Transnational Automotive Group Reports Improved Financial Results for Fiscal 2009 Second Quarter

  
    
  
  
    
      Transnational Automotive Group, Inc. (TAUG) (OTCBB: TAMG) today reported 
      improved financial results, including sharp increases in revenue and 
      gross profit and a significantly reduced operating loss, for the fiscal 
      2009 second quarter ended August 31, 2008.
    
    
      Revenue for the most recent second quarter increased 67% to $3.6 million 
      from $2.1 million in the same quarter last year. The company achieved 
      net income of $1.9 million, or $0.04 per share, compared with a net loss 
      of $1.8 million, or $0.04 per share, in the same quarter of fiscal 2007.
    
    
      Net income for the fiscal 2009 period includes a gain of $2.1 million 
      from exoneration by the Minister of Finance of Cameroon of VAT and 
      custom duty taxes on the company’s purchase of 
      47 city buses used in the operations of its LeBus division.
    
    
      Gross profit for the second quarter nearly quadrupled to $1.1 million 
      from $217,718 in the prior year period. Total operating expenses for 
      fiscal 2009 second quarter were reduced slightly to $1.1 million from 
      $1.2 million, a year ago. The company’s 
      operating loss for the fiscal 2009 second quarter declined to $60,242 
      from $955,315.
    
    
      For the year-to-date period of fiscal 2009, revenue advanced 72% to $6.4 
      million from $3.7 million a year ago. The company posted net income of 
      $509,617, or $0.01 per share, for the first half of fiscal 2009, 
      compared with a net loss of $3.5 million, or $0.09 per share, for the 
      same period last year. Gross profit for the first half of fiscal 2009 
      more than doubled to $1.3 million from $624,819 in the prior year 
      period. Total operating expenses amounted to $2.7 million, compared with 
      $2.4 million last year. The company’s 
      operating loss for the first half of fiscal 2009 declined to $1.3 
      million from $1.8 million a year ago.
    
    
      TAUG, which provides public bus transportation services in Cameroon, 
      began operations in September 2006, with the introduction of LeBus 
      in the capital city of Yaoundé, followed by 
      launch of LeCar in December 2006. Today, the company transports 
      more than 30,000 passengers per day.
    
    
      “Our second fiscal quarter was marked by 
      continued steady increases in ridership, demonstrating the importance of 
      the vital transportation services we are providing to the cities we 
      serve in Cameroon,” said Seid Sadat, TAUG’s 
      chief financial officer, who also is serving as interim chief executive 
      officer. “Results also benefited from a near 
      tripling in government subsidies during the quarter, amounting to $1.4 
      million, which validates the positive social and economic change we are 
      bringing to the region.
    
    
      “We believe the need for professional 
      transportation services in sub-Saharan African nations, combined with 
      our proven ability to serve this area will provide growth opportunities 
      for the company in the years ahead,” Sadat 
      added.
    
    
      About Transnational Automotive Group
    
    
      Founded with the goal to improve millions of lives through its economic 
      and social development projects, TAUG currently employs more than 700 
      people in Cameroon. TAUG established and currently is operating the 
      country’s government supported mass 
      transportation urban bus system, LeBus, in the capital city of 
      Yaoundé’ and an 
      inter-city, rural bus system, LeCar, between Yaoundé 
      and Douala, Cameroon’s two leading commercial 
      and population centers, with plans for several new urban and inter-city 
      route openings. The company has been invited by a number of Sub-Saharan 
      African governments and business communities to undertake operations in 
      transportation and energy-related programs.
    
    
      For more information about TAUG, visit www.transauto-group.com.
    
    
      Forward-Looking Statements
    
    
      This news release contains certain forward-looking statements, which 
      in accordance with the Safe Harbor provisions of the Private Securities 
      Litigation Reform Act of 1995, may involve known and unknown risks, 
      uncertainties and other factors that may cause actual results and 
      performance in future periods to be materially different from that 
      suggested by the forward-looking statements. Such statements include, 
      but are not limited to, solid growth opportunities that exist both in 
      Cameroon and other sub-Saharan African nations. Although management 
      believes the expectations reflected in such forward-looking statements 
      are based upon reasonable assumptions, no assurance can be given that 
      actual results will not differ materially from these expectations. From 
      time to time, these risks, uncertainties and other factors are discussed 
      in filings with the U.S. Securities and Exchange Commission.
    
    
      
        
          TRANSNATIONAL AUTOMOTIVE GROUP, INC.
        
      
      
        
          CONSOLIDATED STATEMENTS OF OPERATIONS
        
      
      
        
          (unaudited)
        
      
      
        
        
        
        
        
        
        
           
        
        
        
        
        
        
           
        
        
        
      
      
        
        
        
        
        
        
        
        
        
          Three Months Ended
        
        
        
        
        
        
          Six Months Ended
        
      
      
        
        
        
        
        
        
        
        
        
          August 31,
        
        
        
        
        
        
          August 31,
        
      
      
        
        
        
        
        
        
        
        
        
           
        
        
          2008
        
        
        
        
           
        
        
           
        
        
          2007
        
        
        
        
        
        
           
        
        
          2008
        
        
        
        
           
        
        
          2007
        
      
      
        
          NET REVENUE
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
           
        
        
          Transportation services
        
        
        
        
        
        
          $
        
        
          2,053,217
        
        
        
        
        
        
          $
        
        
          1,510,455
        
        
        
        
        
        
          $
        
        
          3,967,826
        
        
        
        
        
        
          $ 2,543,465
        
      
      
        
        
        
          Government subsidy
        
        
        
        
        
        
        
        
          1,384,564
        
        
        
        
        
        
        
        
          512,236
        
        
        
        
        
        
        
        
          2,169,690
        
        
        
        
        
        
          993,424
        
      
      
        
        
        
          Other
        
        
        
        
        
        
        
        
           
        
        
          132,575
        
        
        
        
        
        
           
        
        
          111,075
        
        
        
        
        
        
           
        
        
          243,071
        
        
        
        
        
        
          176,920
        
      
      
        
        
        
          Total revenue
        
        
        
        
        
        
        
        
          3,570,356
        
        
        
        
        
        
        
        
          2,133,766
        
        
        
        
        
        
        
        
          6,380,587
        
        
        
        
        
        
          3,713,809
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          COST OF REVENUE - Transportation services
        
        
        
        
           
        
        
          2,488,681
        
        
        
        
        
        
           
        
        
          1,916,048
        
        
        
        
        
        
           
        
        
          5,041,138
        
        
        
        
        
        
          3,088,990
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
          GROSS PROFIT
        
        
        
        
        
        
          1,081,675
        
        
        
        
        
        
        
        
          217,718
        
        
        
        
        
        
        
        
          1,339,449
        
        
        
        
        
        
          624,819
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          OPERATING EXPENSES
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
        
        
          Sales and marketing
        
        
        
        
        
        
          17,147
        
        
        
        
        
        
        
        
          30,084
        
        
        
        
        
        
        
        
          56,643
        
        
        
        
        
        
          103,399
        
      
      
        
        
        
          General and administrative
        
        
        
        
        
        
          1,092,276
        
        
        
        
        
        
        
        
          1,227,201
        
        
        
        
        
        
        
        
          2,263,932
        
        
        
        
        
        
          2,412,546
        
      
      
        
        
        
          Stock based compensation
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          300,000
        
        
        
        
        
        
          -
        
      
      
        
        
        
          Depreciation and amortization
        
        
        
        
        
        
          32,494
        
        
        
        
        
        
        
        
          25,230
        
        
        
        
        
        
        
        
          66,441
        
        
        
        
        
        
          40,764
        
      
      
        
        
        
          Foreign currency exchange loss
        
        
        
        
           
        
        
          -
        
        
        
        
        
        
           
        
        
          (109,482
        
        
          )
        
        
        
        
           
        
        
          -
        
        
        
        
        
        
           
        
        
          (166,667
        
        
          )
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          TOTAL OPERATING EXPENSES
        
        
        
        
           
        
        
          1,141,917
        
        
        
        
        
        
           
        
        
          1,173,033
        
        
        
        
        
        
           
        
        
          2,687,016
        
        
        
        
        
        
          2,390,042
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          OPERATING LOSS
        
        
        
        
        
        
        
        
          (60,242
        
        
          )
        
        
        
        
        
        
          (955,315
        
        
          )
        
        
        
        
        
        
          (1,347,567
        
        
          )
        
        
        
        
        
        
          (1,765,223
        
        
          )
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          OTHER (INCOME) EXPENSE
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
        
        
          Gain on extinguishment of government debt
        
        
        
        
        
        
          (2,057,291
        
        
          )
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          (2,057,291
        
        
          )
        
        
        
        
          -
        
      
      
        
        
        
          Finance costs from beneficial conversion feature
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          109,704
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
          121,982
        
      
      
        
        
        
          Finance costs from issuance of warrants
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          430,241
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
          950,667
        
      
      
        
        
        
          Loss on accident of buses
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          29,837
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
          63,274
        
      
      
        
        
        
          Interest expense
        
        
        
        
        
        
          101,704
        
        
        
        
        
        
        
        
          266,965
        
        
        
        
        
        
        
        
          200,901
        
        
        
        
        
        
          611,798
        
      
      
        
        
        
          Interest income
        
        
        
        
           
        
        
          (45
        
        
          )
        
        
        
        
           
        
        
          (7,719
        
        
          )
        
        
        
        
           
        
        
          (794
        
        
          )
        
        
        
        
           
        
        
          (7,721
        
        
          )
        
      
      
        
          TOTAL OTHER (INCOME) EXPENSE
        
        
        
        
           
        
        
          (1,955,632
        
        
          )
        
        
        
        
           
        
        
          829,028
        
        
        
        
        
        
           
        
        
          (1,857,184
        
        
          )
        
        
        
        
          1,740,000
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          NET INCOME (LOSS)
        
        
        
        
        
        
          1,895,390
        
        
        
        
        
        
        
        
          (1,784,343
        
        
          )
        
        
        
        
        
        
          509,617
        
        
        
        
        
        
        
        
          (3,505,223
        
        
          )
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          COMPREHENSIVE INCOME (LOSS)
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Unrealized foreign currency translation gain (loss)
        
        
        
        
           
        
        
          (135,152
        
        
          )
        
        
        
        
           
        
        
          -
        
        
        
        
        
        
           
        
        
          (58,382
        
        
          )
        
        
        
        
           
        
        
          -
        
        
        
      
      
        
          COMPREHENSIVE INCOME (LOSS)
        
        
        
        
          $
        
        
          1,760,238
        
        
        
        
        
        
          $
        
        
          (1,784,343
        
        
          )
        
        
        
        
          $
        
        
          451,235
        
        
        
        
        
        
          $
        
        
          (3,505,223
        
        
          )
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          NET INCOME (LOSS) PER SHARE: BASIC
        
        
        
        
          $
        
        
          0.04
        
        
        
        
        
        
          $
        
        
          (0.04
        
        
          )
        
        
        
        
          $
        
        
          0.01
        
        
        
        
        
        
          $
        
        
          (0.09
        
        
          )
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          NET INCOME (LOSS) PER SHARE: DILUTED
        
        
        
        
          $
        
        
          0.04
        
        
        
        
        
        
          $
        
        
          (0.04
        
        
          )
        
        
        
        
          $
        
        
          0.01
        
        
        
        
        
        
          $
        
        
          (0.09
        
        
          )
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          WEIGHTED AVERAGE NUMBER OF SHARES
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
        
        
          BASIC
        
        
        
        
           
        
        
          51,679,036
        
        
        
        
        
        
           
        
        
          43,100,815
        
        
        
        
        
        
           
        
        
          51,439,906
        
        
        
        
        
        
          40,288,938
        
      
      
        
        
        
          DILUTED
        
        
        
        
           
        
        
          51,679,036
        
        
        
        
        
        
           
        
        
          43,100,815
        
        
        
        
        
        
           
        
        
          51,439,906
        
        
        
        
        
        
          40,288,938
        
      
    
    
      
        
           
        
        
          TRANSNATIONAL AUTOMOTIVE GROUP, INC.
        
      
      
        
        
        
          CONSOLIDATED BALANCE SHEET
        
      
      
        
        
        
        
        
        
        
        
        
        
        
           
        
        
        
        
           
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
          August 31,
        
        
        
        
          February 28,
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
          2008
        
        
           
        
        
        
        
          2008
        
        
           
        
      
      
        
          ASSETS
        
        
        
        
          (Unaudited)
        
        
        
        
        
        
        
      
      
        
          CURRENT ASSETS
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
        
        
          Cash & cash equivalents
        
        
        
        
        
        
        
        
        
        
          $
        
        
          273,556
        
        
        
        
        
        
          $
        
        
          578,105
        
        
        
      
      
        
        
        
          Restricted cash
        
        
        
        
        
        
        
        
        
        
        
        
          51,274
        
        
        
        
        
        
        
        
          -
        
        
        
      
      
        
        
        
          Other receivables
        
        
        
        
        
        
        
        
        
        
        
        
          1,753,167
        
        
        
        
        
        
        
        
          665,693
        
        
        
      
      
        
        
        
          Prepaid expenses, advances and deposits
        
        
        
        
        
        
        
        
          278,759
        
        
        
        
        
        
        
        
          315,133
        
        
        
      
      
        
        
        
          
            Inventory, net of reserve for obsolescence
          
        
        
        
        
        
        
           
        
        
          351,817
        
        
           
        
        
           
        
        
           
        
        
          304,978
        
        
           
        
      
      
        
        
        
          Total current assets
        
        
        
        
        
        
        
        
        
        
          2,708,573
        
        
        
        
        
        
        
        
          1,863,909
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          PROPERTY, BUSES & EQUIPMENT, net
        
        
        
        
        
        
           
        
        
          5,040,504
        
        
           
        
        
        
        
           
        
        
          6,300,415
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          TOTAL ASSETS
        
        
        
        
        
        
        
        
        
        
          $
        
        
          7,749,077
        
        
           
        
        
        
        
          $
        
        
          8,164,324
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          LIABILITIES AND STOCKHOLDERS' DEFICIT
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          CURRENT LIABILITIES
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
        
        
          Accounts payable and accrued expenses
        
        
        
        
        
        
          $
        
        
          
            2,535,680
          
        
        
        
        
        
        
          $
        
        
          2,424,543
        
        
        
      
      
        
        
        
          Deferred revenue
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          338,440
        
        
        
      
      
        
        
        
          
            VAT and custom duty taxes payable to governmental agencies of 
            Cameroon
          
        
        
        
        
        
        
          1,634,292
        
        
        
        
        
        
        
        
          3,377,287
        
        
        
      
      
        
        
        
          Due to related parties
        
        
        
        
        
        
        
        
        
        
        
        
          1,284,401
        
        
        
        
        
        
        
        
          831,486
        
        
        
      
      
        
        
        
          Notes payable, net of debt discount
        
        
        
        
        
        
        
        
        
        
          260,000
        
        
        
        
        
        
        
        
          110,000
        
        
        
      
      
        
        
        
          Notes payable to related party, net of debt discount
        
        
        
        
        
        
          2,815,000
        
        
        
        
        
        
        
        
          2,815,000
        
        
        
      
      
        
        
        
          Accrued interest (including $576,876 and $385,466 to related parties 
          as of

          
            August 31, 2008 and February 29, 2008, respectively)
          
        
        
        
        
           
        
        
          604,693
        
        
           
        
        
        
        
           
        
        
          403,792
        
        
           
        
      
      
        
        
        
          Total current liabilities
        
        
        
        
        
        
        
        
        
        
          9,134,066
        
        
        
        
        
        
        
        
          10,300,548
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          COMMITMENTS AND CONTINGENCIES
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          STOCKHOLDERS' DEFICIT
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
        
        
          Common stock, $.001 par value; 200,000,000 shares authorized;
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
        
        
          51,679,036 and 51,179,036 shares issued and outstanding, respectively
        
        
        
        
        
        
          48,013
        
        
        
        
        
        
        
        
          51,179
        
        
        
      
      
        
        
        
          Treasury (400,000 shares owned by subsidiary)
        
        
        
        
        
        
        
        
          (100,000
        
        
          )
        
        
        
        
        
        
          (100,000
        
        
          )
        
      
      
        
        
        
          Additional paid-in capital
        
        
        
        
        
        
        
        
        
        
          16,137,286
        
        
        
        
        
        
        
        
          
            15,837,786
          
        
        
        
      
      
        
        
        
          Accumulated deficit
        
        
        
        
        
        
        
        
        
        
          (17,866,569
        
        
          )
        
        
        
        
        
        
          (18,376,186
        
        
          )
        
      
      
        
        
        
          Other comprehensive gain – foreign 
          currency
        
        
        
        
           
        
        
          392,615
        
        
           
        
        
        
        
           
        
        
          450,997
        
        
           
        
      
      
        
        
        
          Total stockholders' deficit
        
        
        
        
        
        
        
        
           
        
        
          (1,384,989
        
        
          )
        
        
        
        
           
        
        
          (2,136,224
        
        
          )
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT
        
        
        
        
          $
        
        
          7,749,077
        
        
           
        
        
        
        
          $
        
        
          8,164,324