World Surveillance Group Inc (fka WSGI)

[BareBaxBo]

accounting changes/adjustments/regulations ALL companies everywhere are going through, thanks to recent market activity or lack thereof in financial reporting for all "derivatives":

but more specific to us are listed increases/decreases as follows:
Description of adjustments:

(1) To record $1,524,274 increase to derivative liability, $244,274 decrease to accumulated deficit for prior period recognition of derivative liability, and $1,280,000 decrease to additional paid in capital upon adoption of EITF 00-19.

(2) To record $601,536 increase in derivative liability for the six months ended June 30, 2008.

(3) To record $79,923 decrease from the extinguishment of derivative liabilities for the six months ended June 30, 2008.

(4) To reclass $168,918 from interest expense to change in derivative liability for the six months ended June 30, 2008.

(5) To record $266,877 increase in derivative liability for the three months ended June 30, 2008.

(6) To record $211,611 decrease from the extinguishment of derivative liabilities for the three months ended June 30, 2008.

(7) To reclass $61,484 from interest expense to change in derivative liability for the three months ended June 30, 2008.