Exhibit 99.3

Introduction to Unaudited Pro Forma Financial Statements

The following unaudited pro forma combined consolidated balance sheet as of September 30, 2008 and unaudited pro forma combined consolidated statements of income for the year ended December 31, 2007 and for the nine months ended September 30, 2008 are based on the corresponding historical financial statements of Otelco Inc. (“Otelco”) and Pine Tree Holdings, Inc., Granby Holdings, Inc. and War Holdings, Inc. (“CR Companies”), after giving effect to the acquisition of CR Companies and the financing transaction related thereto, which occurred on October 31, 2008.

The unaudited pro forma combined consolidated balance sheet gives effect to the acquisition of CR Companies and related financing transaction as if they had occurred on September 30, 2008. The unaudited pro forma combined consolidated statements of income give effect to the acquisition of CR Companies and related financing transaction as if they had occurred on January 1, 2007.

The unaudited pro forma financial statements are based on available information and certain estimates and assumptions set forth in the accompanying notes to such financial statements. These unaudited pro forma financial statements do not give effect to any integration costs or any synergies, cost savings or other operating efficiencies that could result from the acquisition. These unaudited pro forma financial statements are provided for informational purposes only, and do not purport to represent our financial condition or our results of operations that would have been achieved if the acquisition and related financing transaction had occurred on the dates noted above, or to project the financial condition or results of operations for any future date or period.

The acquisition has been accounted for using purchase accounting in accordance with Financial Accounting Standards Board ("FASB") Statement No. 141, Business Combination and CR Companies’ assets acquired and liabilities assumed will be recorded at fair value. The resultant goodwill and other intangible assets will be accounted for under FASB Statement No. 142, Goodwill and Other Intangible Assets. We have reflected the preliminary assessment of the purchase price allocation. It includes assignment of value to intangibles associated with a non-compete agreement, the acquisition of customers, and the continuing value of a contract with a multi-service operator. The final assessment of the fair value of the assets and liabilities could change. Any such change would be reflected in regular quarterly financial reporting.

These unaudited pro forma financial statements should be read in conjunction with the historical financial statements of Otelco included in its annual report on Form 10-K for the year ended December 31, 2007; its quarterly reports on Form 10-Q for the fiscal quarters ended March 31, 2008, June 30, 2008 and September 30, 2008; and the historical financial statements of CR Companies included elsewhere in this current report on Form 8-K/A.

OTELCO INC.

PRO FORMA CONSOLIDATED BALANCE SHEET

AS OF SEPTEMBER 30, 2008

(unaudited)

	Historical
	Otelco Inc.		CR Companies		Pro Forma Adjustments				Pro Forma Consolidated
Assets

Current assets
Cash	$	13,160,898	$	146,000	$	929,032		2		14,235,930
Accounts receivable - customers		2,899,519		4,123,000		-				7,022,519
Unbilled revenue		2,649,775		-		-				2,649,775
Other receivables		1,934,355		-		-				1,934,355
Materials & supplies		2,259,937		219,000		-				2,478,937
Prepaid expenses		548,079		377,000		75,000		2		1,000,079
Income tax receivables		214,440		-		-				214,440
Deferred income taxes		1,486,439		-		-				1,486,439
Total Current Assets		25,153,442		4,865,000		1,004,032				31,022,474

Property and equipment, net		52,786,133		22,284,000		1,673,155		1		76,743,288

Other Assets
Goodwill		134,570,435		42,718,000		(29,919,155	)	1		186,796,268
						13,129,988		1
						(1,473,000	)	4
						(8,471,000	)	6
						36,241,000		2
Covenant not to compete		-		2,000		1,198,000		1		1,200,000
Intangible assets, net		8,462,790		9,552,000		27,048,000		1		45,062,790
Investments		1,188,051		841,000		-				2,029,051
Deferred financing costs		4,760,463		1,354,000		(1,354,000	)	3		8,565,239
						5,311,000		2
						(1,506,224	)	7
Interest rate cap		479,152		-		-				479,152
Deferred Charges		650,228		-		-				650,228
Total Assets	$	228,050,694	$	81,616,000	$	42,881,796			$	352,548,490

See accompanying notes to the unaudited pro forma consolidated financial statements.

OTELCO INC.

PRO FORMA CONSOLIDATED BALANCE SHEET

AS OF SEPTEMBER 30, 2008

(unaudited)

	Historical
	Otelco Inc.			CR Companies			Pro Forma Adjustments				Pro Forma Consolidated
Liabilities and Stockholders' Equity

Current liabilities
Current portion of long-term debt	$	-		$	2,200,000		$	(2,200,000	)	2	$	-
Borrowings under revolving credit		-			1,500,000			(1,500,000	)	2		-
Accounts payable		1,867,564			1,142,000			-				3,009,564
Accrued liabilities		5,210,931			1,793,000			-				7,003,931
Advanced billing & payments		1,944,115			-			-				1,944,115
Customer deposits		194,531			-			-				194,531
Total Current Liabilities		9,217,141			6,635,000			(3,700,000	)			12,152,141

Deferred income tax		25,223,656			2,417,000			13,129,988		1		40,770,644
Advance billing and payments		750,081			-			-				750,081
Other liabilities		179,911			23,000			-				202,911
Long-term notes payable		169,965,588			62,597,000			(62,597,000	)	2		278,818,620
								108,853,032		2
Total liabilities		205,336,377			71,672,000			55,686,020				332,694,397

Derivative liability		516,112			-							516,112
Interest rate swap		-			1,473,000			(1,473,000	)	4		-
Class B Common Conv Sen Sub Notes		4,085,033			-			-				4,085,033

Stockholder's Equity
Class A stock $.01 par value - C R Companies		-			60			(60	)	6		-
Class A stock $.01 par value - Otelco		126,767			-			-				126,767
Class B stock $.01 par value - Otelco		5,447			-			-				5,447
Additional paid in capital		21,512,233			8,578,940			(8,578,940	)	6		21,512,233
Retained earnings (deficit)		(2,481,378	)		(108,000	)		(1,354,000	)	3		(5,092,122	)
								249,480		5
								108,000		6
								(1,506,224	)	7
Accumulated other comprehensive income		(1,049,897	)		-			(249,480	)	5		(1,299,377	)
Total Stockholders' Equity		18,113,172			8,471,000			(11,331,224	)			15,252,948

Total Liabilities and
Stockholders' Equity	$	228,050,694		$	81,616,000		$	42,881,796			$	352,548,490

See accompanying notes to the unaudited pro forma consolidated financial statements.

OTELCO INC.

NOTES TO THE UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET

AS OF SEPTEMBER 30, 2008

1.	Otelco is in the process of performing its allocation of the purchase, and the final allocation is subject to completion of a review by an independent valuation specialist. Our preliminary allocation consists of:

Incremental value of intangible assets of $27,048,000 related to customer relationships

Incremental value of intangible assets of $1,198,000 related to non-competition agreement.

Purchase accounting adjustments of $1,673,155 to adjust net property and equipment acquired to fair value.

Offsetting adjustment to goodwill of $29,919,155 for items A. and B. as indicated above.

Recognition of deferred taxes of $13,129,988.

2.	To record the activity for the acquisition. This activity consists of the following:

Loan proceeds of $108,853,032.

Retirement of CR Companies’ old loan consisting of long-term notes payable of $62,597,000, current portion of debt $2,200,000, and borrowings under revolving credit of $1,500,000.

GE annual administrative fee of $75,000.

Deferred loan cost of $5,311,000.

Transaction payments totaling $36,241,000 including payments to selling shareholders.

Record the net-effect of the acquisition on cash totaling $929,032.

3.	Write-off of CR Companies’ old loan cost of $1,354.000.

4.	To record the elimination of CR Companies’ interest rate swap of $1,473,000.

5.	Since we have additional debt related to the acquisition, our interest rate cap is a fully effective hedge. To adjust accumulated other comprehensive income related to the interest rate cap as if it was fully effective on September 30, 2008.

	Prior to			Pro forma			Pro forma
	9/30/08			9/30/08			Adjustment
Effective hedge %		80.2	%		100.0	%

Amount	$	1,049,897		$	1,299,377		$	249,480

6.	Elimination of CR Companies’ stockholder's equity to goodwill.

7.	Amortize remaining loan cost balance of $1,506,224 associated with existing Otelco senior debt in accordance with guidance in EITF Issue No. 96-19, Debtor's Accounting for a Modification or Exchange of Debt instruments.

8.	Purchase Price Allocation

The following table reflects the allocation of the purchase price to the assets acquired and the liabilities assumed:

Cash Paid	$	41,627,000
Notes payable assumed		66,297,000
	$	107,924,000

Allocation of purchase price

Cash		146,000
Other current assets		4,794,000
Property and equipment		23,957,155
Goodwill		52,225,833
Intangible assets		37,800,000
Investments		841,000
Loan cost		6,665,000
Current liabilities		(2,935,000	)
Deferred Income tax liability		(15,546,988	)
Other liabilities		(23,000	)

Total		107,924,000

The transaction closed on October 31, 2008. Final purchase price allocation will be based on October 31, 2008 financial information.

OTELCO INC.

PRO FORMA CONSOLIDATED STATEMENTS OF INCOME (LOSS)

FOR THE YEAR ENDED DECEMBER 31, 2007

(unaudited)

	Historical
				CR			Pro Forma				Pro Forma
	Otelco Inc.			Companies			Adjustments				Consolidated

Telecommunications revenue		69,749,434			31,359,000			-				101,108,434

Operating expenses
Cost of services and products		25,718,634			12,254,000							37,972,634
Selling, general and administrative expenses		10,418,760			5,412,000			75,000		8		15,905,760
Depreciation and amortization		14,346,620			5,581,000			487,691		1		28,894,279
								7,283,968		3
								1,195,000		4
Total operating expenses		50,484,014			23,247,000			9,041,659				82,772,673

Income from operations		19,265,420			8,112,000			(9,041,659	)			18,335,761

Other income (expense)
Interest expense		(21,378,434	)		(8,947,000	)		287,000		2		(29,993,612	)
								(1,062,200	)	2
								(7,725,542	)	5
								8,947,000		5
								(1,107,878	)	6
								(194,717	)	7
								1,188,159		9
Change in fair value of derivative		970,281			-			323,591		7		1,293,872
Other income		947,737			89,000			(194,717	)	7		842,020
Total other expense		(19,460,416	)		(8,858,000	)		460,696				(27,857,720	)

Income (loss) before income tax expense		(194,996	)		(746,000	)		(8,580,963	)			(9,521,959	)

Income tax (expense) benefit		374,375			169,000			3,346,576		10		3,889,951

Net income (loss) available to common stockholders	$	179,379		$	(577,000	)	$	(5,234,387	)		$	(5,632,008	)

Weighted average shares outstanding:
Basic		11,156,185										11,156,185
Diluted		11,700,856										11,700,856

Net income (loss) per share
Basic	$	0.02									$	(0.50	)
Diluted	$	(0.10	)								$	(0.59	)

See accompanying notes to the unaudited pro forma consolidated financial statements.

OTELCO INC.

NOTES TO THE UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME (LOSS)

FOR THE YEAR ENDED DECEMBER 31, 2007

1.	To record additional depreciation expense of $487,691 related to acquired property and equipment adjusted to fair value at the acquisition date.

Reflects the elimination of CR Companies’ historical deferred loan cost amortization expense of $287,000 and to reflect the pro forma loan cost amortization expense of $1,062,200 associated with the incremental $108.9 million Otelco loan included in the amended and restated credity facility to fund the transaction.

3.	Increase in amortization expense of $7,283,968 related to customer relationships that have been assigned lives ranging from 6 to 9 years, using the declining balance method.

4.	Increase in amortization expense of $1,195,000 is related to non-competition agreement that has been assigned a life of 1 year.

5.	Adjustment to eliminate CR Companies’ historical interest expense of $8,947,000 and to reflect the pro forma interest expense of $7,725,542 associated with the incremental $108.9 million Otelco loan included in the amended and restated credit facility to fund the transaction.

6.	To record increase in interest expense of $1,107,878 related to existing Otelco loan due to the increase in margin cost from 3.25% for 186 days and 2% for 179 days to 4% for the period on existing senior debt associated with the amended and restated credit agreement to fund the transaction.

7.	Since we have additional debt related to the acquisition, our interest rate cap is a fully effective hedge. Adjustment is recorded to eliminate the interest income of $194,717 and change in fair value of $323,591 related to the ineffective portion of the interest rate cap.

8.	To record amortization of $75,000 related to GE Administrative fee (annual fee prorated).

9.	Remove loan cost amortization associated with existing senior Otelco debt in accordance with guidance in EITF Issue No. 96-19, Debtor's Accounting for a Modification or Exchange of Debt instruments.

10.	Adjustments to reflect the income tax effect of the pro forma adjustments at an effective tax rate of 39%.

10.	Income (loss) per Common Share and Potential Common Share

Basic income (loss) per common share is computed by dividing net income (loss) by the weighted-average number of shares outstanding for the period. Diluted income (loss) per common share reflects the potential dilution that could occur if the Class B common stock were exercised into IDSs. Class B common stock is convertible on a one-for-one basis into IDSs, each of which includes a Class A common share.

A reconciliation of the common shares for the Company's basic and diluted income (loss) per common share calculation is provided for historical and pro forma earnings as follows

	For the Year Ended December 31, 2007

	Historical			Pro Forma

Weighted average common shares		11,156,185			11,156,185

Weighted average common shares and potential common shares		11,700,856			11,700,856

Net income (loss) available to common shareholders	$	179,379		$	(5,632,008	)

Net income (loss) per basic share	$	0.02		$	(0.50	)

Net income (loss) available to common shareholders	$	179,379		$	(5,632,008	)
Less: Change in fair value of derivative		1,293,872			1,293,872

Net Income (loss) available for diluted shares	$	(1,114,493	)	$	(6,925,880	)

Net income (loss) per diluted share	$	(0.10	)	$	(0.59	)

OTELCO INC.

PRO FORMA CONSOLIDATED STATEMENTS OF INCOME (LOSS)

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2008

(unaudited)

	Historical
				CR			Pro Forma				Pro Forma
	Otelco Inc.			Companies			Adjustments				Consolidated

Telecommunications revenue		53,765,726			24,560,000			-				78,325,726

Operating expenses
Cost of services and products		20,052,583			10,221,000							30,273,583
Selling, general and administrative expenses		7,998,818			5,384,000			(260,000	)	7		13,179,068
								56,250		9
Depreciation and amortization		9,903,702			3,601,000			354,076		1		20,845,504
								6,089,726		3
								897,000		4
Total operating expenses		37,955,103			19,206,000			7,137,052				64,298,155

Income from operations (loss)		15,810,623			5,354,000			(7,137,052	)			14,027,571

Other income (expense)
Interest expense		(14,229,727	)		(5,640,000	)		217,000		2		(20,623,884	)
								(796,650	)	2
								5,640,000		5
								(5,662,835	)	5
								(984,071	)	6
								(68,823	)	8
								901,222		10
Change in fair value of derivative		99,787			-			198,106		8		297,893
Other income		618,785			67,000			(68,823	)	8		616,962
Total other expense		(13,511,155	)		(5,573,000	)		(624,874	)			(19,709,029	)

Income (loss) before income tax expense		2,299,468			(219,000	)		(7,761,926	)			(5,681,458	)

Income tax (expense) benefit		(696,049	)		88,000			3,027,151		11		2,419,102


Net income (loss) available to common stockholders	$	1,603,419		$	(131,000	)	$	(4,734,775	)		$	(3,262,356	)

Weighted average shares outstanding:
Basic		12,676,733										12,676,733
Diluted		13,221,404										13,221,404

Net income (loss) per share
Basic	$	0.13									$	(0.26	)
Diluted	$	0.10									$	(0.27	)

See accompanying notes to the unaudited pro forma consolidated financial statements.

OTELCO INC.

NOTES TO THE UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF

INCOME (LOSS)

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2008

1.	To record additional depreciation expense of $354,076 related to acquired property and equipment adjusted to fair value at the acquisition date.

Reflects the elimination of CR Companies historical deferred loan cost amortization expense of $217,000 and to reflect the pro forma loan cost amortization expense of $796,650 associated with the incremental $108.9 million Otelco loan included in the amended and restated credit facility to fund the transaction.

3.	Adjusted for incremental increase in amortization expense of $6,089,726 related to customer relationships that have been assigned lives ranging from 6 to 9 years, using the declining balance method.

4.	Increase in amortization expense of $897,000 related to non-competition agreement that has been assigned a life of 1 year.

5.	Adjustment to eliminate CR Companies historical interest expense of $5,640,000 and to reflect the pro forma interest expense of $5,662,835 associated with the incremental $108.9 million Otelco loan included in the amended and restated credit facility to fund the transaction.

6.	To record increase in interest expense of $984,071 related to existing Otelco loan due to the increase in margin cost from 2% to 4% for the period on existing senior debt associated with the amended and restated credit agreement.

7.	Pro forma adjustment to exclude expenses incurred related to the acquisition. These expenses included the following:

	Legal Expense		Salaries (Bonuses)		Total
Q1	$	5,000	$	65,000	$	70,000
Q2		60,000		65,000		125,000
Q3		-		65,000		65,000
Total	$	65,000	$	195,000	$	260,000

8.	Since we have additional debt related to the acquisition, our interest rate cap is a fully effective hedge. Adjustment is recorded to eliminate the interest income of $68,823 and change in fair value of $198,106 related to the ineffective portion of the interest rate cap.

9.	To record amortization of $56,250 related to GE Administrative fee (annual fee prorated).

10.	Remove loan cost amortization associated with existing senior Otelco debt in accordance with guidance in EITF Issue No. 96-19, Debtor's Accounting for a Modification or Exchange of Debt instruments.

11.	Adjustments to reflect the income tax effect of the pro forma adjustments at an effective tax rate of 39%.

11.	Income (loss) per Common Share and Potential Common Share

A reconciliation of the common shares for the Company's basic and diluted income (loss) per common share calculation is provided for historical and pro forma earnings as follows:

	For the Nine Months Ended September 30, 2008

	Historical			Pro Forma

Weighted average common shares		12,676,733			12,676,733

Weighted average common shares and potential common shares		13,221,404			13,221,404

Net income (loss) available to common shareholders	$	1,603,419		$	(3,263,356	)

Net income (loss) per basic share	$	0.13		$	(0.26	)

Net income (loss) available to common shareholders	$	1,603,419		$	(3,263,356	)
Less: Change in fair value of B share derivative		(297,893	)		(297,893	)

Net Income (loss) available for diluted shares	$	1,305,526		$	(3,560,249	)

Net income (loss) per diluted share	$	0.10		$	(0.27	)