World Surveillance Group Inc. - FORM 8-K/A - EX-99.3 - EXHIBIT 99.3 - October 12, 2011

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EX-23.1 - EXHIBIT 23.1 - World Surveillance Group Inc.v236740_ex23-1.htm
EX-99.2 - EXHIBIT 99.2 - World Surveillance Group Inc.v236740_ex99-2.htm
EX-99.1 - EXHIBIT 99.1 - World Surveillance Group Inc.v236740_ex99-1.htm
8-K/A - FORM 8-K/A - World Surveillance Group Inc.v236740_8ka.htm

Exhibit 99.3
Unaudited pro forma condensed
Consolidated financial statements

The following unaudited pro forma condensed consolidated balance sheet as of  March 31, 2011 combines the historical consolidated balance sheet of World Surveillance Group, Inc. and its subsidiaries as of March 31, 2011, and the balance sheet of Global Telesat Corp. as of March 31, 2011, under the acquisition method of accounting, giving effect to the acquisition of Global Telesat Corp. (the “GTC Acquisition”) by World Surveillance Group, Inc. as if it had occurred on March 31, 2011.

The following unaudited pro forma condensed consolidated statements of operations for the year ended December 31, 2010, and the three month period ended March 31, 2011, combine the historical consolidated statements of operations of World Surveillance Group, Inc. and its subsidiaries for the year ended December 31, 2010, and the three month period ended March 31, 2011, and the statements of operations for Global Telesat Corp. for the year ended December 31, 2010 and the three month period ended March 31, 2010, in each case giving effect to the GTC Acquisition as if it had occurred on January 1, 2010.

The unaudited pro forma condensed consolidated financial statements have been prepared giving effect to, among other things, the acquisition of Global Telesat Corp. which will be accounted for as a purchase in accordance with ASC 805-10 “Business Combinations.” Under acquisition accounting, the total acquisition consideration will be allocated to the Global Telesat Corp assets and liabilities acquired based upon management’s preliminary estimates of fair value. The final allocation of the acquisition consideration will be based upon management’s final valuation analysis. Any adjustments based on that final valuation may change the allocations of the acquisition consideration, which could affect the fair value assigned to the assets and liabilities and result in a change to the unaudited pro forma condensed consolidated financial statements. Any such changes may be material.

The unaudited pro forma condensed consolidated financial statements are based on the estimates and assumptions set forth in the notes to such statements, which have been made solely for purposes of developing such pro forma information. The pro forma adjustments are based upon available information and certain assumptions that are factually supportable and that we believe are reasonable under the circumstances, and are subject to revision. The unaudited pro forma condensed consolidated financial statements are presented for informational purposes only, and we cannot assure you that the assumptions used in the preparation of the pro forma condensed consolidated financial statements will ultimately prove to be correct. The unaudited pro forma information is not necessarily indicative of the financial position or results of operations that may have actually occurred had the Acquisition taken place on the dates noted or the future financial position or operating results of the combined company.
 
 
 
 
 
WORLD SURVEILLANCE GROUP INC. AND SUBSIDIARIES

PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

YEAR ENDED DECEMBER 31, 2010
 
   
COMPANY AS
REPORTED
(12/31/10)
    
GLOBAL
TELESAT
CORP.
(12/31/10)
        
PRO FORMA
ADJUSTMENTS
    
PRO FORMA
CONSOLIDATED
  
                             
REVENUE
  
$
250,000
    
$
562,934
    
(1
)
  
$
(250,000
)
  
$
562,934
  
 COST OF SALES
    
- 
      
405,729
            
- 
      
405,729
  
                                       
OPERATING EXPENSES
    
6,495,101
      
228,144
    
(2
)
    
-
      
6,273,245
  
RESEARCH AND DEVELOPMENT
    
2,162,837
      
250,000
            
-
      
2,412,837
  
DEPRECIATION
    
-
      
-
    
(3
)
    
140,000
      
140,000
  
                                       
                                       
LOSS FROM OPERATIONS
    
(8,407,938
)
    
(320,939
)
          
(390,000
)
    
(9,118,877
)
                                       
NONOPERATING EXPENSES
    
(1,388,072
)
    
(148,348
)
  
(4
)
    
62,628
      
(1,473,792
)
INCOME TAX BENEFIT
            
31,571
                    
31,571
  
                                       
NET LOSS
  
$
(9,796,010
)
  
$
(437,716
)
        
$
(327,372
)
  
$
(10,561,098
)
                                       
TOTAL NET LOSS PER SHARE:
                                      
BASIC
  
$
(0.03
)
                        
$
(0.03
)
DILUTED
  
$
(0.03
)
                        
$
(0.03
)
                                       
WEIGHTED AVERAGE SHARES OUTSTANDING:
                                
BASIC
    
293,619,380
                            
323,619,380
  
DILUTED
    
293,619,380
                            
323,619,380
  

 
2
 

WORLD SURVEILLANCE GROUP INC. AND SUBSIDIARIES

NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

YEAR ENDED DECEMBER 31, 2010

(1)
To eliminate intercompany sale of airship
 
Revenues 
   $ (250,000 )
                                  
(2)
To reflect depreciation on step-up to fair value on acquired property and equipment
 
Depreciation
   $ 140,000  
 
(3)
To reflect elimination of interest expense due to pay-off of notes payable on acquisition date
 
Interest expense
   $ (62,628 )

 
3
 

WORLD SURVEILLANCE GROUP INC. AND SUBSIDIARIES

PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

MARCH 31, 2011

   
COMPANY AS
REPORTED
(3/31/11)
    
GLOBAL
TELESAT
CORP. (3/31/11)
          
PRO FORMA
ADJUSTMENTS
    
PRO FORMA
CONSOLIDATED
  
ASSETS
                              
                               
CURRENT ASSETS
  
$
17,323
    
$
511,391
          
$
-
    
$
528,714
  
                                       
PROPERTY AND EQUIPMENT
    
-
      
-
      
(1
)
    
2,671,591
      
2,676,591
  
                                         
 TOTAL ASSETS
  
$
17,323
    
$
511,391
            
$
2,671,591
    
$
3,200,305
  
LIABILITES AND STOCKHOLDER’S EQUITY (DEFICIT)
                                        
                                         
CURRENT LIABILITIES
  
$
16,162,195
    
$
464,088
      
(2
)
  
$
(131,106
)
  
$
16,495,177
  
                                         
NON-CURRENT LIABILITIES
    
-
      
852,155
      
(2
)
    
(852,155
)
    
-
  
                                         
STOCKHOLDER’S DEFICIT
    
(16,144,872
)
    
(804,852
)
    
(1
)
    
2,671,591
          
                     
(2
)
    
983,261
      
(13,294,872
)
                                         
 TOTAL LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)
  
$
17,323
    
$
511,391
            
$
2,671,591
    
$
3,200,305
  

 
4
 

WORLD SURVEILLANCE GROUP INC. AND SUBSIDIARIES

NOTES TO PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

YEAR ENDED MARCH 31, 2011

(1)
To allocate the $2,850,000 purchase price of Global Telesat Corp. over the fair market value of the assets and liabilities acquired.
 
Property and equipment  
   $ 2,671,591  
         
Stockholder’s deficit
   $ 2,671,591  

(2)
To reflect pay-off of notes payable prior to acquisition date

Current liabilities
   $ 131,106  
         
Non-current liabilities  
   $ 852,155  
         
Stockholder’s deficit
   $ 983,261  

 
5
 

WORLD SURVEILLANCE GROUP INC. AND SUBSIDIARIES

PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2011

   
COMPANY AS
REPORTED
(3/31/11)
    
GLOBAL
TELESAT
CORP. (3/31/11)
        
PRO FORMA
ADJUSTMENTS
    
PRO FORMA
CONSOLIDATED
  
                             
REVENUE
  
$
-
    
$
129,100
  
11
          
$
129,100
  
                                   
OPERATING EXPENSES
    
684,180
      
177,611
                
861,791
  
DEPRECIATION
                
(1
)
    
35,000
      
35,000
  
                                     
                                     
                                     
LOSS FROM OPERATIONS
    
(684,180
)
    
(48,511
)
        
(35,000
)
    
(767,691
)
                                     
NONOPERATING INC (EXP)
    
3,087,397
      
(21,377
)
(2
)
    
10,087
      
3,076,107
  
PROVISION FOR INCOME TAX
    
-
      
(500
)
                
(500
)
                                     
NET LOSS
  
$
2,403,217
    
$
(70,388
)
      
$
(24,913
)
  
$
2,307,916
  
                                     
TOTAL NET LOSS PER SHARE:
                                    
BASIC
  
$
0.01
                        
$
0.01
  
DILUTED
  
$
0.01
                        
$
0.01
  
                                     
WEIGHTED AVERAGE SHARES OUTSTANDING:
                              
BASIC
    
327,082,203
                          
327,415,536
  
DILUTED
    
330,340,736
                          
330,674,069
  

 
6
 

WORLD SURVEILLANCE GROUP INC. AND SUBSIDIARIES

NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2011

(1)
To reflect depreciation on step-up to fair value on acquired property and equipment
 
Depreciation
   $ 35,000  
 
(2)
To reflect elimination of interest expense due to pay-off of notes payable on acquisition date
 
Interest expense
   $ (10,087 )

 
7
 

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