SOURCE: World Surveillance Group Inc.

World Surveillance Group Inc.

May 17, 2011 09:01 ET

World Surveillance Group Announces First Quarter 2011 Financial Results

Company Reduces Liabilities by Over $3 Million

KENNEDY SPACE CENTER, FL--(Marketwire - May 17, 2011) - World Surveillance Group Inc. (OTCBB: WSGI), a developer of lighter-than-air unmanned aerial vehicles ("UAVs") and related technologies announced financial results for its quarter ended March 31, 2011. WSGI filed its Quarterly Report on Form 10-Q with the U.S. Securities and Exchange Commission for the three months ended March 31, 2011. The Company's Form 10-Q containing its unaudited financial statements for the quarter ended March 31, 2011 can be accessed online at www.wsgi.com or can also be obtained through the SEC's website at www.sec.gov.

WSGI did not have any revenue in either the quarter ended March 31, 2011 or 2010. The Company reported net income of $2.4 million, or $0.01 per share, for the quarter ending March 31, 2011, compared to a net loss of $729,090, or $0.00 per share, for the first quarter of 2010. The net income in the first quarter of 2011 was primarily attributable to a $2.5 million gain from the extinguishment of liabilities to our former joint venture partner in connection with the settlement agreement reached with TAO Technologies GmbH in March 2011.

WSGI had operating expenses of $684,180 for the quarter ended March 31, 2011, compared to $1.2 million for the prior year period, a decrease of 41%. This decrease was primarily due to reductions in stock based compensation, professional fees for accounting and legal services, and discontinued amortization due to the impairment and write-off of the related intellectual property during the last quarter of 2010. These reductions were partially offset by the an increase in research and development relating to our Argus One LTA UAV and an increase in compensation expense.

WSGI's total assets at March 31, 2011 were $17,323 compared to $36,247 at December 31, 2010, a decrease of 52%, primarily due to a reduction of cash and cash equivalents. At March 31, 2011, we had total liabilities of $16.2 million compared to $19.4 million at December 31, 2010, a decrease of 17% principally due to the write-off of accounts payable and accrued liabilities due to our former joint venture partner and a decline in fair value of derivative liabilities in the first quarter of 2011. Due largely to the factors discussed above, the Company's accumulated deficit decreased to $142.1 million at March 31, 2011 from $144.5 million at December 31, 2010.

WSGI's Chairman Michael K. Clark stated, "We are pleased to have reduced our total outstanding liabilities by over $3 million this past quarter and we are working diligently to continue to reduce our overall debt level and strengthen our balance sheet. We are continuing to see the results of programs and strategies we put in place in 2010 to address our balance sheet and look to make further progress in the quarters to come."

Glenn D. Estrella, WSGI's President and Chief Executive Officer, added, "Since the beginning of the year, not only have we been able to strengthen our balance sheet through the closing of significant financings and our debt reduction plans, but we launched and have begun testing our new Argus One UAV. We secured our first government contract with Space Florida and have been invited by the U.S. Army to test the Argus One at their proving ground facilities in Yuma, Arizona. We are excited by the advances WSGI has made towards commercializing our products and look forward to working with our partners to capitalize on such momentum to further execute on our goals."

World Surveillance Group Inc. (OTCBB: WSGI) designs, develops, markets and sells autonomous, lighter-than-air UAVs capable of carrying payloads that provide persistent security and/or wireless communications solutions at low, mid, and high altitudes. WSGI's airships, when integrated with electronics systems and other high technology payloads, are designed for use by government-related and commercial entities that require real-time intelligence, surveillance and reconnaissance or communications support for military, homeland defense, border control, drug interdiction, natural disaster relief and maritime missions. For more information regarding WSGI, please visit www.wsgi.com, or view our reports and filings with the Securities and Exchange Commission on http://www.sec.gov.

Forward-Looking Statements

Certain statements in this release constitute forward-looking statements. These statements include those regarding the financial condition, results of operations and balance sheet of the Company, the ability of the Company to reduce its debt levels or strengthen its balance sheet, the ability of the Company to build on its 2010 or first quarter 2011 progress or momentum, the results of any programs or strategies enacted by the Company, the timing or results of any flight testing of our UAVs, the further advancement, development or commercialization of the Company's UAVs, the capabilities and advantages of, and costs related to, the Company's technology and products, the ability of the Company to capitalize on market demand and grow the Company's business, the Company's ability to successfully commercialize its airships, or execute its strategy and business plans, the Company's ability to successfully accomplish any of its goals, the effects of any changes in the Company's operations, and the Company's ability to enhance shareholder value. The words "forecast," "project," "intend," "expect," "plan, " "should," "would," and similar expressions and all statements, which are not historical facts, are intended to identify forward-looking statements. These forward-looking statements involve and are subject to known and unknown risks, uncertainties and other factors, any of which could cause the Company to not achieve some or all of its goals or the Company's previously reported actual results, performance (finance or operating) to change or differ from future results, performance (financing and operating) or achievements, including those expressed or implied by such forward-looking statements. The Company assumes no, and hereby disclaims any, obligation to update the forward-looking statements contained in this press release.

Contact Information

  • Contact:
    World Surveillance Group Inc.
    321-452-3545

    Barbara M. Johnson
    investors@wsgi.com