August 23, 1978 under the laws of the State of Utah as Price Card & Gift, Inc. On June 27, 2008, the Company changed its name to Quintana Gold Resources Corp. and on April 18, 2011 the Company amended its articles of incorporation changing the name to CLEAN TRANSPORTATION GROUP, INC.

On May 30, 2011, the Company acquired 100% of the issued and outstanding shares of Engine Clean Solutions, Inc. (“Engine Clean”), a private California company with active revenue generating operations based in California. Accordingly, the Company is no longer considered to be in the development stage.

The accompanying interim unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six and three month period ended June 30, 2012 are not necessarily indicative of the results that may be expected for the year ending December 31, 2012. For further information, refer to the financial statements for the year ended December 31, 2011 and the notes thereto included in the Company’s Annual 10-K Report.

Accounting Method

The financial statements are prepared using the accrual method of accounting. The Company has elected a calendar year end.

Consolidation

The accompanying consolidated financial statements include the Company and its wholly owned subsidiary, Engine Clean, as of and for the six months ended June 30, 2012.

Estimates

The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments with a maturity of six months or less when purchased to be cash equivalents.

Financial Instruments

The carrying values of cash, accounts receivable, accounts payable, promissory notes payable and due to related parties approximate fair value because of the short-term nature of these instruments. Management is of the opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments.

Inventory

Inventory, which consists of finished goods, is valued at the lower of cost and net realizable value using the first in first out (FIFO) method.

CLEAN TRANSPORTATION GROUP, INC.

Notes to Consolidated Financial Statements

June 30, 2012

NOTE 1 -

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Property Plant and Equipment

Property and equipment are stated at cost. Depreciation and amortization are calculated using the straight-line method over estimated useful lives as follows:


Equipment and Tooling	3-5 years
Office furniture and equipment	5-7 years
Vehicles	3-5 years

Intangible Assets and Amortization

The Company has adopted ASC 350 "Goodwill and Other Intangible Assets", which requires that intangible assets be tested annually for impairment. Intangible assets with a finite life will be amortized over the estimated useful life of the asset. The Company's operational policy for the assessment and measurement of any impairment in the intangible assets is to evaluate annually, the recoverability and remaining life of its intangible assets to determine the fair value of these assets.

Revenue Recognition

The Company receives revenues from the sale of fuel cleaning systems. The Company recognizes revenues when persuasive evidence of an arrangement exists, the product is delivered and collection is reasonably assured. A one-year warranty is provided by the Company on all its products.

Income Taxes

The Company accounts for income tax using the asset and liability method in accordance with ASC 740, “Income Taxes”. The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities and for operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.

Basic and Diluted Loss per Share

Basic loss per common share is computed by dividing net loss available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted loss per common share is computed in the same way as basic loss per common share except that the denominator is increased to include the number of additional common shares that would be outstanding if all potential common shares had been issued and if the additional common shares were dilutive. As of June 30, 2012 and 2011 there were no dilutive shares.

Fair Value of Financial Instruments

The fair value of the Company’s cash, accounts receivable, accounts payable, promissory notes payable and due to related parties approximate carrying value based on their effective interest rates compared to current market prices.

CLEAN TRANSPORTATION GROUP, INC.

Notes to Consolidated Financial Statements

June 30, 2012

NOTE 1 -

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Product Warranties

Our products are warranted to be free of defects in workmanship and materials for a period of one year from date of purchase by original purchaser. If the product fails within this period, it will be repaired or replaced at seller’s option; provided (1) the product is submitted with proof of purchase date and (2) transportation charges are prepaid to the nearest Service Center. Liability under this warranty is expressly limited to repairing or replacing the product or parts thereof. This warranty does not apply to product or parts broken by accident, negligence, overload, abuse, or if they have been tampered with in any way. Our warranty does not apply to service hoses and adapters which may need replacing due to normal wear. If this warranty does not apply, then the purchaser shall pay all costs for labor, material and transportation. The use of this apparatus for any purpose other than the services described renders the warranty null and void. No other warranties are expressed or implied for our products. As of June 30, 2012, and December 31, 2011 any warranty liability is immaterial.

Trade Receivables and Collections

The Company maintains an allowance for doubtful accounts for estimated losses that may arise if any of its customers are unable to make required payments. Management specifically analyzes the age of customer balances, historical bad debt experience, customer credit-worthiness, and changes in customer payment terms when making estimates of the collectability of the Company’s trade accounts receivable balances. If the Company determines that the financial conditions of any of its customers has deteriorated, whether due to customer-specific or general economic issues, increases in the allowance may be made. Accounts receivable are written off when all collection attempts have failed. The Company had bad debt expense of $0 for the six months ended June 30, 2012 and June 30, 2011.

Sales Tax

Pursuant to FASB ASC 235/APB 22D our sales tax policy is to use the gross method. We collect sales tax on sales within the State of California. On sales to customers outside California we do not collect sales tax. The significant majority of our sales are outside of California.

Significant Customers

During the first six months of 2012, three customers each represented more than 10% of revenues as detailed in the table below. There was one month of revenues from Engine Clean after acquisition in the six months ended June 30, 2011 and the three customers who represented more than 10% is also detailed below.


Customer	For the Six Months Ended June 30, 2012	One Month Ended June 30, 2011
Customer 1	27%	51%
Customer 2	14%	12%
Customer 3	13%	10%

CLEAN TRANSPORTATION GROUP, INC.

Notes to Consolidated Financial Statements

June 30, 2012

NOTE 2 - RELATED PARTY TRANSACTIONS

The Company makes use of office space and management services controlled by a related party. These services are non-contractual and are on an as-used basis. The Company also, from time to time, has some of its expenses paid by related parties with the intent to repay. For the six months ended June 30, 2012, the Company incurred $59,771 in debt for such expenses. These types of transactions, from time to time, result in related party balances on the Company’s books as a necessary part of funding the Company’s operations. At June 30, 2012, the Company owed related parties payables of $251,224 and a promissory note of $247,800 which total $499,024 as of June 30, 2012. Also included in accrued liabilities is $144,500 due to the company’s CEO for past wages and expenses (December 31, 2011, $62,500).

Interest on payables to related parties is accrued during the period. As there is no expectation for this interest to ever have to be repaid, the amount is recorded as contributed capital for expenses and recorded as an increase to Additional Paid-in Capital. During the six month period ended June 30, 2012 the company recorded $17,102 of interest as contributed capital.

NOTE 3 - GOING CONCERN

The Company's consolidated financial statements are prepared using generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has sustained recurring losses, has accumulated deficit and a deficit in working capital. This raises substantial doubt about the Company’s ability to continue as a going concern. Management intends to seek additional acquisitions and obtain debt and equity financing. There is no assurance the Company will be successful in these efforts.

NOTE 4 - ACQUISITION OF SUBSIDIARY

Effective May 30, 2011, the Company closed on the acquisition of Engine Clean Solutions, Inc., a private California corporation (“Engine Clean”) by which Engine Clean became our wholly owned subsidiary. Following the closing of the acquisition, we have become engaged in the business of Engine Clean. The acquisition transaction has not been considered a change in control with the shareholders of the Company retaining 90% interest in the consolidated entity upon the completion of the transaction.

Under the terms of the Acquisition Agreement, we acquired 100% of the issued and outstanding capital stock of Engine Clean, held by two stockholders, in exchange for 2,500,000 shares of the Company’s authorized, but previously unissued common stock, and $500,000 in cash. The cash portion is to be paid subsequently from funds raised by the Company pursuant to a private placement of securities or by other financings. The cash payment is evidenced by a promissory note in the amount of $500,000 payable as follows: (i) $285,000 to be paid 45 days after the first day the Company’s shares are traded on the OTC Bulletin Board (“OTCBB”), or an equivalent trading medium, such cash funds to be utilized in retiring Engine Clean related party liabilities (ii) $100,000 to be paid six months after the first day the Company’s shares are traded on the OTCBB; (iii) $100,000 to be paid twelve months after the first day the Company’s shares are traded on the OTCBB; and (iv) repayment of two loans totalling $15,000.

The Company has agreed to use its best efforts to seek funding in order to satisfy the promissory note prior to the closing of the Acquisition Agreement. However, at the closing, the promissory note had not yet been satisfied and there can be no assurance that the funds will be raised. The Company intends to continue to seek the necessary funds following the closing. In the event of inability by the Company to satisfy payments as required by the promissory note, the Company will retire any unpaid portion of the promissory note by issuing two million common shares to the stockholders of Engine Clean.

CLEAN TRANSPORTATION GROUP, INC.

Notes to Consolidated Financial Statements

June 30, 2012

NOTE 4 - ACQUISITION OF SUBSIDIARY (continued)

The allocation of total consideration to the assets acquired and liabilities assumed based on the estimated fair value of Engine Clean were as follows:


	May 30, 2011		Estimated Life
Property, plant and equipment	$	58,000	5 years
Intangible assets acquired		87,000	4 years
Current assets		225,474
Accounts payable and accrued liabilities		(67,126)
Line of credit and reserve accounts		(9,700)
Notes payable		(288,000)
Total consideration	$	5,648

Pro Forma Financial Information

The following pro forma statement of operations for the three months ended March 31, 2011 and June 30, 2011 is derived from the historical financial statements of the Company and Engine Clean and has been prepared to give effect to the acquisition of Engine Clean as if the closing of the acquisition agreement had occurred as of January 1, 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.


	For the Six Months Ended June 30, 2011 (Pro Forma Unaudited)			For the Three Months Ended June 30, 2011 (Pro Forma Unaudited)
Sales	$	252,280	$	102,607
Cost of sales		172,690		73,413
Gross Profit		79,590		29,194
General and Administrative Costs		130,923		47,428
Loss from Operations	$	(51,333)	$	(18,234)

CLEAN TRANSPORTATION GROUP, INC.

Notes to Consolidated Financial Statements

June 30, 2012

NOTE 5 - INTELLECTUAL PROPERTY

Intellectual property consists of the design documents, the CNC machine coding for fabrication and other know-how for the manufacture of machines and related attachments. Intellectual Property is amortized on straight-line basis over a period of 4 years. For the six months ended June 30, 2012 we recorded amortization expense of $10,874.

The Company's acquired Intellectual Property assets subject to amortization are as follows:


	June 30, 2012			December 31, 2011
	Gross Carrying Amount	Accumulated Amortization	Net Carrying Amount	Gross Carrying Amount	Accumulated Amortization	Net Carrying Amount
Product Designs	$ 87,000	$ (23,562)	$ 63,438	$ 87,000	$ (12,688)	$ 74,312

NOTE 6 - PROPERTY AND EQUIPMENT

Property and Equipment consists of equipment used in the manufacturing process, office furniture and fixtures, and leasehold improvements. Property, Plant and Equipment is amortized on a straight-line basis over a period of 5 years. Depreciation expense for the six months ended June 30, 2012 was $5,800.


	June 30, 2012			December 31, 2011
	Gross Carrying Amount	Accumulated Depreciation	Net Carrying Amount	Gross Carrying Amount	Accumulated Depreciation	Net Carrying Amount
Equipment & Tooling	$ 201,905	$ (156,472)	$ 45,433	$ 201,905	$ (150,672)	$ 51,233
Leasehold Improvements	122,695	(122,695)	-	122,695	(122,695)	-
Furniture and Fixtures	32,000	(32,000)	-	32,000	(32,000)	-
Total	$ 356,600	$ (311,167)	$ 45,433	$ 356,600	$ (305,367)	$ 51,233

CLEAN TRANSPORTATION GROUP, INC.

Notes to Consolidated Financial Statements

June 30, 2012

NOTE 7 - NOTE PAYABLE

As part of the consideration for the acquisition of Engine Clean, the Company issued a promissory note on May 30, 2011 for $285,000 to one of the shareholders. This note is to be paid from funds raised by the Company pursuant to a private placement of securities or by other financing. Payment is due 45 days after the first day the Company’s shares are traded on the OTC Bulletin Board (“OTCBB”), or an equivalent trading medium. The note carries no interest. If payment is not made according the above conditions, a penalty of up two million shares will paid from the treasury to the note holder. There are no other payments associated with this note. As of June 30, 2012, the balance outstanding on this note is $247,800. As of June 30, 2012, the Company’s shares have not started trading.

Also as part of the acquisition of Engine Clean, the Company assumed the obligation to repay two notes, one for $8,500 and one for $6,500.

The Company maintains a $50,000 revolving line of credit with our bank. This line carries interest at 5.25% APR. At June 30, 2012 the balance was $50,000. The Company also maintains two reserve accounts, each with a $10,000 limit and carrying interest rates of 9.25%. At June 30, 2012, these two reserve accounts had balances of $10,000 and $9,700, respectively.

NOTE 8 - ISSUANCES OF SHARE CAPITAL

There were no shares issued during the six month period ending June 30, 2012. At June 30, 2012 and December 31, 2011 the Company had 26,117,767 shares issued and outstanding.

NOTE 9 - CONTINGENCIES AND COMMITTMENTS

Litigation

From time to time, the Company may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm the Company. The Company is currently not aware of any such legal proceedings or claims that the Company believes will have, individually or in the aggregate, a material adverse effect on its business, financial condition or operating results.

Indemnities and Guarantees

During the normal course of business, the Company has made certain indemnities and guarantees under which it may be required to make payments in relation to certain transactions. The Company indemnifies its directors, officers, employees and agents to the maximum extent permitted under the laws of the State of Utah. These indemnities include certain agreements with the Company's officers under which the Company may be required to indemnify such person for liabilities arising out of their employment relationship. The duration of these indemnities and guarantees varies and, in certain cases, is indefinite. The majority of these indemnities and guarantees do not provide for any limitation of the maximum potential future payments the Company could be obligated to make. Historically, the Company has not been obligated to make significant payments for these obligations and no liabilities have been recorded for these indemnities and guarantees in the accompanying balance sheets.

Commitments

The Company has no commitments as of June 30, 2012.

NOTE 10 - RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

The Company has reviewed all recently issued, but not yet adopted, accounting standards in order to determine their effects, if any, on its results of operation, financial position or cash flows. Based on that review, the Company believes that none of these pronouncements will have a significant effect on its current or future earnings or operations.

NOTE 11 - SUBSEQUENT EVENTS

Management has evaluated subsequent events pursuant to the requirements of ASC Topic 855 and notes that there are no subsequent events that require disclosure.

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

The following information should be read in conjunction with the financial statements and notes thereto appearing elsewhere in this Form 10-Q.

As used in this quarterly report the terms "we", "us", "our", “CTGI” and “our company” refer to CLEAN TRANSPORTATION GROUP, INC., unless otherwise indicated. All dollar amounts in this report are in U.S. dollars unless otherwise stated.

On May 30, 2011, the Company closed on the acquisition of Engine Clean Solutions, Inc., a private California corporation (“Engine Clean”) by which Engine Clean became our wholly owned subsidiary.

By acquiring Engine Clean we have become engaged in the business of offering a full line of automotive maintenance service products to engine manufacturers, distributors, dealers and service centers in the United States and elsewhere. Engine Clean specializes in systems for enhanced cleaning of automotive and truck engines, drive trains, cooling and fuel systems.

Engine Clean, founded in 1991, is based in Los Angeles, California and manufactures service equipment to improve the fuel efficiency, performance, service life, safety, and environmental impact of gasoline and diesel engines. Engine Clean’s customers are diesel engine OEM vendors, manufacturers selling chemicals and equipment to the global automotive aftermarket and commercial transport fleets. OEMs are original equipment manufacturers that design and build automobiles, trucks and agricultural and heavy-duty transport trucks. These vehicles are then serviced by vendors that are authorized distributors appointed by the OEM.

Engine Clean maintains its principal offices at 5112 Heintz Street, Baldwin Park, California, 91706-1819 and its telephone number is (626) 814-3969. Engine Clean maintains a website that can be accessed at www.engineclean.com and www.enginecleansales.com

Engine Clean manufactures all of its automotive service equipment that is sold to distributors for fuel system cleaning, diesel fuel system cleaning, coolant exchange, lubrication exchange, differential fluid exchange, power steering fluid exchange, brake bleeding, and tank cleaning. Engine Clean also manufactures a Ford diesel EGR cleaning tool intended for Ford diesel engines.

Engine Clean sells two fuel system cleaning solutions. One is for petrol (with a trade name GX – 301) and one for diesel fuel system cleaning (with a trade name of D-501). It also sells one lubrication cleaning solution under the trade name of EFX-601. The cleaning solutions have been blended for Engine Clean for the past 20 years by a local Southern California chemical vendor. The formulas were derived from US military cleaning solution specifications.

Engine Clean employs a Diesel Fuel Tool connected to an engine with fuel system specific adapters. While the engine is idling, a mixture of cleaning solution and diesel fuel is circulated through the fuel system. This includes the fuel pump, injectors, fuel rails, valves, rings and combustion chamber surfaces. The cleaning solution loosens carbon and other contaminants that are then removed by the Tool’s 5- micron filter or expelled through the exhaust. A 5-micron polypropylene sediment filter traps sediments and other particulate matter, such as dirt, silt, and rust that are in vehicle diesel fuel, lubrication oil, and engine coolant. The 5-micron rating refers to the micron smallest size of particles that are trapped by the polypropylene filter media.

We believe that this treatment can improve engine performance, drivability and fuel economy. Vehicle drivability involves ease of engine starting; engine idling, and engine acceleration without engine roughness, stalling, hesitation or surge. We believe that today’s diesel engines that comply with current Environment Protection Agency (“EPA”) standards are particularly well suited for this treatment, as they use fuel injectors that are prone to failure due to buildup of the contaminants found in diesel fuel. In an article published by the Society of Automotive Engineers (“Deposit Control in Modern Diesel Fuel Injection Systems” – October 10, 2010), it was stated that “modern diesel fuel injection equipment systems are susceptible to the formation of a variety of deposits”, such as in nozzle spray-holes and inside the injector body. This could “lead to increased fuel consumption, loss in power, poor driveability and failure to start.” We believe that our treatment can address some of these issues. We also offer a system

for cleaning the fuel tanks of vehicles to remove contaminants that build up over time as they settle out of the fuel in the tank.

The product line includes cleaning solutions, spare machine parts, and adapter kits to fit new makes and models of automobiles. Engine Clean is currently selling products through distributors in North America, Indonesia, India, South America, Europe and the Middle East. A major heavy duty equipment OEM is distributing the Engine Clean Diesel Fuel Tool in Canada, Germany, and France. Products offered by Engine Clean are outlined below:

The Fuel Tool

Designed and intended to clean components of the fuel intake system, including:

Air Plenum

Throttle Body

Air Bypass Valve

Ports

Injectors

Valves

Combustion Chambers

Oxygen Sensors

Catalytic Converters

The Oil Tool

Designed and intended to perform the following:

Purges old oil from engine using shop air

Injects clean oil into oil galleys preventing dry starts

Eliminates Oil Carryover during oil changes

The Diesel Fuel Tool

Designed and intended to clean the fuel and combustion system including:

Lines

Injector Pump

Fuel Injectors

Removes Carbon, Gums and Varnish

Restores Throttle Response

Restores Fuel Efficiency

Cleaning Solutions

Designed to work with the Oil and Fuel Tools:

Fuel system cleaner

Diesel fuel system cleaner

Oil system cleaner

Fluid Services

The vehicle fluid systems we address:

Coolant system service

Power steering service

Differential Service

Brake Bleeder Service

Diesel EGR Service

Diesel Fuel Tank Cleaning Machine

Designed to clean fuel storage tanks:

Fuel Storage Tank Cleaning Machine

Vehicle Fuel Tank Cleaning Machine

Fluid services referenced above refers to the range of fluid exchange service recommend by vehicle manufacturers to maintain vehicle warranties and provide for extended engine life beyond the new car warranty period. They include fuel service, diesel fuel service, engine oil service, differential gear box exchange, coolant exchange, brake system flushing, and power steering service. Engine Clean provides tools and machines that help service technicians perform fluid exchange service according to manufacturer’s specifications.

Engine Clean’s Fuel Tool is designed to clean deposits that accumulate in fuel intake systems. Excessive deposits in the intake fuel system can trigger a malfunction indicator light by an on board diagnostic sensor and cause a vehicle to fail an emissions inspection program. Fuel system intake cleaning is an OEM authorized service and an approved emissions inspection station maintenance procedure for licensed emissions technicians.

The federal government mandates minimum detergent requirements for gasoline to minimize the emissions problems associated with fuel system intake deposits. These detergents are sold to automotive service facilities for fuel system maintenance. A fuel system service using fuel system cleaning and detergents in machines like Engine Clean’s Fuel Tool is intended to cleanse an engine to enable the vehicle to pass an emission inspection retest.

The Oil Tool purges old oil from the engine, injects clean oil into oil galleys, and helps prevent dry starts. Engine Clean has obtained an oil analysis performed by Herguth Laboratories detailing the effectiveness of this service.

Engine Clean`s overall strategy is to first identify targeted OEM manufacturer clients, establish corporate relationships that lead to distributors/dealers, and then implement roll-out plans to the distributor’s service location base. Engine Clean targets OEM manufacturers that have a significant network of service locations for their products. Targeted OEM manufactures include makers of key engine components such as fuel injectors, makers of brand-name engines and companies that sell complete vehicles. Our focus is in the heavy-duty segment, meaning that we will seek out OEMs who specialize in diesel engines. We intend to establish corporate relationships whereby our OEM partners validate the benefits of our products and then recommend their use as part of the normal maintenance cycle of the vehicle. As a consequence, we anticipate that our equipment will be sold into the service locations of the OEM partner. Engine Clean offers adapters that enable its tools to fit a wide range of vehicles. Management believes that fluid exchange and engine cleaning services could create additional revenue opportunities for service locations.

Target Market

Engine Clean‘s specific target market is medium to heavy-duty trucks. We estimate that there are between three and five million medium to heavy-duty trucks in operation in the United States based on available U.S. EPA data. Engine Clean’s customers are the service locations for diesel engine OEM vendors, manufacturers selling chemicals and equipment to the global automotive aftermarket and commercial transport fleets. Engine Clean provides a range of services for both diesel and petrol vehicles.

Sales and Marketing

Our sales and marketing strategy will consist of several elements. First, we intend to present Engine Clean technology to potential target companies at industry conferences and trade shows. We intend to focus on customers referred to us by independent agents. We also intend to maintain a high public profile through announcements, press releases and advertising. We have forged channel relationships with a major supplier of chemicals to the global automotive industry. The sales team from the chemical vendor introduces us to accounts when there is a need for equipment in addition to the chemicals provided by the vendor. We do not have a written agreement with the chemical vendor; rather our relationship is based on personal relationships between Engine Clean sales and the sales team of the chemical vendor. Our major customer was introduced to us through this chemical supplier. Our relationship with this vendor is at an active stage, with both companies being represented in selected accounts. We intend to develop similar relationships with other vendors of chemicals to the vehicle maintenance market. Five customers

represented 67% of our revenues in the first six months of 2012. Our largest customer in the first six months of 2012 represented 27% of sales in the first six months of 2012. Two other customers represented 14% and 13% of sales during the first six months of 2012. As Engine Clean was acquired May 30, 2011 there was no revenue for the first 5 months of 2011. In June 2011, our largest customer represented 51% in sales and two other customers represented 12% and 10% of sales in June 2011. We do not have written agreement with any of our principal customers. We expect this concentration to decrease as our customer base grows. There is no guarantee that our customer base will grow.

Engine Clean plans to expand its business in both North America and the rest of the World as business warrants and funds are available. During 2012, we intend to hire an Executive Vice President of Sales and Marketing. We anticipate looking at candidates that have strong ties to the heavy-duty transportation industry. Subsequently and as funds are available, we plan on adding up to 14 regional sales managers to provide sales coverage in North America. We would expect to add these sales managers over the next four years; six in 2012, two in 2013 and three in each of 2014 and 2015.

Management estimates that our selling and marketing expenses will be approximately $500,000 in 2012, $1.0 million in 2013 and up to $4.0 million by 2015. These projections by management are premised on our ability to secure necessary funding and realize future sales that can support the expenditure. To fund these initial efforts, we will most likely raise funds through the private sale of our securities, although we have not entered into any agreement or arrangement for the possible sale of our securities. There can be no assurance that we will be able raise the necessary funds and/or realize sufficient sales to reach these goals.

Of the $500,000 projected for selling and marketing expenses in 2012, we anticipate $100,000 will be budgeted for advertising, which amount would significantly increase in subsequent year as business warrants. The balance of selling and marketing expenses projected for 2012 would be for hiring up to six new regional sales persons and would include salaries, commissions and travel and entertainment expenses estimated for the new sales persons. Initial marketing activities have commenced and are focused on the U.S. market. However, we will engage in limited marketing activities outside of the U.S. and North America during 2012, which will be limited to attendance at selected trade shows and from leads generated from our web site.

Our overall marketing strategy is to first identify targeted OEM manufacturer clients, establish corporate relationships that lead to distributors/dealers, and then implement direct sales campaigns for dealers identified as potential customers. We plan to target OEMs that have a significant presence in diesel engines, as we believe our products are well-suited to this particular segment. Because fuel injectors are typically sensitive to contaminants and residues found in diesel fuel, it is our belief that diesel engine manufacturers have significant warranty repair costs, which is an incentive for products that clean engine systems. Our target markets are new-car dealerships and after-market automotive service locations with maintenance programs for fluids in various vehicle systems, such as engine oil, braking, cooling, transmission and others. We plan to conduct future advertising programs to market this service.

Engine Clean will routinely sell to customers on credit. Typical terms are 2% - 10, net 30, which means that invoices are due within 30 days, but customers are given a 2% discount if they pay the invoice within 10 days. International sales are conducted via credit card or wire transfer with payment confirmed prior to shipping

Trademarks and Copyrights

Engine Clean does not own trademarks or copyrights at this time.

Markets and Competition

Engine Clean operates in a highly competitive marketplace. Our principal competitors include SPX Corporation, Wynn’s Oil, BG Products, Moc Products, Justice Brothers, Bardahl, Kenvo, RTI(Bosch), Motorvac(UView), Flow Dynamics, Granitize, and AEC. Most of our competitors are larger and better financed than Engine Clean and there is no assurance that we can successfully compete with these businesses.

Employees

Engine Clean presently has 5 full time employees, three part-time employees and one consultant. It is anticipated that during the next 12 months, Engine Clean will add approximately 3 new employees for product assembly. Engine Clean employees are not members of any union, nor have they entered into any collective bargaining agreements, nor is it anticipated in the near future. It is believed that Engine Clean’s relationship with its employees is good. CTGI has one employee, its CEO; its directors and other officers operate as consultants to the company.

Technical Expertise

Certain Engine Clean customers require specialized adapters for their engines and engine subsystems or their fluid products. Engine Clean has its own machine shop to design, prototype and manufacture custom adapters as needed. Engine Clean manufactures fuel tools, oil tools, diesel fuel tools and cleaning machines from components sourced from third-party vendors. These components are widely available from a number of vendors and we do not anticipate difficulties in securing the raw materials. Engine Clean resells a limited quantity of cleaning solutions, sourced from independent contract manufacturers and packaged under the Engine Clean brand. The raw materials for these solutions are widely available from specialty chemical manufacturers such as Lubrizol. Engine Clean Tools are sold primarily without cleaning solutions so as to avoid conflicts with our current and potential channel partners.

Government Regulation

We believe that Engine Clean’s operations are not materially affected by government regulations and agencies, despite regulations established by such agencies as the California Air Resources Board (“ARB”), the US EPA and environmental agencies in Europe and Asia. As an example, recent stringent regulatory fuel and emissions standards for new diesel vehicles and cleaner diesel fuels sold in North America, have created demand for diesel fuel system cleaning machines, exhaust recirculation cleaning services, and diesel fuel tank cleaning machines. These machines and associated fluids, such as those offered by Engine Clean, are intended to help keep engines operating as close to factory specifications as possible. These new regulations and new generation cleaning equipment are also the basis of many new international standards for greenhouse gas control programs.

Federal Clean Air Acts and California ARB regulations are of such stringency that vehicle manufacturers have adopted high-pressure injection systems to meet emissions standards. Fuel and oil contaminants can cause a variety of injector problems including rough start, poor idle, poor engine performance and fuel efficiency and increased emissions. When injector problems trigger On-Board Diagnostic (“OBD”) fault codes or cause drivability problems, new car dealers must return the vehicles to OEM specifications on the first service visit. If the problem occurs on a second or third visit, the consumer can return the vehicle to the dealer under many state “lemon laws.” We believe these regulations do not materially affect Engine Clean’s business, but rather can create demand for its equipment.

Facilities and website

Engine Clean maintains its principal offices at 5112 Heintz Street, Baldwin Park, California 91706. The 3 buildings rented by Engine Clean comprise approximately 7,500 square feet for its machine shop, product assembly, shipping and adapter manufacturing, and storage. The facility has approximately 500 square feet of office space. The buildings are rented from the original founder of Engine Clean – The Flynn Family Trust. Rental payments are $4,678 per month on a month by month basis.

We currently use as our executive offices the business office of our Secretary and director, Delbert G. Blewett, in Vancouver, BC. We have no written agreement and currently pay no rent for the use of the facilities. We have no current plans to secure additional commercial office space.

Our website address is http://www.ctgi-inc.com. Information on or accessed through our website is not incorporated into this Quarterly Report on Form 10-Q and is not a part of this Form 10-Q.

Industry Segments

We operate in a single industry segment, namely Engine Maintenance.

Results of Operations

As discussed earlier, on May 30, 2011, the Company closed the acquisition of Engine Clean Solutions, Inc., a private California corporation (“Engine Clean”) by which Engine Clean became our wholly owned subsidiary.

Engine Clean, founded in 1990, is based in Los Angeles, California and manufactures service equipment to improve the fuel efficiency, performance, service life, safety, and environmental impact of gasoline and diesel engines. Engine Clean’s customers are diesel engine OEM vendors, manufacturers selling chemicals and equipment to the global automotive aftermarket and commercial transport fleets. Their staffs have in the aggregate over 50 years of experience in the automotive arena.

The operating results and cash flows are presented for the three and six months ended June 30, 2012 and June 30, 2011.

Sales

We derive our revenues primarily from the sale of products to businesses performing engine maintenance. Revenues from sales during the six months ended June 30, 2012 were $316,181 and $197,659 for the three months ended June 30, 2012 compared to $49,745 for the three and six months ended June 30, 2011. We acquired Engine Clean on May 30, 2011. The Company had no operations prior to the acquisition, thus the increase in revenues is entirely due to the contribution from Engine Clean.

Cost of Goods Sold

Cost of goods sold during the three months ended June 30, 2012 was $107,882 and for the six months ended June 30, 2012 was $168,681 compared to $35,094 for the three and six months ended June 30, 2011. We began consolidating Engine Clean’s results in June 2011.

Operating Expenses

Total operating expenses for the six months ended June 30, 2012 were $461,042 compared to $222,060 for the six months ended June 30, 2011. For the three months ended June 30, 2012 operating expenses were $218,783 compared to $205,058 for the three months ended June 30, 2011.

The increase in expenses for the six months ended June 30, 2012 is due to the acquisition of Engine Clean and the expenses of being a public company which are comprised of (i) $135,557 of operating expenses of Engine Clean, which we began consolidating in June of 2011, (ii) fees for legal, audit, accounting and administrative costs related to being a public operating company of $168,505 and (iii) $156,980 representing the amortized portion of prior issuances of shares for advisory services.

Net Loss

Our net loss for the six months ended June 30, 2012 was $358,631 compared to a net loss of $210,462 for the six months ended June 30, 2011. For the three months ended June 30, 2012 the net loss was $154,691 compared to $191,510 for the three months ended June 30, 2011. The increase in the loss for the six months is due to general and administrative fees related to being a public operating company For the six months ended June 30, 2012 Engine Clean’s operations resulted in a loss of $11,943.

Liquidity and Capital Resources

From inception to June 30, 2012, we have incurred an accumulated deficit of $1,746,142. This deficit was incurred through a combination of stock compensation expense, acquisition expenses, professional fees and expenses supporting our plans to develop our business as well as continued operating losses. Since inception, we have financed our operations primarily through debt and equity financings. We had total current assets as of June 30, 2012 of $270,475 compared to current assets at December 31, 2011 of $385,574. At June 30, 2012, we had current liabilities of $967,444 compared to $757,688 at December 31, 2011.

Portions of expenses incurred during 2011 and the first six months of 2012 were paid by a stockholder. Because the company has limited cash reserves, we may need to rely on stockholders to pay some administrative expenses until the company becomes profitable.

Our available working capital and capital requirements will depend upon numerous factors, including the sale of our products and services, the timing and cost of expanding into new markets, the cost of developing competitive technologies, the resources that we devote to developing new products and commercializing capabilities, the status of our competitors, our ability to establish collaborative arrangements with other organizations, and our ability to attract and retain key employees.

Inflation

In the opinion of management, inflation has not and will not have a material effect on our operations in the immediate future. Management will continue to monitor inflation and evaluate the possible future effects of inflation on our business and operations.

Off-balance Sheet Arrangements

We have no off-balance sheet arrangements.

Taxes

We have accumulated approximately $573,000 of net operating loss carry forwards as of December 31, 2011. Some of this loss carried forward may be offset against future taxable income from the year 2012 through 2031. The use of these losses to reduce future income taxes will depend on the generation of sufficient taxable income prior to the expiration of the net operating loss carryforwards. In the event of certain changes in control, there will be an annual limitation on the amount of net operating loss carryforwards that can be used. No tax benefit has been reported in the financial statements for the year ended December 31, 2011 because it has been fully offset by a valuation reserve. The use of future tax benefit is undeterminable because our current operations are not profitable.

Plan of Operation

The Company recently completed a significant acquisition that is reflected in the accompanying financial statements. The Company is actively pursuing a business model that was changed and expanded in connection with the acquisition of assets. Therefore the significance of this recent acquisition includes certain factors which represent risks and also require accentuation and explanation.

The current operations of the Company consist of providing equipment and consumables to providers of engine servicing. The Company is focused on providing its products and services to companies in the Heavy Duty transportation, automotive and other transportation sectors. The Company intends to grow organically from the expansion of offerings and services to customers, most of whom were acquired as relationships from the acquisition as well as the acquisition of new business relationships as part of its acquisition strategy.

The financial statements that form part of this quarterly report include recently acquired assets. The Company has limited operating history with these assets, with management and with the implementation of controls. There can be no assurance that the assets will continue to perform in the manner and to the degree indicated by the financial results reported for the first quarter.

Forward-Looking and Cautionary Statements

This report includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements may relate to such matters as anticipated financial performance, future revenues or earnings, business prospects, projected ventures, new products and services, anticipated market performance and similar matters.

When used in this report, the words "may," "will, “should”," expect, “plan”, " anticipate," "continue," “believe”, "estimate, “predict”, " "project," "intend,", “potential”, “continue” and similar expressions are intended to identify forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 regarding events, conditions, and financial trends that may affect our future plans of operations, business strategy, operating results, and financial position. We caution readers that a variety of factors could cause our actual results to differ materially from the anticipated results or other matters expressed in forward-looking statements. These risks and uncertainties, many of which are beyond our control, include:

●

the sufficiency of existing capital resources and the ability to raise additional capital to fund cash requirements for future operations;

●

uncertainties following any successful acquisition or merger related to the future rate of growth of the acquired business and acceptance of its products and/or services;

●

volatility of the stock market, particularly within the technology sector; and

●

general economic conditions.

Although we believe the expectations reflected in these forward-looking statements are reasonable, such expectations cannot guarantee future results, levels of activity, performance or achievements.

Item 3.

Quantitative and Qualitative Disclosures About Market Risk.

This item is not required for a smaller reporting company.

Item 4.

Controls and Procedures.

Evaluation of Disclosure Controls and Procedures. Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. Disclosure and control procedures are also designed to ensure that such information is accumulated and communicated to management, including the chief executive officer and principal accounting officer (CEO), to allow timely decisions regarding required disclosures.

As of the end of the period covered by this quarterly report, we carried out an evaluation, under the supervision and with the participation of management, including our chief executive officer and principal accounting officer, of the effectiveness of the design and operation of our disclosure controls and procedures. In designing and evaluating the disclosure controls and procedures, management recognizes that there are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their desired control objectives. Additionally, in evaluating and implementing possible controls and procedures, management is required to apply its reasonable judgment. Based on the evaluation described above, our management, including our principal executive officer and principal accounting officer, has concluded that, as of our recently completed year our disclosure controls and procedures were not effective to ensure that the material information required to be included in our Securities and Exchange Commission reports is accumulated and communicated to our management, including our principal executive and financial officer, recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms relating to our

company, particularly during the period when this report was being prepared. Lack of funding and managerial oversight resulted in late filing of both the 10-K Report as of December 31, 2011 and the 10-Q Report as of March 31, 2012. The Company filed a 12b-25 for its 10-Q as of June 30, 2012.

Changes in Internal Control Over Financial Reporting. Management has evaluated whether any change in our internal control over financial reporting occurred during the first six months ended June 30, 2012. Based on its evaluation, management, including the chief executive officer and principal accounting officer, has concluded that there has been no change in our internal control over financial reporting during the six months ended June 30, 2012 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II — OTHER INFORMATION

Item 1.

Legal Proceedings

There are no material pending legal proceedings to which we are a party or to which any of our property is subject and, to the best of our knowledge, no such actions against us are contemplated or threatened.

Item 1A.

Risk Factors

This item is not required for a smaller reporting company.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

This Item is not applicable.

Item 3.

Defaults Upon Senior Securities

This Item is not applicable.

Item 4.

Submission of Matters to a Vote of Security Holders

This Item is not applicable.

Item 5.

Other Information

This Item is not applicable.

Item 6.

Exhibits

Exhibit 31.1

Certification of C.E.O. and Acting Principal Accounting Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Exhibit 32.1

Certification of C.E.O. and Acting Principal Accounting Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

CLEAN TRANSPORTATION GROUP, INC.

Date: August 20, 2012

By: /S/ DENNIS DOS SANTOS

Dennis Dos Santos

Chief Executive Officer and

Acting Principal Accounting Officer

Exhibit 31.1

CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Dennis Dos Santos, certify that:

I have reviewed this quarterly report on Form 10-Q of CLEAN TRANSPORTATION GROUP, INC.;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

Designed such disclosure controls and procedures, or caused such disclosure controls and

procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 20, 2012

/S/ DENNIS DOS SANTOS

Dennis Dos Santos

Chief Executive Officer and

Acting Principal Accounting Officer

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of CLEAN TRANSPORTATION GROUP, INC. (the “Company”) on Form 10-Q for the period ending June 30, 2012, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Dennis Dos Santos, Chief Executive Officer and Principal Accounting Officer of the Company, certify, pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley Act of 2002, that:

(1)

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ DENNIS DOS SANTOS

Dennis Dos Santos

Chief Executive Officer

Acting Principal Accounting Officer

August 20, 2012

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request. The foregoing certifications are accompanying the Company's Form 10-Q solely pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code) and is not being filed as part of the Form 10-Q or as a separate disclosure document.

COVER LETTER

Leonard E. Neilson

A PROFESSIONAL CORPORATION

LEONARD E. NEILSON

8160 SOUTH HIGHLAND DRIVE, SUITE 104

ATTORNEY AT LAW

SANDY, UTAH 84093

TELEPHONE: (801) 733-0800

FAX: (801) 733-0808

E-MAIL: LNEILSONLAW@AOL.COM

August 20, 2012

Securities and Exchange Commission

Office of Document Control

100 F Street NE

Washington, D.C. 20549

VIA: EDGAR

Re:

CLEAN TRANSPORTATION GROUP, INC.

File No. 000-52206

Amendment No. 1 to Form 10-Q (for the period ended September 30, 2011)

To Whom It May Concern:

Please find herewith transmitted by EDGAR, the Form 10-Q filed on behalf of CLEAN TRANSPORTATION GROUP, INC. for the quarter ended June 30, 2012.

Please direct all correspondences concerning this filing and CLEAN TRANSPORTATION GROUP, INC. to this office.

Yours truly,

Leonard E. Neilson

:ae

Attachment

CLEAN TRANSPORTATION GROUP, INC. 10-Q