8-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

(Amendment No. 1)

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): March 28, 2013

WORLD SURVEILLANCE GROUP INC.

(Exact name of registrant as specified in its charter)

Delaware	001-32509	88-0292161
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

State Road 405, Building M6-306A, Room 1400, Kennedy Space Center, FL 32815

(Address of principal executive offices and Zip Code)

Registrant's telephone number, including area code (321) 452-3545

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

World Surveillance Group Inc. (the “Company”) previously reported the completed acquisition (the “Acquisition”) of Lighter Than Air Systems Corp. (“LTAS”) in accordance with the terms of a Stock Purchase Agreement by and among the Company, LTAS, Felicia Hess and Kevin Hess pursuant to which the Company acquired 100% of the outstanding shares of capital stock of LTAS on its Current Report on Form 8-K filed on April 1, 2013 (the “Initial 8-K”). This Amendment No. 1 to Current Report on Form 8-K/A (this “Form 8-K/A”) amends the Initial 8-K to include the financial statements and pro forma financial information required to be filed in connection with the Acquisition pursuant to Item 9.01 (a) and (b) of Form 8-K. The information previously reported under Item 2.01 in the Initial 8-K is hereby incorporated by reference into this Form 8-K/A.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

(a) Financial Statements of Businesses Acquired.

The following historical audited financial statements of Lighter Than Air Systems Corp. are filed as Exhibit 99.1 hereto:

· Independent Auditors’ Report

· Balance Sheet as of December 31, 2012

· Statements of Operations for the year ended December 31, 2012

· Statement of Changes in Stockholders’ Equity (Deficit) for the year ended December 31, 2012

· Statement of Cash Flows for the year ended December 31, 2012

· Notes to Financial Statements

(b) Pro Forma Financial Information.

The following unaudited pro forma financial statements, including the notes thereto, of World Surveillance Group Inc. are filed as Exhibit 99.2 hereto:

· Unaudited Pro Forma Condensed Consolidated Balance Sheet as of December 31, 2012

· Unaudited Pro Forma Condensed Consolidated Statement of Operations for the year ended December 31, 2012

· Notes to the Unaudited Pro Forma Condensed Consolidated Financial Statements

· Unaudited Pro Forma Condensed Consolidated Statement of Operations for the three months ended March 31, 2013

· Notes to the Unaudited Pro Forma Condensed Consolidated Financial Statements

(d) Exhibits. The following exhibits are filed with this Report:

Exhibit Number	Description
23.1	Consent of Rosen Seymour Shapss Martin & Company LLP
99.1	Audited financial statements of Lighter Than Air Systems Corp. as of and for the year ended December 31, 2012
99.2	Unaudited pro forma financial statements of Registrant as of December 31, 2012 and for the year ended December 31, 2012 and the three months ended March 31, 2013

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	World Surveillance Group Inc.
		(Registrant)
Date:  June 17, 2013		/s/ Glenn D. Estrella
	By:	Glenn D. Estrella
	Title:	President and Chief Executive Officer

EX-23.1

EXHIBIT 23.1

Board of Directors

World Surveillance Group Inc.

CONSENT OF INDEPENDENT AUDITORS

We consent to the incorporation of our report dated June 17, 2013 on our audits of the financial statements of Lighter Than Air Systems Corp. for the year ended December 31, 2012 included in this Current Report on Form 8-K/A.

/s/ Rosen Seymour Shapss Martin & Company LLP

Rosen Seymour Shapss Martin & Company LLP

New York, New York

June 17, 2013

EX-99.1

LIGHTER THAN AIR SYSTEMS CORP.

DECEMBER 31, 2012

TABLE OF CONTENTS

	Page No.
Independent Auditors' Report	1
Financial Statements
Balance Sheet	2
Statement of Operations	3
Statement of Changes in Stockholder’s Equity	4
Statement of Cash Flows	5
Notes to the Financial Statements	6-8

Independent Auditors’ Report

To the Stockholder of

Lighter Than Air Systems Corp.:

We have audited the accompanying financial statements of Lighter Than Air Systems Corp., which comprise the balance sheet as of December 31, 2012, and the related statements of operations, changes in stockholder’s equity, and cash flows for the year then ended, and the related notes to the financial statements.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Lighter Than Air Systems Corp. as of December 31, 2012, and the results of its operations and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.

/s/ Rosen Seymour Shapss Martin & Company LLP

CERTIFIED PUBLIC ACCOUNTANTS

New York, New York

June 17, 2013

-1-

LIGHTER THAN AIR SYSTEMS CORP.

BALANCE SHEET

DECEMBER 31, 2012

ASSETS
CURRENT ASSETS
Cash	$	162,297
Accounts receivable, net		177,450
Inventories		15,326
Prepaid expenses		34,977
Total current assets		390,050
PROPERTY AND EQUIPMENT
Property and equipment, net		3,913
TOTAL ASSETS	$	393,963
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES
Accounts payable	$	34,587
Payroll liabilities		31,330
Due to related party		116,371
Unearned revenue – customer deposits		50,000
Total current liabilities		232,288
STOCKHOLDER'S EQUITY
Common stock, $.01 par value, 2,000 shares authorized, 100 shares issued and outstanding		1
Additional paid in capital		181,148
Accumulated deficit		(19,474	)
Total stockholder’s equity		161,675
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY	$	393,963

The accompanying notes are an integral part of these financial statements.

-2-

LIGHTER THAN AIR SYSTEMS CORP.

STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2012

SALES	$	390,098
COST OF GOODS SOLD		266,012
GROSS PROFIT		124,086
OPERATING EXPENSES
General and administrative		127,656
Professional fees		1,580
Depreciation		1,278
TOTAL OPERATING EXPENSES		130,514
LOSS FROM OPERATIONS		(6,428	)
OTHER INCOME
Interest income		113
NET LOSS	$	(6,315	)

The accompanying notes are an integral part of these financial statements.

-3-

LIGHTER THAN AIR SYSTEMS CORP.

STATEMENT OF CHANGES IN STOCKHOLDER’S EQUITY

FOR THE YEAR ENDED DECEMBER 31, 2012

	Common Stock									Total
	Number of Shares		Amount		Additional Paid-in Capital		Accumulated Deficit			Stockholder’s Equity
Balance – December 31, 2011		100	$	1	$	181,148	$	(13,159	)	$	167,990
Net loss								(6,315	)		(6,315	)
Balance - December 31, 2012		100	$	1	$	181,148	$	(19,474	)	$	161,675

The accompanying notes are an integral part of these financial statements.

-4-

LIGHTER THAN AIR SYSTEMS CORP.

STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 2012

CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(6,315	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		1,278
Change in operating assets and liabilities:
Accounts receivable		(109,700	)
Inventories		(7,526	)
Prepaid expenses		(34,977	)
Accounts payable		19,938
Payroll liabilities		(676	)
Due to related party		36,455
Unearned revenues		37,100
Net cash used in operating activities		(64,423	)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of office furniture		(2,035	)
Net cash used in investing activities		(2,035	)
NET DECREASE IN CASH		(66,458	)
CASH - BEGINNING OF YEAR		228,755
CASH - END OF YEAR	$	162,297

The accompanying notes are an integral part of these financial statements.

-5-

LIGHTER THAN AIR SYSTEMS CORP.

NOTES TO THE FINANCIAL STATEMENTS

DECEMBER 31, 2012

NOTE 1 – NATURE OF OPERATIONS

Lighter Than Air Systems Corp. (“LTAS”) (the “Company”), provides critical aerial and land-based surveillance and communications solutions to government and commercial customers. LTAS systems are designed and developed in-house utilizing proprietary technologies and processes that result in compact, rapidly deployable aerostat solutions and mast-based ISR systems. The LTAS systems have been proven to fulfill critical requirements of the military and law enforcement in the U.S. and internationally.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Preparation

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

Revenue Recognition

Revenues from sales are recorded when all four of the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred and title has transferred or services have been rendered; (3) our price to the buyer is fixed or determinable; and (4) collectability is reasonably assured. Customer deposits received in advance are recorded as unearned revenues and recognized as revenue upon shipment of the completed order.

Accounts Receivable

Accounts receivable are stated at amounts due from customers net of an allowance for doubtful accounts. Management reviews the accounts receivable for potential uncollectible accounts and provides an allowance for bad debts, when considered necessary. Accounts receivable are written off when management determines that they become uncollectible. No allowance was considered necessary at December 31, 2012.

Inventories

Inventories are stated at the lower of costs, determined on a first-in, first-out basis, or market, which represents management’s best estimate of market value. Management regularly reviews inventory quantities on hand and records a provision for excess and obsolete inventory based primarily on forecasts of future product demand.

Property and Equipment

Property and equipment is stated at cost. Depreciation is computed using the straight-line method based on the estimated useful lives of the assets. Repairs and maintenance are charged to expense as incurred. Renewals and betterments are capitalized. Upon the sale or retirement of an asset, the related costs and accumulated depreciation are removed from the accounts and any gain or loss recognized in the results of operations.

Income Taxes

The Company has elected to be treated as an “S” corporation for federal income tax purposes, whereby net income or loss of the Company is reported on the stockholder’s tax return. Although the Company’s income or loss is taxed directly to the stockholder, the effects of an uncertain tax position, if any, may have an impact on the tax return of the stockholder. Therefore, GAAP requires that any such effects be recognized based on the outcome that is more likely than not to occur. Under this criterion, the most likely resolution of an uncertain tax position should be analyzed based on technical merits and on the outcome that will likely be sustained under examination. As of December 31, 2012, the Company has no uncertain tax positions that qualify for either recognition or disclosure in the financial statements. The Company’s income tax returns for the years ended December 31, 2009 through December 31, 2011 can still be examined by the taxing authorities.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Advertising and Marketing Costs

Advertising and marketing costs are charged to expense as incurred. These costs amounted to $206 for the year ended December 31, 2012.

-6-

LIGHTER THAN AIR SYSTEMS CORP.

NOTES TO THE FINANCIAL STATEMENTS

DECEMBER 31, 2012

NOTE 3 – INVENTORIES

Inventories consist of the following at December 31, 2012:
Raw materials	$	5,000
Work-in-process		10,326
Finished goods		-
	$	15,326

Raw materials inventories primarily consist of a hybrid winch.

NOTE 4 – PREPAID EXPENSES

Prepaid expenses consist of the following at December 31, 2012:
Prepaid insurance	$	3,477
Prepaid deposit on inventory purchases		31,500
	$	34,977

NOTE 5 - PROPERTY AND EQUIPMENT

Machinery and equipment	$	1,100
Furniture and fixtures		5,461
		6,561
Less: Accumulated depreciation		(2,648	)
	$	3,913

NOTE 6 – RELATED PARTY TRANSACTIONS

The Company made payments of $16,055 in 2012 to Aerial Products Corp. (“APC”), an affiliated company, owned and controlled by the spouse of the Company’s shareholder. APC shares the office and manufacturing facility with LTAS and provides labor support and manufactures the envelopes for the LTAS aerostats.

At the end of 2012, the Company received an advance deposit of $50,000 from Global Telesat Corp (“GTC”), a wholly-owned subsidiary of World Surveillance Group for the purchase of two aerostat systems (see Note 8 – Subsequent Events). The $50,000 advance deposit is recorded as unearned revenues at December 31, 2012.

-7-

LIGHTER THAN AIR SYSTEMS CORP.

NOTES TO THE FINANCIAL STATEMENTS

DECEMBER 31, 2012

NOTE 7 – COMMITMENTS AND CONTINGENCIES

APC currently leases the shared office and manufacturing facility under a 3-year lease agreement, which can be cancelled without penalty after the thirteenth month of the lease term. During 2012, APC allocated $19,260 in rent expense to LTAS based upon estimated square footage occupied. The Company has no other long-term contracts or commitments.

NOTE 8 – ECONOMIC DEPENDENCE

For the year ended December 31, 2012, approximately 66% of sales were to a single customer and the year-end accounts receivable balance was entirely due from one customer.

NOTE 9 – SUBSEQUENT EVENTS

The Company has evaluated its subsequent events through June 17, 2013, the date the financial statements were available to be issued. The Company has the following material subsequent event:

On March 28, 2013 the Company entered into a Stock Purchase Agreement with World Surveillance Group Inc. pursuant to which World Surveillance Group Inc. acquired 100% of the outstanding common stock of the Company.

-8-

EX-99.2

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