CLNE Clean Energy Fuels Corp

On March 31, 2017, Clean Energy Renewable Fuels, LLC (“Renewables”), an indirect subsidiary of Clean Energy Fuels Corp. (the “Registrant”), completed its sale to BP Products North America, Inc. (“BP”) of certain assets related to the Registrant’s renewable natural gas (“RNG”) business, including two RNG production facilities, a 50% ownership interest in joint ventures formed to develop two new RNG production facilities, and third-party RNG supply contracts (collectively, the “Assets”) (such transaction, the “Asset Sale”).

Upon completion of the Asset Sale, BP paid Renewables $30.0 million in cash and delivered to Renewables a promissory note for $123.5 million that matures on April 3, 2017, and Renewables retained $7.1 million of cash relating to the Assets. BP has also agreed to pay up to an additional $25.0 million in cash over a five-year period, which amount could be paid in whole, in part or not at all, depending on the satisfaction of certain performance conditions related to the Assets. The Registrant expects the net proceeds from the Asset Sale, after deducting costs and other payments associated with the transaction paid or payable by the Registrant or Renewables, to be approximately $150.1 million, and the Registrant intends to use these net proceeds for general working capital, including the payment of its outstanding indebtedness.

Following completion of the Asset Sale, Renewables and the Registrant will continue to obtain RNG from BP under a long-term supply contract and from other RNG suppliers, and will resell such RNG through its natural gas fueling infrastructure as Redeem™, the Registrant’s RNG vehicle fuel. The Registrant will collect royalties from BP on gas purchased from BP and sold as Redeem at its stations, which royalty is in addition to any payment obligation of BP under the APA (as defined below).

The Asset Sale was completed pursuant to the terms of an asset purchase agreement (the “APA”) between Renewables and BP, which was entered into on February 27, 2017 and filed as Exhibit 2.11 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 1, 2017. The foregoing description of the terms of the APA does not purport to be complete and is qualified in its entirety by the full text of the APA, which is incorporated herein by reference. The APA contains customary representations and warranties by the parties thereto, which were made solely for the purpose of the APA and as of specific dates as set forth therein, may have been qualified by certain private disclosures made between the parties and are subject to a contractual standard of materiality different from that generally applicable to stockholders, among other limitations. As a result, these representations and warranties should not be relied upon as a disclosure of factual information.

In accordance with applicable rules of the Securities and Exchange Commission, the Registrant has prepared pro forma financial information about the continuing impact of the Asset Sale by showing how it might have affected the Registrant’s historical consolidated financial statements if the transaction had been consummated at the end of the Registrant’s last completed fiscal year for purposes of the pro forma consolidated balance sheet and at the beginning of the Registrant’s last completed fiscal year for purposes of the pro forma consolidated statement of operations. Such pro forma financial information is attached as Exhibit 99.1 to this Current Report on Form 8-K.