Document:

Filed by Automated Filing Services Inc. (604)609-0244 - Journey Resources Corp. - Exhibit 4.1

SUMMARY OF TERMS 

RE: Management Fees Paid to 688435 B.C. Ltd. 

During the year ended November 30, 2006, the Company paid
management fees of $36,000 to a company controlled by the brother of the
President of the Company, 688435 B.C. Ltd., for management and consulting
services performed.

As compensation for the performance of management services by
6883435 B.C. Ltd., which included managing and assisting with property
acquisitions and raising capital for the Company through private placement
financings, the Company paid 688435 B.C. Ltd. an amount equal to $3,000 per
month, payable on the first (1st) day of each calendar month for a
twelve (12) month period.

The Company also paid 688435 B.C. Ltd. a finder’s fee of $7,600
in connection with the private placement completed in fiscal 2006 for assisting
the Company in raising capital through such financing. The Company has not, and
does not expect to make any future payments for such management services, as
688435 B.C. Ltd. is no longer providing management services to the Company.Filed by Automated Filing Services Inc. (604)609-0244 - Journey Resources Corp. - Exhibit 4.2

SUMMARY OF TERMS 

RE: Management Fees Paid to Centerline Capital Corp.

During the year ended November 30, 2006, Journey paid
management fees of $51,000 to a company controlled by the President of the
Company, Centerline Capital Corp. (“Centerline”) for management and consulting
services performed.

As compensation for performance of management services, which
include performing services as President of the Company, presentations to
brokerage firms and investors, raising capital for the company and other
services as President, the Company paid Centerline an amount equal to
$4,250 per month, payable on the first (1st) day of each calendar
month. The Company also reimburses Centerline for all expenses reasonably
incurred in connection with the performance of the management services, payable
on the first (1st) day of each calendar month.

From November 30, 2006 to date, the Company continues to pay
Centerline an amount equal to $7,000 per month, based on the same terms as
provided above, for its ongoing performance of management services.Filed by Automated Filing Services Inc. (604) 609-0244 - Transnational Automotive Group, Inc. - Exhibit 10.1

Exhibit 10.1

TRANSNATIONAL AUTOMOTIVE GROUP, INC.
(Formerly
Apache Motor, Corp.)
CONFIDENTIAL PRIVATE PLACEMENT
MEMORANDUM

	Minimum Investment: $100,000 USD 	PPM No.
_____________

This Private Placement Memorandum (the “Memorandum”) describes
an offering (the “Offering”) of up to 10,000,000 Units at $0.50 per Unit by
Transnational Automotive Group, Inc. (the "Company"). Each Unit is comprised of
one share of Common Stock and a Warrant. Each Warrant may be exercised to
purchase an additional share of Common Stock within five years from date of
purchase at $1.50 per share.

INVESTMENT IN THE UNITS IS SPECULATIVE AND INVOLVES A HIGH
DEGREE OF RISK. SEE "RISK FACTORS". INVESTORS MUST BE PREPARED TO BEAR THE
ECONOMIC RISK OF THE INVESTMENT FOR AN INDEFINITE PERIOD AND BE ABLE TO
WITHSTAND A TOTAL LOSS OF THEIR INVESTMENT.

	Offering Price 	Proceeds to the Company 
	Per Unit	$               
       0.50 	         $ 0.4625 
	Minimum Purchase	$      100,000.00 	         $ 92,500.00

	Total Maximum Offering	$   5,000,000.00 	         $ 4,625,000.00
  

THE UNITS – THE SHARES OF COMMON STOCK AND WARRANTS HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
APPLICABLE STATE OR PROVINCIAL SECURITIES LAWS, NOR HAS THE SECURITIES AND
EXCHANGE COMMISSION (“SEC”) OR ANY STATE REGULATORY AUTHORITY PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS MEMORANDUM OR ENDORSED THE MERITS OF THIS OFFERING
AND ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL. THE UNITS ARE OFFERED
PURSUANT TO EXEMPTIONS PROVIDED BY SECTION 4(2) OF THE ACT, RULE 506 OF
REGULATION D THEREUNDER, REGULATION S UNDER THE ACT AS IT PERTAINS TO
NON-RESIDENTS OF THE UNITED STATES, EXEMPTIONS FROM REGISTRATION AND
QUALIFICATION PROVIDED UNDER VARIOUS STATE SECURITIES LAWS AND CERTAIN RULES AND
REGULATIONS PROMULGATED PURSUANT THERETO. THE WARRANTS AND SHARES OF COMMON
STOCK MAY NOT BE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR, FOLLOWING
AN OPINION OF THE COMPANY'S COUNSEL THAT SUCH A REGISTRATION STATEMENT IS NOT
REQUIRED FOR THE WARRANTS OR SHARES OF COMMON STOCK TO BE TRANSFERRED.

The Company reserves the right to accept investment amounts
less than the minimum investment amount of $100,000.

The Company has engaged finders to place this Offering, and may
pay a 5%-7.5% finder’s fee, which will reduce the total proceeds of the offering
received by the Company. See “Plan of Distribution” below.

Delivery of this Memorandum shall not create any implication
that there has been no change in circumstances of the Company since the date of
this Memorandum or in the financial information or projections stated herein as
of 2006. The Units are offered solely by this Memorandum. Authorized
counterparts are numbered sequentially.

	The date of this Memorandum
      is: 
January 17, 2007 

	For further information, please contact: 	  
	  	  
	Ralph J. Thomson, Chairman 	Judy Crowhurst, Business Development 
	TRANSNATIONAL AUTOMOTIVE GROUP, INC. 	TRANSNATIONAL AUTOMOTIVE GROUP, INC. 
	Direct Line 801-949-1811 	Direct line 818-961-2727 
	E-mail: rthomson@transauto-group.com 	E-mail: jcrowhurst@transauto-group.com
  

1

INVESTOR INFORMATION

THIS INVESTMENT INVOLVES A HIGH DEGREE OF RISK. PLEASE READ
THIS ENTIRE MEMORANDUM. IT CONTAINS INFORMATION YOU SHOULD KNOW BEFORE
PURCHASING ANY SECURITIES UNDER THIS OFFERING. IN MAKING AN INVESTMENT DECISION,
INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE COMPANY AND THE TERMS OF THE
OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT
BEEN RECOMMENDED, APPROVED OR DISAPPROVED BY ANY FEDERAL, STATE OR PROVINCIAL
SECURITIES COMMISSION OR REGUALTORY AUTHORITY. FURTHERMORE, THE FOREGOING
AUTHORITIES HAVE NOT PASSED UPON OR CONFIRMED THE ACCURACY OR DETERMINED THE
ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.

THE UNITS ARE BEING OFFERED ONLY TO INDIVIDUALS AND BUSINESS
ENTITIES THAT MEET CERTAIN QUALIFICATIONS. THE COMPANY RESERVES THE RIGHT TO
REJECT ANY SUBSCRIPTION IN WHOLE OR IN PART IN ITS SOLE DISCRETION. SEE "PLAN OF
DISTRUBUTION,” BELOW.

THESE UNITS ARE BEING OFFERED SUBJECT TO ACCEPTANCE, PRIOR
SALE, WITHDRAWAL, CANCELLATION OR MODIFICATION OF THE OFFER AT ANY TIME WITHOUT
NOTICE. 

THE INFORMATION CONTAINED IN THIS MEMORANDUM IS PROPRIETARY TO
THE COMPANY AND IS BEING SUBMITTED TO PROSPECTIVE INVESTORS IN THE COMPANY
SOLELY FOR SUCH INVESTORS' USE WITH THE EXPRESS UNDERSTANDING THAT, WITHOUT
PRIOR EXPRESS WRITTEN PERMISSION OF THE COMPANY, SUCH PERSONS WILL NOT RELEASE
THIS DOCUMENT OR DISCUSS THE INFORMATION CONTAINED HEREIN OR MAKE REPRODUCTIONS
OF OR USE THIS MEMORANDUM FOR ANY PURPOSE OTHER THAN EVALUATING A POTENTIAL
INVESTMENT IN THE UNITS. ANY OFFEREE ACCEPTING DELIVERY OF THIS MEMORANDUM
AGREES TO KEEP STRICTLY CONFIDENTIAL THE CONTENTS OF THIS MEMORANDUM AND SUCH
OTHER MATERIAL AND TO RETURN THIS MEMORANDUM AND ALL RELATED DOCUMENTS TO THE
COMPANY IF THE OFFEREE DOES NOT TO SUBSCRIBE TO PURCHASE ANY OF THE UNITS
OFFERED, THE OFFEREE’S SUBSCRIPTION IS NOT ACCEPTED, OR THIS OFFERING IS
TERMINATED OR WITHDRAWN. 

OFFEREES ARE NOT TO CONSTRUE THE CONTENTS OF THE MEMORANDUM AS
LEGAL, BUSINESS, INVESTMENT OR TAX ADVICE. EACH OFFEREE SHOULD CONSULT HIS OR
HER OWN COUNSEL, ACCOUNTANT AND OTHER ADVISORS AS TO LEGAL, TAX, BUSINESS, OR
INVESTMENT ADVICE AND RELATED MATTERS CONCERNING THE INVESTMENT DESCRIBED HEREIN
AND IT’S SUITABILITY.

THIS MEMORANDUM INCLUDES CERTAIN STATEMENTS, ESTIMATES AND
PROJECTIONS OF THE COMPANY WITH RESPECT TO THE ANTICIPATED FUTURE BUSINESS AND
PERFORMANCE OF THE COMPANY, SUCH STATEMENTS, ESTIMATES AND PROJECTIONS REFLECT
VARIOUS ASSUMPTIONS OF MANAGEMENT, WHICH ASSUMPTIONS MAY OR MAY NOT PROVE TO BE
CORRECT. CERTAIN INFORMATION PRESENTED IN THIS MEMORANDUM CONSTITUTES
“FORWARD-LOOKING STATEMENTS” WHICH CAN BE IDENTIFIED BY THE USE OF
FORWARD-LOOKING TERMINOLOGY SUCH AS “MAY,” “EXPECT,” “BELIEVE,” “ANTICIPATE,”
“ESTIMATE,” “PLAN,” OR “CONTINUE,” OR THE NEGATIVE THEREOF OR OTHER VARIATIONS
THEREON OR COMPARABLE TERMINOLOGY. SUCH FORWARD-LOOKING STATEMENTS REPRESENT THE
SUBJECTIVE VIEWS OF THE MANAGEMENT OF THE COMPANY AND MANAGEMENT’S CURRENT
ESTIMATES OF FUTURE PERFORMANCE ARE BASED ON ASSUMPTIONS WHICH MANAGEMENT
BELIEVES ARE REASONABLE BUT WHICH MAY OR MAY NOT PROVE TO BE CORRECT. THERE CAN
BE NO ASSURANCE THAT MANAGEMENT’S VIEWS ARE ACCURATE OR THAT MANAGEMENT’S
ESTIMATES WILL BE REALIZED, AND NOTHING CONTAINED HEREIN IS OR SHOULD BE RELIED
ON AS A PROMISE AS TO THE FUTURE PERFORMANCE OR CONDITION OF THE COMPANY.
INDUSTRY EXPERTS MAY DISAGREE WITH THESE ASSUMPTIONS AND WITH MANAGEMENT’S VIEW
OF THE MARKET AND THE PROSPECTS OF THE COMPANY.

THE PROJECTED FINANCIAL INFORMATION WAS NOT PREPARED WITH A
VIEW TOWARD COMPLYING WITH PUBLISHED GUIDELINES OF THE SECURITIES EXCHANGE
COMMISSION OR THE GUIDELINES ESTABLISHED BY THE AMERICAN INSTITUTE OF CERTIFIED
PUBLIC ACCOUNTANTS REGARDING PROJECTIONS, NOR IS THE

2

PROJECTED FINANCIAL INFORMATION INTENDED TO BE PRESENTED IN A
MANNER CONSISTENT WITH FINANCIAL STATEMENTS PREPARED IN ACCORDANCE WITH
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES.

PRIOR TO MAKING AN INVESTMENT DECISION RESPECTING THE
SECURITIES OFFERED HEREBY, A PROSPECTIVE INVESTOR SHOULD CAREFULLY REVIEW AND
CONSIDER THE CONTENTS OF THE ENTIRE MEMORANDUM. PROSPECTIVE INVESTORS ARE URGED
TO MAKE ARRANGEMENTS WITH THE COMPANY TO INSPECT ANY DOCUMENT REFERRED TO IN
THIS MEMORANDUM AND OTHER DATA RELATING TO THIS OFFERING. THE DIRECTORS OF THE
COMPANY ARE AVAILABLE TO DISCUSS WITH PROSPECTIVE INVESTORS ANY MATTER SET FORTH
IN THIS MEMORANDUM OR ANY OTHER MATTER RELATING TO THE SECURITIES OFFERED HEREBY
IN ORDER THAT PROSPECTIVE INVESTORS AND THEIR REPRESENTATIVES MAY HAVE AVAILABLE
TO THEM ALL INFORMATION, FINANCIAL AND OTHERWISE, RELATING TO THIS INVESTMENT.
THE COMPANY UNDERTAKES (1) TO MAKE AVAILABLE TO EVERY OFFEREE AND ITS
REPRESENTATIVES, DURING THE COURSE OF THIS TRANSACTION AND PRIOR TO THE SALE,
ANY REASONABLY AVAILABLE INFORMATION REQUESTED BY THEM REGARDING THE CORPORATION
OR ITS PRINCIPALS, (2) TO GIVE EACH INVESTOR THE OPPORTUNITY TO ASK QUESTIONS OF
AND RECEIVE ANSWERS FROM THE COMPANY CONCERNING ALL TERMS AND CONDITIONS OF THIS
OFFERING, AND (3) TO OBTAIN ANY ADDITIONAL INFORMATION NECESSARY TO VERIFY THE
ACCURACY OF INFORMATION MADE AVAILABLE HEREIN.

NO PERSON HAS BEEN AUTHORIZED IN CONNECTION WITH THIS OFFERING
TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE
CONTAINED IN THIS MEMORANDUM, EXCEPT AS IS MADE AVAILABLE BY THE COMPANY
PURSUANT TO THE ABOVE UNDERTAKINGS. THE COMPANY’S ADVERTISEMENTS AND WEBSITE ARE
NOT PART OF THE MEMORANDUM. NO OFFERING LITERATURE OR ADVERTISING IN ANY FORM IS
AUTHORIZED FOR USE IN CONNECTION WITH THIS OFFERING EXCEPT FOR THIS MEMORANDUM,
THE EXHIBITS HERETO, AND ANY AMENDMENTS HERETO. ONLY THOSE REPRESENTATIONS SET
FORTH IN THIS MEMORANDUM MAY BE RELIED UPON IN CONNECTION WITH THIS
OFFERING.

EXCEPT AS OTHERWISE INDICATED, THIS MEMORANDUM SPEAKS AS OF THE
DATE HEREOF. NEITHER THE DELIVERY OF THIS MEMORANDUM NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY AFTER THE DATE HEREOF.

THIS MEMORANDUM DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY THE UNITS IN ANY STATE OR OTHER JURISDICTION OR
TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. 

3

TRANSNATIONAL AUTOMOTIVE GROUP, INC.

TABLE OF CONTENTS

	EXECUTIVE SUMMARY 	5
	 	 
	SUMMARY OF THE OFFERING 	10 
	 	 
	RISK FACTORS 	11 
	 	 
	USE OF PROCEEDS 	17 
	 	 
	DESCRIPTION OF THE COMPANY AND ITS BUSINESS 	18 
	 	 
	CAPITAL STRUCTURE/BENEFICIAL OWNERSHIP 	35 
	 	 
	DESCRIPTION OF CAPITAL SHARES AND OPTIONS 	36
	 	 
	LIMITATION OF DIRECTOR AND OFFICER LIABILITY 	38
	 	 
	DIVIDEND POLICY 	38
	 	 
	PLAN OF DISTRIBUTION 	39
	 	 
	EXHIBIT A - FINANCIAL STATEMENTS (10-KSB as of February
      28, 2006) 	43 
	 	 
	EXHIBIT B - FINANCIAL FORECAST (Projected Financial Statements)
      	70 
	 	 
	EXHIBIT C - SUBSCRIPTION AGREEMENT 	72 

4

EXECUTIVE SUMMARY

INTRODUCTION

Transnational Automotive Group, Inc., a Nevada corporation (the
“Company”), is a public company registered on the Over-the-Counter Bulletin
Board (“OTC-BB”) as stock symbol “TAMG.” The Company is a transportation
and sustainable energy company headquartered in Los Angeles, CA, with operating
entities in Cameroon and early-stage operations in Ethiopia, Nigeria and
Mozambique. TAUG’s vision is to become a leading transportation and sustainable
energy company on the African continent by establishing key infrastructure and
workforce development that dramatically accelerate the economies and quality of
life for Sub-Saharan African nations.

	Offering Size: 	$5 million 	 	Stock Symbol: 	         TAMG 
	Founded: 	2005 	 	52-week Range 1/1-12/31/07: 	$.55 - $5.45 
	Headquarters: 	 Los Angeles, CA 	 	2007 Projected EBITDA: 	 $4 million 
	URL: 	www.transauto-group.com 	 	 
    	  

COMPANY OVERVIEW

Transnational Automotive Group, Inc. (“TAUG”), a Nevada
corporation that trades under the symbol (OTCBB: TAMG), is a transportation and
sustainable energy company headquartered in Los Angeles, CA, with operating
entities in Cameroon and early-stage planning for prospective operations in
Ethiopia, Nigeria and Mozambique. TAUG’s vision is to become a leading
transportation and sustainable energy company on the African continent by
establishing key infrastructure and workforce development that dramatically
accelerate the economies and quality of life for Sub-Saharan African nations.

 

TAUG, in partnership with the central government of the host
nation, is currently engaged in establishing and operating mass transit systems
in leading Sub-Saharan African commercial and population centers. As its
inaugural venture, TAUG has entered into a partnership with the federal
government of Cameroon to develop and operate both intra- and intercity bus
service throughout the country. In September 2006 the first intra-city bus lines
were successfully launched in the capital city, Yaoundé. This milestone was
followed by initial inter-city bus service between Yaoundé and Cameroon’s
largest city and commercial center, Douala, in December 2006. The TAUG-Cameroon
project has the support of OPIC, the U.S. government’s developing nation
financing arm, which is currently completing formal funding and risk insurance
procedures/approvals.

TAUG has positioned itself for expansion into additional
Sub-Saharan African markets, as well as other industry sectors, including
manufacturing and marketing of environmentally-friendly bio-diesel fuels. 

 

TAUG is transforming lives in the developing nations of
Sub-Saharan Africa! Imagine:

	The impact of an efficient public transportation system introduced to
  cities that never had one
  
	The impact of a worker able to travel to work each day in a fraction of
  the time or expense previously required
  
	The impact of children getting to school safely each day without parents
  worrying for their safe return after long and exhausting walks
  
	The power of workers and students alike having ready access to reliable
  and cost efficient transportation 

TAUG is uniquely qualified and positioned to succeed with its
own ventures, and to help ensure the success of its strategic business and
government partners on the African continent. TAUG’s core management team has
acquired a wealth of successful experience in global business-government
relations and projects, including domain expertise specific to African nations,
in which business and government are heavily interconnected. TAUG’s management
team has over 100 years of combined experience in international trade and
foreign affairs, managing the marketing, sales, manufacturing and distribution
of transportation devices, as well as first hand experience in transportation
asset management and utilization. 

5

The Company’s management team is complemented by an impressive
core staff with expertise in engineering, automotive engineering, sales and
distribution, foreign languages, international business, international and US
politics, and corporate finance. TAUG currently employs over 350 people. With
each partnership, TAUG typically becomes one of the largest private employers in
the host country, creating thousands of quality jobs for citizens of Sub-Saharan
developing nations. 

TAUG COMPANY HIGHLIGHTS:

	October 2005 – Established formal partnership with the government of
  Cameroon. Signed an agreement with the government of Cameroon to establish and
  manage the nation’s urban bus system. The Government has funded $1.8
  million cash directly to TAUG and is in the process of transferring title to
  bus depots and associated office buildings and land to TAUG.
  
	June 2006 – Raised $5 million in private placement
  
	August 2006 – TAUG’s initial shipment of 28 buses from China arrives in
  Cameroon
  
	September 2006 – LeBus intra-city transportation system launched in
  Yaoundé, Cameroon
  
	December 2006 – LeCar inter-city/rural transportation system launched in
  Cameroon 

TAUG’s MISSION

The developing world is at an impasse. Inadequate
transportation is hindering developing nations’ workforce growth and obstructing
the progress of their emerging economies. TAUG believes in transforming the
developing world through the implementation of the Company’s world-class
transportation systems and networks, thus removing a major barrier to these
nations’ economic progress.

Emerging countries face several key challenges as they pursue
the goal of developing political stability coupled with dynamic, growth-oriented
economies. These challenges, which TAUG’s leadership considers the fundamental
factors for achieving economic growth, involve: 1- securing a reliable and
sustainable source of food; 2- providing adequate housing and readily available
medical treatment; 3- promoting and stimulating an expanding job market; and 4-
constructing and availing an open system for educating children and the
work-force. 

Meeting these challenges requires the securing of reliable and
effective transportation infrastructure. TAUG’s transportation systems connect
communities and create new, cost-effective opportunities for economic and social
development where none previously existed.

CAMEROON  

The International Monetary Fund (IMF) and the World Bank's
International Development Association (IDA) have agreed that Cameroon, with a
population in excess of 17 million people, has made sufficient progress and
taken the necessary steps to reach its completion point under the Enhanced
Heavily Indebted Poor Countries (HIPC) Initiative. By reducing Cameroon's future
debt service payments by over US $4.9 billion, Cameroon will be able to allocate
its financial resources in other sectors of the economy.

To reach this completion point, Cameroon met a number of
milestones involving, among other issues, greater macroeconomic stability and a
commitment to poverty reduction. In addition, Cameroon has taken steps to
improve governance and to fight official corruption. While Cameroon’s President
has achieved great success in implementing reform, he is keenly aware of the
need to do more to improve the financial condition of the average Cameroonian.
Clearly TAUG stands to benefit from any improvement in the economic well-being
of the country’s population. 

In what appears to be his final term in office, the President
has indicated his desire to show meaningful results in fighting economic
hardship before stepping down. The main catalysts

6

will be the reduction in Cameroon’s debt service payments and
the inflow of foreign investment capital. These are key reasons TAUG has
experienced such strong official commitment and support as a US company
investing in Cameroon, and as a major local employer and provider of essential
transportation infrastructure. 

As it seeks to offer its abundant natural resources to the
world, Cameroon is experiencing healthy economic expansion in all sectors.

Cameroon’s continuing economic expansion requires an immediate
improvement of the country’s transportation infrastructure. The cities of
Cameroon – and in particular its capital, Yaoundé (population 2+ million) – have
been without an adequate city bus system for more than 15 years. Since the
former city bus company, SOTUC, failed in 1992 due to mismanagement and lack of
modernization, the streets of Yaoundé and Douala (population 2+ million) have
become clogged with taxis and associated pollution. With increasing population
growth in the cities straining the taxi market and the safety and security
concerns of ordinary Cameroonians who take taxis, an urban bus transportation
system has been identified as a desperate need. As a result, reviving city/urban
bus systems throughout the country became a top national priority of the
nation’s Prime Minister and his administration. Joining with TAUG to establish
this modern city/urban and inter-city/rural comprehensive integrated bus
transportation system will enable the country to sustain and expand its economic
growth and prosperity.

Cameroon Achievements:

	
  Stable government with a focus on significantly reducing corruption.
  High-profile anti-corruption arrests in last 6 months. Transparency getting
  stronger. 

  
	
  Violence is not part of the nation’s cultural fabric. 

  
	
  French and English spoken, predominantly French. 

  
	
  French political and private economic influence is being balanced by other
  investments. 

  
	
  Literacy is high; people are generally content and eager to develop their
  country. Workers are skilled and respond well to management. 

  
	
  Cameroon is a republic with a presidential system of government. 

  
	
  Current President (and TAUG project supporter) Paul Biya has been head of
  state since 1982, re-elected in 2004 for another 7-year term. 

  
	
  Cameroon is currently experiencing economic growth, a building boom, and
  considerable domestic and foreign investment in resource development and
  infrastructure. 

OVERSEAS PRIVATE INVESTMENT CORPORATION (“OPIC”)

While TAUG believes its efforts will be directed to help
stabilize governments and economies, it recognizes the historical risks inherent
in making investments and operating in selected African nations. TAUG has
therefore submitted an application with OPIC, an agency of the United States
government, to utilize OPIC’s financing and insurance programs in order to
protect any investment and debt secured by TAUG in connection with the company’s
opportunities in Africa.

OPIC is an independent U.S. government agency whose mission is
to mobilize and facilitate the participation of U.S. private capital and skills
in the economic and social development of less-developed countries and areas, as
well as countries in transition from non-market to market economies. OPIC
assists U.S. companies by providing financing, political risk insurance and
investment funds. OPIC complements the private sector in managing risks
associated with foreign direct investment and supports U.S. foreign policy.

All projects or transactions considered for OPIC financing must
be deemed commercially and financially sound. They must be within the
demonstrated competence of the proposed management team, which must have a
proven record of success in the same or a closely-related business, as well as a
significant continuing financial stake in the enterprise. 

Experience indicates that an adequate level of equity
contribution is essential for a project to succeed. Investors must be willing to
establish sound debt-to-equity relationships that will not jeopardize the
success of the project through excessive leverage. In general, OPIC looks for a
debt-to-equity ratio in the range of 60/40, although the financial structure
will vary with the nature of a specific business and by the variability of
expected cash flows.

In order to take full advantage of economies of scale, TAUG is
  seeking an initial loan of $9 million. It is anticipated that the approval process
  and funding will take place in the first half of 2007. The proceeds of this
  financing will be used to purchase additional buses, maintenance equipment and
  supplies; to provide the necessary capital to complete construction of new and
  existing facilities; and to provide a working capital reserve.

MANAGEMENT

Ralph J. Thomson, Ph.D., MALD, MA: Chairman of the Board,
President & CEO. Dr. Thomson's career involves more than thirty years'
experience in state/local and federal government advocacy; legislative and
regulatory activity; and international policymaking, negotiations, technology
and trade consulting, business and higher education. He is currently Chairman
and CEO of

7

International Business Catalysts, LLC (IBC), a firm devoted to
partnerships, mergers and acquisitions, strategic alliances, representation to
U.S. and foreign governments, technology transfer, trade and finance. During his
career, Dr. Thomson has been responsible for private and public sector project
funding, joint ventures and technology sales contracts totaling over $500
million in the U.S., Asia, Europe, the Middle East and Latin America. Public
sector funding and policy activities have involved U.S. government agencies, the
United Nations, the World Bank/IMF, and regional development banks.

Don Durand: President, Africa Operations, is a graduate
of Royal Military College with a Bachelors of Engineering and has an Executive
MBA from Simon Fraser University. He served as an Engineer Officer in both the
Canadian and British Armies. During his career in the military, Mr. Durand
served with distinction in many complex operations around the world both as a
peacekeeper and during peace-making operations. 

Following his retirement from the Army, Mr. Durand turned his
focus to helping start-up companies establish their markets and set up their
operations to meet growing demand. He has broad company experience in finance,
sales, business development, marketing, product management and operations as
well as pan-industry experience from software development, entertainment and
military simulation to transportation infrastructure. He recently sold his 3D
simulation training company to join TAUG, to help lead and grow its worldwide
operations.

Bokwe Mofor, Managing Director, LeBus. Mr. Mofor is a
Cameroonian American who has practiced law in the U.S. for more than 19 years.
He graduated with an MBA in International Business from the University of the
District of Columbia and has a Masters in International and Comparative Law from
Georgetown University. Mr. Mofor is well respected in the Cameroonian government
community.

Cyrille Tollo, Managing Director, LeCar. Mr. Tollo graduated
  with a Master of Arts Degree in Archeology from the University of Geneva and
  received an International Specialized Certificate in African Archeology at the
  University of Brussels. Mr. Tollo received his MBA from the Robert Kennedy University
  of Zurich. Mr. Tollo is a Cameroonian citizen who is also well-known and -respected
  in the Cameroonian community.

	USE OF PROCEEDS 	  
	TAUG is raising $5 million, either in one or multiple
      traunches, beginning in Q1 2007. The proceeds will be used principally to:
    	› 2007 Projected EBITDA - $4 million
  

	 	(i) 	
      Purchase additional buses to complete the intra-city
      rollout in Cameroon’s major cities, as well as inter- city/rural routes
      throughout the country;

	 	 	 
	 	(ii) 	
      Fulfill the required staffing and infrastructure needs of
      the additional buses;

	 	 	 
	 	(iii) 	
      Recruit high-level management talent;

	 	 	 
	 	(iv) 	
      Fuel TAUG’s expansion into additional African
    nations

	 	 	 
	 	(v) 	
      Provide working capital.

	 	 	 
	 	(vi) 	
      FINANCIAL HIGHLIGHTS

 

8

	CONTACT INFORMATION 	  
	   Ralph Thomson 	Judy Crowhurst 
	   Chairman of the Board, President & CEO 	Director of Business Development 
	   Direct: 1-801-949-1811 	Direct: 1-818-961-2727 
	   rthomson@transauto-group.com 	jcrowhurst@transauto-group.com

 

	This Document contains forward-looking
        statements within the meaning of the Private Securities Litigation Reform
        Act of 1995.The statements regarding Transnational Automotive Group Inc.
        contained in this fact sheet that are not historical in nature, particularly
        those that utilize terminology such as "may," "will," "should," "likely,"
        "expects," "anticipates," "estimates," "believes" or "plans," or comparable
        terminology, are forward-looking statements based on current expectations
        and assumptions, and entail various risks and uncertainties that could
        cause actual results to differ materially from those expressed in such
        forward-looking statements. Important factors known to Transnational Automotive
        Group Inc. that could cause such material differences are the difficulty
        of developing pharmaceutical products, obtaining regulatory and other
        approvals and achieving market acceptance, and other factors identified
        and discussed from time to time in Transnational Automotive Group, Inc.’s
        filings with the Securities and Exchange Commission.

Principal Offices of Transnational Automotive Group, Inc. -
OTC BB (“TAMG”)

21800 Burbank Boulevard
Suite
200
Woodland Hills, California 91367
Suite 200

	 	Phone: 	(818)961-2727 
	 	Fax: 	(818)961-2728 

9

TRANSNATIONAL AUTOMOTIVE GROUP, INC.

SUMMARY OF THE OFFERING

This summary of certain provisions of this Memorandum is
intended only for quick reference and is not intended to be complete. The
following summary is qualified in its entirety by reference to the full text of
this Memorandum and more detailed exhibits, supporting documents and financial
information and notes thereto appearing elsewhere in this Memorandum.

	 	Issuer 	Transnational Automotive Group,
        Inc. (the “Company”). 

	 	  	 

	 	Offering Amount 	$5,000,000. The forgoing Offering
        Amount is subject to increase pursuant to the sale of over-allotments
        of an amount not to exceed 

	20% of the Units offered hereby.
      

	 	  	 

	 	Eligible Purchasers 	Only "Accredited Investors,"
        as defined in Section 2(a)(15) of the Act or Rule 501(a) of Regulation
        D of the Act or offshore investors who are not “U.S. Persons”
        as that term is defined in Regulation S under the 1933 Act, and meets
        the Canadian investor standards described in the Subscription Agreement
        attached hereto as Exhibit C. 

	 	  	 

	 	Minimum Investment 	The minimum investment is
        $100,000 USD 

	 	  	 

	 	Securities Offered 	Up to 10,000,000 Units at
        $0.50 per Unit, each Unit comprised of one share of Common Stock and a
        Warrant to purchase an additional share of Common Stock at $1.50 per share
        for a period of five years from date of purchase. 

	 	  	 

	 	Voting Rights 	The Common Stock has full
        voting rights. 

	 	  	 

	 	Registration Rights 	The Common Stock obtained
        hereunder will not have piggy-back registration rights. 

	 	  	 

	 	Transfer Restrictions 	The Warrants and common stock
        are "restricted securities" and, therefore, may be transferred, to the
        extent permissible, only pursuant to registration or qualification under
        federal and state securities laws or pursuant to an exemption from registration
        or qualification. 

	 	  	 

	 	Cost of Offering 	The Company will pay to finders
        a finder’s fee equal to 5%-7.5% of the gross sales price of the Units
        sold in the Offering. The Company will also pay the other costs of this
        Offering, including attorneys’ fees, costs of complying with federal
        and state securities laws and regulations and all miscellaneous expenses.
        (See “Plan of Distribution.”) 

	 	  	 

	 	Capital Shares Outstanding upon

      Completion of Offering 	Assuming the closing of the
        Maximum Offering hereunder, there would be 53,508,401 Common Shares issued
        and outstanding, and no preferred shares are issued and outstanding (See
        “Capital Structure/Beneficial Ownership – Options/Warrants”).
        The Company intends to adopt an Equity Incentive Plan and will reserve
        an amount of shares equal to 20% of the outstanding and issued Common
        Shares at the time of adoption of the Equity Incentive Plan for issuance
        upon exercise of options granted to consultants, advisors 

10

			and employees (See
        “Capital Structure/Beneficial Ownership – Options/Warrants”).
      

	 	  	 
	 

		Use of Proceeds 	We intend to use
        the proceeds of this Offering to pay for start-up expenses and capital
        expenditures, organizational and operational costs of our business, selling,
        managing, assembling and developing innovative transportation and renewable
        energy products and services (as defined below) and the Company’s
        services, retirement of bridge financing, and for general corporate purposes.
      

	 	  	 
	 

		Finder Fees 	The Company has
        engaged finders to place this Offering, and may pay a 5-7.5% finder’s
        fee, which will reduce the total proceeds of the offering received by
        the Company (See “Plan of Distribution” below). 

	 	  	 
	 

		Risk Factors 	An investment in
        the Company’s Securities is speculative and involves substantial
        risks, including those described in "Risk Factors" below. The Company
        has a limited operating history and believes it will incur operating losses
        during its start-up. There can be no assurance that the Company will be
        able to achieve its financial and business objectives. The Units should
        only be purchased by persons who can afford the loss of their entire investment.
        See "Risk Factors” below. 

	 	  	 
	 

		Method of Subscription 	Each prospective
        investor desiring to purchase Units must execute and deliver to us a Subscription
        Agreement, which includes a Prospective Questionnaire, and if necessary,
        a Purchaser’s Representative Questionnaire, each of which will be
        provided to the investor (collectively, the “Subscription Documents”).
        The Subscription Documents must be submitted together with a check or
        wire transfer payable to Transnational Automotive Group, Inc. in an amount
        equal to $0.50 per Unit. 

	 	  	 
	 

		Subscription Period 	The subscription
        period for this Offering will terminate on February 20, 2007, unless sooner
        terminated or extended by us. 

RISK FACTORS 

The securities offered hereby are speculative and involve a
high degree of risk. The risk factors described below summarize some of the
material risks inherent in the Offering. These risk factors are not presented in
any particular order of significance. Each prospective investor should carefully
consider the following risk factors inherent in and affecting the business of
the Company and the Offering before making an investment decision. You should
also refer to the other information set forth in this Memorandum. Unless the
context clearly suggests otherwise, references in this Memorandum to the Company
include its wholly-owned subsidiaries which will be formed to operate the
Facilities.

RISKS OF THE OFFERING

The Offering amount will not be sufficient to adequately
fund the Company. While the Offering is sufficient to begin implementing
the Company’s business plan, management believes that it will not be sufficient
to adequately fund the company. The Company will require at least an additional
$25,000,000 to fund expenses related to hiring additional personnel, and funding
operations for 12 month period after the closing of the Offering. There is no
assurance, however,

11

that any additional proceeds from this Offering will be raised
after the Offering to keep the Company and its business plan from failing. If
the remaining $25,000,000 cannot be raised, Management will have to reduce costs
and possibly lose key personnel, and/or delay the start-up and/or build-up on
various components of the business. In such event, Management believes it could
not generate sufficient revenue to continue on with its business plan, or, in
the alternative, repay investors a portion of their amount invested, but there
can be no assurance that the revenues generated will be sufficient to pay
investors any portion of their amount invested. There is no assurance that
adequate funds will be raised in the time periods as reflected in the financial
forecasts described herein (See “Use of Proceeds” and “Plan of Distribution,”
below).

Arbitrary determination of offering price; investors’
ownership in the Company may be diluted. The Offering price of the Units
has been determined arbitrarily and is not necessarily based on the financial
condition of the Company or on any market value. Neither the price of the Units
nor conversion price of $0.50 cents for the common stock and the $1.50 Warrant
exercise price offered hereby bears any relationship to the assets, book value,
net worth, current or anticipated revenue, cash flow, earnings or shareholders’
equity of the Company, or any other recognized criteria or value of the Company.
The Company has few assets, and therefore, the Offering Price is substantially
higher than the book value per share of the outstanding Common Shares. As a
result, if you purchase the Units in this Offering, you will suffer an immediate
and substantial dilution. Investors in this Offering are likely to experience
substantial dilution as a result of future financing. The Company's Articles of
Incorporation do not provide preemptive rights and even if the Company sells all
outstanding common shares offered in this Offering, the Company will still have
additional Common Shares and potentially preferred shares authorized but not
issued, which could be issued by the Board of Directors if it considers it to be
in the Company's best interests, without shareholder approval. In the event the
Company finds it necessary to raise additional capital, it may issue common
shares or other securities at a price per share less than that paid by
investors. 

In addition, under the terms of the existing warrants issued
pursuant to this Offering, and under any consulting or advisor contract or share
option plan that may be adopted by the Company, and other outstanding options to
acquire Common Shares, the holders thereof are given an opportunity to profit
from a rise in the market price, if any, of the Common Shares with a resulting
dilution in the interests of the other shareholders. The terms on which the
Company may obtain additional financing may be adversely affected by the
existence of such options and warrants. The holders of the warrants and options
may exercise them at a time when the Company might be able to obtain additional
capital through a new offering of securities on terms more favorable than those
provided by such existing warrants or options. In addition, holders of certain
options and warrants have registration rights the same as the holders of
Convertible Debentures once the shares and warrants have been issued with
respect the underlying securities, exercise of which may involve substantial
expense to the Company. 

The Company might not pay dividends. The Company
has not previously paid any cash dividends, nor has it determined to pay
dividends on any Preferred or Common Shares, except as described in the rights
and preferences in “Description of Capital Shares and Options” below. There can
be no assurance that the operation of the Company will result in sufficient
revenues to enable the Company to operate at profitable levels or to generate
positive cash flows. Furthermore, there is no assurance the Board will declare
dividends even if profitable. Dividend policy is subject to the discretion of
the Company's Board of Directors and will depend on, among other things, the
Company's earnings, financial condition, capital requirements and other factors.
(See “Dividend Policy” below.)

There is a public market for our securities, but your
stock needs to be registered so you will be unable to liquidate them if you need
money. There is a public market for the Common Shares. It is not likely
that an active market for the Common Shares will develop or be sustained after
this Offering or in the foreseeable future. Therefore, you will not be able to
sell the securities you purchase in this Offering until the shares are converted
and the stock is registered.

There are restrictions on the transfer of the securities
being offered in this Offering. The securities offered in this Offering
have not been registered with the SEC under the Act or registered or qualified
with any state or provincial securities regulatory agency. If we do not register
the securities, you will not be able to sell, transfer or otherwise dispose of
these securities, even if a liquid public market develops for the securities,
unless you furnish us with a satisfactory opinion from your legal counsel, for
which you must pay, stating that the disposition is exempt from registration
under any applicable federal or state laws. We cannot guarantee that any
exemption from registration or qualification will be available subsequent to
this Offering. (See “Plan of Distribution,” below.)

12

The Directors and Officers will control election of the
Board. Following the completion of this Offering, members of the
Company’s Board of Directors and the Company’s executive officers will
beneficially own approximately 40% of the votes if the Offering is sold and
warrants and options reserved are exercised. The Company’s directors are
appointed upon a vote of simple majority of the Company’s shareholders. Also,
the Company’s Directors will nominate candidates for director elections. This
means certain Directors and executive officers may be able to determine the
outcome of director elections and other corporate actions requiring shareholder
approval. This level of ownership may have a significant effect in delaying,
deferring or preventing a change in control of the Company and may adversely
affect the voting and other rights of other holders of our Common Shares and
Debentures. (See “Capital Structure and Beneficial Ownership,”
below.)

Our Management has broad discretion over the use of
proceeds and could spend these proceeds in ways with which you may not agree.
We intend to use the net proceeds from this offering primarily to
generate revenue and provide working capital. However, Management and board of
directors will have broad discretion with respect to the actual application of
the proceeds. The actual use of the net proceeds from this offering may change
and will depend on a number of factors, including future sales growth, future
profitability, and the success of our current marketing strategies.

Our charter provides for limited liability for directors
and officers and you may disagree with actions they take. Our Articles
of Incorporation eliminate the personal liability of a director or officer to
our Company and our stockholders for monetary damages for breach of fiduciary
duty of care as a director, subject to certain exceptions, to the fullest extent
allowed by Nevada law. Accordingly, except in limited circumstances, our
directors and officers will not be liable to our Company or our stockholders for
breach of this duty.

Limited Capitalization of the Company; Need for
Additional Financing. The Company has limited capitalization, which
increases its vulnerability to general adverse economic and industry conditions,
limits the Company’s flexibility in planning for or reacting to changes in its
business and industry, may place it at a competitive disadvantage to competitors
with sufficient or excess capitalization, and might also limit, among other
things, its ability to borrow additional funds. Also, the Company is currently
in the start-up development stage and formal operations began September 2006. As
such, the Company believes it may experience losses from its operations for a
period of at least nine to eleven months after the Closing. There is no
assurance that such losses will not be in an amount and for a duration that will
exceed Company projections. In addition, although the Company believes that the
Offering will be sufficient to fund the initial operations and the early months
of the Company’s business plan, there can be no assurance that sufficient
revenues will be generated to fund the Company's ongoing operations or to
implement its business plan in whole or in part. In any of these cases, the
Company would be required to seek additional financing through borrowings, debt
or equity financing or other means of financing in order to continue operations
or implement its business plan. Such financing, if required, may not be
available to the Company or may be available to it only on unfavorable terms.
Should the Company be unable to raise additional capital, on acceptable terms,
you could lose your entire investment. Moreover, in the event the Company seeks
to raise additional funds through the sale of additional Common Shares or other
interests in the Company, investors in this Offering may experience dilution of
their equity invested in the Company. (See “Description of Company and Its
Business,” below.)

BUSINESS RISKS

Our efforts to sell into the African markets create a
number of logistical and communications challenges. Additionally, we
purchase certain materials from international sources, and in the future we may
decide to move certain manufacturing functions to, or establish additional
manufacturing operations in, international locations. Purchasing, manufacturing,
and selling products internationally exposes us to various economic, political,
and other risks, including the following:

	management of a multi-national organization,
  
	compliance with local laws/regulatory requirements as well as changes in
  those laws/requirements,
  
	imposition of restrictions on currency conversion or the transfer of
  funds,
  
	transportation delays or interruptions and other effects of less developed
  infrastructures,
  
	foreign exchange rate fluctuations, 

13

	employment and severance issues,
  
	overlap of tax issues,
  
	tariffs and duties,
  
	possible employee turnover or labor unrest,
  
	lack of developed infrastructure,
  
	the burdens and costs of compliance with a variety of foreign laws, and
  
	political or economic instability in certain parts of the world. 

Political and economic conditions abroad may adversely affect
our foreign relationships. Protectionist auto legislation in either the United
States or foreign countries, such as a change in the current tariff structures,
export or import compliance laws, or other trade policies, could adversely
affect our ability to manufacture or sell vehicles, and parts in foreign markets
and to purchase materials or equipment from foreign suppliers.

Changes in policies by the United States or foreign governments
resulting in, among other increased duties, higher taxation, currency conversion
limitations, restrictions on the transfer or repatriation of funds, limitations
on imports or exports, or the expropriation of private enterprises also could
have a materials adverse effect on us. Any actions by our host countries to
reverse policies that encourage foreign investment or foreign trade also could
adversely affect our operating results. In addition, U.S. trade policies, such
as “most favored nation” status and trade preferences for certain Asian nations,
could affect the attractiveness of our services to our customers.

We must effectively manage our growth. The
failure to manage our growth effectively could adversely affect our operations.
Our ability to manage our planned growth effectively will require us to: 

	enhance our operational, financial, and management systems, and
  
	expand our facilities and equipment. 

Any acquisitions that we undertake could be difficult to
integrate, disrupt our business, dilute stockholder value, and harm our
operating results.

We plan to review opportunities to buy other businesses or
technologies that would complement our current products, expand the breadth of
our markets, enhance our technical capabilities, or otherwise offer other growth
opportunities. While we have no current agreements or active negotiations
underway, we may buy businesses, products, or technologies in the future. If we
make any future acquisitions, we could issue stock that would dilute existing
stockholders’ percentage ownership, incur substantial debt, or assume contingent
liabilities. Our experience in acquiring other businesses and technologies is
limited. Potential acquisitions also involve numerous risks, including the
following:

	problems integrating the purchased operations, technologies, products, or
  services with our own,
  
	unanticipated costs associated with the acquisition,
  
	diversion of management’s attention from our core business,
  
	adverse effects on existing business relationships with suppliers and
  customers,
  
	risks associated with entering markets in which we have no or limited
  prior experience, and
  
	potential loss of key employees and customers of purchased organizations.
  

Our acquisition strategy entails reviewing and potentially
reorganizing acquired business operations, corporate infrastructure and systems,
and financial controls. Unforeseen expenses, difficulties, and delays frequently
encountered in connection with rapid expansion through acquisitions could
inhibit our growth and negatively impact our profitability. We may be unable to
identify suitable acquisition candidates or to complete the acquisitions of
candidates that we identify. Increased competition for acquisition candidates
may increase purchase prices for acquisitions to levels beyond our financial
capability or to levels that would not result in the returns required by our
acquisition criteria. In addition, we may encounter difficulties in integrating
the operations of acquired businesses with our own operations or managing
acquired businesses profitably without substantial costs, delays, or other
operational or financial problems.

We may issue common or preferred stock and incur substantial
indebtedness in making future acquisitions. The size, timing, and integration of
any future acquisition may cause substantial fluctuations in operating results
from quarter to

14

quarter. Consequently, operating results for any quarter may
not be indicative of the results that may be achieved for any subsequent quarter
or for a full fiscal year. These fluctuations could adversely affect the market
price of our common stock.

Our ability to grow through acquisitions will depend upon
various factors, including the following:

	availability of suitable acquisition candidates at attractive purchase
  prices,
  
	ability to compete effectively for available acquisition opportunities,
  and
  
	availability of funds or common stock with a sufficient market price to
  complete the acquisitions. 

As a part of our acquisition strategy, we frequently engage in
discussions with various companies regarding their potential acquisition by us.
In connection with these discussions, we and each potential acquisition
candidate will exchange confidential operational and financial information,
conduct due diligence inquiries, and consider the structure, terms, and
conditions of the potential acquisition. In most cases, the prospective
acquisition candidate will agree not to discuss a potential acquisition with any
other party for a specific period of time, grants us an option to purchase the
prospective business for a designated price during a specific time, and agrees
to take other actions designed to enhance the possibility of the acquisition,
such as preparing financial information. Potential acquisition discussions
frequently take place over a long period of time and involve difficult business
integration and other issues, including in some cases, management succession and
related matters. As a result of these and other factors a number of potential
acquisitions, that from time to time appear likely to occur, do not result in
binding legal agreements and are not consummated.

	We cannot assure you that we will be successful in overcoming problems
encountered in connection with acquisitions in the future, and our inability to
do so could adversely affect our ability to make successful acquisitions. 

The Company has limited history of operations and its profitability is
uncertain. The Company is a startup company and, therefore, has a
limited history of operations. The Company is faced with all of the risks
associated with a company in the early stages of development. The Company's
business is subject to numerous risks associated with a new company engaged in
the automotive market. Such risks include, among other things, competition from
well-established and well-capitalized companies, unanticipated development,
changes in trends, marketing difficulties and risks associated with the launch
of transportation, including promotion and development of on-going regional and
national bus routes. There can be no assurance that the Company will ever
generate sufficient commercial sales or achieve profitability. Should this be
the case, you could lose your entire investment.

Potential investors should evaluate us in light of the
expenses, delays, uncertainties, and complications typically encountered by
early-stage businesses, many of which will be beyond our control. These risks
include the following: lack of sufficient capital, unanticipated problems,
delays, and expenses relating to product development and implementation, lack of
intellectual property, licensing and marketing difficulties, competition,
technological changes, and uncertain market acceptance of our products and
services.

Our planned expense levels will be based in part on our
expectations concerning future revenue, which is difficult to forecast
accurately based on its stage of development. We may be unable to adjust
spending in a timely manner to compensate for any unexpected shortfall in
revenue. Further, business development and marketing expenses may increase
significantly as we expand operations. To the extent that these expenses precede
or are not rapidly followed by a corresponding increase in revenue, our
business, operating results, and financial condition may be materially and
adversely affected.

The Company’s success and profitability depends upon key
persons. Success of the Company is dependent on the continued services
of certain key personnel, consultants, advisors and strategic partners described
in “Directors, Officers, Management” below. The Company benefits from a core
staff with years of experience in business development and management. The loss
of any of these individuals may have a substantial and prolonged impact on the
Company’s ability to implement its business plan. The Company does not currently
have employment or other consulting or advisory agreements with any of its key
senior management or other key personnel and advisors. The Company does not have
key man life insurance on any of these key persons or its officers. The loss of
the services any of these individuals could result in great difficulties and
delays with the design and development of new expansions of the transportation
business, and execution of the Company’s marketing plan, which could adversely
affect the Company’s business and results of operations.

15

The Company might depend on joint ventures, partnerships,
and other third parties to implement its business plan. The Company is
and will continue to be dependent upon third parties to provide products,
services, and operations in various jurisdictions. The Company intends to enter
into strategic partnerships with parties and governments which can provide
logistics, resources, and governmental support. The Company currently has many
commitments to enter into strategic partnerships or joint ventures. The Company
may not identify suitable strategic partnership candidates, or if it does
identify suitable candidates, the Company may not complete those transactions on
commercially favorable terms, or at all. The risks of any partnership or joint
venture will depend on the terms of each agreement. For example, provisions of
any such agreement may result in the Company lacking of voting control for the
Company, being subject to buy-out or removal terms, unable to collect payments
or enforce the terms of the agreement. There can be no assurance that such
parties will perform their contractual obligations or that there will not be
political or economic events in relation to such parties which may have a
material adverse effect on the Company. In addition, any strategic partnership
could result in difficulties assimilating operations and products. Our
management has had experience but may not have enough in assimilating
organizations in joint ventures or partnerships, and may not successfully
integrate any operations in such cases. If the Company fails to successfully
integrate such transactions, its business could be materially harmed (See
“Description of the Company and Its Business” below).

The Company might not be successful if it cannot obtain
and retain qualified personnel. The Company anticipates that in the
first year following consummation of this Offering, it will require additional
administrative, technical, and marketing employees. While the Company has
discussed employment with certain prospects, it has no binding arrangements to
fulfill its staffing requirements and there is no assurance it will be able to
successfully accomplish this requirement. If the Company is not able to hire and
retain qualified employees, it will diminish the Company's ability to operate
effectively, which will adversely affect the Company’s financial condition.
Furthermore, there is potential that the cost of retaining necessary staff will
be higher than Management has forecasted which will have an adverse effect on
the Company’s profitability.

The Company might not be able to implement its business
strategy. To some extent, the Company’s ability to generate positive
cash flow in the future is subject to general economic, financial, competitive,
and other factors that are beyond our control. In the event Management has
misjudged the market demand, market acceptance of the Company’s services, or
financial projections and assumptions, results of operations could be adversely
affected, and the Company might not be able to fund additional releases as
planned. If the Company is unable to finance existing or future projects with
cash flow from operations, it will have to adopt one or more alternatives, such
as reducing staff, delaying launch, postponing advertising and marketing,
canceling development projects and other capital expenditures, selling assets,
or obtaining additional equity/debt financing, or joint venture partners. These
sources of additional funds might not be sufficient to finance existing or
future projects, and other financing may not be available on acceptable terms,
in a timely manner or at all. If the Company is unable to secure additional
financing, it could be forced to limit its business plan, or it might not be
able to take advantage of unanticipated opportunities or otherwise respond to
unanticipated competitive pressures, which might adversely affect its business,
financial condition and results of operations. (See “Description of the
Company and Its Business” below.)

Company may fail to accurately forecast
demand. Due to the high costs of capital and equipment the
forecasts and ability to manage both increases and decreases in demand may
adversely affect the profits of the company.

We are subject to governmental regulations. Like
all businesses, our operations are subject to certain federal, state, and local
regulatory requirements relating to environmental, waste management, health, and
safety matters. We could become subject to liabilities as a result of a failure
to comply with applicable laws and incur substantial costs from complying with
existing, new, modified, or more stringent requirements. In addition, our past,
current, or future operations may give rise to claims of exposure by employees
or the public or to other claims or liabilities relating to environmental, waste
management, or health and safety concerns.

Our operating results may have significant periodic and
seasonal fluctuations. In addition to the variability resulting from the
short-term nature of our customers’ commitments, other factors may contribute to
significant periodic and seasonal quarterly fluctuations in our results of
operations. These factors include the following:

16

	the timing of orders,
  
	the volume of orders relative to our capacity
  
	product introductions and market acceptance of new products or new
  generations of products,
  
	evolution in the life cycles of customers’ products,
  
	timing of expenditures in anticipation of future orders,
  
	effectiveness in managing manufacturing processes,
  
	changes in cost and availability of labor and components,
  
	introduction and market acceptance of our customers’ products,
  
	product mix,
  
	pricing and availability of competitive products, and
  
	changes or anticipated changes in economic conditions. 

Accordingly, you should not rely on the results of any past
periods as an indication of our future performance. It is likely that in some
future period, our operating results may be below expectations of public market
analysts or investors. If this occurs, our stock price may decline.

We could experience reduced operating margins and other
  losses due to fluctuations in foreign currency exchange rates. While
  we transact business predominantly in U.S. dollars and bill and collect most
  of our sales in U.S. dollars, we plan on collecting a significant portion of
  our revenue in non-U.S. currencies. In the future, customers may make payments
  in non-U.S. currencies. Fluctuations in foreign country exchange rates could
  affect our cost of goods and operating margins, but could result in foreign
  currency exchange losses. In addition, currency devaluation can result in a
  loss to us if we hold deposits of that currency. Hedging foreign currencies
  can be difficult, especially if the currency is not freely traded. We cannot
  predict the impact of future exchange rate fluctuations on our operating results.

Our projections assume certain timing and phasing
targets. We may experience delays in implementing various components of
our business, which could result in reduced earnings, reduced cash flow, the
need for addition funding, and/or changes in our staffing plans. These timing
and phasing targets could result from delays in securing financing from either
debt or future equity offerings, delays caused by governments or our partners,
suppliers, potential labor disputes, or other uncontrollable factors..

USE OF PROCEEDS

The proceeds from the sale of Debentures in this Offering are
expected to be $5,000,000 if all are sold. 

The table below describes how the Company will use the proceeds
from the Minimum and Maximum Offering. While the estimated amounts of the
expenses are believed to be reasonable, this table should be viewed only as an
estimate of the use of proceeds that may be achieved. 

	  	Offering 	 	  
	  	Amount 	 	Percent 
	 	 	 	 
	GROSS PROCEEDS 	 $5,000,000 	 	   100.0% 
	 	 	 	 
	Less: 	  	 	  
	   Finder Fees 	     $375,000 	 	       7.5% 
	  	  	 	  
	Total Finder Fees 	     $375,000 	 	       7.5% 

17

	APPLICATION OF NET PROCEEDS: 	  	 	  
	 	 	 	 
	  O&A Expenses 	   $300,000 	 	   6.0% 
	 	 	 	 
	  Bus Operations 	     400,000
	 	   8.0% 
	  Capital Acquisitions 	 3,400,000 	 	 68.0% 
	  Cash Reserves 	     525,000
	 	 10.5% 
	 	 	 	 
	APPLICATION OF PROCEEDS 	$4,625,000 	 	 92.5% 
	  	  	 	  
	TOTAL USE OF PROCEEDS 	$5,000,000 	 	100.0% 

DESCRIPTION OF THE COMPANY AND ITS BUSINESS

General Company Description
On October 12, 2005, the
Government of Cameroon and Transnational Automotive Group, Inc. (“TAUG”) signed
an agreement for TAUG to establish and exclusively manage the urban bus systems
in Cameroon, starting with the country’s two major cities: the capital city of
Yaoundé and the leading population and commercial center, Douala. This project
is a national priority; it will significantly improve the lives of millions of
Cameroonians, employ thousands and help accelerate the country’s economic
growth. The Prime Minister’s stated aim is to “get his country to work on time,
securely and safely.” Underpinning this joint Government-TAUG task is the desire
by both parties to develop a model case study of how Cameroon is transforming
itself into an attractive venue for foreign investment. 

Since the signing of the October 2005 agreement, TAUG has
established Transnational Automotive Group – Cameroon, SA (“TAUG-C”),
headquartered in Yaoundé. TAUG-C, through its intra-city transportation
operational company, Transnational Industries – Cameroon, S.A., known as
“LeBus,” officially commenced urban bus operations in Yaoundé on September 25,
2006 and is currently transporting 12,000 to 14,000 passengers per day in that
city, generating approximately $100,000 USD/month. LeBus started its first-phase
operations with an initial fleet of 17 of a planned 200 buses for the Yaoundé
metropolis, on two fully operational routes of the 25 approved bus routes. 

As projected, LeBus ridership is strong and continues to grow.
TAUG anticipates that the ridership will enjoy another jump in growth with the
introduction of complementary lines. The LeBus operation has received excellent
media reviews, and has overwhelming support from Cameroon’s citizenry. LeBus
also enjoys the direct support of the nation’s President, Prime Minister and
Cabinet.

On December 18, 2006, TAUG-C launched its inter-city
transportation operating subsidiary, LeCar Transportation Corporation (SARL),
known as “LeCar.” In its first week of operations, LeCar transported 3,976
passengers between the cities of Yaoundé and Douala, generating approximately
$50,000 USD in revenues. Like LeBus, LeCar has received excellent support from
the media and from Cameroon’s citizens, as indicated in the noteworthy success
of its first three weeks of operation. LeCar has also impressed Cameroon
government leaders for its reliability and quality of service, and enjoys the
support of the nation’s highest officials. 

As of January 5, 2007, TAUG-C has 311 employees and a total of
28 buses in operation. The company is currently preparing for the deployment of
60 new city buses for its LeBus operation in Q1 and Q2 2007. These additional
buses will allow the Company to begin offering service on an additional six of
its planned 25 bus routes in Yaoundé, and will require 450 new staff members.

The Market
The current weekday market for public
transportation in the city of Yaoundé is approximately $770,000 USD daily, for
an annual estimate of $185 million USD.

The current annual inter-city transportation market between
Yaoundé and Douala (not including routes to other cities in the country) is
estimated at $33 million USD. Although there are no official numbers, these
markets can be expected to expand substantially, given the increased overall
economic growth Cameroon is experiencing and projecting.

18

The Opportunity
As a result of re-establishing urban
transportation for the people of Cameroon through LeBus, TAUG-C is now
positioned to mesh its inter-city/rural “LeCar” service with LeBus, in order to
provide a comprehensive integrated transportation network that leverages the
expertise and maintenance infrastructure of LeBus. Beginning in the capital city
of Yaoundé and expanding to Douala, TAUG-C’s integrated transportation system
will utilize economies of scale to create a highly profitable, sustainable
business.

Overseas Private Investment Corporation (OPIC)
While
TAUG believes its efforts will be directed to help stabilize Cameroon and its
economy, the Company recognizes the risks inherent in making investments and
operating in Africa. Accordingly, TAUG has submitted an application with the
Overseas Private Investment Corporation (OPIC), an agency of the United States
government, to utilize OPIC’s financing and insurance programs in order to
protect any investment and debt secured by TAUG in connection with the Company’s
opportunities – first in Cameroon, and then in other parts of Africa.

OPIC is an independent U.S. government agency whose mission is
to mobilize and facilitate the participation of U.S. private capital and skills
in the economic and social development of less-developed countries. OPIC assists
U.S. companies by providing financing, political risk insurance and other forms
of support. OPIC complements the private sector in managing risks associated
with foreign direct investment, and supports U.S. foreign policy, which is
increasingly focusing on African development and security.

TAUG and OPIC are in the final stages of approvals/processing
for an initial $9 million USD loan. Proceeds from the initial OPIC financing
will be used to purchase additional buses, maintenance equipment and supplies;
provide necessary capital to complete construction of new and existing
facilities; and provide a working capital reserve.

Institutional Financing Opportunity
Establishing a
bus transportation infrastructure is capital-intensive. Although strategic, the
OPIC financing only gets TAUG part of the way through its business plan. In
Cameroon alone, TAUG has forecasted the need for approximately 880 buses. The
Company, therefore, is seeking other institutional financing partners. To
execute its business plan and maintain its momentum, the Company requires
additional funding of $29 million USD for the first three quarters of 2007 – a
total investment of $38 million USD ($29 million from the private sector plus $9
million in debt financing from OPIC).

TAUG corporate overview

Background|
Transnational Automotive Group, Inc. (the
“Company”), a Nevada corporation trading under the symbol (OTCBB: TAMG), is a
transportation and sustainable energy company headquartered in Los Angeles, CA,
with operating entities in Cameroon and early-stage business development efforts
in other Sub-Saharan East African and West African nations. Invitations for TAUG
participation have been received from the public and private sectors in
Ethiopia, Nigeria, Kenya and Mozambique. High level government discussions have
begun in Ethiopia and Nigeria anticipating late 2007 project kick-off. TAUG has
also been approached by representatives of Liberia and Ghana 

At the same time TAUG is engaged in establishing and operating
mass transit systems in leading African commercial and population centers –
beginning in Yaoundé and Douala, Cameroon – the Company is also positioning
itself for expansion into additional African markets and industry sectors –
including manufacturing and marketing sustainable bio-diesel fuels. 

In the alternative energy arena, TAUG has begun planning for
production of palm oil-based bio-fuels within palm plantations situated in both
Ethiopia and Cameroon. Beckoning markets for such bio-fuel products have been
confirmed by the Company in Greater China, India, North America and other
automotive-intensive nations and regions.

TAUG’s vision is to become the leading transportation and
sustainable energy company on the African continent, and to establish key
infrastructure and workforce development that dramatically accelerates Africa’s
economy and quality of life. 

The Company has established a business development center
dedicated to exploiting several transportation, energy and other natural
resource market opportunities in the People’s Republic of China, Greater China
and additional Asia Pacific and South Asian locations.

19

TAUG intends to implement its business plan by creating wholly-owned
  subsidiaries located in different parts of the world. In Cameroon, TAUG-C is
  the first wholly-owned subsidiary for urban and rural transportation system
  established by the Company.

Transportation is Key to Development

Emerging countries that pursue political stability and a
dynamic, growth-oriented economy require a reliable, sustainable source of food,
adequate housing, readily-available medical treatment, an expanding job market
and an open system for educating children and the work-force. Progress in these
vital areas requires a sustainable, affordable and reliable transportation
infrastructure.

Establishing a sustainable mass transportation system is
capital-intensive and requires systemic technical and management expertise. The
acute need for affordable transportation infrastructure in developing countries,
coupled with the lack of financial resources and management expertise within
these countries, has created a unique opportunity for the Company.

Strategy

TAUG has developed a strategy that combines its management
knowledge of transportation and business systems with its ability to create an
infrastructure network essential to these developing countries. 

Establishing and operating a sustainable transportation
infrastructure that is affordable to a population that is largely characterized
by joblessness and poverty requires:

	1. 	
      Minimizing capital expenditures; and

	2. 	
      Minimizing operating costs

Minimizing Capital Expenditures:

There are three main components to keeping the capital
expenditures at a minimum, thereby reducing the amount of required financing and
associated costs.

	 	(1) 	
      Partnering with the Government: As part of the
      October, 2005 agreement, the Cameroon Government is responsible for
      supplying TAUG with adequate depot facilities for the urban bus system as
      well as improving the road network. This has enabled TAUG to reduce its
      capital needs that would have been required to purchase and then develop
      these facilities and this infrastructure. Additionally, the Government is
      allowing TAUG to import the city buses into the country tax and duty free.
      This reduces the landed value of these vehicles significantly, thus
      reducing the need for additional capital to pay for duties of 60 percent
      or more.

	 	 	 
	 	(2) 	
      Sourcing high-quality, less expensive buses from
      China: The Company has sourced quality buses from China that are
      significantly less expensive than comparable US or European
    vehicles.

	 	 	 
	 	(3) 	
      Seeking competitive financing: TAUG is seeking to
      keep its cost of capital at a minimum to enable the Company to use cash
      flow to help fund its growth. A low-interest debt financing arrangement
      with OPIC provides one way to keep its cost of capital lower than
      traditional bank financing and therefore, is a key component of TAUG’s
      strategy.

Minimizing Operating Costs:

There are three main components to keeping operational costs as
low as possible to enable TAUG to offer competitive fares.

	 	(1) 	
      Negotiated tax abatements from the Government: The
      Government of Cameroon has requested that the Company offer a “socially
      acceptable” fare of 150 CFA ($0.29-30 USD) for the urban bus system. To
      enable such a low fare, the Company negotiated tax abatements, such as a
      30-percent reduction in the cost of fuel as well as a waiver from Value
      Added Tax (VAT) on the ticket price.

	 	 	 
	 	(2) 	
      Implementing technology: The Company will be
      implementing several business process automation technologies such as
      accounting, payroll and HR software tools to substantially reduce
      administrative costs. In addition, the Company plans to implement a “smart
      fare card” technology to eliminate the handling of

20

			 enormous volumes of cash and coin, thus reducing the
        need for a large cashier staff and for ticket sellers on board the buses.

	 	 	 
	 	(3) 	 Negotiate access to natural resources such as oil
        and gas concessions: TAUG has proposed to the Cameroon Government
        that the Company could keep fares low or even lower – as well as
        being able to offer other special transport services to the elderly and
        handicapped and supplying dedicated school buses – if the Company
        could find ways to finance these services with cash flow from other sources.
        TAUG is currently in discussions with senior Cameroon Government officials
        to obtain “marginal” producing oil concessions whereby the Company
        would split the profits1 with the Government. TAUG would invest
        50 percent of its share into urban bus systems to maintain or even lower
        the fares as well as offering special services such as school buses, which
        are high-demand needs of Cameroon’s economy and society.

Organization – Transnational Automotive Group Inc.

 

The People

Ralph
  J. Thomson, Ph.D., MALD, MA: Chairman of the Board, President & CEO. Dr.
  Thomson's career involves more than thirty years’ experience in government
  advocacy; legislative and regulatory activity; and international policymaking,
  negotiations, business management and higher education. His career has also
  been devoted to partnership development, mergers and acquisitions, strategic
  alliances, representation to U.S. and foreign governments, technology transfer,
  trade and finance. Dr. Thomson has been responsible for private and public sector
  project funding, joint ventures and technology sales contracts totaling over
  $500 million in the U.S., Asia, Europe, the Middle East and Latin America. Public
  sector funding and policy activities have involved U.S. government agencies,
  the United Nations, the World Bank/IMF and regional development banks. Dr. Thomson
  received his Bachelors degree from the University of Utah, two Master’s
  degrees and a Ph.D. in international affairs, economics, law and diplomacy from
  the Fletcher School of Law and Diplomacy (Tufts and Harvard Universities), with
  dissertation under Dr. Henry Kissinger. 

Dr.
  Louis P. Shu: Vice-President of Business Development and President, China Operations.
  Dr. Shu is an experienced high-tech executive with a long track record of
  business and product development success in start-up companies. His venture
  capital background includes senior positions at Centennial Funds and Acer Capital
  Corporation. He founded Weise Labs, Inc. and co-founded Nanotech Special Interest
  Group in Silicon Valley. He organized Nanotech Forum and Exhibitions in NASA,
  Mountain View; Tsukuba, Japan; Beijing, China; and Taipei, Taiwan. In 2003,
  he received “Innovative Technology Award” in the First International
  Nanotechnology Business Plan Contest, NanoTech 2003 + Future, Makuhari, Japan.
  He was a pioneer for undersea optical fiber communications and digital cellular
  technologies. In 1989, he received the "Industry Service Award" 

 

______________________

  1 TAUG is developing partnerships with US Oil and Gas companies to
  provide the operational expertise to capitalize on any oil and gas concessions
  it is able to negotiate with the Government of Cameroon.

21

presented by the Cellular Telecommunications Industry
Association (CTIA) and the Telecommunication Industry Association (TIA) for his
contribution to the industry and the international standards community. Earlier
positions included CTO of Galaxy Online, Inc., President of OctaliBay
Corporation, Director of Network Architecture of US West NewVector Group, Acting
Supervisor of AT&T Bell Labs. From 1978 to 1984, he earned Ph.D. in Control
Systems, MSEE in Computer Engineering, MS in Statistics/Operations Research and
MBA from Michigan State University. He was a fighter pilot with Bachelor Degree
in Aeronautical Engineering from the Air Force Academy of Taiwan. Dr. Shu has
developed and owns two patents in the advanced diesel engine field with focus on
energy saving and environmental protection.

Seid Sadat, Acting Chief Financial Officer. Mr. Sadat
has been a professional in public accounting for over eighteen years. He has
performed a wide range of accounting services for a diversified client base
consisting of estate, manufacturing, non-profit, retail, construction, and
service organizations. He has acted as the CFO for several companies, has
extensive audit and regulatory expertise and has been called upon to act as an
“expert” witness. He is currently a member of the Report Quality Monitoring
Committee for the California Board of Accountancy.

	   
	Don Durand, President Africa Operations.
        Graduate of Royal Military College with a Bachelors of Engineering
        and has an Executive MBA from Simon Fraser University. He served as an
        Engineer Officer in both the Canadian and British Armies. During his career
        in the military, Mr. Durand served with distinction in many complex operations
        around the world in Europe, and the Middle East both as a peacekeeper
        and during peace making operations; including building an aide convoy
        road in central Bosnia, managing a fleet of over 100 heavy equipment vehicles
        fulfilling similar roles in places such as Kuwait. 

	 	 
		Bokwe Mofor, Managing
        Director LeBus. Mr. Mofor is a Cameroonian American who has practiced
        law in the USA for over 19 years. He graduated with an MBA in International
        Business from the University of the District of Columbia and has a Masters
        in International and Comparative Law from Georgetown University. Mr. Mofor
        is well respected in the Cameroonian government community.

	 	 
		 Cyrille Tollo, Managing
        Director LeCar. Mr. Tollo graduated with a Master of Arts Degree
        in Archeology from the University of Geneva and received an International
        Specialized Certificate in African Archeology at the University of Brussels.
        Mr. Tollo received his MBA from the Robert Kennedy University of Zurich.
        Mr. Tollo is a Cameroonian citizen who is also well known and respected
        in the Cameroonian community. 

       

Mark McCoy, Business & Financial Analyst, TAUG-C. Mr.
  McCoy graduated with Degree in Commerce from the Sauder School of Business at
  the University of British Columbia. Notably, he was on a four person team that
  won an International Business Case Competition in Copenhagen, Denmark. Prior
  to working for TAUG he was a Financial Consultant. 

Non-Executive Board Members of TAUG, Inc.

William Jacobson, Director. Mr. Jacobson has been
president and CEO of Atlas Mining Company since August of 1997. He has worked
directly in the mining industry for over 12 years. Mr. Jacobson also spent 15
years in the banking industry. He graduated with a B. S. in Business
Administration from the University of Idaho in 1971 and is a member of the
Northwest Mining Association. 

Henry Huber, Director. Mr. Huber has a Masters of
Education degree, and has spent the last five years as President of his company,
Uptrend Investment Services, providing investment services to private
clients.

Investing In Cameroon and The NEED for TAUG

The International Monetary Fund (IMF) and the World Bank's
International Development Association (IDA) have agreed that Cameroon, with a
population in excess of 17 million people, has made sufficient progress and
taken the necessary steps to reach its completion point under the Enhanced
Heavily Indebted Poor Countries (HIPC) Initiative. By reducing Cameroon's future
debt payments by over U.S. $4.9 billion, Cameroon will be able to more fully
allocate its financial resources to other priority sectors of the economy.

To reach this completion point, Cameroon met a number of
milestones involving, among other issues, macroeconomic stability and a
commitment to poverty reduction. In addition, Cameroon took steps to improve
governance and to fight

22

official corruption. While Cameroon’s President has achieved
great success in implementing reform, he is keenly aware of the need to do more
to improve the financial condition of the average Cameroonian. Clearly TAUG
stands to benefit from any improvement in the economic well-being of the
country’s population. 

In what appears to be the President’s last term in office, the
Head of State has indicated his desire to show meaningful results in fighting
economic hardship before exiting. The main catalysts will be the reduction in
Cameroon’s debt service payments and the inflow of foreign investment capital.
These are some of the key reasons TAUG has experienced increased strong
commitment and support as a U.S. company investing in Cameroon, major local
employer, and provider of essential transportation infrastructure. As a direct
result of its efforts, Cameroon is experiencing healthy economic expansion in
all sectors of its economy, as it seeks to offer its abundant natural resources
to the world.

Cameroon’s continuing economic expansion requires an immediate
improvement of the country’s transportation infrastructure. The cities of
Cameroon – and in particular its capital, Yaoundé (population 2+ million) – have
been without an adequate city bus system for more than 15 years. Since the
former city bus company, SOTUC, failed in 1992 due to mismanagement and lack of
modernization, the streets of Yaoundé and Douala (population 2+ million) have
become clogged with taxis and associated pollution. With increasing population
growth in the cities straining the taxi system and the safety and security
concerns of ordinary Cameroonians who take taxis, an urban bus transportation
system has been identified as a desperate need. As a result, reviving city/urban
bus systems throughout the country became a top national priority of the
nation’s Prime Minister and his administration. Joining with TAUG to establish
this modern city/urban and inter-city/rural comprehensive integrated bus
transportation system will enable the country to sustain and expand its economic
growth and prosperity.

Cameroon Highlights:

	Stable government with a focus on significantly reducing corruption.
  High-profile anti-corruption arrests in the last 6 months. Transparency
  getting stronger.
  
	Violence is not part of the nation’s cultural fabric.
  
	French and English spoken, predominantly French.
  
	French political and private economic influence is being balanced by other
  investment, services and policy influences, including an invited increased
  American presence.
  
	Literacy is high; people are generally content and eager to develop their
  country. Workers are skilled, and respond well to management.
  
	Cameroon is a republic with a presidential system of government.
  
	Current President (and TAUG project supporter) H.E. Paul Biya has been
  Head of State since 1982, re-elected in 2004 for another 7-year term.
  
	Cameroon is currently experiencing economic growth, a building boom, and
  considerable domestic and foreign investment in resource development and
  infrastructure. 

23

Transnational automotive group – Cameroon (“TAUG-C”)

Background

Transnational Automotive Group – Cameroon, S.A. (“TAUG-C”) is a
Public Liability Company incorporated on October 17, 2005, in the Republic of
Cameroon. TAUG-C is a wholly-owned subsidiary of Transnational Automotive Group,
Inc., a Nevada Corporation. 

TAUG-C is a transportation management company currently
operating two subsidiaries in Cameroon. The city/urban transportation system,
known as LeBus, is presently operating in the capital city of Yaoundé
transporting between 12,000-14,000 passengers per day on its first two (of 25)
lines and generating monthly revenues of approximately $100,000 USD. 

The inter-city/rural bus operation known as LeCar is
transporting approximately 4,000 passengers per week between Yaoundé and
Cameroon’s most populous city, Douala. It is currently generating weekly
revenues of approximately $50,000 USD. Like LeBus, LeCar is in its launch phase
operating at about 10 percent of the projected number of buses and routes that
the Company plans to offer.

Organization

In order to address both the city/urban and inter-city/rural
transportation system opportunities, TAUG Inc., operating through its wholly
owned subsidiary TAUG-C, created two separate operating entities as follows:

 

	1. 	
      LeBus (city/urban transportation). Transnational
        Industries – Cameroon, S.A. has the trade name of “LeBus.”
        Under agreement with the Government of Cameroon, LeBus will manage all
        the urban bus transportation in the cities of Cameroon. The initial focus
        was to establish its operations in the capital city of Yaoundé, with
        expansion to the commercial center, Douala, later in 2007. The urban bus
        business is characterized by high passenger volume with low fares and
        short trips. It is also characterized by the need for higher levels of
        capital expenditure to purchase the required volume of buses, to develop
        the infrastructure such
	
      

24 

as bus depots and bus stops/shelters, and thus carries higher
financing costs. LeBus is 34% owned by the following Cameroonian entities that
invested cash or property for its equity share of the company – section 5.5
discusses this ownership in greater detail:

	 	a. 	
      Caisse De Stabilisation Des Prix Des Hydrocarbures
      (“CSPH”) – owns 6% for its $1mm investment;

	 	b. 	
      The Yaoundé Urban Council – owns 24% for the
      in-kind contributions including a $4mm bus depot as well as road
      improvements it made for the bus routes; and

	 	c. 	
      The Chamber of Commerce – owns 4% for its $800,000
      investment.

	2. 	
      LeCar (inter-city/rural transportation). “LeCar”
        (French for “coach bus”) is the operating company which will
        manage the inter-city/rural bus service connecting the various population
        centers in Cameroon. The initial operation is focused on connecting the
        two largest cities of Douala (population of 2.3m) and Yaoundé (population
        of 2+M). Inter-city/rural bus transportation business is characterized
        by low volume, high fares and long trips. Its capital expenditures on
        infrastructure and the required number of buses are much lower relative
        to city/urban bus transportation, and therefore, its financing costs are
        much less.
	
       

Strategic Focus

Integrating the operations of a city/urban bus system
with that of inter-city/rural bus system will allow TAUG-C to provide a seamless
transportation network for the citizens of Cameroon. By leveraging and
sharing the fixed assets and infrastructure of each operating division, TAUG-C
will be able to provide superior service focused on safety, security and
reliability at affordable fares for the predominately low-income population.
“Integrating” the services and “leveraging” the
infrastructure are the operational and strategic principles that will provide
the Company’s organizational focus on:

	
  Increasing the ridership volume; and 

  
	
  Keeping the cost structure competitive. 

Operational Focus

TAUG-C has and will continue to import U.S. best practices in
the following areas:

	
  Environmental stewardship and corporate responsibility 

  
	
  Customer service 

  
	
  Corporate ethics 

  
	
  Employee growth and care2 

TAUG-C has began to implement these best practices and will
continue to do so as it moves from its current start-up phase to full-scale
implementation.

________________________

  2  For Example, Nfinyo Mabu, the Company’s VP of Business Development
  for TAUG-C, was selected to represent Cameroon and Central Africa two years
  ago as part of the U.S. State Department's program, International Visitors Leadership
  Program. The U.S. State Department recently selected him as the State Alumni
  of the Month of September for all of Africa and the Near East for the work he
  has done on this project.

25

Cameroon Project COMPANY OPERATIONS

“LeBus” (City/Urban Transportation System)

Since the signing of the October 12, 2005, agreement with the
  Government of Cameroon, TAUG-C has created Transnational Industries – Cameroon,
  S.A., also known as “LeBus,” which has established its project management
  office in Yaoundé. It successfully launched its first two bus lines on
  September 25, 2006. Twenty-three additional route lines have been approved for
  the capital city. Operations will be ramped up substantially with the arrival
  of 60 new buses by April 2007 and a full complement of additional buses are
  projected to arrive at the rate of 50 vehicles per month throughout 2007 and
  into January/February 2008.

According
  to Cameroon’s Minister of Transport, there are 19,920 registered taxi cabs
  in Yaoundé, transporting in excess of 100 passengers per taxi per weekday
  at a fare of 200 CFA ($0.39 USD). This currently generates daily combined revenue
  of more than $770,000 USD.3 It should be noted that the taxis do
  not offer pick-up or door-to-door, exclusive service as one would expect in
  North America or Europe. Rather, a taxi driver will try to pack as many (non-related)
  passengers into a vehicle as possible and travel in a general direction. When
  the taxi has to change course, some passengers will have to get out and hail
  additional cabs heading in the direction of their final destinations. To get
  across town, it is typical that one would be required to take several rides
  – that is to say that a commuter will likely need to take at least 2 taxis
  in the morning and 2 in the evening implying that of the 2 million people of
  Yaoundé only 25% choose or can afford to take a taxi. It is likely that
  with the introduction of a less expensive and reliable bus service the riding
  public will grow. The projections for Lebus are based on conservatively capturing
  less than 10% of the overall market for public transportation in Yaoundé.
  It would be realistic to project that LeBus could capture 35% of this market
  which, as explained, is likely to grow. 

LeBus urban buses operate from 6 a.m. to 8 p.m. each weekday
with a reduced service on the weekends.. At full operations, there will be 24
lines serving the city, with an additional line servicing the airport. Each bus
line is on average 15 km in length, with approximately 30-40 stops. Each bus
will make 10 trips daily, an average of 90 minutes per round trip. The ridership
capacity per bus ranges from 970-1500 daily. LeBus is offering an affordable
fare of 150 CFA ($0.29 -.30 USD), 25 percent less than the taxi
fare.4

With part of the proceeds from invested capital, LeBus plans to
implement an automated fare verification system to prevent fraudulent rides.
When LeBus implements this technology, it will transition from its current
system of on-board retailing to a distributed sales system – i.e., LeBus will
sell tickets to wholesalers, who in turn will sell to retailers. Cash flow to
LeBus will be through the wholesalers on a monthly basis, which eliminates daily
cash management. 

It is anticipated that by Q2 2007, LeBus will implement a Smart
Card pilot solution, which will use a non-disposable plastic card that allows
for improved fraud prevention. The Company anticipates full implementation by
year end 2007.

“LeCar” (Inter-city/rural Transportation System)

The inter-city/rural bus transportation system commenced initial
  operations on December 18, 2006 with 11 coach buses, providing service between
  the capital city of Yaoundé and the port city Douala. 

_________________________

  3 Total Taxis = 19,920 * 100 (Fares/Taxi) = ~ 1,900,000 fares * 200CFA
  = 380,000,000CFA / 515CFA/US$ = $770,000

  4 Although the posted taxi fare is 200 CFA – most riders must
  take several taxis to get to their destination which often costs up to 600 CFA.
  Therefore, the LeBus fare of 150 CFA could be 75% less expensive.

26

Within
  Cameroon, the most profitable route is between Yaoundé and Douala (See
  map – the dark line show the road between Yaoundé and Douala). This
  route is approximately 250 km long, and takes 3.5 hours to complete. Currently,
  there are more than 10 companies offering discount transportation services,
  carrying approximately 88,000 passengers per week and generating approximately
  $600,000 USD. Presently three of the companies also offer VIP services. These
  three companies transport an aggregate of approximately 3,600 passengers per
  week and generate approximately $60,000 USD, contributing to an overall market
  size of $660,000 USD per week, or $35 million USD annually. LeCar considers
  the three companies offering VIP services as its primary competition; the rest
  are “mom and pop” services. 

The Yaoundé to Douala route provides access to approximately
  5 million people living in and between the two cities.

 

	The market is segmented into:
      	Low-end, very affordable travel at $4 -$6 per trip (the picture shows
          a bus that would carry passengers in this price range); and
        
	High-end and exclusive travel at the $16-17 per trip. 

	

 LeCar is targeting the mid-market, $10-$12-per-trip price
  point, and expects to attract passengers who cannot afford or do not wish to
  pay for the VIP service (pictured below), who currently have no mid-market alternative.
  LeCar will attract passengers who can barely afford the premium service, but
  whose public stature prevents them from using the low-end service. 

Based
  on our analysis, the two highest-contributing factors to accidents causing delay,
  injury or death are poor servicing of vehicles and driver fatigue. None of the
  current companies inspect/service their vehicles between trips, nor do the drivers
  get adequate rest. LeCar is building a unique market position that offers superior
  service at mid-market price points, with an operational focus on safety and
  reliability. This market positioning is proving to be successful; LeCar is already
  transporting approximately 4,000 passengers per week, generating $50,000 USD
  and capturing about 10 percent of the Yaoundé-Douala market in the infancy
  of LeCar service. 

Once LeCar firmly establishes its Yaoundé-Douala service
  it plans to expand its service to provide transportation to other population
  centers throughout the rest of the country and sub-region. 

Facilities and Infrastructure

  TAUG-C occupies a central bus depot in the heart of Yaoundé. It currently
  has a number of operations and administrative offices, including a heavy and
  light maintenance facility (the picture shows the light maintenance facility
  in the foreground equipped with a fuel tank and inspection bays while the heavy
  maintenance facility can be found behind the light building) and an administrative
  complex that accommodates the operations and administrative staff. The compound
  occupies a footprint of 21,000m2 which has capacity for approximately
  200 buses5. The Government is legally bound to provide the Company
  with the title to this facility, and is currently in the process of transferring
  title. 

_________________________

  5 Landed Property Evaluation Report: 21st March, 2006 Conducted
  by Heliang Ndekebitik, Registered Construction Expert

27

Presently, the Yaoundé Urban Council is responsible for
building, installing and maintaining the bus stops. The Council is also
responsible for maintaining the road network to be suitable for bus traffic.
Additional facilities will be created, purchased or renovated as the Company
expands to other cities.

Maintenance

The Company maintains a central depot facility in Yaoundé
  with trained mechanics and the necessary supplies and equipment capable of providing
  a full service maintenance program which allows for both preventative maintenance
  and upkeep. This central depot facility will accommodate all necessary maintenance
  for LeBus and LeCar. 

The Company has established daily inspections and light maintenance,
  augmented by a manufacturer-suggested preventative maintenance schedule. For
  example, the city buses completed their 12,000-KM inspection and service in
  late 2006. The maintenance team also responds to break-downs, and is skilled
  at removing, repairing or replacing key systems such as clutches, water pumps
  and other main components. In the case of the LeCar buses (coaches), a mechanic
  is positioned at each terminal who completes a “hot” inspection of
  each bus as it arrives from its trip and repairs any faults prior to its next
  trip. This is in addition to the end-of-day inspection.

 

Corporate Structure: The Government as a Partner

Currently, Transnational Industries – Cameroon, S.A. (LeBus) is
66 percent owned by TAUG-C, and 34 percent owned by the following Cameroonian
organizations:

	Shareholder 	Type of Organization
    	Share 	 
       % 
	  	  	Capital 	  
	TAUG – C 	Private 	659,934 	66% 
	  	Parastatal and is subsidiary of the 	  	  
	Caisse De Stabilisation Des Prix Des 	Societe National de Hydrocarbure 	  	  
	Hydrocarbures (“CSPH”)1 	(SNH) (National Hydrocarbons 	55,188 	 6% 
	  	Corporation) 	  	  
	  	The Yaounde Urban Council is an State 	  	  
	Communaute Urbaine De Yaoundé 2
    	Administrative Organ subject to the 	244,789 	24% 
	  	Ministry of Territorial Administration 	  	  
	  	and Decentralisation.
    	  	  
	Chambre De Commerce D’Industrie 	  	  	  
	Des Mines et De L’Artisanat 	Parastatal 	39,989 	 4% 
	(‘CCIMA’)3
    	  	  	  
	Total 	  	CFA 999,900 	100% 
	Notes: 	  	  	  

	 	1. 	
      For its 6 percent, CSPH invested $1 million USD in cash
      on 30 December 2005.

	 	2. 	
      For its 24 percent, the Urban Council provided the bus
      depot facility valued at $4MM USD and has constructed bus pull-off areas
      on the routes.

	 	3.	For its 4 percent, the Chamber of Commerce invested
      $800,000 in cash in November 2006.

After subsequent rounds of financing, the aggregate
government-related ownership will likely drop to less than 20 percent.

28

	Employment 	  	 	
      

	The companies currently employ 311 Cameroonians
      working two 8 hour shifts, as follows: 
	  	  	  	 
	         a. 	Drivers 	75 	 
	         b. 	Controllers 	43 	 
	         c. 	Security 	62 	 
	         d. 	Mechanics 	20 	 
	         e. 	Operations Staff 	11 	 
	         f. 	Training Staff 	 3 	 
	         g. 	Bus Cleaners 	13 	 
	         h. 	Hostesses 	30 	 
	         i. 	Terminal Staff 	24 	 
	         j. 	Administration 	30 	 
	 	 	 	 	
      

 The total employment level for the Company will increase from
  311 employees as of December 1, 2006 to more than 1,900 (projected) employees
  by the end of 2007. This employment level increase will continue throughout
  the 10-year projection period. It should be noted that this employment level
  is financially sustainable, given the average TAUG-Cameroon wage of approximately
  $300/month. 

Progress and Performance to Date

TAUG-C has completed its business analysis and planning for its
  operating entities LeBus and LeCar. The Company has extensively renovated and
  upgraded the central bus depot it now owns and occupies in Yaoundé, hired
  and trained its initial staff and management team, and shipped its first 28
  buses into Cameroon. TAUG is currently operating its first of a planned total
  of 25 bus lines for the city of Yaoundé. It is also in the process of preparing
  its expansion into Douala. 

 

TAUG-C successfully launched its LeBus division with 17 of a
  planned 200 buses for Yaoundé alone, and operating only two of the planned
  25 lines within the city. This historic launch on September 25th, 2006 was received
  by an enthusiastic public and with the personal blessings from Cameroon’s
  President and Head of State; the Prime Minister and Head of Government (The
  picture shows the US Ambassador and the Prime Minister during the launch ceremony);
  the U.S. Ambassador to Cameroon; and other Minister-level Government officials.

  

 

29

TAUG-C also successfully launched its LeCar division with 11
  of a planned 150 buses, to an enthusiastic public and press. LeCar has had an
  immediate impact on the current intercity/rural bus market, which has impressed
  the Ministry of Transportation as well as other Government Officials, as indicated
  by correspondence and meetings between the Government and the U.S. Embassy.

Directly below is a summary of the performance of the first two
  months of LeBus6:

	  	 	 Summary of Oct 06 Results for LeBus
    	 
	  	 	Without Fuel Tax Credits 	 	 	With Expected Reduction 	 
	  	 	  	 	 	  	 	 	in Fuel Costs 	 
	  	 	CFA 	 	 	USD 	 	 	CFA 	 	 	USD 	 
	Revenue 	 	44,231,145 	 	$	 85,886 	 	 	44,231,145 	 	$	 85,886 	 
	  	 	  	 	 	  	 	 	  	 	 	  	 
	Direct Labor 	 	13,406,000 	 	$	 26,031 	 	 	13,406,000 	 	$	 26,031 	 
	Fuel 	 	24,979,092 	 	$	 48,503 	 	 	18,821,236 	 	$	 36,546 	 
	Parts 	 	2,211,557 	 	$	 4,294 	 	 	2,211,557 	 	$	 4,294 	 
	Total Variable 	 	40,596,649 	 	$	 78,828 	 	 	34,438,793 	 	$	 66,871 	 
	  	 	  	 	 	  	 	 	  	 	 	  	 
	Contribution Margin 	 	3,634,496 	 	$	 7,057 	 	 	9,792,352 	 	$	 19,014 	 
	% 	 	8% 	 	 	  	 	 	22% 	 	 	  	 

	 	 	Summary of Nov 06 Results for
      LeBus	 
	 	 	Without Fuel Tax Credits	 	 	With Expected Reduction in Fuel
      Costs	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	  	 	CFA 	 	 	USD 	 	 	CFA 	 	 	USD 	 
	Revenue 	 	47,800,000 	 	$	 92,816 	 	 	47,800,000 	 	$	 92,816 	 
	  	 	  	 	 	  	 	 	  	 	 	  	 
	Direct Labor 	 	15,000,000 	 	$	 29,126 	 	 	15,000,000 	 	$	 29,126 	 
	Fuel 	 	25,000,000 	 	$	 48,544 	 	 	19,537,452 	 	$	 37,937 	 
	Parts 	 	2,390,000 	 	$	 4,641 	 	 	2,390,000 	 	$	 4,641 	 
	Total Direct 	 	42,390,000 	 	$	 82,311 	 	 	36,927,452 	 	$	 71,704 	 
	  	 	  	 	 	  	 	 	  	 	 	  	 
	Contribution 	 	  	 	 	  	 	 	  	 	 	  	 
	Margin 	 	5,410,000 	 	$	 10,505 	 	 	10,872,548 	 	$	 21,112 	 
	% 	 	11% 	 	 	  	 	 	23% 	 	 	  	 

 

_________________________ 

6 The direct labor costs
include only the drivers, controllers and security staff employed on each bus
and do not include other operational, administrative or management staff. The
above figures do not include G&A, depreciation or interest expenses. These
charts show the relationship between revenues and cost of revenues. The company
expects cash-flow neutral to occur between the 50th-60th
bus. To see the projected G&A, depreciation and interest expenses please
refer to the project consolidated financial statements in section 8.

30

The following is a summary of the performance of the first two
weeks of LeCar7:

Summary of Dec 06 Results for LeCar (two weeks of
operations)

	  	   CFA 	USD 
	Revenue 	43,484,000 	   $84,435 
	  	  	  
	Direct Labor 	 4,533,333 	     $8,803
  
	Fuel 	17,493,005 	   $33,967 
	Parts 	 2,174,200 	     $4,222 
	Total Direct 	24,200,538 	   $46,991 
	  	  	  
	Contribution Margin 	19,283,462 	   $37,444 
	% 	       
           44% 	 

OPIC financing 

Funding TAUG-C: OPIC Strategic Risk Mitigation

Tapping U.S. capital markets for projects in Africa is often
challenging, as North America is generally not well-informed regarding the
African Continent, nor completely comfortable about investing and operating
there. However, as recent events demonstrate, the U.S. markets may be
disadvantaged by this reluctance, as the rest of the world, especially China, is
making significant investments to tap the abundant opportunities that Africa
offers.

There is significant interest in investing in Africa from U.S.
institutional investors; however, they are understandably concerned about
risk-mitigation strategies. Availability of investment capital and sovereign
risk insurance from the Overseas Private Investment Corporation (OPIC), an
agency of the U.S. government, offers one validated way to encourage these
institutions to take larger equity positions, thereby providing needed growth
capital to expand projects and at the same time benefiting these U.S.
institutions to compete for opportunities in Africa. 

All projects or transactions considered for OPIC financing must
be deemed commercially and financially sound. They must be within the
demonstrated competence of the proposed management team, which must have a
proven record of success in the same or a closely-related business, as well as a
significant continuing financial stake in the enterprise. 

Experience indicates that an adequate level of equity
contribution is essential for a project to succeed. Investors must be willing to
establish sound debt-to-equity relationships that will not jeopardize the
success of the project through excessive leverage. In general, OPIC looks for a
debt-to-equity ratio in the range of 60/40, although the financial structure
will vary with the nature of a specific business and by the variability of
expected cash flows.

In order to take full advantage of economies of scale, TAUG is
seeking an initial loan of $9 million. It is anticipated that the approval
process and funding will take place in the first half of 2007. The proceeds of
this financing will be used to purchase additional buses, maintenance equipment
and supplies; to provide the necessary capital to complete construction of new
and existing facilities; and to provide a working capital reserve.

TAUG is in the final stages of approvals/processing of this initial
  $9 million USD loan. TAUG has received indications that this loan is likely
  to be in place by the end of Q1 2007, but the Company is conservatively planning
  for a Q2 07 draw-down of funds. Investment in Cameroon is an OPIC priority and
  investment in transportation infrastructure is viewed especially favorably,
  as this opportunity will directly impact hundreds of thousands of people. The
  TAUG OPIC application is also strongly supported by the U.S. Ambassador to Cameroon,
  who has stated that he has never seen an opportunity that will have a greater
  positive social impact than the TAUG project.

_________________________

7 The direct labor costs
include only the drivers and hostesses employed on each bus and do not include
other operational, administrative or management staff. The above figures do not
include G&A, depreciation or interest expenses. This chart shows the
relationship between revenues and cost of revenues. To see the projected
G&A, depreciation and interest expenses please refer to the project
consolidated financial statements in section 8.

31

The Senior Investment Officer at OPIC dealing with the TAUG
file has indicated that TAUG has presented a very strong application, and sees
no real hurdles in getting the application accepted by end of Q1 07. The file
has already received Human Rights clearance and is undergoing the final three
policy clearances: Environmental; Workers Rights; and U.S. Effects.

Equity Contribution to Date and OPIC Loan Ratio

As mentioned above, OPIC looks for a debt-to-equity ratio in
the range of 60/40. The table below was presented in the OPIC application, and
OPIC has accepted the equity contributions including the “in-kind” real property
provided by the Cameroon Government. With the investments TAUG has already
received, the project clearly exceeds the 60/40 OPIC guideline.

It should be noted that the numbers presented below represent
equity already raised by the Company, and is independent of the additional $29
million USD equity placement that is currently being offered by the Company. It
should also be noted that any additional equity raised by the Company allows
TAUG to seek additional capital from OPIC, thus providing further leverage to
help improve financial performance.

	Equity 	  	       Amount 	 	% 
	Cash: 	From TAUG USA 	 $4,410,000 	 	  
	Cash: 	From TAUG USA by 20 Nov. 2006 	     $500,000 	 	 
    
	Cash: 	From “CSPH” – Cameroon Entity1 	 $1,000,000 	 	  
	Cash: 	From “CCIMA” – Cameroon Entity2 	     $800,000 	 	 
    
	Cash: 	From Urban Council – Cameroon Entity3
    	 $3,000,000 	 	  
	Cash: 	Operating Bus Lease4 	 $1,500,000 	 	 
    
	In-Kind: 	Bus Depot – Deed in progress5 	 $4,000,000 	 	  
	In-Kind:
    	Bus
      Shelters6 	 $1,896,000 	 	 
    
	Total Cash 	$11,210,000 	 	  
	Total
      In-Kind 	 $5,896,000 	 	 
    
	Total Equity to Date 	$17,106,000 	 	66% of total 
	  	  	  	  	 	  
	OPIC Debt Financing 	  	 	  
	OPIC
      Loan 	 $9,000,000 	 	38%
      of total 
	 	 	 	 
	Total Equity and Debt 	$26,106,000	 	
      100% 1

Total Equity and Debt $26,106,000 100% 

Notes:

	 	1. 	CSPH - Caisse De Stabilisation Des Prix Des
      Hydrocarbures (“CSPH”), it is a private sector organization and is
      subsidiary of the Societe National de Hydrocarbure (SNH) (National
      Hydrocarbons Corporation). CSPH made its investment in December, 2005.
  
	 	2. 	CCIMA - Chambre De Commerce D’Industrie Des
      Mines et De L’Artisanat (‘CCIMA’), is the Cameroon Chamber of Commerce. It
      is a private sector entity and made its investment in October, 2006.

	 	3. 	The Yaoundé Urban Council has invested cash in
      upgrading the depot and bus shelters as well as other infrastructure
      costs. 
	 	4. 	The terms of this operating lease requires
      monthly payments of $200,000 for 9 months. Terms of this lease are
      flexible to comply with OPIC rules and terms. 
	 	5.  	A competent 3rd Party valuation was
      conducted in March 2006 and valued the property at $4 million.
	 	6.  	The Government Delegate is in process of
      transferring title to the bus shelters in Yaoundé.

32

Use of Proceeds – OPIC Loan

The table directly below provides a summary of the planned use
of proceeds for the OPIC investment, independent of the additional $29 million
USD equity placement that is currently being raised by the Company. Note that 88
percent of the proceeds are being used to purchase additional buses.

	Use of Proceeds 	   Amount 	 	             
                 Remarks 
	Equipment: City Buses (LeBus) 	$6,300,000 	 	97 city buses1 
	Equipment: Rural
      Buses (LeCar) 	$1,600,000 	 	14
      rural (coach) buses2 
	Equipment: Heavy and light Tools 
	$150,000 		e.g. Air compressors and air
      tools3 
	Equipment: (Furniture, Computers & Software) 	$100,000 	 	e.g. Fleet management and HR
      software4 
	Construction and Facilities Upgrades 5 	   $250,000 	 	  
	Working Capital & Cash Reserves 	$600,000 		Training of 888 new staff including
      fuel6 
	Total OPIC Loan (First Phase)	$9,000,000	 	 

	 	Notes: 	  
	 	1. 	The OPIC funding will provide an
      additional 97 buses, costing $65,000 each, bringing the Yaoundé city bus
      fleet to 114 buses which is 95 percent capacity. The buses are being
      purchased outright from King- Long United Automotive Industry Suzhou) Co.
      Ltd. (http://www.kinglong-sz.com.cn/en/index.asp). 
	 	2.	OPIC funding will provide an
      additional 14 coach buses, costing $115,000 each, bringing the LeCar fleet
      to its full complement of 25 buses for the Yaoundé-Douala route. The buses
      are being purchased outright from King-Long. 
	 	3.	This estimate was derived from
      proforma invoices from various suppliers in Cameroon. 
	 	4.	This estimate was derived from
      proforma invoices from the various suppliers in Cameroon as well as from
      our own experience of past purchases. 
	 	5.	This estimate was derived from our
      past experiences as well as the quotes we received from the supplier that
      will be building the Yaoundé and Douala terminals for LeCar. 
	 	6.	Each new bus requires approximately 8
      new staff, including drivers, controllers, security guards as well as
      mechanics. This staff will require approximately two months of training,
      uniforms and job-site tools. 

INVESTMENT OPPORUNITY

Phased Operations and Financing Growth Strategy

To effectively manage its growth, the Company has broken its
Cameroon growth plan into four successive stages: (1) startup; (2) Yaoundé
build-out; (3) Douala build-out; and (4) Cameroon completion. Depending on the
demand from other countries in the region, a similar operations and financing
plan can be developed and executed for each country, concurrent with the
Cameroon growth plan. Although there will be country-by-country nuances, the
foundational assumptions will hold. Therefore the TAUG-Cameroon model can be
used as an accurate proxy for regional growth and hence additional project and
financial and project opportunities for the Company. 

However, this section focuses only on the financing
requirements for TAUG’s Cameroon operations.

The first phase is currently being implemented with the launch
of the initial 17 city buses as well as the launch of the initial 11 coaches for
LeCar. During this start-up phase, the Company is establishing its
core-processes which will allow mass scalability of customers, control of cash
handling procedures, employee administration, accounting and audit controls, as
well as operations and maintenance.

In order to complete the build-out of the Yaoundé operation and
LeBus Douala (the Douala city bus system), and to expand LeCar to 40 buses, the
Company requires expansion capital (including OPIC’s $9 million first tranche)
of $38 million USD. To complete the countrywide build-out for Cameroon,
the Company foresees the need for an additional $18 million in 2009 (when more
buses will be needed for expansion and/or to replace original buses). All of
this could be funded by additional OPIC financing, given that the Company will
have strong debt/equity ratios and strong cash flows to service the debt.

33

Use of Equity Proceeds

The table below provides a detailed account of how the $29
million will be used to accelerate the growth of the Company:

	Use of Proceeds 	       Amount 	 	Remarks 
	Equipment: City Buses (LeBus) 	$18,100,000 	 	278 city buses1 
	Equipment: Rural Buses
      (LeCar) 	 $4,025,000 	 	35 rural
      (coach) buses2 
	Equipment: Heavy and light Tools 	     $577,600 	 	e.g. Air compressors and air tools3 
	Equipment: (Furniture,
      Computers & Software) 	$200,000 		e.g. Computers,
      surveillance camera, fleet management and HR software4 
	Construction and Facilities Upgrades 5 	$1,586,000 		Construction of terminal facilities for LeCar and expansion
      to LeBus facilities 
	Fare Card Implementation
    	$2,385,000 		Installed cost per city bus is approximately $5,500 USD. 
	Working Capital & Cash Reserves 	 $2,126,400 	 	Cash reserves and contingency. 
	Total Investment
      Capital	$29,000,000	 	 

	 	Notes: 	  
	 	1. 	
      The proceeds from this equity raise will be used to
      purchase an additional 278 city buses. When added to the current fleet of
      17 and the 97 from the OPIC funding, the fleet will grow to 392 city buses
      which is sufficient to equip LeBus Yaounde and LeBus Douala. The buses are
      being purchased outright from King-Long United Automotive Industry
      (Suzhou) Co. Ltd. 

	 	2.	
      The proceeds from this equity raise will be used to
      purchase an additional 35 coaches which will bring the LeCar fleet to 60.
      The buses are being purchased outright from King-Long.

	 	3.	
      This estimate was derived from proforma invoices from
      various suppliers in Cameroon.

	 	4.	
      This estimate was derived from proforma invoices from the
      various suppliers in Cameroon as well as from our own experience of past
      purchases.

	 	5.	
      This estimate was derived from our past experiences as
      well as the quotes we received from the supplier that will be building the
      Yaoundé and Douala terminals for LeCar.

34

Consolidated Financial Statements

The power of integrating LeBus and LeCar lies in the sharing of
resources, integration of services, and especially integrating the strong
cash-flow from LeCar relative to its financial carrying costs to augment the
ability of LeBus to meet its loan repayment obligations. Together, LeBus and
LeCar produce healthy debt service ratios. 

LeBus & LeCar Consolidated Un-audited Proforma Financial
Projections For Cameroon Operation Only8

	US$ Millions 	   2006 	2007 	2008 	2009 	2010 	2011 	2012 
	Profit & Loss 	  	  	  	  	  	  	  
	#
      of Buses (LeBus and LeCar) 	             28 	   422 	     597 	       609 	   619 	     637 	     739 
	Total Revenue 	         0.33 	25.40
    	76.90
    	   88.45 	95.67
    	104.63 	123.75 
	COGS & Distribution 	         0.01 	   0.75 	   2.40 	     2.52 	   2.52 	   2.52 	   2.87 
	Gross Margin 	         0.32 	24.65 	74.50 	   85.93 	93.16 	102.11 	120.88 
	Direct Costs 	         0.29 	12.74 	31.81 	   35.64 	38.27 	 42.12 	 49.53 
	Contribution
      Margin 	         0.02 	11.91
    	42.70
    	   50.29 	54.88
    	 59.99 	 71.35 
	   % Revenue 	       7.6% 	46.9% 	55.5% 	 56.9% 	57.4% 	57.3% 	57.7% 
	G&A 	       0.989 	   5.03 	   7.78 	     9.05 	10.28
    	 11.71 	 13.36 
	EBITDA 	     (0.95) 	   6.88 	34.91 	   41.24 	44.61 	 48.28 	 57.99 
	   %
      Revenue 	(290.6%) 	27.1%
    	45.4%
    	 46.6% 	46.6%
    	46.1%
    	46.9%
    
	Interest 	         0.06 	   1.00 	   1.00 	     0.91 	   0.78 	   0.66 	   0.53 
	Principal 	         0.00 	   0.00 	   0.63 	     1.25 	   1.25 	   1.25 	   1.25 
	Total Debt Service 	         0.06 	   1.00 	   1.63 	     2.16 	   2.03 	   1.91 	   1.78 
	Depreciation 	         0.11 	   3.72 	   9.93 	   10.58 	10.83
    	 11.17 	 12.78 
	Profit Before Tax 	     (1.12) 	   2.16 	23.98 	   29.76 	33.00 	 36.45 	 44.68 
	Net Income 	     (1.12) 	   1.22 	15.64 	   19.29 	21.31 	 23.45 	 28.70 
	  	  	  	  	  	  	  	  
	Balance Sheet 	  	  	  	  	  	  	  
	Total Assets 	         8.88 	10.10 	25.12 	   43.16 	63.22 	 85.42 	112.88 
	Total Liabilities
    	       10.00 	10.00
    	   9.38 	     8.13 	   6.88 	   5.62 	   4.38 
	Net Worth 	     (1.12) 	   0.10 	15.74 	   35.04 	56.35 	 79.80 	108.50 

NOTE: DURING 2007-2008 LEBUS AND LECAR PLAN TO SIGNIFICANTLY INCREASE
  THE FLEET TO ENSURE YAOUNDÉ AND DOUALA ARE AT FULL CAPACITY. THE SIGNIFICANTLY
  LOWER GROWTH IN THE FLEET IN 2009-2011 IS DUE TO THE NEED TO USE MOST OF THE
  FREE CASH TO REPLACE THE DEPRECIATED FLEET THUS LEAVING LITTLE ROOM FOR FLEET
  GROWTH. BY 2012, LEBUS PLANS TO EXPAND TO OTHER SMALLER CENTERS WHICH ACCOUNTS
  FOR THE ADDITION OF OVER 100 BUSES.

CAPITAL STRUCTURE/BENEFICIAL OWNERSHIP

CAPITAL STRUCTURE

The Company has authorized 200,000,000 Common Shares and 100,000,000
  Preferred Shares. The capitalization of the Company (a) as of the date of this
  Memorandum, and (b) adjusted to give effect to receipt of gross proceeds in
  the Maximum Offering, and the use of the proceeds there from before deduction
  of the estimated expense of this Offering is s follows. There are currently
  33,508,401 shares of Common Stock issued and outstanding. Pursuant to a prior
  offering, the Company issued convertible debentures that, if fully converted
  per their terms, would result in an additional 5,972,938 in

__________________________

8 These projects are for Cameroon operations only
and do not include the planned expansion in the sub-region
9 This
number includes the start-up capital requirements for 12 months prior to the
launch of the LeBus and LeCar operations. Currently LeBus and LeCar each have
G&A expenses of approximately $100,000 USD/month.

35

shares of Common Stock issued and outstanding. If this offering
is completed in full, there will be an additional 10,000,000 shares in common
stock issued and outstanding. Finally, the company has previously issued
warrants for the acquisition of an additional 14,461,458 of shares of Common
Stock pursuant to terms set forth in greater particularity below in the section
entitled “Warrants.” Pursuant to this offering I completed in full, an
additional 10,000,000 shares can be purchased pursuant to the warrants issued
hereunder.

PRINCIPAL STOCKHOLDERS

The following table sets froth certain information with respect
to the beneficial ownership of our common stock on January 1, 2007 by (1) each
of our directors, director nominees and executive officers, and (2) each person
known by us to be the beneficial owner of more than 5% ownership of the
33,508,401 of Common Shares outstanding at that time. Percentages after the
Offering assume the Shares offered hereby (i.e. 10,000,000 plus 10,000,000
warrants, or 20,000,000 shares):

	 	 Number of 	Percent of Outstanding 	Number of Shares 	Percent of Outstanding 
	Beneficial Owner 	Shares Owned 	   Shares pre-offering 	       
       Owned 	 Shares post-offering 
	 	  	  	  	  
	Joseph W. Parker (through Parker
      Transnational Industries, LLC) 	4,000,000 	11.937% 	Same 	7.475% 
		  	  	  	  
	Daniel C. Goldman 	       
       2,000,000 	       
                         
           5.969% 	       
                         
       Same 	       
                         
             3.738% 
	Avalon Holdings 	         2,750,000
	           
                         
       8.207% 	           
                       Same 	           
                         
         5.139% 
	 	  	  	  	  
	Mazel Trust 	         2,900,000
	           
                         
       8.655% 	           
                       Same 	           
                         
         5.420% 
	 	  	  	  	  
	Fusion Equity 	         1,936,134
	           
                         
       5.778% 	           
                       Same 	           
                         
         3.618% 
	 	  	  	  	  
	Seid Sadat 	         1,600,000 	                 
                     4.775% 	                 
                 Same 	                 
                       2.990%

	         TOTAL 	     
       15,186,134 	       
                         
         45.321% 	       
             15,186,134 	       
                         
           28.380% 

Other 5% Stockholders 

None

COMPENSATION OF OFFICERS/DIRECTORS

There are no employment agreements currently executed for the
officers or directors of the Company

DESCRIPTION OF CAPITAL SHARES AND OPTIONS

The Company's authorized capital stock consists of 200,000,000
Common Shares and 100,000,000 Preferred Shares. Common Shares and Preferred
Shares can be issued by the Board of Directors, without shareholder approval, in
various series containing differing rights, privileges and restrictions. No
shareholder of the Company will have, solely by reason of being a shareholder,
any preemptive or preferential right or subscription right to any shares of the
Company or to any obligations convertible into shares of the Company, or to any
warrant or option for the purchase thereof, except to the extent provided by
resolution or resolutions of the Board of Directors establishing a series of
preferred shares or by written agreement with the Company.

36

The following description of the Company’s Common Shares is
qualified in its entirety by the Company’s Articles of Incorporation
(“Articles”), which are available upon request.

COMMON SHARES

The Company has 200,000,000 Common Shares authorized, of which
  33,508,401 are currently issued and outstanding, and after this offering there
  is a potential for 53,508,401 Each shareholder holding the Company Common Shares
  is entitled to one vote for each Common Share held and fully participates in
  the growth and appreciation of the Company.

PREFERRED SHARES

The Company has 100,000,000 shares of Preferred Shares (“Preferred
  Shares”) authorized, none of which are outstanding as of the date of this
  Memorandum.

CONVERTIBLE DEBENTURES

Interest and Dividends

     The Company has issued
Convertible Debentures that pay an annual interest rate of 7.0% . If converted
per their terms, an additional 5,972,978 in chares of Common Stock would be
issued in exchange for the convertible debentures.

Voting

     The Convertible Debentures do not
have voting rights unless the conversion has occurred to common shares or the
warrants are exercised 

Conversion

The holders of Debentures have certain rights to convert the
Debentures to Common Shares. These rights are summarized below:

	
  Voluntary Conversion. Each Debenture is convertible, at the
  option of the holder, at any time after the date of issuance, into shares of
  Common Stock of the Company at $0.50 per share. 

  
	
  Mandatory Conversion. After maturity, the holder has
  30 days to convert or request cash plus interest. After thirty days all
  convertible Debentures will convert at the conversion price. 

The conversion rate is equal to the dollar value of debenture
(i.e. $.0001) divided by the Conversion Price. The Conversion Price is initially
$.50 per share, resulting in an initial conversion rate of one dollar of
Debenture for two Common Shares.

Fractional Shares

No fractional shares will be issued
upon the conversion of any Convertible Debentures. All Common Shares (including
fractions thereof) issuable upon conversion of more than one Convertible
Debenture by a holder thereof shall be aggregated for purposes of determining
whether the conversion would result in the issuance of any fractional
shares.

37

STOCK OPTION PLAN

No stock options or stock option plans currently exist, however,
  the Company does plan on establishing a plan for key employees in the near future,
  and intends to reserve an amount of common shares for an equity incentive plan
  that is equal to 20% of the total issued and outstanding stock of the Company
  upon the date that the plan is adopted and approved by the Board of Directors
  and its Shareholders.

WARRANTS

The Company currently has warrants outstanding in connection
with the convertible debentures that permit the acquisition of 7,161,458 shares
of Common Stock at a price of $1.50 per share, which are exercisable for five
years from the purchase of the convertible debenture. With regard to agreements
reached in 2006 with prior management and others to reduce the number of shares
of Common Stock held by them, it was agreed that they would collectively hold
warrants to purchase 7,300,000 shares of Common Stock at $1.50 per share, which
are exercisable for five years from the date of those agreements. Pursuant to
this offering, there is a potential for an additional warrants to purchase
10,000,000 shares of Common Stock at $1.50 per share, which are exercisable for
five years from the date of the purchase pursuant to this Offering.

LIMITATION OF DIRECTOR AND OFFICER LIABILITY

Pursuant to the Company's Articles of Incorporation, every
Director or Officer of the Company and the personal representatives of the same
shall be indemnified and secured harmless out of the assets and funds of the
Company against all actions, proceedings, costs, charges, expenses, losses,
damages or liabilities incurred or sustained by him in or about the conduct of
the Company's business or affairs or in the execution or discharge of his
duties, powers, authorities or discretions, including without prejudice to the
generality of the foregoing, any costs, expenses, losses or liabilities incurred
by him in defending (whether successfully or otherwise) any civil proceedings
concerning the Company or its affairs in any court whether in the Cayman Islands
or elsewhere. No such Director or Officer of the Company will be liable (a) for
the acts, receipts, neglects, defaults or omissions of any other such Director
or officer or agent of the Company or (b) for any loss on account of defect of
title to any property of the Company or (c) on account of the insufficiency of
any security in or upon which any money of the Company shall be invested or (d)
for any loss incurred through any bank, broker or other similar person or (e)
for any loss occasioned by any negligence, default, breach of duty, breach of
trust, error of judgment or oversight on his part or (f) for any loss, damage or
misfortune whatsoever which may happen in or arise from the execution or
discharge of the duties, powers authorities, or discretions of his office or in
relation thereto, unless the same shall happen through his own dishonesty.

Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers or persons
controlling the registrant pursuant to the foregoing provisions, the registrant
has been informed that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is
therefore unenforceable.

DIVIDEND POLICY

The Company has never declared or paid dividends on its Common
Shares and does not intend to pay dividends on the Common Shares in the
foreseeable future. Instead, the Company plans to retain any earnings to finance
the development of the business and for general corporate purposes.

38

PLAN OF DISTRIBUTION

The Offering is effective as of the date of the Memorandum. The
Offering will remain open until February 20, 2007 unless extended. Subscription
proceeds will be accepted and used by the Company as received; there is no
minimum offering. If more than one person is executing the Subscription
Agreement, the obligations of each shall be joint and the representations and
warranties contained in the Subscription Agreement shall be deemed to be made
by, and be binding upon, each subscriber and his or her heirs, executors,
administrators, successors and assigns. This subscription, upon acceptance by
the Company, shall be binding upon each subscriber’s heirs, executors,
administrators, successors and assigns. The Subscription Agreement shall be
construed in accordance with and governed in all respects by the laws of the
State of California.

This Offering is made in reliance on Section 4(2) of the Act
and Rule 506 of Regulation D under the Act, which preempts state jurisdiction
other than as to certain filings and fees or Regulation S as it relates to
non-residents of the United States. 

DOCUMENTS REQUIRED TO BE COMPLETED BY
PURCHASERS

A person wishing to subscribe for any Units will be required to
execute and deliver to the Company:

	 	(a) 	
      a signed Subscription Agreement; and

	 	(b) 	
      a check payable to Transnational Automotive Group, Inc.
      for the subscription of the Unit, or a wire transfer to the Company’s
      Primary Checking Account.

NO REGISTRATION OF SECURITIES; RESTRICTED SECURITIES

The Units being offered in this Memorandum have not been registered
  under the Act or the securities laws of any state and to this extent are being
  offered in reliance upon federal, state and provincial exemptions from registration
  for nonpublic Offerings. The Common Stock and Warrants are “covered securities”
  offered without state registration pursuant to the National Securities Markets
  Improvement Act of 1996. There are also regulatory safe harbors for these exemptions
  codified under federal law by SEC Regulation D, and under similar provisions
  of state and provincial laws. The Company has designed the Offering to comply
  with the safe harbors. The Company will also satisfy certain notice requirements
  respecting the Offering imposed by the states in which investors are domiciled.

The Common Stock and Warrants offered in the Memorandum are
restricted securities as defined in Rule 144 promulgated by the SEC, and must be
held until maturity or conversion unless they are subsequently registered under
the Act and any other applicable state securities laws or, in the opinion of the
Company, they may be sold in a transaction which is exempt from federal and
state securities registration requirements. The Company has no obligation, and
does not intend to register the Debentures, Common Stock, or warrants under the
Act. Accordingly, investment in the Common Stock and Warrants offered herein is
suitable only for persons of adequate financial means who can bear the economic
risk of their investment and who have no need for liquidity with respect to
their investment during the initial term and any renewal term purchased.

ACCREDITED INVESTORS ONLY

Investment in the Common Stock and Warrants involves significant
  risks and is suitable only for persons of adequate financial means who have
  no need for liquidity with respect to this investment and are sophisticated.
  The suitability standards discussed below represent minimum suitability standards
  for prospective investors. The satisfaction of such standards by a prospective
  investor does not necessarily mean that the Common Stock and Warrants are a
  suitable

39

investment for such prospective investor. Prospective investors
are encouraged to consult their personal financial advisors to determine whether
an investment in the Common Stock or Warrants is appropriate. The Company may
reject subscriptions, in whole or in part, in its absolute discretion.

Subscriptions for the purchase of Common Stock and Warrants can
be accepted only from investors who are United States residents if they are
“accredited,” as that term is defined by the federal securities laws. Investors
will be deemed to be accredited if they are able to absorb the loss of their
investment in the Common Stock and Warrants because they meet the minimum
income, net worth or total assets standards summarized in this section. An
accredited investor is defined as any person who comes within any of the
following categories, or whom the Company reasonably believes comes within any
of the following categories, at the time of the sale of the securities to that
person:

	 	(a) 	
      Any bank as defined in section 3(a)(2) of the Act,
      or any savings and loan association or other institution as defined in
      section 3(a)(5)(A) of the Act whether acting in its individual or
      fiduciary capacity; any broker or dealer registered pursuant to section
      15 of the Securities Exchange Act of 1934; any insurance company as
      defined in section 2(13) of the Act; any investment company
      registered under the Investment Company Act of 1940 or a business
      development company as defined in section 2(a)(48) of that Act; any
      Small Business Investment Company licensed by the U.S. Small Business
      Administration under section 301(c) or (d) of the Small Business
      Investment Act of 1958; any plan established and maintained by a state,
      its political subdivisions, or any agency or instrumentality of a state or
      its political subdivisions, for the benefit of its employees, if such plan
      has total assets in excess of $5,000,000; any employee benefit plan within
      the meaning of the Employee Retirement Income Security Act of 1974 if the
      investment decision is made by a plan fiduciary, as defined in section
      3(21) of such act, which is either a bank, savings and loan
      association, insurance company, or registered investment adviser, or if
      the employee benefit plan has total assets in excess of $5,000,000 or, if
      a self-directed plan, with investment decisions made solely by persons
      that are accredited investors;

	 	 	 
	 	(b) 	
      Any private business development company as defined in
      section 202(a)22 of the Investment Advisers Act of 1940;

	 	 	 
	 	(c) 	
      Any organization described in section 501(c)3 of the
      Internal Revenue Code, corporation, Massachusetts or similar business
      trust, or partnership, not formed for the specific purpose of acquiring
      the securities offered, with total assets in excess of
  $5,000,000;

	 	 	 
	 	(d) 	
      Any director, executive officer, or general partner of
      the issuer of the securities being offered or sold, or any director,
      executive officer, or general partner of a general partner of that
      issuer;

	 	 	 
	 	(e) 	
      Any natural person whose individual net worth, or joint
      net worth with that person's spouse, at the time of his purchase exceeds
      $1,000,000;

	 	 	 
	 	(f) 	
      Any natural person who had an individual income in excess
      of $200,000 in each of the two most recent years or joint income with that
      person's spouse in excess of $300,000 in each of those years and has a
      reasonable expectation of reaching the same income level in the current
      year;

	 	 	 
	 	(g) 	
      Any trust, with total assets in excess of $5,000,000, not
      formed for the specific purpose of acquiring the securities offered, whose
      purchase is directed by a sophisticated person as described in Rule
      506(b)(2)(ii) and

	 	 	 
	 	(h) 	
      Any entity in which all of the equity owners are
      accredited investors.

As used in this Memorandum, the term "net worth" means the
excess of total assets over total liabilities. In computing net worth for the
purpose of paragraph (1) above, the principal residence of the investor must be
valued at cost, including cost of improvements, or at recently appraised value
by an institutional lender making a secured loan, net of encumbrances.

Each investor who is a United States resident must represent in
writing that he or she qualifies as an "accredited investor" as described above,
and must demonstrate the basis for such qualification. In addition, all
investors, regardless of their income, net worth or total assets, must certify
in writing that, among other things, he or she by reason of the investor's
business or financial experience, or that of the investor's professional
advisor, (i) the investor could reasonably be assumed to have the capacity to
protect their own interests in connection with this transaction and is able to
evaluate the merits and risks of a purchase of the Common Stock and Warrants,
(ii) the investor is acquiring the Common Stock and Warrants for its own
account, for investment only and not with a view toward the resale or
distribution thereof, (iii) the investor is aware that the

40

Common Stock and Warrants have not been registered under the
Act or any state securities laws and that transfer thereof (and of the
underlying shares of the Company's Common Stock) is restricted by the Act,
applicable state securities laws, the subscription agreement to be entered into
in connection with the purchase of the Common Stock and Warrants and the absence
of a market for the Common Stock and Warrants, (iv) that such investors meet the
suitability requirements set forth in this Memorandum; (v) the investor has had
access to sufficient information needed to make an investment decision about
Company and the Common Stock and Warrants, and has had an opportunity to ask
questions; and that the investor can tolerate the illiquidity that is
characteristic of restricted securities in a private company and in these Common
Stock and Warrants in particular.

OFFSHORE INVESTORS.

Offshore investors who are not “US Persons” as that term
is defined in Regulation S as promulgated under the 1933 Act, and who otherwise
satisfy any applicable criteria established by the laws of the jurisdiction in
which they reside;

	 	(a) 	
      If such non US Persons are residents of the provinces of
      Alberta or British Columbia, Canada, they must either be (1) “accredited
      investors” as defined in Multilateral Investments 45-103 Capital Raising
      Exemptions (“MI-45-103”), as adopted by, respectively, the British
      Columbia Securities Commission (the “BCSC”), and the Alberta Securities
      Commission (the “ASC”), or (2) investors who are purchasing the shares as
      a principal and who are either:

	 	 	 	 
	 		(i) 	
      a director, senior officer or control person of the
      Company, or of an affiliate of the Company,

	 	 	 	 
	 		(ii) 	
      a spouse, parent, grandparent, brother, sister or child
      of a director, senior officer or control person of the Company, or of an
      affiliate of the Company,

	 	 	 	 
	 		(iii) 	
      a parent, grandparent, brother, sister or child of the
      spouse of a director, senior officer or control person of the Company or
      of an affiliate of the Company,

	 	 	 	 
	 		(iv) 	
      a close personal friend of a director, senior officer or
      control person of the Company, or of an affiliate of the
Company,

	 	 	 	 
	 		(v) 	
      a close business associate of a director, senior officer
      or control person of the Company, or of an affiliate of the
  Company,

	 	 	 	 
	 		(vi) 	
      a founder of the issuer or a spouse, parent, grandparent,
      brother, sister, child, close personal friend or close business associate
      of a founder of the Company,

	 	 	 	 
	 		(vii) 	
      a parent, grandparent, brother, sister or child of the
      spouse of a founder of the Company,

	 	 	 	 
	 		(viii) 	
      a person or company of which a majority of the voting
      securities are beneficially owned by, or a majority of the directors are,
      persons or companies described in paragraphs (i) to (vii), or

	 	 	 	 
	 		(ix) 	
      a trust or estate of which all of the beneficiaries or a
      majority of the trustees are persons or companies described in paragraphs
      (i) to (vii).

Collectively, the categories of prospective investors described
in paragraphs 1.4 (a)(2)(i) through (ix) of the Subscription Agreement are
herein referred to as “Family and Friends;” or

	 	(b) 	 If the Subscriber is resident in Ontario, Canada, the
        Subscriber is an “accredited investor” as defined in Ontario
        Securities Commission Rule 45.501 Exemption Distributions (“Rule
        45-501”) the Ontario Securities Commission (the “OSC”)

	 	 	 
	 	(c) 	 If the Subscriber is resident in Alberta or British
        Columbia and is purchasing the Subscribed For Units as an "accredited
        investor" within the meaning of MI 45-103, the Subscriber must deliver,
        at Closing, a duly completed and executed Representation Letter in the
        form attached the Subscription Agreement as Exhibit "1.4D”.

41

	 	(d) 	
      If the Subscriber is resident of Ontario, and is
      purchasing the Subscription for Shares as in “accredited investor” within
      the meaning of Rule 45.501 the Subscriber must deliver at closing, a duly
      completed and executed Representation Letter in the form attached to the
      Subscription Agreement as “Exhibit “1.4E”.

	 	 	 
	 	(e) 	
      If the Subscriber is resident in Alberta or
      Ontario, the Subscriber acknowledges that, in addition to any other
      requirements under applicable securities legislation to which a
      disposition of the Subscribed For Units may be subject, the Subscriber
      may, depending on the nature of the disposition, be required to file a
      report on Form 45-501F2 with the Ontario Securities Commission or on Form
      20 with the Alberta Securities Commission, as applicable, within 10 days
      of each disposition by the Subscriber of Subscribed For
  Units.

After the Company determines that a potential investor meets
the Company’s suitability standards and is accredited, the Company will deliver
to the potential investor a Memorandum and Subscription Agreement. Each
Subscription Agreement must be fully completed and executed. The Company may
reject a potential investor’s Subscription Agreement arbitrarily without stating
a reason. Subscriptions may be rejected for failure to conform to the
requirements of this Memorandum, insufficient documentation, oversubscription,
or for any other reason the Company determines to be in the interests of the
Company. Subscriptions may not be revoked, canceled, or terminated by the
subscriber except as provided in the subscription agreement itself.

The Company will rely upon the material accuracy of the
statements, representations and warranties contained in the Questionnaires and
Subscription Agreements, all of which are binding upon offerees. The Company
assumes no responsibility to verify independently the accuracy of any such
statement, representation or warranty.

The preceding summary of the suitability standards is qualified
in its entirety by the text of the Subscription Agreement which is attached
hereto as Exhibit C.

CERTAIN MATERIAL TRANSACTIONS

KEY AGREEMENTS

Agreement dated October 12, 2005 between Parker Transnational
Industries, LLC and the Government of the Republic of Cameroon forming Parker
Transnational Industries Cameroon (PTI-Cameroon, aka PTI-C). This is the
Pre-Incorporation Agreement for the formation of an urban passenger transport
company for Cameroon, and re-incorporated as Transnational Industries Cameroon
(“TIC”) in a joint TAUG-Cameroon Government partner/Board meeting in September
2006. The Federal Cameroon Government agencies are currently in the final stages
of processing and finalizing an operational agreement designating TAUG as the
exclusive manager of Cameroon’s urban bus systems.

42

EXHIBIT A

FINANCIAL STATEMENTS

Attached is the 10-KSB effective through February 28, 2006.
Since that time, there have been significant changes in the company, as shown in
the 10Q filings since that time which are available for review, and which are
fully set forth above in the section Description of the Company and Its
Business.

43

EXHIBIT B

FINANCIAL FORECAST

NO INDEPENDENT ACCOUNTANTS HAVE EXAMINED OR COMPILED THE
ACCOMPANYING FORWARD-LOOKING STATEMENTS AND, ACCORDINGLY, DO NOT PROVIDE ANY
ASSURANCE WITH RESPECT TO SUCH STATEMENTS.

THE FOLLOWING EXHIBIT SHOULD BE READ IN CONJUNCTION WITH
THTE OTHER INFORMATION AND DISCLOSURES CONTAINED IN THIS DOCUMENT. ALTHOUGH
MANAGEMENT BELIEVES THE ASSUMPTIONS ON WHICH THE FORECASTS ARE BASED ARE
REASONABLE, NO REPRESENTATION IS MADE OR SHOULD BE INFERRED WITH RESPECT TO THE
ACCURACY OR COMPLETENESS OF THE PROJECTIONS OR THE LIKELIHOOD THAT THE
PROJECTIONS SET FORTH IN THE FORECASTS CAN OR WILL BE ACHIEVED. NO INVESTOR
SHOULD INVEST IN THE COMPANY IN RELIANCE ON THE ACCURACY OR ADEQUACY OF THE
PROJECTIONS. MANAGEMENT DOES NOT INTEND TO UPDATE THESE PROJECTIONS.

The Company believes the forecasted financial results are
reasonable and represent its estimate of the likely financial results for the
forecast period. The Company prepared the forecast assumptions on the basis of
information obtained through the experience of its management in managing
operations in the transportation industry and in Africa. Accordingly, the
attached Forecasted Financial Statements reflect the Company’s judgment, based
on present circumstances and what the Company believes to be a reasonable set of
assumptions.

All forecasts assume that money is raised in an
appropriate and reasonable time frame from which to meet the projected
development schedules and financial forecasts.

44

EXHIBIT C

SUBSCRIPTION AGREEMENT

THE UNITS, THE SHARES OF COMMON STOCK AND WARRANTS TO WHICH
THIS AGREEMENT RELATES HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”) AND THE RULES AND
REGULATIONS PROMULGATED THEREUNDER AND MAY NOT BE OFFERED OR SOLD DIRECTLY OR
INDIRECTLY (A) WITHIN THE UNITED STATES OR TO OR FOR THE ACCOUNT OR BENEFIT OF
U.S. PERSONS (AS DEFINED IN REGULATION S) EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AS TO SUCH SECURITIES UNDER, OR AN EXEMPTION FROM, THE
REGISTRATION REQUIREMENTS OF THE 1933 ACT, OR (B) IN CANADA OR TO RESIDENTS OF
CANADA EXCEPT PURSUANT TO PROSPECTUS EXEMPTIONS UNDER THE APPLICABLE PROVINCIAL
SECURITIES LAWS AND REGULATIONS OR PURSUANT TO AN EXEMPTION ORDER MADE BY THE
APPROPRIATE PROVINCIAL SECURITIES REGULATOR. 

     This Subscription
Agreement (this “Agreement”) by and between
_____________________________(the “Subscriber”), and Transnational
Automotive Group, Incorporation, a Nevada Corporation (the
“Company”).

RECITALS

     WHEREAS, the Company is offering:
10,000,000 units at $0.50 per unit. Each unit is comprised of a share of Common
Stock and a warrant to purchase an additional share of common stock at $1.50 per
share (the “Warrant”) (the Common Stock and the Warrant together an “Offered
Unit”). All references herein to “dollars” or “$” shall be to U.S. dollars
unless otherwise specified.

     WHEREAS, the
Company will offer and sell Units only to investors (the “Qualified
Investors”) who either are (i) residents of the United States and are
“accredited investors” as defined in Regulation D as promulgated under
the Securities Act of 1933, as amended (the “1933 Act”) and as more fully
set forth herein or (ii) offshore investors who are not “US Persons” as that
term is defined in Regulation S under the 1933 Act, as more fully set forth
herein; and who otherwise satisfy any applicable criteria established by the
laws of the jurisdiction in which they reside as more fully set forth in Section
1.4 hereof. 

     WHEREAS, subject to
the terms and conditions set forth herein, the Company desires to issue and sell
to the Subscriber and the Subscriber desires to subscribe for the aggregate
number of Offered Units as set forth in Section 1.1 hereof.

     NOW
THEREFORE, in consideration of the recitals and the mutual covenants
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:

AGREEMENTS

	1. 	
      Subscription and Purchase of Shares; Closing.
      

	 	 
	 	1.1	 Subscription and Purchase of
  Units.

                 
Subject to the terms and conditions herein set forth, the Subscriber hereby
subscribes for and agrees to purchase from the Company ______________Offered
Units (the “Subscribed for Units”), at a price of $.50 per Unit or an
aggregate consideration of $_________________ (the “Purchase
Price”). The Warrant shall be in the forms attached hereto as Exhibit A.

45

	 	1.2 	
      Payment of Purchase
  Price.

                 
Simultaneously with the execution and delivery of this Agreement by the
Subscriber, the Subscriber shall deliver the Purchase Price by check payable to
the Company or by wire transfer of funds pursuant to wiring instructions
provided by the Company and as set forth on Exhibit 1.2 hereto.

	 	1.3 	
      Closing.

                 
The closing of the purchase and sale of the Subscribed for Units (the
“Closing”) shall take place at the offices of the Company, or at
such other time and place or on such other business day thereafter as the
parties hereto may agree (the “Closing Date”). On the Closing
Date, all funds will be released to the Company and the Company will direct its
stock transfer agent to deliver a certificate(s) representing the Subscribed for
Units to the Subscriber against confirmation of collection of the Purchase
Price

	 	1.4 	
      Limitations of
Offering.

               
  (a)                 
  The Subscriber acknowledges that the Company is offering and selling the Subscribed
  For Units only to investors (the “Qualified Investors”) who
  either are (i) residents of the United States and are “accredited investors”
  as defined in Regulation D (which definition is set forth on Exhibit 1.4(a)(i)
  hereto) 1.4(a)(ii) as promulgated under the 1933 Act or (ii) offshore investors
  who are not “US Persons” as that term is defined in Regulation
  S as promulgated under the 1933 Act, and who otherwise satisfy any applicable
  criteria established by the laws of the jurisdiction in which they reside;

                
  (b)                 
  if such non US Persons are

                     
                    (i)
  residents of the provinces of Alberta or British Columbia, Canada, they must
  either be (1) “accredited investors” as defined in Multilateral
  Investments 45-103 Capital Raising Exemptions (“MI-45-103”),
  as adopted by, respectively, the British Columbia Securities Commission (the
  “BCSC”), and the Alberta Securities Commission (the “ASC”),
  or (2) investors who are purchasing the shares as a principal and who are either

(i) a director, senior officer or control
  person of the Company, or of an affiliate of the Company,

(ii) a spouse, parent, grandparent, brother,
  sister or child of a director, senior officer or control person of the Company,
  or of an affiliate of the Company,

  (iii) a parent, grandparent, brother, sister or child of the spouse of a director,
  senior officer or control person of the Company or of an affiliate of the Company,

  (iv) a close personal friend of a director, senior officer or control person
  of the Company, or of an affiliate of the Company,

  (v) a close business associate of a director, senior officer or control person
  of the Company, or of an affiliate of the Company,

  (vi) a founder of the issuer or a spouse, parent, grandparent, brother, sister,
  child, close personal friend or close business associate of a founder of the
  Company,

  (vii) a parent, grandparent, brother, sister or child of the spouse of a founder
  of the Company,

  (viii) a person or company of which a majority of the voting securities are
  beneficially owned by, or a majority of the directors are, persons or companies
  described in paragraphs (i) to (vii), or

  (ix) a trust or estate of which all of the beneficiaries or a majority of the
  trustees are persons or companies described in paragraphs (i) to (vii).

Collectively, the categories of prospective investors described
in paragraphs 1.4 (a)(2)(i) through (ix) are herein referred to as “Family
and Friends;” or

46

                     
                   (ii)
  or if the Subscriber is resident in Ontario, Canada, the Subscriber is an “accredited
  investor” as defined in Ontario Securities Commission Rule 45.501 Exemption
  Distributions (“Rule 45-501”) the Ontario Securities Commission
  (the “OSC”)

                (c)                 
  If the Subscriber is a resident of the United States, the Subscriber must deliver
  at or prior to closing, a duly executed Representation Letter in the form attached
  as 1.4(c) . 

                (d)
                   
  If the Subscriber is resident in Alberta or British Columbia and is purchasing
  the Subscribed for Units as an "accredited investor" within the meaning of MI
  45-103, the Subscriber must deliver, at Closing, a duly completed and executed
  Representation Letter in the form attached hereto as Exhibit "1.4D”
  .

                (e)
                   
  if the Subscriber is resident of Ontario, and is purchasing the Subscription
  for Shares as in “accredited investor” within the meaning of Rule
  45.501 the Subscriber must deliver at closing, a duly completed and executed
  Representation Letter in the form attached hereto as “Exhibit “1.4E”
  .

                (f)                 
  If the Subscriber is resident in Alberta or Ontario, the Subscriber acknowledges
  that, in addition to any other requirements under applicable securities legislation
  to which a disposition of the Subscribed For Units may be subject, the Subscriber
  may, depending on the nature of the disposition, be required to file a report
  on Form 45-501F2 with the Ontario Securities Commission or on Form 20 with the
  Alberta Securities Commission, as applicable, within 10 days of each disposition
  by the Subscriber of Subscribed For Units.

	 	1.5. 	
      No Minimum Number of Subscribed for Units Need be
      Sold.

                 
The Subscriber acknowledges that the Company is offering and selling the Offered
Units on a no minimum basis, and further acknowledges and understands that since
there is no minimum number of Offered Units to be sold, no proceeds will be held
in an escrow account and all funds will be immediately available to, and for use
by, the Company.

	2. 	
      Subscriber’s Conditions of
  Closing.

                 
The Subscriber’s obligation to purchase and pay for the Subscribed For Units is
subject to the satisfaction or waiver, of the condition that the
representations, warranties and covenants of the Company set forth in Section 4
hereof shall be true in all material respects on and as of the Closing Date,
except to the extent of changes caused by the transactions herein contemplated;
and, if the Closing Date is other than the date hereof, the Company shall
deliver to Subscriber a certificate of a duly authorized officer of the Company,
dated the Closing Date, to such effect.

	3. 	
      Company’s Conditions of
  Closing.

                 The
  Company’s obligation to sell the Subscribed for Units is subject to the
  satisfaction or waiver, on or before the Closing Date, of the conditions contained
  in this Section 3.

	 	3.1 	
      Representations, Warranties and
      Covenants.

                 
The representations, warranties and covenants of the Subscriber set forth in
Section 5 hereof shall be true in all material respects on and as of the Closing
Date.

	 	3.2 	
      Payment of Purchase
Price.

                 
The Subscriber shall have purchased and paid for the Subscribed for Units by
delivery of the Purchase Price.

47

	 	3.3 	
      No Adverse Action or
  Decision.

                 
There shall be no action, suit, investigation or proceeding pending, or to the
Company’s knowledge, threatened, against or affecting the Company or any of its
properties or rights, or any of its affiliates, associates, officers or
directors, before any court, arbitrator, or administrative or governmental body
that (i) seeks to restrain, enjoin, prevent the consummation of or otherwise
adversely affect the transactions contemplated by this Agreement, or (ii)
questions the validity or legality of any such transaction or seeks to recover
damages or to obtain other relief in connection with any such transaction.

	 	3.4 	
      Compliance with Securities
  Laws.

                 
The offer and sale of the Subscribed for Units under this Agreement shall have
complied with, and shall not be prohibited by, all applicable requirements of
the 1933 Act or applicable Canadian Securities Laws (as hereinafter
defined).

	4. 	
      Representations and Warranties of the
      Company.

	 	 
		
      The Company represents, warrants and covenants to the
      Subscriber that:

	 	 
		
      4.1 
	Corporate Existence.

                 
The Company is a Company duly organized, legally existing, and in good standing
under the laws of the State of Nevada with the requisite corporate power and
authority to own and use its properties and assets and to carry on its business
as currently conducted.

	 	4.2 	
      Authorization;
  Enforcement.

                 
The Company has the requisite corporate power and authority to enter into and to
consummate the transactions contemplated by this Agreement, and otherwise to
carry out its obligations hereunder. The execution and delivery of this
Agreement by the Company and the consummation by it of the transactions
contemplated hereby have been duly authorized by all necessary action on the
part of the Company. When executed and delivered in accordance with the terms
hereof, this Agreement shall constitute the legal, valid and binding obligation
of the Company enforceable against the Company in accordance with its terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation or similar laws relating to,
or affecting generally the enforcement of, creditors' rights and remedies or by
other equitable principles of general application. Anything herein to the
contrary notwithstanding, this Agreement shall not become a binding obligation
of the Company until it has been accepted by the Company as evidenced by its
execution by a duly authorized officer.

	 	4.3 	
      Agreement Not in
Conflict.

                 
The execution and delivery of this Agreement by the Company and the completion
of the transactions contemplated hereby do not and will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under (whether after notice or lapse of time or both): (A)
any statute, rule or regulation applicable to the Company; (B) the charter
documents, by-laws or resolutions of the Company which are in effect at the date
hereof; (C) any mortgage, note, indenture, contract, agreement, instrument,
lease or other document to which the Company is a party or by which it is bound;
or (D) any judgment, decree or order binding the Company or, to the best of its
knowledge, information and belief, the property or assets of the Company.

	 	4.4 	
      Authorized and Outstanding Capital
      Stock.

                 
The Company’s authorized capital stock of consists of 200,000,000 shares of
common stock, $ .001 par value per share; and, as at January 1, 2007 there were
33,508,401 shares of common stock issued and outstanding or reserved for
issuance. If all of the Offered Units are sold and all warrants exercised, there
will be an aggregate of 53,508,401 shares issued and outstanding or reserved for
issuance.

48

	5. 	
      Representations, Warranties and Acknowledgements of
      Subscriber.

	 	 
		
      The Subscriber represents, warrants and covenants to the
      Company that:

	 	 
		
      5.1 
	 Organization;
Authority.

                 
The Subscriber has the requisite power and authority to enter into and to
consummate the transactions contemplated hereby and to carry out its obligations
hereunder. The Subscriber, if: 

                 
  (a)             a
  company, trust, partnership, qualified plan or other entity, it is duly incorporated
  or formed, validly existing and in good standing under the laws of the jurisdiction
  of its organization and is authorized and qualified to become a holder of the
  Subscribed For Units, the person signing this Agreement on behalf of such entity
  has been duly authorized to execute and deliver this agreement, and the acquisition
  of the Subscribed For Units by the Subscriber and the consummation by the Subscriber
  of the transactions contemplated hereby have been duly authorized by all necessary
  action to be taken on the part of the Subscriber; or

                 
  (b)             If
  the Subscriber is not an individual, the Subscriber has the requisite power,
  authority and legal capacity to execute and deliver this Subscription Agreement,
  to perform all of its obligations hereunder and to undertake all actions required
  of the Subscriber hereunder, and all necessary approvals of its directors, partners,
  shareholders, trustees or otherwise (as the case may be) with respect to such
  matters have been given or obtained.

                 
  (c)             
  in any case, this Agreement has been duly executed and delivered by the Subscriber
  and constitutes a valid and legally binding obligation of the Subscriber, enforceable
  against the Subscriber, in accordance with its terms, subject to applicable
  bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
  similar laws of general applicability relating to or affecting creditors' rights
  generally and to general principles of equity. The entering into of this Agreement
  and the transactions contemplated hereby will not result in a violation of any
  of the terms or provisions of any law applicable to the Subscriber, or any of
  the Subscriber’s charter documents, or of any agreement to which the Subscriber
  is a party or by which it is bound.

	 	5.2	
       Acquisition of Subscribed For Units
      for Investment.

                 
The Subscriber is acquiring the Subscribed For Units as principal for its own
account for investment purposes only and not with a view to or for distributing
or reselling the Subscribed For Units or any part thereof or interest therein,
without prejudice, however, to the Subscriber’s right, subject to the provisions
of this Agreement and in accordance with all applicable laws, at all times to
sell or otherwise dispose of all or any part of such Subscribed For Units as
otherwise permitted hereunder. Except as otherwise disclosed in writing to the
Company, the Subscriber is not acting jointly or in concert with any other
person or company for the purposes of acquiring any of the Offered Units.

		5.3	
       Experience of
      Subscriber.

                 
The Subscriber either alone or together with its representatives, has such
knowledge, sophistication and experience in business and financial matters so as
to be capable of evaluating and assessing the merits and risks of the
prospective investment in the Subscribed For Units, and has so evaluated the
merits and risks of such investment and has determined that the Subscribed For
Units are suitable to investment for him.

               
5.4            Ability
of Subscriber to Bear Risk of Investment. The Subscriber
acknowledges that the purchase of the Subscribed for Units is a highly
speculative investment, involving a high degree of risk and the Subscriber is
able to bear the economic risk of an investment in the Subscribed for Units;
and, at the present time, is able to afford a complete loss of such
investment.

               
5.5           
No Conflict or Violation. The execution, delivery, and
performance of this Agreement by Subscriber and the consummation by Subscriber
of the transactions contemplated hereby will not conflict with or result in a
default under the terms of any material contract, agreement, obligation or
commitment applicable to Subscriber. The execution, delivery and performance by
the Subscriber of this Subscription Agreement and the completion of the
transaction contemplated hereby do not and will not result in a violation of any
law, regulation,

49

order or ruling applicable to the Subscriber, and do not and
will not constitute a breach of or default under any of the Subscriber's charter
documents (if the Subscriber is not a natural person) or any agreement to which
the Subscriber is a party or by which it is bound.

               
5.6            Regulation
D – US Accredited Investor Status. Subscriber is an “accredited
investor” as defined in Rule 501(a) of Regulation D. Specifically, Subscriber
either: (i) has an individual net worth, or joint net worth with
Subscriber’s spouse, in excess of $1,000,000, (ii) had an individual
income in excess of $200,000 in each of the two most recent years or joint
income with Subscriber’s spouse in excess of $300,000 in each of those two years
and has a reasonable expectation of reaching the same income level in the
current year, (iii) is a Company or partnership not formed for the
specific purpose of acquiring the securities offered hereby, with total assets
in excess of $5,000,000, or (iv) is an entity in which all of the equity
owners are accredited persons as described in clauses (i) through
(iii) above (in which case, Subscriber has caused Schedule to Exhibit
1.4C hereto to be executed and delivered, along with this Agreement, to the
Company). Subscriber can afford to lose Subscriber’s entire investment in the
Company.

               
5.7             Regulation
S Representations, Acknowledgements and Warranties. 

                 
(a)             The
Subscriber acknowledges that the Subscribed For Units are being offered and sold
in reliance on the exemptions from the registration requirements of the 1933 Act
provided by the provisions of Regulation S as promulgated under the 1933 Act,
and that the Subscribed For Units may not be resold in the United State or to a
US Person as defined in Regulation S, except pursuant to an effective
registration statement or an exemption from the registration provisions of the
1933 Act as evidenced by an opinion of counsel acceptable to the Company, and
that in the absence of an effective registration statement covering the
Subscribed For Units or an available exemption from registration under the 1933
Act, the Subscribed For Units must be held indefinitely. The Subscriber further
acknowledges that this Agreement is not intended as a plan or scheme to evade
the registration requirements of the 1933 Act;

                 
(b)             The
Subscriber is a resident of the country set forth on the signature page
hereto;

                 
(c)             the
Subscriber is not a “US Person” as that term is defined in Rule 902 of
Regulation S, as more fully set forth in Exhibit B hereto;

                 
(d)             the
Subscriber is not, and on the Closing Date will not be, an affiliate of the
Company;

                 
(e)             the
Subscriber agrees that all offers and sales of the Subscribed For Units shall be
made in compliance with all applicable laws of any applicable jurisdiction and,
particularly, in accordance with Rules 903 and 904, as applicable, of Regulation
S or pursuant to registration of the Subscribed For Units under the 1933 Act or
pursuant to an exemption from registration. In any case, none of the Subscribed
For Units have been and will be offered or sold by the Subscriber to, or for the
account or benefit of a U.S. Person or within the United States until after the
end of a one year period commencing on the date on which this Agreement is
accepted by the Company (the "Distribution Compliance Period"), except
pursuant to an effective registration statement as to the Subscribed For Units
or an applicable exemption from the registration requirements of the 1933
Act.

                 
(f)             the
Subscribed for Units have not been offered to the Subscriber in the United
States and the individuals making the decision to purchase the Subscribed For
Units and executing and delivering this Agreement on behalf of the Subscriber
were not in the United States when the decision was made and this Agreement was
executed and delivered;

                 
(g)             the
Subscriber will not engage in any activity for the purpose of, or that could
reasonably be expected to have the effect of, conditioning the market in the
United States for any of the Subscribed for Units;

                 
(h)             neither
the Subscriber nor any of his affiliates will directly or indirectly maintain
any short position, purchase or sell put or call options or otherwise engage in
any hedging activities in any of the Subscribed For Units or any other
Subscribed For Units of the Company until after the end of the Distribution
Compliance Period, and acknowledges that such activities are prohibited by
Regulation S.

50

	 	5.8 	
      Canadian Exemptions Representations,
      Acknowledgements and Warranties.

                  (a)              The
Subscriber understands that it is purchasing the Subscribed For Units pursuant
to the Canadian Exemptions from the registration and prospectus requirements of
applicable securities legislation in Canada (the “Canadian Securities
Laws”) and, as a consequence, (A) certain rights, remedies and protections
under securities legislation will not be available to the Subscriber in
connection with the purchase of the Shares; (B) the Subscriber may not receive
information that would otherwise be required to be provided to it under
securities legislation; and (C) the Company is relieved from certain obligations
that would otherwise apply under securities legislation;

                  (b)              the
Subscriber is purchasing the Subscribed For Units as principal solely for its
own benefit and not for the benefit of any other person, and not with a view to
the resale or distribution of all or any of the Subscribed For Units and if the
Subscriber is resident in Alberta or British Columbia, the Subscriber is
(A) an "accredited investor" as such term is defined in "MI 45-103" (which
definition is reproduced in the Schedule to Exhibit "1.4(d) ” attached
hereto) and has executed and delivered a duly completed Representation Letter in
the form attached hereto as Exhibit "1.4(d)" representing that the
Subscriber fits within one of the categories of "accredited investor" set forth
in such definition; or (C) satisfies the definition of Family and Friends;
and

                  (c)              the
Subscriber is purchasing the Subscribed For Units as principal solely for its
own benefit and not for the benefit of any other person, and not with a view to
the resale or distribution of all or any of the Subscribed For Units and if the
Subscriber is resident in Ontario, the Subscriber is (A) an "accredited
investor" as such term is defined in "Rule 45-501" (which definition is
reproduced in the Schedule to Exhibit "1.4(e)" attached hereto) and has
executed and delivered a duly completed Representation Letter in the form
attached hereto as Exhibit "14(e)" representing that the Subscriber fits
within one of the categories of "accredited investor" set forth in such
definition.

	 	5.9 	
      Transfer of
Restrictions.

                  (a)              The
Subscriber acknowledges that the certificates representing Subscribed for Units
shall bear a legend substantially as follows:

“THE UNITS, THE SHARES OF COMMON STOCK AND WARRANTS TO WHICH
THIS CERTIFICATE RELATES HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”) AND THE RULES AND
REGULATIONS PROMULGATED THEREUNDER AND MAY NOT BE OFFERED OR SOLD DIRECTLY OR
INDIRECTLY (A) WITHIN THE UNITED STATES OR TO OR FOR THE ACCOUNT OR BENEFIT OF
U.S. PERSONS (AS DEFINED IN REGULATION S) EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AS TO SUCH SECURITIES UNDER, IN COMPLIANCE WITH
REGULATION S AND/OR OTHER APPLICABLE EXEMPTION FROM, THE REGISTRATION
REQUIREMENTS OF THE 1933 ACT, OR (B) IN CANADA OR TO RESIDENTS OF CANADA EXCEPT
PURSUANT TO PROSPECTUS EXEMPTIONS UNDER THE APPLICABLE PROVINCIAL SECURITIES
LAWS AND REGULATIONS OR PURSUANT TO AN EXEMPTION ORDER MADE BY THE APPROPRIATE
PROVINCIAL SECURITIES REGULATOR, IN EACH CASE AS EVIDENCED BY AN OPINION OF
COUNSEL ACCEPTABLE TO THE COMPANY.”

                  (b)              The
Subscriber understands and acknowledges that the Company has the right not to
record a purported transfer of the Subscribed for Units without the Company
being satisfied that such transfer is exempt from or not subject to registration
under the U.S. 1933 Act and any applicable state securities laws, as well as the
Canadian Securities Laws.

                  (c)             
In addition to resale restrictions imposed under U.S. securities laws, there are
additional restrictions on the Subscriber’s ability to resell the Subscribed For
Units under applicable Canadian Securities Law, including, but not limited to
the B.C. Act and Multilateral Instrument 45-102 adopted by the BCSC.

                  (d)              The
Subscriber understands and acknowledges that the Company is not obligated to
file and has no present intention of filing with the Commission or with any
state or provincial securities administrator any 

51

registration statement or prospectus in respect of re-sales of
the Subscribed for Units in the United States or elsewhere.

                  (e)              The
Subscriber confirms that it has been advised to consult its own legal and
financial advisors with respect to the suitability of the Subscribed For Units
as an investment for the Subscriber and the resale restrictions (including "hold
periods") to which the Subscribed For Units will be subject under applicable
securities legislation and confirms that no representation has been made to the
Subscriber by or on behalf of the Company with respect thereto.

                  (f)              The
Subscriber will not resell any Subscribed for Units except in accordance with
the provisions of applicable securities legislation and stock exchange
rules.

	 	5.10 	
      No Approval by Regulatory
      Authority.

                  The
Subscriber understands that no securities commission, stock exchange,
governmental agency, regulatory body or similar authority has made any finding
or determination or expressed any opinion with respect to the merits of an
investment in Offered Units of which the Subscribed for Units are a
part.

	 	5.11 	
      No Representation as to Value of Subscribed For
      Units.

                  The
Subscriber confirms that neither the Company nor any of its directors,
employees, officers, consultants, agents or affiliates, has made any
representations (written or oral) to the Subscriber regarding the future value
of the Subscribed For Units and acknowledges and confirms that no representation
has been made to the Subscriber with respect to the listing of the Subscribed
For Units on any exchange or that application has been or will be made be made
for such listing. In making its investment decision with respect to the
Subscribed for Units, the Subscriber has relied solely upon publicly available
information relating to the Company and not upon any verbal or written
representation made by or on behalf of the Company.

	 	5.12 	
      No
Advertisement.

                  The
Subscriber is not and has not become aware of any advertisement in printed
public media or on radio, television or other form of communication (including
electronic display such as the Internet) with respect to the Offering.

	 	5.13 	
      Conditional
Sale.

                  The
Subscriber understands that the sale and delivery of the Subscribed for Units is
conditional upon such sale being exempt from the registration and prospectus
requirements under applicable securities legislation or upon the issuance of
such orders, consents or approvals as may be required to permit such sale and
delivery without complying with such requirements. If required under applicable
securities legislation or regulatory policy, or by any securities commission,
stock exchange or other regulatory authority, the Subscriber will execute,
deliver, file and otherwise assist the Company in filing such reports,
undertakings and other documents with respect to the issue of the Shares.

	 	5.14 	
      No Joint
Action.

                  Except
as disclosed in writing to the Company, the Subscriber does not act jointly or
in concert with any other person or company for the purposes of acquiring the
Subscribed for Units.

52

	 	5.15 	
      Tax Consequences.

                  The
investment in the Units may have tax consequences under applicable taxation
laws, that it is the sole responsibility of the Subscriber to determine and
assess such tax consequences as may apply to its particular circumstances, and
the Subscriber has not received and is not relying on the Company for any tax
advice whatsoever.

	 	5.16 	
      Legal Advice.

                  The
Subscriber is responsible for obtaining such legal advice as it considers
appropriate in connection with the execution and delivery of this Subscription
Agreement and the purchase of the Units by it; and

	6. 	
      Reliance and Indemnification. 6.1
      Reliance and Timeliness.

                  The
Subscriber understands and acknowledges that (i) the Units are being offered and
sold to the Subscriber without registration under the Securities Act or
applicable Canadian Securities Laws in a private placement that is exempt from
the registration provisions of the Securities Act and/or the registration and
prospectus requirements of applicable Canadian Securities Laws and (ii) the
availability of such exemption, depends in part on, and the Company will rely
upon, the accuracy and truthfulness of, the foregoing representations and
warranties and the Subscriber hereby consents to such reliance. The Subscriber
agrees that the representations, warranties and covenants of the Subscriber
contained herein (or in any Representation Letter executed and delivered by the
Subscriber pursuant to the provisions hereof) shall be true and correct both as
of the execution of this Subscription Agreement and as of the Closing Date, and
shall survive the completion of the distribution of the Units. The Subscriber
hereby agrees to notify the Company immediately of any change in any
representation, warranty, covenant or other information relating to the
Subscriber contained in this Agreement which takes place prior to Closing.

	 	6.2	
       Indemnification.

                  The
Subscriber agrees to indemnify the Company, and each of its officers, directors,
employees, consultants and agents from and against all losses, claims, costs,
expenses, damages or liabilities that any of them they may suffer or incur as a
result of or in connection with their reliance on such representations,
warranties and covenants. The Subscriber acknowledges and agrees that the
Company acts as trustee of the Subscriber’s covenants hereunder for each of its
officers, directors, employees, consultants and agents entitled to indemnity
hereunder and shall be entitled to enforce such covenants on behalf of such
persons.

	7. 	
      Miscellaneous.

	 	 
		
      7.1 
	Amendment; Waivers.

                  No
provision of this Agreement may be waived or amended except in a written
instrument signed, in the case of an amendment, by both the Company and the
Subscriber; or, in the case of a waiver, by the party against whom enforcement
of any such waiver is sought. No waiver of any default with respect to any
provision, condition or requirement of this Agreement shall be deemed to be a
continuing waiver in the future or a waiver of any other provision, condition or
requirement hereof, nor shall any delay or omission of either party to exercise
any right hereunder in any manner impair the exercise of any such right accruing
to it thereafter.

	 	7.2	
      Survival of Representations and
      Warranties.

                  All
representations, warranties and agreements contained herein or made in writing
by or on behalf of any party to this Agreement in connection herewith shall
survive the execution and delivery of this Agreement.

53

	 	7.3 	 Successors and Assigns; No Third Party.

                  All
  covenants and agreements in this Agreement contained by or on behalf of the
  parties hereto shall be binding upon and inure to the benefit of the parties
  and their respective successors and assigns and, to the extent provided in this
  Agreement.

	 	7.4	  Notices.

                  Any
and all notices or other communications or deliveries required or permitted to
be provided hereunder shall be in writing and shall be deemed given and
effective on the earliest of (i) the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile telephone number
specified in this Section prior to 4:30 p.m. (Pacific Standard Time) on a
business day, (ii) the business day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile telephone
number specified in the this Agreement later than 4:30 p.m. (Pacific Standard
Time) on any date and earlier than 11:59 p.m. (Pacific Standard Time) on such
date, (iii) the business day following the date of mailing, if sent by
nationally recognized overnight courier service, or (iv) upon actual receipt by
the party to whom such notice is required to be given. The address for such
notices and communications shall be as follows:

	 	If to the Company: 	TRANSNATIONAL AUTOMOTIVE GROUP, INC. 
	 	  	21800 Burbank Blvd. 
	 	  	Suite 200 
	 	  	Woodland Hills, CA 91367 
	 	  	Tel: (818) 961 – 2727 
	 	  	Fax: (818) 961 – 2728 

                  If
  to the Subscriber: At the address set forth below the Subscriber’s name
  on the signature page hereto; or such other address as may be designated in
  writing hereafter, in the same manner, by such party.

	 	7.5	
Headings.

      

                  The
  headings herein are inserted for convenience only and do not constitute a part
  of this Agreement. Whenever the context requires, the gender of any word used
  in this Agreement includes the masculine, feminine or neuter, and the number
  of any word includes the singular or plural. Unless the context otherwise requires,
  all references to articles and sections refer to articles and sections of this
  Agreement, and all references to schedules are to schedules attached hereto,
  each of which is made a part hereof for all purposes. The descriptive headings
  of the several articles and sections of this Agreement are inserted for purposes
  of reference only, and shall not affect the meaning or construction of any of
  the provisions hereof.

	 	7.6	 Governing Law; Consent to Jurisdiction.

                  This
  Agreement shall be governed by and construed in accordance with the laws of
  the State of California applicable to contracts made and to be performed in
  the State of California. The Company and each Subscriber irrevocably consent
  to the jurisdiction of the United States federal courts and the state courts
  located in the State of California, in any suit or proceeding based on or arising
  under this Agreement and irrevocably agree that all claims in respect of such
  suit or proceeding may be determined in such courts. The Company irrevocably
  waives the defense of an inconvenient forum to the maintenance of such suit
  or proceeding in such forum. The Company further agrees that service of process
  upon the Company mailed by first class mail shall be deemed in every respect
  effective service of process upon the Company in any such suit or proceeding.
  Nothing herein shall affect the right of any Subscriber to serve process in
  any other manner permitted by law. The Company agrees that a final non-appealable
  judgment in any such suit or proceeding shall be conclusive and may be enforced
  in other jurisdictions by suit on such judgment or in any other lawful manner.

	 	7.7 	 Remedies.

                  In
addition to being entitled to exercise all rights provided herein or granted by
law, including recovery of damages, the Subscriber will be entitled to specific
performance of the obligations of the Company hereunder. The Company and the
Subscriber agree that monetary damages would not be adequate compensation for
any loss

54

incurred by reason of any breach of its obligations described
in the foregoing sentence and hereby agrees to waive in any action for specific
performance of any such obligation the defense that a remedy at law would be
adequate.

	 	7.8 	
      Entire
Agreement.

                  This
Agreement and the other writings referred to herein or delivered pursuant hereto
contain the entire agreement among the parties with respect to the subject
matter hereof and supersede all prior and contemporaneous arrangements or
understandings with respect thereto.

	 	7.9 	
      Severability.

                  Any
provision of this Agreement that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and the parties will attempt to agree upon a valid and
enforceable provision which shall be a reasonable substitute therefore, and upon
so agreeing, shall incorporate such substitute provision in this Agreement. Any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

	 	7.10 	
      Counterparts.

                  This
Agreement may be executed in two or more counterparts, all of which shall be
considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the other party.
This Agreement, once executed by a party, may be delivered to the other parties
hereto by facsimile transmission of a copy of this Agreement bearing the
signature of the party so delivering this Agreement. In the event any signature
is delivered by facsimile transmission, the party using such means of delivery
shall cause the manually executed execution page(s) hereof to be physically
delivered to the other party within five days of the execution hereof, provided
that the failure to so deliver any manually executed execution page shall not
affect the validity or enforceability of this Agreement.

	 	7.11 	
      Fees and Expenses.

                  Except
as otherwise provided herein, each of the parties hereto shall pay its own fees
and expenses, including attorney fees, in connection with the transactions
contemplated by this Agreement.

	 	7.12 	
      English Language.

                  The
Subscriber acknowledges that it has consented to and requested that all
documents evidencing or relating in any way to the sale of the Units be drawn up
in the English language only.

	 	7.13 	
      Knowledge.

                  As
used in this Agreement, the term “knowledge” of any person or entity shall mean
and include (i) actual knowledge and (ii) that knowledge which a reasonably
prudent business person could have obtained in the management of his or her
business affairs after making due inquiry and exercising due diligence which a
prudent business person should have made or exercised, as applicable, with
respect thereto.

	 	7.14 	
      Reference Date and Effective
  Date.

                  The
“reference date” for this Agreement is _________________ _____, 2007. The
date of acceptance of this Agreement by the Company, as set forth on the
signature page, shall be the “effective date” hereof.

SIGNATURES APPEAR ON THE NEXT PAGE

55

                  IN
WITNESS WHEREOF, the parties hereto caused this Agreement to be duly
executed as of the dates set forth below.

	(Name of Subscriber – please print) 	 	Number Of Units: ____________________________
		 	Aggregate Consideration: $
      ___________________ 
	By:_______________________________________________ 	 	 
	Authorized Signature 	 	Paid by Delivery of $
      ________________________ 
	 	 	 
	(Official Capacity or Title – please print) 	 	Date the Subscription 
	  	 	Agreement Signed by the 
	(Please print name of individual whose signature appears
      above 	 	Subscriber: _______________________________
	if different than the name of the subscriber printed
      above.) 	 	  
	  	 	Deliver the Subscribed For Units as set
      forth below: 
	  	 	
	  	 	(Name) 
	(Subscriber's Address including Country of
      Residence) 	 	 
    
	  	 	(Account Reference, if applicable)

	(Telephone Number) (Facsimile
    Number)	 	 
	 	 	(Address)
	 	 	 
	 	 	(Telephone Number) (Facsimile
  No.)

Register the Subscribed For Units as set forth
below:

_________________________________________________________________________
(Name)

_________________________________________________________________________
(Account
Reference, if applicable)

_________________________________________________________________________
(Address)

ACCEPTANCE

The Company hereby accepts the above subscription for
Subscribed for Units of the Company effective the ______day of
__________________, 2007.

By:
____________________________________________
President

56

SAMPLE

EXHIBIT A

FORM COMMON STOCK PURCHASE WARRANT

THIS COMMON STOCK PURCHASE WARRANT AND THE UNDERLYING COMMON
SHARES TO WHICH THIS CERTIFICATE RELATES HAVE NOT BEEN REGISTERED UNER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”) AND THE RULES
AND REGULATIONS PROMULGATED THEREUNDER AND MAY NOT BE OFFERED OR SOLD DIRECTLY
OR INDIRECTLY (A) WITHIN THE UNITED STATES OR TO OR FOR THE ACCOUNT OR BENEFIT
OF U.S. PERSONS (AS DEFINED IN REGULATIONS) EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AS TO SUCH SECURITIES UNDER, IN COMPLIANCE WITH
REGULATION S AND/OR OTHER APPLICABLE EXEMPTION FROM, THE REGISTRATION
REQUIREMENTS OF THE 1933 ACT, OR (B) IN CANADA OR TO RESIDENTS OF CANADA EXCEPT
PURSUANT TO PROSPECTUS EXEMPTIONS UNDER THE APPLICABLE PROVINCIAL SECURITIES
LAWS AND REGULATIONS OR PURSUANT TO AN EXEMPTION ORDER MADE BY THE
APPROPRIATE PROVINCIAL SECURITIES REGULATOR, IN EACH CASE AS EVIDENCED BY AN
OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY.

WARRANT TO PURCHASE
SHARES OF COMMON STOCK
OF
TRANSNATIONAL AUTOMOTIVE GROUP, INC.

	Warrant No. _________________	_______Shares of Common Stock

1.                   Issuance.
This Warrant is issued to _______________________________________, by
Transnational Automotive Group, Inc., a Nevada corporation (hereinafter with its
successors called the "Company").

2.                   Purchase
Price; Number of Shares. The registered holder of this Warrant (the
"Holder"), commencing on the date hereof, is entitled upon surrender of this
Warrant with the subscription form annexed hereto as Exhibit A duly executed, at
the principal office of the Company, to purchase from the Company
__________________fully paid and non-assessable shares (the "Shares") of Common
Stock, $0.001 par value, of the Company (the "Common Stock") at a price per
share (the "Purchase Price") of one dollar fifty cents ($1.50) . The person or
persons in whose name or names any certificate representing shares of Common
Stock is issued hereunder shall be deemed to have become the holder of record of
the shares represented thereby as at the close of business on the date this
Warrant is exercised, whether or not the transfer books of the Company shall be
closed.

3.                   Payment
of Purchase Price. The Purchase Price may be paid (i) in cash or by
certified check or wire transfer, (ii) by the surrender or forgiveness by the
Holder to the Company of any promissory notes or other obligations issued by the
Company, with all such notes and obligations so surrendered being credited
against the Purchase Price in an amount equal to the principal amount thereof
plus accrued interest to the date of surrender, or (iii) by any combination of
the foregoing.

4.                   Fractional
Shares. No fractional shares shall be issued upon exercise of this Warrant.
The Company shall, in lieu of issuing any fractional share, pay the holder
entitled to such fraction a sum in cash equal to such fraction multiplied by the
then effective Purchase Price. 

5.                   Exercise;
Expiration Date; Automatic Exercise. This Warrant may be exercised in whole
or in part at any time commencing on the date hereof and ending 5:00 p.m.
Pacific Time on the fifth anniversary of the date of this warrant (the
"Expiration Date") and shall be void thereafter. 

6.                   Reserved
Shares; Valid Issuance. The Company covenants that it will at all times from
and after the date hereof reserve and keep available such number of its
authorized shares of Common Stock of the Company, free from all 

57

SAMPLE

preemptive or similar rights therein, as will be sufficient to
permit the exercise of this Warrant in full. The Company further covenants that
such shares as may be issued pursuant to such exercise will, upon issuance, be
duly and validly issued, fully paid and non-assessable and free from all taxes,
liens and charges with respect to the issuance thereof.

7.                   Stock
Splits and Dividends. If after the date hereof the Company shall subdivide
the Common Stock, by stock split or otherwise, or combine the Common Stock, or
issue additional shares of Common Stock in payment of a stock dividend on the
Common Stock, the number of shares of Common Stock issuable on the exercise of
this Warrant shall forthwith be proportionately increased in the case of a
subdivision or stock dividend, or proportionately decreased in the case of a
combination, and the Purchase Price shall forthwith be proportionately decreased
in the case of a subdivision or stock dividend, or proportionately increased in
the case of a combination.

8.                   Mergers
and Reclassifications. If after the date hereof the Company shall enter into
any Reorganization (as hereinafter defined), then, as a condition of such
Reorganization, lawful provisions shall be made, and duly executed documents
evidencing the same from the Company or its successor shall be delivered to the
Holder, so that the Holder shall thereafter have the right to purchase, at a
total price not to exceed that payable upon the exercise of this Warrant in
full, the kind and amount of shares of stock and other securities and property
receivable upon such Reorganization by a holder of the number of shares of
Common Stock which might have been purchased by the Holder immediately prior to
such Reorganization, and in any such case appropriate Provisions shall be made
with respect to the rights and interest of the Holder to the end that the
provisions hereof (including without limitation, provisions for the adjustment
of the Purchase Price and the number of shares issuable hereunder) shall
thereafter be applicable in relation to any shares of stock or other securities
and property thereafter deliverable upon exercise hereof. For the purposes of
this Section 9, the term "Reorganization" shall include without limitation any
reclassification, capital reorganization or change of the Common Stock (other
than as a result of a subdivision, combination or stock dividend provided for in
Section 8 hereof), or any consolidation of the Company with, or merger of the
Company into, another corporation or other business organization (other than a
merger in which the Company is the surviving corporation and which does not
result in any reclassification or change of the outstanding Common Stock), or
any sale or conveyance to another corporation or other business organization of
all or substantially all of the assets of the Company.

9.                   Certain
Events. If any change in the outstanding Common Stock of the Company or any
other event occurs as to which the provisions of Section 7 or Section 8 are not
strictly applicable or if strictly applicable would not fairly protect the
purchase rights of the Holder of the Warrant in accordance with such provisions,
then the Board of Directors of the Company shall make an adjustment in the
number and class of shares available under the Warrant, the Purchase Price or
the application of such provisions, so as to protect such purchase rights as
aforesaid. The adjustment shall be such as will give the Holder of the Warrant
upon exercise for the same aggregate Purchase Price the total number, class and
kind of shares as he would have owned had the Warrant been exercised prior to
the event and had he continued to hold such shares until after the event
requiring adjustment.

10.                  
Certificate of Adjustment. Whenever the Purchase Price is adjusted, as
herein provided, the Company shall promptly deliver to the Holder a certificate
of the Company's chief financial officer setting forth the Purchase Price after
such adjustment and setting forth a brief statement of the facts requiring such
adjustment.

11.                   Issue
Tax. The issuance of certificates for the Shares upon the exercise of the
Warrant shall be made without charge to the Holder of the Warrant for any issue
tax (other than any applicable income taxes) in respect thereof; provided,
however, that the Company shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issuance and delivery of any
certificate in a name other than that of the then Holder of the Warrant being
exercised.

12.                   Notices
of Record Date, Etc. In the event of:

           (1)
any taking by the Company of a record of the holders of any class of securities
for the purpose of determining the holders thereof who are entitled to
receive any dividend or other distribution, or any right to subscribe for,
purchase, sell or otherwise acquire or dispose of any shares of stock of any
class or any other securities or property, or to receive any other right;

58

SAMPLE

          (2) any
reclassification of the capital stock of the Company, capital reorganization of
the Company, consolidation or merger involving the Company, or sale or
conveyance of all or substantially all of its assets; 

          (3) any
voluntary or involuntary dissolution, liquidation or winding-up of the Company;
or

          (4) the
filing of a registration statement under the Securities Act of 933, as amended,
in connection with an Initial Public Offering;

then and in each such event the Company will provide or cause
to be provided to the Holder a written notice thereof. Such notice shall be
provided at least fifteen (15) business days prior to the date specified in such
notice on which any such action is to be taken.

13.                  
Representations, Warranties and Covenants. This Warrant is issued and
delivered by the Company and accepted by each Holder on the basis of the
following representations, warranties and covenants made by the Company:

                       (a)
The Company has all necessary authority to issue, execute and deliver this
Warrant and to perform its obligations hereunder. This Warrant has been duly
authorized, issued, executed and delivered by the Company and is the valid and
binding obligation of the Company, enforceable in accordance with its terms.

                       (b)
The shares of Common Stock issuable upon the exercise of this Warrant have been
duly authorized and reserved for issuance by the Company and, when issued in
accordance with the terms hereof, will be validly issued, fully paid and
non-assessable.

                       (c)
The issuance, execution and delivery of this Warrant do not, and the issuance of
the shares of Common Stock upon the exercise of this Warrant in accordance with
the terms hereof will not, (i) violate or contravene the Company's certificate
of incorporation or by-laws, or any law, statute, regulation, rule, judgment or
order applicable to the Company, (ii) violate, contravene or result in a breach
or default under any contract, agreement or instrument to which the Company is a
party or by which the Company or any of its assets are bound or (iii) require
the consent or approval of or the filing of any notice (other than, if any,
post-issuance state securities laws filings) or registration with any person or
entity.

14.                   No
Voting or Dividend Rights; Limitation of Liability. Nothing contained in
this Warrant shall be construed as conferring upon the Holder hereof the right
to vote or to consent or to receive notice as a shareholder of the Company or
any other matters or any rights whatsoever as a shareholder of the Company. No
dividends or interest shall be payable or accrued in respect of this Warrant or
the interest represented hereby or the shares purchasable hereunder until, and
only to the extent that, this Warrant shall have been exercised. No provisions
hereof, in the absence of affirmative action by the Holder to purchase Shares,
and no mere enumeration herein of the rights or privileges of the Holder hereof,
shall give rise to any liability of such Holder for the Purchase Price or as a
shareholder of the Company, whether such liability is asserted by the Company or
by its creditors.

15.                   Amendment.
The terms of this Warrant may be amended, modified or waived only with the
written consent of the Holder.

16.                   Notices,
Etc.

                       (a)                   Any
notice or written communication required or permitted to be given to the Holder
may be given by United States mail, by overnight courier or by facsimile
transmission at the address most recently provided by the Holder to the Company
or by hand, and shall be deemed received upon the earlier to occur of (i)
receipt, (ii) if sent by overnight courier, then on the day after which the same
has been delivered to such courier for overnight delivery, or (iii) if sent by
United States mail, seventy-two (72) hours after the same has been deposited in
a regularly maintained receptacle for the deposit of the United States mail.

59

SAMPLE

                       (b)
In case this Warrant shall be mutilated, lost, stolen or destroyed, the Company
shall issue a new warrant of like tenor and denomination and deliver the same
(i) in exchange and substitution for and upon surrender and cancellation of any
mutilated Warrant, or (ii) in lieu of any Warrant lost, stolen or destroyed,
upon receipt of an affidavit of the Holder or other evidence reasonably
satisfactory to the Company of the loss, theft or destruction of such
Warrant.

17.                    No
Impairment. The Company will not, by amendment of its certificate of
incorporation or through any reclassification, capital reorganization,
consolidation, merger, sale or conveyance of assets, dissolution, liquidation,
issue or sale of securities or any other voluntary action, avoid or seek to
avoid the observance of performance of any of the terms of this Warrant, but
will at all times in good faith assist in the carrying out of all such terms and
in the taking of all such action as may be necessary or appropriate in order to
protect the rights of the Holder.

18.                    Descriptive
Headings and Governing Law. The descriptive headings of the several sections
and paragraphs of this Warrant are inserted for convenience only and do not
constitute a part of this Warrant. The provisions and terms of this Warrant
shall be governed by and construed in accordance with the internal laws of the
State of Nevada.

19.                    Successors
and Assigns. This Warrant shall be binding upon the Company's successors and
assigns and shall inure to the benefit of the Holder's successors and legal
representatives.

Date: ________________ ____, 2006

TRANSNATIONAL AUTOMOTIVE GROUP, INC.
(a Nevada
Corporation)

 

___________________________

Name: ___________________________
Title:
__________________________

60

SAMPLE

Exhibit A

SUBSCRIPTION FORM

________________ ____, ____

Transnational Automotive Group, Inc.
21800 Burbank
Blvd.
Suite 200
Woodland Hills, CA 91367
Attn: President

Ladies and Gentlemen:

The undersigned hereby elects to exercise the warrant issued
  to it by Transnational Automotive Group, Inc. (the "Company") and dated _____________________,
  2007 (the "Warrant") in full and to purchase all of the _______________________shares
  of the Common Stock of the Company (the"Shares") purchasable thereunder at a
  purchase price of ___________________($______) per Share or an aggregate purchase
  price of ________________Dollars ($__________) (the "Purchase Price"). Pursuant
  to the terms of the Warrant the undersigned has delivered the Purchase Price
  herewith in full in cash or by certified check or wire transfer or as otherwise
  permitted pursuant to Section 3 of the Warrant.

The undersigned also makes the representations set forth on
Exhibit B attached to the Warrant.

The certificate(s) for such shares shall be issued in the name
of the undersigned or as otherwise indicated below:

Very truly yours,

61

SAMPLE

Exhibit B

TO WARRANT CERTIFICATE

THIS AGREEMENT MUST BE COMPLETED, SIGNED AND RETURNED TO
TRANSNATIONAL AUTOMOTIVE GROUP, INC. ALONG WITH THE SUBSCRIPTION FORM BEFORE THE
SHARES ISSUABLE UPON EXERCISE OF THE WARRANT CERTIFICATE
DATED __________________ ____, 2006 WILL BE ISSUED.

_____________________, ____

Transnational Automotive Group, Inc.
21800 Burbank
Blvd.
Suite 200
Woodland Hills, CA 91367

Attention: President

     The undersigned,
_____________________________________________________("Purchaser"), intends to
acquire up to ______________shares of the Common Stock (the "Shares") of
Transnational Automotive Group, Inc. (the "Company") from the Company pursuant
to the exercise of a certain Warrant to purchase Shares held by Purchaser. The
Shares will be issued to Purchaser in a transaction not involving a public
offering and pursuant to an exemption from registration under the Securities Act
of 1933, as amended (the "1933 Act") and applicable state securities laws. In
connection with such purchase and in order to comply with the exemptions from
registration relied upon by the Company, Purchaser represents, warrants and
agrees as follows:

     1. Purchaser is acquiring the
Shares for its own account, to hold for investment, and Purchaser shall not make
any sale, transfer or other disposition of the Shares in violation of the 1933
Act or the General Rules and Regulations promulgated thereunder by the
Securities and Exchange Commission (the "SEC") or in violation of any applicable
state securities law;

     2. Purchaser has been advised
that the Shares have not been registered under the 1933 Act or state securities
laws on the ground that this transaction is exempt from registration, and that
reliance by the Company on such exemptions is predicated in part on Purchaser's
representations set forth in this letter;

     3. Purchaser has been informed
that under the 1933 Act, the Shares must be held indefinitely unless it is
subsequently registered under the 1933 Act or unless an exemption from such
registration (such as Rule 144) is available with respect to any proposed
transfer or disposition by Purchaser of the Shares;

     4. The Company may refuse to
permit Purchaser to sell, transfer or dispose of the Shares (except as permitted
under Rule 144) unless there is in effect a registration statement under the
1933 Act and any applicable state securities laws covering such transfer, or
unless Purchaser furnishes an opinion of counsel reasonably satisfactory to
counsel for the Company, to the effect that such registration is not
required;

     5. Purchaser has invested in
securities of companies in the development stage and acknowledges that it is
able to fend for itself, can bear the economic risk of its investment, and has
such knowledge and experience in financial or business matters that it is
capable of evaluating the merits and risks of the investment in the Shares.
Purchaser represents and warrants that it is an "accredited investor" within the
meaning of Rule 501 of Regulation D of the 1933 Act.

62

SAMPLE

Purchaser also understands and agrees that there will be placed
on the certificate(s) for the Shares, or any substitutions therefor, legends
stating in substance:

"These securities have not been registered under the Securities
Act of 1933, as amended (the "Act"), or any applicable state securities laws,
and may not be sold, offered for sale or transferred unless such sale or
transfer is in accordance with the registration requirements of such Act and
applicable laws or an exemption from the registration requirements of such Act
and applicable laws is available with respect thereto."

Any legend required pursuant to applicable state securities
laws.

Purchaser has carefully read this letter and has discussed its
requirements and other applicable limitations upon Purchaser's resale of the
Shares with Purchaser's counsel.

Very truly yours,

63

EXHIBIT 1.2
WIRE INSTRUCTIONS AND PAYMENT INSTRUCTIONS

If paying by wire, please wire payment to:

	Account Name: 	Transnational Automotive Group, Inc. 
	Account Number: 	291376663 
	Bank Name: 	Bank of Orange County 
	Routing Number: 	122237955 

If paying check, make checks payable to: Transnational
Automotive Group, Inc.

64

EXHIBIT 1.4(a)(i)
Regulation D – Definition of Accredited
Investor

"Accredited investor" shall mean any person who comes
within any of the following categories, or who the issuer reasonably believes
comes within any of the following categories, at the time of the sale of the
securities to that person: 

          (1)
Any bank as defined in section 3(a)(2) of the Act, or any savings and loan
association or other institution as defined in section 3(a)(5)(A) of the Act
whether acting in its individual or fiduciary capacity; any broker or dealer
registered pursuant to section 15 of the Securities Exchange Act of 1934; any
insurance company as defined in section 2(13) of the Act; any investment company
registered under the Investment Company Act of 1940 or a business development
company as defined in section 2(a)(48) of that Act; any Small Business
Investment Company licensed by the U.S. Small Business Administration under
section 301(c) or (d) of the Small Business Investment Act of 1958; any plan
established and maintained by a state, its political subdivisions, or any agency
or instrumentality of a state or its political subdivisions, for the benefit of
its employees, if such plan has total assets in excess of $5,000,000; any
employee benefit plan within the meaning of the Employee Retirement Income
Security Act of 1974 if the investment decision is made by a plan fiduciary, as
defined in section 3(21) of such Act, which is either a bank, savings and loan
association, insurance company, or registered adviser, or if the employee
benefit plan has total assets in excess of $5,000,000 or, if a self-directed
plan, with investment decisions made solely by persons that are accredited
investors; 

          (2)
Any private business development company as defined in section 202(a)(22) of the
Investment Advisers Act of 1940; 

          (3)
Any organization described in section 501(c)(3) of the Internal Revenue Code,
corporation, Massachusetts or similar business trust, or partnership, not formed
for the specific purpose of acquiring the securities offered, with total assets
in excess of $5,000,000; 

          (4)
Any director, executive officer, or general partner of the issuer of the
securities being offered or sold, or any director, executive officer, or general
partner of a general partner of that issuer; 

          (5)
Any natural person whose individual net worth, or joint net worth with that
person's spouse, at the time of his purchase exceeds $1,000,000; 

          (6)
Any natural person who had an individual income in excess of $200,000 in each of
the two most recent years or joint income with that person's spouse in excess of
$300,000 in each of those years and has a reasonable expectation of reaching the
same income level in the current year; 

          (7)
Any trust, with total assets in excess of $5,000,000, not formed for the
specific purpose of acquiring the securities offered, whose purchase is directed
by a sophisticated person as described in Rule 506(b)(2)(ii); and 

          (8)
Any entity in which all of the equity owners are accredited investors.

(b) Affiliate. An "affiliate" of, or person "affiliated"
with, a specified person shall mean a person that directly, or indirectly
through one or more intermediaries, controls or is controlled by, or is under
common control with, the person specified.

65

EXHIBIT 1.4(a)(ii)

REGULATION S – DEFINITION OF US PERSON

Rule 902(k) of Regulation S states:

	(1) 	
      “US person” means:

	 	 	 	 
		(i) 	
      Any natural person resident in the United States;
      (1)

	 	 	 	 
		(ii) 	
      Any partnership or Company organized or incorporated
      under the laws of the United States;

	 	 	 	 
		(iii) 	
      Any estate of which any executor or administrator is a US
      person;

	 	 	 	 
		(iv) 	
      Any trust of which any trustee is a US person;

	 	 	 	 
		(v) 	
      Any agency or branch of a foreign entity located in the
      United States;

	 	 	 	 
		(vi) 	
      Any non-discretionary account or similar account (other
      than an estate or trust) held by a dealer or other fiduciary for the
      benefit or account of a US person;

	 	 	 	 
		(vii) 	
      Any discretionary account or similar account (other than
      an estate or trust) held by a dealer or other fiduciary organized,
      incorporated, or (if an individual) resident in the United States;
    and

	 	 	 	 
		(viii) 	
      Any partnership or Company if:

	 	 	 	 
			(A) 	
      Organized or incorporated under the laws of any foreign
      jurisdiction; and

	 	 	 	 
			(B) 	
      Formed by a US person principally for the purpose of
      investing in securities not registered under the 1933 Act, unless it is
      organized or incorporated, and owned, by accredited investors (as defined
      in Rule 501(a)) who are not natural persons, estates or trusts.

	 	 	 	 
	(2) 	
      The following are not “US persons”:

	 	 	 	 
		(i) 	
      Any discretionary account or similar account (other than
      an estate or trust) held for the benefit or account of a non-US person by
      a dealer or other professional fiduciary organized, incorporated, or (if
      an individual) resident in the United States;

	 	 	 	 
		(ii) 	
      Any estate of which any professional fiduciary acting as
      executor or administrator is a US person if:

	 	 	 	 
			(A) 	
      An executor or administrator of the estate who is not a
      US person has sold or Subscribed For Units investment discretion with
      respect to the assets of the estate; and

	 	 	 	 
			(B) 	
      The estate is governed by foreign law;

	 	 	 	 
		(iii) 	
      Any trust of which any professional fiduciary acting as
      trustee is a US person, if a trustee who is not a US person has sole or
      shared investment discretion with respect to the trust assets, and no
      beneficiary of the trust (and no settler if the trust is revocable) is a
      US person;

	 	 	 	 
		(iv) 	
      An employee benefit plan established and administrated in
      accordance with the law of a country other than the United States and
      customary practices and documentation of such country;

	 	 	 	 
		(v) 	
      Any agency or branch of a US person located outside the
      United States if:

66

			(A) 	 The agency or branch operates for valid business reasons;
        and

	 	 	 	 
			(B) 	 The agency or branch is engaged in the business of insurance
        or banking and is subject to substantive insurance or banking regulation,
        respectively, in the jurisdiction where located; and

	 	 	 	 
	 	(vi) 	 The International Monetary Fund, the International
        Bank for Reconstruction and Development, the Inter- American Development
        Bank, the Asian Development Bank, the African Development Bank, the United
        Nations, and their agencies, affiliates and pension plans, and any other
        similar international organizations, their agencies, affiliates and pension
        plans.

(1) United States. “United States” means the United
States of America, its territories and possessions, any State of the United
States, and the District of Columbia.

67

EXHIBIT 1.4(c)

Accredited Investor Questionnaire
2007
Form

Dear Investor:

The information contained in this questionnaire is being
furnished to Transnational Automotive Group, Inc. (“TAUG”) in order that TAUG
may determine whether offers of subscriptions for TAUG’s securities may be made
to you, as an investor, in light of the requirements of Regulation D promulgated
under the Securities Act of 1933 (the “Act”) and certain exemptions contained in
state securities laws. You understand that the information is needed for TAUG to
determine whether it has reasonable grounds to believe that you are an
“accredited investor” as that term is defined in Regulation D and that you have
such knowledge and experience in financial, investment and business matters that
you are capable of evaluating the merits and risks of the investment in TAUG’s
securities (the “Shares”). You understand that (a) TAUG will rely on the
information contained herein for purposes of such determination, (b) the Shares
will not be registered under the Act, (c) the Shares will not be registered
under the securities laws of any state, and (d) this questionnaire is not an
offer to purchase the Shares or any other securities in any case where such
offer would not be legally permitted.

Information contained in this questionnaire will be kept
confidential by TAUG and its agents, employees or representatives. You
understand, however, that TAUG may have the need to present it to such parties
as it deems advisable in order to establish the applicability under any federal
or state securities laws of an exemption from registration.

In accordance with the foregoing, the following representations
  and information are hereby made and furnished by the investor: 

Please answer all questions. If the answer is “none”
  or “not applicable,” please so state.

INFORMATION REQUIRED OF EACH
INVESTOR:

	 	1. 	A. 	If Investor is an
      Individual: 	  
	 	  	Name:________________________________
    	Age:
    ___________________________________________
	 	  	Social Security Number:
      ____________________________________	No. of Dependents:
      ________________________________ 
	 	  	Marital Status:
      ___________________________________________	Citizenship:
      ______________________________________
	 	  	B. 	If Investor is an
      entity: 	  
	 	 	 	 	 
	 	  	Name:
      ________________________________ 	  
	 	  	EIN: 
      ________________________________ 	  
	 	 	 	 
	 	2. 	A. 	If Investor is an
      Individual: 	  
	 	 	 	 	 
	 	  	Home Address and telephone
      number: 	 	 
    
	 	  	Business Address and telephone number: 	 
    
	 	  	B. 	If Investor is an
      entity: 	  
	 	 	 	 	 
	 	  	Corporate Address and telephone number: 	 
    
	 	 	 	 
	 	3. 	A. 	If Investor is an
      Individual: 	  
	 	  	State in which the investor: 	  
	 	  	is licensed to drive 	 	 
    
	 	  	is registered to vote 	 	 
    
	 	 	 	 	 
	 	  	B. 	If Investor is an
      entity: 	  
	 	  	State in which the investor: 	  
	 	  	files income tax returns 	 	 
    

68

		
      has principal place of business
      __________________________________________________________________________

	 	 
	4. 	
      Employer and position:
      ________________________________________________________________________________

	 	 
	5. 	
      Business or professional education and the degrees
      received are as follows:

	 	School 	 	Degree 	 	Year
      Received 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 

	6. 	If Investor is an entity: 
	  	  
	  	Provide the total assets of the entity as of a
      recent date: 
	  	Assets:$ _________________. 
	  	Date:___________. 

	7. 	If Investor is an
      Individual: 	  	  
	  	(a) 	Individual income during 2005: 	  	$________________ 
	  	  	(exclusive of spouse’s income) 	  	  
	  	  	  	  	  
	  	(b) 	Individual income during 2006: 	  	$________________ 
	  	  	(exclusive of spouse’s income) 	  	  
	  	  	  	  	  
	  	(c) 	Estimated income during 2007: 	  	$________________ 
	  	  	(exclusive of spouse’s income) 	  	  
	  	  	  	  	  
	  	(d) 	Joint income, with spouse 	2005 	$________________ 
	  	  	  	2006 	$________________ 
	  	  	  	  	  
	  	(e) 	Estimated joint income, with spouse, 	  	$________________ 
	  	  	during 2007 	  	  

	8. 	Estimated net worth (may include joint net 	$________________ 
	  	worth with spouse) 	  

	9. 	
      Is the investor involved in any litigation, which, if an
      adverse decision occurred, would materially affect the investor’s
      financial condition?

		
      Yes ____ No ____

		
      If yes, please provide details: ______________________________________________________

	 	

	10. 	The investor is an experienced and sophisticated investor or
      is advised by a qualified investment 
	  	advisor, all as required under the securities laws and regulations.
      Yes  ____      No ____

	11. 	
      The investor understands the full nature and risk of an
      investment in the Shares and can afford the complete loss of the entire
      investment in the Shares. Yes  ____      No
      ____

	12. 	The investor is able to bear the economic risk of
      an investment in the Shares for an indefinite 
	  	period of time and understands that an investment
      in the Shares may be illiquid. Yes  ____     
      No ____

	13. 	 Does the investor have any other investments or contingent
        liabilities that the investor reasonably anticipates could cause the need
        for sudden cash requirements in excess of cash readily available to the
        investor? 

	 	 	Yes _____	No _____
	 	If yes, please explain: 	 
    

	14. 	
      Please describe the investor’s experience as an investor
      (including amounts invested) in securities, particularly investments in
      non-marketable and tax incentive securities.

	 	 
	 	 

69

	15. 	
      Has the investor participated in other private placements
      of securities? 

	 	Yes ____ No ____ 
	 	If yes, please provide details:
    
	 	 
	16. 	
      In evaluating the merits and risks of this investment,
      does the investor intend to rely upon the advice of the investor’s
      attorney, accountant, or other advisor?

		
      Yes ____ No ____

	 	 
	17. 	 If the investor is an entity, was it formed for the
        specific purpose of acquiring the securities offered?

        Yes ____ No ____ 

        Please indicate the date of incorporation/organization ________.

The investor understands that TAUG will be relying on the
accuracy and completeness of the investor’s responses to the foregoing questions
and the investor represents and warrants to TAUG as follows:

	 	(i) 	
      The answers to the above questions are complete and
      correct and may be relied upon by TAUG whether or not the offering in
      which the investor proposes to participate is exempt from registration
      under the Act and the securities laws of certain states;

	 	(ii) 	
      The investor will notify TAUG immediately of any material
      change in any statement made herein occurring prior to the closing of any
      purchase by the investor of TAUG’s securities; and

	 	(iii) 	
      The investor or its management, in case of an entity, has
      sufficient knowledge and experience in financial, investment and business
      matters to evaluate the merits and risks of the prospective investment;
      the investor is able to bear the economic risk of the investment in the
      shares and currently could afford a complete loss of such
    investment.

[SIGNATURE PAGE TO FOLLOW]

70

IN WITNESS WHEREOF, the undersigned has executed this
Accredited Investor Questionnaire this ____ day of  ___________, 2007, and
declares under oath that it is truthful and correct to the best of the
undersigned’s knowledge.

Signature of the Investor or Authorized Signatory of
Investor: __________________________

Name of Investor: ____________________________________
Name
of Authorized Signatory:__________________________
Title of Authorized
Signatory:___________________________

71

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