Exhibit 99.2
Unaudited Pro Forma Condensed
Consolidated Financial Statements
The following unaudited pro forma condensed consolidated balance sheet as of December 31, 2012 combines the historical consolidated balance sheet of World Surveillance Group Inc. and its subsidiaries as of December 31, 2012, and the balance sheet of Lighter Than Air Systems Corp. as of December 31, 2012, under the acquisition method of accounting, giving effect to the acquisition of Lighter Than Air Systems Corp. (the “LTAS” Acquisition”) by World Surveillance Group Inc. as if it had occurred on December 31, 2012.
The following unaudited pro forma condensed consolidated statements of operations for the year ended December 31, 2012 and the three-month period ended March 31, 2013, combine the historical consolidated statements of operations of World Surveillance Group Inc. and its subsidiaries for the year ended December 31, 2012 and the three months ended March 31, 2013, and the statements of operations for Lighter Than Air Systems Corp. for the year ended December 31, 2012 and the three month period ended March 31, 2013, in each case giving effect to the LTAS Acquisition as if it had occurred on January 1, 2012.
The unaudited pro forma condensed consolidated financial statements have been prepared giving effect to, among other things, the acquisition of Lighter Than Air Systems 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 Lighter Than Air Systems 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 LTAS 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
FOR THE YEAR ENDED DECEMBER 31, 2012
| | | Company as Reported (12/31/12) | | | Lighter Than Air Systems
(12/31/12) | | | | Pro Forma Adjustments | | | Pro Forma Consolidated | |
| | | | | | | | | | | | | | |
| Contract Revenues | | $ | 200,000 | | | $ | - | | | | $ | - | | | $ | 200,000 | |
| Sales | | | 891,844 | | | | 390,098 | | | | | - | | | | 1,281,942 | |
| Cost of Sales | | | 819,643 | | | | 266,012 | | | | | - | | | | 1,085,655 | |
| Gross Profit | | | 72,201 | | | | 124,086 | | | | | - | | | | 196,287 | |
| Net Revenues | | | 272,201 | | | | 124,086 | | | | | - | | | | 396,287 | |
| | | | | | | | | | | | | | | | | | |
| Operating Expenses | | | 4,813,788 | | | | 130,514 | | (1) | | | 240,500 | | | | 5,184,802 | |
| Acquisition-related Expenses | | | - | | | | - | | (2) | | | 20,000 | | | | 20,000 | |
| | | | | | | | | | | | | | | | | | |
| Loss from Operations | | | (4,541,587 | ) | | | (6,428 | ) | | | | (260,500 | ) | | | (4,808,515 | ) |
| | | | | | | | | | | | | | | | | | |
| Other Income | | | 1,178,734 | | | | 113 | | | | | - | | | | 1,178,847 | |
| | | | | | | | | | | | | | | | | | |
| Net Loss | | $ | (3,362,853 | ) | | $ | (6,315 | ) | | | $ | (260,500 | ) | | $ | (3,629,668 | ) |
| | | | | | | | | | | | | | | | | | |
| Per Common Share: | | | | | | | | | | | | | | | | | |
| Basic and Diluted | | $ | (0.01 | ) | | | | | | | | | | | $ | (0.01 | ) |
| | | | | | | | | | | | | | | | | | |
| Weighted Average Shares Outstanding: | | | | | | | | | | | | | |
| Basic and Diluted | | | 420,841,556 | | | | | | | | | | | | | 445,773,250 | |
WORLD SURVEILLANCE GROUP INC. AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2012
| (1) | To record LTAS annual compensation |
| Operating Expenses | | $ | 240,500 | |
| (2) | To record acquisition-related expenses |
| Legal and professional fees | | $ | 20,000 | |
WORLD SURVEILLANCE GROUP INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
DECEMBER 31, 2012
| | | Company as Reported (12/31/12) | | | Lighter Than Air Systems
(12/31/12) | | | | Pro Forma Adjustments | | | Pro Forma Consolidated | |
| ASSETS | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| Current Assets | | $ | 202,674 | | | $ | 390,050 | | (2) | | $ | (50,000 | ) | | $ | 542,724 | |
| Property and Equipment | | | 2,452,966 | | | | 3,913 | | | | | | | | | 2,456,879 | |
| Goodwill | | | - | | | | - | | (1) | | | 760,825 | | | | 760,825 | |
| Other Long-term Assets | | | 43,074 | | | | - | | | | | | | | | 43,074 | |
| | | $ | 2,698,714 | | | $ | 393,963 | | | | $ | 710,825 | | | $ | 3,803,502 | |
| | | | | | | | | | | | | | | | | | |
| Current Liabilities | | $ | 15,572,403 | | | $ | 232,288 | | (1) | | | $ 250,000 | | | $ | 16,004,691 | |
| | | | | | | | | | (2) | | | (50,000 | ) | | | | |
| Long-term Liabilities | | | 287,000 | | | | - | | | | | | | | | 287,000 | |
| Stockholders’ Equity (Deficit) | | | (13,160,689 | ) | | | 161,675 | | (1) | | | 510,825 | | | | (12,488,189 | ) |
| | | $ | 2,698,714 | | | $ | 393,963 | | | | $ | 710,825 | | | $ | 3,803,502 | |
WORLD SURVEILLANCE GROUP INC. AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
DECEMBER 31, 2012
| (1) | To allocate the $922,500 purchase price of Lighter Than Air Systems Corp. over the fair value of the assets and liabilities acquired, net of consolidation elimination entry. |
| Goodwill | | $ | 760,825 | |
| Current liabilities | | $ | 250,000 | |
| Stockholders’ equity (deficit) | | $ | 510,825 | |
| (2) | To eliminate intercompany prepaid advance deposit and unearned revenues |
| Current liabilities | | $ | 50,000 | |
| Current assets | | $ | 50,000 | |
WORLD SURVEILLANCE GROUP INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2013
| | | Company as Reported (3/31/13) | | | Lighter Than Air Systems
(3/31/13) | | | | Pro Forma Adjustments | | | Pro Forma Consolidated | |
| | | | | | | | | | | | | | |
| Sales | | $ | 526,177 | | | $ | 296,300 | | (1) | | $ | (296,300 | ) | | $ | 526,177 | |
| Cost of Sales | | | 364,309 | | | | 198,771 | | (1) | | | (198,771 | ) | | | 364,309 | |
| Gross Profit | | | 161,868 | | | | 97,539 | | | | | (97,539 | ) | | | 161,868 | |
| | | | | | | | | | | | | | | | | | |
| Operating Expenses | | | 507,586 | | | | 30,425 | | (2) | | | 42,775 | | | | 580,786 | |
| | | | | | | | | | | | | | | | | | |
| Income (Loss) from Operations | | | (345,718 | ) | | | 67,114 | | | | | (140,314 | ) | | | (418,918 | ) |
| | | | | | | | | | | | | | | | | | |
| Other Income (Expense) | | | (171,363 | ) | | | 10 | | | | | - | | | | (171,353 | ) |
| | | | | | | | | | | | | | | | | | |
| Net Income (Loss) | | $ | (517,081 | ) | | $ | 67,124 | | | | $ | (140,314 | ) | | $ | (590,271 | ) |
| | | | | | | | | | | | | | | | | | |
| Per Common Share: | | | | | | | | | | | | | | | | | |
| Basic and Diluted | | $ | (0.00 | ) | | | | | | | | | | | $ | (0.00 | ) |
| | | | | | | | | | | | | | | | | | |
| Basic and Diluted | | | 489,871,669 | | | | | | | | | | | | | 514,871,669 | |
WORLD SURVEILLANCE GROUP INC. AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2013
| (1) | To eliminate intercompany sales and amounts previously reported |
| Sales | | $ | (296,300 | ) |
| Cost of Sales | | | (198,771 | ) |
| (2) | To record LTAS quarterly compensation, net of amounts previously reported |
| Operating Expenses | | $ | 42,775 | |
