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 | |
| | | | | | | | | | | | | | | | | | | | | |
| OPERATING EXPENSES | | | 8,657,938 | | | | 633,873 | | | | (2 | ) | | | (50,000 | ) | | | 9,241,811 | |
| DEPRECIATION | | | - | | | | - | | | | (3 | ) | | | 140,000 | | | | 140,000 | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| LOSS FROM OPERATIONS | | | (8,407,938 | ) | | | (70,939 | ) | | | | | | | (340,000 | ) | | | (8,818,877 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| 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 | ) | | $ | (187,716 | ) | | | | | | $ | (277,372 | ) | | $ | (10,261,098 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL NET LOSS PER SHARE: | | | | | | | | | | | | | | | | | | | | |
| BASIC | | $ | (0.03 | ) | | | | | | | | | | | | | | $ | (0.03 | ) |
| DILUTED | | $ | (0.03 | ) | | | | | | | | | | | | | | $ | (0.03 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| WEIGHTED AVERAGE SHARES OUTSTANDING: | | | | | | | | | | | | | | | | | |
| BASIC | | | 293,619,380 | | | | | | | | | | | | | | | | 293,619,380 | |
| DILUTED | | | 293,619,380 | | | | | | | | | | | | | | | | 293,619,380 | |
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 |
| (2) | To reflect reduction of legal and professional fees that management anticipates will be performed in-house |
| | Legal and professional fees | $(50,000) |
| (3) | To reflect depreciation on step-up to fair value on acquired property and equipment |
| (4) | To reflect elimination of interest expense due to pay-off of notes payable on acquisition date |
| | Interest expense | $(62,628) |
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 | | | $ | 636,391 | | | | | | $ | - | | | $ | 653,714 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| PROPERTY AND EQUIPMENT | | | - | | | | 125,000 | | | | (1 | ) | | | 2,421,591 | | | | 2,546,591 | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | $ | 17,323 | | | $ | 761,391 | | | | | | | $ | 2,421,591 | | | $ | 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 | ) | | | (554,852 | ) | | | (1 | ) | | | 2,421,591 | | | | | |
| | | | | | | | | | | | (2 | ) | | | 983,261 | | | | (13,294,872 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| | | $ | 17,323 | | | $ | 761,391 | | | | | | | $ | 2,421,591 | | | $ | 3,200,305 | |
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 | $2,421,591 |
| | | |
| | Stockholder’s deficit | $2,421,591 |
| (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 |
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 | | | | | | | | | | | | | | | | 327,082,203 | |
| DILUTED | | | 330,340,736 | | | | | | | | | | | | | | | | 330,340,736 | |
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 |
| (2) | To reflect elimination of interest expense due to pay-off of notes payable on acquisition date |
| | Interest expense | $(10,087) |
